Siemens 2009 Annual Report Download - page 195

107
condition and our provisions for legal proceedings-related
losses may not be sufficient to cover our ultimate loss or ex-
penditure.
Examinations by tax authorities and changes in tax regula-
tions could result in lower earnings and cash flows: We op-
erate in approximately 190 countries and therefore are subject
to different tax regulations. Changes in tax law could result in
higher tax expense and payments. Furthermore, this could
materially impact our tax receivables and liabilities as well as
deferred tax assets and deferred tax liabilities. In addition, the
uncertainty of tax environment in some regions could limit our
ability to enforce our rights. As a globally operating organiza-
tion, we conduct business in countries subject to complex tax
rules, which may be interpreted in different ways. Future inter-
pretations or developments of tax regimes may affect our tax
liability, return on investments and business operations. We
are regularly examined by tax authorities in various jurisdic-
tions.
We are subject to environmental and other government
regulations: Some of the industries in which we operate are
highly regulated. Current and future environmental and other
government regulations or changes thereto, may result in sig-
nificant increases in our operating or product costs. We could
also face liability for damage or remediation for environmental
contamination at the facilities we design or operate. For fur-
ther information, see “Notes to Consolidated Financial State-
ments.” We establish provisions for environmental risks when
(1) we have a present obligation as a result of a past event; (2) it
is probable that an outflow of resources embodying economic
benefits will be required to settle the obligation; and (3) a reli-
able estimate can be made of the amount of the obligation.
With regard to certain environmental risks, we maintain liabil-
ity insurance at levels that our management believes are ap-
propriate and consistent with industry practice. We may incur
environmental losses beyond the limits, or outside the cover-
age, of such insurance, and such losses may have a material
adverse effect on the results of our operations or financial con-
dition and our provisions for environmental remediation may
not be sufficient to cover the ultimate losses or expenditures.
LEGAL PROCEEDINGS
For information on legal proceedings, see “Notes to Consoli-
dated Financial Statements.”
 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