International Bank for Reconstruction and
Development
[LOGO]
Financial Statements
June 30, 1997
<PAGE>
International Bank for Reconstruction and
Development
<PAGE>
IBRD Financial Statements 3
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Table of Contents
June 30, 1997
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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
Report of Independent Accountants .......................................... 46
<PAGE>
4 IBRD Financial Statements
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Balance Sheet
June 30, 1997 and June 30, 1996
Expressed in millions of U.S. dollars
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1997 1996
-------- --------
<S> <C> <C>
Assets
DUE FROM BANKS
Unrestricted currencies ........................................ $ 26 $ 27
Currencies subject to restrictions--Note A ...................... 615 612
-------- --------
641 639
-------- --------
INVESTMENTS--Notes B and E
Trading ........................................................ 17,229 15,001
Held-to-maturity ............................................... 1,279 1,169
-------- --------
18,508 16,170
-------- --------
SECURITIES PURCHASED UNDER RESALE AGREEMENTS--Note B ............. 97 1,282
NONNEGOTIABLE, NONINTEREST-BEARING DEMAND OBLIGATIONS ON ACCOUNT
OF SUBSCRIBED CAPITAL ......................................... 1,902 1,765
AMOUNTS RECEIVABLE TO MAINTAIN VALUE OF CURRENCY HOLDINGS ....... 574 732
OTHER RECEIVABLES
Amounts receivable from currency swaps--Notes D and E ........... 29,031 18,010
Amounts receivable from investment securities traded ........... 29 2,365
Amounts receivable from covered forwards--Notes B and E ......... 4,571 204
Accrued income on loans ........................................ 1,932 2,127
Accrued interest on investments ................................ 143 92
-------- --------
35,706 22,798
-------- --------
LOANS OUTSTANDING (see Summary Statement of Loans, Notes C and E)
Total loans .................................................... 157,381 164,766
Less undisbursed balance ....................................... 51,576 54,520
-------- --------
Loans outstanding ............................................. 105,805 110,246
Less accumulated provision for loan losses ..................... 3,210 3,340
-------- --------
Loans outstanding net of accumulated provision ................ 102,595 106,906
-------- --------
OTHER ASSETS
Unamortized issuance costs of borrowings ....................... 492 412
Miscellaneous--Notes I and J .................................... 1,430 1,300
-------- --------
1,922 1,712
-------- --------
Total assets .................................................... $161,945 $152,004
======== ========
</TABLE>
<PAGE>
IBRD Financial Statements 5
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Balance Sheet
June 30, 1997 and June 30, 1996
Expressed in millions of U.S. dollars
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<TABLE>
<CAPTION>
1997 1996
--------- --------
<S> <C> <C>
Liabilities
BORROWINGS-- Notes D and E
Short-term ............................................................................. $ 7,648 $ 4,328
Medium- and long-term .................................................................. 89,031 92,391
--------- --------
96,679 96,719
--------- --------
SECURITIES SOLD UNDER REPURCHASE AGREEMENTS AND PAYABLE FOR CASH
COLLATERAL RECEIVED-Note B ............................................................ 294 2,439
AMOUNTS PAYABLE TO MAINTAIN VALUE OF CURRENCY HOLDINGS ................................. 4 4
OTHER LIABILITIES
Amounts payable for currency swaps--Notes D and E ...................................... 29,687 19,427
Amounts payable for investment securities purchased .................................... 135 1,508
Amounts payable for covered forwards--Notes B and E .................................... 4,694 202
Accrued charges on borrowings .......................................................... 2,167 2,352
Payable for Board of Governors-approved transfers--Note F .............................. 201 205
Accounts payable and miscellaneous liabilities ......................................... 856 848
--------- --------
37,740 24,542
--------- --------
Total liabilities ....................................................................... 134,717 123,704
--------- --------
Equity
CAPITAL STOCK (see Statement of Subscriptions to Capital Stock and Voting Power, Note A)
Authorized capital (1,558,478 shares--June 30, 1997 and June 30, 1996)
Subscribed capital (1,512,211 shares--June 30, 1997; 1,497,325 shares--June 30, 1996) 182,426 180,630
Less uncalled portion of subscriptions .............................................. 171,378 169,636
--------- --------
11,048 10,994
DEFERRED AMOUNTS TO MAINTAIN VALUE OF CURRENCY HOLDINGS ................................. (106) 136
PAYMENTS ON ACCOUNT OF PENDING SUBSCRIPTIONS--Note A .................................... 7 15
RETAINED EARNINGS (see Statement of Changes in Retained Earnings, Note F) ............... 16,194 16,099
CUMULATIVE TRANSLATION ADJUSTMENT (see Statement of Changes in Cumulative
Translation Adjustment) ............................................................... 85 1,056
--------- --------
Total equity ............................................................................ 27,228 28,300
--------- --------
Total liabilities and equity ............................................................ $ 161,945 $152,004
========= ========
</TABLE>
The Notes to Financial Statements are an integral part of these Statements.
<PAGE>
6 IBRD Financial Statements
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Statement of Income
For the fiscal years ended June 30, 1997 and June 30, 1996
Expressed in millions of U.S. dollars
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<TABLE>
<CAPTION>
1997 1996
------- -------
<S> <C> <C>
INCOME
Income from loans--Note C
Interest ................................................................ $ 7,122 $ 7,804
Commitment charges ...................................................... 113 118
Income from investments--Note B
Trading
Interest ............................................................... 718 673
Net gains/(losses)
Realized .............................................................. 47 31
Unrealized ............................................................ (43) (83)
Held-to-maturity
Interest ............................................................... 103 100
Income from securities purchased under resale agreements--Note B ......... 53 66
Other income ............................................................. 12 11
------- -------
Total income ........................................................... 8,125 8,720
------- -------
EXPENSES
Borrowing expenses--Note D
Interest ................................................................ 5,827 6,455
Prepayment costs ........................................................ 16 9
Amortization of issuance and other borrowing costs ...................... 109 106
Interest on securities sold under agreements to repurchase and payable for
cash collateral received--Note B ........................................ 44 67
Administrative expenses--Notes G, H, I and J ............................. 651 733
Provision for loan losses--Note C ........................................ 63 42
Other expenses ........................................................... 10 8
------- -------
Total expenses .......................................................... 6,720 7,420
------- -------
OPERATING INCOME .......................................................... 1,405 1,300
Less contributions to special programs--Note G ............................ 120 113
------- -------
NET INCOME ................................................................ $ 1,285 $ 1,187
======= =======
</TABLE>
The Notes to Financial Statements are an integral part of these Statements.
<PAGE>
IBRD Financial Statements 7
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Statement of Changes in Retained Earnings
For the fiscal years ended June 30, 1997 and June 30, 1996
Expressed in millions of U.S. dollars
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<TABLE>
<CAPTION>
1997 1996
-------- --------
<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) (90)
Trust Fund for Bosnia and Herzegovina .................... -- (150)
Heavily Indebted Poor Countries Debt Initiative Trust Fund (500) --
Net income for the fiscal year ............................ 1,285 1,187
-------- --------
Retained earnings at end of the fiscal year ................ $ 16,194 $ 16,099
======== ========
</TABLE>
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Statement of Changes in Cumulative Translation Adjustment
For the fiscal years ended June 30, 1997 and June 30, 1996
Expressed in millions of U.S. dollars
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1997 1996
------- -------
<S> <C> <C>
Cumulative translation adjustment at beginning of the fiscal year $ 1,056 $ 3,308
Translation adjustment for the fiscal year .................... (971) (2,252)
------- -------
Cumulative translation adjustment at end of the fiscal year ..... $ 85 $ 1,056
======= =======
</TABLE>
The Notes to Financial Statements are an integral part of these Statements.
<PAGE>
8 IBRD Financial Statements
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Statement of Cash Flows
For the fiscal years ended June 30, 1997 and June 30, 1996
Expressed in millions of U.S. dollars
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1997 1996
-------- --------
<S> <C> <C>
Cash flows from lending and investing activities
Loans
Disbursements ............................................................................. $(14,009) $(13,321)
Principal repayments ...................................................................... 10,710 11,494
Principal prepayments ..................................................................... 1,311 812
Investments: Held-to-maturity
Purchases ................................................................................. (8,911) (5,417)
Maturities ................................................................................ 8,895 5,422
-------- --------
Net cash used in lending and investing activities ........................................ (2,004) (1,010)
-------- --------
Cash flows from Board of Governors-approved transfers to
International Development Association ...................................................... (599) (250)
Debt Reduction Facility for IDA-Only Countries ............................................. (1) (86)
Trust Fund for Gaza and West Bank, Trust Fund for Bosnia and Herzegovina, and for
Emergency Assistance for Rwanda ........................................................... (91) (179)
Heavily Indebted Poor Countries Debt Initiative Trust Fund ................................. (500) --
-------- --------
Net cash used in Board of Governors-approved transfers ................................... (1,191) (515)
-------- --------
Cash flows from financing activities
Medium- and long-term borrowings
New issues ................................................................................ 14,928 9,851
Retirements ............................................................................... (14,137) (10,330)
Net short-term borrowings .................................................................. 3,277 340
Net currency swaps ......................................................................... (266) (649)
Net capital stock transactions ............................................................. 71 111
-------- --------
Net cash provided by (used in) financing activities ...................................... 3,873 (677)
-------- --------
Cash flows from operating activities
Net income ................................................................................. 1,285 1,187
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization ............................................................. 541 399
Provision for loan losses ................................................................. 63 42
Changes in other assets and liabilities
Decrease in accrued income on loans and investments ...................................... 18 176
Increase in miscellaneous assets ......................................................... (153) (80)
Decrease in accrued charges on borrowings ................................................ (49) (214)
Increase (decrease) in accounts payable and miscellaneous liabilities .................... 35 (18)
-------- --------
Net cash provided by operating activities ............................................... 1,740 1,492
-------- --------
Effect of exchange rate changes on unrestricted cash and liquid investments ................. (319) (1,632)
-------- --------
Net increase (decrease) in unrestricted cash and liquid investments ......................... 2,099 (2,342)
Unrestricted cash and liquid investments at beginning of the fiscal year .................... 14,730 17,072
-------- --------
Unrestricted cash and liquid investments at end of the fiscal year .......................... $ 16,829 $ 14,730
======== ========
Composed of
Investments held in trading portfolio ...................................................... $ 17,229 $ 15,001
Unrestricted currencies .................................................................... 26 27
Net (payable) receivable for investment securities traded/purchased ........................ (106) 857
Net (payable) receivable from covered forwards ............................................. (123) 2
Net payable for securities purchased/sold under resale/repurchase agreements and payable for
cash collateral received .................................................................. (197) (1,157)
-------- --------
$ 16,829 $ 14,730
======== ========
Supplemental disclosure
Increase (decrease) in ending balances resulting from exchange rate fluctuations
Loans outstanding ......................................................................... $ (6,429) $(14,436)
Investments: Held-to-maturity ............................................................. 94 (29)
Borrowings ................................................................................ (4,701) (11,731)
Currency swaps ............................................................................ (495) (1,184)
</TABLE>
The Notes to Financial Statements are an integral part of these Statements.
<PAGE>
IBRD Financial Statements 9
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Summary Statement of Loans
June 30, 1997
Expressed in millions of U.S. dollars
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<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 $ 2,624 $ 89 $ 720 $ 1,815 1.72
Argentina 8,483 1,259 1,852 5,372 5.08
Armenia 11 -- 1 10 0.01
Bahamas, The 8 -- -- 8 0.01
Bangladesh 43 -- -- 43 0.04
Barbados 32 -- 18 14 0.01
Belarus 158 -- 36 122 0.12
Belize 56 7 14 35 0.03
Bolivia 48 -- -- 48 0.05
Bosnia and Herzegovina 579 -- -- 579 0.55
Botswana 58 -- -- 58 0.05
Brazil 9,529 943 2,691 5,895 5.57
Bulgaria 768 40 263 465 0.44
Cameroon 475 -- 8 467 0.44
Chile 1,434 -- 404 1,030 0.97
China 16,765 2,181 6,647 7,937 7.50
Colombia 2,813 15 819 1,979 1.87
Congo, Democratic Republic of 84 -- -- 84 0.08
Congo, Republic of 77 -- 1 76 0.07
Costa Rica 287 -- 62 225 0.21
Cote d'Ivoire 1,191 -- 2 1,189 1.12
Croatia 544 135 185 224 0.21
Cyprus 89 -- 27 62 0.06
Czech Republic 519 -- 101 418 0.40
Dominica 4 -- 4 -- --
Dominican Republic 376 112 37 227 0.21
Ecuador 1,255 21 322 912 0.86
Egypt, Arab Republic of 1,257 20 262 975 0.92
El Salvador 473 -- 191 282 0.27
Estonia 117 -- 50 67 0.06
Fiji 45 -- 11 34 0.03
Gabon 113 10 18 85 0.08
Ghana 35 -- -- 35 0.03
Grenada 4 -- 4 -- --
Guatemala 274 46 32 196 0.19
Guyana 23 -- -- 23 0.02
Honduras 311 -- -- 311 0.29
Hungary 2,172 60 604 1,508 1.43
India 12,560 575 3,102 8,883 8.40
Indonesia 15,269 284 4,444 10,541 9.96
Iran, Islamic Republic of 795 -- 384 411 0.39
Iraq 44 -- -- 44 0.04
Jamaica 656 -- 179 477 0.45
Jordan 940 -- 168 772 0.73
Kazakhstan 917 17 412 488 0.46
Kenya 257 -- -- 257 0.24
Korea, Republic of 2,083 -- 434 1,649 1.56
Latvia 233 38 89 106 0.10
Lebanon 597 53 407 137 0.13
Lesotho 87 -- 29 58 0.05
</TABLE>
<PAGE>
10 IBRD Financial Statements
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Summary Statement of Loans (Continued)
June 30, 1997
Expressed in millions of U.S. dollars
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<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>
Liberia $ 141 -- -- $ 141 0.13
Lithuania 267 4 156 107 0.10
Macedonia, former Yugoslav Republic of 111 -- 38 73 0.07
Madagascar 4 -- -- 4 *
Malawi 39 -- -- 39 0.04
Malaysia 947 -- 126 821 0.78
Mauritania 7 -- -- 7 0.01
Mauritius 182 -- 61 121 0.11
Mexico 15,341 960 2,669 11,712 11.07
Moldova 237 17 82 138 0.13
Morocco 4,488 90 881 3,517 3.32
Nicaragua 30 -- -- 30 0.03
Nigeria 2,917 -- 352 2,565 2.42
Oman 16 -- -- 16 0.02
Pakistan 3,958 -- 1,019 2,939 2.78
Panama 368 50 98 220 0.21
Papua New Guinea 353 -- 70 283 0.27
Paraguay 369 -- 233 136 0.13
Peru 2,756 -- 876 1,880 1.78
Philippines 5,653 230 1,009 4,414 4.17
Poland 2,830 -- 678 2,152 2.03
Portugal 18 -- 2 16 0.02
Romania 2,467 548 839 1,080 1.02
Russian Federation 7,778 316 3,787 3,675 3.47
St. Kitts and Nevis 3 -- 2 1 *
St. Lucia 10 -- 6 4 *
St. Vincent and the Grenadines 3 -- 2 * *
Senegal 18 -- -- 18 0.02
Seychelles 6 -- 2 4 *
Sierra Leone 2 -- -- 2 *
Slovak Republic 270 -- 28 242 0.23
Slovenia 212 43 27 142 0.13
South Africa 46 46 -- -- --
Sri Lanka 35 -- -- 35 0.03
Sudan 6 -- -- 6 0.01
Swaziland 37 -- 25 12 0.01
Syrian Arab Republic 360 -- -- 360 0.34
Tanzania 45 -- -- 45 0.04
Thailand 2,495 288 705 1,502 1.42
Trinidad and Tobago 158 -- 81 77 0.07
Tunisia 2,273 162 567 1,544 1.46
Turkey 5,100 15 1,218 3,867 3.65
Turkmenistan 89 65 20 4 *
Ukraine 1,937 88 845 1,004 0.95
Uruguay 717 201 88 428 0.40
</TABLE>
<PAGE>
IBRD Financial Statements 11
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Summary Statement of Loans
June 30, 1997
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>
Uzbekistan $ 230 $ -- $ 79 $ 151 0.14
Venezuela 1,998 -- 691 1,307 1.24
Yugoslavia, Federal Republic of (Serbia/Montenegro)(3) 1,146 -- -- 1,146 1.08
Zambia 78 -- -- 78 0.07
Zimbabwe 622 -- 122 500 0.47
-------- ------ ------- -------- ------
Subtotal(5) 156,744 9,027 42,519 105,198 99.42
Caribbean Development Bank(4) 35 -- 27 8 0.01
International Finance Corporation 602 -- 3 599 0.57
-------- ------ ------- -------- ------
Total--June 30, 1997(5) $157,381 $9,027 $42,549 $105,805 100.00
======== ====== ======= ======== ======
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 $6,417 million ($5,170 million--June 30, 1996) have been
approved by IBRD, but the related agreements have not been signed. Loan
agreements totaling $2,610 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 $1,937 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.
<PAGE>
12 IBRD Financial Statements
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Statement of Subscriptions to
Capital Stock and Voting Power
June 30, 1997
Expressed in millions of U.S. dollars
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Subscriptions Voting Power
------------------------------------------------------------------ ---------------------
Percentage Amounts Number Percentage
of Total 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 1.18 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 0.34 629.1 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 2.89
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, Democratic Republic of 2,643 0.17 318.8 25.4 293.5 2,893 0.19
Congo, Republic of 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
</TABLE>
<PAGE>
IBRD Financial Statements 13
- --------------------------------------------------------------------------------
Statement of Subscriptions to
Capital Stock and Voting Power
June 30, 1997
Expressed in millions of U.S. dollars
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Subscriptions Voting Power
------------------------------------------------------------------ ---------------------
Percentage Amounts Number Percentage
of Total Amounts subject of of
Member Shares total amounts paid in(1) to call(1) votes total
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
El Salvador 141 0.01 $ 17.0 $ 1.7 $ 15.3 391 0.03
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 4.47
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 1,292 0.09 155.9 7.1 148.8 1,542 0.10
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 6.20 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
Kazakhstan 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 0.10
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
</TABLE>
<PAGE>
14 IBRD Financial Statements
- --------------------------------------------------------------------------------
Statement of Subscriptions to
Capital Stock and Voting Power (Continued)
June 30, 1997
Expressed in millions of U.S. dollars
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Subscriptions Voting Power
------------------------------------------------------------------ ---------------------
Percentage Amounts Number Percentage
of Total Amounts subject of of
Member Shares total amounts paid in(1) to call(1) votes total
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Malaysia 8,244 0.55 $ 994.5 $ 59.5 $ 935.0 8,494 0.55
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 1,294 0.09 156.1 7.1 149.0 1,544 0.10
Paraguay 1,229 0.08 148.3 6.6 141.6 1,479 0.09
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
</TABLE>
<PAGE>
IBRD Financial Statements 15
- --------------------------------------------------------------------------------
Statement of Subscriptions to
Capital Stock and Voting Power
June 30, 1997
Expressed in millions of U.S. dollars
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Subscriptions Voting Power
------------------------------------------------------------------ ---------------------
Percentage Amounts Number Percentage
of Total Amounts subject of of
Member Shares total amounts paid in(1) to call(1) votes total
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Sri Lanka 3,817 0.25 $ 460.5 $ 26.1 $ 434.3 4,067 0.26
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 1.72
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 4.47
United States 264,969 17.52 31,964.5 1,998.4 29,966.2 265,219 17.03
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
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--June 30, 1997(2) 1,512,211 100.00 $ 182,426 $ 11,048 $ 171,378 1,557,211 100.00
========= ============ ============ ============ ============ ========== ==========
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 operations 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, determination of net
periodic pension cost, 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
material impact on IBRD's financial statements.
During the fourth quarter of fiscal year 1997, IBRD adopted International
Accounting Standards (IAS) No. 32 entitled "Financial Instruments: Disclosure
and Presentation". IAS No. 32 specifies the disclosure of certain information on
various risk elements associated with financial instruments. These disclosures
are contained in Notes B, C, and D.
In 1996 the Financial Accounting Standards Board issued the Statement of
Financial Accounting Standards No. 125, entitled "Accounting for Transfers of
Assets and Servicing of Financial Assets and Extinguishments of Liabilities",
which requires new accounting and reporting standards for transfers of assets,
securitizations, collateral, and servicing of receivables and other financial
assets, and extinguishments of liabilities. While the standard is effective for
fiscal year 1997, the provisions which would impact IBRD relating to transfers
involving repurchase/resale agreements, collateral agreements and securities
lending for transfers of financial assets will not be effective until the
beginning of 1998. The adoption of this standard is expected to have no material
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.
<PAGE>
IBRD Financial Statements 17
- --------------------------------------------------------------------------------
Notes to Financial Statements
- --------------------------------------------------------------------------------
IBRD is an international organization which conducts its operations 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.
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.
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 (see Note A), 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.
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 operations.
<PAGE>
18 IBRD Financial Statements
- --------------------------------------------------------------------------------
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
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 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.
Delays in receiving loan payments result in present value losses to IBRD since
it does not charge fees or additional interest on any overdue interest or loan
charges. These present value losses are equal to the difference between the
present value of payments for interest and charges made according to the related
loan's contractual terms and the present value of their expected future cash
flows discounted at the loan's contractual interest rates. Such present value
losses are considered in the determination of the Accumulated Provision for Loan
Losses.
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 made to or guaranteed by 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, the member's loans may
not automatically emerge from nonaccrual status, even though the member's
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. A decision on the restoration of accrual status
is made on a case-by-case basis after a suitable period of payment performance
has passed from the time of arrears clearance.
IBRD determines the Accumulated Provision for Loan Losses based on an assessment
of collectibility risk in the total loan and callable guarantees portfolio,
including loans in nonaccrual status. The accumulated provision is periodically
adjusted based on a review of the prevailing circumstances. Adjustments to the
accumulated provision are recorded as a charge or credit to
<PAGE>
IBRD Financial Statements 19
- --------------------------------------------------------------------------------
Notes to Financial Statements
- --------------------------------------------------------------------------------
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: Investment securities are classified based on IBRD management's
intention on the date of purchase. Securities which management has the intention
and ability to hold until maturity are included in the Held-to-maturity
portfolio and reported at amortized cost. All other 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. Investment securities and related financial
instruments held in IBRD's Trading portfolio are carried and reported at market
value. Unrecognized gains and losses for financial instruments held in the
Trading portfolio are included in income. Derivative instruments are used in
liquidity management to take advantage of profitable trading opportunities and
as a proxy for cash securities. These instruments include short-term,
over-the-counter foreign exchange forwards and exchange-traded futures and
options on fixed income instruments. These derivatives are carried at market
value. 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.
Securities Purchased Under Resale Agreements and Securities Sold Under
Repurchase Agreements: Securities purchased under resale agreements and
securities sold under repurchase agreements are treated as securities lending
and borrowing transactions and are carried at historical cost.
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.
IBRD uses derivatives in its borrowing and liability management activities to
create synthetic debt instruments to take advantage of cost saving opportunities
across capital markets and lower its funding costs, to delink the time at which
its borrowing costs are fixed from the timing of the actual market borrowings,
and to establish an appropriate match between the currency and interest rate
characteristics of its assets and liabilities. These instruments include
currency and interest rate swaps, swap spread-locks, foreign exchange forwards,
exchange-traded futures, options and deferred and anticipatory rate setting
contracts. These derivatives 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 these derivatives is recognized as an
adjustment to the borrowing cost over the life of the derivative contract and
included in Interest under Borrowing Expenses on the income statement. Upon
termination, the change in the derivative'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 remaining life of the borrowing. In
instances where the underlying borrowing is prepaid, the change in the
associated derivative's market value is recognized immediately as an adjustment
to the cost of the underlying borrowing instrument and accordingly into income.
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.
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.
<PAGE>
20 IBRD Financial Statements
- --------------------------------------------------------------------------------
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
Note A--Capital Stock, Restricted Currencies, Maintenance of Value and
Membership
Capital Stock: At June 30, 1997, IBRD's capital comprised 1,558,478
(1,558,478--June 30, 1996) authorized shares, of which 1,512,211
(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, $11,048 million ($10,994 million--June 30, 1996) has
been paid in, and the remaining $171,378 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 $145,940 million ($144,504
million--June 30, 1996) the restriction on calls is imposed by the Articles of
Agreement and as to $25,438 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) $9,943 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) $435 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 $5,299 million ($5,522 million--June 30, 1996) has been used for
lending purposes, with such consent.
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 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.
On April 18, 1997, the Executive Directors approved changes in IBRD's general
investment authority to permit IBRD to invest in marketable bonds, notes, and
other debt obligations or securities (including asset-backed securities) issued
or unconditionally guaranteed by corporate entities or trusts. Such obligations
or securities require a credit rating of AAA. IBRD was also authorized to enter
into currency swaps for liquid asset management purposes.
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
minimum credit rating of AA.
<PAGE>
IBRD Financial Statements 21
- --------------------------------------------------------------------------------
Notes to Financial Statements
- --------------------------------------------------------------------------------
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 the right,
but not the obligation 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 for a specified period of time 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>
22 IBRD Financial Statements
- --------------------------------------------------------------------------------
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
Liquid Portfolio: A summary of IBRD's position in trading and other liquid
portfolio instruments at June 30, 1997 and June 30, 1996 is as follows:
In millions of U.S. dollars equivalent
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Other All
Deutsche mark Japanese yen U.S. dollars currencies currencies
------------- ------------- ------------- ----------- --------------
1997 1996 1997 1996 1997 1996 1997 1996 1997 1996
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Trading:
Government and agency
obligations:
Carrying value 642 524 -- 1,119 2,873 3,536 20 238 3,535 5,417
Average balance during
fiscal year 429 879 324 2,738 2,237 3,473 182 257 3,172 7,347
Net gains (losses) for the
fiscal year (2) 19 (2) (45) (13) (41) 10 7 (7) (60)
Average yield (%) 3.22 4.60 -- 1.35 5.92 5.03 3.52 4.82 5.40 4.12
Average maturity (years) 2.03 5.10 -- 2.94 5.35 3.80 0.19 8.40 4.71 3.87
Time deposits:
Carrying value 1,311 1,041 3,569 1,775 7,664 5,822 1,149 942 13,693 9,580
Average balance during
fiscal year 578 411 2,126 1,562 6,847 3,793 1,055 1,035 10,606 6,801
Net gains (losses) for the
fiscal year -- -- -- -- -- -- -- (*) -- (*)
Average yield (%) 3.11 3.38 0.49 0.50 5.91 5.52 3.76 3.96 4.05 4.21
Average maturity (years) 0.23 0.02 0.20 0.07 0.13 0.01 0.17 0.02 0.16 0.03
Futures and forwards:
Carrying value 1 1 * 3 -- -- -- * 1 4
Average balance during
fiscal year 1 1 2 3 -- -- * * 3 4
Net gains (losses) for the
fiscal year (*) (2) 1 (3) 11 15 * (*) 12 10
Options :
Carrying value -- -- * * * (*) -- * * *
Average balance during
fiscal year -- -- * * * * * * * *
Net gains (losses) for the
fiscal year (*) (*) (*) (*) (1) (2) * (*) (1) (2)
Total Trading Investments***
Carrying value 1,954 1,566 3,569 2,897 10,537 9,358 1,169 1,180 17,229 15,001
Average balance during fiscal
year 1,008 1,291 2,452 4,303 9,084 7,266 1,237 1,292 13,781 14,152
Net gains (losses) for the fiscal
year (2) 17 (*) (48) (3) (28) 10 7 4 (52)
</TABLE>
<PAGE>
IBRD Financial Statements 23
- --------------------------------------------------------------------------------
Notes to Financial Statements
- --------------------------------------------------------------------------------
Liquid Portfolio (continued)
In millions of U.S. dollars equivalent
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Other All
Deutsche mark Japanese yen U.S. dollars currencies currencies
------------- ------------- ------------- ----------- --------------
1997 1996 1997 1996 1997 1996 1997 1996 1997 1996
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Repurchase agreements and
Securities loans:
Carrying value -- -- -- -- (294) (2,394) -- (45) (294) (2,439)
Average balance during fiscal
year (34) (142) -- -- (716) (1,406) (80) (27) (830) (1,575)
Average yield (%) -- -- -- -- 5.73 5.20 -- 4.06 5.73 5.18
Average maturity (years) -- -- -- -- 0.02 0.02 -- 0.02 0.02 0.02
Resale agreements:
Carrying value 2 571 -- -- 95 655 -- 56 97 1,282
Average balance during fiscal
year 305 463 -- -- 721 775 92 68 1,118 1,306
Average yield (%) 2.90 3.49 -- -- 5.46 5.17 -- 4.40 5.41 4.39
Average maturity (years) 0.02 0.01 -- -- 0.06 0.03 -- ** 0.06 0.02
Short sales:
Carrying value -- (25) -- -- (92) (54) -- (*) (92) (79)
Average balance during fiscal
year (42) (44) -- (5) (134) (133) (15) (12) (191) (194)
Net covered forwards:
Carrying value (908) 60 (3,226) (91) 4,571 (17) (560) 50 (123) 2
Average balance during fiscal
year (198) 162 (694) (88) 1,047 (423) (142) 348 13 (1)
Average yield (%) 3.10 3.33 0.48 0.43 5.78 5.40 3.69 3.17 3.55 3.69
Average maturity (years) 0.33 0.01 0.21 0.04 0.24 0.02 0.27 0.01 0.24 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>
24 IBRD Financial Statements
- --------------------------------------------------------------------------------
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
Held-to-maturity portfolio: The carrying and fair values of investment
securities in the Held-to-maturity portfolio at June 30, 1997 and June 30, 1996
are as follows:
In millions
- --------------------------------------------------------------------------------
1997
-------------------------------------------
Carrying Average Gross Gross
value yield unrealized unrealized Fair
(%) gains losses value
------ ------ ---------- ---------- -----
Government and agency obligations . $1,140 8.74 $110 $-- $1,250
Time deposits ..................... 139 6.38 -- -- 139
------ ---- ---- ---- ------
Total ............................. $1,279 8.49 $110 $-- $1,389
====== ==== ==== ==== ======
- --------------------------------------------------------------------------------
In millions
- --------------------------------------------------------------------------------
1996
-------------------------------------------
Carrying Average Gross Gross
value yield unrealized unrealized Fair
(%) gains losses value
------ ------ ---------- ---------- -----
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
====== ==== ==== ==== ======
- --------------------------------------------------------------------------------
At June 30, 1997 and June 30, 1996, the Held-to-maturity portfolio comprised
investments in pounds sterling only. The annualized rate of return on average
investments in the Held-to-maturity portfolio held during the fiscal year ended
June 30, 1997 was 8.31 percent (8.35 percent--June 30, 1996).
The expected maturities of investment securities in the Held-to-maturity
portfolio at June 30, 1997 and June 30, 1996 are summarized below:
In millions
- --------------------------------------------------------------------------------
1997
-------------------------------
Net
Carrying Fair unrealized
value value gains
------- ------ ----------
July 1, 1997 through June 30, 1998 ........ $ 139 $ 139 $ --
July 1, 1998 through June 30, 2002 ........ 172 177 5
July 1, 2002 through June 30, 2007 ........ 255 277 22
Thereafter ................................ 713 796 83
------ ------ ----
Total ..................................... $1,279 $1,389 $110
====== ====== ====
- --------------------------------------------------------------------------------
<PAGE>
IBRD Financial Statements 25
- --------------------------------------------------------------------------------
Notes to Financial Statements
- --------------------------------------------------------------------------------
In millions
- --------------------------------------------------------------------------------
1997
-------------------------------
Net
Carrying Fair unrealized
value value gains
------- ------ ----------
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
====== ====== ===
- --------------------------------------------------------------------------------
Note C--Loans, Cofinancing and Guarantees
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.
Average Maturity: 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.
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 variable 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.
<PAGE>
26 IBRD Financial Statements
- --------------------------------------------------------------------------------
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
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. The rates that will be charged on single currency pool loans will be
variable based on the average cost of outstanding borrowings allocated to fund
loans in each individual single currency pool plus a 50 basis point spread.
Conversions to the new single currency pool terms 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. At June 30,
1997, borrowers had requested and IBRD had converted $6,412 million of
undisbursed multicurrency pool loan amounts to single currency loan terms and
$5,764 million remained to be converted at that date. At June 30, 1997,
borrowers had requested that $9,794 million of outstanding multicurrency pool
loan amounts and $71 million of undisbursed multicurrency pool loan amounts be
converted to single currency pool loan terms on July 1, 1997.
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 fiscal year ended June 30, 1997, the combined effect of
these waivers was to reduce Net Income by $259 million ($286 million--June 30,
1996).
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 fiscal year ended June 30, 1997, the effect of the commitment
fee waiver was to reduce Net Income by $226 million ($235 million--June 30,
1996).
<PAGE>
IBRD Financial Statements 27
- --------------------------------------------------------------------------------
Notes to Financial Statements
- --------------------------------------------------------------------------------
A summary of IBRD's outstanding loans by currency and product at June 30, 1997
and June 30, 1996 follows:
In millions of U.S. dollars equivalent
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1997
------------------------------------------------------------------------------------
Multicurrency loans Single currency loans Total loans
----------------------- --------------------------------- ------------------------
Weighted Weighted Average Weighted
Rate verage average maturity average
Currency type Amount rate (%)* Amount rate (%)* (years) Amount rate (%)*
- -------------------- -------------- ---------- ----------- --------- ---------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Deutsche mark Fixed .... $ 1,937 8.77 $ -- -- -- $ 1,937 8.77
Adjustable 27,269 6.70 83 3.48 7.07 27,352 6.69
Japanese yen Fixed .... 1,954 8.87 -- -- -- 1,954 8.87
Adjustable 30,154 6.70 5 0.81 3.51 30,159 6.70
Netherlands guilders Fixed .... 179 8.42 -- -- -- 179 8.42
Adjustable 1,155 6.70 -- -- -- 1,155 6.70
Swiss francs Fixed .... 1,064 8.02 -- -- -- 1,064 8.02
Adjustable 3,438 6.70 -- -- -- 3,438 6.70
U.S. dollars Fixed .... 1,578 8.78 2,315 7.03 6.63 3,893 7.74
Adjustable 27,848 6.70 4,515 6.01 8.99 32,363 6.60
Others Fixed .... 154 9.11 133 6.35 7.17 287 7.83
Adjustable 2,020 6.70 4 3.53 7.80 2,024 6.69
------- ---- ------ ---- ---- -------- ----
Loans outstanding Fixed .... 6,866 8.68 2,448 6.99 6.66 9,314 8.24
Adjustable 91,884 6.70 4,607 5.96 8.95 96,491 6.66
------- ---- ------ ---- ---- -------- ----
Total .... $98,750 6.84 $7,055 6.32 8.16 105,805 6.80
======= ==== ====== ==== ==== ====
Less accumulated provision for loan losses 3,210
--------
Loans outstanding net of accumulated provision $102,595
========
</TABLE>
- --------------------------------------------------------------------------------
* Excludes effects of any waivers of loan interest.
<PAGE>
28 IBRD Financial Statements
- --------------------------------------------------------------------------------
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
In millions of U.S. dollars equivalent
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1996
------------------------------------------------------------------------------------
Multicurrency loans Single currency loans Total loans
----------------------- --------------------------------- ------------------------
Weighted Weighted Average Weighted
Rate verage average maturity average
Currency type Amount rate (%)* Amount rate (%)* (years) Amount rate (%)*
- -------------------- -------------- ---------- ----------- --------- ---------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Deutsche mark Fixed .... $ 3,111 8.68 $ -- -- -- $ 3,111 8.68
Adjustable 26,838 6.98 -- -- -- 26,838 6.98
Japanese yen Fixed .... 3,093 8.88 -- -- -- 3,093 8.88
Adjustable 31,259 6.98 -- -- -- 31,259 6.98
Netherlands guilders Fixed .... 325 8.58 -- -- -- 325 8.58
Adjustable 1,845 6.98 -- -- -- 1,845 6.98
Swiss francs Fixed .... 1,989 8.18 -- -- -- 1,989 8.18
Adjustable 7,029 6.98 -- -- -- 7,029 6.98
U.S. dollars Fixed .... 2,266 8.85 1,119 6.79 7.17 3,385 8.17
Adjustable 27,640 6.98 1,096 5.66 10.11 28,736 6.93
Others Fixed .... 255 9.16 42 7.29 7.20 297 8.89
Adjustable 2,331 6.98 8 5.07 7.80 2,339 6.97
-------- ----- ------ ----- ----- --------- -----
Loans outstanding Fixed .... 11,039 8.69 1,161 6.81 7.17 12,200 8.51
Adjustable 96,942 6.98 1,104 5.66 10.09 98,046 6.96
-------- ----- ------ ----- ----- --------- -----
Total .... $107,981 7.15 $2,265 6.25 8.59 110,246 7.13
======== ===== ====== ===== ===== =====
Less accumulated provision for loan losses 3,340
--------
Loans outstanding net of accumulated provision $106,906
========
</TABLE>
- --------------------------------------------------------------------------------
* Excludes effects of any waivers of loan interest.
<PAGE>
IBRD Financial Statements 29
- --------------------------------------------------------------------------------
Notes to Financial Statements
- --------------------------------------------------------------------------------
The maturity structure of IBRD's loans outstanding, by product, at June 30, 1997
and June 30, 1996 is as follows:
In millions
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1997
------------------------------------------------------------------------------------------
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>
July 1, 1997 through June 30, 1998 $ 2,844 $ 9,150 $ -- $ 4 $ 2,844 $ 9,154 $ 11,998
July 1, 1998 through June 30, 2002 3,675 37,141 773 774 4,448 37,915 42,363
July 1, 2002 through June 30, 2007 335 33,585 1,365 2,283 1,700 35,868 37,568
Thereafter ....................... 12 12,008 310 1,546 322 13,554 13,876
------- ------- ------ ------ ------- ------- --------
Loans outstanding ................ $ 6,866 $91,884 $2,448 $4,607 $ 9,314 $96,491 $105,805
======= ======= ====== ====== ======= ======= ========
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
In millions
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1996
------------------------------------------------------------------------------------------
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>
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
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.
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 June 30, 1997 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>
30 IBRD Financial Statements
- --------------------------------------------------------------------------------
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
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 June 30, 1997. 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.
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 June 30, 1997 and June 30, 1996:
In millions
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1997 1996
----------------------- -----------------------
Carrying Estimated Carrying Estimated
value value value value
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Multicurrency loans
Fixed .................................... $ 6,866 $ 7,655 $ 11,039 $ 12,383
Adjustable ............................... 91,884 99,775 96,942 103,080
Single currency loans
Fixed .................................... 2,448 2,497 1,161 1,067
Adjustable ............................... 4,607 4,844 1,104 1,108
-------- -------- -------- --------
Total loans
Fixed .................................... 9,314 10,152 12,200 13,450
Adjustable ............................... 96,491 104,619 98,046 104,188
-------- -------- -------- --------
105,805 114,771 110,246 117,638
Less accumulated provision for loan losses........................ 3,210 3,210 3,340 3,340
-------- -------- -------- --------
Loans outstanding net of accumulated
provision ..................................................... $102,595 $111,561 $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 $1,593 million at June 30, 1997 ($1,537
million--June 30, 1996) were not included in reported loan balances. At June 30,
1997, $148 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 June 30, 1997, these guarantees,
approximating $1 million ($1 million--June 30, 1996), were subject to call.
<PAGE>
IBRD Financial Statements 31
- --------------------------------------------------------------------------------
Notes to Financial Statements
- --------------------------------------------------------------------------------
Statutory Lending Limit
Under the Articles of Agreement, the total amount outstanding of callable
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 June 30, 1997 and June 30, 1996, the status of the
statutory lending limit is as follows:
In millions
- --------------------------------------------------------------------------------
1997 1996
-------- --------
Statutory lending limit
Subscribed capital .............................. $182,426 $180,630
Retained earnings ............................... 16,194 16,099
Cumulative translation adjustment ............... 85 1,056
-------- --------
$198,705 $197,785
======== ========
Loans and guarantees outstanding
Loans outstanding ............................... $105,805 $110,246
Principal guarantees callable ................... 148 122
Interest guarantees callable .................... 1 1
-------- --------
$105,954 $110,369
======== ========
Loans and guarantees outstanding as a percentage of
statutory lending limit ......................... 53% 56%
- --------------------------------------------------------------------------------
Overdue Amounts
At June 30, 1997, no loans payable to IBRD other than those referred to in the
following paragraphs were overdue by more than three months.
At June 30, 1997, the loans made to or guaranteed by certain member countries
and the FRY with an aggregate principal balance outstanding of $2,360 million
($2,520 million--June 30, 1996), of which $1,314 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 $893 million ($808
million--June 30, 1996). If these loans had not been in nonaccrual status,
income from loans for the fiscal year ended June 30, 1997 would have been higher
by $146 million ($188 million--June 30, 1996).
<PAGE>
32 IBRD Financial Statements
- --------------------------------------------------------------------------------
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
A summary of countries with loans or guarantees in nonaccrual status follows:
In millions
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1997
--------------------------------------------
Principal Principal and Nonaccrual
Borrower outstanding charges overdue since
- ------------------------------------------------------ ------------ --------------- --------------
<S> <C> <C> <C>
With overdues
Congo, Democratic Republic of ..................... $ 84 $ 72 November 1993
Iraq .............................................. 44 68 December 1990
Liberia ........................................... 141 252 June 1987
Sudan ............................................. 6 4 January 1994
Syrian Arab Republic .............................. 360 513 February 1987
Yugoslavia, Federal Republic of (Serbia/Montenegro) 1,146 1,298 September 1992
------ ------
Total ............................................. 1,781 2,207
Without overdues
Bosnia and Herzegovina ............................ 579 -- September 1992
------ ------
Total ............................................... $2,360 $2,207
====== ======
</TABLE>
- --------------------------------------------------------------------------------
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.
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 fiscal year
ended June 30, 1997 was $2,430 million ($2,466 million--June 30, 1996).
During the fiscal years ended June 30, 1997 and June 30, 1996, no loans came out
of nonaccrual status.
<PAGE>
IBRD Financial Statements 33
- --------------------------------------------------------------------------------
Notes to Financial Statements
- --------------------------------------------------------------------------------
Accumulated Provision for Loan Losses
IBRD has never suffered a loss on any of its loans, with the exception of losses
resulting from the difference between the present value of payments for interest
and charges made according to the related loan's contractual terms and the
present value of their expected future cash flows discounted at the loan's
contractual rates. 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 and any other potential overdue payments,
IBRD maintains a provision for loan losses.
An analysis of the changes to the Accumulated Provision for Loan Losses for the
fiscal years ended June 30, 1997 and June 30, 1996 appears below:
In millions
- --------------------------------------------------------------------------------
1997 1996
------- -------
Balance, beginning of the fiscal year ........ $ 3,340 $ 3,740
Provision for loan losses .................... 63 42
Translation adjustment ....................... (193) (442)
------- -------
Balance, end of the fiscal year .............. $ 3,210 $ 3,340
======= =======
- --------------------------------------------------------------------------------
IBRD has endorsed a multilateral initiative for addressing the debt problems of
a group of countries identified as heavily indebted poor countries (HIPCs) to
ensure that the reform efforts of these countries will not be put at risk by
unsustainable external debt burdens. Under this initiative, creditors are to
provide enhanced debt relief for those countries that demonstrated good policy
performance over an extended period to bring their debt burdens to sustainable
levels. On November 7, 1996, the HIPC Debt Initiative Trust Fund was
established, constituted by funds to be contributed by creditors of HIPCs, to
assist eligible beneficiary countries reduce their overall debt burden. The HIPC
Debt Initiative Trust Fund is administered by IDA. IBRD has taken the situation
of these countries into account in its review of the adequacy of the Accumulated
Provision for Loan Losses.
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 June 30, 1997, IDA had approved credits
of $1,526 million ($1,379 million--June 30, 1996) under this program from
inception, of which $1,435 million ($1,327 million--June 30, 1996) had been
disbursed to the eligible countries.
<PAGE>
34 IBRD Financial Statements
- --------------------------------------------------------------------------------
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
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 limits have been established for each counterparty.
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.
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 or 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 June 30, 1997 and June 30,
1996, the effective interest cost of all principal amounts had been fixed.
<PAGE>
IBRD Financial Statements 35
- --------------------------------------------------------------------------------
Notes to Financial Statements
- --------------------------------------------------------------------------------
A summary of IBRD's borrowings portfolio at June 30, 1997 and June 30, 1996
follows:
Medium- and Long-term Borrowings and Swaps at June 30, 1997
<TABLE>
<CAPTION>
In millions of U.S. dollars equivalent
- ------------------------------------------------------------------------------------------------------------------------------------
Currency Interest rate
Direct borrowings swap agreements swap agreements Net currency obligations
--------------------------- -------------------------- -------------------------- ---------------------------
Wgtd. Wgtd. National Wgtd. Wgtd.
avg. Average Amount avg. Average amount avg. Average Amount avg. Average
Rate cost maturity payable cost maturity payable cost maturity payable cost maturity*
Currency type Amount % (years) (receivable) % (years) (receivable) % (years) (receivable) % (years)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Deutsche
mark Fixed $12,468 6.58 5.43 $ 3,071 7.47 2.33 $ 6,800 6.93 2.74 $ 22,339 6.81 4.19
(393) 5.93 14.05 (2,878) 5.25 4.48 (3,271) 5.33 5.63
Adjustable 203 7.54 6.12 8,921 3.05 2.98 2,936 3.24 4.53 12,060 3.17 3.41
(22) 5.58 0.99 (6,858) 3.35 2.78 (6,880) 3.35 2.77
Japanese
yen Fixed 24,501 5.15 4.48 529 5.63 2.39 2,148 3.60 1.87 27,178 5.04 4.23
(1,251) 5.99 6.07 (3,123) 3.02 4.39 (4,374) 3.85 4.86
Adjustable 1,223 1.83 2.66 506 0.05 1.20 3,123 0.57 4.39 4,852 0.83 3.62
(44) 4.45 14.98 (2,148) 1.34 1.87 (2,192) 1.41 2.13
Nether-
lands
guilders Fixed 1,873 7.25 3.28 80 6.31 0.19 -- -- -- 1,953 7.21 3.15
(1,123) 7.62 2.05 (1,123) 7.62 2.05
Swiss
francs Fixed 3,916 6.02 5.63 1,862 5.20 2.94 780 7.11 2.77 6,558 5.91 4.52
(3,050) 5.79 2.84 (3,050) 5.79 2.84
Adjustable -- -- -- 780 .74 2.70 780 .74 2.70
(780) 1.73 2.77 (780) 1.73 2.77
U. S.
dollars Fixed 23,725 7.49 6.63 178 8.98 2.99 6,095 6.81 3.67 29,998 7.36 6.01
(1,023) 9.19 3.12 (10,518) 6.29 5.69 (11,541) 6.55 5.46
Adjustable 1,213 5.14 3.59 12,111 5.49 6.26 10,646 5.77 5.64 23,970 5.59 5.85
(2,511) 5.57 2.31 (6,223) 5.78 3.62 (8,734) 5.72 3.24
Others Fixed 18,112 8.71 4.80 157 8.34 2.09 113 5.77 7.17 18,382 8.68 4.79
(16,029) 8.59 4.43 (424) 7.12 5.73 (16,453) 8.55 4.46
Adjustable 1,798 5.92 4.95 13 10.85 .32 424 3.35 5.73 2,235 5.46 5.07
(2,149) 5.61 5.08 (113) 3.46 7.17 (2,262) 5.50 5.18
------------------------------------ ------- -----------------------
Total Fixed 84,595 6.86 5.32 5,877 15,936 106,408 6.79 4.82
(22,869) (16,943) (39,812) 6.95 4.70
Adjustable 4,437 4.65 4.00 22,331 17,129 43,897 4.31 4.83
(4,726) (16,122) (20,848) 4.31 3.16
------------------------------------ ------- -----------------------
Principal at face
value 89,032 6.75 5.25 613 89,645 6.07 5.26
Net unamortized
discounts (1) -- (1)
------------------------------------ ------- -----------------------
Total $89,031 6.75 5.25 $ 613 $ -- $ 89,644 6.07 5.26
==================================== ======= =======================
</TABLE>
- --------------------------------------------------------------------------------
* At June 30, 1997 the average repricing period of the net currency
obligations for adjustable rate borrowings is four months.
<PAGE>
36 IBRD Financial Statements
- --------------------------------------------------------------------------------
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
Medium- and Long-term Borrowings and Swaps at June 30, 1996
<TABLE>
<CAPTION>
In millions of U.S. dollars equivalent
- ------------------------------------------------------------------------------------------------------------------------------------
Currency Interest rate
Direct borrowings swap agreements swap agreements Net currency obligations
--------------------------- -------------------------- -------------------------- ---------------------------
Wgtd. Wgtd. National Wgtd. Wgtd.
avg. Average Amount avg. Average amount avg. Average Amount avg. Average
Rate cost maturity payable cost maturity payable cost maturity payable cost maturity
Currency type Amount % (years) (receivable) % (years) (receivable) % (years) (receivable) % (years)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Deutsche
mark Fixed $14,287 6.71 5.58 $ 2,000 7.75 2.51 $ 8,544 7.08 3.41 $ 24,831 6.92 4.59
(2,134) 5.26 5.51 (2,134) 5.26 5.51
Adjustable 229 7.54 7.12 9,919 2.93 3.53 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 Fixed 29,466 5.24 4.78 335 5.51 2.21 1,329 5.49 3.15 31,130 5.26 4.68
(964) 6.12 8.07 (2,528) 2.64 5.72 (3,492) 3.59 6.36
Adjustable 1,232 2.04 3.21 71 0.03 1.59 2,528 0.67 5.72 3,831 1.09 4.83
(92) 0.25 0.48 (1,329) 2.09 3.15 (1,421) 1.97 2.97
Nether-
lands
guilders Fixed 2,837 7.23 3.33 91 6.31 1.19 -- -- -- 2,928 7.20 3.26
(1,447) 7.70 2.77 (1,447) 7.70 2.77
Swi
francs Fixed 4,996 6.04 6.28 2,523 5.19 3.39 892 7.11 3.77 8,411 5.90 5.15
(873) 6.47 3.46 (873) 6.47 3.46
Adjustable -- -- -- 892 0.84 3.70 892 0.84 3.70
(892) 2.08 3.77 (892) 2.08 3.77
U. S.
dollars Fixed 23,305 7.84 6.91 178 8.98 3.99 4,002 7.10 3.72 27,485 7.74 6.43
(1,198) 9.02 3.73 (6,211) 6.45 7.50 (7,409) 6.87 6.89
Adjustable 1,453 4.90 3.87 3,344 5.06 4.49 6,449 5.55 7.27 11,246 5.32 6.00
(848) 4.94 4.66 (4,240) 5.53 3.58 (5,088) 5.43 3.76
Others Fixed 13,180 9.30 3.72 36 6.62 7.20 13,216 9.29 3.73
(10,904) 9.25 2.97 (287) 7.43 4.37 (11,191) 9.21 3.01
Adjustable 1,419 6.38 4.62 417 5.24 4.57 1,836 6.12 4.61
(1,610) 5.97 4.51 (166) 8.74 5.47 (1,776) 6.22 4.60
------------------------------------- --------- ------------------------
Total Fixed 88,071 6.90 5.36 5,127 14,803 108,001 6.87 4.98
(15,386) (11,160) (26,546) 7.33 4.74
Adjustable 4,333 4.70 4.10 14,226 11,593 30,152 3.79 4.87
(2,550) (15,236) (17,786) 4.12 3.59
------------------------------------- --------- ------------------------
Principal at face
value 92,404 1,417 -- 93,821
Net unamortized
discounts (13) (13)
------------------------------------- --------- ------------------------
Total $92,391 6.80 5.29 $ 1,417 $ -- $ 93,808 6.26 5.29
===================================== ========= ========================
</TABLE>
- --------------------------------------------------------------------------------
<PAGE>
IBRD Financial Statements 37
- --------------------------------------------------------------------------------
Notes to Financial Statements
- --------------------------------------------------------------------------------
Short-term Borrowings and Swaps at June 30, 1997 and June 30, 1996
<TABLE>
<CAPTION>
In millions of U. S. dollars equivalent
- ------------------------------------------------------------------------------------------------------------------------------------
1997 1996
-------------------------------------------------------- -----------------------------------------------------
Interest Interest
Currency rate Wgtd. Currency rate Wgtd.
swap swap Net avg. swap swap Net avg.
Rate Principal payable payable currency cost Principal payable payable currency cost
Currency type outstanding (receivable) (receivable) obligations*(%) outstanding (receivable) (receivable) obligations (%)
- -------- ---- ----------- ----------------------------------------- ------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Short-term Notes
U. S. dollars Fixed $ 3,015 $ -- $ -- $ 3,015 5.68 $ 1,369 $ -- $ -- $ 1,369 5.46
Global Multicurrency Notes
Czech koruny Fixed 220 -- -- 220 10.88 54 -- -- 54 10.91
(220) -- (220) 10.88 (54) -- (54) 10.91
Deutsche mark Fixed -- -- -- -- -- -- 20 -- 20 3.09
Adjustable -- 394 -- 394 2.80 -- 54 -- 54 3.05
Italian lire Fixed 148 -- -- 148 6.80 20 -- -- 20 8.62
(148) -- (148) 6.80 (20) -- (20) 8.62
Japanese yen Fixed 95 88 -- 183 3.16 -- -- -- -- --
(95) -- (95) 5.93 -- -- -- -- --
New Zealand Fixed 137 -- -- 137 7.96 -- -- -- -- --
dollars (137) -- (137) 7.96
Slovak koruny Fixed 67 -- -- 67 12.65 -- -- -- -- --
(67) -- (67) 12.65 -- -- -- -- --
U. S. dollars Fixed 1,100 120 -- 1,220 4.93 300 -- -- 300 5.52
(900) (900) 4.65 -- -- -- -- --
Adjustable -- 877 900 1,777 5.52 -- -- -- -- --
(112) -- (112) 5.40 -- -- -- -- --
South African Fixed 657 -- -- 657 15.07 -- -- -- -- --
rand (657) -- (657) 15.07 -- -- -- -- --
Central Bank Facility
U. S. dollars Adjustable 2,200 -- -- 2,200 5.14 2,586 -- -- 2,586 5.47
------------------------------------------------- -----------------------------------------------------
Total Fixed 5,439 208 -- 5,647 6.90 1,743 20 -- 1,763 5.65
(1,324) (900) (2,224) 8.99 -- (74) -- (74) 10.29
Adjustable 2,200 1,271 900 4,371 5.09 2,586 54 -- 2,640 5.42
(112) (112) 5.40
------------------------------------------------- -----------------------------------------------------
Principal at face value 7,639 43 -- 7,682 5.28 4,329 -- -- 4,329 5.43
Net unamortized discounts 9 9 (1) (1) --
------------------------------------------------- -----------------------------------------------------
Total $ 7,648 $ 43 $ -- $ 7,691 5.28 $ 4,328 $ -- $ -- $ 4,328 5.43
================================================= =====================================================
</TABLE>
- --------------------------------------------------------------------------------
* At June 30, 1997 the average repricing period of the net currency obligations
for short-term borrowings is three months.
<PAGE>
38 IBRD Financial Statements
- --------------------------------------------------------------------------------
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
The maturity structure of IBRD's Medium-and Long-term borrowings outstanding at
June 30, 1997 and June 30, 1996 is as follows:
In millions
- --------------------------------------------------------------------------------
Period 1997
- ---------------------------------------------------------- -------
July 1, 1997 through June 30, 1998 ....................... $13,185
July 1, 1998 through June 30, 1999 ....................... 9,492
July 1, 1999 through June 30, 2000 ....................... 17,430
July 1, 2000 through June 30, 2001 ....................... 8,173
July 1, 2001 through June 30, 2002 ....................... 9,498
July 1, 2002 through June 30, 2007 ....................... 21,806
Thereafter ............................................... 9,448
-------
Total .................................................... $89,032
=======
- --------------------------------------------------------------------------------
In millions
- --------------------------------------------------------------------------------
Period 1996
- ---------------------------------------------------------- -------
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
=======
- --------------------------------------------------------------------------------
<PAGE>
IBRD Financial Statements 39
- --------------------------------------------------------------------------------
Notes to Financial Statements
- --------------------------------------------------------------------------------
The following table reflects the carrying and estimated fair values of the
borrowings portfolio at June 30, 1997 and June 30, 1996:
In millions
- --------------------------------------------------------------------------------
1997 1996
---------------------- ----------------------
Carrying Estimated Carrying Estimated
value fair value value fair value
-------- --------- -------- ---------
Short-term .......... $ 7,648 $ 7,699 $ 4,328 $ 4,371
Medium- and long-term 89,031 96,310 92,391 99,250
Swaps
Currency
Payable ........... 29,687 30,098 19,427 19,841
Receivable ........ (29,031) (30,375) (18,010) (19,203)
Interest rate ...... -- 654 -- 1,064
Swaptions .......... -- 1 -- 1
-------- --------- -------- ---------
Total ............... $ 97,335 $ 104,387 $ 98,136 $ 105,324
======== ========= ======== =========
- --------------------------------------------------------------------------------
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.
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 risk is controlled through application of
eligibility criteria and volume limits for transactions with individual
counterparties and through the expanding use of mark-to-market collateral
arrangements for swap transactions. IBRD may also accept collateral in the form
of cash or other approved liquid securities from individual counterparties in
order to mitigate its credit exposure.
<PAGE>
40 IBRD Financial Statements
- --------------------------------------------------------------------------------
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
The contract value/notional amounts and credit risk exposure, as applicable, of
these financial instruments at June 30, 1997 and June 30, 1996 are given below:
In millions
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1997 1996
------- -------
<S> <C> <C>
INVESTMENTS - TRADING PORTFOLIO
Futures and forwards
o Long position ................................................... $ 6,620 $ 1,499
o Short position .................................................. 6,675 5,875
o Credit exposure due to potential nonperformance by counterparties 1 2
Options
o Long position ................................................... 134 679
o Short position .................................................. -- 429
Covered forwards
o Credit exposure due to potential nonperformance by counterparties 36 2
BORROWINGS PORTFOLIO
Currency swaps
o Credit exposure due to potential nonperformance by counterparties 1,255 728
Interest rate swaps
o Notional principal .............................................. 33,965 26,396
o Credit exposure due to potential nonperformance by counterparties 393 96
Swaptions
o Notional principal .............................................. 74 30
o Credit exposure due to potential nonperformance by counterparties -- --
</TABLE>
- --------------------------------------------------------------------------------
Note F--Retained Earnings, Allocations and Transfers
Retained Earnings: Retained Earnings comprises the following elements at June
30, 1997 and June 30, 1996:
In millions
- --------------------------------------------------------------------------------
1997 1996
------- -------
Special reserve .......................... $ 293 $ 293
General reserve .......................... 14,159 13,909
Surplus .................................. 457 710
Unallocated net income ................... 1,285 1,187
------- -------
Total .................................... $16,194 $16,099
======= =======
- --------------------------------------------------------------------------------
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 Heavily
<PAGE>
IBRD Financial Statements 41
- --------------------------------------------------------------------------------
Notes to Financial Statements
- --------------------------------------------------------------------------------
Indebted Poor Countries (HIPC) Debt Initiative Trust Fund or other arrangements
in support of the HIPC Debt 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 February 3,
1997, the Board of Governors approved a transfer from Surplus, by way of grant,
of $90 million to the Trust Fund for Gaza and West Bank.
Transfers to International Development Association: The Board of Governors had
approved aggregate transfers through June 30, 1996 to IDA totaling $4,831
million from unallocated Net Income. 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 June 30, 1997, there was no payable to IDA.
Transfers to Debt Reduction Facility for IDA-Only Countries: The Board of
Governors had approved aggregate transfers through June 30, 1996 to the Debt
Reduction Facility for IDA-Only Countries (DRF) totaling $300 million. At June
30, 1997, $118 million ($119 million--June 30, 1996) remained payable.
Transfer to Trust Fund for Gaza and West Bank: The Board of Governors had
approved aggregate transfers through June 30, 1996 to the Trust Fund for Gaza
and West Bank (TFG), totaling $140 million. On February 3, 1997, the Board of
Governors approved a transfer from Surplus, by way of grant, of $90 million. At
June 30, 1997, $83 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 June 30, 1997, there was no payable to the Trust
Fund. At June 30, 1996, $16 million remained payable.
Transfers to the Heavily Indebted Poor Countries Debt Initiative Trust Fund: 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 Debt Initiative 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. On May 5, 1997, upon management's determination
that creditors holding a substantial portion of the debts of countries eligible
under the HIPC Debt Initiative have agreed to meet their share of the costs
envisaged under the Initiative, IBRD's Executive Directors approved the transfer
of the $500 million that had been set aside in Surplus for the HIPC Debt
Initiative Trust Fund. At June 30, 1997, there was no payable to the HIPC Debt
Initiative 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 June 30, 1997, $64
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.
On March 31, 1997, the Executive Directors approved a multiyear program of
institutional renewal to improve IBRD's and IDA's business processes, products
and services, strengthen their human resources through more skilled and better
trained staff, and achieve a higher level of development effectiveness.
Implementation of this program is expected to result in costs associated with
staff reductions during the fiscal years 1997 through 1999. At June 30, 1997, 57
staff had been identified for separation at a cost of $10 million. Included in
the total charge of $10 million are costs associated with outplacement
consulting, job search assistance, training, medical insurance plan
contributions and related tax allowances. Of the total charge of $10 million, $4
million has been charged to IDA for fiscal year 1997 consistent with normal cost
apportionment procedures applied in the calculation of the management fee.
<PAGE>
42 IBRD Financial Statements
- --------------------------------------------------------------------------------
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
Administrative Expenses for the fiscal year ended June 30, 1997 are net of the
management fee of $416 million ($508 million--June 30, 1996) charged to IDA and
$108 million ($102 million--June 30, 1996) charged to reimbursable programs.
Included in the amounts charged to reimbursable programs are allocated charges
of $21 million ($22 million--June 30, 1996) charged to IFC and $1 million ($1
million--June 30, 1996) charged to MIGA.
Contributions to special programs represent grants for agricultural research,
the control of onchocerciasis, and other developmental activities.
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 June 30, 1997
and June 30, 1996 is as follows:
- ---------------------------------------------------------------------------
1997 1996
---------------------------- -------------------------
Total
Total fiduciary Number of fiduciary Number of
assets trust fund assets trust fund
(In millions) accounts (In millions) accounts
------------- -------- ------------- --------
IBRD executed ....... $ 552 1,622 $ 548 1,314
Recipient executed .. 1,513 1,236 1,308 935
------ ----- ------ -----
Total ............... $2,065 2,858 $1,856 2,249
====== ===== ====== =====
- ---------------------------------------------------------------------------
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 fiscal
year ended June 30, 1997, IBRD received $15 million ($15 million--June 30, 1996)
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.
<PAGE>
IBRD Financial Statements 43
- --------------------------------------------------------------------------------
Notes to Financial Statements
- --------------------------------------------------------------------------------
Net periodic pension cost for IBRD participants for the fiscal years ended June
30, 1997 and June 30, 1996 consisted of the following components:
In millions
- --------------------------------------------------------------------------------
1997 1996
---- ----
Service cost--benefits earned during the fiscal year ..... $ 189 $ 216
Interest cost on projected benefit obligation ............ 342 360
Actual return on plan assets ............................. (1,472) (917)
Net amortization and deferral ............................ 842 437
------- -----
Net periodic pension (income) cost ....................... $ (99) $ 96
======= =====
- --------------------------------------------------------------------------------
IBRD has re-evaluated the economic assumptions underlying its pension expense
methodology. Based on changes arising from this re-evaluation and changes in the
Plan assets at their fair value, IBRD recorded $63 million in pension income for
the fiscal year ending June 30, 1997 versus pension expense of $60 million for
the fiscal year ended June 30, 1996. For the fiscal year ended June 30, 1997,
the employers' cash contribution for all participants in the Plan was $94
million, of which $49 million is attributable to IBRD and is included in
Miscellaneous Assets on the balance sheet. For the fiscal year ended June 30,
1997, the management fee charged to IDA was reduced by $36 million representing
the portion of the pension income allocated to IDA. For the fiscal year ended
June 30, 1996, a pension expense of $36 million was included in the management
fee charged to IDA.
The following table sets forth the Plan's funded status at June 30, 1997 and
June 30, 1996:
In millions
- --------------------------------------------------------------------------------
1997 1996
---- ----
Actuarial present value of benefit obligations
Accumulated benefit obligation
Vested ............................................... $(3,760) $(3,543)
Nonvested ............................................ (49) (36)
------- -------
Subtotal ........................................... (3,809) (3,579)
Effect of projected compensation levels ................ (1,783) (1,718)
------- -------
Projected benefit obligation ......................... (5,592) (5,297)
Plan assets at fair value ................................ 8,698 7,033
------- -------
Plan assets in excess of projected benefit obligation .... 3,106 1,736
Remaining unrecognized net transition asset .............. (78) (91)
Unrecognized prior service cost .......................... 66 74
Unrecognized net gain from past experience different
from that assumed and from changes in assumptions ...... (2,881) (1,719)
------- -------
Prepaid pension cost ..................................... $ 213 $ --
======= =======
- --------------------------------------------------------------------------------
<PAGE>
44 IBRD Financial Statements
- --------------------------------------------------------------------------------
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
Of the $213 million prepaid at June 30, 1997 ($nil at June 30, 1996), $184
million is attributable to IBRD ($nil at June 30, 1996) and is included in
Miscellaneous Assets on the balance sheet. The remainder has been attributed to
IFC and MIGA.
The weighted-average discount rate used in determining the actuarial present
value of the projected benefit obligation was 7.5 percent (7.5 percent--June 30,
1996). 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 11.0 percent (13.3 percent--June 30, 1996) at age 20 and
decreasing to 5.5 percent (6.8 percent--June 30, 1996) at age 64. The expected
long-term rate of return on assets was 9 percent (9 percent--June 30, 1996).
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 fiscal
years ended June 30, 1997 and June 30, 1996 consisted of the following
components:
In millions
- --------------------------------------------------------------------------------
1997 1996
---- ----
Service cost--benefits earned during the fiscal year ........... $ 38 $ 32
Interest cost on accumulated postretirement benefit obligation . 47 45
Actual return on plan assets ................................... (200) (130)
Net amortization and deferral .................................. 139 87
----- -----
Net periodic postretirement benefits cost ...................... $ 24 $ 34
===== =====
- --------------------------------------------------------------------------------
The portion of this cost that relates to IBRD and is included in Administrative
Expenses for the fiscal year ended June 30, 1997 is $15 million ($22 million --
June 30, 1996). The balance has been included in the management fee charged to
IDA.
<PAGE>
IBRD Financial Statements 45
- --------------------------------------------------------------------------------
Notes to Financial Statements
- --------------------------------------------------------------------------------
The following table sets forth the RSBP's funded status at June 30, 1997 and
June 30, 1996:
In millions
- --------------------------------------------------------------------------------
1997 1996
------ ------
Accumulated postretirement benefit obligation
Retirees ............................................. $ (320) $ (293)
Fully eligible active plan participants .............. (142) (128)
Other active plan participants ....................... (277) (285)
------- -------
(739) (706)
Plan assets at fair value .............................. 1,177 937
------- -------
Plan assets in excess of accumulated
postretirement benefit obligation .................... 438 231
Unrecognized prior service costs ....................... (10) (12)
Unrecognized net loss from past experience
different from that assumed and from changes
in assumptions ....................................... (99) 107
------- -------
Prepaid postretirement benefit cost .................... $ 329 $ 326
======= =======
- --------------------------------------------------------------------------------
Of the $329 million prepaid at June 30, 1997 ($326 million--June 30, 1996), $296
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 June 30, 1997, the accumulated plan benefit obligation (APBO) was determined
using health care cost trend rates of 13.7 percent to 10.8 percent, decreasing
gradually to 5.5 percent in 2009 and thereafter. The health care cost trend
rates used for June 30, 1996 were 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 June 30, 1997 by $139
million and the net periodic postretirement benefit cost for the fiscal year
then ended by $21 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>
46 IBRD Financial Statements
- --------------------------------------------------------------------------------
Report of Independent Accountants
- --------------------------------------------------------------------------------
[Letterhead of Price Waterhouse]
July 28, 1997
President and Board of Governors
International Bank for Reconstruction
and Development
In our opinion, the financial statements appearing on pages 4 through 45 of this
Report present fairly, in all material respects, in terms of United States
dollars, the financial position of the International Bank for Reconstruction and
Development at June 30, 1997 and 1996, and the results of its operations and
its cash flows for the years then ended in conformity with generally accepted
accounting principles in the United States and with International Accounting
Standards. These financial statements are the responsibility of management of
the International Bank for Reconstruction and Development; our responsibility is
to express an opinion on these financial statements based on our audits. We
conducted our audits of these statements in accordance with generally accepted
auditing standards, including International Standards on Auditing, which require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for the opinion expressed above.
/s/ Price Waterhouse
(International Firm)
<PAGE>
AUGUST 12, 1997 ACT_RPT_025
11:01:17 Page 1
INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
LIABILITIES MANAGEMENT SYSTEM
SEC Report On Changes in Borrowings
NEW BORROWINGS (MLT) 01-APR-1997 thru 30-JUN-1997
<TABLE>
<CAPTION>
Source : Public
Description Issue # Currency Tranche Bond Amount US$ Equivalent Settlement Date
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Czech Koruna
- ------------
CZK 1 billion 10.375% Euronotes, due April 21, 1999 581 CZK 1 1,000,000,000 33,107,101 21-Apr-1997
Deutsche mark
- -------------
DEM 100 Million 5.25% Swap-Linked Notes due 2000 32 DEM 1 100,000,000 58,075,382 09-May-1997
DEM 500 million 4.625% notes of 1997, due December 18, 2001 562 DEM 2 500,000,000 294,698,376 02-Jun-1997
DEM 250 million 4.745% notes of 1997, due April 29, 2002 580 DEM 1 250,000,000 145,653,694 29-Apr-1997
--------------
** Total By Currency 498,427,452
--------------
Spanish pesetas
- ---------------
ESP 15 billion 5.375% Bonds of 1997 due May 9, 2000 18 ESP 1 15,000,000,000 103,384,106 09-May-1997
Pounds sterling
- ---------------
GBP 750 million 7% notes of 1997, due June 7, 2002 590 GBP 1 750,000,000 1,223,550,000 27-May-1997
</TABLE>
<PAGE>
AUGUST 12, 1997 ACT_RPT_025
11:01:17 Page 2
INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
LIABILITIES MANAGEMENT SYSTEM
SEC Report On Changes in Borrowings
NEW BORROWINGS (MLT) 01-APR-1997 thru 30-JUN-1997
<TABLE>
<CAPTION>
Source : Public
Description Issue # Currency Tranche Bond Amount US$ Equivalent Settlement Date
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Hong Kong dollars
- -----------------
HKD 1 Billion 7.58% notes of 1997, due May 7, 2007 583 HKD 1 1,000,000,000 129,080,059 07-May-1997
Italian lire
- ------------
ITL 500 BILLION DOMESTIC LIRA CAPPED FRNs DUE MAY 28, 2004 27 ITL 1 500,000,000,000 299,736,831 27-May-1997
Itl 50 billion 10-yr callable reverse floater notes due 2007 28 ITL 4 50,000,000,000 29,626,821 30-Jun-1997
ITL 50 BIL 7.45% CALLABLE BONDS DUE MAY 20, 2002 31 ITL 1 150,000,000,000 89,623,938 20-May-1997
Increase of ITL 50 billion 7.45% Callable Bonds due 2002 31 ITL 2 50,000,000,000 29,874,646 20-May-1997
MULTI-CALLABLE CAPPED FLOATING RATE NOTES DUE 6/6/2007 33 ITL 1 175,000,000,000 103,006,010 06-Jun-1997
Multi-Callable Capped Floating Rate Notes due June 6, 2007 33 ITL 2 25,000,000,000 14,715,144 06-Jun-1997
ITL 300 billion 6.590% notes of 1997 due May 21, 2002 589 ITL 1 300,000,000,000 179,245,734 21-May-1997
--------------
** Total By Currency 745,829,124
--------------
Japanese yen
- ------------
5% FOR 1 DAY, OTHER ANN. COUPONS FORMULA BASED,DUE JUN.20,2012 35 JPY 1 5,000,000,000 44,169,611 19-Jun-1997
JPY 15 billion 5.6% JPY/GBP Dual Currency Notes due 4/24/00 577 JPY 1 15,000,000,000 119,617,225 24-Apr-1997
jpy 5 bn step-down Coupon of 4/97 due 4/25/2007 579 JPY 1 5,000,000,000 39,572,616 25-Apr-1997
--------------
** Total By Currency 203,359,452
--------------
</TABLE>
<PAGE>
AUGUST 12, 1997 ACT_RPT_025
11:01:17 Page 3
INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
LIABILITIES MANAGEMENT SYSTEM
SEC Report On Changes in Borrowings
NEW BORROWINGS (MLT) 01-APR-1997 thru 30-JUN-1997
<TABLE>
<CAPTION>
Source : Public
Description Issue # Currency Tranche Bond Amount US$ Equivalent Settlement Date
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Korean Won
- ----------
KRW 95 billion 9.80% Notes due April 23, 2002 1 KRW 1 71,500,000,000 80,004,476 23-Apr-1997
KRW 95 billion 9.80% Notes due April 23, 2002 1 KRW 2 23,500,000,000 26,295,177 23-Apr-1997
--------------
** Total By Currency 106,299,653
--------------
New Zealand dollars
- -------------------
7.50% NZD Notes of 1997, due April 4, 2000 571 NZD 1 100,000,000 69,730,000 04-Apr-1997
NZD 100 Million 8.25% notes of 1997, due May 15, 2000 584 NZD 1 100,000,000 69,560,000 15-May-1997
NZD 100 million 8.00% notes of 1997, due May 23, 2007 586 NZD 1 100,000,000 69,530,000 23-May-1997
NZD 100 million 7.625% notes of 1997, due June 24, 2002 593 NZD 1 100,000,000 68,660,000 24-Jun-1997
--------------
** Total By Currency 277,480,000
--------------
Philippine Pesos
- ----------------
PHP 3 billion 10.25% Euronotes,due April 11, 2002 574 PHP 1 3,000,000,000 113,765,427 11-Apr-1997
Increase PHP 1 billion 10.25% Euronotes, due April 11, 2002 574 PHP 2 1,000,000,000 37,921,809 11-Apr-1997
--------------
** Total By Currency 151,687,236
--------------
</TABLE>
<PAGE>
AUGUST 12, 1997 ACT_RPT_025
11:01:17 Page 4
INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
LIABILITIES MANAGEMENT SYSTEM
SEC Report On Changes in Borrowings
NEW BORROWINGS (MLT) 01-APR-1997 thru 30-JUN-1997
<TABLE>
<CAPTION>
Source : Public
Description Issue # Currency Tranche Bond Amount US$ Equivalent Settlement Date
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Polish Zlotys
- -------------
PLN 100 million 19.5% Eurontes of 1997, due June 17, 1999 591 PLN 1 100,000,000 31,335,193 17-Jun-1997
United States dollars
- ---------------------
USD 300 mn 6.625% Notes of 4/23/97 due 5/21/2001 588 USD 1 300,000,000 300,000,000 21-May-1997
South African Rand
- ------------------
ZAR 2.5 billion Zero Coupon Euronotes due April 4, 2017 572 ZAR 1 2,500,000,000 565,291,125 04-Apr-1997
ZAR 500 million zero coupon notes, due April 4, 2017 572 ZAR 2 500,000,000 113,058,225 04-Apr-1997
ZAR 500 million zero coupon notes, due April 4, 2017 572 ZAR 3 500,000,000 113,058,225 04-Apr-1997
ZAR 1.5 BILLION ZERO-COUPON NOTES OF 1997 DUE APRIL 4, 2007 572 ZAR 4 1,500,000,000 339,174,675 04-Apr-1997
ZAR 1 billion Zero-coupon Notes of 1997, due April 4, 2017 572 ZAR 5 1,000,000,000 223,638,600 12-May-1997
ZAR 150 million 14.50% Eurnotes of 1997 due April 8, 2002 575 ZAR 1 150,000,000 33,963,546 08-Apr-1997
ZAR 2 billion 0% coupon notes, due April 1, 2022 576 ZAR 1 2,000,000,000 452,552,160 01-Apr-1997
ZAR 2 billion zero coupon notes, due April 1, 2022 576 ZAR 2 2,000,000,000 452,552,160 01-Apr-1997
ZAR 1 billion zero coupon notes of 1997, due April 1, 2022 576 ZAR 3 1,000,000,000 226,276,080 01-Apr-1997
ZAR 2 billion zero coupon notes of 1997, due April 1, 2022 576 ZAR 4 2,000,000,000 452,552,160 01-Apr-1997
ZAR 1.0 billion Zero coupon notes of 1997, due May 14, 2012 587 ZAR 1 1,000,000,000 224,114,750 14-May-1997
ZAR 2 billion Zero coupon notes of 1997, due May 14, 2012 587 ZAR 2 2,000,000,000 447,277,200 05-Jun-1997
ZAR 200 million 14.625% Euronotes due June 19, 2000 592 ZAR 1 200,000,000 44,360,652 19-Jun-1997
--------------
** Total By Currency 3,687,869,558
--------------
--------------
** Total By Source 7,491,408,934
--------------
</TABLE>
<PAGE>
AUGUST 12, 1997 ACT_RPT_025
11:01:17 Page 5
INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
LIABILITIES MANAGEMENT SYSTEM
SEC Report On Changes in Borrowings
NEW BORROWINGS (MLT) 01-APR-1997 thru 30-JUN-1997
<TABLE>
<CAPTION>
Source : Private
Description Issue # Currency Tranche Bond Amount US$ Equivalent Settlement Date
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Italian lire
- ------------
ITL 55 BIL.COUPON 3MLIB LESS 17BP,TO A MAX.COUPON OF10% 34 ITL 1 55,000,000,000 32,698,973 30-May-1997
United States Dollars
- ---------------------
USD 30 million 6.45% Loan of May 1997 due June 27, 2002 269 USD 1 30,000,000 30,000,000 27-Jun-1997
--------------
** Total By Source 62,698,973
--------------
</TABLE>
<PAGE>
AUGUST 12, 1997 ACT_RPT_025
11:01:17 Page 6
INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
LIABILITIES MANAGEMENT SYSTEM
SEC Report On Changes in Borrowings
NEW BORROWINGS (MLT) 01-APR-1997 thru 30-JUN-1997
<TABLE>
<CAPTION>
Source : Loans
Description Issue # Currency Tranche Bond Amount US$ Equivalent Settlement Date
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Japanese yen
- ------------
JPY 2.825% Callable Double-up Issue, due May 21,2007 220 JPY 1 1,000,000,000 8,568,980 20-May-1997
</TABLE>
<PAGE>
AUGUST 12, 1997 ACT_RPT_025
11:01:17 Page 7
INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
LIABILITIES MANAGEMENT SYSTEM
SEC Report On Changes in Borrowings
MATURED BORROWINGS (MLT) 01-APR-1997 thru 30-JUN-1997
<TABLE>
<CAPTION>
Source : Public
Redemption
Description Issue # Currency Tranche Amount US$ Equivalent Redemption Date
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Swiss francs
- ------------
7.50% CHF Bonds of 1990, due May 30, 1997 223 CHF 1 300,000,000 211,312,249 30-May-1997
Deutsche mark
- -------------
6.625% DM Bonds of 1989, due 1997 258 DEM 1 150,000,000 87,422,777 14-Apr-1997
French francs
- -------------
10% FRF Notes of 1990, due May 9, 1997 6 FRF 1 1,000,000,000 172,476,241 09-May-1997
Greek drachmas
- --------------
15.50% GRD 15 BILLION NOTES OF 1994, DUE APRIL 14, 1997 1 GRD 1 15,000,000,000 55,574,080 14-Apr-1997
Japanese yen
- ------------
4.625% JPY Bonds of 1987, due May 12, 1997 (1st Offering) 138 JPY 1 40,000,000,000 320,256,205 12-May-1997
4.25% JPY Bonds of 1987, due June 3, 1997 (2nd Offering) 139 JPY 1 39,900,000,000 342,636,325 03-Jun-1997
6-7/8% YEN BONDS DUE JUNE 11, 1997 190 JPY 1 30,000,000,000 265,957,447 11-Jun-1997
--------------
** Total By Currency 928,849,977
--------------
* Indicates Partial Maturity
</TABLE>
<PAGE>
AUGUST 12, 1997 ACT_RPT_025
11:01:17 Page 8
INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
LIABILITIES MANAGEMENT SYSTEM
SEC Report On Changes in Borrowings
MATURED BORROWINGS (MLT) 01-APR-1997 thru 30-JUN-1997
<TABLE>
<CAPTION>
Source : Public
Redemption
Description Issue # Currency Tranche Amount US$ Equivalent Redemption Date
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
European currency units
- -----------------------
8-1/4% ECU BONDS OF 1992 DUE APRIL 10, 1997 16 XEU 1 150,000,000 171,372,000 10-Apr-1997
--------------
** Total By Source 1,627,007,324
--------------
* Indicates Partial Maturity
</TABLE>
<PAGE>
AUGUST 12, 1997 ACT_RPT_025
11:01:17 Page 9
INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
LIABILITIES MANAGEMENT SYSTEM
SEC Report On Changes in Borrowings
MATURED BORROWINGS (MLT) 01-APR-1997 thru 30-JUN-1997
<TABLE>
<CAPTION>
Source : Private
Redemption
Description Issue # Currency Tranche Amount US$ Equivalent Redemption Date
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Netherlands guilders
- --------------------
8.125% NLG Private Placement of '85, Due '91-2000 71 NLG 1 10,000,000 5,270,648 24-May-1997
United States dollars
- ---------------------
14.9% US$ Notes of 1982, due 5/24/97 147 USD 1 45,500,000 45,500,000 24-May-1997
--------------
** Total By Source 50,770,648
--------------
* Indicates Partial Maturity
</TABLE>
<PAGE>
AUGUST 12, 1997 ACT_RPT_025
11:01:17 Page 10
INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
LIABILITIES MANAGEMENT SYSTEM
SEC Report On Changes in Borrowings
MATURED BORROWINGS (MLT) 01-APR-1997 thru 30-JUN-1997
<TABLE>
<CAPTION>
Source : Loans
Redemption
Description Issue # Currency Tranche Amount US$ Equivalent Redemption Date
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Deutsche mark
- -------------
7.4% DM Loan of 1977, due 1988/97 (Tranche B) 95 DEM 2 10,000,000 5,929,088 25-May-1997*
Japanese yen
- ------------
5.80% JPY Loan of 1987, due 1995/2000 124 JPY 1 3,600,000,000 31,732,041 23-Jun-1997*
JAPANESE YEN LOAN OF 1987, DUE 1994-1999 (Ref. #29) 129 JPY 1 2,700,000,000 23,841,060 20-Jun-1997*
JAPANESE YEN LOAN OF 1987, DUE 1994-1999 (REF #29) 129 JPY 2 3,600,000,000 31,788,079 20-Jun-1997*
JAPANESE YEN LOAN OF 1987, DUE 1994-1999 130 JPY 1 5,000,000,000 42,844,901 20-May-1997*
JAPANESE YEN LOAN OF 1987, DUE 1995-2000 132 JPY 1 2,700,000,000 21,340,500 17-Apr-1997*
JAPANESE YEN LOAN OF 1987, DUE 1992-1997 133 JPY 2 1,000,000,000 8,613,264 19-May-1997*
JAPANESE YEN LOAN OF 1987, DUE 1993-1998 134 JPY 1 6,300,000,000 50,420,168 09-Apr-1997*
5.70% JAPANESE YEN LOAN OF 1989, DUE 1997 175 JPY 1 20,000,000,000 174,520,070 26-Jun-1997
--------------
** Total By Currency 385,100,083
--------------
Netherlands guilders
- --------------------
11.375% f. Loan of 1982, due 1988-97 26 NLG 1 15,000,000 7,958,742 01-Apr-1997
9.125% f. Loan of 1984, due 1990-2004 54 NLG 1 6,500,000 3,336,567 02-May-1997*
--------------
** Total By Currency 11,295,309
--------------
--------------
** Total By Source 402,324,480
--------------
* Indicates Partial Maturity
</TABLE>
<PAGE>
AUGUST 12, 1997 ACT_RPT_025
11:01:17 Page 11
INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
LIABILITIES MANAGEMENT SYSTEM
SEC Report On Changes in Borrowings
MATURED BORROWINGS (COLTS) 01-APR-1997 thru 30-JUN-1997
<TABLE>
<CAPTION>
Source : Public
Redemption
Description Issue # Currency Tranche Amount US$ Equivalent Redemption Date
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
United States dollars
- ---------------------
7.85% COLTS DUE 01-APR-1997 262 USD 1 3,000,000 3,000,000 01-Apr-1997
0% COLTS DUE 29-MAY-1997 753 USD 1 150,000 150,000 29-May-1997
9.3% COLTS DUE 30-MAY-1997 1091 USD 1 150,000 150,000 30-May-1997
0% COLTS DUE 15-MAY-1997 1111 USD 1 1,000,000 1,000,000 15-May-1997
0% COLTS DUE 30-JUN-1997 1340 USD 1 174,000 174,000 30-Jun-1997
9.15% COLTS DUE 24-APR-1997 1406 USD 1 150,000 150,000 24-Apr-1997
9.25% COLTS DUE 28-APR-1997 1408 USD 1 25,000 25,000 28-Apr-1997
7.375% COLTS DUE 10-MAY-1997 1418 USD 1 340,000 340,000 10-May-1997
9.21% COLTS DUE 15-MAY-1997 1433 USD 1 100,000 100,000 15-May-1997
9% COLTS DUE 22-MAY-1997 1434 USD 1 25,000 25,000 22-May-1997
9.02% COLTS DUE 09-JUN-1997 1443 USD 1 30,000 30,000 09-Jun-1997
8.06% COLTS DUE 09-APR-1997 1530 USD 1 200,000 200,000 09-Apr-1997
8.125% COLTS DUE 22-MAY-1997 1546 USD 1 50,000 50,000 22-May-1997
--------------
** Total By Currency 5,394,000
--------------
--------------
** Total By Source 5,394,000
--------------
</TABLE>
<PAGE>
AUGUST 12, 1997 ACT_RPT_025
11:01:17 Page 12
INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
LIABILITIES MANAGEMENT SYSTEM
SEC Report On Changes in Borrowings
PREPAYMENT ADVICES (MLT) 01-APR-1997 thru 30-JUN-1997
<TABLE>
<CAPTION>
Source : Public
Prepayment
Description Issue # Currency Tranche Amount US$ Equivalent Prepayment Date
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Australian Dollars
- ------------------
Zero -Coupon Euro-Australian $ notes of 1995 due Oct 18, 1999 16 AUD 1 100,000,000 75,980,000 06-Jun-1997
Zero -Coupon Euro-Australian $ notes of 1995 due Oct 18, 1999 16 AUD 1 100,000,000 76,130,000 12-Jun-1997
7.60% AUD NOTES OF 1996, DUE APRIL 22, 1999 529 AUD 1 12,900,000 10,019,430 09-May-1997
7.65% AUD NOTES OF 1996, DUE JUNE 1, 1999 534 AUD 1 18,000,000 14,007,600 13-May-1997
7.50% AUD NOTES OF 1996, DUE AUGUST 13, 1999 545 AUD 1 15,500,000 12,038,850 09-May-1997
--------------
** Total By Currency 188,175,880
--------------
Canadian Dollars
- ----------------
5.6% CAD NOTES OF 1996, DUE JUNE 25, 1998 538 CAD 1 11,500,000 8,327,902 02-Jun-1997
Italian Lire
- ------------
9.65% Callable Notes due 1999 (Callable 4/1/97 or 4/1/97) 8 ITL 1 200,000,000,000 119,253,473 01-Apr-1997
7-Year Capped Callable Floating Rate Notes, due 2003 9 ITL 1 150,000,000,000 89,179,018 30-May-1997
7 Year Capped Callable Floating Rate Notes, due 2003 9 ITL 2 50,000,000,000 29,726,339 30-May-1997
7 Year Capped Callable Floating Rate Note Due 30-May-2003 9 ITL 3 100,000,000,000 59,452,679 30-May-1997
ITL 300 billion 8.50% Callable Notes due 1999 12 ITL 1 300,000,000,000 177,760,923 30-Jun-1997
--------------
** Total By Currency 475,372,432
--------------
</TABLE>
<PAGE>
AUGUST 12, 1997 ACT_RPT_025
11:01:17 Page 13
INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
LIABILITIES MANAGEMENT SYSTEM
SEC Report On Changes in Borrowings
PREPAYMENT ADVICES (MLT) 01-APR-1997 thru 30-JUN-1997
<TABLE>
<CAPTION>
Source : Public
Prepayment
Description Issue # Currency Tranche Amount US$ Equivalent Prepayment Date
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Japanese yen
- ------------
6.60% JPY/AUD Dual Currency Bonds of 1996, due Jul 17, 1998 15 JPY 1 776,000,000 6,183,267 21-Apr-1997
5.10% JPY/USD Dual Currency Bonds of 96, due August 27, 1998 19 JPY 1 1,000,000,000 8,936,550 16-Jun-1997
5.00% JPY/USD DUAL CURRENCY BONDS OF 1996, DUE OCT. 21, 1999 24 JPY 1 1,500,000,000 11,952,191 21-Apr-1997
5.00% JPY/USD DUAL CURRENCY BONDS OF 1996, DUE OCT. 21, 1999 24 JPY 1 2,500,000,000 19,786,308 25-Apr-1997
5.00% JPY/USD DUAL CURRENCY BONDS OF 1996, DUE OCT. 21, 1999 24 JPY 1 1,000,000,000 7,980,846 09-May-1997
5.00% JPY/USD DUAL CURRENCY BONDS OF 1996, DUE OCT. 21, 1999 24 JPY 1 1,000,000,000 8,557,980 30-May-1997
JPY ZERO COUPON NOTES OF 1994, DUE SEPTERMBER 20, 1999 213 JPY 1 14,000,000,000 123,022,847 23-May-1997
--------------
** Total By Currency 186,419,989
--------------
--------------
** Total By Source 858,296,203
--------------
</TABLE>
