Siemens 2006 Annual Report Download - page 209

Notes to Consolidated Financial Statements
(in millions of €, except where otherwise stated and per share amounts) 205
Miscellaneous
Under the German Stock Corporation Act (Aktiengesetz), the amount of dividends available
for distribution to shareholders is based upon the earnings of Siemens AG as reported in its
statutory financial statements determined in accordance with the German Commercial Code
(Handelsgesetzbuch). During the fiscal year ended September 30, 2006, Siemens AG manage-
ment distributed an ordinary dividend of €1,201 (€1.35 per share) of the fiscal 2005 earnings
of Siemens AG to its shareholders. During the year ended September 30, 2005, Siemens AG
management distributed €1,112 (€1.25 per share) of the fiscal 2004 earnings of Siemens AG as
an ordinary dividend to its shareholders.
24 Commitments and contingencies
Guarantees and other commitments
The following table presents the undiscounted amount of maximum potential future payments
for each major group of guarantee:
Credit guarantees cover the financial obligations of third parties in cases where Siemens is
the vendor and/or contractual partner. These guarantees generally provide that in the event of
default or non-payment by the primary debtor, Siemens will be required to settle such finan-
cial obligations. In addition, Siemens provides credit guarantees generally as credit-line guar-
antees with variable utilization to associated and related companies. The maximum amount of
these guarantees is subject to the outstanding balance of the credit or, in case where a credit
line is subject to variable utilization, the nominal amount of the credit line. These guarantees
usually have terms of between one and five years. Except for statutory recourse provisions
against the primary debtor, credit guarantees are generally not subject to additional contractu-
al recourse provisions. As of September 30, 2006 and 2005, the Company has accrued €25 and
€36, respectively, relating to credit guarantees.
Furthermore, Siemens issues Guarantees of third-party performance, which include per-
formance bonds and guarantees of advanced payments in cases where Siemens is the general
or subsidiary partner in a consortium. In the event of non-fulfillment of contractual obliga-
tions by the consortium partner(s), Siemens will be required to pay up to an agreed-upon
maximum amount. These agreements span the term of the contract, typically ranging from
three months to seven years. Generally, consortium agreements provide for fallback guaran-
tees as a recourse provision among the consortium partners. No significant liability has been
recognized in connection with these guarantees.
Notes to Consolidated Financial Statements
September 30,
2006 2005
Guarantees
Credit guarantees 302 362
Guarantees of third-party performance 1,489 1,456
Other guarantees 528 602
2,319 2,420