Siemens 2011 Annual Report Download - page 311

153 D. Consolidated Financial Statements 273 E. Additional information
158 D. Consolidated Statements of Changes in Equity
160 D. Notes to Consolidated Financial Statements
266 D. Supervisory Board and Managing Board
154 D. Consolidated Statements of Income
155 D.2 Consolidated Statements of Comprehensive Income
156 D. Consolidated Statements of Financial Position
157 D. Consolidated Statements of Cash Flow

are primarily attributable to environmental clean-up costs
which amounted to €, million and €, million, respec-
tively, as of September ,  and  (the non-current
portion thereof being €, million and € million, respec-
tively) and to costs primarily associated with the removal of
leasehold improvements at the end of the lease term amount-
ing to € million and € million, respectively, as of Septem-
ber ,  and  (the non-current portion thereof being
€ million and € million, 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 pro-
cess will be supported by continuing engineering studies and
radioactive sampling under the supervision of German federal
and state authorities. The decontamination, disassembly and
sorting activities are planned to continue until ; thereaf-
ter, the Company is responsible for intermediate storage of
the radioactive materials until a final storage facility is avail-
able. With respect to the Hanau facility, the process of setting
up intermediate storage for radioactive waste has nearly
reached completion; on September , , the Company re-
ceived 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 unre-
stricted. The ultimate costs of the remediation are contingent
on the decision of the federal government on the location of
the final storage facility and the date of its availability. Conse-
quently, the provision is based on a number of significant es-
timates and assumptions.
In fiscal , the parameters related to the life-span of the
German nuclear reactors generally changed to a planned
phase-out until . Using the input of an independent advi-
sor, management updated its valuation of the liability, accord-
ingly. The valuation uses revised assumptions to reflect cur-
rent and detailed cost estimates as well as a shorter time span
of future cash outflows, reflecting the shorter life-span of the
German nuclear reactors. The updated valuation as of Sep-
tember ,  assumes a continuous outflow until  in-
stead of  in the prior valuation. The change in estimates
resulted in a minor adjustment of the related provision.
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 in-
put of an independent advisor, management adjusted its valu-
ation of the liability in fiscal . The valuation used revised
assumptions to reflect more current and detailed cost esti-
mates, price inflation and discount rates as well as a longer
spread of future cash outflows. While the valuation as of Sep-
tember ,  assumed a lump sum payment in  relat-
ed to the costs for the final storage, the updated accounting
estimates applied as of the third quarter of fiscal  assume
a continuous outflow until  related to the costs for dis-
mantling as well as intermediate and final storage. The
change in estimates resulted in a decrease of the related pro-
vision of € million.
The determination of the provisions related to major asset re-
tirement obligations will continue to involve significant esti-
mates and assumptions. Uncertainties surrounding the
amount to be recognized include, for example, the estimated
costs of decommissioning because of the long time frame
over which future cash outflows are expected to occur.
Amongst others, the estimated cash outflows related to the
asset retirement obligation could alter significantly if, and
when, political developments affect the government’s plans
to develop the so called Schacht Konrad. As of September ,
 and , the provision totals €, million and €,
million, respectively, and is recorded net of a present value
discount of €, million and €, million, respectively.
The total expected payments for each of the next five fiscal
years and the total thereafter are € million, € million, €
million, € million, € million and €, million.
The Company recognizes the accretion of the provision for as-
set retirement obligations using the effective interest method
applying current interest rates prevailing at the period-end
date. In fiscal  and , the Company recognized €
million and € million, respectively in accretion expense in
line item Other Financial income (expense), net. Changes in
discount rates increased the carrying amount of provisions by
€ million and € million as of September ,  and
, respectively.
Other – Other includes transaction-related and post-closing
provisions in connection with portfolio activities.