annual report 2010 - Öbb-presse602e3f94-4f98... · reporting interpretation committee...

Annual Report 2010ÖBB-Holding AG

Content

MANAGEMENT REPORT A. Group structure, Participations and Branch Offices

B. Economic Report and Outlook

C. Personnel Report

D. Real Estate Management

E. Research and Development Report

F. Environmental Report

G. Accessibility

H. Risk Report

I. Commitment to the Austrian

Corporate Governance Code

J. Significant Events after the Reporting Date

(subsequent events)

K. Notes to the Management Report

CONSOLIDATED FINANCIAL STATEMENTSConsolidated Income Statement

Consolidated Statement of Comprehensive Income

Consolidated Statement of Financial Position

Consolidated Cash Flow Statement

Consolidated Statement of Changes in

Shareholder’s Equity

Inhalt

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OFDECEMBER 31, 2010 A. Basis of Presentation

B. Notes to the Consolidated Statement

of Financial Position and the Consolidated

Income Statement

C. Other Notes to the Consolidated

Financial Statements

INDEPENDENT AUDITOR’S REPORT ON THE CONSOLIDATEDFINANCIAL STATEMENTS (AUDITOR’S REPORT)

SEPARATE FINANCIAL STATEMENTS OF ÖBB-HOLDING AG: INCOME STATEMENT AND STATEMENT OF FINANCIAL POSITION

INDEPENDENT AUDITOR’S REPORT ON THE SEPARATEFINANCIAL STATEMENTS (AUDITOR’S REPORT)

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Consolidated Management Report | Consolidated Financial Statements

This Management Report complements the Consolidated Financial Statements of Österreichische Bundesbahnen-Holding Aktiengesellschaft, Vienna, (hereinafter referred to as “ÖBB Group”) that must mandatorily be established pursuant to § 244 UGB [Austrian Commercial Code] and that is submitted to the Commercial Court Vienna under Company Register number FN 247642 f. The Consolidated Financial Statements as of December 31, 2010, were established pursuant to § 245a (2) UGB in accordance with the International Financial Reporting Standards (“IFRS/IAS”) adopted by the International Accounting Standards Board (“IASB”), the interpretations of the International Financial Reporting Interpretation Committee (“IFRIC”) as well as the interpretations of the Standards Interpretation Committee (“SIC”), which have come into force and been adopted by the European Union as of December 31, 2010. In addition, a subsidiary of Österreichische Bundesbahnen-Holding Aktiengesellschaft (hereinafter referred to as “ÖBB-Holding AG”), the company ÖBB-Infrastruktur Aktiengesellschaft, is obligated to establish unconsolidated financial statements pursuant to § 245 (5) UGB because it issued bonds listed for trade in a regulated market. The unconsolidated financial statements of ÖBB-Infrastruktur Aktiengesellschaft are submitted to the Commercial Court Vienna under Company Register number FN 71396 w.

A. G R O U P S T R U C T U R E , P AR T I C I P AT I O N S AN D B R AN C H O F F I C E S

Structure of the ÖBB Group

In the course of the reorganization of Austrian Federal Railways, which was mainly effective as of January 1, 2005, a holding structure was created, with ÖBB-Holding AG as holding company. The following “parts of operations” or business units respectively were included as spin-offs for affiliation in its subsidiaries, which act as independently operating corporations or limited liability companies respectively:

- Transportation of People and Goods - Traction - Technical Services - Services - Railway Infrastructure Operation - Real Estate - Profit Center Bahnbus The residual assets of Austrian Federal Railways, which were converted to ÖBB-Infrastruktur Bau AG (now ÖBB-Infrastruktur AG) and subsequently merged with Eisenbahn-Hochleistungsstrecken-AG and Schieneninfrastruktur-finanzierungs-Gesellschaft mbH, became a subsidiary of ÖBB-Holding AG as well.

The former parts of operations were included in the five wholly owned subsidiaries, which are held directly, as follows:

- Part of operation Transportation of People – ÖBB-Personenverkehr AG - Part of operation Transportation of Goods – Rail Cargo Austria AG - Part of operation Traction – ÖBB Produktion GmbH (formerly ÖBB-Traktion GmbH) as common subsidiary of ÖBB-

Personenverkehr AG and Rail Cargo Austria AG - Part of operation Technical Services – ÖBB-Technische Services-Gesellschaft mbH as common subsidiary of ÖBB-

Personenverkehr AG and Rail Cargo Austria AG - Part of operation Railway Infrastructure Operation – ÖBB-Infrastruktur Betrieb AG (now ÖBB-Infrastruktur AG) - The part of operation Services was demerged to ÖBB-Dienstleistungs GmbH (now ÖBB-IKT-Gesellschaft mbH or

ÖBB-Shared Service Center Gesellschaft mbH respectively) in 2004 already. - The residual assets were transformed into ÖBB-Infrastruktur Bau AG (now ÖBB-Infrastruktur AG).

§ 29 a Bundesbahngesetz [Federal Railways Act] in the current version effective as of August 18, 2009 (BGBl [Federal Law Gazette] I no. 95/2009) stipulates that ÖBB-Infrastruktur Betrieb AG shall be merged with ÖBB-Infrastruktur Bau AG as absorbing company by way of universal succession under analogous application of the first section “Merger of corporations” of Part Nine of the Aktiengesetz [Stock Corporation Act] 1965 as of the end of December 31, 2008, whereas the reference date for the merger was fixed at January 1, 2009, and the merger must be notified for entry in the Company Register by September 30, 2009, at the latest. There is no consideration (award of shares of ÖBB-Infrastruktur Bau AG). The name of the absorbing company is “ÖBB-Infrastruktur Aktiengesellschaft” as of the date of entry of the merger in the Company Register.

ÖBB-Holding AG acts as strategic controlling company holding all the shares in the three corporations (sub-groups) ÖBB-Personenverkehr AG, Rail Cargo Austria AG and ÖBB-Infrastruktur AG. The sub-groups are hereinafter referred to as sub-group ÖBB-Personenverkehr, sub-group Rail Cargo Austria and sub-group ÖBB-Infrastruktur.

The sub-groups ÖBB-Personenverkehr and Rail Cargo Austria are responsible for customer-friendly, profit-oriented and environmentally friendly transportation of people and goods. Their common subsidiaries ÖBB-Produktion GmbH (formerly ÖBB-Traktion GmbH) and ÖBB-Technische Services-Gesellschaft mbH are responsible for the business units Traction and Technical Services.

Consolidated Management Report

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The sub-group ÖBB-Infrastruktur is, on the one hand, responsible for ensuring availability and utilization of the Austrian railway infrastructure in a safe and cost-effective way without discriminating any of the railway companies. On the other hand, the sub-group installs the Austrian railway infrastructure on behalf or for the benefit of its owner, the Republic of Austria, respectively. Financing for investments in the extension of the railway infrastructure is now ensured by means of the generated cash flow, borrowed capital as well as guarantees and subsidies of the federal government on the basis of long-term master plans. Management, development and utilization of the ÖBB Group’s real estate are assumed by ÖBB-Immobilienmanagement GmbH, the subsidiary of ÖBB-Infrastruktur AG.

In order to increase the information content, the developments and aspects of the sub-groups will be detailed separately in some parts of this Management Report.

Participations

The Overview of participations in the Notes on the Consolidated Financial Statements lists all the participations of the ÖBB Group. The following table only gives a summary by sub-group and country.

ÖBB-Personen-

verkehr

Rail Cargo Austria

ÖBB-Infrastruktur

Others Total DC ²)Total

(without DC) ¹)Affiliated subsidiaries 9 61 31 9 110 110

of which abroad 1 45 0 0 46 46

Participating subsidiaries 4 28 2 2 36 -2 34of which abroad 0 20 0 0 20 0 20

Other subsidiaries 3 13 2 2 20 -1 19of which abroad 3 13 1 1 18 -1 17

Total 16 102 35 13 166 -3 163of which abroad 4 78 1 1 84 -1 83

¹) only companies that can be influenced directly²) double count: subsidiary whose shares are held by several sub-groups

Sub-group (including double counts)

Outside Austria, the ÖBB Group holds varying amounts of shares in 83 companies whose registered offices are located in the following countries: Hungary (28), the Czech Republic (8), Slovakia (6), Romania (5), Belgium (4), Italy (4), Poland (4), Slovenia (4), the Netherlands (3), Bulgaria (2), Germany (2), Croatia (2), Serbia (2) as well as one participation each in Bosnia-Herzegovina, Greece, Liechtenstein, Russia, Sweden, Switzerland, Spain, Turkey and the Ukraine.

ÖBB-Holding AG and other companies

ÖBB-Holding AG constitutes the strategic controlling company of the ÖBB Group. The purpose of ÖBB-Holding AG is to exercise its rights as shareholder in the companies in which it holds a direct or indirect interest, aiming at a strategic orientation. The main tasks of the company include: overall coordination of the establishment and implementation of the companies’ policies as well as ensuring transparency regarding the public funds used.

Following the redefinition of ÖBB-Holding AG as strategic controlling company, installation of ÖBB-Shared Service Center Gesellschaft mbH and ÖBB-IKT GmbH as service companies was completed in 2010. They are now responsible for inter-group cross-divisional functions and services in the personnel and IT departments. ÖBB-IKT GmbH constitutes the competence center for information, communication and railway technologies throughout the entire ÖBB Group.

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The three sub-groups and their branch offices

ÖBB-Personenverkehr sub-group

This sub-group services 1,118 stations and stops throughout Austria in passenger transport by railway. In 145 of these stations, tickets are sold at staff-operated counters, and ÖBB ticket machines are available in 599 stations. The busses of ÖBB-Postbus GmbH service approximately 22,000 stops. 700 stops are located in close proximity to a railway connection. ÖBB-Postbus GmbH services almost all of the 2,360 Austrian municipalities; in about 870 municipalities it constitutes the only public means of transport. The organization of ÖBB-Postbus GmbH comprises one head office and seven regional managements with a total of 19 traffic management departments. These traffic management departments comprise a total of 54 traffic points with and without Technical Services, and at these traffic points, busses and drivers are scheduled and/or busses are maintained.

Rail Cargo Austria sub-group

Rail Cargo Austria AG, whose registered office is located in Vienna, is the subsidiary of ÖBB responsible for the transportation of goods and acting on an international level. As comprehensive logistics company, it offers transport and logistics services for goods from all kinds of industries. Its core competencies in railway transportation and forwarding ensure an environmentally friendly, technically mature, reliable and cost-efficient transport and logistics system.

The Rail Cargo Austria sub-group is present in the market with its four strategic business units “Cargo & Logistics (C&L)” (Cargo & Logistik), “Intermodal”, “Contracted logistics” (Kontraktlogistik) and “Freight forwarders” (Speditionen). The Rail Cargo Austria sub-group has adopted the same distribution channels for its subsidiaries in Austria and abroad.

The strategic business unit “Cargo & Logistics” operates eight sales offices in Austria and one in Frankfurt on the Main in Germany as well as branch offices in Slovenia, Romania and Bulgaria. “Cargo & Logistics” is divided into the following market sections: “Coal/Special transports” (Montan/Spezialtransporte), “Automotive/Mineral oil” (Automotive/Mineralöl), “Wood/Agriculture” (Holz/Agrar) and “Commercial goods/Building material” (Kaufmannsgüter/Baustoffe).

The strategic business unit “Intermodal” operates eight terminals and comprises the following sections: “Combi Cargo”, “Combined road/railway transport” (Rollende Landstraße (ROLA)), “Mobile and terminal service Austria” (Mobiler und Terminal Service Austria).

The strategic business unit “Contracted logistics” comprises the sections “Transport logistics” (Transportlogistik), “Storage logistics” (Lagerlogistik) and “Freight transport” (Ladungsverkehr). There are 13 Logistics Centers, three external storage areas, six charter offices and seven operational sites of automobile cargo traffic throughout Austria.

The fourth strategic business unit of the Rail Cargo Austria sub-group, “Freight forwarders”, comprises approximately 60 companies as of the end of the year 2010, divided into approx. 30 universal freight forwarders and 30 specialized freight forwarders. The specialized freight forwarders are allocated to the units “Cargo & Logistics”, “Intermodal” and “Contracted logistics”, and each of these strategic business units “C&L”, “Intermodal” and “Contracted logistics” is responsible for operative control of the respective companies allocated to them.

The strategic business units are supported in the provision of goods and services by Production Management. This unit is responsible for providing transports and means of transport as well as transportation by railway. The unit is supported in its tasks by ÖBB-Technische Services-Gesellschaft mbH and ÖBB-Produktion Gesellschaft mbH as well as production companies in Slovenia, Romania and Bulgaria.

Together with the group’s subsidiaries, Rail Cargo Austria disposes of an international transport and logistics network. Rail Cargo Austria combines the advantages and benefits of all carriers and coordinates them in an optimal way.

ÖBB-Infrastruktur sub-group

The ÖBB-Infrastruktur sub-group operates 1,140 traffic stations as well as the railway infrastructure throughout Austria, which are used by ÖBB-Personenverkehr AG, Rail Cargo Austria AG, two other companies affiliated with the ÖBB Group and other railway undertakings not affiliated with the ÖBB Group.

The sub-group is furthermore responsible for approximately 2,100 planning and construction projects throughout Austria, of which about 1,300 projects have a term of more than one year. The funding requirements for the master plan investments started before December 31, 2010 - taking the effects of the approved master plan for the years 2011 to 2016 into account and prevalorized at 2.5% - amount to EUR14,077 million.

As ÖBB-IKT-GmbH focuses on railway and infrastructure with respect to information and communication technologies, it results as wholly owned subsidiary in the ÖBB-Infrastruktur sub-group like ÖBB-Immobilienmanagement GmbH, which manages the real estate owned by ÖBB-Infrastruktur AG and comprising approximately 200 million square meters.

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B . E C O N O M I C R E P O RT AN D O U T L O O K

B.1. National economic environment and trends

Economic development

The devaluation of the Euro during the first semester has benefitted exports from the euro area. Redemptions of the reflationary fiscal and financial policies in Europe are, however, expected to have a curbing effect on the economic development in the coming year. High national deficits and significant imbalances in the euro area constitute an additional risk. In Germany and neighboring countries, the economy is expected to expand more strongly than in the southern euro area in 2011 as well.

The effects of the economic crisis are not yet overcome at all. Gross investments in 2011 will still be approx. 10% below the level of 2008. The import and export sector have not yet completely recovered, either.

Key data and forecasts for the economic situation in Austria

Parameter Unit 2008 2009 2010 2011

Gross domestic product +2,2 -3,9 +2 +1,9Goods exports +0,3 -18,7 +12 +3,7Goods imports Change in % compared to the previous year +0,2 -15,1 +8,6 +6Gross investments +1 -12,7 -0,4 +3,7Crude oil price +33,8 -36,6 +23,6 +5,3Net borrowing of the state % of the GDP -0,4 -3,5 -4,1 -3,5Unemployment rate % of the labor force 3,8 4,8 4,4 4,3Source: WIFO monthly report 10/2010,forecast for 2010 and 2011

Parameters of the transportation of people and goods in Austria

(Change in % compared to the previous year)

Transportation of goods 2006 2007 2008 2009 2010

Railway* (tonne-kilometers) 9,0 1,9 2,5 -18,9 12,0of which domestic transportation 3,4 9,0 8,5 -3,7 -

of which import and export 3,7 -3,5 -3,2 -17,9 -

of which transit 8,9 12,2 -6,3 -14,0 -

Road (tonne-kilometers) 2,6 8,2 -0,4 -12,4 3,7New registration of trucks 4,3 6,3 2,2 -23,6 6,6

Transportation of passengers 2006 2007 2008 2009 2010

Railway 2,1 3,2 13,8 -0,7 1,5

Air transport 5,8 10,1 4,2 -8,5 6,7New registrations of passenger cars 0,2 -3,4 -1,5 8,8 2,1*all railway companies

Source: Statistics Austria, ÖBB

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Development of the transportation of goods by railway after the crisis

With respect to performance in the transportation of goods by railway, Switzerland, Germany and Austria have mostly overcome the slump of 2009 during the year under review, at least for the time being. Transport performance of the rail freight companies of the eastern neighbors of Austria has reached approx. 90% of the level of 2008. Stagnation or further decline was observed in Bulgaria and Romania as well as in France and Italy (see below). A recovery in the transport performance can suggest an economic recovery of the rail freight companies only to a limited extent. The rail freight companies in the new EU member states are still suffering from high infrastructure charges and inadequate infrastructure financing at the same time. In Italy and France, the offer for single-wagon customers had to be retracted to a significant extent during the crisis. This resulted in another sharp decline in transportation of goods by railway in these countries in 2010 (Italy: -11% France: -12.8%).1

Amended framework for railway – road – air transport competition

In the course of budget restructuring, a number of measures was determined during the year under review concerning the competitive situation of railway versus road and air transport:

- Increase in petroleum tax - Reduction of the motor vehicle tax for trucks - Flight ticket duty - Increase in the tax allowances for commuters - non-taxable “Jobticket” for more than 20 kilometers travel to work - Cancelation of the reimbursement of energy charges for service companies

The increase in petroleum tax is expected to have little impact on the competitive situation of the railways in the transportation of goods, because the additional fuel costs will be compensated by a reduction of the motor vehicle tax by 30 percent.

The flight ticket duty is suited to improve the competitive position of the railways in long-distance passenger transportation. In France, a duty on flight tickets has been applicable since 2006. In Austria and Germany, such a duty will be effective as of 2011.

The “Jobticket” constitutes a positive development for the railways in general. If an employer provides his employee with the ticket for the journey to the workplace, this ticket is not taxable as benefit in kind. This regulation is, however, only applicable for a journey to work of more than 20 kilometers. The increase in tax allowances for commuter traffic by car is expected to partly counterbalance the positive effect of the “Jobticket”.

The cancelation of the reimbursement of energy charges causes a distortion of competition at the expense of the railways, because it affects the railways but not its competitors on the road. The costs for ÖBB alone amount to approx. EUR28 million per year.2

B.2. Regulatory environment and trends

The First Railway Package

In the middle of September 2010, the European Commission presented the proposal for amendment of the First Railway Package that has long been anticipated. It suggests that the three relevant Directives be merged into one and that selected aspects be reviewed. Two large subject fields remain unaffected: the liberalization of national passenger transport and the clearer separation of infrastructure and distribution.

According to the European Commission, the opening of the market is not supposed to be finalized until a corresponding Directive is proposed in 2012. A possible orientation of this Directive can be seen in a study3 commissioned by the European Commission. The authors recommend that the legal regulations regarding passenger transport be formulated in such a way that all traffic services are awarded in the form of public service contracts under competition conditions in the future. In addition, free access to the network should be granted under the supervision of the regulatory authorities.

The European Court of Justice will decide the future course of action with respect to the separation of infrastructure and distribution. At the end of June 2010, the European Commission announced the initiation of the third stage in the treaty violation proceedings against the Republic of Austria and twelve other member states of the European Union for insufficient implementation of the First Railway Package. One of the main issues raised is the lack of independence of the body entrusted with essential functions from the operator of the infrastructure, which allegedly leads to impairments of access to the market and intransparent entrance requirements. In the opinion of the European Commission, the related conflicts of interest can only be resolved by a clearer separation of infrastructure and distribution. The conclusion of the treaty violation proceedings is expected no sooner than in 2012.

1 UIC monthly data: FS from January to September, SNCF only January + February 2 The petroleum tax is not valued as energy tax in national infrastructure expenditure accounting, but as contribution to road costs. The proceeds cover approx. 70% of the road costs. 3 EVERIS et al.: Study on Regulatory Options on Further Market Opening in Rail Passenger, final report of September 9, 2010, 303 pages.

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The two large subject fields are not dealt with in the course of the amendment of the First Railway Package, but the ongoing proceedings could still have significant effects for the companies concerned, in particular regarding access to service facilities, the extension of the regulatory authority’s powers and the related reporting obligations as well as the determination of the infrastructure charges. In the current situation, the first reading in the European Parliament can be expected to be concluded before the summer break 2011. The discussion in the Council will probably take place mainly under Polish presidency in the second semester of 2011.

TEN-T Amendment

In the weeks to come, the amendment of the Trans-European Transport Networks (TEN-T), which has been underway since the beginning of the year 2009, will reach a decisive stage. On the basis of a methodology for strategic network planning developed specifically for this purpose, the European Commission will elaborate a proposal for the so-called core network. The core network – which is part of the overall network – shall comprise the sections of the infrastructure on which European long-distance transportation is currently taking place or is supposed to take place respectively. According to the European Commission, the core network must furthermore be multimodal and coherent. Consideration of the network idea is contradictory to the result of the last TEN-T amendment, because the 30 priority projects determined in 2004 do not form a coherent network, but according to the amendment currently underway, they are supposed to become part of the core network – in order to ensure continuity of the projects.

In Austria, this concerns the priority projects 1 (Brenner axis) and 17 (Danube axis). The outlook for the three railway connections crossing the Alps further to the East is, however, vague: the Tauern axis, the Pyhrn axis and the southern section of the Baltic-Adriatic Sea axis. None of these three North-South connections were included in the list of priority projects in 2004. The southern section of the Baltic-Adriatic Sea axis, the connection from Vienna to Bologna via Graz and Klagenfurt, has a good chance to be included in the core network. The northern section – the connection from Danzig to Vienna via Warsaw – has already been identified as priority project 23. The proposal of the European Commission is expected in April 2011. The discussion in the European Parliament and in the Council will follow.

White Paper

The European Commission will in all probability publish the White Paper on the European traffic policy until 2020 in the first quarter of 2011. The delay is explained, among others, with the necessity of a better coordination of the contents with strategic concepts of the Directorates-General for Energy or Climate Protection respectively. The “Energy Efficiency Action Plan” and the “Low Carbon Economy 2050 Roadmap” are scheduled to be presented in the first quarter of 2011.

The White Paper will not only contain strategic considerations regarding competitiveness, climate change and financing, but also a comprehensive catalog of specific measures. The proposals for the liberalization of national passenger transport and for the complete separation of infrastructure and distribution are of particular relevance for the railway sector. Planned initiatives aiming at the reinforcement of the cooperation of regulatory authorities and infrastructure operators are important as well. The list of measures furthermore comprises a proposal to internalize the external costs for all carriers in order to create equal competition conditions. For the railway sector, this could result in the introduction of a noise-dependent infrastructure charge as well as a ban on conventional cast iron inserts for freight cars.

Ecology and traffic

After years of discussions, in October 2010 the EU ministers of transport agreed on possible higher road tolls for trucks in Europe. The so-called “Eurovignettes” Directive (“Road Cost Directive”) allows the member states to calculate additional charges for noise and air pollution in the future. According to the EU ministers of transport, this regulation may only be applied for European highways. Furthermore, it shall only be applicable for trucks of 12 tonnes or more. The member states are also free to decide whether vehicles of 3.5 tonnes or more will be included in the regulation.

According to calculations of the European Commission, trucks are currently paying an average of 15 to 25 Cents per kilometer of road tolls in Europe. The new Directive may result in an extra 3 to 4 Cents per kilometer. Due to the pressure exerted by numerous member states, the present draft of the new “Eurovignettes” Directive does not stipulate any appropriation for the usage of the additional revenues from the “external costs”. It only recommends using these funds for ensuring a sustainable infrastructure.

The railway sector welcomes this agreement, but it points out that an even stricter regulation is required to create equal competition conditions in the transport sector. It is regrettable that the congestion costs, which account for approx. 40% of the external costs, are not included in the regulation and that the appropriation of the additional revenues is not taken into consideration. The proposal adopted by the European Parliament in the first reading in 2009 must be graded as more extensive than the compromise reached by the EU ministers of transport. The result of the second reading, which will probably be concluded in the first semester of 2011, is expected to be situated somewhere between the positions of the European Parliament and the Council.

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Market environment of the ÖBB-Personenverkehr sub-group

In the financial year 2010, an increase in the number of passengers was recorded, amounting to 3% in long-distance passenger transport and 2% in short-distance passenger transport. In total, approx. 460 million passengers use the services provided by the ÖBB-Personenverkehr Group. With the coming into effect of the EU Regulation 1370/07, the award of transport services is regulated in a consistent and transparent way. On this basis, a multi-year contract on the provision of public railway transport services has been concluded with the Republic of Austria.

Short-distance and regional passenger transport

The execution of the agreement in principle on January 14, 2010 regarding the transfer of railway lines to the state of Lower Austria and the financing of the railway transport in Lower Austria constituted a milestone in the consolidation of the short-distance and the regional transport in the eastern region. The withdrawal of services that are less in demand, which became possible as a result, and the full funding of the remaining services accomplished an important prerequisite for economically sustainable provision of short-distance and regional transport services. However, the number of passengers in the eastern region is stagnating at the same time. On the other hand, extensions of service based on transport service contracts result in a frequency increase in the other regions. Further fields of action for ensuring revenues include key marketing activities oriented towards target groups and measures to ensure payment of the fares.

Long-distance passenger transport

Throughout the past years, long-distance passenger transport recorded a continuous increase in the number of passengers in national as well as international railway connections. The development in national demand shows a significant increase for the Westbahn [Western Railway], particularly in the First and Premium Class, due to the increased use of the premium product “railjet”, whereas the Südbahn [Southern Railway] and intra-alpine transport as well as the Tauern and the Wörgl – Bischofshofen line were regressing. The trends in national transport did not continue in the year under review due to the blocking of the Vienna Southern Station and restrictions of the infrastructure, and despite the further increase in the Westbahn, the revenues from national transport sank just below the level of the previous year.

In international transport, a significant increase was recorded due, on the one hand, to marketing activities in cooperation with DB, SBB, Ceske Drahy (Czech national railways) and Polskie Koleje Państwowe (Polish national railways) as well as the extensive “railjet” actions and, on the other hand, to the impairments in air transport. Following the strong increase throughout the past years, the outgoing transport controlled by ÖBB increased again by 20% in 2010; this turnover was driven by the newly designed “SparSchiene” pricing structure with a distinctive increase in yield.

Bus transport

ÖBB-Postbus GmbH transported approx. 243 million passengers in 2010. In regional bus transport (line traffic), the Postbus holds a market share of approx. 70%, and a market share of approx. 20% in the entire public transport sector in Austria. ÖBB-Postbus GmbH disposes of approx. 2,200 busses, which cover a distance of approx. 151.1 million kilometers per year on approx. 840 lines (30,000 courses), i.e. more than 400,000km per day. The subsidiary CSAD, which transports approx. 7 million passengers and covers a distance of approx. 9.6 million kilometers per year in the Budweis region, is also successful.

Market environment of the Rail Cargo Austria sub-group

With respect to performance in the transportation of goods by railway, Switzerland, Germany and Austria have mostly overcome the slump of 2009 during the year under review, at least for the time being. Transport performance of the rail freight companies of the eastern neighbors of Austria has reached approx. 90% of the level of 2008. Stagnation or further decline was observed in Bulgaria and Romania as well as in France and Italy (see below). A recovery in the transport performance can suggest an economic recovery of the rail freight companies only to a limited extent. The rail freight companies in the new EU member states are still suffering from high infrastructure charges and inadequate infrastructure financing at the same time. In Italy and France, the offer for single-wagon customers had to be retracted to a significant extent during the crisis. This resulted in another sharp decline in transportation of goods by railway in these countries in 2010 (Italy: -11% France: -12.8%).4

Strategic business unit “Cargo & Logistics”

“Coal/Special transports”: In 2010, the recovery of the coal industry was quicker than expected. After a slump by more than 30% in the year of crisis 2009, demand increased again by 25%. Furthermore, this recovery is expected to continue in 2011 at a stable rate of +5%. The increase in the commodity sector largely corresponds to the development of the demand in the steel industry. Although increases are observed throughout the entire commodity sector, the development varies in the individual segments. In the field of military and special transports, turnover increased slightly compared to the year 2009 despite difficult economic circumstances.

4 UIC monthly data: FS from January to September, SNCF only January + February

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“Automotive/Mineral oil”: The automotive segment was stabilized and its profitability increased by means of adequate measures despite a slump in the production figures. New competitors in the railway market, who increasingly address major customers as well, constitute a significant factor in the development of the mineral oil/chemicals market. Despite this competition, it was possible to ensure the business volume over a period of several years with these customers.

“Wood/Agriculture”: The wood segment has stabilized compared to the year of crisis 2009; however, we cannot yet speak of substantial recovery. The Austrian paper industry in particular had to increase its imports because the national offer was not sufficient. The sugar market has gained momentum due to the increase in world-market prices caused by crop failures in Brazil and India, the two global producers, which should open up new opportunities. The international grain trade experienced shifts in the international transport flows due to the weather. Compared to the peak year 2009, transit volumes decreased significantly. As the share of biogenic fuels in the overall market is expected to increase further, we expect the vitality of this field to continue.

“Commercial goods/Building material”: The greatest volumes in the commercial goods sector are generated by the paper/cellulose industry. Compared to the year 2009, paper production in Austria has increased by more than 10%. In the sector of linen goods, the decrease of the previous years continues. In domestic transport, Rail Cargo Austria will withdraw from certain sectors, which will cause total volumes in the commercial goods segment to decrease slightly in 2011. The building materials segment concluded the year 2010 with an increase in volumes and a decrease in profits. Rail Cargo Austria is currently working on establishing itself as logistics company for railway construction and will increasingly take on activities in the field of site logistics.

Strategic business unit “Intermodal”

After the year of crisis 2009, the strategic business unit “Intermodal” is again in a period of growth. For the combined road/railway transport, the year 2010 was the best year since the takeover of ÖKOMBI GmbH by the Rail Cargo Austria AG sub-group. The Combi Cargo section recorded a double-digit percentage increase in volumes as regards tonnage as well as profits compared to 2009. In the mobile section, turnover as well as tonnage increased significantly. The results are significantly better than expected, but still negative in total.

Strategic business unit “Contracted logistics”

The total turnover of the previous year was exceeded slightly. This is due to the extension of international transports on the one hand, which results in a higher contribution of international transports to profits, and to the economic recovery in general on the other hand. Despite the insolvency of one of our major customers, the level held before the crisis was achieved again and even exceeded slightly. The trend of the previous years as regards volumes continues in that the total number of shipments is decreasing, but the tonnage shipped is increasing, meaning that the average weight of the shipments is increasing. This is due to the bundling of several units into larger shipments as well as the loss of smaller shipments to competitors in the express package courier area.

Strategic business unit “Freight forwarders”

After the severe slumps in turnover and profits in the previous year, the turnover component of the total portfolio developed according to plan during the year under review, but the gross margin declined strongly at the same time, so that the gross profit was below the level achieved in the previous year. The decline of the gross margin is primarily due to the price increases of our suppliers, which could not or only to a limited extent be passed on to our customers due to the strong competition. Additional countermeasures in the fixed cost area partly compensated the deteriorating profit situation. In the course of the turnaround project of Rail Cargo Austria, the freight forwarder segment “Universalspedition” focuses on revenue-increasing projects, system integration in the IT field as well as the elimination of existing sources of loss in the portfolio and the reduction of the number of freight forwarding companies.

Technical Services

ÖBB-Technische Services GmbH (TS) produced about 90% of its sales amounting to EUR427 million from services provided to companies of the ÖBB Group. TS is the market leader in the domestic rail vehicle maintenance market. The continued intense dedication in Europe together with the subsidiaries TS Slovakia s.r.o. and TS Hungaria Kft. significantly contributes to the success of ÖBB-Technische Services-GmbH within the Group.

09


Market environment of the ÖBB-Infrastruktur sub-group

The high number of strategic circumstances directly or indirectly affecting the company ÖBB-Infrastruktur AG required specific measures in 2010 already, which are listed below:

Economic developments: - Noticeable recovery of the volumes of goods transported by railway in the first semester of 2010 despite noticeable

aftereffects of the global economic crisis. From October 2010, transport volumes were decreasing again.

Legal developments: - Performance Regime demanded by the EU and the owner - Recast of the First Railway Package; subsequent admonition of railway transport companies (or the owners

respectively) belated

Political developments: - Current government program for budget reorganization and related discussions about large-scale projects - Raise of the average age of retirement and almost complete termination of early retirements

Technical developments: - Development of the interoperability and harmonization of EU networks (TSI, ETCS) - Start of a global technology boost by means of an investment promotion action for alternative energy sources and

fuel types

The situation in the capital markets, particularly in the first semester of the year 2010, was characterized by the turbulent developments in the peripheral countries Greece, Ireland, Spain and Portugal. Austria was well able to sustain its position in this volatile environment, which had a positive effect on ÖBB-Infrastruktur AG as well. Therefore bonds amounting to a total of EUR2.12 billion were issued at the capital market in 2010, all of which are listed in Euro. Due to the low interest rates, these fundings were selected from the long-term segment, in accordance with the long-term investments.

The “AAA/Aaa” rating of the rating agencies Standard&Poor’s and Moody’s for ÖBB-Infrastruktur AG was again confirmed in 2010, which means that the company furthermore has an excellent credit rating.

Railway transport market 2010

As in the previous year, 23 railway undertakings were entitled to use the ÖBB infrastructure as of the end of 2010. For 2011, five new access authorizations for railway undertakings are expected (four in goods transport, one in passenger transport). The number of authorized companies is thus increasing to 28.

The progressive opening of the market in railway transport and the recession caused further shifting of the market shares for the network of ÖBB-Infrastruktur sub-group. The share of external railway undertakings in goods transport increased to 12% as measured by the total gross tonne-kilometers (TGTkm). The largest market share (TGTkm), namely more than 26%, was achieved by the external railway undertakings in combined freight transport (CFT).

After the global recession and the subsequent slump in volumes of goods transport in 2009, 2010 saw a significant recovery. Goods transports increased by 7% as measured by train-kilometers and even 12% as measured by TGTkm. This increase is slightly lower than in Germany were the volumes of railway transports increased by up to 18%.

As a result of the reinforced efforts to optimize the production process, the load factor in goods transport increased by an average 5% as measured by the train weight.

In 2010, products and prices were adjusted. In the medium term, ÖBB-Infrastruktur AG will progressively introduce a route price model that is more differentiated and market segment-specific and that is based in particular on the consumer and usage principle.

The year 2010 was particularly characterized by optimization and cost reduction measures in cooperation with the railway undertakings; ÖBB-Infrastruktur AG lists the following adjustments and measures:

- Sale of tracks to the state of Lower Austria as well as closure of tracks with no or too little transport demand - Optimization of the hours of track operation - Continuous adjustment of shunting activities by means of ongoing adjustments of the railway undertaking production

and short-term implementation in the schedule - No reservation or cancelation fees in goods transport

The passenger transport remained almost stable in 2010. The performance in train-kilometers remained on the same level as in the previous year. For the TGTkm, even a slight increase of 1% was observed.

10


Energy market

In the field of power plants, we aim at increasing our own production (currently one third of the annual demand) by 25% by means of a comprehensive extension scheme, thus reducing our dependency on external electricity supply. A total investment of EUR535 million is budgeted for the planned new constructions and extensions of power plants.

The Tauernmoos power plant, a pumped storage power station that is planned to be built in the Pinzgau region, is one of the new construction projects. The Tauernmoos power plant will on the one hand generate clean hydroelectric power for railways by utilizing the water present and on the other hand, the pumped storage operation will help cover the increasingly fluctuating demand by indigenous production. The submission schedule for the Tauernmoos project was submitted to the relevant authority in December 2009 in the form of an environmental impact statement. During the so-called “preliminary analysis stage”, experts examined the completeness and negotiability of the documents and issued instructions to add certain special fields. At the end of November 2010, the completed documents were submitted to the relevant authority who then initiated the environmental impact assessment procedure. This procedure is expected to be concluded with the issue of the decisions on the construction and operation of the Tauernmoos power plant in one year.

Construction industry

The business unit “New Construction and Extension” (Neu- und Ausbau) is responsible for the project management of all new construction and extension projects from the track selection process to the planning and project execution (construction) of the Austrian railway network up to delivery to the owner. Its work is based on the annually updated six-year master plan. It comprises the realization of more than 200 major railway infrastructure projects under highly complex circumstances and partly during operation, corresponding to an investment volume of EUR1,050 million in 2010. Main points include the four-track extension of the Westbahn including the Lainzer Tunnel, the extension of the Südbahn, the Koralmbahn as well as short-distance projects in certain conurbations and train station buildings such as the Vienna Main Station. About 425 employees (as of December 31, 2010) work daily to implement these highly complex projects and create a modern railway infrastructure for Austria. Forward-looking and environmentally sustainable project implementation is of the greatest importance, taking profitability and the requirements of the mobility market into account.

The cost and price level respectively in the construction industry depends largely on the important commodities (basic materials in the production process) and the production materials such as concrete, gravel, steel, copper, diesel or gas. Changes are illustrated in the construction-specific indexes.

The construction price index for construction and civil engineering increased by an average 4.1% compared to the previous year until the middle of the year 2010. This significant increase is the reaction, among others, to the increase in costs, which was very sharp in some areas: For example, the construction price index for road construction increased by 6.4% and the construction price index for bridge construction even increased by 6.9% compared to the previous year. These above-average increases in costs for road and bridge construction are mainly due to the highly increased prices for steel and crude oil products. The steel price increased by more than one third in the first semester of 2010, the price for bitumen by more than 10%.

The value of technical production in the railway construction sector – which is calculated from the total value of characteristic services and goods manufactured or treated and processed by order of other companies respectively – shows further significant increase in accordance with the economic survey of Statistik Austria in 2010.5

In its medium-term construction outlook of July 2010, the Austrian Economic Research Institute (WIFO) foresees another (slight) increase in demand in 2011, tied to a comparatively strong increase in 2010 but based on the significantly lower level of 2009. The WIFO forecasts a decrease in construction demand for civil engineering from 2012 only.6

B.3. Revenues

Group revenue

Direct revenue in mil. EUR 2.466,3 2.311,4 154,9 7%Contribution of the federal governmentaccording to § 42 BBG in mil. EUR

1.054,0 1.029,6 24,4 2%

Public services in mil. EUR 1.087,3 1.012,6 74,7 7%Revenue in mil. EUR 5.136,1 4.827,8 308,3 6%Total revenues in mil. EUR 6.081,8 5.747,6 334,2 6%Total income per employee in thousand EUR 134 125 9 7%

Overview 2010 2009 Change Change in %

5 Cf. http://www.viboe.at/statistik.php?menu=12&typ=27 or http://www.solidbau.at/home/thema/q/Marktbeobachtung 6 Cf. WIFO medium-term construction outlook (07/2010), published at http://www.viboe.at/publikationen.php?menu=4&typ=6

11


The ÖBB Group registered an increase in revenue by 6% to EUR5,136.1 million in the year 2010 (prior year: EUR4,827.8 million). As in the prior year, 48% of revenue (13% passenger transport, 35% goods transport) or EUR2,466.3 million (prior year: EUR2,311.4 million) come from direct revenue in the market. The isolated comparison of sales from direct market sales therefore shows an increase by 7%.

The reimbursement by the state for operation, maintenance, inspection and repair of the railway infrastructure increased by EUR24.4 million compared to the prior year to EUR1,054.0 million (prior year: EUR1,029.6 million). As in the prior year, these payments pursuant to § 42 Bundesbahngesetz correspond to 21% of the Group revenue. Revenue generated by the execution of public orders account for EUR1,087.3 million or 21% of the Group revenue (prior year: EUR1,012.6 million or 21%). Differentiating revenue according to the customers of public transport services provided, the federal government accounts for 13% and the states and communities account for 8% of the Group revenue, as in the prior year.

Due to the increase in revenues and the decrease of the average number of staff from 45,973 to 45,352 employees, the figure “Total income per employee”7 increased to EUR134,000 (prior year: EUR125,000). As in the prior year, the share of revenue generated abroad amounting to EUR1,367.9 million (prior year: EUR1,242.7 million) accounts for about 16% of the unconsolidated Group revenue.

Change in %

Sub-group ÖBB-Personenverkehr 1.719,5 2.068,9 -349,4 -17%Sub-group Rail Cargo Austria 2.412,8 2.210,1 202,7 9%Sub-group ÖBB-Infrastruktur 2.154,9 2.074,7 80,2 4%ÖBB-Holding AG and other companies 2.131,1 1.410,5 720,6 51%less intra-group revenue -3.282,2 -2.936,4 -345,8 -12%Group revenue acc. to Consolidated Financial Statements

5.136,1 4.827,8 308,3 6%

Total other income 945,7 919,8 25,9 3%Total revenues 6.081,8 5.747,6 334,2 6%

Structure of revenue per sub-group in mil. EUR 2010 2009 Change

The following diagram shows the development of the revenues according to the Consolidated Financial Statements, amounting to EUR5,136.1 million (prior year: EUR4,827.8 million), according to their origin as detailed in the table above: Development of the revenues of the ÖBB Group according to their origin (in mil. EUR)

7 Total income per employee: total income/average number of employees

12


In the reporting year 2010, the revenues from passenger transport generated by direct sales in the market decreased, while the revenues from goods transport increased. The payments according to § 42 Bundesbahngesetz increased slightly compared to the previous year. The revenues from public services provided for the federal government also showed a slight increase, and so did the revenues from transport service orders of the states and communities.

Other revenues increased by 11% compared to the prior year to EUR528.5 million (prior year: EUR474.1 million). This amount comprises revenues from rent and lease amounting to EUR166.8 million (prior year: EUR154.8 million) and revenues from the trade in energy amounting to EUR163.7 million (prior year: EUR138.8 million).

Rail ÖBB-

Cargo Infra-

Austria struktur

- - 1.054,0 1.054,0- - (PY: 1.029,6) (PY: 1.029,6)

567,8 103,6 - 671,4(PY: 532,0) (PY: 101,5) - (PY: 633,5)

- - 308,0 308,0- - (PY: 222,0) (PY: 222,0)

Total payments of the federal government 567,8 103,6 1.362,0 2.033,4

Revenues according to § 43 Bundesbahngesetz

Revenue-related payment of the federal governmentin mil. EUR

Sub-groups

TotalÖBB-Personen-

verkehr

Contribution of the federal governmentaccording to § 42 Bundesbahngesetz

Public services ordered by the federal government

According to § 42 Bundesbahngesetz, the federal government pays a contribution to the costs for the operation, maintenance, inspection and repair of the railway infrastructure, which is required in order to fulfill the purpose of the company, insofar as such expenditures are not paid by third parties. The payments made to the ÖBB-Personenverkehr sub-group result from the public service agreements concluded with the federal government pursuant to § 48 Bundesbahngesetz for the reporting years, which define the grant of social fare reductions in passenger transport as well as the provision of services in short-distance and regional passenger transport by railway. The payments made to the Rail Cargo Austria sub-group result from the transport of hazardous material and waste and from services provided in the framework of the combined transport.

Compensation of the federal government (§ 42 Bundesbahngesetz) and public services (GWL) (in mil. EUR)

13


Revenue of the ÖBB-Personenverkehr sub-group

Due to the sale of 2% of the shares in ÖBB-Produktion Gesellschaft mbH as of December 31, 2009, the share in this company sank to 49% at this time and the company is no longer one of the fully consolidated companies. As the shares were not sold as of the beginning but as of the end of the year, the income statement of ÖBB-Produktion Gesellschaft mbH is included in the Consolidated Income Statement of the year 2009, but not in that of the year 2010. Therefore, the figures in the Consolidated Income Statement relating to the previous year as well as the “of which” sub-items are only comparable to a limited extent to the values of the reporting year.

Due to the shift in the shares in ÖBB-Produktion Gesellschaft mbH and the resulting separation of this company from the basis of consolidation as of December 31, 2009, the number of staff of the ÖBB-Personenverkehr sub-group averaging 7,551 employees in 2010 was noticeably below the value of 13,949 employees of the previous year.


Mil. of transported passengers 460 453 7 2%Sale of ÖBB regular customer cards 1.746.284 1.731.486 14.798 1%Revenue in mil. EUR 1.719,5 2.068,9 -349,4 -17%Total revenues in mil. EUR 1.747,3 2.140,4 -393,1 -18%Total income per employee in thousand EUR 231 153 78 51% The ÖBB-Personenverkehr sub-group registered an increase in the number of railway passengers of 2% compared to the prior year to 210 million people (prior year: 206 million people). The number of passengers in the bus sector increased as well to 250 million people in the reporting year 2010 (prior year: 247 million people).

Transported persons (in mil.)

The sale of ÖBB regular customer cards – the “VORTEILScard” – was increased by 1% to 1,746,284 cards (prior year: 1,731,486 cards) by means of targeted marketing activities.

14


Mil. of transported people 2010 2009 Change Change in %

Long-distance railway transport 34 33 1 3%Short-distance railway transport 176 173 3 2%Total railway 210 206 4 2%Bus 250 247 3 1%Total 460 453 7 2%

Revenue of the sub-groupÖBB-Personenverkehr in mil. EUR Change in %

Total group revenue 1.187,1 1.970,4 -783,3 -40%thereof abroad 133,4 157,8 -24,4 -15%

Revenues from public service orders 567,8 532,0 35,8 7%less intra-group revenue -35,4 -433,5 398,1 92%Group revenue 1.719,5 2.068,9 -349,4 -17%Total other income 27,8 71,5 -43,7 -61%Total revenues of the Group 1.747,3 2.140,4 -393,1 -18%

thereof with other entities of the ÖBB Group 25,6 418,9 -393,3 -94%

2010 2009 Change

With a number of staff averaging 7,551 employees (prior year: 13,949), the total income per employee equals EUR231,000 (prior year: EUR153,000). The part of the total group revenue generated abroad, which amounts to EUR133.4 million (prior year: EUR157.8 million), accounts for 11% (prior year: 8%).

With respect to the revenue, a decrease of 17% to EUR1,719.5 million (prior year: EUR2,068.9 million) was registered in the reporting year 2010. From this amount, traction services account for EUR0.5 million (prior year: EUR402.3 million). Direct revenue in the market (railways and bus) amounted to EUR663.4 million (prior year: EUR668.1 million) and accounts for 39% (prior year: 28%) of the sub-group’s revenue. The execution of public orders commissioned by the public authorities account for 57% (prior year: 38%) of revenue. Orders of the states and communities account for EUR415.8 million (prior year: EUR379.1 million) and orders of the federal government for EUR567.8 million (prior year: EUR532.0 million).

Total other income comprise revenues from rent and lease amounting to EUR34.9 million (prior year: EUR40.7 million) and maintenance revenues amounting to EUR11.2 million (prior year: EUR18.3 million). Revenues generated abroad – mainly in Germany and Eastern Europe – decreased by EUR24.4 million or 15%.

Revenue of the ÖBB-Personenverkehr sub-group (in mil. EUR)

*) Exclusion of ÖBB-Produktion Gesellschaft mbH from the basis of full consolidation due to a shift in shares

15


Revenue of the Rail Cargo Austria sub-group


Volume of goods transported in mil. tonnes 132,9 120,3 12,6 10%Revenue in mil. EUR 2.412,8 2.210,1 202,7 9%Total revenues in mil. EUR 2.495,2 2.321,4 173,8 7%Total income per employee in thousand EUR 227 203 24 12%

The volumes in tonnes constitute important comparison data in the transport business within the Rail Cargo Austria sub-group.

Rail Cargo Austria AG

Volume in mil. tonnes Budget 2010 Actual 2010

Cargo & Logistics 61,9 65,9Intermodal UKV + combined road/railway 27,0 30,0Contracted logistics 1,5 1,6Total 90,4 97,5

Rail Cargo Hungaria Zrt.

Volume in mil. tonnes Budget 2010 Actual 2010

Cargo & Logistics 31,2 30,7Intermodal UKV 3,1 3,8Intermodal combined road/railway 0,8 0,9Total 35,1 35,4

Tonnes transported (in mil.)

The Rail Cargo Austria sub-group registered an increase by 10% in the goods transport volume to 132.9 million (prior year: 120.3 million) tonnes transported in the reporting year.

88 93 97 9988

98

35

32

0

20

40

60

80

100

120

140

2005 2006 2007 2008 2009 2010

Rail Cargo Austria AG Rail Cargo Hungaria Zrt.

16


Revenue of the Rail Cargo Austria sub-group(in mil. EUR) 2010 2009 Change Change in %

Total group revenue 3.064,2 2.736,7 327,5 12%thereof abroad 1.136,6 1.034,5 102,1 10%

Revenues from public service orders 103,6 101,5 2,1 2%less intra-group revenue -755,0 -628,1 -126,9 -20%Group revenue 2.412,8 2.210,1 202,7 9%Total other income 82,4 111,3 -28,9 -26%Total revenues of the Group 2.495,2 2.321,4 173,8 7%

thereof with other entities of the ÖBB Group 414,0 254,5 159,5 63%

In total, revenue of the Rail Cargo Austria sub-group increased by 9% to EUR2,412.8 million (prior year: EUR2,210.1 million). Direct revenue in the market accounts for EUR1,883.6 million or 78% (prior year: EUR1,730.7 million or 78%). The compensation of the federal government for the execution of public service orders account for EUR103.6 million or 4% of revenue (prior year: EUR101.5 million or 5%). The item “Total other income” comprises revenues from rent and lease amounting to EUR65.4 million (prior year: EUR53.1 million).

Development of revenue of the Rail Cargo Austria sub-group (in mil. EUR)

With a number of staff averaging 11,002 employees (prior year: 11,409 employees), the total income per employee amounts to EUR227,000 (prior year: EUR203,000). The part of the group revenue generated abroad, which amounts to EUR1,136.6 million (prior year: EUR1,034.5 million), accounts for 37% (prior year: 38%). Thus, the revenue generated abroad increased by EUR102.1 million or 10%.

17


Revenue of the ÖBB-Infrastruktur sub-group


Mil. train-kilometers 148 146 2 1%

Total gross tonnage-kilometers in mil. 73.863 68.804 5.059 7%

Total consumption of traction power in GWh 2.044 1.926 118 6%

Useable floor space of real estate in thousand m² 2.719 2.667 52 2%

Revenue in mil. EUR 2.154,9 2.074,7 80,2 4%

Total revenues in mil. EUR 2.890,6 2.724,2 166,4 6%

Total income per employee in thousand EUR 158 152 6 4%

An important indicator for the assessment of the operative performance of the ÖBB-Infrastruktur sub-group is the development of the train-kilometer performance (Tkm). The performance increased by a total of 1% compared to the previous year to 148 mil. Tkm (prior year: 146 mil. Tkm).

Passenger transport 96 96 0 0%thereof ÖBB Group 95 95 0 0%

Freight transport 44 42 2 5%thereof ÖBB Group 40 38 2 5%

Service trains and locomotive trains 8 8 0 0%thereof ÖBB Group 7 8 -1 -13%

Total 148 146 2 1%

Development of train-kilometersby type of transport in mil. 2010 2009 Change Change in %

Another indicator for the assessment of the business development is the development of the total gross tonnage-kilometers (TGTkm), which increased by 5,059 mil. TGTkm in the reporting year 2010. While external railway companies accounted for 4.9 Mil. TGTkm or 7% of the total in the reporting year 2009, in 2010 they accounted for 5.7 mil. TGTkm, which corresponds to 8% of the total.

Passenger transport 27.605 27.239 366 1%thereof ÖBB Group 27.383 27.028 355 1%

Freight transport 45.120 40.436 4.684 12%thereof ÖBB Group 39.722 35.850 3.872 11%

Service and locomotive trains 1.138 1.129 9 1%thereof ÖBB Group 1.041 1.049 -8 -1%

Total 73.863 68.804 5.059 7%

Development of gross tonnage-kilometersby type of transport in mil. 2010 2009 Change Change in %

The self-produced kilowatt-hours of electricity amounting to 699GWh (prior year: 702GWh) and the floor space of properties rented out constitute further performance indicators for the revenue generated. The floor area of the buildings is the same as in the previous year, i.e. 2.7 mil. m2 surface. Of these 2.7 mil. m2, almost one third is rented out to third parties. The rest is rented out within the Group or used by the ÖBB-Infrastruktur group itself.

Development of the electricity sector:

Traction power in GWh Production of traction power in GWh 699 702 -3 0%

Purchased traction power in GWh 1.345 1.224 121 10%

Total consumption of traction power in GWh 2.044 1.926 118 6%

2010 2009 Change Change in %

18


Development of the areas rented out:

Useable real estate areas in thousand m²Usage by external parties (outside the Group) 826 649 177 27%

Usage by Group companies 382 334 48 14%

Usage by the ÖBB-Infrastruktur sub-group 490 601 -111 -18%Vacant and public space 1.021 1.083 -62 -6%

Total portfolio 2.719 2.667 52 2%


Revenue of the ÖBB-Infrastruktur sub-groupin mil. EURTotal group revenue 2.497,1 2.216,6 280,5 13%

less intra-group revenue -342,2 -141,9 -200,3 <-100%

Group revenue 2.154,9 2.074,7 80,2 4%Total other income 735,7 649,5 86,2 13%

Total revenues of the Group 2.890,6 2.724,2 166,4 6%thereof with other entities of the ÖBB Group 793,6 802,8 -9,2 -1%


As detailed above, the revenue of the sub-group amounted to EUR2,154.9 million (prior year: approx. EUR2,074.7 million); EUR786.8 million (prior year: EUR786.7 million) of this amount were generated with companies of other sub-groups of the ÖBB Group.

Development of the sub-group revenue (in mil. EUR)

Revenue per employee at an average of 18,333 employees (prior year: 17,932 employees) amounts to EUR118,000 (prior year: EUR116,000).

Revenues are mainly generated in Austria. Revenues amounting to EUR75.7 million (prior year: EUR50.3 million), which was mainly generated from energy supply, was generated with customers abroad.

19


B.4. Result of operations

EBIT in mil. EUR 254,8 313,6 -58,8 -19%

EBIT margin in % 4,2% 5,5% -1,3% -24%

EBT in mil. EUR -329,8 120,8 -450,6 <-100%

Return on equity in % -22% 7% -29% <-100%

Return on assets in % 1,18% 1,59% -0,41% -26%

Change in %Overview 2010 2009 Change

Structure of the Consolidated Income Statement (in mil. EUR) 2010

% of thetotal

revenues 2009

% of thetotal

revenues Change Change in %

Revenue 5.136,1 84% 4.827,8 84% 308,3 6%Other work capitalized 404,9 7% 472,2 8% -67,3 -14%Other operating income and increase/decrease of inventories 540,8 9% 447,6 8% 93,2 21%Total revenue 6.081,8 100% 5.747,6 100% 334,2 6%Expenses for materials 536,0 9% 449,7 8% 86,3 19%Expenses for services received 1.532,6 25% 1.456,2 25% 76,4 5%Personnel expenses 2.410,1 40% 2.328,6 41% 81,5 3%Amortization and Depreciation(incl. impairments) 840,3 14% 578,5 10% 261,8 45%Other operating expenses 508,0 8% 621,0 11% -113,0 -18%Total expenses 5.827,0 96% 5.434,0 95% 393,0 7%EBIT 254,8 4% 313,6 5% -58,8 -19%Financial result -584,6 -10% -192,8 -3% -391,8 <100%EBT -329,8 -5% 120,8 2% -450,6 <100%

At an amount of EUR6,081.8 million (prior year: EUR5,747.6 million), the total revenues increased by 6% compared to the previous year, so that the figure “total revenues per employee” with an average of 45,352 employees (prior year: 45,973 employees) increased to EUR134,000 (prior year: EUR125,000). The EBIT of the ÖBB Group decreased by 19% to EUR254.8 million (prior year: EUR313.6 million) during the reporting year. Accordingly, the EBIT margin8 decreased from 5.5% in the prior year to 4.2%. The negative financial result increased from -EUR192.8 million to -EUR584.6 million due to the special item of revenue-related changes in fair value of the Credit Default Swap/Collateralized Debt Obligation portfolio in 2009. Accordingly, after the positive result of EUR120.8 million in the prior year, this year shows a negative EBT of EUR329.8 million.

8 EBIT margin: EBIT/total revenues

20


Development of operating expenses (in mil. EUR)

The total expenses increased by EUR393.0 million to EUR5,827.0 million (prior year: EUR5,434.0 million) in the reporting year 2010.

The personnel expenses increased by 3% compared to the prior year to EUR2,410.1 million (prior year: EUR2,328.6 million) and still constitute the largest expense category. The average personnel expenses per employee amount to EUR53,000 (prior year: EUR51,000). The personnel cost/total revenue ratio, which measures the share of the personnel expenses in the total revenues, decreased to 40% (prior year: 41%).

Expenses for materials increased to EUR536.0 million (prior year: EUR449.7 million). This item comprises expenses for purchased traction power amounting to EUR272.9 million (prior year: EUR219.4 million) as well as expenses for liquid fuels amounting to EUR84.7 million (prior year: EUR79.8 million).

The expenses for services received amounting to EUR1,532.6 million (prior year: EUR1,456.2 million) constitute the second largest expense category. This item primarily comprises fees for rented vehicles, transport services and infrastructure charges for third-party railways. Furthermore, this item comprises other purchased services consisting primarily of goods and services that cannot be capitalized in connection with repairs, maintenance, cleaning and other services in the freight forwarding sector. The combined share of expenses for materials and services received in the total revenues increased from 33% to 34% in the reporting year 2010. Depreciation expenses increased by EUR261.8 million to EUR840.3 million (prior year: EUR578.5 million) due mainly to a need for impairment of the fixed assets.

21


Development of personnel expenses (in mil. EUR)

Despite a decrease of the average number of staff by 1% to 45,352 employees, the personnel expenses increased by 3% compared to the prior year to EUR2,410.1 million (prior year: EUR2,328.6 million). Details regarding the personnel structure and the development of the number of staff are given in Chapter C. Personnel Report of the Management Report.

The expenses for operating costs amounting to EUR133.2 million (prior year: EUR106.2 million) constitute the largest category of the other operating expenses. Taxes and duties were reduced (-11% to EUR42.1 million). On the other hand, the operating costs (+25% to EUR133.2 million), the rent, leasing and licensing expenses (+9% to EUR40.7 million), the expenses for information technology and office supplies (+7% to EUR33.1 million), the marketing and representation expenses (+2% to EUR24.2 million) as well as brokerage fees (+8% to EUR12.5 million) and other expenses (+27% to EUR222.2 million) increased, among others. In total however, the other operating expenses decreased by EUR113.1 million or 18% to EUR508.0 million (prior year: EUR621.0 million).

Development of the financial result (in mil. EUR)

-1.021,1

-192,8

-584,6

-1.200,0

-1.000,0

-800,0

-600,0

-400,0

-200,0

0,0

2008 2009 2010

The ÖBB Group presents a negative financial result amounting to -EUR584.6 million (prior year: -EUR192.8 million) for the reporting year 2010. The EBT decreased accordingly from EUR120.8 million in the prior year to -EUR329.8 million. The return on equity9 decreased to <-100% (prior year: 7%).

9 Return on equity: EBT/equity

22


Result of operations of the ÖBB-Personenverkehr sub-group

Due to the sale of 2% of the shares in ÖBB-Produktion Gesellschaft mbH as of December 31, 2009, the share in this company sank to 49% at this time and the company is no longer one of the fully consolidated companies. As the shares were not sold as of the beginning but as of the end of the year, the income statement of ÖBB-Produktion Gesellschaft mbH is included in the Consolidated Income Statement of the year 2009, but not in that of the year 2010. Therefore, the figures in the Consolidated Income Statement relating to the prior year as well as the “of which” sub-items are only comparable to a limited extent to the values of the reporting year.

Revenue in mil. EUR 1.719,5 2.068,9 -349,4 -17%

Total revenues in mil. EUR 1.747,3 2.140,4 -393,1 -18%

Total expenses in mil. EUR -1.714,2 -2.076,4 362,2 17%

EBIT in mil. EUR 33,1 64,0 -30,9 -48%

EBIT margin in % 2% 3% -1% -33%Financial result in mil. EUR -46,1 103,0 -149,1 <-100%

EBT in mil. EUR -13,0 167,0 -180,0 <-100%

Return on equity in % -3% 19% -22% <-100%


The ÖBB-Personenverkehr sub-group suffered a decrease in revenue by 17% to EUR1,719.5 million (prior year: EUR2,068.96 million) during the reporting year. Expenses for materials decreased by 59% to EUR122.3 million (prior year: EUR296.9 million). After a positive result amounting to EUR64.0 million in the prior year, the ÖBB Group presents an EBIT amounting to EUR33.1 million in the reporting year 2010. The financial result decreased to -EUR46.1 million (prior year: EUR103.0 million). The sub-group presents a negative EBT amounting to EUR13.0 million (prior year: EUR167.0 million) and a return on equity of -3% (prior year: 19%) for the reporting year 2010. The EBIT margin decreased from 3% in the prior year to 2%.

The personnel expenses of the sub-group were reduced by EUR369.0 million or 49% compared to the prior year to 384,0 million (prior year: EUR753.0 million) in the reporting year 2010. The average personnel expenses per employee were reduced to EUR51,000 (prior year: EUR54,000). The share of the personnel expenses in the total revenues was reduced to 22% (prior year: 36%). The expenses for materials amounting to EUR122.3 million (prior year: EUR296.9 million) comprise, among others, expenses for traction power amounting to approx. EUR43.8 million (PY: approx. 205.0 million) and for liquid fuels amounting to EUR47.4 million (prior year: EUR79.9 million). The services received increased by 39% compared to the prior year to EUR946.7 million (prior year: EUR682.0 million). This item comprises fees for rented vehicles amounting to EUR33.0 million (prior year: EUR53.8 million), transport services amounting to EUR438.1 million (prior year: 97.8 million) and infrastructure charges for third-party railways amounting to EUR254.5 million (prior year: 249.5 million). The combined share of the expenses for materials and services received in the total revenues accounted for 61% (prior year: 47%).

Result of operations of the Rail Cargo Austria sub-group

Revenue in mil. EUR 2.412,8 2.210,1 202,7 9%

Total revenues in mil. EUR 2.495,2 2.321,4 173,8 7%

Total expenses in mil. EUR -2.774,6 -2.423,2 -351,4 -15%

EBIT in mil. EUR -279,4 -101,8 -177,6 <-100%

EBIT margin in % -11% -4% -7% <-100%Financial result in mil. EUR -73,8 24,3 -98,1 <-100%

EBT in mil. EUR -353,2 -77,5 -275,7 <-100%

Return on equity in % <-100% -21% <-100% <-100%


23


The Rail Cargo Austria sub-group suffered a decrease in the EBIT by EUR177.6 million to -EUR279.4 million (prior year: -EUR101.8 million) during the reporting year. The increase in total revenues by 7% to EUR2,495.2 million (prior year: EUR2,321.4 million) results in an EBIT margin of -11%, after -4% in the prior year. The financial result decreased from EUR24.3 million in the prior year to -EUR73.8 million, which is mainly the result of the release of a provision for risk for the Credit Default Swap Debt Obligations portfolio amounting to EUR51.3 million in the prior year. Accordingly, an EBT of -EUR353.2 million (prior year: -EUR77.5 million) and a negative return on equity of <-100% (prior year: approx. -21%) is determined for 2010. The effects of the crisis have not been overcome during the reporting year 2010. The result of operations therefore remained on the level of the prior year. In addition, the EBT deteriorated mainly due to impairments amounting to approx. EUR193.7 million resulting from the impairment test of the fixed assets, due to the creation of a reorganization provision amounting to EUR30.4 million for agreed measures in the personnel sector of Rail Cargo Hungaria Zrt. and due to a provision in connection with Cross Border Leasing transactions of ÖBB-Produktion GmbH amounting to EUR12.8 million.

The total expenses of the Rail Cargo Austria sub-group amounting to EUR2,774.6 million (prior year: EUR2,423.2 million) were 15% lower than in the prior year. The expenses for services received, which increased by 8% to EUR1,690.8 million (prior year: EUR1,566.5 million) in the reporting year, constitute the largest expense category. This item comprises expenses for transport services, infrastructure charges including joint services and personnel leasing, rent for railway and road vehicles and other services. The personnel expenses increased to EUR463.7 million (prior year: EUR431.6 million) in the reporting year . As the average number of staff decreased, the average personnel expenses per employee increased from EUR38,000 in the prior year to EUR42,000. The share of the personnel expenses in the total revenues was 19% as in the prior year. The total of the expenses for materials and services received corresponds to 75% (prior year: 73%) of the total revenues.

Result of operations of the ÖBB-Infrastruktur sub-group

Revenue in mil. EUR 2.154,9 2.074,7 80,2 4%Total revenues in mil. EUR 2.890,6 2.724,2 166,4 6%Total expenses in mil. EUR -2.394,1 -2.366,5 -27,6 -1%EBIT in mil. EUR 496,5 357,7 138,8 39%EBIT margin in % 17% 13% 4% 31%Financial result in mil. EUR -485,6 -334,8 -150,8 -45%EBT in mil. EUR 10,9 22,9 -12,0 -52%Return on equity in % 1% 2% -1% -50%


The total revenues of the ÖBB-Infrastruktur sub-group amounted to EUR2,890.6 million in the reporting year (prior year: EUR2,724.2 million), i.e. with a number of staff averaging 18,333 employees (prior year: 17,932 employees) the revenues per employee amounted to EUR158,000 (prior year: EUR152,000). This means that the total revenues increased by EUR166.4 million or 6% compared to 2009. This increase results on the one hand from an increase of the federal grant according to § 42 Bundesbahngesetz and on the other hand from an increase of the charge for the usage of infrastructure due to the increase in train-kilometers, gross tonnage-kilometers and prices. Furthermore, the revenues generated from energy supplies increased due to higher electricity prices and sales to external railway undertakings and industrial companies.

The ÖBB-Infrastruktur sub-group generated an EBIT of EUR496.5 million in 2010 (prior year: EUR357.7 million) and an EBIT margin10 of 17% (prior year: 13%).

The ÖBB-Infrastruktur sub-group generated a negative financial result of EUR485.6 million in the reporting year (prior year: -EUR334.8 million). The EBT amounted to EUR10.9 million in 2010 (prior year: EUR22.9 million).

The total expenses of the sub-group increased by 1% to EUR2,394.1 million in 2010 (prior year: EUR2,366.5 million). The personnel expenses constituted the largest expense item in 2010, increasing by 7% to EUR1,093.6 million (prior year: EUR1,023.6 million). Average expenses per employee increased accordingly from EUR57,000 to EUR60,000. This increase mainly results from non-repetitive events in connection with liabilities payable to the Federal Ministry of Finance for nursing care benefits of the years 1993 to 2009. As in the prior year, the share of the personnel expenses in the total revenues of the sub-group corresponds to 38%. The second largest expense item is constituted by the depreciations because of the operational responsibility of the sub-group. Due to increased investments in the prior years, this item increased by 12% to EUR452,7 million in the reporting year (prior year: EUR404,2 million). 20% (prior year: 21%) of the total revenues are allotted to expenses for materials and expenses for services received.

∗) adjusted comparison values after restatement 10 EBIT margin: EBIT/total revenues

24


B.5. Result of operations and financial position

Total assets in mil. EUR 21.484,0 19.651,7 1.832,3 9%PP&E-to-total assets ratio in % 85% 85% 0% 0%PP&E-to-net-worth ratio in % 8% 11% -3% -27%PP&E-to-net-worth ratio II in % 99% 97% 2% 2%Working capital in mil. EUR -75,5 -88,8 13,3 15%Equity ratio in % 7% 9% -2% -22%Cash-effective change of funds in mil. EUR 96,8 -366,3 463,1 >100%


Structure of the ConsolidatedStatement of Financial Position(in mil. EUR)Non-current assets 16.594,0 18.439,1 94% 20.057,6 93% 1.618,5Current assets 1.600,9 1.212,6 6% 1.426,4 7% 213,8Total assets 18.194,9 19.651,7 100% 21.484,0 100% 1.832,3Equity 1.728,0 *) 1.823,6 9% 1.478,0 7% -345,6Non-current borrowings 13.799,6 *) 14.349,6 73% 16.558,6 77% 2.209,0Current borrowings 2.667,3 3.478,5 18% 3.447,4 16% -31,1

Dec 31, 2008 Dec 31, 2009Structure

2009 Dec 31, 2010Structure

2010Change

from 2009 to 2010

Development of total assets (in mil. EUR) Development ofequity (in mil. EUR)

18.194,919.651,7

21.484,0

0

5.000

10.000

15.000

20.000

25.000

2008 2009 2010

1.728,01.823,6

1.478,0

0

200

400

600

800

1.000

1.200

1.400

1.600

1.800

2.000

2008*) 2009 2010

Mainly because of the investments in property, plant and equipment, total assets of the ÖBB Group increased by 9% to EUR21,484.0 million in the reporting year (prior year: EUR19,651.7 million). As of the reporting date, the property, plant and equipment accounted for 85% of total assets (PP&E-to-total assets ratio11) as in the prior year. These investments were primarily financed with borrowings through the issue of bonds. PP&E-to-net-worth ratio12 was 8% as of December 31, 2010 (prior year: 11%). Taking the non-current borrowings into account, the PP&E-to-net-worth ratio II13 is 99% (prior year: 97%).

The working capital14 amounts to -EUR75.5 million (prior year: -EUR88.8 million).

As of December 31, 2010, the ÖBB Group presents an equity ratio15 of 7% (prior year: 9%). The increase of total assets on the liabilities side is primarily due to new issues of bonds.

11 PP&E-to-total assets ratio: property, plant and equipment/ total assets 12 PP&E-to-net worth ratio: Equity*100/ property, plant and equipment 13 PP&E-to-net-worth ratio II: (Equity + non-current liabilities)/ property, plant and equipment 14 Working capital: Inventories + trade receivables + prepayments made on property, plant and equipment + prepayments made on intangible assets – trade liabilities – prepayments made for inventories 15 Equity ratio: Shareholder’s equity /total assets

25


Explanations on the Consolidated Cash Flow Statement

The free cash flow16 amounted to -EUR1,857.8 million in the year under review (PY: approx. -EUR2,753.5 million). The cash effective change of the funds cash and cash equivalents changed from. -EUR366.2 million to . EUR96.8 million.

Extract from the Consolidated Cash Flow Statement (in mil. EUR)

Dec 31, 2010 Dec 31, 2009 Change

Cash flow from operating activities 463,7 379,7 84,0

Cash flow from investing activities -2.321,5 -3.133,2 811,7Free cash flow -1.857,8 -2.753,5 895,7Cash flow from financing activities 1.954,6 2.387,3 -432,7Cash-effective change of funds 96,8 -366,2 463,0

The detailed Consolidated Cash Flow Statement is included in the notes on the Consolidated Financial Statement.

Liabilities

The external financing of the ÖBB Group is mainly done by means of bonds. These bonds are entered in the statement of financial position of ÖBB-Infrastruktur AG at an amount of EUR10,696.1 million (prior year: EUR8.982,0 million of ÖBB-Infrastruktur AG and EUR199,9 million of ÖBB-Personenverkehr AG).

Liabilities (in mil. EUR) Financial liabilities (in mil. EUR)

15.709,517.007,4

19.305,5

0

2.000

4.000

6.000

8.000

10.000

12.000

14.000

16.000

18.000

20.000

2008 2009 2010

14.116,515.481,7

17.477,7

0

2.000

4.000

6.000

8.000

10.000

12.000

14.000

16.000

18.000

20.000

2008 2009 2010

The financial liabilities of the ÖBB Group comprise all liabilities from bonds as well as liabilities due to banks and the EUROFIMA (European Company for the Financing of Railroad Rolling Stock). In total, the financial liabilities increased by 13% or EUR1,996.0 million to EUR17,477.7 million in the reporting year (prior year: EUR15,481.7 million).

16 Operating cash flow + cash flow from investing activities

26


Composition and residual terms of liabilities as of December 31, 2010 (in mil. EUR)

Financial liabilities17,477.7

91%

Trade

receivables

968.45%

Other

liabilities 859.4

4%

0 2.000 4.000 6.000 8.000 10.000 12.000 14.000 16.000 18.000 20.000

Financial liabilities

Trade

receivables

Otherliabilities

long-term short-term

27


Result of operations and financial position of the ÖBB-Personenverkehr sub-group

Total assets in mil. EUR 2.971,7 2.894,7 77,0 3%PP&E-to-total asset ratio in % 62% 61% 1% 2%PP&E-to-net-worth ratio in % 27% 29% -2% -7%PP&E-to-net-worth ratio II in % 125% 106% 19% 18%Equity ratio in % 17% 18% -1% -6%


Structure of theConsolidated Statement of Financial Position (in mil. EUR)Non-current assets 3.763,0 *) 2.601,4 90% 2.579,0 87% -22,4Current assets 542,8 293,3 10% 392,7 13% 99,4Total assets 4.305,8 2.894,7 100% 2.971,7 100% 77,0Equity 560,1 *) 506,8 18% 492,6 17% -14,2Non-current borrowings 3.134,7 *) 1.373,0 47% 1.791,6 60% 418,6Current borrowings 611,0 1.014,9 35% 687,5 23% -327,4



2010Change

from 2009 to 2010

∗) The balance sheet total of the ÖBB-Personenverkehr sub-group increased by EUR77.0 million or 3% to EUR2,971.7 million in the reporting year (prior year: EUR2,894.7 million). The property, plant and equipment accounted for 62% (prior year: 61%) of the total assets (PP&E-to-total assets ratio) as of the reporting date. PP&E-to-net-worth ratio was 27% at this date (prior year: 29%), PP&E-to-net-worth ratio II was 125% (prior year: 106%). The working capital amounted to EUR146.8 million (prior year: EUR72.3 million). Following a decrease of the equity by EUR14.2 million to EUR492.6 million (prior year: EUR506.8 million), the resulting equity ratio as of December 31, 2010, is 17% (prior year: 18%).

The liabilities of the ÖBB-Personenverkehr sub-group recorded an increase in total by 4% to EUR2,352.5 million (prior year: EUR2,271.3 million). The financial liabilities increased by EUR57.9 million or 3% to EUR2,006.5 million in the reporting year (prior year: EUR1,948.6 million).

Result of operations and financial position of the Rail Cargo Austria sub-group

Total assets in mil. EUR 2.274,0 2.187,7 86,3 4%PP&E-to-total assets ratio in % 34% 34% 0% 0%PP&E-to-net-worth ratio in % -2% 49% -51% <-100%Working capital in mil. EUR 137,0 116,1 20,9 18%Equity ratio in % -1% 17% -18% <-100%


Structure of the ConsolidatedStatement of Financial Position (in mil. EUR)Non-current assets 1.316,8 *) 1.414,1 65% 1.288,6 57% -125,5Current assets 853,6 773,6 35% 985,4 43% 211,8Total assets 2.170,4 2.187,7 100% 2.274,0 100% 86,3Equity 451,6 *) 365,6 17% -15,7 -1% -381,3Non-current borrowings 840,6 *) 906,7 41% 1.106,0 49% 199,3Non-current borrowings 878,2 915,4 42% 1.183,7 52% 268,3



2010Change

from 2009 to 2010

*) adjusted comparison values after restatement

28


Total assets of the Rail Cargo Austria sub-group increased by EUR86.3 million or 4% to EUR2,274.0 million in the reporting year (prior year: EUR2,187.7 million). As in the prior year, property, plant and equipment accounted for 34% of total assets (PP&E-to-total assets ratio) as of the reporting date. PP&E-to-net-worth ratio was -2% at this date (prior year: 49%). The working capital amounted to EUR137.0 million (prior year: EUR116.1 million). Following a decrease of the equity by EUR381.3 million to -EUR15.7 million (prior year: EUR365.6 million), the resulting equity ratio as of December 31, 2010, is -1% (prior year: 17%).

The liabilities of the sub-group recorded an increase in total by EUR444.4 million or 27% to EUR2,077.9 million (prior year: EUR1,633.5 million). The financial liabilities increased to EUR1,477.9 million (prior year: EUR1,195.3 million).

Result of operations and financial position of the ÖBB-Infrastruktur sub-group

Total assets in mil. EUR 17.756,3 15.901,7 1.854,6 12%

PP&E-to-total assets ratio in % 83% 83% 0% 0%

PP&E-to-net-worth ratio in % 8% 8% 0% 0%

PP&E-to-net-worth ratio II in % 104% 104% 0% 0%

Equity ratio in % 6% 7% -1% -14%


Structure of the ConsolidatedStatement of Financial Position (in mil. EUR)Non-current assets 13.891,2 15.235,9 96% 16.915,2 95% 1.679,3Current assets 881,6 665,8 4% 841,1 5% 175,3Total assets 14.772,8 15.901,7 100% 17.756,3 100% 1.854,6Equity 1.085,8 1.096,5 7% 1.133,3 6% 36,8Non-current borrowings 11.758,9 12.643,6 79% 14.170,9 80% 1.527,3Current borrowings 1.928,1 2.161,6 14% 2.452,1 14% 290,5

Dec 31, 2008**) Dec 31, 2009Structure


2010Change

from 2009 to 2010

∗

Total assets of the ÖBB-Infrastruktur sub-group increased by 12% to EUR17,756.3 million (prior year: EUR15,901.7 million) as of the end of the reporting year 2010. As in the prior year, PP&E-to-total assets ratio was 83%. Also as in the prior year, PP&E-to-net-worth ratio was 8% as of the reporting date. Taking non-current borrowings into account, the resulting PP&E-to-net-worth ratio II is 104% as in the prior year. The working capital amounted to -EUR461.5 million (prior year: -EUR395.3 million). Following an increase of the equity by EUR36.8 million to EUR1,133.3 million (prior year: EUR1,096.5 million), the resulting equity ratio as of December 31, 2010, is 6% (prior year: 7%).

The liabilities of the ÖBB-Infrastruktur sub-group recorded an increase in total by 13% to EUR16,323.8 million in the reporting year (prior year: EUR14,417.6 million). After an increase of the financial liabilities by 14% to EUR15,290.4 million (prior year: EUR13,454.9 million), this category accounts for 94% of all liabilities.

In the reporting year 2010, fixed-interest bonds amounting to EUR2.1 billion were issued through the Euro Medium Term Note (EMTN) Program established in 2005 for financing of the infrastructure investments.

B.6. Capital expenditure and financing

Capital expenditure in mil. EUR 2.698,5 2.698,9 -0,4 0%

Capital expenditure ratio of total income in % 42% 46% -4% -9%Capital expenditure ratio of carrying amounts in % 15% 18% -3% -17%


**) unaudited values according to the new group structure after restatement for comparison purposes

29


During the reporting year, the ÖBB Group invested – investment being defined as an addition to the fixed assets at cost – in intangible assets and property, plant and equipment amounting to a total of EUR2,698.5 million (prior year: EUR2,698.9 million). This amount corresponds to a capital expenditure ratio of 42% (prior year: 46%) of total income17 or 15% (prior year: 18%) respectively according to the carrying amounts18 as of January 01, 2010.

Capital expenditure19 (in mil. EUR) Property, plant and equipment (in mil. EUR)

2.781,5

2.698,9 2.698,5

2.640

2.660

2.680

2.700

2.720

2.740

2.760

2.780

2.800

2008 2009 2010

14.810,4

16.648,018.207,2

0

2.000

4.000

6.000

8.000

10.000

12.000

14.000

16.000

18.000

20.000

2008 2009 2010

The largest part of the capital expenditures and financing measures was taken by the ÖBB-Infrastruktur sub-group. The property, plant and equipment of this sub-group with a carrying amount of EUR14,741.6 million (prior year: EUR13,254.9 million) account for about 81% (prior year: 80%) of the entire property, plant and equipment of the ÖBB Group, which amounts to EUR18,207.2 million (prior year: EUR16,648.0 million). The depreciation expenses increased by EUR261.8 million to EUR840.3 million (prior year: EUR578.5 million), due mainly to a need for impairment of the fixed assets.

Overview over capital expenditures of the Development of depreciations of the sub-groups (in mil. EUR) ÖBB Group (in mil. EUR)

240,5 231,3

2.244,4

156,0 204,9

2.287,0

0,0200,0400,0600,0800,0

1.000,01.200,01.400,01.600,01.800,02.000,02.200,02.400,02.600,0

ÖBB-Personenverkehr

Rail CargoAustria

ÖBB-Infrastruktur

2009 2010

915,3

578,5

840,3

0,0

100,0

200,0

300,0

400,0

500,0

600,0

700,0

800,0

900,0

1.000,0

2008 2009 2010

17 Capital expenditure ratio of total income: Capital expenditure/ total income 18 Capital expenditure ratio of carrying amounts: Capital expenditure/ carrying amounts of property, plant and equipment as of January 01, 2010 19 Additions to property, plant and equipment and intangible assets less additions due to changes in the consolidation basis

30


Capital expenditures of the ÖBB-Personenverkehr sub-group

Capital expenditure in mil. EUR 156,0 240,5 -84,5 -35%

Capital expenditure ratio of total income in % 9% 11% -2% -18%Capital expenditure ratio of carrying amounts in % 9% 9% 0% 0%


During the reporting year, the ÖBB-Personenverkehr sub-group invested EUR156.0 million (prior year: EUR240.5 million) in intangible assets and property, plant and equipment. This corresponds to a capital expenditure ratio of 9% (prior year: 11%) of the total income or 9% of the carrying amounts as of January 01, 2010, as in the prior year.

Capital expendituresAmount

in mil. EUR

Railjet 108Busses 29Other fleets (Desiro, Talent) 8Ticket machines 3Furniture and fixtures 2Other 6Total capital expenditures 156

Capital expenditures of the Rail Cargo Austria sub-group

Capital expenditures in mil. EUR 204,9 231,3 -26,4 -11%



During the reporting year, the Rail Cargo Austria sub-group invested approx. EUR204.9 million (prior year: EUR231.3 million) in intangible assets and property, plant and equipment. This corresponds to a capital expenditure ratio of 8% (prior year: 9%) of total income or 27% (prior year: 34%), of the carrying amounts as of January 01, 2010.

Capital expenditure Description Invested amount

Property, plant and equipment

Type Talns bulk freight cars Replacement of old cars by modern bulk freight cars

24,6 mil. EUR

Type Habb sliding-wall cars Replacement of out-of-date cars 23,3 mil. EUR

Type Shimmns steel transport cars To secure scheduled transports, top quality cars are required

18,1 mil. EUR

Type Eanos, open cars Maintenance of car capacity to improve competitiveness

17,4 mil. EUR

Type Laarps wood transport cars Provision of cars corresponding to logistics requirements

10,1 mil. EUR

Type Habb sliding-wall cars Reliable provision in suitable quality can only be guarateed by own procurement

4,9 mil. EUR

Other rolling stock 1,6 mil. EUR

Real estate and buildings Primarily workshops 88,7 mil. EUR

Other tangible assets 7,9 mil. EUR

Intangible assets 8,3 mil. EUR

31


The Rail Cargo Austria sub-group procures its financing primarily from Österreichische Kontrollbank (OeKB), Raiffeisen Bank International AG (RBI), the European Company for the Financing of Railroad Rolling Stock (EUROFIMA) and the Bank für Arbeit und Wirtschaft AG (BAWAG).

The OeKB financing amounting to EUR200.0 million taken up by Rail Cargo Austria AG in the years 2008 and 2009 for the acquisition of Rail Cargo Hungaria Zrt. was extended with RBI at a variable interest rate until December 31, 2020. The increase of the OeKB financing amounting to EUR70.0 million taken up with RBI for the acquisition of Rail Cargo Hungaria Zrt. in 2009 was converted to a fixed interest rate through an interest rate swap for the remaining term until December 31, 2017.

In 2010, Industriewaggon GmbH procured financing amounting to a total of EUR132.5 million at a fixed interest rate and with terms of eight and eleven years from EUROFIMA, for investments in rolling stock.

Furthermore, the subsidiary Express-Interfracht GmbH procured financing amounting to EUR75.0 million from the BAWAG at a fixed interest rate and with a term of seven years and with redemption – whereas there is no redemption in the first three years – and the subsidiary Rail Cargo Hungaria procured financing amounting to approx. EUR50.0 million from RBI with a term of five years and a fixed interest rate in 2010.

Capital expenditure of the ÖBB-Infrastruktur sub-group

Capital expenditure in mil. EUR 2.287,0 2.244,4 42,6 2%



Development of property, plant and equipment of the ÖBB-Infrastruktur sub-group (in mil. EUR)

11.632,6

13.254,9

14.741,6

0

2.000

4.000

6.000

8.000

10.000

12.000

14.000

16.000

2008*) 2009 2010

*)

With a carrying amount of approx. EUR14,741.6 million (prior year: EUR13,254.9 million), the property, plant and equipment of the ÖBB-Infrastruktur sub-group account for about 81% (prior year: 80%) of the entire property, plant and equipment of the ÖBB Group.

In total, the ÖBB-Infrastruktur sub-group invested EUR2,287.0 million (prior year: EUR2,244.4 million) in the reporting year, resulting in a capital expenditure ratio of 75% (PY: 81%) of the total income and of 16% (prior year: 19%) of the carrying amounts as of January 01, 2010.

Main capital expenditure according to the master plan 2009 – 2014

ÖBB-Infrastruktur AG defined the following main investment areas for 2010 according to the current master plan 2009 – 2014:

- Four-track extension of Westbahn (section Vienna – Wels) - Four-track extension of the Unterinntal route - Connection of Westbahn, Südbahn and Donauländebahn (Lainzer Tunnel) - Gradual expansion of the southern corridor - Numerous short-distance transport projects in conurbations areas - Improvement of tunnel safety on existing lines - Noise protection measures - Construction of Park & Ride facilities - Extensive reinvestments

32


The following projects, among others, were worked on intensively during the year under review: the Lainzer Tunnel (Vienna [V]), the new track Vienna – St. Pölten (V/Lower Austria [LA]), the completion of the track St. Pölten – Loosdorf (goods transport bypass) (LA), the main station of St. Pölten (LA), the completion of the track Ybbs – Amstetten (LA), the section Salzburg – Freilassing (Salzburg), the four-track expansion of the Unterinntal route (Tyrol), the expansion of the section Werndorf – Leibnitz (Styria [ST]), the exploration work for the Koralm tunnel (Carinthia [C]), the sections Althofen/Drau – Klagenfurt (C) and Werndorf – Wettmannstätten (ST) of the Koralmbahn and the station promotion particularly in the Vienna region. Furthermore, the detailed planning for the preparation of the documents required for the administrative procedures regarding the new Semmering base tunnel project (LA/ST) were concluded in spring 2010, so that the project documents could be submitted for the prescribed administrative procedures at the end of May / beginning of June.

B.7. Corporate strategy

Challenges for the ÖBB Group

The economic situation of the ÖBB Group is challenging for several reasons, including

- high losses of the goods transport subsidiaries RCA and RCH - complex organization structures - aftereffects of the economic crisis in 2008/2009 - uncompetitive cost structures in some areas - planned reductions of public services in the goods transport sector - “shaping up” for increasing competition in passenger transport - high investments in improving the quality of the existing network as well as execution of the new construction

projects subject to cost and time limits

The railway mobility market, which is continuously growing, supports the economic development, but not sufficiently to face the challenges listed above.

Strategic priorities 2010

In 2010, the ÖBB Group focused on three strategic priorities: restructuring, customer orientation and partnership with the economy. The future of ÖBB will be characterized by economic behavior and better customer orientation. The objective is to shape a modern, efficient mobility company and to remain a strong leader in the Austrian economy.

Restructuring

In the years to come, the economic environment presents ÖBB with challenges such as the opening of the market for competition, budget consolidation of the public authorities as well as a continuously challenging economic situation, particularly in the goods transport markets.

Because of these factors, ÖBB requires reforms and a reorientation. The Railway Reform 2005 multiplied organizational units, management structures and administrative procedures of ÖBB without providing appropriate measures of control and an organizational framework.

The restructuring in the coming months and years aims at creating leaner structures, clear responsibilities and a simplified organization. In addition, the introduction of a new management culture is supposed to contribute to the profitability of the company.

It is planned to raise the age of retirement, to keep the employees in the active work process for a longer time and to deploy the personnel in a more productive and efficient way. In order to ensure this, health protection, flexible deployment of personnel within the Group, reduction of leased personnel and implementation of new tools such as part-time regulations will be promoted.

Customer orientation

To increase customer orientation, organizational measures were taken this year. They aim at measurable, customized improvements in quality and service. In the future, the customer will be at the beginning, in the center and at the end of our activities.

70 immediate measures such as additional employees present on the platforms, reduction of the waiting times in the call center, simplification of online bookings and improvement of the catering offer have already been identified and implemented. Further medium-term and long-term measures are currently being elaborated; they will progressively transform ÖBB into a more customer-friendly company.

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The imminent competition on the railways in short-distance and long-distance transport will create new incentives to improve customer orientation, but also to adjust structures and organizations. Preparation for this competition by means of an adjustment of existing and development of new products suitable for the market will therefore be an essential task of ÖBB in the months to come.

Partnership with the economy

With 45,000 employees, ÖBB is the largest group of companies in the country. Every year, it trains about 1,700 apprentices and invests EUR2.3 billion in construction projects.

With large-scale infrastructure projects, ÖBB is investing in the competitiveness of Austria as business location, which is of high public interest. Each Euro invested by ÖBB yields about 2 Euros of added value for the Austrian economy. It will be increasingly necessary to distinguish more clearly between financing services that ÖBB provides primarily on behalf of the general public and financing of entrepreneurial investments of ÖBB and its sub-groups in the future.

Corporate initiatives

In order to meet the challenges and use the opportunities, extensive corporate initiatives have been implemented, which are outlined in the following.

Customer relation management

Customer satisfaction is one of the main concerns of ÖBB and a prerequisite for the acquisition of new customers and for customer retention. It is also the determined path towards an increase in passenger numbers and profitability in passenger transport.

For all priority subjects, which were specifically identified by means of various customer surveys, short-term measures have been initiated and implemented and long-term measures including possible strategy adjustments have been determined.

By means of professional customer management, the sustainability of the measures and their continuous development in accordance with market requirements will by guaranteed.

Punctuality management

Positive results have been achieved with respect to the punctuality management. Compared to 2009, punctuality improved by 7.9% to 75.7% regarding long-distance passenger transport and by 3.4% to 95.2% regarding short-distance passenger transport. The punctuality of the Vienna rapid transit train, which improved by 6.3% to 97.6%, is worth highlighting. In total, the punctuality of ÖBB was 94.2% in the period under review (previous year: 90.5%). Thus, ÖBB has gained on the leader SBB, who is only 1.9% ahead now.

Adjustment of the product range and market expansion in goods transport

Fulfilling the customer requirements from an economic, ecologic and social point of view means providing the perfect product package for each and every customer. This includes structural changes, price and volume optimization in accordance with the logistics requirements of the respective customer and the services offered at the market.

A comprehensive package of preliminary and follow-up concepts, spatial conditions and site optimization as well as adjustments in the management and supporting organizational bodies is intended to increase the competitiveness of our customers.

Based on the domestic market, the expansion to the CEE market is of essential importance for our export-oriented customers. Austria has proven itself as an important hub, and it will further develop its competences and the location advantage in this respect.

Competitive and profitable passenger transport

ÖBB sees the competition in passenger transport as unprecedented opportunity to better synchronize offer and demand, to place the customer more clearly at the center of the activities and to offer customized services for all customer groups.

However, this also means a reorientation in passenger transport throughout all business areas of the companies – offers, production, transparency, corporate culture and many others.

ÖBB is looking forward to meeting these challenges with enthusiasm.

Effective management structures

Acting effectively and in a customer-oriented way at the market requires flexible procedures and structures aligned accordingly. A clear program regarding modern executive and expert positions and the usage of synergies – in Shared Service functions within the Group – will enable us to support our customers more quickly and more efficiently.

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Reorganization of production

Bundling of all activities along the entire chain of production in ÖBB-Produktions GmbH has been agreed and initiated. Clear responsibilities, the combination of processing units into multifunctional units and transparency of costs will help to optimize input in terms of personnel and materials. This results in an increase of profitability and productivity.

Standardized procurement strategy

The reorganization of the procurement department is characterized by the introduction of a Category Management in the newly established Strategic Corporate Procurement (Strategischer Konzerneinkauf) in the Holding. Projects and programs to increase efficiency and reduce costs have been initiated in all Group companies, with terms until 2016. An inter-company standardized procurement system corresponding to current and future requirements for modern procurement is being developed.

Usage of synergies within the Group in the IT and Working Capital Management areas

Our activities also focus on numerous other measures intended to increase efficiency and security of supply, such as the optimization of IT processes and the optimization of assets. For example, the IT Governance organization was redesigned in 2010, based on the restructuring of IT and TK initiated within the Group, allowing the various IT and TK issues within the Group to be coordinated and controlled more efficiently.

The implementation initiatives are accompanied by a professional reporting and management information system, program and project management and a sustainable personnel development.

B.8. Other important occurrences and outlook

Forecast ÖBB Group

Strategy development process 2011

The development in the market and the analyses of the economic situation of ÖBB exposed structural deficits necessitating a strategic development process for the year 2011. It will focus on the sales areas.

The objectives include:

- definition of the business portfolio aimed at in the medium term - deduction of the products and production logistics for sustainably profitable operation - integrated target system with specific key performance indicators for each business area - defined strategy control and review process

The developments and challenges expected in the individual sub-groups are detailed below.

Forecast ÖBB-Personenverkehr sub-group

The long-distance passenger transport offer will be consolidated significantly in 2011, particularly in West Austria. Upon completion of the railjet cycle development, a two-hour railjet cycle will be provided between Vienna and Feldkirch. A two-hour IC cycle shifted by one hour will be introduced between Vienna and Innsbruck, with some of the trains going on to Landeck-Zams or Bregenz respectively. Thus, a comfortable and fast connection between West Austria and the capital will be available every hour in the future.

In cooperation with Deutsche Bahn (DB), the transports on the Brenner axis will also be extended. The offer in 2011 will comprise five pairs of trains per day instead of four on the Munich – Verona track. The Munich – Innsbruck – Venice train connection will also be re-established.

Additional direct railjet connections will run between Vienna and Zurich, and another one will run from Budapest via Vienna and Munich to Stuttgart and Frankfurt on weekends.

The importance of the internet has shown above-average growth throughout the last years – a trend confirmed by the increasing number of users per month of the www.oebb.at homepage. As customer service and satisfaction already begin prior to the start of the journey nowadays, the new travel portal of ÖBB constitutes an important contribution: Our customers were involved from the start of the concept design in the course of the “user-centered prototyping” program. The new travel portal is the result of numerous usability tests conducted with more than 80 test subjects.

The new internet presentation also provides other quality features besides customer-oriented design. The barrier-free presentation of the texts and images as well as the bilingual presentation of all texts in German and English contribute to the high quality of the travel portal.

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To further improve travel convenience in short-distance and regional transport, telematics applications are being continuously developed and extended. The first step was made with the “Desiro Link” project. On the basis of customer surveys, a modern passenger information system was developed for the Desiro diesel railcar. In addition to the display of the next stops in the form of a pearl chain and the connections available at each stop, the functionality of the connection information was realized as well. This allows the passenger to see whether a train or bus will be waiting or not while he is still in the vehicle. Since December 2010, this information is displayed on monitors in all 60 Desiro railcars, which are primarily used on non-electrified tracks in Styria, Upper Austria, Carinthia as well as Lower Austria and Burgenland. With the integration of the ÖBB channel in the middle of the year 2011, the passengers will also be able to receive information on disruptions and the latest news.

The business development of ÖBB-Postbus GmbH is characterized by the focus on the core business and the design and implementation of further measures to increase productivity as well as by an aggressive sales policy. This includes new transport offers, the development of innovative products and market-oriented price adjustments. This framework is supposed to enable further increases in revenues to be realized in the years to come.

Forecast Rail Cargo Austria sub-group

Measures for the reorganization of Rail Cargo Austria

Rail Cargo Austria AG is currently in a stage of reorganization. This includes the restructuring of the product portfolio, abandoning loss-generating business units while increasing results by promoting growth in profitable segments. The objective is to create new offers, to support sales and to increase competitiveness based on an adjusted price and cost structure.

In the course of projects, important measures will be established that constitute the prerequisite for Rail Cargo Austria to ensure a sustainable future for the company and to establish itself as a strong partner for the Austrian economy.

The objective of the project “Wood” (Holz) is the optimization of the existing business that is below the general price level. The combination of price adjustments, changes in the fee structure as well as cost and process optimization will help achieve sustainability of the business. Approx. 57 of the more than 500 loading stations throughout Austria were closed as of December 12, 2010, due to insufficient profitability, and another 67 stations will from now on only be serviced on the basis of specific agreements.

The turnaround project “Revenue increase in railway logistics” (Ertragswachstum Schienenlogistik) focuses primarily on the increase of revenues in the Commercial Goods and Agricultural Transports segments. Measures with respect to costs for example are intended to improve the cost-efficiency of the plant logistics transport area.

The segment Unaccompanied combined transport (container segment) will be subject to price increases. Based on new production concepts (terminal to terminal connections mainly without shunting), the cost situation is supposed to be adjusted accordingly. In the segment Combined road/railway transport, costs are also planned to be reduced by means of optimized utilization of resources, reductions of terms and waiting times, and at the same time market acceptance is planned to be improved.

In the strategic business unit Contracted logistics, reorganization measures were established in order to achieve profitability. The objective of the “Reorganization of Contracted logistics” (Sanierung Kontraktlogistik) is to achieve a positive EBIT by 2013 at the latest. The focus for the years 2011 to 2013 is on the continuation of the current reorganization course of the strategic business unit Contracted logistics. This includes mostly fee optimization for the customer, site re-dimensioning, improvement of internal cost transparency, and acquisition of new customers as well as reorientation of the main run between the individual logistics centers.

The objective of the turnaround project “Revenue increase in freight forwarding” (Ertragssteigerung Universalspedition) is to discover additional revenue potential. The perception of the market opportunities of Express-Interfracht in the main target markets in Eastern and Southern Europe is supposed to be improved and strengthened by means of a product and sales promotion, aiming at developing its competence as freight forwarder in the target markets.

The integration of Rail Cargo Hungaria Zrt. in the course of the Joining Forces project did not have the expected synergy effects. The turnaround project is now establishing steps that will lead the way towards the reorganization of Rail Cargo Hungaria. With respect to turnover, price increases are aspired. Costs are supposed to be reduced significantly through synergies created by means of joint trains of Rail Cargo Austria and Rail Cargo Hungaria, by negotiations regarding the reduction of infrastructure charges, by price reductions for traction services and by a reduction of the number of staff.

The investment portfolio will be reviewed with respect to the strategic objectives of the RCA Group in the course of the project “RCA investment structure” (Beteiligungsstruktur RCA). As a result, the portfolio will be tightened and homogenized.

The tasks of the Support and assistance units (overhead) of the individual RCA companies are currently carried out independently and at the sole responsibility of the respective company. This resulted in the development of parallel structures with similar areas of responsibility in the past years. The objective of this turnaround project is to consolidate these tasks and have them carried out under the responsibility of one company for the entire RCA sub-group. In particular, a central investment controlling and investment management will be established within Rail Cargo Austria AG.

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Forecast ÖBB-Infrastruktur sub-group

Structure

After the merger of former ÖBB infrastructure companies Bau AG and Betrieb AG into ÖBB-Infrastruktur AG according to formal law in 2009, a functioning organization was implemented as of January 01, 2010, which ensures the responsibilities and roles within the management of the railway infrastructure are performed without fault.

The second step was taken in the course of the first semester 2010, reaching the next stage in the organizational development that aims at streamlining structures and reducing interfaces. Effective as of October 01, 2010, resorts and corresponding responsible positions on the Executive Board were reduced from five to three, business units were reorganized and company staffs were merged. With this step, ÖBB-Infrastruktur AG was the first ÖBB sub-group to implement the corporate specifications regarding the reduction of management personnel and overhead units. In 2011, further measures for reorganization and increase of efficiency will be implemented in accordance with the corporate specifications.

Concept: mission, vision and values

The mission and the vision of ÖBB-Infrastruktur AG as well as the core values of the sub-group were defined in the course of a comprehensive concept process in 2010.

An important mission:

- We provide a reliable railway infrastructure that corresponds to the demand. - We ensure safe and timely operation of the railway transport.

A clear company vision:

- We want to create an attractive and sustainable railway system - with an infrastructure that is adequate for the market, at the required quality and appropriate costs.

Strong values:

Reliability, competence and transparency – these are the three central values of ÖBB-Infrastruktur AG. Since the beginning of 2011, these core values are imparted to the employees through a comprehensive communication program and discussed within the company. The objective is to implement these values in daily work, particularly in the dealings with customers, and to achieve continuous improvement in all three areas together.

A common motto:

The mission, vision and values have been summarized in the slogan of ÖBB-Infrastruktur AG: “All our efforts and our energy for the railway system”

Basic strategic orientation

The long-term strategic orientation of ÖBB-Infrastruktur AG comprises two part strategies. The long-term orientation was agreed in 2010 and will characterize the development of the sub-group in the years to come.

1. Cost strategy: focus on the core business

In the future, the infrastructure will be focused and sustainably developed in areas where demand and development potential correspond to the strengths of the railway system.

The given competences regarding provision and dimensioning of facilities as well as safe and cost-efficient operation in the facilities are supposed to be maintained on a high level and strengthened further.

Service segments that are open for a large market of suppliers will be abandoned in the long run.

2. Market strategy: “Zielnetz 2025+”

“Zielnetz 2025+” [target network] is the master plan of ÖBB-Infrastruktur AG for system-oriented and cost-efficient development of the railway infrastructure in Austria. The long-term infrastructure strategy of “Zielnetz 2025+” aims at the introduction of a highly synchronized timetable as well as the elimination of expectable capacity shortage in the network.

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The target network is based on internationally acknowledged scientific criteria and forms the overall framework for the company objectives of ÖBB-Infrastruktur AG.

- Strengthening of the market position of the railways by increasing track capacity and reducing travel time; - Increase of the profitability by implementing the operational remote control strategy incl. train movement checkpoints

as well as electrification and line category upgrades of selected tracks; - Adjustment of the infrastructure to the state of the art and development of security services by means of installation

of the European Train Control System (ETCS) and GSM-R as well as asset preserving reinvestment in the existing network.

The measures from the “Zielnetz 2025+” strategy will be implemented in several stages:

Stage 1 is explicated in the master plan 2011 – 2016 agreed by the Supervisory Board of ÖBB-Infrastruktur AG and by the Austrian council of ministers. Main elements of Stage 1 include the commissioning of the four-track Westbahn and the Vienna Main Station as well as the creation of a “New Südbahn” by extending the Pottendorf line and constructing the new Semmering Base Tunnel and the Koralmbahn.

Stage 2 comprises measures that are still required to achieve the objectives based on this master plan.

Stage 3 comprises measures for further optimization and complete achievement of the objectives stipulated in the “Zielnetz 2025+” strategy. These measures can only be implemented in the medium or long run and they will continue until after the year 2030.

Further objectives for 2011

The subsidy contract concluded by the owner and ÖBB-Infrastruktur AG as an element of the infrastructure financing stipulates the following operative objectives, among others:

During the ongoing implementation of the current medium-term plan, the following operative objectives were agreed, among others, with the owner in the subsidy contract:

- increase of punctuality in long-distance passenger transport to 82%, in short-distance passenger transport to 95% and in goods transport to 65%;

- reduction of the number of low-speed sections in the core network to 130; - customer information: 1.95 in normal cases; 2.20 in deviating cases; - Safety development (Infra 4.02); - implement ratio potential 187 mil.; - EBT 5.9 mil.; realize § 42 with 1,432 mil. according to the service contract

These objectives serve as a guideline for the implementation and updating of the current medium-term plan of the sub-group.

Continued company development: Team Objective Meeting (TOM)

The company strategy and the development of the company culture are derived according to the TOM method – which had already been established in the previous companies – at ÖBB-Infrastruktur AG. The managers determine the contributions of the individual organizational units to the company’s success and to the achievement of the company objectives in moderated workshops. In 2011, the company objectives will be complemented by measurable indicators in the course of the TOM process.

C . P E R S O N N E L R E P O R T

The ÖBB Group is one of the largest employers in Austria. As of the end of the year 2010, 42,419 active employees (without apprentices) were employed in the entire Group including the Rail Cargo Hungaria group. Compared to the prior year, this corresponds to a reduction of the number of staff by 1,186 employees. The ÖBB Group is also one of the largest training facilities in Austria. As of the end of the year 2010, 1,706 apprentices were employed in the Group, which constitutes an increase by 125 apprentices compared to the end of the year 2009.

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Employee structure in the ÖBB Group

*) Values as of Dec 31, 2008 including Rail Cargo Hungaria group

Reference date in % 2010 2009

Employees 15.647 15.467 180 1% 15.864 15.197Tenured employees 26.772 28.051 -1.279 -5% 27.912 29.406Other company changes 87 -87 -100%Total employees 42.419 43.605 -1.186 -3% 43.776 44.603

Apprentices 1.706 1.581 125 8% 1.576 1.370Total incl. apprentices 44.125 45.186 -1.061 -2% 45.352 45.973

Employee structure Dec 31, 2010 Dec 31, 2009

Change Average

Allocation of employees as of December 31, 2010

The company units with the highest number of staff constitute the ÖBB-Infrastruktur sub-group, which accounts for 40% of all employees, and the Rail Cargo Austria sub-group accounting for 24%. The average age is 41.9 years and the ratio of female employees is 8.2%.

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Apprenticeship in the ÖBB Group

The ÖBB Group offers young people throughout Austria a wide range of apprenticeship trainings. The companies of the ÖBB Group train young people in 22 different professions at several sites. The ÖBB-Personenverkehr and Rail Cargo Austria sub-group mainly offer commercial apprenticeships, while ÖBB-Shared Service Gesellschaft mbH and ÖBB-Postbus GmbH mainly offer apprenticeships in the technical area. ÖBB participates in the “Lehre mit Matura” [apprenticeship with qualification for university entrance] scheme, giving its apprentices an opportunity for further qualification.

Including the apprentices admitted in September 2010, the ÖBB Group is training 1,706 apprentices. Thus, the ÖBB Group is one of the largest training facilities in Austria. 384 of the 487 apprentices admitted in September 2010 are male (78%) and 103 are female (22%).

ÖBB-Shared Service Gesellschaft mbH

Of the 487 apprentices admitted by the ÖBB Group in 2010, ÖBB-Shared Service Center Gesellschaft mbH assumed the apprenticeship of 422 apprentices. The apprentices are trained in 11 ÖBB training workshops.

Since September 2010, the following six new railway apprenticeships are offered: railway production engineering, railway transport engineering, railway vehicle engineering, railway electrical engineering, railway safety engineering and railway maintenance engineering. The technical profession with the highest number of apprentices is plant and production engineer. This profession is the basis for the new railway professions. Upon completion of these new railway profession trainings, the apprentice has two degrees – in a traditional trade and in a specialized railway profession.

In November 2010, a team of ÖBB apprentices became the Austrian national champion of the “Skills Austria” competition in mechatronics and will represent Austria in the World Championship in London in 2011. Successes of this kind confirm the high quality of ÖBB apprenticeships.


At the beginning of September 2010, 31 apprentices took up their apprenticeship with the Rail Cargo Austria sub-group. In total, 164 apprentices were employed as of the end of the year; they are completing an apprenticeship as forwarding agent – some of them are completing a complementary training as freight forwarding logistics agent. In order to prepare the apprentices for their professional activity in the best possible way, they pass through the various departments in a rotational system. Additional further education seminars and language trainings within the Rail Cargo Austria Language Academy constitute a solid basis for a successful career.


In order to meet the demand in skilled personnel, the ÖBB-Personenverkehr sub-group is training a total of 86 apprentices as mobility service agent. Since 2008/09, advanced English coaching as well as communication and customer orientation seminars are included in the training.

ÖBB-Postbus GmbH is training about 45 apprentices in technical and commercial professions. The technical apprentices are trained directly in the Technical Services department and integrated in everyday operations from the start. This enables a flexible arrangement of the training, and the apprentices benefit from a great variety of tasks in which they can participate. In the course of a welcome workshop, the new employees get to know the ÖBB Group, ÖBB-Postbus GmbH and the other apprentices. The training at the vocational school is complemented by excursions and subject-specific courses.

Continued training

Continued training is summarized in three categories in the “ÖBB training catalog”:

1. Soc ia l and methodologica l competence Continued training events such as sales, communication, presentation and personality trainings and training programs for managers, language and EDP trainings

2. Corporate technical t ra in ing The offers are arranged according to cross-divisional functions (e.g. personnel, accounting/controlling, purchase), and all offers include trainings of group-wide importance. In 2010, the corporate controlling training was reviewed and complemented by new seminars and transfer discussions.

3. Company-spec i f i c technical t ra in ing Comprises training offers relevant for specific companies

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Personnel marketing

The ÖBB personnel marketing organized 15 recruiting trade fairs and other events in 2010. The main target groups addressed by the trade fairs in 2010 were potential apprentices. Furthermore, two High Potential Programs, namely the WU Top League Program of the Vienna University of Economics and Business and the TUtheTOP Program of the Vienna University of Technology, were continued. These cooperations have the objective to awaken the interest of potential specialists and trainees in ÖBB and to improve the reputation of ÖBB as an attractive employer. Another important point of the personnel marketing 2010 was the development of the employer brand ÖBB with the objective to establish the ÖBB Group as an attractive employer within and outside of the Group.

Promotion of female personnel

The railway industry has a relatively low ratio of female personnel due to its technical orientation. In order to support women in the ÖBB Group and to increase the ratio of women, ÖBB implements specific measures in personnel development.

The ratio of women in the ÖBB Group was 8.2% as of the end of the year 2010. The planned ratio of 10% for 2010 has not yet been achieved. Therefore, further measures for the target group of women in the ÖBB Group are scheduled for 2011. By means of tools such as the Rail Map Karenz (the maternity leave information tool in the ÖBB intranet) or programs like the maternity leave program of ÖBB-Infrastruktur AG, women are specifically supplied with information and support regarding the return to their profession.

Currently, women account for 7.6% of the management in the ÖBB Group. The planned figure of 100 women in executive positions has not yet been reached in 2010. In order to achieve this goal in 2011, particular emphasis is placed on the target group of female trainees, whose development will be supported by programs such as the ÖBB mentoring program.

Social benefits

The ÖBB Group offers its employees the following social benefits on a voluntary basis: holidays in holiday homes and apartments, travel privileges within Austria and abroad, aids and benefits in case of severe occupational or commuting accidents or other states of emergency, assistance in the search for an apartment and support of sports and cultural activities.

Health care management

In order to centrally coordinate the activities in the health care area, the health care management of ÖBB-Holding AG was established in the field of strategic corporate personnel management in 2009.

For the second time, a meeting of health circle facilitators from the Group and from all of Austria was organized in spring 2010. The objective of this event was to enable an exchange of information and experiences of all parties involved in health care management.

The “Conference Employability in the Demographic Change” invited the corporate health care management for a presentation on working ability at a high age and age-adequate working environments. Due to its leading role, ÖBB was named the leader of an international working group.

Health care advice that is updated every two weeks was added to the intranet platform “Gesunde ÖBB” [Healthy ÖBB]. Furthermore, new offers for ÖBB employees can always be found in the “Schnäppchenbörse Gesundheit” [Health care bargains].

The cost-benefit management project was completed and the results were presented in spring 2010.

The apprentice project Fit & Fair took place in 2010 and dealt with the subjects tolerance, integration, and health care. The projects were awarded prizes and presented in December.

More than 700 employees participated in the team running events in Vienna, Graz and Salzburg this year.

The program and the target group of the Josefhof prevention week “Fit with handicap” were reviewed and extended. Because of the positive feedback, a diabetic week was offered for the second time.

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Corporate labor market

As personnel management tool for the control of regional and cross-regional corporate personnel balancing, the ÖBB corporate labor market supports the corporate HR strategy by relieving the personnel expenses by means of reducing additions and deploying available employee capacities in a productive way.

By making the actual demand and offer of workforce in the Group companies visible, employees who could no longer be employed in their original area due to organizational streamlining and reorganization measures or due to service retraction respectively or due to inaptitude determined by an occupational physician and service retraction are taken care of, requalified and placed on the ÖBB corporate labor market. The jobs offered on the ÖBB corporate labor market cover the entire range of professions exercised in the ÖBB Group, e.g. in customer services, in construction, in operations up to controlling, and represent a great variety of the job possibilities on offer. As the market is a dynamic and ambitious service provider, its activities focus on employer services for the Group companies as well as employee services for the employees that have to be taken care of. The ÖBB corporate labor market presents itself as broker for technical knowledge and expertise in the area of railway construction and operation that has been accumulated and consolidated over decades and promotes the knowledge transfer throughout the Group by means of internal matching of vacant positions and placeable employees.

The department Strategic Personnel Management of ÖBB-Holding AG is responsible for the strategic positioning of the ÖBB corporate labor market, and ÖBB-Shared Service Center GmbH with its own organizational unit is responsible for operative handling and implementation of the strategic specifications. A detailed illustration of the structures and a description of the processes are given in the ÖBB corporate labor market manual.

Management structures and cross-divisional functions

The structures and competences of the management in all the Group companies are being examined in the course of the reorientation and reorganization. The objective is to streamline and improve the efficiency of the competences on the one hand and the management margin on the other hand. Some of the available options can be implemented in a short period of time, such as top-down measures to reduce the number of executive personnel by 5%; on the other hand, strategy-optimized, systematic implementation processes are of the utmost importance for reasons of sustainability. This includes the merger of small staffs in cross-divisional segments. Furthermore, specialists and experts need to be disentangled from executive positions.

With respect to cross-divisional functions such as personnel management and accounting, purchase and IT, multiplication of positions and responsibilities should be minimized by means of centralization and shared service structures.

Employees of the ÖBB-Personenverkehr sub-group


Employees 2.881 2.818 63 2% 2.793 4.096Tenured employees 4.516 4.698 -182 -4% 4.637 9.726Total employees 7.397 7.516 -119 -2% 7.430 13.822

Apprentices 131 129 2 2% 121 127Total incl. apprentices 7.528 7.645 -117 -2% 7.551 13.949


Change Average

The number of staff of the ÖBB-Personenverkehr sub-group was 7,528 employees as of the end of the year 2010, i.e. slightly below the number of the prior year. 60% of the employees of the sub-group are tenured employees. As of the end of the year 2010, 131 apprentices were being trained. The average age of all employees of this sub-group is 43.7 years. As of December 31, 2010, the ratio of female personnel was 12.6%.

Due to the shift in the shares in ÖBB-Produktion Gesellschaft mbH and the resulting separation of this company from the basis of consolidation as of December 31, 2009, the number of staff of the ÖBB-Personenverkehr sub-group averaging 7,551 employees in 2010 was noticeably below the value of 13,949 employees of the prior year.

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Employees of the Rail Cargo Austria sub-group

As of the end of the year 2010, the Rail Cargo Austria sub-group has 10,804 employees, 2% less than in the prior year. As of the end of the year 2010, 164 apprentices were being trained in various professions in Austria. The average age is 41.5 years. As of December 31, 2010, the ratio of female personnel was 7.3%.


Employees 6.513 6.528 -15 0% 6.622 6.705Tenured employees 4.127 4.239 -112 -3% 4.217 4.541Other company changes 87 -87 -100%Total employees 10.640 10.854 -214 -2% 10.839 11.246

Apprentices 164 152 12 8% 163 163Total incl. apprentices 10.804 11.006 -202 -2% 11.002 11.409


Change Average

Employees of the ÖBB-Infrastruktur sub-group

The number of staff of the ÖBB-Infrastruktur sub-group decreased to 17,366 employees in the reporting year. Tenured employees account for 76% of the personnel. The average age is 43.2 years. As of December 31, 2010, the ratio of female personnel was 7.2%.


Employees 4.181 3.905 276 7% 4.341 3.649

Tenured employees 13.183 13.707 -524 -4% 13.991 14.283

Total employees 17.364 17.612 -248 -1% 18.332 17.932

Apprentices 2 2 100% 1

Total incl. apprentices 17.366 17.612 -246 -1% 18.333 17.932


Change Average

Employees of other companies of the ÖBB Group

As of December 31, 2010, the other subsidiaries of ÖBB-Holding AG that are not subject to an unconsolidated financial statement had 8,427 employees.


Employees 2.072 2.216 -144 -6% 2.108 747Tenured employees 4.946 5.407 -461 -9% 5.067 856Total employees 7.018 7.623 -605 -8% 7.175 1.603Apprentices 1.409 1.300 109 8% 1.291 1.080Total incl. apprentices 8.427 8.923 -496 0 8.466 2.683


Change Average

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D . R E AL E S T AT E M AN AG E M E N T

With about 26,000 properties and a total surface of 200 million square meters, ÖBB is one of the largest real estate owners in Austria. ÖBB-Immobilienmanagement GmbH – a wholly-owned subsidiary of ÖBB-Infrastruktur AG – acts primarily as a service provider for the ÖBB Group, but also at the free market.

As of January 01, 2010, about 400 employees from the business units Management Transport Depot (Management Verkehrsstation, MVS) of the former ÖBB-Infrastruktur Betrieb AG and Technical Building Services (Technisches Gebäudeservice, TGS) of the former ÖBB-Infrastruktur Bau AG were incorporated in ÖBB-Immobilienmanagement GmbH. With this incorporation, the responsibility for the entire real estate portfolio of ÖBB was consolidated within ÖBB-Immobilienmanagement GmbH for the first time, in the interest of group-wide streamlining of processes and increase in efficiency. This way, the real estate under the administration of Immobilienmanagement GmbH can be managed even more efficiently and comprehensively since January 01, 2010: the extended range of services of ÖBB-Immobilienmanagement GmbH includes standard property management and technical real estate service as well as station-related services in the train stations and the development and liquidation of real estate that is no longer required for railway operations.

This range of services is provided by four business units:

- Project development - Station and real estate management - Technical management - Liquidation

E . R E S E AR C H AN D D E V E L O P M E N T R E P O R T

The ÖBB Group can again look back on a successful year of innovation 2010. In close cooperation with more than 160 partners from industry, science and SME, new strategic research fields have been developed in addition to the current initiatives and projects.

R&D facts and figures for the Group

The ÖBB Group was involved in 72 research projects in 2010. The average term of all these projects is 2.85 years. The total project volume for all partners amounts to approx. EUR149.0 million this year. The share of the ÖBB Group in these projects amounts to approx. EUR23.2 million. Almost one third of the Group’s R&D expenses were covered by national and EU subsidies.

Milestones 2010

eMORAIL

The submission and funding approval regarding the research project “eMORAIL”, one of the most important milestones of the past years was reached. The project prevailed in this national lighthouse call for tenders against strong competitors. The ÖBB Group takes pride in the “eMORAIL” project, which will set a strong signal for the combination of public transport and electro-mobility.

ISIS

A paper on the “ISIS Wechselverkehrszeichen [variable message signs]/LaneLights” project, which won the national award 2009 of the Bundesministerium für Verkehr, Innovation und Technologie [Federal Ministry of Transport, Innovation and Technology], was submitted to the “Global Level Crossing Symposium – Tokyo 2010” by ÖBB and the project partner EBE Solutions in May 2010. An international jury selected this paper to be one of the first projects for a presentation in Tokyo in October 2010.

As ISIS has been used in Austria for several years now and produced positive results, it can definitely be described as one of the flagship projects for innovative solutions for railway junctions. Prospective buyers from France, Germany and Australia have already declared their interest in installing the ISIS LaneLights and the ISIS variable message signs at certain railway junctions.

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ZEUS

ZEUS 2020 aims at discovering and describing a new living concept in an urban environment, which reviews and redefines all process steps from the planning stage to the specific utilization of the facilities, primarily from a point of view of a large reduction of CO2 emissions. The model developed this way will then be tested in general and with respect to its flexibility regarding local/regional features in the urban environment of a project partner town. In the course of the project work, the model will be continuously evaluated and aligned with the demands and specifications of a model region (Linz) and a specific model area. Ultimately, the applicability of the model to other towns/regions constitutes a major result of ZEUS 2020, whereas the model designed is supposed to form the basis for a standardized procedure for the development of urban districts/areas. The project is subsidized with funds from the Climate & Energy Fund and constitutes an important part of the environment and sustainability strategy of the ÖBB Group.

Extension of the research data base in the ÖBB Group

With the ÖBB research data base, the Group possesses a unique tool for cooperative research. This data base contains all research projects running since 2005 ongoing and all finished research projects with relevant data regarding partners, costs, objectives and sponsors. This year, the data base was equipped with an extension for the utilization of the research premium. The Group is now able to show the research premium for the group of companies every year, in addition to the statistical data.

Awards ceremony for the research competition of ÖBB 2009/2010

In spring 2010, the winning projects were awarded prizes in the framework of a public event in cooperation with the Lebensministerium [Federal Ministry for Agriculture and Forestry, the Environment and Water Management]. With this, an important initiative of ÖBB for the promotion of innovative efforts of young people and students was concluded. The winners were honored in a ceremony by Executive Director DI Peter Klugar and Federal Minister Nikolaus Berlakovits.

F . E N V I R O N M E NT AL R E PO R T

The ÖBB Group is the most climate-friendly provider of mobility services in Austria. Our declared objective is not only to maintain this advantage, but to expand and develop it continuously. As strategic controlling company, ÖBB-Holding AG also directs the development of the corporate environmental performance. With the assistance of subject-related program managers, the ÖBB corporate coordinator for sustainability & environment provides initiatives and orientations that are coordinated within the entire Group – in order to use synergy effects, reduce costs and continuously develop the environmental performance of the ÖBB Group.

The following subject fields are coordinated throughout the Group:

- Sustainability/CSR - CO2/Climate/Energy - Noise/Waste/Fine dust - Environmental protection/ÖBB & Nature - Environmental promotion - Information & Data service

The performance of ÖBB in the individual program subjects was continuously developed in the year under review – some extracts will be given in the following:

In the course of the “klima:aktiv – partnership” (5-point program) between the Lebensministerium and ÖBB, a number of very successful corporate initiatives were implemented in 2010 as well. Corporate fuel saving trainings intended to reduce CO2 and economize fuel costs were coordinated and carried out, as well as the analysis and prize-awarding of the public research competition in the subject field of “Railways & environment”. The ÖBB Group was furthermore the official partner of the Lebensministerium for the so-called “klima:aktiv – mobile tour”. The objective of this tour through the capitals of all the federal states was to raise the people’s awareness in order to boost environmentally friendly mobility solutions. Thanks to this action, the ÖBB railway and bus transport system was strongly advertized throughout Austria in addition to the basic marketing measures.

With respect to the ÖBB climate protection charter published in the previous year, specific implementation projects have been developed, such as a potential analysis on the subject of energy efficiency of ÖBB-held buildings or the promotion of the usage of renewable energy sources for major new construction projects of ÖBB. Regarding the subject of “sustainable mobility”, a number of initiatives have been commenced as well – namely internal measures such as the first steps towards the transformation of the ÖBB fleet into a more ecological one and customer-related activities such as the commencement of the promoted project “eMORAIL” (eMobility & Rail) for linking railways and the budding electro-mobility in individual transport in the future.

As for the subject of “ÖBB & Nature”, the contribution of ÖBB to the Austrian activities within the framework of the international year of biodiversity 2010 constituted the focal point. The ÖBB Group was one of the major alliance partners of the national campaign titled “vielfaltleben” [diversity of life] on the topic of protection of species. The contributions of ÖBB to specific species protection projects (projects for the protection of the tawny pipit or the horned viper) were coordinated and an ÖBB special edition of the journal “Natur und Land” [Nature and country] was created together with the Österreichischer Naturschutzbund [Austrian Nature and Biodiversity Conservation Union] and published in spring 2010. This special edition gives an excellent overview over the commitment of ÖBB to nature and its preservation.

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In 2010, the ÖBB Group again received numerous awards such as “klima:aktiv” awards, the Environment Prize of the City of Innsbruck and other awards for successful environmental commitment of the ÖBB Group – an ÖBB employee was even awarded the title of “European Energy Manager of the Year“ (award of the Austrian Federal Economic Chamber).

This feedback from outside the Group proves that the environmental performance of ÖBB contributes significantly to the positive image of the ÖBB Group.

G . AC C E S S I B I L I T Y

460 mil. passengers used the trains and busses of ÖBB in the year 2010. ÖBB implemented numerous improvements in order to enable people with a mobility handicap to travel in a comfortable, stress-free and barrier-free way. The basis of these improvements was the staged plan pursuant to § 19 Bundes-Behindertengleichstellungsgesetz [Federal Law on Equal Opportunities for the Disabled]. This staged plan was elaborated by experts of the ÖBB companies following discussions with representatives of the associations of disabled persons, and it is composed of chapters on short-distance and long-distance passenger transport, Postbus, infrastructure (stations) and website.

The continuous elimination of those barriers that persons restricted in their mobility encounter will be carried out in 3-year steps until 2015. In order to make sure that the improvements are as practical as possible, the results of each work stage will be evaluated together with representatives of people with a mobility handicap. This allows for any corrections required by the target groups to be taken into consideration. The “Corporate coordination of accessibility” (Konzernkoordination Barrierefreiheit) unit established by ÖBB-Holding is responsible for optimum alignment and coordination of the measures.

H . S AF E T Y

The ÖBB Group is increasingly confronted with the opportunities and risks created by the liberalization of European railway transports and the increasingly intense competition. All identified risks are continuously assessed in terms of quality and quantity, in particular with respect to possible extent of losses and the probability of loss, based on the updated evaluations or on experience.

Risk management in the ÖBB Group

Based on the general principles already elaborated in the course of an extensive Group project in 2007, the entire risk management system of the ÖBB Group is continuously developed. The risk portfolio is evaluated on a regular basis. The ÖBB Group defines risks as events or developments that might cause a negative deviation of results from the assumptions made during planning – irrespective of whether such risks are associated to opportunities or whether their occurrence can be actively influenced.

The risk management of the ÖBB Group accompanies all relevant business processes and financial items of the important Group companies. It is based on comprehensive risk identification, risk assessment, risk aggregation, risk control and risk reporting. The risk management manual that is binding for the entire Group defines rules, margins and minimum requirements of risk management for all company units involved. The first objective of the risk policy of the ÖBB Group is unrestricted safeguarding of the business activity (“going concern”). According to this, risks may only be taken if they are calculable and associated to an increase in the revenues and the company value.

All three ÖBB sub-groups and ÖBB-Shared Service Center GmbH enter their risks in the risk management software introduced in 2009 on a regular basis after an internal evaluation process. Following assessment and consolidation of the individual risks in the corporate risk platform, a report to the Executive Board of ÖBB-Holding AG is established which describes the most important risks and respective counter-measures. Based on this, the Supervisory Board and the audit committee of ÖBB-Holding AG and of the Group companies are provided with detailed information regarding the current risk situation of the ÖBB Group.

The evaluation process takes place in a periodic cycle on all levels of the ÖBB Group relevant for the risk management system. Threshold values for the individual risks were defined for the ÖBB Group, its sub-groups and downstream subsidiaries, and these threshold values make it possible to categorize risks as threatening the existence of the company, major or minor. This means for the individual companies that risks are on principle only registered and evaluated if they exceed the threshold value of EUR0.5 million (small companies) or EUR1.0 million (larger companies); on sub-group level, the threshold value is EUR1.5 million and on Group level it is EUR2.0 million. Risks below the threshold value can also be entered in the risk management software. This ensures that even comparatively small risks are recorded and processed in a structured way.

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The risk fields applicable since the introduction of the corporate risk management system were not changed during the year under review. They serve for structured and standardized registration and processing of all relevant risks:

Strategy Operations Finance/

Accounting

Sales/

Distribution

Personnel/

Management/

Organization

Legal issues/

Liability

Purchase/

Procurement

Information processing

Subsidiaries/

Investments

In 2009, the existing risk management processes were extended to form an integrated opportunity and risk management system that is supported in a professional way by the introduced software.

For the year 2011, the most important risks (“Top risks in the ÖBB Group”) are distributed to the nine risk fields as follows:

- Risk field Strategy: Risk of loss of profit due to the amendment of the Kraftfahrliniengesetzes [Austrian Road Transport Act].

- Risk field Operations: Risk of damage to ticket machines due to vandalism. - Risk field Finance/Accounting: This risk field comprises counterparty risks and risks associated with financial

instruments, among others, which are described in the chapter “Risks associated with financial instruments”. - Risk field Sales/Distribution: One of the major risks regarding sales consists in the effects of the economic crisis.

Close observance and analysis of customer behavior as well as a comprehensive adjustment of the offer help to reduce this risk. In addition, there is a risk of a decrease of the turnover in public services.

- Risk field Legal issues/Liability: Costs incurred due to own loss and disruptions in operation caused by accidents and cases of force majeure that are not covered by insurances.

- Risk field Purchase/Procurement: The main risk consists in fluctuations of the prices of certain commodities. - Risk field Information processing: System failures can cause additional costs and loss of turnover in the operative

business units. - Risk field Subsidiaries/Holdings: The highest risk consists in impairments of the fixed assets in the course of

impairment tests within the framework of the annual financial statements.

With the entry into force of the Verbandsverantwortlichkeitsgesetz [Association Liability Law] as of January 01, 2006, the regulation stipulating that companies can be held liable and convicted for actions of their employees or decision-makers that are punishable applies to the ÖBB Group as well. In order to hedge against this risk, relevant areas with respect to criminal law, e.g. regarding cases of negligence, environmental offense and corruption, are identified in the framework of legal risk management, the current situation is evaluated and measures to avoid the risk are determined. Preventive measures have also been established by introducing monitoring and reporting systems and by issuing general behavior directives in the Code of Conduct. Corresponding trainings and the creation of clear and unambiguous areas of responsibility also aim at minimizing risks.

Risks related to financial instruments

Financial instruments

Financial instruments within ÖBB Group (receivables and liabilities resulting from financing activities, trade receivables and liabilities as well as long-term financial assets and current marketable securities) are reported in the consolidated statement of financial position. Detailed information is given in the respective notes to the consolidated financial statements.

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Derivative financial instruments

The ÖBB Group uses derivative financial instruments primarily for the purpose of hedging its exposure to exchange rate and interest rate risks and commodity price risks. The group guidelines prohibit the issuing or holding of derivative financial instruments for speculative purposes. Derivative financial instruments are only used for hedging purposes, and the Group guidelines define admissible financial transactions. If hedge-accounting is not applicable for derivative financial instruments, these are measured according to the IFRS provisions. Risk definition and risk management with respect to financial instruments

ÖBB-Holding AG performing financial transactions on behalf of and on the account of group companies only according to their approval and order, has created a risk-oriented control environment which outlines guidelines and processes for the assessment of risks, the approval, reporting and supervision of financial instruments. Highest priority of all financial activities is the protection of the group company’s assets. An essential task of the competent Group Finance department it to identify, assess and limit financial risks. The limitation of risks does not mean complete avoidance of any financial risks, but a reasonable and transparent control of quantified risk items within a framework to be precisely predetermined with the group companies. Most important financing risks are discussed below. Liquidity risk

The primary aim of ÖBB Group treasury management is the safeguarding of the necessary liquidity. Liquidity risk means any limitation of the independents or the ability to raise capital which might jeopardize the execution of the corporate strategy. Therefore, one of the main objectives of ÖBB Group’s cash and treasury management department of group finance is to consistently secure the liquidity of all group companies by a realistic liquidity plan, arranging for sufficient credit lines, and sufficiently diversifying creditors. Interest rate risk

Risks from interest rate fluctuations might affect ÖBB Group’s financial result due to its balance sheet structure. Therefore, the Company aims to limit market interest rate fluctuations exceeding a level to be agreed with the group companies by using e.g. derivative financial instruments to keep their influence on the earnings development as low as possible. Suitable derivative instruments to manage interest rate risks (interest rate swaps) are concluded based on portfolio analyses and recommendations by the Group Finance department and relating decisions made by the group companies. Foreign exchange rate risk

ÖBB Group’s financing is based mainly on Euro. Funding was concluded partially in foreign exchange to take advantage of interest rate benefits, however such were converted to Euro liabilities by using derivative financial instruments (interest rate swaps) in compliance with volume and terms. Foreign exchange rate risks were not hedged in case of a proportionally very low financing raised in Swiss Francs. Foreign exchange rate risks resulting from operative balance sheet positions, in particular trade receivables and liabilities are analyzed for risks on an ongoing basis and hedged in case of need. No significant foreign exchange rate risks resulting from cross-border leasing transactions exist, as contractual liabilities in foreign exchange are, as far as possible, matched by relating investments and receivables of the same amount and with adequate volumes and terms. Suitable derivative instruments to manage foreign exchange rate risks (exchange rate swaps) are concluded based on portfolio analyses and recommendations by the Group Finance department and relating decisions made by the group companies. Credit risk

Credit risk is the risk of financial loss to the Company if the counterparty to a financial instrument fails to meet its contractual obligations (predominantly money-market transactions, investments, funds, swap transactions with positive cash value). The limits underlying the credit risk management which are individually allocated to each financial partner are monitored for compliance on a daily basis. ÖBB Group has business relations exclusively with financial partners who have a sufficient rating (at least investment grade) and an objective risk classification of the capital market. In 2009, ÖBB introduced a credit risk management where the determination and allocation of limits is primarily based on the evaluation of credit default swap data of ÖBB’s financial partners. This ensures a fast reaction to changing risk evaluations in the capital market regarding such financial partners. The actual limits and their use are under daily supervision being able to react to market disturbances like those experienced e.g. in the financial crisis 2008, in due time and in a risk-oriented manner.

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Credit risks exist outside of originated transactions with ÖBB’s financial partners in connection with cross-border-leasing. For Cross-Border-Leasing transactions, security deposits, payment undertaking agreements and swaps were concluded with financial partners to pay lease payments during the term and the purchase price at the end of the term. For more information on cross-border-leasing agreements, refer to note 30.3.

Internal control system

General information

The Executive Boards and managing directors of the ÖBB Group companies respectively are aware of their responsibility to establish and organize an appropriate internal control system, and they assume this responsibility accordingly.

Within the ÖBB Group, the Internal Audit System (ICS) by definition comprises the review of all supervision and audit measures on the basis of the organizational guidelines for the operational management as well as the review of audit and supervision tasks of each process owner determined in relation to the respective process. Therefore, the ICS is an important element of the corporate risk management system and contributes to the achievement of the company objectives.

The ICS comprises the elements audit environment, risk assessment, audit activities, information and communication and supervision, in order to

- support compliance with the directives relevant for the company and the given business policy (Compliance), - guarantee the correctness and reliability of financial reporting (Financial Reporting), and - support efficiency and profitability of the operational activities (this also includes the protection of the assets from

loss caused by damage and embezzlement) (Operations).

This system is based on the Internal Control and Enterprise Risk Managing Frameworks of the Committee of Sponsoring Organisations of the Treadway Commission (COSO) and provides the management with a tested and accepted analysis and control tool.

In accordance with the decentralized structure of the ÖBB Group, each Group company provides evidence that it has established and maintains an effective ICS that is appropriate for the company. The companies themselves are responsible for the establishment and operation of a sufficiently effective ICS.

The Group Audit department is responsible, based on its directive power, for determining the ICS framework and group-wide harmonization. Group Audit controls on the basis of a random or sometimes a complete test whether the Group companies have implemented and are maintaining an effective ICS.

The ICS ensures the compliance of important processes in the company with internal and external regulations based on the following principles:

- The audit measures regarding essential/critical business processes are documented in a complete and comprehensible fashion.

- The organizational structure is documented comprehensibly and to an appropriate extent (organization chart, job description, functional description, etc.) and adjusted on a regular basis,

- The regulations and internal specifications applicable for the respective business activity are widely known and available.

During the year 2010, standardized audits of the key checks determined in the Internal Audit System of the companies affiliated to the ÖBB Group as well as standardized documentation of these audits were prepared to the greatest possible extent. This project is scheduled to be finished in the first quarter of 2011.

Based on the process documentation and the company-specific business activity, the important risks are identified, assessed and recorded on a regular basis. Suitable audit activities are determined for the recorded risks in order to reduce the risk to an appropriate level. The effectiveness of the determined audits is tested and documented by means of a regular self-evaluation.

Based on an annual audit plan approved by the Executive Board, Group Audit monitors certain elements of the ICS. The results of the audits carried out are submitted to the audit committee of the Supervisory Board in the form of an activity report.

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The ICS for the accounting process is part of the regular audit schedule of the auditor in the course of the annual audit. The results of the audits carried out are reported to the audit committee of the Supervisory Board.

Reporting on the accounting related internal control system

The Executive Board of ÖBB-Holding AG is responsible for the establishment and organization of the internal accounting audit system and for ensuring compliance with legal regulations.

In terms of organization, corporate accounting of the ÖBB Group is assigned to ÖBB-Holding AG. The accounting department of ÖBB-Holding AG, which is primarily responsible for external reporting in connection with the Consolidated Financial Statements, reports directly to the chief financial officer.

An IFRS group manual that is published and updated at regular intervals by the Accounting department of ÖBB-Holding AG constitutes the basis of the processes in corporate accounting. It stipulates the important balancing requirements based on the IFRS in a standardized way for the entire Group. Guidelines and regulations regarding financial reporting are updated and communicated to all employees concerned at regular intervals. Furthermore, the employees in Accounting are continuously trained with respect to new developments in accounting in order to recognize any risk of accidental false reporting early on.

Business transactions are generally entered in the books of the ÖBB Group through EDP systems by means of the SAP R/3 software. In some subsidiaries outside Austria, different software solutions may be applicable as well. Insofar as the Group companies use the same system as ÖBB-Holding AG, data transfer is automated; otherwise, upload files are delivered to ÖBB-Holding AG. These data are then entered into the central consolidation system SAP Netweaver BI. A software purchased by ÖBB-Holding AG solely for this purpose is used throughout the Group for collection and consolidation of the data required for the statements given in the Notes.

All subsidiaries deliver comprehensive reporting packages including all relevant accounting data with respect to the income statement, the statement of financial position, the cash flow statement and the notes to the Accounting department of ÖBB-Holding AG for compilation of the Consolidated Financial Statements. All these documents are audited on site by local auditors in accordance with Austrian legal regulations and principles of due and proper annual auditing as well as the International Standards on Auditing (ISA) published by the International Auditing and Assurance Standards Board (IAASB) of the International federal government of Accountants (IFAC) and the General Terms and Conditions for Audits within the ÖBB Group, which constitutes part of the external audit system supporting the ICS. This audit is confirmed by the “auditor’s report for the group package”. Reporting packages are processed only when these auditor’s reports have been received.

The internal control and reporting system described above is designed so as to enable the Executive Board to recognize risks and react accordingly and quickly.

The Supervisory Board is informed about the economic development of the ÖBB Group in regular meetings, in particular in the framework of the audit committee of ÖBB-Holding AG that must mandatorily be created, by means of consolidated presentations.

With respect to the size of the company, an additional Internal Review unit has been established.

I . C O M M I TM E N T T O T H E AU S T R I AN C O R P O R A T E G O V E R N AN C E C O D E

The Austrian Corporate Governance Code is primarily intended for listed corporations. Although neither the shares of the ÖBB Group nor of any of its three sub-groups are listed on any stock exchange, they follow the recommendation of the Austrian Corporate Governance working committee, according to which unlisted corporations should also follow the Code, insofar as the regulations are applicable to them. In September 2006, the Executive Board and the Supervisory Board of ÖBB-Holding AG agreed to adopt the Austrian Corporate Governance Code, and in February 2011 they agreed to implement the amendments of the Code from 2009 and 2010. This commitment, the Code as amended and applicable for the Group companies as well as justifications for any deviations are available at the website of the ÖBB Group http://konzern.oebb.at/de/Konzern.

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J . S I G N I F I C AN T E V E NT S AF T E R T H E B AL AN C E S H E E T D AT E

In addition to the statements made in Note 37 of the Consolidated Financial Statements, the following information is disclosed:


As of February 03, 2011, a new transport service contract was concluded with Schieneninfrastruktur-Dienstleistungs-gesellschaft mbH on the provision of transport services in railway passenger transport. The contractual term starts retroactively as of April 01, 2010, and ends as of December 31, 2019.

With the new contract, clearly defined railway connections are ordered by the federal government in a clearly attributable and transparent way as public services. The contract that is valid until 2019 thus secures the nationwide basic public transport offer.

As of March 24, 2011, Mag. Georg Lauber was reappointed as Chief Financial Officer in the extraordinary meeting of the Supervisory Board of Personenverkehr AG, and at the same time, Ms. Birgit Wagner was appointed Director of the areas Market and Sales as of April 01, 2011.


The Bundeswettbewerbsbehörde [Federal Competition Authority] (“BWB”) filed a claim with the cartel court for violation of the anti-trust laws and for imposition of a fine against a total of 43 companies in February 2010. The proceedings distinguish two different facts. The first accusation concerns the so-called Speditions-Sammelladungskonferenz [Freight forwarder conference regarding collective shipments] (“SSK”). The BWB accuses the former members of the SSK, which was dissolved in 2007, including Schier Otten & Co Gesellschaft mbH (merged with Express-Interfracht Internationale Spedition GmbH in 2009), of agreement and application of a common fee for domestic collective shipment transport as well as of market allocation, among others. The BWB accuses Rail Cargo Austria AG of having disclosed the annual increases of the BahnExpress fee applicable for domestic general cargo transport in advance to the members of the SSK in the years 2002 – 2007. Furthermore, market-sensitive data has allegedly been exchanged.

Following two exchanges of written pleadings, the first oral proceedings took place at the cartel court on January 19, 2011. Consequently, the cartel court rejected the requests of the BWB with respect to the SSK accusation in their entirety by part decision. With respect to the BEX accusation, neither the oral proceedings nor the part decision produced new findings.

Insofar as the BWB is raising an appeal against the part decision at the Oberster Gerichtshof [Supreme Court], we assume that the cartel court will not prosecute the BEX accusation further for the time being and that the proceedings will be suspended until a decision by the supreme cartel court regarding the SSK accusation was made.

The BWB has not yet filed a claim for imposition of a specific fine. From the current point of view, it is not possible to reliably predict whether, when and in what amount a fine will be imposed in the coming proceedings with respect to the BEX accusation.


Master plan 2011 to 2016 On February 01, 2011, the federal government agreed the new master plan 2011 to 2016 in the Council of Ministers. Furthermore, the government commits to long-term modernization of the Austrian railway infrastructure in the framework of the “Zielnetz 2025” development program. Further agreements were reached with respect to financing of public short-distance railway transport, ensuring affordable offers for railway customers. The master plan focuses primarily on the development of the major corridors Westbahn, Südbahn and Brenner. Furthermore, it focuses on the modernization of the short-distance transport network in and around conurbations, the renovation of train stations and stops as well as the elimination of all low-speed sections in the existing network by 2014.

The subsidy contract mainly negotiated and agreed in terms of content in the past financial year was formally executed by the contractual parties at the end of March 2011.

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K . N O T E S T O T H E C O N SO L I D AT E D M AN AG E M E N T R E P O R T

This consolidated Management Report contains statements and forecasts referring to the development of the ÖBB Group and its economic environment in the future. Any and all forecasts are based on the information available at the time of compilation. Therefore, the actual developments might deviate from the expectations described in the consolidated Management Report.

Vienna, April 08, 2011

The Executive Board

Mag. Christian Kern Ing. Franz Seiser Mag. Josef Halbmayr MBA

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Konzernlagebericht | Konzernabschluss Notes | Consolidated Financial Statements

Consolidated Financial Statements

Consolidated Income Statement 2010

2010 2009

in KEUR in KEUR

Revenue 4 5.136.142,0 4.827.840,1

Change in finished goods, work in p rogress and services not ye t chargeable 4.145,3 1.342,0

Other own work cap ita lized 5 404.873,5 472.179,4

Other operat ing income 6 536.657,6 446.249,0

Total revenue 6.081.818,4 5.747.610,5

Expenses for m aterials and services received 7 -2.068.623,2 -1.905.895,1

Personne l expenses 8 -2.410.121,6 -2.328.591,8

Depreciat ion and Amortization 9 -645.066,0 -573.314,5

Im pairments 9 -195.222,0 -5.156,1

Other operat ing expenses 10 -508.005,5 -621.058,5

Earnings before interest and taxes(EB IT without equity in earnings from associa ted companies) 254.780,1 313.594,5

Earnings before interest and taxes without impairments 450.002,1 318.750,6

Equity in earnings f rom associated com pan ies 17 5.068,1 6.113,9

In terest income 11 146.024,1 173.414,9

In terest expense 11 -695.253,8 -648.181,1

Other financia l resu lt 12 -40.378,4 275.812,1

Financial result (incl. equity in earnings from associa ted companies) -584.540,0 -192.840,2

Earnings before income tax (EBT) -329.759,9 120.754,3

Income taxes 13 -8.289,3 -4.901,3

Net income for the year -338.049,2 115.853,0

Conso lidated annua l profit att ribu table on a pro rata basis:

to the shareholder o f the parent com pany -336.264,0 114.308,2

to non-cont ro lling in terests -1.785,2 1.544,8

Note

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Consolidated Statement of Comprehensive Income 2010

2010 2009

in KEUR in KEUR

Net Income for the year -338.049,2 115.853,0

Unrealized income from cash flow hedges (after tax) 24 6.149,1 -40.170,0

Realized income from cash flow hedges (after tax) 24 -802,8 -734,0

Unrealized income from Available for Sale reserve (after tax) 24 869,3 -288,0

Realized income from Available for Sale reserve (after tax) 24 580,0 0,0

Unrealized income from currency translation -8.180,8 -3.742,4

Other comprehensive income -1.385,2 -44.934,4

Comprehensive income -339.434,4 70.918,6

Comprehensive income attributable on a pro rata basis:

to the shareholder of the parent company -337.649,2 69.373,8

to non-controlling interests -1.785,2 1.544,8

Note

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Consolidated Statement of Financial Position as of December 31, 2010

Dec 31, 2010 Dec 31, 2009

Assets Note in KEUR in KEUR

Non-current assetsProperty, plant and equipment 14 18.207.189,3 16.647.992,2Intangible assets 15 554.079,7 561.147,5Investment property 16 87.934,7 77.306,3Investments in associated recorded at equity 17 66.941,6 64.566,1Other financial assets 18 1.027.859,6 1.004.130,5Other receivables and assets 20 110.873,8 83.841,2Deferred tax assets 13 2.724,0 153,7

20.057.602,7 18.439.137,5Current assetsInventories 21 131.971,9 133.066,0Trade receivables 20 587.159,0 501.690,2Other receivables and assets 20 452.047,4 338.244,6Income tax receivables 13 569,1 1.271,3Other financial assets 18 84.049,7 125.794,1Non-current assets held for sale 19 33.063,7 37.427,9Cash and cash equivalents 22 137.573,3 75.034,1

1.426.434,1 1.212.528,221.484.036,8 19.651.665,7

Dec 31, 2010 Dec 31, 2009

Shareholder's equity and liabilities Note in KEUR in KEUR

Shareholder's equityShare capital 23 1.900.000,0 1.900.000,0Additional paid-in capital 24 260.812,2 568.097,2Other reserves 24 -75.825,3 -74.440,1Retained earnings 24 -608.810,1 -574.786,1Equity attributable to shareholder of the parent company 1.476.176,8 1.818.871,0Non-controlling interests 24 1.870,3 4.756,9

1.478.047,1 1.823.627,9Non-current liabilitiesFinancial liabilities 25 15.916.736,1 13.828.018,4Provisions 26 283.277,7 242.119,4Other liabilities 27 358.611,1 279.456,8

16.558.624,9 14.349.594,6Current liabilitiesFinancial liabilities 25 1.560.977,1 1.653.688,2Provisions 26 417.209,8 578.647,3Trade liabilities 27 968.372,9 935.556,0Other liabilities 27 500.805,0 310.551,7

3.447.364,8 3.478.443,221.484.036,8 19.651.665,7

55


Consolidated Statement of Cash Flows 2010

2010 2009

in mil. EUR in mil. EUR

Earnings before taxes (EBT) -329,8 120,8

Non-cash expenses and income

+ Depreciation and amortization / - appreciation on property, plant and equipment and intangible assets 1.067,6 815,2+ Depreciation / - appreciation on non-current financial assets 48,9 10,1- Amortization of goverment grants -227,4 -240,1+ Losses / - gains on disposal of property, plant and equipment and intangible assets -83,6 -48,0+ Losses / - gains on disposal of financial assets -8,6 -7,7- Gains on exchange rates / + losses on exchange rates 5,3 -6,4- Other non-cash income / + other non-cash expenses 0,1 -2,8+ Interest expense 695,3 648,2- Interest income -146,1 -173,4

Changes in assets and liabilities

- Increase / + decrease in inventories 1,3 14,8- Increase / + decrease in trade receivables and other receivables -174,0 -239,4+ Increase / - decrease in trade liabilities and other liabilities 277,4 -201,0+ Increase / - decrease in provisions -139,4 165,8

- Interest paid -552,6 -530,5+ Interest received 36,2 56,1- Income tax paid -6,9 -2,0Cash flow from operative activities a) 463,7 379,7

+ Proceeds from disposal of property, plant and equipment and intangible assets 41,5 115,3- Purchase of property, plant and equipment and intangible assets -2.568,8 -2.703,0+ Proceeds from disposal of financial assets 44,4 18,8- Disbursements for purchase of financial assets -14,1 -1,6+ Proceeds from / - reimbursement of third-party grants 175,1 186,2+ Proceeds from sale of consolidated companies and other business units 0,0 0,2- Purchase of other business units -9,2 -57,1+ Dividends received 0,5 1,8+ Redemption of loans granted / - grant of loans (from investment activities) 9,1 -693,8Cash flow from investing activities b) -2.321,5 -3.133,2

+ Proceeds from equity contributions 0,6 16,4- Payments to owner and non-controlling interests -0,5 -1,0+ Proceeds from issue of bonds and loans 3.212,8 3.170,8- Redemption of bonds and loans -1.186,0 -797,3- Payment of finance lease receivables -72,3 -1,6Cash flow from financing activities c) 1.954,6 2.387,3

Cash flow from operating activities a) 463,7 379,7Cash flow from investment activities b) -2.321,5 -3.133,2Free cash flow (a+b) -1.857,8 -2.753,5

Cash and cash equivalents at the beginning of the period 19,9 386,3Change resulting from the basis of consolidation 0,0 1,5Foreign currency translation 1,7 -1,7Change in cash and cash equivalents resulting from the cash flows (a+b+c) 96,8 -366,2Cash and cash equivalents at the end of the period 118,4 19,9 For details on the composition of the fund, please refer to Note 35.

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Consolidated Statement of Changes in Shareholder’s Equity 2010

Capital reserves

Cash flow hedge

reserveAvailable-for-sale reserve

Foreign currency

translationRetained earnings Total

Compre-hensive

equityNumber of

shares in mil. EUR in mil. EUR in mil. EUR in mil. EUR in mil. EUR in mil. EUR in mil. EUR in mil. EUR in mil. EUR

As of January 01, 2009 190.000 1.900,0 539,4 -29,0 -0,3 -0,2 -689,6 1.720,3 7,8 1.728,0

114,3 114,3 1,6 115,9

-41,0 -0,3 -3,7 -45,0 -45,0

-41,0 -0,3 -3,7 114,3 69,3 1,6 70,9

28,8 28,8 28,8

0,6 0,6 -4,7 -4,1

As of December 31, 2009 190.000 1.900,0 568,1 -69,9 -0,6 -3,9 -574,7 1.818,9 4,7 1.823,6

Capital reserves

Cash flow hedge

reserveAvailable-for-sale reserve

Foreign currency

translationRetained earnings Total

Compre-hensive

equityNumber of

shares in mil. EUR in mil. EUR in mil. EUR in mil. EUR in mil. EUR in mil. EUR in mil. EUR in mil. EUR in mil. EUR

As of January 01, 2010 190.000 1.900,0 568,1 -69,9 -0,6 -3,9 -574,7 1.818,9 4,7 1.823,6

-336,3 -336,3 -1,8 -338,1

5,3 1,5 -8,2 -1,4 -1,4

5,3 1,5 -8,2 -336,3 -337,7 -1,8 -339,5

-5,1 -5,1 -1,6 -6,7

-307,4 307,4 0,0 0,0

0,6 0,7

As of December 31, 2010 190.000,0 1.900,0 260,8 -64,6 0,9 -12,1 -608,8 1.476,2 1,9 1.478,0

Other profit

Shareholder's contribution

Other changes

Share capital

Other provisions

Equity attributable to the shareholder of the parent company

Other provisions

Share capital

Equity attributable to the shareholder of the parent company

Purchase of non-controlling interests

Release of capital reserve

Other changes

Non-controlling

interests

Non-controlling

interests

Consolidated annual profit

Other profit

Consolidated comprehensive income

Consolidated comprehensive income

Consolidated annual profit

Further details on the Statement of Changes in Shareholder’s Equity are given in Notes 23 and 24.

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Notes on the Consolidated Financial Statements as of December 31, 2010

A. B AS I S AN D M E T H O D S

Österreichische Bundesbahnen-Holding Aktiengesellschaft (hereinafter referred to as “ÖBB-Holding AG”) and its subsidiaries constitute the Österreichische Bundesbahnen-Holding Aktiengesellschaft Group (hereinafter referred to as “ÖBB Group”).

ÖBB-Holding AG is a stock corporation incorporated as controlling company of the ÖBB Group in 2004 pursuant to § 2 (1) Bundesbahngesetz [Austrian Federal Railways Act] as amended by the BundesbahnstrukturG [Federal Railway Structure Act] according to BGBl. [Federal Law Gazette] I no. 138/2003 and having its registered office in Vienna. The address of the registered office is Vienna, Wienerbergstraße 11. The ÖBB Group is registered in the Company Register at the Handelsgericht [Commercial Court] Vienna under number FN 247642 f. This is also where the Consolidated Financial Statements are filed.

ÖBB-Holding AG is the strategic controlling company of the ÖBB Group, holding all the shares of the three stock corporations (sub-groups) ÖBB-Personenverkehr Aktiengesellschaft, Rail Cargo Austria Aktiengesellschaft and ÖBB-Infrastruktur Aktiengesellschaft (hereinafter “AG” instead of “Aktiengesellschaft”). The sub-groups are hereinafter referred to as ÖBB-Personenverkehr sub-group, Rail Cargo Austria sub-group and ÖBB-Infrastruktur sub-group. In the following, the sub-groups will be described within the framework of the segment reporting.

Until December 31, 2008, ÖBB-Holding AG was the strategic controlling company of ÖBB-Infrastruktur Betrieb AG as well. § 29 a of the Bundesbahngesetz as amended on August 18, 2009 (BGBl. I no. 95/2009) defines that ÖBB-Infrastruktur Betrieb AG will be merged with ÖBB-Infrastruktur Bau AG as acquiring company at the end of December 31, 2008, by way of universal succession by applying the meaning of the first section of “Merging of Stock Corporations” of part nine of the Aktiengesetz [Stock Corporation Act] of 1965, where January 01, 2009 was defined as the merging date and this merger had to be filed for registration in the Company Register by September 30, 2009, at the latest. No compensation was paid (granting of shares of ÖBB-Infrastruktur Bau AG). After the registration of the merger in the Company Register, the acquiring company is named “ÖBB-Infrastruktur Aktiengesellschaft”.

Pursuant to § 245 (5) UGB [Austrian Commercial Code], one subsidiary of ÖBB-Holding AG, namely ÖBB-Infrastruktur AG, is obligated to prepare unconsolidated financial statements in accordance with the IFRS because it issued bonds listed for trade in a regulated market. The unconsolidated financial statements of ÖBB-Infrastruktur AG are submitted to the Handelsgericht Vienna under Company Register number FN 71396 w.

1. Accounting principles

ÖBB-Holding AG is required to issue consolidated financial statements pursuant to § 244 UGB. The Consolidated Financial Statements as of December 31, 2010 (including the figures from the previous year as of December 31, 2009), were prepared pursuant to § 245a (2) UGB in conjunction with the International Financial Reporting Standards (“IFRS/IAS”) issued by the International Accounting Standards Board (“IASB”), the interpretations of the International Financial Reporting Interpretation Committee (“IFRIC”, “SIC”), which were effective as of December 31, 2010 and endorsed by the European Union. With these Consolidated Financial Statements according to the IFRS, ÖBB-Holding AG issues exempting consolidated financial statements pursuant to § 245a UGB in accordance with internationally accepted accounting principles.

The Consolidated Financial Statements are presented in Euro (EUR). All amounts contained in the Notes are presented in million EUR, unless another currency unit is indicated. Since the rounded presentation in internal calculation systems also includes amounts not presented, rounding differences may occur.

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Disclosure on amended and new IFRS regulations

The following standards and interpretations were amended compared to the Consolidated Financial Statements as of December 31, 2009, or were to be applied initially on a mandatory basis due to the endorsement by the EU or as they took effect for the first time during the year:

Revised and amended standards/interpretations Valid as of1)

IFRIC 12 Service Concession Arrangements Mar 25, 2009

IFRS 3 Business Combinations Jul 01, 2009

IAS 27 Consolidated and Separate Financial Statements Jul 01, 2009

IAS 39 Financial Instruments: Recognition and Measurement - Eligible Hedged Items Jul 01, 2009

IFRIC 15 Agreements for the Construction of Real Estate Jan 01, 2010IFRIC 16 Hedges of a Net Investment in a Foreign Operation Jul 01, 2009IFRIC 17 Distributions of Non-cash Assets to Owners Nov 01, 2009

IFRIC 18 Transfers of Assets from Customers Nov 01, 2009

IFRS 1 Additional Exceptions for First-time Adoption Jan 01, 2010

IFRS 2 Group Cash-Settled Share-Based Payment Transactions Jan 01, 2010IAS 24 Related Party Disclosures Jan 01, 20112)

Miscellaneous Improvements of the IFRS 2008 and 2009 individually

1) applicable for financial years starting on or after the indicated date 2) early applied

IFRIC 12 “Service Concession Arrangements”

IFRIC 12 was issued on November 30, 2006, and endorsed by the EU on March 25, 2009. The mandatory date of first application was changed by the EU endorsement from reporting periods starting on or after January 01, 2008 to financial years starting on or after January 01, 2009. Earlier application is permitted. The purpose of this interpretation is the accounting of service agreements with companies offering public services, e.g. construction of roads, airports or energy supply infrastructure on behalf of regional public authorizes. While the power of disposition of the assets remains with the government, the company is contractually obligated to construct, operate and maintain them. IFRIC 12 addresses the accounting of rights and obligations arising from such contractual agreements. The amendments are not relevant for the ÖBB Group.

IFRS 3 “Business Combinations”

The standard regarding business combinations as amended and issued by the IASB in January 2008 is applicable for business combinations effected during financial years beginning on or after July 01, 2009. IFRS 3 introduces important changes in the accounting of business combinations. It effects the measurement of non-controlling interests, the accounting of transaction costs, the initial recognition and subsequent measurement of a contingent consideration as well as business combinations achieved in stages. These new regulations will affect the recognition of the goodwill, the profit of the period in which the business combination occurs and those of subsequent periods.

IAS 27 “Consolidated and Separate Financial Statements”

IAS 27 requires that a change in the investment in a subsidiary while control is retained is accounted for as an equity transaction with owners in their capacity as owners. Therefore, such a transaction results neither in any goodwill nor in any profit or loss. Furthermore, the regulations regarding attribution of losses to the owners of the parent company and the non-controlling interests and the regulations regarding accounting for transactions that result in a loss of control are amended. The new regulations of IAS 27 affect the acquisition of and the loss of control in subsidiaries and transactions with non-controlling interests affected on or after January 01, 2010.

IAS 39 “Financial Instruments: Recognition and Measurement - Eligible Hedged Items”

The amendments of IAS 39 were issued on July 31, 2008, and are initially applicable for financial years beginning on or after July 01, 2009. The amendment permits to designate only fractions of the changes of the fair value or the cash flows of a financial instrument as hedged item. This also includes the designation of inflation risks as hedged risk or part of a hedged risk in certain cases. The amendments are not relevant for the ÖBB Group.

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IFRIC 15 “Agreements for the Construction of Real Estate”

IFRIC 15 was issued on July 05, 2007, and is applicable for financial years beginning on or after January 01, 2010. IFRIC 15 standardizes the accounting principles with respect to the recognition of proceeds from the sale of units such as apartments or individual houses “off plan” (i.e. before construction is completed) by the construction company. The main issue is whether the construction company is actually selling goods (finished apartments or houses) or providing services (construction services as a building society contracted by the buyer). Proceeds from the sale of goods are usually recognized on delivery. Proceeds from the provision of services are usually recognized according to the degree of completion during the construction progress. The amendments are not relevant for the ÖBB Group.

IFRIC 16 “Hedges of a Net Investment in a Foreign Operation”

IFRIC 16 was issued on July 03, 2008, and is applicable for financial years beginning on or after July 01, 2009. Earlier application is permitted. The interpretation clarifies two issues arising in the two standards IAS 21 Effects of Changes in Foreign Exchange Rates and IAS 39 Financial Instruments: Recognition and Measurement - Eligible Hedged Items in connection with the accounting of foreign exchange risk hedges within an entity and its foreign operations. IFRIC 16 clarifies what must be considered a risk in the hedging of a net investment in a foreign operation and where, within the group of companies, the hedging instrument intended to minimize such risk may be held. The amendments are not relevant for the ÖBB Group.

IFRIC 17 “Distributions of Non-cash Assets to Owners”

IFRIC 17 was issued on November 27, 2008, and is applicable for financial years beginning on or after October 01, 2009, with earlier application being permitted. This interpretation contains guidelines on the accounting of agreements based on which a company distributes non-cash assets to owners from reserves or as dividends. The amendments are not relevant for the ÖBB Group.

IFRIC 18 “Transfers of Assets from Customers”

IFRIC 18 clarifies the IFRS prerequisites for agreements on the transfer of assets from customers required for connection of the customer to a network or for the supply of goods or services (e.g. power, gas, water) to the customer or for both. IFRIC 18 is applicable for asset transfers in financial years beginning on or after October 31, 2009. The amendments are not relevant for the ÖBB Group.

IFRS 1 “Additional Exceptions for First-time Adoption”

The amendments of IFRS 1 were issued on July 23, 2009, and apply retroactively for certain situations. They aim at ensuring that first-time adopters of the IFRS do not incur any unnecessary costs or expenses during the transition process:

- Companies applying the full cost method are exempt from the retroactive application of the IFRS on oil and gas assets and

- Companies with existing leasing agreements are exempt from the assessment of the classification of these agreements according to IFRIC 4, which examines whether an agreement constitutes a leasing relation, if application of the national accounting regulations had the same result.

The amendments are not relevant for the ÖBB Group.

IFRS 2 “Group Cash-Settled Share-Based Payment Transactions”

The IASB issued an amendment to IFRS 2 regarding the scope of application and the accounting of share-based payments with cash settlement within the group on June 18, 2009. The amendments are not relevant for the ÖBB Group.

60


IAS 24 “Related Party Disclosures”

The IASB issued the amended IAS 24 on November 04, 2009. The amended standard is applicable for financial years starting on or after January 01, 2011. The amendment clarifies the definition of related parties in order to simplify the determination of such relations and eliminate inconsistencies in application. The amended standard introduces a partial exemption from the disclosure requirements for companies related to a public authority. This amended standard was applied early by the ÖBB Group in the financial year, resulting in simplifications in Note 33.

Improvements of the IFRS 2008 and 2009

In November 2008, the IASB issued a revised version of IFRS 1 (First-time adoption of the International Financial Reporting Standards). The revised version is applicable for financial years beginning on or after June 01, 2009. The IASB issued improvements of IFRS 2009, a collective standard regarding the amendment of various IFRS. The amendments are applicable for financial years beginning on or after July 01, 2009, or January 01, 2010, respectively. The amendments are not relevant for the ÖBB Group.

Outlook on future IFRS amendments

The following IFRS were issued by the IASB or interpretations thereof by the IFRIC until the reporting date, but they are mandatorily applicable only for future reporting periods or have not yet been endorsed by the EU. ÖBB Group AG has not early applied any of these standards, which are mandatorily applicable only for future reporting periods.

Revised and amended standards/interpretations Valid as ofIAS 32 Financial Instruments: Presentation - Classification of Rights Issues Feb 01, 20101)

IFRS 1 Limited Exemption for First-time Adopters from Comparative IFRS 7 Disclosures Jul 01, 20101)

IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments Jul 01, 20101)

IFRIC 14 Prepayment of a Minimum Funding Requirement Jan 01, 20111)

IFRS 1 Hyperinflation and Fixed Conversion Date Jan 01, 20111)

IFRS 7 Financial Instruments: Disclosures Jul 01, 20112)

IAS 12 Income Taxes Jan 01, 20122)

IFRS 9 Financial Instruments Jan 01, 20132)

IFRS 1, IFRS 7, IAS 1, IAS 34, IFRIC 13

Improvements of the IFRS 2010 Jan 01, 20111)

1) applicable for financial years starting on or after the indicated date 2) not yet endorsed by the EU

IAS 32 “Financial Instruments: Presentation - Classification of Rights Issues”

The amended IAS 32 is applicable for financial years beginning on or after February 01, 2010. It changes the definition of a financial liability in that purchase rights (and certain options or warrants) must be classified as equity instruments, if such rights entitle the holder to acquire a fixed number of equity instruments of the company at a fixed amount in any currency and the company offers them to all current owners of the respective class of its non-derivative equity instruments on a pro rata basis. This is not expected to have any effect on the Consolidated Financial Statements.

IFRS 1 “Limited Exemption for First-time Adopters from Comparative IFRS 7 Disclosures”

The amendments of IFRS 1 were issued on January 28, 2010, and are applicable for financial years beginning on or after July 01, 2010. IFRS 1 was amended to enable first-time adopters to avail themselves of the transition regulations of IFRS 7 Financial Instruments: Disclosures resulting from the amendment of this standard issued in March 2009. These provisions exempt the first-time adopter from to include comparative disclosures with respect to the required disclosures in the notes in the first year of application.

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In order to achieve this objective, the transition regulations of IFRS 7 were amended so that disclosures are not required for:

- annual and interim reporting periods presented as comparative periods in the financial statements as of December 31, 2009 (this also applies for statements of financial position) and

- the opening balance for the earliest comparative period presented in the financial statements as of December 31, 2009.

Earlier application is permitted and must be disclosed in the notes. The amendments are not relevant for the ÖBB Group.

IFRIC 19 “Extinguishing Financial Liabilities with Equity Instruments”

IFRIC 19 is applicable for annual periods beginning on or after July 01, 2010. The interpretation states that equity instruments issued to a lender to extinguish a financial liability constitute a consideration paid. The equity instruments issued are measured at their fair value. If this fair value cannot be reliably determined, the measurement shall be based on the fair value of the liability extinguished. Any profit or loss is recognized immediately. The amendment is not expected to have any effect on the Consolidated Financial Statements.

IFRIC 14 “Prepayment of a Minimum Funding Requirement”

The amended IFRIC 14 is applicable retroactively for annual period beginning on or after January 1, 2011. The amendment contains guidelines on determining the achievable amount of a net pension asset. The amendment enables companies to treat prepayments of minimum funding requirements as an asset. The amendment is not expected to have any effect on the Consolidated Financial Statements.

IFRS 1 “Hyperinflation and Fixed Conversion Date”

The IASB issued improvements of IFRS 1 on December 20, 2010. The amendments concern hyperinflation and the fixed conversion date and are effective as of July 1, 2011. Earlier application is permitted. The amendments are not relevant for the ÖBB Group.

IFRS 7 “Financial Instruments: Disclosures”

In October 2010, the IASB issued amendments of IFRS 7 (Financial Instruments: Disclosures). These amendments require further disclosures regarding transfer of assets and possible effects of the risks remaining with the ceding entity. Furthermore, additional disclosures are required when a disproportionate part of the transfers is executed at the end of a reporting period. Companies are required to apply the amendments to annual periods beginning on or after July 1, 2011. The EU has not endorsed the amendment. The amendment is not expected to have any considerable effect on the Consolidated Financial Statements.

IAS 12 “Income Taxes”

In December 2010, the IASB issued an amendment of IAS 12 comprising the disprovable assumption that the carrying value of an asset is usually realized by sale and not by usage of the asset. This stipulation is particularly relevant in countries in which the income tax rate applicable for sales proceeds is different from the rate applicable for current income from rent for example. In this connection, SIC 21 (Income Taxes – Non-depreciable Assets) was integrated in IAS 12 (Income Taxes) – insofar as it did not refer to investment property. The amended standard is retroactively applicable for annual periods beginning on or before January 1, 2012. Endorsement by the EU is pending. The amendment is not expected to have any effect on the Consolidated Financial Statements.

IFRS 9 “Financial Instruments”

The issued version of IFRS 9 reflects the first stages of the IASB project for replacement of IAS 39 and deals with the classification, measurement and derecognition of financial assets and liabilities as defined in IAS 39. The standard is applicable for annual periods beginning on or after January 01, 2013. In further stages of project the IASB will deal with hedging relations, impairments and offsetting. It is expected that the project will be concluded in 2011. Application of the first stages of IFRS 9 will affect the classification and measurement of financial assets and liabilities of the Group. The EU has not yet endorsed IFRS 9. Effects on the Consolidated Financial Statements are currently being evaluated.

62


Improvements of the IFRS 2010

The IASB has issued improvements of the IFRS 2010, a collective standard regarding the amendment of various IFRS. The European Union endorsed the annual improvements to IFRS from the 2010 cycles in its Gazette of February 19, 2011. The Company did not apply the amendments as they are applicable for annual periods beginning on or after July 01, 2010, or January 01, 2011, respectively. The amendment is not expected to have any effect on the net assets, financial position and results of operations.

2. Consolidation principles and basis of consolidation

Consolidation principles

Reporting date

The reporting date for all fully consolidated companies included in the Consolidated Financial Statements is December 31.

Foreign currency translation

Foreign currencies are translated according to the functional currency concept. The functional currency of all subsidiaries included in the Consolidated Financial Statements is the respective national currency. The Consolidated Financial Statements are presented in EURO, the functional currency of the parent company.

Foreign currency transactions are first translated into the functional currency at the spot rate applicable on the date of the transaction. Monetary assets and liabilities denominated in a foreign currency are translated into the functional currency at each reporting date at the respective spot rate. Any translation differences are recognized in the other operating income or expenses, with the exception of all monetary items constituting an effective hedge of a net investment in a foreign operation. Such items are recognized in the other comprehensive income until disposal of the net investment, and included in the income statement only after disposal of the investment. Any taxes resulting from translation differences of such monetary items are also recognized in the other comprehensive income. Non-monetary items measured at cost denominated in a foreign currency are translated at the rate applicable at the date of the transaction. Non-monetary items measured at fair value denominated in a foreign currency are translated at the rate applicable at the time the fair value is determined.

The financial statements of the foreign subsidiaries included in the Consolidated Financial Statements are translated according to the modified closing rate method. The equity items are measured at the historical rates of the initial consolidation reporting date, and the other balance sheet items are measured at the foreign exchange reference rates of Österreichische Nationalbank [Austrian National Bank] (ÖNB) applicable at the reporting date. The items of the income statement are translated at the annual average rates. Differences resulting from foreign currency translation are recognized in the other consolidated profit. As long as the subsidiary is included in the basis of consolidation, the translation differences are continued in the consolidated equity. If subsidiaries leave the basis of consolidation, the corresponding translation differences are recognized in the consolidated annual profit.

As the principal market of the ÖBB Group is in Austria, sales in foreign currencies account only for a small portion. The exchange rates of important currencies developed as follows (source: reference rates of the European Central Bank (ECB) according to www.oenb.at):

rounded in EUR Dec 31, 2010 Dec 31, 2009 2010 2009

Bulgarian Lev (BGN) 1,956 1,956 1,956 1,956Swiss Francs (CHF) 1,250 1,484 1,380 1,510

Czech Koruna (CZK) 25,061 26,473 25,284 26,435Japanese Yen (JPY) 108,650 133,160 116,240 130,340Croatian Kuna (HRK) 7,383 7,300 7,289 7,340Hungarian Forint (HUF) 277,950 270,420 275,480 280,330PolishZłoty (PLN) 3,975 4,105 3,995 4,328Romanian Leu (RON) 4,262 4,236 4,212 4,240Russian Ruble (RUB) 40,820 43,154 40,263 44,138Swedish Krona (SEK) 8,966 10,252 9,537 10,619New Turkish Lira (TRY) 2,069 2,155 1,997 2,163US Dollar (USD) 1,336 1,441 1,326 1,395

Reporting date rate Annual average rate

63


Consolidation

Subsidiaries

Entities are considered subsidiaries, if the ÖBB Group has control over the financial and operating policies by holding voting rights of more than 50%. In determining whether control is exercised, the existence and impact of potential voting rights currently exercisable or convertible is considered. Subsidiaries are included in the Consolidated Financial Statements (full consolidation) from the date the ÖBB Group obtains control. Upon expiration of control, these entities are deconsolidated.

The results of operations of the acquired businesses are included in the Company’s consolidated income statement from the respective dates of acquisition until the date of sale. Non-controlling interests in equity and the earning of companies are disclosed separately.

Accounting and measurement methods are applied consistently by all subsidiaries in the ÖBB Group.

Business combinations before January 1, 2010

Business combinations are accounted for according to the purchase method. Upon acquisition, assets and liabilities of the acquired subsidiaries are measured at their fair value as of the acquisition date. In the event that the acquisition costs of the subsidiary exceed the fair value of identifiable assets and liabilities assumed, the excess amount is recorded as goodwill. Negative differences between the acquisition costs and the acquired identifiable assets and liabilities assumed (i.e. a discount upon acquisition), are recognized in the income statement at the time of acquisition.

Business combinations after January 1, 2010

Business combinations are accounted for according to the purchase method. The acquisition costs are measured at the total of the consideration transferred, measured at fair value at the acquisition, date, plus the non-controlling interests in the acquired company. For each business combination, the acquirer measures the non-controlling interests in the acquired company at the corresponding share of the identifiable net assets of the acquired company. Any costs incurred in the course of the business combination are recognized as other operational expenses.

When an entity is acquired, the Group assesses the suitable classification and designation of the financial assets and liabilities assumed in accordance with the contractual terms, economic circumstances and general conditions given at the time of the acquisition. This also includes separation of derivatives incorporated in the host contracts.

In case of business combinations carried out in stages, the equity share in the acquired company previously held by the acquirer will be re-measured at fair value at the time of the acquisition, and the resulting profit or loss will be recognized effecting the income statements in the current period. An agreed contingent consideration is recognized at fair value at the time of the acquisition.

Subsequent changes in the fair value of a contingent consideration which constitute an asset or a liability are recognized either in the income statement or in other comprehensive income according to IAS 39. A contingent consideration classified as equity will not be remeasured, and its payment is accounted for in the equity.

At initial recognition goodwill is first measured at cost, determined as the excess amount of the total consideration transferred plus the amount of the non-controlling interest over the identifiable assets acquired and liabilities assumed. If this consideration is less than the fair value of the net assets acquired, the difference is recognized in the income statement. After the initial recognition, goodwill is measured at cost less cumulative impairment charges. For the purpose of the impairment test and from the time of acquisition, the goodwill acquired in the course of a business combination is allocated to those cash-generating units of the Group that are expected to benefit from the business combination, irrespective of whether other assets or liabilities of the acquired entity are attributed to these cash-generating units.

64


When goodwill has been allocated to a cash-generating unit and a portion of it is sold, goodwill attributable to this business unit is taken into account determining the carrying value and the profit from the sale of this business unit. The value of the goodwill sold is determined on the basis of the relative values of the business unit sold and the remaining part of the cash-generating unit.

Associated companies

An associated company is an entity where the ÖBB Group has significant influence on financial and operating decisions, but is not able to control or jointly control the company. This is generally the case when the interest held in a company is between 20% and 50%.

Except for investments classified as held for sale, shares in associated companies are included in the Consolidated Financial Statements by applying the equity method of accounting. They are initially recognized at cost excluding incidental acquisition cost, which are adjusted to reflect changes in the interest of ÖBB Group in the net assets subsequent to the acquisition date and to reflect losses resulting from impairment. Losses exceeding the share of the ÖBB Group in an associated company are not recognized, unless a commitment for additional contributions exists.

If the acquisition cost of the share acquired by the ÖBB Group exceeds the fair values of identifiable assets and liabilities of the associated company at the date of acquisition, such excess amount is accounted for as goodwill in the framework of the valuation of the investment. If the acquisition cost of the share acquired by the ÖBB Group is less than the fair values of identifiable assets and liabilities at the date of acquisition (i.e. deduction upon acquisition), the difference is recognized in the income statement in the period the acquisition occurred. However, if the negative difference is caused by shareholder’s relations, the difference is recognized in the capital reserves.

Elimination of intercompany accounts

Loans, trade receivables and other receivables are offset with the corresponding liabilities and provisions between the subsidiaries included in the Consolidated Financial Statements in the scope of elimination of intercompany accounts.

Income and expense elimination

Any and all intra-group expenses and income are eliminated in the course of the income and expense elimination. When fixed assets are constructed by the ÖBB Group itself, any revenues arising therefrom are transferred to own work capitalized after elimination of the interim profits. Unrealized gains and losses from transactions between Group companies are eliminated.

Interim profit elimination

Unrealized profits resulting from intragroup sales of assets and assets created by the ÖBB Group itself were eliminated in the Consolidated Financial Statements of the two years under review.

Composition of and change in the basis of consolidation

The basis of consolidation includes ÖBB-Holding AG and 69 (prior year: 72) other fully consolidated entities and 15 (prior year: 15) entities accounted at equity (associated companies), i.e. a total of 85 (prior year: 88) companies. The companies included in the Consolidated Financial Statements are indicated in Note 36. It lists all investments of the ÖBB Group, including shareholder’s equity, net income according to local national accounting law and the type of consolidation. Subsidiaries consolidated in the years 2009 and 2010 or subsidiaries for which the type of consolidation changed are disclosed separately in the list of investments in Note 36.

The basis of consolidation is delimited in such a way that the Consolidated Financial Statements give a true and fair view on the net assets, financial position and results of operations of the ÖBB Group. The subsidiaries consolidated are those with a small business volume whose turnover and respective equity jointly account for less than 1% of the consolidated amounts. In 2010, three subsidiaries were excluded from the consolidation after discontinuing their business activities. With respect to the changes in the basis of consolidation in 2010, see Note 36.

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Changes in the basis of consolidation in 2009 and 2010

The basis of consolidation developed as follows:

Basis of consolidation Full consolidation

Consolidation at

equity Total

As of Jan 01, 2009 74 14 88of which foreign companies 28 11 39

Mergers -7 0 -7

Initial consolidation 6 2 8

Change from equity to full consolidation 1 -1 0

Change from full to equity consolidation -1 1 0

Exit (f inal consolidation) 0 -1 -1

As of Dec 31, 2009 73 15 88thereof foreign companies 31 8 39

Mergers -1 0 -1

Initial consolidation 1 2 3

Exit (f inal consolidation) -3 -2 -5

As of Dec 31, 2010 70 15 85thereof foreign companies 32 6 38

Notes 32 and 36 respectively explicate the changes in the basis of consolidation.

Effects of the changes in the basis of consolidation on the financial position and result of operations

The changes in the basis of consolidation described have the following effects on the Consolidated Financial Statements:

Jan 01, 2009 Sale Purchase Dec 31, 2010

Long-term assets 16.594,0 -0,1 6,0 1.839,3 18.439,2 0,1 1.618,3 20.057,6Current assets 1.600,9 -1,2 10,8 -398,0 1.212,5 4,4 209,5 1.426,4

Balance sheet total 18.194,9 -1,3 16,8 1.441,3 19.651,7 4,5 1.827,8 21.484,0Equity 1.728,0 -0,5 2,5 93,6 1.823,6 2,2 -347,8 1.478,0

Lnon-current liabilities 13.799,6 0,0 2,3 547,8 14.349,7 0,0 2.208,9 16.558,6

Current liabilities 2.667,3 -0,8 12,0 799,9 3.478,4 2,3 -33,3 3.447,4Balance sheet total 18.194,9 -1,3 16,8 1.441,3 19.651,7 4,5 1.827,8 21.484,0

Development of financial positionin mil. EUR, rounded

Change in basis of consolidation

Organic incl. exchange

effects Dec 31, 2009

Change in basis of

consolida-tion

Organic incl. exchange and cons.

effects

2008 2009 2010

Total revenues 5.831,0 373,2 -456,6 5.747,6 37,7 296,5 6.081,8

Total expenses -5.824,6 -391,4 782,0 -5.434,0 -34,6 -358,4 -5.827,0

Financial result -1.021,1 -3,3 831,6 -192,8 -0,2 -391,5 -584,5

Organic incl. exchange effects

Income statement developmentin mil. EUR, rounded

Change in basis of consolidation

Organic incl . exchange effects

Change in bas is of consolidation

The column “Organic” includes changes that do not result from changes in the basis of consolidation.

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3. Summary of significant accounting policies

Basic principles for the preparation of the financial statements

The Consolidated Financial Statements are prepared on a cost basis, with the exception of derivative financial instruments and available-for-sale financial instruments that have been measured at fair value. The carrying amounts of the assets and liabilities recognized in the statement of financial position and designated as hedged items in fair value hedges that would otherwise be carried at amortized cost, are adjusted to record changes in the fair values attributable to the risks that are being hedged in effective hedge relationships.

Property, plant and equipment and investment property

Property, plant and equipment and investment property are recognized at cost less depreciation and possible impairments. Costs include certain expenses incurred in the course of the acquisition, the construction and development, such as acquisition costs, material and personnel expenses, directly attributable fixed and variable overheads, the present value of obligations resulting from the demolition and disposal of assets as well as the restoration of sites. Value added tax charged by suppliers and entitling to input tax deduction is not included in the cost. Property, plant and equipment under finance lease are recognized at the lower of the present value of minimum lease payments and its fair value.

In accordance with IAS 23, borrowing costs for significant qualifying assets are capitalized since January 1, 2009. For more information, see Note 14.

Property, plant and equipment and investment property is depreciated on a straight-line basis over the estimated useful lives, and are recognized in the line item depreciation of the Consolidated Income Statement. Leased property, plant and equipment (held under finance leases) and fixtures in third-party buildings are also depreciated over their estimated useful life if ownership is expected to be transferred at the end of the leasing term, otherwise it is depreciated over the shorter of the lease term or their estimated useful life. Assets with costs of up to EUR400.00 are classified as low-value assets and are expensed as incurred due to their significance.

The useful lives are:

Years

Substructure 20–150

Buidlings and constructions 10–50

High-voltage and lighting 15–50

Superstructure 35–40

Safety and telecommunications systems 4–30

Automobiles and trucks 5–50

Tools and equipment 4–20

Technical equipment and machinery 9–15

Costs for maintenance and repair are expensed as incurred, whereas replacements and improvements are capitalized. The cost and accumulated depreciation of assets sold or retired are removed from the accounts, and the difference between the net sales proceeds and the carrying amount is recognized in other operating income or expenses. The useful lives presented in this table and the methods of depreciation are also applied to assets presented in the line item “Investment property”.

Subsequent to the extension of the useful lives for new acquisitions of certain asset classes in 2009, the useful life for new acquisitions of “Slab tracks in tunnels” was extended from 30-35 years to 80 years in 2010 and thus adjusted to the actual operational availability: For further information on the effects of this change of the useful life see Note 14.

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Grants related to assets

The ÖBB Group receives public grants that are on principle related to assets. Government grants are recognized where there is reasonable assurance that the grant will be received and all attached conditions will be complied with. Asset-related grants, in particular government grants, are deducted directly from the cost of the related assets. The depreciation expenses less income from the amortization of these grants are recognized in the Consolidated Income Statement.

Goodwill and other intangible assets

Goodwill

The difference between the cost of acquisition of a company and the fair value of the shares of the ÖBB Group in the net assets of the acquired company at the time of acquisition constitutes the goodwill. Goodwill generated through the acquisition of a company is accounted for in the intangible assets. The recognized goodwill is subject to an annual impairment test and measured at its original cost less accumulated impairments. Impairment reversals are not permitted. For the purpose of impairment testing, the goodwill is allocated to cash-generating entities. It is allocated to those cash-generating entities or groups of cash-generating entities that are expected to benefit from the business combination that generated the goodwill.

Other intangible assets

The ÖBB Group does not recognize any important other intangible assets with indefinite useful lives. Intangible assets with a finite useful live are recognized at cost reduced by amortization on a straight-line basis. Assets with costs of up to EUR400.00 are classified as low-value assets and expensed as incurred due to insignificance

Scheduled straight-line amortization is subject to the following useful lives:

Years

Investment grants to affiliated companies 3–20

Concessions 4–20

Software 2–20Other intangible assets 5–30

Grants are amortized over the useful life of the asset for which the grant was received. See Note 9 regarding impairment.

Impairment of property, plant and equipment and intangible assets

Methodology

Property, plant and equipment and intangible assets with a definite useful life are tested for impairment if specific events or changes in circumstances indicate that the carried value of an asset exceeds the fair value. The impairment test is carried out for all property, plant and equipment and intangible assets. According to the provisions of IAS 36, impairment expenses are recognized if the carried value exceeds the higher of the fair value less liquidation cost or the value in use. The fair value after deduction of liquidation cost corresponds to the amount recoverable in a sales transaction at arm’s length less liquidation cost. The value in use corresponds to the estimated future net discount cash flows expected from continued usage of an asset and its sale or retirement at the end of the useful life. Impairments are recognized in a separate line item of the income statement. If the impairment concerns associated companies or joint ventures, it is recognized in the line item “Profit of associated companies”.

For the purpose of impairment testing, the ÖBB Group calculates the value in use. Value in use is determined by estimating the future net cash flows of the cash-generating entities based on the business plans, which are derived from the historical performance and the management’s best estimates with respect to future developments. The growth rates assumed in the business plans (budget 2011 and medium-term plan 2012-2016) reflect the weighted average growth rates based on market estimates. Estimated cash flow projections going beyond the period covered by the business plan are based on steady growth rates for subsequent years and do not exceed the long-term weighted average growth rate for the industry and the country in which the cash-generating entity operates.

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If the recoverable amount exceeds the carrying amount, the respective cash-generating entity shall be regarded as not impaired. If the recoverable amount of the cash-generating entity is less than its carrying amount, the entity shall recognize an impairment loss. The impairment loss will first be allocated to the goodwill and subsequently to the other assets of the cash-generating entity on a pro-rata basis, whereas the other assets of the cash-generating entity may not be impaired below their respective recoverable amounts. The reductions in carrying amounts constitute impairment losses on individual assets.

If there is any indication that an impairment of an asset (except for goodwill) does no longer exist, the ÖBB Group shall reverse the impairment, in whole or in part, in the consolidated annual profit. Impairment reversal is not permitted for goodwill and financial assets recognized at cost. Any increase in the fair value of equity instruments classified as “available for sale” is recognized in the other profit.

After approval of the medium-term plan by the Supervisory Board, regular audits are carried out to determine whether an event triggering impairment has occurred. If a considerable change of the value in use is suspected due to current insights gained regarding business development or changes in assumptions during the financial year, additional audits shall be carried out.

Structure of the cash-generating entities

Each cash-generating entity comprises a unit or a number of legally independent companies. The delimitation criteria for the cash-generating entities are based on the operative business structure and correspond to the business units or business activities respectively. A short description of these business units is given in Note 34. ÖBB-Produktions GmbH is allocated to the Rail Cargo Austria segment and the ÖBB-Personenverkehr segment on a pro rata basis.

Calculation assumption

Cash-generating entities of ÖBB-Personenverkehr

The cash-generating entities of ÖBB-Personenverkehr are Passenger Transport Rail, Bus and Services.

A weighted average capital cost rate reflecting the interest claim of the capital market for the allocation of borrowed capital and equity against the cash-generating entities of the ÖBB-Personenverkehr group is used for discounting. Risks and taxes are taken into account by means of various deductions. The following discount rates were applied:

Dec 31, 2010 Dec 31, 2010

For the cash-generating entities of ÖBB-Personenverkehr Borrowed capital Equity

Share acc. to Peer Group 31% 69%risk-free interest rate for 10-year or 30-year German Government Bonds respectively 2,47% 2,93%Beta Relevered according to the respective Peer Group 0,71Country or market risk respectively 0,00% 4,50%Spread 0,71%Borrowed capital interest rate after tax or equity interest rate respectively 2,39% 6,14%Weighted Average Cost of Capital (after tax) (2011 - 2016)Growth deductionWeighted Average Cost of Capital (perpetuity from 2017)

-1,33%4,98%

3,65%

The cash flow forecasts take intra-group transfer prices based on market-oriented evaluations of the companies involved into account. For the cash flow forecasts after the planning period (perpetuity approach), the impairment test was based on assumed growth rates corresponding to a realistic evaluation of the specific market development. This year, the capital cost rate was separately calculated for ÖBB-Personenverkehr for the first time, independently from the ÖBB Group. In the previous year, the discount interest rate before tax was 7.7%, the discount interest rate before tax from 2016 (perpetuity) was 6.7%. In the previous year, risk and resource consolidation with the rest of the ÖBB Group was assumed and the capital cost rate was applied consistently throughout the Group.

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Cash-generating entities of Rail Cargo Austria

The cash-generating entities of the Rail Cargo Austria group are: Cargo & Logistics (C&L), Unaccompanied Transport (UKV), Combined Road/Railway Transport (RoLa), Contracted Logistics (KL), Freight Forwarders (SPED) and Technical Services (TS).

A weighted average capital cost rate reflecting the interest claim of the capital market for the allocation of borrowed capital and equity against the cash-generating entities of the Rail Cargo Austria group is used for discounting. Risks and taxes are taken into account by means of various deductions. The following discount rates were applied:

For the cash-generating entities of Rail Cargo Austria as of Dec 31, 2010 C&L UKV RoLa KL SPED TS

Austria

Before taxInterest rate 2011-2016 12,5% 16,6% 8,4% 6,3% 7,6% 7,0%Interest rate perpetuity 10,7% 14,8% 6,6% 4,5% 5,8% 5,2%

After taxInterest rate 2011-2016 6,0% 6,0% 6,0% 6,0% 6,0% 5,5%

Interest rate perpetuity 4,7% 4,7% 4,7% 4,7% 4,7% 4,2%

Hungary

Before taxInterest rate 2011-2016 13,8% 10,7% 10,0% 10,7%

Interest rate perpetuity 12,0% 8,8% 8,2% 8,9%

After taxInterest rate 2011-2016 9,7% 9,7% 9,7% 9,4%

Interest rate perpetuity 8,4% 8,4% 8,4% 8,1%

The cash flow forecasts take intra-group transfer prices based on market-oriented evaluations of the companies involved into account. For the cash flow forecasts after the planning period (perpetuity approach), the impairment test was based on assumed growth rates corresponding to a realistic evaluation of the specific market development. This year, the capital cost rate was separately calculated for Rail Cargo Austria for the first time, independently from the ÖBB Group. In the previous year, the discount interest rate before tax was 7.7% for Austrian companies and 13.0% for Hungarian companies, the discount interest rate before tax from 2016 (perpetuity) was 6.7% for Austrian companies and 12.4% for Hungarian companies. In the previous year, risk and resource consolidation with the rest of the ÖBB Group was assumed and the capital cost rate was applied consistently throughout the Group.

Cash-generating entities of ÖBB-Infrastruktur

Due to the following preamble to the grant agreements, no impairment test was required any more: “ÖBB-Infrastruktur AG is a railway infrastructure company whose activities are of public interest and further defined in § 31 BBG [Austrian Federal Railways Act]. The basis for the financing of the company is given in § 47 BBG, according to which the federal government is responsible for ensuring that ÖBB-Infrastruktur AG has the funds available required to fulfill its tasks and maintain its liquidity and equity, insofar as the tasks are included in the business plan pursuant to § 42 para. 6 BBG. The commitment regulated by the federal government in this provision is implemented by the grant agreements pursuant to § 42 para. 1 and 2 BBG. It is the understanding of the contractual parties that the objective of the grant agreements, irrespective of their respective terms, is to permanently guarantee the value of the assets of the ÖBB-Infrastruktur AG sub-group used for the tasks pursuant to § 31 BBG, which also conforms with the official task according to the Bundesbahngesetz.”

Further information is provided in Notes 9, 14 and 15.

Impairment of investments recognized at equity

After application of the equity method according to IAS 28.31 it has to be determined whether there is any objective indication of an impairment of the carrying amount in accordance with IAS 39.58 et seq. If indicators are identified, the recoverable amount of the investment shall be determined according to IAS 36 Impairment of assets. In case of impairment, the investment shall be impaired accordingly.

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Non-current assets held for sale (IFRS 5)

Assets held for sale are measured at the carrying amount or the lower fair value less disposal cost according to IFRS 5 (“Non-current assets held for sale and discontinued operation”). Assets classified as “held for sale” are not amortized and reported in a separate line item in the Statement of Financial Position. Gains or losses from the sale of these assets are recorded together with the profits or losses from the sale or retirement of property, plant and equipment and intangible assets as other operating income or expenses.

Financial instruments

General information

Financial assets and liabilities are recognized when the ÖBB Group becomes a party to the contractual provisions of the financial instrument under observance of the following regulations with respect to acquisition customary in the market. Financial assets are derecognized when:

- the contractual rights to the cash flows from the financial asset have expired or have been settled or - all risks and rewards arising from the asset have been transferred to another party or - the power to control the asset has been transferred to another party in its entirety.

A financial liability may only be derecognized when it has been extinguished, i.e. when the contractual obligation has been discharges or cancelled or has expired. Regular purchases and sales of financial assets are recognized at the settlement date (date of fulfillment). Derivative financial instruments are recognized at the date of conclusion (trade date).

Financial assets and liabilities are initially recognized at the fair value of the consideration given or received. Transaction costs are included in the initial measurement of the fair value, except in the case of financial instruments measured at fair value through profit or loss.

Cash and cash equivalents

The ÖBB Group recognizes cash on hand, cash in banks and highly liquid financial investments with remaining maturities of three months or less as cash and cash equivalents. Money market deposits with original maturities of more than three months are classified as current financial assets along with securities. Cash and cash equivalents represent the funding for the cash flow statement.

Financial assets and liabilities

Financial instruments disclosed in the statement of financial position as financial assets, liabilities and derivative instruments are measured at their fair value with the exception of loans and receivables held to maturity and the other liabilities. Changes in the fair value of derivative financial instruments are recognized in profit or loss or other comprehensive income, depending on whether the derivative financial instrument is designated to hedge assets or liabilities recognized in the statement of financial position (fair value hedge) or future cash flows (cash flow hedge). For derivative financial instruments designated as fair value hedges, changes of the fair value of the hedged asset or liability and of the hedging instrument are recognized in profit or loss. For derivative financial instruments designated as cash flow hedges, changes of the fair value of the effective portion of the hedging instrument are recognized via other comprehensive income in equity (cash flow hedge reserve). Effects recognized in other comprehensive income are transferred to profit or loss when the hedged item affects profit and loss. Changes in the fair value of the ineffective portion of the hedge and changes in the fair value of derivative financial instruments not classified as hedge are recognized in profit or loss immediately. Hedge accounting is applied in the ÖBB Group and a general description is given in Note 29.2.

Furthermore, the ÖBB Group entered into interest or interest currency swaps respectively and forward foreign exchange contracts which are accounted for as free standing derivative financial instruments. In economic terms, these derivatives serve primarily for hedging risks from fluctuations in foreign currencies and interest rates. Changes in the fair value are recognized directly in profit and loss.

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In accordance with IAS 39, securities and certain non-current financial instruments are classified either as financial assets held to maturity (HtM) or available for sale (AfS) by the ÖBB Group and are measured at amortized cost or at fair value. Unrealized profits and losses on available-for-sale assets are recognized via other comprehensive income in equity.

The impairment test for securities is based on a two-step approach, which examines whether the carrying amount or the acquisition cost differs from the fair value of the securities as well as the period of time for which such a difference exists. Impairment losses are recognized in other financial result in the respective period.

If there is an indication that an impairment no longer exists, the ÖBB Group has to reverse all or part of the impairment in the consolidated annual result, unless these financial assets are carried at cost or equity instruments classified as “available for sale”. For equity instruments classified as “available for sale” and carried at cost, reversal of the impairment is not permitted. For equity instruments classified as “available for sale” and measured at fair value, any increase in the fair value is recognized in other comprehensive income.

Trade receivables

Trade receivables are recognized at amortized cost or the lower realizable amount. Impairments are recognized if the collection of the claims can no longer be expected due to customer-specific circumstances. If such doubts regarding the collection of the receivables occur, receivables are measured at the lower realizable amount and specific provisions are recognized on the basis of identifiable risks. Impairment indications include significant financial difficulties of the contractual partner, initiated insolvency proceedings, unsuccessful dunning and execution attempts, effective breach of contract (e.g. default or failure to pay) and other information raising doubts about the solvency of the debtor. The debtor’s creditworthiness is considered in determining the amount of impairment. As soon as the irrecoverability of the receivable has been determined, the receivable is derecognized.

Construction contracts, if significant, are recognized according to the “percentage of completion” method. Currently, there are no significant construction contracts in the ÖBB Group and are therefore recognized at cost of production less appropriate allowances in trade receivables.

Fair value of financial instruments

The carrying amounts of cash, trade receivables and liabilities, receivables due from and liabilities due to related companies approximate their fair values. The fair values of securities held to maturity and securities available for sale result from the respective quoted prices. The fair value of non-current financial liabilities and swap agreements is based on the future cash flows, discounted at the ÖBB Group’s estimated current interest rate at which comparable financial instruments may be concluded.

The ÖBB Group estimates, based on the audited financial statements, if any, that the fair value of assets for which no quoted prices are available – mainly investments – corresponds to their carrying amount. Assets are subject to impairment testing, if the investment generates losses over an extended period or in the event of significant changes in the business environment.

For further information on accounting and evaluation methods see Note 29.

Inventories

Inventories mainly consist of material and spare parts used primarily for the expansion, maintenance and repair of faults of the Group’s own railway networks and for maintenance of the fleet. Inventories are measured at the lower of cost or net realizable value, cost being determined on the basis of the weighted average price method. Net realizable value is determined based on the estimated selling price in the ordinary course of business, less estimated cost to complete and selling costs still to be incurred.

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Provisions

Provisions are recognized when obligations to a third party were assumed, payment made by the ÖBB Group is probable and the amount can be reasonably estimated. Non-current provisions are recognized at their present value. For further information see Note 26.2.

Leases

Lease agreements in which the ÖBB Group, being the lessee, assumes substantially all the risks and rewards of ownership of an asset are classified as finance leases. Otherwise, they are classified as operating leases. Property, plant and equipment acquired by way of finance leasing is recognized at the leased item’s fair value or at the lower present value of the minimum lease payments at inception of the lease, less depreciation and impairment losses.

If substantially all risks and rewards of ownership are attributable to the ÖBB Group as lessor, the leased asset is recognized in the statement of financial position by the ÖBB Group. The leased item is accounted for according to the regulations applicable to this asset in accordance with IAS 16. For information on the accounting methods applied to the cross border leasing transactions see Note 30.3.

Employee benefit obligations

The ÖBB Group has entered into only one individual pension obligation for a former board member. Apart from this obligation, there are only defined contribution plans with respect to pensions. The ÖBB Group pays contributions to publicly or privately administered pension or severance insurance plans on a mandatory or contractual basis for these defined contribution plans. Apart from the contribution payments, there are no further payment obligations. The regular contributions are recognized as personnel expense in the respective period.

All other obligations (severance and anniversary payments) result from unfunded defined benefit plans for which adequate provisions are recognized. The ÖBB Group calculates the provision using the projected unit credit method (PUC method) in accordance with IAS 19 (“Employee Benefits”). The future obligations are measured using actuarial methods on the basis of an appropriate assessment of the discount rate, rate of compensation increase, rate of increase of pensions and rate of employee turnover. In accordance with this method, the ÖBB Group recognizes all actuarial profits and losses immediately and totally as personnel expenses. Any past service cost is amortized on a straight-line basis over the remaining service period. For further information see Note 26.1.

Changes in existing provisions for decommissioning, restoration and similar liabilities

In accordance with IAS 16 (”Property, Plant and Equipment”), the cost of property, plant and equipment includes the initial estimate of the cost of dismantling and removing the item and restoring the site on which it is located. Provisions for decommissioning, restoration and similar obligations are measured in accordance with the regulations of IAS 37. The effects of changes in the measurement of existing provisions for decommissioning, restoration and similar obligations are accounted for in accordance with IFRIC 1 (“Changes in Existing Decommissioning, Restoration and Similar Liabilities”). The provisions require that any increase of such a liability that reflects the passage of time shall be recognized in profit and loss. Changes in the measurement of these liabilities resulting from changes in the estimated maturity or amount of the outflow of resources required to fulfill the liability or from changes in the discount rate shall be added to or deducted from the cost of the relevant asset in the current period. The amount deducted from the cost of the asset shall not exceed its carrying amount. If the adjustment results in an addition to the cost of an asset, the ÖBB Group shall examine whether this is an indication that the new carrying amount of the asset may not be fully recoverable. If there is such an indication, the asset shall be tested for impairment and any impairment losses shall be recognized.

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Revenue recognition

Revenue is recorded when the risks and rewards are transferred or when the service has been provided, when the amount of revenue can reliably be determined and it is highly probable that the economic benefit will flow to the ÖBB Group.

Grants related to income

Grants related to expense and income provided to the ÖBB Group are recognized in profit or loss immediately upon fulfillment of the preconditions.

Research and development costs

In accordance with IAS 38, research costs refer to original and planned research performed to gain new scientific or technical knowledge and understanding are expensed as incurred. Development costs are defined as costs incurred for using research findings to achieve technical and commercial feasibility. If development costs cannot be separated from research costs they are expensed as incurred in accordance with IAS 38. Since the recognition requirements of IAS 38 are not met, research and development costs are expensed as incurred. If the recognition requirements of IAS 38 are met, development costs shall be capitalized as intangible assets.

Interest, royalties and dividends

Interest is recognized using the effective interest method in accordance with IAS 39. Dividends are recognized when the shareholder’s right to receive payment is established. Royalties such as rents are recognized on an accrual basis in accordance with the provisions of the relevant agreement. Turnover rental fees are rental payments, which are settled dependent on the revenue realized by the lessee and are recognized when the amount of rent can reliably be determined.

In accordance with IAS 23, borrowing costs for significant qualifying assets are capitalized since January 1, 2009. For more information, see Note 14.

Income tax

In accordance with § 50 para. 2 Bundesbahngesetz as amended by BGBl. No. 95/2009 - ÖBB-Infrastruktur AG has been exempted from federal taxes as of 2005, except for VAT, from federal administration fees as well as from court charges and from juridical administration fees to the extent that such taxes and duties result from the execution of the respective tasks under the Bundesbahngesetz (partial tax exemption).

With respect to the tax situation of ÖBB-Infrastruktur AG, the following services are assumed to be subject to income tax:

• Income from power trade; • Rendering of services not related to railway infrastructure; • Management of real estate not representing railway assets as defined in § 10a Eisenbahngesetz [Railways

Act]; • Investment administration.

The other Group entities are subject to corporate income tax obligations.

In December 2005, a tax group contract was concluded with ÖBB-Holding AG as head of the tax group and the majority of the ÖBB Group companies as group members. At present, the corporate tax group does not include any foreign companies. The fiscal claims and obligations from the tax group contract are based on the current fiscal result of each respective member of the group. Positive tax amounts are on principle charged at the corporate income tax rate valid in the year of the financial statements, while negative tax amounts are compensated only insofar as they can be realized in the Group.

The primacy of sub-group consideration and the principle of equal treatment of all participants in the company group within the respective sub-group apply for the usage of fiscal losses; in addition, the principle of equal treatment of all participants in the company group applies for inter-sub-group usage of fiscal losses.

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Deferred taxes

Deferred taxes are recognized – taking into account the exception clauses under IAS 12.15 and IAS 12.24 – for all temporary differences between the tax base of the assets/liabilities and their carrying amounts in the IFRS financial statements (liability method), insofar as these assets and liabilities are related to the business operation that is not exempt from income taxes.

However, if deferred taxes arise from the initial recognition of an asset or a liability resulting from a transaction other than a business combination which neither affects accounting profit or loss nor taxable profit at the time of the transaction, no deferred taxes are recognized at the time of initial recognition and thereafter.

Deferred tax liabilities arising from temporary differences in connection with investments in subsidiaries and associates are recognized, unless the ÖBB Group is able to control the timing of the reversal of the temporary differences and it is probable that the temporary differences will not reverse in the foreseeable future due to this influence.

Deferred taxes are measured at the tax rates (and under the tax regulations) that have been enacted or substantially enacted on the reporting date and that are expected to apply to the period when the deferred tax assets are realized or the deferred tax liability is expected to be settled.

Deferred tax assets are recognized to the extent that it is probable that taxable profit will be available in the future against which the temporary difference can be utilized.

If income taxes relate to items that are recognized in other comprehensive income in the same or a different period, deferred taxes are also recognized in other comprehensive income.

Use of estimates and judgment

The preparation of Consolidated Financial Statements requires the Executive Board to make estimates and assumptions that may affect the amounts of assets, liabilities and contingent liabilities reported at the reporting date as well as the amounts of revenue and expenses of the reporting period. Actual results may differ from these estimates. All estimates and assumptions are updated on a regular basis and based on experience as well as other factors including expectations with respect to future events deemed to be reasonable under the given circumstances.

The Executive Board has made judgments in the process of applying the accounting policies of the ÖBB Group. Additionally, as of the reporting date, the Executive Board has made key assumptions concerning the future and has identified key sources of estimation uncertainty at the reporting date which bear a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities in the next financial year:

a . Employee benef i t p lans :

The measurement of the post-employment benefit plans, pension plans and anniversary benefit claims is based on a method that uses various parameters such as the expected discount rate, rate of compensation and pension increase and rate of employee turnover (see Note 26.1). If the development of the relevant parameters differs significantly from the expectations, this can have a significant effect on the provision and, as a result, on the net personnel expenses of the ÖBB Group.

b. Impai rments :

Impairment tests for intangible assets and property, plant and equipment are generally based on estimated discounted future net cash flows expected to result from the continued use of the asset and its sale or retirement at the end of its useful life. Factors such as lower than anticipated sales and resulting decreases in net cash flows as well as changes in the discount rates used could lead to impairment. Impairment tests were carried out at each of the reporting dates and resulted in impairment expenses as described in Note 14, as the value in use was lower than the carrying amount in some cases. According to the sensitivity analysis performed, a change in the discount rate by +/- 0.25% would have led to an increase in impairment amounting to EUR277.2 million (prior year: EUR159.9 million) or a decrease in impairment amounting to EUR210.3 million (prior year: EUR601.6 million) respectively. With respect to the carrying amounts of the intangible assets and property, plant and equipment, please refer to the asset analysis in Notes 14 and 15 or to Note 9 respectively.

c . Assumpt ions wi th respec t to the usefu l l i fe of proper t y , p lant and equipment and intangib le assets :

The useful lives are determined based on the specific conditions of the company, taking regular maintenance into account. According to the sensitivity analysis performed, a change in the useful life of +/- 1 year would result in an increase in depreciation and amortization amounting to EUR77.7 million (prior year: EUR31.8 million) or a decrease in depreciation and amortization amounting to EUR68.5 million (prior year: EUR85.1 million).

75


In 2010, the useful lives of certain assets were changed when it was ascertained that the period of average use of some types of property, plant and equipment depending on the individual operation was extended due to newly applied technologies. Useful lives of lines transferred to the federal state of Lower Austria and of lines which will no longer be part of the target network were reduced accordingly.

In 2010, the useful lives of further lines that are not part of the target network were reduced to the expected remaining useful life, which resulted in an additional depreciation amounting to EUR12.3 million. On the other hand, the slab track was separated from the substructure class and its useful life was extended accordingly. This resulted in a decrease in depreciation amounting to EUR1.4 million (for further information see Note 14 or Note 3 “Property, plant and equipment” respectively).

d . In teres t and exchange sens i t i v i t ies :

Sensitivity analyses of the interest and exchange risk are described in Note 29.1.

e. Provis ions :

Provisions were measured according to the best estimate in accordance with IAS 37.37, i.e. the amount that the Company would have to pay, under reasonable consideration, to settle the obligation as of the reporting date or to transfer the obligation to a third party at that time. Reliable statements on a sensitivity analysis are not possible, especially regarding the likelihood of occurrence of environmental risks and decommissioning costs, reduced tickets outside the tariff and public services. The measurement of the provision for decommissioning costs is based on the assumption that the Company and the lines will continue to exist and to operate. Decommissioning costs are estimated and a respective provision is recognized only when the closure of individual tracks is expected in the foreseeable future or when such closure has already been initiated. The change in the provision for decommissioning costs from the Lower Austria package 2009 is not a change in estimate, but a change due to a new contractual agreement. The carrying amounts are indicated in Note 26.2.

On October 20, 2010, an indictment was issued at the United States District Court for the District of Columbia by Rosalie Simon et alt. against the Republic of Hungary, MÁV and Rail Cargo Hungaria Zrt. for alleged misconduct during the Hungarian holocaust. On December 31, 2010, the indictment was formally filed with the Hungarian Department of Justice. Due to the debatable competence of the court at which the proceedings were instituted (USA) – there is no enforcement treaty between the USA and Austria or Hungaria – “inadmissibility” was agreed in the USA in view of the long duration and high costs anticipated if the claim was admitted. On March 10, 2011, the court in the USA issued a default order, confirming the default of Rail Cargo Hungaria Zrt. for the time being. This could subsequently result in claims for damages that are not enforceable in Austria and Hungaria. Therefore, it was decided to initiate legal measures, contrary to the previous agreement of inadmissibility. However, based on the current legal situation, the general opinion is that no payments are expected to be made by Rail Cargo Austria AG and Rail Cargo Hungaria Zrt.

Due to the business activities of Rail Cargo Austria AG, a risk e.g. of freight documents or invoices being filled out or issued incorrectly remains despite ongoing training of the employees. At the moment, no significant payment obligations are expected to result from such errors. Therefore, no provision has been made for this risk.

The final processing of reduced tickets outside the tariff as well as the nursing care benefit is also described in Note 26.2. This comprises final settlement of issues that have not been settled so far.

f . Defer red taxes :

Deferred tax assets were recognized for temporary differences between the tax base and the carrying amounts of assets and liabilities as well as for losses carried forward. If the tax assessment regarding the qualification of the segments of ÖBB-Holding AG changes from “exempt from taxes” and “taxable” or if future taxable results are insufficient, this can have a significant impact on the amount of deferred tax assets. When assessing deferred tax assets, the Executive Board evaluates the prospective usage within the 5-year tax-planning period (see Note 13).

In 2010, only power trading was classified as taxable within the power plant business unit, which is why taxes recognized in the previous year amounting to EUR33.3 million were no longer recognized.

76


g. Cross Border Leas ing:

The events in connection with the crisis in the financial markets had an impact on the classification of certain cross border lease transactions. With respect to contracting parties for investments with an AA+ rating or better or for which a subsidiary guarantor liability is assumed by the government, the default risk is still regarded as extremely low. Accordingly, there is no need for adjustments in line with present assessments and these transactions can continue to be presented “off balance”. Should there be unexpected defaults on these investments or should requirements for the minimum rating no longer be fulfilled, the obligations from the transactions as well as the investments would have to be recognized in the statement of financial position and allowances on the investments would probably have to be recognized (see Note 30.3).

Concentration of risks

As of the reporting dates, no significant dependence on particular suppliers or creditors outside the ÖBB Group whose sudden default might significantly affect business operations existed. Furthermore, there is no concentration of labor services, providers of other services, franchising or licensing rights or other rights that the ÖBB Group is dependent on and that could, if suddenly eliminated, severely affect business operations. The ÖBB Group invests its cash with various institutes with excellent credit ratings. For information on the grants and grant agreements provided by the Republic of Austria, see Note 33.

Capital management

The company defines equity as share capital, capital reserves and other reserves as well as generated profit and possible non-controlling interests. The objective of the financial management of the ÖBB Group is to sustainably increase the shareholder value and to maintain a capital structure appropriate for upholding the excellent credit rating. Due to the Company’s special situation and its statutory mission and also as a result of the government’s commitment to subsidize infrastructure expenditures (both erection and operation and maintenance) not covered by the Company’s income from current operations, the control of the capital structure focuses mainly on debt ratios and on the following ratios, which are compared to the respective budgeted values: number of employees, EBIT margin, “income from ordinary activities” margin, equity ratio, net working capital.

B . N O T E S O N T H E C ON S O L I D AT E D S T AT E M E N T O F F I N AN C I AL P O S I T I O N AN D T H E C O N S O L I D AT E D I N C O M E ST AT E M E N T

4. Sales

2010 2009


Goods transport 1.924,9 1.762,8thereof public services contracted by the federal government 103,6 101,5

Passenger and baggage transport 1.213,0 1.182,1thereof public services contracted by the federal government 567,8 532,0

Government grant according to § 42 sec.1 Federal Railways Act 1.054,0 1.029,6

Traffic service orders 415,8 379,1

Rent and lease 166,8 154,8

Energy 163,7 138,8

Maintenance/repair 56,3 65,7

Traction services 26,6 25,0

Infrastructure usage charge 20,3 18,3

Other revenue 94,7 71,6

Total 5.136,1 4.827,8

For the composition of revenue per business unit and according to geographic aspects see Note 34 (segment reporting).

77


5. Own work capitalized

Directly attributable personnel expenses and expenses for materials as well as appropriate parts of material and production overheads were taken into account in determining the own work capitalized in connection with the construction of assets. This item also comprises own work capitalized that was provided by a subsidiary to other related companies within the Group. Such own work investment is incurred mainly in connection with the construction of railway infrastructure. In the course of the preparation of the Consolidated Financial Statements, these settlements within the Group were recognized as own work capitalized.

6. Other operating income

2010 2009


Government grant according to § 42 sec. 2 Federal Railways Act 308,0 222,0Gain from the sale of property, plant and equipment, intangible assets and non-current assets held for sale 105,4 65,4

Energy charge reimbursement 29,3 26,2

Income from sale of materials 17,1 15,5

Proceeds from leisure time service 16,0 17,4

Translation differences 8,8 18,8

Personnel leasing 8,5 12,8

Compensation for damage 5,1 6,7

Derecognition of old liabilities 5,0 6,1

Third-party grants for expenses 3,8 4,6

Additional and re-capitalization of property, plant and equipment 2,7 0,2

Other operating income 27,0 50,5

Total 536,7 446,2

The government grants pursuant to § 42 Bundesbahngesetz (formerly § 43 Bundesbahngesetz) concerns the federal grant for planning and construction of railway infrastructure projects on the basis of the 6-year master plan.

The other operating income includes income from rent and lease of buildings and other advertising space and income from canteens, among others.

78


7. Expenses for materials and purchased services

2010 2009


Expenses for materials

Power 272,9 219,4

Raw materials and supplies 182,0 168,4

Other expenses for materials 81,2 61,9

Subtotal expenses for materials 536,1 449,7

Expenses for services received

Third-party transport services 276,7 288,1

Infrastructure usage charge 108,0 111,1

Rent for rail and road vehicles 113,2 109,5

Other services received 1.034,6 947,5

Subtotal expenses for services received 1.532,5 1.456,2Total 2.068,6 1.905,9

The other expenses for materials mainly comprise expenses for liquid fuels less payments of the petroleum tax.

Expenses for other purchased services mainly comprise freight forwarding services, incoming and customs duties as well as goods and services of a non-capital nature in connection with repairs, maintenance, cleaning and other services.

8. Personnel expenses and employees

2010 2009


Salaries 1.712,4 1.709,5Wages 58,2 47,9Statutory social contributions 558,5 521,3Pension costs 27,6 26,7Expenses for severance payments 46,7 15,9Other social expenses 6,7 7,3Total 2.410,1 2.328,6

The employee structure is composed as follows:


Employees 15.647 15.467 180 1% 15.864 15.197

Tenured employees 26.772 28.051 -1.279 -5% 27.912 29.406

Other company changes 0 87 -87 -100% 0 0Total active employees 42.419 43.605 -1.186 -3% 43.776 44.603

Apprentices 1.706 1.581 125 8% 1.576 1.370

Total incl. apprentices 44.125 45.186 -1.061 -2% 45.352 45.973

Change

Employee structure Dec 31, 2009

Average

Dec 31, 2010

79


9. Amortization and depreciation

2010 2009


Regular depreciation on property, plant and equipment 818,9 763,9Regular amortization on intangible assets 50,7 47,2

Depreciation on investment properties 2,9 2,3less amortization of investment grants -227,4 -240,1Total regular depreciation 645,1 573,3Impairment of property, plant and equipment 91,5 4,4

Impairment of intangible assets 103,7 0,8Total impairment 195,2 5,2Total depreciation 840,3 578,5

Following impairment testing, impairments amounting to EUR195.2 million (prior year: EUR5.2 million) were deducted from property, plant and equipment and intangible assets in 2010.

10. Other operating expenses

The other operating expenses of the ÖBB Group are composed as follows:

2010 2009


Cost of operation 133,2 106,2Compensation for additional expenses 52,0 53,2

Non-income taxes 42,1 47,5Rent, lease and license expenses 40,7 37,2Office supplies 33,1 30,8

Events of loss 32,8 20,0Allowances for receivables 29,0 40,7

Marketing 24,2 23,8Loss from sale or retirement of assets 21,4 14,1Legal and consultancy fees 16,3 24,0

Leisure time service 12,8 14,4Insurances 12,2 12,1

Commissions 12,5 11,6Postal, bank and telephone fees 11,0 15,3

Translation differences 10,8 13,7Lease of personnel and service contracts 7,6 9,8Training and education 7,6 8,6

Other passenger transport services 5,8 6,7Work clothes 5,6 6,2

Leasing expenses 2,8 5,9Consumption/allocation of reserves -65,3 41,4Other 59,8 77,9

Total 508,0 621,1

Non-income taxes comprise all taxes related to business operations (electricity tax, motor vehicle tax, real estate tax, road user charges and other taxes and contributions etc.).

The termination of legal disputes resulted in an increase in the consolidated annual profit by EUR5.1 million (prior year: EUR1.3 million). The development of the provision for legal disputes is shown in the schedule of provisions (Note 26.2).

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The expenses for services of the auditors of the Consolidated Financial Statements and the separate financial statements are also included in the other operating expenses and are as follows (amounts in thousands EUR):

2010 2009

in thousand EUR in thousand EUR

Consolidated/annual financial statements audit 1.082,8 2.460,7

Other auditing services 259,6 270,5

Consulting services 85,4 127,5

Other services 101,6 287,8

Total 1.529,4 3.146,5

11. Interest income and expense

The interest income and expense of the ÖBB Group is composed as follows:

2010 2009


Interest income 146,0 173,4Interest expense -695,3 -648,2Total interest income and expense -549,3 -474,8

The interest income from non-related companies mainly comprises interest income from swaps and other derivative financial instruments as well as interest income from marketable deposits made in connection with cross border leasing transactions.

The interest received from swap agreements amounting to EUR58.4 million (prior year: EUR72.2 million) was not offset with the interest expenses from hedged financial instruments but included in the interest income.

The borrowing costs amounting to EUR404.0 million (prior year: EUR358.0 million) refer to bonds. In addition, interest expenses are incurred in connection with loans of the EUROFIMA or banks respectively, for cross border leasing transactions and derivative financial instruments.

12. Other financial result

The other financial result of the ÖBB Group is composed as follows:

2010 2009

Other financial result in mil. EUR in mil. EUR

Income from investments 0,5 1,8Income from disposal and revaluation of financial assets 11,7 13,5

Other financial income 415,3 387,6thereof from measurement/translation differences 197,6 57,5thereof other financial income 217,7 330,1

Other financial expenses -467,9 -127,1thereof from measurement/translation differences -300,7 -43,3thereof other financial expenses -167,2 -83,8

Total -40,4 275,8

Regarding the fair value changes of the portfolio credit default swap/collateralized debt obligation amounting to EUR306.9 million recognized in the other financial result in the year under review 2009, see Note 29.3.

The other financial expenses result in particular from fair value changes of derivative financial instruments as well as losses resulting from the measurement of financial liabilities. The other financial expenses also include the provisions made for investments in connection with cross border leasing transactions amounting to EUR38.9 million (prior year: EUR34.8 million).

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13. Income taxes

The item income taxes is composed as follows:

2010 2009


Actual income taxes current period -0,3 -2,9

Actual income taxes previous periods -6,9 0,0

Actual income taxes -7,2 -2,9

Deferred tax expense -1,1 -2,0

Income taxes -8,3 -4,9

Income taxes are calculated at 25% of the estimated taxable profit in the financial year. The tax load abroad is calculated at the respective rates applicable there.

The changes in deferred taxes are composed as follows:

2010 2009

in mil . EUR in mil . EUR

Amounts recognized as of Jan 01 0,2 2,4

In income or expense -1,1 -2,0

in the other consolidated result 3,6 -0,2

Amounts recognized as of Dec 31 2,7 0,2

The tax expenses in the financial year can be reconciled with the profit according to the Consolidated Income Statement as follows:

2010 2009


Net income before income tax according to the IFRS -329,8 120,8

Adjustment of taxable portion pursuant to § 50 para. 2 Bundesbahngesetz 49,9 136,9

Taxable annual profit -279,9 257,7

Group tax rate in % 25% 25%

Expected income/expense from taxes in the financial year 69,9 -64,4

Tax rate differences between foreign companies and the corporate tax rate -3,8 -1,3

Other tax-exempt income and other reductions 30,9 -6,1

Non-deductible operating expense and other additions -9,2 -2,2

Effects of taxes from previous years reimbursed in the financial year -6,0 -0,1

Effects of changes of recognition of deferred taxes -6,5 0,1

Unrecognized loss carried forward from the year under review -155,2 0,0Effects of changes in recognition 61,3 49,2Other effects 10,3 19,9

Taxes on income -8,3 -4,9

Effective corporate tax rate 3,0% 1,9%

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Deferred tax assets and liabilities

Deferred tax assets and deferred tax liabilities as of December 31, 2010, and December 31, 2009, are the result of the following temporary differences between the carrying amounts in the IFRS Consolidated Financial Statements and the relevant tax bases, insofar as they do not relate to the tax-exempted portion according to § 50, para. 2 of the Bundes-bahngesetz:

In 2010, the deferred tax assets and liabilities were offset for the first time in accordance with a recommendation from the AFRAC statement “IFRS Balancing and Reporting Issues in Connection with the Introduction of Group Taxation”. The amounts of the previous year were adjusted accordingly. The effects of offsetting on the amounts reported in the previous year are indicated below. Offsetting the deferred taxes reduces the total amounts reported in the statement of financial position in the previous year by a corresponding amount. However, offsetting has no significant effects on the relevant ratios of the Company.

The deferred taxes refer to the assets liabilities assets liabilities assets liabilities

following important balance sheet items, Dec 31, 2010 Dec 31, 2010 Dec 31, 2009 Dec 31, 2009 Dec 31, 2008 Dec 31, 2008

loss carried forward and tax credits: in mil. EUR in mil. EUR in mil. EUR in mil. EUR in mil. EUR in mil. EUR

Non-current assets

Property, plant and equipment 17,1 -60,7 19,6 -17,1 27,4 -25,0

Intangible assets 0,3 -0,4 1,2 -0,3 0,3 -0,3

Investment properties 0,8 0,0 0,0 0,0 0,0 0,0

Financial assets 0,6 0,0 0,1 -0,2 0,7 -0,7

Financial assets - leasing 7,0 0,0 0,0 0,0 0,0 0,0

Other non-current financial assets 3,7 -8,4 0,0 0,0 0,0 0,0

Other non-current receivables and assets 0,1 -1,1 0,0 0,0 0,0 0,0

29,6 -70,6 20,9 -17,6 28,4 -26,0

Current assets

Inventories 0,1 0,0 0,2 -0,1 0,1 -0,1

Trade receivables 1,1 0,0 0,0 0,0 0,0 0,0

Other current receivables and assets 1,1 0,0 0,0 0,0 0,0 0,0

Financial assets - leasing 0,0 -5,6 0,0 0,0 0,0 0,0

Other current financial assets 11,5 -7,0 0,0 0,0 0,0 0,0

13,8 -12,6 0,2 -0,1 0,1 -0,1

Non-current liabilities

Financial liabilities - leasing 68,5 -0,9 0,0 0,0 0,0 0,0

Other non-current financial liabilities 0,0 -1,3 0,0 0,0 0,0 0,0

Provisions 6,9 -0,8 11,7 -17,2 5,1 -5,1

Other non-current liabilities 8,0 -2,2 2,4 -6,9 0,0 0,0

83,4 -5,2 14,1 -24,1 5,1 -5,1

Current liabilities

Financial liabilities - leasing 4,1 0,0 0,0 0,0 0,0 0,0

Other current financial liabilities 1,3 -3,9 0,0 0,0 0,0 0,0

Provisions 7,1 -31,8 0,0 0,0 0,0 0,0

Trade payables 0,0 -12,2 0,0 0,0 4,9 -4,9

Other current liabilities 2,2 -2,9 0,0 0,0 0,0 0,0

14,7 -50,8 0,0 0,0 4,9 -4,9

Tax losses carried forward 0,4 0,0 6,8 0,0 0,0 0,0

Deferred tax assets ordeferred tax liabilities respectively 141,9 -139,2 42,0 -41,8 38,5 -36,1

Offsetting -139,2 139,2 -41,8 41,8 -36,1 36,1

Net deferred tax assets 2,7 0,0 0,2 0,0 2,4 0,0

Deferred tax Deferred tax Deferred tax

83


The deferred tax assets and liabilities are itemized in a more detailed way in the year under review, the previous year figures have not been adjusted to this degree of detail.

When assessing the recoverability of deferred tax assets, the Executive Board estimates the prospective use within the 5-year tax planning period. In order to use deferred tax assets, sufficient taxable income must be available in those periods in which the deductible temporary differences reverse. In this assessment the Executive Boards considers the expected release of deferred tax assets and the planned taxable income.

Based on these planning calculations, usage of the tax losses carried forward and the temporary differences is improbable for the Austrian corporate tax group. Therefore, deferred tax assets were recognized only at the amount of the deferred tax liabilities in the corporate tax group as of December 31, 2010. The excess amount of deferred tax assets recognized in the statement of financial position results from the consolidation activities and from foreign subsidiaries.

No deferred tax liabilities were established for the following losses carried forward and temporary differences:

2010 2009

Temporary differences for which no deferred taxes were established in mil. EUR in mil. EUR

Losses carried forward 5.755,0 5.175,0

Temporary differences 1.087,1 1.218,9

Total 6.842,1 6.393,9

The tax losses carried forward in the amount of EUR5,747.6 million (prior year: EUR5,143.8 million) originate from Austrian companies and can be carried forward for an unlimited period of time according to currently applicable law. Annual usage of losses carried forward is limited to 75% of the respective taxable income in Austria; however, EUR4,258.5 million (prior year: EUR4,111.6 million) result from pre-taxgroup losses and can therefore be utilized in their entirety against taxable income generated in future periods.

With respect to seventh-part depreciations of investments that have not yet been asserted as operating expenses, deferred tax assets amounting to EUR0.6 million (prior year: EUR14.9 million) were recognized as of the reporting date.

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14. Property, plant and equipment

The following fixed asset schedule shows the structure of the property, plant and equipment, the changes in the financial year, and the development of government grants (investment grants) to property, plant and equipment.

Land and buildings

Land and buildings

leased

Automo-biles and

trucks

Automo-biles and

trucks leased

Technical equipment

and machinery

Technical equipment and machi-nery leased

Other plant furniture and

fixtures

Assets

under con-struction and

pre-payments

Total property, plant and

equipment

in mil. EUR in mil. EUR in mil. EUR in mil. EUR in mil. EUR in mil. EUR in mil. EUR in mil. EUR in mil. EUR

Cost 2010Cost as of Jan 01, 2010 17.316,6 10,2 5.259,1 1.173,2 6.587,8 47,0 233,8 5.264,6 35.892,3Translation differences -0,1 0,0 -4,1 -0,6 -0,1 0,0 0,1 0,0 -4,8

Additions 103,8 0,0 101,6 9,2 5,1 0,2 22,8 2.333,2 2.575,9

Additions from contribution 0,0 0,0 0,1 0,0 0,0 0,0 0,3 0,0 0,4

Disposals -475,6 -26,3 -160,5 -5,8 -106,6 -54,6 -12,1 20,4 -821,1

Reclassification 0,0 26,3 0,0 0,0 33,7 127,3 0,0 -10,2 177,1Transfers 1.084,3 -2,9 356,7 -73,5 492,7 -110,4 18,3 -1.801,2 -36,0Cost as of Dec 31, 2010 18.029,0 7,3 5.552,9 1.102,5 7.012,6 9,5 263,2 5.806,8 37.783,8

Accumulated depreciations as of Jan 01, 2010 (incl. impairment) 6.688,0 6,2 2.970,1 295,9 3.573,6 42,1 161,4 0,9 13.738,2

Translation differences 0,3 0,0 -0,1 0,0 0,0 0,0 0,1 0,0 0,3

Depreciation 2010 (incl. impairment) 387,5 -0,1 202,0 50,9 233,3 5,6 31,2 0,0 910,4

Additions from merger and change in reporting entity 0,0 0,0 0,0 0,0 0,0 0,0 0,2 0,0 0,2

Disposals -369,8 -7,5 -126,6 0,0 -45,7 -51,5 -0,7 -0,3 -602,1

Reclassification 0,0 8,7 0,0 0,0 33,7 10,2 0,0 0,0 52,6

Transfers 0,0 0,0 42,2 -42,2 0,0 0,0 0,0 0,0 0,0

Accumulated depreciations as of Dec 31, 2010 (incl. impairment) 6.706,0 7,3 3.087,6 304,6 3.794,9 6,4 192,2 0,6 14.099,6

Carrying amounts before investment grants as of Jan 01, 2010 10.628,6 4,0 2.289,0 877,3 3.014,2 4,9 72,4 5.263,7 22.154,1

Carrying amounts before investment grants as of Dec 31, 2010 11.323,0 0,0 2.465,3 797,9 3.217,7 3,1 71,0 5.806,2 23.684,2

Grants 2010Cost as of Jan 01, 2010 8.866,9 0,0 422,1 0,0 2.895,5 0,0 10,1 872,4 13.067,0

Additions 44,2 0,0 0,0 0,0 9,6 0,0 0,5 76,8 131,1

Disposals -113,3 -20,2 -10,3 0,0 -35,0 -75,8 -1,5 0,0 -256,1

Reclassification 0,0 20,2 7,5 0,0 75,4 75,8 0,0 0,0 178,9

Transfers 14,4 0,0 0,0 0,0 10,2 0,0 0,2 -32,4 -7,6

Cost as of Dec 31, 2010 8.812,2 0,0 419,3 0,0 2.955,7 0,0 9,3 916,8 13.113,3

Accumulated depreciations as of Jan 01, 2010 5.122,1 0,0 278,5 0,0 2.152,0 0,0 5,1 3,2 7.560,9

Depreciations 2010 129,2 0,7 16,3 0,0 67,5 2,6 0,9 0,0 217,2

Disposals -111,5 -3,4 -7,5 0,0 -18,1 -12,8 -1,4 0,0 -154,7

Reclassification 0,0 2,7 0,0 0,0 0,0 10,2 0,0 0,0 12,9Accumulated depreciations as of Dec 31, 2010 5.139,8 0,0 287,3 0,0 2.201,4 0,0 4,6 3,2 7.636,3

Investment grants as of Jan 01, 2010 3.744,8 0,0 143,6 0,0 743,5 0,0 5,0 869,2 5.506,1

Investment grants as of Dec 31, 2010 3.672,4 0,0 132,0 0,0 754,3 0,0 4,7 913,6 5.477,0

Carrying amounts after grants as of Jan 01, 2010 6.883,8 4,0 2.145,4 877,3 2.270,7 4,9 67,4 4.394,5 16.648,0

Carrying amounts after grants as of Dec 31, 2010 7.650,6 0,0 2.333,3 797,9 2.463,4 3,1 66,3 4.892,6 18.207,2

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Land and buildings

Land and buildings

leased

Automo-biles and

trucks

Automo-

biles and trucks

leased

Technical

equipment and

machinery

Technical

equipment and

machinery leased

Other plant furniture and

fixtures

Assets

under con-struction and

pre-payments

Total

property, plant and

equipment

in mi l. EUR in mil . EUR in mil. EUR in mil. EUR in mil. EUR in mil. EUR in mil. EUR in mil. EUR in mil. EUR

Cost 2009

Cost as of Jan 01, 2009 16.639,8 10,2 5.853,2 357,6 6.296,5 46,8 238,3 4.581,2 34.023,6

Translation differences -0,4 0,0 -2,0 -0,3 -0,1 0,0 0,0 0,0 -2,8

Addit ions 89,4 0,0 273,7 7,7 3,5 0,1 23,8 2.223,7 2.621,9

Addit ions from contribut ion 0,0 0,0 0,0 0,0 2,6 0,0 0,3 0,0 2,9

Disposals -397,0 0,0 -175,1 -0,3 -111,9 0,0 -45,2 -7,1 -736,6

Transfers 984,8 0,0 -690,7 808,5 397,2 0,1 16,6 -1.533,2 -16,7

Cost as of Dec 31, 2009 17.316,6 10,2 5.259,1 1.173,2 6.587,8 47,0 233,8 5.264,6 35.892,3

Accumulated depreciations as of Jan 01, 2009 (incl. impairment) 6.670,2 6,3 3.193,9 53,2 3.465,8 39,2 168,5 3,7 13.600,8

Translation differences 0,1 0,0 -0,1 0,0 -0,1 0,0 0,0 0,0 -0,1

Depreciation 2009 (incl. impairment) 328,9 -0,1 138,4 47,5 214,7 2,9 35,3 0,7 768,3

Addit ions from merger and change in reporting entity 0,0 0,0 0,0 0,0 0,1 0,0 0,2 0,0 0,3

Disposals -311,2 0,0 -166,9 0,0 -106,9 0,0 -42,6 -3,5 -631,1

Transfers 0,0 0,0 -195,2 195,2 0,0 0,0 0,0 0,0 0,0

Accumulated depreciations as of Dec 31, 2009 (incl. impairment) 6.688,0 6,2 2.970,1 295,9 3.573,6 42,1 161,4 0,9 13.738,2

Carrying amounts before investment grants as of Jan 01, 2009 9.969,6 3,9 2.659,3 304,4 2.830,7 7,6 69,8 4.577,5 20.422,8

Carrying amounts before investment grants as of Dec 31, 2009 10.628,6 4,0 2.289,0 877,3 3.014,2 4,9 72,4 5.263,7 22.154,1

Grants 2009Cost as of Jan 01, 2009 8.825,9 0,0 423,8 0,0 3.029,7 0,0 13,2 891,1 13.183,7Addit ions 70,8 0,0 0,2 0,0 15,7 0,0 2,1 65,5 154,3

Disposals -97,4 0,0 -1,9 0,0 -164,1 0,0 -5,3 -0,5 -269,2

Transfers 67,6 0,0 0,0 0,0 14,2 0,0 0,1 -83,7 -1,8

Cost as of Dec 31, 2009 8.866,9 0,0 422,1 0,0 2.895,5 0,0 10,1 872,4 13.067,0

Accumulated depreciation as of Jan 01, 2009 5.058,7 0,0 259,3 0,0 2.242,3 0,0 7,7 3,2 7.571,2

Depreciations 2009 126,3 0,0 30,5 0,0 70,0 0,0 0,9 0,0 227,7

Disposals -62,9 0,0 -11,3 0,0 -160,3 0,0 -3,5 0,0 -238,0

Accumulated depreciations as of Dec 31, 2009 5.122,1 0,0 278,5 0,0 2.152,0 0,0 5,1 3,2 7.560,9

Investment grants as of Jan 01, 2009 3.767,2 0,0 164,5 0,0 787,4 0,0 5,5 887,9 5.612,5

Investment grants as of Dec 31, 2009 3.744,8 0,0 143,6 0,0 743,5 0,0 5,0 869,2 5.506,1

Carrying amounts after grants as of Jan 01, 2009 6.202,4 3,9 2.494,7 304,4 2.043,4 7,6 64,4 3.689,6 14.810,4Carrying amounts after grants as of Dec 31, 2009 6.883,8 4,0 2.145,4 877,3 2.270,7 4,9 67,4 4.394,5 16.648,0

Reclassification of the fixed assets of the schedule of 2010 was required in order to appropriately allocate the investment grants.

The ÖBB Group received non-repayable investment grants for property, plant and equipment that were deducted from costs according to IAS 16.28 in conjunction with IAS 20. These investment grants are indicated in the schedule of assets. Both the depreciation of these assets and the amortization of all investment grants due to depreciation are recognized in the item “Depreciation and Amortization”.

The additions to property, plant and equipment resulting from the initial consolidation of companies are indicated in a separate line item in the schedule of assets.

The transfers refer primarily to amounts of finished assets transferred from the line item “Assets under construction and prepayments” to the specific asset accounts. In addition, transfers were made with respect to assets held for sale (see Note 19). Property, plant and equipment with carrying values amounting to EUR33.1 million (prior year: EUR37.4 million) were transferred to the assets held for sale and recognized in the schedule of assets as disposals.

As explained in Note 3 “Property, plant and equipment”, the useful life of certain assets was changed.

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In 2009, the useful life of certain tracks that were sold to the federal state of Lower Austria or tracks that are scheduled to go out of operation in the near future was reduced accordingly. The useful life of certain asset classes (in particular overhead lines or track superstructure respectively) was extended. The reduction of the useful lives resulted in an increase in depreciation amounting to EUR29.3 million, while the extension of the useful lives resulted in a decrease in depreciation amounting to EUR27.6 million.

In 2010, the useful life of further tracks that are very likely to be closed down was reduced to the expected remaining useful life, resulting in further depreciation amounting to EUR12.3 million. On the other hand, the slab track was separated from the substructure class and its useful life was extended accordingly. This resulted in a decrease in depreciations amounting to EUR1.4 million.

The ÖBB Group capitalized interest on construction costs of qualifying assets amounting to EUR13.9 million (prior year: EUR4.7 million) in accordance with the provisions of IAS 23. The underlying interest rate for borrowed capital is 4.1% (prior year: 4.0%). Losses from the disposal of property, plant and equipment incurred at an amount of EUR21.4 million (prior year: EUR14.1 million), resulting for example from retirement by scrapping or demolition of assets or from the sale of vehicles and other plant equipment respectively.

Financial liabilities are collateralized by property, plant and equipment at the following carrying values:

2010 2009

in mil. EUR in mil. EURLand and buildings 67,9 81,4 Automobiles and trucks 1.813,8 1.250,0 Other technical equipment and machinery 211,1 230,1

In total, assets amounting to EUR979.2 million (prior year: EUR1,073.9 million) are subject to restrictions of the rights of disposal. Certain assets are subject to acceptance obligations, in particular due to the finance leasing agreements and open purchase commitments amounting to EUR1,980.2 million (prior year: EUR1,715.9 million). Estimations of residual values had to be amended by EUR0.4 million (prior year: EUR0.3 million).

Third-party grants

The ÖBB Group received non-repayable investment grants for assets, usually from public authorities or companies that are closely related to the state, that were treated as reduction of costs in accordance with IAS 16.28 in conjunction with IAS 20. Both the depreciation of these assets and the release of all grants due to depreciation are recognized in the line item “Depreciation and Amortization”. If assets that grants were allocated to are disposed of, these are recognized together with the sold or retired carrying values in the other operating income or other operating expense. The development of the investment grants is shown in the attached schedule of assets. The most important grantors are composed as follows:

Dec 31, 2010 Dec 31, 2009


Schieneninfrastrukturfinanzierungs GmbH 1.608,8 1.684,4

former Eisenbahn-Hochleistungsstrecken AG 1.453,0 1.474,5

Republic of Austria (grant from the opening balance as of Jan 01, 1994) 1.372,9 1.472,1

Republic of Austria 851,4 774,8

ASFINAG 123,2 130,2Other third parties 168,3 63,5Total 5.577,6 5.599,5

Master plan

The ÖBB Group, in particular the ÖBB-Infrastruktur sub-group, initiated numerous infrastructure projects based on the master plan 2009-2014 approved by the Federal Minister of Transport, Innovation and Technology and by the Federal Minister of Finance, which projects are currently being carried out over a period of several years. Pursuant to § 42 Bundesbahngesetz (previously § 43 Bundesbahngesetz) in conjunction with § 47 para. 1 Bundesbahngesetz, the Republic of Austria is obligated to provide the means to ÖBB-Infrastruktur AG that it requires fulfilling its tasks and maintaining its liquidity and equity for the implementation of the master plan. Further information is given in Note 33.

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Finance leasing assets

The property, plant and equipment comprises include leased and rented out assets that are reported separately in the fixed assets schedule. The ÖBB Group is the beneficial owner, but not the legal owner of these lease property, plant and equipment due to the underlying lease agreements. These assets primarily comprise technical equipment and machinery and fleet. For further information see Note 30.

Impairment

Due to the negative economic circumstances, the planning assumptions had to be adjusted in the impairment test compared to the previous year. The impairment test carried out for property, plant and equipment and intangible assets with the adjusted planning data resulted in a need for impairment for both years under review. The parameters for calculation of the value in use are described in Note 3. The cash-generating entities subject to impairments are all part of the Rail Cargo Austria sub-group and located in the Rail Cargo segment (Note 34). An overview of the cash-generating entities, the impairments and the type of asset for which impairment was recognized are shown in the following table.

Total Fleet

Technical equipment and

machineryLand and buildings

Other facilities, fixtures and furnishings

Intangible assets Goodwill

Dec 31, 2010 in mil. EUR in mil. EUR in mil. EUR in mil. EUR in mil. EUR in mil. EUR in mil. EUR

Cargo & Logistics 90,8 0,0 0,0 0,0 0,0 0,0 90,8

Technical Services 26,6 1,0 3,9 19,6 0,8 0,1 1,2

Unaccompanied combined transport73,6 62,0 0,0 0,0 0,0 0,0 11,6

Freight forwarders 4,2 0,0 0,0 4,2 0,0 0,0 0,0

Rail Cargo Austria 195,2 63,0 3,9 23,8 0,8 0,1 103,6

Total Fleet

Technical equipment and

machinery Land and bui ldings

Other facil ities, fix tures and

furnishings Intangible assets

Dec 31, 2009 in mil. EUR in mil. EUR in mi l. EUR in mil. EUR in mil. EUR in mil. EUR

Rail Cargo Austria 5,2 4,4 0,0 0,0 0,0 0,8

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15. Intangible assets

Concessions, property rights,

licenses

Investment grants to

third parties Goodwill

Down payments on intangible

assets Total

in mil. EUR in mil. EUR in mil. EUR in mil. EUR in mil. EUR

Accumulated cost and amortization 2010

Cost as of Jan 01, 2010 231,3 607,5 292,3 0,0 1.131,1

Translation differences 4,2 0,0 1,6 0,0 5,8

Additions from contributions 9,6 100,0 0,0 13,0 122,6

Disposals -3,3 -0,5 -2,9 0,0 -6,7

Transfers 13,3 27,6 0,0 -4,9 36,0

Accumulated cost as of Dec 31, 2010 255,1 734,6 291,0 8,1 1.288,8

Accumulated amortization as of Jan 01, 2010 (incl. impairment) 139,8 336,8 0,0 0,0 476,6

Translation differences 5,8 0,0 6,0 0,0 11,8

Amortization 2010 (incl. impairment) 21,7 29,1 103,6 0,0 154,4

Disposals -4,4 -4,1 0,0 0,0 -8,5Accumulated amortization as of Dec 31, 2010(incl. impairment) 162,9 361,8 109,6 0,0 634,3

Carrying amounts before investment grants as of Jan 01, 2010 91,5 270,7 292,3 0,0 654,5

Carrying amounts before investment grants as of Dec 31, 2010 92,2 372,8 181,4 8,1 654,5

Grants 2010

Cost as of Jan 01, 2010 33,8 372,6 0,0 0,0 406,4

Additions 1,1 8,6 0,0 0,0 9,7

Disposals -2,4 -0,1 0,0 0,0 -2,5

Transfers 0,0 7,6 0,0 0,0 7,6

Accumulated cost as of Dec 31, 2010 32,5 388,7 0,0 0,0 421,2

Accumulated amortization as of Jan 01, 2010 9,7 303,3 0,0 0,0 313,0

Amortization 2010 1,8 8,4 0,0 0,0 10,2

Disposals -2,4 0,0 0,0 0,0 -2,4

Accumulated amortization as of Dec 31, 2010 9,1 311,7 0,0 0,0 320,8

Investment grants as of Jan 01, 2010 24,1 69,3 0,0 0,0 93,4

Investment grants as of Dec 31, 2010 23,4 77,0 0,0 0,0 100,4

Carrying amounts after investment grants as of Jan 01, 2010 67,4 201,4 292,3 0,0 561,1

Carrying amounts after investment grants as of Dec 31, 2010 68,8 295,8 181,4 8,1 554,1

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Concessions, property rights,

licenses

Investment grants to

third parties Goodwill

Down payments on intangible

assets Total

in mil. EUR in mil. EUR in mil. EUR in mil. EUR in mil. EUR

Accumulated cost and amortization 2009

Cost as of Jan 01, 2009 216,8 566,7 275,2 2,1 1.060,8

Translation differences -0,2 0,0 2,0 0,0 1,8

Additions 9,6 49,1 15,1 3,2 77,0

Additions from merger and change in reporting entities 3,1 0,3 0,0 0,0 3,4

Disposals -8,3 -17,4 0,0 -2,9 -28,6

Transfers 10,3 8,8 0,0 -2,4 16,7

Accumulated cost as of Dec 31, 2009 231,3 607,5 292,3 0,0 1.131,1

Accumulated amort ization as of Jan 01, 2009 (incl. impairment) 123,0 314,8 0,0 0,0 437,7

Amortization 2009 (incl. impairment) 23,1 24,9 0,0 0,0 48,0

Additions from merger and change in reporting entities 1,4 0,2 0,0 0,0 1,6

Disposals -7,7 -3,1 0,0 0,0 -10,8

Accumulated amortization as of Dec 31, 2009 (incl. impairment) 139,8 336,8 0,0 0,0 476,6

Carrying amounts before investment grants as of Jan 01, 2009 93,8 251,9 275,2 2,1 623,0

Carrying amounts before investment grants as of Dec 31, 2009 91,5 270,7 292,3 0,0 654,5

Grants 2009

Cost as of Jan 01, 2009 35,9 374,3 0,0 0,0 410,2

Additions 0,4 17,3 0,0 0,0 17,7

Disposals -2,5 -20,8 0,0 0,0 -23,3

Transfers 0,0 1,8 0,0 0,0 1,8

Accumulated cost as of Dec 31, 2009 33,8 372,6 0,0 0,0 406,4

Accumulated amort ization as of Jan 01, 2009 9,9 299,1 0,0 0,0 308,9

Amortization 2009 2,1 10,2 0,0 0,0 12,3

Disposals -2,3 -6,0 0,0 0,0 -8,3

Accumulated amortization as of Dec 31, 2009 9,7 303,3 0,0 0,0 313,0

Investment grants as of Jan 01, 2009 26,1 75,3 0,0 0,0 101,3

Investment grants as of Dec 31, 2009 24,1 69,3 0,0 0,0 93,4

Carrying amounts after investment grants as of Jan 01, 2009 67,8 176,6 275,2 2,1 521,7

Carrying amounts after investment grants as of Dec 31, 2009 67,4 201,4 292,3 0,0 561,1

The development of the intangible assets is shown in the table above. Additions from the first-time inclusion of companies are disclosed in a separate line item.

The ÖBB Group received non-repayable grants for intangible assets that were deducted as cost reduction according to IAS 16.28 in conjunction with IAS 20. These investment grants are indicated in the schedule of assets. Both the amortization of these assets and the release of all grants due to amortization are recognized in the line item “Amortizations”. The grantors are listed in Note 14.

There were no significant additions of intangible assets created within the Group. Development costs amounting to EUR2.3 million (prior year EUR5.8 million) were recognized in expenses, because distinguishment from the research phase of the projects was not possible and the ability to generate future benefits was considered uncertain. Besides the goodwill and advertising rights amounting to EUR14.1 million (prior year: EUR14.1 million), which are recognized in the line item concessions, property rights, licenses, there are no intangible assets with an indefinite useful life.

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Goodwill

The development of the goodwill is shown in the table above. This goodwill is allocated within the Rail Cargo Austria segment to the cash-generating entity Rail Logistics at an amount of EUR171.1 million and to the cash-generating entity forwarding at an amount of EUR10.4 million, and it is subject to impairment testing with respect to future profits. Further information is given in Note 14, Note 32 or Note 3 respectively.

16. Investment property (IAS 40)

Only property not classified as railway assets which can be leased out to third parties or sold at any time is assigned to this asset category. Therefore, the investment property comprises mainly crossing keeper’s houses, residential buildings and agricultural areas.

No impairments according to IAS 36 had to be recognized. The line item developed as follows:

2010 2009

in mil . EUR in mi l. EUR

253,7 228,1

10,0 19,1

-4,7 -1,8

4,8 8,3

263,8 253,7

176,4 175,6

2,9 2,3

-4,3 -1,40,9 -0,1

175,9 176,4

Cost as of Dec 31 263,8 253,7

Depreciations as of Dec 31 -175,9 -176,4Net carrying value as of Dec 31 87,9 77,3

As of Dec 31

As of Jan 01

Depreciations

Disposals

Transfers

Cost

Depreciations

As of Jan 01

Addit ions

Disposals

Transfers

As of Dec 31

Investment property held by the ÖBB Group is all leased out under operating leases. Rental income from these leases amounted to EUR15.2 million, not including operating costs (prior year: EUR9.1 million, not including operating costs); expenses directly attributable to rental income (including repair and maintenance, but not including operating costs) amounted to EUR13.0 million (prior year: EUR7.4 million, not including operating costs). Additionally, operating expenses amounting to EUR0.8 million (prior year: EUR0.4 million) were incurred to which no rental income was attributable. The ÖBB Group did not enter into maintenance contracts with respect to its investment property that result in a corresponding obligation. The fair value of the investment property was determined by internal and external experts using the existing market data and the gross rental method and amounts to EUR354.8 million (prior year: EUR170.9 million). An interest rate of 4.0-8.0% (prior year: 3.0-9.33%) was applied to determine the fair values. Additions to the line item amounting to EUR8.1 million resulted from acquisitions, and the rest resulted from investments in buildings.

91


17. Investment in associated companies

The following table shows the roll forward of the investments in associated companies:

2010 2009


As of Jan 01 64,6 21,2

Addit ions 2,5 41,0

Disposals -1,7 -0,9

Share of profit 5,1 6,1

Disbursements -3,6 -2,8As of Dec 31 66,9 64,6

The profits of associated companies stated in the Consolidated Income Statement correspond to the share of the annual profit attributed to the ÖBB Group. The increase in this line item in the year 2009 results primarily from the initial consolidation of Galleria di Base del Brennero – Brenner Basistunnel BBT SE.

The financial data of all associated companies is summarized in the following table. The shares held directly and indirectly by the ÖBB Group are shown in the schedule of investments (Note 36).

Assets

Liabilities and

prov isions Revenues EBIT Annual profit

Financial data 2010 (2009) in KEUR in KEUR in KEUR in KEUR in KEUR

412.090 185.231 419.363 15.381 13.519

(408.633) (188.865) (228.240) (68.187) (14.053) Data from annual financial statements of associated companies

The initial accounting for at equity of Galleria di Base del Brennero – Brenner Basistunnel BBT SE in 2009 resulted in a negative difference between the acquisition cost and the Company’s acquired share in the net asset amounting to EUR12.5 million. Due to the fact that the investment was made by the Republic of Austria and that the Republic of Austria granted the ÖBB-Infrastruktur group a shareholder grant in the amount of the contractual purchase price through ÖBB-Holding AG, the remaining difference was caused by relations subject to corporate law and was therefore recognized directly in the capital reserves.

18. Other financial assets

in mil. EUR in mil . EUR in mi l. EUR

2010 Current Non-current Total

Investments 0,0 19,9 19,9

Financial assets - leasing 24,5 810,1 834,6

Other financial assets 59,5 197,8 257,3

Total 84,0 1.027,8 1.111,8

in mil. EUR in mil . EUR in mi l. EUR

2009 Current Non-current Total

Investments 0,0 51,9 51,9

Financial assets - leasing 18,7 803,7 822,4

Other financial assets 107,1 148,5 255,6

Total 125,8 1.004,1 1.129,9

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Investments

A complete overview over all investments is given in Note 36. These investments are classified as financial assets available for sale in accordance with IAS 39, but they are measured at amortized cost, since no fair values are available.

Financial assets – leasing

The financial assets are mostly composed of non-current loans and deposits and are almost completely connected to cross border leasing transactions. They serve to cover future payment obligations (lease payments and purchase price). Income from these accumulating investments increases this line item, while payments made from these funds to settle the lease obligations result in a decrease of these assets. These financial assets are matched by financial liabilities in the same amounts. Differences result from the allowances made in the year under review as well as the previous years. For further information see Note 30.

Other financial assets

The other (non-current) financial assets comprise the residual value of assets leased out, which amounts to EUR81.8 million (prior year: EUR81.8 million), in the form of bank deposits. Furthermore, this line item primarily includes short-term securities amounting to EUR14.6 million (prior year: EUR20.7 million), investment certificates amounting to EUR25.0 million (prior year: EUR25.0 million), derivatives in connection with energy trade transactions amounting to EUR10.8 million (prior year: EUR57.2 million) and other derivatives with a positive present value that are not related to hedging. Other financial assets at an amount of EUR4.7 million are issued as collateral for debts.

19. Non-current assets held for sale (IFRS 5)

2010 2009

Non-current assets held for sale in mil. EUR in mil. EUR

As of Jan 01 37,4 5,8

Addit ions 33,1 37,4

Disposal by sale -37,4 -5,8

As of Dec 31 33,1 37,4

In 2010, the assets held for sale mainly related to properties in Upper Austria and Greater Vienna. In the financial year 2009, the assets held for sale furthermore related to railway superstructure amounting to EUR0.2 million and the investment in HBF Eins Holding GmbH amounting to EUR12.6 million. All the assets recognized in this line item in the previous year have been sold.

The proceeds anticipated for 2011 exceed the current carrying amounts of the assets. The ÖBB Group recognized income from assets held for sale amounting to EUR26.6 million in 2010 (prior year: EUR1.7 million), which is recognized in the other operating income, together with the gains from the sale of other investments. The non-current assets held for sale relate solely to the ÖBB-Infrastruktur sub-group.

After the reporting date, assets with a carrying amount of EUR0.6 million (prior year: EUR14.4 million) were designated as held for sale, the anticipated selling price less cost to sell exceeding the respective carrying amounts. The assets concerned are properties in Tyrol and Upper Austria.

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20. Trade and other receivables

Maturity Current Non-current Total

Dec 31, 2010 in mil. EUR in mil. EUR in mil. EUR

Trade receivables 587,2 0,0 587,2thereof uninvoiced services 20,0 0,0 20,0

Other receivables and prepaid expenses 452,0 110,9 562,9Income tax receivables 0,6 0,0 0,6Total 1.039,8 110,9 1.150,7

Maturity Current Non-current Total

Dec 31, 2009 in mil. EUR in mil. EUR in mil. EUR

Trade receivables 501,7 0,0 501,7thereof uninvoiced services 8,1 0,0 8,1

Other receivables and prepaid expenses 338,2 83,8 422,0

Income tax receivables 1,3 0,0 1,3Total 841,2 83,8 925,0

Receivables amounting to EUR43.7 million (prior year: EUR7.7 million) are secured by bills of exchange.

The trade receivables result primarily from transport services and from power trading. The carrying amount of the trade receivables and the other receivables approximates their respective fair values due to the short maturity.

Receivables from services not yet charged in connection with services provided to third parties that are not yet completed and other services that were not yet finalized at the reporting date are recognized in the trade receivables. Work orders produced income amounting to EUR33.4 million (prior year: EUR51.6 million).

The other receivables primarily refer to receivables from value added tax payable by the Austrian revenue office. Furthermore, this line item comprises receivables payable by the Republic of Austria with respect to subsidies for apprentices and energy charge reimbursements.

The other receivables comprise prepaid expenses amounting to EUR203.4 million (prior year: EUR182.7 million). The accrual items mainly refer to prepaid guarantee premiums amounting to EUR107.4 million (prior year: EUR78.0 million) and to the salaries paid in December 2010 including the charges for January 2011 amounting to EUR59.1 million (prior year: EUR61.7 million).

The allowances mainly refer to trade receivables and developed as follows:

2010 2009


As of Jan 01 119,7 80,8Utilization -13,0 -6,8

Release -74,6 -8,4Addition 46,4 54,1

As of Dec 31 78,5 119,7

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Past due or impaired receivables that are not overdue are as follows:

Gross carrying amount (before

impairment)

thereof not individually

impaired

thereof individually

impaired Allowance

thereof individual allowance

thereof standard individual

impairmentNet carrying

amount

in mil. EUR in mil. EUR in mil. EUR in mil. EUR in mil. EUR in mil. EUR in mil. EUR

Receivable not yet past due but impaired 35,0 0,0 35,0 35,0 9,5 25,5 0,0less than 30 days past due 203,4 139,6 63,8 3,5 3,5 0,0 199,9

30 to 60 days past due 18,3 8,2 10,1 1,0 1,0 0,0 17,3

60 to 90 days past due 12,4 7,2 5,2 0,6 0,6 0,0 11,8

90 to 180 days past due 10,3 5,8 4,5 1,5 1,5 0,0 8,8

180 to 360 days past due 95,4 90,1 5,3 5,5 5,5 0,0 89,9

more than 360 days past due 59,2 28,4 30,8 31,4 23,7 7,7 27,8Total exposure 434,0 279,3 154,7 78,5 45,3 33,2 355,5

Dec 31, 2010Analysis of past due / impaired receivables

Gross carrying amount (before

impairment)

thereof not individually

impaired

thereof individually

impaired Allowance

thereof individual allowance

thereof standard individual

impairmentNet carrying

amount

in mil. EUR in mil. EUR in mil. EUR in mil. EUR in mil. EUR in mil. EUR in mil. EUR

Receivable not yet past due but impaired 68,7 0,0 68,7 68,7 54,6 14,1 0,0

less than 30 days past due 311,7 284,1 27,6 1,9 1,9 0,0 309,8

30 to 60 days past due 37,0 18,3 18,7 0,6 0,6 0,0 36,4

60 to 90 days past due 14,8 11,4 3,4 0,2 0,2 0,0 14,6

90 to 180 days past due 25,0 17,0 8,0 1,4 1,4 0,0 23,5

180 to 360 days past due 46,1 32,6 13,5 10,3 10,3 0,0 35,7

more than 360 days past due 73,5 31,5 42,0 36,6 28,8 7,8 36,9

Total exposure 576,8 394,9 181,9 119,7 97,8 21,9 456,9

Dec 31, 2009Analysis of past due / impaired receivables

Past due but unimpaired receivables amounting to EUR279.3 million (prior year: EUR394.9 million) are subject to regular monitoring.

Based on experience, the management of the ÖBB Group estimates that no additional impairments than the ones detailed above are required, even if the receivables are past due by more than 30 days.

21. Inventories

This line item is composed as follows:

Dec 31, 2010 Dec 31, 2009


Raw materials and supplies 128,2 127,2Unfinished goods 0,2 0,2Finished goods 1,4 2,0Down payments 2,2 3,7Total 132,0 133,1

thereof measured at cost 124,4 105,5

thereof measured at realizable net value 7,6 27,6

The cost of goods and services received is shown in Note 7. The item expense for materials includes expenses due to the write down of inventories amounting to EUR6.9 million (prior year: EUR2.1 million). No write-ups were recorded in the reporting period.

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22. Cash and cash equivalents

Dec 31, 2010 Dec 31, 2009

in mil . EUR in mil. EUR

Cash on hand and checks 3,6 3,5Cash at banks 134,0 71,5Total 137,6 75,0

This item includes current (terms of less than 3 months) investments and cash in banks as well as cash on hand, the residual term at the time of acquisition being the decisive factor. The carrying amount of these assets corresponds to their respective fair value. All components of cash and cash equivalents are at the unrestricted disposal of the ÖBB Group. The composition of the funds is described in Note 35.

23. Share capital and other equity

The development of the equity is shown in the Statement of Changes in Equity.

The share capital consists of 190,000 common stock at a nominal value of EUR10,000 each. The share capital is fixed in § 2 para. 1 Bundesbahngesetz and constitutes the share capital of the parent company. The share capital was raised pursuant to § 2 para. 2 Bundesbahngesetz by contribution of all shares of the federal government in Österreichische Bundesbahnen [Austrian Federal Railways]. The shares had to be recognized at equity in the sense of § 224 para. 3 UGB according to the statement of financial position of Österreichische Bundesbahnen as of December 31, 2003. The shares in ÖBB-Holding AG are reserved for the Republic of Austria in their entirety pursuant to § 2 para. 1 Bundesbahngesetz, and may not be traded publicly.

The development of this line item and the other line items in the equity is shown in the schedule of equity.

24. Reserves and Retained Earnings

Dec 31, 2010 Dec 31, 2009


Additional paid-in capital 260,8 568,1

Other reserves -75,8 -74,4

thereof cash flow hedge reserve -64,6 -69,9

thereof available-for-sale reserve 0,9 -0,6

thereof translation differences -12,1 -3,9

Retained earnings -608,8 -574,8

Further information on the changes in equity is given in the Statement of Changes in Shareholder’s Equity. The unrestricted additional-paid-in capital increased by EUR16.3 million in the previous year due to a shareholder contribution for the acquisition of 12.5% of the shares in Galleria di Base del Brennero – Brenner Basistunnel BBT SE. Furthermore, the negative difference between the acquisition cost and the Company’s share of the net assets from the initial at equity accounting of Galleria di Base del Brennero – Brenner Basis Tunnel BBT SE and amounting to EUR12.5 million was also recognized in additional paid in capital in 2009, because it resulted from a transaction with the shareholder. In 2010, capital reserves amounting to EUR307.4 million were released.

The differences resulting from capital consolidation which incurred prior to the transition to the IFRS are recognized in the retained earnings.

96


The cash flow hedge reserve and the available-for-sale reserve developed as follows:

Development inc luded Development included

carrying value taxes carrying value taxes

in mil. EUR in mil. EUR in mil. EUR in mil. EUR

As of Jan 01, 2009 -29,0 -12,2 -0,3 -0,1

Realized profit -0,7 -0,2 0,0 0,0

Unrealized profit -40,2 -2,4 -0,3 -0,1As of Dec 31, 2009 -69,9 -14,7 -0,6 -0,2

Realized profit -0,9 -0,2 0,6 0,2

Unrealized profit 6,2 -2,1 0,9 0,3

As of Dec 31, 2010 -64,6 -17,0 0,9 0,3

Cash flow hedge reserve Available-for-sale reserve

The transition reserve amounting to -EUR402.3 million, which resulted from the opening balance sheet as of January 1, 2006, and includes all the effects of the transition from UGB to IFRS, was recognized in the retained earnings in both years. Further information on the shareholders´ equity is given in the Statement of Changes in Shareholders´ Equity.

25. Financial liabilities

Maturity < 1 year 1 - 5 years > 5 years Total

2010 in mil. EUR in mil. EUR in mil. EUR in mi l. EUR

Bonds 1.001,7 1.901,6 7.792,8 10.696,1

Bank loans 187,6 490,9 1.822,3 2.500,8

Financial liabilities leasing 41,0 558,7 830,2 1.429,9

Other financial liabilities 330,7 1.039,2 1.481,0 2.850,9

Total 1.561,0 3.990,4 11.926,3 17.477,7

Maturity < 1 year 1 - 5 years > 5 years Total

2009 in mil. EUR in mil. EUR in mil. EUR in mi l. EUR

Bonds 715,3 2.644,7 5.821,9 9.181,9

Bank loans 242,5 409,5 1.430,6 2.082,6

Financial liabilities leasing 36,4 418,2 970,0 1.424,6

Other financial liabilities 659,5 1.543,3 589,8 2.792,6

Total 1.653,7 5.015,7 8.812,3 15.481,7

The total amount of liabilities with a maturity of more than five years mainly relates to bonds, bank loans with EUROFIMA or banks respectively and liabilities from cross border lease agreements. For further information on the bonds see Note 29.

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Issued bonds

Nominal Currency Term ISIN Interest rate

575.000.000,00 USD 2003 - 2013 DE0008021759 4,750%600.000.000,00 USD 2003 - 2013 DE000A0AABN9 4,630%

12.150.000,00 EUR 2003 - 2015 AT0000171723 EIB Poolrate

4.500.000,00 EUR 2004 - 2015 AT0000171731 EIB Poolrate

650.000.000,00 EUR 2004 - 2014 XS0206152810 3,880%

1.000.000.000,00 EUR 2005 - 2020 XS0232778083 3,500%

1.000.000.000,00 EUR 2006 - 2016 XS0271660242 3,880%

100.000.000,00 EUR 2006 - 20361) XS0275973278 3,490%

80.000.000,00 EUR 2006 - 20361) XS0275974599 3,490%

100.000.000,00 EUR 2006 - 20362) XS0252697130 3)

50.000.000,00 EUR 2006 - 20362) XS0252721450 3)

100.000.000,00 EUR 2006 - 20362)

XS0243862876 3,420%

100.000.000,00 EUR 2006 - 20362)

XS0244522396 3,480%1.300.000.000,00 EUR 2007 - 2022 XS0307792159 4,875%

50.000.000,00 EUR 2007 – 20374) XS0336043517 3,985%

50.000.000,00 EUR 2007 – 20375) XS0331427905 4,190%

100.000.000,00 EUR 2007 – 20375) XS0321318163 4,170%

100.000.000,00 EUR 2007 – 20375)

XS0328866982 4,227%

100.000.000,00 EUR 2007 – 20375)

XS0324893626 4,398%

50.000.000,00 EUR 2007 – 20375) XS0324895670 4,398%

1.000.000.000,00 EUR 2008 - 2011 XS0392808415 3,875%

165.000.000,00 CHF 2008 - 2013 CH0047775413 2,750%

200.000.000,00 EUR 2008 - 20226) XS0307792159 4,875%

40.000.000,00 EUR 2009 - 2019 XS0475835863 3,750%

1.250.000.000,00 EUR 2009 - 2019 XS0436314545 4,500%

100.000.000,00 EUR 2009 - 2019 XS0463371236 3MoEURIBOR +0,46%

100.000.000,00 EUR 2010 – 20197) XS0436314545 4,500%

300.000.000,00 EUR 2010 – 20208) XS0232778083 3,500%

1.500.000.000,00 EUR 2010 - 2025 XS0520578096 3,875%

100.000.000,00 EUR 2010 - 2030 XS0512125849 3,900%

70.000.000,00 EUR 2010 - 2030 XS0503724642 4,200%

50.000.000,00 EUR 2010 - 2030 XS0497430172 4,210%

1) Right of early cancellation by the investor in 2015, 2) Right of early cancellation by the investor in 2016, 3) 3.409% as long as the 1 year EURIBOR swap rate is < 5%, otherwise 1 year EURIBOR swap rate -0.2%, 4) Right of early cancellation by the investor in 2014, 5) Right of early cancellation by the investor in 2017, 6) Increase of the bond XS0307792159 amounting to EUR1.3 billion from 2007 to a total of EUR1.5 billion, 7) Increase of the bond amounting to EUR1.25 billion from 2009 to a total of EUR1.35 billion, 8) Increase of the bond XS0232778083 amounting to EUR1.0 billion from 2005 to a total of EUR1.3 billion.

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All the bonds were issued by ÖBB-Infrastruktur AG. In 2005, ÖBB-Infrastruktur AG initiated a Euro Medium Term Note program (“EMTN”). All amounts due in respect of bonds issued under this framework agreement are unconditionally and irrevocably guaranteed by the Republic of Austria. ÖBB-Infrastruktur AG has issued all bonds since 2005 in the framework of this program.

As of December 31, 2010, the Group complied with all covenants in respect of the loan agreements.

Bank loans

The bank loans are composed as follows:

Dec 31, 2010 Dec 31, 2009


European Investment Bank (EIB) 1.559,0 1.344,6

Raiffeisen Bank International AG 401,2 411,7

Deutsche Bank AG 219,1 0,0

Unicredit Bank Austria AG 107,6 121,3

Other banks 213,9 204,9

Total 2.500,8 2.082,5

Financial liabilities leasing

The leasing liabilities result from non-linked CBL transactions. The leasing liabilities are matched with assets in the same amounts (financial assets such as loans to banks and leasing institutes or securities). Differences result from impairments that had to be carried out in the year under review and the previous years.

Other financial liabilities

The other financial liabilities consist mainly of EUROFIMA loans amounting to EUR2,231.9 million (prior year: EUR1,806.7 million), EUR74.6 million (prior year: EUR213.8 million) of which having a maturity of less than one year in 2010. Apart from that, this line item also includes the negative present values of derivative financial instruments.

Financial liabilities from leases amounting to EUR663.0 million (prior year: EUR419.9 million) and other financial liabilities amounting to EUR1,181.6 million (prior year: EUR858.6 million) are collateralized in rem, mainly with vehicles. Information on the leasing transactions is given in Note 30, statements according to IFRS 7 are given in Note 29.

The part of a Collateralized Debt Obligation concluded as Portfolio Credit Default Swap (PCDS/CDO) and recognized in the other financial liabilities in the previous year was transferred upon cessation of this transaction on January 15, 2010, to bank loans as of the reporting date. The total termination value of the four pieces concluded in 2005 amounted to EUR295.0 million in total at the time of the liquidation. As of the reporting date, the liability amounts to EUR219.1 million, with maturity in 2013.

For further information see Note 29.3.

Guarantees by the federal government

The federal government has issued guarantees with respect to bonds and bank loans amounting to EUR10,692.8 million (prior year: EUR8,961.6 million). In addition, liabilities to the EUROFIMA amounting to EUR2,147.7 million (prior year: EUR1,738.9 million) are secured by guarantees of the federal government.

26. Provisions

The ÖBB Group records provisions when an outflow of resources embodying economic benefits in the future is probable and a reliably estimate can be made of the amount of the obligation.. The provision is recognized in the amount of the probable obligation. In the event of scenarios with equal probabilities, the expected value weighted according to the probability is recognized as provision.26.1. Provisions for personnel

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26.1. Provisions for personnel

Dec 31, 2006 Dec 31, 2007 Dec 31, 2008 Dec 31, 2009 Dec 31, 2010

in mil. EUR in mil. EUR in mil. EUR in mil . EUR in mi l. EUR

Statutory severance payments 26,7 26,1 28,5 28,7 31,1

Pensions 0,7 0,8 0,9 4,0 2,7

Anniversary bonuses 135,1 129,6 135,0 124,4 129,4

Voluntary severance payments 20,8 17,7 16,2 13,6 14,2

Other provisions for personnel 3,3 3,7 2,5 2,3 32,8

Total 186,6 177,9 183,1 173,0 210,2

thereof long-term 183,9 174,6 180,8 170,7 207,4

Short-term provisions are mainly constituted by provisions for personnel. Any changes in these provisions for personnel affecting income are recognized in personnel expenses.

The following table shows the adjustments based on experience in percent of the present value of the obligations for severance payments, pensions and anniversary bonuses for the financial years 2006 to 2010.

2006 2007 2008 2009 2010

Statutory severance payments 7% 5% 7% 1% 0%Anniversary bonuses -8% -3% -1% -8% -2%Voluntary severance payments 19% -2% 35% -23% -5%

Actuarial assumptions

The following table shows the assumptions used in measuring the obligations for anniversary bonuses, severance payments, and pensions:

Dec 31, 2008 Dec 31, 2009 Dec 31, 2010

Discount rate 5,5% 5,5% 5,0%

Rate of compensation increase 4,0% 3,5% 3,2%

Employee turnover rate of tenured employees 0,0 - 6,11% 0,0 - 7,3 % 0,0 - 6,19%

Employee turnover rate of other workers and employees 0,0 - 10,83% 0,0 - 7,0% 0,0 - 9,32%

Statutory severance payments

The Company recorded a provision for severance obligations for those employees who are not tenured employees based on mandatory and contractual regulations in the sense of § 21 para. 3 Bundesbahngesetz as amended by federal law BGBl. I no. 71/2003. In accordance with IAS 19, severance payment provision is based on an actuarial report using the project unit credit method (PUC method). The calculation is based on the biometric actuarial basis of the Actuarial Association of Austria (AVÖ) 2008-P issued by Pagler & Pagler (male and female employees).

Severance obligations to employees hired before January 1, 2003, are covered by defined benefit plans as described below. Following a legal amendment, obligations for employees hired in Austria after January 1, 2003, are covered by a defined contribution plan. With respect to this, the ÖBB Group paid EUR4.6 million and EUR3.8 million to this defined contribution plan (VBV Vorsorgekasse AG) in 2010 and 2009, respectively.

Upon retirement, eligible employees receive a severance payment equal to a multiple of their monthly base salary – based on their period of service – but no more than a maximum of twelve monthly salaries. Upon termination of the employment, up to three monthly salaries are paid immediately, any benefit in excess of that amount being paid over a period not exceeding ten months. In the event of death, the heirs of an eligible employee are entitled to 50% of the severance benefits. In addition, the Company recorded a provision for voluntary severance obligations.

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The following table shows the components of net periodic severance cost and the development of the severance provisions:

2010 2009


Service cost 1,7 2,2Interest cost 1,3 1,5

Actuarial losses (+) / gains (-) 1,2 -0,8Net periodic cost of statutory severance payments for the year 4,2 2,9

2010 2009


Defined benefit obligation as of Jan 01 28,7 28,5Service cost 1,7 2,2Interest cost 1,3 1,5Severance payments -2,5 -3,1Additions and disposals 0,7 0,4Actuarial losses (+) / gains (-) 1,2 -0,8Present value of the obligation as of Dec 31 31,1 28,7

Anniversary bonuses

Tenured employees and certain employees (together “employees”) are eligible for anniversary bonuses. Pursuant to statutory and contractual provisions, eligible employees receive a bonus in the amount of two monthly salaries after 25 years of service and four monthly salaries after 40 years of service. Employees with at least 35 years of service when retiring are also eligible for a bonus equal to four monthly salaries. For those tenured employees of ÖBB who have reached an age between 47 and 51 as of the reporting date (completed years in both cases) and have been with the Company for at least 31 years, no provision for anniversary bonuses is recognized, but rather a provision for voluntary severance payments. The provision was calculated based on an actuarial report using the project unit credit (PUC) method, which is prescribed for assessments in accordance with IAS 19. The calculation was based on the biometric actuarial basis of the Actuarial Association of Austria (AVÖ) 2008-P prepared by Pagler & Pagler. The employee benefits are accrued over the period of service taking into account an employee turnover deduction for employees retiring early from service. Actuarial gains and losses are recognized in the period they are incurred. No provision for anniversary bonuses after 35 and 40 years, respectively, is recognized for employees for whom a voluntary severance provision is made.

Anniversary bonuses for the other employees are provided for in accordance with the provisions of the applicable collective wage agreement or of internal company agreements respectively.

The following table shows the components and the development of the anniversary bonus provision:

2010 2009


Service cost 4,2 6,3

Interest cost 4,4 7,2

Actuarial losses (+) / gains (-) 4,5 -12,2Net periodic bonus costs 13,1 1,3

2010 2009


Defined benefit obligation as of Jan 01 124,4 135,1Service cost 4,2 6,3Interest cost 4,4 7,2Anniversary bonuses -12,3 -12,0Additions and disposals 4,2 0,0Actuarial losses (+) / gains (-) 4,5 -12,2Present value of the obligation as of Dec 31 129,4 124,4

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Voluntary severance payments

The provision for voluntary severance payments is recognized since the optional regulation in the general contract terms (AVB) providing for a 35-year anniversary bonus to retiring employees must no longer be met according to a resolution of the Executive Board. This provision was recognized for the alternative option of paying a voluntary severance payment to those retiring employees. However, employees should not incur any financial disadvantages from this regulation.

A provision for voluntary severance payment is recognized for those tenured employees of ÖBB who are between 47 and 51 years old at the reporting date (both completed years) and have completed a minimum of 31 years of service in the Company. After 40 years of service, the voluntary severance payment is 400% of the monthly salary to which the employee is entitled at the beginning of the month in which the voluntary severance will be paid. A provision for voluntary severance payments is also recognized for those employees who have not reached 40 years of service but a minimum of 35 years of service at the time of their retirement. Those employees receive the full amount of the voluntary severance payment upon commencement of their retirement.

Voluntary severance payments for the other employees are provided for in accordance with the provisions of internal company agreements.

The entitled employees always comprise the persons having reached the stated ages. Therefore, the beneficiaries always changes at the respective date of calculation.

2010 2009


Service cost 0,4 0,5Interest cost 0,5 0,9

Actuarial gains -0,4 -3,3Net cost 0,5 -1,9

2010 2009


Defined benefit obligation as of Jan 01 13,6 16,2Service cost 0,4 0,5Interest cost 0,5 0,9Severance payments -0,2 -0,7Additions and disposals 0,3 0,0Actuarial gains -0,4 -3,3Present value of the obligation as of Dec 31 14,2 13,6

Pensions

The provisions for pensions account only for benefit obligations arising from individual contracts.

Defined contribution plans

In Austria, pension benefits for employees are provided generally by the social security institutions, and for tenured railway employees by the Versicherungsanstalt für Eisenbahn und Bergbau [insurance institution for railway and mining] or the federal government pursuant to § 52 Bundesbahngesetz respectively. The ÖBB Group is required to pay pension and health care contributions for current and retired tenured employees and their surviving dependents. The ÖBB Group is legally obligated to make annual contributions to the Versicherungsanstalt für Eisenbahn und Bergbau for active tenured employees. Additionally, the ÖBB Group offers a defined contribution plan to all employees of the ÖBB Group in Austria. The contributions of the ÖBB Group are calculated as a percentage of the compensation and must not exceed 0.8%. The contribution to this plan amounted to EUR16.4 million and EUR16.3 million in 2010 and 2009 respectively.

Defined benefit plans

A defined benefit plan is provided for one former Board member (payments beginning with the 60th birthday), under which the ÖBB Group has made payments according to a defined benefit plan since 2010. This unfunded plan provides for pension payments calculated as a percentage of the salary based on the years of service. The pension amounts to a maximum of 13.2% of the last salary, including pension payments received from the statutory social security institution.

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26.2. Other provisions

As of Jan 01, 2010

Translation difference Usage Reversal Transfers

Interest effects Additions

As of Dec 31, 2010

in mil. EUR

in mil. EUR

in mil. EUR

in mil. EUR

in mil. EUR

in mil. EUR

in mil. EUR

in mil. EUR

Branch lines 26,8 0,0 -0,1 0,0 0,0 1,0 54,1 81,8

Reduced tickets outside tariffs 176,2 0,0 -16,9 -100,8 -30,0 0,0 42,8 71,3

Threat potential of public services 33,8 0,0 0,0 -2,8 0,0 0,0 16,6 47,6

Free student and apprentice tickets 32,7 0,0 -1,5 -0,8 0,0 0,0 4,7 35,1

Litigations 19,6 0,0 -2,8 -5,1 2,1 0,0 23,0 36,8

Project cost 24,5 0,0 -22,2 -2,3 0,0 0,0 31,8 31,8

Environmental protection measures 27,8 0,0 -0,4 0,0 0,0 0,2 0,0 27,6

Imminent losses 8,7 0,0 -9,3 0,0 0,0 0,0 26,6 26,0

Uncertain debts 20,0 0,0 -7,4 -7,5 0,0 0,0 15,4 20,5

Prepayments and similar obligations 10,8 0,0 -1,9 -0,3 0,0 0,5 7,1 16,2

Taxes 3,7 0,0 -1,4 -2,9 0,6 0,0 5,2 5,2

Deferrals 19,1 0,0 -5,8 0,0 -13,3 0,0 1,2 1,2

Federal nursing allowance 108,0 0,0 0,0 0,0 -108,0 0,0 0,0 0,0

Pension administration 47,7 0,0 -8,5 -29,8 -9,4 0,0 0,0 0,0

Compensations 2,4 0,0 0,0 0,0 -2,4 0,0 0,0 0,0

Miscellaneous 85,9 -0,1 -31,9 -40,2 12,3 1,1 62,1 89,2

Total of other provisions 647,7 -0,1 -110,1 -192,5 -148,1 2,8 290,6 490,3thereof long-term 71,4 75,9

Branch lines

The provision for the decommissioning of branch lines includes expenses for the demolition and removal of assets and the restoration of sites. These branch lines either have already been decommissioned or are to be decommissioned in the near future. The provision is only recognized for branch lines when it is sufficiently certain that they will be decommissioned. In 2010, the probability of occurrence of decommissioning obligations was reassessed and additional provisions amounting to EUR54.1 million were recognized. The addition to provisions for the decommissioning of lines is matched with the release of provisions for imminent cost liabilities in connection with the sale of railway lines in 2009 amounting to EUR19.9 million, which are recognized in the miscellaneous provisions, resulting in net expenses from the measurement of the decommissioning obligations of EUR34.3 million.

Reduced tickets outside tariff

Due to the division of the ÖBB company into 9 separate companies under the holding of ÖBB-Holding AG in the framework of the Bundesbahnstrukturgesetz [Federal Railway Structure Act] 2003, legally independent companies were formed that are no longer recognized as transport companies in the sense of § 3 EStG [Income Tax Act] by the relevant tax authorities. Privileged transport of own employees constitutes a taxable employment benefit that is subject to social security contributions for the companies concerned (i.e. all Group companies with the exception of ÖBB-Personenverkehr AG and ÖBB-Produktion GmbH). For the years 2005 to 2009, the relevant tax authorities have reached a final conclusion in accordance with tax and social security law.

Since January 1, 2010, the privileged transport of employees, retirees and their respective relatives is recognized as an employment benefit, evaluated analogous to the calculation method of the relevant tax authorities in the period from 2005 to 2009 based on the price of an annual railway pass of ÖBB-Personenverkehr AG and a respective provision is made as required.

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Threat potential of public services

In the course of an audit carried out by the Rail Cargo Austria group, Schieneninfrastruktur-Dienstleistungsgesellschaft mbH discovered that this sub-group of the ÖBB Group submitted amounts based on the agreements concluded with the federal government on the commissioning and provision of public services for the year 2007 that were not invoiced in compliance with the agreements according to Schienen Control GmbH.

The Federal Ministry of Transport, Innovation and Technology (BMVIT) has now entered into negotiations regarding the reimbursement of the excess payment calculated in the audit report for non-compliant invoicing in the period of 2007. This concerns combined road/railway transports, transports of hazardous and environmentally hazardous materials, statements of volumes, dimensions and distances without due and proper justification or line orders without justification respectively, sham shipments posted and collected at the station or shipments within one fare zone respectively, new registration of shipments as well as double invoicing.

Based on the information currently provided, the risks with respect to the expected liability towards the federal government arising from the non-compliant invoicing of transports of hazardous and environmentally hazardous materials were assessed for the respective years 2007 to 2009. As a result, the ÖBB Group was required to establish a provision amounting to EUR47.6 million (prior year: EUR33.8 million).

Federal care allowance

Since July 01, 1993 Österreichische Bundesbahnen and since the coming into effect of the Bundesbahnstrukturgesetz [Federal Railway Structure Act] in 2003 ÖBB-Dienstleistungs Gesellschaft mbH (now ÖBB-Shared Service Center Gesellschaft mbH) is responsible for decisions regarding nursing care allowance issues of the ÖBB Group companies in accordance with the Bundespflegegeldgesetz [Federal Nursing Allowance Act] as amended before January 1, 2011, The federal government has to reimburse the ÖBB Group companies – analogous to the provisions applicable for the social security agencies – for justified expenses incurred for the nursing care allowance and other exhaustively listed expenses (in particular for the corresponding ratio of administration expenses), insofar as they exceed the ratio of the contributions paid for insured employees and retirees, which amounts to a contribution rate of 0.8% (retention).

The Rechnungshof [Court of Audit] examined the implementation of the Bundespflegegeldgesetz by ÖBB-Dienstleistungs Gesellschaft mbH in the period from 2003 to 2007 and came to the conclusion that ÖBB-Dienstleistungs Gesellschaft mbH charged the entire expenses for nursing care allowances paid and expert fees (but not the internal administration expense) to the federal government in the audited period without deducting the retention to be borne by it or the ÖBB Group companies respectively.

Furthermore, the Rechnungshof stated that the assessment basis for the retention to be borne by the ÖBB Group companies also includes pensions, which is not the case for other private employers, and therefore issued a recommendation to the competent ministries to evaluate the statutory provisions on the financing of nursing allowance expenses as regards equal treatment with respect to the ÖBB Group compared to other private employers.

Since January 1, 2010, the entire nursing allowance expense (including the internal administration expense) less the statutory retention is invoiced for settlement of the nursing care allowance with the Federal Ministry of Finance. Due to this, the Group incurred additional costs amounting to EUR25.0 million in the fiscal year 2010.

An amendment of the Bundespflegegeldgesetz in the sense of the findings of the Rechnungshof was carried out in the framework of the Budgetbegleitgesetz [Budget Trailer Bills] 2011. Pursuant to this, the ÖBB companies shall only have to bear the so-called retention for active employees as of January 1, 2011. The ÖBB Group was obligated by the Federal Ministry of Finance to pay EUR216.5 million for the years 1993 to 2009, which is recognized in the other liabilities (Note 27). This federal liability will be paid in monthly installments over a period of 5 years, starting in the year 2011.

Other issues

Appropriate provisions are made for uncertainties with respect to the settlement of the free student and apprentice tickets (SLF) with the individual transport associations.

The provision for litigations was recorded based on all litigation risks at the time of the preparation of the financial statements based on management’s best estimate. The provision comprises numerous minor litigations resulting from the Company´s normal course of business.

The provision for project costs results primarily from additional costs justifiably claimed by suppliers and currently examined in detail by the ÖBB-Infrastruktur group. These additional project costs are capitalized in property, plant and equipment.

The provision for environmental protection measures concerns anticipated restoration measures for contaminated sites.

Miscellaneous provisions primarily include provisions for liability pensions and warranties.

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Anticipated cash outflow for the provisions

Non-current provisions are discounted at interest rates of 1.5% - 3.4% (prior year: 1.2% - 4.4%). Adjustments due to changes in the discount factor were insignificant.

EUR75.9 million (prior year: EUR71.4 million) of the other provisions are classified as non-current. The payment for these provisions is anticipated after 2011. Cash outflows are anticipated in the year 2011 for provisions classified as current. When the maturity is uncertain, the provisions concerned were mainly classified as current.

27. Trade payables and other payables

Maturity Current Long-term Total

2010 in mil. EUR in mil. EUR in mil. EUR

Trade payables 968,4 0,0 968,4

thereof down payments on orders received 39,2 0,0 39,2

Other payables 500,8 358,6 859,4thereof other deferrals 70,7 153,0 223,7

thereof taxes 138,2 0,0 138,2

thereof employee-related liabilities 102,0 0,0 102,0

thereof social security 38,5 0,0 38,5

thereof other liabilities 151,4 205,6 357,0

Total 1.469,2 358,6 1.827,8

Maturity Current Long-term Total

2009 in mil. EUR in mil. EUR in mil. EUR

Trade payables 935,6 0,0 935,6

thereof down payments on orders received 23,2 0,0 23,2

Other payables 310,6 279,5 590,1thereof other deferrals 56,7 173,6 230,3

thereof personnel-related liabilities 114,7 0,0 114,7

thereof taxes 54,2 0,0 54,2

thereof social security 22,0 0,0 22,0

thereof other liabilities 63,0 105,9 168,9

Total 1.246,2 279,5 1.525,7

Trade payables and other payables comprise obligations resulting from deliveries and services. Management estimates the fair value to approximate that the carrying amount of the trade payables Advance payments received mainly relate to advance payments on services provided for third parties.

Employee-related liabilities include in particular overtime at an amount of EUR14.2 million (prior year: EUR16.4 million) and vacation days not yet taken at an amount of EUR70.7 million (prior year: EUR77.3 million).

Other deferrals primarily comprise the tax benefit resulting from the CBL transactions of EUR101.8 million (prior year: EUR123.0 million) and from the advance sale of tickets in the amount of EUR19.2 million (prior year: EUR18.8 million).

Furthermore, the trade payables and other payables include cross-currency derivatives recognized at their respective fair value (see Note 29).

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C . O T H E R N O TE S O N T H E C O N S O L I D AT E D F I N AN C I AL S T AT E M E N T S

28. Other guarantees and contingent liabilities

The contingent liabilities are composed as follows:

2010 2009


Contingent obligation from lease transactions 1.225,7 1.303,9PCDS/CDO (Note 29.3) 0,0 317,9

Other contingent liabilities 80,0 197,3Total 1.305,7 1.819,1

Contingencies resulting from lease transactions (cross border leasing)

Contingent liabilities from lease transactions relate to cross border lease transactions that have no economic substance pursuant to the provisions of SIC 27 so that consequently the related investments and lease obligations are not recorded in the statement of financial position. In respect of these transactions, the ÖBB Group assumes that the relevant contracting parties of the underlying assets will fulfill their payment obligations in line with the agreement – as in previous periods – and that no outflows of cash exceeding the payments made upon conclusion of the transaction are to be expected. The relevant contracting parties of the assets concerned have at least an AA+ rating according to Standard & Poor’s or a subsidiary guarantor liability is assumed by the federal government respectively. Due to the existing contractual obligation of the ÖBB Group resulting from the cross border lease agreements, the obligations in respect of the unredeemed lease liabilities are disclosed as contingent liabilities. Collateral securities in the form of pledged investments exist for unredeemed lease obligations.

PCDS/CDO

Contingent liabilities resulted from the assumption of credit risks upon conclusion of Portfolio Credit Default Swaps / Collateralized Debt Obligations. The Collateralized Debt Obligations (PCDS/CDO) concluded as part of a Portfolio Credit Default Swap were reversed based on an agreement with Deutsche Bank on January 15, 2010, and at the same time, the proceedings in this respect which have been pending since 2008 were closed. For more details, please see Note 29.3.

Other contingent liabilities

The guarantees mainly comprise guarantees for associated companies at an amount of EUR39.1 million (prior year: EUR39.1 million). These guarantees are matched with contingent receivables amounting to EUR3.7 million.

For further information on the contractual term of the BL transactions see Notes 30.3 and 29.3.

29. Financial instruments

29.1. Risk management

The ÖBB Group is exposed, in particular, to foreign currency exchange rate risks, interest rate risks and risks arising from the creditworthiness of its contractual partners (credit risk) associated with its underlying financial assets and liabilities. Financial risk management is considered as management of market risks and means the economic balancing of the portfolios of the individual companies with respect to the development of interests, currencies and commodities. The ÖBB Group uses derivative financial instruments for the purpose of hedging these risks. Derivative financial instruments are entered into only with reference to a hedged item.

The key task of risk management is to identify, assess and limit financial risks. The limitation of risks does not mean a complete exclusion of financial risks, but a reasonable control of risk positions quantified at any time within a precisely defined framework.

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ÖBB-Holding AG, who performs financial transactions on behalf and on the account of its subsidiaries only with their approval and at their instruction, created a risk-oriented control environment that includes guidelines and processes for the assessment of risks, the approval, reporting and supervision of financial instruments, among others. Highest priority of all financial activities is the protection of the assets of the ÖBB Group.Financial risks are defined as follows:

- 29.1.a. Interest rate risk - 29.1.b. Exchange rate risk - 29.1.c. Credit risk - 29.1.d. Liquidity risk

29.1.a. Interest rate risk

Risks from the exposure to changes of interest rates are risks for the profitability and enterprise value of the ÖBB Group and may occur in the following forms:

- interest payment risk (increased interest expense due to the market development); - present value risk (change in value of the portfolio);

Risks from market interest rate fluctuations may affect the financial result of the ÖBB Group due to the structure of its statement of financial position. Therefore, market interest rate fluctuations exceeding a certain level to be agreed with the Group companies need to be limited, e.g. by using derivative financial instruments, in order to minimize the influence on the earnings development.

The conclusion of adequate derivative financial instruments to manage interest risks (interest swaps) is based on portfolio analyses and recommendations by ÖBB-Holding AG and relating decisions of the subsidiaries.

The ÖBB Group is exposed to interest risks mainly in the Euro zone. In order to most efficiently implement the Company’s risk strategy, it uses derivative interest rate contract taking the present debt structure into account.

Financial instruments (current and non-current)Fixed interest finan-

cial instrumentsvariable interest fi-

nancial instruments

Dec 31, 2010 in mil. EUR in mil. EUR

Financial assets 902,7 110,0Cash and cash equivalents 47,1 53,4Total 958,1 163,4

Financial liabilities 15.143,1 1.288,7Other liabilities 72,9 0,0Total 15.216,0 1.288,7

Financial instruments (current and non-current)Fixed interest finan-

cial instrumentsvariable interest fi-

nancial instruments

Dec 31, 2009 in mil. EUR in mil. EUR

Financial assets 920,0 32,9Cash and cash equivalents 0,3 54,8Total 920,4 87,9

Financial liabilities 12.755,6 1.545,5Total 12.755,6 1.545,5

In return, the hedged items were classified as financial instruments at fixed or variable interest respectively, taking the concluded derivatives into account.

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Sensitivity analysis interest risk

IFRS 7 requires a sensitivity analysis for market risks, showing how profit and loss and shareholder’s equity would be affected by hypothetical changes in market interest rates. The effects of each period are determined by applying the hypothetical changes in the risk variables to the portfolio of financial instruments at the reporting date. For the purpose of the sensitivity analysis, it is assumed that the portfolio at the reporting date is representative for the entire year.

Changes in market interest rates of original fixed interest financial instruments affect profit or loss only if these instruments are measured at fair value. As such, fixed interest rate financial instruments carried at amortized cost are not exposed to any interest rate risks.

In the case of fair value hedges designated to hedge against interest rate fluctuations, the change in the fair value of the hedged item and the hedging instrument resulting from changes in interest rates in the same period are compensate in the income statement. Consequently, these financial instruments are not exposed to any interest rate risks either.

Market interest rate fluctuations of financial instruments designated as cash flow hedges affect the cash flow hedge reserve in shareholders´ equity and are therefore considered in equity-related sensitivities.

Market interest rates fluctuations of original variable interest financial instruments, for which interest payments are not hedged against interest rate risks by means of cash flow hedges, are included in the profit-related sensitivities.

Market interest rates fluctuation of derivative financial instruments not designated as hedging instrument in accordance with IAS 39 affect the other financial result (changes of the fair value of the financial assets) and are therefore included in the profit-related sensitivities

Sensitivity analysis interest risk as of Dec 31, 2010 + 100 base points - 100 base points + 100 base points - 100 base points

AssetsFinancial assets 1,0 -1,0 -14,9 16,9Cash and cash equivalents 0,4 -0,3 0,0 0,0DebtsFinancial liabilities -11,9 11,9 71,3 -77,5 Balanced effect 2010 -10,5 10,6 56,4 -60,6

Measurement in income statement in mil. EUR

Measurement in shareholder's equityin mil. EUR

Sensitivity analysis interest risk as of Dec 31, 2009 + 100 base points - 100 base points + 100 base points - 100 base points

AssetsFinancial assets 0,3 -0,3 0,0 0,0Cash and cash equivalents 15,8 -7,9 0,0 0,0DebtsFinancial liabilities -9,6 3,3 54,5 -58,4

Balanced effect 2009 6,5 -4,9 54,5 -58,4

Measurement in income statement in mil. EUR

Measurement in shareholder's equityin mil. EUR

29.1.b. Exchange rate risk

The exposure of the ÖBB Group to exchange rate risks primarily results from non-derivative financial liabilities. The predominant part of these risks is hedged.

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JPY USD CHF CAD

Currency-sensitive financial instruments 2010 in mil. in mil. in mil. in mil.

Trade receivables 0,0 1,3 0,0 0,0Financial assets 0,0 949,0 0,0 106,0Trade payables 0,0 -1,3 0,0 0,0Financial liabilites -3.300,0 -2.162,0 -285,0 -106,0

-3.300,0 -1.213,0 -285,0 0,0less forward foreign exchange contracts currency swaps 3.300,0 1.203,0 165,0 0,0Net exchange rate risk 0,0 -10,0 -120,0 0,0

JPY USD CHF CADCurrency-sensitive financial instruments 2009 in mil. in mil. in mil. in mil.

Financial assets 0,0 1.001,2 0,0 99,0Financial liabilities -3.300,0 -2.218,9 -675,5 -99,0

-3.300,0 -1.217,7 -675,5 0,0less forward foreign exchange contracts currency swaps 3.300,0 1.217,7 555,5 0,0Net exchange rate risk 0,0 0,0 -120,0 0,0

At the reporting date, the ÖBB Group was not exposed to any significant risks resulting from liabilities denominated in foreign currencies. Cross-currency swaps are used to convert financial liabilities in foreign currencies to the functional currency of the Group companies. Therefore, changes in foreign exchange rates have no material effects on the profit. As of the reporting date, foreign currency liabilities which are hedged against exchange rate risks were primarily bonds denominated in USD and loans denominated in CHF.

Sensitivity analysis exchange rate risk

In the case of fair value and cash flow hedges designated to hedge exchange rate risks, the change in the fair value of the hedged item and the hedging instrument resulting from changes in exchange rates are almost entirely compensated in the income statement in the same period. Therefore, these financial instruments are not exposed to foreign exchange rate risks in respect of their effects on profit and loss and shareholders´ equity.

Additionally, the Company entered into derivative financial instruments which completely hedge the foreign exchange risk of the hedged item (basis swaps), but for which hedge accounting is not applied.

The ÖBB Group is therefore only exposed to exchange rate risks resulting from liabilities denominated in foreign currencies that are not hedged. Gains and losses resulting from the changes in the rate of the currency in which these transactions are denominated are recognized in the income statement.

A revaluation (devaluation) of the Euro compared to the CHF by 10% as of December 31, 2010, would have resulted in an increase in profit amounting to EUR10.0 million (decrease in profit amounting to EUR9.0 million) as of December 31, 2010, and an increase amounting to EUR8.0 million (decrease amounting to EUR7.0 million) as of December 31, 2009; a revaluation (devaluation) of the Euro compared to the USD by 10% as of December 31, 2010, would have resulted in an increase (decrease) in profit amounting to EUR1.0 million as of December 31, 2010.

29.1.c. Credit risk

Credit risk is the risk of loss if the counterparty to a financial instrument to meet its contractual obligations (mainly money-market transactions, investments, funds, swap transactions with positive present value). ÖBB-Holding AG monitors compliance with the limits underlying the counterparty risk management, which are individually allocated to each financial partner on a daily basis. The ÖBB Group maintains only business relations with financial partners who have a defined rating and an objective risk classification of the capital market.

In 2009, the ÖBB Group introduced a credit risk management in which the determination and allocation of limits is primarily based on the evaluation of credit default swap data of the financial partners. This ensures fast reaction to changing risk evaluations by the capital market regarding such financial partners. The applicable limits and their use are monitored on a daily basis in order to be able to react to market disturbances in a quick and risk-oriented manner.

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Credit risks also exist outside of the original transactions with the financial partners in connection with cross border leasing. For cross border leasing transactions, security deposits, payment undertaking agreements and swaps were concluded with financial partners to make lease payments during the lease term and to pay the purchase price at the end of the term. For more information on cross border leasing agreements, see Note 30.3.

The maximum credit risk for the ÖBB Group resulting from original financial instruments as of the reporting date corresponds to the total of the investments, the positive present values from derivatives and guarantees issued (Note 28).

The financial assets of the ÖBB Group mainly comprise cash in banks, trade receivables as well as receivables from finance leases and securities. These items represent the maximum loss exposure of the ÖBB Group with respect to its financial assets. In an extreme case, this credit risk constitutes the equivalent of all assets less property, plant and equipment, intangible assets, investments in associated companies, inventories and other receivables that do not constitute financial instruments.

Gross exposure less(carrying amount incl. collateral Netvaluation allowance) (FV) exposure

Credit risk from financial instruments in the statement of financial position in mil. EUR in mil. EUR in mil. EUR

Total exposure 2010

Financial assets 1.176,3 0,0 1.176,3

Trade receivables 631,4 -16,8 614,6

Other receivables and assets 596,5 -272,2 324,3

Cash and cash equivalents 137,6 -1,1 136,5

Risk of non-current and current assets 2.541,8 -290,1 2.251,7

thereof neither past due nor impaired 1.805,8

thereof not past due, due to renegotiation or impairment of financial assets 46,9

thereof past due 399,0

Guarantees from leases 1.225,7 0,0 1.225,7

Other contingent liabilities 80,0 -3,7 76,3

Credit risk from issued guarantees 1.305,7 -3,7 1.302,0

Total credit risk as of Dec 31, 2010 3.847,5 -293,8 3.553,7

Total exposure 2009

Financial assets 1.125,2 0,0 1.125,2

Trade receivables 532,3 -9,0 523,3

Other receivables and assets 444,6 -257,1 187,5

Cash and cash equivalents 72,3 0,0 72,3

Risk of non-current and current assets 2.174,4 -266,1 1.908,3thereof neither past due nor impaired 1.369,5

thereof not past due, due to renegotiation or impairment of financial assets 30,7

thereof past due 508,1

Guarantees from leases 1.303,9 0,0 1.303,9

Other contingent liabilities 515,2 0,0 515,2

Credit risk from issued guarantees 1.819,1 0,0 1.819,1

Total credit risk as of Dec 31, 2009 3.993,5 -266,1 3.727,4

The credit risk of the ÖBB Group mainly results from the trade receivables and from finance leasing. The amounts reported in the statement of financial position are net of allowances for doubtful accounts that were estimated by the management of the ÖBB Group based on previous experience and the current economic environment as well as debtor-specific circumstances.

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29.1.d. Liquidity risk

The primary aim of ÖBB Group treasury management is the safeguarding of the necessary liquidity for all companies. For the ÖBB Group, liquidity risk means any limitation of the indebtedness or the ability to raise capital (e.g. due to a lower credit rating by a rating agency or by a bank-internal rating) with respect to volume and conditions for raising financial funds whereby the realization of the Company’s strategy or of the financial scope might be limited.

Therefore, analyzing the liquidity risk and consistently securing liquidity (mainly by liquidity planning, agreement of sufficient credit lines and sufficient diversification of creditors) constitutes the core task of treasury management.

The following tables show the contractually agreed (undiscounted) interest and redemption payments of non-derivative and derivative financial liabilities. Actually expected maturities do not deviate from the contractually agreed maturities.

Carrying amount Interest Redemption Interest Redemption Interest Redemption

Dec 31, 2010 2011 2011 2012-2015 2012-2015 2016 ff. 2016 ff.

in mil.EUR

in mil.EUR

in mil.EUR

in mil.EUR

in mil.EUR

in mil.EUR

in mil.EUR

Originate financial liabilities

Bonds 10.696,1 434,9 1.001,7 1.465,9 1.901,6 1.794,7 7.792,8

Bank loans 2.500,8 91,8 187,6 334,9 490,9 768,6 1.822,3

Finance leasing liabilities 1.429,9 44,7 41,0 142,0 558,7 565,7 830,2

Other financial liabilities 2.523,0 51,4 296,9 183,0 628,5 225,5 1.597,6

Trade payables 968,4 0,0 968,4 0,0 0,0 0,0 0,0interest-bearing liabilities 53,6 0,0 53,6 0,0 0,0 0,0 0,0

non-interest-bearing liabilities 914,8 0,0 914,8 0,0 0,0 0,0 0,0

Other liabilities 859,4 1,9 500,8 3,0 358,0 0,0 0,6interest-bearing liabilities 321,8 1,7 252,7 2,0 69,1 0,0 0,0


Cash flows 2011 Cash flows 2012-15 Cash-Flows 2016 ff.


Dec 31, 2009 2010 2010 2011-2014 2011-2014 2015 ff. 2015 ff.

in mil.EUR

in mil.EUR

in mil.EUR

in mil.EUR

in mil.EUR

in mil.EUR

in mil.EUR

Originate financial liabilities

Bonds 9.181,9 380,9 719,8 1.249,0 2.641,8 1.256,7 5.821,9

2.082,6 71,1 240,4 263,5 410,7 690,3 1.431,5

Finance leasing liabilities 1.424,6 42,4 37,3 161,1 534,6 578,0 852,7

Other financial liabilities 2.056,9 30,3 453,7 104,1 513,0 122,7 1.090,2

935,6 0,0 935,6 0,0 0,0 0,0 0,0interest-bearing liabilities 1,6 0,0 1,6 0,0 0,0 0,0 0,0


Other liabilities 590,1 0,0 310,6 0,0 199,5 0,0 70,8non-interest-bearing liabilities 590,1 0,0 310,6 0,0 199,5 0,0 70,8

Cash flows 2010 Cash flows 2011-14 Cash flows 2015 ff.

Bank loans

Trade payables

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2010 2011 2011 2012-2015 2012-2015 2016 ff. 2016 ff.

in mil. EUR

in mil. EUR

in mil. EUR

in mil. EUR

in mil. EUR

in mil. EUR

in mil. EUR

Derivative financial liabilities and assets or financial guarantees respectively

Derivative financial receivables

Energy derivatives designated as fair value hedges 24,4 0,0 13,9 0,0 10,4 0,0 0,0

Interest rate derivatives designated as fair value hedges 72,3 18,7 0,0 32,9 17,9 -15,3 0,0

Other derivatives not designated as hedges 6,8 0,1 5,2 1,5 0,0 -0,1 0,0

Derivative financial liabilities

Interest rate derivatives not designated as hedges 38,6 6,7 0,2 22,4 0,9 16,9 0,1

Interest rate derivatives designated as fair value hedges 20,1 -10,0 0,0 -19,9 44,0 0,0 0,0

Energy derivatives designated as fair value hedges 26,2 0,0 15,8 0,0 10,5 0,0 0,0

Interest rate derivatives designated as cash flow hedges 221,2 53,0 0,0 138,3 94,2 87,9 0,0

Other derivatives 21,8 3,6 0,0 14,4 0,0 17,2 0,0

Financial guarantees

Guarantee from cross border leasing 1.225,7 73,7 53,6 255,8 214,9 389,0 957,2

Other contingent liabilities 80,0 0,4 3,7 1,4 2,3 0,4 74,0


Carrying value Interest Redemption Interest Redemption Interest Redemption

Dec 31, 2009 2010 2010 2012-2014 2012-2014 2015 ff. 2015 ff.

in mil. EUR

in mil. EUR

in mil. EUR

in mil. EUR

in mil. EUR

in mil. EUR

in mil. EUR

Derivative financial receivables

Interest rate derivatives not designated as hedges 3,1 -0,2 2,1 1,2 0,1 -0,1 0,0

Electricity derivatives designated as fail value hedges 57,2 0,0 37,5 0,0 19,6 0,0 0,0


Derivative financial liabilities

Interest rate derivatives not designated as hedges 54,0 13,6 4,1 40,0 2,5 38,6 0,7

Interest rate derivatives designated as fail value hedges 45,4 -9,8 0,0 -29,4 65,8 0,0 0,0

Electricity derivatives designated as fail value hedges 58,7 0,0 39,0 0,0 19,6 0,0 0,0


Other derivatives (in particular CDO) 301,0 0,9 161,0 7,0 134,1 2,5 5,3


Derivative financial liabilities and assets

All instruments included in the portfolio as of the reporting date for which contractual payments have already been agreed are included in this table. Anticipated new liabilities were not included. Amounts in foreign currencies were translated at the rate applicable at the reporting date. Variable interest payments from financial instruments were determined based on the interest rates applicable at the reporting date.

Guarantees of the federal government

As explained in Note 25, the federal government has issued guarantees for bonds and liabilities payable to EUROFIMA.

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29.2. Hedging transactions

Hedge accounting

The ÖBB Group applies the hedge accounting regulations of IAS 39 relating to hedges of assets and liabilities and future cash flows. This reduces volatilities in the Consolidated Income Statement. Depending on the type of the hedged item, the hedge is either designated as “fair value hedge” or “cash flow hedge”.

In case of fair value hedges, the exposure to changes in the fair value of a recognized asset or liability or a fixed commitment is hedged. Changes in the fair value of the derivative used as hedging instrument are recognized in profit or loss; the carrying amount of the hedged item is adjusted by the gain or loss attributable to the hedged risk.

In the case of a cash flow hedge the exposure to variability of future, not yet determined cash flows from recognized financial assets and liabilities is hedged. For cash flow hedges, the effective portion of the change in the fair value of the hedging instrument is recognized via other comprehensive income in shareholder’s equity (cash flow hedge reserve) until the cash flow resulting from the hedged item occurs with effect on profit and loss; the ineffective portion of the change in the fair value of the hedging instrument is recognized in the income statement.

For cross currency swaps designated as cash flow hedges, the hedged risk comprises only the exchange rate risk, i.e. the risk of a change in the fair value of the hedged item due to changes in the spot rate. In accordance with IAS 39.100, the corresponding amount is transferred from the cash flow hedge reserve to the Consolidated Income Statement.

The ÖBB Group does not apply hedge accounting in accordance with IAS 39 for basis swaps with respect to foreign currency risks of variable interest bearing assets and because the gains and losses on the hedged items to be realized from the currency translation and recognized in profit or loss in accordance with IAS 21 are reported in the Consolidated Income Statement in the same period as the gains and losses resulting from the derivates used as hedging instruments. However, when fixed interest bearing hedged items denominated in a foreign currency are hedged , they may be designated as cash flow hedge.

The ÖBB Group complies with the requirements of IAS 39 in respect of hedge accounting as follows:

At the inception of the hedge, the relationship of the hedging instrument and the hedged item as well as the Company’s objective for undertaking the hedge are documented. The documentation includes allocating the hedging instruments to the respective hedged assets/liabilities and assessment of the effectiveness of the hedging instruments used. The effectiveness of the current hedges is assessed on an ongoing basis; if the hedge becomes ineffective, the hedging relationship has to be discontinued.

The ÖBB Group also enters into hedges which do not comply with the formal requirements of IAS 39 but which contribute to an economically effective hedging of financial risks in accordance with the principles of the risk management.

Fair value hedges

For the purpose of hedging the fair value or present value risk of fixed interest rate liabilities, the ÖBB Group entered into receiver swap agreements (“receive fixed – pay variable”) denominated in EUR in the financial year 2010. A USD fixed interest rate bond was designated as hedged item. Changes in the value of this hedged item resulting from the changes in the market interest rate and exchange rate are offset by the changes in the fair value of the interest rate and cross currency swap. The objective of this hedge transaction is to transform the fixed interest rate bond into a debt at variable interest rate, thus hedging the fair value of the financial liability.

The effectiveness of the hedging relationship is assessed on a prospective basis using the Critical Terms Match method pursuant to IAS 39.AG 108. On a retrospective basis, the effectiveness is assessed at each reporting date by an effectiveness test according to the Dollar-Offset method. The Dollar-Offset method compares the cumulative changes in the value of the hedged item, expressed in monetary units, to the cumulative changes in the fair value of the interest swap, expressed in monetary units. The changes in the value of both transactions are calculated based on the cash flows outstanding at the beginning and at the end of a test period and are adjusted for accrued interest. The effectiveness of all hedging relationships was within the range of the quotient of both accumulated value changes required by IAS 39 (between 80% and 125%). The change in the credit spread (component depending on the creditworthiness) was not considered account in the determination of the change in value of the hedged item for the purpose of effectiveness assessment.

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The following table shows the range of maturities of the fair value hedges:

Dec 31, 2010 Dec 31, 2010 Dec 31, 2009 Dec 31, 2009

Other derivative financial instruments Number of swaps Nominal volume Number of swaps Nominal volume

Maturity in mil . EUR in mil . EUR in mil. EUR in mil. EUR

Portfolio 1 343,6 1 343,6thereof maturing in 2010 0 0,0

thereof maturing in 2011 0 0,0 0 0,0thereof maturing in 2012 0 0,0 0 0,0thereof maturing in 2013 1 343,6 1 343,6

As the table of fair values of derivative financial instruments shows (see table “Derivative financial instruments”), the ÖBB Group designated interest rate derivatives totaling EUR343.6 million (prior year: EUR343.6 million) as fair value hedges as of December 31, 2010. The change in the carrying amount of the hedged items (interest portion) resulted in losses amounting to EUR6.3 million in the financial year 2010 (prior year: profits amounting to EUR12.6 million), and changes of the fair values (interest portion) of the hedging transactions resulted in profits amounting to EUR5.1 million (prior year: expense amounting to EUR7.7 million) both recognized in other financial result.

Cash flow hedges

Interest rate risks/exchange rate risks

For the purpose of hedging interest payment risks with respect to hedged items at variable interest, the ÖBB Group entered into payer interest rate swaps (“receive variable - pay fixed”) in 2010. The changes in cash flows of the hedged items resulting from changes in the EURIBOR rate are offset by the changes in cash flows of the interest rate swaps. The objective of these hedges is to transform the variable interest bonds into fixed interest financial debts, thus hedging the cash flow from the financial liabilities.

The following table shows the range of maturities of the cash flow hedges:

Dec 31, 2010maturity Number o f contrac ts

Nom inal volume in

mi l. EUR

Portfolio 66 2.538,9thereof maturing in 2011 3 33,0thereof maturing in 2012 9 185,0thereof maturing in 2013 11 1.457,7thereof maturing in 2014 8 111,7thereof maturing in 2015 ff. 35 751,5

Dec 31, 2009maturity Num ber of contrac ts

Nom inal volume in mi l. EUR

Portfolio 63 2.349,5thereof maturing in 2010 4 200,0thereof maturing in 2011 3 33,0thereof maturing in 2012 9 185,0thereof maturing in 2013 11 1.428,7thereof maturing in 2014 ff. 36 502,8

The effectiveness of the hedging relationship is assessed on a prospective basis using the Critical Terms Match method pursuant to IAS 39.AG 108. On a retrospective basis, the effectiveness is assessed at each reporting date by an effectiveness test according to the Dollar-Offset method. A hypothetical derivative financial instrument serves as the hedged item. All hedging relationships of this type were effective as of the reporting date. As the table of present values of derivative financial instruments shows, ÖBB Group designated derivative financial instruments totaling EUR2,538.9 million as of December 31, 2010 (prior year: EUR2,349.5 million) as cash flow hedges. In 2010, an amount of EUR16.4 million (prior year: -EUR40.2 million) recognized in the cash flow hedge reserve resulted from the change in value of the hedging instruments recognized in the other comprehensive income.

Changes in the fair value of interest rate swaps designated as hedging instruments with respect to future variable interest payments are recognized in shareholders´ equity via the other comprehensive income (cf. Statement of Changes in Equity). These amounts are recognized in finance costs in the period in which the corresponding interest payments from the hedged item affect profit and loss. In 2010, the Company realized a gain of EUR62.8 million (prior year: EUR18.8 million) from foreign currency hedges in the other financial result. Furthermore, ineffective portions of hedge accounting relationships amounting to EUR0.1 million (prior year: EUR0.1 million) were recognized in the profit.

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As a result of discontinued hedging instruments (cash flow hedges), an amount of EUR5.1 million (prior year: EUR5.8 million) was recognized in shareholder’s equity via other comprehensive income, which will be realized as follows: 2011: EUR0.7 million, 2012 – 2014: EUR2.1 million, 2015 ff: EUR2.3 million.

Energy derivatives

The Company enters into energy derivatives with the objective of hedging anticipated payments resulting from purchase of power, and they are accounted for as cash flow hedges. The forward contracts are concluded via the stock exchange (futures) and in particular via the OTC market (forwards). Accounting of these contracts conforms to the accounting of derivative financial instruments, as disclosed above. Forward contracts that are discontinued by counter forwards prior to the end of their term are measured at their fair value (market value) on the reporting date through profit or loss.

Dec 31, 2010 Dec 31, 2010 Dec 31, 2009 Dec 31, 2009

Energy derivatives Number of contracts Nominal volume Number of swaps Nominal volume

Maturity in mil. EUR in mil. EUR in mil. EUR in mil. EUR

Portfolio 199 399,7 289 345,1thereof maturing in 2010 190 200,2

thereof maturing in 2011 98 194,1 60 97,9



thereof maturing in 2014 10 15,2

In addition, a small number of diesel hedges are also concluded.

29.3 Portfolio Credit Default Swap/Collateralized Debt Obligation

In addition to the above described derivative financial instruments, the ÖBB Group entered into portfolio credit default swap/collateralized debt obligation (PCDS/CDO) agreements with Deutsche Bank AG 2005. These PCDS/CDO transactions were dissolved on January 15, 2010, and the proceedings in this matter that were pending since 2008 were closed. Upon dissolution of the contracts, the amounts recognized for the PCDS/CDO tranches in the statement of financial position were adjusted to the respective dissolution values. The dissolution values of January 15, 2010, were used for the measurement on December 31, 2009.

The agreed dissolution value for the four tranches concluded in 2005 totals EUR295.0 million as of December 31, 2009. The dissolution value plus interest is paid in four equal annual partial amounts of EUR75.9 million each, starting on February 1, 2010, and ending on February 1, 2013.

29.4. Additional disclosures according to IFRS 7

Financial assets are initially recognized at their fair value. For all financial assets subsequently not measured at their fair value through profit or loss, the transaction costs directly attributable to the acquisition are included in cost. The fair values recognized in the statement of financial position usually approximate the market prices of the financial assets.

Financial assets and liabilities held for trading (FAHfT) are measured at their fair value. This category consists primarily of derivative financial instruments that do not qualify for hedge accounting in accordance with IAS 39 and are therefore mandatorily classified as held for trading. Gains or losses from the subsequent measurement are recognized in the income statement.

Loans and Receivables (LaR) comprise financial assets with fixed or determinable payments which are not traded in an active market and are not held for sale.

Available-for-sale financial assets (AfS) are financial assets which are not allocated to any other category. Equity instruments and interests in mutual funds, if not carried at fair value through profit or loss, are mandatorily classified to this category. On principle, interests in mutual funds are always classified to this category, unless a short-term trading activity can be proven. Investments are allocated to this category as well.

Financial liabilities (FLAC) are initially measured at their fair value and subsequently at amortized cost.

Derivative financial instruments are used by the ÖBB Group for the purpose of hedging its exposure to interest rate, credit and exchange rate risks resulting from financial transactions. All derivative financial instruments are recognized either as assets or liabilities in the statement of financial position and are measured at their fair value in accordance with IAS 39.

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Changes in the fair value of derivative financial instruments (designated as hedging instruments in accordance with IAS 39)are recognized through profit or loss in the Consolidated Income Statement or in equity (cash flow hedge reserve) via the other profit, depending on whether the derivative instrument is hedging a recognized item in the statement of financial position(fair value hedge ) or future cash flows ( cash flow hedge). If the transaction does not qualify for hedge accounting, the derivative financial instrument must mandatorily be classified as held for trading and is therefore measured at fair value through profit or loss.

Recognition in the Consolidated Income Statement

Accrued interest payments from derivative financial instruments (interest rate swaps) designated as fair value hedges and cash flow hedges in accordance with IAS 39 are recognized accordingly as interest income or expense at their gross amount. The interest result is allocated to the valuation categories according to the hedged item; in the reporting period, only financial liabilities were hedged.

Additional disclosures regarding the financial instruments

Cash and cash equivalents, trade receivables and other receivables mainly have a short residual term. Therefore, their carrying amounts as at the reporting date approximate their fair values. The fair values of other non-current receivables correspond to the present values of the payments associated with these assets discounted at the respective interest rates.

Trade payables and other liabilities are mainly short-term; the amounts reported approximate the fair values. The fair values of bank loans and other financial liabilities are determined as the present values of the payments associated with the liabilities, based on the applicable interest curve. The following reconciliation shows non-financial instruments and financial instruments from hedge accounting in a separate (additional) column in order to enable reconciliation to the carrying amount of item reported in the statement of financial position.

Cash

Hedge accoun-

ting

Non

financial instru-ments

Fair value as of Dec 31, 2010

in mil. EUR

in mil. EUR

in mil. EUR

in mil. EUR

in mil. EUR

in mil. EUR

in mil. EUR

in mil. EUR

in mil. EUR

in mil. EUR

Non-current assets

Financial assets 1.027,8 0,1 69,0 1,8 79,2 780,0 0,0 96,7 1,0 1.038,8Other receivables and assets 110,9 0,0 0,0 0,0 0,0 5,4 0,0 0,0 105,5 5,4

Current assets

Financial assets 84,0 10,4 0,1 5,0 0,0 63,5 3,5 0,0 1,5 83,8Trade receivables 587,2 0,0 0,0 0,0 0,0 557,5 0,0 0,0 29,7 557,5Other receivables and assets 452,6 0,0 0,0 0,0 0,0 241,0 0,0 0,0 211,6 241,0Cash and cash equivalents 137,6 0,0 0,0 0,0 0,0 0,0 137,6 0,0 0,0 137,6Total carrying value per category 10,5 69,1 6,8 79,2 1.647,4 141,1 96,7

Financial assetsas of Dec 31, 2010

Carrying amount as

of Dec 31, 2010

Available for sale

(at fair value)

Available for

sale (at cost)

At fair value through

profit and

loss (held for trading)

Held to

maturity (HtM)

Loans and

receiv-ables

116


Hedge ac counting

Finance lease

Non-financ ial ins truments

Fair value as

of Dec 31, 2010

in mi l. EUR in mil . E UR in m il. EUR in m il. EUR in mi l. EUR in mi l. EUR in mil . EUR

Non-current liabilitiesFinancial liabilities 15.916,7 15.166,2 59,1 263,7 406,6 21,1 16.365,2

thereof interest-bearing liabili ties 15.569,3 15.139,9 0,0 0,0 406,6 22,8 16.018,1

Other liabilities 358,6 158,9 0,0 0,0 0,0 199,7 158,9thereof interest-bearing liabili ties 208,7 54,4 0,0 0,0 0,0 154,3 69,1

Current liabilities

Financial liabilities 1.561,0 1.537,9 0,0 0,6 15,5 7,0 1.553,0thereof interest-bearing liabili ties 1.315,2 1.293,4 0,0 0,0 15,3 6,5 0,0

Trade payables 968,4 906,6 0,0 0,0 0,0 61,8 906,6thereof interest-bearing liabili ties 0,3 0,3 0,0 0,0 0,0 0,0 0,3

Other liabilities 500,8 316,8 0,0 0,0 0,0 184,0 316,8thereof interest-bearing liabili ties 21,0 18,5 0,0 0,0 0,0 2,5 21,0

Total carrying value per category 18.086,4 59,1 264,3 422,1thereof interest-bearing liabilities 16.506,5 0,0 0,0 421,9

At fair value through profit

and loss (held for

trading)Financial liabilities

as of Dec 31, 2010

Carrying amount as of Dec 31,

2010

At amortized

cost

Cash

Hedge accoun-

ting

Non financial

instru-ments


in mil. EUR

in mil. EUR

in mil. EUR

in mil. EUR

in mil. EUR

in mil. EUR

in mil. EUR

in mil. EUR

in mil. EUR

in mil. EUR

Non-current assetsFinancial assets 1.004,1 9,6 56,0 1,8 65,9 812,5 0,0 54,2 4,1 1.114,0Other receivables and assets 83,8 0,0 0,0 0,0 0,0 3,5 0,0 0,0 80,3 83,8Current assetsFinancial assets 125,8 13,8 0,1 2,4 0,0 71,4 0,0 37,5 0,6 125,8

Trade receivables 501,7 5,0 0,0 0,0 0,0 464,4 0,0 0,0 32,3 501,7Other receivables and assets 338,2 0,5 0,0 0,0 0,0 118,0 0,0 0,0 219,7 338,2Cash and cash equivalents 75,0 4,6 0,0 0,0 0,0 0,0 70,4 0,0 0,0 75,0Total carrying value per category 33,5 56,1 4,2 65,9 1.469,8 70,4 91,7

Financial assetsas of Dec 31, 2009


2009

Available for sale (at fair value)

Available for sale

(at cost)

At fair value through

profit and loss (held

for trading)

Held to maturity

(HtM)

Loans and

receiv-ables

117


Hedge accoun-

tingFinance

lease

Non-financial

instru-ments


Financial liabilities as of Dec 31, 2009in mil. EUR

in mil. EUR

in mil. EUR

in mil. EUR

in mil. EUR

in mil. EUR

in mil. EUR

in mil. EUR

Non-current liabilitiesFinancial liabilities 13.828,0 12.891,3 20,1 193,3 318,8 401,2 3,3 14.715,9

thereof interest-bearing liabilities 13.389,1 12.862,6 20,1 101,9 0,0 401,2 3,3 14.276,9Other liabilities 279,5 149,6 0,0 0,0 0,0 0,0 129,9 279,5Current liabilitiesFinancial liabilities 1.653,7 1.420,2 1,0 161,8 44,5 13,7 12,5 1.649,9

thereof interest-bearing liabilities 1.341,3 1.279,5 1,0 35,3 0,0 13,7 11,8 1.336,6Trade liabilities 935,6 858,4 0,0 0,0 0,7 3,9 72,6 935,6

thereof interest-bearing liabilities 1,6 1,6 0,0 0,0 0,0 0,0 0,0 1,6Other liabilities 310,6 31,8 0,0 0,0 0,1 0,3 278,4 310,6Total carrying value per category 15.351,3 21,1 355,1 364,1 419,1

thereof interest-bearing liabilities 14.143,7 21,1 137,2 0,0 414,9


2009

At amortized

cost


and loss (fair value

option)


and loss (held for trading)

Net financial results by category

The net financial result by category presents itself as follows:

Result of subsequent measurement Interest resultDec 31, 2010 in mil. EUR in mil. EUR in mil. EUR in mil. EUR in mil. EUR in mil. EUR in mil. EUR

Loans and receivables (LaR) 55,0 -0,1 51,1 0,1 2,6 0,1 2,5

Held-to-maturity investments (HtM) 5,8 0,0 9,5 0,0 0,0 0,0 0,0Available for sale financial assets(AfS) 0,9 -12,4 0,0 -1,3 2,8 3,5 -3,4 Financial instruments held for trading(FAHfT, FLHfT) 0,0 58,4 0,0 0,0 0,0 0,0 0,0Financial liabilities measured at amortized cost (FLAC) -571,9 -0,5 -170,5 0,0 0,0 0,0 -0,6 Hedge accounting -33,8 0,0 0,0 0,0 0,0 0,0 20,4

Cash and cash equivalents -0,4 0,0 -0,2 0,0 0,0 0,0 0,0

Currency translationAt fair value

Proceeds from

disposal

Proceeds from

investment Other profitImpairment/ appreciation

118


Result of subsequent measurement Interest result

Dec 31, 2009 in Mio. EUR in Mio. EUR in Mio. EUR in Mio. EUR in Mio. EUR in Mio. EUR in Mio. EUR

Loans and receivables (LaR) 49,3 0,0 -36,4 0,0 0,0 0,2 -4,7

Held-to-maturity investments (HtM) 3,5 0,0 7,3 -0,1 0,0 0,0 0,0Available for sale financial assets(AfS) 0,7 4,3 0,0 -4,2 3,4 1,4 -0,9 Financial instruments held for trading(FAHfT, FLHfT) -0,4 288,3 0,0 -0,3 3,4 0,0 -2,7 Financial liabilities measured at amortized cost (FLAC) -523,7 0,0 44,4 0,0 0,0 0,0 -4,8

Hedge accounting -22,8 0,0 0,0 0,0 0,0 0,0 0,0

Cash and cash equivalents 6,9 0,0 0,0 0,0 0,8 0,0 0,0

Other profitImpairment/ appreciation

Currency translationAt fair value

Proceeds from

disposal

Proceeds from

investment

Interest from financial instruments is recognized in the interest result. The ÖBB Group recognizes other components of the net result in other financial result.

Interest expense on financial liabilities classified as financial liabilities measured at amortized cost (net expenses amounting to EUR571.9 million [prior year: EUR523.7 million]) mainly includes interest expense from bonds and loans. Furthermore, it also comprises interest income from discount rate adjustments with respect to trade payables.

In the course of recognition of changes in the value of financial assets classified as available for sale in the other profit, measurement gains amounting to EUR0.9 million are recognized in the equity at the end of the financial year (prior year: measurement losses amounting to EUR0.3 million). No gains (losses) of the amounts recognized in the equity were transferred to the income statement in the financial year 2010 (prior year: EUR0.0 million). Impairments of assets classified as available for sale amounting to EUR1.3 million were carried out in the year under review (prior year: EUR4.2 million). For details on these financial instruments see Note 25.

29.5. Derivative financial instruments

The following table shows the fair values of all derivative financial instruments as recognized. They are divided into those that qualify for hedge accounting in accordance with IAS 39 (fair value hedge, cash flow hedge) and those that do not.

C arryi ng a mou nts

D ec 31 , 2 01 0

C arryin g a mou ts

De c 3 1, 20 09

C arryi ng a mo un ts

D ec 3 1, 20 10

C arryi ng a mo uts

De c 31 , 2 009

in m il. EU R i n mi l. E UR in mil . EU R i n mi l. EUR

Intere st r ate swaps

without hedge relation 1,8 0,3 49,2 43, 3

des ignated a s c ash flow hedge 53,8 34,5 90,7 86, 6

Cr oss c urren cy s waps

without hedge relation 5,0 2,8 1,4 10, 8

des ignated a s fai r v alue hedge 0,0 0,0 16,9 45, 4des ignated a s c ash flow hedge 18,5 0,0 130,5 174, 3

P ower fut ures and forwar ds

des ignated a s fai r v alue hedge 24,4 57,2 26,2 58, 7

O ther der iv ativ es

Der iv atives without hedge relation 10,5 0,0 8,5 163, 9

Der iv atives with hedge relation 0,0 0,0 0,0 0, 0To tal 114,0 94,8 323,4 583, 0

As se ts L iab ilities

119


Furthermore, other derivatives without hedge relation at fair values amounting to -EUR301.0 million existed in the year under review 2010. For further information on the fair values of the CDOs see Note 29.3.

Fair value hierarchy

The following list summarizes how the fair values were determined.

Level 1: Quoted prices (unadjusted) are available from active markets for identical financial instruments.

Level 2: Other parameters than those stated for level 1 were used which are observable for the financial instruments (either directly, i.e. as price, or indirectly, i.e. derived from prices).

Level 3: Parameters were used which are not based on observable market data.

Dec 31, 2010 Level 1 Level 2 Level 3 Total

Trading 2,4 14,9 0,0 17,3

Derivatives subject to hedge accounting 0,0 96,7 0,0 96,7

Derivative financial assets 2,4 111,6 0,0 114,0

Trading 0,0 59,1 0,0 59,1


Derivative financial liabilities 0,0 323,4 0,0 323,4

Dec 31, 2009 Level 1 Level 2 Level 3 Total

Trading 25,0 12,6 0,0 37,6


Derivative financial assets 25,0 104,2 0,0 129,2

Trading 0,0 376,2 0,0 376,2


Derivative financial liabilities 0,8 739,5 0,0 740,3

The line “Trading” includes derivative financial instruments as well as financial instruments available for sale (at fair value).

These financial assets and financial liabilities are exclusive derivative financial instruments and financial assets which are measured using evaluation model and market input parameters or the values of which can be read in the prices quoted in active markets and which are, therefore, allocated to level 1 or level 2. Liabilities from the PCDS/CDO transaction were also measured according to level 2 in the year under review 2009. For information on these financial instruments see Note 29.3.

30. Leasing transactions

30.1. Lessor

There are 27,000 lease agreements for the real estate, predominantly with indefinite terms, which can be terminated with a notice period of 6 months maximum. About 5,300 external lease agreements exist, which end between 2011 and 2059. The long-term agreements referrer to building leases granted for property. Contingent lease payments relate exclusively to lease agreements and were concluded with third parties, not with Group companies. The assets comprised in property, plant and equipment and in the line item “Investment property” and leased out by “operating leases” have the following residual carrying values as of the respective reporting dates:

120


Dec 31, 2010 Dec 31, 2009


Land and buildings 6,9 4,8

Technical equipment and machinery 2,9 5,8Investment property 87,9 54,3

97,7 64,9

Net carrying value of the finance lease assets per group of assets

The ÖBB Group leases out equipment that is classified either as operating lease or as finance lease or cross border lease respectively. The agreements have different contractual terms customary in the market, depending on the leased object.

The ÖBB Group had agreed the following minimum lease payments with the lessees as of the reporting date:

Total up to 1 year 1 to 5 years more than 5 years

Dec 31, 2010 in mil . E UR in mil. EUR in mil . EUR in mi l. EUR

Land and buildings 169,8 14,6 33,5 121,7

Automobiles and trucks 0,5 0,3 0,2 0,0

Total up to 1 year 1 to 5 years more than 5 years

Dec 31, 2009 in mil . E UR in mi l. EUR in mil . EUR in mil. EUR

Land and buildings 204,0 18,4 41,3 144,3

Automobiles and trucks 0,9 0,6 0,3 0,0

Contingent lease payments were recognized as income from land and buildings at an amount of EUR0.4 million in 2010 (prior year: EUR2.8 million) and from technical equipment and machinery and fleet at an amount of EUR0.9 million (prior year: EUR0.4 million). For further information on the cross border leasing transactions see Note 30.3.

30.2. Lessees

Finance leasing

The ÖBB Group procured certain items of its property, plant and equipment by means of finance lease agreements. As of December 31, 2010, the average effective interest rate was based on the six-month EURIBOR rate, incl. a contractually agreed premium. The interest rates are determined as fixed rates upon conclusion of the contracts. The terms of all leases are stipulated in writing. The obligations of the ÖBB Group resulting from finance lease agreements are secured by the lessor’s retention of the title of the leased assets.

The net carrying amounts of the finance lease assets by asset category and their respective development are shown in the schedule of assets (Note 14). As of the reporting date, the ÖBB Group had contractually agreed the following minimum lease payments for the non-terminable finance leases with the lessors:

Minimum lease

payments

Interest expense

included

As of Dec 31, 2010 in mil. EUR in mi l. EUR

2011 34,0 18,4

2012 - 2015 387,9 59,1

after 2015 279,3 80,6

Total of m inimum lease payments 701,2 158,1

less interest -158,1

Present value of lease payments 543,1

121


Minimum lease

payments

Interest expense

included

As of Dec 31, 2009 in mil. EUR in mil. EUR

2010 27,1 16,6

2011- 2014 232,5 65,1

after 2014 440,5 62,1

Total of minimum lease payments 700,1 143,8

less interest 143,8

Present value of lease payments 556,3

Contingent lease payments were made at an amount of EUR1.9 million (prior year: EUR3.9 million).

Operating leases

Minimum lease payments amounting to EUR59.8 million (prior year: EUR62.2 million) were recognized as expense in the respective reporting periods.

Future minimum lease payments from non-cancelable operating lease agreements are as follows in each of the subsequent periods:

up to 1 year 1-5 years more than 5 years

2010 in mi l. EUR in mil. EUR in mil. EUR

Land and buildings 20,4 55,8 78,5Automobiles and trucks 19,3 23,5 0,1

Other technical equipment and machinery 3,1 12,3 0,0

Other equipment, furnitures and fixtures 0,7 1,1 0,0Intangible assets 1,0 4,0 0,0

Total 44,5 96,7 78,6

up to 1 year 1-5 years more than 5 years

2009 in mil. EUR in mil . EUR in mi l. EUR

Land and buildings 24,4 86,0 26,5Automobiles and trucks 22,5 39,6 0,6Other technical equipment and machinery 0,1 0,1 0,0

Other equipment, furnitures and fixtures 0,7 1,1 0,0

Total 47,7 126,8 27,1

Future minimum lease payments from non-terminable sub-lease agreements for land and buildings amounted to EUR1.8 million in 2009. In 2010, no significant future minimum lease payments from non-terminable sub-lease agreements were recognized.

30.3. Cross border lease agreements

Between May 1995 and June 2006, Österreichische Bundesbahnen (now ÖBB-Infrastruktur AG) entered into 15 (prior year: 16) cross border lease (“CBL”) transactions, ÖBB-Produktion Gesellschaft mbH and ÖBB-Personenverkehr AG each entered into one CBL transaction which are still valid as of December 31, 2010. The CBL transaction concluded by Österreichische Post AG (now ÖBB-Postbus GmbH) expired as scheduled. One entire transaction and one tranche respectively of two more transactions were terminated in the course of the year 2010.

- In essence two types of lease transaction were carried out: Sa le and l eas eback : In this transaction, the contractual partner is the buyer of the assets and leases them back to the respective companies of the ÖBB Group.

- Leas e and l eas eback : The respective companies of the ÖBB Group lease assets under its legal ownership to the investor and simultaneously lease them back. The contractual partner makes upfront lease payments at the inception of the lease.

122


Amounts (purchase price or lease payment in advance) received by Österreichische Bundesbahnen at the inception of the CBL transactions were invested in specially structured products in such a way that the future obligations can be serviced from the investments (taking generated interest into account). The CBL agreements grant the ÖBB Group companies early buyout options at a fixed price and at defined dates. There is only one CBL transaction with a volume of EUR31.5 million for rolling stock with a maturity until 2019 which does not provide for a fixed repurchase price.

A part of the lease obligations was transferred to various banks and leasing institutes by concluding payment undertaking agreements in return for a single payment those institutes having a high credit rating at the time of conclusion of the agreement. In these payment undertaking agreements, the banks or leasing institutes agreed to make the contractual payments at the stipulated payment dates on behalf of the ÖBB Group companies.

Property, plant and equipment subject to the CBL transactions are maintained regularly in accordance with the stipulations of the agreements and may, in principle, not be sold, leased, pledged as collateral or decommissioned.

Premature termination of CBL transactions

In 2010, two tranches of two CBL transactions (prior year: four tranches of CBL transactions) and one entire CBL transaction were terminated prematurely. One of these tranches legally relates to ÖBB-Infrastruktur AG in their external relation, but was charged to the group company ÖBB-Personenverkehr AG as sub-lessee in its entirety. The second terminated tranche relates to ÖBB-Infrastruktur AG in its external as well as internal relation. The CBL transaction that was completely terminated in the financial year relates partly to ÖBB-Infrastruktur AG in its external relation, but was charged in its entirety to the group company ÖBB-Personenverkehr AG as sub-lessee in its internal relation. The second part of the terminated CBL transaction relates to ÖBB-Rail Equipment GmbH & Co KG in its external as well as internal relation, which therefore does not hold any CBL transactions anymore.

Accounting

General principles for all CBL transactions:

- The ÖBB Group remains t he benef ic i a l owner o f the ass ets : Due to continuing beneficial ownership, property, plant and equipment sold and leased back is still recognized in the statement of financial position of the ÖBB Group.

- Amor t izat i on o f t he defer red t ax benef i t : The deferred tax benefit realized at the inception of the transaction is recognized in other liabilities and is amortized pro rata temporis over the term of the contracts. As of December 31, 2010, the deferred tax benefit not yet amortized amounted to EUR108.3 million (prior year: EUR129.7 million). Income from the amortization of the deferred tax benefit amounting to EUR21.4 million in 2010 (prior year: EUR27.1 million) is recognized as interest income in the interest result.

Classification of lease transactions according to their substance

IAS 17 (Leases) provides detailed rules for the accounting of leases. The substance of the lease transaction is decisive for accounting.

The CBL transactions were classified in accordance with SIC 27 (Evaluating the Substance of Transactions in the Legal Form of a Lease). IAS 17 applies only when the substance of an agreement includes the conveyance of the right to use an asset for an agreed period of time. In consideration of the regulations of SIC 27, numerous financial assets in the legal ownership of the ÖBB Group (securities and bank deposits) as well as the corresponding lease liabilities do not meet the criteria of assets and liabilities (“linked transactions”), respectively, due to the lack of substance of the agreements, and are therefore not accounted for (“off balance”). Consequently, some transactions have to be recognized (in part) in the statement of financial position (“on balance”) (“non-linked transactions”).

In respect of contracting parties with at least an AA+ rating or for whose compliance a subsidiary guarantor liability is assumed by the government, and whose investments are pledged in favor of the investor, the default risk is still regarded as extremely low, so that no need for any change is seen at present and these transactions can continue to be disclosed “off balance”. However, the creditworthiness (measured by the rating) of contracting partners rated as safe in the past has, in part, deteriorated significantly. For this case, the contractual provisions prescribe, among others, that the affected deposits or payment undertaking agreements shall be replaced or hedged. In consideration of the increased risk, transactions classified as “off balance” in the past were recognized in the statement of financial position of the year under review 2009 in the amount of EUR 103.9 million, as well as a redemption carrier in the amount of EUR15.8 million, converted into Euro. No further transactions had to be included in the financial statement of in 2010.

123


Accounting for assets and lease liabilities (non-linked transactions)

If recognition in the statement of financial position is required, the securities were classified as held-to-maturity (bonds) or loans and receivables (deposits with banks and payment undertaking agreements) and measured at amortized cost. Initially, the financial assets are matched with lease liabilities in the same amount. Amounts denominated in foreign currencies are translated at the exchange rate applicable at the reporting date. Any changes in the value of the assets resulting from changes in exchange rates are offset by corresponding exchange rate effects on the lease liabilities.

Higher credit risks were considered by recording allowances on investments with those contractual parties which have a Standard & Poor’s rating below AA and for which no additional collaterals in the form of guarantor liability or pledged marketable securities of the highest rating (AAA) in favor of the ÖBB Group exist. The amount of the respective impairment is always determined by way of portfolio allowance depending on historical probabilities of default, measured by the rating of the contractual parties and the residual term of the transaction, considering the individual circumstances. As of December 31, 2010, the company recognized allowances on investments of EUR36.6 million (prior year: EUR21.2 million).

In December 2009, one CBL redemption carrier did not achieve the contractually defined minimum rating. Accordingly, ÖBB-Infrastruktur AG is obligated to obtain new collaterals with an appropriate rating within a certain period of time. Negotiations with the CBL contract partner on the actual procedure in this so-called rating trigger event were completed by December 31, 2010. The CBL contract partners disclaim additional collaterals, so that the provision amounting to EUR13.6 million, which was recorded as of December 31, 2009, in case the redemption carrier had to be replaced, could be released to profit in 2010.

In the Consolidated Financial Statements as of December 31, 2010, financial assets in connection with non-linked lease transactions amount to EUR915.9 million (prior year: EUR904.0 million). The related financial liabilities amount to EUR1,077.5 million as of December 31, 2010 (prior year: EUR1,054.6 million).

In 2010, an amount of EUR75.6 million (prior year: EUR59.0 million) of interest income from financial assets related to CBL transactions was recognized. This interest income is matched with interest expenses in the amount of EUR75.6 million (prior year: EUR65.2 million).

Accounting for transactions without substance (linked transactions)

In accordance with SIC 27, the Company did not recognize assets or liabilities for these transactions. Therefore, the deposits made and marketable securities purchased in connection with the payment undertaking agreements as well as the lease prepayments received under the master lease agreement were not recognized in the statement of financial position. Legal obligations under the lease agreements resulting from the failure of the banks or leasing institutes respectively to comply with their payment obligation towards the investors, which they assumed for the ÖBB Group companies in return for a single payment, are recognized as contingent liabilities. As of December 31, 2010, contingent liabilities from CBL transactions amount to EUR1,225.7 million (prior year: EUR1,303.9 million). All underlying investments have at least an AA+ rating or are collateralized by a guarantor liability issued by the government.

31. Service concession arrangements (SIC 29)

The following explanations and disclosures refer to the requirements of SIC 29 (Service Concession Arrangements). These are agreements between enterprises for the provision of services that give the public access to major economic and public facilities.

Liechtenstein concession

On June 13, 1977, ÖBB-Infrastruktur Bau AG was granted a concession to operate railways in the Principality of Liechtenstein, which is valid until December 31, 2017. Accordingly, ÖBB-Infrastruktur AG is entitled and obligated to operate the licensed public transport railways in Liechtenstein without disruption and in compliance with regulations throughout the entire period of the concession. The infrastructure assets located in Liechtenstein are owned by ÖBB-Infrastruktur AG. The concessionaire is responsible for the transportation of people, luggage and goods.

An extension of the concession is aspired. Currently, a comment procedure is underway regarding the draft of a new Railways Act 2010 in Liechtenstein. The resolution on the draft of the legislation is an essential precondition for the decision on the application for concession, particularly because free access to the network must now also be implemented in Liechtenstein law. This is of particular significance for the content and the scope of the concession. The progress of the negotiations on the partially double-track line expansion according to the demands of short-distance transport is expected to have a significant influence on the timeframe of the concession proceedings.

124


Although upon expiration of the concession in 2017, the assets would be transferred to Liechtenstein, the property, plant and equipment concerned is depreciated over the anticipated longer useful life, because on the one hand, an extension of the concession is likely to be granted due to the scheduled new construction of the track (which constitutes the subject-matter of international agreements) and due to the fact that ÖBB is the only applicant for the concession, and because on the other hand, the provision of reversion of the assets without compensation included in the draft of the Railways Act amendment seems at least to require reconsideration from a legal point of view.

32. Company acquisitions

No (prior year: one) initial consolidation of investments in acquired companies, for which the recognized investment as of December 31, 2010, exceeded the fair value of the net assets acquired and goodwill was created, was carried out in 2010. In the previous year, goodwill amounting to EUR1.5 million was created as recognized investments amounting to EUR2.4 million were matched by fair values of the net assets acquired amounting to EUR0.9 million.

Due to subsequent cost incurred in the year under review, undisclosed reserves in the intangible assets amounting to EUR0.5 million (prior year: EUR0.5 million) were capitalized and will be amortized over the scheduled useful life. Differences amounting to EUR1.8 million (prior year: EUR7.2 million) were adjusted in the other operating expenses, differences amounting to EUR1.1 million are adjusted in the other operating income. The acquisition of further shares in subsidiaries already under the control of the Group was accounted for at an amount of EUR5.1 million as equity transaction with the shareholders reducing the equity. Goodwill remained unchanged.

33. Related party transactions

Supplies to and from related parties

Related parties consist of affiliated, not fully consolidated companies of the ÖBB Group, associated companies, the shareholder of ÖBB-Holding AG (Republic of Austria) as well as their major subsidiaries and key management personnel (members of the Executive Board and the Supervisory Board of ÖBB-Holding AG).

The Company maintained business relationships at arm’s lengths, within the scope of activities of the ÖBB Group, with companies in which the Republic of Austria directly or indirectly holds an interest (e.g. Österreichische Industrieholding AG, ÖMV Aktiengesellschaft) and which are also classified as related parties in accordance with IAS 24. The transactions in the sense of IAS 24 that were carried out with these companies during the year under review referred to ordinary transactions in the course of the operating business and were, overall insignificant. Receivables due from and liabilities due to these companies are disclosed as trade receivables and trade payables and are not discussed further in this Note. Purchases were made at market prices less standard volume discounts and other discounts based on the business relationship.

125


The following table presents the volume of transactions carried out with consolidated companies of the Group and related parties, and the receivables or liabilities resulting from these transactions at the end of the financial year:

in m il. EU R, round ed 2010 2 00 9 2 01 0 20 09

Sale of goods/p rovision of services (sh are on total income) 18,4 14,2 179,1 174,5

Purchase of goods/services(share of total e xpenses) 9,8 16,7 93,4 73,4

Receivables as of D ec 31 68,6 39,8

Liabilities as of Dec 31 9,1 112,1

Transactions with Raiff eisen Bank International AG

Liabilities without cross border leasing as of D ec 31 401,2 411,7

Average l iabilities without cross border leasing in the year under review 368,5 325,2

Liabilities from cross border leasing 10,6 12,0

Average l iabilities from cross border leasing in th e year under review 10,7 19,5

Money market investments and deposits 17,4 18,2

Average money market investments in the year under review 16,8 40,9

Other financial transactions 248,8 196,8

Average level of other financial transactions 213,2 249,2

A ss oc iated c om panies

Members of the Supervisory B oard a nd

persons re late d to other bodie s

No guarantees or investment subsidies were issued to or accepted from affiliated, not fully consolidated companies. No transactions with board members to be disclosed were reported in both financial years. Guarantees amounting to EUR39.1 million (prior year: EUR44.0 million) were issued to associated companies. The Republic of Austria issued guarantees amounting to EUR58.2 million and Österreichische Kontrollbank AG issued guarantees amounting to EUR6.4 million to the ÖBB Group.

Transactions with members of the Supervisory Board relate to sales concluded with companies in which the members of the Supervisory Board of the ÖBB Group were also members of executive bodies of the respective company

Transactions with and benefits from the Republic of Austria, master plan for investments in infrastructure and guarantees provided by the Republic of Austria

ÖBB-Personenverkehr and Rail Cargo Austria sub-groups

Pursuant to the Bundesbahnstrukturgesetz, public service agreements are concluded with the Republic of Austria referring primarily to the granting of social tariffs in passenger transport, the commissioning of services regarding short-distance and regional passenger transport by railway, the compensation for transports of hazardous and waste materials and the compensation for unaccompanied combined road/railway transport. Accordingly, ÖBB-Personenverkehr AG and Rail Cargo Austria AG provides public services. The services charged to the Republic of Austria amount to EUR671.5 million (prior year: EUR633.5 million). On the basis of transport service agreements, services are provided for the federal states and the communities that were charged at EUR415.8 million (prior year: EUR376.9 million) in the financial year.


ÖBB-Infrastruktur AG is a railway infrastructure company whose activities are of public interest and further defined in § 31 Bundesbahngesetz. The basis for the financing of the Company is given in § 47 Bundesbahngesetz, according to which the federal government is responsible for ensuring that ÖBB-Infrastruktur AG disposes of the funds required to fulfill its tasks and maintain its liquidity and equity, insofar as the tasks are included in the business plan pursuant to § 42 para. 6 Bundesbahngesetz. The commitment regulated by the federal government in this provision is implemented by the grant agreements pursuant to § 42 para. 1 and 2 Bundesbahngesetz.

It is the understanding of the contractual parties that the objective of the grant agreements, irrespective of their respective terms, is to permanently guarantee the value of the assets of the ÖBB-Infrastruktur AG sub-group used for the tasks pursuant to § 31 Bundesbahngesetz, which also conforms with the official task according to the Bundesbahngesetz.

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ÖBB-Infrastruktur AG bears the costs incurred for the fulfillment of its tasks. The federal government grants ÖBB-Infrastruktur AG

- a grant pursuant to § 42 para. 1 Bundesbahngesetz, at the request of the ÖBB-Infrastruktur Group, in particular for the operation of the railway infrastructure and the provision of the same to its users insofar and for as long as the revenues generated by the users of the railway infrastructure under the respective market conditions do not cover the expenses incurred with economical and efficient management, and

- grants pursuant to § 42 para. 2 Bundesbahngesetz for maintenance, planning and construction of the railway infrastructure.

Two separate agreements on the grants, each with a term of six years, shall be concluded between ÖBB-Infrastruktur AG and the Federal Minister of Transport, Innovation and Technology in coordination with the Federal Minister of Finance pursuant to § 42 para. 1 and 2 BBG, and these agreements shall determine the objective of the grant, the amounts to be granted for this purpose, the general and specific terms and conditions and the payment terms. The agreements shall be amended each year by one year and adapted to the new six-year period.

Schieneninfrastruktur-Dienstleistungsgesellschaft mbH monitors the compliance with the grant agreements concluded between the federal government and ÖBB-Infrastruktur AG pursuant to § 42 para. 1 and para. 2 Bundesbahngesetz as well as compliance with the objectives and provisions stipulated in the business plan pursuant to § 42 para. 6. Furthermore, SCHIG mbH is entrusted with the task of monitoring the implementation and execution of a project cost control system, considering the efficiency improvement program to be consistently pursued and implemented by ÖBB-Infrastruktur AG.

The update of the master plan for the period 2011 - 2016 was approved by the Supervisory Board of the Company on December 2, 2010. In addition, the master plan for 2011 to 2016 was unanimously approved by the Council of Ministers on February 1, 2011.

At the end of March 2011 the Republic of Austria, represented by the Federal Ministry of Transport, Innovation and Technology in coordination with the Federal Minister of Finance and by ÖBB-Infrastruktur AG and ÖBB-Holding AG formally concluded on the grant agreement pursuant to § 42 Bundesbahngesetz which was for the most part negotiated and agreed in terms of content during the past financial year and that regulates the subsidies from 2011 onwards.

Infrastructure financing

The grants agreement pursuant to § 42 para. 2 Bundesbahngesetz is based on the business plan to be prepared by ÖBB-Infrastruktur AG pursuant to § 42 para. 6 Bundesbahngesetz. One component of the business plan is the six-year master plan to be prepared by ÖBB-Infrastruktur AG pursuant to § 42 para. 7 Bundesbahngesetz, which has to comprise the annual funds for maintenance (in particular repairs and reinvestments) as well as for investments in expansion. Both the business plan and the master plan shall be amended each year by one year and adapted to the new six-year period.

According to the agreement on the master plan 2009-2014, 70% of the investments in expansion and reinvestments (with the exception of the Brenner base tunnel) shall be borne by the federal government in each year until 2013, and from 2014 the federal government shall bear 75% of the annual investment costs, for which subsidies are granted in the form of an annuity allocated over 30 years with consideration of the average useful life, and the interest rate corresponds to the rate respectively applicable for long-term financing measures of ÖBB-Infrastruktur AG.

The share of the investments for expansion (with the exception of the Brenner base tunnel) and reinvestments to be assumed by the federal government is continuously validated and adjusted as necessary to the current requirements for future subsidies. With respect to payments to be made to third parties in the course of the transfer of railway facilities to third parties, which have to be considered in the master plan, a separate agreement on the required government grants will be concluded with reference to each individual case.

For the construction of the Brenner base tunnel, the federal government will assume 100% of the annual investment costs, for which subsidies will be granted in the form of an annuity allocated over 50 years, and the interest rate will correspond to the rate respectively applicable for long-term financing measures of ÖBB-Infrastruktur AG.

The federal government also grants a grant for inspection and maintenance, elimination of malfunctions and repair of the railway infrastructure operated by ÖBB-Infrastruktur AG. The amount of the grant is fixed with consideration of the liquidity requirements based on the business plan of ÖBB-Infrastruktur AG, the limit of the total grant prescribed by § 42 Bundesbahngesetz and the objectives (performance or output objectives respectively) according to the grant agreement pursuant to § 42 para. 1 Bundesbahngesetz. Changes of the functionality and/or the extent of the railway infrastructure operated by ÖBB-Infrastruktur AG result in a corresponding increase or decrease of the grant. Therefore, ÖBB-Infrastruktur AG shall obtain the consent of the Federal Ministry of Transport, Innovation and Technology (BMVIT) and the Federal Ministry of Finance (BMF) prior to any such change.

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The update of the master plan for the period 2011-2016 was approved by the Supervisory Board of the Company on December 2, 2010. In addition, the master plan for 2011 to 2016 was unanimously approved by the Council of Ministers on February 1, 2011. At the end of March 2011 the Republic of Austria, represented by the Federal Ministry of Transport, Innovation and Technology in coordination with the Federal Minister of Finance and by ÖBB-Infrastruktur AG and ÖBB-Holding AG formally concluded on the grant agreement pursuant to § 42 Bundesbahngesetz, that regulates the subsidies from 2011 onwards, which was for the most part negotiated and agreed in terms of content during the past financial year.

Based on the valid master plan agreement 2009 to 2014, an amount of EUR308.0 million (prior year: EUR222.0 million) was granted for investments in expansion and reinvestments (with the exception of the Brenner base tunnel) in 2010; for inspection, maintenance and elimination of malfunctions, an amount of EUR343.8 million (prior year: EUR324.9 million) was granted.

With respect to the construction costs of the Brenner base tunnel, ÖBB-Infrastruktur AG paid amounts totaling EUR10.3 million (prior year: EUR0.0) that were reimbursed to the Company by the federal government in the same amount.

Infrastructure operation and apprenticeship costs

The federal government grants ÖBB-Infrastruktur AG a subsidy pursuant to § 42 para. 1 BBG, at the request of the ÖBB-Infrastruktur Group, in particular for the operation of the railway infrastructure and the provision of the same to its users insofar and for as long as the revenues that can be achieved by the users of the railway infrastructure under the respective market conditions do not cover the expenses incurred with economical and efficient management.

The agreement on the grant pursuant to § 42 para. 1 BBG is based in particular on the six-year business plan to be prepared by ÖBB-Infrastruktur AG pursuant to § 42 para. 6 Bundesbahngesetz, which comprises a detailed description of the measures required to fulfill its tasks of providing a secure railway infrastructure corresponding to requirements, including time schedules and budgets as well as rationalization plans and a forecast with respect to usage fees and other fees and charges. The business plan pursuant to § 42 para. 6 Bundesbahngesetz shall be amended each year by one year and adapted to the new six-year period.

Pursuant to § 45 Bundesbahngesetz, the BMVIT charged SCHIG mbH with monitoring the fulfillment of the obligations assumed by ÖBB-Infrastruktur AG under the grant agreement.

This grant agreement defines the objectives to be achieved by ÖBB-Infrastruktur AG in connection with this grant pursuant to § 42 BBG.

The specific objectives to be achieved by ÖBB-Infrastruktur AG are categorized in particular in general, quality, safety and efficiency objectives agreed with consideration of the statutory tasks of ÖBB-Infrastruktur AG and stipulated in the business plan agreed between the federal government and ÖBB-Infrastruktur AG pursuant to § 42 para. 6 BBG.

Compliance with the obligation for ÖBB-Infrastruktur AG to guarantee and constantly improve the quality and safety of the railway infrastructure operated, which results from the Bundesbahngesetz, is assessed by means of certain ratios in connection with the grant.

Unless otherwise agreed between ÖBB-Infrastruktur AG and the federal government, the annual grant shall be reduced by the part of operating expenses incurred for those railway infrastructure that is transferred to other operators or no longer operated by ÖBB-Infrastruktur AG, in contrary to the provisions of the business plan pursuant to § 42 para. 6 Bundesbahngesetz.

The total grant granted pursuant to § 42 Bundesbahngesetz in 2010 therefore amounted to EUR1,362.0 million (prior year: EUR1,251.6 million); the grant for investments for expansion and reinvestments, which accounts for EUR308.0 million thereof (prior year: EUR222.0 million), is recognized in the other operating income and the s grant for signaling and control and maintenance, which accounts for EUR1,054.0 million (prior year: EUR1,029.6 million), is recognized in sales.

In addition, contributions (usually grants for investment measures) amounting to EUR68.1 million (prior year: EUR56.3 million) were paid by the governments of the Austrian federal states or communities respectively; EUR11.9 million thereof (prior year: EUR7.1 million) are still outstanding and reported in receivables. Furthermore, the EU paid a grant of EUR53.7 million.

Remuneration of members of the Executive Board

As of the reporting date, the Executive Board of ÖBB-Holding AG consists of three members. Remuneration of the members of the Executive Board amounted to EUR2.1 million in 2010 (prior year: EUR1.2 million) for former and current board members; the former board members accounted for EUR0.8 million thereof. This amount includes claims from previous periods amounting to EUR0.4 million. In addition, expenses for contractual severance payments amounting to EUR0.4 million were incurred in the year under review (prior year: EUR0.1 million). Provisions for holidays were created in the amount of EUR0.1 million. The provision for severance payments was reduced by EUR0.3 million.

128


Expenses for severance payments and pensions for members of the Executive Board and executives of the ÖBB Group were made in the following amounts in the period under review:

Entire Group 2010 2010 2009 2009

in KEUR Severance payments Pensions Severance payments Pensions

Members of the Executive Board (entire Group) -448 104 285 65

Executives -364 204 63 113

The total remuneration of the members of the Executive Board is composed of a fixed and a variable component. The amount of the variable annual component is subject to the achievement of objectives agreed with the Executive Committee of the Supervisory Board at the beginning of each financial year.

The employment contracts with top executives (members of the Executive Boards of the parent companies and general managers of companies on comparable levels) include a performance-related component; thus, the success of the company is reflected by the remuneration to a considerable extent. In general, 2/3rds of the remuneration of top executives consist in a fixed base salary, and 1/3rd is a variable performance-related component. At the beginning of each financial year, an individual score card is developed for each company for the purpose of agreeing upon clearly defined, mainly quantitative objectives. These objectives are aligned with the Group’s overall results, its strategy and the focus of its activities.

The members of the Executive Board of ÖBB-Holding AG participate in an external pension fund scheme based on a defined contribution plan, except for members of the Executive Board who are seconded for the time of their activity in the Board within a definite ÖBB employment relation in accordance with the general term and conditions for employment with Österreichische Bundesbahnen (AVB). The Company itself assumes no pension commitments. In the event of withdrawal from office or termination of employment, the relevant provisions of the Stellenbesetzungsgesetz [Appointment Act] apply to the vested rights of future pension payments and claims of the members of the Executive Board. No further claims exist.

Remuneration of members of the Supervisory Board

In accordance with the rules of procedure of the Supervisory Board of ÖBB-Holding AG and the resolution of the annual general meeting, the ÖBB Group shall reimburse the actual expenses incurred by the shareholders’ representatives on the Supervisory Board in the course of performing their duty against the provision of bills and pay a compensation to the shareholders’ representatives on the Supervisory Board.

The basic remuneration for a Supervisory Board member amounts to EUR9,000 per year. In addition to that, the Supervisory Board member receives an attendance fee of EUR200 for each meeting of a Supervisory Board, an Executive Committee or any other committee. The chairperson of the Supervisory Board receives 200% of the basic remuneration and a deputy chairperson in ÖBB-Holding AG receives 150% of the basic remuneration. For any activity in another Supervisory Board of the ÖBB Group, the member receives an additional 50% of the amounts stipulated above. If several functions are accumulated in one person, the upper limit of EUR27,000 (plus attendance fees) may not be exceeded. Members of the Supervisory Board who are employees of the ÖBB Group do not receive any supervisory board remuneration.

Compensation of the shareholders’ representatives on the Supervisory Board for their activities in ÖBB-Holding AG amounted to EUR145,000 (prior year: EUR177,000). Compensation of the other Supervisory Board members of the Group companies amounted to EUR62,000 (prior year EUR126,000).

34. Segment reporting

A business segment is a component of an entity that engages in business activities from which it generates revenues and incurs expenses and whose operating results are reviewed regularly by the entity’s chief operating decision maker with respect to the allocation of resources to the respective segment and assessment of its performance. It is a group of assets and operating activities providing products or services which are subject to risks and return that are different from those of other operating segments and for which discrete financial information is available.

Business segments

The structure of the ÖBB sub-groups according to the management structure is used for segment reporting by business units. In addition, the unit “Others” comprises the direct subsidiaries of ÖBB-Holding AG. These units constitute the basis for segment reporting by business unit.

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The ÖBB Group comprises the following segments (= sub-groups):

ÖBB-Personenverkehr

This sub-group comprises all the activities in the area of passenger transport and service. The business fields refer to long distance railway transport, short-distance railway transport and bus transport as well as the travel agency activities of Rail Tours Touristik GmbH and, until December 31, 2009, the provision of traction services (ÖBB-Produktion Gesellschaft mbH).

Rail Cargo Austria

Rail Cargo Austria AG handles the classic railway cargo business. A major part of the sub-group is the Express-Interfracht Internationale Spedition GmbH group, which operates as national and international logistics and freight forwarding service group with subsidiaries located in almost every country in Central, Eastern and Southeastern Europe. In addition to Rail Cargo Austria AG, Express-Interfracht Internationale Spedition GmbH comprises specialized companies in the field of full-load transportation for almost every type of freight from various industries (agriculture, chemistry, wood, coal, paper, waste disposal). On the other hand, Express-Interfracht Internationale Spedition GmbH comprises companies in the field of intermodal transportation, in unaccompanied combined road/railway transport as well as in the field of rolling road, and also companies in the field of storage and contracted logistics (general cargo transport and food logistics). ÖBB-Technische Services-GmbH is responsible for the provision of technical services.

ÖBB-Infrastruktur

The tasks of the ÖBB-Infrastruktur sub-group comprise

- the previous tasks of planning and construction of railway infrastructure including high-performance tracks, planning and construction of related projects as well as the provision of railway infrastructure including equipment and facilities

- and the tasks of former ÖBB-Infrastruktur Betrieb AG, such as: provision, operation and maintenance of safe railway infrastructure corresponding to requirements (maintenance, inspection, repair, operational planning and shunting).

Holding/Other activities

This segment comprises the various management, financing and service functions of ÖBB-Holding AG, its other investments (e.g. ÖBB-Shared Service Center Gesellschaft mbH, ÖBB-Finanzierungsservice GmbH, ÖBB-Werbecenter GmbH) and ÖBB-Produktion GmbH (provision of traction services).

The accounting and measurement methods of segment reporting are in accordance with the IFRS regulations applicable for the preparation of the Consolidated Financial Statement. The earnings before interest and taxes are used as Performance Measure. Interest income and interest expenses are allocated.

The accounting principles for transactions carried out between segments with a reporting obligation are standardized and correspond to Note 3.

130


Investment expenses

The investment expenses are recognized prior to the deduction of possible grants, if any.

Passenger Rail Cargo Others un-

transport Austria consolidated Transition Total

2010 2010 2010 2010 2010 2010

2010 in mil. EUR in mil. EUR in mil. EUR in mil. EUR in mil. EUR in mil. EUR

Total revenues

Total revenues unconsolidated 1.786,7 3.288,5 3.223,5 1.050,8 0,0 9.349,5

thereof sales 1.754,8 3.167,8 2.497,1 998,6 0,0 8.418,3thereof other revenues 31,9 120,7 726,4 52,2 0,0 931,2

Elimination of revenues in the segment -39,4 -793,3 -332,9 0,0 -2.102,1 -3.267,7

thereof sales -35,3 -755,0 -342,2 0,0 -2.149,7 -3.282,2thereof other revenues -4,1 -38,3 9,3 0,0 47,6 14,5

Total revenues of the segment 1.747,3 2.495,2 2.890,6 1.050,8 -2.102,1 6.081,8

thereof sales 1.719,5 2.412,8 2.154,9 998,6 -2.149,7 5.136,1thereof other revenues 27,8 82,4 735,7 52,2 47,6 945,7

Elimination of revenues between segments -25,2 -334,0 -773,9 -969,0 2.102,1 0,0

thereof sales -23,8 -376,5 -790,3 -959,1 2.149,7 0,0thereof other revenues -1,4 42,5 16,4 -9,9 -47,6 0,0

Total revenues vis-à-vis third parties 1.722,1 2.161,2 2.116,7 81,8 0,0 6.081,8thereof sales 1.695,7 2.036,3 1.364,6 39,5 0,0 5.136,1thereof other revenues 26,4 124,9 752,1 42,3 0,0 945,7

Expenses for materials and purchasedservices

-1.069,0 -1.861,1 -584,1 -381,0 1.826,6 -2.068,6

Personnel expenses -384,0 -463,7 -1.093,6 -471,7 2,9 -2.410,1

Depreciations -78,7 -25,1 -452,7 -88,1 -0,5 -645,1

Impairments 0,0 -195,2 0,0 0,0 0,0 -195,2

Other operating expenses -182,5 -229,5 -263,7 -125,2 292,9 -508,0

Earnings before interest and taxes (EBIT) 33,1 -279,4 496,5 -15,2 19,8 254,8

Profit of associated companies -6,8 -43,2 0,9 0,0 54,2 5,1Interest income 32,8 12,1 155,4 76,7 -131,0 146,0

Interest expenses -66,4 -40,3 -637,8 -78,8 128,0 -695,3

Other financial result -5,7 -2,4 -4,1 -22,2 -6,1 -40,5

Earnings before income tax (EBT) -13,0 -353,2 10,9 -39,5 64,9 -329,9

Income tax -5,7 -3,7 5,4 3,9 -8,2 -8,3

Infra-structure

131


The figures from the previous year are comparable only to a limited extent because of ÖBB-Produktion GmbH, which was allocated to the passenger transport segment in 2009 and to the “Others” segment in 2010.



Dec 31, 2010 Dec 31, 2010 Dec 31, 2010 Dec 31, 2010 Dec 31, 2010 Dec 31, 2010

Dec 31, 2010 in mil. EUR in mil. EUR in mil. EUR in mil. EUR in mil. EUR in mil. EUR

Assets 2.971,7 2.274,0 17.756,3 6.532,3 -8.050,3 21.484,0

Investments in associated companies 343,2 236,4 43,7 0,3 -556,7 66,9

Liabilities

Liabilities unconsolidated 2.557,0 2.515,6 16.751,1 2.733,5 0,0 24.557,2

Elimination of liabilities in the segment -15,2 -210,0 -127,6 0,0 -4.059,2 -4.412,0

Liabilities of the segment 2.541,8 2.305,6 16.623,5 2.733,5 -4.059,2 20.145,2

Elimination of liabilities between segments -733,4 -542,9 -885,6 -2.036,5 4.059,2 -139,2

Liabilities towards third parties 1.808,4 1.762,7 15.737,9 697,0 0,0 20.006,0

Passenger Rail Cargo Others un-transport Austria consolidated Transition Total

2010 2010 2010 2010 2010 2010


Other informationInvestment expenses 156,0 204,9 2.287,0 17,3 33,3 2.698,5

Infra-structure

Infra-structure

132




2009 2009 2009 2009 2009 2009


Total revenues

Total revenues unconsolidated 2.575,7 2.943,2 2.886,1 242,2 0,0 8.647,2thereof sales 2.502,4 2.838,2 2.216,6 207,1 0,0 7.764,3thereof other revenues 73,3 105,0 669,5 35,1 0,0 882,9

Elimination of revenues in the segment -435,3 -621,8 -161,9 0,0 -1.680,6 -2.899,6thereof sales -433,5 -628,2 -141,9 0,0 -1.732,8 -2.936,4thereof other revenues -1,8 6,4 -20,0 0,0 52,2 36,8

Total revenues of the segment 2.140,4 2.321,4 2.724,2 242,2 -1.680,6 5.747,6thereof sales 2.068,9 2.210,0 2.074,7 207,1 -1.732,8 4.827,9thereof other revenues 71,5 111,4 649,5 35,1 52,2 919,7

Elimination of revenues between segments -410,7 -313,5 -745,8 210,5 1.259,5 0,0thereof sales -408,7 -350,3 -786,7 187,2 1.358,4 -0,1thereof other revenues -2,0 36,8 40,9 23,3 -98,9 0,1

Total revenues vis-à-vis third parties 1.729,7 2.007,9 1.978,4 31,7 -0,1 5.747,6thereof sales 1.660,2 1.859,7 1.288,0 19,9 0,0 4.827,8thereof other revenues 69,5 148,2 690,4 11,8 -0,1 919,8

Expenses for materials and purchasedservices -978,9 -1.684,5 -565,2 -10,0 1.332,7 -1.905,9

Personnel expenses -753,0 -431,6 -1.023,6 -120,4 0,0 -2.328,6

Depreciations -99,2 -63,7 -404,2 -7,8 1,6 -573,3

Impairments 0,0 -5,2 0,0 0,0 0,0 -5,2

Other operating expenses -245,3 -238,2 -373,5 -107,6 343,6 -621,0

Earnings before interest and taxes (EBIT)64,0 -101,8 357,7 -3,6 -2,7 313,6

Profit of associated companies 2,2 -4,9 0,8 0,0 8,0 6,1Interest income 86,6 15,5 155,9 59,2 -143,8 173,4

Interest expenses -113,0 -38,0 -587,0 -53,8 143,6 -648,2Other financial result 127,2 51,7 95,5 21,4 -19,9 275,9

Earnings before income tax (EBT) 167,0 -77,5 22,9 23,2 -14,8 120,8Income tax 0,8 -9,7 -7,7 -1,3 13,0 -4,9

Infra-structure

133




Dec 31, 2009 Dec 31, 2009 Dec 31, 2009 Dec 31, 2009 Dec 31, 2009 Dec 31, 2009

Dec 31, 2009 in mil. EUR in mil. EUR in mil. EUR in mil. EUR in mil. EUR in mil. EUR

Assets 2.894,7 2.187,7 15.901,7 4.880,8 -6.213,2 19.651,7Investments in associated companies 359,8 282,5 43,6 0,3 -621,6 64,6

LiabilitiesLiabilities unconsolidated 3.580,4 2.046,4 15.954,8 1.572,8 367,1 23.521,5

Elimination of liabilities in the segment -1.192,5 -224,3 -1.149,6 0,0 -3.127,0 -5.693,4Liabilities of the segment 2.387,9 1.822,1 14.805,2 1.572,8 -2.759,9 17.828,1Elimination of liabilities between segments -554,3 -428,0 -1.032,7 -1.391,3 3.406,3 0,0

Liabilities towards third parties 1.833,6 1.394,1 13.772,5 181,5 646,4 17.828,1

Passenger Rail Cargo Others un-transport Austria consolidated Transition Total

2009 2009 2009 2009 2009 2009


Other informationInvestment expenses 240,5 231,3 2.244,4 7,7 -25,0 2.698,9

Infra-structure

Infra-structure

The figures from the previous year are comparable only to a limited extent because of ÖBB-Produktion GmbH, which was allocated to the passenger transport segment in 2009 and to the “Others” segment in 2010. ÖBB-Produktion GmbH was classified as joint venture in the segments passenger transport and Rail Cargo Austria and recognized in investments in associated companies.

Information on company level

The following table shows the Group revenue according to the geographic markets, based on the registered offices of the customers, irrespective of the origin of the products/services:

Pas sen ge r

tran spo rt

Ra il C arg o

Au stri a

In f ra-

structu re

O the rs/

T ra nsi t ion T otal 200 9

To tal reven ues in m il . EU R in m il. EU R i n mi l. EUR i n mil . E UR in m il . EU R

Domes tic 1.053,7 1.927,5 1 .367,5 976,2 5.324,9

For eign 133,4 1.136,6 75,6 22,3 1.367,9

the reo f G erm any 5 3,7 2 66 ,2 42 ,0 1 2,9 37 4,8

the reo f Sw itzerl an d 1 5,2 56 ,4 26 ,1 0,2 9 7,9

the reo f I ta ly 4,9 92 ,5 0 ,0 1,0 9 8,4

oth er mark ets 5 9,6 7 21 ,5 7 ,5 8,2 79 6,8

To tal 1.187,1 3.064,1 1 .443,1 998,5 6.692,8Rev enues from publ ic s erv ice or ders 567,8 103,7 0,0 0,0 671,5

G over nm ent grant p urs uant to § 42 B B G 0,0 0,0 1 .054,0 0,0 1.054,0

less internal turnov er -35,4 - 755,1 - 342,2 -2.149,5 -3.282,2

S egm ent tu rn over 1.719,5 2.412,7 2 .154,9 -1.151,0 5.136,1

O ther oper ating inc ome incl . other own work c apital ized 27,8 82,5 735,7 99,7 945,7

To tal seg men t revenu es 1.747,3 2.495,2 2 .890,6 -1.051,3 6.081,8

134


Passenger transport

Rail CargoAustria

Infra-structure

Others/Transition Total 2009

Total revenues in mil. EUR in mil. EUR in mil. EUR in mil. EUR in mil. EUR

Domestic 1.812,6 1.702,2 1.136,6 207,0 4.858,4

Foreign 157,8 1.034,5 50,4 0,0 1.242,7thereof Germany 56,5 239,9 26,5 0,0 322,9

thereof Switzerland 25,6 52,2 16,4 0 94,2

thereof Italy 9,9 56,7 0,0 0,0 66,6

other markets 65,8 685,7 7,5 0,0 759,0

Total 1.970,4 2.736,7 1.187,0 207,0 6.101,1

Revenues from public service orders 532,0 101,5 0,0 0,0 633,5

Government grant pursuant to § 42 BBG 0,0 0,0 1.029,6 0,0 1.029,6less internal turnover -433,5 -628,1 -141,9 -1.732,9 -2.936,4Segment turnover 2.068,9 2.210,1 2.074,7 -1.525,9 4.827,8

Other operating income incl. other own work capitalized 71,5 111,3 649,5 87,5 919,8Total segment revenues 2.140,4 2.321,4 2.724,2 -1.438,4 5.747,6

The following table shows the carrying amounts of the segment assets and the capital expenditure on property plan and equipment and intangible assets by geographic areas in which the assets are located. The segment assets comprise property, plant and equipment, intangible assets and investment property.

Dec 31, 2010 Dec 31, 2009 Dec 31, 2010 Dec 31, 2009

in mil . E UR in mi l. E UR in mi l. EUR in mi l. EUR

Segment ÖBB-Personenverkehr

Domestic 1.830,3 1.775, 1 154,9 236,9

Foreign 8,8 9, 4 1,1 3,6the reo f Eastern E urope 8,8 9,4 1 ,1 3,6

Total 1.839,1 1.784, 5 156,0 240,5

Segment Rail Cargo Austria

Domestic 565,8 526, 5 167,9 173,6

Foreign 416,0 523, 8 37,0 57,7the reo f Germ any 0,0 0,0 0 ,0 0,0the reo f Ita ly 12,5 14,5 0 ,5 0,5the reo f Eastern E urope 398,2 499,8 36 ,2 57 ,2res t of Europe 5,1 9,2 0 ,2 0,0res t 0,2 0,3 0 ,1 0,0

Total 981,8 1.050, 3 204,9 231,3Segment ÖBB-Infrastruktur 15.164,4 13.570, 4 2. 287,0 2.244,4

Domestic 15.164,4 13.570, 4 2. 287,0 2.244,4

Segment Holding and other companies 893,9 954, 4 50,6 55,2

Domestic 893,9 954, 4 50,6 55,2

Sub-total se gments 18.879,2 17.359, 6 2. 698,5 2.771,4less consolidation -30,0 -73, 2 0,0 -14,4According to C onsolidated Financial Statements 18.849,2 17.286, 4 2. 698,5 2.757,0

the reo f domestic 18.424,4 16.753,2 38 ,1 2 .695,7the reo f fore ign 424,8 533,2 2.660 ,4 61 ,3

Carrying va lues of

segment assets

Additions to proper ty, plant and

equipment and intangible assets

135


35. Notes on the Cash Flow Statement

The Cash Flow Statement shows the change in cash and cash equivalents of the ÖBB Group from inflows and outflows of funds in the reporting year. The Cash Flow Statement is divided into cash flows from operations, from investment activities and from financing activities. Operative parts of the Cash Flow Statement are presented using the indirect method. The liquid fund presented in the Cash Flow Statement comprises cash on hand, checks and cash in banks.

Liquid funds include cash and cash equivalents as well as current liabilities (recognized in the current liabilities) in the amount of EUR19.1 million (prior year: EUR55.1 million).

Important non-cash transactions carried out during the year under review mainly refer to finance leasing transactions regarding property, plant and equipment as well as accounting of investments and obligations from CBL transactions.

As regards payments received and made with respect to the acquisition of consolidated companies, please refer to Note 36 and the figures in brackets there.

36. Subsidiaries

Disclosures on subsidiaries, associated companies, investments and other interests of the ÖBB Group existing as of December 31, 2010

The following changes took place during the year 2010: HBF Eins Holding GmbH and its four subsidiaries were sold. ÖBB-Dienstleistungs Gesellschaft mbH was incorporated in the ÖBB-Infrastruktur sub-group. ÖBB-IKT Gesellschaft merged with Scope Consulting Unternehmensberatung GmbH. ÖBB-IKT Gesellschaft mbH was subsequently incorporated in ÖBB-Dienstleistungs Gesellschaft mbH and the name of the company was changed to ÖBB-IKT Gesellschaft mbH. Furthermore, the unit SAP-CCC was contributed from ÖBB-Holding AG to the ÖBB-Infrastruktur AG sub-group.

During the year under review, all shares in the company TMF Transports Terrestres Maritimes et Fluviaux SA, 92817 Puteaux Cedex, France, were sold. Eurocargo Shipping Spólka z.o.o merged with ECS EUROCARGO SPÓLKA z.o.o. Furthermore, RAABERSPED d.o.o. merged with TRANSEUROPA d.o.o and its name was changed to EXPRESS-INTERFRACHT CROATIA d.o.o. The shares in Terminal Graz Süd GmbH were assigned as of June 2010.

Purchases and new incorporations are noted in brackets and changes in the type of consolidation are noted in footnotes in the schedule of investments.

ÖBB-Holding AG held direct or indirect (through other affiliated companies) interests in the following companies as of the reporting date (without interests in short-term joint ventures). The disclosures regarding equity and the annual profits were adopted from the annual financial statements according to respective national accounting laws; exceptions are marked with corresponding footnotes.

Parent company Country, registered office, type of consolidation

Equity in thousand

EUR

Annual profit in thousand EUR

Österreichische Bundesbahnen-Holding Aktiengesellschaft A-1100 Vienna V 2.245.220 -307.278

ÖBB-Personenverkehr group Country, registered office, type of consolidation

Equity in thousand

EUR

Annual profit In thousand EUR

100% ÖBB-Personenverkehr Aktiengesellschaft A-1220 Vienna V 930.167 -27.190

├► 100% BD Gastservice GmbH A-1220 Vienna V0 188 190

├► 100% ÖBB-Postbus GmbH A-1220 Vienna V 79.661 11.489

├► 100% ČSAD AUTOBUSY České Budějovice a.s. CZ-37027 České Budějovice

V 6.409 827 5)

├► 100% Koch Busverkehr GmbH A-1220 Vienna V0 121 -13

└► 100% "KÖB" Kraftwagenbetrieb der Österreichischen Bundesbahnen Gesellschaft m.b.H.

A-1220 Vienna V 1.354 988

├► 100% Österreichische Postbus Aktiengesellschaft A-1220 Vienna V 3.562 -475

├► 100% Rail Tours Touristik Gesellschaft m.b.H. A-1220 Vienna V 1.079 396

├► 98.57% FZB Fahrzeugbetrieb GmbH A-1220 Vienna V 45.738 76

├► 50% Niederösterreichische Schneebergbahn GmbH A-2734 Puchberg/Schneeberg

E 14.977 79 4)

├► 49.9% City Air Terminal Betriebsgesellschaft m.b.H. A-1300 Vienna Airport E 11.904 289

├► 49% (100%) ÖBB-Produktion Gesellschaft mbH A-1150 Vienna E 746.862 -32.019

├► 49% (100%) ÖBB-Technische Services-Gesellschaft mbH A-1110 Vienna E 195.120 21.873

├► 10% RailLink B.V. NE-1012 AB Amsterdam 0 n/a

├► 10% Railteam B.V. NE-1012 AB Amsterdam 0 n/a

└► 6.8% (10.8%) Bureau central de clearing s.c.r.l. B-1060 Brussels 0 n/a

136


Rail Cargo Austria group Country, registered office, type of consolidation

Equity in thousand

EUR

Annual profit inthousand EUR

100% Rail Cargo Austria Aktiengesellschaft A-1030 Vienna V 154.735 -379.108

├► 100% Express-Interfracht Internationale Spedition GmbH A-1050 Vienna V 30.025 -17.219

├► 100% BURGYSPED S.L. E-20302 Irún V 1.043 324 5)

├► 100% ECS EUROCARGO SPÓLKA z.o.o. PL-42500 Będzin V 2.798 519 5)

├► 100% Entsorgungslogistik Austria GmbH A-1020 Vienna V 3.665 3.599

├► 50% HAELA Abfallverwertung GmbH A-4470 Vienna E0 352 95

├► 50% AUL Abfallumladelogistik Austria GmbH A-2344 Maria Enzersdorf E0 n/a

├► 50% ELATEC Metallverwertungs GmbH A-2201 Grasdorf near Vienna E1) 148 73 3)

└► 33% Ökologische Bodenaufbereitung GmbH (2010: incorporation)

A-2475 Neudorf/Parndorf E0 New 2010

├► 100% EXPRESS HUNGÁRIA Kft. HU-1037 Budapest V0 18 -3

├► 100% Express-Interfracht Bulgaria Speditionsgesellschaft EOOD BG-1000 Sofia V0 1.854 -82 4)

├► 100% Express-Interfracht Hellas S.A. GR-17121 Nea Simirni -Athens

V -1.226 -4.530 5)

├► 100% Express-Interfracht mezinárodní spedice CZ s.r.o. CZ-61400 Brno V 2.873 230 5)

├► 100% Express-Interfracht Romania srl RO-75100 Otopeni V -9.786 -5.829 5)

└► 1%

(100%) RAIL CARGO ROMANIA S.R.L. RO-75100 Otopeni V -473 -444 5)

├► 100% Express-Interfracht Uluslararasi Tasimacilik Ticaret Limited Sirketi

TR-34303 Halkali-Kücükcekmece

V -447 -770 5)

├► 100% EXPRESS-INTERFRACHT ITALIA S.r.l. (formerly: Express Italia s.r.l.)

I-20121 Milan V 793 -8.057 5)

├► 100% Magazzini del Veneto Orientale S.R.L. I-30029 Santo Stino di Livenza

V 185 -87 5)

├► 100% M.D.B. – Magazzini Desio Brianza S.p.A. I-20033 Desio V 350 -448 5)

└► 80%

(100%) ooo "Express-Interfracht RUS" RU-620026 Yekaterinburg

V0 -6 0

├► 100% Express Polska Sp. z.o.o. PL-02796 Warsaw V 1.958 -308 5)

└► 50% RAILPORT Sławków Sp. z.o.o. (2010: incorporation)

PL-02796 Warsaw E0 New 2010

├► 100% Express Scandinavia AB S-23145 Trelleborg V 883 -254 5)

├► 100% Kadmos Line s.r.o. SK-82109 Bratislava V0 5 2

├► 100% MÁVTRANSSPED Kft. HU-1065 Budapest V 1.463 -478 5)

└► 100% MÁVTRANSSPED GmbH A-1040 Vienna V0 36 -8

├► 100% Papier & Recycling Logistik GmbH A-1020 Vienna V 3.491 2.656

├► 100% ProRail Internationale Speditionsgesellschaft m.b.H. A-9587 Riegersdorf V 3.381 480

├► 100% SLOVAKTEAM s.r.o. SK-83104 Bratislava V0 -10 4 4)

├► 100%

(PY: 97%) TEAMTRANS d.o.o. SLO-2000 Maribor V0 -76 -83 4)

├► 100% EXPRESS-INTERFRACHT CROATIA d.o.o. (formerly: TRANSEUROPA d.o.o.)

HR-10000 Zagreb V1) 553 47 5)

├► 100% Dione Kft. (2010: incorporation by spin-off from Raaber Befektetési Korlátolt Felelösségü Társaság)

HU-1037 Budapest V1) 900 0

└► 49%

(100%)

Express-Interfracht Hungaria Kft. (formerly: Raabersped Kft; 2010: purchase of 49% through spin-off for new incorporation of Dione Kft. from Raaber Befektetési Korlátolt Felelösségü Társaság)

HU-1037 Budapest V 3.822 530

├► 95% 6.OKTOBAR d.o.o SCG-11070 Novi Beogra V 108 11 5)

├► 90% (PY:

62.8%) TRANSPED-SOC spol.s.r.o. (2010: purchase of 27.2%) CZ-50002 Hradec Králov V 577 197

├► 75% AgroFreight Spedition GmbH A-1050 Vienna V 3.413 1.749

└► 100% AgroFreight Spedition CZ s.r.o. CZ-61200 Brno V 482 518 5)

├► 74.6% Express-Interfracht Internationale Spedition AG FL-9494 Schaan V 464 -440 5)

├► 60% SKAT - Express Ltd. UA-3150 Kiev V0 -702 215

├► 51% Asotra-Internationale Speditions- und Transport-Gesellschaft mit beschränkter Haftung

A-2000 Stockerau V 1.788 -83

├► 51% BIHATEAM d.o.o. BiH-71000 Sarajevo V0 720 201 4)

├► 51% Dolphin Shipping Transportagentur GmbH A-1040 Vienna V 216 188

├► 51%

(100%) Express-Interfracht Hungaria Kft. (formerly: Raabersped Kft.) HU-1037 Budapest V

├► 50% ChemFreight Transport, Logistik & Waggonvermietung GmbH

A-1030 Vienna E 8.322 2.200 3)

├► 50% HUNGARO-RAIL Kft. HU-1023 Budapest E 344 71 3)

├► 50% INTEREUROPA FLG, Železniška špedicija d.o.o. SLO-1001 Ljubljana E 232 67 3) 5)

├► 50% Trans Cargo Logistic GmbH A-1030 Vienna E 1.076 698 3)

├► 46.5% VADECO SRL RO-900733 Constanta E 669 379

├► 45.35% Eurocargo Rail Spólka z.o.o. PL-00696 Warsaw E0 87 -40

├► 45% logMASter Kft. HU-1139 Budapest E 122 64

├► 33% Express Slovakia "Medzinárodná preprava, a.s." SK-82109 Bratislava E 13.563 6.072

├► 26% Viator & Vector TIR,services and trade d.o.o. (in liquidation) SLO-1000 Ljubljana E0 n/a

└► 20%

(100%) ooo "Express-Interfracht RUS" RU-620026 Yekaterinburg

V0 -6 0

├► 100% EC LOGISTIK GmbH A-4600 Wels V 843 -55

├► 100% Industriewaggon GmbH A-1030 Vienna V 45.003 2.919

137


Rail Cargo Austria group (continued) Country, registered office, type of consolidation

Equity in thousand

EUR


├► 100% (PY: 85%)

Intercontainer Austria GesmbH (2010: purchase of 15%) A-1030 Vienna V 717 -5.198

├► 100% Česká a slovenská kombinovaná doprava - INTRANS s.r.o. CZ-13000 Prague V 2.927 396 3)

├► 100% Slovenská kombinovaná doprava INTRANS a.s.

SK-01236 Žilina V 3.576 1.823 5)

├► 90% INTRANS Port/Rail Services GmbH D-20459 Hamburg V0 16 2 3)

└► 33.06%

(PY: 39.5%) Terminal Brno, a.s. (2010: sale of 6.44%) CZ-61900 Brno E0 76 0 4)

├► 100% HUNGARIA INTERMODAL Kft. HU-1133 Budapest V 44 -100 5)

├► 37.08% ICA Romania s.r.l. (in bankruptcy) RO-020572 Bucaresti E0 n/a

├► 20% Bohemiakombi spol. s.r.o. CZ-11376 Prague E 406 -72 3)

└► 5.56%

(16.67%) Union International des Sociétés de Transport Combine Rail-Route s.c. (PY: 5.26% (15.78%)) B-1000 Brussels 0 n/a

├► 100% ÖKOMBI GmbH A-1030 Vienna V 3.277 -336

├► 71.517% HUNGAROKOMBI KFT HU–1138 Budapest V 2.955 136 5)

├► 16.12% HUNGAROKOMBI KFT és Társa BT (in windup)

HU-1011 Budapest 0 n/a

├► 14.52% (100%) BILK KOMBITERMINÁL Zrt. HU-1239 Budapest V 11.453 19

├► 12%

(65.2%) KOMBISZTÁR Kft. (in liquidation) HU-8000 Székesfehérvár

V0 -22 -79 4)

├► 5.56%

(16.67%) Union International des Sociétés de Transport Combine Rail-Route s.c. (PY: 5.26% (15.78%)) B-1000 Brussels 0 n/a

├► 5% EURO KAPU Kft. HU-4624 Tiszabezdéd 0 n/a

├► 4% (11%) Bulkombi Co.Ltd (in liquidation) BG-1000 Sofia 0 n/a

└► 0.09%

(53.82%) LOGISZTÁR Kft. HU-8000 Székesfehérvár

V0 4.152 -33 4)

├► 25.1% ADRIA KOMIB NOVA d.o.o. SLO-1000 Ljubljana E0 864 24 4)

├► 7% (11%) Bulkombi Co.Ltd (in liquidation) SLO-1000 Ljubljana 0 n/a

└► 5.56%

(16.67%) Union International des Sociétés de Transport Combine Rail-Route s.c. (PY: 5.26% (15.78%)) BG-1000 Sofia 0 n/a

├► 100% RCA Terminal s.r.o. CZ-13000 Prague V -2.675 -27 5)

├► 99% (100%) RAIL CARGO ROMANIA S.R.L. RO-75100 Otopeni V -473 -444 5)

├► 85% Wagon service s.r.o. SK-83101 Bratislava V0 62 -42 3)

├► 75% (PY: 55%) LINEA S.p.A. (2010: purchase of 20%) I-28100 Novara V -3.090 -4.470 5)

├► 51% FR Logistik-Betriebs GmbH A-8141 Zettling V0 16 0

├► 51% FR Logistik-Betriebs GmbH & Co KG A-8141 Zettling V0 56 -20

├► 51% (100%) ÖBB-Produktion Gesellschaft mbH A-1150 Vienna E 746.862 -32.019

├► 51%

(100%) ÖBB-Technische Services-Gesellschaft mbH A-1110 Vienna V 195.120 21.873

├► 100% TS Hungaria Kft. (formerly: MÁV-TISZAVAS Kft.) HU-3527 Miskolc V 6.111 1.073

├► 55% NIKO SERVISI d.o.o. (not operating) HR-10000 Zagreb V0 n/a

└► 51% Technical Services Slovakia, s.r.o. SK-91701 Trnava V 1.366 907

├► 46.67% ABC-Provider GmbH A-1220 Vienna E0 49 -53

├► 16% X-Rail s.a. (2010: incorporation) B-1000 Brussels 0 n/a

└► 3.53% Intercontainer-Interfrigo (ICF) SA (in liquidation) B-1060 Brussels 0 n/a

├► 100% Rail Cargo Hungaria Zrt. (formerly: MAV Cargo Zrt.) HU-1133 Budapest V 58.684 -72.719

├► 100% Blue Real Estate Kft. (2010: incorporation after spin-off from MAVTRANSSPED Kft.)

HU-1133 Budapest V0 760 2

├► 100% RAIL SERVICE HUNGARIA KFT. (formerly: MÁV KOMBITERMINÁL Kft.) HU-1065 Budapest V 6.038 223

├► 53.73%

(53.82%) LOGISZTÁR Kft. HU-8000 Székesfehérvár

V0 4.152 -33 4)

└► 3%

(65.2%) KOMBISZTÁR Kft. (in liquidation)

HU-8000 Székesfehérvár

V0 -22 -79 4)

├► 50.2%

(65.2%) KOMBISZTÁR Kft. (in liquidation) HU-8000 Székesfehérvár

V0 -22 -79 4)

├► 45% Kelenföld Konténer Depo Kft. HU-1239 Budapest E0 1.232 162 4)

├► 33.33% Railport Arad srl. RO-31000 Arad E1) 7.214 -767

├► 4.98%

(PY: 10%) MTMG Zrt. (2010: after capital increase only 5%)

HU-1012 Budapest 0 n/a

├► 10% Törökbálint Kombiterminál Kft. (2010: purchase)

HU-2045 Törökbálint 0 n/a

├► 5% ZÁHONY TÉRSÉGI LOGISZTIKAI KLASZTER KFT.

HU-4625 Záhony 0 n/a

└► 0.1715%

(PY: 0.19%) GlobalLog Kft. HU-6728 Szeged 0 n/a

├► 85.48% (100%) BILK KOMBITERMINÁL Zrt. HU-1239 Budapest V 11.453 19

├► 50% Vámkapu Zrt. HU-1239 Budapest E0 570 197 4)

├► 33.33% boxXagency Kft. HU-1239 Budapest E0 24 48 4)

└► 25% BILK-TRANS Kft HU-1239 Budapest E0 41 2 4)

├► 32% EAST Rail srl. (in liquidation) I-34132 Trieste E0 n/a

├► 30% Agrochimtranspack Kft. HU-1117 Budapest E0 1.202 -55 4)

├► 24.5% UniverTrans Kft. HU-1211 Budapest E0 444 6 4)

├► 6.67% HUNGRAIL Magyar Vasúti Fuvarozói Egyesülés HU-1138 Budapest 0 n/a

└► 4% (10.8%) Bureau central de clearing s.c.r.l. B-1060 Brussels 0 n/a

138


ÖBB-Infrastruktur group Country, registered office, type of consolidation

Equity in thousand

EUR


100% ÖBB-Infrastruktur Aktiengesellschaft A-1120 Vienna V 1.057.343 7.459

├► 100% Austrian Rail Construction & Consulting GmbH A-1120 Vienna V05) 128 0

├► 100% Austrian Rail Construction & Consulting GmbH & Co KG A-1120 Vienna V05) 210 7

├► 100% Hans Hechenbichler Erdölprodukte Gesellschaft m.b.H. A-6020 Innsbruck V0 430 -8 4)

├► 100% Hauptbahnhof Zwei Holding GmbH A-1100 Vienna V0 45 -2

├► 100% HBF Fünf Epsilon Projektentwicklungs GmbH A-1100 Vienna V0 11 -2

└► 100% HBF Sechs Gamma Projektentwicklungs GmbH A-1100 Vienna V0 11 -2

├► 100% Mungos Sicher & Sauber GmbH A-1050 Vienna V 33 2

├► 100% Mungos Sicher & Sauber GmbH & Co KG A-1050 Vienna V 1.010 510

├► 100% Netz- und Streckenentwicklung GmbH A-1020 Vienna V05) 372 38

├► 100% ÖBB-IKT Gesellschaft mbH A-1120 Vienna V 6.419 -1.616

├► 100% ÖBB-Immobilienmanagement Gesellschaft mbH A-1100 Vienna V 3.672 91

├► 100% ÖBB-Projektentwicklung GmbH A-1100 Vienna V 29 8

├► 100% ÖBB-Realitätenbeteiligungs GmbH & Co KG A-1100 Vienna V 51.407 -6

├► 100% BahnhofCity WBHF Alpha GmbH & Co KG A-1100 Vienna V0 -3 -1

├► 100% BahnhofCity WBHF Beta GmbH & Co KG A-1100 Vienna V0 -3 -1

├► 100% Businesscenter Linz Entwicklungs- und Verwertungs GmbH & Co KG

A-1100 Vienna V0 -3 -1

├► 100% Elisabethstraße 9 Projektentwicklung GmbH & Co KG A-1100 Vienna V0 -3 -1

├► 100% Europaplatz 1 Projektentwicklung GmbH & Co KG A-1100 Vienna V0 -3 -1

├► 100% Gauermanngasse 2-4 Projektentwicklung GmbH & Co KG A-1100 Vienna V 11.537 105

├► 100% InterCity WHBF Alpha GmbH & Co KG A-1100 Vienna V0 14.163 -1

├► 100% InterCity WHBF Beta GmbH & Co KG A-1100 Vienna V0 6.884 -1

├► 100% InterCity WHBF Gamma GmbH & Co KG A-1100 Vienna V0 3.443 -1

├► 100% InterCity WHBF Delta GmbH & Co KG A-1100 Vienna V0 6.443 -1

├► 100% InterCity WHBF Epsilon GmbH & Co KG A-1100 Vienna V0 9.115 -1

├► 100% Mariannengasse 16-20 Projektentwicklung GmbH & Co KG A-1100 Vienna V0 -3 -3

├► 100% Modul Office Hauptbahnhof Graz GmbH & Co KG A-1100 Vienna V0 -5 -1

└► 100% Westbahnhof A3 GmbH & Co KG A-1100 Vienna V0 -3 -1

├► 100% ÖBB Telekom Service GmbH A-1120 Vienna V 1.644 60

├► 100% Rail Equipment GmbH A-1040 Vienna V 16.098 315

├► 100% Rail Equipment GmbH & Co KG A-1040 Vienna V 26.800 4.027

├► 30% Weichenwerk Wörth GmbH A-3151 St. Georgen am Steinfelde

E 10.616 2.913

├► 25% Galleria di Base del Brennero - Brenner Basistunnel BBT SE A-6020 Innsbruck E 162.214 0 3)

├► 8% HIT Rail B.V. NL-3500 HA Utrecht 0 n/a

├► 1) „Am Hafen“ Garagenerrichtungs- und Betriebs GmbH & Co KG A-6900 Bregenz 0 n/a

└► 6) Tiefgarage Stuben Gesellschaft m.b.H. & Co. KG 6762 Stuben/Arlberg 0 n/a

Others Country, registered office, type of consolidation

Equity in thousand

EUR


100% ÖBB-CI & M Werbeagentur GmbH A-1100 Vienna V 443 186

100% ÖBB-Netting GmbH A-1100 Vienna V 187 2.120

└► 100% ÖBB-Finanzierungsservice GmbH A-1100 Vienna V 313 2.133

100% ÖBB-Shared Service Center Gesellschaft mbH A-1100 Vienna V 14.143 6.088

├► 100% ÖBB-Stiftungs Management Gesellschaft mbH A-1100 Vienna V0 73 21

└► Allgemeine Privatstiftung für berufliche Bildung A-1100 Vienna V0 188 116

├► 100% ÖBB-Versicherungsmanagement Gesellschaft mbH A-1100 Vienna V 97 -4

└► 34% Wellcon Gesellschaft für Prävention und Arbeitsmedizin GmbH A-1030 Vienna E 1.640 109

100% ÖBB-Werbecenter GmbH A-1100 Vienna V 8.122 1.305

25% ÖBB-Breitspur Planungsgesellschaft mbH A-1010 Vienna E0 3.026 -2.981

2% EUROFIMA European Company for the Financing of Railroad Rolling Stock AG CH-4001 Basel 0 n/a

The equity of foreign companies was converted into EUR at the exchange rate of the reporting date. The annual profit is converted into EUR at the average exchange rate. The values were determined in accordance with the respective national accounting laws. Disclosures in accordance with the IFRS were marked with a footnote. Investments in % indicated in brackets indicate the recognized investment held by several companies within in the ÖBB Group; if the figure is preceded by “PY”, it refers to the previous year. V Affiliated, fully consolidated company V0 Affiliated company not fully consolidated due to its insignificance E Participating company accounted for at equity (associated company) E0 Participating company not accounted for at equity due to its minor importance 0 Other associated company Abbreviations and footnotes i.L. in liquidation PY: Prior year 1) Initial consolidation as of December 31, 2010 2) Final consolidation in 2010 3) Preliminary amounts as of December 31, 2010 4) Equity and annual profit as of December 31, 2009 5) Amounts in accordance with IFRS 6) EEIG investment 7) Amounts as of March 31, 2010 8) Silent contribution 9) Initial consolidation as of January 01, 2010 10) Preliminary values as of December 31, 2009

Information on the purposes of the sub-groups is given in Note 34.

139


37. Subsequent events

The Executive Board members of ÖBB-Holding AG released the audited Consolidated Financial Statements as of December 31, 2010, on April 8, 2011, for submission to the Supervisory Board. The Supervisory Board is charged with auditing the Consolidated Financial Statements and declaring whether it approves the Consolidated Financial Statements.


As of February 3, 2011, a new transport service contract was concluded with Schienen-Infrastruktur-Dienstleistungsgesellschaft mbH regarding the provision of transport services in the field of passenger transport by railway. The contractual term commences with retroactive effect as of April 01, 2010, and ends as of December 31, 2019.

The new contract means that the federal government commissions clearly defined train connections as public services in a clearly attributable and transparent way. The contract, that is valid until 2019, thus secures the nationwide basic offer of public railway transport.

As of March 24, 2011, Mag. Georg Lauber was reappointed as Chief Financial Officer in the extraordinary meeting of the Supervisory Board of Personenverkehr AG, and at the same time, Ms. Birgit Wagner was appointed Director of the areas Market and Sales as of April 1, 2011.


Proceedings instituted by the Bundeswettbewerbsbehörde [Federal Competition Authority] (“BWB”)

The Bundeswettbewerbsbehörde (“BWB”) filed a claim with the cartel court for violation of the anti-trust laws and for imposition of a fine against a total of 43 companies in February 2010. The proceedings distinguish two different facts. The first accusation concerns the so-called Speditions-Sammelladungskonferenz [Freight forwarder conference regarding collective shipments] (“SSK”). The BWB accuses the former members of the SSK, which was dissolved in 2007, including Schier Otten & Co Gesellschaft mbH (merged with Express-Interfracht Internationale Spedition GmbH in 2009), of agreement and application of a common fee for domestic collective shipment transport as well as of market allocation, among others. The BWB accuses Rail Cargo Austria AG of having disclosed the annual increases of the BahnExpress fee applicable for domestic general cargo transport in advance to the members of the SSK in the years 2002-2007. Furthermore, market-sensitive data has allegedly been exchanged.

Following two exchanges of written pleadings, the first oral proceedings took place at the cartel court on January 19, 2011. Consequently, the cartel court rejected the requests of the BWB with respect to the SSK accusation in their entirety by part decision. With respect to the BEX accusation, neither the oral proceedings nor the part decision produced new findings.

Insofar as the BWB is raising an appeal against the part decision at the Oberster Gerichtshof [Supreme Court], we assume that the cartel court will not prosecute the BEX accusation further for the time being and that the proceedings will be suspended until a decision regarding the SSK accusation was made by the supreme cartel court. The BWB has not yet filed a claim for imposition of a specific fine. From the current point of view, it is not possible to reliably predict whether, when and in what amount a fine will be imposed in the coming proceedings with respect to the BEX accusation.


Master plan 2011 to 2016

On February 1, 2011, the federal government agreed the new master plan 2011 to 2016 in the Council of Ministers. Furthermore, the government commits to long-term modernization of the Austrian railway infrastructure in the framework of the “Zielnetz 2025” development program. Further agreements were reached with respect to financing of public short-distance railway transport, ensuring affordable offers for railway customers. The master plan focuses primarily on the development of the major corridors Westbahn, Südbahn and Brenner. Furthermore, it focuses on the modernization of the short-distance transport network in and around conurbations, the renovation of train stations and stops as well as the elimination of all low-speed sections in the existing network by 2014.

The grant contract was mainly negotiated and agreed in terms of content in the past financial year and was formally executed by the contractual parties at the end of March 2011.

140


38. Executive bodies of the parent company of the ÖBB Group

In the financial year 2010, the following persons were appointed members of the Executive Board or members of the Supervisory Board of ÖBB-Holding AG respectively:

Members of the Executive Board DI Peter Klugar until June 7, 2010 spokesman of the Executive Board

from June 7, 2010

until July 31, 2010 member of the Executive Board

Mag. Christian Kern from June 7, 2010 chairman of the Executive Board

Mag. Josef Halbmayr MBA

Ing. Franz Seiser from April 1, 2010

KR Gustav Poschalko until March 31, 2010

Members of the Supervisory Board DI Horst Pöchhacker chairman

DI Herbert Kasser from June 7, 2010 1st deputy of the chairman

Wilhelm Haberzettl * from June 7, 2010 2nd deputy of the chairman

(previously 4th deputy)

Franz Rauch until May 26, 2010 2nd deputy of the chairman

DI Herbert Kasser until May 26, 2010 3rd deputy of the chairman

Mag. Maria Kubitschek

Dr. Leopold Specht

KR Kurt Eder

Lic.rer.pol. Paul Blumenthal since January 18, 2010

Mag. Christian Teufl until May 26, 2010

Mag. Andreas Martinsich *

Gottfried Winkler *

Helmut Radlingmayr * since January 28, 2010 until June 2, 2010

Werner Harrer * until January 28, 2010 * employee representative

State commissioner MR Mag. Dr. Gerhard Gürtlich state commissioner

Dipl.-Ing. Georg Parrer deputy state commissioner

A report on compensations or advances and credits granted to these persons during the reporting period or guarantees assumed in favor of these persons is presented in Note 33 (“Transactions with affiliated parties”).

Vienna, this April 8, 2011

The Executive Board

Mag. Christian Kern Ing. Franz Seiser Mag. Josef Halbmayr MBA

141


INDEPENDENT AUDITOR’S REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS

AUDITOR’S REPORT *)

Report on the Consolidated Financial Statements We have audited the accompanying consolidated financial statements of Österreichische Bundesbahnen-Holding Aktiengesellschaft, Vienna, for the fiscal year from January 1, 2010 to December 31, 2010. These consolidated financial statements comprise the consolidated balance sheet as of December 31, 2010, the consolidated income statement, the consolidated statement of comprehensive income, the consolidated cash flow statement and the consolidated statement of changes in equity for the fiscal year ended December 31, 2010, and the notes.

Management’s Responsibility for the Consolidated Financial Statements and for the Accounting System

The Company’s management is responsible for the group accounting system and for the preparation and fair presentation of the consolidated financial statements in accordance with the International Financial Reporting Standards (IFRSs) as adopted by the EU. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; making accounting estimates that are reasonable in the circumstances.

Auditor’s Responsibility and Description of Type and Scope of the Statutory Audit

Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with laws and regulations applicable in Austria and Austrian Accounting Standards on Auditing, as well as in accordance with International Standards on Auditing (ISAs), issued by the International Auditing and Assurance Standards Board (IAASB) of the International Federation of Accountants (IFAC). Those standards require that we comply with professional guidelines and that we plan and perform the audit to obtain reasonable assurance whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Group’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a reasonable basis for our audit opinion.

Opinion

Our audit did not give rise to any objections. In our opinion, which is based on the results of our audit, the consolidated financial statements comply with legal requirements and give a true and fair view of the financial position of the Group as of December 31, 2010 and of its financial performance and its cash flows for the fiscal year from January 1, 2010 to December 31, 2010 in accordance with the International Financial Reporting Standards (IFRSs) as adopted by the EU.

142


Comments on the consolidated Management Report

Pursuant to statutory provisions, the consolidated management report is to be audited as to whether it is consistent with the consolidated financial statements and as to whether the other disclosures are not misleading with respect to the Company’s position. The auditor’s report also has to contain a statement as to whether the consolidated management report is consistent with the consolidated financial statements and whether the disclosures pursuant to Section 243a UGB (Austrian Commercial Code) are appropriate.

In our opinion, the consolidated management report is consistent with the consolidated financial statements. The disclosures pursuant to Section 243a UGB (Austrian Commercial Code) are appropriate.

Vienna, April 8, 2011

Ernst & Young Wirtschaftsprüfungsgesellschaft m.b.H.

Mag. Helmut Maukner m.p. Mag. Karl Rab m.p.

Certified Auditor Certified Auditor

Mag. Helmut Maukner Mag. Karl Rab

*) This report is a translation of the original report in German, which is solely valid. Publication of the consolidated financial statements together with our auditor's opinion may only be made if the consolidated financial statements and the consolidated management report are identical with the audited version attached to this report. Section 281 paragraph 2 UGB (Austrian Commercial Code) applies.

143


SEPARATE FINANCIAL STATEMENTS OF ÖBB-HOLDING AG: INCOME STATEMENT

1-12/2010 1-12/2009

EUR EUR

1. Revenues 30.000.321,39 34.369.658,14

2. Change in the inventory of not invoiced

services -1.132.796,95 1.133.861,96

3. Other operating income

a) Income from the disposal of fixed assets 1,00 12,51

b) Income from the release of provisions 135.572,09 60.429,00

c) Other operating income 7.504.196,95 5.791.980,56

7.639.770,04 5.852.422,07

4. Total income (sub-total from lines 1 to 3) 36.507.294,48 41.355.942,17

5. Expenses for purchased services -5.350.728,72 -3.582.407,28

6. Personnel expenses

a) Salaries -11.255.750,13 -11.750.325,92

b) Expenses for severance payments and contributions to

severance funds -244.926,42 -337.758,29

c) Contributions to pension schemes -106.504,79 -178.329,63

d) Statutory social security contributions

and wage-related taxes and compulsory contributions -2.306.832,69 -3.358.639,11

-13.914.014,03 -15.625.052,95

7. Depreciation and amortization

a) on intangible fixed assets and property, plant and equipment -190.817,21 -425.573,50

thereof extraordinary EUR0.00 (2009: EUR0.00)

-190.817,21 -425.573,50

8. Other operating expenses

a) Non-income taxes -476.133,16 -222.364,93

b) Others -16.425.168,88 -20.201.563,08

-16.901.302,04 -20.423.928,01

9. Earnings before interest and tax (EBIT) (sub-total from lines 4 to 8) 150.432,48 1.298.980,43

144


1-12/2010 1-12/2009

EUR EUR

10. Income from invesstments 3.570.303,11 9.360.238,57thereof from affiliated companies EUR3,570,303.11

(2009: EUR9,085,687.36)

11. Other interest and similar income 39.020,90 117.164,52thereof from affiliated companies EUR38,306.62

(2009: EUR117,465.80)

12. Income from write-up of financial assets 0,00 18.000.000,00

13. Expenses for financial assets -317.569.874,60 -211.300.000,00a) thereof impairment EUR317,569,874.60

(2009: EUR211,300,000.00)

b) thereof from affiliated companies EUR316,544,874.60

(2009: EUR211,300,000.00)

14. Interest and similar expenses -470.266,86 -61.223,59thereof from affiliated companies EUR20,872.89

(2009: EUR20,573.74)

15. Financial result (sub-total from lines 10 to 14) -314.430.817,45 -183.883.820,50

16. Income from ordinary activities -314.280.384,97 -182.584.840,07

17. Income taxes 7.002.837,67 21.246,22

18. Annual deficit -307.277.547,30 -182.563.593,85

19. Release of capital reserves 307.285.000,00 182.562.000,00

20. Allocation to untaxed reserves -3.800,00 0,00

21. Profit carried forward from previous years 721,19 2.315,04

22. Accumulated net profit 4.373,89 721,19

145


SEPARATE FINANCIAL STATEMENTS OF ÖBB-HOLDING AG: STATEMENT OF FINANCIAL POSITION

Dec 31, 2010 Dec 31, 2009

A s s e t s EUR EUR

A. Fixed assetsI. Intangible assets

1. Industrial property rights and similar rightsand derived licenses 296.249,07 606.389,60

Total I 296.249,07 606.389,60

II. Property, plant and equipment1. Land and buildings, including

buildings on third-party land 18.842,52 22.169,962. Other tools, furniture and fixtures 97.649,61 172.062,523. Advance payments and construction in progress 89.704,94 814.960,30

Total II 206.197,07 1.009.192,78

III. Financial assets1. Interest in affiliated companies 2.221.610.461,93 2.537.088.409,672. Investments 22.169.334,07 42.348.537,10

Total III 2.243.779.796,00 2.579.436.946,77

Total A 2.244.282.242,14 2.581.052.529,15

B. Current assetsI. Inventories

1. Not yet invoiced services 0,00 1.133.861,96Total I 0,00 1.133.861,96

II. Receivables and other assets1. Trade receivables 38.400,00 29.700,002. Accounts due from affiliated companies 104.741.756,36 94.749.068,873. Other receivables and assets 79.100.261,16 87.674.319,25

Total II 183.880.417,52 182.453.088,12

III. Cash on hand and cash in banks1. Cash on hand 6.116,23 2.233,322. Cash in banks 799,74 5.940,35

Total III 6.915,97 8.173,67

Total B 183.887.333,49 183.595.123,75

C. Prepaid expenses 180.425,28 160.390,79T o t a l a s s e t s 2.428.350.000,91 2.764.808.043,69

146


Dec 31, 2010 Dec 31, 2009

L i a b i l i t i e s EUR EUR

A. Equity

I. Shareholder's capital 1.900.000.000,00 1.900.000.000,00

II. Capital reserves

1. Allocated capital reserves 66.970.555,93 66.970.555,93

2. Unallocated capital reserves 277.244.688,93 584.529.688,93

III. Statutory reserve 1.000.000,00 1.000.000,00

IV. Accumulated net profit 4.373,89 721,19thereof profit carried forward EUR721.19 (2009: EUR2,315.04)

Total A 2.245.219.618,75 2.552.500.966,05

B. Untaxed reserves1. 3.800,00 0,00

Total B 3.800,00 0,00

C. Provisions

1. Provisions for severance payments 220.237,00 731.944,00

2. Provisions for taxes 257.062,50 443.320,27

3. Other provisions 2.444.507,06 3.315.759,30

Total C 2.921.806,56 4.491.023,57

D. Liabilities

1. Trade payables 824.355,69 2.347.510,29

2. Liabilities to affiliated companies 167.614.758,16 175.289.947,50

3. Liabilities to associated companies

8.320.000,00 27.027.027,03

4. Other liabilities 3.441.832,01 3.151.569,25thereof taxes EUR2,684,933.45 (2009: EUR2,873,341.23)

thereof social security EUR144,931.96

(2009: EUR181,885.56)

Total D 180.200.945,86 207.816.054,07

E. Deferred income 3.829,74 0,00

T o t a l l i a b i l i t i e s 2.428.350.000,91 2.764.808.043,69

Valuation reserve due to extraordinay depreciations

147


INDEPENDENT AUDITOR’S REPORT ON THE SEPARATE FINANCIAL STATEMENTS

AUDITOR’S REPORT *)

Report on the Annual Financial Statements

We have audited the accompanying financial statements, including the accounting system, of Österreichische Bundesbahnen-Holding Aktiengesellschaft, Vienna, for the fiscal year from January 1, 2010 to December 31, 2010. These financial statements comprise the balance sheet as of December 31, 2010, the income statement for the fiscal year ended December 31, 2010, and the notes.

Management’s Responsibility for the Financial Statements and for the Accounting System

The Company’s management is responsible for the accounting system and for the preparation and fair presentation of these financial statements in accordance with Austrian Generally Accepted Accounting Principles. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditor’s Responsibility and Description of Type and Scope of the Statutory Audit

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with laws and regulations applicable in Austria and Austrian Standards on Auditing. Those standards require that we comply with professional guidelines and that we plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

Our audit did not give rise to any objections. In our opinion, which is based on the results of our audit, the financial statements comply with legal requirements and give a true and fair view of the financial position of the Company as of December 31, 2010 and of its financial performance for the fiscal year from January 1, 2010 to December 31, 2010 in accordance with Austrian Generally Accepted Accounting Principles.

148


Comments on the Management Report

Pursuant to statutory provisions, the management report is to be audited as to whether it is consistent with the financial statements and as to whether the other disclosures are not misleading with respect to the Company’s position. The auditor’s report also has to contain a statement as to whether the management report is consistent with the financial statements and whether the disclosures pursuant to Section 243a UGB (Austrian Commercial Code) are appropriate.

In our opinion, the management report is consistent with the financial statements. The disclosures pursuant to Section 243a UGB (Austrian Commercial Code) are appropriate.

Vienna, March 31, 2011

Ernst & Young Wirtschaftsprüfungsgesellschaft m.b.H.

Mag. Elfriede Baumann m.p. Mag. Karl Rab m.p.

Certified Auditor Certified Auditor

Mag. Elfriede Baumann Mag. Karl Rab

*) This report is a translation of the original report in German, which is solely valid. Publication of the financial statements together with our auditor's opinion may only be made if the financial statements and the management report are identical with the audited version attached to this report. Section 281 paragraph 2 UGB (Austrian Commercial Code) applies.

Konzernlagebericht | Konzernabschluss Company Information

ÖBB-Holding AG Enquiries regarding the annual report Group communication Wienerbergstraße 11 1100 Vienna Austria Phone: +43 1 93000-32233 E-Mail: [email protected] www.oebb.at Call Center 05-1717 You will obtain information on trains and busses at any time from our Call Center. Phone: 05-1717 (0.00 a.m.-12.00p.m.) for calls from Austria without area code and at local rates, or Phone: +43 5-1717 for calls from abroad.

Masthead Editor ÖBB-Holding AG Wienerbergstraße 11 1100 Vienna Austria Phone: +43 1 93000-0 E-Mail: [email protected] www.oebb.at Graphic arrangement and design ÖBB-CI&M Werbeagentur on behalf of ÖBB-Holding AG Disclaimer The statements contained in this report were compiled to the best of our knowledge and verified with due diligence. Typographical errors and misprints excepted. This annual report is available only in electronic form at: http://konzern.oebb.at/de/Presse/Publikationen

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