<PAGE>
International Bank for Reconstruction
and Development
1818 H Street, N.W. (202) 477- 1234
Washington, D.C. 20433 U.S.A. Cable Address: INTBAFRAD
FILE NO. 1-3431
REGULATION BW
RULE 2
February 14, 1997
VIA EDGAR
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
Please find enclosed herewith for filing in compliance with Rule 2 of
Regulation BW:
(a) the Quarterly Financial Statements (Unaudited) of the International Bank
for Reconstruction and Development for the six months ending December 31,
1996; and
(b) the list of transactions with regard to the Bank's securities and
borrowings during the quarter ending December 31, 1996.
Sincerely Yours,
Scott B. White
Chief Counsel, Finance
Attachments
<PAGE>
INTERNATIONAL BANK FOR RECONSTRUCTION AND
DEVELOPMENT
QUARTERLY FINANCIAL STATEMENTS
December 31, 1996
(Unaudited)
<PAGE>
INTERNATIONAL BANK FOR RECONSTRUCTION AND
DEVELOPMENT
<PAGE>
IBRD Financial Statements 3
Table of Contents
December 31, 1996
Balance Sheet............................................... 4
Statement of Income......................................... 6
Statement of Changes in Retained Earnings................... 7
Statement of Changes in Cumulative Translation Adjustment... 7
Statement of Cash Flows..................................... 8
Summary Statement of Loans.................................. 9
Statement of Subscriptions to Capital Stock and Voting Power. 12
Notes to Financial Statements............................... 16
<PAGE>
4 IBRD Financial Statements
- ------------------------------------------------------------------------------
BALANCE SHEET
DECEMBER 31, 1996 (UNAUDITED) AND JUNE 30, 1996
EXPRESSED IN MILLIONS OF U.S. DOLLARS
- -------------------------------------------------------------------
<TABLE>
<CAPTION>
DECEMBER 31 JUNE 30
------------ ----------
<S> <C> <C>
Assets
DUE FROM BANKS
Unrestricted currencies............................... $ 34 $ 27
Currencies subject to restrictions--Note A............ 608 612
------------ ----------
642 639
------------ ----------
INVESTMENTS--Notes B and E
Trading............................................... 16,677 15,001
Held-to-maturity...................................... 1,256 1,169
------------ ----------
17,933 16,170
------------ ----------
SECURITIES PURCHASED UNDER RESALE AGREEMENTS--Note B.. 514 1,282
NONNEGOTIABLE, NONINTEREST-BEARING DEMAND OBLIGATIONS
ON ACCOUNT OF SUBSCRIBED CAPITAL--Note A.............. 1,919 1,765
AMOUNTS RECEIVABLE TO MAINTAIN VALUE OF CURRENCY
HOLDINGS--Note A...................................... 463 732
OTHER RECEIVABLES
Amounts receivable from currency swaps--Notes D and E. 22,241 18,010
Amounts receivable from investment securities traded.. 258 2,365
Amounts receivable from covered forwards--Notes
B and E............................................... 1,159 204
Accrued income on loans............................... 2,092 2,127
Accrued interest on investments....................... 126 92
------------ ----------
25,876 22,798
------------ ----------
LOANS OUTSTANDING (see Summary Statement of Loans,
Notes C and E)
Total loans........................................... 159,725 164,766
Less undisbursed balance.............................. 51,146 54,520
------------ ----------
Loans outstanding..................................... 108,579 110,246
Less accumulated provision for loan losses............ 3,290 3,340
------------ ----------
Loans outstanding net of accumulated provision........ 105,289 106,906
------------ ----------
OTHER ASSETS
Unamortized issuance costs of borrowings.............. 488 412
Miscellaneous......................................... 1,385 1,300
------------ ----------
1,873 1,712
------------ ----------
Total assets........................................... $ 154,509 $ 152,004
------------ ----------
------------ ----------
</TABLE>
<PAGE>
IBRD Financial Statements 5
- -----------------------------------------------------------------------------
BALANCE SHEET
DECEMBER 31, 1996 (UNAUDITED) AND JUNE 30, 1996
EXPRESSED IN MILLIONS OF U.S. DOLLARS
<TABLE>
<CAPTION>
DECEMBER 31 JUNE 30
------------- ----------
<S> <C> <C>
Liabilities
BORROWINGS-- Notes D and E
Short-term........................................... $ 5,418 $ 4,328
Medium- and long-term................................ 91,888 92,391
------------ ----------
97,306 96,719
------------ ----------
SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE AND
PAYABLE FOR CASH COLLATERAL RECEIVED--Note B......... 1,200 2,439
AMOUNTS PAYABLE TO MAINTAIN VALUE OF CURRENCY
HOLDINGS--Note A..................................... 5 4
OTHER LIABILITIES
Amounts payable for currency swaps--Notes D and E.... 23,101 19,427
Amounts payable for investment securities purchased.. 732 1,508
Amounts payable for covered forwards--Notes B and E.. 1,116 202
Accrued charges on borrowings........................ 2,270 2,352
Payable for Board of Governors-approved
transfers--Note F.................................... 123 205
Accounts payable and miscellaneous liabilities....... 850 848
------------ ----------
28,192 24,542
------------ ----------
Total liabilities.................................... 126,703 123,704
------------ ----------
Equity
CAPITAL STOCK (see Statement of Subscriptions to
Capital Stock and Voting Power, Note A)
Authorized capital (1,558,478 shares--December 31,
1996 and June 30, 1996)
Subscribed capital (1,511,076 shares--December 31,
1996; 1,497,325 shares--June 30, 1996).............. 182,289 180,630
Less uncalled portion of subscriptions............... 171,245 169,636
------------ ----------
11,044 10,994
DEFERRED AMOUNTS TO MAINTAIN VALUE OF CURRENCY
HOLDINGS--Note A.................................... (53) 136
PAYMENTS ON ACCOUNT OF PENDING SUBSCRIPTIONS--Note A. 8 15
RETAINED EARNINGS (see Statement of Changes in
Retained Earnings, Note F)........................... 16,174 16,099
CUMULATIVE TRANSLATION ADJUSTMENT (see Statement of
Changes in Cumulative Translation Adjustment)........ 633 1,056
------------ ----------
Total equity......................................... 27,806 28,300
------------ ----------
Total liabilities and equity......................... $ 154,509 $ 152,004
------------ ----------
------------ ----------
</TABLE>
The Notes to Financial Statements are an integral part of these Statements.
<PAGE>
6 IBRD Financial Statements
- -------------------------------------------------------------------------------
STATEMENT OF INCOME
FOR THE SIX MONTHS ENDED DECEMBER 31, 1996 (UNAUDITED) AND
DECEMBER 31, 1995 (UNAUDITED)
EXPRESSED IN MILLIONS OF U.S. DOLLARS
<TABLE>
<CAPTION>
1996 1995
--------- ---------
<S> <C> <C>
INCOME
Income from loans--Note C
Interest............................................................ $ 3,741 $ 4,035
Commitment charges.................................................. 58 60
Income from investments--Note B
Trading
Interest.............................................................. 327 388
Net gains/(losses)
Realized............................................................. 48 65
Unrealized........................................................... (36) (29)
Held-to-maturity
Interest.............................................................. 51 51
Income from securities purchased under resale agreements................... 38 38
Other income............................................................... 5 7
--------- ---------
Total income............................................................. 4,232 4,615
--------- ---------
EXPENSES
Borrowing expenses--Note D
Interest.............................................................. 3,028 3,352
Prepayment costs...................................................... 13 1
Amortization of issuance and other borrowing costs.................... 44 53
Interest on securities sold under agreements to repurchase and payable for
cash collateral received................................................. 26 40
Administrative expenses--Notes G, H, I and J.............................. 343 379
Provision for loan losses--Note C......................................... 39 31
Other expenses............................................................ 4 4
--------- ---------
Total expenses.......................................................... 3,497 3,860
--------- ---------
OPERATING INCOME........................................................... 735 755
Less contributions to special programs--Note G............................. 60 87
--------- ---------
NET INCOME................................................................. $ 675 $ 668
--------- ---------
--------- ---------
</TABLE>
The Notes to Financial Statements are an integral part of these Statements.
<PAGE>
IBRD Financial Statements 7
- -------------------------------------------------------------------------------
STATEMENT OF CHANGES IN RETAINED EARNINGS
FOR THE SIX MONTHS ENDED DECEMBER 31, 1996 (UNAUDITED) AND
DECEMBER 31, 1995 (UNAUDITED)
EXPRESSED IN MILLIONS OF U.S. DOLLARS
<TABLE>
<CAPTION>
1996 1995
--------- ---------
<S> <C> <C>
Retained earnings at beginning of the fiscal year....................... $ 16,099 $ 15,502
Board of Governors-approved transfers to--Note F
International Development Association............................... (600) (250)
Debt Reduction Facility for IDA-Only Countries ..................... (100)
Trust Fund for Gaza and West Bank ................................ -- (90)
Trust Fund for Bosnia and Herzegovina
Net income for the period............................................... 675 668
--------- ---------
Retained earnings at end of the period.................................. $ 16,174 $ 15,730
--------- ---------
--------- ---------
- -------------------------------------------------------------------------------------------------
STATEMENT OF CHANGES
IN CUMULATIVE TRANSLATION ADJUSTMENT
FOR THE SIX MONTHS ENDED DECEMBER 31, 1996 (UNAUDITED) AND
DECEMBER 31, 1995 (UNAUDITED)
EXPRESSED IN MILLIONS OF U.S. DOLLARS
Cumulative translation adjustment at beginning of the fiscal year.......... $ 1,056 $ 3,308
Translation adjustment for the period.................................... (423) (1,425)
--------- ---------
Cumulative translation adjustment at end of the period..................... $ 633 $ 1,883
--------- ---------
--------- ---------
</TABLE>
The Notes to Financial Statements are an integral part of these Statements.
<PAGE>
8 IBRD Financial Statements
- -------------------------------------------------------------------------------
STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED DECEMBER 31, 1996 (UNAUDITED) AND
DECEMBER 31, 1995 (UNAUDITED) EXPRESSED IN MILLIONS OF U.S. DOLLARS
DECEMBER 31, 1995 (UNAUDITED)
EXPRESSED IN MILLIONS OF U.S. DOLLARS
<TABLE>
<CAPTION>
1996 1995
--------- ---------
<S> <C> <C>
Cash flows from lending and investing activities
Loans
Disbursements $(7,451) $(7,334)
Principal repayments.............................................. 5,534 5,826
Principal prepayments............................................. 782 740
Investments: Held-to-maturity
Purchases......................................................... (3,889) (3,325)
Maturities........................................................ 3,907 3,338
--------- ---------
Net cash used in lending and investing activities............. (1,117) (755)
--------- ---------
Cash flows from Board of Governors-approved transfers to International
Development Association.............................................. (599) (250)
Debt Reduction Facility for IDA-Only Countries ...................... -- (86)
Trust Fund for Gaza and West Bank, Trust Fund for Bosnia and
Herzegovina, and for Emergency Assistance for Rwanda................. (81) (5)
--------- ---------
Net cash used in Board of Governors-approved transfers........ (680) (341)
--------- ---------
Cash flows from financing activities
Medium- and long-term borrowings
New issues......................................................... 8,123 5,033
Retirements........................................................ (6,976) (7,262)
Net short-term borrowings............................................ 1,038 443
Net currency swaps................................................... (197) (317)
Net capital stock transactions....................................... 44 47
--------- ---------
Net cash provided by (used in) financing activities........... 2,032 (2,056)
--------- ---------
Cash flows from operating activities
Net income........................................................... 675 668
Adjustments to reconcile net income to net cash provided by operating
activities
Depreciation and amortization...................................... 218 194
Provision for loan losses.......................................... 39 31
Changes in other assets and liabilities
(Increase) decrease in accrued income on loans and investments.... (51) 64
Increase in miscellaneous assets.................................. (98) (4)
Decrease in accrued charges on borrowings......................... (39) (119)
Increase in accounts payable and miscellaneous liabilities........ 16 98
--------- ---------
Net cash provided by operating activities...................... 760 932
--------- ---------
Effect of exchange rate changes on unrestricted cash and liquid
investments........................................................... (131) (1,158)
--------- ---------
Net increase (decrease) in unrestricted cash and liquid investments..... 864 (3,378)
Unrestricted cash and liquid investments at beginning of the fiscal
year.................................................................. 14,730 17,072
--------- ---------
Unrestricted cash and liquid investments at end of the period.......... $ 15,594 $ 13,694
--------- ---------
--------- ---------
</TABLE>
- -------------------------------------------------------------------------------
DECEMBER 31, 1995 (UNAUDITED) EXPRESSED IN MILLIONS OF U.S. DOLLARS
STATEMENT OF CASH FLOWS (CONTINUED)
<TABLE>
<CAPTION>
1996 1995
--------- ---------
<S> <C> <C>
Composed of
Investments held in trading portfolio................................ $ 16,677 $ 15,442
Unrestricted currencies.............................................. 34 55
Net payable for investment securities traded/purchased............... (474) (407)
Net receivable from covered forwards................................. 43 14
Net payable for securities purchased/sold under resale/repurchase
agreements and payable for cash collateral received................. (686) (1,410)
--------- ---------
$ 15,594 $ 13,694
--------- ---------
--------- ---------
Supplemental disclosure
Increase (decrease) in ending balances resulting from exchange rate
fluctuations
Loans outstanding $(2,802) $(9,162)
Borrowings............................................................ (1,879) (8,085)
Currency swaps....................................................... (360) (268)
Investments: Held-to-maturity........................................ 105 (20)
</TABLE>
The Notes to Financial Statements are an integral part of these Statements.
<PAGE>
IBRD Financial Statements 9
SUMMARY STATEMENT OF LOANS
DECEMBER 31, 1996 (UNAUDITED)
EXPRESSED IN MILLIONS OF U.S. DOLLARS
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
LOANS UNDISBURSED PERCENTAGE
APPROVED BALANCE OF OF TOTAL
TOTAL BUT NOT YET EFFECTIVE LOANS LOANS
BORROWER OR GUARANTOR LOANS EFFECTIVE (1) LOANS (2) OUTSTANDING OUTSTANDING
- -------------------------------- ---------- --------------- ------------------- ----------- -----------------
<S> <C> <C> <C> <C> <C>
Algeria......................... $ 2,737 $ 78 $ 720 $ 1,939 1.79
Argentina....................... 8,518 751 2,395 5,372 4.95
Armenia......................... 12 -- 2 10 0.01
Bahamas, The.................... 9 -- -- 9 0.01
Bangladesh...................... 46 -- -- 46 0.04
Barbados........................ 37 -- 22 15 0.01
Belarus......................... 163 -- 42 121 0.11
Belize.......................... 52 -- 20 32 0.03
Bolivia......................... 61 -- -- 61 0.06
Bosnia and Herzegovina 3........ 589 -- -- 589 0.54
Botswana........................ 69 -- -- 69 0.06
Brazil.......................... 9,369 568 2,925 5,876 5.41
Bulgaria........................ 839 24 362 453 0.42
Cameroon........................ 548 -- 28 520 0.48
Chile........................... 1,530 -- 437 1,093 1.01
China........................... 15,408 1,515 6,277 7,616 7.01
Colombia........................ 3,075 -- 898 2,177 2.00
Congo........................... 83 -- 1 82 0.08
Costa Rica...................... 326 -- 81 245 0.23
Cote d'Ivoire................... 1,317 -- 6 1,311 1.21
Croatia......................... 476 139 142 195 0.18
Cyprus.......................... 118 -- 54 64 0.06
Czech Republic.................. 549 -- 114 435 0.40
Dominica........................ 4 1 3 -- --
Dominican Republic.............. 403 140 19 244 0.22
Ecuador......................... 1,343 32 331 980 0.90
Egypt, Arab Republic of......... 1,379 20 284 1,075 0.99
El Salvador..................... 494 139 73 282 0.26
Estonia......................... 121 14 45 62 0.06
Fiji............................ 48 -- 15 33 0.03
Gabon........................... 112 -- 20 92 0.08
Ghana........................... 44 -- -- 44 0.04
Grenada......................... 4 -- 4 -- --
Guatemala....................... 241 -- 41 200 0.18
Guyana.......................... 27 -- -- 27 0.02
Honduras........................ 350 -- * 350 0.32
Hungary......................... 2,090 8 432 1,650 1.52
India........................... 12,759 196 3,378 9,185 8.46
Indonesia....................... 16,175 527 4,521 11,127 10.25
Iran, Islamic Republic of....... 821 -- 419 402 0.37
Iraq............................ 49 -- -- 49 0.05
Jamaica......................... 711 28 168 515 0.47
Jordan.......................... 998 20 201 777 0.72
Kazakstan....................... 924 116 318 490 0.45
Kenya........................... 312 -- -- 312 0.29
Korea, Republic of.............. 2,339 -- 521 1,818 1.67
Latvia.......................... 204 58 71 75 0.07
Lebanon......................... 551 188 231 132 0.12
Lesotho......................... 89 -- 32 57 0.05
Liberia......................... 146 -- -- 146 0.13
</TABLE>
<PAGE>
10 IBRD Financial Statements
SUMMARY STATEMENT OF LOANS (Continued)
DECEMBER 31, 1996 (UNAUDITED)
EXPRESSED IN MILLIONS OF U.S. DOLLARS
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
LOANS UNDISBURSED PERCENTAGE
APPROVED BALANCE OF OF TOTAL
TOTAL BUT NOT YET EFFECTIVE LOANS LOANS
BORROWER OR GUARANTOR LOANS EFFECTIVE (1) LOANS (2) OUTSTANDING OUTSTANDING
- -------------------------------- ---------- --------------- ------------------- ----------- -----------------
<S> <C> <C> <C> <C> <C>
Lithuania....................... $ 267 $ -- $ 166 $ 101 0.09
Macedonia, former Yugoslav
Republic of................... 92 12 2 78 0.07
Madagascar...................... 7 -- -- 7 0.01
Malawi.......................... 42 -- -- 42 0.04
Malaysia........................ 1,046 -- 153 893 0.82
Mauritania...................... 8 -- -- 8 0.01
Mauritius....................... 196 -- 72 124 0.11
Mexico.......................... 15,933 617 2,748 12,568 11.57
Moldova......................... 226 20 64 142 0.13
Morocco......................... 4,806 95 979 3,732 3.44
Nicaragua....................... 44 -- -- 44 0.04
Nigeria......................... 3,234 -- 472 2,762 2.54
Oman............................ 19 -- -- 19 0.02
Pakistan........................ 4,207 -- 1,200 3,007 2.77
Panama.......................... 336 -- 137 199 0.18
Papua New Guinea................ 376 -- 106 270 0.25
Paraguay........................ 387 22 227 138 0.13
Peru............................ 2,524 85 806 1,633 1.50
Philippines..................... 6,146 338 1,142 4,666 4.30
Poland.......................... 3,262 20 1,067 2,175 2.00
Portugal........................ 57 -- 2 55 0.05
Romania......................... 1,974 50 915 1,009 0.93
Russian Federation.............. 6,119 629 2,978 2,512 2.31
St. Kitts and Nevis............. 3 2 * 1 *
St. Lucia....................... 10 2 4 4 *
St. Vincent and the
Grenadines.................... 3 2 1 * *
Senegal......................... 23 -- -- 23 0.02
Seychelles...................... 6 -- 2 4 *
Sierra Leone.................... 2 -- -- 2 *
Slovak Republic................. 286 -- 36 250 0.23
Slovenia........................ 234 48 31 155 0.14
Sri Lanka....................... 40 -- -- 40 0.04
Sudan........................... 6 -- -- 6 0.01
Swaziland....................... 40 -- 26 14 0.01
Syrian Arab Republic............ 382 -- -- 382 0.35
Tanzania........................ 56 -- -- 56 0.05
Thailand........................ 2,366 214 552 1,600 1.47
Trinidad and Tobago............. 165 -- 87 78 0.07
Tunisia......................... 2,256 37 609 1,610 1.48
Turkey.......................... 5,710 5 1,441 4,264 3.93
Turkmenistan.................... 25 -- 22 3 *
Ukraine......................... 1,955 406 690 859 0.79
Uruguay......................... 690 125 119 446 0.41
Uzbekistan...................... 235 5 75 155 0.14
Venezuela....................... 2,288 -- 880 1,408 1.30
Yugoslavia, Federal Republic of
(Serbia/ Montenegro) 3........ 1,178 -- -- 1,178 1.08
Zaire........................... 87 -- -- 87 0.08
</TABLE>
<PAGE>
IBRD Financial Statements 11
SUMMARY STATEMENT OF LOANS (Continued)
DECEMBER 31, 1996 (UNAUDITED)
EXPRESSED IN MILLIONS OF U.S. DOLLARS
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
LOANS UNDISBURSED PERCENTAGE
APPROVED BALANCE OF OF TOTAL
TOTAL BUT NOT YET EFFECTIVE LOANS LOANS
BORROWER OR GUARANTOR LOANS EFFECTIVE (1) LOANS (2) OUTSTANDING OUTSTANDING
- -------------------------------- ---------- --------------- ------------------- ----------- -----------------
<S> <C> <C> <C> <C> <C>
Zambia.......................... $ 105 $ -- $ -- $ 105 0.10
Zimbabwe........................ 661 -- 148 513 0.47
---------- ---------- ----------- ---------- ------
Subtotal 5...................... 158,788 7,295 43,612 107,881 99.36
Caribbean Development Bank 4.... 38 -- 29 9 0.01
International Finance
Corporation................... 899 -- 210 689 0.63
---------- ---------- ----------- ---------- ------
Total---December 31, 19965...... $ 159,725 $ 7,295 $ 43,851 $ 108,579 100.00
---------- ---------- ----------- ---------- ------
---------- ---------- ----------- ---------- ------
Total--June 30, 1996............ $ 164,766 $ 9,500 $ 45,020 $ 110,246
---------- ---------- ----------- ---------- ------
---------- ---------- ----------- ---------- ------
</TABLE>
- ------------------------
* Indicates amount less than $0.5 million or less than 0.005 percent. NOTES
(1) Loans totaling $3,748 million ($5,170 million--June 30, 1996) have been
approved by IBRD, but the related agreements have not been signed. Loan
agreements totaling $3,547 million ($4,330 million-- June 30, 1996) have
been signed, but the loans do not become effective and disbursements
thereunder do not start until the borrowers and guarantors, if any, take
certain actions and furnish certain documents to IBRD.
(2) Of the undisbursed balance, IBRD has entered into irrevocable commitments to
disburse $2,067 million ($2,258 million--June 30, 1996).
(3) See Notes to Financial Statements--Notes A and C.
(4) These loans are for the benefit of The Bahamas, Barbados, Grenada, Guyana,
Jamaica, Trinidad and Tobago, and territories of the United Kingdom
(Associated States and Dependencies) in the Caribbean Region, who are
severally liable as guarantors to the extent of subloans made in their
territories.
(5) May differ from the sum of individual figures shown due to rounding.
The Notes to Financial Statements are an integral part of these Statements.
6
<PAGE>
12 IBRD Financial Statements
- -------------------------------------------------------------------------------
STATEMENT OF SUBSCRIPTIONS TO
CAPITAL STOCK AND VOTING POWER
DECEMBER 31, 1996 (UNAUDITED)
EXPRESSED IN MILLIONS OF U.S. DOLLARS
<TABLE>
<CAPTION>
SUBSCRIPTIONS VOTING POWER
------------------------------------------------------------------ ----------------------------
PERCENTAGE NUMBER PERCENTAGE
OF TOTAL AMOUNTS AMOUNTS SUBJECT OF OF
MEMBER SHARES TOTAL AMOUNTS PAID IN(1) TO CALL(1) VOTES TOTAL
- ----------------------------- ---------- --------- ------------ ---------- ----------------- --------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Afghanistan.................. 300 0.02 $ 36.2 $ 3.6 $ 32.6 550 0.04
Albania...................... 830 0.05 100.1 3.6 96.5 1,080 0.07
Algeria...................... 9,252 0.61 1,116.1 67.1 1,049.0 9,502 0.61
Angola....................... 2,676 0.18 322.8 17.5 305.4 2,926 0.19
Antigua and Barbuda.......... 520 0.03 62.7 1.3 61.5 770 0.05
Argentina.................... 17,911 1.19 2,160.7 132.2 2,028.4 18,161 1.17
Armenia...................... 1,139 0.08 137.4 5.9 131.5 1,389 0.09
Australia.................... 24,464 1.62 2,951.2 181.8 2,769.5 24,714 1.59
Austria...................... 11,063 0.73 1,334.6 80.7 1,253.9 11,313 0.73
Azerbaijan................... 1,646 0.11 198.6 9.7 188.8 1,896 0.12
Bahamas, The................. 1,071 0.07 129.2 5.4 123.8 1,321 0.08
Bahrain...................... 1,103 0.07 133.1 5.7 127.4 1,353 0.09
Bangladesh................... 4,854 0.32 585.6 33.9 551.6 5,104 0.33
Barbados..................... 948 0.06 114.4 4.5 109.9 1,198 0.08
Belarus...................... 3,323 0.22 400.9 22.3 378.5 3,573 0.23
Belgium...................... 28,983 1.92 3,496.4 215.8 3,280.6 29,233 1.88
Belize....................... 586 0.04 70.7 1.8 68.9 836 0.05
Benin........................ 868 0.06 104.7 3.9 100.8 1,118 0.07
Bhutan....................... 479 0.03 57.8 1.0 56.8 729 0.05
Bolivia...................... 1,785 0.12 215.3 10.8 204.5 2,035 0.13
Bosnia and Herzegovina....... 549 0.04 66.2 5.8 60.4 799 0.05
Botswana..................... 615 0.04 74.2 2.0 72.2 865 0.06
Brazil....................... 24,946 1.65 3,009.4 185.1 2,824.2 25,196 1.62
Brunei Darussalam............ 2,373 0.16 286.3 15.2 271.1 2,623 0.17
Bulgaria..................... 5,215 0.35 629.1 36.5 592.6 5,465 0.35
Burkina Faso................. 868 0.06 104.7 3.9 100.8 1,118 0.07
Burundi...................... 716 0.05 86.4 3.0 83.4 966 0.06
Cambodia..................... 214 0.01 25.8 2.6 23.2 464 0.03
Cameroon..................... 1,527 0.10 184.2 9.0 175.2 1,777 0.11
Canada....................... 44,795 2.96 5,403.8 334.9 5,068.9 45,045 2.89
Cape Verde................... 508 0.03 61.3 1.2 60.1 758 0.05
Central African Republic..... 862 0.06 104.0 3.9 100.1 1,112 0.07
Chad......................... 862 0.06 104.0 3.9 100.1 1,112 0.07
Chile........................ 6,931 0.46 836.1 49.6 786.6 7,181 0.46
China........................ 44,799 2.96 5,404.3 335.0 5,069.3 45,049 2.90
Colombia..................... 6,352 0.42 766.3 45.2 721.1 6,602 0.42
Comoros...................... 282 0.02 34.0 0.3 33.7 532 0.03
Congo........................ 927 0.06 111.8 4.3 107.5 1,177 0.08
Costa Rica................... 233 0.02 28.1 1.9 26.2 483 0.03
Cote d'Ivoire................ 2,516 0.17 303.5 16.4 287.1 2,766 0.18
Croatia...................... 2,293 0.15 276.6 17.3 259.3 2,543 0.16
Cyprus....................... 1,461 0.10 176.2 8.4 167.9 1,711 0.11
Czech Republic............... 6,308 0.42 761.0 45.9 715.0 6,558 0.42
Denmark...................... 10,251 0.68 1,236.6 74.6 1,162.0 10,501 0.67
Djibouti..................... 559 0.04 67.4 1.6 65.9 809 0.05
Dominica..................... 504 0.03 60.8 1.1 59.7 754 0.05
Dominican Republic........... 2,092 0.14 252.4 13.1 239.3 2,342 0.15
Ecuador...................... 2,771 0.18 334.3 18.2 316.1 3,021 0.19
Egypt, Arab Republic of...... 7,108 0.47 857.5 50.9 806.6 7,358 0.47
El Salvador.................. 141 0.01 17.0 1.7 15.3 391 0.03
</TABLE>
<PAGE>
IBRD Financial Statements 13
- -------------------------------------------------------------------------------
STATEMENT OF SUBSCRIPTIONS TO
CAPITAL STOCK AND VOTING POWER (CONTINUED)
DECEMBER 31, 1996 (UNAUDITED)
EXPRESSED IN MILLIONS OF U.S. DOLLARS
<TABLE>
<CAPTION>
SUBSCRIPTIONS VOTING POWER
------------------------------------------------------------------ ----------------------------
PERCENTAGE NUMBER PERCENTAGE
OF TOTAL AMOUNTS AMOUNTS SUBJECT OF OF
MEMBER SHARES TOTAL AMOUNTS PAID IN(1) TO CALL(1) VOTES TOTAL
- ----------------------------- ---------- --------- ------------ ---------- ------------------ -------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Equatorial Guinea............ 715 0.05 $ 86.3 $ 2.7 $ 83.5 965 0.06
Eritrea...................... 593 0.04 71.5 1.8 69.7 843 0.05
Estonia...................... 923 0.06 111.3 4.3 107.1 1,173 0.08
Ethiopia..................... 978 0.06 118.0 4.7 113.3 1,228 0.08
Fiji......................... 987 0.07 119.1 4.8 114.3 1,237 0.08
Finland...................... 8,560 0.57 1,032.6 61.9 970.8 8,810 0.57
France....................... 69,397 4.59 8,371.7 520.4 7,851.3 69,647 4.48
Gabon........................ 987 0.07 119.1 5.1 113.9 1,237 0.08
Gambia, The.................. 543 0.04 65.5 1.5 64.0 793 0.05
Georgia...................... 1,584 0.10 191.1 9.3 181.8 1,834 0.12
Germany...................... 72,399 4.79 8,733.9 542.9 8,190.9 72,649 4.67
Ghana........................ 1,525 0.10 184.0 12.7 171.2 1,775 0.11
Greece....................... 1,684 0.11 203.1 14.1 189.1 1,934 0.12
Grenada...................... 531 0.04 64.1 1.4 62.7 781 0.05
Guatemala.................... 2,001 0.13 241.4 12.4 229.0 2,251 0.14
Guinea....................... 725 0.05 87.5 5.0 82.4 975 0.06
Guinea-Bissau................ 540 0.04 65.1 1.4 63.7 790 0.05
Guyana....................... 1,058 0.07 127.6 5.3 122.3 1,308 0.08
Haiti........................ 1,067 0.07 128.7 5.4 123.3 1,317 0.08
Honduras..................... 641 0.04 77.3 2.3 75.0 891 0.06
Hungary...................... 8,050 0.53 971.1 58.0 913.1 8,300 0.53
Iceland...................... 1,258 0.08 151.8 6.8 144.9 1,508 0.10
India........................ 44,795 2.96 5,403.8 333.7 5,070.1 45,045 2.89
Indonesia.................... 14,981 0.99 1,807.2 110.3 1,697.0 15,231 0.98
Iran, Islamic Republic of.... 23,686 1.57 2,857.4 175.8 2,681.5 23,936 1.54
Iraq......................... 2,808 0.19 338.7 27.1 311.6 3,058 0.20
Ireland...................... 5,271 0.35 635.9 37.1 598.8 5,521 0.35
Israel....................... 4,750 0.31 573.0 33.2 539.8 5,000 0.32
Italy........................ 44,795 2.96 5,403.8 334.8 5,069.0 45,045 2.89
Jamaica...................... 2,578 0.17 311.0 16.8 294.2 2,828 0.18
Japan........................ 93,770 6.21 11,311.9 703.5 10,608.5 94,020 6.04
Jordan....................... 1,388 0.09 167.4 7.8 159.6 1,638 0.11
Kazakstan.................... 2,985 0.20 360.1 19.8 340.3 3,235 0.21
Kenya........................ 2,461 0.16 296.9 15.9 281.0 2,711 0.17
Kiribati..................... 465 0.03 56.1 0.9 55.2 715 0.05
Korea, Republic of........... 9,372 0.62 1,130.6 67.9 1,062.7 9,622 0.62
Kuwait....................... 13,280 0.88 1,602.0 97.4 1,504.6 13,530 0.87
Kyrgyz Republic.............. 1,107 0.07 133.5 5.7 127.9 1,357 0.09
Lao People's Democratic
Republic................... 178 0.01 21.5 1.5 20.0 428 0.03
Latvia....................... 1,384 0.09 167.0 7.8 159.2 1,634 0.11
Lebanon...................... 340 0.02 41.0 1.1 39.9 590 0.04
Lesotho...................... 663 0.04 80.0 2.3 77.6 913 0.06
Liberia...................... 463 0.03 55.9 2.6 53.3 713 0.05
Libya........................ 7,840 0.52 945.8 57.0 888.8 8,090 0.52
Lithuania.................... 1,507 0.10 181.8 8.7 173.1 1,757 0.11
Luxembourg................... 1,652 0.11 199.3 9.8 189.5 1,902 0.12
Macedonia, former Yugoslav
Republic of................ 427 0.03 51.5 3.2 48.3 677 0.04
Madagascar................... 1,422 0.09 171.5 8.1 163.5 1,672 0.11
Malawi....................... 1,094 0.07 132.0 5.6 126.4 1,344 0.09
Malaysia..................... 8,244 0.55 994.5 59.5 935.0 8,494 0.55
</TABLE>
<PAGE>
14 IBRD Financial Statements
- -------------------------------------------------------------------------------
STATEMENT OF SUBSCRIPTIONS TO
CAPITAL STOCK AND VOTING POWER (CONTINUED)
DECEMBER 31, 1996 (UNAUDITED)
EXPRESSED IN MILLIONS OF U.S. DOLLARS
<TABLE>
<CAPTION>
SUBSCRIPTIONS VOTING POWER
------------------------------------------------------------------ ----------------------------
PERCENTAGE NUMBER PERCENTAGE
OF TOTAL AMOUNTS AMOUNTS SUBJECT OF OF
MEMBER SHARES TOTAL AMOUNTS PAID IN(1) TO CALL(1) VOTES TOTAL
- ----------------------------- ---------- --------- ------------ ---------- ----------------- --------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Maldives..................... 469 0.03 $ 56.6 $ 0.9 $ 55.7 719 0.05
Mali......................... 1,162 0.08 140.2 6.1 134.1 1,412 0.09
Malta........................ 1,074 0.07 129.6 5.4 124.1 1,324 0.09
Marshall Islands............. 469 0.03 56.6 0.9 55.7 719 0.05
Mauritania................... 900 0.06 108.6 4.1 104.4 1,150 0.07
Mauritius.................... 1,242 0.08 149.8 6.7 143.1 1,492 0.10
Mexico....................... 18,804 1.24 2,268.4 139.0 2,129.4 19,054 1.22
Micronesia, Federated States
of......................... 479 0.03 57.8 1.0 56.8 729 0.05
Moldova...................... 1,368 0.09 165.0 7.6 157.4 1,618 0.10
Mongolia..................... 466 0.03 56.2 2.3 53.9 716 0.05
Morocco...................... 4,973 0.33 599.9 34.8 565.1 5,223 0.34
Mozambique................... 930 0.06 112.2 4.8 107.4 1,180 0.08
Myanmar...................... 2,484 0.16 299.7 16.1 283.6 2,734 0.18
Namibia...................... 1,523 0.10 183.7 8.8 174.9 1,773 0.11
Nepal........................ 968 0.06 116.8 4.6 112.1 1,218 0.08
Netherlands.................. 35,503 2.35 4,282.9 264.8 4,018.1 35,753 2.30
New Zealand.................. 7,236 0.48 872.9 51.9 821.0 7,486 0.48
Nicaragua.................... 608 0.04 73.3 2.1 71.3 858 0.06
Niger........................ 852 0.06 102.8 3.8 99.0 1,102 0.07
Nigeria...................... 12,655 0.84 1,526.6 92.7 1,433.9 12,905 0.83
Norway....................... 9,982 0.66 1,204.2 72.6 1,131.6 10,232 0.66
Oman......................... 1,561 0.10 188.3 9.1 179.2 1,811 0.12
Pakistan..................... 9,339 0.62 1,126.6 67.8 1,058.9 9,589 0.62
Panama....................... 385 0.03 46.4 3.2 43.2 635 0.04
Papua New Guinea............. 726 0.05 87.6 5.0 82.5 976 0.06
Paraguay..................... 1,229 0.08 148.3 6.6 141.6 1,479 0.10
Peru......................... 5,331 0.35 643.1 37.5 605.6 5,581 0.36
Philippines.................. 6,844 0.45 825.6 48.9 776.7 7,094 0.46
Poland....................... 10,908 0.72 1,315.9 79.6 1,236.3 11,158 0.72
Portugal..................... 5,460 0.36 658.7 38.5 620.2 5,710 0.37
Qatar........................ 1,096 0.07 132.2 9.0 123.3 1,346 0.09
Romania...................... 4,011 0.27 483.9 30.5 453.4 4,261 0.27
Russian Federation........... 44,795 2.96 5,403.8 333.9 5,070.0 45,045 2.89
Rwanda....................... 1,046 0.07 126.2 5.2 120.9 1,296 0.08
St. Kitts and Nevis.......... 275 0.02 33.2 0.3 32.9 525 0.03
St. Lucia.................... 552 0.04 66.6 1.5 65.1 802 0.05
St. Vincent and the
Grenadines................. 278 0.02 33.5 0.3 33.2 528 0.03
Sao Tome and Principe........ 495 0.03 59.7 1.1 58.6 745 0.05
Saudi Arabia................. 44,795 2.96 5,403.8 335.0 5,068.9 45,045 2.89
Senegal...................... 2,072 0.14 250.0 13.0 237.0 2,322 0.15
Seychelles................... 263 0.02 31.7 0.2 31.6 513 0.03
Sierra Leone................. 718 0.05 86.6 3.0 83.6 968 0.06
Singapore.................... 320 0.02 38.6 3.9 34.7 570 0.04
Slovak Republic.............. 3,216 0.21 388.0 23.0 365.0 3,466 0.22
Slovenia..................... 1,261 0.08 152.1 9.5 142.6 1,511 0.10
Solomon Islands.............. 513 0.03 61.9 1.2 60.7 763 0.05
Somalia...................... 552 0.04 66.6 3.3 63.3 802 0.05
South Africa................. 13,462 0.89 1,624.0 98.8 1,525.2 13,712 0.88
Spain........................ 23,686 1.57 2,857.4 175.6 2,681.7 23,936 1.54
Sri Lanka.................... 3,817 0.25 460.5 26.1 434.3 4,067 0.26
</TABLE>
<PAGE>
IBRD Financial Statements 15
- -------------------------------------------------------------------------------
STATEMENT OF SUBSCRIPTIONS TO
CAPITAL STOCK AND VOTING POWER (CONTINUED)
DECEMBER 31, 1996 (UNAUDITED)
EXPRESSED IN MILLIONS OF U.S. DOLLARS
<TABLE>
<CAPTION>
SUBSCRIPTIONS VOTING POWER
------------------------------------------------------------------ ----------------------------
PERCENTAGE NUMBER PERCENTAGE
OF TOTAL AMOUNTS AMOUNTS SUBJECT OF OF
MEMBER SHARES TOTAL AMOUNTS PAID IN(1) TO CALL(1) VOTES TOTAL
- ----------------------------- ---------- --------- ------------ ---------- ------------------ --------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Sudan........................ 850 0.06 $ 102.5 $ 7.2 $ 95.3 1,100 0.07
Suriname..................... 412 0.03 49.7 2.0 47.7 662 0.04
Swaziland.................... 440 0.03 53.1 2.0 51.1 690 0.04
Sweden....................... 14,974 0.99 1,806.4 110.2 1,696.2 15,224 0.98
Switzerland.................. 26,606 1.76 3,209.6 197.2 3,012.4 26,856 1.73
Syrian Arab Republic......... 2,202 0.15 265.6 14.0 251.7 2,452 0.16
Tajikistan................... 1,060 0.07 127.9 5.3 122.5 1,310 0.08
Tanzania..................... 1,295 0.09 156.2 10.0 146.2 1,545 0.10
Thailand..................... 6,349 0.42 765.9 45.2 720.7 6,599 0.42
Togo......................... 1,105 0.07 133.3 5.7 127.6 1,355 0.09
Tonga........................ 494 0.03 59.6 1.1 58.5 744 0.05
Trinidad and Tobago.......... 2,664 0.18 321.4 17.6 303.7 2,914 0.19
Tunisia...................... 719 0.05 86.7 5.7 81.1 969 0.06
Turkey....................... 7,379 0.49 890.2 52.9 837.2 7,629 0.49
Turkmenistan................. 526 0.03 63.5 2.9 60.5 776 0.05
Uganda....................... 617 0.04 74.4 4.4 70.1 867 0.06
Ukraine...................... 10,908 0.72 1,315.9 79.3 1,236.6 11,158 0.72
United Arab Emirates......... 2,385 0.16 287.7 22.6 265.1 2,635 0.17
United Kingdom............... 69,397 4.59 8,371.7 539.5 7,832.2 69,647 4.48
United States................ 264,969 17.54 31,964.5 1,998.4 29,966.2 265,219 17.04
Uruguay...................... 2,812 0.19 339.2 18.6 320.7 3,062 0.20
Uzbekistan................... 2,493 0.16 300.7 16.1 284.7 2,743 0.18
Vanuatu...................... 586 0.04 70.7 1.8 68.9 836 0.05
Venezuela.................... 20,361 1.35 2,456.2 150.8 2,305.5 20,611 1.32
Vietnam...................... 968 0.06 116.8 8.1 108.7 1,218 0.08
Western Samoa................ 531 0.04 64.1 1.4 62.7 781 0.05
Yemen, Republic of........... 2,212 0.15 266.8 14.0 252.8 2,462 0.16
Zaire........................ 2,643 0.17 318.8 25.4 293.5 2,893 0.19
Zambia....................... 2,810 0.19 339.0 20.0 319.0 3,060 0.20
Zimbabwe..................... 3,325 0.22 401.1 22.4 378.7 3,575 0.23
---------- --------- ------------ --------- -------- --------------- -----------
Total--December 31,
1996(2).................... 1,511,076 100.00 $ 182,289 $ 11,044 $ 171,245 1,556,076 100.00
---------- --------- ------------ --------- -------- --------------- -----------
---------- --------- ------------ --------- -------- --------------- -----------
Total--June 30, 1996......... 1,497,325 100.00 $ 180,630 $ 10,994 $ 169,636 1,542,325
---------- --------- ------------ --------- -------- --------------- -----------
---------- --------- ------------ --------- -------- --------------- -----------
</TABLE>
NOTES
(1) See Notes to Financial Statements--Note A.
(2) May differ from the sum of individual figures shown due to rounding.
The Notes to Financial Statements are an integral part of these Statements.
<PAGE>
16 IBRD Financial Statements
- -------------------------------------------------------------------------------
_______________________________________________________________________________
NOTES TO FINANCIAL STATEMENTS
_______________________________________________________________________________
PURPOSE AND AFFILIATED ORGANIZATIONS
The International Bank for Reconstruction and Development (IBRD) is an
international organization which commenced business in 1946. The principal
purpose of IBRD is to promote economic development in its member countries,
primarily by providing loans and related technical assistance for specific
projects and for programs of economic reform in developing member countries. The
activities of IBRD are complemented by those of three affiliated organizations,
the International Development Association (IDA), the International Finance
Corporation (IFC), and the Multilateral Investment Guarantee Agency (MIGA). Each
of these organizations is legally and financially independent from IBRD, with
separate assets and liabilities, and IBRD is not liable for their respective
obligations. IDA's purpose is to promote economic development in the less
developed areas of the world included in IDA's membership by providing financing
on concessionary terms. IFC's purpose is to encourage the growth of productive
private enterprises in its member countries through loans and equity investments
in such enterprises without a member's guarantee. MIGA was established to
encourage the flow of investments for productive purposes among member countries
and, in particular, to developing member countries by providing guarantees
against noncommercial risks for foreign investment in its developing member
countries.
SUMMARY OF SIGNIFICANT ACCOUNTING AND RELATED POLICIES
IBRD's financial statements are prepared in conformity with the accounting
principles generally accepted in the United States and with International
Accounting Standards.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during the reporting
period. Actual results could differ from these estimates. Significant judgments
have been used in the computation of estimated and fair values of loans and
borrowings, the adequacy of the Accumulated Provision for Loan Losses, and the
present value of obligations under the Staff Retirement and Retired Staff
Benefits Plans.
During the first quarter of fiscal year 1997, IBRD adopted prospectively the
Statement of Financial Accounting Standards No. 121, entitled Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed of ,
which prescribes that long-lived assets and certain intangibles be reviewed for
impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. This accounting standard
does not apply to financial instruments. The adoption of this standard had no
impact on IBRD's financial statements.
Certain reclassifications of the prior year's information have been made to
conform to the current period's presentation.
Translation of Currencies: IBRD's financial statements are expressed in
terms of U.S. dollars solely for the purpose of summarizing IBRD's financial
position and the results of its operations for the convenience of its members
and other interested parties.
IBRD is an international organization which conducts its business in the
currencies of all of its members. IBRD's resources are derived from its capital,
borrowings, and accumulated earnings in those various currencies. IBRD has a
number of general policies aimed at minimizing exchange-rate risk in a
multicurrency environment. IBRD matches its borrowing obligations in any one
currency (after swaps) with assets in the same currency, as prescribed by its
Articles of Agreement, primarily by holding or lending the proceeds of its
borrowings (after swaps) in the same currencies in which they are borrowed. In
addition, IBRD periodically undertakes currency conversions to more closely
match the currencies underlying its Retained Earnings with those of the
outstanding loans.
<PAGE>
IBRD Financial Statements 17
- -------------------------------------------------------------------------------
________________________________________________________________________________
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
________________________________________________________________________________
Assets and liabilities are translated at market exchange rates at the end of
the period. Income and expenses are translated at the market exchange rates on
the dates on which they are recognized or at average market exchange rates in
effect during each month. Translation adjustments are charged or credited to
Equity.
Valuation of Capital Stock: In the Articles of Agreement, the capital stock
of IBRD is expressed in terms of U.S. dollars of the weight and fineness in
effect on July 1, 1944 (1944 dollars). Following the abolition of gold as a
common denominator of the monetary system and the repeal of the provision of the
U.S. law defining the par value of the U.S. dollar in terms of gold, the
pre-existing basis for translating 1944 dollars into current dollars or into any
other currency disappeared. The Executive Directors of IBRD have decided, until
such time as the relevant provisions of the Articles of Agreement are amended,
that the words U.S. dollars of the weight and fineness in effect on July 1, 1944
in Article II, Section 2(a) of the Articles of Agreement of IBRD are interpreted
to mean the Special Drawing Right (SDR) introduced by the International Monetary
Fund, as the SDR was valued in terms of U.S. dollars immediately before the
introduction of the basket method of valuing the SDR on July 1, 1974, such value
being $1.20635 for one SDR.
Retained Earnings: Retained Earnings consists of allocated amounts (Special
Reserve, General Reserve, and Surplus) and unallocated Net Income.
The Special Reserve consists of loan commissions set aside pursuant to
Article IV, Section 6 of the Articles of Agreement, which are to be held in
liquid assets. These assets may be used only for the purpose of meeting
liabilities of IBRD on its borrowings and guarantees in the event of defaults on
loans made, participated in, or guaranteed by IBRD. The Special Reserve assets
are included under Investments held in the Trading portfolio, comprising
obligations of the United States Government, its agencies, and other official
entities. The allocation of such commissions to the Special Reserve was
discontinued in 1964 with respect to subsequent loans and no further additions
are being made to it.
The General Reserve consists of earnings from prior fiscal years which, in
the judgment of the Executive Directors, should be retained in IBRD's business.
Surplus consists of earnings from prior fiscal years which are retained by
IBRD until a further decision is made on their disposition or the conditions of
transfer for specified uses have been met.
Unallocated Net Income consists of earnings in the current fiscal year.
Commencing in 1950, a portion or all of the unallocated Net Income has been
allocated to the General Reserve. The Board of Governors, consisting of one
Governor appointed by each member, periodically approves transfers out of
unallocated Net Income and Surplus, components of Retained Earnings, after an
assessment by the Executive Directors of IBRD's reserve needs, to various
entities for development purposes consistent with IBRD's Articles of Agreement.
Loans: All of IBRD's loans are made to or guaranteed by members, except
loans to IFC. The majority of IBRD's loans have repayment obligations in various
currencies determined on the basis of a currency pooling system, which is
designed to equalize exchange-rate risks among borrowers. IBRD also offers
single currency loans. Except for certain loans which were converted to the
currency pooling system, loans negotiated prior to July 1980 and all single
currency loans are repayable in the currencies disbursed.
Incremental direct costs associated with originating loans are expensed as
incurred as such amounts are considered immaterial.
IBRD's policy is to not reschedule interest or principal payments on its
loans or participate in debt rescheduling agreements with respect to its
loans. In exceptional cases, however, such as when implementation of a
financed project has been delayed, the loan amortization schedule may be
modified to avoid substantial repayments prior to project completion. In
addition, in the special case of Bosnia and Herzegovina, IBRD has
refinanced/rescheduled, through three new IBRD consolidation loans, certain
loans made to the former Socialist Federal Republic of Yugoslavia (SFRY) for
which Bosnia and Herzegovina has accepted liability. IBRD's special treatment
in this case was based on the following criteria: the country (i) has emerged
from
<PAGE>
18 IBRD Financial Statements
- -------------------------------------------------------------------------------
________________________________________________________________________________
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
________________________________________________________________________________
a current or former member of IBRD, (ii) is assuming responsibility for a
share of the debt of that member, (iii) has limited creditworthiness for
servicing the debt that it assumes, because of a major armed conflict in its
territory involving extensive destruction of physical assets, and (iv) can
improve significantly its repayment capacity through
refinancing/rescheduling, if appropriate supporting measures are taken. At
the balance sheet dates no other country met these criteria.
It is the policy of IBRD to place in nonaccrual status all loans made to or
guaranteed by a member of IBRD if principal, interest, or other charges with
respect to any such loan are overdue by more than six months, unless IBRD
management determines that the overdue amount will be collected in the immediate
future. In addition, if development credits made by IDA to a member government
are placed in nonaccrual status, all loans to that member government will also
be placed in nonaccrual status by IBRD. On the date a member's loans are placed
in nonaccrual status, unpaid interest and other charges accrued on loans
outstanding to the member are deducted from the income of the current period.
Interest and other charges on nonaccruing loans are included in income only to
the extent that payments have actually been received by IBRD. If collectibility
risk is considered to be particularly high at the time of arrears clearance or
if IBRD refinances/reschedules nonaccruing loans to a member so that no
debt-service payments remain overdue, its loans may not automatically emerge
from nonaccrual status, even though its eligibility for new loans may have been
restored. The previously overdue interest and other charges are not recognized
as income in the period the refinancing/rescheduling occurs. After a suitable
period of payment performance has passed from the time of arrears clearance, a
decision on the restoration of accrual status is made on a case-by-case basis.
IBRD determines the Accumulated Provision for Loan Losses based on an
assessment of collectibility risk in the total loan portfolio, including loans
in nonaccrual status. The accumulated provision is periodically adjusted based
on a review of the prevailing circumstances and would be used to meet actual
losses on loans. Adjustments to the accumulated provision are recorded as a
charge or credit to income. In the context of determining the adequacy of the
Accumulated Provision for Loan Losses, IBRD considers the present value of
expected cash flows relative to the contractual cash flows for loans in making
the required assessment.
Investments: In fiscal year 1995 IBRD began holding certain securities to
maturity to align the investment portfolio with the debt funding these
investments in specific currencies. Remaining investment securities are held in
a Trading portfolio and classified as an element of liquidity in the Statement
of Cash Flows due to their nature and IBRD's policies governing the level and
use of such investments.
IBRD carries its investment securities and related financial instruments
classified as its Trading portfolio at market value and investment securities in
the Held-to-maturity portfolio at amortized cost. From time to time, IBRD enters
into forward contracts for the sale or purchase of investment securities; these
transactions are recorded at the time of commitment.
Borrowings: To ensure funds are available for lending and liquidity purposes,
IBRD borrows in the worldwide capital markets offering its securities to
private and governmental buyers. IBRD issues short-term and medium- and
long-term debt instruments denominated in various currencies with both fixed
and adjustable interest rates. Borrowings are carried on the balance sheet at
their par value (face value) adjusted for any unamortized premiums or
discounts. Issuance costs associated with a bond offering are deferred and
amortized over the period during which the related indebtedness is
outstanding. The unamortized balance of the issuance costs is included in
Other Assets on the balance sheet, and the issuance costs amortization is
presented as a separate element under Borrowing Expenses on the income
statement. Amortization of discounts and premiums is included in interest
under Borrowing Expenses on the income statement.
In connection with its borrowing and liability management operations, IBRD
also undertakes a substantial volume of currency and interest rate swap
transactions. Currency swap payables and receivables are recorded on a
historical cost basis and are separate items on the balance sheet. The notional
principal on interest rate swaps is treated as an off-balance sheet item. Income
and expenses from swaps are included in Interest under Borrowing Expenses on the
income statement. Gains and losses on termination of swaps that are designated
and performing as hedges, where the hedged borrowings remain in place, are
deferred and amortized as adjustments to interest expense.
<PAGE>
IBRD Financial Statements 19
- -------------------------------------------------------------------------------
________________________________________________________________________________
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
________________________________________________________________________________
Fair Value Disclosures: Financial instruments for which market quotations
are available have been valued at the prevailing market value. Financial
instruments for which market quotations are not readily available have been
valued using methodologies and assumptions that necessarily require the use of
subjective judgments. Accordingly, the actual value at which such financial
instruments could be exchanged in a current transaction or whether they are
actually exchangeable is not determinable.
NOTE A--CAPITAL STOCK, RESTRICTED CURRENCIES, MAINTENANCE OF VALUE AND
MEMBERSHIP
Capital Stock: At December 31, 1996, IBRD's capital comprised 1,558,478
(1,558,478--June 30, 1996) authorized shares, of which 1,511,076
(1,497,325--June 30, 1996) shares had been subscribed. Each share has a par
value of 0.1 million 1974 SDRs, valued at the rate of $1.20635 per 1974 SDR. Of
the subscribed capital, $11,044 million ($10,994 million--June 30, 1996) has
been paid in, and the remaining $171,245 million ($169,636 million--June 30,
1996) is subject to call only when required to meet the obligations of IBRD
created by borrowing or guaranteeing loans. As to $145,831 million ($144,504
million--June 30, 1996) the restriction on calls is imposed by the Articles of
Agreement and as to $25,414 million ($25,132 million--June 30, 1996) by
resolutions of the Board of Governors.
Restricted Currencies: The portion of capital subscriptions paid in to IBRD
is divided into two parts: (1) $1,105 million ($1,100 million--June 30, 1996)
initially paid in gold or U.S. dollars and (2) $9,939 million ($9,894
million--June 30, 1996) paid in cash or noninterest-bearing demand obligations
denominated either in the currencies of the respective members or in U.S.
dollars. The amounts mentioned in (1) above, and (i) $777 million ($777
million--June 30, 1996) which were repurchased by members with U.S. dollars, and
(ii) $423 million ($419 million--June 30, 1996) which were the proceeds from
encashments of U.S. dollar-denominated notes which are included in the amounts
mentioned in (2) above, are freely usable by IBRD in any of its operations. The
portion of the amounts paid in U.S. dollar-denominated notes are encashed by
IBRD in accordance with the schedules agreed between the members and IBRD. The
remaining amounts paid in the currencies of the members, referred to as
restricted currencies, are usable by IBRD in its lending operations only with
the consent of the respective members, and for administrative expenses. The
equivalent of $5,461 million ($5,522 million--June 30, 1996) has been used for
lending purposes, with such consent.
Maintenance of Value: Article II, Section 9 of the Articles of Agreement
provides for maintenance of the value, at the time of subscription, of such
restricted currencies, requiring (1) the member to make additional payments to
IBRD in the event that the par value of its currency is reduced or the foreign
exchange value of its currency has, in the opinion of IBRD, depreciated to a
significant extent in its territories and (2) IBRD to reimburse the member in
the event that the par value of its currency is increased.
Since currencies no longer have par values, maintenance of value amounts are
determined by measuring the foreign exchange value of a member's currency
against the standard of value of IBRD capital based on the 1974 SDR. Members are
required to make payments to IBRD if their currencies depreciate significantly
relative to the standard of value. Furthermore, the Executive Directors have
adopted a policy of reimbursing members whose currencies appreciate
significantly in terms of the standard of value.
The net maintenance of value amounts relating to restricted currencies out
on loan are included in Deferred Amounts to Maintain Value of Currency Holdings
and shown as a component of Equity since maintenance of value becomes effective
only as such currencies are repaid to IBRD.
Membership: In February 1993 IBRD's Executive Directors decided that the
SFRY had ceased to be a member of IBRD and that the Republic of Bosnia and
Herzegovina (now called Bosnia and Herzegovina), the Republic of Croatia, the
former Yugoslav Republic of Macedonia, the Republic of Slovenia and the Federal
Republic of Yugoslavia (Serbia and Montenegro) (FRY) are authorized to succeed
to the SFRY's membership when certain requirements are met, including entering
into a final agreement with IBRD on IBRD's loans made to or guaranteed by the
SFRY which the particular successor Republic would
<PAGE>
20 IBRD Financial Statements
- -------------------------------------------------------------------------------
________________________________________________________________________________
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
________________________________________________________________________________
assume. Four of the five successor Republics--Bosnia and Herzegovina, the
Republic of Croatia, the Republic of Slovenia and the former Yugoslav
Republic of Macedonia--have become members of IBRD. The paid-in portion of
the SFRY's subscribed capital allocated to the FRY is included under Payments
on Account of Pending Subscriptions until the requirements of succession are
met.
NOTE B--INVESTMENTS
As part of its overall portfolio management strategy, IBRD invests in
government and agency obligations, time deposits and related financial
instruments with off-balance sheet risk including futures, forward contracts,
covered forward contracts, options, and short sales.
Government and Agency Obligations: These obligations include marketable
bonds, notes and other obligations. Obligations issued or unconditionally
guaranteed by governments of countries require a minimum credit rating of AA, if
denominated in a currency other than the home currency of the issuer, otherwise
no rating is required. Obligations issued by an agency or instrumentality of a
government of a country, a multilateral organization or any other official
entity require a credit rating of AAA.
Time Deposits: Time deposits include certificates of deposit, bankers'
acceptances, and other obligations issued or unconditionally guaranteed by banks
and other financial institutions.
Futures and Forwards: Futures and forward contracts are contracts for
delayed delivery of securities or money market instruments in which the seller
agrees to make delivery at a specified future date of a specified instrument, at
a specified price or yield. Futures contracts are traded on regulated United
States and international exchanges. IBRD generally closes out most open
positions in futures contracts prior to maturity. Therefore, cash receipts or
payments are mostly limited to the change in market value of the futures
contracts. Futures contracts generally entail daily settlement of the net cash
margin.
Options: Options are contracts that allow the holder of the option to
purchase or sell a financial instrument at a specified price within a specified
period of time from or to the seller of the option. The purchaser of an option
pays a premium at the outset to the seller of the option, who then bears the
risk of an unfavorable change in the price of the financial instrument
underlying the option. IBRD only invests in exchange-traded options. The initial
price of an option contract is equal to the premium paid by the purchaser and is
significantly less than the contract or notional amount. IBRD does not write
uncovered option contracts.
Repurchase and Resale Agreements and Securities Loans: Repurchase agreements
are contracts under which a party sells securities and simultaneously agrees to
repurchase the same securities at a specified future date at a fixed price. The
reverse of this transaction is called a resale agreement. Securities loans are
contracts under which securities are lent up to a future specified date at a
fixed price.
Short Sales: Short sales are sales of securities not held in IBRD's
portfolio at the time of the sale. IBRD must purchase the security at a later
date and bears the risk that the market value of the security will move
adversely between the time of the sale and the time the security must be
delivered.
Covered Forwards: Covered forwards are agreements in which cash in one
currency is converted into a different currency and, simultaneously, a forward
exchange agreement is executed providing for a future exchange of the two
currencies in order to recover the currency converted.
<PAGE>
IBRD Financial Statements 21
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
Trading Portfolio: A summary of IBRD's position in trading instruments at
December 31, 1996 and June 30, 1996 is as follows:
In millions of U.S. dollars equivalent
<TABLE>
<CAPTION>
DEUTSCHE MARK JAPANESE YEN U.S. DOLLARS OTHER CURRENCIES
------------------------ ----------------- ---------------- --------------------
DEC. JUN. DEC. JUN. DEC. JUN. DEC. JUN.
1996 1996 1996 1996 1996 1996 1996 1996
------- ------- ------ ------- ------ ----- ------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Trading:
Government and agency
obligations:
Carrying value........... 191 524 114 1,119 2,862 3,536 172 238
Average balance during
fiscal year to date.... 429 879 503 2,738 2,496 3,473 234 257
Net gains (losses) for
the fiscal year to date (*) 19 (*) (45) 7 (41) 10 7
Average yield (%)........ 3.09 4.60 1.84 1.35 5.62 5.03 5.12 4.82
Average maturity (years). 2.27 5.10 0.71 2.94 4.15 3.80 2.98 8.40
Time deposits:
Carrying value........... 894 1,041 2,148 1,775 9,002 5,822 1,293 942
Average balance during
fiscal year to date.... 792 411 2,360 1,562 6,660 3,793 1,059 1,035
Net gains (losses) for
the fiscal year to date -- -- -- -- -- -- -- (*)
Average yield (%)........ 3.79 3.38 0.49 0.50 6.26 5.52 3.96 3.96
Average maturity (years). 0.05 0.02 0.09 0.07 0.04 0.01 0.08 0.02
Futures and forwards:
Carrying value ......... * 1 1 3 -- -- * 1
Average balance during
fiscal year to date.... 1 1 2 3 -- -- * *
Net gains (losses) for
the fiscal year to date... * (2) 1 (3) (6) 15 * (*)
Options:
Carrying value -- -- * * * (*) * *
Average balance during
fiscal year to date -- -- * * * * * *
</TABLE>
ALL CURRENCIES
------------------------
DEC. 1996 JUN. 1996
----------- -----------
Trading:
Government and agency
obligations:
Carrying value................. 3,339 5,417
Average balance during
fiscal year to date.......... 3,662 7,347
Net gains (losses) for
the fiscal year to date...... 17 (60)
Average yield (%).............. 5.01 4.12
Average maturity (years)....... 3.59 3.87
Time deposits:
Carrying value................. 13,337 9,580
Average balance during
fiscal year to date.......... 10,871 6,801
Net gains (losses) for
the fiscal year to date...... -- (*)
Average yield (%).............. 4.94 4.21
Average maturity (years)....... 0.06 0.03
Futures and forwards:
Carrying value................. 1 4
Average balance during
fiscal year to date.......... 3 4
Net gains (losses) for
the fiscal year to date...... (4) 10
Options:
Carrying value................. * *
Average balance during
fiscal year to date.......... * *
<PAGE>
22 IBRD Financial Statements
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
<TABLE>
<CAPTION>
Trading Portfolio (continued)
In millions of U.S. dollars equivalent
DEUTSCHE MARK JAPANESE YEN U.S. DOLLARS OTHER CURRENCIES
------------------------ ---------------------- ---------------------- -------------------
DEC. JUN. DEC. JUN. DEC. JUN. DEC. JUN.
1996 1996 1996 1996 1996 1996 1996 1996
------- ------- ------ ------- ------ ----- ------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net gains (losses) for
the fiscal year to date... (*) (*) (*) (*) (*) (*) (*) (2)
Total Trading
Investments***
Carrying value........... 1,085 1,566 2,263 2,897 11,864 9,358 1,465 1,180
Average balance during
fiscal year to date.... 1,222 1,291 2,865 4,303 9,157 7,266 1,292 1,292
Net gains (losses) for
the fiscal year to date... * 17 1 (48) 1 (28) 10 7
Repurchase agreements and
Securities loans:
Carrying value.............. -- -- -- -- (1,108) (2,394) (92) (45)
Average balance during
fiscal year to date.... (61) (142) -- -- (958) (1,406) (51) (27)
Average yield (%)........ -- -- -- -- 5.73 5.20 2.92 4.06
Average maturity (years).. -- -- -- -- 0.09 0.02 0.02 0.02
Resale agreements:
Carrying value........... 116 571 -- -- 278 655 120 56
Average balance during
fiscal year to date.... 510 463 -- -- 1,085 775 62 68 1,657
Average yield (%)........ 4.00 3.49 -- -- 5.12 5.17 3.07 4.40 4.39
Average maturity
(years)................ 0.01 0.01 -- -- 0.05 0.03 0.03 ** 0.03
Short sales:
Carrying value........ -- (25) -- -- (217) (54) (34) (*) (251)
Average balance during
fiscal year to date.... (77) (44) -- (5) (184) (133) (19) (12) (280)
Net covered forwards:
<CAPTION>
ALL CURRENCIES
------------------------
DEC. 1996 JUN. 1996
----------- -----------
<S> <C> <C>
Net gains (losses) for
the fiscal year to date.. (*) (2)
Total Trading
Investments***
Carrying value........... 16,677 15,001
Average balance during
fiscal year to date.... 14,536 14,152
Net gains (losses) for
the fiscal year to date... 12 (52)
Repurchase agreements and
Securities loans:
Carrying value........... (1,200) (2,439)
Average balance during
fiscal year to date.... (1,070) (1,575)
Average yield (%)........ 5.51 5.18
Average maturity (years).. 0.08 0.02
Resale agreements:
Carrying value........... 514 1,282
Average balance during
fiscal year to date.... 1,657 1,306
Average yield (%)........ 4.39 4.39
Average maturity (years). 0.03 0.02
Short sales:
Carrying value........ (251) (79)
Average balance during
fiscal year to date.... (280) (194)
Net covered forwards:
</TABLE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
<TABLE>
<CAPTION>
OTHER
DEUTSCHE MARK JAPANESE YEN U.S. DOLLARS CURRENCIES
------------------------ ---------------------- ---------------------- -------------------
DEC. JUN. DEC. JUN. DEC. JUN. DEC. JUN.
1996 1996 1996 1996 1996 1996 1996 1996
------- ------- ------ ------- ------ ----- ------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Carrying value........... (159) 60 (705) (91) 1,088 (17) (181) 50
Average balance during
fiscal year to date.... (223) 162 (465) (88) 747 (423) (47) 348
Average yield (%)........ 3.21 3.33 0.44 0.43 5.60 5.40 4.55 3.17
Average maturity
(years)................ 0.18 0.01 0.17 0.04 0.16 0.02 0.20 0.01
<CAPTION>
ALL
CURRENCIES
------------------------
DEC. 1996 JUN. 1996
----------- -----------
<S> <C> <C>
Carrying value........... 43 2
Average balance during
fiscal year to date.... 12 (1)
Average yield (%)........ 3.68 3.69
Average maturity
(years)................ 0.16 0.02
</TABLE>
- ------------------------
* Less than $0.5 million.
** Less than 0.005 years.
*** May differ from the sum of individual figures due to rounding.
<PAGE>
IBRD Financial Statements 23
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
Held-to-maturity portfolio: the carrying and fair values of investment
securities in the Held-to-maturity portfolio at December 31, 1996
and June 30, 1996 are as follows:
<TABLE>
<CAPTION>
IN MILLIONS
- ---------------------------------------------------------------------------------------------------------------------------
DECEMBER 31
------------------------------------------------------------------------
AVERAGE GROSS GROSS
YIELD UNREALIZED UNREALIZED FAIR
CARRYING VALUE (%) GAINS LOSSES VALUE
--------------- ----------- ------------- ----------- ---------
<S> <C> <C> <C> <C> <C>
Government and agency obligations.............. $ 1,151 8.74 $ 85 $-- $ 1,236
Time deposits............................ 105 5.96 -- -- 105
--------- ------- ----- ------- --------
Total.......................................... $ 1,256 8.51 $ 85 $-- $ 1,341
--------- ------- ----- ------- --------
--------- ------- ----- ------- --------
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
IN MILLIONS
- --------------------------------------------------------------------------------------------------------------------------
JUNE 30
--------------------------------------------------------------------
AVERAGE GROSS GROSS
CARRYING YIELD UNREALIZED UNREALIZED FAIR
VALUE (%) GAINS LOSSES VALUE
----------- ----------- ------------- --------------- ----------
<S> <C> <C> <C> <C> <C>
Government and agency obligations............ $ 1,055 8.74 $ 56 $-- $ 1,111
Time deposits................................ 114 5.81 -- -- 114
--------- -------- ------ --------- ---------
Total........................................ $ 1,169 8.46 $ 56 $-- $ 1,225
--------- -------- ------ --------- ---------
--------- -------- ------ --------- ---------
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
At December 31, 1996 and June 30, 1996, the Held-to-maturity portfolio was
comprised of investments in pounds sterling only. The annualized rate of return
on average investments in the Held-to-maturity portfolio, held during the six
months ended December 31, 1996, was 8.28 percent (8.40 percent--December 31,
1995).
The expected maturities of investment securities in the Held-to-maturity
portfolio at December 31, 1996 and June 30, 1996 are summarized below:
<PAGE>
24 IBRD Financial Statements
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
<TABLE>
<CAPTION>
IN MILLIONS
- -------------------------------------------------------------------------------------------------------------------------
DECEMBER 31
-------------------------------------
NET
CARRYING FAIR UNREALIZED
VALUE VALUE GAINS
----------- --------- -------------
<S> <C> <C> <C>
January 1, 1997 through December 31, 1997......................................... $ 105 $ 105 $--
January 1, 1998 through December 31, 2001......................................... 176 182 6
January 1, 2002 through December 31, 2006......................................... 257 277 20
Thereafter........................................................................ 718 777 59
----------- --------- ---
Total............................................................................. $ 1,256 $ 1,341 $ 85
----------- --------- ---
----------- --------- ---
</TABLE>
IN MILLIONS
<TABLE>
<CAPTION>
JUNE 30
-------------------------------------
NET
CARRYING FAIR UNREALIZED
VALUE VALUE GAINS
----------- --------- -------------
<S> <C> <C> <C>
July 1, 1996 through June 30, 1997................................................ $ 114 $ 114 $--
July 1, 1997 through June 30, 2001................................................ 162 170 8
July 1, 2001 through June 30, 2006................................................ 236 252 16
Thereafter........................................................................ 657 689 32
---------- --------- ---
Total............................................................................. $ 1,169 $1,225 $ 56
----------- --------- ---
----------- --------- ---
</TABLE>
NOTE C--LOANS, COFINANCING AND GUARANTEES
All of IBRD's loans are made to or guaranteed by countries that are members
of IBRD, except for those loans made to IFC. IBRD does not currently sell its
loans, nor is there a market of loans comparable to those made by IBRD.
In connection with the cessation of the membership of the SFRY discussed in
Note A, in February 1993 IBRD reached an agreement with the FRY for the
apportionment and service of debt due to IBRD on loans made to or guaranteed by
the SFRY and assumed by the FRY, which confirmed a February 1992 interim
agreement between the SFRY (then consisting of the Republics of Bosnia and
Herzegovina, Macedonia, Montenegro and Serbia) and IBRD pertaining, among other
things, to such loans. As of the date hereof, no debt-service payments have been
received by IBRD from the FRY.
MULTICURRENCY LOANS
Fixed rate loans: On loans negotiated prior to July 1982, IBRD charges
interest at fixed rates.
Adjustable rate loans: In 1982 IBRD mitigated its interest rate risk by
moving from fixed rate to adjustable rate lending. This rate, reset twice a
year, is based on IBRD's own cost of qualified borrowings plus a 50 basis point
spread, resulting in a pass-through of its average borrowing costs to those
members that benefit from IBRD loans.
<PAGE>
IBRD Financial Statements 25
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
SINGLE CURRENCY LOANS
Fixed rate loans: IBRD introduced fixed rate single currency loans in 1995.
The rates charged on fixed rate single currency loans are set on semi-annual
rate fixing dates for loan amounts disbursed during the preceding six-month
period and remain fixed for such disbursed amounts until they are repaid. For
the interim period from the date each disbursement is made until its rate fixing
date, interest accrues at a rate equal to the rate on LIBOR-based single
currency loans (PIBOR-based for French franc denominated loans) applicable for
such interim period. The fixed lending rate comprises a base rate reflecting
medium-to long-term market rates on the rate fixing date, plus a total spread
consisting of (a) IBRD's funding cost margin for these loans, (b) a risk premium
(intended to compensate IBRD for market risks incurred in funding these loans),
and (c) a spread of 50 basis points.
LIBOR-based loans: IBRD introduced LIBOR-based single currency loans in
1993. The rates charged on LIBOR-based single currency loans are a direct
pass-through of IBRD's cost of funding for these loans, and are reset
semi-annually. They comprise a base rate equal to the six-month reference
interbank offered rate for the applicable currency on the rate reset date and a
total spread consisting of (a) IBRD's average funding cost margin for these
loans and (b) a spread of 50 basis points.
Since September 1, 1996, IBRD has offered its borrowers, in addition to its
loan products, the option to convert undisbursed multicurrency pool loan amounts
to single currency loan terms. Further, borrowers have the option to convert
disbursed and undisbursed multicurrency pool loan amounts to new single currency
pool loans. Borrowers selecting single currency pool loans have their choice of
four different pools (U. S. dollars, Japanese yen, Deutsche mark or Swiss
francs). Each single currency pool will be a multicurrency pool at inception,
but will be adjusted to reach a level of at least 90 percent in the designated
currency by July 1, 1999 and will be maintained at or above that level
thereafter. Conversions to the new single currency pool loans will be
implemented on one of three conversion dates (July 1, 1997, January 1, 1998 or
July 1, 1998) depending upon the date the conversion request is approved by
IBRD.
WAIVERS OF LOAN INTEREST AND CHARGES
On August 1, 1996, IBRD's Executive Directors approved a one-year interest
waiver of 25 basis points on disbursed and outstanding loans for all payment
periods commencing in the fiscal year ending June 30, 1997 for all eligible
borrowers. A similar waiver of 25 basis points was in effect for the fiscal year
ended June 30, 1996. In fiscal year 1995 IBRD's Executive Directors approved a
one-time 10 basis point interest waiver, for two consecutive six-month interest
periods, on currency pool loans which a borrower converts from loan interest
rate terms in effect between 1982 and 1989 to interest rate terms in effect
since 1989. For the six months ended December 31, 1996 the combined effect of
these waivers was to reduce Net Income by $131 million ($145 million--December
31, 1995).
Further, on August 1, 1996, the Executive Directors approved a one-year
commitment fee waiver of 50 basis points on undisbursed loans to all borrowers
for all payment periods commencing in the fiscal year ending June 30, 1997. A
similar waiver of 50 basis points was in effect for the fiscal year ended June
30, 1996. For the six months ended December 31, 1996, the effect of the
commitment fee waiver was to reduce Net Income by $115 million ($119
million--December 31, 1995).
<PAGE>
26 IBRD Financial Statements
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Continued)
A summary of IBRD's outstanding loans by currency and product at December
31, 1996 and June 30, 1996 follows:
In millions of U.S. dollars equivalent
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
DECEMBER 31
-----------------------------------------------------------------------------------
MULTICURRENCY LOANS SINGLE CURRENCY LOANS TOTAL LOANS
-----------------------------------------------------------------------------------
WEIGHTED WEIGHTED AVERAGE WEIGHTED
RATE AVERAGE AVERAGE MATURITY AVERAGE
CURRENCY TYPE AMOUNT RATE (%)* AMOUNT RATE (%)* (YEARS) AMOUNT RATE (%)$*
- --------------- ---------- --------- ------------- ----------- ----------- ---------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Deutsche mark.. Fixed $ 2,619 8.70 $ -- -- -- $ 2,619 8.70
Adjustable 28,268 6.94 3 3.56 6.12 28,271 6.94
Japanese yen... Fixed 2,451 8.84 -- -- -- 2,451 8.84
Adjustable 29,702 6.94 -- -- -- 29,702 6.94
Netherlands
guilders..... Fixed 253 8.48 -- -- -- 253 8.48
Adjustable 1,557 6.94 -- -- -- 1,557 6.94
Swiss francs... Fixed 1,494 8.10 -- -- -- 1,494 8.10
Adjustable 5,128 6.94 -- -- -- 5,128 6.94
U.S. dollars... Fixed 1,925 8.79 2,001 7.01 7.04 3,926 7.88
Adjustable 27,813 6.94 2,661 5.96 9.34 30,474 6.85
Others......... Fixed 206 9.13 49 7.22 6.79 255 8.77
Adjustable 2,352 6.94 97 3.82 8.10 2,449 6.82
---------- --------- ------ ----------- ------ ----- ---------- -----
Loans
outstanding... Fixed 8,948 8.66 2,050 7.01 7.03 10,998 8.35
Adjustable 94,820 6.94 2,761 5.89 9.30 97,581 6.91
---------- --------- ------- ----------- ------ ----- ----------- ------
Total $103,768 7.09 $ 4,811 6.37 8.33 108,579 7.06
---------- --------- ------- ----------- ------ ----- ------
---------- --------- ------- ----------- ------ ----- ------
Less
accumulated
provision for
loan losses 3,290
-----------
Loans
outstanding
net of
accumulated
provision $105,289
-------------
-------------
</TABLE>
- ------------------------------------------------------------------------
* Excludes effects of any waivers of loan interest.
<PAGE>
IBRD Financial Statements 27
- --------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
In millions of U.S. dollars equivalent
- --------------------------------------------------------------------------
<TABLE>
<CAPTION>
JUNE 30
-----------------------------------------------------------------------------------
MULTICURRENCY LOANS SINGLE CURRENCY LOANS TOTAL LOANS
-----------------------------------------------------------------------------------
WEIGHTED WEIGHTED AVERAGE
RATE AVERAGE AVERAGE MATURITY
CURRENCY TYPE AMOUNT RATE (%)* AMOUNT RATE (%)* (YEARS) AMOUNT
- ------------- ---------- --------- ------------- ----------- ----------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Deutsche mark.. Fixed $ 3,111 8.68 $ -- -- -- $ 3,111
Adjustable 26,838 6.98 -- -- -- 26,838
Japanese yen... Fixed 3,093 8.88 -- -- -- 3,093
Adjustable 31,259 6.98 -- -- -- 31,259
Netherlands
guilders..... Fixed 325 8.58 -- -- -- 325
Adjustable 1,845 6.98 -- -- -- 1,845
Swiss francs... Fixed 1,989 8.18 -- -- -- 1,989
Adjustable 7,029 6.98 -- -- -- 7,029
U. S. dollars.. Fixed 2,266 8.85 1,119 6.79 7.17 3,385
Adjustable 27,640 6.98 1,096 5.66 10.11 28,736
Others......... Fixed 255 9.16 42 7.29 7.20 297
Adjustable 2,331 6.98 8 5.07 7.80 2,339
---------- --------- ------ ----------- -------- ----- ---------
Loans
outstanding.. Fixed 11,039 8.69 1,161 6.81 7.17 12,200
Adjustable 96,942 6.98 1,104 5.66 10.09 98,046
---------- --------- ------- ----------- ------- ----- ----------
Total $ 107,981 7.15 $2,265 6.25 8.59 110,246
---------- --------- ----- ----------- ------ -----
---------- --------- ----- ----------- ------ -----
Less
accumulated
provision for
loan
losses....... 3,340
----------
Loans
outstanding
net of
accumulated
provision.... $106,906
---------
---------
<CAPTION>
<S> <C>
TOTAL LOANS
-----------------------
WEIGHTED AVERAGE RATE
CURRENCY (%)*
- --------------- ---------------------
<S> <C>
Deutsche mark.. 8.68
6.98
Japanese yen... 8.88
6.98
Netherlands
guilders..... 8.58
6.98
Swiss francs... 8.18
6.98
U. S.
dollars...... 8.17
6.93
Others......... 8.89
6.97
---
Loans
outstanding.. 8.51
6.96
---
7.13
---
---
Less
accumulated
provision for
loan
losses.......
Loans
outstanding
net of
accumulated
provision....
</TABLE>
- -----------------------------------------------------------------------------
* Excludes effects of any waivers of loan interest.
IBRD maintains a targeted currency composition in its multicurrency
loans. The present target ratio is one U.S. dollar for every 125 Japanese yen
and two Deutsche mark equivalents (consisting of Deutsche mark, Netherlands
guilders and Swiss francs). These five major currencies comprise at least 90
percent of the multicurrency loans' U.S. dollar equivalent value, with the
remainder in other currencies. This ratio has been maintained since 1991, and
is reviewed periodically. The composition of the multicurrency loans is
affected by the selection of currencies for disbursements on those loans and
by the currencies selected for the billing of the principal repayments. Along
with the selection of disbursement currencies, IBRD manages the selection of
repayment currencies to maintain the alignment of the multicurrency loans'
composition with the target ratio. The selection of currencies for repayment
billing by IBRD precludes the determination of average maturity information
for multicurrency loans by individual currency. Accordingly, IBRD only
discloses the maturity periods for its multicurrency loans on a combined U.S.
dollars equivalent basis.
The maturity structure of IBRD's loans outstanding, by product, at
December 31, 1996 and June 30, 1996 is as follows:
<PAGE>
28 IBRD Financial Statements
- ---------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
IN MILLIONS
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DECEMBER 31
----------------------------------------------------------------------------
MULTICURRENCY LOANS SINGLE CURRENCY LOANS ALL LOANS
RATE --------------------- --------------------- -------------------------------
PERIOD TYPE: FIXED ADJUSTABLE FIXED ADJUSTABLE FIXED ADJUSTABLE TOTAL
- ------------------------------------------ ------ --------- ----------- --------- ----------- -------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
January 1, 1997 through December 31, 1997... $3,367 $ 9,047 $ -- $ -- $ 3,367 $ 9,047 $ 12,414
January 1, 1998 through December 31, 2001... 5,033 38,428 565 396 5,598 38,824 44,422
January 1, 2002 through December 31, 2006... 528 34,679 1,140 1,413 1,668 36,092 37,760
Thereafter.................................. 20 12,666 345 952 365 13,618 13,983
------- ------- -------- --------- -------- --------- -----------
Loans outstanding........................... $8,948 $94,820 $2,050 $2,761 $10,998 $ 97,581 $ 108,579
------- ------- -------- --------- -------- --------- -----------
------- ------- -------- --------- -------- --------- -----------
</TABLE>
IN MILLIONS
- ------------------------------------------------------------------
<TABLE>
<CAPTION>
JUNE 30
-------------------------------------------------------------------------
MULTICURRENCY LOANS SINGLE CURRENCY LOANS ALL LOANS
RATE ------------------- --------------------- ------------------------------
PERIOD TYPE: FIXED ADJUSTABLE FIXED ADJUSTABLE FIXED ADJUSTABLE TOTAL
- ------------------------------------ ------ ------ ----------- -------- ----------- -------- ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
July 1, 1996 through June 30, 1997. $ 3,837 $ 8,868 $ -- $ -- $ 3,837 $ 8,868 $ 12,705
July 1, 1997 through June 30, 2001. 6,437 38,825 302 245 6,739 39,070 45,809
July 1, 2001 through June 30, 2006. 734 35,281 646 433 1,380 35,714 37,094
Thereafter......................... 31 13,968 213 426 244 14,394 14,638
-------- --------- -------- ------ ------- ------- -----------
Loans outstanding.................. $ 11,039 $96,942 $ 1,161 $1,104 $12,200 $98,046 $110,246
-------- --------- -------- ------ ------- ------- -----------
-------- --------- -------- ------ ------- ------- -----------
</TABLE>
ESTIMATED VALUE OF LOANS
Multicurrency loans: The estimated value of fixed rate loans negotiated
prior to July 1982 has been based on discounted future cash flows using the
rate at which IBRD could undertake borrowings of comparable maturities at
December 31, 1996 plus a 50 basis point spread. The estimated value of
adjustable rate multicurrency loans is based on the relationship of the fair
value to the carrying value of the underlying qualified borrowings, since the
interest rate for such loans is based on the interest rate of the qualified
borrowings.
<PAGE>
IBRD Financial Statements 29
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
- ------------------------------------------------------------------------------
Single Currency Loans: The estimated value of fixed rate single currency
loans has been based on discounted future cash flows using the rate at which
IBRD could make similar loans of comparable maturities at December 31, 1996.
The estimated value of LIBOR-based single currency loans has been based on
the relationship of the fair value to the carrying value of the underlying
borrowings funding these loans.
IBRD has never suffered a loss on any of its loans, although certain
borrowers have found it difficult to make timely payments for protracted
periods, resulting in their loans being placed in nonaccrual status. Several
borrowers have emerged from nonaccrual status after a period of time by
bringing up-to-date all principal payments and all overdue service payments,
including interest and other charges. In an attempt to recognize the risk
inherent in these overdue payments, IBRD maintains a provision for loan
losses. The balance of the Accumulated Provision for Loan Losses at December
31, 1996 was $3,290 million ($3,340 million--June 30, 1996).
The following table reflects the carrying and estimated values of the
loan portfolio based on current borrowing rates net of the Accumulated
Provision for Loan Losses at December 31, 1996 and June 30, 1996:
<TABLE>
<CAPTION>
DECEMBER 31 JUNE 30
------------------------- -------------------------
CARRYING VALUE CARRYING VALUE
IN MILLIONS VALUE ESTIMATED VALUE ESTIMATED
- ---------------------------------------------------------- ------------- ---------- ------------- ----------
<S> <C> <C> <C> <C>
Multicurrency loans
Fixed.................................................. $ 8,948 $ 10,093 $ 11,039 $ 12,383
Adjustable............................................. 94,820 102,765 96,942 103,080
Single currency loans
Fixed.................................................. 2,050 2,082 1,161 1,067
Adjustable............................................. 2,761 2,854 1,104 1,108
------------- ---------- ------------- ----------
Total loans
Fixed.................................................. 10,998 12,175 12,200 13,450
Adjustable............................................. 97,581 105,619 98,046 104,188
------------- ---------- ------------- ----------
108,579 117,794 110,246 117,638
Less accumulated provision for loan losses................ 3,290 3,290 3,340 3,340
------------- ---------- ------------- ----------
Loans outstanding net of accumulated provision............ $ 105,289 $ 114,504 $ 106,906 $ 114,298
------------- ---------- ------------- ----------
------------- ---------- ------------- ----------
</TABLE>
- ------------------------------------------------------------------------------
COFINANCING AND GUARANTEES
IBRD has taken direct participations in, or provided partial guarantees of,
loans syndicated by other financial institutions for projects or programs also
financed by IBRD through regular loans. IBRD also has provided partial
guarantees of securities issued by an entity eligible for IBRD loans. IBRD's
partial guarantees of bond issues are included in the guarantees amount
mentioned below. IBRD's direct participations in syndicated loans are included
in the reported loan balances.
Guarantees of loan principal of $1,604 million at December 31, 1996 ($1,537
million--June 30, 1996) were not included in reported loan balances. At December
31, 1996, $150 million of these guarantees were subject to call ($122
million--June 30, 1996). IBRD has partially guaranteed the timely payment of
interest amounts on certain loans that have been sold. At December 31, 1996,
these guarantees, approximating $1 million ($1 million--June 30, 1996), were
subject to call.
<PAGE>
30 IBRD Financial Statements
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- ------------------------------------------------------------------------------
STATUTORY LENDING LIMIT
Under the Articles of Agreement, the total amount outstanding of guarantees,
participations in loans, and direct loans made by IBRD may not be increased to
an amount exceeding 100 percent of the sum of Subscribed Capital, reserves, and
surplus. At December 31, 1996 and June 30, 1996, the status of the statutory
lending limit is as follows:
IN MILLIONS
<TABLE>
<CAPTION>
DECEMBER 31 JUNE 30
------------ ----------
<S> <C> <C>
Statutory lending limit
Subscribed capital................................................ $182,289 $180,630
Retained earnings................................................. 15,584 a 16,099
Cumulative translation adjustment................................. 633 1,056
---------- --------
$198,506 $197,785
---------- --------
---------- --------
Loans and guarantees outstanding
Loans outstanding................................................. $108,579 $110,246
Principal guarantees callable..................................... 150 122
Interest guarantees callable...................................... 1 1
---------- --------
$108,730 $110,369
---------- --------
---------- --------
Loans and guarantees outstanding as a percentage of statutory
lending limit..................................................... 55% 56%
</TABLE>
- ------------------------
(a) Excludes allocations of $500 million for the Highly Indebted Poor Countries
Trust Fund and $90 million to the Trust Fund for Gaza and West Bank. See
Note F.
OVERDUE AMOUNTS
At December 31, 1996, no loans payable to IBRD other than those referred to
in the following paragraphs were overdue by more than three months.
At December 31, 1996, the loans made to or guaranteed by certain member
countries and the FRY with an aggregate principal balance outstanding of $2,437
million ($2,520 million--June 30, 1996), of which $1,279 million ($1,227
million--June 30, 1996) was overdue, were in nonaccrual status. At such date,
overdue interest and other charges in respect of these loans totaled $856
million ($808 million--June 30, 1996). If these loans had not been in nonaccrual
status, income from loans for the six months ended December 31, 1996 would have
been higher by $80 million ($97 million--December 31, 1995).
<PAGE>
IBRD Financial Statements 31
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- ------------------------------------------------------------------------------
A summary of countries with loans or guarantees in nonaccrual status
follows:
<TABLE>
<CAPTION>
DECEMBER 31
IN MILLIONS ----------------------------------------------------------------------
<S> <C> <C> <C>
PRINCIPAL AND
BORROWER PRINCIPAL OUTSTANDING CHARGES OVERDUE NONACCRUAL SINCE
- ------------------------------------------ --------------------- --------------------------- ------------------
With overdues
Federal Republic of Yugoslavia............ $ 1,178 $ 1,226 September 1992
Iraq...................................... 49 69 December 1990
Liberia................................... 146 252 June 1987
Sudan..................................... 6 3 January 1994
Syrian Arab Republic...................... 382 519 February 1987
Zaire..................................... 87 66 November 1993
Total..................................... 1,848 2,135
Without overdues
Bosnia and Herzegovina.................... 589 -- September 1992
------ ------
Total..................................... $ 2,437 $ 2,135
------ ------
------ ------
</TABLE>
In June 1996 the accumulated arrears on loans to the former SFRY assumed by
Bosnia and Herzegovina were cleared through three new consolidation loans
extended by IBRD. These new loans consolidated all outstanding principal and
overdue interest on the loans assumed by Bosnia and Herzegovina. This resulted
in an increase in loans outstanding of $168 million and the deferral of the
recognition of the related interest income. The first consolidation loan was a
currency pool loan of $29 million carrying IBRD's adjustable lending rate for
such loans at the time, 6.98 percent, plus 41 basis points. The second
consolidation loan was also a currency pool loan in the amount of $285 million
carrying IBRD's adjustable lending rate for such loans at the time, 6.98
percent, plus 4 basis points. The third consolidation loan was a U. S. dollar
LIBOR-based single currency loan of $307 million carrying IBRD's lending rate
for such loans at the time, 5.38 percent. All three consolidation loans have a
final maturity of 30 years, which includes a five-year grace period. The
consolidation loans aggregated the existing assumed loans which had final
maturities ranging from April 1, 1992 to May 15, 2001 and a combined
weighted-average interest rate of 7.95 percent.
The average recorded investment in nonaccruing loans during the six months
ended December 31, 1996 was $2,506 million ($2,512 million--December 31, 1995).
During the six months ended December 31, 1996 and December 31, 1995, no
loans came out of nonaccrual status.
<PAGE>
32 IBRD Financial Statements
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- ------------------------------------------------------------------------------
ACCUMULATED PROVISION FOR LOAN LOSSES
An analysis of the changes to the Accumulated Provision for Loan Losses for
the six months ended December 31, 1996 and the fiscal year ended June 30, 1996
appears below:
IN MILLIONS
DECEMBER 31 JUNE 30
------------- ---------
Balance, beginning of the fiscal year........ $3,340 $3,740
Provision for loan losses.................... 39 42
Translation adjustment....................... (89) (442)
------ ------
Balance, end of period....................... $3,290 $3,340
------ ------
------ -------
FIFTH DIMENSION PROGRAM
Under IDA's Fifth Dimension program established in September 1988, a portion
of principal repayments to IDA are allocated on an annual basis to provide
supplementary IDA credits to IDA-eligible countries that are no longer able to
borrow on IBRD terms, but have outstanding IBRD loans approved prior to
September 1988 and have in place an IDA-supported structural adjustment program.
Such supplementary IDA credits are allocated to countries that meet specified
conditions, in proportion to each country's interest payments due that year on
its pre-September 1988 IBRD loans. To be eligible for such IDA supplemental
credits, a member country must meet IDA's eligibility criteria for lending, must
be ineligible for IBRD lending and must not have had an IBRD loan approved
within the last twelve months. To receive a supplemental credit from the
program, a member country cannot be more than 60 days overdue on its
debt-service payments to IBRD or IDA. At December 31, 1996, IDA had approved
credits of $1,530 million ($1,379 million--June 30, 1996) under this program
from inception, of which $1,391 million ($1,327 million--June 30, 1996) had been
disbursed to the eligible countries.
NOTE D--BORROWINGS
Providing liquidity and minimizing the cost of funds are key objectives to
IBRD's overall borrowing strategy. IBRD uses swaps in its borrowing strategy to
lower the overall cost of its borrowings for those members who benefit from IBRD
loans. IBRD undertakes swap transactions with a list of authorized
counterparties. Credit and maturity limits have been established for each
counterparty.
Swaps are used to modify the interest rate and/or currency characteristics
of the borrowing portfolio and are linked to the related borrowings at inception
and remain so throughout the terms of their contracts. The interest component of
a swap is recognized as an adjustment to the borrowing cost over the life of the
contract. Upon termination, the change in a swap's market value is recorded as
an adjustment to the carrying value of the underlying borrowing and recognized
as an adjustment of the borrowing cost over the expected remaining life of the
borrowing. In instances where the underlying borrowing is prepaid, the change in
the associated swap's market value is recognized immediately as an adjustment to
the cost of the underlying borrowing instrument.
Currency swaps: Currency swaps are agreements comprised of a conversion of
the proceeds of a borrowing into a different currency and a forward exchange
agreement providing for a schedule of future exchanges of the two currencies in
order to recover the currency converted. The combination of a borrowing and a
currency swap produces the financial equivalent of substituting a borrowing in
the currency obtained in the initial conversion for the original borrowing.
<PAGE>
IBRD Financial Statements 33
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- ------------------------------------------------------------------------------
Interest rate swaps: Interest rate swaps are agreements which transform a
fixed rate payment obligation in a particular currency into a floating rate
obligation in that currency and vice-versa.
Forward interest rate swaps: A forward interest rate swap is an agreement
under which the cash flow exchanges of the underlying interest rate swaps would
begin to take effect from a specified date.
Swaptions: A swaption is an option that gives the holder the right to enter
into an interest rate or currency swap at a certain future date.
Deferred rate setting (DRS) agreements: DRS allows an entity to fix the
effective interest cost of all or a portion of debt issues over a specified
period of time after the issue date of the respective debt issues. IBRD enters
into DRS agreements in conjunction with some of its bond issues. The agreements
provide for payments to be made to or by IBRD reflecting gain or loss on one or
more government securities or related financial instruments. The potential
credit loss to IBRD from nonperformance is limited to any amounts due, but
unsettled, from the financial intermediary. However, periodic mark-to-market
settlements on these agreements limit this risk. At December 31, 1996 and June
30, 1996, the effective interest cost of all principal amounts had been fixed.
<PAGE>
34 IBRD Financial Statements
- -------------------------------------------------------------------------------
IBRD
NOTES TO FINANCIAL STATEMENTS
A summary of IBRD's borrowings portfolio at December 31, 1996 and June 30,
1996 follows:
Medium- and Long-term Borrowings and Swaps at December 31, 1996
In millions of U.S. dollars equivalent
<TABLE>
<CAPTION>
CURRENCY
----------------------
DIRECT BORROWINGS SWAP AGREEMENTS
----------------------------------- -------------------------------------
WGTD. WGTD.
AVG. AVERAGE AMOUNT AVG. AVERAGE
RATE COST MATURITY PAYABLE COST MATURITY
CURRENCY TYPE AMOUNT (%) (YEARS) (RECEIVABLE) (%) (YEARS)
- --------------------------------------- --------- ----------- --------- ----------- ------------- --------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Deutsche mark Fixed $ 13,873 6.65 5.55 $ 2,009 7.72 2.31
(178) 6.57 19.87
Adjustable 225 7.47 6.61 9,920 2.97 3.30
Japanese yen Fixed 26,306 5.20 4.64 237 5.49 2.08
(1,303) 6.23 5.60
Adjustable 1,170 1.74 2.70 502 0.06 1.70
Netherlands guilders Fixed 2,560 7.27 3.10 89 6.31 0.69
(1,420) 7.70 2.26
Swiss francs Fixed 4,415 6.09 5.78 2,070 5.18 3.31
(1,701) 6.10 3.49
Adjustable -- -- -- 833 1.12 3.20
U. S. dollars Fixed 25,080 7.59 6.64 178 8.98 3.49
(1,095) 9.11 3.43
Adjustable 1,213 4.92 4.09 6,722 5.21 6.21
(1,296) 5.09 3.34
Others Fixed 15,299 8.99 4.42
(12,750) 8.91 3.93
Adjustable 1,767 6.41 4.46
(1,955) 5.95 4.34
------- ---- ----- -------
Total Fixed 87,533 6.88 5.33 4,583
(18,447)
Adjustable 4,375 4.79 4.00 17,977
(3,251)
------- ---- ----- -------
Principal at face value 91,908 862
Net unamortized discounts (20) --
------- ---- ----- -------
Total $ 91,888 6.78 5.27 $ 862
------- ---- ----- -------
------- ---- ----- -------
<CAPTION>
INTEREST RATE
------------------------
SWAP AGREEMENTS NET CURRENCY OBLIGATIONS
--------------------------------------- -----------------------------------------
NOTIONAL WGTD. WGTD.
AMOUNT AVG. AVERAGE AMOUNT AVG. AVERAGE
PAYABLE COST MATURITY PAYABLE COST MATURITY
CURRENCY (RECEIVABLE) (%) (YEARS) (RECEIVABLE) (%) (YEARS)
- --------------------------------------- ------------- ----------- ----------- --------------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Deutsche mark $ 7,946 7.00 3.08 $ 23,828 6.86 4.46
(2,847) 5.25 4.95 (3,025) 5.33 5.82
2,911 3.16 5.00 13,056 3.09 3.74
(8,010) 3.38 3.12 (8,010) 3.38 3.12
Japanese yen 1,957 3.84 2.40 28,500 5.11 4.46
(3,154) 2.99 4.80 (4,457) 3.93 5.04
3,154 0.47 4.80 4,826 0.74 3.97
(1,957) 1.37 2.40 (1,957) 1.37 2.40
Netherlands guilders -- -- -- 2,649 7.24 3.02
(1,420) 7.70 2.26
Swiss francs 833 7.11 3.27 7,318 5.95 4.80
(1,701) 6.10 3.49
(833) 2.34 3.27
833 1.12 3.20 (833) 2.34 3.27
U. S. dollars 5,197 6.95 4.05 30,455 7.49 6.18
(10,073) 6.28 6.20 (11,168) 6.56 5.93
10,201 5.73 6.15 18,136 5.48 6.03
(5,325) 5.70 3.99 (6,621) 5.58 3.87
Others 42 6.57 6.79 15,341 8.99 4.43
(454) 7.14 6.09 (13,204) 8.85 4.01
584 4.71 5.73 2,351 5.98 4.78
(172) 8.45 5.05 (2,127) 6.16 4.40
------- ------- ---- ----
Total 15,975 108,091 6.83 4.93
(16,528) (34,975) 7.01 4.81
16,850 39,202 4.04 4.88
(16,297) (19,548) 4.18 3.44
------- ------- ---- ----
Principal at face value -- 92,770
Net unamortized discounts (20)
------- ------- ---- ----
Total $ -- $ 92,750 6.13 5.27
------- ------- ---- ----
------- ------- ---- ----
</TABLE>
<PAGE>
IBRD Financial Statements 35
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
Medium- and Long-term Borrowings and Swaps at June 30, 1996
In millions of U.S. dollars equivalent
<TABLE>
<CAPTION>
CURRENCY
DIRECT BORROWINGS SWAP AGREEMENTS
---------------------------------- ----------------------------------------
WGTD.
AVG. AVERAGE AMOUNT WGTD. AVG. AVERAGE
RATE COST MATURITY PAYABLE COST MATURITY
CURRENCY TYPE AMOUNT (%) (YEARS) (RECEIVABLE) (%) (YEARS)
- ---------------------------------- --------- ----------- ----------- ----------- ------------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Deutsche mark Fixed $ 14,287 6.71 5.58 $ 2,000 7.75 2.51
Adjustable 229 7.54 7.12 9,919 2.93 3.53
Japanese yen Fixed 29,466 5.24 4.78 335 5.51 2.21
Adjustable 1,232 2.04 3.21 71 0.03 1.59
(92) 0.25 0.48
Netherlands guilders Fixed 2,837 7.23 3.33 91 6.31 1.19
(1,447) 7.70 2.77
Swiss francs Fixed 4,996 6.04 6.28 2,523 5.19 3.39
(873) 6.47 3.46
Adjustable -- -- -- 892 0.84 3.70
U. S. dollars Fixed 23,305 7.84 6.91 178 8.98 3.99
(1,198) 9.02 3.73
Adjustable 1,453 4.90 3.87 3,344 5.06 4.49
(848) 4.94 4.66
Others Fixed 13,180 9.30 3.72
(10,904) 9.25 2.97
Adjustable 1,419 6.38 4.62
(1,610) 5.97 4.51
Total Fixed 88,071 6.90 5.36 5,127
(15,386)
Adjustable 4,333 4.70 4.10 14,226
(2,550)
Principal at face value........... 92,404 1,417
Net unamortized discounts......... (13)
Total............................. $ 92,391 6.80 5.29 $ 1,417
<CAPTION>
INTEREST RATE
SWAP AGREEMENTS NET CURRENCY OBLIGATIONS
---------------------------------------- -------------------------------------
NOTIONAL WGTD. WGTD.
AMOUNT AVG. AVERAGE AMOUNT AVG. AVERAGE
PAYABLE COST MATURITY PAYABLE COST MATURITY
CURRENCY (RECEIVABLE) (%) (YEARS) (RECEIVABLE) (%) (YEARS)
- ---------------------------------- ------------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Deutsche mark $ 8,544 7.08 3.41 $ 24,831 6.92 4.59
(2,134) 5.26 5.51 (2,134) 5.26 5.51
2,199 3.37 5.57 12,347 3.09 3.96
(8,609) 3.47 3.45 (8,609) 3.47 3.45
Japanese yen 1,329 5.49 3.15 31,130 5.26 4.68
(2,528) 2.64 5.72 (3,492) 3.59 6.36
2,528 0.67 5.72 3,831 1.09 4.83
(1,329) 2.09 3.15 (1,421) 1.97 2.97
Netherlands guilders -- -- -- 2,928 7.20 3.26
(1,447) 7.70 2.77
Swiss francs 892 7.11 3.77 8,411 5.90 5.15
(873) 6.47 3.46
892 0.84 3.70
(892) 2.08 3.77 (892) 2.08 3.77
U. S. dollars 4,002 7.10 3.72 27,485 7.74 6.43
(6,211) 6.45 7.50 (7,409) 6.87 6.89
6,449 5.55 7.27 11,246 5.32 6.00
(4,240) 5.53 3.58 (5,088) 5.43 3.76
Others 36 6.62 7.20 13,216 9.29 3.73
(287) 7.43 4.37 (11,191) 9.21 3.01
417 5.24 4.57 1,836 6.12 4.61
(166) 8.74 5.47 (1,776) 6.22 4.60
Total 14,803 108,001 6.87 4.98
(11,160) (26,546) 7.33 4.74
11,593 30,152 3.79 4.87
(15,236) (17,786) 4.12 3.59
--------- -------- ------- -------
Principal at face value........... -- 93,821
Net unamortized discounts......... (13)
Total............................. $ -- $ 93,808 6.26 5.29
--------- -------- ------- -------
--------- -------- ------- -------
</TABLE>
<PAGE>
36 IBRD Financial Statements
- -------------------------------------------------------------------------------
IBRD
NOTES TO FINANCIAL STATEMENTS (Continued)
Short-term Borrowings and Swaps at December 31, 1996 and June 30, 1996
In millions of U. S. dollars equivalent
<TABLE>
<CAPTION>
DECEMBER 31 JUNE 30
---------------------------------------------------------- -------------
INTEREST
CURRENCY RATE WGTD.
SWAP SWAP NET AVG.
RATE PRINCIPAL PAYABLE PAYABLE CURRENCY COST PRINCIPAL
CURRENCY TYPE OUTSTANDING (RECEIVABLE) (RECEIVABLE) OBLIGATIONS (%) OUTSTANDING
- ---------------------------------- --------- ------------- ------------- ------------- ------------- --------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Short-term Notes
U. S. dollars Fixed $ 1,106 $ -- $ -- $ 1,106 5.53 $ 1,400
Global Multicurrency Notes
Czech koruny Fixed 165 (165) -- -- -- 54
Deutsche mark Fixed -- -- -- -- -- --
Adjustable -- 158 -- 158 2.99 --
Italian lire Fixed 150 (150) -- -- -- 20
Japanese yen Fixed 87 (87) -- -- -- --
87 -- 87 0.16 --
Fixed
New Zealand dollars Fixed 141 (141) -- -- -- --
U. S. dollars Fixed 1,400 120 (900) 620 5.61 300
Adjustable -- 176 900 1,076 5.23 --
Central Bank Facility
U. S. dollars Adjustable 2,374 -- -- 2,374 5.18 2,586
-------------------------------------------------------------------------------
Total Fixed 3,049 207 1,813 5.29 1,774
(543) (900)
Adjustable 2,374 334 900 3,608 5.10 2,586
-------------------------------------------------------------------------------
Principal at face value 5,423 (2) -- 5,421 4,360
Net unamortized discounts (5) (5) (32)
-------------------------------------------------------------------------------
Total $5,418 $(2) $ -- $5,416 5.16 $ 4,328
--------------------------------------------------------------------------------
-------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
INTEREST
CURRENCY RATE WGTD.
SWAP SWAP NET AVG.
PAYABLE PAYABLE CURRENCY COST
CURRENCY (RECEIVABLE) (RECEIVABLE) OBLIGATIONS (%)
- ---------------------------------- ------------- --------------- ------------- ---------
<S> <C> <C> <C> <C>
Short-term Notes
U. S. dollars $ -- $ -- $ 1,400 5.46
Global Multicurrency Notes
Czech koruny (54) -- -- --
Deutsche mark 20 -- 20 3.09
54 -- 54 3.05
Italian lire (20) -- -- --
Japanese yen -- -- -- --
-- -- -- --
New Zealand -- -- -- --
U. S. dollars -- -- 300 5.52
Adjustable -- -- --
Central Bank Facility
U. S. dollars -- -- 2,586 5.47
--------------------------------------------------
Total 20 -- 1,720 5.44
(74)
54 -- 2,640 5.42
--------------------------------------------------
Principal at face value -- -- 4,360
Net unamortized discounts (32)
--------------------------------------------------
Total $ -- $ -- $ 4,328 5.43
--------------------------------------------------
--------------------------------------------------
</TABLE>
<PAGE>
IBRD Financial Statements 37
- ----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
The maturity structure of IBRD's Medium-and Long-term borrowings
outstanding at December 31, 1996 and June 30, 1996 is as follows:
<TABLE>
<CAPTION>
IN MILLIONS
- ----------------------------------------------------------------------------
PERIOD DECEMBER 31
- ---------------------------------------------------------------- ------------
<S> <C>
January 1, 1997 through December 31, 1997........................ $ 14,470
January 1, 1998 through December 31, 1998........................ 11,230
January 1, 1999 through December 31, 1999........................ 15,798
January 1, 2000 through December 31, 2000........................ 8,026
January 1, 2001 through December 31, 2001........................ 7,047
January 1, 2002 through December 31, 2006........................ 26,153
Thereafter....................................................... 9,184
------------
Total............................................................. $ 91,908
------------
------------
</TABLE>
IN MILLIONS
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERIOD JUNE 30
- ------------------------------------------------------------------- ---------
<S> <C>
July 1, 1996 through June 30, 1997................................. $ 12,467
July 1, 1997 through June 30, 1998................................. 13,949
July 1, 1998 through June 30, 1999................................. 9,526
July 1, 1999 through June 30, 2000................................. 14,262
July 1, 2000 through June 30, 2001................................. 7,529
July 1, 2001 through June 30, 2006................................. 25,886
Thereafter......................................................... 8,785
---------
Total.............................................................. $ 92,404
---------
---------
</TABLE>
The following table reflects the carrying and estimated fair values of
the borrowings portfolio at December 31, 1996 and June 30, 1996:
IN MILLIONS
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DECEMBER 31 JUNE 30
--------------------- ---------------------
CARRYING ESTIMATED CARRYING ESTIMATED
VALUE FAIR VALUE VALUE FAIR VALUE
--------- ----------- --------- ----------
<S> <C> <C> <C> <C>
Short-term........................ $ 5,418 $ 5,447 $ 4,328 $ 4,371
Medium- and long-term............. 91,888 99,989 92,391 99,250
Swaps
Currency
Payable........................... 23,101 23,593 19,427 19,841
Receivable........................ (22,241) (23,927) (18,010) (19,203)
Interest rate..................... -- 862 -- 1,064
Swaptions......................... -- 1 -- 1
--------- ---------- --------- ----------
Total............................. $ 98,166 $ 105,965 $ 98,136 $ 105,324
--------- ---------- --------- ----------
--------- ---------- --------- ----------
</TABLE>
<PAGE>
38 IBRD Financial Statements
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
The estimated fair values are based on quoted market prices where such
prices are available. Where no quoted market price is available, the fair
value is estimated based on the cost at which IBRD could currently undertake
borrowings with similar terms and remaining maturities, using the secondary
market yield curve. The fair value of swaps represents the estimated cost of
replacing these contracts on that date.
The average cost of borrowings outstanding during the six months ended
December 31, 1996 was 6.24 percent (6.45 percent--December 31, 1995),
reflecting a reduction in interest expense of $229 million ($70
million--December 31, 1995) as a result of swaps.
NOTE E--CREDIT RISK
Country Credit Risk: This risk includes potential losses arising from
protracted arrears on payments from borrowers. IBRD manages country credit
risk through individual country exposure limits according to
creditworthiness. These exposure limits are tied to performance on
macroeconomic and structural policies. In addition, IBRD establishes absolute
limits on the share of outstanding loans to any individual borrower. The
country credit risk is further managed by financial incentives such as
pricing loans using IBRD's own cost of borrowing and partial interest charge
waivers conditioned on timely payment that give borrowers self-interest in
IBRD's continued strong intermediation capacity. Collectibility risk is
covered by the Accumulated Provision for Loan Losses. IBRD also uses a
simulation model to assess the adequacy of its reserves in the case a major
borrower, or group of borrowers, stops servicing its loans for an extended
period of time.
Commercial Credit Risk: For the purpose of risk management, IBRD is party
to a variety of financial instruments, certain of which involve elements of
credit risk in excess of the amount recorded on the balance sheet. Credit
risk exposure represents the maximum potential accounting loss due to
possible nonperformance by obligors and counterparties under the terms of the
contracts. Additionally, the nature of the instruments involve contract value
and notional principal amounts that are not reflected in the basic financial
statements. For both on-and off-balance sheet securities, IBRD limits trading
to a list of authorized dealers and counterparties. Credit limits have been
established for each counterparty by type of instrument and maturity category.
The contract value/notional amounts and credit risk exposure, as
applicable, of these financial instruments at December 31, 1996 and June 30,
1996 are given below:
<PAGE>
IBRD Financial Statements 39
- --------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
IN MILLIONS
- ----------------------------------------------------------------------------
<TABLE>
<CAPTION>
DECEMBER 31 JUNE 30
------------ ---------
<S> <C> <C>
INVESTMENTS--TRADING PORTFOLIO
Futures and forwards
- - Long position.................................. $ 12,176 $ 1,499
- - Short position................................. 931 5,875
- - Credit exposure due to potential nonperformance
by counterparties.............................. 5 2
Options
- - Long position.................................. 650 679
- - Short position................................. 510 429
Covered forwards
- - Credit exposure due to potential nonperformance
by counterparties.............................. 57 2
BORROWINGS
Currency swaps
- - Credit exposure due to potential nonperformance
by counterparties.............................. 1,205 728
Interest rate swaps
- - Notional principal............................. 33,725 26,396
- - Credit exposure due to potential nonperformance
by counterparties............................. 418 96
Swaptions
- - Notional principal............................. 73 30
- - Credit exposure due to potential nonperformance
by counterparties.............................. -- --
- -------------------------------------------------------------------------------
</TABLE>
NOTE F--RETAINED EARNINGS, ALLOCATIONS AND TRANSFERS
Retained Earnings: Retained Earnings is comprised of the following elements
at December 31, 1996 and June 30, 1996:
IN MILLIONS
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DECEMBER 31 JUNE 30
------------ ---------
<S> <C> <C>
Special reserve........................................ $ 293 $ 293
General reserve........................................ 14,159 13,909
Surplus................................................ 1,047 710
Unallocated net income................................. 675 1,187
Total.................................................. $ 16,174 $ 16,099
</TABLE>
On August 1, 1996, the Executive Directors allocated $250 million of the
net income earned in the fiscal year ended June 30, 1996 to the General
Reserve. On October 3, 1996, the Board of Governors approved the following
transfers, out of unallocated Net Income: an amount equivalent to $300
million in SDRs (valued at June 30, 1996) to IDA, by way of grant, and $637
million to Surplus. On the same day, the Board of Governors approved the
following transfers, by way of grant, out of Surplus: an amount equivalent to
$300 million in SDRs (valued at June 30, 1996) to IDA and amounts up to $500
million to the Highly Indebted Poor Countries (HIPC) Trust Fund or other
arrangements in support of the HIPC Debt
<PAGE>
40 IBRD Financial Statements
- ------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Continued)
- -------------------------------------------------------------------------
Initiative when other creditors of the eligible beneficiary countries are
determined by IBRD to have agreed to meet their share of the costs envisaged
within the framework of the initiative. On December 19, 1996, the Executive
Directors recommended that the Board of Governors approve a transfer from
Surplus, by way of grant, in the amount of $90 million to the Trust Fund for
Gaza and West Bank.
Transfers to International Development Association: The Board of
Governors has approved aggregate transfers to IDA totaling $4,823 million
from unallocated Net Income through June 30, 1995. On October 3, 1996, the
Board of Governors approved a transfer to IDA, by way of grant, of $300
million in an equivalent amount in SDRs out of unallocated Net Income. On the
same day, the Board of Governors approved a transfer, by way of grant, out of
Surplus of $300 million in an equivalent amount in SDRs. At December 31, 1996
and June 30, 1996, all transfers had been paid.
Transfers to Debt Reduction Facility for IDA-Only Countries: The Board of
Governors has approved aggregate transfers to the Debt Reduction Facility for
IDA-Only Countries (DRF) totaling $300 million through June 30, 1995. At
December 31, 1996, $118 million ($119 million--June 30, 1996) remained
payable.
Transfer to Trust Fund for Gaza and West Bank: The Board of Governors has
approved aggregate transfers to the Trust Fund for Gaza and West Bank (TFG),
totaling $140 million through June 30, 1995. At December 31, 1996, $5 million
($70 million--June 30, 1996) remained payable.
Transfer to Trust Fund for Bosnia and Herzegovina: In February 1996 the
Board of Governors approved a transfer from Surplus, by way of grant, of $150
million to a trust fund administered by IDA to finance an emergency
reconstruction program in Bosnia and Herzegovina. At December 31, 1996, all
transfers had been paid. At June 30, 1996, $16 million remained payable.
Transfers to the Highly Indebted Poor Countries Trust Fund: The HIPC
Trust Fund was established on November 7, 1996, and is administered by IDA in
support of the HIPC Debt Initiative. On October 3, 1996, the Board of
Governors approved a transfer from Surplus, by way of grant, of amounts up to
$500 million to the HIPC Trust Fund contingent upon IBRD's determination that
the other creditors of the eligible beneficiary countries have agreed to meet
their share of the costs envisaged under the HIPC Debt Initiative. At
December 31, 1996, no funds had been transferred to the HIPC Trust Fund.
NOTE G--ADMINISTRATIVE EXPENSES AND CONTRIBUTIONS TO SPECIAL PROGRAMS
In fiscal year 1995 the Executive Directors authorized expenditures for
costs associated with planned staff reductions. The total cost of this
program was $112 million, of which $45 million was charged to IDA. At
December 31, 1996, $46 million ($26 million--June 30, 1996) has been charged
against the accrual of $112 million. This accrual included costs associated
with job search assistance, training, outplacement consulting, pension plan
contributions, medical insurance contributions and related tax allowances.
Administrative Expenses for the six months ended December 31, 1996 are
net of the management fee of $244 million ($256 million--December 31, 1995)
charged to IDA and $52 million ($50 million-- December 31, 1995) charged to
reimbursable programs. Included in the amounts charged to reimbursable
programs are allocated charges of $12 million ($11 million--December 31,
1995) charged to IFC and $0.4 million ($0.4 million--December 31, 1995)
charged to MIGA.
Contributions to special programs represent grants for agricultural
research, the control of onchocerciasis, and other developmental activities.
<PAGE>
IBRD Financial Statements 41
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Continued)
- ------------------------------------------------------------------------------
NOTE H--TRUST FUNDS
IBRD, alone or jointly with IDA, administers on behalf of donors, including
members, their agencies and other entities, funds restricted for specific uses
which include the cofinancing of IBRD lending projects, debt reduction
operations, technical assistance for borrowers including feasibility studies and
project preparation, global and regional programs and research and training
programs. These funds are placed in trust and are not included in the assets of
IBRD. The distribution of trust fund assets by executing agent at December 31,
1996 and June 30, 1996 is as follows:
<TABLE>
<CAPTION>
DECEMBER 31 JUNE 30
--------------------------------------- ----------------------------
TOTAL TOTAL
FIDUCIARY NUMBER OF FIDUCIARY NUMBER OF
ASSETS TRUST FUND ASSETS TRUST FUND
(IN MILLIONS) ACCOUNTS (IN MILLIONS) ACCOUNTS
------------------- --------------------- --------------- -----------
<S> <C> <C> <C> <C>
IBRD executed............................. $ 507 1,322 $ 548 1,314
Recipient executed........................ 1,441 1,078 1,308 935
------ ----- ------ -----
Total..................................... $ 1,948 2,400 $ 1,856 2,249
------ ----- ------ -----
------ ----- ------ -----
</TABLE>
The responsibilities of IBRD under these arrangements vary and range from
services normally provided under its own lending projects to full project
implementation including procurement of goods and services. During the six
months ended December 31, 1996, IBRD received $8 million ($7 million--
December 31, 1995) as fees for administering trust funds. These fees have
been recorded as a reduction of administrative expenses.
NOTE I--STAFF RETIREMENT PLAN
IBRD has a defined benefit retirement plan (the Plan) covering substantially
all of its staff. The Plan also covers substantially all the staff of IFC and
MIGA. Under the Plan, benefits are based on the years of contributory service
and the highest three-year average of pensionable remuneration as defined in the
Plan, with the staff contributing a fixed percentage of pensionable
remuneration, and IBRD contributing the remainder of the actuarially-determined
cost of future Plan benefits. The actuarial present values of Plan obligations
throughout the fiscal year are determined at the beginning of the fiscal year by
the Plan's actuary. All contributions to the Plan and all other assets and
income held for the purposes of the Plan are held by IBRD separately from the
other assets and income of IBRD, IDA, IFC and MIGA and can be used only for the
benefit of the participants in the Plan and their beneficiaries, until all
liabilities to them have been paid or provided for. Plan assets consist
primarily of equity and fixed income securities, with smaller holdings of cash,
real estate and other investments.
IBRD has not charged any pension expense to its income for the six months
ended December 31, 1996 because it believes it is less than probable that any
expense will be incurred. IBRD management will review the pension expense
accrual methodology upon completion of a reevaluation of the funding assumptions
of IBRD's pension plan. While IBRD does not anticipate recording any pension
expense during the fiscal year, this does not preclude IBRD from making a
contribution to the pension plan. If any income impact results from the
reevaluation, it will be recognized in the period it is determined. Therefore,
disclosures have not been provided for the six months ended December 31, 1996.
Net periodic pension cost for IBRD participants for the six month ended
December 31, 1995 consisted of the following components:
<PAGE>
42 IBRD Financial Statements
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Continued)
- ------------------------------------------------------------------------------
IN MILLIONS
DECEMBER 31
---------------
Service cost--benefits earned during the period.... $ 108
Interest cost on projected benefit obligation...... 178
Actual return on plan assets....................... (490)
Net amortization and deferral...................... 252
-----
Net periodic pension cost.......................... $ 48
-----
-----
The portion of this cost that relates to IBRD and is included in
Administrative Expenses for the six months ended December 31, 1995 is $31
million. The balance has been included in the management fee charged to IDA.
The following table sets forth the Plan's funded status at June 30, 1996:
IN MILLIONS
JUNE 30
-----------
Actuarial present value of benefit obligations
Accumulated benefit obligation
Vested................................................ $(3,543)
Nonvested............................................. (36)
------
Subtotal............................................ (3,579)
Effect of projected compensation levels................ (1,718)
------
Projected benefit obligation............................. (5,297)
Plan assets at fair value................................ 7,033
-----
Plan assets in excess of projected benefit obligation.... 1,736
Remaining unrecognized net transition asset.............. (91)
Unrecognized prior service cost.......................... 74
Unrecognized net gain from past experience different
from that assumed and from
changes in assumptions................................. (1,719)
------
Prepaid pension cost ................................... $ --
------
------
At June 30, 1996, the weighted-average discount rate used in determining the
actuarial present value of the projected benefit obligation was 7.5 percent. The
effect of projected compensation levels was calculated based on a scale that
provides for a decreasing rate of salary increase depending on age, beginning
with 13.3 percent at age 20 and decreasing to 6.8 percent at age 64. The
expected long-term rate of return on assets at June 30, 1996 was 9 percent.
<PAGE>
IBRD Financial Statements 43
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Continued)
- ------------------------------------------------------------------------------
NOTE J--RETIRED STAFF BENEFITS PLAN
IBRD has a Retired Staff Benefits Plan (RSBP) that provides certain health
care and life insurance benefits to retirees. All staff who are enrolled in the
insurance programs while in active service and who meet certain requirements are
eligible for benefits when they reach early or normal retirement age while
working for IBRD. The RSBP also covers the staff of IFC and MIGA.
Retirees contribute a level amount toward life insurance based on the amount
of coverage. Retiree contributions toward health care are based on length of
service and age at retirement. IBRD annually contributes the remainder of the
actuarially determined cost for future benefits. The actuarial present
values of RSBP obligations throughout the fiscal year are determined at the
beginning of the fiscal year by the RSBP's actuary. All contributions to the
RSBP and all other assets and income held for purposes of the RSBP are held by
IBRD separately from the other assets and income of IBRD, IDA, IFC, and MIGA and
can be used only for the benefit of the participants in the RSBP and their
beneficiaries until all liabilities to them have been paid or provided for. RSBP
assets consist primarily of fixed income and equity securities.
Net periodic postretirement benefits cost for IBRD participants for the six
months ended December 31, 1996 and December 31, 1995 consisted of the following
components:
IN MILLIONS
<TABLE>
<CAPTION>
1996 1995
----- -----
<S> <C> <C>
Service cost--benefits earned during the period................................. $ 19 $ 16
Interest cost on accumulated postretirement benefit obligation.................. 24 23
Actual return on plan assets.................................................... (70) (71)
Net amortization and deferral................................................... 39 50
---- ----
$ 12 $ 18
---- ----
---- ----
</TABLE>
The portion of this cost that relates to IBRD and is included in
Administrative Expenses for the six months ended December 31, 1996 is $8 million
($11 million--December 31, 1995). The balance has been included in the
management fee charged to IDA.
<PAGE>
44 IBRD Financial Statements
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Continued)
- ------------------------------------------------------------------------------
The following table sets forth the RSBP's funded status at December 31, 1996
and June 30, 1996:
IN MILLIONS
<TABLE>
<CAPTION>
DECEMBER 31 JUNE 30
------------- -----------
<S> <C> <C>
Accumulated postretirement benefit obligation
Retirees $ (307) $(293)
Fully eligible active plan participants............................... (134) (128)
Other active plan participants........................................ (298) (285)
------ -----
(739) (706)
Plan assets at fair value............................................. 1,039 937
------ -----
Plan assets in excess of accumulated postretirement benefit
obligation.......................................................... 300 231
Unrecognized prior service costs...................................... (10) (12)
Unrecognized net loss from past experience different from that assumed
and from changes in assumptions..................................... 53 107
------ -----
Prepaid postretirement benefit cost................................... $ 343 $ 326
------ -----
------ -----
</TABLE>
Of the $343 million prepaid at December 31, 1996 ($326 million--June 30,
1996), $309 million is attributable to IBRD ($295 million--June 30, 1996) and
is included in Miscellaneous Assets on the balance sheet. The remainder has
been attributed to IFC and MIGA.
For December 31, 1996, the accumulated plan benefit obligation (APBO) was
determined using health care cost trend rates of 13.9 percent to 10.7
percent, decreasing gradually to 5.0 percent in 2010 andthereafter. The
health care cost trend rates used for June 30, 1996 was 14.4 percent to 11.2
percent decreasing gradually to 5.5 percent in 2010 and thereafter.
The health care cost trend rates assumption has a significant effect on the
amounts reported. To illustrate, increasing the assumed health care cost
trend rates by one percentage point would increase the APBO at December 31,
1996 by $148 million and the net periodic postretirement benefit cost for the
six months then ended by $11 million.
The weighted average discount rate used in determining the APBO was 7.5
percent (8 percent-- June 30, 1996). The expected long-term rate of return on
plan assets was 7.5 percent (8 percent--June 30, 1996).
<PAGE>
February 12, 1997 ACT Rpt 025
09:06:57 Page 1
INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
LIABILITIES MANAGEMENT SYSTEM
SEC Report On Changes in Borrowings
NEW BORROWINGS (MLT) 01-OCT-1996 thru 31-DEC-1996
Source: Public
<TABLE>
<CAPTION>
DESCRIPTION ISSUE # CURRENCY TRANCHE BOND AMOUNT US$ EQUIVALENT SETTLEMENT DATE
- --------------- ----------- ----------- ----------- --------------- ---------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Deutsche mark
- -------------
DEM 1 BILLION ZERO-COUPON NOTES
OF 1996 DUE 11/8/2016................ 557 DEM 1 1,000,000,000 658,371,190 08-NOV-1996
DEM 500 million 4.625% Notes of 1996,
due December 18, 2001................ 562 DEM 1 500,000,000 321,543,408 18-DEC-1996
---------------
** Total By Currency................... 979,914,598
---------------
Danish kroner
- -------------
DKK 400 mn 6.375% of 1996 due March 14,
2003................................. 551 DKK 1 400,000,000 69,168,252 15-NOV-1996
DKK 500 mn 4.00% Notes of 1996, due
November 18, 2004.................... 560 DKK 1 500,000,000 86,512,674 18-NOV-1996
---------------
** Total By Currency................... 155,680,926
---------------
Spanish pesetas
- ---------------
7.20% ESP 10 billion bonds of 1996 due
2001................................. 17 ESP 1 10,000,000,000 77,700,078 16-OCT-1996
Pounds sterling
- ---------------
GBP 350 million Zero-coupon Notes, due
July 17, 2000........................ 31 GBP 1 350,000,000 577,850,000 16-DEC-1996
</TABLE>
<PAGE>
February 12, 1997 ACT Rpt 025
09:06:57 Page 2
INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
LIABILITIES MANAGEMENT SYSTEM
SEC Report On Changes in Borrowings
NEW BORROWINGS (MLT) 01-OCT-1996 thru 31-DEC-1996
Source: Public
<TABLE>
<CAPTION>
DESCRIPTION ISSUE # CURRENCY TRANCHE BOND AMOUNT US$ EQUIVALENT SETTLEMENT DATE
- ------------ ----------- ------------- ----------- ------------------- ---------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Greek drachmas
- --------------
10.25% GRD Notes of 1996, due
December 28, 2001............ 566 GRD 1 20,000,000,000 80,942,154 30-DEC-1996
Italian lire
- ------------
ITL 800 billion callable ZERO
Coupon Notes due Oct 3, 2011..... 23 ITL 1 800,000,000,000 525,496,430 03-OCT-1996
ITL 200 billion callable zero
coupon notes due Oct. 3, 2011.... 23 ITL 2 200,000,000,000 131,374,107 03-OCT-1996
ITL 500 BILLION 10 YR CALLABLE ZERO
COUPON NOTES..................... 27 ITL 1 500,000,000,000 326,234,471 06-DEC-1996
ITL 300 BILLION 10-YR CALLABLE ZERO
COUPON NOTES..................... 27 ITL 2 300,000,000,000 195,740,683 06-DEC-1996
ITL 200 billion 10 year Callable
Zero Coupon Notes due 2006....... 27 ITL 3 200,000,000,000 130,493,788 06-DEC-1996
ITL 250 Billion 10 year Callable
Zero Coupon Notes due 2006....... 27 ITL 4 250,000,000,000 163,117,236 06-DEC-1996
ITL 1 trillion zero-coupon notes of
1996 due Nov. 7, 2016............ 552 ITL 1 1,000,000,000,000 657,617,845 07-NOV-1996
Increase of ITL 500 bn notes of
1996 due on Nov. 7, 2016......... 552 ITL 2 500,000,000,000 328,808,923 07-NOV-1996
Increase of ITL 500 b zerocoupon
notes of 96 due 11/07/2016....... 552 ITL 3 500,000,000,000 328,808,923 07-NOV-1996
ITL 1 billion zero-coupon notes due
November 7, 2016................. 552 ITL 4 1,000,000,000,000 654,013,682 20-DEC-1996
ITL 300 billion 7.625% notes of
1996 due 11/21/2003.............. 554 ITL 1 300,000,000,000 198,336,617 21-NOV-1996
--------------
** Total By Currency............... 3,640,042,705
--------------
Japanese yen
- ------------
5.00% JPY/USD DUAL CURRENCY BONDS
OF 1996, DUE OCT. 21, 1999...... 24 JPY 1 50,000,000,000 446,229,362 21-OCT-1996
</TABLE>
<PAGE>
February 12, 1997 ACT Rpt 025
09:06:57 Page 3
INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
LIABILITIES MANAGEMENT SYSTEM
SEC Report On Changes in Borrowings
NEW BORROWINGS (MLT) 01-OCT-1996 thru 31-DEC-1996
Source: Public
<TABLE>
<CAPTION>
DESCRIPTION ISSUE # CURRENCY TRANCHE BOND AMOUNT US$ EQUIVALENT SETTLEMENT DATE
- ------------ ----------- ------------- ----------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
New Zealand dollars
- -------------------
8.00% NZD Notes of 1996, due October 7,
1998.................................. 550 NZD 1 100,000,000 70,050,000 07-OCT-1996
6.65% NZD Notes of 1996, due June 16,
1998.................................. 563 NZD 1 100,000,000 69,770,000 16-DEC-1996
-----------
** Total By Currency.................... 139,820,000
-----------
United States dollars
- ---------------------
USD 100 MILLION STEP-UP CALLABLE NOTES
DUE NOV 1999.......................... 26 USD 1 100,000,000 100,000,000 18-NOV-1996
USD 1 bn Notes of 1996 due March 23,
2000.................................. 564 USD 1 1,000,000,000 1,000,000,000 24-DEC-1996
-------------
** Total By Currency.................... 1,100,000,000
-------------
South African Rand
- ------------------
ZAR 100 million 14.5% notes of 1996 due
Nov.13, 1998.......................... 558 ZAR 1 100,000,000 21,265,284 13-NOV-1996
-------------
** Total By Source...................... 7,219,445,107
</TABLE>
<PAGE>
February 12, 1997 ACT Rpt 025
09:06:57 Page 4
INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
LIABILITIES MANAGEMENT SYSTEM
SEC Report On Changes in Borrowings
NEW BORROWINGS (MLT) 01-OCT-1996 thru 31-DEC-1996
Source: Private
<TABLE>
<CAPTION>
DESCRIPTION ISSUE # CURRENCY TRANCHE BOND AMOUNT US$ EQUIVALENT SETTLEMENT DATE
- ------------ ----------- ------------- ----------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
-------------
Italian lire
- ------------
ITL 50 billion FRNs of 1996 due October
17, 2001.............................. 553 ITL 1 50,000,000,000 32,693,414 17-OCT-1996
</TABLE>
<PAGE>
February 12, 1997 ACT Rpt 025
09:06:57 Page 5
INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
LIABILITIES MANAGEMENT SYSTEM
SEC Report On Changes in Borrowings
NEW BORROWINGS (MLT) 01-OCT-1996 thru 31-DEC-1996
Source: Loans
<TABLE>
<CAPTION>
DESCRIPTION ISSUE # CURRENCY TRANCHE BOND AMOUNT US$ EQUIVALENT SETTLEMENT DATE
- ------------ ----------- ------------- ----------- --------------- --------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Japanese yen
- ------------
JPY 1 BILLION CALLABLE MULTI-UP LOAN..... 219 JPY 1 1,000,000,000 8,924,587 21-OCT-1996
</TABLE>
<PAGE>
February 12, 1997 ACT Rpt 025
09:06:57 Page 6
INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
LIABILITIES MANAGEMENT SYSTEM
SEC Report On Changes in Borrowings
MATURED BORROWINGS (MLT) 01-OCT-1996 thru 31-DEC-1996
Source: Public
<TABLE>
<CAPTION>
DESCRIPTION ISSUE # CURRENCY TRANCHE BOND AMOUNT US$ EQUIVALENT
- ------------ ----------- ------------- ----------- --------------- ---------------
<S> <C> <C> <C> <C> <C>
Spanish pesetas
- ---------------
11% Spanish Peseta Bonds of 1991
due October 16, 1996............. 11 ESP 1 15,000,000,000 116,550,117
Hong Kong dollars
- -----------------
4.608% HKD 1 Billion Bonds of 1993,
due 10/28/96..................... 5 HKD 1 1,000,000,000 129,333,814
Japanese yen
- ------------
7.30% JPY Bonds of 1989, due Dec.
13, 1996......................... 183 JPY 1 10,000,000,000 88,300,221
JPY 6% NOTES DUE OCTOBER 18,
1996............................. 201 JPY 1 75,000,000,000 667,853,963
6% JPY BONDS OF 1991, DUE OCTOBER
1996 (NIKKO) 18TH ISSUE.......... 204 JPY 1 80,000,000,000 712,377,560
------------
** Total By Currency............... 1,468,531,744
------------
Portuguese escudos
- ------------------
12% PTE Bonds of 1991, due October
1996............................. 1 PTE 1 15,000,000,000 96,698,083
<CAPTION>
DESCRIPTION REDEMPTION DATE
- ----------------------------------- ----------------
<S> <C>
Spanish pesetas
11% Spanish Peseta Bonds of 1991
due October 16, 1996............. 16-OCT-1996
Hong Kong dollars
4.608% HKD 1 Billion Bonds of 1993,
due 10/28/96..................... 28-OCT-1996
Japanese yen
7.30% JPY Bonds of 1989, due Dec.
13, 1996......................... 13-DEC-1996
JPY 6% NOTES DUE OCTOBER 18,
1996............................. 18-OCT-1996
6% JPY BONDS OF 1991, DUE OCTOBER
1996 (NIKKO) 18TH ISSUE.......... 18-OCT-1996
** Total By Currency...............
Portuguese escudos
12% PTE Bonds of 1991, due October
1996............................. 23-OCT-1996
</TABLE>
* Indicates Partial Maturity
<PAGE>
February 12, 1997 ACT Rpt 025
09:06:57 Page 7
INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
LIABILITIES MANAGEMENT SYSTEM
SEC Report On Changes in Borrowings MATURED BORROWINGS (MLT) 01-OCT-1996
thru 31-DEC-1996
Source: Public
<TABLE>
<CAPTION>
DESCRIPTION ISSUE # CURRENCY TRANCHE REDEMPTION AMOUNT US$ EQUIVALENT
- ----------- ----------- ------------- ----------- ------------------------- ---------------
<S> <C> <C> <C> <C> <C>
United States dollars
7-1/4% USD Bonds of 1991, due
October 1, 1996................... 242 USD 1 1,490,887,000 1,490,887,000
-------------
** Total By Source.................. 3,302,000,758
<CAPTION>
DESCRIPTION REDEMPTION DATE
- ------------------------------------ ----------------
<S> <C>
United States dollars
- ---------------------
7-1/4% USD Bonds of 1991, due
October 1, 1996................... 01-OCT-1996
** Total By Source..................
</TABLE>
* Indicates Partial Maturity
<PAGE>
FEBRUARY 12, 1997 ACT_RPT_025
09:06:57 Page 8
INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
LIABILITIES MANAGEMENT SYSTEM
SEC Report On Changes in Borrowings
MATURED BORROWINGS (MLT) 01-OCT-1996 thru 31-DEC-1996
Source: Private
<TABLE>
<CAPTION>
DESCRIPTION ISSUE # CURRENCY TRANCHE REDEMPTION AMOUNT US$ EQUIVALENT REDEMPTION DATE
- ---------------------------------- ----------- ----------- ----------- ------------------- ----------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Italian lire
0% ITL Notes of 1991 due October
4, 1996......................... 1005 ITL 1 100,000,000,000 65,878,757 04-OCT-1996
10 5/8% Notes of 1991 due October
2, 1996......................... 1007 ITL 1 50,000,000,000 32,758,316 02-OCT-1996
10.75% ITL Bonds of 1991 due
October 17, 1996................ 1009 ITL 1 50,000,000,000 32,693,414 17-OCT-1996
10.50% ITL Notes of 1991 due
November 4, 1996................ 1011 ITL 1 50,000,000,000 33,000,251 04-NOV-1996
10.50% ITL Notes of 1991 due
November 27, 1996............... 1012 ITL 1 50,000,000,000 33,333,556 27-NOV-1996
10.50% ITL Notes of 1991 due
November 21, 1996............... 1013 ITL 1 50,000,000,000 33,056,103 21-NOV-1996
-----------
** Total By Currency.............. 230,720,397
-----------
Netherlands guilders
7.25% NLG Private Placement of
'85, Due 1991-2000.............. 75 NLG 1 20,000,000 11,665,889 15-OCT-1996 *
United States dollars
Floating Rate Notes of 1991 due
October 16, 1996................ 1006 USD 1 25,000,000 25,000,000 16-OCT-1996
Floating Rate Notes of 1991 due
October 21, 1996................ 1008 USD 1 20,000,000 20,000,000 21-OCT-1996
FRN USD Notes of 1991 due October
18, 1996........................ 1010 USD 1 18,500,000 18,500,000 18-OCT-1996
-----------------
** Total By Currency.............. 63,500,000
-----------------
-----------------
** Total By Source................ 305,886,286
-----------------
</TABLE>
* Indicates Partial Maturity
<PAGE>
FEBRUARY 12, 1997 ACT_RPT_025
09:06:57 Page 9
INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
LIABILITIES MANAGEMENT SYSTEM
SEC Report On Changes in Borrowings
MATURED BORROWINGS (MLT) 01-OCT-1996 thru 31-DEC-1996
Source: Loans
<TABLE>
<CAPTION>
DESCRIPTION ISSUE # CURRENCY TRANCHE REDEMPTION AMOUNT US$ EQUIVALENT REDEMPTION DATE
- ---------------------------------- ----------- ----------- ----------- ------------------- ---------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Deutsche mark
- -------------
10.5% DM Loan of 1981, due 1987-96
(Tran. II)....................... 150 DEM 2 500,000 328,407 30-OCT-1996
10.5% DM Loan of 1981, due 1987-96
(Tran. II)....................... 151 DEM 2 2,000,000 1,313,629 30-OCT-1996
--------------
** Total By Currency............... 1,642,036
--------------
Japanese yen
- ------------
5.80% JPY Loan of 1987, due
1995/2000........................ 124 JPY 1 3,600,000,000 31,496,063 24-DEC-1996*
JAPANESE YEN LOAN OF 1987, DUE
1994-1999 (Ref. #29)............. 129 JPY 1 2,700,000,000 23,767,606 20-DEC-1996*
JAPANESE YEN LOAN OF 1987, DUE
1994-1999 (REF #29).............. 129 JPY 2 3,600,000,000 31,690,141 20-DEC-1996*
JAPANESE YEN LOAN OF 1987, DUE
1994-1999........................ 130 JPY 1 5,000,000,000 44,984,256 20-NOV-1996*
JAPANESE YEN LOAN OF 1987, DUE
1995-2000........................ 132 JPY 1 2,700,000,000 24,158,912 17-OCT-1996*
JAPANESE YEN LOAN OF 1987, DUE
1992-1997........................ 133 JPY 2 900,000,000 8,053,691 18-NOV-1996*
JAPANESE YEN LOAN OF 1987, DUE
1993-1998........................ 134 JPY 1 6,300,000,000 56,300,268 09-OCT-1996*
6.0% JPY Loan of 1989, due Oct. 30,
1996 (Ref. #92).................. 181 JPY 1 20,000,000,000 176,056,338 30-OCT-1996
6.0% JPY Loan of 1989, due Oct. 30,
1996 (Ref. #91).................. 182 JPY 1 20,000,000,000 176,056,338 30-OCT-1996
--------------
** Total By Currency............... 572,563,613
--------------
--------------
** Total By Source................. 574,205,649
--------------
</TABLE>
* Indicates Partial Maturity
<PAGE>
FEBRUARY 12, 1997 ACT_RPT_025
09:06:57 Page 10
INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
LIABILITIES MANAGEMENT SYSTEM
SEC Report On Changes in Borrowings
MATURED BORROWINGS (COLTS) 01-OCT-1996 thru 31-DEC-1996
Source: Public
<TABLE>
<CAPTION>
DESCRIPTION ISSUE # CURRENCY TRANCHE REDEMPTION AMOUNT US$ EQUIVALENT
- ---------------------------------- ----------- ----------- ----------- ------------------- -----------------
<S> <C> <C> <C> <C> <C>
United States dollars
8.2% COLTS DUE 15-OCT-1996........ 34 USD 1 2,000,000 2,000,000
8.1% COLTS DUE 05-NOV-1996........ 39 USD 1 75,000 75,000
7.95% COLTS DUE 14-NOV-1996....... 40 USD 1 1,000,000 1,000,000
0% COLTS DUE 25-NOV-1996.......... 457 USD 1 150,000 150,000
9.17% COLTS DUE 21-OCT-1996....... 717 USD 1 300,000 300,000
9% COLTS DUE 10-NOV-1996.......... 770 USD 1 50,000 50,000
0% COLTS DUE 21-NOV-1996.......... 796 USD 1 70,000 70,000
9.45% COLTS DUE 01-NOV-1996....... 884 USD 1 25,000 25,000
0% COLTS DUE 15-NOV-1996.......... 993 USD 1 1,213,000 1,213,000
0% COLTS DUE 18-NOV-1996.......... 1070 USD 1 584,000 584,000
0% COLTS DUE 16-NOV-1996.......... 1110 USD 1 1,000,000 1,000,000
0% COLTS DUE 14-NOV-1996.......... 1252 USD 1 1,000,000 1,000,000
0% COLTS DUE 13-NOV-1996.......... 1256 USD 1 2,000,000 2,000,000
8.3% COLTS DUE 01-NOV-1996........ 1326 USD 1 2,000,000 2,000,000
0% COLTS DUE 31-DEC-1996.......... 1339 USD 1 210,000 210,000
8.23% COLTS DUE 01-DEC-1996....... 1366 USD 1 100,000 100,000
8.96% COLTS DUE 15-OCT-1996....... 1468 USD 1 400,000 400,000
---------------
** Total By Currency.............. 12,177,000
---------------
---------------
** Total By Source................ 12,177,000
---------------
<CAPTION>
DESCRIPTION REDEMPTION DATE
- ------------------------------------- ----------------
<S> <C>
United States dollars
8.2% COLTS DUE 15-OCT-1996........... 15-OCT-1996
8.1% COLTS DUE 05-NOV-1996........... 05-NOV-1996
7.95% COLTS DUE 14-NOV-1996.......... 14-NOV-1996
0% COLTS DUE 25-NOV-1996............. 25-NOV-1996
9.17% COLTS DUE 21-OCT-1996.......... 21-OCT-1996
9% COLTS DUE 10-NOV-1996............. 10-NOV-1996
0% COLTS DUE 21-NOV-1996............. 21-NOV-1996
9.45% COLTS DUE 01-NOV-1996.......... 01-NOV-1996
0% COLTS DUE 15-NOV-1996............. 15-NOV-1996
0% COLTS DUE 18-NOV-1996............. 18-NOV-1996
0% COLTS DUE 16-NOV-1996............. 16-NOV-1996
0% COLTS DUE 14-NOV-1996............. 14-NOV-1996
0% COLTS DUE 13-NOV-1996............. 13-NOV-1996
8.3% COLTS DUE 01-NOV-1996........... 01-NOV-1996
0% COLTS DUE 31-DEC-1996............. 31-DEC-1996
8.23% COLTS DUE 01-DEC-1996.......... 01-DEC-1996
8.96% COLTS DUE 15-OCT-1996.......... 15-OCT-1996
** Total By Currency.................
** Total By Source...................
</TABLE>
<PAGE>
FEBRUARY 12, 1997 ACT_RPT_025
09:06:57 Page 11
INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
LIABILITIES MANAGEMENT SYSTEM
SEC Report On Changes in Borrowings
PREPAYMENT ADVICES (MLT) 01-OCT-1996 thru 31-DEC-1996
Source: Public
<TABLE>
<CAPTION>
DESCRIPTION ISSUE # CURRENCY TRANCHE PREPAYMENT AMOUNT US$ EQUIVALENT PREPAYMENT DATE
- ------------------------------------- ----------- ------------- ----------- ------------------ -------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Australian dollars
7.60% AUD NOTES OF 1996, DUE APRIL
22, 1999........................... 529 AUD 1 53,000,000 42,071,400 22-OCT-1996
Canadian dollars
10.75% Can$ Bonds of 1985, due 2009.. 22 CAD 1 5,000,000 3,698,033 15-OCT-1996
10.75% Can$ Bonds of 1985, due 2009.. 22 CAD 1 11,000,000 8,242,170 13-NOV-1996
-------------
** Total By Currency................. 11,940,203
-------------
Italian lire
- ------------
ITL 200,000,000,000 10.60 percent
Callable Notes due 1997............ 4 ITL 1 200,000,000,000 130,619,922 18-DEC-1996
ITL 50,000,000,000 10.6 percent
Callable Notes due 1997............ 4 ITL 2 50,000,000,000 32,654,981 18-DEC-1996
---------------
** Total By Currency................. 163,274,903
---------------
---------------
** Total By Source................... 217,286,506
---------------
</TABLE>
<PAGE>
FEBRUARY 12, 1997 ACT_RPT_025
09:06:57 Page 12
INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
LIABILITIES MANAGEMENT SYSTEM
SEC Report On Changes in Borrowings
PREPAYMENT ADVICES (MLT) 01-OCT-1996 thru 31-DEC-1996
Source: Private
<TABLE>
<CAPTION>
DESCRIPTION ISSUE # CURRENCY TRANCHE PREPAYMENT AMOUNT US$ EQUIVALENT PREPAYMENT DATE
- ------------------------------------ --------- --------- -------- ------------------ --------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Japanese yen
3.25% Callable Double-up Bond due
April 18, 2006.................. 216 JPY 1 5,000,000,000 44,523,598 18-OCT-1996
</TABLE>
