FORM 18-K/A
For Foreign Governments and Political Subdivisions Thereof
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 4
to
ANNUAL REPORT
of
KfW
(Name of Registrant)
and
KfW INTERNATIONAL FINANCE INC.
(Name of Registrant)
Date of end of last fiscal year: December 31, 2003
SECURITIES REGISTERED
(As of the close of the fiscal year) *
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| | | Amount as to which | | Names of exchanges on |
| Title of Issue | | registration is effective | | which registered |
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| N/A | | | N/A | | | | N/A | |
| |
* The registrants file annual reports on Form 18-K on a voluntary basis.
Name and address of person authorized to receive notices
and communications from the Securities and Exchange Commission:
DAVID MORRISON
Sullivan & Cromwell LLP
Neue Mainzer Strasse 52
60311 Frankfurt am Main, Germany
Page 1 of 5
TABLE OF CONTENTS
The undersigned registrant hereby amends its Annual Report on Form 18-K for the fiscal year ended December 31, 2003, as subsequently amended, as follows:
Exhibit (d) is hereby amended by adding the following text in relation to the section “Kreditanstalt für Wiederaufbau — Financial Section — Management’s Comments on the Consolidated Financial Statements — Recent Developments”:
“Further information on KfW’s results for the nine months ended September 30, 2004
For the nine months ended September 30, 2004, KfW Group’s total assets increased by 7%, or €21 billion, to €335 billion, compared with €314 billion for the year ended December 31, 2003. KfW Group’s income from current operations before risk provisions and valuations decreased to €936 million. The respective figure for KfW Group’s full year 2003 amounted to €1.3 billion.
Capitalization and indebtedness of KfW Group as of September 30, 2004
| | | | | |
| | | As of |
| | | September 30, 2004
|
| | | (millions of €) |
| Short-term indebtedness(1) | | | 48,481 | |
| | | |
| |
| Long-term borrowings(2) from |
| Federal Government | | | 13,101 | |
| ERP Special Fund | | | 18,600 | |
| Banks | | | 17,085 | |
| Other lenders | | | 14,638 | |
| | | |
| |
| Total long-term borrowings | | | 63,424 | |
| Bonds(2) | | | 180,741 | |
| | | |
| |
| Total long-term debt | | | 244,165 | |
| Equity |
| Paid-in capital(3) | | | 3,300 | |
| Reserves(4) | | | 4,916 | |
| Fund for general bank risks | | | 2,000 | |
| | | |
| |
| Total equity | | | 10,216 | |
| Total capitalization | | | 254,381 | |
| | | |
| |
| (1) | | With a remaining term of one year or less. |
| |
| (2) | | With remaining terms of more than one year. |
| |
| (3) | | KfW’s equity capital, 80% of which is held by the Federal Government and the remaining 20% by the Länder, amounts to €3,750 million. €3,300 million has been paid in pro rata by the Federal Government and the Länder. |
| |
| (4) | | Consists of capital reserves of €1,604 million, retained earnings of €2,670 million and reserves from the ERP Special Fund of €642 million. |
The short-term indebtedness and capitalization of KfW Group as of September 30, 2004 is not necessarily indicative of KfW Group’s short-term indebtedness and capitalization as of December 31, 2004.”
Other recent developments
“On November 30, 2004, KfW effected a direct sale (accelerated bookbuilding) of approximately 73 million Deutsche Post AG shares at an offering price of €15.79 per share. This transaction resulted in a reduction of KfW’s share in Deutsche Post AG by approximately 7% to approximately 36%. KfW expects the Federal Government as part of its ongoing privatization initiatives to sell to KfW a further stake in Deutsche Telekom AG or Deutsche Post AG at a total aggregate amount of up to €2 billion prior to year-end 2004. In addition, the Federal Government may sell to KfW further stakes in Deutsche Telekom AG or Deutsche Post AG in 2005. However, KfW expects its holdings in these shares to be reduced in the medium term.”
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Exhibit (d) is hereby amended by adding in relation to the section entitled “The Federal Republic of Germany — The Economy” a new subsection entitled “Recent Developments” as follows:
“Recent Developments
Key Economic Figures
Germany’s gross domestic product (GDP) increased in real terms by 0.4% in each of the first and the second quarter of 2004, compared with the respective previous quarter. The economic recovery that started in mid 2003 was mainly driven by a strong and dynamic external demand. Temporarily, the recovery lost momentum in the third quarter 2004, in which GDP almost stagnated, increasing by 0.1% in real terms. The inflation rate (defined as year-to-year change in the consumer price index) was 1.8% in November 2004. The seasonally adjusted unemployment rate according to the national definition used by the Federal Employment Agency was 10.8% in November 2004, compared with 10.6% in the third quarter of 2004. In October 2004, Germany had a current account surplus of €6.9 billion (preliminary figures), compared with a surplus of €6.5 billion in October 2003. At October 31, 2004, the accumulated current account surplus amounted to €62.6 billion compared with €33.9 billion at October 31, 2003.
(Source:http://www.destatis.de/presse/deutsch/pm2004/p4960121.htm;
http://www.destatis.de/presse/deutsch/pm2004/p5270051.htm, Deutsche Bundesbank, Monthly Report
October 2004, p. 90; http://www.bundesbank.de/stat/download/saisonbwirt/i428.pdf;
http://www.bundesbank.de/stat/download/aussenwirtschaft/S201ATB30607.PDF)
Germany’s Budget Deficit and the Excessive Deficit Procedure
On July 13, 2004, the European Court of Justice (the “Court”) annulled a resolution taken by the Ecofin Council (the “Council”) in November 2003, in which the Council did not follow the European Commission’s (the “Commission”) recommendation to proceed with the excessive deficit procedure under the Stability and Growth Pact (the “Pact”) and the Maastricht Treaty against Germany. The Commission had challenged this resolution in January 2004 on the grounds that it allegedly violated the Pact. The Court stated in its decision that the Council’s resolution violated the Commission’s right to make recommendations relating to the excessive deficit procedure and clarified that the Council and the Commission were required to cooperate with respect to decisions regarding the excessive deficit procedure. However, the Court also noted that the Council enjoyed a certain amount of discretion in applying the rules of the Pact. In particular, the Court stated that the Council was not obliged to adopt the recommendations of the Commission.
(Source:http://www.bundesfinanzministerium.de/Aktuelles/Pressemitteilungen-
..395.25502/Pressemitteilung/Nr.-91/2004-Salomonische-Entsc...htm;
http://www.bundesregierung.de/Nachrichten-,417.684049/artikel/European-Court-ruling-strength.htm)
On October 26, 2004, the Commission published its Economic Forecasts Autumn 2004 for the European Union and its Member States, in which it projects for Germany a general government deficit of 3.9% of GDP for 2004, 3.4% for 2005 and 2.9% for 2006. In addition, general government gross debt is expected to continue to rise until 2006, staying considerably above the reference value of 60% of GDP set by the Maastricht Treaty.
(Source:http://www.europa.eu.int/comm/economy_finance/publications/european_economy/2004/ee504en.pdf, pp.47-48)
On December 1, 2004, the Federal Cabinet of Ministers approved the Federal Ministry of Finance’s draft stability program, which was submitted to the Council of the European Union and the Commission in accordance with the Pact. According to the Federal Ministry of Finance the German
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economy is recovering and the Federal Ministry of Finance is expecting economic growth of 1.5% to 2% in real terms in 2005. Despite the positive trend in the overall economic development, there was a lower increase in tax revenues in 2004 than expected and as a consequence the general budget deficit for 2004 will amount to approximately 3 3/4% of the GDP, which is above the 3% threshold provided for by the Pact. Additional factors included weak domestic demand as well certain unexpected revenue losses. For 2005, the Federal Ministry of Finance expects a general budget deficit of 2.9% as a result of additional consolidation measures implemented in the federal budget for 2005. The Federal Ministry of Finance will examine what further measures of adjustment could be taken, should it prove necessary in order to comply with the European requirements. As of 2006, based on its more optimistic assessment of prospects for the economic development in the mid-term, the Federal Ministry of Finance expects that a further reduction of the general budget deficit by approximately 0.5% should be possible on an annual basis.
On the basis of this stability program the European Commission decided on December 14, 2004 that it would not proceed with the excessive deficit procedure against Germany.
(Source:http://www.bundesfinanzministerium.de/Aktuelles/Pressemitteilungen-
..395.27992/Pressemitteilung/Nr.148/2004-Stabilitaets-und-w...htm;
http://www.bundesregierung.de/Nachrichten-,417.753661/artikel/2005-haelt-Deutschland-den-Sta.htm;
http://www.bundesfinanzministerium.de/BMF-.336.28757/Pressemitteilung/index.htm;
http://europa.eu.int/rapid/pressReleasesAction.do?reference=IP/04/1471&format=HTML&aged=0&language=EN&guiLanguage=en)
Federal Budget 2004
On October 6, 2004, the Federal Cabinet of Ministers approved the draft of a supplementary budget for 2004 that provides for net borrowings in the amount of EUR 43.7 billion, compared to the initially budgeted amount of EUR 29.3 billion, due to lower than expected tax revenues for 2004.
(Source: http://www.bundesregierung.de/Nachrichten-,417.724615/artike/Nachtragshaushalt-2004-Verantw.htm;
http://www.bundesregierung.de/Nachrichten/Artikel-,434.567617/artikel/Bundeshaushalt-2004-Konsolidie.htm)
On November 4, 2004, the Federal Government revised its tax revenue estimate for the consolidated public sector for 2004 to €442.4 billion, which is €1.4 billion lower than previously estimated. This estimate is based on the Federal Government’s growth rate forecast of nominal GDP of 2.6% in 2004.
(Source: http://www.bundesfinanzministerium.de/BMF-.336.27428/Pressemitteilung/index.htm)
Federal Budget 2005
On November 26, 2004 the Bundestag approved the federal budget for 2005, which among other things provides for total expenditures of €254.3 billion, net borrowings of €22 billion and investments of €22.7 billion. The Bundestag will take the final vote on the federal budget for 2005 after its approval by the Bundesrat.
(Source: http://www.bundesregierung.de/Nachrichten-,417.751563/artikel/Haushalt-2005-verabschiedet.htm)”
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrants KfW and KfW International Finance Inc. have each duly caused this amendment to be signed on their respective behalves by the undersigned, thereunto duly authorized.
| | | | | |
| | KfW | | |
| | | | | |
| | By: | | /s/ Horst Seissinger |
| | | |
|
| | | | Horst Seissinger
First Vice President |
| | | | | |
| | By: | | /s/ Jochen Leubner |
| | | |
|
| | | | Jochen Leubner
Vice President |
| | | | | |
| | KfW INTERNATIONAL FINANCE INC. |
| | | | | |
| | By: | | /s/ Dr. Volker Gross |
| | | |
|
| | | | Dr. Volker Gross
General Counsel, Vice President
and Secretary |
Date: December 17, 2004
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