Siemens 2009 Annual Report Download - page 181

93
 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
Purchase obligations – At September 30, 2009, Siemens had
€11.218 billion in purchase obligations. Purchase obligations
include agreements to purchase goods or services that are
enforceable and legally binding and which specify all of the
following items: (i) fixed or minimum quantities, (ii) fixed,
minimum or variable price provisions and (iii) approximate
timing of the transaction. For additional information, see
“Notes to Consolidated Financial Statements.”
Operating leases – At September 30, 2009, Siemens had a total
of €2.851 billion in total future payment obligations under non-
cancelable operating leases. For additional information, see
“Notes to Consolidated Financial Statements.”
Siemens is subject to asset retirement obligations related to
certain items of property, plant and equipment. Such asset
retirement obligations are primarily attributable to environ-
mental clean-up costs related to remediation and environmen-
tal protection liabilities which amounted to €780 million as of
September 30, 2009 and to costs primarily associated with the
removal of leasehold improvements at the end of the lease
term amounting to €36 million as of September 30, 2009. For
additional information with respect to asset retirement obliga-
tions, see “Notes to Consolidated Financial Statements.”
In fiscal 2009, Siemens has reached an agreement with the
trustees of its largest pension plan in UK, which may lead to
gross contributions of up to €620 million until 2025.
Off-Balance sheet arrangements
Guarantees – Guarantees are principally represented by credit
guarantees and guarantees of third-party performance. As of
September 30, 2009, the undiscounted amount of maximum
potential future payments for guarantees was €7.148 billion.
Credit guarantees cover the financial obligation of third-par-
ties in cases where Siemens is the vendor and/or contractual
partner. In addition, Siemens provides credit line guarantees
with variable utilization to joint ventures, associated and other
companies we held an investment in. The total amount for
credit guarantees was €313 million as of September 30, 2009.
Performance bonds and guarantees of advanced payments
guarantee the fulfillment of contractual commitments of part-
ners in a consortium where Siemens may be the general or
subsidiary partner. In the event of non-performance under the
contract by the consortium partner(s), Siemens will be re-
quired to pay up to an agreed-upon maximum amount. Guar-
antees of third-party performance amounted to €1.092 billion
as of September 30, 2009.
The Federal Republic of Germany has commissioned a consor-
tium consisting of Siemens IT Solutions and Services and IBM
Deutschland GmbH (IBM) to modernize and operate the non-
military information and communications technology of the
German Federal Armed Forces (Bundes wehr). This project is
called HERKULES. A project company, BWI Informationstech-
nik GmbH (BWI), will provide the services required by the
terms of the contract. Siemens IT Solutions and Services is a
shareholder in the project company. The total contract value
amounts to a maximum of approximately €6 billion. In connec-
tion with the consortium and execution of the contract be-
tween BWI and the Federal Republic of Germany in December
2006, Siemens issued several guarantees connected to each
other legally and economically in favor of the Federal Republic
of Germany and of the consortium member IBM. The guaran-
tees ensure that BWI has sufficient resources to provide the re-
quired services and to fulfill its contractual obligations. These
guarantees are listed as a separate item HERKULES obligations
due to their compound and multilayer nature. Total future pay-
ments potentially required by Siemens amount to €3.490 bil-
lion as of September 30, 2009 and will be reduced by approxi-
mately €400 million per year over the remaining 8-year
con-
tract period. Yearly payments under these guarantees are limited
to €400 million plus, if applicable, a maximum of €90 million
in unused guarantees carried forward from the prior year.
Furthermore, Siemens has provided indemnification in con-
nection with dispositions of certain business entities, which
protects the buyer from certain tax, legal, and other risks re-
lated to the purchased business entity. These other guarantees
were €2.253 billion as of September 30, 2009. In the event that
it becomes probable that Siemens will be required to satisfy
these guarantees, provisions are established. Such provisions
are established in addition to the liabilities recognized for the
non-contingent component of the guarantees. Most of the