Siemens 2009 Annual Report Download - page 169

81
 Managing Board statements, Independent auditors’ report, Additional information
95 Net assets position 97 Report on post-balance sheet date events
98 Risk report
108 Information required pursuant to
§315 (4) HGB of the German Commercial
Code and explanatory report
114 Compensation report
114 Report on expected developments
Corporate items and pensions
In fiscal 2009, Corporate items and pensions totaled a negative
€1.714 billion compared to a negative €3.860 billion a year ear-
lier. The main factor in the change was Corporate items, which
declined from a negative €3.966 billion to a negative €1.342 bil-
lion. Corporate items in the prior-year period included €1.081
billion in charges related to the global SG&A program, a provi-
sion of approximately €1 billion related to legal proceedings in
the U.S. and Germany that were resolved during fiscal 2009
and a one-time endowment of €390 million to the Siemens
Stiftung (foundation). Another major factor contributing to
this change was lower expenses for outside advisors engaged
in connection with investigations into alleged violations of
anti-corruption laws and related matters as well as remedia-
tion activities, which declined to €95 million from €430 million
a year earlier. Fiscal 2008 also included expenses of €128 mil-
lion related to a regional sales organization in Germany, in-
cluding an impairment, as well as a €32 million donation to the
Siemens Foundation in the U.S. These factors were partly off-
set by the release of an accrual of €38 million following rever-
sal of a previous judgment related to Italian electrical utility
Enel. For comparison, Corporate items in fiscal 2009 included
net charges of €235 million related to the global SG&A program
and other personnel-related restructuring measures. The cur-
rent year also included higher interest-related net expenses
associated with a major asset retirement obligation, including
a negative effect from the measurement of this obligation,
partly offset by a positive effect from related hedging activities
not qualifying for hedge accounting. In addition, fiscal 2009
included a positive effect related to shifting an employment
bonus program from cash-based to share-based payment, as
well as a charge of €53 million related to a global settlement
agreement with the World Bank Group.
Centrally carried pension expense swung to a negative €372
million in fiscal 2009 from a positive €106 million in the prior-
year period. This change was due primarily to higher benefit
costs related to our principal pension plans. In addition, cen-
trally carried pension expense in the current period also in-
cludes increased insurance costs of €106 million related to our
mandatory membership in the Pensionssicherungsverein
(PSV), the German pension insurance association.
Eliminations, Corporate Treasury
and other reconciling items
In fiscal 2009, income before income taxes from Eliminations,
Corporate Treasury and other reconciling items was a negative
€373 million compared to a negative €300 million in the prior
year period. The current period included higher negative re-
sults from interest rate hedging activities not qualifying for
hedge accounting. These negative results were partly compen-
sated by reduced counter-party risks. In the fourth quarter
a year earlier charges of €50 million were posted related
to counter-party risks, principally involving banks affected
adversely by developments in the international financial
markets.