Siemens 2010 Annual Report Download - page 265

147 Consolidated Financial Statements
148 Consolidated Statements of Income
149 Consolidated Statements of Comprehensive Income
150 Consolidated Statements of Financial Position
151 Consolidated Statements of Cash Flow
152 Consolidated Statements of Changes in Equity
154 Notes to Consolidated Financial Statements
(in millions of €, except where otherwise stated
and per share amounts)
261 Additional information

Except for asset retirement obligations (see discussion below),
the majority of the Company ’s provisions are generally ex-
pected to result in cash outflows during the next  to  years.
Warranties mainly relate to products sold. See Note  product
related expenses for further information concerning our policy
for estimating warranty provisions.
Order related losses and risks are provided for anticipated
losses and risks on uncompleted construction, sales and leas-
ing contracts.
Asset retirement obligations – The Company is subject to asset
retirement obligations related to certain items of property,
plant and equipment. Such asset retirement obligations are
primarily attributable to environmental clean-up costs which
amounted to €, and €, respectively, as of September
,  and  (the non-current portion thereof being €
and €, respectively) and to costs primarily associated with
the removal of leasehold improvements at the end of the lease
term amounting to € and €, respectively, as of September
,  and  (the non-current portion thereof being €
and €, respectively).
Environmental clean-up costs relate to remediation and envi-
ronmental protection liabilities which have been accrued
based on the estimated costs of decommissioning facilities for
the production of uranium and mixed-oxide fuel elements in
Hanau, Germany (Hanau facilities), as well as a nuclear re-
search and service center in Karlstein, Germany (Karlstein fa-
cilities). According to the German Atomic Energy Act, when
such a facility is closed, the resulting radioactive waste must
be collected and delivered to a government-developed final
storage facility. In this regard, the Company has developed a
plan to decommission the Hanau and Karlstein facilities in the
following steps: clean-out, decontamination and disassembly
of equipment and installations, decontamination of the facili-
ties and buildings, sorting of radioactive materials, and inter-
mediate and final storage of the radioactive waste. This process
will be supported by continuing engineering studies and radio-
active sampling under the supervision of German federal and
state authorities. The decontamination, disassembly and sort-
ing activities are planned to continue until ; thereafter, the
Company is responsible for intermediate storage of the radio-
active materials until a final storage facility is available. With
respect to the Hanau facility, the process of setting up interme-
diate storage for radioactive waste has nearly reached comple-
tion; on September , , the Company received official
notification from the 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 deci-
sion of the federal government on the location of the final
storage facility and the date of its availability. Consequently,
the provision is based on a number of significant estimates and
assumptions.
In fiscal , several parameters relating to the development
of a final storage facility for radioactive waste were specified on
the so called “Schacht Konrad” final storage. Using the input of
an independent advisor, management adjusted its valuation of
the liability in fiscal . The valuation uses revised assump-
tions to reflect more current and detailed cost estimates, price
inflation and discount rates as well as a longer spread of future
cash outflows. While the valuation as of September , 
assumed a lump sum payment in  related to the costs for
Warranties Order
related losses
and risks
Asset
retirement
obligations
Other Total
Balance as of October ,  2,744 1,705 682 2,567 7,698
Additions 1,508 948 3 719 3,178
Usage (713) (630) (29) (1,457) (2,829)
Reversals (485) (300) (6) (389) (1,180)
Translation differences (23) (33) (1) (12) (69)
Accretion expense and effect of changes in discount rates 4 15 161 10 190
Other changes (35) (43) 6 46 (26)
Balance as of September ,  3,000 1,662 816 1,484 6,962
Thereof non-current 861 551 793 566 2,771