Siemens 2005 Annual Report Download - page 173
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173
In connection with the acquisition of Flender (see Note 3), Siemens assumed a €250 million,
11% senior note due 2010, of which the Company repurchased €176 through a cash tender offer.
The Company has an option to repurchase the remaining outstanding senior note on and after
August 1, 2007 at contractually defined prices.
In fiscal 2005, the Company redeemed and retired the remainder of the Siemens Nederland
N.V. 1.0% exchangeable notes into shares of Infineon Technologies AG with a notional amount of
€596. In fiscal 2004, the Company repurchased and retired €464.5 in notional amount of the
Siemens Nederland N.V. 1.0% exchangeable notes into shares of Infineon Technologies AG, which
resulted in a gain of €2. Additionally, in fiscal 2004, the Company repurchased €405 in notional
amount of the 5% €-bond resulting in a loss of €1.
21 Pension plans and similar commitments
Pension benefits provided by Siemens are currently organized primarily through defined benefit
pension plans which cover virtually all of the Company’s domestic employees and many of the
Company’s foreign employees. To reduce the risk exposure to Siemens arising from its pension
plans, the Company has implemented new plans whose benefits are predominantly based on con-
tributions made by the Company. In order to fund Siemens’ pension obligations, the Company’s
major pension plans are funded with assets in segregated pension entities. Furthermore, there
are other postretirement benefits, which primarily comprise transition payments to German
employees after retirement as well as postretirement health care and life insurance benefits to
U.S. employees. These predominantly unfunded other postretirement benefit plans are qualified
as defined benefit plans under U.S. GAAP.
In addition to the above, the Company has foreign defined contribution plans for pensions
and other postretirement benefits. The recognition of a liability is not required because the obli-
gation of the Company is limited to the payment of the contributions into these plans.
Notes to Consolidated Financial Statements
Consolidated Financial Statements Notes to Consolidated Financial Statements
(in millions of €, except where otherwise stated
and per share amounts)