Siemens 2013 Annual Report Download - page 277

253 D. Consolidated Financial Statements 357 E. Additional Information
254 D. Consolidated Statements of Income
255 D. Consolidated Statements of Comprehensive Income
256 D. Consolidated Statements of Financial Position
257 D. Consolidated Statements of Cash Flows
258 D. Consolidated Statements of Changes in Equity
260 D. Notes to Consolidated Financial Statements
348 D. Supervisory Board and Managing Board

of a spin-off by issuing OSRAM shares to the shareholders of
Siemens AG and a subsequent listing of these shares.
The decision in June  represented a significant change of
the previous disposal plan. Siemens no longer considered it
highly probable to complete the disposal of OSRAM via an ini-
tial public offering by the end of calendar year , resulting
in a reversal of the previous classification of the disposal group
OSRAM as held for disposal and discontinued operations. By
reversing the previous classification, Siemens recognized a
negative effect on earnings of € million before taxes in the
third quarter of fiscal  that result from depreciation / amor-
tization and impairments of property, plant and equipment
and intangible assets and equity pick ups that were not recog-
nized while OSRAM was previously classified as discontinued
operations (€ million referring to fiscal ). This effect on
earnings is presented under expenses in the table below.
Siemens considered a listing via spin-off as highly probable in-
cluding the high probability of the shareholders approval
based on past experience with other capital matters suggested
for approval at the Annual Shareholders’ Meeting, feedback
from the financial market and the economic rationale of the
decision from a shareholder perspective. Accordingly, Siemens
classified OSRAM as held for disposal and discontinued opera-
tions again. Among other impacts on other income taxes (on
costs to sell / spin-off costs), Siemens adjusted deferred tax as-
sets according to the plan of issuing OSRAM shares in the form
of a spin-off.
In November , Siemens called off the initial public offer-
ing plan and made available a spin-off report to its sharehold-
ers in December  in order to request their approval for the
spin-off of .% of OSRAM at the Annual Shareholders’ Meet-
ing in January . At the Annual Shareholders’ Meeting the
shareholders of Siemens AG approved the spin-off of OSRAM
by a majority of more than %. In July , Siemens success-
fully completed its planned spin-off and listing of OSRAM. As a
result, Siemens derecognized the net carrying amount of the
disposal group OSRAM and the associated spin-off liability. The
spin-off liability which was initially recognized in the second
quarter of fiscal  based on the shareholders’ approval was
presented in other current liabilities and reflected .% of the
fair value of OSRAM. At the end of each reporting period and at
the date of the actual spin-off, Siemens measured the spin-off
liability at fair value with any changes recognized in retained
earnings.
Effective July ,  Siemens transferred .% of its owner-
ship interest in OSRAM in the spin-off transaction to its share-
holders. Immediately after the effectiveness of the spin-off,
Siemens contributed .% to the Siemens Pension Trust e.V.
and thereafter owns .% in OSRAM. The effectiveness of the
spin-off triggered a remeasurement of the spin-off liability at
fair value. The loss of control resulted in the derecognition of
OSRAM’s net assets, including non-controlling interests, the
reclassification of components of other comprehensive in-
come and the recognition of the remaining stake in OSRAM at
fair value. Siemens applied a multiple valuation technique in
order to determine the fair value of the spin-off liability as of
July ,  using the input of a discounted cash flow valua-
tion and market multiples, derived from a report from an inde-
pendent expert. The fair value of the spin-off liability repre-
senting .% of the ownership interest in OSRAM amounted
to €, million; the derecognized net assets spun-off
amounted to €, million, resulting in a difference at the
amount of € million. Siemens recognized a gain of € mil-
lion due to the measurement of the remaining stake in OSRAM
at fair value. The derecognition of the non-controlling inter-
ests and the reclassification of relevant components of other
comprehensive income resulted in a gain of € million and
of € million, respectively. In fiscal  costs to sell/ spin-
off costs amounted to € million. As a result, Siemens
recognized a total gain on the spin-off in the amount of €
million in fiscal . Due to the nature of the spin-off, the
derecognition of the disposal group is presented as a non-cash
transaction.
The results of OSRAM are disclosed as discontinued operations
in the Company ’s Consolidated Statements of Income for all
periods presented:
Year ended September ,
(in millions of €)  
Revenue 4,064 5,400
Expenses (3,745) (5,476)
Gain on the spin-off of the disposal group
constituting the discontinued operations
(prior years: costs to sell/spin-off costs) 54 (33)
Pretax income (loss) from discontinued
operations 372 (109)
Income taxes on ordinary activities (110) –
Other income taxes
(on costs to sell/spin-off costs) 15 (26)
Income (loss) from discontinued
operations, net of income taxes 277 (135)
The assets and liabilities of OSRAM were presented as held for
disposal in the Consolidated Statements of Financial Position
until the effective date of the spin-off on July , . The car-
rying amounts of the major classes of assets and liabilities of
OSRAM were as follows: