Siemens 2006 Annual Report Download - page 204

Notes to Consolidated Financial Statements
(in millions of €, except where otherwise stated and per share amounts)
200
decontamination of the facilities and buildings, sorting of radioactive materials, and inter-
mediate and final storage of the radioactive waste. This process will be supported by con-
tinuing engineering studies and radioactive sampling under the supervision of German
federal and state authorities. The decontamination, disassembly and sorting activities are
planned to continue until 2010; thereafter, the Company is responsible for intermediate stor-
age of the radioactive materials until a final storage facility is available. The final location is
not expected to be available before approximately 2030. With respect to the Hanau facility, the
process of setting up intermediate storage for radioactive waste has neared completion; on
September 21, 2006 the Company received official notification from the competent authorities
that the Hanau facility has been released from the scope of application of the German Atomic
Energy Act and that its further use is unrestricted. The ultimate costs of the remediation are
contingent on the decision of the federal government on the location of the final storage facili-
ty and the date of its availability. Consequently, the accrual is based on a number of significant
estimates and assumptions. The Company does not expect any recoveries from third parties
and did not reduce the accruals for such recoveries. The Company believes that it has ade-
quately provided for this exposure. As of September 30, 2006 and 2005, the accrual totals €501
and €499, respectively, and is recorded net of a present value discount of €1,457, and €1,472,
respectively. The total expected payments for each of the next five fiscal years and the total
thereafter are €25, €21, €20, €14, €7, and €1,871 (includes €1,811 for the estimated costs asso-
ciated with final storage in 2033).
The Company recognizes the accretion of the liability for the Hanau facility using the
effective interest method. During each of the years ended September 30, 2006 and 2005, the
Company recognized €26 in accretion expense.
The current and non-current portion of asset retirement obligations developed as follows:
Year ended
September 30,
2006 2005
Aggregate carrying amount as of the beginning of fiscal year
(thereof current portion of €43 and €74) 542 552
Liabilities incurred in the current period 9 12
Liabilities settled in the current period (34) (62)
Accretion expense 31 28
Revision in estimated cash flows (1) 12
Aggregate carrying amount as of fiscal year-end
(thereof current portion of €38 and €43) 547 542