Siemens 2006 Annual Report Download - page 132

Management’s discussion and analysis
128
Overview financial position
As of September 30, 2006, total assets increased 6%, to €90.973 billion, from €86.117 billion as
of September 30, 2005.
In June 2006, we announced an agreement to form a joint venture with Nokia, combining
the carrier-related operations of Com with the networks operations of Nokia. The transaction
is expected to close in the first half of fiscal 2007 and is subject to customary regulatory
approvals (European Union approval having been received on November 13, 2006), the com-
pletion of standard closing conditions, and agreement on a number of detailed implementa-
tion steps. In exchange for transferring our carrier-related operations into the new joint-ven-
ture NSN, we will receive shares in NSN. Pending that transfer, the assets and liabilities of the
carrier-related operations of Siemens are classified on the balance sheet as held for disposal
and measured at the lower of their carrying amount or fair value less costs to sell.
Further, in the context of the overall reorganization of its Com segment, the Company
plans to divest the enterprise networks business, which is part of Com, in fiscal 2007. The
assets and liabilities of the enterprise networks business were classified on the balance sheet
as held for disposal. For information on the carrying amounts of major classes of assets and
liabilities held for disposal, see “Notes to Consolidated Financial Statements.”
The following table shows current assets at end of fiscal 2006 and fiscal 2005. Given the
reclassification of Com’s carrier and enterprise businesses as held for disposal in fiscal 2006,
in particular Accounts receivable, net, and Inventories, net for those businesses are now
included in Assets held for disposal:
Cash and cash equivalents totaled €10.214 billion at September 30, 2006. The increase of
€2.093 billion was driven by cash inflows associated with financing activities. Marketable
securities were lower primarily due to sales of our remaining shares in Infineon, Juniper and
Epcos in fiscal 2006. The decrease in Accounts receivable, net year-over-year is driven by
reclassifying the carrier and enterprise businesses as held for disposal. Assets held for dis-
posal included €1.981 billion related to assets, which were reclassified from non-current to
current.
September 30,
(€ in millions) 2006 2005
Cash and cash equivalents 10,214 8,121
Marketable securities 596 1,789
Accounts receivable, net 15,149 17,122
Inventories, net 12,790 12,812
Deferred income taxes 1,468 1,484
Assets held for disposal 7,189 245
Other current assets 4,205 5,230
Total current assets 51,611 46,803