Siemens 2005 Annual Report Download - page 163

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In fiscal 2004, the Company reduced its investment in Infineon from approximately 39.7%
ownership interest in Infineon’s outstanding shares as of the beginning of fiscal 2004 to 18.2% as
of the end of fiscal 2005. The company sold 150 million Infineon shares for cash consideration of
€1,794 and lost its ability to exercise significant influence over Infineon’s operating and financial
policies. As a result, the Company ceased accounting for Infineon under the equity method (see
Note 5) and began reporting its interest as an available-for-sale marketable security at fair value.
Of the 150 million shares sold, 86,292,363 shares represented all of the Company’s earlier 16.6%
voting interest as of the time of the sale and 63,707,637 shares came from the non-voting trust
(see below).
On December 5, 2001, the Company transferred 200 million Infineon shares or approximately
28.9% of Infineon’s share capital to an irrevocable, non-voting trust under a trust agreement. In
January 2004, 63,707,637 Infineon-shares of the non-voting trust were sold to third parties (see
above). The trustee was not related to the Company or any of its affiliates. Under the terms of the
trust agreement, the trustee had legal title to the shares held in trust and the Company irrevoca-
bly relinquished all voting rights in the shares. However, the trustee was not permitted to vote
any Infineon shares it held in trust under the agreement. The trust agreement would terminate
only when the Company and its affiliates, on a consolidated basis, had held, directly or indirectly,
less than 50% of the voting share capital of Infineon, including the shares held in trust by the
trustee, for a period of two consecutive years. We notified the trustee that the trust terminated in
accordance with the terms of the trust agreement on November 28, 2004. Upon termination, any
shares held by the trustee reverted to the Company and the Company is again entitled to vote
these shares.
10 Accounts receivable, net
Related companies are those in which Siemens has an ownership interest of less than 20% and
exercises no significant influence over their operating and financial policies.
The valuation allowance for accounts receivable changed as follows:
Notes to Consolidated Financial Statements
Consolidated Financial Statements Notes to Consolidated Financial Statements
(in millions of €, except where otherwise stated
and per share amounts)
September 30,
2005 2004
Trade receivables from the sale of goods and services, net 15,465 13,978
Receivables from sales and direct finance leases, net 1,488 1,365
Receivables from associated and related companies, net 169 127
17,122 15,470
Year ended
September 30,
2005 2004
Valuation allowance as of beginning of fiscal year 918 1,122
Increase (decrease) in valuation allowances recorded
in the income statement in the current period 190 59
Write-offs charged against the allowance (179) (280)
Recoveries of amounts previously written-off 34 32
Foreign exchange translation adjustment 18 (15)
Valuation allowance as of fiscal year-end 981 918