For descriptions of these non-U.S. GAAP financial measures and the adjustments made to the most directly comparable U.S. GAAP financial measures to obtain them, please refer (i) in the case of the adjusted net income measure, to “Item 3: Key Information—Certain Key Ratios and Figures” and “Item 5: Operating and Financial Review and Prospects—Effects of 1999/2000 German Tax Reform Legislation and Accounting for Income Tax”, (ii) in the case of average active equity and return on average active equity (post-tax), to “Item 3: Key Information—Certain Key Ratios and Figures”, and (iii) in the case of pre-tax profit (target definition) and pre-tax return on average active equity (target definition) (pre-tax profit (target definition) divided by average active equity), to the following paragraphs and page S-12, which is incorporated by reference herein.

Our target definition of pre-tax profit excludes from income before income taxes significant charges and gains that are attributable to factors that are not reflective of the performance of our business in a given period. Such charges and gains may include substantial restructuring or other charges and substantial gains on the sale of our industrial holdings or businesses.

In “Item 4: Information on the Company—Business Overview”, we present our targets for pre-tax profit (target definition) for us and our business segments that we aim to achieve by 2008, as well as our target pre-tax return on average active equity (target definition) across the business cycle. Our Group and business segment pre-tax profit targets are summarized on page S-12; the Group target is less than the sum of the business segment targets because it includes € (0.5) billion in Consolidation & Adjustments. When used with respect to future periods, these targets are forward-looking statements as well as non-GAAP financial measures. We cannot predict or quantify the income before income taxes or pre-tax return on average total shareholders’ equity that would correspond to the targets for pre-tax profit (target definition) or pre-tax return on average active equity (target definition) for future periods. This is because the magnitude of neither income before income taxes nor average total shareholders’ equity, nor the magnitude of the adjustments to be used to calculate pre-tax profit (target definition) and average active equity from such amounts, can be predicted. The adjustments used to obtain pre-tax profit (target definition) from income before income taxes, if any, will relate to specific, currently unknown, events and can be positive or negative, so that it is not possible to predict whether, for a future period, pre-tax profit (target definition) will be greater than or less than income before income taxes. The adjustments used to obtain average active equity from average total shareholders’ equity also vary. The adjustments for average unrealized gains on securities available for sale, net of applicable tax effects, may be positive or negative, depending on market movements and the composition of our portfolio of securities available for sale. The adjustments for dividends will generally be negative.

These reductions in tax rates resulted in significant decreases in our deferred taxes payable, with a corresponding reduction in our income tax expense for 2000. In the years 2002 through 2005, when we sold securities that had accumulated deferred tax provisions within other comprehensive income, we reversed such deferred tax provisions, which resulted in a significant increase in reported income tax expense, even though there was no related actual income tax liability.

We more fully explain the financial accounting treatment of these tax rate changes in “Item 5: Operating and Financial Review and Prospects — Effects of 1999/2000 German Tax Reform Legislation and Accounting for Income Taxes.”

Due to sales of equity securities for which there were accumulated deferred tax provisions in other comprehensive income, it was necessary to reverse € 1.0 million as income tax benefit in 2006, whereas € 544 million, € 120 million, € 215 million and € 2.8 billion of those provisions were reversed as income tax expense in 2005, 2004, 2003 and 2002, respectively. During these years, our net income was € 6.0 billion, € 3.5 billion, € 2.5 billion, € 1.4 billion and € 397 million, respectively. Without the additional income tax expense (benefit) we describe above, and also without the cumulative effect of accounting changes we describe below, our net income would have been € 5.9 billion, € 4.1 billion, € 2.6 billion, € 1.4 billion and € 3.2 billion in 2006, 2005, 2004, 2003 and 2002, respectively. We recommend that you consider our net income excluding the impact of the changes in income tax rates and the reversing effect and the cumulative effect of accounting changes when you compare the years 2002 through 2006 to one another and to earlier and future periods.

In 2006, our net income included a € 46 million gain, net of tax, as a cumulative effect of a change in accounting principles, related to our adoption of two new accounting principles. We adopted SFAS No. 123 (revised 2004), “Share-Based Payment” (“SFAS 123(R)”) in 2006, recognizing a gain of € 42 million, net of tax. This new accounting standard requires companies to recognize compensation cost relating to share-based payment transactions in their financial statements based on the fair value of the equity or liability instruments issued, with consideration of the expected forfeitures of unvested share-based payment awards. Also in 2006, we adopted EITF 05-5, “Accounting for Early Retirement or Postemployment Programs with Specific Features (Such As Terms Specified in Altersteilzeit Early Retirement Arrangements)” (“EITF 05-5”) and recorded a related gain of € 4 million, net of tax.

In 2003, as a result of the application of FASB Interpretation No. 46, “Consolidation of Variable Interest Entities” (“FIN 46”), we recorded a € 140 million gain, net of tax, as a cumulative effect of a change in accounting principles in our Consolidated Statement of Income. Also in 2003, we adopted SFAS No. 150, “Accounting for Certain Instruments with Characteristics of Both Liabilities and Equity” (“SFAS 150”) and recorded an after-tax gain of € 11 million. The requirements of SFAS 150 also resulted in a reduction in shareholders’ equity of € 2.9 billion during 2003. Upon adoption of the requirements of SFAS No. 142, “Goodwill and Other Intangible Assets” (“SFAS 142”) as of January 1, 2002, we discontinued the amortization of goodwill with a net carrying amount of € 8.7 billion and we recognized a € 37 million tax-free gain as a cumulative effect of a change in accounting principles in our Consolidated Statement of Income.

We more fully explain the cumulative effect of changes in accounting principles on our financial results in Note [2] to our consolidated financial statements.

The following table shows in euro and in U.S. dollars the dividend per share for the years ended December 31, 2006, 2005, 2004, 2003 and 2002. We declare our dividends at our Annual General Meeting following each year. Our dividends are based on the nonconsolidated results of Deutsche Bank AG as prepared in accordance with German accounting principles. Because we declare our dividends in euro, the amount an investor actually receives in any other currency depends on the exchange rate between the euro and that currency at the time the euros are converted into that currency.

The table does not reflect German withholding tax that will apply to payments made to non-German residents. Dividends that we paid in 2002 and thereafter have been subject to German withholding tax at an aggregate rate of 21.1 % (consisting of a 20 % withholding tax and a 1.1 % surcharge).

Residents of countries that have entered into an income tax convention with Germany may be eligible to receive a refund from the German tax authorities of a portion of the amount withheld. For dividends paid in 2002 and thereafter, U.S. residents have been entitled to receive a refund equal to 6.1 % of those dividends. Such U.S. residents have not been treated as though they received an additional dividend in the amount of such refund.

For U.S. federal income tax purposes, the dividends we pay are not eligible for the dividends received deduction generally allowed for dividends received by U.S. corporations from other U.S. corporations.

See “Item 10: Additional Information — Taxation” for more information on the tax treatment of our dividends.

We believe that maintaining our credit quality is a key part of the value we offer to our clients, bondholders and shareholders. Below are our long-term credit ratings.

As of the date of this document, there has been no change in any of the above ratings.

Each rating reflects the view of the rating agency only at the time it gave us the rating, and you should evaluate each rating separately and look to the rating agencies for any explanations of the significance of their ratings. The rating agencies can change their ratings at any time if they believe that the circumstances so warrant. You should not view these long-term credit ratings as recommendations to buy, hold or sell our securities.

The following table sets forth our consolidated capitalization in accordance with U.S. GAAP as of December 31, 2006:

very liquid markets to begin with. Assets that are not traded on stock exchanges or other public trading markets, such as derivatives contracts between banks, may have values that we calculate using models other than publicly-quoted prices. Monitoring the deterioration of prices of assets like these is difficult and could lead to losses we did not anticipate.

Even in the absence of a market downturn, below-market performance by our investment funds may result in increased withdrawals and reduced inflows, which would reduce the revenue we receive from our asset management business.

In particular, many of the businesses we have engaged in through our Corporate Banking & Securities Corporate Division entail credit transactions, frequently ancillary to other transactions. Nontraditional sources of credit risk can arise, for example, from:

plex. Consequently, we rely heavily on our financial, accounting and other data processing systems. If any of these systems do not operate properly, or are disabled, we could suffer financial loss, a disruption of our businesses, liability to clients, regulatory intervention or reputational damage.

In addition, despite the contingency plans we have in place, our ability to conduct business may be adversely impacted by a disruption in the infrastructure that supports our businesses and the communities in which we are located. This may include a disruption involving electrical, communications, transportation or other services used by us or third parties with which we conduct business, terrorist activities or disease pandemics.

Where available, fair value is based on quoted market prices or observable market parameters, or derived from such prices or parameters, and minimal or no management judgment or estimation is required. Where quoted market prices or observable market parameters are not available, valuation techniques appropriate for the particular instrument or market are applied to estimate fair value. These valuation techniques involve some level of management judgment and estimation, the degree of which will depend on the price transparency for the instrument or market and the instrument’s complexity. Management judgment is required in the selection and application of the appropriate parameters, assumptions and modeling techniques.

Notwithstanding our established internal control procedures, our estimate of the fair value for an asset or liability for which significant management judgment and estimation is required might differ from actual net realizable values. In the event our estimate of the fair value of an asset exceeded its actual net realizable value, or our estimate of the fair value of a liability was exceeded by its actual net realizable value, we may incur losses.

of our activities. In addition, downturns in the German economy could add to the competitive pressure, through, for example, increased price pressure and lower business volumes for us and our competitors.

In recent years there has been substantial consolidation and convergence among companies in the financial services industry, particularly in Europe. This trend has significantly increased the capital base and geographic reach of some of our competitors and has hastened the globalization of the securities and other financial services markets. In order to take advantage of some of our most significant challenges and opportunities, we will have to compete successfully with financial institutions that are larger and better capitalized than us and that may have a stronger position in local markets.

As mentioned above, we sometimes commit capital and take market risk to facilitate certain capital markets transactions. We have experienced, and expect to continue to experience, competitive pressure to retain market share by committing capital to businesses or transactions on terms that offer returns that may not be commensurate with their risks. In particular, corporate clients sometimes seek such commitments (such as credit commitments) from financial services firms in connection with investments banking and other assignments. We have also experienced intense price competition in some of our businesses in recent years.

Due to the nature of our business, we and our subsidiaries are involved in litigation, arbitration and regulatory proceedings in Germany and in a number of jurisdictions outside Germany, including the United States. Such matters are subject to many uncertainties, and the outcome of individual matters is not predictable with assurance.

We may settle litigation or regulatory proceedings prior to a final judgment or determination pursuant to which our liability is established and quantified. We may do so to avoid the cost, management efforts or negative business, regulatory or reputational consequences of continuing to contest liability, even when we believe we have valid defenses to liability. We may also do so when the potential economic, business, regulatory or reputational consequences of failing to prevail would be disproportionate to the costs of settlement. Furthermore, we may, for similar reasons, reimburse counterparties for losses incurred by them even in situations where we do not believe that we are legally compelled to do so. See “Item 8: Financial Information — Legal Proceedings” and Note [34] to our consolidated financial statements for information on our judicial, regulatory and arbitration proceedings.

The financial impact of legal risks might be considerable but may be hard or impossible to estimate and so to quantify, so that amounts eventually paid may exceed the amount of reserves set aside therefore. See “Item 5: Operational and Financial Review and Prospects — Significant Accounting Policies and Critical Accounting Estimates — Legal, Regulatory and Tax Contingencies”.

The legal and commercial name of our company is Deutsche Bank Aktiengesellschaft. The original Deutsche Bank was founded in Berlin in 1870 as a joint stock company principally dedicated to financing foreign trade. To support this business, after its founding, Deutsche Bank expanded by opening branches in Bremen, Yokohama, Shanghai, Hamburg and London. This international growth was supported by Deutsche Bank’s establishment of the German Overseas Bank (Deutsche Ueberseeische Bank) in 1886 and by Deutsche Bank’s taking a stake in the newly created German Asian Bank (Deutsch-Asiatische Bank) in 1889. To complement its international activities, Deutsche Bank developed a strong domestic presence in Germany by accepting cash deposits and developing relationships with large corporations. Beginning in the 1880s, Deutsche Bank began underwriting securities of these large corporations, with particular emphasis on the electrical engineering and steel industries. In the 1890s, Deutsche Bank expanded its domestic presence by opening new branches and acquiring smaller regional banks.

In 1929, following a long period of retrenchment after World War I, Deutsche Bank merged with the second largest bank in Germany, Disconto-Gesellschaft. The merged company operated under the name Deutsche Bank und Disconto-Gesellschaft until 1937, at which time it reverted to the Deutsche Bank name.

In 1952, Deutsche Bank disincorporated and split into three separate institutions (Norddeutsche Bank Aktiengesellschaft, Rheinisch-Westfälische Bank Aktiengesellschaft, and Süddeutsche Bank Aktiengesellschaft) pursuant to a 1952 law limiting the scope of credit institutions. These three institutions later reunified. Deutsche Bank Aktiengesellschaft, as it is known today, is a stock corporation organized under the laws of Germany.

The merger of the three institutions and our corporate name were entered into the Commercial Register of the District Court in Frankfurt am Main on May 2, 1957. We operate under the German Stock Corporation Act (Aktiengesetz). We are registered under registration number HRB 30 000. Our registered address is Taunusanlage 12, 60325 Frankfurt am Main, Germany, and our telephone number is +49-69-910-00. Our agent in the United States is: Peter Sturzinger, Deutsche Bank Americas, c/o Office of the Secretary, 60 Wall Street, Mail Stop NYC60-4006, New York, NY 10005.

We have made the following significant capital expenditures or divestitures since January 1, 2006:

The following table shows our net revenues by geographical region, based on our management reporting systems.

The Management Board has the overall responsibility for the management of Deutsche Bank, as provided by the German Stock Corporation Act. Its members are appointed and removed by the Supervisory Board which is a separate corporate body. Our Management Board focuses on strategic management, corporate governance, resource allocation, risk management and control, assisted by Functional Committees.

The Group Executive Committee (GEC), established in 2002, comprises the members of the Management Board, the heads of the business divisions within our client-facing group divisions, CIB and PCAM, and one member representing the management of our regions. The GEC is a body that is not required by the Stock Corporation Act. It serves as a tool to coordinate our businesses and regions. We believe this underscores our commitment to a virtual holding structure.

Statement Regarding Forward-Looking Statements” and “Use of Non-GAAP Financial Measures” on pages (iii) and (iv) for certain considerations relating to such targets. Such targets are summarized on page S-12; the Group target is less than the sum of the business segment targets because it includes € (0.5) billion in Consolidation & Adjustments.)

GROWTH STRATEGIES IN OUR CIB BUSINESSES:
In CORPORATE BANKING & SECURITIES, we aim to build further on our position as one of the world’s leading investment banks (based on publicly available revenue information). In sales and trading, we have established a position as one of the world’s leading houses (based on publicly available revenue information). We command strong positions in both “market access” products such as foreign exchange trading, where we were again named no. 1 in Euromoney magazine’s 2006 annual poll, and in complex “intellectual capital” business areas such as derivatives, where a 2006 poll in Risk Magazine identified us as the world’s largest derivatives trader for the second consecutive year. We aim to grow our platform by means of several targeted initiatives. Having integrated our debt and equity platforms in 2005, we seek to achieve further synergies across these two areas. We also seek to continue to expand our capabilities in high-value, “intellectual capital” businesses. We aim to continue to build our global equities platform with focused investments in our cash equities, derivatives and prime services businesses. We also aim to continue to build our presence in emerging growth markets, including in Central and Eastern Europe, Latin America and the Asia-Pacific regions. We intend to continue to invest in our platform in the United States, as evidenced in 2006 by our acquisition of MortgageIT Holdings, Inc., a residential mortgage originator, which significantly expands our scope in residential mortgage-backed securities. Furthermore, we seek to build up our position in commodities trading selectively. In Corporate Finance, we have also built a powerful European franchise. In 2006 we were market leaders in M&A in Germany, as measured by fee pool and deal volume, and in the UK and Russia, as measured by deal volume. Globally, we have built strong positions in important business areas such as high yield debt and equity-linked issuance, as reflected by the awards of “High Yield Bond House of the Year” and “Best Equity-Linked House of the Year” for 2006 from The Banker magazine. Our principal strategic goal is to build a sustainable top-5 position globally, as measured by fee pool. We aim to achieve this goal by growing market share, profitably, in the United States market; by strengthening our relationships with our most important clients through a leaner, more focused client coverage model; by continuing to build our presence in important emerging growth markets; and by continuing to unlock further synergies between our corporate finance business and our sales and trading businesses, between CB&S and PCAM. CB&S aims to deliver pre-tax profit (target definition) of € 5.3 billion in 2008.

In GLOBAL TRANSACTION BANKING, we have achieved significant growth in pre-tax profitability between 2004 and 2006, and our cost-income ratio in 2006 compared favorably with leading global competitors with comparable business models (based on publicly available financial data). Our aim is to achieve further profitable growth by means of several initiatives. In Europe, we aim to grow revenues by expanding on our current position in Germany, by building out our European domestic custody platform, and by increasing our business with European mid-cap clients. In the Asia-Pacific region, our growth strategy focuses on large local corporate clients and on fast-growing markets such as China, India and Korea. We also aim to grow in Central and Eastern Europe, and the Middle East, and to support our growth with incremental acquisitions. Increased co-operation with Corporate Banking & Securities, and with Private Clients and Asset Management, is central to our strategy. Global Transaction Banking aims to deliver pre-tax profit (target definition) of € 1 billion in 2008.

GROWTH STRATEGIES IN OUR PCAM BUSINESSES:
In ASSET AND WEALTH MANAGEMENT, we command a significant global presence, with invested assets of € 732 billion as at the end of 2006. Our aim is to develop further, and grow profitably in, both our Asset Management business and our Private Wealth Management business. In Asset Management, our growth strategy includes specific plans for each of our four global business lines. In retail asset management, we aim to consolidate and expand our leadership position in Germany and Europe, where our DWS franchise commands a top-3 position (as measured by publicly available invested asset data). We also aim to continue repositioning and reconfiguring DWS Scudder in North America, and to further expand the DWS franchise across the Asia-Pacific region. In alternative asset manage-

OUR GROUP DIVISIONS

Group division is a term we use to describe the three highest-level divisions of our firm, which are the Corporate and Investment Bank Group Division (CIB), the Private Clients and Asset Management Group Division (PCAM) and the Corporate Investments Group Division (CI). The CIB and PCAM Group Divisions are each divided into two principal corporate divisions. The CI Group Division does not use the intermediate corporate division designation.

CORPORATE AND INVESTMENT BANK GROUP DIVISION

The Corporate and Investment Bank Group Division primarily serves large and medium-sized corporations, financial institutions and sovereign, public sector and multinational organizations. This group division generated 66 % of our net revenues in 2006, 62 % in 2005 and 61 % in 2004 (on the basis of our management reporting systems).

The Corporate and Investment Bank Group Division’s operations are predominantly located in the world’s primary financial centers, including London, New York, Frankfurt, Tokyo, Singapore and Hong Kong.

The businesses that comprise the Corporate and Investment Bank Group Division seek to reach and sustain a leading global position in corporate and institutional banking services, measured by financial performance, market share, reputation and customer franchise, while making optimal usage of, and achieving optimal return on, our economic capital. The division also continues to exploit business synergies with the Private Clients and Asset Management Group Division and the Corporate Investments Group Division. The Corporate and Investment Bank Group Division’s activities and strategy are primarily client driven. Teams of specialists in each business division give clients access not only to their own products and services, but also to those of our other businesses.

At December 31, 2006, this group division included two corporate divisions, comprising the following business divisions:

Corporate Banking & Securities includes our debt and equity sales and trading businesses, which are housed in our Global Markets Business Division. Global Markets has eight primary business lines and three horizontally-integrated client-facing groups (Debt Capital Markets / Corporate Coverage, the Institutional Client Group, and Research), unified at a local level by strong regional management. Corporate Banking & Securities also includes the Corporate Finance Business Division, which focuses on providing advisory, equity and debt financing and structuring services to corporates and financial institutional clients. CIB’s client coverage functions are also a key part of the Corporate Finance Business Division.

Global Transaction Banking is closely aligned with Corporate Finance, but is a separately managed corporate division, providing trade finance, cash management and Trust & Securities Services.

Corporate Banking & Securities and Global Transaction Banking are supported by the Loan Exposure Management Group (LEMG). LEMG has responsibility for a range of loan portfolios, actively managing the risk of these through the implementation of a hedging regime on a selective basis. LEMG manages credit risk of loans and lending-related commitments related to both our investment-grade and medium-sized German companies portfolios.

derivatives (such as futures contracts on an equity index) and the underlying prices on the stock exchange of the individual stocks in the index. In convertible arbitrage, we identify volatility-related pricing differences between the market for convertible debt instruments and the cash and derivatives markets. In credit and equity arbitrage, we use statistics-driven trading strategies based on short-term market movements and indicators to manage our trading book so that the market value of our long positions remains roughly equal to the market value of our short positions. We also undertake risk-arbitrage, which is generally related to mergers and acquisitions, involving, for example, transactions such as buying a target company’s shares at the same time as selling the bidding company’s shares.

All our trading activities, including proprietary trading, are covered by our risk management procedures and controls which are described in detail in “Item 11: Quantitative and Qualitative Disclosures about Credit, Market and Other Risk — Risk Management — Market Risk — Value-at-Risk Analysis.”

DISTRIBUTION CHANNELS AND MARKETING
In the Corporate Banking & Securities Corporate Division, the focus of our corporate and institutional coverage bankers and sales teams is on our client relationships. We have structured our client coverage model so as to provide varying levels of standardized or dedicated services to our customers depending on their needs and level of complexity.

GLOBAL TRANSACTION BANKING CORPORATE DIVISION
CORPORATE DIVISION OVERVIEW
Global Transaction Banking is primarily engaged in the gathering, transfer, safeguarding and control of assets for its clients throughout the world. It provides processing, fiduciary and trust services to corporations, financial institutions and governments and their agencies and comprises the following business divisions:

Effective May 2006, we completed the acquisition of the UK Depository and Clearing Centre business from JPMorgan Chase.

In January 2004, we completed the acquisition of Dresdner Banks AG’s German domestic custody business, which we successfully integrated by December 2004.

PRODUCTS AND SERVICES
Trade Finance provides comprehensive solutions along the client’s trade value chain by combining international trade risk mitigation products and services with custom-made solutions for structured trade and export finance as well as — in a continuously growing number of regions - cross-selling of interest and currency risk products.

Cash Management caters to the needs of a diverse client base of corporates and financial institutions. With the provision of a comprehensive range of innovative and robust solutions, we handle the complexities of global and regional treasury functions including customer access, payment and collection services, liquidity management, information and account services and electronic bill presentation and payment solutions.

Trust & Securities Services provides a range of trust, payment, administration and related services for selected securities and financial transactions, as well as domestic securities custody in more than 25 markets.

acquisition is an important element in our strategy to expand the onshore presence in dedicated core markets and to expand into various client segments, including the Independent Financial Advisors sector.

The opening of a Deutsche Bank branch in Riyadh, Saudi Arabia, in April 2006 allows us to offer a full range of wealth management services in the largest market in the Middle East.

At the end of 2006, PWM entered into the important Chinese onshore market with the opening of an office in Shanghai to serve wealthy clients.

In the U.S., our two PWM franchises, with their specific offering of private banking and brokerage for high net worth individuals, were brought closer together in 2005, which we believe created beneficial synergies for our clients and our businesses due to improved service offering and cost efficiency.

In July 2006, AM’s real estate investment company, Deutsche Wohnen AG, was deconsolidated following the termination of a control agreement with DB Real Estate Management GmbH.

In December 2006, AM announced that DWS Investments Italy signed an agreement to form a strategic partnership with Anima S.G.R.p.A. Under the agreement, DWS will sell its local Italian mutual fund business to Anima. DWS’ local mutual fund range will be merged into Anima’s existing fund range. The agreement also includes long-term distribution arrangements between Deutsche Bank and Anima, in particular our financial advisors network Finanza & Futuro Banca and its branch banking network in Italy.

In July 2005, AM announced the sale of a substantial part of its UK- and Philadelphia-based business to Aberdeen Asset Management PLC. The first tranche of the transaction closed on September 30, 2005 and included the UK-based institutional Equity, Fixed Income, Global Equity and Multi-Asset businesses and the UK retail DWS business. In December 2005, AM completed this transaction by selling a substantial part of its UK- and Philadelphia-based business. Excluded from the sale was the Philadelphia-based high yield business, which remains an integral part of AWM’s global platform.

In March 2005, AM signed a joint venture agreement with Harvest Fund Management, including the acquisition of a minority stake, marking the division’s entry into China’s mutual fund market.

In January 2005, PWM acquired investment manager Wilhelm von Finck AG. The company continues to operate under its own name and offers specific investment solutions for large-scale private and family wealth portfolios.

In 2004, AM merged three Australian trusts — Deutsche Diversified Trust, Deutsche Office Trust and Deutsche Industrial Trust — into a new trust, DB RREEF Trust, creating Australia’s fourth largest listed property trust. In connection with this transaction we also transferred our Australian fiduciary real estate trust management and property management business into a subsidiary, renamed DB RREEF Holdings, subsequently selling a 50 % interest in DB RREEF Holdings.

Later in 2004, PWM sold a portion of the private client unit of Scudder, Scudder Private Investment Counsel (PIC), to Legg Mason. In addition AM completed the acquisition of the remaining minority interests in DWS Holding & Service GmbH. Also in 2004 we transferred a London-based PCS business unit from AWM to CB&S.

PRODUCTS AND SERVICES
AWM’s portfolio/fund management products include active fund management, passive/quantitative fund management, alternative investments and discretionary portfolio management.

AWM generates revenues from other products, including direct real estate investments included in our alternative investments business, rental revenues and gains and losses earned on real estate deal flows and revenues that are not part of our core business, specifically, the gain on sale of businesses.

DISTRIBUTION CHANNELS AND MARKETING
AM markets our retail products in Germany and other Continental European countries, generally through our established internal distribution channels in PWM and PBC. We also distribute our funds through other banks, insurance companies and independent investment advisors. We market our retail funds outside Europe via our own Asset and Wealth Management distribution channels and through third-party distributors. DWS Scudder distributes its retail products to US investors primarily through financial representatives at major national and regional wirehouses, independent and bank-based broker dealers, and independent financial advisors and registered investment advisors.

Products for institutional clients are distributed through the substantial sales and marketing network within AM and through third-party distribution channels. They are also distributed through our other businesses, notably the Corporate and Investment Bank Group Division.

We distribute our alternative investment products predominantly to high net worth clients, institutions and retail customers worldwide through our sales and marketing network within Asset and Wealth Management and through third-party distribution channels.

Within our alternative investments business, we employ global investment management teams that understand the needs of their clients and the dynamics of their specific markets.

PWM pursues an integrated holistic business model to cater to the complex needs of high net worth clients, their families and selected institutions. Based on individual strategic asset allocation we offer discretionary portfolio management, structured advisory process including alternative investments, family office, wealth preservation and estate planning services, tax advisory and philanthropic advisory services. The relationship managers work within target customer groups, assisting clients in developing individual investment strategies and creating enduring relationships with our clients.

In our PWM onshore business, wealthy customers are served via our relationship manager network in the respective countries. Where PBC has a presence, our customers also have access to our retail branch network and other general banking products. The offshore business encompasses all of our clients who establish accounts outside their countries of residence. These customers are able to use our offshore services to access financial products that may not be available in their countries of residence.

In addition, the client advisors of the Private Client Services business focus on traditional brokerage offering and asset allocation, including a wide range of third party products.

PRIVATE & BUSINESS CLIENTS CORPORATE DIVISION
CORPORATE DIVISION OVERVIEW
The Private & Business Clients Corporate Division operates under a single business model across Europe and selected Asian markets with a focused, sales-driven management structure under the Deutsche Bank brand. PBC serves retail and affluent clients as well as small corporate customers.

In 2006, we continued to grow our presence in selected European and Asian markets. The acquisition of Berliner Bank, which was signed in June 2006, will advance our goal of reaching a market share of 15 % in the retail banking sector of the German capital. The closing of this transaction took place in January 2007. In the course of 2006, the acquisition of norisbank, from DZ Bank Group was completed. The transaction aims at tapping into the potential of the

In addition to our branch network and financial agents, we also enter into country-specific distribution arrangements. In Germany, for example, we have a cooperation agreement with Deutsche Vermögensberatung AG (referred to as DVAG) whereby we distribute our mutual funds and other banking products through DVAG’s independent distribution network. We also work successfully together with ADAC (Germany’s largest automobile club with more than 15 million members), with whom we have an exclusive sales cooperation agreement in place. In order to complement our product range, we have signed distribution agreements, whereby PBC distributes the products of reputable product suppliers. These include an agreement with Zurich Financial Services for insurance products, and a strategic alliance with nine fund companies for the distribution of their investment products.

CORPORATE INVESTMENTS GROUP DIVISION

The Corporate Investments Group Division manages a portfolio containing certain alternative assets and other debt and equity positions. The portfolio includes our industrial holdings, certain private equity and venture capital investments, private equity fund investments, certain corporate real estate investments, our holding in Atradius N.V., certain credit exposures and certain other non-strategic investments. Historically, its mission has been to provide financial, strategic, operational and managerial capital to enhance the values of the portfolio companies in which the group division has invested.

We believe that the group division enhances the bank’s portfolio management and risk management capability. The group division is in the course of reducing its equity and other exposure significantly.

Corporate Investments holds interests in a number of manufacturing and financial services corporations (our “Industrial Holdings”). The largest two of these Industrial Holdings by market value at December 31, 2006 were interests of 4.4 % in DaimlerChrysler AG and 2.2 % in Allianz SE. Currently, over 96 % of our Industrial Holdings are in German corporations.

In February 2007, we signed a contract to acquire a 10 % stake in Dedalus GmbH & Co. KGaA economically representing a 0.75 % participation in European Aeronautic Defence and Space Company EADS N.V. The transaction closed in March 2007.

In 2006, we reduced our investment in Linde AG from 10.0 % to 7.8 %, and we sold our stake in WMF and our remaining stake in DEUTZ AG. In 2006, we acquired a 1.0 % stake in Deutsche Börse AG. Our investment in Deutsche Beteiligungs AG increased from 11.9 % to 13.2 % due to a share buy back program in which we did not participate.

In 2005, we reduced our investments in DaimlerChrysler AG from 10.4 % to 4.4 %, in DEUTZ AG from 4.5 % to 2.0 %, and in Deutsche Beteiligungs AG from 15.0 % to 11.9 %, and we sold our remaining stake in Südzucker AG.

In 2004, we reduced our investments in DaimlerChrysler AG from 11.8 % to 10.4 % and in DEUTZ AG from 10.5 % to 4.5 %. We sold our investments in Fresenius AG and Motor-Columbus AG.