The current state-of-the-art in statistical machine translation (SMT) suffers from issues of sparsity and inadequate modeling power when translating into morphologically rich languages. We model both inflection and word-formation for the task of translating into German. We translate from English words to an underspecified German representation and then use linearchain CRFs to predict the fully specified German representation. We show that improved modeling of inflection and wordformation leads to improved SMT. .