Preliminary information Notice of Annual General Meeting Corporate officers Consolidated financial highlights Profile of the Group and its business model Message from the CEO

Report on operations Real estate market in 2007 The European real estate market The Italian real estate market Pirelli RE in 2007 Financial highlights Review of operating results Review of the balance sheet and financial position Performance of the main business segments in 2007 Investment & Asset Management - Co-investment activities Investment & Asset Management - Service activities Specialized services Subsequent events Business outlook Reconciliation between the parent company’s results and equity and those of the Group Results of the parent company Pirelli & C. Real Estate S.p.A. Other information Corporate Governance Equity interests held by Directors, Statutory Auditors and General Managers Stock Option plans Treasury shares Group tax election Personal data and privacy protection Resolutions

Pirelli & C. Real Estate Group Consolidated Balance Sheet Consolidated Income Statement Consolidated Cash Flow Statement Consolidated statement of recognized income and expenses in net equity Notes to the consolidated financial statements Accounting standards and policies Standards and interpretations effective from January 1st, 2007 New international accounting standards or interpretations not yet effective Reporting formats Consolidation area Consolidation methods Accounting policies Financial risk management policies Capital management policy Accounting estimates and assumptions Information on the Balance Sheet and Income Statement Transactions with related parties Transactions with related parties Other information Supplementary tables to the consolidated financial statements Annex 1: Consolidation area Remuneration paid to directors, statutory auditors and general managers Condensed income statement Certification of consolidated financial statements pursuant to art. 81-ter of CONSOB Regulation no. 11971 of May 14th, 1999 and subsequent amendments and additions Independent Auditors’ report

Reporting formats


The Pirelli & C. Real Estate Group has complied with the requirements of CONSOB Resolution 15519 of July 27th, 2006 relating to financial reporting formats and CONSOB Communication 6064293 of July 28th, 2006 relating to disclosure.

The consolidated financial statements are comprised of the balance sheet, income statement, consolidated statement of recognized income and expenses, cash flow statement and notes and are accompanied by the directors’ report on operations.

The balance sheet distinguishes between current and non-current assets and liabilities.

The income statement lists costs according to type.

The statement of changes in net equity is in the form of a “Consolidated statement of recognized income and expenses”. It includes net income for the year along with like categories of income and expenses which, on the basis of IFRS, are recorded directly in net equity. Transactions with equity holders and movements in earnings reserves during the year are detailed in the notes.

In the cash flow statement, cash flows from operating activities are presented using the indirect method, by which net income or loss for the year is adjusted for the effects of non-monetary transactions, of any deferral or provision of prior or future operating receipts or payments, and of revenues or costs relating to cash flows from investing or financing activities.

Relative to the consolidated financial statements published at December 31st, 2006, the following lines have been renamed in the balance sheet:

– “Deferred income tax assets” have been renamed “Deferred tax assets”;
– “Deferred income tax liabilities” have been renamed “Deferred tax provision”.