Siemens 2012 Annual Report Download - page 181

135 D. Consolidated Financial Statements
239 E. Additional Information
130 C. Siemens AG (Discussion on basis of
German Commercial Code)
134 C. Notes and forward-looking statements
129 C. Compensation Report, Corporate Governance
statement pursuant to Section a of the
German Commercial Code, Takeover-relevant
information and explanatory report

protection liabilities have been accrued based on the estimat-
ed costs of decommissioning facilities for the production of
uranium and mixed-oxide fuel elements in Hanau, Germany
(Hanau facilities), as well as a nuclear research and service
center in Karlstein, Germany (Karlstein facilities). For addition-
al information with respect to asset retirement obligations, see
   .     .
Our liquidity may be adversely affected in future periods by
regular or special contributions to fund our pension plans and
similar commitments. As of September , , our liability
for pension plans and similar commitments as recognized in
the Consolidated Statements of Financial Positions amounted
to €. billion. However, the recognized liability may fluctu-
ate significantly in future periods due to changes in assump-
tions, in particular the discount rate, rate of future compensa-
tion increases and pension progression. Actual developments
may differ from assumptions due to changing market, eco-
nomic and governmental regulatory conditions, thereby re-
sulting in an increase or decrease of the liability. Employer
contributions expected to be paid to the funded pension plans
during fiscal  are € million, including contributions
due to contractual and legal obligations of approximately €.
billion. Additional contributions to our pension benefit plans
may be made or contractually agreed at the discretion of our
management after the end of the reporting period. In fiscal
, Siemens reached an agreement with the trustees of cer-
tain pension plans in the U.K., which may lead to contractually
agreed contributions of up to approximately €. billion in com-
ing years. For additional information regarding contributions to
the fund our pension plans and similar commitments see
   .     .
For further information with respect to contractual obligations
see    .     .
... -  
Guarantees – Siemens guarantees are principally credit guar-
antees and guarantees of third-party performance. As of Sep-
tember , , the undiscounted maximum amount of poten-
tial future payments for guarantees was €. billion, includ-
ing guarantees relating to discontinued operations. Credit guar-
antees cover the financial obligations of third-parties in cases
where Siemens is the vendor and / or contractual partner. In ad-
dition, Siemens provides credit guarantees generally as credit-
line guarantees with variable utilization to joint ventures and
associated and other companies accounted for using the equity
method. Total credit guarantees were € million as of Sep-
tember , . Furthermore, Siemens issues guarantees of
third-party performance, which include performance bonds
and guarantees of advanced payments in cases where Siemens
is the general or subsidiary partner in a consortium. In the
event of non-fulfillment of contractual obligations by the con-
sortium partner(s), Siemens will be required to pay up to an
agreed-upon maximum amount. Guarantees of third-party per-
formance amounted to €. billion as of September , .
In fiscal , The Federal Republic of Germany commissioned
a consortium consisting of Siemens and IBM Deutschland GmbH
(IBM) to modernize and operate the non-military information
and communications technology of the German Federal Armed
Forces (Bundeswehr). This project is called HERKULES. A proj-
ect company, BWI Informationstechnik GmbH (BWI),
will pro-
vide the services required by the terms of the contract.
Siemens is a shareholder in the project company. The total
contract value amounts to a maximum of approximately € bil-
lion. In connection with the consortium and execution of the
contract between BWI and the Federal Republic of Germany in
December , Siemens issued several guarantees legally
and economically connected to each other in favor of the Fed-
eral Republic of Germany and of the consortium member IBM.
The guarantees ensure that BWI has sufficient resources to
provide the required services and to fulfill its contractual obli-
gations. Total future payments potentially required by Siemens
amounted to €. billion as of September ,  and will be
reduced by approximately € million per year over the re-
maining five-year contract period as of September , .
Yearly payments under these guarantees are limited to €
million plus, if applicable, a maximum of € million in un-
used guarantees carried forward from the prior year.
Other guarantees amounted to €. billion as of September
,  and included indemnifications issued in connection
with dispositions of business entities. Such indemnifications,
if customary to the relevant transactions, may protect the buy-
er from potential tax, legal and other risks in conjunction with
the purchased business entity. Indemnifications primarily re-
late to NSN, disposed of in fiscal , EN, disposed of in fiscal
, and to Siemens IT Solutions and Services, disposed of in
fiscal . In the event that it becomes probable that Siemens
will be required to satisfy these guarantees, provisions are es-
tablished. Such provisions are established in addition to the
liabilities recognized for the non-contingent component of the
guarantees.
Capital commitments – As of September , , the Com-
pany had commitments to make capital contributions to vari-
ous companies of € million.
For additional information with respect to guarantees and our
other commitments, see    .   
 
.