INFORMATION MEMORANDUM BRSENZULASSUNGSPROSPEKT gemß § 44 Brsenzulassungs- Verordnung

Deutsche Bahn Aktiengesellschaft (Berlin, Federal Republic of Germany)

Deutsche Bahn Finance B.V. (Amsterdam, The Netherlands) 7 5,000,000,000 Debt Issuance Programme

The notes (the “Notes”) to be issued under the 5 5,000,000,000 Debt Issuance Programme (the “Pro- gramme”) are admitted for official quotation on the Frankfurt Stock Exchange and application has been made to list the Notes to be issued under the Programme on the Luxembourg Stock Exchange. Notes issued under the Programme may also be listed on an alternative stock exchange or may not be listed at all.

The payments of all amounts due in respect of the Notes issued by Deutsche Bahn Finance B.V. will be unconditionally and irrevocably guaranteed by Deutsche Bahn Aktiengesellschaft.

Arranger Deutsche Bank

Dealers

ABN AMRO Deutsche Bank

DZ BANK AG Dresdner Kleinwort Wasserstein

Merrill Lynch International MORGAN STANLEY

Schroder Salomon Smith Barney SG Investment Banking

UBS Warburg Westdeutsche Landesbank Girozentrale

The date of this Information Memorandum (which for purposes of a listing of Notes serves as “Brsenzulassungsprospekt”) is 11 July 2002. This Information Memorandum replaces the Informa- tion Memorandum dated 27 June 2001 and is valid for one year from the date hereof. Deutsche Bahn Aktiengesellschaft (“Deutsche Bahn AG”, “Deutsche Bahn”, or “DB AG” and together with its subsidiaries and affiliates “DB Group”), Deutsche Bahn Finance B.V. (herein also referred to as “Issuer” and together the “Issuers”) and Deutsche Bahn Aktiengesellschaft in its capacity as guar- antor (the “Guarantor”) and the banks named on page 203 jointly and severally accept responsibility for the information contained in this Information Memorandum. To the best of the knowledge and belief of the Issuers and the Guarantor (each of which has taken all reasonable care to ensure that such is the case), the information contained in the Information Memorandum is in accordance with the facts and does not omit anything likely to affect the import of such information.

References herein to the “Programme Date” are to the date specified on the cover of this Information Memorandum.

This Information Memorandum should be read and construed with any amendment or supplement thereto and with any other documents incorporated by reference (according to the rules of the Luxembourg Stock Exchange) and, in relation to any Series (as defined herein) of Notes, should be read and construed together with the relevant Pricing Supplement(s) (as defined herein).

Each of the Issuers and the Guarantor has confirmed to the dealers as set forth on the cover page (the “Dealers”) that this Information Memorandum is true, accurate and complete in all material respects and is not misleading; that any opinions and intentions expressed by each of them therein are hon- estly held and based on reasonable assumptions; that there are no other facts with respect to any of the Issuers and the Guarantor the omission of which would make this Information Memorandum as a whole or any statement therein or opinions or intentions expressed therein misleading in any mate- rial respect; and that all reasonable enquiries have been made to verify the foregoing.

No person has been authorised by either of the Issuer or the Guarantor to give any information or to make any representation not contained in or not consistent with this Information Memorandum or any other document entered into in relation to the Programme or any information supplied by either Issuer or the Guarantor or any other information in the public domain and, if given or made, such information or representation should not be relied upon as having been authorised by the Issuers, the Guarantor, the Dealers or any of them.

The Dealers do not constitute an underwriting syndicate or otherwise take responsibility for the sub- scription, sale or other matters in connection with any issue of Notes under this Programme except to the extent that any Dealer takes part in such issue as manager, underwriter, selling agent or in similar capacity. The delivery of this Information Memorandum and the statement on the cover page that it is valid for one year from the date hereof do not imply any assurance by the Issuers, the Guarantor or any Dealer that this Information Memorandum will continue to be correct at all times during such one-year period except that the Issuers and the Guarantor will publish a supplement to this Informa- tion Memorandum if and when required pursuant to § 44 and § 52 (2) of the German Stock Exchange Admissions Regulation in the event of certain material changes occuring subsequent to the publica- tion of this Information Memorandum and prior to the listing of any Notes issued under the Pro- gramme.

No representation or warranty is made or implied by the Dealer or any of their respective affiliates, and neither the Dealers nor any of their respective affiliates make any representation or warranty or accept any responsibility, as to the accuracy or completeness of the information contained in this Information Memorandum.

The distribution of this Information Memorandum and any Pricing Supplement and the offering, sale and delivery of the Notes in certain jurisdictions may be restricted by law. Persons into whose pos- session this Information Memorandum or any Pricing Supplement comes are required by the Issuers and the Dealers to inform themselves about and to observe any such restrictions. For a description of certain restrictions on offers, sales and deliveries of Instruments and on the distribution of the Infor- mation Memorandum or any Pricing Supplement and other offering material relating to the Notes, see “Subscription and Sale”.

In particular, Notes have not been and will not be registered under the United States Securities Act of 1933 (as amended) and may include Notes in bearer form which are subject to U.S. tax law require-

2 ments. Subject to certain exceptions, Notes may not be offered, sold or delivered within the United States or to U.S. persons. Neither this Information Memorandum nor any Pricing Supplement may be used for the purpose of an offer or solicitation by anyone in any jurisdiction in which such offer or solicitation is not authorised or to any person to whom it is unlawful to make such an offer or solicita- tion.

This document may only be communicated or caused to be communicated in the UK in circum- stances in which section 21(1) of the Financial Services and Markets Act 2000 (“FSMA”) does not apply.

Neither the Information Memorandum nor any Pricing Supplement may be used for the purpose of an offer or solicitation by anyone in any jurisdiction in which such offer or solicitation is not authorised or to any person to whom it is unlawful to make such an offer or solicitation.

Neither the Information Memorandum nor any Pricing Supplement constitutes an offer or an invita- tion to subscribe for or purchase any Notes and should not be considered as a recommendation by the Issuers, the Guarantor, the Dealers or any of them that any recipient of this Information Memo- randum or any Pricing Supplement should subscribe for or purchase any Notes. Each recipient of this Information Memorandum or any Pricing Supplement shall be taken to have made its own appraisal of the condition (financial or otherwise) of the Issuers and the Guarantor.

In connection with the issue of any Tranche (as defined herein) of Notes under the Programme, the Dealer (if any) who is specified in the relevant Pricing Supplement as the stabilising institution or any person acting for him may over-allot or effect transactions with a view to supporting the market price of the Notes of the Series of which such Tranche forms part and any associated securities at a level higher than that which might otherwise prevail for a limited period after the issue date. However, there may be no obligation on the stabilising institution to do this. Such stabilising, if commenced, may be discontinued at any time, and must be brought to an end after a limited period. Such stabilis- ing shall be in compliance with all apllicable laws, regulations and rules.

In this Information Memorandum, all references to “5”, “Eur”, “euro” or “Euro”are to the single cur- rency which was introduced on 1 January 1999 with the start of the third stage of European Economic and Monetary Union by which date the euro became the legal currency in eleven member states of the European Union. As of 1 January 2002 the euro is no longer subdivided into the national currency units of the member states of the European Union participating in the European Economic and Mone- tary Union. Where references are made to such national currency units these references shall be read as references to the euro taking into account the respective conversion rates.

Schroder is a trademark of Schroders Holdings plc and is used under licence by Salomon Brothers International Limited.

3 TABLE OF CONTENTS Page Summary of the Programme ...... 5 Issue Procedures...... 10 Terms and Conditions of the Notes (German language version) ...... 12 Terms and Conditions of the Notes (English language version) ...... 29 Form of Guarantee/Muster der Garantie ...... 45 Form of Pricing Supplement/Muster-Konditionenblatt ...... 51 Deutsche Bahn Aktiengesellschaft Establishment, Duration and Seat ...... 64 Objects...... 64 Share Capital ...... 64 Capitalisation...... 65 Financial Year...... 65 Principles of Cooperation within the DB Group ...... 65 Liability for Obligations of DB AG...... 65 Financial Relationships to the Federal Republic of Germany or the Federal States ...... 66 Corporate Bodies and Management ...... 68 Liabilities ...... 71 Shareholders’ Meeting...... 71 Independent Accountants ...... 71 Group Management Report...... 72 Financial Statements DB Group ...... 151 Recent Developments and Outlook ...... 174 Deutsche Bahn Finance B.V. Incorporation, Duration and Registered Seat ...... 175 Purpose...... 175 Share Capital ...... 175 Capitalisation...... 175 Management ...... 175 General Meetings ...... 176 Independent Accountants ...... 176 Fiscal Year ...... 176 Financial Statements ...... 177 Taxation ...... 192 General Information Clearing Systems ...... 196 Selling Restrictions ...... 196 Use of Proceeds...... 200 Listing Information ...... 200 Documents Incorporated by Reference ...... 201 Availability of Documents ...... 202 Authorisation...... 202 Litigation...... 202 Material Change ...... 202 Names and Addresses ...... 204

4 SUMMARY OF THE PROGRAMME

The following summary does not purport to be complete and is taken from and qualified in its entirety by the remainder of this Information Memorandum and, in relation to the terms and condi- tions of any particular Tranche of Notes, the applicable Pricing Supplement. Expressions defined in “Terms and Conditions of the Notes” below shall have the same meaning in this Summary unless specified otherwise.

Issuers: Deutsche Bahn Aktiengesellschaft (“Deutsche Bahn AG”) Deutsche Bahn Finance B.V. (“Deutsche Bahn Finance”)

Guarantor: Deutsche Bahn AG, in respect of Notes issued by Deutsche Bahn Finance, (in such capacity, the “Guarantor”)

Arranger: Deutsche Bank Aktiengesellschaft

Dealers: ABN AMRO Bank N.V. Deutsche Bank Aktiengesellschaft DZ BANK Deutsche Zentral-Genossenschaftsbank AG, Frankfurt am Main Dresdner Bank Aktiengesellschaft Merrill Lynch International Morgan Stanley & Co. International Limited Salomon Brothers International Limited Socit Gnrale UBS AG, acting through its business group UBS Warburg Westdeutsche Landesbank Girozentrale

Fiscal Agent: Deutsche Bank Aktiengesellschaft

Paying Agents: Deutsche Bank Aktiengesellschaft Deutsche Bank Luxembourg S.A. and other institutions, all as indicated in the applicable Pricing Supplement.

Luxembourg Deutsche Bank Luxembourg S.A. Listing Agent:

Regulatory Matters: Any issue of Notes denominated in a currency in respect of which particular laws, regulations, guidelines, restriction and reporting requirements apply will only be issued in circumstances which comply with such laws, regulations, guidelines, restriction and reporting requirements from time to time. Without prejudice to the generality of the foregoing:

Each issue of Notes in respect of which the issue proceeds are accepted in the United Kingdom (including Notes denominated in Sterling) shall be made in accordance with all applicable laws, regulations and guidelines (as amended from time to time) of United Kingdom authorities and relevant in the context of the issue of Notes, and the Issuer shall submit (or procure the submission on its behalf of) such reports or information as may from time to time be required for compliance with such laws, regulations and guidelines. The rele- vant Issuer shall ensure that such Notes have the maturities and denomina- tions as required by such laws, regulations and guidelines.

Issues of Notes denominated in Swiss Francs or carrying a Swiss Franc related element with a maturity of more than one year will be effected in compliance with the relevant regulations of the Swiss National Bank based on Article 7 of the Federal Law on Banks and Savings Banks of 1934, as amended, and Article 15 of the Federal Law on Stock Exchanges and Securities Trading of 24 March 1995 in connection with Article 2 (2) of the Ordinance of the Federal Banking Commission on Stock Exchanges and Securities Trading of 25 June

5 1997. Under such regulations, the relevant Dealer or, in the case of a syndicated issue, the Lead Manager, must be a bank domiciled in Switzerland (which includes branches or subsidiaries of a foreign bank located in Switzerland) or a securities dealer licensed by the Swiss Federal Banking Commission as per the Federal Law on Stock Exchanges and Securities Trading of 24 March 1995 (the “Swiss Dealer”). The Swiss Dealer must report certain details of the relevant transaction to the Swiss National Bank no later than the relevant issue date for such a transaction.

The Issuer shall ensure that Notes denominated or payable in yen (“Yen Notes”) will only be issued in compliance with applicable Japanese laws, regu- lations, guidelines and policies. The Issuer or its designated agent shall submit such reports or information as may be required from time to time by applicable laws, regulations and guidelines promulgated by Japanese authorities in the case of Yen Notes. Each Dealer has agreed to provide all necessary information relating to Yen Notes to the Issuer (which shall not include the names of cli- ents) so that the Issuer may make any required reports to the competent authority of Japan for itself or through its designated agent.

Programme 5 5,000,000,000 (or its equivalent in other currencies) outstanding at any time. Amount: The Issuers may increase the amount of the Programme in accordance with the terms of the Dealer Agreement from time to time.

Distribution: Notes may be distributed by way of public or private placements and, in each case, on a syndicated or non-syndicated basis. The method of distribution of each Tranche will be stated in the relevant Pricing Supplement.

Issuance in Series: Notes will be issued in series (each, a “Series”). Each Series may comprise of one or more tranches (“Tranches” and each, a “Tranche”) issued on different issue dates.

Currencies: Subject to any applicable legal or regulatory restrictions and requirements of relevant central banks, Notes may be issued in euro, Canadian dollars, Japa- nese yen, Pounds Sterling, Swiss francs, U.S. dollars or any other currency agreed by the Issuers and the relevant Dealer.

Denominations Notes will be issued in such denominations as may be agreed between the rele- of Notes: vant Issuer and the relevant Dealer and as indicated in the applicable Pricing Sup- plement save that the minimum denomination of the Notes will be such as may be allowed or required from time to time by the relevant central bank (or equivalent body) or any laws or regulations applicable to the relevant Specified Currency.

Unless otherwise permitted by then current laws and regulations, Notes in respect of which the issue proceeds are to be accepted by the relevant Issuer in the United Kingdom will have a minimum denomination of £ 100,000 (or its equivalent in other currencies), unless such Notes may not be redeemed until on or after the first anniversary of their date of issue.

Maturities: Such maturities as may be agreed between the relevant Issuer and the relevant Dealer and as indicated in the applicable Pricing Supplement, subject to such minimum or maximum maturities as may be allowed or required from time to time by the relevant central bank (or equivalent body) or any laws or regula- tions applicable to the relevant Issuer or the relevant Specified Currency.

Unless otherwise permitted by then current laws and regulations, Notes in re- spect of which the issue proceeds are to be accepted by the relevant Issuer in the United Kingdom will have a minimum denomination of £ 100,000 (or its equivalent in other currencies), unless such Notes may not be redeemed until on or after the first anniversary of their date of issue.

6 Issue Price: Notes may be issued at an issue price (“Issue Price”) which is at par or at a discount to, or premium over, par.

Form of Notes: Notes may be issued in bearer form only.

Notes to which U.S. Treasury Regulation § 1.163-5(c)(2)(i)(C) (the “TEFRA C Rules”) apply (“TEFRA C Notes”) will be represented by a permanent global Note in bearer form, without interest coupons, in a principal amount equal to the aggre- gate principal amount of such Notes (“Permanent Global Note”).

Notes to which U.S. Treasury Regulation § 1.163-5 (c)(2)(i)(D) (the “TEFRA D Rules”) apply (“TEFRA D Notes”) will be represented initially by a temporary glo- bal note in bearer form, without interest coupons, in an initial principal amount equal to the aggregate principal amount of such Notes (“Temporary Global Note”) which will be exchanged for Notes represented by one or more Permanent Global Note(s), in each case not earlier than 40 days and not later than 180 days after the completion of distribution of the Notes comprising the relevant Tranche upon certification of non U.S.-beneficial ownership in the form available from time to time at the specified office of the Fiscal Agent.

Notes to which neither the TEFRA C Rules nor the TEFRA D Rules apply will be represented a Permanent Global Note.

As a general rule, Deutsche Bahn AG and Deutsche Bahn Finance issue Notes in global form only.

Status of the Notes: The Notes will constitute unsecured and unsubordinated obligations of the respective Issuer ranking pari passu among themselves and pari passu with all other unsecured and unsubordinated obligations of the respective Issuer.

Guarantee: The Notes issued by Deutsche Bahn Finance will have the benefit of the guarantee (the “Guarantee”) given by Deutsche Bahn AG.

The Guarantee constitutes an unconditional, unsecured and unsubordinated obligation of Deutsche Bahn AG and ranks pari passu with all other unsecured and unsubordinated obligations of Deutsche Bahn AG.

Description of Notes: Notes may be either interest bearing at fixed or variable rates or non-interest bearing, with principal repayable at a fixed amount or by reference to a formula as may be agreed between the Issuer and the relevant Dealer as speci- fied in the applicable Pricing Supplement.

Fixed Rate Notes: Fixed interest will be payable on such basis as may be agreed between the relevant Issuer and the relevant Dealer as specified in the applicable Pricing Supplement.

Floating Rate Notes: Floating Rate Notes will bear interest on such basis as may be agreed between the relevant Issuer and the relevant Dealer, as indicated in the relevant Pricing Supplement. The margin, if any, relating to such floating rate will be agreed between the relevant Issuer and the relevant Dealer for each Series of Floating Rate Notes.

Interest periods for Floating Rate Notes will be one, two, three, six or twelve months or such other period(s) as may be agreed between the relevant Issuer and the relevant Dealer, as indicated in the applicable Pricing Supplement.

Other provisions in Floating Rate Notes and Index-linked Interest Notes may also have a maximum relation to Floating interest rate, a minimum interest rate or both. Rate Notes and Index-linked Interest on Floating Rate Notes and Index-linked Interest Notes in respect of Interest Notes: each Interest Period, as selected prior to issue by the relevant Issuer and the relevant Dealer, will be payable on such Interest Payment Dates specified in, or

7 determined pursuant to, the applicable Pricing Supplement and will be calcu- lated as specified in the applicable Pricing Supplement.

Zero Coupon Notes: Zero Coupon Notes will be offered and sold at a discount to their principal amount and will not bear interest other than in the case of late payment.

Other Notes: Notes may be of any other type such as Dual Currency Notes, Instalment Notes, Credit linked Notes, Equity linked Notes or may have any other struc- ture, all upon terms provided in the applicable Pricing Supplement and in com- pliance with all applicable legal and/or regulatory requirements.

Redemption: The applicable Pricing Supplement will indicate either that the Notes cannot be redeemed prior to their stated maturity (except for taxation reasons, or upon the occurrence of an event of default) or that such Notes will be redeemable at the option of the relevant Issuer and/or the Holders upon giving notice within the notice period (if any) indicated in the applicable Pricing Supplement to the Holders or the relevant Issuer, as the case may be, on a date or dates specified prior to such stated maturity and at a price or prices and on such terms as indi- cated in the applicable Pricing Supplement.

Unless otherwise permitted by then current laws and regulations, Notes in re- spect of which the issue proceeds are to be accepted by the relevant Issuer in the United Kingdom will have a minimum redemption amount of £ 100,000 (or its equivalent in other currencies), unless such Notes may not be redeemed until on or after the first anniversary of their date of issue.

Taxation: Payments of principal and interest in respect of the Notes will be made without withholding or deduction for or on account of any present or future taxes or duties of whatever nature imposed or levied by or on behalf of the country where the relevant Issuer is domiciled and, in the case of Notes issued by Deutsche Bahn Finance and, in the case of any payments under the Guarantee, the Federal Republic of Germany, or any political subdivision or any authority thereof or therein having power to tax unless such withholding or deduction is required by law. In such event, the relevant Issuer, subject to the exeptions set out in the Conditions, will pay such additional amounts as shall be necessary in order that the net amounts received by the Holders of the Notes after such with- holding or deduction shall equal the respective amounts of principal and inter- est which would otherwise have been receivable in respect of the Notes in the absence of such withholding or deduction.

Early Redemption Early redemption for taxation reasons will be permitted as provided in § 5 of for Taxation the Terms and Conditions of the Notes. Reasons:

Negative Pledge: The Notes issued by Deutsche Bahn AG and Deutsche Bahn Finance will con- tain a negative pledge provision as set out in the Terms and Conditions of the Notes. Likewise, the Guarantee applicable to Notes issued by Deutsche Bahn Finance includes a negative pledge of Deutsche Bahn AG.

Events of Default: The Notes will provide for events of default entitling Holders to accelerate re- demption of the Notes as set out in § 9 of the Terms and Conditions of the Notes. They will not provide for a right of acceleration in the event of a cross default by the respective Issuer.

Substitution Each of the Issuer may substitute for itself, without the consent of the Holders of Issuer: of such Notes, Deutsche Bahn AG (where it is not the Issuer) or any subsidiary which is at least 90% owned directly or indirectly by Deutsche Bahn AG, as principal debtor in respect of all obligations arising from or in connection with the Notes of such Series in accordance with, and subject to, the Terms of Con-

8 ditions of the Notes with respect to any Series of Notes. In the event of any such substitutions where the new issuer is not Deutsche Bahn AG, the Notes of such Series will be unconditionally and irrevocably guaranteed by Deutsche Bahn AG.

Listing: Application has been made to list Notes to be issued under the Programme on the official market (amtlicher Handel) of the Frankfurt Stock Exchange and on the Luxembourg Stock Exchange. The Programme provides that Notes may be listed on other or further stock exchanges as may be agreed between the rele- vant Issuer and the relevant Dealer(s) in relation to each issue. Notes may further be issued under the Programme which will not be listed on any stock exchange.

Governing Law: German law.

Selling Restrictions: There will be specific restrictions on the offer and sale of Notes and the distri- bution of offering materials in Germany, the Netherlands, Luxembourg, France, Japan, the United Kingdom and the United States of America and such other restrictions as may be required under applicable law in connection with the offering and sale of a particular Tranche of Notes. See below “Selling Restrictions”.

Process Agent: Deutsche Bahn Finance B.V. has appointed Deutsche Bahn AG to act as its agent for service of process in any proceedings arising out of the Notes brought, or to be brought, in any court in the Federal Republic of Germany.

Place of Non-exclusive place of jurisdiction for any legal proceedings arising under the Jurisdiction: Notes and the Guarantee is Frankfurt am Main.

Clearance and Notes will be accepted for clearing through one or more Clearing Systems as Settlement: specified in the applicable Pricing Supplement. These systems will include those operated by Clearstream Banking AG, Frankfurt am Main (“CBF”), Clearstream Banking, socit anonyme (“CBL”) and Euroclear Bank S.A./N.V., Brssel (“Euro- clear“).

9 ISSUE PROCEDURES

General

The relevant Issuer and the relevant Dealer(s) will agree on the terms and conditions applicable to each particular Tranche of Notes (the “Conditions”). The Conditions will be constituted by the Terms and Conditions of the Notes set forth below (the “Terms and Conditions”) as completed, modified, supplemented or replaced by the provisions of the Pricing Supplement (the “Pricing Supplement”). The Pricing Supplement relating to each tranche of Notes will specify: – whether the Conditions are to be Long-Form Conditions or Integrated Conditions (each as described below); and – whether the Conditions will be in the German language or the English language or both (and, if both, whether the German language version or the English language version is controlling).

As to whether Long-Form Conditions or Integrated Conditions will apply, the Issuers anticipate that: – Long-Form Conditions will generally be used for Notes sold on a non-syndicated basis and which are not publicly offered. – Integrated Conditions will generally be used for Notes sold and distributed on a syndicated basis. Integrated Conditions will be required where the Notes are to be publicly offered, in whole or in part, or are to be distributed, in whole or in part, to non-professional investors.

As to the controlling language of the respective Conditions, the Issuers anticipate that, in general, subject to any stock exchange or legal requirements applicable from time to time, and unless other- wise agreed between the relevant Issuer and the relevant Dealer: – in the case of Notes sold and distributed on a syndicated basis, German will be the controlling language. – in the case of Notes publicly offered, in whole or in part, in Germany, or distributed, in whole or in part, to non-professional investors in Germany, German will be the controlling language. If, in the event of such public offer or distribution to non-professional investors, however, English is cho- sen as the controlling language, a German language translation of the Conditions will be available from the principal office of the Fiscal Agent and the relevant Issuer as specified on the back cover of this Information Memorandum.

Long-Form Conditions

If the Pricing Supplement specifies that Long-Form Conditions are to apply to the Notes, the provi- sions of the applicable Pricing Supplement and the Terms and Conditions, taken together, shall con- stitute the Conditions. Such Conditions will be constituted as follows: – the blanks in the provisions of the Terms and Conditions which are applicable to the Notes will be deemed to be completed by the information contained in the Pricing Supplement as if such infor- mation were inserted in the blanks of such provisions; – the Terms and Conditions will be modified, supplemented or replaced by the text of any provi- sions of the Pricing Supplement modifying, supplementing or replacing, in whole or in part, the provisions of the Terms and Conditions; – alternative or optional provisions of the Terms and Conditions as to which the corresponding pro- visions of the Pricing Supplement are not completed or are deleted will be deemed to be deleted from the Conditions; and – all instructions and explanatory notes set out in square brackets in the Terms and Conditions and any footnotes and explanatory text in the Pricing Supplement will be deemed to be deleted from the Conditions.

Where Long-Form Conditions apply, each global note representing the Notes of the relevant Series will have the Pricing Supplement and the Terms and Conditions attached.

10 Integrated Conditions

If the Pricing Supplement specifies that Integrated Conditions are to apply to the Notes, the Condi- tions in respect of such Notes will be constituted as follows: – all of the blanks in all applicable provisions of the Terms and Conditions will be completed accord- ing to the information contained in the Pricing Supplement and all non-applicable provisions of the Terms and Conditions (including the instructions and explanatory notes set out in square brackets) will be deleted; and/or – the Terms and Conditions will be otherwise modified, supplemented or replaced, in whole or in part, according to the information set forth in the Pricing Supplement.

Where Integrated Conditions apply, the Integrated Conditions alone will constitute the Conditions. The Integrated Conditions will be attached to each global note representing Notes of the relevant Series.

11 TERMS AND CONDITIONS OF THE NOTES – GERMAN LANGUAGE VERSION – – (DEUTSCHE FASSUNG DER EMISSIONSBEDINGUNGEN) –

Diese Serie von Schuldverschreibungen wird gemß einem Fiscal Agency Agreement vom 31. Mai 2001 gendert und ergnzt durch ein Supplemental Agency Agreement vom 11. Juli 2002 (zusammen das „Agency Agreement“) zwischen Deutsche Bahn Aktiengesellschaft („Deutsche Bahn AG“) und Deutsche Bahn Finance B.V. („Deutsche Bahn Finance“) (jeweils eine „Emittentin“ und zusammen die „Emittentinnen“) und Deutsche Bank Aktiengesellschaft als Emissionsstelle (der „Fiscal Agent“), wobei dieser Begriff jeden Nachfolger des Fiscal Agent gemß dem Agency Agreement einschließt), und den anderen darin genannten Parteien begeben. Ablichtungen des Agency Agreement knnen kostenlos bei der bezeichneten Geschftsstelle des Fiscal Agent und bei den bezeichneten Geschfts- stellen einer jeden Zahlstelle sowie bei den Hauptgeschftsstellen einer jeden Emittentin bezogen werden.

[Im Fall von nicht-konsolidierten Bedingungen:

Die Bestimmungen der nachstehenden Emissionsbedingungen gelten fr diese Schuldverschreibun- gen so, wie sie durch die Angaben des beigefgten Konditionenblatts (das „Konditionenblatt“) ver- vollstndigt, gendert, ergnzt oder ganz oder teilweise ersetzt werden. Die Leerstellen in den auf die Schuldverschreibungen anwendbaren Bestimmungen dieser Emissionsbedingungen gelten als durch die im Konditionenblatt enthaltenen Angaben ausgefllt, als ob die Leerstellen in den betref- fenden Bestimmungen durch diese Angaben ausgefllt wren; sofern das Konditionenblatt die nderung, Ergnzung oder (vollstndige oder teilweise) Ersetzung bestimmter Bestimmungen vor- sieht, gelten die betreffenden Bestimmungen der Emissionsbedingungen als entsprechend gendert, ergnzt oder ersetzt; alternative oder whlbare Bestimmungen dieser Emissionsbedingungen, deren Entsprechungen im Konditionenblatt nicht ausdrcklich ausgefllt oder die gestrichen sind, gelten als aus diesen Emissionsbedingungen gestrichen; smtliche auf die Schuldverschreibungen nicht anwendbaren Bestimmungen dieser Emissionsbedingungen (einschließlich der Anweisungen, Anmerkungen und der Texte in eckigen Klammern) gelten als aus diesen Emissionsbedingungen ge- strichen, so daß die Bestimmungen des Konditionenblatts Geltung erhalten. Kopien des Konditionen- blattes sind kostenlos bei der bezeichneten Geschftsstelle des Fiscal Agent und bei den bezeichneten Geschftsstellen einer jeden Zahlstelle erhltlich; bei nicht an einer Brse notierten Schuldverschrei- bungen sind Kopien des betreffenden Konditionenblattes allerdings ausschließlich fr die Glubiger solcher Schuldverschreibungen erhltlich.]

12 BEDINGUNGEN

§1 WHRUNG, STCKELUNG, FORM, DEFINITIONEN

(1) Whrung; Stckelung. Diese Serie der Schuldverschreibungen (die „Schuldverschreibungen“) der [Emittentin einfgen] (die „Emittentin“) wird in [festgelegte Whrung einfgen] (die „festgelegte Whrung“) im Gesamtnennbetrag von [Gesamtnennbetrag einfgen] (in Worten: [Gesamtnennbe- trag in Worten einfgen]) in Stckelungen von [festgelegte Stckelungen einfgen] (die „festgeleg- ten Stckelungen“) begeben.]

(2) Form. Die Schuldverschreibungen lauten auf den Inhaber.

[Im Fall von Schuldverschreibungen, die durch eine Dauerglobalurkunde verbrieft sind, einfgen:

(3) Dauerglobalurkunde. Die Schuldverschreibungen sind durch eine Dauerglobalurkunde (die „Dau- erglobalurkunde“) ohne Zinsscheine verbrieft. Die Dauerglobalurkunde trgt die eigenhndigen Unterschriften zweier ordnungsgemß bevollmchtigter Vertreter der Emittentin und ist vom Fiscal Agent oder in dessen Namen mit einer Kontrollunterschrift versehen. Einzelurkunden und Zins- scheine werden nicht ausgegeben.]

[Im Fall von Schuldverschreibungen, die anfnglich durch eine vorlufige Globalurkunde verbrieft sind, einfgen:

(3) Vorlufige Globalurkunde – Austausch.

(a) Die Schuldverschreibungen sind anfnglich durch eine vorlufige Globalurkunde (die „vorlufige Globalurkunde“) ohne Zinsscheine verbrieft. Die vorlufige Globalurkunde wird gegen Schuld- verschreibungen in den festgelegten Stckelungen, die durch eine Dauerglobalurkunde (die „Dauerglobalurkunde“) ohne Zinsscheine verbrieft sind, ausgetauscht. Die vorlufige Global- urkunde und die Dauerglobalurkunde tragen jeweils die eigenhndigen Unterschriften zweier ordnungsgemß bevollmchtigter Vertreter der Emittentin und sind mit einer Kontrollunterschrift versehen. Einzelurkunden und Zinsscheine werden nicht ausgegeben.

(b) Die vorlufige Globalurkunde wird an einem Tag (der „Austauschtag“) gegen die Dauerglobalur- kunde ausgetauscht, der nicht mehr als 180 Tage nach dem Tag der Ausgabe der vorlufigen Globalurkunde liegt. Der Austauschtag darf nicht weniger als 40 Tage nach dem Tag der Bege- bung liegen. Ein solcher Austausch soll nur nach Vorlage von Bescheinigungen erfolgen, wonach der oder die wirtschaftlichen Eigentmer der durch die vorlufige Globalurkunde verbrieften Schuldverschreibungen keine US-Personen sind (ausgenommen bestimmte Finanzinstitute oder bestimmte Personen, die Schuldverschreibungen ber solche Finanzinstitute halten). Zinszahlun- gen auf durch eine Vorlufige Globalurkunde verbriefte Schuldverschreibungen erfolgen erst nach Vorlage solcher Bescheinigungen. Eine gesonderte Bescheinigung ist hinsichtlich einer jeden solchen Zinszahlung erforderlich. Jede Bescheinigung, die am oder nach dem 40. Tag nach dem Tag der Ausgabe der Vorlufigen Globalurkunde eingeht, wird als ein Ersuchen behandelt werden, diese vorlufige Globalurkunde gemß Absatz (b) dieses § 1 (3) auszutauschen. Wertpa- piere, die im Austausch fr die vorlufige Globalurkunde geliefert werden, sind nur außerhalb der Vereinigten Staaten (wie in § 6 (2) definiert) zu liefern.]

(4) Clearing System. Jede Dauerglobalurkunde wird solange von einem oder im Namen eines Clea- ring Systems verwahrt, bis smtliche Verbindlichkeiten der Emittentin aus den Schuldverschreibun- gen erfllt sind. „Clearing System” bedeutet [bei mehr als einem Clearing System einfgen: jeweils] folgendes: [Clearstream Banking AG, Frankfurt am Main („CBF“)][Clearstream Banking socit anonyme, Luxembourg („CBL”)][Euroclear Bank S.A./N.V., Brussel („Euroclear“)][,][und] [anderes Clearing System angeben] sowie jeder Funktionsnachfolger.

(5) Glubiger von Schuldverschreibungen. „Glubiger“ bedeutet jeder Inhaber eines Miteigentums- anteils oder vergleichbaren anderen Rechts an den Schuldverschreibungen.

13 §2 STATUS, NEGATIVVERPFLICHTUNG, [im Fall von Schuldverschreibungen, die von Deutsche Bahn Finance begeben werden, einfgen: GARANTIE UND NEGATIVVERPFLICHTUNG DER GARANTIN]

(1) Status. Die Schuldverschreibungen begrnden nicht besicherte und nicht nachrangige Verbind- lichkeiten der Emittentin, die untereinander und mit allen anderen nicht besicherten und nicht nach- rangigen Verbindlichkeiten der Emittentin gleichrangig sind mit Ausnahme von Verbindlichkeiten, die nach geltenden Rechtsvorschriften vorrangig sind.

(2) Negativverpflichtung. Die Emittentin verpflichtet sich, solange Schuldverschreibungen ausstehen, jedoch nur bis zu dem Zeitpunkt, an dem alle Betrge an Kapital und Zinsen dem Fiscal Agent zur Ver- fgung gestellt worden sind, (i) keine gegenwrtigen oder zuknftigen Kapitalmarktverbindlichkeiten (wie nachstehend definiert) und keine Garantie oder Gewhrleistung hierfr durch Grund- oder Mobi- liarpfandrechte oder eine sonstige dingliche Belastung des eigenen Vermgens zu besichern oder besichern zu lassen [Im Fall von Schuldverschreibungen, die von der Deutschen Bahn AG begeben werden, einfgen:, und (ii) ihre Fhrungsgesellschaften (wie nachstehend definiert) zu veranlassen, fr andere Schuldverschreibungen oder hnliche verbriefte Schuldtitel oder fr dafr bernommene Gewhrleistungen, keine gegenwrtigen oder zuknftigen Kapitalmarktverbindlichkeiten und keine Garantie oder Gewhrleistung hierfr durch Grund- oder Mobiliarpfandrechte oder eine sonstige dingliche Belastung des eigenen Vermgens zu besichern oder besichern zu lassen, ohne gleichzeitig die Glubiger an derselben Sicherheit im gleichen Rang und gleichem Verhltnis teilnehmen zu las- sen, es sei denn, eine solche Besicherung ist gesetzlich oder behrdlich vorgeschrieben.

„Fhrungsgesellschaften“ sind die mit Ausgliederungsplan vom 24. November 1998 in Erfllung des gesetzlichen Auftrags gemß § 2 Absatz 1 und § 25 Deutsche Bahn Grndungsgesetz unter den der- zeitigen Firmen DB Regio Aktiengesellschaft, DB Reise&Touristik Aktiengesellschaft, DB Cargo Aktien- gesellschaft, DB Station&Service Aktiengesellschaft und DB Netz Aktiengesellschaft errichteten Aktiengesellschaften sowie solche Unternehmen, die den Geschftsbetrieb der vorgenannten Gesell- schaft ganz oder im wesentlichen ganz fortfhren].

„Kapitalmarktverbindlichkeit“ bedeutet im Rahmen dieser Bedingungen jede gegenwrtige oder zuknftige Verbindlichkeit, die in Form von Schuldverschreibungen oder sonstigen Wertpapieren, die blicherweise an einer Brse oder einem vergleichbaren organisierten Wertpapiermarkt gehandelt werden oder gehandelt werden knnen, verbrieft, verkrpert oder dokumentiert sind, sowie Verbind- lichkeiten, die sich aus Schuldscheindarlehen ergeben.

[Im Fall von Schuldverschreibungen, die von Deutsche Bahn Finance begeben werden, einfgen:

(3) Garantie und Negativverpflichtung der Garantin. Die Deutsche Bahn Aktiengesellschaft („Deut- sche Bahn AG“ oder die „Garantin“) hat die unbedingte und unwiderrufliche Garantie (die „Garan- tie“) fr die ordnungsgemße und pnktliche Zahlung von Kapital und Zinsen und sonstiger auf die Schuldverschreibungen zahlbarer Betrge bernommen.

Die Garantin hat sich außerdem in einer Negativverpflichtung (die „Negativverpflichtung“) verpflich- tet, solange Schuldverschreibungen ausstehen, jedoch nur bis zu dem Zeitpunkt, an dem alle Betrge an Kapital und Zinsen dem Fiscal Agent zur Verfgung gestellt worden sind, (i) keine gegenwrtigen oder zuknftigen Kapitalmarktverbindlichkeiten (wie vorstehend definiert) und keine Garantie oder Gewhrleistung hierfr durch Grund- oder Mobiliarpfandrechte oder eine sonstige dingliche Bela- stung des eigenen Vermgens zu besichern oder besichern zu lassen, und (ii) ihre Fhrungsgesell- schaften (wie nachstehend definiert) zu veranlassen, fr andere Schuldverschreibungen oder hn- liche verbriefte Schuldtitel oder fr dafr bernommene Gewhrleistungen, keine gegenwrtigen oder zuknftigen Kapitalmarktverbindlichkeiten und keine Garantie oder Gewhrleistung hierfr durch Grund- oder Mobiliarpfandrechte oder eine sonstige dingliche Belastung des eigenen Verm- gens zu besichern oder besichern zu lassen, ohne gleichzeitig die Glubiger an derselben Sicherheit im gleichen Rang und gleichem Verhltnis teilnehmen zu lassen, es sei denn, eine solche Besicherung ist gesetzlich oder behrdlich vorgeschrieben.

„Fhrungsgesellschaften“ sind die mit Ausgliederungsplan vom 24. November 1998 in Erfllung des gesetzlichen Auftrags gemß § 2 Absatz 1 und § 25 Deutsche Bahn Grndungsgesetz unter den der- zeitigen Firmen DB Regio Aktiengesellschaft, DB Reise&Touristik Aktiengesellschaft, DB Cargo Aktien-

14 gesellschaft, DB Station&Service Aktiengesellschaft und DB Netz Aktiengesellschaft errichteten Aktiengesellschaften sowie solche Unternehmen, die den Geschftsbetrieb der vorgenannten Gesell- schaft ganz oder im wesentlichen ganz fortfhren.]

Die Garantie und Negativverpflichtung stellen einen Vertrag zugunsten jedes Glubigers als begns- tigtem Dritten gemß § 328 BGB dar, welcher das Recht jedes Glubigers begrndet, Erfllung aus der Garantie und der Negativverpflichtung unmittelbar von der Garantin zu verlangen und die Garan- tie und die Negativverpflichtung unmittelbar gegen die Garantin durchzusetzen.

Kopien der Garantie und Negativverpflichtung werden bei den bezeichneten Geschftsstellen der Zahlstellen zur kostenlosen Ausgabe bereitgehalten.

§3 ZINSEN

[(A) Im Fall von festverzinslichen Schuldverschreibungen einfgen:

(1) Zinssatz und Zinszahlungstage. Die Schuldverschreibungen werden bezogen auf ihren Nennbe- trag verzinst, und zwar vom [Verzinsungsbeginn einfgen] (einschließlich) bis zum Flligkeitstag (wie in § 5 (1) definiert) (ausschließlich) mit jhrlich [Zinssatz einfgen]%. Die Zinsen sind nachtrg- lich am [Festzinstermin(e) einfgen] eines jeden Jahres zahlbar (jeweils ein „Zinszahlungstag“). Die erste Zinszahlung erfolgt am [ersten Zinszahlungstag einfgen] [sofern der erste Zinszahlungstag nicht der erste Jahrestag des Verzinsungsbeginns ist einfgen: und beluft sich auf [anfnglichen Bruchteilszinsbetrag pro Stckelung einfgen] je Schuldverschreibung im Nennbetrag von [Stcke- lung einfgen] [Sofern der Flligkeitstag kein Festzinstermin ist einfgen: Die Zinsen fr den Zeit- raum vom [den letzten dem Flligkeitstag vorausgehenden Festzinstermin einfgen] (einschließlich) bis zum Flligkeitstag (ausschließlich) belaufen sich auf [abschließenden Bruchteilszinsbetrag pro Stckelung einfgen] je Schuldverschreibung im Nennbetrag von [Stckelung einfgen].

(2) Auflaufende Zinsen. Der Zinslauf der Schuldverschreibungen endet mit Ablauf des Tages, der dem Tag vorangeht, an dem sie zur Rckzahlung fllig werden. Falls die Emittentin die Schuldverschrei- bungen bei Flligkeit nicht einlst, endet die Verzinsung des ausstehenden Nennbetrages der Schuld- verschreibungen nicht am Tag der Flligkeit, sondern erst mit Ablauf des Tages, der dem Tag der tat- schlichen Rckzahlung der Schuldverschreibungen vorangeht.

(3) Berechnung der Zinsen fr Teile von Zeitrumen. Sofern Zinsen fr einen Zeitraum von weniger als einem Jahr zu berechnen sind, erfolgt die Berechnung auf der Grundlage des Zinstagequotienten (wie nachstehend definiert).

[(B) Im Fall von variabel verzinslichen Schuldverschreibungen einfgen:

(1) Zinszahlungstage. (a) Die Schuldverschreibungen werden bezogen auf ihren Nennbetrag ab dem [Verzinsungsbeginn einfgen] (der „Verzinsungsbeginn“) (einschließlich) bis zum ersten Zinszahlungstag (ausschließ- lich) und danach von jedem Zinszahlungstag (einschließlich) bis zum nchstfolgenden Zinszah- lungstag (ausschließlich) verzinst. Zinsen auf die Schuldverschreibungen sind an jedem Zinszah- lungstag zahlbar.

(b) „Zinszahlungstag“ bedeutet [im Fall von festgelegten Zinszahlungstagen einfgen: jeder [festgelegte Zinszahlungstage einf- gen].]

[im Fall von festgelegten Zinsperioden einfgen: (soweit diese Bedingungen keine abweichenden Bestimmungen vorsehen) jeweils der Tag, der [Zahl einfgen] [Wochen][Monate] [andere festge- legte Zeitrume einfgen] nach dem vorausgehenden Zinszahlungstag liegt, oder im Fall des ersten Zinszahlungstages, nach dem Verzinsungsbeginn.]

15 (c) Fllt ein Zinszahlungstag auf einen Tag, der kein Geschftstag (wie nachstehend definiert) ist, so wird der Zinszahlungstag

[bei Anwendung der Modified Following Business Day Convention einfgen: auf den nchstfol- genden Geschftstag verschoben, es sei denn, jener wrde dadurch in den nchsten Kalendermo- nat fallen; in diesem Fall wird der Zinszahlungstag auf den unmittelbar vorausgehenden Geschftstag verlegt.]

[bei Anwendung der FRN Convention einfgen: auf den nchstfolgenden Geschftstag verscho- ben, es sei denn, jener wrde dadurch in den nchsten Kalendermonat fallen; in diesem Fall (i) wird der Zinszahlungstag auf den unmittelbar vorausgehenden Geschftstag verlegt und (ii) ist jeder nachfolgende Zinszahlungstag der jeweils letzte Geschftstag des Monats, der [[Zahl einfgen] Monate] [andere festgelegte Zeitrume einfgen] nach dem vorhergehenden anwend- baren Zinszahlungstag liegt.]

[bei Anwendung der Following Business Day Convention einfgen: auf den nchstfolgenden Geschftstag verschoben.]

[bei Anwendung der Preceding Business Day Convention einfgen: auf den unmittelbar voraus- gehenden Geschftstag verlegt.]

(d) In diesem § 3 bezeichnet „Geschftstag“ einen Tag (außer einem Samstag oder Sonntag), an dem das betreffende Clearing System und das Trans-European Automated Real-time Gross Settlement System (TARGET) betriebsbereit ist (soweit einschlgig) [falls die festgelegte Whrung nicht Euro ist, einfgen: und an dem Geschftsbanken und Devisen fr den Geschftsverkehr geffnet sind und Zahlungen in [smtliche relevanten Finanzzentren einfgen] abwickeln].

(2) Zinssatz. [Bei Bildschirmfeststellung einfgen: Der Zinssatz (der „Zinssatz“) fr jede Zinsperiode (wie nachstehend definiert) ist, sofern nachstehend nichts abweichendes bestimmt wird, entweder:

(a) der Angebotssatz (wenn nur ein Angebotssatz auf der Bildschirmseite (wie nachstehend definiert) angezeigt ist); oder

(b) das arithmetische Mittel (falls erforderlich, auf das nchste [falls der Referenzsatz EURIBOR ist, einfgen: Tausendstel Prozent auf- oder abgerundet, wobei 0,0005] [falls der Referenzsatz nicht EURIBOR ist, einfgen: Hunderttausendstel Prozent auf- oder abgerundet, wobei 0,000005] auf- gerundet wird) der Angebotsstze,

(ausgedrckt als Prozentsatz per annum) fr Einlagen in der festgelegten Whrung fr die jeweilige Zinsperiode, der bzw. die auf der Bildschirmseite am Zinsfestlegungstag (wie nachstehend definiert) gegen 11.00 Uhr ([Brsseler][Londoner] Ortszeit) angezeigt werden [im Fall einer Marge einfgen: [zuzglich][abzglich] der Marge (wie nachstehend definiert)], wobei alle Festlegungen durch die Berechnungsstelle erfolgen.

„Zinsperiode“ bezeichnet den Zeitraum von dem Verzinsungsbeginn (einschließlich) bis zum ersten Zinszahlungstag (ausschließlich) bzw. von jedem Zinszahlungstag (einschließlich) bis zum jeweils darauffolgenden Zinszahlungstag (ausschließlich).

„Zinsfestlegungstag“ bezeichnet den [zweiten][zutreffende andere Zahl von Tagen einfgen][TAR- GET][Londoner] [zutreffende andere Bezugnahmen einfgen] Geschftstag vor Beginn der jeweili- gen Zinsperiode. [Im Falle eines TARGET-Geschftstages einfgen: „TARGET-Geschftstag“ bezeich- net einen Tag, an dem TARGET (Trans-European Automated Real-time Gross Settlement Express Transfer System) betriebsbereit ist.] [Im Falle eines nicht-TARGET-Geschftstages einfgen: „[Londo- ner] [zutreffenden anderen Ort einfgen] Geschftstag“ bezeichnet einen Tag (außer einem Samstag oder Sonntag), an dem Geschftsbanken in [London] [zutreffenden anderen Ort einfgen] fr Geschfte (einschließlich Devisen- und Sortengeschfte) geffnet sind.]

[Im Fall einer Marge einfgen: Die „Marge“ betrgt [•]% per annum.]

16 „Bildschirmseite“ bedeutet [Bildschirmseite einfgen].

[Sofern eine andere Basis zur Bestimmung eines Referenzzinssatzes gelten soll, sind die entspre- chenden Bestimmungen hier einzufgen.]

Wenn im vorstehenden Fall (b) auf der maßgeblichen Bildschirmseite fnf oder mehr Angebotsstze angezeigt werden, werden der hchste (falls mehr als ein solcher Hchstsatz angezeigt wird, nur einer dieser Stze) und der niedrigste Angebotssatz (falls mehr als ein solcher Niedrigstsatz angezeigt wird, nur einer dieser Stze) von der Berechnungsstelle fr die Bestimmung des arithmetischen Mittels der Angebotsstze (das wie vorstehend beschrieben auf- oder abgerundet wird) außer acht gelassen; diese Regel gilt entsprechend fr diesen gesamten Absatz 2.

Sollte die maßgebliche Bildschirmseite nicht zur Verfgung stehen oder wird im Fall von oben (a) kein Angebotssatz angezeigt oder werden im Fall von oben (b) weniger als drei Angebotsstze angezeigt (in jedem dieser Flle zu der genannten Zeit), wird die Berechnungsstelle von den Referenz- banken (wie nachstehend definiert) deren jeweilige Angebotsstze (jeweils als Prozentsatz per annum ausgedrckt) fr Einlagen in der festgelegten Whrung fr die betreffende Zinsperiode gegenber fhrenden Banken im [Londoner] [zutreffenden anderen Ort einfgen] Interbanken-Markt [in der Euro-Zone] um ca. 11.00 Uhr ([Brsseler][Londoner] Ortszeit) am Zinsfestlegungstag anfordern. Falls zwei oder mehr Referenzbanken der Berechnungsstelle solche Angebotsstze nennen, ist der Zins- satz fr die betreffende Zinsperiode das arithmetische Mittel (falls erforderlich, auf- oder abgerundet auf das nchste [falls der Referenzsatz EURIBOR ist, einfgen: Tausendstel Prozent, wobei 0,0005] [falls der Referenzsatz nicht EURIBOR ist, einfgen: Hunderttausendstel Prozent, wobei 0,000005] aufgerundet wird) dieser Angebotsstze [im Fall einer Marge einfgen: [zuzglich][abzglich] der Marge], wobei alle Festlegungen durch die Berechnungsstelle erfolgen.

Falls an einem Zinsfestlegungstag nur eine oder keine der Referenzbanken der Berechnungsstelle sol- che im vorstehenden Absatz beschriebenen Angebotsstze nennt, ist der Zinssatz fr die betreffende Zinsperiode der Satz per annum, den die Berechnungsstelle als das arithmetische Mittel (falls erforder- lich, auf- oder abgerundet auf das nchste [falls der Referenzsatz EURIBOR ist, einfgen: Tausendstel Prozent, wobei 0,0005] [falls der Referenzsatz nicht EURIBOR ist, einfgen: Hunderttausendstel Pro- zent, wobei 0,000005] aufgerundet wird) der Angebotsstze ermittelt, die die Referenzbanken bzw. zwei oder mehrere von ihnen der Berechnungsstelle auf deren Anfrage als den jeweiligen Satz nen- nen, zu dem ihnen um ca. 11.00 Uhr ([Brsseler][Londoner] Ortszeit) an dem betreffenden Zinsfestle- gungstag Einlagen in der festgelegten Whrung fr die betreffende Zinsperiode von fhrenden Ban- ken im [Londoner] [zutreffenden anderen Ort einfgen] Interbanken-Markt [in der Euro-Zone] angebo- ten werden [im Fall einer Marge einfgen: [zuzglich][abzglich] der Marge]; falls weniger als zwei der Referenzbanken der Berechnungsstelle solche Angebotsstze nennen, dann soll der Zinssatz fr die betreffende Zinsperiode der Angebotssatz fr Einlagen in der festgelegten Whrung fr die betref- fende Zinsperiode oder das arithmetische Mittel (gerundet wie oben beschrieben) der Angebotsstze fr Einlagen in der festgelegten Whrung fr die betreffende Zinsperiode sein, den bzw. die eine oder mehrere Banken (die nach Ansicht der Berechnungsstelle und der Emittentin fr diesen Zweck geeig- net sind) der Berechnungsstelle als Stze bekannt geben, die sie an dem betreffenden Zinsfestle- gungstag gegenber fhrenden Banken am [Londoner] [zutreffenden anderen Ort einfgen] Interban- ken-Markt [in der Euro-Zone] nennen (bzw. den diese Banken gegenber der Berechnungsstelle nen- nen) [im Fall einer Marge einfgen: [zuzglich][abzglich] der Marge]. Fr den Fall, daß der Zinssatz nicht gemß den vorstehenden Bestimmungen dieses Absatzes ermittelt werden kann, ist der Zinssatz der Angebotssatz oder das arithmetische Mittel der Angebotsstze auf der Bildschirmseite, wie vorste- hend beschrieben, an dem letzten Tag vor dem Zinsfestlegungstag, an dem diese Angebotsstze angezeigt wurden [im Fall einer Marge einfgen: [zuzglich][abzglich] der Marge (wobei jedoch, falls fr die relevante Zinsperiode eine andere Marge als fr die unmittelbar vorhergehende Zinsperiode gilt, die relevante Marge an die Stelle der Marge fr die vorhergehende Zinsperiode tritt)].

[Im Fall des Interbankenmarktes in der Euro-Zone einfgen: „Euro-Zone“ bezeichnet das Gebiet der- jenigen Mitgliedstaaten der Europischen Union, die gemß dem Vertrag ber die Grndung der Europischen Gemeinschaft (unterzeichnet in Rom am 25. Mrz 1957), gendert durch den Vertrag ber die Europische Union (unterzeichnet in Maastricht am 7. Februar 1992) und den Amsterdamer Vertrag vom 2. Oktober 1997, in seiner jeweiligen Fassung, eine einheitliche Whrung eingefhrt haben oder jeweils eingefhrt haben werden.]

17 „Referenzbanken“ bezeichnen [falls im Konditionenblatt keine anderen Referenzbanken bestimmt werden, einfgen: im vorstehenden Fall (a) diejenigen Niederlassungen [im Fall von EURIBOR ein- fgen: von mindestens fnf] derjenigen Banken, deren Angebotsstze zur Ermittlung des maßgeb- lichen Angebotssatzes zu dem Zeitpunkt benutzt wurden, als solch ein Angebot letztmals auf der maßgeblichen Bildschirmseite angezeigt wurde, und im vorstehenden Fall (b) diejenigen Banken, deren Angebotsstze zuletzt zu dem Zeitpunkt auf der maßgeblichen Bildschirmseite angezeigt wur- den, als nicht weniger als drei solcher Angebotsstze angezeigt wurden] [falls im Konditionenblatt andere Referenzbanken bestimmt werden, sind sie hier einzufgen].

[Wenn der Referenzsatz ein anderer als LIBOR oder EURIBOR ist, sind die entsprechenden Einzelhei- ten anstelle der Bestimmungen dieses Absatzes 2 einzufgen.]

[Sofern eine andere Methode der Feststellung anwendbar ist, sind die entsprechenden Einzelheiten anstelle der Bestimmungen dieses Absatzes 2 einzufgen]

[Falls ein Mindest- und/oder Hchstzinssatz gilt einfgen:

(3) [Mindest-][und][Hchst-] Zinssatz.

[Falls ein Mindestzinssatz gilt einfgen: Wenn der gemß den obigen Bestimmungen fr eine Zins- periode ermittelte Zinssatz niedriger ist als [Mindestzinssatz einfgen], so ist der Zinssatz fr diese Zinsperiode [Mindestzinssatz einfgen].]

[Falls ein Hchstzinssatz gilt: Wenn der gemß den obigen Bestimmungen fr eine Zinsperiode ermittelte Zinssatz hher ist als [Hchstzinssatz einfgen], so ist der Zinssatz fr diese Zinsperiode [Hchstzinssatz einfgen].]]

[(4)] Zinsbetrag. Die Berechnungsstelle wird zu oder baldmglichst nach jedem Zeitpunkt, an dem der Zinssatz zu bestimmen ist, den Zinssatz bestimmen und den auf die Schuldverschreibungen zahlba- ren Zinsbetrag in bezug auf die Schuldverschreibungen (der „Zinsbetrag“) fr die entsprechende Zinsperiode berechnen. Der Zinsbetrag wird ermittelt, indem der Zinssatz und der Zinstagequotient (wie nachstehend definiert) auf den Gesamtnennbetrag der Schuldverschreibungen angewendet werden, wobei der resultierende Betrag auf die kleinste Einheit der festgelegten Whrung auf- oder abgerundet wird, wobei 0,5 solcher Einheiten aufgerundet werden.

[(5)] Mitteilung von Zinssatz und Zinsbetrag. Die Berechnungsstelle wird veranlassen, daß der Zins- satz, der Zinsbetrag fr die jeweilige Zinsperiode, die jeweilige Zinsperiode und der relevante Zins- zahlungstag der Emittentin [im Fall von Schuldverschreibungen, die von Deutsche Bahn Finance begeben werden: und der Garantin], sowie den Glubigern gemß § 13 baldmglichst, aber keines- falls spter als am vierten auf die Berechnung jeweils folgenden [TARGET][Londoner] [zutreffenden anderen Ort einfgen] Geschftstag (wie in § 3 (2) definiert) sowie jeder Brse, an der die betreffen- den Schuldverschreibungen zu diesem Zeitpunkt notiert sind und deren Regeln eine Mitteilung an die Brse verlangen, baldmglichst, aber keinesfalls spter als zu Beginn der jeweiligen Zinsperiode mit- geteilt werden. Im Fall einer Verlngerung oder Verkrzung der Zinsperiode knnen der mitgeteilte Zinsbetrag und Zinszahlungstag ohne Vorankndigung nachtrglich angepaßt (oder andere geeig- nete Anpassungsregelungen getroffen) werden. Jede solche Anpassung wird umgehend allen Br- sen, an denen die Schuldverschreibungen zu diesem Zeitpunkt notiert sind, sowie den Glubigern gemß § 13 mitgeteilt.

[(6)] Verbindlichkeit der Festsetzungen. Alle Bescheinigungen, Mitteilungen, Gutachten, Festsetzun- gen, Berechnungen, Quotierungen und Entscheidungen, die von der Berechnungsstelle fr die Zwecke dieses § 3 gemacht, abgegeben, getroffen oder eingeholt werden, sind (sofern nicht ein offensichtlicher Irrtum vorliegt) fr die Emittentin, [die Garantin,] den Fiscal Agent [, die Zahlstellen] und die Glubiger bindend.

[(7)] Auflaufende Zinsen. Der Zinslauf der Schuldverschreibungen endet mit Ablauf des Tages, der dem Tag vorangeht, an dem sie zur Rckzahlung fllig werden. Sollte die Emittentin die Schuldver- schreibungen bei Flligkeit nicht einlsen, endet die Verzinsung des ausstehenden Nennbetrags der Schuldverschreibungen nicht am Flligkeitstag, sondern erst mit Ablauf des Tages, der dem Tag der tatschlichen Rckzahlung der Schuldverschreibungen vorangeht. Der jeweils geltende Zinssatz wird gemß diesem § 3 bestimmt.]]

18 [(C) Im Fall von Nullkupon-Schuldverschreibungen einfgen:

(1) Keine periodischen Zinszahlungen. Es erfolgen keine periodischen Zinszahlungen auf die Schuld- verschreibungen.

(2) Auflaufende Zinsen. Sollte die Emittentin die Schuldverschreibungen bei Flligkeit nicht einlsen, fallen auf den ausstehenden Nennbetrag der Schuldverschreibungen ab dem Flligkeitstag bis zum Tag der tatschlichen Rckzahlung Zinsen in Hhe von [Emissionsrendite einfgen] per annum an.]

[(D) Im Fall von Doppelwhrungs-Schuldverschreibungen, indexierten Schuldverschreibungen Credit Linked Notes, Equity Linked Notes oder Raten-Schuldverschreibungen anwendbare Bestimmungen die Zinsen betreffend hier einfgen.]

[(•)] Zinstagequotient. „Zinstagequotient“ bezeichnet im Hinblick auf die Berechnung des Zinsbetra- ges auf eine Schuldverschreibung fr einen beliebigen Zeitraum (der „Zinsberechnungszeitraum“):

[Im Falle von Actual/365 oder Actual/Actual einfgen: [(ISMA Regelung 251) die tatschliche Anzahl von Tagen im Zinsberechnungszeitraum, dividiert durch die tatschliche Anzahl der Tage (365 bzw. 366) im jeweiligen Zinsjahr.] [andere relevante Actual/Actual-Methode nach ISMA einfgen].]

[Im Falle von Actual/365 (Fixed) einfgen: die tatschliche Anzahl von Tagen im Zinsberechnungszeit- raum dividiert durch 365.]

[Im Falle von Actual/360 einfgen: die tatschliche Anzahl von Tagen im Zinsberechnungszeitraum dividiert durch 360.]

[Im Falle von 30/360, 360/360 oder Bond Basis einfgen: die Anzahl von Tagen im Zinsberechnungs- zeitraum dividiert durch 360, wobei die Anzahl der Tage auf der Grundlage eines Jahres von 360 Tagen mit zwlf Monaten zu je 30 Tagen zu ermitteln ist (es sei denn, (A) der letzte Tag des Zins- berechnungszeitraums fllt auf den 31. Tag eines Monates, whrend der erste Tag des Zinsberech- nungszeitraumes weder auf den 30. noch auf den 31. Tag eines Monats fllt, wobei in diesem Fall der diesen Tag enthaltende Monat nicht als ein auf 30 Tage gekrzter Monat zu behandeln ist, oder (B) der letzte Tag des Zinsberechnungszeitraumes fllt auf den letzten Tag des Monats Februar, wobei in diesem Fall der Monat Februar nicht als ein auf 30 Tage verlngerter Monat zu behandeln ist).]

[Im Falle von 30E/360 oder Eurobond Basis einfgen: die Anzahl der Tage im Zinsberechnungszeit- raum dividiert durch 360 (dabei ist die Anzahl der Tage auf der Grundlage eines Jahres von 360 Tagen mit 12 Monaten zu 30 Tagen zu ermitteln, und zwar ohne Bercksichtigung des ersten oder letzten Tages des Zinsberechnungszeitraumes, es sei denn, daß im Falle einer am Flligkeitstag endenden Zinsperiode der Flligkeitstag der letzte Tag des Monats Februar ist, in welchem Fall der Monat Febru- ar als nicht auf einen Monat zu 30 Tagen verlngert gilt).]

§4 ZAHLUNGEN (1) [(a)] Zahlungen auf Kapital. Zahlungen auf Kapital in bezug auf die Schuldverschreibungen erfol- gen nach Maßgabe des nachstehenden Absatzes 2 an das Clearing System oder dessen Order zur Gutschrift auf den Konten der jeweiligen Kontoinhaber des Clearing Systems gegen Vorlage und (außer im Fall von Teilzahlungen) Einreichung der die Schuldverschreibungen zum Zeitpunkt der Zah- lung verbriefenden Globalurkunde bei dem Fiscal Agent. [Im Fall von Schuldverschreibungen, die keine Nullkupon-Schuldverschreibungen sind, einfgen: (b) Zahlung von Zinsen. Die Zahlung von Zinsen auf Schuldverschreibungen erfolgt nach Maßgabe von Absatz 2 an das Clearing System oder dessen Order zur Gutschrift auf den Konten der jewei- ligen Kontoinhaber des Clearing Systems.]

[Im Fall von Zinszahlungen auf eine vorlufige Globalurkunde einfgen: Die Zahlung von Zinsen auf Schuldverschreibungen, die durch die vorlufige Globalurkunde verbrieft sind, erfolgt nach Maßgabe von Absatz 2 an das Clearing System oder dessen Order zur Gutschrift auf den Konten der jeweiligen Kontoinhaber des Clearing Systems, und zwar nach ordnungsgemßer Bescheini- gung gemß § 1(3)(b).]]

19 (2) Zahlungsweise. Vorbehaltlich geltender steuerlicher und sonstiger gesetzlicher Regelungen und Vorschriften erfolgen zu leistende Zahlungen auf die Schuldverschreibungen in der frei handelbaren und konvertierbaren Whrung, die am entsprechenden Flligkeitstag die Whrung des Staates der festgelegten Whrung ist.

(3) Erfllung. Die Emittentin [Im Fall von Schuldverschreibungen, die von Deutsche Bahn Finance begeben werden, einfgen: bzw. die Garantin] wird durch Leistung der Zahlung an das Clearing System oder dessen Order von ihrer Zahlungspflicht befreit.

(4) Zahltag. Fllt der Flligkeitstag einer Zahlung in bezug auf eine Schuldverschreibung auf einen Tag, der kein Zahltag ist, dann hat der Glubiger keinen Anspruch auf Zahlung vor dem nchsten Zahltag am jeweiligen Geschftsort. Der Glubiger ist nicht berechtigt, weitere Zinsen oder sonstige Zahlungen auf- grund dieser Versptung zu verlangen. Fr diese Zwecke bezeichnet „Zahltag“ einen Tag, [bei nicht auf Euro lautenden Schuldverschreibungen, einfgen: der ein Tag (außer einem Samstag oder Sonntag) ist, an dem Geschftsbanken und Devisenmrkte Zahlungen in [smtliche relevanten Finanzzentren ange- ben] abwickeln] [bei auf Euro lautenden Schuldverschreibungen, einfgen: der ein Tag (außer einem Samstag oder Sonntag) ist, an dem das Clearing System sowie alle betroffenen Bereiche [im Fall von festverzinslichen Schuldverschreibungen einfgen: des Trans-European Automated Real-time Gross Settlement Express Transfer System („TARGET“)] [im Fall von variabel verzinslichen Schuldverschrei- bungen einfgen: von TARGET] betriebsbereit sind, um die betreffenden Zahlungen weiterzuleiten.]

(5) Bezugnahmen auf Kapital und Zinsen. Bezugnahmen in diesen Bedingungen auf Kapital der Schuldverschreibungen schließen, soweit anwendbar, die folgenden Betrge ein: den Rckzahlungs- betrag der Schuldverschreibungen; den vorzeitigen Rckzahlungsbetrag der Schuldverschreibungen; [falls die Emittentin das Wahlrecht hat, die Schuldverschreibungen aus anderen als steuerlichen Grn- den vorzeitig zurckzuzahlen, einfgen: den Wahl-Rckzahlungsbetrag der Schuldverschreibungen;] [falls der Glubiger ein Wahlrecht hat, die Schuldverschreibungen vorzeitig zu kndigen, einfgen: den Wahl-Rckzahlungsbetrag der Schuldverschreibungen;] [im Fall von Nullkupon-Schuldverschrei- bungen einfgen: der Amortisationsbetrag der Schuldverschreibungen;] [im Fall von Raten-Schuld- verschreibungen einfgen: die auf die Schuldverschreibungen anwendbare(n) Rate(n);] sowie jeden Aufschlag sowie sonstige auf oder in bezug auf die Schuldverschreibungen zahlbaren Betrge. Bezug- nahmen in diesen Bedingungen auf Zinsen auf Schuldverschreibungen sollen, soweit anwendbar, smtliche gemß § 7 zahlbaren zustzlichen Betrge einschließen.

(6) Hinterlegung von Kapital und Zinsen. Die Emittentin ist berechtigt, beim Amtsgericht Frankfurt am Main Zins- oder Kapitalbetrge zu hinterlegen, die von den Glubigern nicht innerhalb von zwlf Monaten nach dem Flligkeitstag beansprucht worden sind, auch wenn die Glubiger sich nicht in Annahmeverzug befinden. Soweit eine solche Hinterlegung erfolgt, und auf das Recht der Rck- nahme verzichtet wird, erlschen die Ansprche der Glubiger gegen die Emittentin.

§5 RCKZAHLUNG (1) Rckzahlung bei Endflligkeit.

[Im Fall von Schuldverschreibungen, die keine Raten-Schuldverschreibungen sind, einfgen: Soweit nicht zuvor bereits ganz oder teilweise zurckgezahlt oder angekauft und entwertet, werden die Schuldverschreibungen zu ihrem Rckzahlungsbetrag am [im Fall eines festgelegten Flligkeitstages, Flligkeitstag einfgen] [im Fall eines Rckzahlungsmonats einfgen: in den [Rckzahlungsmonat einfgen] fallenden Zinszahlungstag] (der „Flligkeitstag“) zurckgezahlt. Der Rckzahlungsbetrag in bezug auf jede Schuldverschreibung entspricht [falls die Schuldverschreibungen zu ihrem Nennbe- trag zurckgezahlt werden, einfgen: dem Nennbetrag der Schuldverschreibungen] [ansonsten den Rckzahlungsbetrag fr die jeweilige Stckelung einfgen].] [Im Fall von Raten-Schuldverschreibungen einfgen: Soweit nicht zuvor bereits ganz oder teilweise zurckgezahlt oder angekauft und entwertet, werden die Schuldverschreibungen an dem/den nach- stehenden Ratenzahlungstermin(en) zu der/den folgenden Rate(n) zurckgezahlt:

Ratenzahlungstermin(e) Rate(n) [Ratenzahlungstermin(e) einfgen] [Rate(n) einfgen] [ ][ ] [ ] [ [ ]]

20 (2) Vorzeitige Rckzahlung aus steuerlichen Grnden. Die Schuldverschreibungen knnen insgesamt, jedoch nicht teilweise, nach Wahl der Emittentin mit einer Kndigungsfrist von nicht weniger als 30 und nicht mehr als 60 Tagen gegenber dem Fiscal Agent und gemß § 13 gegenber den Glubi- gern vorzeitig gekndigt und zu ihrem vorzeitigen Rckzahlungsbetrag (wie nachstehend definiert) zuzglich bis zum fr die Rckzahlung festgesetzten Tag aufgelaufener Zinsen zurckgezahlt werden, falls die Emittentin als Folge einer nderung oder Ergnzung der Steuer- oder Abgabengesetze und -vorschriften [Im Fall von Schuldverschreibungen, die von Deutsche Bahn Finance begeben werden, einfgen: der Niederlande oder] der Bundesrepublik Deutschland oder deren politischen Untergliede- rungen oder Steuerbehrden oder als Folge einer nderung oder Ergnzung der Anwendung oder der offiziellen Auslegung dieser Gesetze und Vorschriften (vorausgesetzt diese nderung oder Ergn- zung wird am oder nach dem Tag, an dem die letzte Tranche dieser Serie von Schuldverschreibungen begeben wird wirksam) [im Fall von Schuldverschreibungen, die nicht Nullkupon-Schuldverschrei- bungen sind, einfgen: am nchstfolgenden Zinszahlungstag (wie in § 3 (1) definiert)] [im Fall von Nullkupon-Schuldverschreibungen einfgen: bei Flligkeit oder im Fall des Kauf oder Tauschs einer Schuldverschreibung] zur Zahlung von zustzlichen Betrgen (wie in § 7 dieser Bedingungen defi- niert) verpflichtet sein wird und diese Verpflichtung nicht durch das Ergreifen vernnftiger der Emit- tentin zur Verfgung stehender Maßnahmen vermieden werden kann.

Eine solche Kndigung darf allerdings nicht (i) frher als 90 Tage vor dem frhestmglichen Termin erfolgen, an dem die Emittentin verpflichtet wre, solche zustzlichen Betrge zu zahlen, falls eine Zahlung auf die Schuldverschreibungen dann fllig sein wrde, oder (ii) erfolgen, wenn zu dem Zeit- punkt, zu dem die Kndigung erfolgt, die Verpflichtung zur Zahlung von zustzlichen Betrgen nicht mehr wirksam ist. [Im Fall von variabel verzinslichen Schuldverschreibungen einfgen: Der fr die Rckzahlung festgelegte Termin muß ein Zinszahlungstag sein.]

Eine solche Kndigung hat gemß § 13 zu erfolgen. Sie ist unwiderruflich, muß den fr die Rckzah- lung festgelegten Termin nennen und eine zusammenfassende Erklrung enthalten, welche die das Rckzahlungsrecht der Emittentin begrndenden Umstnden darlegt.

[Falls die Emittentin das Wahlrecht hat, die Schuldverschreibungen vorzeitig zurckzuzahlen, einfgen:

(3) Vorzeitige Rckzahlung nach Wahl der Emittentin.

(a) Die Emittentin kann, nachdem sie gemß Absatz (b) gekndigt hat, die Schuldverschreibungen insgesamt oder teilweise am/an den Wahl-Rckzahlungstag(en) zum/zu den Wahl-Rckzahlungs- betrag/betrgen, wie nachstehend angegeben, nebst etwaigen bis zum Wahl-Rckzahlungstag (ausschließlich) aufgelaufenen Zinsen zurckzahlen. [Bei Geltung eines Mindestrckzahlungsbe- trages oder eines erhhten Rckzahlungsbetrages einfgen: Eine solche Rckzahlung muß in Hhe eines Nennbetrages von [mindestens [Mindestrckzahlungsbetrag einfgen]] [erhhter Rckzahlungsbetrag] erfolgen.]

Wahl-Rckzahlungstag(e) Wahl-Rckzahlungsbetrag/betrge [Wahl-Rckzahlungstag(e) einfgen] [Wahl-Rckzahlungsbetrag/betrge einfgen] [ ][ ] [ ] [ [ ] ]

[Falls der Glubiger ein Wahlrecht hat, die Schuldverschreibungen vorzeitig zu kndigen, einfgen: Der Emittentin steht dieses Wahlrecht nicht in bezug auf eine Schuldverschreibung zu, deren Rckzahlung bereits der Glubiger in Ausbung seines Wahlrechts nach Absatz [(4)] dieses § 5 verlangt hat.]

(b) Die Kndigung ist den Glubigern der Schuldverschreibungen durch die Emittentin gemß § 13 bekanntzugeben. Sie beinhaltet die folgenden Angaben: (i) die zurckzuzahlende Serie von Schuldverschreibungen; (ii) eine Erklrung, ob diese Serie ganz oder teilweise zurckgezahlt wird und im letzteren Fall den Gesamtnennbetrag der zurckzuzahlenden Schuldverschreibungen; (iii) den Wahl-Rckzahlungstag, der nicht weniger als [Mindestkndigungsfrist einfgen] und nicht mehr als [Hchstkndigungsfrist einfgen] Tage nach dem Tag der Kndigung durch die Emittentin gegenber den Glubigern liegen darf; und

21 (iv) den Wahl-Rckzahlungsbetrag, zu dem die Schuldverschreibungen zurckgezahlt werden.

(c) Wenn die Schuldverschreibungen nur teilweise zurckgezahlt werden, werden die zurckzuzah- lenden Schuldverschreibungen in bereinstimmung mit den Regeln des betreffenden Clearing Systems ausgewhlt.]

[Falls der Glubiger ein Wahlrecht hat, die Schuldverschreibungen vorzeitig zu kndigen, einfgen:

[(4)] Vorzeitige Rckzahlung nach Wahl des Glubigers.

(a) Die Emittentin hat eine Schuldverschreibung nach Ausbung des entsprechenden Wahlrechts durch den Glubiger am/an den Wahl-Rckzahlungstag(en) zum/zu den Wahl-Rckzahlungsbe- trag/betrgen, wie nachstehend angegeben nebst etwaigen bis zum Wahl-Rckzahlungstag (aus- schließlich) aufgelaufener Zinsen zurckzuzahlen.

Wahl-Rckzahlungstag(e) Wahl-Rckzahlungsbetrag/betrge [Wahl-Rckzahlungstag(e) einfgen] [Wahl-Rckzahlungsbetrag/betrge einfgen] [ ][ ] [ ] [ [ ] ]

Dem Glubiger steht dieses Wahlrecht nicht in bezug auf eine Schuldverschreibung zu, deren Rckzahlung die Emittentin zuvor in Ausbung ihres Wahlrechts nach diesem § 5 verlangt hat.

(b) Um dieses Wahlrecht auszuben, hat der Glubiger nicht weniger als [Mindestkndigungsfrist ein- fgen] Tage und nicht mehr als [Hchstkndigungsfrist einfgen] Tage vor dem Wahl-Rckzahlungs- tag, an dem die Rckzahlung gemß der Ausbungserklrung (wie nachstehend definiert) erfolgen soll, bei dem Fiscal Agent whrend der normalen Geschftszeiten eine ordnungsgemß ausgefllte Mitteilung zur vorzeitigen Rckzahlung („Ausbungserklrung“), wie sie von dem Fiscal Agent erhltlich ist, zu hinterlegen. Die Ausbung des Wahlrechts kann nicht widerrufen werden.]

[Außer bei Nullkupon-Schuldverschreibungen) einfgen:

[(5)] Vorzeitiger Rckzahlungsbetrag.

Fr die Zwecke von Absatz 2 dieses § 5, § 9 und § 10 entspricht der vorzeitige Rckzahlungsbetrag einer Schuldverschreibung dem Rckzahlungsbetrag.]

[Im Fall von Nullkupon-Schuldverschreibungen einfgen:

[(5)] Vorzeitiger Rckzahlungsbetrag.

(a) Fr die Zwecke des Absatzes 2 dieses § 5, § 9 und § 10 entspricht der vorzeitige Rckzahlungs- betrag einer Schuldverschreibung dem Amortisationsbetrag der Schuldverschreibung.

(b) Der Amortisationsbetrag einer Schuldverschreibung entspricht der Summe aus:

(i) [Referenzpreis einfgen] (der „Referenzpreis“), und

(ii) dem Produkt aus [Emissionsrendite einfgen] (jhrlich kapitalisiert) und dem Referenzpreis ab dem (und einschließlich) [Tag der Begebung einfgen] bis zu (aber ausschließlich) dem vorgesehenen Rckzahlungstag oder (je nachdem) dem Tag, an dem die Schuldverschreibun- gen fllig und rckzahlbar werden.

Wenn diese Berechnung fr einen Zeitraum, der nicht einer ganzen Zahl von Kalenderjahren entspricht, durchzufhren ist, hat sie im Fall des nicht vollstndigen Jahres (der „Zinsberech- nungszeitraum“) auf der Grundlage des Zinstagequotienten (wie vorstehend in § 3 definiert) zu erfolgen.

22 (c) Falls die Emittentin den vorzeitigen Rckzahlungsbetrag bei Flligkeit nicht zahlt, wird der Amor- tisationsbetrag einer Schuldverschreibung wie vorstehend beschrieben berechnet, jedoch mit der Maßgabe, daß die Bezugnahmen in Unterabsatz (b)(ii) auf den fr die Rckzahlung vorgesehenen Rckzahlungstag oder den Tag, an dem diese Schuldverschreibungen fllig und rckzahlbar wer- den, durch den Tag, an dem die Zahlung gegen ordnungsgemße Vorlage und Einreichung der betreffenden Schuldverschreibungen (sofern erforderlich) erfolgt, ersetzt werden.]

[Im Fall von indexierten Schuldverschreibungen, Equity Linked Notes oder Credit Linked Notes voll- stndige Einzelheiten in bezug auf den Rckzahlungsbetrag hier einfgen. Dasselbe gilt im Fall von Doppelwhrungs-Schuldverschreibungen.]

§6 DER FISCAL AGENT[,] [UND] [DIE ZAHLSTELLEN] [UND DIE BERECHNUNGSSTELLE]

(1) Bestellung; Geschftsstelle. Der Fiscal Agent[,][und] die Zahlstelle[n][und die Berechnungsstelle] und deren jeweilige Geschftsstelle lauten wie folgt:

Emissions- und Zahlstelle: Deutsche Bank Aktiengesellschaft Corporate Trust and Agency Services Große Gallusstraße 10–14 D-60272 Frankfurt am Main

[Zahlstelle[n]: Deutsche Bank Luxembourg S.A. 2, Boulevard Konrad Adenauer L-1115 Luxembourg

[andere Zahlstellen und deren Geschftsstellen einfgen]

[Falls der Fiscal Agent als Berechnungsstelle bestellt werden soll, einfgen: Der Fiscal Agent handelt auch als Berechnungsstelle.]

[Falls eine Berechnungsstelle bestellt werden soll, die nicht der Fiscal Agent ist, einfgen: Die Berech- nungsstelle und ihre Geschftsstelle lauten:

Berechnungsstelle: [Namen und Geschftsstelle einfgen]]

Der Fiscal Agent[,][und] die Zahlstelle[n][und die Berechnungsstelle] behalten sich das Recht vor, jederzeit ihre jeweilige bezeichnete Geschftsstelle durch eine andere bezeichnete Geschftsstelle in derselben Stadt zu ersetzen.

(2) nderung der Bestellung oder Abberufung. Die Emittentin behlt sich das Recht vor, jederzeit die Bestellung des Fiscal Agent oder einer Zahlstelle [oder der Berechnungsstelle] zu ndern oder zu beenden und einen anderen Fiscal Agent oder zustzliche oder andere Zahlstellen [oder eine andere Berechnungsstelle] zu bestellen. Die Emittentin wird zu jedem Zeitpunkt (i) einen Fiscal Agent unter- halten[,][und] (ii) zustzlich zu dem Fiscal Agent eine Zahlstelle mit einer Geschftsstelle in einer kon- tinentaleuropischen Stadt unterhalten [im Fall von Schuldverschreibungen, die an einer Brse notiert sind, einfgen:[,][und] (iii) solange die Schuldverschreibungen an der [Name der Brse] notiert sind, eine Zahlstelle (die der Fiscal Agent sein kann) mit einer Geschftsstelle in [Sitz der Brse] und/oder an solchen anderen Orten unterhalten, die die Regeln dieser Brse verlangen] [im Fall von Zahlungen in US-Dollar einfgen:[,][und][(iv)] falls Zahlungen bei den oder durch die Geschftsstellen aller Zahlstellen außerhalb der Vereinigten Staaten aufgrund der Einfhrung von Devisenbeschrnkungen oder hnlichen Beschrnkungen hinsichtlich der vollstndigen Zahlung oder des Empfangs der entsprechenden Betrge in US-Dollar widerrechtlich oder tatschlich ausge- schlossen werden, eine Zahlstelle mit bezeichneter Geschftsstelle in New York City unterhalten] [falls eine Berechnungsstelle bestellt werden soll, einfgen:[,][und][(v)] eine Berechnungsstelle [falls die Berechnungsstelle eine bezeichnete Geschftsstelle an einem vorgeschriebenen Ort zu unterhalten hat, einfgen: mit bezeichneter Geschftsstelle in [vorgeschriebenen Ort einfgen]] unterhalten].

23 Eine nderung, Abberufung, Bestellung oder ein sonstiger Wechsel wird nur wirksam (außer im Insolvenzfall, in dem eine solche nderung sofort wirksam wird), sofern die Glubiger hierber gemß § 13 vorab unter Einhaltung einer Frist von mindestens 30 und nicht mehr als 45 Tagen infor- miert wurden.

„Vereinigte Staaten“ bezeichnet die Vereinigten Staaten von Amerika (einschließlich deren Bundes- staaten und des District of Columbia) sowie deren Territorien (einschließlich Puerto Rico, der U.S. Vir- gin Islands, Guam, American Samoa, Wake Island und Northern Mariana Islands).

(3) Beauftragte der Emittentin. Der Fiscal Agent[,][und] die Zahlstelle[n][und die Berechnungsstelle] handeln ausschließlich als Beauftragte der Emittentin und bernehmen keinerlei Verpflichtungen gegen- ber den Glubigern und es wird kein Auftrags- oder Treuhandverhltnis zwischen ihnen und den Glu- bigern begrndet.

§7 STEUERN Kapital und Zinsen werden von der Emittentin ohne Abzug oder Einbehalt gegenwrtiger oder zuknftiger Steuern, Abgaben oder amtlicher Gebhren gleich welcher Art gezahlt, die von oder in [Im Fall von Schuldverschreibungen, die von Deutsche Bahn Finance begeben werden, einfgen: den Niederlanden oder] der Bundesrepublik Deutschland oder fr deren Rechnung oder von oder fr Rechnung einer dort zur Steuererhebung ermchtigten Gebietskrperschaft oder Behrde auferlegt, erhoben oder eingezogen werden (nachstehend zusammen „Quellensteuern“ genannt), es sei denn, ein solcher Abzug oder Einbehalt ist gesetzlich vorgeschrieben. In diesem letzteren Fall wird die Emit- tentin die zustzlichen Betrge („zustzlichen Betrge“) an Kapital und Zinsen zahlen, die erforderlich sind, damit der dem Glubiger nach diesem Abzug oder Einbehalt zufließende Nettobetrag jeweils den Betrgen an Kapital und Zinsen entspricht, die ihm zustehen wrden, wenn der Abzug oder Ein- behalt nicht erforderlich wre. Solche zustzlichen Betrge sind jedoch nicht zahlbar wegen Steuern, Abgaben oder amtlicher Gebhren, die (a) von einer als Depotbank oder Inkassobeauftragter des Glubigers handelnden Person oder sonst auf andere Weise zu entrichten sind als dadurch, daß die Emittentin aus den von ihr zu leistenden Zahlungen von Kapital oder Zinsen einen Abzug oder Einbehalt vornimmt; oder (b) wegen gegenwrtiger oder frherer persnlicher oder geschftlicher Beziehungen des Glubigers zu [Im Fall von Schuldverschreibungen, die von Deutsche Bahn Finance begeben werden, einf- gen: den Niederlanden oder] der Bundesrepublik Deutschland zu zahlen sind, und nicht allein des- halb, weil Zahlungen auf die Schuldverschreibungen aus Quellen in [Im Fall von Schuldverschrei- bungen, die von Deutsche Bahn Finance begeben werden, einfgen: den Niederlanden oder] der Bundesrepublik Deutschland stammen (oder fr Zwecke der Besteuerung so behandelt werden) oder dort besichert sind; oder (c) aufgrund (i) einer Richtlinie oder Verordnung der Europischen Union betreffend die Besteuerung von Zinsertrgen oder (ii) einer zwischenstaatlichen Vereinbarung ber deren Besteuerung, an der die Bundesrepublik Deutschland, die Niederlande oder die Europische Union beteiligt ist, oder (iii) einer gesetzlichen Vorschrift, die diese Richtlinie, Verordnung oder Vereinbarung umsetzt oder befolgt, abzuziehen oder einzubehalten sind; oder (d) aufgrund einer Rechtsnderung zahlbar sind, die spter als 30 Tage nach Flligkeit der betreffen- den Zahlung von Kapital oder Zinsen oder, wenn dies spter erfolgt, ordnungsgemßer Bereitstel- lung aller flligen Betrge und einer diesbezglichen Bekanntmachung gemß § 13 wirksam wird.

§8 VORLEGUNGSFRIST

Die in § 801 Absatz 1 Satz 1 BGB bestimmte Vorlegungsfrist wird fr die Schuldverschreibungen auf zehn Jahre abgekrzt.

§9 KNDIGUNG

(1) Kndigungsgrnde. Jeder Glubiger ist berechtigt, seine Schuldverschreibungen zu kndigen und deren sofortige Tilgung zu ihrem vorzeitigen Rckzahlungsbetrag (wie in § 5 beschrieben), zuzglich

24 etwaiger bis zum Tage der Rckzahlung aufgelaufener Zinsen zu verlangen, falls einer der folgenden Kndigungsgrnde („Kndigungsgrnde“) vorliegt: (a) die Emittentin zahlt Kapital oder Zinsen nicht innerhalb von 30 Tagen nach dem betreffenden Fl- ligkeitstag; oder (b) die Emittentin unterlßt die ordnungsgemße Erfllung irgendeiner anderen Verpflichtung aus den Schuldverschreibungen [bei von Deutsche Bahn Finance begebenen Schuldverschreibungen: oder die Garantin unterlßt die Erfllung einer Verpflichtung aus der Garantie, auf die in § 2 Bezug genommen wird,] und diese Unterlassung, falls sie geheilt werden kann, lnger als 30 Tage fortdau- ert, nachdem der Fiscal Agent hierber eine Benachrichtigung von einem Glubiger erhalten hat; oder (c) die Emittentin [bei von Deutsche Bahn Finance begebenen Schuldverschreibungen: oder die Ga- rantin] ihre Zahlungsunfhigkeit bekanntgibt oder ihre Zahlungen einstellt, oder (d) ein Gericht ein Insolvenzverfahren gegen die Emittentin [bei von Deutsche Bahn Finance begebe- nen Schuldverschreibungen: oder die Garantin] erffnet, oder die Emittentin [bei von Deutsche Bahn Finance begebenen Schuldverschreibungen: oder die Garantin] ein solches Verfahren einlei- tet oder beantragt, oder eine allgemeine Schuldenregelung zugunsten ihrer Glubiger anbietet oder trifft, oder [bei von Deutsche Bahn Finance begebenen Schuldverschreibungen: die Emitten- tin ein „surseance van betaling“ (Schuldenmoratorium im Sinne des niederlndischen Insolvenz- rechts) beantragt, oder] (e) die Emittentin [bei von Deutsche Bahn Finance begebenen Schuldverschreibungen: oder die Garantin] in Liquidation tritt, es sei denn, dies geschieht im Zusammenhang mit einer Verschmel- zung (insbesondere eine Verschmelzung gemß § 2 Absatz 2 Deutsche Bahn Grndungsgesetz) oder einer anderen Form des Zusammenschlusses mit einer anderen Gesellschaft und diese Gesellschaft bernimmt alle Verpflichtungen, die die Emittentin [bei von Deutsche Bahn Finance begebenen Schuldverschreibungen: oder die Garantin] im Zusammenhang mit diesen Schuldver- schreibungen eingegangen ist, oder (f) in [bei von Deutsche Bahn Finance begebenen Schuldverschreibungen: den Niederlanden oder in] der Bundesrepublik Deutschland irgendein Gesetz, eine Verordnung oder behrdliche Anordnung erlassen wird oder ergeht, aufgrund derer die Emittentin [bei von Deutsche Bahn Finance begebe- nen Schuldverschreibungen: oder die Garantin] daran gehindert wird, die von ihr gemß diesen Emissionsbedingungen [bei von Deutsche Bahn Finance begebenen Schuldverschreibungen: bzw. der Garantie] bernommenen Verpflichtungen in vollem Umfang zu beachten und zu erfllen und diese Lage nicht binnen 90 Tagen behoben ist.

Das Kndigungsrecht erlischt, falls der Kndigungsgrund vor Ausbung des Rechts geheilt wurde.

(2) Quorum. In den Fllen des § 9 Absatz 1 (b) wird eine Kndigung, sofern nicht bei deren Eingang zugleich einer der in § 9 Absatz 1 (a), 1 (c), 1 (d), 1 (e) oder 1 (f) bezeichneten Kndigungsgrnde vor- liegt, erst wirksam, wenn bei dem Fiscal Agent Kndigungserklrungen von Glubigern von Schuld- verschreibungen im Nennbetrag von mindestens einem Zehntel der dann ausstehenden Schuldver- schreibungen eingegangen sind.

(3) Form der Erklrung. Eine Benachrichtigung, einschließlich einer Kndigung der Schuldverschrei- bungen gemß vorstehendem Absatz 1 ist schriftlich, in deutscher oder englischer Sprache, gegen- ber dem Fiscal Agent zu erklren und persnlich oder per Einschreiben an deren bezeichnete Geschftsstelle zu bermitteln.

§10 RESTRUKTURIERUNG

Fr den Fall, daß gemß § 2 Absatz 2 Deutsche Bahn Grndungsgesetz die Garantin aufgelst oder aufgespalten wird, sind die Glubiger unabhngig von den Vorschriften in § 9 Absatz 1(e) zur Kndi- gung zum vorzeitigen Rckzahlungsbetrag berechtigt. Das Kndigungsrecht besteht nicht, falls im Fall (i) der Auflsung Sicherheiten gestellt werden;

25 (ii) der Aufspaltung, die aus der Aufspaltung hervorgehenden Gesellschaften die uneingeschrnkte, unwiderrufliche und gesamtschuldnerische Haftung fr die Verbindlichkeiten [Im Fall von Schuld- verschreibungen, die von der Deutschen Bahn Finance begeben werden, einfgen: der Garantin aus der Garantie] [Im Fall von Schuldverschreibungen, die von der Deutschen Bahn AG begeben werden, einfgen: der Emittentin aus den Schuldverschreibungen] gegenber den Glubigern bernehmen oder eine solche andere Sicherheit, die von einem unabhngigen Wirtschaftsprfer als gleichwertige Sicherheit anerkannt wird, fr die Glubiger gestellt wird. Die Haftungsbernahme ist gegenber der Deutschen Bank Aktiengesellschaft zu erklren und gemß § 13 zu verffentlichen. Die Haftungsbernahme ist als Vertrag zugunsten der jeweiligen Glubiger als begnstigte Dritte gemß § 328 Absatz 1 BGB darzustellen, der jedem Glubiger das Recht gibt, Erfllung aus der Haftungsbernahme unmittelbar gegen die haftungsbernehmende(n) Gesellschaft/Gesellschaften durchzusetzen.

§11 ERSETZUNG

(1) Ersetzung. Die Emittentin ist jederzeit berechtigt, sofern sie sich nicht mit einer Zahlung von Kapi- tal oder Zinsen auf die Schuldverschreibungen in Verzug befindet, ohne Zustimmung der Glubiger [Im Fall von Schuldverschreibungen, die von Deutsche Bahn Finance begeben werden, einfgen: ent- weder die Garantin oder] eine Tochtergesellschaft (wie nachstehend definiert) [Im Fall von Schuldver- schreibungen, die von Deutsche Bahn AG begeben werden, einfgen: der Emittentin] [Im Fall von Schuldverschreibungen, die von Deutsche Bahn Finance begeben werden, einfgen: der Garantin] an ihrer Stelle als Hauptschuldnerin (die „Nachfolgeschuldnerin“) fr alle Verpflichtungen aus und im Zusammenhang mit diesen Schuldverschreibungen einzusetzen, vorausgesetzt, daß:

(a) die Nachfolgeschuldnerin alle Verpflichtungen der Emittentin in bezug auf die Schuldverschrei- bungen bernimmt;

(b) die Emittentin und die Nachfolgeschuldnerin alle erforderlichen Genehmigungen erhalten haben und berechtigt sind, an den Fiscal Agent die zur Erfllung der Zahlungsverpflichtungen aus den Schuldverschreibungen zahlbaren Betrge in der hierin festgelegten Whrung zu zahlen, ohne verpflichtet zu sein, jeweils in dem Land, in dem die Nachfolgeschuldnerin oder die Emittentin ihren Sitz oder Steuersitz haben, erhobene Steuern oder andere Abgaben jeder Art abzuziehen oder einzubehalten;

(c) die Nachfolgeschuldnerin sich verpflichtet hat, jeden Glubiger hinsichtlich solcher Steuern, Abgaben oder behrdlichen Lasten freizustellen, die einem Glubiger bezglich der Ersetzung auferlegt werden;

(d) [Im Fall von Schuldverschreibungen, die von Deutsche Bahn AG begeben werden, einfgen: die Emittentin] [Im Fall von Schuldverschreibungen, die von Deutsche Bahn Finance begeben wer- den, einfgen: die Garantin, sofern sie nicht selbst die Nachfolgeschuldnerin ist,] unwiderruflich und unbedingt gegenber den Glubigern die Zahlung aller von der Nachfolgeschuldnerin auf die Schuldverschreibungen zahlbaren Betrge zu Bedingungen garantiert, [Im Fall von Schuldver- schreibungen, die von Deutsche Bahn AG begeben werden, einfgen: die den Bedingungen der Garantie der Emittentin vom [Datum einfgen] hinsichtlich der Schuldverschreibungen, die von Deutsche Bahn Finance unter dem Debt Issuance Programme begeben werden.] [Im Fall von Schuldverschreibungen, die von Deutsche Bahn Finance begeben werden, einfgen: die den Bedingungen der Garantie] entsprechen; und

(e) dem Fiscal Agent ein oder mehrere Rechtsgutachten von anerkannten Rechtsanwlten vorgelegt werden, die besttigen, daß die Bestimmungen in den vorstehenden Unterabstzen (a), (b), (c) und (d) erfllt wurden.

Im Sinne dieser Bedingungen bedeutet „Tochtergesellschaft“ eine Kapitalgesellschaft, an der die Deutsche Bahn AG direkt oder indirekt insgesamt nicht weniger als 90% des Kapitals jeder Klasse oder der Stimmrechte hlt.

(2) Bekanntmachung. Jede Ersetzung ist gemß § 13 bekanntzumachen.

26 (3) nderung von Bezugnahmen. Im Fall einer Ersetzung gilt jede Bezugnahme in diesen Bedingun- gen auf die Emittentin ab dem Zeitpunkt der Ersetzung als Bezugnahme auf die Nachfolgeschuldnerin und jede Bezugnahme auf das Land, in dem die Emittentin ihren Sitz oder Steuersitz hat, gilt ab diesem Zeitpunkt als Bezugnahme auf das Land, in dem die Nachfolgeschuldnerin ihren Sitz oder Steuersitz hat. Des weiteren gilt im Fall einer Ersetzung folgendes:

[Im Fall von Schuldverschreibungen, die von Deutsche Bahn AG begeben werden, einfgen:

(a) in § 7 und § 5 (2) gilt eine alternative Bezugnahme auf die Bundesrepublik Deutschland als aufge- nommen (zustzlich zu der Bezugnahme nach Maßgabe des vorstehenden Satzes auf das Land, in dem die Nachfolgeschuldnerin ihren Sitz oder Steuersitz hat);

(b) in § 9 (1)(d) bis (f) gilt eine alternative Bezugnahme auf die Emittentin in ihrer Eigenschaft als Garantin als aufgenommen (zustzlich zu der Bezugnahme auf die Nachfolgeschuldnerin).]

[Im Fall von Schuldverschreibungen, die von Deutsche Bahn Finance begeben werden, einfgen:

In § 7 und § 5 (2) gilt eine alternative Bezugnahme auf die Niederlande als aufgenommen (zustzlich zu der Bezugnahme nach Maßgabe des vorstehenden Satzes auf das Land, in dem die Nachfolge- schuldnerin ihren Sitz oder Steuersitz hat).]

§12 BEGEBUNG WEITERER SCHULDVERSCHREIBUNGEN, ANKAUF UND ENTWERTUNG

(1) Begebung weiterer Schuldverschreibungen. Die Emittentin ist berechtigt, jederzeit ohne Zustim- mung der Glubiger weitere Schuldverschreibungen mit gleicher Ausstattung (gegebenenfalls mit Ausnahme des Tags der Begebung, des Verzinsungsbeginns und/oder des Ausgabepreises) in der Weise zu begeben, daß sie mit diesen Schuldverschreibungen eine einheitliche Serie bilden.

(2) Ankauf. Die Emittentin ist berechtigt, Schuldverschreibungen im Markt oder anderweitig zu jedem beliebigen Preis zu kaufen. Die von der Emittentin erworbenen Schuldverschreibungen knnen nach Wahl der Emittentin von ihr gehalten, weiterverkauft oder bei dem Fiscal Agent zwecks Entwertung eingereicht werden. Sofern diese Kufe durch ffentliches Angebot erfolgen, muß dieses Angebot allen Glubigern gemacht werden.

§13 MITTEILUNGEN

(1) Bekanntmachung. Alle die Schuldverschreibungen betreffenden Mitteilungen sind in einer fhren- den Tageszeitung mit allgemeiner Verbreitung in [Deutschland][Luxemburg][London] [anderen Ort einfgen], voraussichtlich [der Brsen-Zeitung][dem Luxemburger Wort][der Financial Times] [andere Zeitung mit allgemeiner Verbreitung einfgen] zu verffentlichen. Jede derartige Mitteilung gilt mit dem Tag der Verffentlichung (oder bei mehreren Verffentlichungen mit dem Tag der ersten solchen Verffentlichung) als wirksam erfolgt.

(2) Mitteilungen an das Clearing System. Die Emittentin ist berechtigt, eine Zeitungsverffentlichung nach Absatz 1 durch eine Mitteilung an das Clearing System zur Weiterleitung an die Glubiger zu ersetzen, vorausgesetzt, daß in Fllen, in denen die Schuldverschreibungen an einer Brse notiert sind, die Regeln dieser Brse diese Form der Mitteilung zulassen. Jede derartige Mitteilung gilt am siebten Tag nach dem Tag der Mitteilung an das Clearing System als den Glubigern mitgeteilt. [Im Fall von Schuldverschreibungen, die an der Luxemburger Brse notiert sind, einfgen: Solange irgendwelche Schuldverschreibungen an der Luxemburger Brse notiert sind, sind alle die Schuld- verschreibungen betreffenden Mitteilungen gemß Absatz 1 bekanntzumachen.]

27 §14 ANWENDBARES RECHT, GERICHTSSTAND [, ZUSTELLUNGSBEVOLLMCHTIGTER] UND GERICHTLICHE GELTENDMACHUNG

(1) Anwendbares Recht. Form und Inhalt der Schuldverschreibungen sowie die Rechte und Pflichten der Glubiger und der Emittentin bestimmen sich in jeder Hinsicht nach deutschem Recht.

(2) Gerichtsstand. Nicht ausschließlich zustndig fr smtliche im Zusammenhang mit den Schuld- verschreibungen entstehenden Klagen oder sonstige Verfahren („Rechtsstreitigkeiten“) ist das Land- gericht Frankfurt am Main.

[Im Fall von Schuldverschreibungen, die von Deutsche Bahn Finance begeben werden, einfgen:

(3) Ernennung von Zustellungsbevollmchtigten. Fr etwaige Rechtsstreitigkeiten vor deutschen Gerichten bestellt die Emittentin Deutsche Bahn AG, Potsdamer Platz 2, D-10785 Berlin, zu ihrem Zustellungsbevollmchtigten in Deutschland.]

[(4)] Gerichtliche Geltendmachung. Jeder Glubiger von Schuldverschreibungen ist berechtigt, in jedem Rechtsstreit gegen die Emittentin oder in jedem Rechtsstreit, in dem der Glubiger und die Emittentin Partei sind, seine Rechte aus diesen Schuldverschreibungen im eigenen Namen auf der folgenden Grundlage zu schtzen oder geltend zu machen: (i) er bringt eine Bescheinigung der Depotbank bei, bei der er fr die Schuldverschreibungen ein Wertpapierdepot unterhlt, welche (a) den vollstndigen Namen und die vollstndige Adresse des Glubigers enthlt, (b) den Gesamt- nennbetrag der Schuldverschreibungen bezeichnet, die unter dem Datum der Besttigung auf dem Wertpapierdepot verbucht sind und (c) besttigt, daß die Depotbank gegenber dem Clearing System eine schriftliche Erklrung abgegeben hat, die die vorstehend unter (a) und (b) bezeichneten Informationen enthlt; und (ii) er legt eine Kopie der die betreffenden Schuldverschreibungen ver- briefenden Globalurkunde vor, deren bereinstimmung mit dem Original eine vertretungsberech- tigte Person des Clearing Systems oder des Verwahrers des Clearing Systems besttigt hat, ohne daß eine Vorlage der Originalbelege oder der die Schuldverschreibungen verbriefenden Global- urkunde in einem solchen Verfahren erforderlich wre. Fr die Zwecke des Vorstehenden bezeichnet „Depotbank“ jede Bank oder ein sonstiges anerkanntes Finanzinstitut, das berechtigt ist, das Wertpa- pierverwahrungsgeschft zu betreiben und bei der/dem der Glubiger ein Wertpapierdepot fr die Schuldverschreibungen unterhlt, einschließlich des Clearing Systems.

§15 SPRACHE

[Falls die Bedingungen in deutscher Sprache mit einer bersetzung in die englische Sprache abge- faßt sind, einfgen:

Diese Bedingungen sind in deutscher Sprache abgefaßt. Eine bersetzung in die englische Sprache ist beigefgt. Der deutsche Text ist bindend und maßgeblich. Die bersetzung in die englische Spra- che ist unverbindlich.]

[Falls die Bedingungen in englischer Sprache mit einer bersetzung in die deutsche Sprache abge- faßt sind, einfgen:

Diese Bedingungen sind in englischer Sprache abgefaßt. Eine bersetzung in die deutsche Sprache ist beigefgt. Der englische Text ist bindend und maßgeblich. Die bersetzung in die deutsche Spra- che ist unverbindlich.]

[Falls die Bedingungen ausschließlich in deutscher Sprache abgefaßt sind, einfgen:

Diese Bedingungen sind ausschließlich in deutscher Sprache abgefaßt.]

28 TERMS AND CONDITIONS OF THE NOTES ENGLISH LANGUAGE VERSION

This Series of Notes is issued pursuant to a Fiscal Agency Agreement dated as of 31 May 2001 as amended and supplemented by a Supplemental Agency Agreement dated 11 July 2002 (together, the “Agency Agreement”) between Deutsche Bahn Aktiengesellschaft (“Deutsche Bahn AG”), Deutsche Bahn Finance B.V. (“Deutsche Bahn Finance”) (each an “Issuer” and together the “Issuers”) and Deutsche Bank Aktiengesellschaft as fiscal agent (the “Fiscal Agent”, which expression shall include any successor fiscal agent thereunder) and the other parties named therein. Copies of the Agency Agreement may be obtained free of charge at the specified office of the Fiscal Agent, at the specified office of any Paying Agent and at the head office of any of the Issuers.

[In the case of Long-Form Conditions insert:

The provisions of the following Terms and Conditions apply to the Notes as completed, modified, supplemented or replaced, in whole or in part, by the terms of the pricing supplement which is atta- ched hereto (the “Pricing Supplement”). The blanks in the provisions of these Terms and Conditions which are applicable to the Notes shall be deemed to be completed by the information contained in the Pricing Supplement as if such information were inserted in the blanks of such provisions; any provisions of the Pricing Supplement modifying, supplementing or replacing, in whole or in part, the provisions of these Terms and Conditions shall be deemed to so modify, supplement or replace the provisions of these Terms and Conditions; alternative or optional provisions of these Terms and Con- ditions as to which the corresponding provisions of the Pricing Supplement are not completed or are deleted shall be deemed to be deleted from these Terms and Conditions; and all provisions of these Terms and Conditions which are inapplicable to the Notes (including instructions, explanatory notes and text set out in square brackets) shall be deemed to be deleted from these Terms and Conditions, as required to give effect to the terms of the Pricing Supplement. Copies of the Pricing Supplement may be obtained free of charge at the specified office of the Fiscal Agent and at the specified office of any Paying Agent provided that, in the case of Notes which are not listed on any stock exchange, copies of the relevant Pricing Supplement will only be available to Holders of such Notes.]

29 CONDITIONS

§1 CURRENCY, DENOMINATION, FORM, CERTAIN DEFINITIONS

(1) Currency; Denomination. This Series of Notes (the “Notes”) of [insert Issuer] (the “Issuer”) is being issued in [insert Specified Currency] (the “Specified Currency”) in the aggregate principal amount of [insert aggregate principal amount] (in words: [insert aggregate principal amount in words]) in denominations of [insert Specified Denominations] (the “Specified Denominations”).

(2) Form. The Notes are being issued in bearer form.

[In the case of Notes which are represented by a Permanent Global Note insert:

(3) Permanent Global Note. The Notes are represented by a permanent global note (the “Permanent Global Note”) without coupons. The Permanent Global Note shall be signed manually by two author- ized signatories of the Issuer and shall be authenticated by or on behalf of the Fiscal Agent. Definitive Notes and interest coupons will not be issued.]

[In the case of Notes which are initially represented by a Temporary Global Note insert:

(3) Temporary Global Note – Exchange.

(a) The Notes are initially represented by a temporary global note (the “Temporary Global Note”) without coupons. The Temporary Global Note will be exchangeable for Notes in Specified Denominations represented by a permanent global note (the “Permanent Global Note”) without coupons. The Temporary Global Note and the Permanent Global Note shall each be signed manu- ally by two authorized signatories of the Issuer and shall each be authenticated with a control sig- nature. Definitive Notes and interest coupons will not be issued.

(b) The Temporary Global Note shall be exchanged for the Permanent Global Note on a date (the “Exchange Date”) not later than 180 days after the date of issue of the Temporary Global Note. The Exchange Date for such exchange will not be earlier than 40 days after the date of issue of the Temporary Global Note. Such exchange shall only be made upon delivery of certifications to the effect that the beneficial owner or owners of the Notes represented by the Temporary Global Note is not a U.S. person (other than certain financial institutions or certain persons holding Notes through such financial institutions). Payment of interest on Notes represented by a Temporary Global Note will be made only after delivery of such certifications. A separate certification shall be required in respect of each such payment of interest. Any such certification received on or after the 40th day after the date of issue of the Temporary Global Note will be treated as a request to exchange such Temporary Global Note pursuant to subparagraph (b) of this § 1 (3). Any securities delivered in exchange for the Temporary Global Note shall be delivered only outside of the United States (as defined in § 6(2))].

(4) Clearing System. Each Permanent Global Note will be kept in custody by or on behalf of the Clear- ing System until all obligations of the Issuer under the Notes have been satisfied. “Clearing System” means [if more than one Clearing System insert: each of] the following: [Clearstream Banking AG, Frankfurt am Main (“CBF”)][Clearstream Banking socit anonyme, Luxembourg (“CBL”)][Euroclear Bank S.A./N.V., Brussel (“Euroclear”)][,][and] [specify other Clearing System] and any successor in such capacity.

(5) Holder of Notes. “Holder” means any holder of a proportionate co-ownership or other compar- able beneficial interest or right in the Notes.]

30 §2 STATUS, NEGATIVE PLEDGE [in the case of Notes issued by Deutsche Bahn Finance insert: GUARANTEE AND NEGATIVE PLEDGE OF THE GUARANTOR]

(1) Status. The obligations under the Notes constitute unsecured and unsubordinated obligations of the Issuer ranking pari passu among themselves and pari passu with all other unsecured and un- subordinated obligations of the Issuer except for any obligations preferred by law.

(2) Negative Pledge. So long as any of the Notes remain outstanding, but only up to the time all amounts of principal and interest have been placed at the disposal of the Fiscal Agent, the Issuer undertakes not to grant or permit to subsist any encumbrance over any or all of its present or future assets, as security for any present or future Capital Market indebtedness issued or guaranteed by the Issuer or by any other person, without at the same time having the Holders share equally and rate- ably in such security. [In the case of Notes issued by Deutsche Bahn AG insert: and that it will (i) not secure or have secured by mortgage, pledge or any other real encumbrance upon its own assets any present or future Capital Market Indebtedness (as defined below) and any guarantee or indemnity given in respect thereof, and (ii) procure that none of its Main Subsidiaries (as defined below) will provide any security, by encumbering any of their assets, for other bonds, notes, debentures or simi- lar debt instruments or for guarantees or indemnities in respect thereof, without at the same time having the Holders share equally and rateably in such security, unless such encumbrance is required by law or by any authority.

“Main Subsidiaries” are the public limited companies which where established by the spin off plan (Ausgliederungsplan) dated 24 November 1998 in satisfaction of the statutory mandate pursuant to the German Railway Incorporation Act (Deutsche Bahn Grndungsgesetz) under the firms DB Regio Aktiengesellschaft, DB Reise&Touristik Aktiengesellschaft, DB Cargo Aktiengesellschaft, DB Station&- Service Aktiengesellschaft and DB Netz Aktiengesellschaft as well as such companies, which continue to operate the complete or an essential part of the business of the mentioned company.]

Within the context of these Conditions “Capital Market Indebtedness” means any indebtedness, in the form of bonds or notes or other securities, which are ordinarily traded or capable of being traded, quoted, dealt in or listed on any stock exchange or similarly organised securities market or obliga- tions arising from Loan Agreements (Schuldscheindarlehen).

[In the case of Notes issued by Deutsche Bahn Finance insert:

(3) Guarantee and Negative Pledge of the Guarantor. Deutsche Bahn Aktiengesellschaft (the “Guaran- tor”) has given its unconditional and irrevocable guarantee (the “Guarantee”) for the due and punc- tual payment of principal of and interest on and any other amounts payable in respect of the Notes.

The Guarantor has further undertaken in a negative pledge (the “Negative Pledge”), so long as any of the Notes remains outstanding, but only up to the time all amounts of principal and interest have been placed at the disposal of the Fiscal Agent, that it will (i) not secure or have secured by mortgage, pledge or any other real encumbrance upon its own assets any present or future Capital Market Indebtedness (as defined above) and any guarantee or indemnity given in respect thereof, and (ii) procure that none of its Main Subsidiaries (as defined below) will provide any security, by encumber- ing any of their assets, for other bonds, notes, debentures or similar debt instruments or for guaran- tees or indemnities in respect thereof, without at the same time having the Holders share equally and rateably in such security, unless such encumbrance is required by law or by any authority.

Guarantee and Negative Pledge constitute a contract for the benefit of Holders from time to time as third party beneficiaries in accordance with § 328 of the German Civil Code, giving rise to the right of each Holder to require performance of the Guarantee and the Negative Pledge directly from the Guar- antor and to enforce the Guarantee and the Negative Pledge directly against the Guarantor.

Copies of the Guarantee and Negative Pledge may be obtained free of charge at the specified offices of each of the Paying Agents.

“Main Subsidiaries” are the public limited companies which where established by the spin off plan (Ausgliederungsplan) dated 24 November 1998 in satisfaction of the statutory mandate pursuant to

31 the German Railway Incorporation Act (Deutsche Bahn Grndungsgesetz) under the firms DB Regio Aktiengesellschaft, DB Reise&Touristik Aktiengesellschaft, DB Cargo Aktiengesellschaft, DB Station&- Service Aktiengesellschaft and DB Netz Aktiengesellschaft as well as such companies, which continue to operate the complete or an essential part of the business of the mentioned company.

§3 INTEREST

[(A) In the case of Fixed Rate Notes insert:

(1) Rate of Interest and Interest Payment Dates. The Notes shall bear interest on their principal amount at the rate of [insert Rate of Interest] per cent. per annum from (and including) [insert Interest Commencement Date] to (but excluding) the Maturity Date (as defined in § 5 (1)). Interest shall be payable in arrears on [insert Fixed Interest Date or Dates] in each year (each such date, an “Interest Payment Date”). The first payment of interest shall be made on [insert First Interest Payment Date] [if First Interest Payment Date is not first anniversary of Interest Commencement Date insert: and will amount to [insert Initial Broken Amount per Denomination] per note in a denomination of [insert Denomination]].] [If Maturity Date is not a Fixed Interest Date insert: Interest in respect of the period from [insert Fixed Interest Date preceding the Maturity Date] (inclusive) to the Maturity Date (exclu- sive) will amount to [insert Final Broken Amount per Denomination] per Note in a denomination of [insert Denomination].]

(2) Accrual of Interest. The Notes shall cease to bear interest from the expiry of the day preceding the day on which they are due for redemption. If the Issuer shall fail to redeem the Notes when due, inter- est shall continue to accrue on the outstanding principal amount of the Notes beyond the due date until the expiry of the day preceding the day of the actual redemption of the Notes.]

(3) Calculation of Interest for Partial Periods. If interest is required to be calculated for a period of less than a full year, such interest shall be calculated on the basis of the Day Count Fraction (as defined below).]

[(B) In the case of Floating Rate Notes insert:

(1) Interest Payment Dates.

(a) The Notes bear interest on their principal amount from [insert Interest Commencement Date] (inclusive) (the “Interest Commencement Date”) to the first Interest Payment Date (exclusive) and thereafter from each Interest Payment Date (inclusive) to the next following Interest Payment Date (exclusive). Interest on the Notes shall be payable on each Interest Payment Date.

(b) “Interest Payment Date” means

[in the case of Specified Interest Payment Dates insert: each [insert Specified Interest Payment Dates].]

[in the case of Specified Interest Periods insert: each date which (except as otherwise provided in these Conditions) falls [insert number] [weeks][months] [insert other specified periods] after the preceding Interest Payment Date or, in the case of the first Interest Payment Date, after the Interest Commencement Date.]

(c) If any Interest Payment Date would otherwise fall on a day which is not a Business Day (as defined below), it shall be:

[if Modified Following Business Day Convention insert: postponed to the next day which is a Busi- ness Day unless it would thereby fall into the next calendar month, in which event the payment date shall be the immediately preceding Business Day.]

[if FRN Convention insert: postponed to the next day which is a Business Day unless it would thereby fall into the next calendar month, in which event (i) the payment date shall be the immedi-

32 ately preceding Business Day and (ii) each subsequent Interest Payment Date shall be the last Business Day in the month which falls [[insert number] months] [insert other specified periods] after the preceding applicable payment date.]

[if Following Business Day Convention insert: postponed to the next day which is a Business Day.]

[if Preceding Business Day Convention insert: the immediately preceding Business Day.]

(d) In this § 3 “Business Day” means any day (other than a Saturday or a Sunday) on which the rele- vant Clearing System and the Trans-European automated real-time gross system (TARGET) oper- ates (if applicable) [if the Specified Currency is not euro insert: and on which commercial banks and foreign exchange markets are open for business and settle payments in [insert all relevant financial centres]].

(2) Rate of Interest. [if Screen Rate Determination insert: The rate of interest (the “Rate of Interest”) for each Interest Period (as defined below) will, except as provided below, be either:

(a) the offered quotation (if there is only one quotation on the Screen Page (as defined below)); or

(b) the arithmetic mean (rounded, if necessary, to the nearest one [if the Reference Rate is EURIBOR insert: thousandth of a percentage point, with 0.0005] [if the Reference Rate is not EURIBOR insert: hundred-thousandth of a percentage point, with 0.000005] being rounded upwards) of the offered quotations,

(expressed as a percentage rate per annum) for deposits in the Specified Currency for that Interest Period which appears or appear, as the case may be, on the Screen Page as of 11:00 a.m. ([Brussels] [London] time) on the Interest Determination Date (as defined below) [if Margin insert: [plus][minus] the Margin (as defined below)], all as determined by the Calculation Agent.

”Interest Period” means each period from (and including) the Interest Commencement Date to (but excluding) the first Interest Payment Date and from (and including) each Interest Payment Date to (but excluding) the following Interest Payment Date.

“Interest Determination Date” means the [second] [insert other applicable number of days] [TARGET] [London] [insert other relevant location] Business Day prior to the commencement of the relevant Interest Period. [in case of a TARGET Business Day insert: “TARGET Business Day“ means a day which is a day on which the Trans-European Automated Real-time Gross Settlement Transfer system (TARGET) is operating.] [in case of a non-TARGET Business Day insert: “[London] [insert other rele- vant location] Business Day” means a day which is a day (other than a Saturday or Sunday) on which commercial banks are open for business (including dealings in foreign exchange and foreign cur- rency) in [London] [insert other relevant location].]

[If Margin insert: “Margin” means [•] per cent. per annum.]

”Screen Page” means [insert relevant Screen Page].

[If another basis for determining any reference rate is to apply, insert applicable provisions.]

If, in the case of (b) above, five or more such offered quotations are available on the Screen Page, the highest (or, if there is more than one such highest rate, only one of such rates) and the lowest (or, if there is more than one such lowest rate, only one of such rates) shall be disregarded by the Calcula- tion Agent for the purpose of determining the arithmetic mean (rounded as provided above) of such offered quotations and this rule shall apply throughout this subparagraph (2).

If the Screen Page is not available or if, in the case of (a) above, no such quotation appears or, in the case of (b) above, fewer than three such offered quotations appear, in each case as at such time, the Calculation Agent shall request each of the Reference Banks (as defined below) to provide the Calcu- lation Agent with its offered quotation (expressed as a percentage rate per annum) for deposits in the Specified Currency for the relevant Interest Period to leading banks in the [London] [insert other rele-

33 vant location] interbank market [of the Euro-Zone] at approximately 11.00 a.m. ([Brussels][London] time) on the Interest Determination Date. If two or more of the Reference Banks provide the Calcula- tion Agent with such offered quotations, the Rate of Interest for such Interest Period shall be the arith- metic mean (rounded if necessary to the nearest one [if the Reference Rate is EURIBOR insert: thou- sandth of a percentage point, with 0.0005] [if the Reference Rate is not EURIBOR insert: hundred- thousandth of a percentage point, with 0.000005] being rounded upwards) of such offered quotations [if Margin insert: [plus][minus] the Margin], all as determined by the Calculation Agent.

If on any Interest Determination Date only one or none of the Reference Banks provides the Calcula- tion Agent with such offered quotations as provided in the preceding paragraph, the Rate of Interest for the relevant Interest Period shall be the rate per annum which the Calculation Agent determines as being the arithmetic mean (rounded if necessary to the nearest one [if the Reference Rate is EURIBOR insert: thousandth of a percentage point, with 0.0005] [if the Reference Rate is not EURIBOR insert: hundred-thousandth of a percentage point, with 0.000005] of the rates, as communicated to (and at the request of) the Calculation Agent by the Reference Banks or any two or more of them, at which such rates were offered, as at 11.00 a.m. ([Brussels][London] time) on the relevant Interest Determina- tion Date, deposits in the Specified Currency for the relevant Interest Period by leading banks in the [London] [insert other relevant location] interbank market [of the Euro-Zone] [if Margin insert: [plus] [minus] the Margin] or, if fewer than two of the Reference Banks provide the Calculation Agent with such offered rates, the offered rate for deposits in the Specified Currency for the relevant Interest Per- iod, or the arithmetic mean (rounded as provided above) of the offered rates for deposits in the Spe- cified Currency for the relevant Interest Period, at which, on the relevant Interest Determination Date, any one or more banks (which bank or banks is or are in the opinion of the Calculation Agent and the Issuer suitable for such purpose) inform(s) the Calculation Agent it is or they are quoting to leading banks in the [London] [insert other relevant location] interbank market [of the Euro-Zone] (or, as the case may be, the quotations of such bank or banks to the Calculation Agent) [if Margin insert: [plus] [minus] the Margin]. If the Rate of Interest cannot be determined in accordance with the foregoing provisions of this paragraph, the Rate of Interest shall be the offered quotation or the arithmetic mean of the offered quotations on the Screen Page, as described above, on the last day preceding the Interest Determination Date on which such quotations were offered [if Margin insert: [plus] [minus] the Margin (though substituting, where a different Margin is to be applied to the relevant Interest Period from that which applied to the last preceding Interest Period, the Margin relating to the relevant Interest Period in place of the Margin relating to that last preceding Interest Period)].

[In the case of Euro-Zone interbank market insert: “Euro-Zone” means the region comprised of those member states of the European Union that have adopted, or will have adopted from time to time, the single currency in accordance with the Treaty establishing the European Community (signed in Rome on 25 March 1957), as amended by the Treaty on European Union (signed in Maastricht on 7 February 1992) and the Amsterdam Treaty of 2 October 1997,as further amended from time to time.]

As used herein, “Reference Banks” means [if no other Reference Banks are specified in the Pricing Supplement, insert: , in the case of (a) above, those offices of [in case of EURIBOR insert: not less than five] such banks whose offered rates were used to determine such quotation when such quota- tion last appeared on the Screen Page and, in the case of (b) above, those banks whose offered quo- tations last appeared on the Screen Page when no fewer than three such offered quotations appeared] [if other Reference Banks are specified in the Pricing Supplement, insert names here].

[If Reference Rate is other than LIBOR, EURIBOR, insert relevant details in lieu of the provisions of this paragraph (2)]

[If other method of determination applies, insert relevant details in lieu of the provisions of this para- graph (2)]

[If Minimum and/or Maximum Rate of Interest applies insert:

(3) [Minimum][and][Maximum] Rate of Interest.

[If Minimum Rate of Interest applies insert: If the Rate of Interest in respect of any Interest Period determined in accordance with the above provisions is less than [insert Minimum Rate of Interest], the Rate of Interest for such Interest Period shall be [insert Minimum Rate of Interest].]

34 [If Maximum Rate of Interest applies insert: If the Rate of Interest in respect of any Interest Period determined in accordance with the above provisions is greater than [insert Maximum Rate of Inter- est], the Rate of Interest for such Interest Period shall be [insert Maximum Rate of Interest].]]

[(4)] Interest Amount. The Calculation Agent will, on or as soon as practicable after each time at which the Rate of Interest is to be determined, determine the Rate of Interest and calculate the amount of interest (the “Interest Amount”) payable on the Notes for the relevant Interest Period. Each Interest Amount shall be calculated by applying the Rate of Interest and the Day Count Fraction (as defined below) to the aggregate principal amount of Notes and rounding the resultant figure to the nearest unit of the Specified Currency, with 0.5 of such unit being rounded upwards.

[(5)] Notification of Rate of Interest and Interest Amount. The Calculation Agent will cause the Rate of Interest, each Interest Amount for each Interest Period, each Interest Period and the relevant Interest Payment Date to be notified to the Issuer [in the case of Notes issued by Deutsche Bahn Finance: and the Guarantor], and to the Holders in accordance with § 13 as soon as possible after their determina- tion, but in no event later than the fourth [TARGET][London] [insert other relevant location] Business Day (as defined in § 3 (2)) thereafter and if required by the rules of any stock exchange on which the Notes are from time to time listed, to such stock exchange as soon as possible after their determina- tion, but in no event later than the first day of the relevant Interest Period. Each Interest Amount and Interest Payment Date so notified may subsequently be amended (or appropriate alternative arrange- ments made by way of adjustment) without notice in the event of an extension or shortening of the Interest Period. Any such amendment will be promptly notified to any stock exchange on which the Notes are then listed and to the Holders in accordance with § 13.

[(6)] Determinations Binding. All certificates, communications, opinions, determinations, calcula- tions, quotations and decisions given, expressed, made or obtained for the purposes of the provi- sions of this § 3 by the Calculation Agent shall (in the absence of manifest error) be binding on the Issuer, [the Guarantor,] the Fiscal Agent [, the Paying Agents] and the Holders.

[(7)] Accrual of Interest. The Notes shall cease to bear interest from the expiry of the day preceding of the day on which they are due for redemption. If the Issuer shall fail to redeem the Notes when due, interest shall continue to accrue on the outstanding principal amount of the Notes beyond the due date until the expiry of the day preceding of the day of actual redemption of the Notes. The applicable Rate of Interest will be determined in accordance with this § 3.]]

[(C) In the case of Zero Coupon Notes insert:

(1) No Periodic Payments of Interest. There will not be any periodic payments of interest on the Notes.

(2) Accrual of Interest. If the Issuer shall fail to redeem the Notes when due, interest shall accrue on the outstanding principal amount of the Notes as from the due date to the date of actual redemption at the rate of [insert Amortization Yield] % per annum.]

[(D) In the case of Dual Currency Notes, Index-linked Notes, Credit Linked Notes, Equity Linked Notes or Installment Notes, set forth applicable provisions regarding interest herein.]

[(•)] Day Count Fraction. “Day Count Fraction” means, in respect of the calculation of an amount of interest on any Note for any period of time (the “Calculation Period”):

[if Actual/365 or Actual/Actual insert: (ISMA Rule 251) the actual number of days in the Calculation Period divided by the actual number of days (365 or 366) in the respective annual interest period.] [insert other relevant Actual/Actual methodology pursuant to ISMA.]]

[if Actual/365 (Fixed) insert: the actual number of days in the Calculation Period divided by 365.]

[if Actual/360 insert: the actual number of days in the Calculation Period divided by 360.]

[if 30/360, 360/360 or Bond Basis insert: the number of days in the Calculation Period divided by 360, the number of days to be calculated on the basis of a year of 360 days with 12 30-day months (unless

35 (A) the last day of the Calculation Period is the 31st day of a month but the first day of the Calculation Period is a day other than the 30th or 31st day of a month, in which case the month that includes that last day shall not be considered to be shortened to a 30-day month, or (B) the last day of the Calcula- tion Period is the last day of the month of February in which case the month of February shall not be considered to be lengthened to a 30-day month).]

[if 30E/360 or Eurobond Basis: the number of days in the Calculation Period divided by 360 (the num- ber of days to be calculated on the basis of a year of 360 days with 12 30-day months, without regard to the date of the first day or last day of the Calculation Period unless, in the case of the final Calcula- tion Period, the Maturity Date is the last day of the month of February, in which case the month of February shall not be considered to be lengthened to a 30-day month).]

§4 PAYMENTS

(1) [(a)] Payment of Principal. Payment of principal in respect of Notes shall be made, subject to sub- paragraph (2) below, to the Clearing System or to its order for credit to the accounts of the relevant account holders of the Clearing System upon presentation and (except in the case of partial payment) surrender of the Global Note representing the Notes at the time of payment at the Fiscal Agent.

[In the case of Notes represented by Global Notes other than Zero Coupon Notes insert:

(b) Payment of Interest. Payment of interest on Notes shall be made, subject to subparagraph (2), to the Clearing System or to its order for credit to the relevant account holders of the Clearing System.]

[In the case of interest payable on a Temporary Global Note insert: Payment of interest on Notes re- presented by the Temporary Global Note shall be made, subject to subparagraph (2), to the Clearing System or to its order for credit to the relevant account holders of the Clearing System, upon due certification as provided in § 1(3)(b).]]

(2) Manner of Payment. Subject to applicable fiscal and other laws and regulations, payments of amounts due in respect of the Notes shall be made in the freely negotiable and convertible currency which on the respective due date is the currency of the country of the Specified Currency.

(3) Discharge. The Issuer [in the case of Notes issued by Deutsche Bahn Finance insert: or, as the case may be, the Guarantor] shall be discharged by payment to, or to the order of, the Clearing System.

(4) Payment Business Day. If the date for payment of any amount in respect of any Note is not a Payment Business Day then the Holder shall not be entitled to payment until the next such day in the relevant place and shall not be entitled to further interest or other payment in respect of such delay. For these purposes, “Payment Business Day” means any day which is [in the case of Notes not denominated in Euro insert: a day (other than a Saturday or a Sunday) on which commercial banks and foreign exchange markets settle payments in [insert all relevant financial centres]] [in the case of Notes denominated in Euro insert: a day (other than a Saturday or a Sunday) on which the Clearing System as well as all relevant parts of [in the case of Fixed Rate Notes insert: the Trans-European Automated Real-time Gross Settlement Express Transfer System (“TARGET”)] [in the case of Floating Rate Notes insert: TARGET] are operational to forward the relevant payment].

(5) References to Principal and Interest. Reference in these Conditions to principal in respect of the Notes shall be deemed to include, as applicable: the Final Redemption Amount of the Notes; the Early Redemption Amount of the Notes; [if redeemable at option of Issuer for other than taxation reasons insert: the Call Redemption Amount of the Notes;] [if redeemable at option of the Holder insert: the Put Redemption Amount of the Notes;] [in the case of Zero Coupon Notes insert: the Amortized Face Amount of the Notes;] [in the case of Installment Notes insert: the Installment Amount(s) of the Notes;] and any premium and any other amounts which may be payable under or in respect of the Notes. Reference in these Conditions to interest in respect of the Notes shall be deemed to include, as applicable, any Additional Amounts which may be payable under § 7.

36 (6) Deposit of Principal and Interest. The Issuer may deposit with the Amtsgericht in Frankfurt am Main principal or interest not claimed by Holders within twelve months after the Maturity Date, even though such Holders may not be in default of acceptance of payment. If and to the extent that the deposit is effected and the right of withdrawal is waived, the respective claims of such Holders against the Issuer shall cease.

§5 REDEMPTION [(1)] Redemption at Maturity. [In the case of Notes other than Instalment Notes insert: Unless previously redeemed in whole or in part or purchased and cancelled, the Notes shall be redeemed at their Final Redemption Amount on [in the case of a specified Maturity Date insert such Maturity Date] [in the case of a Redemption Month insert: the Interest Payment Date falling in [insert Redemption Month]] (the “Maturity Date”). The Final Redemption Amount in respect of each Note shall be [if the Notes are redeemed at their principal amount insert: its principal amount] [otherwise insert Final Redemption Amount per denomination].]

[In the case of Instalment Notes insert: Unless previously redeemed in whole or in part or purchased and cancelled, the Notes shall be redeemed at the Instalment Date(s) and in the Instalment Amount(s) set forth below:

Instalment Date(s) Instalment Amount(s) [insert Instalment Date(s)] [insert Instalment Amount(s)] [ ][ ] [ ] [ [ ]]

(2) Early Redemption for Reasons of Taxation. If as a result of any change in, or amendment to, the laws or regulations of [in the case of Notes issued by Deutsche Bahn Finance insert: The Netherlands or] the Federal Republic of Germany or any political subdivision or taxing authority thereto or therein affecting taxation or the obligation to pay duties of any kind, or any change in, or amendment to, an official interpretation or application of such laws or regulations, which amendment or change is effec- tive on or after the date on which the last tranche of this series of Notes was issued, the Issuer is required to pay Additional Amounts (as defined in § 7 herein) [in the case of Notes other than Zero Coupon Notes insert: on the next succeeding Interest Payment Date (as defined in § 3 (1))] [in the case of Zero Coupon Notes insert: at maturity or upon the sale or exchange of any Note], and this obligation cannot be avoided by the use of reasonable measures available to the Issuer, the Notes may be redeemed, in whole but not in part, at the option of the Issuer, upon not more than 60 days’ nor less than 30 days’ prior notice of redemption given to the Fiscal Agent and, in accordance with § 13 to the Holders, at their Early Redemption Amount (as defined below), together with interest (if any) accrued to the date fixed for redemption.

However, no such notice of redemption may be given (i) earlier than 90 days prior to the earliest date on which the Issuer would be obligated to pay such Additional Amounts were a payment in respect of the Notes then due, or (ii) if at the time such notice is given, such obligation to pay such Additional Amounts or make such deduction or withholding does not remain in effect. [In the case of Floating Rate Notes insert: The date fixed for redemption must be an Interest Payment Date.]

Any such notice shall be given in accordance with § 13. It shall be irrevocable, must specify the date fixed for redemption and must set forth a statement in summary form of the facts constituting the basis for the right of the Issuer so to redeem.

[If Notes are subject to Early Redemption at the Option of the Issuer insert:

(3) Early Redemption at the Option of the Issuer.

(a) The Issuer may, upon notice given in accordance with clause (b), redeem all or some only of the Notes on the Call Redemption Date(s) at the Call Redemption Amount(s) set forth below together with accrued interest, if any, to (but excluding) the Call Redemption Date. [If Minimum Redemp- tion Amount or Higher Redemption Amount applies insert: Any such redemption must be of a

37 principal amount equal to [at least [insert Minimum Redemption Amount]] [Higher Redemption Amount].]

Call Redemption Date(s) Call Redemption Amount(s) [insert Call Redemption Date(s)] [insert Call Redemption Amount(s)] [ ][ ] [ ][ ]

[If Notes are subject to Early Redemption at the Option of the Holder insert: The Issuer may not exer- cise such option in respect of any Note which is the subject of the prior exercise by the Holder thereof of its option to require the redemption of such Note under subparagraph [(4)] of this § 5.]

(b) Notice of redemption shall be given by the Issuer to the Holders of the Notes in accordance with § 13. Such notice shall specify:

(i) the Series of Notes subject to redemption;

(ii) whether such Series is to be redeemed in whole or in part only and, if in part only, the aggre- gate principal amount of the Notes which are to be redeemed;

(iii) the Call Redemption Date, which shall be not less than [insert Minimum Notice to Holders] nor more than [insert Maximum Notice to Holders] days after the date on which notice is given by the Issuer to the Holders; and

(iv) the Call Redemption Amount at which such Notes are to be redeemed.

(c) In the case of a partial redemption of Notes, Notes to be redeemed shall be selected in accor- dance with the rules of the relevant Clearing System.]

[If the Notes are subject to Early Redemption at the Option of a Holder insert:

[(4)] Early Redemption at the Option of a Holder.

(a) The Issuer shall, at the option of the Holder of any Note, redeem such Note on the Put Redemption Date(s) at the Put Redemption Amount(s) set forth below together with accrued interest, if any, to (but excluding) the Put Redemption Date.

Put Redemption Date(s) Put Redemption Amount(s) [insert Put Redemption Date(s)] [insert Put Redemption Amount(s)] [ ][ ] [ ][ ]

The Holder may not exercise such option in respect of any Note which is the subject of the prior exercise by the Issuer of its option to redeem such Note under this § 5.

(b) In order to exercise such option, the Holder must, not less than [insert Minimum Notice to Issuer] nor more than [insert Maximum Notice to Issuer] days before the Put Redemption Date on which such redemption is required to be made as specified in the Put Notice (as defined below), submit during normal business hours at the Fiscal Agent a duly completed early redemption notice (Put Notice) in the form available from the Fiscal Agent. No option so exercised may be revoked or withdrawn.]

[In the case of Notes other than Zero Coupon Notes insert:

[(5)] Early Redemption Amount.

For purposes of subparagraph (2) of this § 5, § 9 and § 10 the Early Redemption Amount of a Note shall be its Final Redemption Amount.]

38 [In the case of Zero Coupon Notes insert:

[(5)] Early Redemption Amount.

(a) For purposes of subparagraph (2) of this § 5, § 9 and § 10 the Early Redemption Amount of a Note shall be equal to the Amortized Face Amount of the Note.

(b) The Amortized Face Amount of a Note shall be an amount equal to the sum of:

(i) [insert Reference Price] (the “Reference Price”), and

(ii) the product of [insert Amortization Yield] (compounded annually) and the Reference Price from (and including) [insert Issue Date] to (but excluding) the date fixed for redemption or (as the case may be) the date upon which the Notes become due and payable.

Where such calculation is to be made for a period which is not a whole number of years, the calcu- lation in respect of the period of less than a full year (the “Calculation Period”) shall be made on the basis of the Day Count Fraction (as defined in § 3).

(c) If the Issuer fails to pay the Early Redemption Amount when due, the Amortized Face Amount of a Note shall be calculated as provided herein, except that references in subparagraph (b)(ii) above to the date fixed for redemption or the date on which such Note becomes due and repayable shall refer to the date on which upon due presentation and surrender of the relevant Note (if required), payment is made.]

[In the case of Index-linked Notes, Equity-linked Notes or Credit-linked Notes set forth applicable provisions regarding principal here and in the Pricing Supplement. The same applies for Dual Cur- rency Notes.]

§6 AGENTS

(1) Appointment; Specified Offices. The Fiscal Agent [,][and] Paying Agent[s][and the Calculation Agent] and their respective offices are:

Fiscal Agent: Deutsche Bank Aktiengesellschaft and Paying Agent: Corporate Trust and Agency Services Grosse Gallusstrasse 10–14 D-60272 Frankfurt am Main

[Paying Agent[s]: Deutsche Bank Luxembourg S.A. 2 Boulevard Konrad Adenauer L-1115 Luxembourg

[insert other Paying Agents and offices]

[If the Fiscal Agent is to be appointed as Calculation Agent insert: The Fiscal Agent shall also act as Calculation Agent.]

[If a Calculation Agent other than the Fiscal Agent is to be appointed insert: The Calculation Agent and its office shall be:

Calculation Agent: [insert name and office]]

The Fiscal Agent [,][and] the Paying Agent[s][and the Calculation Agent] reserve the right at any time to change their respective offices to some other office in the same city.

(2) Variation or Termination of Appointment. The Issuer reserves the right at any time to vary or termi- nate the appointment of the Fiscal Agent or any Paying Agent [or the Calculation Agent] and to appoint another Fiscal Agent or additional or other Paying Agents [or another Calculation Agent]. The Issuer

39 shall at all times maintain (i) a Fiscal Agent [,][and] (ii) a Paying Agent in addition to the Fiscal Agent with an office in a continental European city [in the case of Notes listed on a stock exchange insert: [,] [and] (iii) so long as the Notes are listed on the [name of Stock Exchange], a Paying Agent (which may be the Fiscal Agent) with an office in [location of Stock Exchange] and/or in such other place as may be required by the rules of such stock exchange] [in the case of payments in U.S.$ insert: [,][and][(iv)] if payments at or through the offices of all Paying Agents outside the United States become illegal or are effectively precluded because of the imposition of exchange controls or similar restrictions on the full payment or receipt of such amounts in U.S.$, a Paying Agent with a specified office in New York City][if any Calculation Agent is to be appointed insert: [,][and][(v)] a Calculation Agent [if Calculation Agent is required to maintain an office in a Required Location insert: with an office located in [insert Required Location]]. Any variation, termination, appointment or change shall only take effect (other than in the case of insolvency, when it shall be of immediate effect) after not less than 30 nor more than 45 days prior notice thereof shall have been given to the Holders in accordance with § 13.

“United States” means the United States of America (including the States thereof and the District of Columbia) and its possessions (including Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and Northern Mariana Islands).

(3) Agents of the Issuer. The Fiscal Agent [,][and] the Paying Agent[s][and the Calculation Agent] act solely as agents of the Issuer and do not have any obligations towards or relationship of agency or trust to any Holder.

§7 TAXATION

Principal and interest shall be payable by the Issuer without deduction or withholding for or on account of any present or future taxes, duties or governmental charges of any nature whatsoever imposed, levied or collected by or in or on behalf of [in the case of the Notes being issued by Deutsche Bahn Finance insert: The Netherlands or] the Federal Republic of Germany or by or on behalf of any political subdivision or authority therein having power to tax (hereinafter together called “Withholding Taxes”), unless such deduction or withholding is required by law. In such event, the Issuer shall pay such additional amounts of principal and interest as may be necessary in order that the net amounts received by the Holder after such deduction or withholding shall equal the respective amounts of principal and interest which would have been receivable had no such deduc- tion or withholding been required. No such additional amounts shall, however, be payable on account of any taxes, duties or governmental charges which

(a) are payable by any person acting as custodian bank or collecting agent on behalf of a Holder, or otherwise in any manner which does not constitute a deduction or withholding by the Issuer from payments of principal or interest made by it; or

(b) are payable by reason of the Holder having, or having had, some personal or business connection with [in the case of the Notes being issued by Deutsche Bahn Finance insert: The Netherlands or] the Federal Republic of Germany and not merely by reason of the fact that payments in respect of the Notes are, or for purposes of taxation are deemed to be, derived from sources in, or are secured in, [in the case of the Notes being issued by Deutsche Bahn Finance insert: The Nether- lands or] the Federal Republic of Germany; or

(c) are deducted or withheld pursuant to (i) any European Union Directive or Regulation concering the taxation of interest income, or (ii) any international treaty or understanding relating to such taxation and to which the Federal Republic of Germany, the Netherlands or the European Union is a party, or (iii) any provision of law implementing, or complying with, or introduced to conform with, such Directive, Regulation, treaty or understanding;

(d) are payable by reason of a change in a law that becomes effective more than 30 days after the relevant payment of principal or interest becomes due, or is duly provided for and notice thereof is published in accordance with § 13, whichever occurs later.

40 §8 PRESENTATION PERIOD

The presentation period provided in § 801 paragraph 1, sentence 1 BGB (German Civil Code) is reduced to ten years for the Notes.

§9 EVENTS OF DEFAULT

(1) Events of Default. Each Holder shall be entitled to declare his Notes due and demand immediate redemption thereof at the Early Redemption Amount (as described in § 5), together with accrued inter- est (if any) to the date of repayment, in the event that any of the following events (each, an “Event of Default”) occurs: (a) the Issuer fails to pay principal or interest within 30 days from the relevant due date, or (b) the Issuer fails duly to perform any other obligation arising from the Notes [in the case of Notes issued by Deutsche Bahn Finance: or the Guarantor fails to perform any obligation arising from the Guarantee referred to in § 2] which failure is not capable of remedy or, if such failure is capable of remedy, such failure continues for more than 30 days after the Fiscal Agent has received notice thereof from a Holder, or (c) the Issuer [in the case of Notes issued by Deutsche Bahn Finance: or the Guarantor] announces its inability to meet its financial obligations or ceases its payments, or (d) a court opens insolvency proceedings against the Issuer [in the case of Notes issued by Deutsche Bahn Finance: or the Guarantor], or the Issuer [in the case of Notes issued by Deutsche Bahn Finance: or the Guarantor] applies for or institutes such proceedings or offers or makes an arrangement for the benefit of its creditors generally, or [in the case of Notes issued by Deutsche Bahn Finance: the Issuer applies for a “surseance van betaling” (within the meaning of the Statute of Bankruptcy of The Netherlands), or] (e) the Issuer [in the case of Notes issued by Deutsche Bahn Finance: or the Guarantor] goes into liquidation unless this is done in connection with a merger (in particular a merger pursuant to Article 2(2) Deutsche Bahn Grndungsgesetz (German Railway Incorporation Act)) or other form of combination with another company and such company assumes all obligations contracted by the Issuer [in the case of Notes issued by Deutsche Bahn Finance: or the Guarantor], as the case may be, in connection with this issue, or (f) any governmental order, decree or enactment shall be made in or by [in the case of Notes issued by Deutsche Bahn Finance: The Netherlands or] the Federal Republic of Germany whereby the Issuer [in the case of Notes issued by Deutsche Bahn Finance: or the Guarantor] is prevented from observing and performing in full its obligations as set forth in these Terms and Conditions [in the case of Notes issued by Deutsche Bahn Finance: and in the Guarantee, respectively,] and this situation is not cured within 90 days.

The right to declare Notes due shall terminate if the situation giving rise to it has been cured before the right is exercised.

(2) Quorum. In the events specified in § 9 subparagraph (1) (b), any notice declaring Notes due shall, unless at the time such notice is received any of the events specified in § 9 subparagraph (1) (a), (1) (c), (1) (d)[,] [or] (1) (e) or (1) (f) entitling Holders to declare their Notes due has occured, become effective only when the Fiscal Agent has received such notices from the Holders of at least one-tenth in principal amount of Notes then outstanding.

(3) Form of Notice. Any notice, including any notice declaring Notes due, in accordance with subpara- graph (1) shall be made by means of a written declaration delivered by hand or registered mail to the specified office of the Fiscal Agent.

41 §10 RESTRUCTURING

For the case that the Guarantor is dissolved or split-up pursuant to Article 2 paragraph 2 Deutsche Bahn Grndungsgesetz (German Railway Incorporation Act), the Holders are entitled, irrespective of the provisions of Section 9 paragraph 1 (e), to declare Notes due at the Early Redemption Amount. This call right does not hold, if, in the case of, (i) a dissolution, security is provided; (ii) a split-up, the emerging companies jointly and severally assume the direct and irrevocable obliga- tions from [in the case of Notes issued by Deutsche Bahn AG insert: the Guarantee] [in the case of Notes issued by Deutsche Bahn Finance insert: the Notes] in favour of the Holders, or, provide an other security as shall be approved by an independent accounting firm as being equivalent secur- ity.

The assumption of liability is to be stated to Deutsche Bank Aktiengesellschaft and announced pur- suant to § 13. The assumption of liability will constitute a contract in favour of the respective Holders as third party beneficiaries pursuant to Section 328 paragraph 1 BGB (German Civil Code) giving rise to the right of each of such Holders to require performance directly from the company/companies assuming liability and to enforce their claim directly against such company/companies.

§11 SUBSTITUTION

(1) Substitution. The Issuer may, without the consent of the Holders, if no payment of principal of or interest on any of the Notes is in default, at any time substitute for the Issuer [In the case of Notes issued by Deutsche Bahn Finance: either the Guarantor or] any Subsidiary (as defined below) [In the case of Notes issued by Deutsche Bahn AG: of it] [In the case of Notes issued by Deutsche Bahn Finance: of the Guarantor] as principal debtor in respect of all obligations arising from or in connec- tion with the Notes (the “Substitute Debtor”) provided that:

(a) the Substitute Debtor assumes all obligations of the Issuer in respect of the Notes;

(b) the Issuer and the Substitute Debtor have obtained all necessary authorizations and may transfer to the Fiscal Agent in the Specified Currency and without being obligated to deduct or withhold any taxes or other duties of whatever nature levied by the country in which the Substitute Debtor or the Issuer has its domicile or tax residence, all amounts required for the fulfilment of the pay- ment obligations arising under the Notes;

(c) the Substitute Debtor has agreed to indemnify and hold harmless each Holder against any tax, duty, assessment or governmental charge imposed on such Holder in respect of such substitution;

(d) [In the case of Notes issued by Deutsche Bahn AG insert: the Issuer] [In the case of Notes issued by Deutsche Bahn Finance insert: the Guarantor if it is not itself the Substitute Debtor] irrevocably and unconditionally guarantees in favour of each Holder the payment of all sums payable by the Substitute Debtor in respect of the Notes on terms equivalent to the terms of the [In the case of Notes issued by Deutsche Bahn AG insert: form of the guarantee of the Issuer dated [insert date] in respect of the Notes issued by Deutsche Bahn Finance under the Debt Issuance Programme] [In the case of Notes issued by Deutsche Bahn Finance: the Guarantee]

(e) there shall have been delivered to the Fiscal Agent an opinion or opinions of lawyers of recog- nised standing to the effect that subparagraphs (a), (b), (c) and (d) above have been satisfied.

For the purposes of this § 10 “Subsidiary” shall mean any corporation in which Deutsche Bahn AG directly or indirectly in the aggregate holds not less than 90% of the capital of any class or of the voting rights.

(2) Notice. Notice of any such substitution shall be published in accordance with § 13.

42 (3) Change of References. In the event of any such substitution, any reference in these Conditions to the Issuer shall from then on be deemed to refer to the Substitute Debtor and any reference to the country in which the Issuer is domiciled or resident for taxation purposes shall from then on be deemed to refer to the country of domicile or residence for taxation purposes of the Substitute Debtor. Furthermore, in the event of such substitution the following shall apply:

[In the case of Notes issued by Deutsche Bahn AG insert:

(a) in § 7 and § 5 (2) an alternative reference to the Federal Republic of Germany shall be deemed to have been included in addition to the reference according to the preceding sentence to the coun- try of domicile or residence for taxation purposes of the Substitute Debtor; and

(b) in § 9 (1) (d) to (f) an alternative reference to the Issuer in its capacity as guarantor shall be dee- med to have been included in addition to the reference to the Substitute Debtor.]

[In the case of Notes issued by Deutsche Bahn Finance insert:

In § 7 and § 5 (2) an alternative reference to The Netherlands shall be deemed to have been included in addition to the reference according to the preceding sentence to the country of domicile or resi- dence for taxation purposes of the Substitute Debtor.]

§12 FURTHER ISSUES, PURCHASES AND CANCELLATION

(1) Further Issues. The Issuer may from time to time, without the consent of the Holders, issue further Notes having the same conditions as the Notes in all respects (or in all respects except for the issue date, interest commencement date and/or issue price) so as to form a single Series with the Notes.

(2) Purchases. The Issuer may at any time purchase Notes in the open market or otherwise and at any price. Notes purchased by the Issuer may, at the option of the Issuer, be held, resold or surrendered to the Fiscal Agent for cancellation. If purchases are made by public tender, such tender for Notes must be made available to all Holder alike.

§13 NOTICES

(1) Publication. All notices concerning the Notes shall be published in a leading daily newspaper hav- ing general circulation in [Germany][Luxembourg][London] [specify other location]. These news- papers are expected to be the [Brsen-Zeitung][Luxemburger Wort][Financial Times] [insert other applicable newspaper having general circulation]. Any notice so given will be deemed to have been validly given on the date of such publication (or, if published more than once, on the date of the first such publication).

(2) Notification to Clearing System. The Issuer may, in lieu of publication in the newspapers set forth in sub-section (1) above, deliver the relevant notice to the Clearing System, for communication by the Clearing System to the Holders, provided that, so long as any Notes are listed on any stock exchange, the rules of such stock exchange permit such form of notice. Any such notice shall be deemed to have been given to the Holders on the seventh day after the day on which the said notice was given to the Clearing System. [In the case of Notes which are listed on the Luxembourg Stock Exchange insert: So long as any Notes are listed on the Luxembourg Stock Exchange, all notices concerning the Notes shall be published in accordance with subparagraph (1).]

§14 APPLICABLE LAW, PLACE OFJURISDICTION [, PROCESS AGENT] AND ENFORCEMENT

(1) Applicable Law. The Notes, as to form and content, and all rights and obligations of the Holders and the Issuer, shall be governed by German law.

43 (2) Submission to Jurisdiction. The District Court (Landgericht) in Frankfurt am Main shall have non- exclusive jurisdiction for any action or other legal proceedings (“Proceedings”) arising out of or in connection with the Notes.

[in the case of Notes issued by Deutsche Bahn Finance insert:

(3) Appointment of Authorised Agent. For any proceedings before German courts, the Issuer ap- points Deutsche Bahn Aktiengesellschaft, Potsdamer Platz 2, D-10785 Berlin, as its authorised agent for service of process in Germany.]

[(4)] Enforcement. Any Holder of Notes may in any proceedings against the Issuer, or to which such Holder and the Issuer are parties, protect and enforce in his own name his rights arising under such Notes on the basis of (i) a statement issued by the Custodian with whom such Holder maintains a securities account in respect of the Notes (a) stating the full name and address of the Holder, (b) speci- fying the aggregate principal amount of Notes credited to such securities account on the date of such statement and (c) confirming that the Custodian has given written notice to the Clearing System con- taining the information pursuant to (a) and (b) and (ii) a copy of the Note in global form certified as being a true copy by a duly authorized officer of the Clearing System or a depository of the Clearing System, without the need for production in such proceedings of the actual records or the global note representing the Notes. For purposes of the foregoing, “Custodian” means any bank or other financial institution of recognized standing authorized to engage in securities custody business with which the Holder maintains a securities account in respect of the Notes and includes the Clearing System.

§15 LANGUAGE

[If the Conditions are to be in the German language with an English language translation insert:

These Conditions are written in the German language and provided with an English language trans- lation. The German text shall be controlling and binding. The English language translation is pro- vided for convenience only.]

[If the Conditions are to be in the English language with a German language translation insert:

These Conditions are written in the English language and provided with a German language transla- tion. The English text shall be controlling and binding. The German language translation is provided for convenience only.]

[If the Conditions are to be in the English language only insert:

These Conditions are written in the English language only.]

*** [In the case of Notes which are to be publicly offered, in whole or in part, in Germany or distrib- uted, in whole or in part, to non-professional investors in Germany with English language Con- ditions insert:

Eine deutsche bersetzung der Bedingungen wird bei der Deutsche Bahn Aktiengesellschaft, Potsdamer Platz 2, D-10785 Berlin, zur kostenlosen Ausgabe bereitgehalten.]

44 FORM OF ORIGINAL GERMAN LANGUAGE VERSION OF GUARANTEE AND NEGATIVE PLEDGE

GARANTIE UND NEGATIVVERPFLICHTUNG

der

Deutsche Bahn Aktiengesellschaft, Berlin, Bundesrepublik Deutschland

zugunsten der Glubiger von Schuldverschreibungen (die „Schuldverschreibungen“),

die von der

Deutsche Bahn Finance B.V. (einer mit beschrnkter Haftung in den Niederlanden errichteten Gesellschaft)

im Rahmen des Debt Issuance Programme (das „Programm“) (wie jeweils abgendert, ergnzt oder neu gefaßt) begeben werden.

IM HINBLICK DARAUF,DASS:

(A) Deutsche Bahn Finance B.V. („Deutsche Bahn Finance”) beabsichtigt, von Zeit zu Zeit Schuldver- schreibungen im Rahmen des Programms zu begeben;

(B) Deutsche Bahn Aktiengesellschaft (die „Garantin“) die ordnungsgemße Zahlung von Kapital und Zinsen sowie von allen sonstigen Betrgen, die aufgrund der von Deutsche Bahn Finance im Rahmen des Programms begebenen Schuldverschreibungen zu zahlen sind, garantieren mchte;

(C) die Garantin gegenber jedem Glubiger der von Deutsche Bahn Finance im Rahmen des Pro- gramms begebenen Schuldverschreibungen eine Negativverpflichtung eingehen mchte;

WIRD FOLGENDES VEREINBART:

(1) (a) Die Garantin bernimmt gegenber jedem Glubiger (jeweils ein „Glubiger“) der Schuldver- schreibungen (wobei dieser Begriff jede vorlufige oder Dauer- oder Sammelglobalurkunde, die Schuldverschreibungen verbrieft, einschließt), welche jetzt oder zu irgendeinem Zeitpunkt nach dem Datum dieser Garantie von Deutsche Bahn Finance im Rahmen des Programms begeben werden, die unbedingte und unwiderrufliche Garantie fr die ordnungsgemße und pnktliche Zahlung bei Flligkeit von Kapital und Zinsen auf die Schuldverschreibungen sowie von allen sonstigen Betrgen, die gemß den Bedingungen der Schuldverschreibungen auf Schuldver- schreibungen zahlbar sind.

(b) Diese Garantie begrndet eine unbedingte, unbesicherte und nicht nachrangige Verbindlichkeit der Garantin, die mit allen anderen jeweils bestehenden, nicht besicherten und nicht nachrangi- gen Verbindlichkeiten der Garantin gleichrangig ist.

(c) Smtliche auf die Garantie zu zahlenden Betrge werden ohne Abzug oder Einbehalt gegenwr- tiger oder zuknftiger Steuern, Abgaben oder amtlicher Gebhren gleich welcher Art gezahlt, die von oder in der Bundesrepublik Deutschland oder fr deren Rechnung oder von oder fr Rech- nung einer dort zur Steuererhebung ermchtigten Gebietskrperschaft oder Behrde auferlegt, erhoben oder eingezogen werden (nachstehend zusammen „Quellensteuern“ genannt), es sei denn, ein solcher Abzug oder Einbehalt ist gesetzlich vorgeschrieben. In diesem letzteren Fall wird die Garantin die zustzlichen Betrge („zustzlichen Betrge“) zahlen, die erforderlich sind, damit der dem Glubiger nach diesem Abzug oder Einbehalt aufgrund der Garantie zufließende Nettobetrag jeweils den Betrgen an Kapital und Zinsen entspricht, die ihm zustehen wrden, wenn der Abzug oder Einbehalt nicht erforderlich wre. Solche zustzlichen Betrge sind jedoch nicht zu zahlen wegen Steuern, Abgaben oder amtlicher Gebhren, die

45 (i) von einer als Depotbank oder Inkassobeauftragter des Glubigers handelnden Person oder sonst auf andere Weise zu entrichten sind als dadurch, daß die Garantin aus den von ihr zu leistenden Zahlungen von Kapital und Zinsen einen Abzug oder Einbehalt vornimmt; oder

(ii) wegen gegenwrtiger oder frherer persnlicher oder geschftlicher Beziehungen des Glu- bigers zu der Bundesrepublik Deutschland zu zahlen sind, und nicht allein deshalb, weil Zahlungen auf die Schuldverschreibungen oder die Garantie aus Quellen in der Bundes- republik Deutschland stammen (oder fr Zwecke der Besteuerung so behandelt werden) oder dort besichert sind; oder

(iii) aufgrund (i) einer Richtlinie oder Verordnung der Europischen Union betreffend die Besteuerung von Zinsertrgen oder (ii) einer zwischenstaatlichen Vereinbarung ber deren Besteuerung, an der die Bundesrepublik Deutschland oder die Europische Union beteiligt ist, oder (iii) einer gesetzlichen Vorschrift, die diese Richtlinie, Verordnung oder Vereinba- rung umsetzt oder befolgt, abzuziehen oder einzubehalten sind; oder

(iv) aufgrund einer Rechtsnderung zahlbar sind, die spter als 30 Tage nach Flligkeit der betreffenden Zahlung von Kapital oder Zinsen oder, wenn dies spter erfolgt, ordnungs- gemßer Bereitstellung aller flligen Betrge und einer diesbezglichen Bekanntmachung gemß § 13 der Bedingungen wirksam wird.

(d) Die Verpflichtungen der Garantin aus dieser Garantie (i) sind selbstndig und unabhngig von den Verpflichtungen der Deutsche Bahn Finance aus den Schuldverschreibungen, (ii) bestehen unabhngig von der Rechtmßigkeit, Gltigkeit, Verbindlichkeit oder Durchsetzbarkeit der Schuldverschreibungen und (iii) werden nicht durch Ereignisse, Bedingungen oder Umstnde tat- schlicher oder rechtlicher Art berhrt, außer durch die vollstndige, endgltige und unwiderruf- liche Erfllung smtlicher in den Schuldverschreibungen eingegangenen Zahlungsverpflichtun- gen.

(e) Die Verpflichtungen der Garantin aus dieser Garantie erstrecken sich ohne weiteres auf die Ver- pflichtungen einer nicht mit der Garantin identischen Nachfolgeschuldnerin, die infolge einer Schuldnerersetzung gemß den Bedingungen der Schuldverschreibungen in bezug auf die Schuldverschreibungen entstehen.

(2) Die Garantin verpflichtet sich gegenber jedem Glubiger, solange Schuldverschreibungen aus- stehen, jedoch nur bis zu dem Zeitpunkt, an dem alle Betrge an Kapital und Zinsen dem Fiscal Agent zur Verfgung gestellt worden sind, (i) keine gegenwrtigen oder zuknftigen Kapitalmarktver- bindlichkeiten (wie nachstehend definiert) und keine Garantie oder Gewhrleistung hierfr durch Grund- oder Mobiliarpfandrechte oder eine sonstige dingliche Belastung des eigenen Vermgens zu besichern oder besichern zu lassen, und (ii) ihre Fhrungsgesellschaften (wie nachstehend definiert) zu veranlassen, fr andere Schuldverschreibungen oder hnliche verbriefte Schuldtitel oder fr dafr bernommene Gewhrleistungen, keine gegenwrtigen oder zuknftigen Kapitalmarktverbindlich- keiten und keine Garantie oder Gewhrleistung hierfr durch Grund- oder Mobiliarpfandrechte oder eine sonstige dingliche Belastung des eigenen Vermgens zu besichern oder besichern zu lassen, ohne gleichzeitig die Glubiger an derselben Sicherheit im gleichen Rang und gleichem Verhltnis teilnehmen zu lassen, es sei denn, eine solche Besicherung ist gesetzlich oder behrdlich vorge- schrieben. „Kapitalmarktverbindlichkeit“ bedeutet jede gegenwrtige oder zuknftige Verbindlich- keit, die in Form von Schuldverschreibungen oder sonstiger Wertpapiere, die blicherweise an einer Brse oder einem vergleichbaren organisierten Wertpapiermarkt gehandelt werden, oder gehandelt werden knnen, verbrieft, verkrpert oder dokumentiert sind, sowie Verbindlichkeiten, die sich aus Schuldscheindarlehen ergeben.

„Fhrungsgesellschaften“ sind die mit Ausgliederungsplan vom 24. November 1998 in Erfllung des gesetzlichen Auftrags gemß § 2 Absatz 1 und § 25 Deutsche Bahn Grndungsgesetz unter den der- zeitigen Firmen DB Regio Aktiengesellschaft, DB Reise&Touristik Aktiengesellschaft, DB Cargo Aktien- gesellschaft, DB Station&Service Aktiengesellschaft und DB Netz Aktiengesellschaft errichteten Aktiengesellschaften sowie solche Unternehmen, die den Geschftsbetrieb der vorgenannten Gesell- schaft ganz oder im wesentlichen ganz fortfhren.

(3) Dieser Vertrag und alle darin enthaltenen Vereinbarungen stellen einen Vertrag zugunsten der Glubiger als begnstigte Dritte gemß § 328 Absatz 1 BGB dar. Sie begrnden das Recht eines

46 jeden Glubigers, die Erfllung der hierin eingegangenen Verpflichtungen unmittelbar von der Garantin zu fordern und diese Verpflichtungen unmittelbar gegenber der Garantin durchzusetzen.

(4) Die Deutsche Bank Aktiengesellschaft in ihrer Eigenschaft als Fiscal Agent handelt nicht als Treu- hnder oder in einer hnlichen Eigenschaft fr die Glubiger.

(5) Die in diesem Vertrag verwendeten und nicht anders definierten Begriffe haben die ihnen in den beigefgten Emissionsbedingungen zugewiesene Bedeutung.

(6) Dieser Vertrag unterliegt deutschem Recht.

(7) Dieser Vertrag ist in deutscher Sprache abgefaßt. Eine unverbindliche bersetzung in die engli- sche Sprache ist beigefgt.

(8) Das Original dieses Vertrages wird dem Fiscal Agent ausgehndigt und von dieser verwahrt.

(9) Erfllungsort ist Berlin.

(10) Gerichtsstand fr alle Rechtsstreitigkeiten aus oder im Zusammenhang mit diesem Vertrag ist Frankfurt am Main. Jeder Glubiger kann seine Ansprche jedoch auch vor jedem anderen zustndi- gen Recht geltend machen.

(11) Jeder Glubiger kann in jedem Rechtsstreit gegen die Garantin und in jedem Rechtsstreit, in dem er und die Garantin Partei sind, seine Rechte aus diesem Vertrag auf der Grundlage einer von einer vertretungsberechtigten Person des Fiscal Agent beglaubigten Kopie dieses Vertrages ohne Vorlage des Originals im eigenen Namen wahrnehmen und durchsetzen.

Berlin, 31. Mai 2001

Deutsche Bahn Aktiengesellschaft

Wir nehmen die Bedingungen der vorstehenden Garantie an.

Frankfurt am Main, 31. Mai 2001

Deutsche Bank Aktiengesellschaft

47 Non-binding translation of the Form of Guarantee:

GUARANTEE AND NEGATIVE PLEDGE

of

Deutsche Bahn Aktiengesellschaft, Berlin, Federal Republic of Germany,

for the benefit of the holders of Notes (the “Notes”)

issued by

Deutsche Bahn Finance B.V. (incorporated as a limited liability company in The Netherlands)

under the Debt Issuance Programme (the “Programme”) as amended, supplemented or restated from time to time

WHEREAS:

(A) Deutsche Bahn Finance B.V. (“Deutsche Bahn Finance”) intends to issue Notes under the Pro- gramme from time to time;

(B) Deutsche Bahn Aktiengesellschaft (the “Guarantor”) wishes to guarantee the due payment of principal, interest and any other amounts payable in respect of any and all Notes that may be issued by Deutsche Bahn Finance under the Programme;

(C) the Guarantor wishes to enter into a negative pledge for the benefit of each Holder of Notes that may be issued by Deutsche Bahn Finance under the Programme;

IT IS AGREED AS FOLLOWS:

(1) (a) The Guarantor unconditionally and irrevocably guarantees to the holder of each Note (which expression shall include any Temporary Global Note, Permanent Global Note representing Notes), (each a “Holder”) issued by Deutsche Bahn Finance now or at any time hereafter under the Programme, the due and punctual payment of the principal of, and interest on, the Notes, and any other amounts which may be expressed to be payable under any Note appertaining thereto, as and when the same shall become due, in accordance with the Terms and Conditions of the Notes.

(b) This Guarantee constitutes an unconditional, unsecured and unsubordinated obligation of the Guarantor and ranks pari passu with all other unsecured and unsubordinated obligations of the Guarantor outstanding from time to time.

(c) All amounts payable in respect of this Guarantee shall be payable to the bearer of Notes without deduction or withholding for or on account of any present or future taxes, duties or governmental charges of any nature whatsoever imposed, levied or collected by or in or on behalf of the Federal Republic of Germany or by or on behalf of any political subdivision or authority therein having power to tax (hereinafter together called “Withholding Taxes”), unless such deduction or with- holding is required by law. In such event, the Guarantor shall pay such additional amounts (“addi- tional amounts”) as may be necessary in order that the net amounts of principal and interest received by the Holder after such deduction or withholding shall equal the respective amounts which would have been receivable had no such deduction or withholding been required. No such additional amounts shall, however, be made on account of any taxes, duties or governmental charges which (i) are payable by any person acting as custodian bank or collecting agent on behalf of a Holder, or otherwise in any manner which does not constitute a deduction or withholding by the Guarantor from payments made of principal or interest by it; or

48 (ii) are payable by reason of the Holder having, or having had, some personal or business con- nection with the Federal Republic of Germany and not merely by reason of the fact that pay- ments in respect of the Notes or the Guarantee are, or for purposes of taxation are deemed to be, derived from sources in, or are secured in, the Federal Republic of Germany; or (iii) are deducted or withheld pursuant to (i) any European Union Directive or Regulation concer- ing the taxation of interest income, or (ii) any international treaty or understanding relating to such taxation and to which the Federal Republic of Germany or the European Union is a party, or (iii) any provision of law implementing, or complying with, or introduced to conform with, such Directive, Regulation, treaty or understanding; or (iv) are payable by reason of a change in a law that becomes effective more than 30 days after the relevant payment of principal or interest becomes due, or is duly provided for and notice thereof is published in accordance with § 13 of the Conditions, whichever occurs later. (d) The obligations of the Guarantor under this Guarantee (i) shall be separate and independent from the obligations of Deutsche Bahn Finance under the Notes, (ii) shall exist irrespective of the legal- ity, validity and binding effect or enforceability of the Notes, and (iii) shall not be affected by any event, condition or circumstance of whatever nature, whether factual or legal, save the full, defini- tive and irrevocable satisfaction of any and all payment obligations expressed to be assumed under the Notes. (e) The obligations of the Guarantor under this Guarantee shall, without any further act or thing being required to be done or to occur, extend to the obligations of any Substituted Debtor which is not the Guarantor arising in respect of any Note by virtue of a substitution pursuant to the Terms and Condi- tions of the Notes, as amended, supplemented or varied by the applicable Pricing Supplement. (2) The Guarantor undertakes towards each Holder, so long as any of the Notes remains outstanding, but only up to the time all amounts of principal and interest have been placed at the disposal of the Fiscal Agent, that it will (i) not secure or have secured by mortgage, pledge or any other real encum- brance upon its own assets any present or future Capital Market Indebtedness (as defined below) and any guarantee or indemnity given in respect thereof, and (ii) procure that none of its Main Subsidi- aries (as defined below) will provide any security, by encumbering any of their assets, for other bonds, notes, debentures or similar debt instruments or for guarantees or indemnities in respect thereof, without at the same time having the Holders share equally and rateably in such security, un- less such encumbrance is required by law or by any authority. Within the context of these Terms and Conditions of the Issue “Capital Market Indebtedness” means any indebtedness, in the form of bonds or notes or other securities which are ordinarily traded or capable of being haded, quoted, dealt in or listed on any stock exchange or similary organised securities market, or obligations arising from Loan Agreements (Schuldscheindarlehen). „Main Subsidiaries“ are the public limited companies which where established by the spin off plan (Ausgliederungsplan) date 24 November 1998 in satisfaction of the statutory mandate pursuant to the German Railway Incorporation Act (Deutsche Bahn Grndungsgesetz) under the existing firms DB Regio Aktiengesellschaft, DB Reise&Touristik Aktiengesellschaft, DB Cargo Aktiengesellschaft, DB Station&Service Aktiengesellschaft and DB Netz Aktiengesellschaft as well as such companies which continue to operate the complete or an essential part of the business of the mentioned company. (3) This Agreement and all undertakings contained herein constitute a contract for the benefit of the Holders from time to time as third party beneficiaries pursuant to § 328 (1) BGB (German Civil Code)(1). They give rise to the right of each such Holder to require performance of the obligations undertaken herein directly from the Guarantor, and to enforce such obligations directly against the Guarantor. (4) Deutsche Bank Aktiengesellschaft in its capacity as Fiscal Agent does not act in a fiduciary or in any other similar capacity for the Holders. (5) Terms used in this Agreement and not otherwise defined herein shall have the meaning attributed to them in the Terms and Conditions of the Notes, a copy of which is attached hereto. (6) This Agreement shall be governed by, and construed in accordance with, German law.

(1) In English language translation § 328 (1) BGB (German Civil Code) reads as follows: “A contract may stipulate performance for the benefit of a third party, to the effect that the third party acquires the right directly to demand performance.”

49 (7) This Agreement is written in the German language and attached hereto is a non-binding English translation.

(8) The original version of this Agreement shall be delivered to, and kept by, the Fiscal Agent.

(9) Place of performance shall be Berlin.

(10) The place of jurisdiction for all legal proceedings arising out of or in connection with this Agree- ment shall be Frankfurt am Main. Each Holder may, however, also pursue his claims before any other court of competent jurisdiction.

(11) On the basis of a copy of this Agreement certified as being a true copy by a duly authorized officer of the Fiscal Agent, each Holder may protect and enforce in his own name his rights arising under this Agreement in any legal proceedings against the Guarantor or to which such Holder and the Guarantor are parties, without the need for production of this Agreement in such proceedings.

Berlin, 31 May 2001

Deutsche Bahn Aktiengesellschaft

We accept the terms of the above Guarantee.

Frankfurt am Main, 31 May 2001

Deutsche Bank Aktiengesellschaft

50 FORM OF PRICING SUPPLEMENT (MUSTER – KONDITIONENBLATT)

[Date] [Datum]

Pricing Supplement Konditionenblatt

[Title of relevant Series of Notes] issued pursuant to the [Bezeichnung der betreffenden Serie der Schuldverschreibungen] begeben aufgrund des

7 5,000,000,000 Debt Issuance Programme

dated 11 July, 2002 datiert 11. Juli 2002

of der

Deutsche Bahn Aktiengesellschaft

and und

Deutsche Bahn Finance B.V.

Issue Price: [ ] per cent. Ausgabepreis: [ ]%

Issue Date: [ ] (1) Tag der Begebung: [ ] (1)

(1) The Issue is the date of payment and settlement of the Notes. In the case of free delivery, the Issue Date is the deliv- ery date. Der Tag der Begebung ist der Tag, an dem die Schuldverschreibungen begeben und bezahlt werden. Bei freier Liefe- rung ist der Tag der Begebung der Tag der Lieferung.

51 [This Pricing Supplement is issued to give details of an issue of Notes under the 5 5,000,000,000 Debt Issuance Programme of Deutsche Bahn Aktiengesellschaft, Deutsche Bahn Finance B.V., (the “Programme”) and is to be read in conjunction with the Terms and Conditions of the Notes (the “Terms and Conditions”) set forth in the Information Memorandum pertaining to the Programme, as the same may be amended or supplemented from time to time. Capitalized Terms not otherwise defined herein shall have the meanings specified in the Terms and Conditions.

Dieses Konditionenblatt enthlt Angaben zur Emission von Schuldverschreibungen unter dem 5 5.000.000.000 Debt Issuance Programme der Deutsche Bahn Aktiengesellschaft, der Deutsche Bahn Finance B.V. (das „Programm“) und ist in Verbindung mit den Emissionsbedingungen der Schuldver- schreibungen (die „Emissionsbedingungen“) zu lesen, die in der jeweils geltenden Fassung des Information Memorandum ber das Programm enthalten sind. Begriffe, die in den Emissionsbedin- gungen definiert sind, haben, falls das Konditionenblatt nicht etwas anderes bestimmt, die gleiche Bedeutung, wenn sie in diesem Konditionenblatt verwendet werden.

All references in this Pricing Supplement to numbered paragraphs and supparagraphs are to Articles and sections of the Terms and Conditions.

Bezugnahmen in diesem Konditionenblatt auf Paragraphen und Abstze beziehen sich auf die Para- graphen und Abstze der Emissionsbedingungen.

All provisions in the Terms and Conditions corresponding to items in this Pricing Supplement which are either not selected or completed or which are deleted shall be deemed to be deleted from the terms and conditions applicable to the Notes (the “Conditions”).

Smtliche Bestimmungen der Emissionsbedingungen, die sich auf Variablen dieses Konditionen- blatts beziehen und die weder angekreuzt noch ausgefllt werden oder die gestrichen werden, gelten als in den auf die Schuldverschreibungen anwendbaren Emissionsbedingungen (die „Bedingun- gen“) gestrichen.] (2)

[The Conditions applicable to the Notes (the “Conditions”) and the German or English language translation thereof, if any, are attached to this Pricing Supplement and replace in full the terms and conditions of the Notes as set out in the Information Memorandum and take precedence over any conflicting provisions in this Pricing Supplement.

Die fr die Schuldverschreibungen geltenden Bedingungen (die „Bedingungen“) sowie eine etwaige deutsch- oder englischsprachige bersetzung sind diesem Konditionenblatt beigefgt. Die Bedingun- gen ersetzen in Gnze die im Information Memorandum abgedruckten Emissionsbedingungen und gehen etwaigen abweichenden Bestimmungen dieses Konditionenblatts vor.] (3)

The Issuer accepts responsibility for the information contained in this Pricing Supplement.

Die Emittentin bernimmt die Verantwortung fr die in diesem Konditionenblatt enthaltenen Infor- mationen.

(2) To be inserted in the case of Long-Form Conditions. Im Fall von nicht-konsolidierten Bedingungen einzufgen. (3) To be inserted in the case of Integrated Conditions. Im Fall von konsolidierten Bedingungen einzufgen.

52 Issuer Emittentin r Deutsche Bahn Aktiengesellschaft r Deutsche Bahn Finance B.V.

Form of Conditions (*) Form der Bedingungen r Long-Form Nicht-konsolidierte Bedingungen r Integrated Konsolidierte Bedingungen

Language of Conditions (**) Sprache der Bedingungen r German only ausschließlich Deutsch r English only ausschließlich Englisch r English and German (English controlling) Englisch und Deutsch (englischer Text maßgeblich) r German and English (German controlling) Deutsch und Englisch (deutscher Text maßgeblich)

CURRENCY, DENOMINATION, FORM, CERTAIN DEFINITIONS (§ 1) WHRUNG, STCKELUNG, FORM, DEFINITIONEN (§ 1)

Currency and Denomination Whrung und Stckelung

Specified Currency [ ] Festgelegte Whrung

(*) To be determined in consultation with the Issuer. It is anticipated that Long-Form Conditions will generally be used for Notes sold on a non-syndicated basis and which are not publicly offered. Integrated Conditions will generally be used for Notes sold and distributed on a syndicated basis. Integrated Conditions will be required where the Notes are to be publicly offered, in whole or in part, or to be distributed, in whole or in part, to non-professional investors. Die Form der Bedingungen ist in Abstimmung mit der Emittentin festzulegen. Es ist vorgesehen, daß nicht-konsoli- dierte Bedingungen fr Inhaberschuldverschreibungen verwendet werden, die auf nicht syndizierter Basis verkauft und die nicht ffentlich zum Verkauf angeboten werden. Konsolidierte Bedingungen werden in der Regel fr Inhaber- schuldverschreibungen verwendet, die auf syndizierter Basis verkauft und vertrieben werden. Konsolidierte Bedin- gungen sind erforderlich, wenn die Schuldverschreibungen insgesamt oder teilweise an nicht berufsmßige oder gewerbliche Investoren verkauft oder ffentlich angeboten werden. (**) To be determined in consultation with the Issuer. It is anticipated that, subject to any stock exchange or legal require- ments applicable from time to time, and unless otherwise agreed, in the case of Notes sold and distributed on a syndicated basis, German will be the controlling language. In the case of Notes publicly offered, in whole or in part, in the Federal Republic of Germany, or distributed, in whole or in part, to non-professional investors in the Federal Republic of Germany, German will be the controlling language. If, in the event of such public offer or distribution to non-professional investors, however, English is chosen as the controlling language, a German language translation of the Conditions will be available from the principal office of Deutsche Bahn Aktiengesellschaft. In Abstimmung mit der Emittentin festzulegen. Es wird erwartet, daß vorbehaltlich geltender Brsen- oder anderer Bestimmungen und soweit nicht anders vereinbart, die deutsche Sprache fr Inhaberschuldverschreibungen maß- geblich sein wird, die auf syndizierter Basis verkauft und vertrieben werden. Falls Inhaberschuldverschreibungen ins- gesamt oder teilweise ffentlich zum Verkauf in der Bundesrepublik Deutschland angeboten oder an nicht berufs- mßige oder gewerbliche Investoren in der Bundesrepublik Deutschland verkauft werden, wird die deutsche Sprache maßgeblich sein. Falls bei einem solchen ffentlichen Verkaufsangebot oder Verkauf an nicht berufsmßige oder gewerbliche Investoren die englische Sprache als maßgeblich bestimmt wird, wird eine deutschsprachige berset- zung der Bedingungen bei der Hauptgeschftsstelle der Deutsche Bahn Aktiengesellschaft erhltlich sein.

53 Aggregate Principal Amount [ ] Gesamtnennbetrag

Specified Denomination(s) [ ] Stckelung/Stckelungen

Number of Notes to be issued in each Specified Denomination [ ] Zahl der in jeder Stckelung auszugebenden Schuldverschreibungen r TEFRA C TEFRA C

r Permanent Global Note Dauerglobalurkunde r TEFRA D TEFRA D

r Temporary Global Note exchangeable for: Permanent Global Note Vorlufige Globalurkunde austauschbar gegen: Dauerglobalurkunde r Neither TEFRA D nor TEFRA C (*) Weder TEFRA D noch TEFRA C

r Permanent Global Note Dauerglobalurkunde

Certain Definitions Definitionen

Clearing System r Clearstream Banking AG, Frankfurt am Main, (“CBF”) [ ] r Clearstream Banking socit anonyme, Luxembourg, (“CBL”) r Euroclear Bank S.A./N.V., Brssel [ ] r Other – specify [ ] sonstige (angeben)

Calculation Agent [Yes/No] Berechnungsstelle [Ja/Nein] r Fiscal Agent Fiscal Agent r Other (specify) [ ] sonstige (angeben)

(*) Applicable only if Notes have an initial maturity of one year or less. Nur anwendbar bei Schuldverschreibungen mit einer ursprnglichen Laufzeit von einem Jahr oder weniger.

54 INTEREST (§ 3) ZINSEN (§ 3) r Fixed Rate Notes Festverzinsliche Schuldverschreibungen

Rate of Interest and Interest Payment Dates Zinssatz und Zinszahlungstage

Rate of Interest [ ] per cent. per annum Zinssatz [ ]% per annum

Interest Commencement Date [ ] Verzinsungsbeginn

Fixed Interest Date(s) [ ] Festzinstermin(e)

First Interest Payment Date [ ] Erster Zinszahlungstag

Initial Broken Amount(s) (per denomination) [ ] Anfngliche(r) Bruchteilzinsbetrag(-betrge) (fr jeden Nennbetrag)

Fixed Interest Date preceding the Maturity Date [ ] Festzinstermin, der dem Flligkeitstag vorangeht

Final Broken Amount(s) (per denomination) [ ] Abschließende(r) Bruchteilzinsbetrag(-betrge) (fr jeden Nennbetrag) r Floating Rate Notes Variabel verzinsliche Schuldverschreibungen

Interest Payment Dates Zinszahlungstage

Interest Commencement Date [ ] Verzinsungsbeginn

Specified Interest Payment Dates [ ] Festgelegte Zinszahlungstage

Specified Interest Period(s) [ ] [weeks/months/other – specify] Festgelegte Zinsperiode(n) [ ] [Wochen/Monate/andere – angeben]

55 Business Day Convention Geschftstagskonvention

r Modified Following Business Day Convention Modifizierte folgender Geschftstag-Konvention

r FRN Convention (specify period(s)) [ ] [months/other – specify] FRN Konvention (Zeitraum angeben) [ ] [Monate/andere – angeben]

r Following Business Day Convention Folgender Geschftstag-Konvention r Preceding Business Day Convention Vorangegangener Geschftstag-Konvention

Relevant Financial Centers [ ] Relevante Finanzzentren

Rate of Interest Zinssatz r Screen Rate Determination Bildschirmfeststellung

r EURIBOR (11.00 a.m. Brussels time/ Interbank market of the Euro-Zone/ TARGET Business Day) EURIBOR (11.00 Uhr Brsseler Ortszeit/ Interbankenmarkt in der Euro-Zone/ TARGET Geschftstag) Screen page [ ] Bildschirmseite

r LIBOR (London time/London Business Day/City of London/ London Office/London Interbank Market) LIBOR (Londoner Ortszeit/Londoner Geschftstag/City of London/ Londoner Geschftsstelle/Londoner Interbankmarkt) Screen page [ ] Bildschirmseite

r Other (specify) [ ] Sonstige (angeben) Screen page(s) [ ] Bildschirmseite(n)

Margin [ ] per cent. per annum Marge [ ]% per annum

r plus plus

r minus minus

56 Interest Determination Date Zinsfestlegungstag

r second Business Day prior to commencement of Interest Period zweiter Geschftstag vor Beginn der jeweiligen Zinsperiode

r first day of each Interest Period [ ] erster Tag der jeweiligen Zinsperiode

r other (specify) [ ] sonstige (angeben)

Reference Banks (if other than as specified in § 3 (2)) (specify) [ ] Referenzbanken (sofern abweichend von § 3 Absatz 2) (angeben) r ISDA Determination (*) [specify details] ISDA-Feststellung [Details einfgen] r Other Method of Determination (insert details (including Margin, [ ] Interest Determination Date, Reference Banks, fall-back provisions)) Andere Methoden der Bestimmung (Einzelheiten angeben (einschließlich Zinsfestlegungstag, Marge, Referenzbanken, Ausweichungsbestimmungen))

Minimum and Maximum Rate of Interest Mindest- und Hchstzinssatz

r Minimum Rate of Interest [ ] per cent. per annum Mindestzinssatz [ ]% per annum

r Maximum Rate of Interest [ ] per cent. per annum Hchstzinssatz [ ]% per annum r Zero Coupon Notes Nullkupon-Schuldverschreibungen

Accrual of Interest Auflaufende Zinsen

Amortization Yield [ ] Emissionsrendite r Dual Currency Notes [] Doppelwhrungs-Schuldverschreibungen (set forth details in full here (including exchange rate(s) or basis for calculating exchange rate(s) to determine interest/fall-back provisions)) (Einzelheiten einfgen (einschließlich Wechselkurs(e) oder Grundlage fr die Berechnung des/der Wechselkurs(e) zur Bestimmung von Zinsbetrgen/Ausweichbestimmungen))

(*) ISDA Determination should only be applied in the case of Notes permanently represented by a Global Note because the ISDA Agreement and the ISDA Definitions have to be attached to the relevant Notes. ISDA-Feststellung sollte nur dann gewhlt werden, wenn die betreffenden Schuldverschreibungen durch eine Dauer- globalurkunde verbrieft werden, weil das ISDA-Agreement und die ISDA Definitions den Schuldverschreibungen bei- zufgen sind.

57 r Index-linked Notes [] Indexierte Schuldverschreibungen (set forth details in full here) (Einzelheiten einfgen) r Installment Notes [] Raten-Schuldverschreibungen (set forth details in full here) (Einzelheiten einfgen)

Day Count Fraction (*) Zinstagequotient r Actual/Actual (ISMA) r Actual/365 (Fixed) r Actual/360 r 30/360 or 360/360 (Bond Basis) r 30E/360 (Eurobond Basis)

PAYMENTS (§ 4) ZAHLUNGEN (§ 4)

Payment Business Day Zahlungstag

Relevant Financial Center(s) (specify all) [ ] Relevante(s) Finanzzentren(um) (alle angeben)

REDEMPTION (§ 5) RCKZAHLUNG (§ 5)

Final Redemption Rckzahlung bei Endflligkeit

Notes other than Instalment Notes Schuldverschreibungen außer Raten-Schuldverschreibungen

Maturity Date [ ] Flligkeitstag

Redemption Month [ ] Rckzahlungsmonat

Final Redemption Amount Rckzahlungsbetrag

r Principal amount Nennbetrag

r Final Redemption Amount (per denomination) [ ] Rckzahlungsbetrag (fr jede Stckelung)

(*) Complete for all Notes. Fr alle Schuldverschreibungen auszufllen.

58 Instalment Notes Raten-Schuldverschreibungen

Instalment Date(s) [ ] Ratenzahlungstermin(e)

Instalment Amount(s) [ ] Rate(n)

Early Redemption Vorzeitige Rckzahlung

Early Redemption at the Option of the Issuer [Yes/No] Vorzeitige Rckzahlung nach Wahl der Emittentin [Ja/Nein]

Minimum Redemption Amount [ ] Mindestrckzahlungsbetrag

Higher Redemption Amount [ ] Hherer Rckzahlungsbetrag

Redemption Date(s) [ ] Wahlrckzahlungstag(e)

Redemption Amount(s) [ ] Wahlrckzahlungsbetrag/-betrge

Minimum Notice to Holders [ ] Mindestkndigungsfrist

Maximum Notice to Holders [ ] Hchstkndigungsfrist

Early Redemption at the Option of a Holder [Yes/No] Vorzeitige Rckzahlung nach Wahl des Glubigers [Ja/Nein]

Redemption Date(s) [ ] Wahlrckzahlungstag(e))

Redemption Amount(s) [ ] Wahlrckzahlungsbetrag/-betrge

Minimum Notice to Issuer [ ] days Mindestkndigungsfrist [ ] Tage

Maximum Notice to Issuer (never more than 60 days) [ ] days Hchstkndigungsfrist (nie mehr als 60 Tage) [ ] Tage

Early Redemption Amount Vorzeitiger Rckzahlungsbetrag

Zero Coupon Notes: Nullkupon-Schuldverschreibungen:

Reference Price [ ] Referenzpreis

59 r Dual Currency Notes [] Doppelwhrungs-Schuldverschreibungen (set forth details in full here (including exchange rate(s) or basis for calculating exchange rate(s) to determine capital/fall-back provisions)) (Einzelheiten einfgen (einschließlich Wechselkurs(e) oder Grundlage fr die Berechnung des/der Wechselkurs(e) zur Bestimmung von Kapitalbetrgen/Ausweichbestimmungen)) r Index-linked Notes [] Indexierte Schuldverschreibungen (set forth details in full here) (Einzelheiten einfgen) r Installment Notes [] Raten-Schuldverschreibungen (set forth details in full here) (Einzelheiten einfgen)

FISCAL AGENT [,] [AND] PAYING AGENTS [AND CALCULATION AGENT] (§ 6) FISCAL AGENT [,] [UND] ZAHLSTELLEN [UND BERECHNUNGSSTELLE] (§ 6)

Calculation Agent/specified office (*)[] Berechnungsstelle/bezeichnete Geschftsstelle

Required location of Calculation Agent (specify) [ ] Vorgeschriebener Ort fr Berechnungsstelle (angeben) r Paying Agents [ ] Zahlstellen r Additional Paying Agent(s)/specified office(s) [ ] Zahlstelle(n)/bezeichnete Gechftsstelle(n)

NOTICES (§ [13]) MITTEILUNGEN (§ [13])

Place and medium of publication Ort und Medium der Bekanntmachung r Germany (Brsen-Zeitung) Deutschland (Brsen-Zeitung) r Luxembourg (Luxemburger Wort) Luxemburg (Luxemburger Wort) r Other (specify) [ ] sonstige (angeben)

(*) Not to be completed if Fiscal Agent is to be appointed as Calculation Agent. Nicht auszufllen, falls der Fiscal Agent als Berechnungsstelle bestellt werden soll.

60 GENERAL PROVISIONS APPLICABLE TO THE NOTE(S) ALLGEMEINE BESTIMMUNGEN HINSICHTLICH DER SCHULDVERSCHREIBUNG(EN)

Listing(s) [Yes/No] Brsenzulassung(en) [Ja/Nein] r Frankfurt am Main r Luxembourg r Other (insert details) [ ] sonstige (Einzelheiten einfgen)

Method of distribution [insert details] Vertriebsmethode [Einzelheiten einfgen] r Non-syndicated Nicht syndiziert r Syndicated Syndiziert

Management Details Einzelheiten bezglich des Bankenkonsortiums

Management Group (specify) [ ] Bankenkonsortium (angeben)

Commissions Provisionen

Management/Underwriting Commission (specify) [ ] Management- und bernahmeprovision (angeben)

Selling Concession (specify) [ ] Verkaufsprovision (angeben)

Listing Commission (specify) [ ] Brsenzulassungsprovision (angeben)

Other (specify) [ ] Andere (angeben)

Stabilising Dealer/Manager [insert details/None] Kursstabilisierender Dealer/Manager [Einzelheiten einfgen/ keiner]

Securities Identification Numbers Wertpapierkennummern

Common Code [ ] Common Code

ISIN [ ] ISIN

German Securities Code [ ] Wertpapierkennummer (WKN)

61 Any other securities number [ ] Sonstige Wertpapiernummer

Supplemental Tax Disclosure (specify) (*)[] Zustzliche Steueroffenlegung (einfgen)

Selling Restrictions Verkaufsbeschrnkungen r TEFRA C TEFRA C r TEFRA D TEFRA D r Neither TEFRA C nor TEFRA D Weder TEFRA C noch TEFRA D

Additional selling restrictions (specify) [ ] Zustzliche Verkaufsbeschrnkungen (angeben) [Dutch Law]

Governing Law German Law Anwendbares Recht Deutsches Recht

Other relevant terms and conditions (specify) [] Andere relevante Bestimmungen (einfgen)

[Listing: (**) [Brsenzulassung:

The above Pricing Supplement comprises the details required to list this issue of Notes pursuant to the listing of the 5 5,000,000,000 Debt Issuance Programme of Deutsche Bahn Aktiengesellschaft and Deutsche Bahn Finance B.V. (as from [insert Issue Date for the Notes]). Das vorstehende Konditionenblatt enthlt die Angaben, die fr die Zulassung dieser Emission von Schuldverschreibungen gemß Brsenzulassung des 5 5.000.000.000 Debt Issuance Programme der Deutsche Bahn Aktiengesellschaft und der Deutsche Bahn Finance B.V. (ab dem [Tag der Begebung der Schuldverschreibungen einfgen]) erforderlich sind.]

Responsibility Verantwortlichkeit

The Issuer accepts responsibility for the information contained in the Pricing Supplement. Die Emittentin bernimmt fr die in diesem Konditionenblatt enthaltenen Informationen die Verant- wortung.

(*) Supplemental tax disclosure should be provided if the Notes would be classified as financial innovations (Finanz- innovationen) under German tax law. Zustzliche Angaben zur steuerlichen Situationen sollten erfolgen, wenn die Schuldverschreibungen nach deut- schem Steuerrecht als Finanzinnovationen eingeordnet wrden. (**) Include only in the version of the Pricing Supplement which is submitted to the relevant stock exchange in the case of Notes to be listed on such stock exchange. Nur in derjenigen Fassung des Konditionenblatts einzufgen, die der betreffenden Brse, bei der die Schuldver- schreibungen zugelassen werden sollen, vorgelegt wird.

62 [DEUTSCHE BAHN AKTIENGESELLSCHAFT

[Name & title of signatory] [Name und Titel des Unterzeichnenden]]

[DEUTSCHE BAHN FINANCE B.V.

[Name & title of signatory] [Name und Titel des Unterzeichnenden]]

63 DEUTSCHE BAHN AKTIENGESELLSCHAFT (“Deutsche Bahn AG” or “DB AG”)

– Issuer and Guarantor –

Establishment, Duration and Seat

After the passing of the Railway Reform Act by the German parliament (Deutscher Bundestag) on 27 December 1993, DB AG was organised as a commercial company, which was established on 1 Jan- uary 1994 according to German law. Its seat is Berlin, where it is registered in the Commercial Regis- ter in Berlin-Charlottenburg under the number HRB 50 000. The head office is located in Potsdamer Platz 2, D-10785 Berlin.

Founder and sole shareholder of DB AG is the Federal Republic of Germany. DB AG comprises the two former state-owned railways Deutsche Bundesbahn (German Federal Railway) and the Deutsche Reichsbahn (East German State Railway), which, up until 31 December 1993, qualified as a govern- ment fund (Sondervermgen) of the Federal Republic of Germany. On the one hand, the business operations, i.e. the operation of the railway infrastructure and the assets which are essential for the railway, were transferred to DB AG and on the other hand, the remaining public administrative opera- tions were transferred to the Bundeseisenbahnvermgen (Federal Railway Fund) and the Eisenbahn- bundesamt (Federal Railway Office).

Objects

The objects of DB AG are:

(a) the provision and marketing of railway transportation services for the transportation of passen- gers and freight;

(b) the operation and marketing of the railway infrastructure, including in particular the planning, construction, maintenance and the management of the operating and security systems; and

(c) all activities in areas related to railway transportation.

DB AG may participate in, establish or acquire other enterprises of a similar or related nature. DB AG may transfer its operations in whole or in part into such other enterprises and may limit itself to a managerial function. DB functions as a holding company.

Share Capital

The authorised share capital of DB AG is EUR 2,150,000,000 divided into 430,000,000 bearer shares without nominal value. All shares have been issued and are fully paid.

64 Capitalisation

As of 31 December 2001, the capitalisation based on the audited non consolidated figures of Deutsche Bahn AG was as follows: 31December 2001 in 5 million Equity Subscribed Capital ...... 2,150 Capital Reserves ...... 5,310 Retained Earnings ...... 1,471 Balance-sheet loss...... – 135 8,796 Provisions Pension provisions ...... 86 Tax provisions ...... 319 Other provisions ...... 5,465 5,870 long term debt 1–5 years ...... 1,127 > 5 years ...... 5,848 6,975 21,641

There has been no material change in the capitalisation table since 31 December 2001.

Financial Year

The financial year of DB AG is the calendar year.

Principles of Cooperation within the DB Group

The close connection between the DB AG and the managing companies, or between the managing companies and some of their assigned subsidiaries are supported through the conclusion of profit and loss transfer agreements, domination agreements and through tax-polling agreements.

The cooperation between the DB AG and the managing companies is regulated in particular through a catalogue of business transactions in need to approval of the Board of Directors of DB AG, the inter- nal rules of procedure of the managing companies, agreements between DB AG and the managing companies amongst themselves and through Group regulations and instructions of the Board of Directors of DB AG. In addition, the managing companies are supervised and advised by the DB AG, in order to ensure that its influence is maintained.

One of the desired effects of the holding structure is the ability to allow the managing companies, as market specialists in their respective fields, to make operational decisions. Another is that the DB AG, guarantees as parent company that the inter-company benefits of the closely-networked and mutually dependent units are maintained to the extent possible.

Liability for Obligations of DB AG

DB AG is an independent legal entity and an independent holder of rights and obligations.

DB AG is liable to its creditors with all its assets. Until the beginning of the second stage of the Bahn- reform described in point (a), these assets were primarily all properties necessary for the running of

65 the railway (e.g. real estate and rights on real estate) and the other assets necessary for the operation of the railway (e.g. multiple-unit trains, locomotives, wagons).

(a) Liability of DB AG after operating devisions have been hived off: In the second stage of restructuring (effective retroactively as of 1 January 1999, with the entry in the commercial register on 1 June 1999) the divisions of Local Passenger Traffic, Long-Distance Passenger Traffic, Cargo Traffic, Track Infrastructure, and Passenger Stations, pursuant to the leg- islative intent, are established as joint stock companies. The newly-established companies are “DB Regio AG”, “DB Reise&Touristik AG”, “DB Cargo AG”, “DB Netz AG” and “DB Station&Service AG”. DB AG remains as a holding company and continues to be liable to its creditors for the redemp- tion of obligations with its entire asset base, which consists to a substantial degree of equity stakes in the above mentioned spun-off companies and (unsecured) claims on these companies relating to the onlending of the funds borrowed directly by DB AG or Deutsche Bahn Finance B.V. In addition, all spun-off companies are jointly and severally liable for five years after the spin-off to protect the interests of the creditors pursuant to Section 133 paragraph 1 UmwG.

(b) Liability if DB AG is defunct: According to the Law on the Establishment of Deutsche Bahn Aktiengesellschaft (Deutsche Bahn Grndungsgesetz), DB AG may, on the basis of a regulation for which the approval of the Bundes- rat is required, either be dissolved, merged with one of the hived-off companies, or split up among the hived-off companies. The liability of DB AG’s obligations or its guarantee with respect to obligations of Deutsche Bahn Finance B.V., will depend on the legal procedure for DB AG’s termination, which is to be deter- mined by a German Federal Law as required by Section 2 paragraph 2 DBGrG. In the event of dissolution, the liquidators must satisfy all creditors before the dissolution can be effected. Also, the claims of Deutsche Bahn Finance B.V. on DB AG relating to the transfer of the borrowed funds would have to be satisfied, with the result that Deutsche Bahn Finance B.V. would be again in the position to meet its obligations to the creditors. In the event of a merger with one of the hived-off companies, all assets and liabilities of DB AG – also the equity stakes in subsidiaries and the claims on subsidiaries – will be passed on to the acquiring company by the registration of the merger in the commercial register at the domicile of the acquiring company; DB AG will cease to exist. Following the merger, the acquiring company is liable to its creditors with all its assets, which will also include the equity stakes in the other hived-off joint stock companies and the claims on these companies from the transferring of the borrowed funds. In the event of a split of DB AG pursuant to Section 123 paragraph 1 No. 1 UmwG, in accordance with a split and transfer agreement, all assets and liabilities of DB AG will be transferred to the joint stock companies previously hived off. After the split has taken place, the joint stock company to which the respective guarantee liability of DB AG has been allocated (according to the split and transfer agreement) will be liable to its creditors with all its assets. Within five years after the split, all companies involved in the split of DB AG will remain jointly and severally liable pursuant to Section 133 paragraph 1 UmwG. Upon expiry of the statutory joint and several liability, the joint stock companies remaining after the split will assume joint and several liability, or provide equal security to cover the obligations under guarantees relating to bond issues of Deutsche Bahn Finance B.V.

Financial Relationship to the Federal Republic of Germany or the Federal States

Apart from the equity holding, the following financial relationships exist as a result of legal provi- sions:

66 (a) The civil servants of the former Deutsche Bundesbahn are in principle assigned to provide serv- ices to Deutsche Bahn Group. Their salaries will be paid from the Federal Railway Fund. Deutsche Bahn Group will reimburse the Federal Railway Fund for the personnel costs only up to the corre- sponding amount which Deutsche Bahn Group would have to pay for new employees. (b) Investments into the track infrastructure will generally be financed through interest free loans and non-repayable investment grants from the Federal Republic of Germany. (c) Concerning the former Deutsche Reichsbahn: DB AG receives, until 2002, financial contributions for: – Costs in connection with the elimination of ecological damage in the new Federal States. – Investments in the infrastructure to bring the track infrastructure level in the new Federal States into line with that of the old Federal States. – Increased costs for materials and personnel as a result of the technical and organizational short-comings in the new Federal States. (d) On 1 January 1996, the functional and financial responsibility for local railway passenger services was transferred from the Federal Republic of Germany to the Federal States. Since then, the Fed- eral States or the municipalities (Gemeinden) or special purpose associations (Zweckverbnde), have “ordered” and will “order” regional services from Deutsche Bahn Group. They are required to pay for services rendered, determined in agreements with the Deutsche Bahn Group on a case- by-case basis.

67 CORPORATE BODIES AND MANAGEMENT

Deutsche Bahn AG Supervisory Board Dr. Gnther Saßmannshausen Honorary Chairman of the Supervisory Board, Hannover Dr. Michael Frenzel Chairman of the Supervisory Board, – since 14 March 2001 – Chairman of the Management Board of Preussag AG, Burgdorf Dr. Dieter H. Vogel Chairman of the Supervisory Board, – until 7 March 2001 – Managing Partner Bessemer Vogel & Treichl GmbH, Dsseldorf Norbert Hansen(*) Deputy Chairman of the Supervisory Board, Chairman of TRANSNET German Railway Workers’ Union, Frankfurt/Main Niels Lund Chrestensen General Manager of the N.L. Chrestensen, Erfurter Samen- und Pflanzenzucht GmbH, Erfurt Peter Debuschewitz(*) Management Representative for Berlin of Deutsche Bahn AG, Taufkirchen Elke Ferner Former State Secretary Ministry of Transport, Building and Housing, – until 5 February 2001 – Saarbrcken Horst Fischer(*) Member of the Works Council of DB Regio AG, Regional division Northern Bavaria, Frth Horst Hartkorn(*) Chairman of the Works Council of S-Bahn Hamburg GmbH, Hamburg Jrg Hensel(*) Chairman of the Central Works Council of DB Cargo AG, Hamm Gnter Kirchheim (*) Chairman of the Group Works Council of Deutsche Bahn AG, Chairman of the Central Works Council of DB Netz AG, Essen Lothar Krauß(*) Deputy Chairman of TRANSNET German Railway Workers’ Union, Rodenbach Heike Moll(*) Member of the Central Works Council of DB Station&Service AG, Frankfurt/Main

68 Ralf Nagel State Secretary Ministry of Transport, Building and Housing, – since 5 February 2001 – Magdeburg Dr. Friedel Neuber Duisburg-Rheinhausen Gnter Ostermann(*) Deputy Chairman of TRANSNET German Railway Workers’ Union, Wunstorf Dr. Manfred Overhaus State Secretary Ministry of Finance St. Augustin Albert Schmidt Member of Parliament (Bundestag), Ingolstadt Prof. Dr. Ekkehard D. Schulz Chairman of ThyssenKrupp AG, Krefeld Dr. Ulrich Schumacher Chairman of the Management Board of Infineon Technologies AG, Starnberg Dr. Alfred Tacke State Secretary Ministry of Economics and Technology, Celle Dr.-Ing. E.h. Heinrich Weiss Chairman of the Management Board of SMS AG, Hilchenbach-Dahlbruch Horst Zimmermann(*) Chairman of the Central Works Council of DB Reise&Touristik AG, Nrnberg

Information as of 31 December 2001 or the date of resignation. (*) Employee representative on the Supervisory Board.

Management Board of Deutsche Bahn AG Hartmut Mehdorn CEO and Chairman of the Management Board, Berlin Klaus Daubertshuser Marketing, Wettenberg Dr. Horst Fhr Personnel – until 13 December 2001 – Berlin Dr. Christoph Franz (1) Passenger Transport, CEO and Chairman of the Management Board of DB Reise&Touristik AG, CEO and Chairman of the Management Board of DB Regio AG, Darmstadt

69 Roland Heinisch Track Infrastructure, CEO and Chairman of the Management Board of DB Netz AG, Idstein Dr. Bernd Malmstrm Freight Transport, CEO and Chairman of the Management Board of DB Cargo AG, Mainz Dr. Karl-Friedrich Rausch Technology, – since 1 January 2001 – Weiterstadt Diethelm Sack Chief Financial Officer, Frankfurt/Main Dieter Ullspenger Passenger Stations/Real Estate, CEO and Chairman of the Management Board of DB Station & Service AG – since 31 December 2001 – Munich

70 Liabilities

The following table sets forth the liabilities based on audited non consolidated figures of the Deutsche Bahn AG as of 31 December 2001: As of 31 December 2001 (in 5 million) Liabilities to credit institutions ...... 51 Accounts payable to affiliated undertakings ...... 7,477 Accounts payable to undertakings with which the company is linked by participating interests ...... 1,452 Others ...... 1,123 Total ...... 10,103

As of 31 December 2001, contingent liabilities of Deutsche Bahn AG amounted to 5 864 million.

Apart from this, Deutsche Bahn AG guarantees to the holders of bonds of Deutsche Bahn Finance B.V. the due payment of principal, interests and eventual additional amounts. On 31 December 2001, the face value of all bonds issued by Deutsche Bahn Finance B.V. was at 5 5,373 million. Since Deutsche Bahn Finance B.V. uses these funds to directly refinance loans to Deutsche Bahn AG, each loan and its respective bond issue constitute an economic unit. The loans were mentioned above in the section liabilities as part of the accounts payable to affiliated undertakings. Due to its status as part of an economic unit, the guarantee for the bonds is not additionally shown as a contingent liability.

Save as disclosed herein, there has been no material change in the capitalisation since 31 December 2001.

Shareholders’ Meeting

The ordinary shareholders’ meeting will take place within eight months after the end of the fiscal year.

Independent Accountants

The independent accountants of Deutsche Bahn AG and of Deutsche Bahn Group are PwC Deutsche Revision Aktiengesellschaft, Wirtschaftsprfungsgesellschaft, Olof-Palme-Strasse 35, D-60439 Frank- furt/Main. They have audited the financial statements of Deutsche Bahn AG and of Deutsche Bahn Group for the fiscal years 1999, 2000 and 2001 and have given in each case their unqualified opinion.

71 The following pages 73–149, are taken from the Deutsche Bahn Annual Report. The following pages 150–173, are taken from the unconsolidated Financial Statements of Deutsche Bahn AG.

References to page numbers are adapted to the page number of this Information Memorandum.

Group Management Report Deutsche Bahn

72 Group Management Report

Rail Reform Continues Ahead

New Management Structure Pays Off During the Year Under Review Our market success is highly dependent on the successful integration of all individual competencies in day-to-day operations as well as on the continuing entrepreneurial and technological development of the integrated rail system. The reorganization of our management structure implemented halfway through last year, which involved consolidating related competencies to form group and service functions (such as Purchasing, Legal, and Environmental Protection), proved itself during the year under review. The operative activities of the DB Group had already been structured into Group divisions as of June 1, 2000. The business activities within the indi- vidual Group divisions have been broken down into strategic business units. The legal structures remain unaffected by the management reorganization. The activities of DB Reise&Touristik and DB Regio were virtually merged into the Group Passenger Transport division, which enabled better coordination of services offered. In addition to the Group divisions Freight Transport, Passenger Stations, and Track Infrastructure, we had initially also consolidated our real estate activities in a separate Group Real Estate division. Continuing our strategy of concentrating on our core business, an internal revision of our Group portfolio led us to the decision to sell off major parts of our real estate activities in the medium term; accordingly, this area is no longer managed as a separate Group division as of January 1, 2002.

Group Portfolio Without Major Changes The portfolio structure of the DB Group has only undergone minor changes during the year under review. Our primary focus was on continuing our course of restructuring and developing our core businesses. Therefore, the largest changes consist of the spin-off of S-Bahn München GmbH (Munich) from DB Regio AG into a separate subsidiary, S-Bahn München GmbH, and the expansion of Railion, our international joint venture in rail freight transport. Retroactive to January 1, 2001, Railion GmbH, Mainz purchased 100% of the interest held by the Danish State Railways (DSB) in Railion Denmark A/S, Copenhagen/Denmark. In return, DSB received 2% of the interest held by DB AG in Railion GmbH. This reduced the share held by DB AG to 92%; N.S. Groep N.V., formerly DB AG’s sole partner in Railion GmbH, continues to hold 6% of Railion GmbH. The successful integration of Railion Denmark during the year under review enabled us to further strengthen the position of Railion as a key platform for European transportation and logistics services. Railion GmbH continues to function purely as a holding company.

73 At the start of 2001, we transferred the heavy maintenance facilities (the so-called “C facilities”) from DB Reise&Touristik AG, DB Regio AG, and DB Cargo AG to a service function within the DB AG. We devised a facility concept that will enable optimization in the long term. At the same time, we have concentrated the entire purchasing, sales, and staging of energy sources within the DB Group in DB Energie GmbH. For this reason, DB Netz AG transferred its 50 Hz electricity sales and energy consulting to DB Energie GmbH, effective January 1, 2001. In a second step, the rail power equipment (separate 16.7 Hz equipment and the direct current equipment of S-Bahn Hamburg), the 50 Hz distribution networks of DB Netz AG, and the electrical train pre-heating systems were transferred to DB Energie GmbH, effective July 1, 2001. We expect these measures to provide greater efficiency and help us capture significant synergy potential. The other changes in our holdings had no major influence on the structure of the DB Group. DB Regio AG purchased interests in several small bus companies, for example, with the aim of improving integrated transportation services. The expansion of integrated urban transportation systems is one of our major objectives; our planned joint venture with üstra in Hanover is a prime example. In freight transport, we have expanded our logistics services through Railog GmbH, our joint venture with Stinnes AG and its subsidiary Schenker AG. As the result of a minor, internal optimization of our structure, DB Medien GmbH was merged with DB AG. In addition, to further develop our portfolio, we conducted negotiations with Arcor regarding a tighter control of DB AG’s telematics services. This – as well as the planned consolidation of our project construction activities and the consoli- dation of activities in the DB Systems and DB Service business units – is discussed in the later section Events After the Balance Sheet Date.

74 Group Management Report

Clear Focus on a Successful Completion of Rail Reform Our development over the year under review follows our multiyear strategy for a successful completion of the Rail Reform program started in 1994. Our efforts were aimed both at creating a reliable framework for our entrepreneurial activities and incrementally developing and implementing sustainable strategies in our core businesses. The Trilateral Agreement (March 2001) with the Federal Ministry of Finance and the Federal Ministry of Transport, Building and Housing has given us an improved basis on which to plan, and also enables higher capital expenditures. In September 2001, the task force appointed by the Federal Ministry of Transport, “Zukunft Schiene” (“Future Rail”), confirmed that our vertically integrated corpo- rate structure is target-oriented and compatible with the legal requirements of the European Union. We have also concluded necessary agreements with labor. Based on this reinforced framework, we were able to develop and introduce our “DB Campaign” strategy: With its approaches of restructuring, performance and growth, it puts us well on track towards readiness for an initial public offering. The necessary course of capital expenditures and modernization taken by the Group – including the associated temporary drag on profits – meets the full approval of our sole stockholder, the federal government. Following our market success and the progress made by the “Fokus” restructuring program during the year under review, we have set a firm goal for the near future: the consequent implementation of our programs for a sustained strengthening of the rail as a mode of transport in the growth markets of personal mobility and transportation.

75 Overall Economic Situation

Overall, the economic development in real terms fell significantly short of forecasts and expectations in the year 2001. The decline in global economic development that had already begun in mid-2000 progressed rapidly during the first six months of 2001, mainly the result of increased oil prices, the crash in the IT sector, and the downturn of the stock markets resulting from a readjustment of investors’ expec- tations. Fleeting hopes for economic stabilization towards the end of 2001 were shattered by the terrorist attacks on the United States; the subsequent deterioration of the economic environment increased the downward trend. In total, global growth for the year 2001 declined to some 2% (previous year: 4.7%). As a result, the growth in global trade in 2001 was less than 0.5% (previous year: 12.4%). On the European continent, the main operating environment for our Group, overall growth in gross domestic product (GDP) slowed nearly to a halt in mid-2001. The growth rate for the euro zone and the European Union (EU) is now merely around 1.5%. The European economies were hit especially hard by the decline in the global economy, which resulted in a slowdown in corporate investments in the euro zone. Development in Central and Eastern European countries was positive in comparison, as they only suffered a minor economic slowdown. GDP in Germany increased by a real 0.6% over the previous year in 2001, representing the second-weakest economic growth in Germany since its reunifica- tion (1993: –1.1%). Exports made a stronger contribution to economic growth in 2001 than in the previous year, at some 1.5 percentage points. Declines resulted from a drop in equipment investments of 5.0% (previous year: +8.7%) and the increasing decline in construction investments of 5.8% (previous year: –2.5%). Real growth in consumer spending slowed to 1.1% (previous year: 1.4%).

76 Group Management Report

Development and Performance of Transport Sectors

The deterioration of the overall economic situation during the year under review is reflected directly in the weaker development of the passenger and freight transport markets. In light of these difficult conditions, we are satisfied with the transport performance we achieved. Passenger transport performance slightly surpassed the 74.4 74.5 previous year’s value – in an overall declining market and despite the special in- 70 fluence of EXPO traffic in 2000 – which exceeded our expectations. In the freight

60 transport market, the worsening economic conditions throughout the year led to a significant cooling of the multiyear growth trend; goods predisposed to rail 50 transport were hit especially hard by this development. As a result, we experi-

40 enced losses slightly in excess of those already anticipated through our streamlined supply. While the Group Passenger Transport division was able to slightly increase 30 the record value of the previous year, the Group Freight Transport division fell

20 slightly short of the previous year’s record high despite the successful integration of Railion Denmark A/S. 10

Passenger Transport 2000 2001 According to preliminary figures, transport performance in the passenger trans- Total rail passenger port market (motorized private traffic, DB rail, domestic air traffic) declined by transport performance in billion pkm around 1% in financial 2001 (previous year: –2.3%), which represents the second

Relative consecutive year of decline. Overall market development reflected development change: + 0.1% in motorized private traffic, whose dominating market position determines the DB R&T: – 2.4% DB Regio: + 2.5% performance of the entire sector. According to preliminary figures, transport performance of motorized individual traffic declined by some 1% in 2001 (previous year: –2.8%). The reduction in transport performance is largely a result from the first few months of the year under review, when fuel prices were initially much higher than in the previous year. Transport performance in automobile traffic then increased as fuel prices dropped during the course of the year.

Growth rates in the passenger transport sector 2001 in %

+ 0.1 % DB (Rail)

– 5.9 % Air traffic

Overall transport demand: – 1.0% – 1.0 % Private road traffic

–6–5–4–3–2–101234567

77 We were able to stabilize our own transport performance in 2001 at 74.5 billion passenger kilometers (pkm), or 0.1% above the previous year’s level, thus further expanding our market share. Transport performance by the DB Reise&Touristik Group fell by 2.4% compared to the previous year, to 35.3 billion pkm, due primarily to the elimination of traffic to the World Exposition EXPO 2000 and the effects of streamlining resulting from our market focus program (MORA P). In contrast, transport performance of the DB Regio Group increased by 2.5% to 39.1 billion pkm, which is partially due to the substitution of long-distance transport through local transport services within the framework of MORA P. Transport performance in domestic air traffic declined by some 6% during the year under review, caused primarily by the pilots’ strike at Lufthansa and general consumer insecurity following the terrorist attacks in the U.S. in September.

Freight Transport Faced with a weakening economic environment, the overall market (DB Cargo AG, road freight transport – both regional and long-distance, including foreign-flagged vehicles –, inland waterway transport) diminished over the course of 2001. Based 80.6 80.3 on preliminary data, the overall market grew by a mere 1.9% (previous year: +3.7%). This growth was driven entirely by road transport with a performance increase 70 of some 4%. Due to poor development in steel and mining products, transport

60 performance in inland waterway transport and at DB Cargo AG dropped after the boom year 2000 (–3.1%; previous year: +7.4%). Despite the fact that DB Cargo AG 50 was able to match the figures from the previous year during the first half of

40 2001, performance dropped continuously in the second half of the year. The strong influence of the steel and mining sector transports became apparent towards the 30 end of the year; in particular, the drop in raw steel production resulted in a signifi-

20 cant reduction in transport demand. In the coal shipping area, the intensifying competition with increasing coal imports through the ports of Amsterdam, Rotterdam 10 and Antwerp (ARA ports) and the use of cheap imported electricity had an un- favorable effect on rail transport demand, as did the fact that imports of hard coal 2000 2001 from Poland – a material especially predisposed to rail transport – only slowly Total rail freight increased over the second half of the year. Moreover, shipments of agricultural transport performance in billion tkm products declined due to reduced exports of German grain, and shipments of

Relative forestry products also dropped due to increased demand in 2000 because of un- change: – 0.4% usually high wind damage to stocks. Shipments of petroleum products and Effect Railion Denmark: + 2.6% construction materials enjoyed positive development.

78 Group Management Report

As in the previous year, more than half of transport performance by DB Cargo AG was rendered in cross-border and international transports. The Group Freight Transport division achieved a total transport performance of 80.3 billion ton- kilometers1) (tkm), thanks to the first-time inclusion of Railion Denmark A/S, limiting the drop from the previous year’s level to 0.4% (previous year, including first-time inclusion of Railion Benelux N.V.: +12.8%).

Growth rates in the freight transport sector 2001 in %

–3.1% DB Cargo

+ 4.0% Road transport

Overall transport demand: +1.9% – 2.5% Waterway transportation

–6–5–4–3–2–101234567

In addition to the sustained strong competition between the various modes of transport, intramodal competition also increased. Competition on the rails is increasing in importance, particularly in the areas of construction materials, petro- leum products, chemicals, lumber, and containerized shipping. Based on preliminary data, inland waterway transportation declined by some 2.5%, a development due primarily to weather-related interruptions in service and the weak mining sector. Transit traffic was the only area that enjoyed a slight increase, whereas cross-border traffic declined slightly and domestic transportation dropped significantly. Road transport continued to benefit from above-average growth in foreign trade in the year 2001, and increased its performance by some 4% according to pre- liminary data. International transports once again increased overproportionally. Accordingly, the increase in performance by foreign-flagged vehicles, which domi- nate the market for cross-border transports, once again surpassed that of vehicles registered in Germany. Pressure on freight rates continued unabated in light of the existing cost advantages of foreign carriers.

1) Please note: All tkm figures represent metric tons (1,000 kg = 2,200 lbs.)

79 Group Management Report

Business Performance

Revenue Trends: Repeated Increase We were able to increase revenues by 1.7% to ‡ 15.7 billion in 2001. The special factors from the year under review and those from the previous year largely cancel each other out. On a comparable basis – e.g. adjusting the previous year’s figures for the one-time effect of EXPO traffic and the figures for the year under review for Railion Denmark, which was included for the first time – revenues from internal growth increased by 1.9%.

External Group revenues Share Change by Group division in € million 2001 in % 2000 in % Group Passenger Transport division 11,064 70 10,980 + 0.8 Group Freight Transport division 3,896 25 3,831 + 1.7 Group Passenger Stations division 219 1 200 + 9.5 Group Track Infrastructure division 138 1 110 + 25.5 Others 405 3 344 + 17.7 Group 15,722 100 15,465 + 1.7

As in the previous year, all Group divisions contributed to our increase in revenues. The Group divisions Passenger Transport and Freight Transport made the highest absolute contribution to the revenue increase, while the Passenger Stations and Track Infrastructure divisions once again enjoyed strong growth rates. The overall revenue structure remained stable: The Group Passenger Transport division remained the area with the highest revenues, contributing 70% (previous year: 71%) of the 15,722 15,465 total. The share of the Group Freight Transport division remained stable at 25%. As in the previous year, the Group Passenger Stations and Track Infrastructure 14,000 divisions made a nearly negligible contribution to the Group’s external revenues, 12,000 with around 1% each, since the vast majority of their services are rendered within the Group. 10,000 The Group Passenger Transport division, with external revenues of ‡ 11.1 billion, 8,000 topped the previous year’s record value by 0.8%. This increase in revenues is due to the positive development of local transport, while revenues in long-distance 6,000 transport largely stagnated. Revenues of the long-distance transport business unit 4,000 (DB Reise&Touristik Group) were ‡ 3.5 billion, matching the previous year’s level. Further increases in the share of higher-value ICE traffic compensated for the 2,000 discontinuation of EXPO traffic in this unit. In local passenger transport, i.e. the regional and urban transport business units (of the DB Regio Group), the 1.2% 2000 2001 increase in revenues to ‡ 7.6 billion was due to positive developments in farebox Revenues revenues (+3.5% to ‡ 3,297 million). Payments from ordered-service contracts in € million with the federal states and the respective ordering organizations for local rail passenger Relative change: +1.7% transport declined slightly to ‡ 4,310 million (previous year: ‡ 4,331 million).

80 The slight increase of 1.7% in the Group Freight Transport division to ‡ 3.9 billion is mainly due to the first-time inclusion of Railion Denmark (revenues: ‡ 76 million), with slightly lower revenues from existing business (–0.3%). The Group Passenger Stations division increased its external revenues in the year under review by 9.5% to ‡ 219 million; these revenues are primarily the result of marketing railway station spaces to third parties. As in the previous year, these figures positively reflect the completion of several station renovation projects. External revenues of the Group Track Infrastructure division continue to grow dynamically. Increasing competition on the rails, combined with the repeated in- creases in market share achieved by competitors of our Group transport companies, resulted in an increase in external revenues in the Group Track Infrastructure division of 25.5% to ‡ 138 million. The train-path revenues contained in these figures resulted from use of the DB rail network by non-Group railroads, whose numbers have now increased to around 250. In contrast to the previous year, real estate activities are no longer managed as a separate Group division.

Results Affected by Modernization Initiative At ‡ 17.5 billion, overall performance of the Group was some 1.6% higher than the previous year’s figure. This development was the result of an increase in revenues (+1.7% to ‡ 15.7 billion) and the slight increase in own work capitalized (+1.7% to ‡ 1.75 billion), with, once again, only minor inventory changes of ‡ 0.1 billion. Other operating income, at ‡ 2.4 billion, was significantly less than the previous year’s figure (‡ 3.7 billion), which had been inflated by the release of provisions for restructuring charges. Overall operating income amounted to ‡ 19.9 billion, a 4.7% decrease from the previous year. Total operating expenditures also decreased slightly to ‡ 20.0 billion (–2.7%). Cost of materials increased by 7.3% to ‡ 7.1 billion; its share of total performance increased from 38.4% to 40.5%. Personnel expenses were influenced by opposing forces: While our continued streamlining efforts had a positive effect, they were countered by the negative effects of increased wages and salaries and reduced government reimbursement for heightened personnel expenses in the area of the former Deutsche Reichsbahn. Compared to the previous year, the major factor in this development was a significant reduction due to the draw- ing of provisions for certain wage and salary components, which had been set up in the financial year 2000. On balance, personnel expenses dropped significantly by 11.7% to ‡ 7.5 billion. Measured by overall performance, personnel expenses in the year under review amounted to 42.7% (previous year: 49.1%).

81 Group Management Report

The DB Group receives grants from the federal government for the purpose of closing the technical and organizational gaps of the former Deutsche Reichsbahn, in accordance with the agreement of December 23, 1994. These grants are reduced in volume according to a defined schedule, and will cease completely after 2002. As a result of these declines, we have to achieve significant gains in productivity merely to stabilize income. Therefore, the fact that federal grants were reduced by some ‡ 0.4 billion has to be taken into account in the above figures on cost of materials and personnel expenses. The modernization of the overall rail system is a major component of the rail reform program, a fact that is reflected in our high capital expenditures ratio. This results in increased charges due to depreciation as well as interest expenses. In the year under review, depreciation amounted to ‡ 2.2 billion, 5.4% over the previous year’s figure. An expansion of capital market financing resulted in a decline in net interest income to ‡ –313 million (previous year: ‡ –251 million). None- theless, the ratio of interest expense to total expenditures remains low at 1.5%. The total effect on expenses of the higher depreciation charge and the poorer interest balance was ‡ 172 million compared to the previous year. Net income from investments of ‡ 2 million (previous year: ‡ – 44 million)

2,492 mainly comprises net income from equity interests in associated companies or 2,400 expenditure related to the transfer of losses and write-downs on equity interests. 2,271 The previous year’s figure reflected the prorated transfer of startup losses from our 2,000 equity investment in Mannesmann Arcor AG & Co. that was not fully compensated

1,600 for by other investment income. This equity interest is no longer consolidated at equity in the year under review, due to the agreed-upon comprehensive restructuring. 1,200 On balance, the Group recorded income before taxes of ‡ – 409 million in

800 the financial year 2001 (previous year: ‡ 37 million) and a net loss of ‡ 406 million (previous year: net income of ‡ 85 million). 400

Operating Income After Interest Better than Expected 2000 2001 The key figures for assessing our operating result are the adjusted measures EBITDA EBITDA and EBIT, as well as operating income after interest. During the year under review, in € million EBITDA (adjusted operating income before interest, taxes, depreciation) from opera- Relative change: – 8.9% tions decreased to ‡ 2,271 million (previous year: ‡ 2,492 million). In addition to a repeated increase in depreciation, this development is due to a significant decline in EBIT (adjusted operating income before interest and taxes) from ‡ 450 million to ‡ 109 million. Operating income after interest declined from ‡ 199 million in the previous year to ‡ –204 million as the result of our modernization program. Thanks largely to our “Fokus” restructuring program and positive revenue development, this result was better than expected in our medium-term planning.

82 Restated for the federal compensation for special burdens related to the former Deutsche Reichsbahn, such as surplus personnel expenses and increased costs of material, which is included in the EBITDA calculation – this compensation amounted to ‡ 838 million in the year under review, ‡ 390 million less than the previous year – EBITDA excluding special burden compensation reflects an operating improvement of € 169 million compared to the previous year. Since 1994, we 199 have had to compensate for a total decrease in government compensation for burdens inherited from the Deutsche Reichsbahn amounting to ‡ 2,424 million, 160 while productivity increases have resulted in an improvement in EBITDA, adjusted for the special burden compensation, of € 3,447 million. 120

80 Operating income after interest Change in € million 2001 2000 in % 40 Group Passenger Transport division 240 173 + 38.7 – 204 Group Freight Transport division 17 49 – 65.3 Group Passenger Stations division 6 4 + 50.0 Group Track Infrastructure division – 207 57 – – 40 Other/Holdings/Consolidation – 260 – 84 – 210.0 Group – 204 199 – 80 –

–120 Please note that the key figures Operating income after interest, EBIT, and EBITDA –160 are adjusted operating results that do not include extraordinary components such as e.g. book profits from the sale of major holdings, provisions for risks from infra- – 200 structure projects and investment risks, reserves associated with facility closings, 2000 2001 and reserves related to staff restructuring measures (socially acceptable measures, Operating income compensation for grandfathered benefits). Excluding these extraordinary com- after interest in € million ponents facilitates the analysis of the underlying business development.

83 Group Management Report

Value Creation and Contributions Made

Value Creation Declines The DB Group created total value of ‡ 7.4 billion through its business activities during the year 2001. This represents a decrease of ‡ 1.4 billion or 16.1% compared to the previous year. The added value was created almost exclusively in the domestic market.

Generation of added value Distribution of added value in € million 2001 2000 in € million 2001 2000 Overall performance 17,535 17,267 + Other operating income 2,406 3,653 Employees 1) 7,487 8,475 Overall operating income 19,941 20,920 Public authorities (taxes) – 3 – 48 – Cost of materials 1) – 7,108 – 6,625 Creditors 313 251 – Other operating expenses – 3,282 – 3,436 Shareholders (incl. minority interests) and non- – Depreciation (properties and intangible assets) – 2,162 – 2,052 operating income (income from investments) – 408 129 Added value 7,389 8,807 Added value 7,389 8,807

1) Restated for reimbursement of burdens inherited from the former Deutsche Reichsbahn

Taking the special burden compensation into account, more than 100% of the value added was distributed to staff (previous year: 96.2%). The share going 1.6 to creditors remained small. No distribution to shareholders or public authorities took place, due to the annual net loss. 1.4

1.2 Contributions to Added Value: ROCE Declines as Expected The DB Group employs a return-on-investment concept in order to steer and channel 1.0 our resources on a value basis. Our key measure of the performance of our business 0.8 portfolio and for allocating capital expenditures is the return on capital employed (ROCE), which is calculated as the ratio of EBIT (operating income before interest 0.6 and taxes) to capital employed. We have defined long-term target values for the 0.4 0.4 individual Group divisions and for the Group as a whole. These values are based on the levels targeted upon completion of the rail reform program. Our long-term 0.2 goal for the DB Group’s ROCE is around 10%. Due to our exhaustive capital ex- penditures activities, capital employed continued to increase in 2001. The inevitable 2000 2001 temporary operating loss, which we had to accept as a consequence of our modern- Return on ization and capital expenditures program, and the associated reduced EBIT capital employed compared to the previous year resulted in a decline in ROCE from 1.6% to 0.4% Relative change in % during the year under review.

84 Balance Sheet Structure

The balance sheet total increased by 6.3% (previous year: +6.1%) to ‡ 42.0 billion in the financial year 2001. The continuing growth in the balance sheet total is the result of high levels of capital expenditures on fixed assets (‡ 35.8 billion; +3.2%) and an increase in current assets of 27.4% to ‡ 5.6 billion. The share of fixed assets in total assets decreased to 85.3% (previous year: 87.8%). Equity capital decreased by 4.0% to ‡ 8.4 billion as the result of the net loss. Combined with a further increase in the balance sheet total, the equity capital ratio fell from 22.3% to 20.1%. Long-term provisions and liabilities accounted for 58.2% of total capital (previous year: 54.1%), while short-term provisions and liabilities made up 21.6% (previous year: 23.6%). Equity and long-term debt therefore covered 91.8% of fixed assets (previous year: 86.9%). The analysis of the capital structure needs to take into account the fact that at ‡ 7.3 billion (previous year: ‡ 6.7 billion), a significant portion of our liabilities consists of interest-free federal government loans provided for infrastructure capital expenditures. Financial debt (interest-bearing liabilities) increased from ‡ 5.5 billion to ‡ 7.0 billion, but at 16.7% of total capital as of December 31, 2001, its share remains low.

Balance sheet structure (in %) 2001 2000 2001 2000 Equity 20.1 22.3 Fixed assets 85.3 87.8 Provisions 34.1 35.9 Current assets 13.3 11.2 Liabilities 43.6 39.3 Prepayments and Accruals and accrued income 1.4 1.0 deferred income 2.2 2.5 Balance sheet total 100.0 100.0 Balance sheet total 100.0 100.0

85 Group Management Report

Capital Expenditures

Intensive Capital Expenditures Program for Aggressive Modernization Since the start of the rail reform program, we have invested in the modernization of the rail system at a level that is unusually high in industry comparison. During the year under review, we approved augmentations to our capital expenditures program to accelerate this process. The measures implemented are aimed at improv- ing the capacity of our infrastructure and rejuvenating our rolling stock. During 6,892 7,110 7,000 the year under review, gross capital expenditures amounted to ‡ 7.1 billion.

6,000

Capital expenditures Share Change 5,000 in € million 2001 in % 2000 in % Gross capital expenditures by Group division 4,000 Group Passenger Transport division 1,584 22 1,804 – 12.2 Group Freight Transport division 321 5 405 – 20.7 3,000 Group Passenger Stations division 459 6 552 – 16.8 Group Track Infrastructure division 4,435 62 3,896 + 13.8 2,000 Others 311 < 5 235 + 32.2 Group 7,110 100 6,892 + 3.2 1,000 Net capital expenditures 3,307 47 3,250 + 1.8

2000 2001 Gross capital The Group Track Infrastructure division is the key factor in the structure expenditures in € million of capital expenditures, as well as in the changes in the year-on-year comparison.

Relative The declining capital expenditures of the transport divisions and the Group change: + 3.2% Passenger Stations division were more than compensated for by the increase in capital expenditures in the Group Track Infrastructure division. Its share of gross capital expenditures increased further to 62% (previous year: 57%). Thanks to the secure base for future planning provided by the Trilateral Agreement signed during the year under review, necessary capital expenditures in the Group Track Infrastructure division could be carried out at a higher overall level and with greater planning stability. The major focus of our capital expenditures was on investments in the existing network; other important projects included the new Cologne–Rhine/Main and Nuremberg–Ingolstadt–Munich lines, as well as the construction projects in Berlin. Capital expenditures in the Group Passenger Transport and Freight Transport divisions primarily involve the acquisition of new rolling stock as part of extensive, multiyear modernization programs. Capital expenditures in the Group Passenger Stations division consist of a multi- tude of station modernization measures and selected new buildings. As in the previous year, the largest individual project by far was the new Cologne–Rhine/ Main line, with a capital expenditures volume of ‡ 0.6 billion.

86 In accordance with the relevant legal regulations, our capital expenditures in infrastructure are generally financed by means of interest-free federal government loans, investment grants netted with properties in the accounts, and to a lesser extend through funds obtained under the Local, Regional, and Municipal Traffic Financing Act (Gemeindeverkehrsfinanzierungsgesetz) and the Railroad Crossings Act (Eisenbahnkreuzungsgesetz). As in the previous year, we again made a signifi- cant contribution to capital expenditures through internal funding. The Group’s net capital expenditures after deduction of non-repayable invest- ment grants amounted to ‡ 3.3 billion (previous year: ‡ 3.3 billion). As in financial 2000, the vast majority was invested in properties. Investments in financial assets were once again of little significance for the DB Group.

87 Group Management Report

Financial Situation

Central Treasury Consolidates Resources The DB AG’s treasury is the central treasury for the DB Group. This structure ensures that all Group companies can borrow and invest funds at the best possible conditions. Before we seek funding from outside sources, we conduct intra-Group financing transactions. When external funds are borrowed, DB AG takes out short- term loans in its own name, whereas long-term funds are generally obtained through the Group’s finance company, DB Finance B.V., Amsterdam/Netherlands. These funds are then passed on to the Group companies in the form of time deposits or loans. This concept enables us to pool risks and resources for the entire Group. It also enables us to consolidate our expertise, capture synergy effects, and minimize refinancing costs.

Rating Agencies Once Again Confirm Outstanding Creditworthiness In the year 2000, the two leading credit rating agencies – Moody’s and Standard & Poor’s – awarded us excellent long-term ratings, with Aa1 (Moody’s) and AA (Standard & Poor’s). These ratings were confirmed during the year under review. In addition, the two agencies awarded us the best possible rating in the short-term area, with P-1 (Moody’s) and A-1+ (Standard & Poor’s). We thus retained our excellent position in comparison to other industrial companies, as well as to other rail companies (those without an explicit state guaranty). The presentation of our strategic focus, the “DB Campaign”strategy, during our international financial presentations enabled us to further improve our standing in the financial markets.

88 Sound Financing of Capital Expenditures Program Capital requirements for the financing of capital expenditures – after deduction of the inflow of funds (net) from investment grants, interest-free federal loans, and the sale of assets – amounted to ‡ 2.1 billion. In contrast, cash flow before taxes – a measure of our internal financing capability – was ‡ 1.8 billion. Cash flow before taxes failed to meet the previous year’s level (‡ 2.1 billion) as the result of our weaker profitability. The ratio of cash flow before taxes to revenues fell from 13.7% to 11.4 %. We once again turned to the capital markets to finance some of our capital expenditures in financial 2001. We established a Debt Issuance Program in May 2001 in the amount of ‡ 5 billion to respond flexibly and consistently to the needs of our investors. Both Deutsche Bahn AG and DB Finance B.V., Amsterdam/Nether- lands, the Group’s financing company, may issue bonds under this program. In addition to a 12-year bond issue in the amount of ‡ 750 million, with a coupon of 5.125%, we also issued securities in foreign currencies for the first time, with the cash inflow swapped to euros. We also issued a commemorative bond with illustrations of historical and modern trains and stations, which was Germany’s last securities issue denominated in DM and printed for physical delivery. It was especially well-received by enthusiasts and collectors. In total, we issued some ‡ 1.3 billion in securities during the financial year. We also obtained a loan in the amount of some ‡ 300 million from the European Company for the Financing of Railway Rolling Stock (EUROFIMA), Basle/Switzerland. Financial debt rose to a total of ‡ 7.0 billion (previous year: ‡ 5.5 billion). Cash and cash equivalents remained steady at some ‡ 0.4 billion. In addition, our other assets included short-term cash investments through year’s end in view of expected payments in the context of the Arcor DB Telematik GmbH transaction. As in the previous year, the DB Group had guaranteed credit facilities of approximately ‡ 1.6 billion as well as the Multi-Currency Multi-Issuer Commercial Paper pro- gram of ‡ 1 billion in the short-term sector. These financing instruments were not utilized as of the balance sheet date. During the financial year 2001, DB AG concluded a sale-and-lease-back trans- action involving passenger locomotives with a total volume of ‡ 178 million. The sales price corresponded to the net book value on the balance sheet. The terms of the four contract tranches range from 13.5 to 15 years.

89 Group Management Report

Employees

Group headcount was reduced from 222,656 as of December 31, 2000, to 214,371 as of December 31, 2001 (–3.7%). The average headcount during the year 2001 was 219,146, some 5.0% less than the previous year’s figure. The decline in Group headcount is the result of continued improvements to our processes and structures. A major component of the decline in the Group Passenger Transport and Freight Transport divisions was the transfer of the heavy mainte- nance facilities from these Group divisions to DB AG; the figure listed under Other increased accordingly. We continued our policy of intensive training; accordingly, the adjusted trainee 222.7 214.4 share with the Group remained high at 4.4% (previous year: 5.7%). As such, 200 Deutsche Bahn has one of the largest numbers of trainees and apprentices among

160 German companies.

120 Headcount by Group division Share Change 80 as of December 31 2001 in % 2000 in % Employees 40 Group Passenger Transport division 72,814 34 83,062 – 12.3 Group Freight Transport division 32,442 15 38,555 – 15.9 Group Passenger Stations division 5,193 2 5,015 + 3.5 2000 2001 Group Track Infrastructure division 52,089 24 53,554 – 2.7 Other 51,833 24 42,470 + 22.0 Employees (at year end) Group 214,371 100 222,656 – 3.7 in thousand Apprentices/Trainees 9,091 11,851

Relative Trainee share (adjusted) 4.4% 5.7% change: – 3.7%

90 Group Management Report

Technology

The quality of our services is highly dependent on the quality and reliability of our technical means of production. In light of the alternative modes of transport available to our customers, both today and in future, we see our main challenges in retaining our established high safety standards and promoting additional innovation that will result in reliable, cost-efficient operations.

Safety Is Our Top Priority Rail transport has a major safety advantage compared to competing modes of transport, an advantage stemming from the intrinsic high safety of the rail/wheel system combined with our own high safety standards, and reflected in both the safety standards of the established production systems and components and our active, day-to-day safety measures. We invest a great deal in comprehensive safety training. We work continually at maintaining and further improving our high safety standards through continual critical-point analyses and improvements to our systems and processes.

Reliability and Innovative Strength Deutsche Bahn and other European railroads have to compete with road traffic and aviation, and are thus faced with major challenges regarding the design of our technical systems. Forecast growth and intensifying competition in the transport market require technology that is effective and reliable, while easy to maintain and affordable at the same time. High availability of the employed systems is a decisive factor in day-to-day operations. Especially in complex, networked production structures, high availability is required at all levels to provide attractive services to our customers. The future of rail transport also depends on comprehensive modernization. The necessary innovations have to take interoperability among European railroads into account to make international transport possible. While actual research work is a function to be performed by industry, universities, and institutes, the main task of our Technology department is to rate these innovations and test them under operational conditions. To fulfill this role as innovation manager, we have to perform many different functions: We develop processes, define quality criteria, describe the interfaces between the subsystems supplied by the vendors – such as vehicles and track infrastructure –, write the specifications for procurement, and verify the required

91 process and quality standards for the products. During operation, we have to ensure high availability of the technical products at reasonable cost, while at the same time developing additional optimization measures for procurement and system develop- ment. Standardization and modularization play a major role here: One of our primary goals is to reduce the currently huge variety of means of production with capital expenditures policies based on uniform standards.

Consolidation of Technical Competency The future of rail transport is closely linked with the control of integrated technical systems. As managers of innovation, we give industry the information it needs to develop systematic solutions for integrated rail systems, and support their practical implementation. We have divided the activities of the DB Systemtechnik division, the former Research and Technology Center, into four areas: Innovation Management, System Implementation/Procurement Management, Systems Support, and Conformity and Certification. In the Innovation Management area, we focus on the future design of the interfaces between the various subsystems supplied by the vendors – such as vehicles and track infrastructure. We have to steer innovations from an early stage and make sure they enhance the development of our integrated system. Our System Implementation/Procurement Management area prepares specifications for ordering technical systems and verifies their implementation and commissioning in a quality assurance process. The Systems Support area is responsible for the continual moni- toring of reliability, availability, safety, and costs of the employed systems. We use these analyses and our experience to develop approaches for further improvement. The Conformity and Certification area ensures the conformity and certification of our employed systems – supporting the development, commissioning and opti- mization measures – and issues reports for the supervisory authorities.

92 Group Management Report

Purchasing

During the financial year 2001, the DB Group placed orders worth some ‡ 11.6 billion (previous year: ‡ 9.7 billion), once again making it one of the largest ordering parties in Germany. The total order volume is distributed among the following four major procurement sectors:

Purchasing volume in € billion 2001 2000 Construction and engineering services 4.1 3.5 Industrial products 4.1 2.7 Other services 2.1 2.1 Utilities and fuel 1.3 1.4 Total 11.6 9.7

A major element of our procurement program during the year 2001 was an order for new vehicles placed with the S-Bahn München bidding group, worth ‡ 300 million. We also awarded two bidding groups contracts for the first two planning lots for the modernization of the Hamburg–Berlin line, with a total contract volume of some ‡ 50 million. Our total order volume was spread among almost 50,000 different suppliers. As in the previous year, a large share of total orders – some 48% – was placed with small and medium-sized companies, especially in the construction services sector. Contracts awarded directly to foreign companies amounted to ‡ 0.3 billion, slightly above the previous year’s figure (‡ 0.2 billion). The Purchasing service function has set ambitious goals within the “Fokus” framework, which will be implemented incrementally. Purchasing has initiated a variety of activities together with the various DB Group divisions. In the vehicle sector, cooperation with the DB Group Technology function ensures that aspects of quality assurance, standardization, modularization, and life cycle cost are increasingly taken into account as early as in the product construction phase. The “eProcurement” project was established to make procurement processes even faster and more effective. The corresponding bidding platform went live in the Internet in September 2001, and makes bid tenders and auctions much faster and more cost-efficient. The Internet platform also enables us to give access to documents (especially engineering plans for vehicle parts) to selected vendors. We introduced this new Internet presence at a suppliers’ conference in Berlin, which was attended by representatives of some 250 suppliers. Overall, the process simplifications were extremely well received by the attendees.

93 Other Information

Heavy Maintenance Facilities Consolidated Effective January 1, 2001, the heavy maintenance facilities (the so-called “C facilities”) were transferred from DB Reise&Touristik AG, DB Regio AG, and DB Cargo AG back to DB AG. We expect this consolidation to provide greater efficiency and flexi- bility and help us capture significant synergy potential. The continuous modern- ization and standardization of our fleet requires adjustments to the structure and capacity of the maintenance facilities. Based on comprehensive preliminary studies, we introduced a facility concept during the year under review that we will be imple- menting incrementally. It combines the necessity of reducing internal capacity with the effort to preserve jobs; the options here include selling maintenance facilities to external investors, which is already being practiced.

Comprehensive Collective Wage Agreements Signed A comprehensive collective wage agreement between labor and management of Deutsche Bahn AG was signed in early March 2001. The objective of the overall package was to create competitive conditions of employment. In addition to confirming the results of the pay negotiations from October 2000, the parties agreed to reorganize DB Arbeit GmbH, the Group’s employment company. To replace existing benefits, funds are to provide appropriate compensation for any disadvan- tages that may arise from the transition from the DB collective wage agreement to a new wage agreement or from employee transfers between companies.

Trilateral Agreement Signed Deutsche Bahn AG, the Federal Ministry of Transport, Building and Housing, and the Federal Ministry of Finance signed a trilateral agreement in March 2001. Among other arrangements, the agreement secures medium and long-term federal funding to finance infrastructure improvement measures. The annual volume was increased and locked in at a total of over ‡ 13 billion until the end of 2003. Moreover, the funds will be provided primarily in the form of construction grants. By confirming the continuing inflow of funds, the signed agreements create a solid foundation for ongoing planning and project realization. At the same time, the DB Group has agreed to a defined level of own funds to be provided. Based on the Trilateral Agreement, we began a sustained increase in our planning capacity, which enabled us to commit the additional funds largely – but not completely – during the year under review; unused funds shall be called upon in subsequent years.

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New Train-path Pricing System Lowers Prices for Infrequent Users Effective April 1, 2001, we converted our two-tier pricing system to a one-tier system; in comparison to the previous approach, prices for infrequent users are now much lower. Even though the previous train-path pricing system was also non-discrimi- natory in our opinion, it had been criticized by the German Federal Cartel Office; preliminary investigations by this office were abandoned shortly after the new price system was announced in March 2001. In light of the intensifying competition on the rails, we expect to double our revenues with non-Group railroads by 2005, despite the declining specific revenues from smaller non-Group users resulting from the new train-path pricing system. We already offer our customers simple access for train-path pricing through CD-ROM and Internet-based services. Moreover, in March of this year, we introduced the supplements for regional factors that will take effect on January 1, 2003. These supplements are intended to ensure the future of the regional networks in the long term.

Task Force Confirms Integration of DB Netz AG Within the DB Group The question of the right organizational structure of the rail infrastructure and the respective transport operations on it is a recurring subject of debate, espe- cially at the European transport policy level. With our clear organizational and budgetary separation of DB Netz AG, Germany is at the forefront of implementing EU Directive 91/440. A task force, “Zukunft Schiene” (“Future Rail”) was organ- ized by the Federal Minister of Transport, Building and Housing in March 2001 to investigate the need for additional action in this area in Germany, and published its recommendations in September 2001. These recommendations confirm that the DB Group’s vertically integrated organizational structure is fully compatible with EU and German legal requirements. The existing division of supervisory responsibil- ities between the Federal Rail Authority and the antitrust enforcement authorities will be retained, and a new Track Infrastructure Agency within the Federal Rail Authority is to ensure that the train-path pricing system and slot allocation are non-discriminatory. We support the task force’s position. Due to the complexities of the wheel/rail system, vertical integration is a key element for ensuring the future of rail transport. Principal modernization programs can only be implemented in close coordination of infrastructure and transport divisions. This applies to commercially sound plans for new construction and expansion and, especially, to the necessary synchronization of capital expenditures for control and safety technology. The projects we pursue bring benefits to all our customers, through the open access to our rail network. We appointed a Competition Officer within DB AG – and thus outside DB Netz AG – in February 2002, who will serve as contact person for our customers and for competition issues involving the Track Infrastructure Agency (to be founded).

95 Dedicated Opposition to Corruption We are taking active steps to deal with the difficult issue of corruption, and further intensified our anti-corruption measures during the year under review. The cornerstone of our approach is appointing ombudsmen, who serve as direct, neutral contact persons for employees and business partners. Our successes in fighting corruption during the year under review showed that we are on the right track. While we are pursuing our fight against corruption throughout the entire Group, the Purchasing area was the subject of particular scrutiny during financial 2001. We initiated additional measures in this area to increase awareness among staff and business partners and to protect individuals against unfair conduct. For example, we agreed upon extensions to existing measures with the construction industry to develop guidelines for controlling, verification, and codes of conduct. Together with the jointly approved quality codes, they represent comprehensive guidelines for our business relationships with our suppliers. We will continue to pursue our anti-corruption measures aggressively and uncompromisingly in the current financial year.

Amendment to Regional Restructuring Act Still Pending Under the terms of the Regional Restructuring Act (RegG), the German federal states currently receive funding of some ‡ 6.7 billion for the purchase of local transport services. The pending amendment to this act, which will define the future state funding for local rail passenger transport and other public local transport (sec. 5 RegG), was not passed in the year 2001 as planned. In particular, the absolute federal funding amounts and the increase in regional restructuring funds requested by the states for the next few years are still being disputed. As a result, funding for the year 2002 is not yet final, which complicates the negotiation of long-term transport contracts. Nonetheless, we expect that the federal and state governments will soon agree on an amendment to the Regional Restructuring Act, which will give us a more secure base for future planning.

96 Group Management Report

Risk Report

Our business activities pose risks as well as opportunities. Our risk management activities aim to proactively minimize these risks. Our risk management system processes all the relevant risk-related information. The DB Group operates an inte- grated risk management system in line with the requirements of the German Act on Corporate Control and Transparency (KonTraG). This system, which is continually enhanced, allows us to quickly introduce offsetting measures.

Active Risk Management in the DB Group

The risks inherent to the DB Group include:

■ Market risks such as overall economic development and cyclical demand for services. The major factors influencing passenger transport – household consump- tion expenditures, number of gainfully employed persons, demographics – have been largely stable. The most important factor in freight transport is the trans- portation demand for consumer products, steel and mining products, petroleum products, chemical products, and building materials – some of which is subject to cyclical fluctuations. Other market risks include the effects of increasing deregulation in European transport markets and significant increases in compe- tition across all modes of transport. We are reacting to these developments with extensive measures aimed at improving efficiency and reducing costs, in addition to optimizing our service offerings. In the financial year 2001, we began implementing our service optimization program in passenger (MORA P) and freight (MORA C) transport. The major project for the current year is the introduction of the new pricing system for passenger transport. The risks of the introductory phase, which will be controlled by intensive project monitoring, stand in contrast to the projected improvements in economic efficiency after implementation. We are responding to risks resulting from changing customer demands – including the ordering organizations – and from shifts in traffic patterns with intensified market monitoring and a change in our service spectrum. To deal with market risks due to changes to the legal framework conditions – such as the pending amendment of the Regional Restructuring Act with its influence on the future orderer fees – we actively represent our position in the ongoing consultations and debates.

97 ■ Operating risks: The DB Group operates a networked production system of high technological complexity. We combat the risk of interruptions in service through systematic maintenance, the employment of qualified staff, and ongoing quality assurance and process improvement measures. ■ Project risks: The modernization of the overall rail system involves immense capital expenditures as well as a number of highly complex projects. Changes in the legal framework, delays in the implementation, or necessary modifications during the project lifetimes – which often last several years – result in project risks that can often affect multiple areas due to our networked production structures. During the year under review, risk controlling was significantly enhanced by the newly established central Controlling function for large-scale projects (projects with a volume of more than ‡ 256 million). Activities continue to focus on major projects like the new Cologne–Rhine/Main line, the Berlin hub (including Lehrter Stadtbahnhof), the new Nuremberg–Ingolstadt–Munich line, and the introduction of GSM-R. Our experiences made in the ongoing commissioning of the Cologne–Rhine/Main line are being applied to similar projects in a targeted manner. An incremental commissioning concept has been developed for the Berlin / Lehrter Stadtbahnhof hub. We conducted comprehensive analyses during the year under review to identify potential risks for the new Nuremberg–Ingolstadt–Munich line and for the introduction of GSM-R. In general, all new projects (such as the Stuttgart 21 project) must pass a full plan approval procedure before implementation can begin. We are also improving the quality of our planning and processes through a targeted expansion of capacity among our in-house planning engineers. Once identified, risks are compensated for by introducing offsetting measures and by additional provisions. ■ Financial risks: We use financial instruments and derivatives to hedge our exposure to interest rate changes, currency risks, and price fluctuations. These instruments are described in the Notes. ■ Political and economic uncertainties: Our political, legal, and social environ- ment is subject to constant change. A stable framework is needed to effectively plan our future corporate activities. We strive to positively influence these framework conditions and eliminate existing hindrances through open dialog.

We consistently anchored risk management in our standard processes during the year 2001. In addition, the Group-wide “Fokus” restructuring program, which was started in the year 2000, achieved the predicted success during the year under review. Furthermore, we took out insurance policies to secure unavoidable risks in order to limit the financial consequences of potential damages and liability risks for the DB Group.

98 Group Management Report

Effective Risk Management System The principles underlying the risk management policy are formulated by Group management and implemented at DB AG and its subsidiaries. Our system for the early recognition of risks entails quarterly reporting to the DB AG Management Board and Supervisory Board. The risks noted in the risk report are categorized and classified by their probability of occurrence; in addition to the possible con- sequences, we also analyze potential offsetting measures and their costs. All suddenly detected risks and unfavorable developments must be reported immediately. Our Group Controlling department is responsible for coordinating all risk management activities for the DB Group. In addition, planned acquisitions are subject to inten- sified monitoring. The Group Finance and Treasury department is responsible for limiting and monitoring credit risks, market price risks, and liquidity risks associated with our corporate refinancing, which is strictly limited to our operations. Consoli- dating these transactions (money market, securities, derivatives) with DB AG enables us to manage and limit the associated risks. The Finance and Treasury area is organized based on the Minimum Requirements for Trading (MaH) formulated for financial institutions, the derived criteria of which meet all the requirements of the German Act on Corporate Control and Transparency (KonTraG).

Risk Portfolio Free of Existence-Threatening Risks Our risk management system provides an overview of the sum total of risks exceed- ing defined materiality thresholds in a risk portfolio, as well as providing a detailed individual listing. Based on our current assessment of risks, offsetting and hedging measures, and provisions, no risks capable of threatening the Group’s continued existence are discernable, now or in the foreseeable future.

99 Report by the Management Board on Relations with Associated Companies

The Federal Republic of Germany is the sole shareholder of DB AG. Pursuant to sec. 312 of the German Stock Corporation Act (AktG), the Management Board of DB AG has compiled a report on its relations with associated companies. The report concludes with the following statement:

“We hereby declare that, according to the circumstances known to us at the time the legal transactions were entered into, our company received adequate con- sideration in each and every legal transaction. During the year under review, no measures were taken or omitted on the initiative or in the interest of the federal government or of any company associated with it.”

100 Group Management Report

Events After the Balance Sheet Date

Seamless Euro Changeover The DB Group, under the management of the central Treasury department, had been preparing for the introduction of the euro since late 1995. After our customers had been able to receive invoices denominated in euros and passengers had been able to make non-cash payments in euros since January 1, 1999, all of our cash register and sales systems were converted to the new currency on January 1, 2002. Thanks to our intensive preparations, we were able to master this major logistical challenge on schedule. The Group currency was also changed over from DM to euro effective January 1, 2002. The retroactive changeover to the new Group currency in accounting was performed after completion of work on these 2001 Annual Financial Statements.

Arcor DB Telematik GmbH Founded With economic effect as of January 1, 2002, Arcor reorganized the entire rail tele- communications business in Arcor DB Telematik GmbH. At the same time, DB Netz AG acquired an equity holding of 49.9%, with an option to purchase the company completely on July 1, 2002. The charter purpose of Arcor DB Telematik GmbH is the operation of rail-specific telecommunications. The new company will also help capture synergies in implementing the GSM-R (Global System for Mobile Communications-Rail) digital mobile communication network.

Project Construction Activities Consolidated in New Company In November of the year under review, we decided to consolidate the DB Group’s builder functions for planning, project management, and construction monitoring processes in a new company, DB ProjektBau GmbH, during the course of the year 2002. We expect this consolidation to greatly simplify and standardize the respective process steps, and significantly reduce the necessary Group resources in the medium term. This step also introduces a clear interface between the building owner and the builder functions in important infrastructure projects. The processes relating to the builder function will be consolidated within DB ProjektBau GmbH, while our infrastructure companies DB Netz AG and DB Station&Service AG will redefine their building owner functions to be compatible with the interface.

101 Consolidation of Activities: DB Services GmbH and DB Systems GmbH DB Services GmbH, a core Group business unit, will consolidate all business activities involving the facility management of fixed or mobile facilities, including staging and transportation services as well as facilities management of Group real estate. To this effect, we merged the corresponding Group service companies under the roof of DB Services GmbH (formerly dvm Deutsche Verkehrsdienstleistungs- und Management GmbH) as of January 1, 2002. To further optimize our IT services, we merged our subsidiaries TLC Transport-, Informatik- und Logistik-Consulting GmbH (TLC) and DB Informatik-Dienste GmbH (IDG) as of January 1, 2002, to form DB Systems GmbH, creating an efficient, full-service IT company within the Group. The new company’s responsibilities involve consulting on IT strategy and processes, the development, integration and main- tenance of IT systems, the operation of our computer centers, as well as the operation and maintenance of our IT infrastructure. We expect this reorganization to lead to further standardization of the Group IT processes, with the resulting synergy effects improving efficiency and reducing costs.

102 Group Management Report

Strategy

Our strategy is designed to meet the challenges posed both by the rail reform process, which was started in 1994, and the changing markets. The dynamics in transport markets has increased on several levels since the start of the rail reform process. Competition on the rails and especially with other modes of transport has intensified. The demands of our customers are also changing. Our strategy is focused on two clear goals: First of all, we want our top, competitive products to make us the best railroad for our customers. Secondly, we have declared our goal of getting the DB Group into shape for a future initial public offering. Restructuring the original government-run railroads to form a powerful company is tied to clear expectations of our economic efficiency. At the conclusion of the reform program, we now have to prepare the DB Group for an IPO. To achieve this objective, we implemented a value management concept that defines detailed target rate of return requirements for the DB Group and our individual Group divisions. As early as 1999, we defined our medium-term goal of a 10% return on capital employed. During the year under review, we responded to these challenges with our “DB Campaign” strategy. The “DB Campaign” involves the simultaneous pursuit of three goals: restructuring, performance, and growth. To ensure the sustained success of the rail reform process, we have to deal with all three challenges at once. In our strategy, the analyses of the long-term sustainability of the individual operations, their profitability, and their growth perspectives set the course and define the framework for the individual steps to be taken in the short term. At the same time, we continually reexamine tasks that we cannot master alone: where we might need partners or should outsource individual activities.

Restructuring Program: More Efficient Structures and Processes The challenges we are facing are considerable, despite the great success the DB Group has achieved since the start of the rail reform process, with productivity increases of 156% to date in the core rail transport area: Imperfectly optimized processes, limited options for price adjustment in passenger transport, and declining freight rates in freight transport – combined with a temporary burden on profits from our ambitious capital expenditures and modernization program – all cause considerable pressure on the cost side. We have to oppose these challenges with additional productivity increases and cost optimization. The cornerstone of our restructuring program is our “Fokus” program: Started in 2000, this Group-wide program currently encompasses 25 subprojects. These projects are implemented primarily by the Group divisions, but are subject to tight, centralized monitoring.

103 DB Regio, for example, is implementing “Fokus” projects involving the com- prehensive decentralization and streamlining of its structures, a reduction in personnel expenses, and the renegotiation of transport contracts with the federal states. The program is intended to maintain our position in the increasingly competitive regional transport markets. The main restructuring issues in the DB Reise&Touristik area are a line and stop concept to increase the load factor and the new pricing and distribution systems. In freight transport, where our division is faced with strong competition both on the rails and on the roads, the implementation of our “MORA C” (market-oriented services – cargo) restructuring program is the focus of our activities. Its objective is to reorganize the transport of single freight cars. An additional challenge is reorganizing the combined rail/road transport. Our Group Track Infra- structure division has established restructuring projects in the areas of operations and maintenance, among others. Another project supports the on-time implemen- tation of the GSM-R (Global System for Mobile Communications-Rail) digital cellular communication network. Other “Fokus” projects concentrate on Group-wide issues, including the fields of purchasing, information technology, administrative expenses, and facilities. Having achieved clear initial success with the “Fokus” restructuring program during the year under review, we expect further significant improvements in the following years. As a result of its inherent efficiency improvements and cost reductions, the reorganization program is tightly linked with our growth program. Only by con- centrating on promising activities, largely standardizing and modularizing our services, and streamlining our core processes will we be able to serve a future growth market.

Performance Program: Focus on Customer Needs Our customers’ needs and expectations are the prime focus of our performance program. All of our products and services have to be designed to satisfy our cus- tomers. To achieve this, we are increasingly tailoring our offerings to the specific demands of our customers, always considering the price they are willing to pay. In passenger transport, for example, our performance program entails significant capital expenditures to reduce the average age of our rolling stock. After the delivery of an additional 37 modern, high-speed trains during the year under review, a fleet of 216 train units is now available to serve travelers on the increasingly popular ICE lines. One major emphasis is the modernization of our rolling stock for regional and urban transport. This involves both DB Regio AG and its subsidiaries – espe- cially in the S-Bahn (metro) area. Procurement programs during the year under review involved electric rail cars, diesel rail cars with tilting technology, and light- weight-construction diesel rail cars. Increasing flexibility in distribution is another focus of our performance program in passenger transport. Above all, this involves a dedicated expansion of electronic, self-service distribution channels such as the

104 Group Management Report

Internet. The Passenger Stations division is improving its appearance through professional operations management for its more than 5,700 stations, and another ongoing program, the “3-S Program”, ensures cleanliness, safety, and service in the stations. In the freight transport area, we offer supplementary logistics services that go beyond rail-bound traffic, such as our Railog joint venture with Schenker AG, a shipping company.

Growth Program: Focus on Market Segments with Sustained Profitability All current forecasts point to stable growth in the mobility, transportation, and logistics markets for the foreseeable future. To capture this growth potential, we have started focusing our business portfolio on the segments in which railroads – alone or in combination with other modes of transport – can play out their strengths. In freight transport, for example, we have to expand our competitive advantages over long distances, which will require further internationalization through holdings, joint ventures, and strategic partnerships. International transports already make up over 50% of our transport performance in freight transport. Our Railion joint venture with the Dutch and Danish National Railways is a success; bilateral cooperation and/or manufacturing agreements were signed in parallel. The joint production optimization agreement we signed with SNCF, the French National Railways, will improve the position of rail freight transport in Franco-German traffic. An important growth segment in passenger transport is that of attractive, fast connections between conurbations at medium distances. This segment demands significant capital expenditures in our ICE fleet and the start of the development for the next generation of trains, but especially a further optimization of our network made possible by federal infrastructure funding. The aims of our “Netz 21” strat- egy are to significantly increase capacity and performance of the rail infrastructure in the medium to long-term, in order to cope with increasing traffic volumes. By disentangling faster-moving from slower services, we will be able to utilize the potential of today’s rail network better than ever before and continue increasing our transport performance. We also see clear growth opportunities in urban trans- port concepts that optimize supply in all modes of transport – a market segment that is currently undergoing significant structural change. In this area, we can utilize our wide range of expertise for the customers’ benefit and improve services, while optimizing costs through logical consolidation at the same time.

105 Important Projects in the Current Year Of the numerous programs and measures during the current year, the introduction of our new pricing system and the commissioning of the new Cologne–Rhine/Main line are especially important. Our new pricing system is designed to gain more customers than ever for rail transport. The new pricing system is clear, transparent, and easy to handle in ticket selling. It is based on three components: basic prices, reduced special prices, and the new BahnCard as the “skeleton key” to price dis- counts. Universally applicable discounts for traveling companions and generous family plans – children under age 14 will travel free when accompanied by a paying adult – round out the new pricing system. The commissioning of the new Cologne – Rhine / Main line represents the completion of the largest single capital expenditures project since the start of the rail reform program. Improved connections between the two largest German conurbations will become reality. As the trial runs have been successful to date, nothing stands in the way of our plans for introducing the first trains in August and comprehensive integration in December 2002 – together with the introduction of the new timetable. The journey between Cologne and Frankfurt will take almost an hour less, which means we can offer our customers unmatched speed from city center to city center. The new line will also result in significant improvements in domestic and international passenger transport services, beyond the connection of these two cities.

Intensive Capital Expenditures Program Approved to 2006 In the plans introduced in March 2001, we approved an intensive capital expenditures program to accelerate the rail reform process for the planning period to 2005; after the extension approved by the Supervisory Board in December – to 2006 – we have increased the capital expenditures volume for the coming years yet again, if only slightly. Total capital expenditures of ‡ 45 billion have now been planned up to the end of 2006. With around 86% of its total volume, most of this program is focused on the Passenger Transport, Freight Transport, and Track Infrastructure divisions. We will improve the availability of the rail network and significantly reduce the average age of our rolling stock. The program will benefit both customers of our own Group transport companies and non-Group companies, as users of the DB Netz AG infrastructure. Our capital expenditures will thus help improve the attractiveness of the rails as a mode of transport in general, even outside the DB Group. Combined with other productivity improvements, we are helping to lay the foundation for gaining a strong share of the forecast market growth.

106 Group Management Report

Success Depends on Political Framework Our success is increasingly dependent on the transport policy framework defined by the European Union. We have been a forerunner in implementing this policy framework in countless areas. Germany boasts a leading role in liberalizing rail operations in comparison with other European countries. Every operator is free to enter the market, and some 250 service providers currently compete on the German rail network. The task force organized by the Federal Ministry of Transport, Building and Housing confirmed in September 2001 that our structures are compatible with European legal requirements. For our own prospects, but also for the future of all rail operators in Europe, it is extremely important that the politicians in every European country achieve a harmonization of their transportation framework – both for rail transport and for other modes of transport. The new mileage-based toll for heavy trucks starting in 2003, which was passed by the upper and lower houses of the German Parliament, is an important step towards improving the framework for more traffic on the rails.

107 Outlook and Expectations for the Financial Year 2002

Economic Outlook: Upswing Later in the Year Based on current estimates by economic research institutes, we expect the global economy to grow by some 2.5% in financial 2002, achieving somewhat stronger growth than in the year under review. This forecast is based on the assumption that the U.S. economy will continue to improve throughout 2002. The economies of the euro zone should pick up speed towards the middle of the year as well, thanks to the impulses of monetary policy. We expect domestic demand in the euro zone to recover by the summer. Real consumer spending will benefit from the decline in inflation. Faced with more optimistic sales volume and earnings forecasts, companies are expected to ramp up their capital expenditures. We therefore expect GDP growth of over 1% in the euro zone. However, analysts’ forecasts for Germany see only a slow economic recovery starting in the second half of the year. Accordingly, we only expect a 0.5% increase in average GDP for the current year. While declining inflation will have a positive effect on consumer spending by increasing purchasing power, this will be tempered by increasing taxes and fees and unfavorable labor market trends. Cheaper financing and a stabilization of exports in the second half of the year are expected to boost corporate capital spending. Export growth, at around 2%, will be much weaker than in the previous year, largely due to its low level at the start of the year.

Transport Sectors: Tainted Growth Prospects Only weak growth impetus is expected in the passenger transport market for the current financial year. Reasons for this include slowing growth in private consumption and a predicted slight decline in the number of gainfully employed persons. Declines in petroleum prices should largely compensate for the increase in the eco-tax of January 1, 2002. In particular, performance in motorized private traffic will likely remain flat at last year’s level. Forecasts for air travel continue to be extremely uncertain. Trends here will depend primarily on the duration of the change in individual propensity to travel that was triggered by the terrorist attacks in the U.S.

108 Group Management Report

Our Passenger Transport divisions are expected to once again outperform the overall market in the current financial year. Growth expectations in long-distance traffic are subdued because of the supply adjustments implemented within the MORA P framework; but they will also increase transport performance in regional transport. We assume that competition will continue to intensify in rail-bound regional and long-distance transport as well as in road-bound local public transport. The main reasons for this are the increasing importance of bid tenders and the further internationalization of the competitive environment. We predict growth of almost 2% in the freight transport market in the financial year 2002 – assuming the economy recovers, as forecast, in the second half of the year. The increase in freight transport performance on the road is hindered by weakened exports and slight declines in the manufacturing sector. With gains of some 3%, however, trucks remain the fastest growing mode of freight transport, expanding their leading position. Foreign-flagged vehicles, whose share of cross- border traffic is already over 80%, will continue to be the prime beneficiary of this trend. Therefore, massive price pressure will be sustained and will be reflected in the rates for the entire freight market. These forces will conspire to drive more freight traffic to the roads. We expect inland waterway transport to boost its performance slightly by around 1.5%. A number of positive factors are involved: the slowing contraction in raw steel production, moderate growth in containerized transport, the increasing share of imported coal via the large ARA ports (Amsterdam, Rotterdam, Antwerp), and slight increases in the agricultural, food/animal feed, and chemicals/fertilizers sectors. We expect a mildly positive impetus in rail freight transport due to slowing contractions in raw steel production, the construction industry, and hard coal con- sumption, as well as a recovery in the chemicals industry. In the overall development of DB Cargo AG, however, these external factors are overshadowed by the expected drops in demand resulting from the MORA C restructuring program. Overall transport performance of our Group Freight Transport division will therefore decline slightly, as Railion Benelux N.V. and Railion Denmark A/S will likely only achieve minor growth. Competitive pressure – both intermodal and intramodal – will con- tinue to increase.

109 Increased trading within the euro zone will lead to a further internationalization of freight transport in the current year, which makes it essential to further improve the competitive position of the rails in international transports. The expansion of our Railion joint venture, with the entry of Railion Denmark A/S, gives us an excellent starting position compared to other European railroads. Nonetheless, we still have a long journey ahead of us, which is why the Group Freight Transport division is working to improve production further through international cooperation. In the long term, the politically supported opening of European rail networks to international freight transport will present additional potential. The necessary leveling of the framework conditions among the individual modes of transport remains a key challenge in transport policy. Among other measures, this includes the scheduled introduction of a mileage-based truck toll in Germany, which is planned at the start of 2003.

Expectations for the DB Group: Negative Result in the Current Financial Year Key events in the current financial year will develop similarly to the year under review. Therefore, we expect only minor changes to our revenue and profitability structure. Our revenue performance is largely dependent on the performance of our Group Passenger Transport and Freight Transport divisions. The implementation of MORA P/C, our market focus programs, will affect both these divisions in the current year. Our streamlined supply resulting from the reorganization of the trans- port of single freight cars – along with the weak economic environment – means that transport performance and revenues in freight transport will remain flat or even decline slightly. In passenger transport, we expect a positive development in transport performance and revenues in both long-distance and local transport. Our “Fokus” restructuring program will once again result in additional efficiency improvements and cost reductions in the current financial year. As in the year under review, our capital expenditures and modernization program will result in higher expenses in the form of increased depreciation and interest expenses. We will also continue to maintain the high level of maintenance expenses in the Group Track Infrastructure division that we first reached in the latter half of the year 2000. The scheduled reduction in federal grants for special burdens from the former Deutsche Reichsbahn (surplus personnel expenses and increased cost of materials) will once again amount to some ‡ 0.4 billion in the year 2002. In the current financial year, we will likely achieve productivity improvements in the amount of the reduction in federal funds, but will not be able to compensate for the temporary charges of our modernization program. The significant structural improvement of the integrated rail system will, therefore, have to be contrasted with a repeated operating loss after interest. We expect the Group Passenger Transport division to deliver a positive result,

110 Group Management Report

though slightly below that of the year under review, primarily due to a reduction in income of DB Reise&Touristik – which in turn is partially due to the costs of implementing our new pricing system and the commissioning of the new Cologne– Rhine/Main line. The Group Freight Transport and Passenger Stations divisions are counting on improved positive results. Clearly negative – and thus strongly affecting Group income – is the expected result in the Group Track Infrastructure division.

Expectations for the year 2002 2002 in € million 2001 expected Revenues 15,722
Gross capital expenditures 7,110  Operating income after interest – 204  Group Passenger Transport division 240  Group Freight Transport division 17
Group Passenger Stations division 6
Group Track Infrastructure division – 207 

Statements Relating to the Future This Annual Report contains forward-looking statements based on beliefs of Deutsche Bahn Group man- agement. When used in this document, the words “anticipate”, “believe”, “estimate”, “expect”, “intend”, and “plan” are intended to identify forward-looking statements. Such statements reflect the current views of Deutsche Bahn Group, its Group divisions and individual companies with respect to future events and are subject to risks and uncertainties. Many factors could cause the actual results to be materially different, especially those described in the “Risk Report”. Actual results may vary materially from those projected here. The Deutsche Bahn Group does not intend or assume any obligation to update these forward-looking statements.

111 Consolidated Financial Statements

Contents

109 Consolidated Balance Sheet

110 Consolidated Statement of Income

111 Consolidated Statement of Cash Flows

112 Notes to the Consolidated Financial Statements

112 Consolidated Fixed Assets Schedule

114 Notes, General Remarks

119 Notes to the Consolidated Balance Sheet

131 Notes to the Consolidated Income Statement

135 Notes to the Consolidated Cash Flow Statement

136 Segment Information

140 Supplemental Information

142 Independent Auditor’s Report

112 Consolidated Balance Sheet

Consolidated Balance Sheet on December 31, 2001

Assets

Dec 31, Dec 31, in € million Note 2001 2000

A. Fixed assets Intangible assets (5) 125 193 Properties (5) 34,930 33,878 Financial assets (5) 735 600 35,790 34,671

B. Current assets Inventories (6) 992 973 Accounts receivable and other assets (7) 3,890 2,990 Securities (8) 348 33 Cash and cash equivalents 363 394 5,593 4,390

C. Prepayments and accrued income (9) 579 406 41,962 39,467

Equity and Liabilities

Dec 31, Dec 31, in € million Note 2001 2000

A. Equity Subscribed capital (10) 2,150 2,147 Capital reserves (11) 5,310 5,313 Retained earnings (12) 1,045 1,269 Balance sheet loss (13) – 134 – 5 Minority interests (14) 65 64 8,436 8,788

B. Special items for investment grants (15) 22 C. Special reserve items with equity portion (16) 14 17 D. Provisions (17) 14,302 14,167 E. Liabilities (18) 18,285 15,514 F. Accruals and deferred income (19) 923 979 41,962 39,467

113 Consolidated Statement of Income January 1 through December 31, 2001

in € million Note 2001 2000

Revenues (23) 15,722 15,465 Inventory changes 65 83 Other internally produced and capitalized assets 1,748 1,719 Overall performance 17,535 17,267

Other operating income (24) 2,406 3,653 Cost of materials (25) – 7,108 – 6,625 Personnel expenses (26) – 7,487 – 8,475 Depreciation – 2,162 – 2,052 Other operating expenses (27) – 3,282 – 3,436 – 98 332

Investment income (28) 2 – 44 Net interest (29) – 313 – 251 Income before taxes – 409 37

Income taxes (30) 3 48 Income after taxes – 406 85

Minority interests in profits 11 21 Minority interests in losses 0 0

114 Consolidated Statement of Cash Flows

Consolidated Statement of Cash Flows January 1 through December 31, 2001

in € million Note 2001 2000

Income before taxes – 409 37 Depreciation of properties 1) 2,162 2,052 Changes to pension provisions 33 24 Cash flow before taxes 1,786 2,113

Depreciation/write-back on financial assets 8 50 Changes to other provisions – 315 1,311 Changes in special items – 3 – 3 Gains/losses from disposal of properties 1) –121 – 96 Gains/losses from disposal of financial assets and (partial) divestiture of consolidated companies – 106 – 405 Changes to current assets (excl. cash and cash equivalents) – 1,408 – 1,183 Changes to other liabilities (excl. financial debt) 489 – 520 Income taxes 348 Cash flow from business activities 333 1,315

Proceeds from disposal of properties 1) 897 471 Payments for purchase of properties 1) – 7,303 – 7,014 Proceeds from investment grants 3,656 3,024 Proceeds from additions to interest-free loans from the federal government 924 622 Repayments of interest-free loans to the federal government – 293 – 248 Proceeds from disposal of financial assets and (partial) divestiture of consolidated companies 66 482 Payments for purchase of financial assets and (partial) acquisition of consolidated companies – 35 – 62 Investing activities – 2,088 – 2,725

Income payments to minority shareholders – 14 – 16 Proceeds from long-term Group financing 294 288 Proceeds/payments from short-term Group financing 31 – 2 Proceeds from sale-and-lease-back 178 255 Proceeds from issuing bonds and new loans 1,239 1,001 Repayments of bonds and loans – 4 – 2 Financing activities 1,724 1,524

Net increase (decrease) in cash – 31 114 Cash and cash equivalents, beginning of year (32) 394 280 Cash and cash equivalents, end of year (32) 363 394

1) Including intangible assets

115 Deutsche Bahn Group: Consolidated Fixed Assets Schedule

Acquisition and manufacturing costs Changes to Balance at companies in € million Jan 1, 2001 consolidated Additions Transfers Disposals

Intangible assets 1. Licences, patents, trademarks, and similar rights 565 – 1 9 1 – 129 2. Advance payments 5 0 5 – 1 0 570 – 1 14 0 –129

Properties 1. Land, leasehold rights, and buildings including buildings on land owned by others a) Land and leasehold rights 5,192 1 35 – 27 – 111 b) Commercial, office, and other buildings 2,261 1 153 60 – 19 c) Permanent way formation and structures 6,917 0 88 222 – 11 14,370 2 276 255 – 141

2. Track infrastructure, signaling and control equipment 9,552 – 1 252 353 – 66 3. Rolling stock for passenger and freight transport 10,735 56 942 1,330 – 472 4. Technical equipment and machinery other than No. 2 or 3 780 0 58 36 – 25 5. Other equipment, operating and office equipment 1,817 0 221 46 – 197 6. Advance payments and construction in progress 5,513 0 1,544 – 2,020 263 42,767 57 3,293 0 – 638

Financial assets 1. Investments in affiliated companies 10100 2. Loans to affiliated companies 60000 3. Investments in associated companies 604060–369 4. Investments in related companies 36 0 417 0 – 1 5. Loans to associated and related companies 10200 6. Long-term securities 00000 7. Other loans 7010–1 655 0 427 0 – 371

Total fixed assets 43,992 56 3,734 0 – 1,138

116 Notes

Accumulated depreciation Book value Balance Balance Changes to Balance Balance Balance at Dec 31, at Jan 1, companies Write- at Dec 31, at Dec 31, at Dec 31, 2001 2001 consolidated Depreciation backs Transfers Disposals 2001 2001 2000

445 – 377 0 – 48 0 0 96 – 329 116 188 9000000095 454 – 377 0 – 48 0 0 96 – 329 125 193

5,090–800000– 85,0825,184 2,456–4290–96015– 5191,9371,832 7,216 – 799 0 – 147 0 – 1 3 – 944 6,272 6,118 14,762 – 1,236 0 – 243008–1,471 13,291 13,134

10,090 – 3,238 0 – 586 0 – 1 45 – 3,780 6,310 6,314 12,591 – 3,183 – 5 – 914 0 0 221 – 3,881 8,710 7,552

849 – 357 0 – 83 0 0 18 – 422 427 423 1,887 – 875 0 – 288 0 1 167 – 995 892 942 5,30000000005,3005,513 45,479 – 8,889 – 5 – 2,114 0 0 459 – 10,549 34,930 33,878

2000000021 6–600000– 600 241 – 43 0 – 1 8 0 85 49 290 561 452–60–14001– 1943330 3000000031 0000000000 7000000077 711 – 55 0 – 15 8 0 86 24 735 600

46,644 – 9,321 – 5 – 2,177 8 0 641 – 10,854 35,790 34,671

117 Notes for the Financial Year 2001

The consolidated financial statements of Deutsche Bahn AG have been drawn up in accordance with the provisions of the German Commercial Code (HGB) and the German Stock Corporation Act (AktG) as well as the Ordinance relating to the structure of annual financial statements of corporations engaged in the transport sector. In order to improve the clarity of the presentation, legally required items have been consolidated in the Balance Sheet and in the Income Statement. The Notes contain the required details and explanatory remarks. The consolidated financial statements are based on accounting in German marks (DM). As in the previous year, they were drawn up in euros at the official exchange rate of 1 euro = DM 1.95583. The Group currency was changed over to euros as of January 1, 2002. The financial statements of Deutsche Bahn AG were audited by PwC Deutsche Revision Aktiengesellschaft Wirtschaftsprüfungsgesellschaft, which issued an unqualified audit certificate. They will be published in the German Federal Gazette (Bundesanzeiger) and filed with the Commercial Register of the Local Court (Amtsgericht) of Berlin-Charlottenburg under No. HRB 50000.

1 Scope of Consolidation Apart from Deutsche Bahn AG as the parent company, the consolidated financial statements extend to include 123 domestic and 11 international subsidiaries in which Deutsche Bahn AG has direct or indirect holdings amounting to more than 50% of the voting capital, as well as two domestic companies in which Deutsche Bahn AG or one of its subsidiaries is entitled as a shareholder to appoint the majority of members of the Management Board or the Supervisory Board. 68 associated companies are included with their pro-rata share of equity capital. 21 companies of minor significance have not been included in the consolidated financial statements in accordance with Section 296 (2) HGB. The companies included in the consolidated financial statements and the associated companies underwent the following changes compared with the consoli- dated financial statements of the prior year:

118 Notes

a) Companies included in the consolidated financial statements:

2001

Additions Newly-founded companies and spin-offs 11 Shares acquired 5 Inclusion for the first time 1 17

Disposals Sales 2 Reallocation to “Associated companies” 1 Mergers within the Group 5 8

Balance 9

b) Associated companies:

2001

Additions Shares acquired 1 Reallocation from “Companies included in the consolidated financial statements” 1 Inclusion for the first time 1 3

Disposals Sales 3 Sales of shares 3 Mergers 1 Termination 1 8

Balance – 5

The differences arising from first-time consolidation were offset in retained earnings. Any changes in the composition of the Group that had a major impact are dealt with in the Management Report. The list of shareholdings in accordance with Section 313 (2) or Section 285 No. 11 HGB has been filed with the Commercial Register of the Local Court of Berlin-Charlottenburg under No. HRB 50000.

119 2 Consolidation Methods The financial statements of the companies included in the consolidated financial statements have been prepared as of December 31. All material financial statements included have been reviewed and certified without qualification by independent auditors. Capital has been consolidated using the book value method on the basis of the reference date of the Group’s opening balance sheet (January 1, 1994) or of the time of acquisition at a later date, respectively. Differences in assets and liabilities arising from capital consolidation on the basis of the Group’s opening balance sheet have been offset against one another. The remaining difference in liabilities has been reported as retained earnings unless pro- visions had to be set up for expenditures after the reference date of the Group opening balance sheet. In cases where capital is consolidated as of the time of acquisition, the acquisition costs of participations are offset against the pro-rata shares of equity capital they account for at the respective point in time. Differences arising in the process are apportioned as retained earnings without this affecting the operating result, as these differences are essentially in the nature of goodwill. This apportionment is retained on the disposal of companies. The same principles apply to the accounting of equity in net earnings of associated companies. Although three associated companies work with a different financial year, no interim financial statements as of December 31 have been prepared for these companies. Where no financial statements as of December 31, 2001, or for a financial year ending in the course of financial year 2001 were available, the financial state- ments of the previous year were used as a basis. Revenues, income, and expenses as well as receivables, liabilities, and provisions between and among the companies included in consolidation have been eliminated, as have the effects arising from the transfer of assets within the Group.

3 Currency Translation Financial statements of foreign subsidiaries are translated according to the reference date method as follows: Balance sheet items, income for the year, and depreciation are translated into DM at the mean rates of exchange on the balance sheet date, while the other items of the income statement are translated at the average exchange rates for the respective financial year. Differences arising from this translation have been reported as “Other operating income” or “Other operating expenses”. In the individual financial statements, receivables and liabilities stated in foreign currency are translated at the buying or selling rate on the creation date. Adjust- ments are made if the exchange rates effective at the balance sheet date lead to lower receivables or higher liabilities.

120 Notes

Currency translations are of minor significance in respect of individual balance sheet items or income statement items of the DB Group. Direct translation effects of the movements in exchange rates are negligible. Accordingly, no separate presentation of currency ratios and currency effects has been provided.

4 Accounting and Valuation Methods There have been no changes in the accounting and valuation methods compared to the previous year. Intangible assets acquired for valuable consideration are carried at acquisition costs and written down on a straight-line basis. Acquired software that constitutes a low-value asset in each individual case is fully written off during the first year. Properties (property, plant and equipment) are carried at acquisition or manu- facturing costs less scheduled depreciation, where applicable. Write-downs for asset impairment are recognized if recovery of the carrying amounts is no longer to be expected. Manufacturing costs include direct costs, prorated material and production overheads, and scheduled depreciation. Prorated material and production overheads as well as depreciation are determined on the basis of actual capacity utilization. Neither interest on borrowed funds nor administrative overhead is included in manufacturing costs. Scheduled depreciation is recognized using the straight-line method based on the normal useful lives as expected in rail transport and shipping and otherwise, where permissible by tax law, using the declining balance method. Depreciation is determined in accordance with the tax depreciation tables. The useful lives of the main groups are shown in the table below:

Years

Software, other licenses 5 Permanent way structures, tunnels, bridges 75 Track infrastructure 20 – 25 Buildings and other constructions 10 – 50 Signaling equipment 20 Telecommunications equipment 5 – 20 Rolling stock 15 – 30 Ships 20 – 25 Other technical equipment, machinery, and vehicles 5 – 25 Factory and office equipment 2 – 20

121 Properties of minor value [at Deutsche Bahn AG and the companies spun off effective January 1, 1999, these are fixed assets up to an individual value of DM 4,000 (‡ 2,045); other than that, properties up to an individual value of DM 800 (‡ 409)] are fully depreciated in the year of acquisition and carried as disposals. Financial assets are carried at acquisition cost and are subject to write-downs for asset impairment where appropriate. Holdings in associated companies are accounted for using the equity method. Inventories are valued at acquisition or manufacturing cost; raw materials and supplies are valued on the basis of average acquisition costs. Risks in inventories resulting from a decline in economic usefulness, long storage periods, price changes in the procurement markets, or any other decline in value are taken into account by adjusting such values accordingly. Accounts receivable and other assets are stated at nominal or face value unless a lower carrying amount is required in individual cases. Discernible risks have been taken into account by individual or lump-sum valuation adjustments. Securities held as current assets are valued at acquisition cost. Special write-offs made pursuant to tax law are reported as special reserve items with equity portion. Pension provisions are carried as liabilities at their going-concern value in accordance with Section 6 a of the German Income Tax Act (EStG). As in previous years, the calculations are based on the 1998 mortality tables of Dr. Klaus Heubeck. The amounts of pension provisions are calculated according to actuarial principles and at a fixed 6% p.a. interest rate for discounting purposes. All other provisions are stated at the amount required, based on sound business judgement. Provisions take all discernible risks into account. Furthermore, reserves for contingencies have been set up in accordance with Section 249 (2) HGB. The remaining provisions are determined at full cost. For temporary differences between earnings determined on the basis of commercial law and earnings as determined for income tax purposes for the companies included in the consolidated financial statements, provisions are set up for deferred taxes if most of these differences are deficits for a specific company. Deferred tax assets are not recorded. Deferred tax assets arising from the consolidation are offset against the deferred income tax items in the individual financial statements of the respective companies. Liabilities are carried at the expected settlement amount.

122 Notes

Notes to the Consolidated Balance Sheet

5 Fixed Assets Movements in fixed assets are shown on the pages 92 and 93. A separate presentation of the impacts of currency translation has been omitted as they are negligible [see Note (3) above, Currency Translation]. The investment grants received in the financial year 2001 from the German government in accordance with Article 2 Section 22 (1) No. 2 of the German Rail- road Restructuring Act (Eisenbahnneuordnungsgesetz) concerning infrastructure measures relating to the former Deutsche Reichsbahn amounted to ‡ 975 million (previous year: ‡ 701 million) and were offset against additions to assets. The positive disposal figure shown under “Advance payments and construction in progress” resulted mainly from the fact that investment grants were recorded as income in 2001, while they were offset against acquisition and manufacturing costs in previous years. In financial year 2001, write-offs for impairment of properties – primarily due to the decommissioning of rolling stock, track infrastructure, and plant and equipment – amounted to ‡ 129 million (previous year: ‡ 72 million). Write-ups of financial assets in the amount of ‡ 8 million (previous year: ‡ 20 million) relate to an adjustment of investment income from associated companies using the equity method. The write-downs of ‡ 15 million in the past financial year are largely due to holdings, whereas write-downs in the previous year (‡ 70 million) involved associated companies exclusively. Deutsche Bahn AG reduced its voting share in Arcor AG & Co., relinquishing its considerable influence. Therefore, the company was removed from the consolidated financial statements as an associated company and included under “Participating interests”. The disposals under “Associated companies” and the additions under “Participating interests” are almost exclusively due to this transaction.

6 Inventories

in € million 2001 2000

Raw materials and manufacturing supplies 491 521 Unfinished products, work in progress 483 421 Finished products and goods 12 26 Advance payments to suppliers 6 5 Total 992 973

123 Valuation adjustments in the amount of ‡ 286 million (previous year: ‡ 279 million) were made to take into account the strict lower of cost or market value principle as well as marketability discounts.

7 Accounts Receivable and Other Assets

of which with a remaining term of more in € million 2001 than one year 2000

Trade receivables 1,137 21 1,153 Receivables due from affiliated companies 1 0 1 Receivables due from companies in which a participating interest is held 122 1 229 Other assets 2,630 271 1,607 Total 3,890 293 2,990

Value adjustments for accounts receivable and other assets amounted to ‡ 320 million (previous year: ‡ 234 million). The main elements of other assets are short-term cash investments through year’s end totaling ‡ 1,775 million (previous year: ‡ 1,046 million), tax receivables, and a claim against the Federal Railroad Fund (BEV) under the “Trilateral Agreement” for the transfer of real estate [for more information, please see the comments under Note (18)].

8 Securities Being set aside as a general operating reserve, securities held as current assets consist exclusively of fungible securities.

9 Prepayments and Accrued Income Prepayments and accrued income amounting to ‡ 579 million (previous year: ‡ 406 million) include a discount of ‡ 52 million (previous year: ‡ 48 million), ‡ 527 million (previous year: ‡ 358 million) mainly involve deferred charges for financing, insurance premiums, rents and leases as well as advance payments in connection with the implementation of the new digital cellular communications network GSM-R.

10 Subscribed Capital In the financial year 2001, Deutsche Bahn AG changed its subscribed capital over from DM to euros. In this context, its equity capital was increased by an amount of some DM 5 million (some ‡ 3 million) to round the value in euros, through a conversion of part of capital reserves, without issuing new shares. The subscribed capital now amounts to DM 4,205 million (‡ 2,150 million). At the same time, the

124 Notes

previous subdivision of the subscribed capital into 84,000,000 bearer shares having a par value of DM 50 each, was changed to a subdivision into 430,000,000 no-par value bearer shares. The shares are held entirely by the Federal Republic of Germany.

11 Capital Reserves Within the process of converting the subscribed capital from DM to euros, some DM 5 million (some ‡ 3 million) were withdrawn from the capital reserves. Accordingly, an amount of DM 10,385 million (‡ 5,310 million) was reported as of December 31, 2001. Capital reserves of subsidiaries included in the consolidated financial statements are to be netted against the book value of the respective shareholding in the consoli- dated financial statements or to be transferred to “Minority interests”.

12 Retained Earnings/Other Retained Earnings The subsidiaries’ equity ratios remaining after netting against the book value of the respective shareholding or reclassification to “Minority interests” are shown under “Other retained earnings”. Changes in the differences resulting from consolidation are mainly due to the group of associated companies.

in € million 2001 2000

Retained earnings carried forward to January 1 1,269 1,354 Balance sheet profit carried forward to January 1 – 5 – 152 Changes in equity and liabilities-side differences resulting from consolidation 11 – 2 Changes in assets-side differences resulting from consolidation 48 2 Transfers from/to minority interests 4 – 4 Changes resulting from foreign currency translation 1 2 Consolidated net income/loss for the year – 406 85 Earnings attributable to minority interests – 11 – 21

Retained earnings and balance sheet profit as of December 31 911 1,264 Posted as balance sheet loss 134 5 Retained earnings as of December 31 1,045 1,269

13 Balance Sheet Loss The balance sheet loss recorded in the consolidated financial statements is equiva- lent to the net loss for the year as shown in the annual financial statements of Deutsche Bahn AG.

125 14 Minority Interests

in € million 2001 2000

Adjustment items on the equity and liabilities side 65 64 Adjustment items on the assets side 0 0 Total 65 64

Adjustment items are calculated using the book value method without hidden reserves being written back. Adjustment items on the assets side concern non-capitalized goodwill attributable to minority interests held indirectly as well as accrued losses.

15 Special Items for Investment Grants Special items for investment grants are written back in accordance with the method of depreciation applied to the respective fixed asset subsidized.

16 Special Reserve Items with Equity Portion The special reserve items with equity portion have been taken over unchanged from the individual financial statements of the subsidiaries.

in € million 2001 2000

In accordance with Section 281 HGB: Reserves in accordance with Section 3 (2) ZonenRFG 1) 33 Reserves in accordance with Section 4 FördergebietsG 2) 11 14 Total 14 17

1) Zonenrandförderungsgesetz – Act Concerning Economic Support of the Areas Along the Former Border to East Germany 2) Fördergebietsgesetz – Assisted Areas Act

Gains of ‡ 3 million (previous year: ‡ 5 million) from writing back special reserve items with equity portion are included in “Other operating income”. Allocations to special reserve items with equity portion (year under review and previous year: ‡ 0 million) are reported under “Other operating expenses”.

17 Provisions

in € millions 2001 2000

Pension provisions 508 475 Tax provisions 372 359 Provisions for deferred taxes 0 0 Other provisions 13,422 13,333 Total 14,302 14,167

‡ 33 million (previous year: ‡ 31 million) were transferred to provisions for pensions in the financial year 2001.

126 Notes

Other provisions consisted of the following:

in € million 2001 2000

Personnel-related commitments 1,071 1,160 Restructuring charges 2,141 2,633 Inherited environmental liabilities 2,620 3,156 Reconveyance obligations 324 476 Other risks 7,266 5,908 Total 13,422 13,333

Personnel-related commitments mainly concern leave entitlements, accumulated flex-time, anniversary bonuses, profit-sharing bonuses, and early retirement benefits. Severance pay and similar expenses are reported under provisions for restructuring charges. Provisions for inherited environmental liabilities relate primarily to the remediation of residual pollution caused before July 1, 1990, in the regions served by the former Deutsche Reichsbahn. A provision of ‡ 2.9 billion was set aside for this purpose in the opening balance sheet of Deutsche Reichsbahn and taken over unchanged to Deutsche Bahn AG’s opening balance sheet. Provisions for recon- veyance obligations were set up for potential restitution claims on property in the area of the former Deutsche Reichsbahn. The reduction of these two provision items is primarily due to the redemption of obligations within the framework of the “Trilateral Agreement” with the Federal Railroad Fund (BEV) [also see comments under Note (18)]. All remaining contingent liabilities are allocated to other risks. These primarily include provisions for:

■ Recultivation and renaturation (decommissioning of railroad tracks and related facilities), ■ Deferred maintenance work (also includes future measures to be taken in connection with the preparation for sale of real estate), ■ Risks from pending business, guaranties, as well as for contingent liabilities arising from deliveries and services not yet invoiced, and ■ Possible reclamation of grants.

127 18 Liabilities

of which with of which with of which with a residual a residual a residual maturity of maturity of maturity of in € million 2001 up to 1 year 1 to 5 years over 5 years 2000

Interest-free loans 7,324 267 1,271 5,786 6,714 Bonds 5,419 511 342 4,566 4,181 Liabilities due to banks 73 19 2 52 76 Advance payments received for orders 316 202 73 41 280 Trade accounts payable 1,557 1,546 11 0 1,704 Liabilities due to affiliated companies 00000 Liabilities due to companies in which a participating interest is held 1,758 236 347 1,175 1,508 Other liabilities 1,838 1,190 555 93 1,051 of which tax liabilities (78) (78) (0) (0) (85) of which social security liabilities (100) (100) (0) (0) (102) Total 18,285 3,971 2,601 11,713 15,514

The interest-free loans arise almost exclusively from German government funding for the extension and replacement of track infrastructure. These loans are based on the government’s responsibility for meeting the transport needs of the general public as incorporated in Germany’s constitution (Article 87e (4) GG) and put in concrete terms in the law governing the extension of the German rail network (BSchwAG). Such loans bear no interest. Amortization is set forth in the respective individual and collective financing agreements. In general, the loans are repaid by equal annual installments, the amounts of which are calculated on the basis of the corresponding annual write-downs. Liabilities due to companies in which a participating interest is held include long-term, interest-bearing loans from EUROFIMA European Company for the Financing of Railway Rolling Stock (Basle/Switzerland) amounting to ‡ 1,501 million (previous year: ‡ 1,206 million). The increase in other liabilities is due almost exclusively to payment obligations to the Federal Railroad Fund (BEV) under the “Trilateral Agreement”. These payments serve primarily to replace obligations that were previously reported as

128 Notes

provisions. The excess amount results in a claim against the BEV for the transfer of properties [also see the comments under Notes (7) and (17) and the Management Report].

In general, liabilities are not secured. Exceptions are:

■ Liabilities due to EUROFIMA, which have to be secured pursuant to EUROFIMA’s memorandum of association by assignment of railroad equipment (rolling stock). ■ Of liabilities due to banks, ‡ 1 million (previous year: ‡ 2 million) were secured by real-estate liens.

For a listing of financial debt and the corresponding comments, please see Note (22).

19 Accruals and Deferred Income Accruals and deferred income of ‡ 923 million (previous year: ‡ 979 million) result primarily from the purchase of redemption commitments in the year 1999 for the years 2025 through 2041 relating to interest-free loans [see Note (18)].

20 Contingent Liabilities

in € million 2001 2000

Liabilities from the drawing and endorsement of bills 0 0 Liabilities from guarantees 231 244 Liabilities from the provision of collateral for third-party liabilities 159 212 Total 390 456

Contingent liabilities from the provision of collateral for third-party liabilities concern liabilities of the Federal Railroad Fund (BEV) to EUROFIMA European Company for the Financing of Railway Rolling Stock (Basle/Switzerland). Loans extended by EUROFIMA to the Federal Railroad Fund (or its legal predecessors, Deutsche Bundesbahn and Deutsche Reichsbahn) are secured by assignment of rolling stock used in passenger and freight transport. While the loans remained with the Federal Railroad Fund, the assigned rolling stock was first transferred to Deutsche Bahn AG and then, as part of the spin-off under phase II of the German rail reform, it was transferred to various companies within the Deutsche Bahn Group – primarily to DB Reise&Touristik AG, DB Regio AG, and DB Cargo AG.

129 21 Other Financial Commitments

in € million 2001 2000

Purchase order commitments for capital expenditures 5,614 7,295 Outstanding contributions 349 340 Commitments under rental, leasing, and other debt obligations with external parties 4,132 4,085 Euro currency on hand for sub-frontloading 56 0 Total 10,151 11,720

The outstanding contributions concern EUROFIMA European Company for the Financing of Railway Rolling Stock, Basle/Switzerland. Commitments under rental, leasing, and other debt obligations with external parties are reported at their nominal values. The two tables below list the cor- responding nominal values and the net present values (as of December 31, 2001) by due date:

Net present Nominal value in € million value at 7.5%

Lease payments due within 1 year 141 136 due within 1 to 5 years 579 467 due after 5 years 890 477 Total 1,610 1,080

Leasing plays only a minor part in the financing of necessary business assets. During the financial year 2001, lease payments totaled ‡ 115 million (previous year: ‡ 84 million).

Net present Nominal value in € million value at 7.5%

Rental and other external-party liabilities due within 1 year 403 389 due within 1 to 5 years 995 816 due after 5 years 1,124 538 Total 2,522 1,743

22 Financial Instruments Deutsche Bahn AG, as the central treasury for the DB Group, is responsible for all financing and hedging activities. In terms of functions and organizational structure, lending and trading workflows in the front office on the one hand and processing and control in the back office on the other hand are kept clearly separate. The

130 Notes

Treasury department operates in the financial markets in compliance with the Mini- mum Requirements for the Trading Activities of Credit Institutions established by the German Banking Supervisory Authority and it is subject to periodic internal audits.

A. Financial Instruments The main financial instruments and total financial debt as of December 31, 2001, are listed in the following table, with nominal amounts and book values being equivalent:

Residual Nominal 2001 maturity interest rate Book value Currency in years in % in € million

Deutsche Bahn AG bonds: Bond 2001– 2011 JPY 9.7 1.390 46

DB Finance B.V. bonds: Bond 1995 – 2002 DM 0.6 6.875 511 Bond 1997 – 2007 DM 5.8 5.750 511 Bond 1998 – 2003 1) DM max. 1.3 1.125 42 Bond 1998 – 2008 DM 6.4 5.000 767 Bond 1999 – 2009 EUR 7.5 4.875 1,350 Bond 2000 – 2010 EUR 8.5 6.000 1,000 Bond 2001– 2006 DM 5.0 4.500 31 Bond 2001– 2006 CHF 4.7 3.375 265 Bond 2001– 2008 DKK 6.8 5.250 54 Bond 2001– 2008 SEK 6.8 5.500 42 Bond 2001– 2008 NOK 6.8 7.000 50 Bond 2001– 2013 EUR 11.9 5.125 750 Total 5,373

EUROFIMA loans: Loan 1995 – 2002 CHF 0.3 5.250 36 Loan 1995 – 2005 2) DM 3.7 4.750 7 Loan 1995 – 2005 CHF 3.7 4.750 27 Loan 1996 – 2006 DM 5.0 6.000 256 Loan 1997 – 2009 DM 8.0 5.625 256 Loan 1999 – 2009 EUR 7.8 5.750 400 Loan 2000 – 2014 EUR 12.8 5.970 219 Loan 2001 – 2014 EUR 12.7 5.410 300 Total 1,501

Liabilities due to banks: Note loan 1998 – 2008 DM 6.3 5.310 51 Other liabilities 22 Total 73 Total financial debt 6,993

1) Bondholders have the option of conversion into Deutsche Lufthansa AG shares held by Deutsche Bahn AG. 2) The EUROFIMA loans to D.A.CH. Hotelzug (Zurich/Switzerland), now trading as CityNightLine CNL AG (Zurich/Switzerland), were taken over as part of a purchase of rolling stock by Deutsche Bahn AG as of December 31, 1996.

131 The bonds issued in foreign currencies have been swapped to euros, which means the DB Group is not exposed to any currency risk from these transactions. An amount of ‡ 0.6 billion of the total financial debt has a residual maturity of up to one year. ‡ 19 million of this amount are liabilities due to banks. In addition to the liabilities shown on the balance sheet, banks had opened guaranteed credit facilities to Deutsche Bahn AG totaling ‡ 1.6 billion as of December 31, 2001, to cover short-term liquidity requirements. Deutsche Bahn AG had drawn on none of these credit lines as of December 31, 2001.

B. Financial Derivatives Financial derivatives are used to hedge against interest rate or currency exposures in connection with the financial transactions of the Deutsche Bahn Group. Each individual deal corresponds to an on-balance sheet item or an anticipated exposure (bonds, loans, etc.). Speculative transactions are not permitted. Derivatives for fuel were purchased to hedge against price risks in commodity markets. The use, settlement, and control of derivative transactions are governed by Group guide- lines. Market valuations and risk assessments are conducted on an ongoing basis as part of the Deutsche Bahn Group’s risk management system. Interest rate swaps and interest rate/currency swaps were used to cover possible interest rate risks. Resulting interest differentials are apportioned on an accrual basis. Future interest differentials are not carried on the balance sheet because they actually are pending transactions. Foreign exchange risks were of marginal significance to the Deutsche Bahn Group. To reduce exposure to exchange rate fluctuations in respect of payables denominated in foreign currencies, foreign currency forwards were used. Commodity risks at Deutsche Bahn AG primarily involve the purchase of fuels. In the year 2001, Deutsche Bahn AG engaged in several hedging transactions in the commodities area, including swaps and options. The total notional value of hedging transactions listed below represents the sum of all purchase and sales contracts being hedged. The tonnage is specified for commodity transactions. From the level of this notional volume, conclusions can be drawn as to the extent to which financial derivatives were used, but this level does not reflect the risk inherent in the use of such derivatives. The fair market value of a derivative financial instrument is equivalent to its cost of liquidation or the amount at which the instrument could be exchanged. The fair values listed below were computed as per the balance sheet date using common financial models; offsetting changes in the values of the items being hedged were not taken into account. In turn, the related financial derivatives are not taken into account for stating the underlying transactions in the balance sheet (no hedge accounting). Because valuation units (derivative/underlying) were formed, the fair values of derivatives as well as changes in the fair values of the underlying transactions are shown in the following tables.

132 Notes

The credit risk is the danger of loss due to nonperformance by counterparties (risk of default). It represents the replacement cost (at fair value) of transactions with a positive fair value giving Deutsche Bahn AG a claim against its counterparties. The risk of default of counterparties is actively controlled by our high demands on the financial standing of counterparties both when entering into a contract and for its entire term as well as by the setting of risk limits. The following information on the credit risk contains the cumulative result of all individual risks.

Notional and Fair Market Values of Interest Rate Derivatives

in € million 2001 2000

Total notional value 4,403 2,851

Performance of valuation units: Fair market value of derivatives – 57 – 60 Change in the fair market value of underlying transactions 8 31 Total – 49 – 29

As of December 31, 2001, the portfolio of interest rate derivatives consisted primarily of interest rate swaps with a remaining term of more than one year.

Notional and Fair Market Values of Currency Derivatives

in € million 2001 2000

Total notional value 1 2

Performance of valuation units: Fair market value of derivatives 0 0 Change in the fair market value of underlying transactions 0 0 Total 00

As of December 31, 2001, existing contracts to offset foreign exchange risks consisted of currency futures contracts of DE-Consult Deutsche Eisenbahn Consulting GmbH with a remaining term of less than one year.

133 Notional and Fair Market Values of Commodity Derivatives

in € million 2001 2000

Total notional volume (in t) 894,000 0

Performance of valuation units: Fair market value of derivatives – 11 0 Change in the fair market value of underlying transactions 0 0 Total – 11 0

As of December 31, 2001, half of the portfolio of commodity derivatives consisted of contracts with a remaining term of more than one year.

Credit Risk

in € million 2001 2000

Credit risk interest rate-, currency-, and commodity derivatives 54 27

The single biggest risk, i.e. a risk of default by a specific counterparty, amounts to ‡ 19 million and relates to a counterparty having a Moody’s rating of Aa3. As regards credit risks arising from contracts with a remaining term of more than one year, all counterparties have a Moody’s rating of no less than A1.

134 Notes

Notes to the Consolidated Income Statement

23 Revenues The breakdown of revenues totaling ‡ 15,722 million (previous year: ‡ 15,465 million) by business segment is shown in the Segment Information [Notes (33) and (34)].

24 Other Operating Income

in € million 2001 2000

Services to external parties and sale of materials 615 621 Rents and leases 213 211 Other operating income 750 766 Gains on sales of properties and (partial) divestiture of consolidated companies 391 701 Income from the release of provisions 345 1,142 Gains on the reversal/recovery of write-downs/write-offs of receivables 82 200 Income from the release of special reserve items with equity portion 3 5 Other income unrelated to accounting period 7 7 Total 2,406 3,653

25 Cost of Materials

in € million 2001 2000

Cost of raw materials, supplies, and merchandise 2,007 1,738 Cost of services purchased 2,718 2,774 Maintenance expenses 2,705 2,578 Subtotal (gross cost of materials) 7,430 7,090

Federal government contributions – 322 – 465 Total 7,108 6,625

The cost of services and merchandise purchased for self-constructed assets is recognized under cost of materials. Such cost is capitalized by inclusion in other internally produced and capitalized assets under properties. Federal government contributions are provided in accordance with Article 2 Section 22 (1) No. 3 German Railroad Restructuring Act. They are intended to reduce Deutsche Bahn’s increased cost of materials for harmonizing the levels of develop- ment, technical equipment, and productivity in the area of the former Deutsche Reichsbahn (East Germany) with those in the area of the former Deutsche Bundes- bahn (West Germany). Federal government contributions are reduced from year to year in proportion to the forecast decrease in the additional cost of materials and will not be granted beyond 2002.

135 26 Personnel Expenses

in € million 2001 2000

Wages and salaries for employees 5,079 6,061 for civil servants assigned Payments to the Federal Railroad Fund IAW Article 2 Section 21 (1) (2) German Railroad Restructuring Act 1,432 1,545 Ancillary remuneration paid directly 66 97 6,577 7,703

Compulsory social security contributions, pensions and similar benefits, and support payments for employees 1,156 1,235 for civil servants assigned (payments to the Federal Railroad Fund IAW Article 2 Section 21 (1) (2) German Railroad Restructuring Act) 270 300 1,426 1,535

of which for pensions and similar benefits (555) (559) Subtotal (gross personnel expenses) 8,003 9,238

Contributions by the Federal Railroad Fund – 516 – 763 Total 7,487 8,475

Grandfathering allowances paid in the financial year 2001 have been offset against provisions. Expenses related to pensions and similar benefits also include social security contributions paid by employers as well as supplemental social security contribu- tions paid by employers for civil servants assigned. The contributions by the Federal Railroad Fund (BEV) are made in accordance with Article 2 Section 21 (5) No. 1 German Railroad Restructuring Act. They are a compensation for increased personnel expenses in the area of the former Deutsche Reichsbahn (East Germany) as compared to those in the area of the former Deutsche Bundesbahn (West Germany). These contributions are reduced from year to year in proportion to the forecast decrease in personnel expenses and will not be granted beyond 2002.

136 Notes

27 Other Operating Expenses

in € million 2001 2000

Rents and leases 604 575 Fees and dues 116 140 Miscellaneous operating expenses 2,208 2,374 Losses on the disposal of fixed assets 164 202 Expenses relating to set-up of allowances for and write-off of accounts receivable 186 102 Expenses relating to allocations to special reserve items with equity portion 0 0 Other expenses unrelated to accounting period 4 43 Total 3,282 3,436

‡ 51 million (previous year: ‡ 73 million) of miscellaneous operating expenses are attributable to “other taxes”.

28 Investment Income

in € million 2001 2000

Income from participating interests 7 2 of which from affiliated companies (0) (0) Income from associated companies 15 27 Transfer of losses – 5 – 3 Write-down of investments – 15 – 70 Total 2 – 44

29 Net Interest

in € million 2001 2000

Income from other securities and long-term loans 0 3 of which from affiliated companies (0) (0) Other interest and similar income 95 94 of which from affiliated companies (0) (0) Interest and similar expenses – 408 – 348 of which from affiliated companies (0) (0) Total – 313 – 251

137 30 Income Taxes Income taxes levied in Germany are corporate income tax, plus solidarity surcharge, and trade income tax. These taxes are reported together with comparable foreign income-linked taxes. Income taxes reported in financial 2001 and the previous year were a benefit, which resulted from tax refunds and tax credits on equity income from consolidated companies as well as from the utilization of tax loss carryforwards. Provided that tax provisions remain unchanged, the above circumstances should continue in the foreseeable future and lead to a continued low taxation ratio.

31 Earnings per Share The calculation of earnings per share is based on net income, which is equivalent to income after taxes less minority interests in profits, plus minority interests in losses. During the year under review, the subdivision of equity capital was changed to 430,000,000 shares [also see comments under Note (10)]. We have adjusted the number of shares for the previous year to simplify comparability.

2001 2000

Net income in € million – 417 64 Number of shares outstanding 430,000,000 430,000,000 Earnings per share in € – 0.97 0.15

138 Notes

Notes to the Consolidated Cash Flow Statement

The cash flow statement is set out in accordance with German Accounting Standard No. 2 (DRS 2), Cash Flow Statement, developed by the German Accounting Standards Board of the German Accounting Standards Committee e.V. (DRSC). The cash flow statement shows a breakdown of cash flows by business activities, investment activities, and financing activities. Cash flow before taxes is reported under the cash flow from business activities. Where a change in the scope of consolidation occurred due to the acquisition or sale of a company, the purchase price less the liquid assets acquired or sold is carried as cash flow from investing activities. All other effects of the acquisition or sale of companies are eliminated under the respective items of the three cash flow categories.

32 Cash and Cash Equivalents This item comprises cash and cash equivalents (cash on hand, Deutsche Bundesbank balance, cash in banks, and checks) as shown on the balance sheet. For information on other near-liquidity assets, please see the comments on the balance sheet items “Other assets” and “Securities” [Notes (7) and (8)].

139 Segment Information

33 Delimitation of Segments At the Deutsche Bahn Group, the delimitation of segments is based on the types of services rendered by the various Group divisions. The operating activities of the Deutsche Bahn Group are now classified according to the Group’s four Group divisions: The Group Passenger Transport division includes the business areas under the lead management of DB Reise&Touristik AG and DB Regio AG, both of which are wholly owned subsidiaries of Deutsche Bahn AG. They are responsible for the Group’s passenger transport services and its tourist business. DB Reise&Touristik offers long-distance passenger transport services, while its subsidiaries are involved in tourist travel and supporting services. The DB Regio business area includes comprehensive local and regional transport services (generally within a distance of up to 50 km or travel times up to one hour). While DB Regio AG is clearly focused on rail transport, its associated subsidiaries provide transport services by rail as well as by bus and other supporting services. The transport services provided by its Passenger Transport division make the Deutsche Bahn Group Europe’s leading rail company in this field. In the Group Freight Transport division, the Railion joint venture took effect on January 1, 2000. Under this joint venture, Deutsche Bahn AG has a 92% stake in Railion GmbH, which, in turn, holds a 100% interest in both DB Cargo AG and Railion Benelux N.V., as well as in Railion Denmark A/S; Nederlandse Spoor- wegen (NS Groep N.V.), the Dutch railroad company, holds a 6% interest in Railion GmbH; and DSB, the Danish State Railways, holds the remaining 2%. This Group division provides domestic and international rail transport services as well as supporting logistical services and, in terms of transport performance, holds a leading position in European rail freight transport.

140 Notes

The Group Track Infrastructure division with its management company DB Netz AG, a wholly owned subsidiary of Deutsche Bahn AG, is responsible for the rail- road infrastructure, i.e. in particular for tracks and transshipment terminals. In the delimitation of segments, the rail construction business unit – which is part of DB Netz AG in strict legal terms – is projected as a separate legal entity and allocated to “Participating interests”, and is therefore reported under “Other operating entities”. The Group Passenger Stations division is in charge of the operation of pas- senger stations as traffic stations and of optimized marketing of the locations to the benefit of all passenger station users. Most of the services involved are provided by DB Station&Service AG as the lead management company, which is a wholly owned subsidiary of Deutsche Bahn AG. Segment information by geographical regions has been deemed unnecessary because the share of international business in total revenues is so small it may be safely neglected and segmentation by region within Germany makes little sense considering Deutsche Bahn AG’s sweeping presence throughout the entire country.

141 34 Financial Data by Segment

Intra-Group Divisional External Revenues Revenues Revenues Depreciation in € million 2001 2000 2001 2000 2001 2000 2001 2000

Passenger Transport DB Reise&Touristik 3,457 3,463 313 256 3,770 3,719 336 272 DB Regio 7,607 7,517 572 560 8,179 8,077 520 404 Total 11,064 10,980 885 816 11,949 11,796 856 676

Freight Transport 3,896 3,831 986 816 4,882 4,647 149 190 Passenger Stations 219 200 589 600 808 800 90 80 Track Infrastructure 138 110 3,391 3,415 3,529 3,525 751 788 Other Operating Entities/ Consolidation Effects 405 344 3,553 3,517 3,958 3,861 316 318 Group 15,722 15,465 9,404 9,164 25,126 24,629 2,162 2,052

1) including civil servants, excluding apprentices

Notes to the Financial Data by Segment:

■ The item “Other Operating Entities/Consolidation Effects” includes consoli- dation effects as well as operations of other operating entities not allocable to one of the four Group divisions, i.e. operations allocated to the divisions “Other” or “Participating Interests” including the operations of the Group holding company Deutsche Bahn AG.

■ A comparison with the previous year must take into account both the addition of Railion Denmark A/S and transfers of business activities between the segments. The latter primarily involves the consolidation of the transport divisions’ heavy maintenance facilities under DB AG and the concentration of all energy-related activities under DB Energie GmbH.

■ External revenues reflect sales to external customers from outside the Group.

■ Intra-Group revenues relate to revenues with Group companies. Due to the business-specific vertical integration of the Deutsche Bahn Group, intra-Group revenues are generated for the most part by the Group divisions Track Infra- structure and Passenger Stations with the Group divisions Passenger Transport and Freight Transport. Internal transfer prices of intra-Group revenues are invoiced at the same conditions that apply to external customers.

142 Notes

Operating Income Gross Capital Employees1) after Interest Gross Cash Flow Capital Employed Total Assets Expenditures as of Dec 31 2001 2000 2001 2000 2001 2000 2001 2000 2001 2000 2001 2000

124 100 483 383 2,978 3,139 4,778 4,809 424 499 27,360 30,293 116 73 714 559 4,628 4,666 7,827 7,359 1,160 1,305 45,454 52,769 240 173 1,197 942 7,606 7,805 12,605 12,168 1,584 1,804 72,814 83,062

17 49 164 259 1,660 1,814 3,199 3,234 321 405 32,442 38,555 6 4 126 111 1,966 1,911 2,727 2,731 459 552 5,193 5,015 – 207 57 693 987 9,549 9,988 18,525 18,562 4,435 3,896 52,089 53,554

– 260 – 84 124 227 7,868 5,925 4,906 2,772 311 235 51,833 42,470 – 204 199 2,304 2,526 28,649 27,443 41,962 39,467 7,110 6,892 214,371 222,656

■ Divisional revenues represent the sum of external and intra-Group revenues and thus show the business performance of the segments.

■ Depreciation as well as gross capital expenditures relate to properties and intangible assets. Gross capital expenditures show the commercial value of total capital expenditures before netting for investment grants. Depreciation is based on capital expenditures net of investment grants as reflected in the balance sheet.

■ Operating income after interest is an adjusted operating result after net interest but before investment income and taxes that is used as an internal control tool of the operating business.

■ Gross cash flow is defined as the operating income (before interest), plus depreciation of properties (including intangible assets) and changes in provisions for pensions.

■ Capital employed includes properties and intangible assets less interest-free loans plus net working capital.

143 Supplemental Information

35 Employees

2001 2001 2000 2000 Annual As of Annual As of average Dec 31 average Dec 31

Wage and salary earners 164,726 161,374 171,335 166,775 Civil servants assigned 54,420 52,997 59,280 55,881 Subtotal 219,146 214,371 230,615 222,656

Apprentices 8,804 9,091 11,315 11,851 Total 227,950 223,462 241,930 234,507

In general, civil servants previously working for the former Deutsche Bundesbahn and Deutsche Reichsbahn have been assigned to work for Deutsche Bahn AG as of its registration date by virtue of Article 2 Section 12 German Railroad Restructuring Act (“civil servants assigned”). Since the beginning of Stage II of the rail reform process they work for the different companies of the DB Group, their official employer is the Federal Railroad Fund (BEV).

36 Exemption of Subsidiaries from the Disclosure Requirement Pursuant to the German Commercial Code The following subsidiaries intend to make use of Section 264 (3) HGB providing for an exemption from the disclosure requirement:

A. Philippi GmbH, Quierschied DB Projekt Verkehrsbau GmbH, Berlin Ameropa-Reisen GmbH, Bad Homburg v.d.H. DB Regionalbahn Rheinland GmbH, Cologne Autokraft GmbH, Kiel DB Regionalbahn Rhein-Ruhr GmbH, Essen Bayern Express Omnibus GmbH, Munich DB Regionalbahn Westfalen GmbH, Bayern Express & P. Kühn Berlin GmbH, Berlin Münster (Westf.) Bodensee-Schiffsbetriebe GmbH, Konstanz DB RegioNetz Infrastruktur GmbH, BRG Servicegesellschaft Leipzig mbH, Leipzig Frankfurt/Main BRN Busverkehr Rhein-Neckar GmbH, DB RegioNetz Verkehrs GmbH, Frankfurt/Main Ludwigshafen DB Rent GmbH, Frankfurt/Main BSG Bahn Schutz & Service GmbH, DB Services GmbH, Berlin Frankfurt/Main DB ServiceStore Systemführungs GmbH, BTT BahnTank Transport GmbH, Mainz Frankfurt/Main BVO Busverkehr Ostwestfalen GmbH, Bielefeld DB Verkehrsbau Logistik GmbH, Mainz BVR Busverkehr Rheinland GmbH, Dusseldorf DB Vermittlung GmbH, Berlin DB Anlagen und Haus Service GmbH, Berlin DB Zeitarbeit GmbH, Berlin DB Arbeit GmbH i.L., Berlin DB ZugBus Nordrhein Holding GmbH, Cologne DBAutoZug GmbH, Dortmund DB ZugBus Regionalverkehr Alb-Bodensee DB Bahnbau GmbH, Berlin GmbH (RAB), Ulm DBBauProjekt GmbH, Frankfurt/Main DB ZugBus Westfalen Holding GmbH, DBDialog Telefonservice GmbH, Schwerin Münster (Westf.) DB Energie GmbH, Frankfurt/Main Deutsche Bahn Gleisbau GmbH, Duisburg DBFuhrparkService GmbH, Frankfurt/Main Deutsche Bahn Immobiliengesellschaft mbH, DB Gastronomie GmbH, Frankfurt/Main Frankfurt/Main DB Informatik-Dienste GmbH, Erfurt Deutsche Eisenbahn-Reklame GmbH, Kassel

144 Notes

Deutsche Gleis- und Tiefbau GmbH, Berlin Regionalverkehr Kurhessen GmbH (RKH), Kassel Deutsche Touring Gesellschaft mbH, Frankfurt/ Regionalverkehr Oberbayern GmbH, Munich Main RSW Regionalbus Saar-Westpfalz GmbH, Ibb Ingenieur-, Brücken- und Tiefbau GmbH, Saarbrücken Dresden RVS Regionalbusverkehr Südwest GmbH, Karlsruhe Kombiwaggon Servicegesellschaft für den S-Bahn Berlin GmbH, Berlin Kombinierten Verkehr mbH (KSG), Mainz S-Bahn Hamburg GmbH, Hamburg Metropolitan Express-Train GmbH, S-Bahn München GmbH, Munich Bad Homburg v.d.H. SBG Südbadenbus GmbH, Freiburg MITROPA AG, Frankfurt/Main TLC Transport-, Informatik- und Logistik- MITROPA Grundstücks- und Beteiligungsgesellschaft Consulting GmbH, Berlin mbH, Frankfurt/Main Transfracht Internationale Gesellschaft MOS Mobile Oberbauschweißtechnik GmbH, Berlin für kombinierten Güterverkehr mbH, Omnibusverkehr Franken GmbH (OVF), Nuremberg Frankfurt/Main ORN Omnibusverkehr Rhein-Nahe GmbH, Mainz UBB Usedomer Bäderbahn GmbH, Heringsdorf Railion GmbH, Mainz Verkehrsgesellschaft mbH Untermain –VU–, RBG Reisebetreuungs GmbH, Frankfurt/Main Frankfurt/Main RBO Regionalbus Ostbayern GmbH, Regensburg WB Westfalen Bus GmbH, Münster (Westf.) Regionalbahn Schleswig-Holstein GmbH, Kiel Weser-Ems Busverkehr GmbH (WEB), Bremen Regionalbus Braunschweig GmbH –RBB–, Zehlendorfer Eisenbahn- und Hafen GmbH, Berlin Braunschweig Zentral-Omnibusbahnhof Berlin GmbH, Berlin Regional Bus Stuttgart GmbH RBS, Stuttgart ZugBus Schleswig-Holstein GmbH, Kiel

37 Total Emoluments of the Management Board and the Supervisory Board, Including Former Members

in € thousand 2001 2000

Total Management Board emoluments 4,694 3,880 Emoluments of former Management Board members 995 2,110 Pensions provisions for former Management Board members 10,971 9,484 Total Supervisory Board emoluments 224 237 Emoluments of former Supervisory Board members 0 0 Loans granted to Management Board members 0 0 Loans granted to Supervisory Board members 0 0

For the names and functions of the members of the Supervisory Board and the Management Board, please see the pages 127– 130.

38 Events After the Balance Sheet Date Events after the balance sheet date are stated in the Group Management Report.

Berlin, March 28, 2002

Deutsche Bahn AG The Management Board

145 Independent Auditor’s Report

The Consolidated Financial Statements were prepared in DM and audited by PwC Deutsche Revision Aktiengesellschaft Wirtschaftsprüfungsgesellschaft, who added the following auditor’s certificate:

“We have audited the consolidated financial statements and the group manage- ment report of Deutsche Bahn Aktiengesellschaft, Berlin, for the business year from January 1 to December 31, 2001. The preparation of the consolidated finan- cial statements and the group management report in accordance with German commercial law are the responsibility of the Company’s Board of Managing Dir- ectors. Our responsibility is to express an opinion on the consolidated financial statements and the group management report based on our audit. We conducted our audit of the consolidated annual financial statements in accordance with § 317 HGB and the generally accepted standards for the audit of financial statements promulgated by the Institut der Wirtschaftsprüfer in Deutsch- land (IDW). Those standards require that we plan and perform the audit such that misstatements materially affecting the presentation of the net assets, financial posi- tion and results of operations in the consolidated financial statements in accord- ance with German principles of proper accounting and in the group management report are detected with reasonable assurance. Knowledge of the business activi- ties and the economic and legal environment of the Company and evaluations of possible misstatements are taken into account in the determination of audit pro- cedures. The effectiveness of the accounting-related internal control system and the evidence supporting the disclosures in the consolidated financial statements and the group management report are examined primarily on a test basis within the framework of the audit. The audit includes assessing the annual financial statements of the companies included in consolidation, the determination of the companies to be included in consolidation, the accounting and consolidation prin- ciples used and significant estimates made by the Company’s Board of Managing Directors, as well as evaluating the overall presentation of the consolidated finan- cial statements and the group management report. We believe that our audit provides a reasonable basis for our opinion. Our audit has not led to any reservations.

146 Independent Auditor’s Report

In our opinion, the consolidated financial statements give a true and fair view of the net assets, financial position and results of operations of the Group in accordance with German principles of proper accounting. On the whole the group management report provides a suitable understanding of the Group’s position and suitably presents the risks of future development.”

Frankfurt/Main, April 16, 2002

PwC Deutsche Revision Aktiengesellschaft Wirtschaftsprüfungsgesellschaft

(Kämpfer) (Jäcker) Wirtschaftsprüfer Wirtschaftsprüfer

147 Major Subsidiaries Deutsche Bahn Group

Revenues Revenues Net income Employees Ownership Equity 2001 relative 2001 as of Name and domicile in % in € million in € million change in % in € million Dec 31, 2001

Group division Passenger Transport Long-distance Passenger Transport (DB Reise&Touristik) DB Reise&Touristik AG, Frankfurt/Main 100.0 2,045.2 3,142.6 0.4 – 1) 19,867 AMEROPA-REISEN GmbH, Bad Homburg v.d.H. 100.0 2.6 103.1 1.9 – 1) 131 Bayern Express & P. Kühn Berlin GmbH, Berlin 100.0 4.1 22.6 6.1 – 1) 199 CityNightLine CNL AG, Zurich 100.0 18.8 42.7 17.1 4.0 13 DBDialog Telefonservice GmbH, Schwerin 100.0 0.8 53.2 276.2 – 1) 1,509 Deutsche Touring Gesellschaft mbH, Frankfurt/Main 82.8 5.0 54.7 6.2 – 1) 159 Metropolitan Express-Train GmbH, Bad Homburg v.d.H. 100.0 4.3 18.8 17.7 – 1) 12 MITROPA Mitteleuropäische Schlafwagen und Speisewagen Aktiengesellschaft, Berlin 100.0 15.5 283.2 – 6.2 1.3 1) 4,554

Local Passenger Transport (DB Regio) DB Regio AG, Frankfurt/Main 100.0 1,764.0 4,695.9 – 5.1 – 1) 25,564 BRN Busverkehr Rhein-Neckar GmbH, Ludwigshafen 100.0 13.3 47.6 – 1.7 – 1) 416 Burgenlandbahn GmbH, Zeitz 70.0 0.3 15.3 4.3 0.2 0 DB Regionalbahn Rhein-Ruhr GmbH, Essen 100.0 126.1 503.0 1.3 – 1) 2,231 DB Regionalbahn Rheinland GmbH, Cologne 100.0 68.6 296.7 6.6 – 1) 1,156 BVR Busverkehr Rheinland GmbH, Dusseldorf 100.0 4.2 53.9 – 5.2 – 1) 262 DB ZugBus Regionalverkehr Alb-Bodensee GmbH (RAB), Ulm 100.0 24.0 188.3 0.5 – 1) 596 DB Regionalbahn Westfalen GmbH, Münster 100.0 35.5 299.7 7.3 – 1) 1,218 WB Westfalen Bus GmbH, Münster 100.0 6.0 54.6 3.7 – 1) 337 BVO Busverkehr Ostwestfalen GmbH, Bielefeld 100.0 11.3 56.8 – 1.4 – 1) 434 Omnibusverkehr Franken GmbH (OFV), Nuremberg 100.0 13.3 83.3 2.2 – 1) 485 ORN Omnibusverkehr Rhein Nahe GmbH, Mainz 100.0 5.1 41.3 4.1 – 1) 318 RBO Regionalbus Ostbayern GmbH, Regensburg 100.0 9.8 54.2 3.1 – 1) 268 Regional Bus Stuttgart GmbH, Stuttgart 100.0 15.9 64.8 – 10.4 – 1) 506 Regionalbus Braunschweig GmbH –RBB–, Braunschweig 100.0 3.6 38.4 0.2 – 1) 266 Regionalverkehr Kurhessen GmbH, Kassel 100.0 10.7 58.9 5.9 – 1) 524 Regionalverkehr Oberbayern GmbH, Munich 100.0 10.8 55.0 7.7 – 1) 625 RMV Rhein-Mosel Verkehrsgesellschaft mbH, Koblenz 74.9 13.4 55.5 2.7 3.8 221 RSW Regionalbus Saar-Westpfalz GmbH, Saarbrücken 100.0 9.4 57.2 6.1 – 1) 321 RVS Regionalbusverkehr Südwest GmbH, Karlsruhe 100.0 7.2 48.8 – 7.7 – 1) 365 S-Bahn Berlin GmbH, Berlin 100.0 165.2 486.8 8.4 – 1) 4,135 S-Bahn Hamburg GmbH, Hamburg 100.0 62.3 159.2 – 0.3 – 1) 1,067 S-Bahn München GmbH, Munich 2) 100.0 225.4 241.6 – 1) 991 SBG SüdbadenBus GmbH, Freiburg 100.0 6.6 63.8 – 9.5 – 1) 446 Verkehrsgesellschaft mbH Untermain –VU–, Frankfurt/Main 100.0 3.8 55.3 4.7 – 1) 335 Weser-Ems Busverkehr GmbH (WEB), Bremen 100.0 10.2 54.7 3.0 – 1) 351 Regionalbahn Schleswig-Holstein GmbH, Kiel 100.0 10.5 239.3 6.8 – 1) 972 Autokraft GmbH, Kiel 100.0 8.7 67.8 3.8 – 1) 623

148 Major Subsidiaries

Revenues Revenues Net income Employees Ownership Equity 2001 relative 2001 as of Name and domicile in % in € million in € million change in % in € million Dec 31, 2001

Group division Freight Transport DB Cargo AG, Mainz 100.0 434.6 3,420.6 – 2.5 – 1) 29,101 ATG Autotransportlogistic GmbH, Eschborn/Taunus 75.0 3.1 268.7 1.0 2.0 45 BTT BahnTank Transport GmbH, Mainz 100.0 1.5 32.1 25.4 – 1) 36 DB Verkehrsbau Logistik GmbH, Mainz 95.0 2.6 417.9 93.8 – 1) 164 NUCLEAR CARGO+SERVICE GmbH, Hanau 100.0 8.7 39.9 77.0 3.6 71 Railion Benelux N.V., Utrecht 100.0 69.6 150.6 4.5 0.1 1,397 Railion Denmark A/S, Copenhagen 3) 100.0 7.8 77.2 (10.0) 707 TRANSA Spedition GmbH, Offenbach/Main 50.0 9.8 208.1 2.4 1.0 313 Transfracht Internationale Gesellschaft für kombinierten Güterverkehr mbH, Frankfurt/Main 100.0 0.5 207.0 0.3 – 1) 182

Group division Passenger Stations DB Station&Service AG, Frankfurt/Main 100.0 1,201.5 807.6 0.9 – 1) 5,096

Group division Track Infrastructure DB Netz AG, Frankfurt/Main 100.0 4,422.7 3,453.4 – 0.6 – 1) 53,894

Other Subsidiaries DB Anlagen und Haus Service GmbH, Berlin 100.0 2.6 340.3 – 1.9 – 1) 4,707 DB Energie GmbH, Frankfurt/Main 100.0 528.9 1,289.8 9.2 – 1) 1,876 DB FuhrparkService GmbH, Frankfurt/Main 90.0 3.5 129.8 1.3 – 1) 164 DB Informatik-Dienste GmbH, Erfurt 100.0 212.5 433.5 7.9 – 1) 850 DE-Consult, Deutsche Eisenbahn Consulting GmbH, Berlin 74.0 23.9 107.5 – 1.5 3.8 1,010 Deutsche Eisenbahn-Reklame GmbH, Kassel 100.0 5.5 170.6 17.2 – 1) 253 Deutsche Bahn Gleisbau GmbH, Duisburg 100.0 7.5 83.3 12.8 – 1) 369 Deutsche Gleis- und Tiefbau GmbH, Berlin 100.0 1.1 144.9 – 18.0 – 1) 1,413 Ibb Ingenieur-, Brücken- und Tiefbau GmbH, Dresden 100.0 2.0 58.9 11.5 – 1) 282 DVA Deutsche Verkehrs-Assekuranz- Vermittlungs-GmbH, Bad Homburg v.d.H. 65.0 1.0 22.6 28.0 11.0 67 BRG Servicegesellschaft Frankfurt a.M. GmbH, Frankfurt/Main 51.0 0.2 29.1 16.0 0.0 692 BRG Servicegesellschaft Hamburg GmbH, Hamburg 51.0 1.7 52.6 8.5 0.9 1,385 BRG Servicegesellschaft München GmbH, Munich 51.0 1.7 57.9 19.0 1.2 1,341 BRG Servicegesellschaft Köln GmbH, Cologne 51.0 1.3 59.4 22.8 0.8 1,306 BRG Bahnreinigung Karlsruhe GmbH, Karlsruhe 51.0 1.3 39.8 15.3 0.8 831 BRG Servicegesellschaft Berlin GmbH, Berlin 51.0 0.8 64.0 4.5 0.5 1,973 BRG Servicegesellschaft Leipzig GmbH, Leipzig 100.0 0.3 66.8 20.3 – 1) 2,162 BSG Bahn Schutz&Service GmbH, Frankfurt/Main 100.0 0.2 102.0 2.8 – 1) 3,063 TLC Transport-, Informatik- und Logistik-Consulting GmbH, Berlin 100.0 1.9 278.8 12.6 – 1) 1,251

1) Profit and loss transfer agreement 2) Spin-off from DB Regio AG 3) First-time consolidation

149 [left intentionally blank]s

150 Financial Statement Deutsche Bahn AG

151 Deutsche

Balance on 31 December

31 Decem- 31 Decem- Assets Note ber 2001 ber 2000 (in 5 million) A. Fixed Assets Intangible Assets ...... (2) 3 33 Properties ...... (2) 4,046 3,954 Financial Assets ...... (2) 16,272 15,936 20,321 19,923 B. Current Assets Inventories ...... (3) 278 25 Accounts receivable and other assets...... (4) 3,138 2,035 Securities ...... (5) 348 30 Cash and cash equivalents ...... 709 747 4,473 2,837 C. Prepayments and accrued income ...... 0 1 24,794 22,761

152 Bahn AG

Sheet 2001

31 Decem- 31 Decem- Equity and Liabilities Note ber 2001 ber 2000 (in 5 million) A. Equity Subscribed capital ...... (6) 2,150 2,147 Capital reserves ...... (7) 5,310 5,313 Retained earnings ...... (8) 1,471 1,471 Balance sheet loss ...... – 135 – 5 8,796 8,926 B. Provisions ...... (9) 5,870 6,084

C. Liabilities ...... (10) 10,103 7,727

D. Accruals and deferred income ...... (11) 25 24

24,794 22,761

153 Deutsche Bahn AG

Statement of Income 1 January through 31 December 2001

Note 2001 2000 (in 5 million) Inventory changes ...... 24 – 8 Other internally produced and capitalized assets ...... 519 19 Overall performance ...... 543 11 Other operating income ...... (15) 2,859 3,325 Cost of materials ...... (16) – 1,509 – 398 Personnel expenses ...... (17) – 651 – 304 Depreciation ...... – 70 – 66 Other operating expenses ...... (18) – 1,413 – 1,316 – 241 – 1,252 Investment income ...... (19) 171 – 1,108 Net interest ...... (20) – 50 3 Income before taxes ...... –130 147 Income taxes ...... 0 0 Income after taxes ...... –130 147 Loss carried forward ...... – 5 – 152 Balance sheet loss ...... –135 –5

154 Deutsche Bahn AG

Statement of Cash Flows 1 January through 31 December 2001

Note 2001 2000 (in 5 million) Income before taxes ...... –130 147 Depreciation of properties(*) ...... 70 67 Changes to pension provisions ...... 36 5 Cash flow before taxes ...... –24 219 Changes to other provisions ...... – 626 – 1,312 Gains/losses from disposal of properties(*) ...... – 207 – 178 Gains/losses from disposal of financial assets ...... – 21 0 Changes to current assets (excl. cash and cash equivalents) – 1,671 – 38 Changes to other operating liabilities...... – 450 718 Income taxes ...... 0 0 Cash flow from business activities ...... – 2,999 – 591 Proceeds from disposal of properties(*) ...... 703 262 Payments for purchase of properties(*) ...... – 250 – 82 Proceeds from disposal of financial assets ...... 38 0 Payments for the purchase of financial assets ...... – 5 – 17 Investing activities ...... 486 163 Proceeds from long-term Group financing ...... 1,142 553 Proceeds from short-term Group financing ...... 1,287 204 Proceeds from issuing bonds and new loans ...... 46 0 Repayments of bonds and loans ...... 0 0 Financing activities ...... 2,475 757 Net increasing (decrease) in cash ...... –38 329 Cash and cash equivalents, beginning of year ...... (21) 747 418 Cash and cash equivalents, end of year ...... (21) 709 747

(*) Including intangible assets.

155 Deutsche

Fixed Assets

Acquisition and manufacturing costs Transfer Balance from/to Balance at Group at 31 De- 1 January compa- cember Fixed Assets Schedule 2001 nies(*) Additions Transfers Disposals 2001 (in 5 million) 1. Licenses, patents, trade- marks, and similar rights . . . 196 – 169 0 0 – 1 26 2. Advance payments ...... 000000 196 – 169 0 0 – 1 26 Properties 1. Land, leasehold rights, and buildings including buildings on land owned by others a) Land and leasehold rights ...... 3,599 0 6 0 – 89 3,516 b) Commercial, office, and other buildings ...... 332 53 11 13 – 7 402 c) Permanent way forma- tion and structures ...... 500005 3,936 53 17 13 – 96 3,923 2. Track infrastructure, signaling and control equipment ...... 9610–115 3. Rolling stock for passenger and freight transport ...... 0 11 0 1 – 1 11 4. Technical equipment and machinery other than No.2or3...... 50 160 11 2 –11 212 5. Other equipment, operating and office equipment ...... 57 32 21 4 – 15 99 6. Advance payments and construction in progress . . . . 20 8 36 – 20 – 1 43 4,072 270 86 0 – 125 4,303 Financial assets 1. Investments in affiliated companies ...... 10,652 0 3 0 – 10 10,645 2. Loans to affiliated companies ...... 4,736 0 681 0 – 333 5,084 3. Investments in associated companies ...... 550 0 2 0 – 6 546 4. Investments in related companies ...... 000000 5. Other loans ...... 1000–10 15,939 0 686 0 – 350 16,275 Total Fixed assets ...... 20,207 101 772 0 – 476 20,604

156 Bahn AG

Schedule

Accumulated depreciation Book value Transfer from/to Deprecia- Balance Balance Balance Balance at Group tion at 31 De- at 31 De- at 31 De- 1 January compa- financial cember cember cember 2001 nies(*) year 2001 Transfers Disposals 2001 2001 2000 (in 5 million) (in 5 million)

– 163 153 – 14 0 1 – 23 3 33 000000 00 – 163 153 – 14 0 1 – 23 3 33

–80000–83,508 3,591

– 51 – 14 – 13 – 1 2 – 77 325 281

–10000–144 – 60 – 14 – 13 – 1 2 – 86 3,837 3,876

–7–3001–962

0–9–101–920

– 27 – 64 – 22 1 7 – 105 107 23

– 24 – 17 – 20 0 13 – 48 51 33

000000 4320 – 118 – 107 – 56 0 24 – 257 4,046 3,954

–20000–210,643 10,650

0000005,084 4,736

–10000–1545549

000000 0 000000 01 –30000–316,272 15,936 – 284 46 – 70 0 25 – 283 20,321 19,923

157 Deutsche Bahn AG

Notes for the Financial Year 2001

The annual financial statements of Deutsche Bahn AG have been drawn up in accordance with the provisions of the German Commercial Code (HGB) and the German Stock Corporation Act (AktG) as well as the Ordinance relating to the structure of annual financial statements of corporations engaged in the transport sector. In order to improve the clarity of the presentation, legally required items have been consolidated in the Balance Sheet and in the Income Statement. The Notes contain the required details and explanatory remarks.

The annual financial statements are based on accounting in German marks (DM). As in the previous year, they were drawn up in euros at the official exchange rate of 1 euro = DM 1.95583. The corporate currency was changed over to euros as of January 1, 2002.

(1) Accounting and Valuation Methods

There have been no changes in the accounting and valuation methods compared to the previous year.

Intangible assets acquired for valuable consideration are carried at acquisition costs and written down on a straight-line basis. Acquired software that constitutes a low-value asset in each individual case is fully written off during the first year.

Properties (property, plant and equipment) are carried at acquisition or manufacturing costs less scheduled depreciation, where applicable. Write-downs for asset impairment are recognized if recov- ery of the carrying amounts is no longer to be expected.

Manufacturing costs include direct costs, prorated material and production overheads, and sched- uled depreciation. Prorated material and production overheads as well as depreciation are deter- mined on the basis of actual capacity utilization. Neither interest on borrowed funds nor administra- tive overhead is included in manufacturing costs.

Scheduled depreciation is recognized using the straight-line method based on the normal useful lives. Depreciation is determined in accordance with the tax depreciation tables. The useful lives of the main groups are shown in the table below: Years

Software, other licenses...... 5 Permanent way structures, bridges ...... 75 Track infrastructure ...... 20 – 25 Buildings and other constructions ...... 10 – 50 Signaling equipment ...... 20 Telecommunications equipment ...... 5 – 20 Rolling stock...... 15 – 30 Other technical equipment, machinery, and vehicles ...... 5 – 25 Factory and office equipment ...... 5 – 13

Properties of minor value with individual values of up to DM 4,000 (5 2,045) are fully depreciated in the year of acquisition and carried as disposals.

Financial assets are carried at acquisition costs and are subject to write-downs for asset impairment where appropriate.

Inventories are valued at acquisition or manufacturing costs; raw materials and supplies are valued on the basis of average acquisition costs. Risks in inventories resulting from a decline in economic usefulness, long storage periods, price changes in the procurement markets, or any other decline in value are taken into account by adjusting such values accordingly.

158 Accounts receivable and other assets are stated at nominal or face value unless a lower carrying amount is required in individual cases. Discernible risks have been taken into account by individual or lump-sum valuation adjustments.

Securities are carried at acquisition costs.

Pension provisions are carried as liabilities at their going-concern value in accordance with Section 6 a of the German Income Tax Act (EStG). As in previous years, the calculations are based on the 1998 mortality tables of Dr. Klaus Heubeck. The amounts of pension provisions are calculated according to actuarial principles and at a fixed 6% p.a. interest rate for accounting purposes.

All other provisions are stated at the amount required, based on sound business judgement. Provi- sions take all discernible risks into account. Furthermore, reserves for contingencies have been set up in accordance with Section 249 (2) HGB. The remaining provisions are determined at full cost.

Liabilities are carried at the expected settlement amount.

Receivables and liabilities stated in foreign currency are translated at the buying or selling rate on the creation date. Adjustments are made if the exchange rates effective at the balance sheet date lead to lower receivables or higher liabilities.

159 Notes to the Balance Sheet

During the year under review, Deutsche Bahn AG took over vehicle maintenance facilities from its subsidiaries DB Reise&Touristik AG, DB Regio AG, and DB Cargo AG. Compared to the previous year, this resulted in major changes in the balance sheet items properties (excluding land), inventories, and pension provisions, as well as in the statement of income items total performance, other operat- ing income, cost of materials, personnel expenses, and depreciation.

Therefore, various balance sheet items and the statement of income of the Financial Statements 2001 of Deutsche Bahn AG are not directly comparable to the previous year. For more information on these transfers, please see the Management Report.

(2) Fixed Assets

Movements in fixed assets are shown on the 32 and 33 pages.

In the financial year 2001, write-offs for asset impairment of properties amounted to 5 0 million (pre- vious year: 5 10 million).

(3) Inventories 2001 2000 (in 5 million) Raw materials and manufacturing supplies...... 248 18 Unfinished products, work in progress...... 28 5 Finished products and goods ...... 0 0 Advance payments to suppliers...... 2 2 Total...... 278 25

Valuation adjustments in the amount of 5 126 million (previous year: 5 13 million) were made to take into account the strict lower of cost or market value principle as well as marketability discounts.

(4) Accounts Receivable and Other Assets of which with a remaining term of more than 2001 one year 2000 (in 5 million) Trade receivables ...... 228 19 382 Receivables due from affiliated companies ...... 455 0 278 Receivables due from companies in which a participating interest is held ...... 87 0 70 Other assets...... 2,368 271 1,305 Total ...... 3,138 290 2,035

Value adjustments for accounts receivable and other assets amounted to 5 121 million (previous year: 5 49 million).

Receivables due from affiliated companies almost exclusively concern cash-pooling-receiveables.

The main elements of other assets are short-term cash investments through year’s end totaling 5 1,775 million (previous year: 5 1,046 million), tax receivables, and a claim against the Federal Rail-

160 road Fund (BEV) under the “Trilateral Agreement” for the transfer of properties [for more informa- tion, please see the comments under Note (10)].

(5) Securities

Being set aside as a general operating reserve, securities held as current assets consist exclusively of fungible securities.

(6) Subscribed Capital

In the financial year 2001, Deutsche Bahn AG changed its subscribed capital over from DM to euros. In this context, its subscribed capital was increased by an amount of some DM 5 million (some 5 3 million) to round the value in euros, through a conversion of part of its capital reserves, without issu- ing new shares. The subscribed capital now amounts to 5 2,150 million. At the same time, the pre- vious subdivision of the subscribed capital into 84,000,000 bearer shares having a par value of DM 50 each, was changed to a subdivision into 430,000,000 no-par value bearer shares. The shares are held entirely by the Federal Republic of Germany.

(7) Capital Reserves

Within the process of converting the subscribed capital from DM to euros, some DM 5 million (some 5 3 million) were withdrawn from the capital reserves. Accordingly, an amount of DM 10,385 million (5 5,310 million) was reported as of December 31, 2001.

(8) Retained Earnings / Other Retained Earnings

Retained earnings remained unchanged at 5 1,471 million.

(9) Provisions 2001 2000 (in 5 million) Pension provisions...... 86 50 Tax provisions...... 319 286 Other provisions...... 5,465 5,748 Total ...... 5,870 6,084

5 36 million (previous year: 5 5 million) were transferred to provisions for pensions in the financial year 2001.

Other provisions consisted of the following: 2001 2000 (in 5 million) Personnel-related commitments ...... 152 105 Restructuring charges ...... 265 343 Inherited environmental liabilities...... 2,620 3,156 Reconveyance obligations ...... 321 473 Other risks ...... 2,107 1,671 Total ...... 5,465 5,748

161 Personnel-related commitments mainly concern leave entitlements, profit-sharing bonuses, and early retirement benefits. Severance pay and similar expenses are reported under provisions for restructuring charges.

Provisions for inherited environmental liabilities relate primarily to the remediation of residual pollu- tion caused before July 1, 1990 in the regions served by the former Deutsche Reichsbahn. A provision of 5 2.9 billion was set aside for this purpose in the opening balance sheet of Deutsche Reichsbahn and taken over unchanged to Deutsche Bahn AG’s opening balance sheet. Provisions for reconvey- ance obligations were set up for potential restitution claims on property in the area of the former Deutsche Reichsbahn. The reduction of these two provision items is primarily due to the redemption of obligations within the framework of the “Trilateral Agreement” with the Federal Railroad Fund (BEV) [also see comments under Note (10)].

All remaining contingent liabilities are allocated to other risks. These primarily include provisions for: – Recultivation and renaturation (decommissioning of railroad tracks and related facilities), – Deferred maintenance work (also includes future measures to be taken in connection with the pre- paration for sale of real estate), – Risks from pending business and for contingent liabilities arising from deliveries and services not yet invoiced.

(10) Liabilities of which with a residual maturity of up to 1 1to5 over 5 2001 year years years 2000 (in 5 million) Bonds ...... 46 0 0 46 0 Liabilities due to banks ...... 51 0 0 51 51 Advance payments received for orders ...... 20 20 0 0 7 Trade accounts payable ...... 121 118 3 0 73 Liabilities due to affiliated companies ...... 7,477 2,615 337 4,525 6,301 Liabilities due to companies in which a participating interest is held. . . . . 1,452 14 263 1,175 1,149 Other liabilities ...... 936 361 524 51 146 – of which tax liabilities...... (14) (14) (0) (0) (10) – of which social security liabilities . . (11) (11) (0) (0) (4) Total ...... 10,103 3,128 1,127 5,848 7,727

Liabilities due to companies in which a participating interest is held include long-term, interest-bear- ing loans from EUROFIMA European Company for the Financing of Railway Rolling Stock (Basle/ Switzerland) amounting to 5 1,438 million (previous year: 5 1,139 million.) These liabilities have to be secured pursuant to EUROFIMA’s memorandum of association by assignment of railroad equipment (rolling stock). The required security was provided by assigning rolling stock of the subsidiaries DB Reise&Touristik AG, DB Regio AG and DB Cargo AG.

No other liabilities have been secured.

The increase in other liabilities is due almost exclusively to payment obligations to the Federal Rail- road Fund (BEV) under the “Trilateral Agreement”. These payments serve primarily to replace obliga- tions that were previously reported as provisions. The excess amount results in a claim against the BEV for the transfer of properties [also see the comments under Notes (4) and (9) and the Manage- ment Report].

For a listing of financial debt and the corresponding comments, please see Note (14).

162 (11) Accruals and Deferred Income

Accruals and deferred income consist primarily of accrued rents from hereditary tenancy contracts.

(12) Contingent Liabilities 2001 2000 (in 5 million) Liabilities from guarantees ...... 226 244 Liabilities for third-party liabilities ...... 638 848 Total ...... 864 1,092

Deutsche Bahn AG furnished an unconditional, irrevocable guaranty to the benefit of Deutsche Bahn Finance B.V., Amsterdam, for its Multi-Currency Commercial Paper program issued in the amount of 5 1,023 million. This guaranty was valuated at 5 zero as of December 31, 2001.

The liability for third-party liabilities was the result of the spin-off of subsidiaries from Deutsche Bahn AG. Pursuant to Section 158 in conjunction with Section 133 of the German Conversion Act (Um- wandlungsgesetz), Deutsche Bahn AG and its management companies of the businesses set up as separate legal entities as of January 1, 1999, are jointly and severally liable for the indebtedness of Deutsche Bahn AG as of December 31, 1998. This liability is limited to obligations due within five years of notice of entry of the spin-offs in the Commercial Register – e.g. to obligations becoming due no later than June 30, 2004. The memo item includes all liabilities of Deutsche Bahn AG incurred by December 31, 1998, that were transferred on January 1, 1999, to the spun-off businesses set up as separate stock corporations, that are becoming due no later than June 30, 2004 and are unpaid as of December 31, 2001.

(13) Other Financial Commitments 2001 2000 (in 5 million) Purchase order commitments for capital expenditures ...... 27 15 Outstanding contributions ...... 349 341 Commitments under rental, leasing, and other debt obligations with external parties ...... 1,244 1,253 – thereof to affiliated companies...... (22) (1) Total ...... 1,620 1,609

The outstanding contributions concern EUROFIMA European Company for the Financing of Railway Rolling Stock, Basle.

Commitments under rental, leasing, and other debt obligations with external parties are carried at their nominal values. The two tables below list the corresponding nominal values and the net present values (as of December 31, 2001) by due date: Net present Nominal value value at 7.5% (in 5 million) Lease payments due within 1 year ...... 90 87 within 1 to 5 years ...... 336 272 after 5 years ...... 488 259 Total ...... 914 618

163 Leasing plays only a minor part in the financing of necessary business assets. During the financial year 2001, lease payments totaled 5 84 million (previous year: 5 70 million). Net present Nominal value value at 7.5% (in 5 million) Rental and other debt obligations with external parties due within 1 year ...... 66 64 within 1 to 5 years ...... 167 136 after 5 years ...... 97 57 Total ...... 330 257

(14) Financial Instruments

Deutsche Bahn AG, as the central treasury for the Deutsche Bahn Group, is responsible for all financ- ing and hedging activities. In terms of functions and organizational structure, lending and trading workflows in the front office on the one hand and processing and control in the back office on the other hand are kept clearly separate. The Treasury department operates in the financial markets in compliance with the Minimum Requirements for the Trading Activities of Credit Institutions estab- lished by the German Banking Supervisory Authority and it is subject to periodic internal audits.

164 A. Financial Instruments

The main financial instruments and total financial debt as of December 31, 2001, are listed in the fol- lowing table, with nominal amounts and book values being equivalent: Nominal Book Residual interest value Currency maturity rate 2001 (in 5 (in years) (in %) million) Deutsche Bahn AG bonds: – Bond 2001-2011 ...... JPY 9.7 1.390 46 DB Finance B.V. bonds: (1) – Bond 1995-2002 ...... DM 0.6 6.875 511 – Bond 1997-2007 ...... DM 5.8 5.750 511 – Bond 1998-2003 (2) ...... DM max. 1.3 1.125 42 – Bond 1998-2008 ...... DM 6.4 5.000 767 – Bond 1999-2009 ...... EUR 7.5 4.875 1,350 – Bond 2000-2010 ...... EUR 8.5 6.000 1,000 – Bond 2001-2006 ...... DM 5.0 4.500 31 – Bond 2001-2006 ...... CHF 4.7 3.375 265 – Bond 2001-2008 ...... DKK 6.8 5.250 54 – Bond 2001-2008 ...... SEK 6.8 5.500 42 – Bond 2001-2008 ...... NOK 6.8 7.000 50 – Bond 2001-2013 ...... EUR 11.9 5.125 750 Total...... 5,373 EUROFIMA loans: – Loan 1995-2005 (3) ...... DM 3.7 4.750 7 – Loan 1996-2006 ...... DM 5.0 6.000 256 – Loan 1997-2009 ...... DM 8.0 5.625 256 – Loan 1999-2009 ...... EUR 7.8 5.750 400 – Loan 2000-2014 ...... EUR 12.8 5.970 219 – Loan 2001-2014 ...... EUR 12.7 5.410 300 Total...... 1,438 Liabilities due to banks: – Note loan 1998-2008 ...... DM 6.3 5.310 51 Total financial debt ...... 6,908

(1) The DB Finance B.V. bonds were passed on to Deutsche Bahn AG as loans. (2) Bondholders have the option of conversion into Deutsche Lufthansa AG shares held by Deutsche Bahn AG. (3) The EUROFIMA loans to D.A.CH. Hotelzug (Zurich/Switzerland), now trading as CityNightLine CNL AG (Zurich/Swit- zerland), were taken over as part of a purchase of rolling stock by Deutsche Bahn AG as of December 31, 1996.

The bonds issued in foreign currencies have been swapped to euros, which means Deutsche Bahn AG is not exposed to any currency risk from these transactions. An amount of 5 511 million of the total financial debt has a residual maturity of up to one year.

In addition to the liabilities shown on the balance sheet, banks had opened guaranteed credit facil- ities to Deutsche Bahn AG totaling 5 1.6 billion as of December 31, 2001 to cover short-term liquidity requirements. Deutsche Bahn AG had drawn on none of these credit lines as of December 31, 2001.

B. Financial Derivatives

Financial derivatives are used to hedge against interest rate or currency exposures in connection with the financial transactions of the Deutsche Bahn Group. Each individual deal corresponds to an on- balance sheet item or an anticipated exposure (bonds, loans, etc.). Speculative transactions are not permitted. Derivatives for fuel were purchased to hedge against price risks in commodity markets. The use, settlement and control of derivative transactions are governed by corporate guidelines.

165 Market valuations and risk assessments are conducted on an ongoing basis as part of the Deutsche Bahn Group’s risk management system.

Interest rate swaps were used to cover possible interest rate risks. Resulting interest differentials are apportioned on an accrual basis. Future interest differentials are not carried on the balance sheet because they actually are pending transactions.

Foreign exchange risks were of marginal significance to the Deutsche Bahn AG. DB AG held no for- eign currency derivative positions as of the balance sheet date.

Commodity risks at Deutsche Bahn AG primarily involve the purchase of fuels. In the year 2001, Deutsche Bahn AG engaged in several hedging transactions in the commodities area, including swaps and options.

The total notional value of hedging transactions listed below represents the sum of all purchase and sales contracts being hedged. The tonnage is specified for commodity transactions. From the level of this notional volume, conclusions can be drawn as to the extent to which financial derivatives were used, but this level does not reflect the risk inherent in the use of such derivatives.

The fair market value of a derivative financial instrument is equivalent to its cost of liquidation or the amount at which the instrument could be exchanged. The fair values listed below were computed as per the balance sheet date using common financial models; offsetting changes in the values of the items being hedged were not taken into account. In turn, the related financial derivatives are not taken into account for stating the underlying transactions in the balance sheet (no hedge accounting). Because valuation units (derivative/underlying) were formed, the fair values of derivatives as well as changes in the fair values of the underlying transactions are shown in the following table.

The credit risk is the danger of loss due to nonperformance by counterparties (risk of default). It represents the replacement cost (at fair value) of transactions with a positive fair value giving Deutsche Bahn AG a claim against its counterparties. The risk of default of counterparties is actively controlled by our high demands on the financial standing of counterparties both when entering into a contract and for its entire term as well as by the setting of risk limits. The following information on the credit risk contains the cumulative result of all individual risks.

Notional and Fair Market Values of Interest Rate Derivatives: 2001 2000 (in 5 million) Total notional value ...... 4,403 2,851 Performance of valuation units: – Fair market value of derivatives ...... – 57 – 60 – Change in the fair market value of underlying transactions ...... 8 30 Total...... –49 –30

As of December 31, 2001, the portfolio of interest rate derivatives consisted almost exclusively of in- terest rate swaps with a remaining term of more than one year.

Notional and Fair Market Values of Commodity Derivatives: 2001 2000 (in 5 million) Nominal volume (in t) ...... 894,000 0 Performance of valuation units: – Fair market value of derivatives ...... – 11 0 – Change in the fair market value of underlying transactions ...... 11 0 Total...... 0 0

166 As of December 31, 2001, half of the portfolio of commodity derivatives consisted of transactions with a remaining term of more than one year. These transactions were transferred 1:1 to the subsidi- ary DB Energie GmbH.

Credit Risk of Interest Rate and Commodity Derivatives: 2001 2000 (in 5 million) Credit risk of interest rate and commodity derivatives...... 54 27

The single biggest risk, i.e. a risk of default by a specific counterparty, amounts to 5 19 million and relates to a counterparty having a Moody’s rating of Aa3.

As regards credit risks arising from contracts with a remaining term of more than one year, all coun- terparties have a Moody’s rating of no less than A1.

167 Notes to the Income Statement

For information on the comparability of the 2001 income statement with that of the previous year, please see the comments under Note (2).

(15) Other Operating Income 2001 2000 (in 5 million) Income from costs debited to Group companies and other intra-Group offsets...... 689 619 Services to external parties and sale of materials ...... 1,289 461 Rents and leases...... 384 395 Other operating income ...... 136 126 Gains on sales of properties ...... 244 215 Income from the release of provisions ...... 115 1,502 Gains on the reversal/recovery of write-downs/write-offs of receivables . . . . 2 6 Other income unrelated to accounting period...... 0 1 Total ...... 2,859 3,325

The large increase in income from the release of provisions in the previous year resulted primarily from the reduction of provisions for restructuring measures, which at the same time increased signif- icantly on the subsidiaries’ balance sheets. In 2000, this had also resulted in a significant increase in the charges for losses assumed [see Note (19)].

(16) Cost of Materials 2001 2000 (in 5 million) Cost of raw materials, supplies, and merchandise ...... 418 48 Cost of services purchased ...... 202 196 Maintenance expenses ...... 911 158 Subtotal (gross cost of materials) ...... 1,531 402 Federal government contributions ...... – 22 – 4 Total ...... 1,509 398

The cost of services and merchandise purchased for self-constructed assets is recognized under cost of materials. Such cost is capitalized by inclusion in other internally produced and capitalized assets under properties.

Federal government contributions are provided in accordance with Article 2 Section 22 (1) No. 3 Ger- man Railroad Restructuring Act (Eisenbahnneuordnungsgesetz). They are intended to reduce Deutsche Bahn’s increased cost of materials for harmonizing the levels of development, technical equipment, and productivity in the area of the former Deutsche Reichsbahn (East Germany) with those in the area of the former Deutsche Bundesbahn (West Germany). Federal government contribu- tions are reduced from year to year in proportion to the forecast decrease in the additional cost of materials and will not be granted beyond 2002.

168 (17) Personnel Expenses 2001 2000 (in 5 million) Wages and salaries for employees ...... 517 195 for civil servants assigned Payments to the Federal Railroad Fund IAW Article 2 Section 21 (1) (2) Railroad Restructuring Act...... 60 39 Ancillary remuneration paid directly ...... 1 1 578 235 Compulsory social security contributions, pensions and similar benefits, and support payments for employees ...... 121 66 for civil servants assigned (payments to the Federal Railroad Fund IAW Article 2 Section 21 (1) (2) Railroad Restructuring Act) ...... 9 12 130 78 – of which for pensions and similar benefits...... (73) (41) Subtotal (gross personnel expenses) ...... 708 313 Contributions by the Federal Railroad Fund ...... –57 –9 Total ...... 651 304

Expenses related to pensions and similar benefits also include social security contributions paid by employers as well as supplemental social security contributions paid by employers for civil servants assigned.

The contributions by the Federal Railroad Fund (BEV) are made in accordance with Article 2 Sec- tion 21 (5) No. 1 German Railroad Restructuring Act. They are a compensation for of increased per- sonnel expenses in the area of the former Deutsche Reichsbahn (East Germany) as compared to those in the area of the former Deutsche Bundesbahn (West Germany). These contributions are reduced from year to year in proportion to the forecast decrease in personnel expenses and will not be granted beyond 2002.

(18) Other Operating Expenses 2001 2000 (in 5 million) Expenses for intra-Group offsets ...... 407 448 Rents and leases...... 176 156 Fees and dues ...... 36 65 Miscellaneous operating expenses ...... 700 585 Losses on the disposal of fixed assets ...... 16 37 Expenses relating to set up of allowances for and write-off of accounts receivable...... 75 23 Other expenses unrelated to accounting period ...... 3 2 Total ...... 1,413 1,316

5 37 million (previous year: 5 51 million) of miscellaneous operating expenses are attributable to “Other taxes”.

169 (19) Investment Income 2001 2000 (in 5 million) Income from participating interests ...... 18 25 – of which from affiliated companies ...... (12) (24) Income from associated companies ...... 6 4 Income from profit transfer agreements...... 385 230 Transfer of losses ...... – 238 – 1,367 Total ...... 171 – 1,108

The significant amount in the transfer of losses in the previous year is explained in Note (15).

(20) Net Interest 2001 2000 (in 5 million) Income from other securities and long-term loans...... 280 255 – of which from affiliated companies ...... (280) (255) Other interest and similar income ...... 131 125 – of which from affiliated companies ...... (51) (64) Interest and similar expenses...... – 471 – 377 – of which from affiliated companies ...... (– 355) (– 282) Total...... –60 3

170 Notes to the Cash Flow Statement

The structure of the Cash Flow Statement corresponds to German Accounting Standard No. 2 (DRS 2), Cash Flow Statement, developed by the German Accounting Standards Board of the German Accounting Standards Committee e.V. (DRSC).

The cash flow statement shows a breakdown of cash flows by business activities, investment activ- ities and financing activities. Cash flow before taxes is reported under the cash flow from business activities.

For information on the comparability of the cash flow statement for the year under review with the previous year, please see the comments before Note (2).

(21) Cash and Cash Equivalents

This item comprises cash and cash equivalents (cash on hand, Deutsche Bundesbank balance, cash in banks, and checks) as shown on the balance sheet.

For information on other near-liquidity assets, please see the comments on the balance sheet items “Other Assets” and “Securities” [Notes (4) and (5)].

171 Supplemental Information

(22) List of Shareholdings

The complete list of shareholdings in accordance with Section 285 No. 11 HGB has been filed with the Commercial Register of the Local Court of Berlin-Charlottenburg under No. HRB 50000.

(23) Employees 2001 2000 As of As of Annual Decem- Annual Decem- average ber 31 average ber 31

Wage and salary earners ...... 16,187 16,013 4,757 4,651 Civil servants assigned...... 1,786 1,720 1,171 1,044 Subtotal ...... 17,973 17,733 5,928 5,695 Apprentices ...... 2,254 2,334 1,394 1,584 Total...... 20,227 20,067 7,322 7,279

In general, civil servants previously working for the Deutsche Bahn AG have been assigned to work for the company as of its registration date by virtue of Article 2 Section 12 Railroad Restructuring Act (“civil servants assigned”). Although they work for Deutsche Bahn AG, their official employer is the Federal Railroad Fund (BEV).

(24) Total Emoluments of the Management Board and the Supervisory Board, Including Former Members 2001 2000 (in 5 thousand) Total Management Board emoluments ...... 4,694 3,880 Emoluments of former Management Board members ...... 995 2,110 Pensions provisions for former Management Board members ...... 10,971 9,484 Total Supervisory Board emoluments...... 224 237 Emoluments of former Supervisory Board members ...... 0 0 Loans granted to Management Board members...... 0 0 Loans granted to Supervisory Board members...... 0 0

For the names and functions of the members of the Supervisory Board and the Management Board, please see the pages 68–70.

(25) Events After the Balance Sheet Date

Events after the balance sheet date are stated in the Management Report.

(26) Proposed Appropriation of Profit/Loss for the Year

After the net loss for the year and including the loss carried forward from the previous year of 5 4,503,076.17, the income statement of Deutsche Bahn AG shows a balance sheet loss of 5 134,721,940.56 as of 31 December 2001, which will be carried forward into the next financial year.

Berlin, 28 March 2002

Deutsche Bahn AG The Management Board

172 Auditor’s Report

Independent Auditor’s Report

The Financial Statements of Deutsche Bahn AG including the management report of Deutsche Bahn AG were prepared in DM and audited by PwC Deutsche Revision Aktiengesellschaft Wirtschaftspr- fungsgesellschaft, who added the following auditor’s certificate:

„We have audited the annual financial statements, together with the bookkeeping system, and the management report of Deutsche Bahn Aktiengesellschaft, Berlin, for the business year from 1 January to 31 December 2001. The maintenance of the books and records and the preparation of the annual financial statements and management report in accordance with German commercial law are the responsibility of the Company’s Board of Managing Directors. Our responsibility is to express an opinion on the annual financial statements, together with the bookkeeping system and the manage- ment report based on our audit.

We conducted our audit of the annual financial statements in accordance with § 317 HGB and the generally accepted standards for the audit of financial statements promulgated by the Institut der Wirtschaftsprfer in Deutschland (IDW). Those standards require that we plan and perform the audit such that misstatements materially affecting the presentation of the net assets, financial position and results of operations in the annual financial statements in accordance with German principles of proper accounting and in the management report are detected with reasonable assurance. Know- ledge of the business activities and the economic and legal environment of the Company and evalua- tions of possible misstatements are taken into account in the determination of audit procedures. The effectiveness of the accounting-related internal control system and the evidence supporting the dis- closures in the books and records, the annual financial statements and the management report are examined primarily on a test basis within the framework of the audit. The audit includes assessing the accounting principles used and significant estimates made by the Company’s Board of Managing Directors, as well as evaluating the overall presentation of the annual financial statements and man- agement report. We believe that our audit provides a reasonable basis for our opinion.

Our audit has not led to any reservations.

In our opinion, the annual financial statements give a true and fair view of the net assets, financial position and results of operations of the Company in accordance with German principles of proper accounting. On the whole the management report provides a suitable understanding of the Compa- ny’s position and suitably presents the risks of future development.

Frankfurt am Main, 16 April 2002

PwC Deutsche Revision Aktiengesellschaft Wirtschaftsprfungsgesellschaft

(Kmpfer) (Jcker) Wirtschaftsprfer Wirtschaftsprfer

173 Recent Developments and Outlook

For a summary of the economic climate and Deutsche Bahn’s expectations for 2001 please refer to section “Group Management Report” on p. 72 onwards above.

Deutsche Bahn expects for 2002 a continuation of the given upward trend in revenues. In view of the ongoing economic weakness, revenues amounted to EUR 3.8 bn in the first quarter of 2002 which is approximately the same level as in the preceding year. In the first quarter, DB increased its opera- tional efficiency. This improvements were partially offset by declining federal payments for special burdens from the former Deutsche Reichsbahn. According to the planned acceleration of its moderni- sation programme, DB currently has to bear additional expenses, which as in the first quarter of the previous year, in total led to a negative operating income after interest. For the second half of the year especially the freight business should benefit from the forecasted upturn of the European and Ger- man economy. However, the ongoing intensive capital expenditures program and further modernisa- tion efforts will lead to negative results also for the current financial year. Not taking into account any effect from the envisaged takeover of Stinnes AG, the operating income after interest is forecasted to be roughly at EUR minus 550 million.

A binding agreement between E.ON AG and Deutsche Bahn was signed on 4 July 2002 in which E.ON irrevocably commits to sell their participation of approximately 65.4 percent in Stinnes as part of the planned take-over offer by Deutsche Bahn to all shareholders of Stinnes AG. After concluding the agreement, the Management Board of Deutsche Bahn has decided to launch a public take-over offer for Stinnes AG at a price of 32.75 EUR per share in cash, which can result in a maximum of EUR 2.5 bn depending on the quotation of acceptance.

The acceptance period of the planned take-over offer is expected to commence after the publication of the offer document during the first half of August. Investors will then have the opportunity to accept the offer most likely until the end of September 2002.

The take-over offer is expected to be subject only to approval by the respective competition law authorities and, no later than 15 September 2002, by the Federal German Transport Ministry pursuant to the Federal Budget Ordinance (“Bundeshaushaltsordnung”).

With the acquisition of Stinnes, Deutsche Bahn plans to expand its cargo business from a pure carrier business to that of a logistics services provider, offering a complete product spectrum. The future strategic concept provides for Stinnes to be organised as the management and holding company for all logistics operations of Deutsche Bahn. The Stinnes-subsidiary Schenker, once part of Deutsche Bundesbahn (one of the legal predecessors of Deutsche Bahn AG) and sold in 1991, is expected to continue operating as an independent organisation after the take-over. The rail transport operations DB Cargo, Railion Denmark and Railion Benelux are planned to operate alongside the logistics and forwarding services of Schenker under this roof. In due course, Deutsche Bahn plans to divest the Stinnes business units Chemicals and Materials as they do not constitute core activities for Deutsche Bahn.

Deutsche Bahn will finance the planned take-over from existing cash resources and the issuance of bonds.

174 Deutsche Bahn Finance B.V. (“Deutsche Bahn Finance”) – Issuer –

Incorporation, Duration and Registered Seat

Deutsche Bahn Finance B.V. was incorporated on 16 September 1994 for an unlimited duration as a limited liability company (Besloten Vennootschap met beperkte aansprakelykheid (B.V.)) under the law of The Netherlands. Its corporate seat is Amsterdam, The Netherlands, where it is registered under No. H 33262213. Its registered office is Herengracht 450, NL-1017 CA Amsterdam.

Purpose

The purpose of Deutsche Bahn Finance B.V. is (i) to finance, and to provide financial services to Deutsche Bahn AG and its subsidiaries, (ii) to raise funds through private and public bond issues as well as loans, (iii) to issue guarantees to foster the purpose of Deutsche Bahn Finance B.V., (iv) to counsel, and provide services to Deutsche Bahn AG and its subsidiaries as well as to perform all activities in connection with the aforementioned or beneficial to them.

Share Capital

The authorised share capital of Deutsche Bahn Finance B.V. is EUR 500,000 divided into 1,000 shares with a nominal value of EUR 500 each. Of this capital EUR 100,000 have been issued and fully paid.

Deutsche Bahn Finance B.V. is 100% owned by Deutsche Bahn AG.

Capitalisation

As of 31 December 2001, the capitalisation (audited) of Deutsche Bahn Finance B.V. was as follows:

As of As of 31 December 30 June 2002 2001 EUR million EUR million Long-term debt bonds ...... 5,332.78 4,816.27 Short term debt bonds ...... 511.29 0 Equity share capital ...... 0.10 0.10 Retained profits ...... 3.75 3.75 Total capitalisation...... 5,336.63 4,820.12 Contingent liabilities ...... – –

Save as disclosed herein, there has been no material change in the capitalisation and the contingent liabilities of Deutsche Bahn Finance B.V. since 30 June 2002 and there has been no material change in the current liabilities since 31 December 2001.

Management

The directors of Deutsche Bahn Finance B.V. are: Wolfgang Reuter, Knigstein, Federal Republic of Germany Deutsche International Trust Company N.V., Amsterdam, The Netherlands

175 General Meetings

The annual General Meeting of shareholders is held within six months after the end of the fiscal year.

Independent Accountants

The independent accountants of Deutsche Bahn Finance B.V. are PricewaterhouseCoopers N.V., Accountants, Strawinskylaan 3127, 1007 JB Amsterdam, The Netherlands, who have audited the financial statements of Deutsche Bahn Finance B.V. for the years 1999, 2000 and 2001 and have issued their unqualified opinion in each case.

Fiscal Year

The fiscal year is the calendar year.

176 Financial Statements

Deutsche Bahn Finance B.V. Annual Report 31 December 2001

The following pages 178–191, are taken from the Deutsche Bahn Finance B.V. Annual Report.

References to page numbers are adapted to the page numbers of this Information Memorandum.

177 Deutsche Bahn Finance B.V. Annual Report 31 December 2001

Contents Page Directors’ Report...... 179 Balance Sheet as at 31 December 2001 ...... 180 Profit and Loss Account for the year ended 31 December 2001...... 181 Notes to the Financial Statements for the year ended 31 December 2001...... 182 Other Information ...... 190 Auditors’ Report ...... 191

178 DEUTSCHE BAHN FINANCE B.V. DIRECTORS’ REPORT 31 DECEMBER 2001

Activities

The company has been incorporated in Amsterdam on 16 September 1994. The company acts as a finance company for the Deutsche Bahn Group. The company issued CHF 400,000,000, NOK 400,000,000, SEK 400,000,000, DKK 400,000,000, EUR 750,000,000 and DEM 60,000,000 bearer bonds in 2001, EUR 1,000,000,000 bearer bonds in 2000, EUR 1,350,000,000 bearer bonds in 1999 and DEM 3,581,640,000 in the years before 1999, which adds up to EUR 5,378,781,611. The proceeds have been used to finance Deutsche Bahn AG in Berlin.

Result for the period

The result for the period is a profit of EUR 1,826,149 after taxation

(2000: EUR 2,127,450).

Events after balance sheet date

No significant events have occurred after the balance sheet date, which would have affected these annual accounts.

Future developments

The company will continue its operations as a group finance company for the foreseeable future.

Amsterdam, 13 February 2002

The Directors,

W. Reuter Deutsche International Trust Company N. V.

179 DEUTSCHE BAHN FINANCE B.V. BALANCE SHEET AS AT 31 DECEMBER 2001 (after proposed appropriation of profit) (amounts expressed in euro)

Note 2001 2000 EUR EUR FINANCIAL FIXED ASSETS Intercompany loans receivable ...... 3 4,813,607,408 4,132,963,551 Total fixed assets ...... 4,813,607,408 4,132,963,551 CURRENT ASSETS Intercompany loans receivable ...... 4 510,970,498 0 Interest receivable on intercompany loans ...... 121,619,967 112,764,231 Intercompany receivable Deutsche Bahn AG ...... 5,329,469 5,487,887 Other receivables...... 0 633 Cash and bank balances ...... 42,898 76,141 Total current assets ...... 637,962,832 118,328,892 CURRENT LIABILITIES (less than one year) Short-term bonds ...... 5 510,984,558 0 Interest payable on bonds ...... 118,181,969 109,346,055 Intercompany payable Deutsche Bahn AG ...... 2,205,709 2,014,520 Corporate income tax payable...... 60,785 41,975 Accrued expenses ...... 19,041 10,483 Total current liabilities...... 631,452,062 111,413,033 Current assets less current liabilities ...... 6,510,770 6,915,859 4,820,118,178 4,139,879,410

LONG-TERM DEBT (more than one year) Long-term bonds ...... 6 4,816,268,885 4,133,318,463 4,816,268,885 4,133,318,463 SHAREHOLDER’S EQUITY Paid-in and called-up share capital ...... 7 100,000 90,756 Other reserves ...... 8 3,749,293 6,470,191 Total shareholder’s equity ...... 3,849,293 6,560,947 4,820,118,178 4,139,879,410

180 Deutsche Bahn Finance B.V. Profit and Loss Account for the Yearended 31 December 2001 (amounts expressed in euro)

Notes 2001 2000 EUR EUR FINANCIAL INCOME Interest on intercompany loans...... 245,585,065 209,024,062 Release of discount on loans receivable ...... 3.2 6,596,536 5,842,458 Other interest ...... 152,509 302,593 252,334,110 215,169,113 FINANCIAL EXPENSE Interest expense...... 237,725,890 202,144,483 Amortisation of discount on bonds issued ...... 6.2 6,429,494 5,788,233 244,155,384 207,932,716 Net financial income ...... 8,178,726 7,236,397 OTHER EXPENSES Guarantee fee...... 4,372,398 3,731,018 Bond-issue costs ...... 841,010 405,345 General and administrative expenses ...... 61,736 34,996 5,275,144 4,171,359 NET RESULT BEFORE TAXATION ...... 2,903,582 3,065,038 Taxation...... 1,077,433 937,588

NET RESULT AFTER TAXATION...... 1,826,149 2,127,450

181 DEUTSCHE BAHN FINANCE B.V. NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2001

1. GENERAL

Activities

Deutsche Bahn Finance B.V. (“the company”) has been incorporated on 16 September 1994 and has its statutory seat in Amsterdam. The company is a wholly owned subsidiary of Deutsche Bahn AG, Germany. The company acts as a finance company to the Deutsche Bahn group.

The company is party to a DEM 2,000,000,000 multi-currency commercial paper programme, arranged by Deutsche Bahn AG in October 1994 and redominated into euro in January 1999, under which the company can issue notes, together with Deutsche Bahn AG.

In May 2001, the company became party to a EUR 5,000,000,000 debt issuance programme, arranged by Deutsche Bahn AG. This programme enables the company to issue all kinds of bonds in different currencies and with different maturity dates. Related to this programme, the company issued 7 new bearer bonds in 2001 for a total of EUR 1,197,518,157, the proceeds of which were used to finance Deutsche Bahn AG in Berlin.

2. ACCOUNTING PRINCIPLES AND PRESENTATION OF ACCOUNTS

The principal accounting policies followed by the company are as follows:

2.1 Accounting principles

The accounts have been prepared under the historical cost convention. Unless otherwise mentioned, assets and liabilities are stated at nominal value.

Foreign currency translation

Transactions in foreign currencies are recorded using the rate of exchange ruling at the date of the transaction. Assets and liabilities denominated in foreign currencies are translated using the rate of exchange ruling at the balance sheet date. Gains and losses resulting from changes in foreign cur- rency rates are included in the profit and loss account.

Discount on bond/loan issues

Discounts arising upon the issue of (intercompany) loans and bonds are released respectively amor- tised on a straight-line basis over the terms of the loans/bonds.

Financial income

Financial income represents the interest income on intercompany loans receivable, the amount regarding the release of discounts on these loans receivable and other interest income. The dis- counts on the loans receivable are released on a straight-line basis over the term of the loans.

182 Financial expense

Financial expense represents the interest expenses on bonds outstanding and the amortisation of discounts and premiums on bonds. The discounts and premiums on bonds are amortised on a straight-line basis over the term of the bonds.

Guarantee fee

Guarantee fee represents the costs relating to the guarantee issued by Deutsche Bahn AG in relation to the redemption of the bonds and the payment of interest thereon. The guarantee fee reflects 0.1% of the issued bonds amount per year.

Taxation

The corporate income tax provision is calculated in accordance with the agreed upon tax ruling be- tween the company and the Dutch tax authorities.

2.2 Presentation of accounts

The presentation of the profit and loss account has been changed compared to last year in order to improve the understanding of the business. By identifying financial income, including the release of the discount on loans receivable, and financial expense, including the amortisation of discount on bonds issued, the activities of the company are better presented. The net financial income represents the result of the main activities of the company, which are financing of group companies by the issu- ing of bonds. Comparative figures of the previous year have been reclassified to conform with the current year presentation.

3. INTERCOMPANY LOANS RECEIVABLE

The intercompany loans receivable consist of the following: Notes 2001 2000 EUR EUR Loans granted ...... 3.1 4,867,489,730 4,181,263,454 Loan discounts...... 3.2 (53,882,322) (48,299,903) Total ...... 4,813,607,408 4,132,963,551

3.1 Loans granted

Loan 1 issued in 1995:

This loan is classified under current assets. Please refer to paragraph 4 on page 8.

Loan 2 issued in 1997:

The loan receivable (DEM 1,000,000,000) was granted to Deutsche Bahn AG at a discount of DEM 9,100,000 on 19 September 1997. The loan receivable bears interest at a fixed rate of 6.07% per year and is payable in full on 10 October 2007.

Loan 3 issued in 1998:

The loan receivable (DEM 81,640,000) was granted to Deutsche Bahn AG at a discount of DEM 2,041,000 on 2 April 1998. The loan receivable bears interest at a fixed rate of 1.3% per year and is payable in full on 2 April 2003.

183 Related to this loan the company issued bonds that hold a right to bondholders to exchange the bonds for fully paid-up registered shares of Deutsche Lufthansa AG (exchangeable bonds). All obliga- tions of the company resulting from the issue of the exchangeable bonds will be taken over by the parent company, Deutsche Bahn AG.

Loan 4 issued in 1998:

The loan receivable (DEM 1,500,000,000) was granted to Deutsche Bahn AG at a discount of DEM 17,185,000 on 10 June 1998. The loan receivable bears interest at a fixed rate of 5.18% per year and is payable in full on 10 June 2008.

Loan 5 issued in 1999:

The loan receivable (EUR 1,000,000,000) was granted to Deutsche Bahn AG at a discount of EUR 10,730,000 on 6 July 1999. The loan receivable bears interest at a fixed rate of 5.00% per year and is payable in full on 6 July 2009.

Loan 6 issued in 1999:

On 19 November 1999 loan 5 has been expanded for the amount of EUR 350,000,000 at a discount of EUR 18,987,500. The loan receivable bears interest at a fixed rate of 5.00% per year and is payable in full on 6 July 2009.

Loan 7 issued in 2000:

The loan receivable (EUR 1,000,000,000) was granted to Deutsche Bahn AG at a discount of EUR 12,000,000 on 15 June 2000. The loan receivable bears interest at a fixed rate of 6.15% per year and is payable in full on 15 June 2010.

Loan 8 issued in 2001:

The loan receivable (CHF 250,000,000) was granted to Deutsche Bahn AG at a discount of CHF 2,500,000 on 24 August 2001. The loan receivable bears interest at a fixed rate of 3.485% per year and is payable in full on 24 August 2006.

Loan 9 issued in 2001:

The loan receivable (CHF 150,000,000) was granted to Deutsche Bahn AG on 24 September 2001. The loan receivable bears interest at a fixed rate of 3.485% per year and is payable in full on 24 August 2006.

Loan 10 issued in 2001:

The loan receivable (NOK 400,000,000) was granted to Deutsche Bahn AG at a discount of NOK 2,500,000 on 8 October 2001. The loan receivable bears interest at a fixed rate of 7.1% per year and is payable in full on 8 October 2008.

Loan 11 issued in 2001:

The loan receivable (SEK 400,000,000) was granted to Deutsche Bahn AG at a discount of SEK 3,000,000 on 8 October 2001. The loan receivable bears interest at a fixed rate of 5.6% per year and is payable in full on 8 October 2008.

Loan 12 issued in 2001:

The loan receivable (DKK 400,000,000) was granted to Deutsche Bahn AG at a discount of DKK 2,000,000 on 8 October 2001. The loan receivable bears interest at a fixed rate of 5.35% per year and is payable in full on 8 October 2001.

184 Loan 13 issued in 2001:

The loan receivable (EUR 750,000,000) was granted to Deutsche Bahn AG at a discount of EUR 8,886,000 on 28 November 2001. The loan receivable bears interest at a fixed rate of 5.375% per year and is payable in full on 28 November 2013.

Loan 14 issued in 2001:

The loan receivable (DEM 60,000,000) was granted to Deutsche Bahn AG at a discount of DEM 2,000,000 on 27 December 2001. The loan receivable bears interest at a fixed rate of 4.5% per year and is due on 27 December 2006. Repayment of the loan shall be done on demand in line with the partial repayment of the bond (due to the character of the effective notes).

3.2 Loan discounts

The movements in the loan discounts are as follows: Balance at Discount on Reclassifica- Balance at 31 December new issued tion to cur- 31 December 2000 loans Release rent assets 2001 EUR EUR EUR EUR EUR Loan 1, 1995 . . . . . 905,717 0 584,334 (321,383) 0 Loan 2, 1997 . . . . . 3,133,961 0 462,577 2,671,384 Loan 3, 1998 . . . . . 470,175 0 208,709 261,466 Loan 4, 1998 . . . . . 6,538,658 0 878,655 5,660,003 Loan 5, 1999 . . . . . 9,129,166 0 1,072,120 8,057,046 Loan 6, 1999 . . . . . 16,779,400 0 1,970,553 14,808,847 Loan 7, 2000 . . . . . 11,342,826 0 1,199,343 10,143,483 Loan 8, 2001. . . . . 0 1,685,865 118.928 1,566,937 Loan 9, 2001. . . . . 0 0 0 0 Loan 10, 2001 . . . . 0 314,406 10,452 303,954 Loan 11, 2001 . . . . 0 322,539 10,722 311,817 Loan 12, 2001. . . . 0 268,944 8,940 260,004 Loan 13, 2001. . . . 0 8,886,000 68,931 8,817,069 Loan 14, 2001 . . . . 0 1,022,584 2,272 1,020,312 48,299,903 12,500,338 6,596,536 (321,383) 53,882,322

4. INTERCOMPANY LOANS RECEIVABLE

The intercompany loans receivable consist of the following: Notes 2001 2000 EUR EUR Loan granted ...... 4.1 511,291,881 0 Loan discount...... 4.2 (321,383) 0 Total ...... 510,970,498 0

4.1 Loan granted

Loan 1 issued in 1995:

The loan receivable (DEM 1,000,000,000) was granted to Deutsche Bahn AG at a discount of DEM 8,000,000 on 19 July 1995. The loan receivable bears interest at a fixed rate of 7.125% per year and is payable in full on 19 July 2002.

185 4.2 Loan discount

Please refer to paragraph 3.2 on page 8.

5. SHORT-TERM BONDS

Short-term bonds consist of the following: Notes 2001 2000 EUR EUR Bond issued ...... 5.1 511,291,881 0 Discount on bonds ...... 5.2 (307,323) 0 Total ...... 510,984,558 0

5.1 Bond issued

Bond 1 issued in 1995:

The long-term bonds (DEM 1,000,000,000) have been issued on 19 July 1995, bear interest of 6.875% per year and mature on 19 July 2002. The funds received amount to DEM 992,350,000, reflecting a ratio of 99.235% of the face value of the bonds and a discount on bonds of 0.765%. The bonds are guaranteed by Deutsche Bahn AG and are traded on the Frankfurt and Berlin stock exchanges.

5.2 Discount on bonds

Please refer to paragraph 6.2 on page 13.

6. LONG-TERM BONDS

Long-term bonds consist of the following: Notes 2001 2000 EUR EUR Bonds issued ...... 6.1 4.867.489.730 4.181.263.453 Discount on bonds ...... 6.2 (51 220 845) (47 944 990) Total ...... 4 816 268 885 4 133 318 463

6.1 Bonds issued

Bond 1 issued in 1995:

This bond is classified under current liabilities. Please refer to paragraph 5 on page 9.

Bond 2 issued in 1997:

The long-term bonds (DEM 1,000,000,000) have been issued on 19 September 1997, bear interest of 5.75% per year and mature on 10 October 2007. The funds received amount to DEM 991,060,000 reflecting a ratio of 99.106% of the face value of the bonds and a discount on bonds of 0.894%. The bonds are guaranteed by Deutsche Bahn AG and are traded on the Frankfurt and Berlin stock exchanges.

Bond 3 issued in 1998:

The long-term bonds (DEM 81,640,000) concern exchange bonds that have been issued on 2 April 1998, bear interest of 1.125% per year and mature on 2 April 2003. The funds received amount to

186 DEM 79,599,000 reflecting a ratio of 97.5% of the face value of the bonds and a discount on bonds of 2.5%. The bonds are guaranteed by Deutsche Bahn AG and are traded on the Luxembourg stock exchange.

The bonds give a right to bondholders to exchange the bonds for fully paid-up registered shares of Deutsche Lufthansa AG (exchangeable bonds). All obligations resulting from the issue of the exchangeable bonds are guaranteed by Deutsche Bahn AG.

The number of shares to be delivered in exchange for a bond will be 186.57 shares (or another num- ber of shares representing shares in a nominal amount of DEM 932.85) for each DEM 10,000 principal amount of bonds. The exchange period will end no later than 11 March 2003.

Bond 4 issued in 1998:

The long-term bonds (DEM 1,500,000,000) have been issued on 10 June 1998, bear interest of 5% per year and mature on 10 June 2008. The funds received amount to DEM 1,482,915,000 reflecting a ratio of 98.861% of the face value of the bonds and a discount on bonds of 1.139%. The bonds are guaran- teed by Deutsche Bahn AG and are traded on the Frankfurt and Berlin stock exchanges.

Bond 5 issued in 1999:

The long-term bonds (EUR 1,000,000,000) have been issued on 6 July 1999, bear interest of 4.875% per year and mature on 6 July 2009. The funds received amount to EUR 989,320,000 reflecting a ratio of 98.932% of the face value of the bonds and a discount on bonds of 1.068%. The bonds are guaran- teed by Deutsche Bahn AG and are traded on the Frankfurt, Berlin Paris and Milan stock exchanges.

Bond 6 issued in 1999:

The long-term bonds (EUR 350,000,000) have been issued on 19 November 1999, bear interest of 4.875% per year and mature on 6 July 2009. The funds received amount to EUR 331,012,500 reflecting a ratio of 94.575% of the face value of the bonds and a discount on bonds of 5.425%. The bonds are guaranteed by Deutsche Bahn AG and are traded on the Frankfurt, Berlin, Paris and Milan stock exchanges.

Bond 7 issued in 2000:

The long-term bonds (EUR 1,000,000,000) have been issued on 15 June 2000, bear interest of 6% per year and mature on 15 June 2010. The funds received amount of EUR 988,140,000 reflecting a ratio of 98.81% of the face value of the bonds and a discount on bonds of 1.19%. The bonds are guaranteed by Deutsche Bahn AG and are traded on the Frankfurt, Berlin, Paris and Milan stock exchanges.

Bond 8 issued in 2001:

The long-term bonds (CHF 250,000,000) have been issued on August 24, 2001, bear interest of 3.375% per year and mature on 24 August 2006. The funds received amount to CHF 248,775,000 reflecting a ratio of 99.51% of the face value of the bonds and a discount on bonds of 0.49%. The bonds are guaranteed by Deutsche Bahn AG and are traded on the Swiss stock exchange.

Bond 9 issued in 2001:

The long-term bonds (CHF 150,000,000) have been issued on 24 September 2001, bear interest of 3.375% per year and mature on 24 August 2006. The funds received amount to CHF 150,675,000 reflecting a ratio of 100.45% of the face value of the bonds and a premium on bonds of 0.45%. The bonds are guaranteed by Deutsche Bahn AG and are traded on the Swiss stock exchange.

Bond 10 issued in 2001:

The long-term bonds (NOK 400,000,000) have been issued on 8 October 2001, bear interest of 7.0% per year and mature on 8 October 2008. The funds received amount to NOK 398,940,000 reflecting a

187 ratio of 99.74% of the face value of the bonds and a discount on bonds of 0.26%. The bonds are guar- anteed by Deutsche Bahn AG and are traded on the Luxembourg stock exchange.

Bond 11 issued in 2001:

The long-term bonds (SEK 400,000,000) have been issued on 8 October 2001, bear interest of 5.5% per year and mature on 8 October 2008. The funds received amount to SEK 398,632,000 reflecting a ratio of 99.66% of the face value of the bonds and a discount on bonds of 0.34%. The bonds are guar- anteed by Deutsche Bahn AG and are traded on the Luxembourg stock exchange.

Bond 12 issued in 2001:

The long-term bonds (DKK 400,000,000) have been issued on 8 October 2001, bear interest of 5.25% per year and mature on 8 October 2008. The funds received amount to DKK 399,160,000 reflecting a ratio of 99.79% of the face value of the bonds and a discount on bonds of 0.21%. The bonds are guar- anteed by Deutsche Bahn AG and are traded on the Luxembourg stock exchange.

Bond 13 issued in 2001:

The long-term bonds (EUR 750,000,000) have been issued on 28 November 2001, bear interest of 5.125% per year and mature on 28 November 2013. The funds received amount to EUR 741,135,000 reflecting a ratio of 98.82% of the face value of the bonds and a discount on bonds of 1.18%. The bonds are guaranteed by Deutsche Bahn AG and are traded on the Frankfurt stock exchange.

Bond 14 issued in 2001:

The long-term bonds (DEM 60,000,000) have been issued on 27 December 2001, bear interest of 4.5% per year and mature on 27 December 2006. The funds received amount DEM 59,250,000 reflecting a ratio of 98.75% of the face value of the bonds and a discount on bonds of 1.25%. The bonds are guar- anteed by Deutsche Bahn AG and are traded on the Frankfurt stock exchange. Payment of capital and interest of the bond will be done successively or will possibly not happen in part due to the character of the effective notes.

6.2 Discount on bonds

The movements in the discount on bonds are as follows:

Discount/ Balance at Premium on Reclassifica- Balance at 31 December newly issued tion to cur- 31 December 2000 bonds Amortisation rent liabilities 2001 EUR EUR EUR EUR EUR Bond 1, 1995 . . . . 866,092 0 558,769 (307,323) 0 Bond 2, 1997 . . . . 3,078,858 0 454,444 2,624,414 Bond 3, 1998 . . . . 470,175 0 208,709 261,466 Bond 4, 1998 . . . . 6,500,609 0 873,542 5,627,067 Bond 5, 2000 . . . . 9,086,625 0 1,067,123 8,019,502 Bond 6, 2000 . . . . 16,779,400 0 1,970,554 14,808,846 Bond 7,2000. . . . . 11,163,231 0 1,180,353 9,982,878 Bond 8, 2001 . . . . 0 826,050 58,251 767,799 Bond 9, 2001 . . . . 0 (455,189) (24,945) (430,244) Bond 10, 2001 . . . 0 133,308 4,431 128,877 Bond 11, 2001. . . . 0 147,078 4,889 142,189 Bond 12, 2001 . . . 0 112,956 3,755 109,201 Bond 13, 2001 . . . 0 8,865,000 68,767 8,796,233 Bond 14, 2001 . . . 0 383,469 852 382,617 47,944,990 10,012,672 6,429,494 (307,323) 51,220,845

188 7. SHAREHOLDER’S EQUITY

7.1 Share capital

The authorised share capital of Deutsche Bahn Finance B.V. is composed of 1,000 shares. During the year the nominal value of NLG 1,000 per share has been changed into EUR 500. As a consequence the authorised share capital amounts to EUR 500,000 (2000: EUR 453,780). 2001 2000 EUR EUR 7.2 Called-up and paid-in share capital 200 shares of EUR 500 each...... 100,000 90,756

Due to the change of the nominal value of the shares the called-up and paid-in share capital has increased by EUR 9,244 to EUR 100,000, which has been transferred from the other reserves.

8. OTHER RESERVES 2001 2000 EUR EUR Balance at January 1...... 6,470,191 4,342,741 Dividend paid...... (4,537,803) 0 Result for the period ...... 1,826,149 2,127,450 Increase called-up and paid-in share capital...... (9,244) 0 Balance at December 31...... 3,749,293 6,470,191

9. EMPLOYEE INFORMATION

(a) The company has two directors and no employees.

(b) The directors received no emoluments (2000: nil).

Amsterdam, 13 February 2002

The Directors,

W. Reuter Deutsche International Trust Company N. V.

189 DEUTSCHE BAHN FINANCE B.V. OTHER INFORMATION 31 DECEMBER 2001

1. AUDITORS’ REPORT

This report is set out on the next page.

2. APPROPRIATION OF THE RESULT FOR THE PERIOD

In accordance with Article 20 of the Articles of Association, the result after taxation is at the disposal of the Shareholder at the Annual General Meeting.

For the year ended 31 December 2001, management proposes to add the result after taxation to the other reserves.

190 191 TAXATION

The information provided below does not purport to be a complete summary of the tax law and prac- tice currently applicable in the Federal Republic of Germany or The Netherlands. For their particular case, prospective investors should consult their own professional advisers.

1. Federal Republic of Germany

The following is a summary of the principal applications of German capital income tax from the own- ership of Notes.

Interest Payments on Notes

In the Federal Republic of Germany, interest payments in respect of Notes held in custody by a bank in Germany to persons who are tax residents of Germany (or non-residents provided that the interest income falls in a category of income from German sources, such as income effectively connected with a German trade or business; income from the letting and leasing of German property, etc.) are subject to an advanced interest income tax (Zinsabschlagsteuer), at present 30%, and an additional solidarity-surcharge tax on the income tax (Solidarittszuschlag), at present 5.5 %, so that the total rate deductable in advance is 31.65%. This tax withheld may later be credited as a prepayment for purposes of the income tax assessment. If the Notes are held in custody for a non-resident, there is no advanced interest income tax and no solidarity-surcharge tax.

Interest payments made by a bank in Germany upon over-the-counter presentation of Coupons are subject to such advanced interest income tax at a rate of at present 35%, regardless of whether or not the recipient is a resident or non-resident for purposes of German taxation, and in addition to the solidarity-surcharge tax of 5.5% on such tax, so that the total rate is 36.925%.

Accrued interest for the time of ownership is also subject to this advanced interest income tax and solidarity-surcharge tax.

Capital Income from Zero Coupon Notes

Capital income from zero coupon Notes held by German tax residents (including the above-men- tioned non-residents) is subject to income tax at maturity or prior sale of the Notes. For private inves- tors, either the income accrued for the time of ownership, calculated on the basis of the yield at launch, or alternatively the difference between the purchase price and the sales or repayment price, i.e. the market yield, is taxable.

Capital income from zero coupon Notes held in custody in Germany is subject to the advanced inter- est income tax, and an additional solidarity-surcharge tax on this tax, so that the total rate of tax deductible in advance is also 31.65%. If the Notes are held in custody from acquisition to sale or repayment by the financial institution which is also paying the capital income, the basis of taxation is the market yield. If this is not the case, the tax deduction will be calculated on the basis of 30% of the proceeds from the sale or repayment of the Notes (i.e. on a lump sum serving as a basis of taxation). If the Notes are held in custody for a person who is not a tax resident in Germany, the capital income is not subject to the advanced interest income tax or the solidarity-surcharge tax.

If the Notes are held in self-custody, the advanced interest income tax rate is 35%. Together with the solidarity-surcharge tax of 5.5 %, the total front-end burden is thus at present 36.925%, regardless of whether or not the beneficiary of the capital income is a tax resident in Germany. The basis of taxa- tion is, in these cases, always 30% of the proceeds from the sale or repayment of the Notes.

192 General

The tax withheld from tax residents will be credited as a prepayment for purposes of the income tax assessment and will be repaid in case of overpayment. Persons who are not tax residents and have held Notes in their own custody will receive a refund of the tax deducted pursuant to existing double taxation treaties (if applicable).

Special rules apply to the calculation of amounts subject to income tax and the advanced interest income tax in the case of Notes that may be classified as financial innovations (Finanzinnovationen) under German tax law.

The above summary is not exhaustive. It does not take into account the possible taxation of specula- tive capital gains or other special considerations that may apply in a particular situation. Investors and other interested parties are required to obtain individual tax advice in connection with the acqui- sition and holding, as well as the sale or repayment of Notes.

2. The Netherlands

General

The following is intended as general information only and it does not purport to present any compre- hensive or complete picture of all aspects of Netherlands tax laws which could be of relevance to a holder of a Note (hereinafter referred to as the “Holder”). Prospective Holders should therefore con- sult their tax adviser regarding the tax consequences of any purchase, ownership or disposal of Notes.

The Issuers have been advised that under existing Netherlands tax law, subject to any change in law, possibly with retrospective effect, the following treatment will apply to the Notes, provided that the Notes (i) will not carry interest or any other payment which is wholly or partially contingent or deemed to be contingent on the profits or on the distribution of profits of the Issuers, or a related party (verbonden lichaam), or if the Notes will carry such interest or other payment the term of the Notes does not exceed 10 years, and (ii) will not carry interest or any other payment which only becomes due depending on the profits, or on a distribution of profits by the Issuers, or a related party (verbonden lichaam), or if the Notes will carry such interest or other payment the Notes are not subordinated and the term of the Notes does not exceed 50 years.

Withholding Tax

All payments under the Notes can be made free of withholding or deduction for or on account of any taxes of whatsoever nature imposed, levied, withheld or assessed by the Netherlands or any political subdivision or taxing authority thereof or therein.

Personal and Corporate Income Tax

A Holder will not be subject to any Netherlands taxation on income or capital gains in respect of any payment under the Notes or in respect of any gain on the disposal or deemed disposal or redemption of a Note, provided that: (i) the Holder is neither resident nor deemed resident in the Netherlands for Netherlands tax pur- poses; and (ii) the Holder is not an individual who opts to be taxed as a resident of the Netherlands for Neth- erlands tax purposes; and (iii) the Holder does not have an enterprise or an interest in an enterprise which is, in whole or in part, carried on through a permanent establishment or a permanent representative in the Neth- erlands and to which enterprise or part of an enterprise the Notes are attributable; and

193 (iv) the Holder is not an individual who performs other activities in relation to the Notes in the Netherlands, including but not limited to, activities that exceed “normal investment activities”; and (v) the Holder is not an individual who has a substantial interest in an Issuer; and (vi) the Holder is not a corporate entity who has a substantial interest or a deemed substantial in- terest in an Issuer or, if such a Holder does have such an interest, it forms part of the assets of an enterprise other than an enterprise of the Netherlands.

Generally, a Holder will have a substantial interest if he, or his partner (partner) holds, alone or to- gether, whether directly or indirectly, the ownership of, or certain other rights over, shares represent- ing five per cent. or more of the total issued and outstanding capital (or the issued and outstanding capital of any class of shares) of an Issuer, or rights to directly or indirectly acquire shares, whether or not already issued, that represent at any time (and from time to time) five per cent. or more of the total issued and outstanding capital (or the issued and outstanding capital of any class of shares) of an Issuer or the ownership of certain profit participating certificates that relate to five per cent. or more of the annual profit of an Issuer and/or to five per cent or more of the liquidation proceeds of an Issuer. A substantial interest is also present if a holder of Notes does not, but his, or his partner’s children (including foster children), certain other relatives or certain persons sharing his household do have a substantial interest, or a deemed substantial interest, in an Issuer. A deemed substantial interest is present if a substantial interest has been disposed of on a non-recognition basis.

Gift, Estate and Inheritance Tax

Netherlands gift, estate or inheritance taxes will not be levied on the occasion of the acquisition of a Note by way of gift by, or on the death of, a Holder unless: (i) the Holder is, or is deemed to be, resident of the Netherlands for the purpose of the relevant provisions; or (ii) the Holder at the time of the gift has, or at the time of his death had an enterprise that is or was, in whole or in part, carried on through a permanent establishment or a permanent representa- tive in the Netherlands and to which enterprise or part of an enterprise the Notes are or were attributable; or (iii) in the case of gift of a Note by any individual who, at the date of gift, was not a resident or deemed resident in the Netherlands, such individual dies within 180 days after the date of gift, while being resident or deemed resident in the Netherlands.

Capital Tax

There is no Netherlands capital tax payable in respect of or in connection with the execution, delivery and enforcement by legal proceedings (including any foreign judgement in the courts of the Nether- lands) of the Notes or the performance by an Issuer of its obligations under the Notes, other than capital tax that may be due on capital contributions made or deemed made under the Guarantee.

Vat

There is no Netherlands value added or turnover tax payable in respect of the payment by the Holder in consideration for the issue of the Notes, in respect of any payment by the Issuers of interest or principal under the Notes, or the transfer of the Notes or by the Guarantor under the Guarantee.

Other Taxes and Duties

There is no Netherlands registration tax, stamp duty or any other similar tax or duty payable in the Netherlands in respect of or in connection with the execution, delivery and enforcement by legal pro- ceedings (including any foreign judgement in the courts of the Netherlands) of the Notes or the per- formance by an Issuer or the Guarantor of their obligations under the Notes or under the Guarantee.

194 Subject to the exceptions of the “Income tax” section above, a Holder will not become resident, or deemed resident in the Netherlands, or become subject to taxation in the Netherlands by reason only of the holding of a Note or the execution, delivery and/or enforcement of the Notes or perform- ance by an Issuer or the Guarantor of their obligations thereunder or under the Notes or under the Guarantee, respectively.

With regard to the corporate income tax position of Deutsche Bahn Finance, it must be noted that its current tax ruling expires on 31 December 2005. It can not be said with certainty at this stage what its minimum required taxable amount will be or its general tax position will be thereafter.

3. Proposed EU Savings Directive

On 13 December 2001 the Council of the European Union approved a new draft directive regarding the taxation of savings income. It is proposed that each EU Member State under its domestic law requires paying agents (within the meaning of the directive) established within its territory to provide to the competent authority of its EU Member State of establishment details of the payment of interest (within the meaning of the directive) to an individual resident in another EU Member State. The com- petent authority of the EU Member State of the paying agent shall then communicate this informa- tion to the competent authority of the EU Member State of which the recipient is a resident. The pro- posed directive is to be implemented by the Member States by 1 January 2004. However, for a transi- tional period of seven years Austria, Belgium and Luxembourg may opt instead to withhold tax from such payments. During the first three years after the directive has come into force tax will have to be withheld by these Member States at a rate of 15% and thereafter of 20%. It is envisaged that the Council of the European Union will decide on a final text of the directive no later than 31 December 2002. However, since the implementation of the proposal is subject to certain non EU Member States and associated territories and dependencies of EU Member States also agreeing to supply informa- tion or imposing a withholding tax it is currently not possible to predict whether, when, or in what form the proposal will ultimately be adopted.

Holders who are individuals should note that, if this proposal is adopted, the Issuer will not pay addi- tional amounts under § 7 of the Terms and Conditions of the Notes in respect of any withholding tax imposed as a result thereof.

195 GENERAL INFORMATION Clearing Systems

The relevant Pricing Supplement will specify which clearing system or systems (including Clear- stream Banking AG, Frankfurt am Main (“CBL”), Euroclear and/or Clearstream Banking socit ano- nyme, Luxembourg (“CBL”) has/have accepted the relevant Notes for clearance and provide any fur- ther appropriate information.

Selling Restrictions

1. General

Each Dealer has represented and agreed that it will comply with all applicable securities laws and regulations in force in any jurisdiction in which it purchases, offers, sells or delivers Notes or pos- sesses or distributes the Information Memorandum and will obtain any consent, approval or permis- sion required by it for the purchase, offer, sale or delivery by it of Notes under the laws and regula- tions in force in any jurisdiction to which it is subject or in which it makes such purchases, offers, sales or deliveries and neither the relevant Issuer nor the Guarantor (if Deutsche Bahn Finance is the Issuer) and any other Dealer shall have any responsibility therefor.

Neither the Issuer, or the Guarantor (if Deutsche Bahn Finance is the Issuer) nor any of the Dealers represent that Notes may at any time lawfully be sold in compliance with any applicable registration or other requirements in any jurisdiction, or pursuant to any exemption available thereunder, or assumes any responsibility for facilitating such sale.

With regard to each Tranche, the relevant Dealer will be required to comply with such other additional restrictions as the relevant Issuer and the relevant Dealer shall agree and as shall be set out in the applicable Pricing Supplement.

2. Germany

Each Dealer has agreed not to offer or sell Notes in the Federal Republic of Germany other than in compliance with the Securities Selling Prospectus Act (Wertpapier-Verkaufsprospektgesetz) of 13 December 1990 (as amended), or any other laws applicable in the Federal Republic of Germany governing the issue, offering and sale of securities.

3. The Netherlands

Each Dealer has acknowledged and agreed (and each further Dealer will be required to acknowledge and agree) that Notes may only be offered in the Netherlands or by the Deutsche Bahn Finance any- where in the world, and such an offer may only be announced: (a) to persons who trade or invest in securities in the conduct of their profession or trade (which includes banks, securities intermediaries (including dealers and brokers), insurance companies, pension funds, other institutional investors and commercial enterprises which as an ancillary activity regularly invest in securities), provided that (i) the offer, the applicable Pricing Supplement or Integrated Conditions and each announcement of the offer states that the offer is exclusively made to those persons and, (ii) a copy of the Information Memorandum and the applicable Pricing Supplement or Integrated Conditions (collectively, the “Offer Documents”) is submitted to the Netherlands Authority for the Financial Markets (Stichting Autoriteit Financile Markten, the “Authority-FM”) before the offer is made; or (b) to persons who are established, domiciled or have their residence (collectively, “are resident”) outside the Netherlands, provided that (i) the offer, the applicable Pricing Supplement or Inte- grated Conditions and each announcement of the offer states that the offer is not and will not be made to persons who are resident in the Netherlands, (ii) the offer, the Offer Documents and each announcement of the offer comply with the laws and regulations of any State where persons to

196 whom the offer is made are resident, (iii) a statement by the Issuer that those laws and regulations are complied with is submitted to the Authority-FM before the offer is made and is included in the applicable Pricing Supplement or Integrated Conditions and each such announcement; or (c) if those Notes have a denomination of at least EUR 45,378.02 (or its foreign currency equivalent); or (d) if: (i) those Notes qualify as Euro-securities (Euro-effecten) (which they do if (a) they are subscribed for and placed by a syndicate of which at least two members are established in different States party to the Agreement on the European Economic Area, (b) at least 60% of those Notes are placed by syndicate members established in one or more states other than the state where the relevant Issuer is established, and (c) the Notes may only be subscribed for or initially be pur- chased through a credit institution or another institution which in the conduct of its business or profession provides one or more of the services referred to under 7 and 8 of Annex 1 to EC Directive 2000/12/EC), and (ii) no general advertising or canvassing campaign is conducted in respect of the Notes anywhere in the world; or (e) otherwise in accordance with the 1995 Act on the Supervision of the Securities Trade (Wet toezicht effectenverkeer 1995).

In addition, Bearer Zero Coupon Notes and other Notes which qualify as savings certificates as defined in the Savings Certificates Act (Wet inzake spaarbewijzen) may only be transferred or accepted through the mediation of either the Issuer or an admitted institution of Euronext Amster- dam N. V. with due observance of the Savings Certificates Act and its implementing regulations (including registration requirements), provided that no mediation is required in respect of (i) the initial issue of those Notes to the first holders thereof, (ii) any transfer and delivery by individuals who do not act in the conduct of a profession or trade, and (iii) the issue and trading of those Notes, if they are physically issued outside the Netherlands and are not distributed in the Netherlands in the course of primary trading or immediately thereafter.

4. Luxembourg

Each Dealer has acknowledged that no steps have been taken to allow a public offering of the Notes in the Grand-Duchy of Luxembourg and has undertaken, not to offer or sell publicly the Notes in the Grand-Duchy of Luxembourg, except for Notes for which the requirements of Luxembourg law con- cerning public offerings of securities have been met.

5. France

Each of the Dealers and the Issuer has represented and agreed, and each further Dealer appointed under the Programme will be required to represent and agree that, in connection with their initial dis- tribution, it has not offered or sold and will not offer or sell, directly or indirectly, Notes to the public in the Republic of France, and has not distributed or caused to be distributed and will not distribute or cause to be distributed to the public in the Republic of France, the Information Memorandum or any other offering material relating to the Notes, and that such offers, sales and distributions have been and shall only be made in the Republic of France (i) qualified investors (investisseurs qualifis) and/or (ii) a restricted group of investors (cercle restreint d’investisseurs), all as defined in and in accordance with Article 6 of ordinnance no. 67-833 dated 28 September 1967 (as amended) and decrt no. 98-880 dated 1 October 1998 as replaced by the Article L 411-2 of the French Code montaire et financier.

Where an issue of Notes is effected as an exemption to the rules relating to an appel public l’pargne in the Republic of France (public offer rules) by way of an offer to a restricted circle of inves- tors, such investors must, to the extent that the Notes are offered to 100 or more of such investors, provide certification as to their personal relationship of such professional or family nature with a member of the management of the Issuer. In the context of such exception, investors in the Republic of France may only participate in the issue of Notes for their own account in accordance with the con- ditions set out in dcret no. 98-880 dated 1 October 1998. Notes so acquired may only be distributed,

197 directly or indirectly, to the public in the Republic of France in accordance with articles L 411-1, L 412-1 and L 621-8 of the French Code montaire et financier.

6. Japan

Each Dealer has acknowledged that the Notes have not been and will not be registered under the Securities and Exchange Law of Japan (the “Securities and Exchange Law”). Each Dealer has repre- sented and agrees that it will not offer or sell any Notes, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan (which term as used herein means any person resident in Japan, including any corporation or other entity organised under the laws of Japan), or to others for re-offer- ing or resale, directly or indirectly, in Japan or to a resident of Japan except pursuant to an exemption which will result in compliance with the Securities and Exchange Law and any applicable laws, regu- lations and guidelines of Japan.

7. United Kingdom of Great Britain and Northern Ireland (“United Kingdom”)

Each Dealer has represented and agreed that: (i) in relation to Notes which have a maturity of one year or more, it has not offered or sold and, prior to the expiry of a period of six months from the Issue Date of such Notes, will not offer or sell any such Notes to persons in the United Kingdom except to persons whose ordinary activ- ities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their businesses or otherwise in circumstances which have not resulted and will not result in an offer to the public in the United Kindom within the meaning of the Securities Regulations 1995; (ii) in relation to any Notes which must be redeemed before the first anniversary of the date of their issue, (a) it is a person whose ordinary activities involve it in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of its business and (b) it has not offered or sold and will not offer or sell any Notes other than to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their businesses or who it is reasonableto expect will acquire, hold, manage or dispose of investments (as principal or agent) for the purpose of their businesses where the issue of the Notes would otherwise constitute a contravention of Section 19 of the FSMA by the relevant Issuer; (iii) it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of Section 21 of the FSMA) received by it in connection with the issue or sale of any Notes in circumstances in which Section 21(1) of the FSMA does not apply to the Issuer or the Guarantor; and (iv) it has complied and will comply with all applicable provisions of the FSMA with respect to any- thing done by it in relation to such Notes in, from or otherwise involving the United Kingdom.

8. United States of America (the “United States”)

(a) Each Dealers has acknowledged that the Notes have not been and will not be registered under the Securities Act and may not be offered or sold within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. Each Dealer has represented and agreed that it has not offered or sold, and will not offer or sell, any Note constituting part of its allotment within the United States except in accordance with Rule 903 of Regulation S under the Securities Act. Accordingly, each Dealer has further represent- ed and agreed that neither it, its affiliates nor any persons acting on its or their behalf have engaged or will engage in any directed selling efforts with respect to a Note.

(b) From and after the time that the Issuer notifies the Dealers in writing that it is no longer able to make the representation set forth in Article 4(1)(m)(i) of the Dealer Agreement, each Dealer (i) has

198 acknowledged that the Notes have not been and will not be registered under the Securities Act and may not be offered or sold within the United States or to, or for the account or benefit of U.S. persons except in accordance with Regulation S under the Securities Act or pursuant to an exemp- tion from the registration requirements of the Securities Act; (ii) has represented and agreed that it has not offered and sold any Notes, and will not offer and sell any Notes (x) as part of its distribu- tion at any time and (y) otherwise until 40 days after the later of the commencement of the offering and closing date only in accordance with Rule 903 of Regulation S under the Securities Act; and accordingly (iii) has further represented and agreed that neither it, its affiliates nor any persons acting on its or their behalf have engaged or will engage in any directed selling efforts with respect to any Note, and it and they have complied and will comply with the offering restrictions require- ment of Regulation S; and (iv) has also agreed that, at or prior to confirmation of any sale of Notes, it will have sent to each distributor, dealer or person receiving a selling concession, fee or other remuneration that purchases Notes from it during the distribution compliance period a confirma- tion or notice to substantially the following effect:

“The Securities covered hereby have not been registered under the U.S. Securities Act of 1933 (the “Securities Act”) and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons by any person referred to in Rule 903 (b) (2) (iii) (i) as part of its distribu- tion at any time or (ii) otherwise until 40 days after the later of the commencement of the offering and the closing date except in either case in accordance with Regulation S under the Securities Act. Terms used above have the meanings given to them by Regulation S.“

(c) Each Dealer who has purchased Notes of a Tranche hereunder (or in the case of a sale of a Tranche of Notes issued to or through more than one Dealer, each of such Dealers as to the Notes of such Tranche purchased by or through it or, in the case of syndicated issue, the relevant Lead Manager) shall determine and notify to the Fiscal Agent the completion of the distribution of the Notes of such Tranche. On the basis of such notification or notifications, the Fiscal Agent has agreed to notify such Dealer/Lead Manager of the end of the restricted period with respect to such Tranche.

Terms used in this paragraph 2 (a)–(c) above have the meanings given to them by Regulation S.

(d) Each Dealer has represented and agreed that it has not entered and will not enter into any contrac- tual arrangement with respect to the distribution or delivery of Notes, except with its affiliates or with the prior written consent of the Issuer.

(e) Notes, other than Notes with a initial maturity of one year or less, will be issued in accordance with the provisions of United States Treasury Regulation § 1.163-5(c)(2)(i)(C) (the “C Rules”), or in accordance with the provisions of United States Treasury Regulation § 1.163-5(c)(2)(i)(D) (the “D Rules”), as specified in the applicable Pricing Supplement.

In addition, where the C Rules are specified in the relevant Pricing Supplement as being applicable to any Tranche of Notes, Notes in bearer form must be issued and delivered outside the United States and its possessions in connection with their original issuance. Each Dealer has represented and agreed that it has not offered, sold or delivered, and will not offer, sell or deliver, directly or indirectly, Notes in bearer form within the United States or its possessions in connection with the original issu- ance. Further, each Dealer has represented and agreed in connection with the original issuance of Notes in bearer form, that it has not communicated, and will not communicate, directly or indirectly, with a prospective purchaser if either such Dealer or purchaser is within the United States or its pos- sessions and will not otherwise involve its U.S. office in the offer or sale of Notes in bearer form. Terms used in this paragraph have the meanings given to them by the U.S. Internal Revenue Code and regulations thereunder, including the C Rules.

In addition, in respect of Notes issued in accordance with the D Rules, each Dealer has represented and agreeed that:

(i) except to the extent permitted under U.S. Treasury Regulation § 1.163-5(c)(2)(i)(D), (x) it has not offered or sold, and during the restricted period will not offer or sell, Notes in bearer form to a person who is within the United States or its possessions or to a United States person, and

199 (y) such Dealer has not delivered and will not deliver within the United States or its possessions definitive Notes in bearer form that are sold during the restricted period;

(ii) it has and throughout the restricted period will have in effect procedures reasonably designed to ensure that its employees or agents who are directly engaged in selling Notes in bearer form are aware that such Notes may not be offered or sold during the restricted period to a person who is within the United States or its possessions or to a United States person, except as permitted by the D Rules;

(iii) if such Dealer is a United States person, it has represented that it is acquiring the Notes in bearer form for purposes of resale in connection with their original issuance and if such Dealer retains Notes in bearer form for its own account, it will only do so in accordance with the requirements of U.S. Treas. Reg. § 1.163-5(c)(2)(i)(D)(6); and

(iv) with respect to each affiliate that acquires from such Dealer Notes in bearer form for the purposes of offering or selling such Notes during the restricted period, such Dealer either (x) has repeated and confirmed the agreements contained in sub-clauses (i), (ii) and (iii) on such affiliate’s behalf or (y) has agreed that it will obtain from such affiliate for the benefit of the Issuer the agreements contained in sub-clauses (i), (ii) and (iii).

Terms used in this paragraph (e) have the meanings given to them by the U.S. Internal Revenue Code and regulations thereunder, including the D Rules.

(f) Each issue of index-, commodity- or currency-linked Notes shall be subject to such additional U.S. selling restrictions as the Issuer and the relevant Dealer may agree as a term of the issue and pur- chase of such Notes, which additional selling restrictions shall be set out in the Pricing Supple- ment. Each Dealer has agreed that it shall offer, sell and deliver such Notes only in compliance with such additional U.S. selling restrictions.

Use of Proceeds

The net proceeds from each issue will be used for financing the business of the Deutsche Bahn Group.

Listing Information

The Notes to be issued under the Programme are admitted on the Frankfurt Stock Exchange for listing with official quotation. Application has been made to list Notes to be issued under the Programme on the Luxembourg Stock Exchange.

However, Notes may be issued pursuant to the Programme which will not be listed on the Frankfurt Stock Exchange and/or on the Luxembourg Stock Exchange or any other stock exchange or which will be listed on such stock exchange as the relevant Issuer and the relevant Dealer(s) may agree.

Luxembourg Stock Exchange

Prior to the listing of the first Series of Notes issued under the Programme, the statutory documents of the Issuers and the Guarantor and the legal notice relating to the issue will have been registered with the Registrar of the District Court in Luxembourg (Greffier en chef du Tribunal d’Arrondissement de et Luxembourg), where copies of these documents may be obtained upon request.

The above-mentioned documents are available for inspection at the head office of the Paying Agent in Luxembourg, Deutsche Bank S.A., 2, Boulevard Konrad Adenauer, L-1115 Luxembourg.

Each Paying Agent shall have available at its specified office a copy of the Dealer Agreement of 31 May 2001 as amended and supplemented by the Supplemental Dealer Agreement of 11 July 2002 (together, the “Dealer Agreement”) and the Fiscal Agency Agreement dated 31 May 2001 as amended

200 and supplemented by the Supplemental Agency Agreement dated 11 July 2002 (together, the “Agency Agreement”) and shall make available the inspection of these documents free of charge during normal business hours. This Information Memorandum and each Pricing Supplement relating to the Notes which shall be quoted on the Luxembourg Stock Exchange may be obtained from the paying agent in Luxembourg.

The Luxembourg Stock Exchange has allocated to the Programme the No. 12594 for listing purposes.

Undertaking

Each of the Issuers and the Guarantor have undertaken, in connection with the listing of the Notes, that if, while Notes of an Issuer are outstanding and listed on the Frankfurt Stock Exchange and/or on the Luxembourg Stock Exchange, there shall occur any adverse change in the business, financial position or otherwise of such Issuer that is material in the context of issuance under the Programme which is not reflected in the Information Memorandum (or any of the documents incorporated by reference in the Information Memorandum according to the rules of the Luxembourg Stock Exchange), such Issuer and Guarantor will prepare or procure the preparation of an amendment or supplement to the Information Memorandum or, as the case may be, publish a new Information Memorandum for use in connection with any subsequent offering by such Issuer of Notes to be listed on the Frankfurt Stock Exchange and/or Luxembourg Stock Exchange.

If the Terms and Conditions of the Notes (as set out in the Information Memorandum) are modified or amended in a manner which would make the Information Memorandum, as amended or supple- mented, inaccurate or misleading, a new Information Memorandum will be prepared to the extent required by law.

Each of the Issuers will, at the specified offices of the Paying Agents, provide, free of charge, upon the oral or written request therefor, a copy of the Information Memorandum (or any document incorpo- rated by reference in the Information Memorandum). Written or oral requests for such documents should be directed to the specified office of any Paying Agent or the specified office of the Listing Agent in Luxembourg.

Documents Incorporated by Reference (Luxembourg Stock Exchange)

The Annual Report of each of the Issuers and Guarantor for the financial year ended 31 December 2000 and 2001 is incorporated by reference into the Information Memorandum. Copies thereof and of any other documents incorporated herein by reference may be obtained without charge at the head office of the Paying Agent in the city of Luxembourg.

The following documents shall be deemed to be incorporated in, and form part of, the Information Memorandum

(1) the most recently published annual report of the Deutsche Bahn AG (including consolidated and non-consolidated financial information); and the most recently published annual report of Deutsche Bahn Finance (including non-consolidated financial information; Deutsche Bahn Finance and Deutsche Bahn AG do not produce interim reports),

(2) all amendments and supplements to the Information Memorandum prepared by each of the Issuers and the Guarantor from time to time, save that any statement contained in the Information Memorandum or in any of the documents incor- porated by reference in, and forming part of, the Information Memorandum shall be deemed to be modified or superseded for the purpose of the Information Memorandum to the extent that a state- ment contained in any documents subsequently incorporated by reference modifies or supersedes such statement.

201 Availability of Documents

The documents mentioned in this Information Memorandum may be inspected during usual busi- ness hours on any working day from the date hereof and so long as any Series of Instruments are listed on the Frankfurt Stock Exchange or on the Luxembourg Stock Exchange at the offices of Deutsche Bank AG, Grosse Gallusstrasse 10–14, D-60272 Frankfurt am Main and at the offices of Deutsche Bank Luxembourg S.A., 2, Boulevard Konrad Adenauer, L-1115 Luxembourg. Copies of the most recent Annual Reports of Deutsche Bahn Finance and the most recent Annual Reports of Deutsche Bahn AG may be obtained from Deutsche Bahn AG, Potsdamer Platz 2, D-10785 Berlin, from Deutsche Bank Luxembourg S.A. under the above-mentioned address and from Deutsche Bank AG under the above mentioned address.

Authorisation

The establishment of the Programme was authorised by the competent representatives of the Issuers.

The Programme was authorised by Deutsche Bahn AG on 15 May 2001. It was authorised by written resolution of Deutsche Bahn Finance N.V. through resolution of the Managing Board dated 31 May 2001.

Litigation

None of the Issuers or the Guarantor is or has during the last two fiscal years been engaged in any litigation or arbitration proceedings which may have or have had during such period a significant effect on the financial position of such Issuer or the Guarantor, nor, as far as each Issuer or the Guar- antor is aware, are any such litigation or arbitration proceedings pending or threatened.

Material Change

Save as disclosed herein, there has been no material adverse change in the financial positions of Deutsche Bahn AG or Deutsche Bahn Finance since the date of the last published annual report.

Berlin and Amsterdam, 11 July 2002

Deutsche Bahn Aktiengesellschaft

Deutsche Bahn Finance B.V.

202 Aufgrund des vorstehenden Prospekts sind unter dem

7 5.000.000.000 Debt Issuance Programme der Deutsche Bahn Aktiengesellschaft Berlin, Bundesrepublik Deutschland als Emittentin und Garantin fr Schuldverschreibungen der Deutsche Bahn Finance B.V. Amsterdam, Niederlande begebene Schuldverschreibungen gemß § 44 Brsenzulassungs-Verordnung an der Frankfurter Wertpapierbrse zum Handel im amtlichen Markt zugelassen worden.

Frankfurt am Main, im Juli 2002

Deutsche Bank Aktiengesellschaft

ABN AMRO BANK N.V. Deutsche Bank Aktiengesellschaft

DZ BANK AG, Dresdner Bank Aktiengesellschaft Deutsche Zentral-Genossenschaftsbank, Frankfurt am Main

Merrill Lynch Capital Markets Bank Limited, Morgan Stanley & Co. International Limited Zweigniederlassung Frankfurt am Main

Salomon Brothers International Limited Socit Gnrale S.A., Zweigniederlassung Frankfurt am Main

UBS Warburg AG Westdeutsche Landesbank Girozentrale

203 REGISTERED OFFICES OF THE ISSUERS

Deutsche Bahn Aktiengesellschaft Deutsche Bahn Finance B.V. Potsdamer Platz 2 Herengraacht 450 D-10785 Berlin NL-1017 CA Amsterdam

ARRANGER

Deutsche Bank Aktiengesellschaft Grosse Gallusstrasse 10–14 D-60272 Frankfurt am Main

DEALERS

ABN AMRO Bank N.V. Deutsche Bank Aktiengesellschaft 250 Bishopsgate Grosse Gallusstrasse 10–14 London EC2M 4AA D-60272 Frankfurt am Main

DZ BANK AG, Dresdner Bank Aktiengesellschaft Deutsche Zentral-Genossenschaftsbank Jrgen-Ponto-Platz 1 Frankfurt am Main D-60301 Frankfurt am Main Am Platz der Republik D-60325 Frankfurt am Main

Merrill Lynch International Morgan Stanley & Co. International Limited Merrill Lynch Financial Centre 25 Cabot Square 2 King Edward Street Canary Wharf London EC1A 1HQ London E14 4QA

Salomon Brothers International Limited Socit Gnrale Citigroup Centre 29 Boulevard Haussmann 33 Canada Square F-75009 Paris London E14 5LB

UBS AG, Westdeutsche Landesbank Girozentrale acting through its business group UBS Warburg Herzogstrasse 15 1 Finsbury Avenue D-40217 Dsseldorf London EC2M 2PP

FISCAL AND PAYING AGENT

Deutsche Bank Aktiengesellschaft Grosse Gallusstrasse 10–14 D-60272 Frankfurt am Main

204 LEGAL ADVISERS

To the Dealers as to German Law

Hengeler Mueller Bockenheimer Landstrasse 51 D-60325 Frankfurt am Main

To the Dealers as to Netherland Law

De Brauw Blackstone Westbroeck Tripolis 300 Burgerweeshulspad 301 NL-1070 AB Amsterdam

LUXEMBOURG LISTING AND PAYING AGENT

Deutsche Bank Luxembourg S.A. 2, Boulevard Konrad Adenauer L-1115 Luxembourg