Landeskreditbank Baden-Württemberg - L-Bank

MANAGEMENT INFORMATION
Introduction
The following Management information is based on our audited unconsolidated annual financial statements
as of and for the fiscal years ended December 31, 2004, 2003 and 2002.
Our financial statements as of and for the fiscal years ended December 31, 2004, 2003 and 2002 were
prepared using German GAAP, as contained in the German Commercial Code (Handelsgesetzbuch), in particular
in the Supplemental Regulations for Banks (Sections 340 et seq. of the German Commercial Code), and in the
German Regulation on the Accounting Principles applied to Credit Institutions and Financial Services
Institutions (Verordnung über die Rechnungslegung der Kreditinstitute und Finanzdienstleistungsinstitute).
For details regarding the principles governing the preparation of our financial statements, see the notes to
our financial statements included in this prospectus and “—Regulation and Supervision of L-Bank in the Federal
Republic of Germany—Financial Statements and Audits.” For a description of certain terms used in our balance
sheet and statement of income, see “Glossary.”
German GAAP differs in certain respects from the generally accepted accounting principles of other
countries, such as the United States. For a discussion of certain differences between German GAAP and U.S.
GAAP, see “—Summary of Certain Differences between Generally Accepted German and United States
Accounting Principles.”
Balance Sheet
Our total assets increased by EUR 1.5 billion, or 3.1%, in 2004 to EUR 47.7 billion at December 31, 2004,
as compared to EUR 46.2 billion at December 31, 2003. In addition to liquidity and risk management activities,
loans to small and medium sized enterprises have been the major contributor to this growth. Loans to credit
institutions (assets item 2, “receivables from credit institutions”) increased by 10.2% in 2004 to EUR 13.0 billion
and represented 27.2% of total assets at December 31, 2004 (compared to 25.4% at December 31, 2003). Loans
to customers other than credit institutions (assets item 3, “receivables from customers”) decreased by 1.7% in
2004 to EUR 24.2 billion and represented 50.7% of total assets at December 31, 2004 (compared to 53.2 % at
December 31, 2003).
Borrowings from credit institutions (liabilities item 1, “liabilities to credit institutions”) decreased by 3.2%
over the previous year and amounted to an aggregate of EUR 18.3 billion at December 31, 2004. Borrowings
from customers (liabilities item 2, “liabilities to customers”) decreased by 6.4% and amounted to an aggregate of
EUR 4.8 billion at December 31, 2004. On the other hand, at December 31, 2004, the outstanding amount of
bonds and notes (certificated liabilities) had increased by 10.3% to EUR 18.1 billion from EUR 16.4 billion at
December 31, 2003, which in turn was a 12.6% increase over EUR 14.6 billion in 2002. The Debt Issuance
Program, which was established in 2001, permitted us to attract an increased funding volume via certificated
liabilities. See “—Business—Sources of Funds.”
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