Landeskreditbank Baden-Württemberg - L-Bank

(4) Loans to customers (i.e., non-credit institutions) include mortgage loans, loans to public authorities and
entities organized under public law and other obligations of customers.
(5) Aggregate book value of all debt or equity securities (excluding equity investments and repurchased own
notes), held by us at December 31 of the year indicated. An “equity investment” (Beteiligung) isan
investment in another company (whether affiliated or non-affiliated) that we intend to hold on a long-term
basis in order to establish a permanent relationship that contributes to our own business. See “—Business—
Securities Activities” and “—Glossary—Equity investments in non-affiliated companies; equity investments
in affiliated companies.”
(6) Fiduciary assets consist of loans that are made by us in our name but on behalf of other entities with funds
entirely supplied by, and for a purpose and on terms specified by, such other entities. See “—Business—
Loan Portfolio Risks” and “—Glossary—Fiduciary assets; fiduciary liabilities.” Amounts are as of
December 31 of the year indicated.
(7) Total guaranties are contingent liabilities in respect of guaranties and indemnity agreements as of December
31 of the year indicated.
(8) Total commitments represent the volume of funds committed by us for loans (including fiduciary loans and
administrative loans in an amount of EUR 121.0 million in 2004, EUR 121.6 million in 2003 and EUR
120.0 million in 2002), grants and guaranties and for the purchase of investment securities during the year
indicated, including amounts to be disbursed in future years and not including amounts disbursed during the
year indicated pursuant to commitments made in prior years. The retroactive change of the figures for new
commitments in 2003 is due to the fact that some customers have not drawn certain loans committed by us
as of December 31, 2003 (wertbegruendendes Ereignis).
(9) Net profit is the difference between total income and total expenses before allocations to retained profits and
reserves for the year indicated. See also our balance sheets and statements of income included elsewhere in
this prospectus.
Responsibility of Baden-Württemberg
Ownership. We are wholly owned by Baden-Württemberg.
Explicit and Unconditional Guaranty of Baden-Württemberg. The L-Bank Act (Section 5(3)) provides
expressly that Baden-Württemberg guaranties all of our obligations in respect of money borrowed by us, debt
obligations issued by us, forward or future contracts, rights under option agreements, other credits extended to us,
as well as credit extended to third parties that we expressly guaranty. Under this explicit guaranty, if we fail to
make any payment of principal or interest or any other amount required to be paid with respect to the Debt
Securities described herein when that payment is due and payable, Baden-Württemberg will be liable for that
payment as and when it becomes due and payable.
Baden-Württemberg’s obligation under this explicit guaranty ranks equally, without any preference, with all
of its other present and future unsecured and unsubordinated indebtedness. Holders of securities issued by us may
enforce this obligation directly against Baden-Württemberg without first having to take legal action against us.
The explicit guaranty of Baden-Württemberg is strictly a matter of statutory law and is not evidenced by any
contract or instrument. It may be subject to defenses available to us with respect to the obligations covered. The
explicit guaranty constitutes a charge on public funds that, as a legally established obligation, would be payable
without the need of any appropriation or other action to be taken by the parliament of Baden-Württemberg.
In case of a change of Baden-Württemberg’s ownership in us, our liquidation or an amendment to the L-
Bank Act, our payment obligations incurred prior to such event, including the obligations in respect of the Debt
Securities described herein, the explicit guaranty of Baden-Württemberg would continue to support our payment
obligations incurred prior to such an event.
Guaranty Obligation. The guaranty obligation (Gewährträgerhaftung) is based on an express statutory
provision included in the L-Bank Act (Section 5(2)). In accordance with this provision, Baden-Württemberg is
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