Siemens 2015 Annual Report Download - page 72

Consolidated Financial Statements

a customer in an amount that reflects the consideration to
which the Company expects to be entitled in exchange for
those goods or services. Revenue is recognized when, or as,
the customer obtains control of the goods or services. IFRS 
also includes guidance on the presentation of contract bal-
ances, that is, assets and liabilities arising from contracts with
customers, depending on the relationship between the entity’s
performance and the customer’s payment. In addition, the new
standard requires a set of quantitative and qualitative disclo-
sures to enable users of the Company’s Consolidated Financial
Statements to understand the nature, amount, timing, and un-
certainty of revenue and cash flows arising from contracts with
customers. IFRS  supersedes IAS , Construction Contracts
and IAS , Revenue as well as related interpretations. In
July  the IASB deferred the standard’s effective date to an-
nual periods beginning on or after January , ; early appli-
cation is permitted. The Company is currently assessing the
impact of adopting IFRS  on the Company’s Consolidated
Financial Statements and will determine the adoption date as
well as the transition method.
NOTE 3 Acquisitions, dispositions
and discontinued operations
ACQUISITIONS
In June , Siemens acquired all shares of Dresser- Rand
Group Inc., Houston, Texas (U. S.) and Paris (France), a
world-leading supplier for the oil and gas industry and for dis-
tributed power generation. With Dresser- Rand on board,
Siemens has a comprehensive portfolio of equipment and ca-
pability for the oil and gas industry and a much expanded in-
stalled base, allowing Siemens to address the needs of the mar-
ket with products, solutions and services. The acquired busi ness
will be integrated in the Division Power and Gas. The purchase
price amounts to US$ , million (€ , million as of the ac-
quisition date) paid in cash. It comprises US$ , million
(€ , million as of the acquisition date) for all outstanding
shares and US$  million (€  million as of the acquisition
date) to settle the outstanding equity-based compensation pro-
grams. Siemens assumed cash amounting to US$  million
(€  million as of the acquisition date). Further, Siemens set-
tled outstanding financial debt of US$ , million (€ , mil-
lion as of the acquisition date). The following figures result
from the preliminary purchase price allocation as of the acqui-
sition date: Other intangible assets € , million, Property,
plant and equipment €  million, Trade and other receivables
€  million, Inventories €  million, Other current financial
assets €  million, Cash and cash equivalents €  million,
Deferred tax assets €  million, Debt including outstanding
financial debt settled € , million, Trade payables €  mil-
lion, Other current liabilities €  million and Deferred tax
liabilities €  million. Intangible assets mainly relate to tech-
nology of €  million, customer relationships of € , mil-
lion and trademarks of €  million. The gross contractual
amount of the trade and other receivables acquired is €  mil-
lion. Preliminary goodwill amounts to € , million and is
largely based on synergies, such as sales synergies mainly
resulting from the extended portfolio and enhanced service
opportunities, and cost synergies, especially in research and
development, purchasing, general administration functions, as
well as manufacturing. Including pre-tax earnings effects from
amortization of intangible assets acquired in the business com-
bination (€  million) and integration costs (€  million), the
acquired business contributed revenues of €  million and a
net income of €() million to Siemens for the period from
acquisition to September , .
In December , Siemens acquired the Rolls-Royce Energy
aero-derivative gas turbine and compressor business of Rolls-
Royce plc, U. K. (Rolls-Royce). By acquiring Rolls-Royce’s small
and medium derivative gas turbines business, Siemens closed
a technology gap in its gas turbine portfolio. The acquired
business will be integrated in the Division Power and Gas. The
contractually agreed purchase price amounts to £  million
(€  million as of the acquisition date). That amount was
subject to post-closing adjustments amounting to £  million
(€  million as of the acquisition date). The purchase price
was paid in cash. In addition, as part of the transaction,
Siemens paid Rolls-Royce £  million (€  million as of the
acquisition date) for a  year technology licensing agreement
granting exclusive access to future Rolls-Royce aero-turbine
technology developments in the four to  megawatt power
output range as well as preferred access to supply and engi-
neering services of Rolls-Royce. The following figures result
from the preliminary purchase price allocation as of the acqui-
sition date: Other intangible assets €  million, Property,
plant and equipment €  million, Trade and other receivables
€  million, Inventories €  million, Deferred tax assets
€  million, Provisions €  million, Trade payables €  mil-
lion and Other current liabilities €  million. Other intangible
assets mainly relate to technology including licences and sim-
ilar rights of €  million and customer relationships of
€  million. Preliminary goodwill amounts to €  million
and is largely based on synergies, such as cost synergies, espe-
cially in manufacturing, purchasing, research and develop-
ment, as well as general administration functions, and sales
synergies mainly resulting from the extension of the gas tur-
bine portfolio. Including pre-tax earnings effects from amor-
tization of intangible assets acquired in the business combina-
tion (€  million) and integration costs (€  million), the
acquired business contributed revenues of €  million and
a net income of €() million to Siemens for the period from
acquisition to September , .