Siemens 2015 Annual Report Download - page 83

Consolidated Financial Statements 
Bond with Warrant Units – Each of the US$ . billion instru-
ments were issued with , detachable warrants. In the
three months ended September , , Siemens made an ex-
change offer to institutional investors to replace the existing
warrants relating to Siemens and OSRAM Licht AG (OSRAM)
shares with new warrants relating only to Siemens shares;
, warrants were offered for exchange by warrant holders
and accepted by Siemens; the previous warrants submitted
for exchange were cancelled. Since September , , holders
of the new warrants are entitled, at their option, to receive
,. Siemens AG shares per warrant at an exercise price
per share of € .. To facilitate the exchange, in total, float-
ing-rate instruments of €  million were issued. , warrants
were not exchanged and retain the original rights to receive
,. Siemens AG shares per warrant and . OSRAM
shares at an exercise price of € ,. (since February ,
). The number of shares remains subject to the adjust ment
provisions under the terms and conditions of the warrants. As
of September ,  and , respectively, the warrants of-
fer option rights to . million and . million Siemens AG
shares. The new warrants are classified as equity instruments
with a fair value of €  million at issuance; they are presented
in Capital reserve in line item Other changes in equity. The pre-
vious warrants not exchanged continue to be recognized as
other financial liability.
ASSIGNABLE AND TERM LOANS
In fiscal , the two bilateral US$  million term loan facili-
ties (in aggregate €  million) were extended by one year un-
til March ,  with no extension option remaining. In
June , Siemens redeemed a €  million assignable loan.
COMMERCIAL PAPER PROGRAM
Siemens has a US$ . billion (€ . billion as of September ,
) commercial paper program in place including US$ ex-
tendible notes capabilities. As of September ,  and ,
US$ . billion (€ . billion) and US$ . billion (€ . billion),
respectively, were outstanding. Siemens’ commercial papers
have a maturity of generally less than  days. Interest rates
ranged from . % to . % in fiscal  and from . % to . %
in fiscal .
NOTE 16 Post-employment benefits
Siemens provides post-employment defined benefit plans or
defined contribution plans to almost all of the Company’s do-
mestic employees and the majority of the Company’s foreign
employees.
DEFINED BENEFIT PLANS
The defined benefit plans open to new entrants are based pre-
dominantly on contributions made by the Company. Only to a
certain extent, those plans are affected by longevity, inflation
and compensation increases and take into account country
specific differences. The Company’s major plans are funded
with assets in segregated entities. In accordance with local
laws and bilateral agreements with benefit trusts (trust agree-
ment) those plans are managed in the interest of the beneficia-
ries. The defined benefit plans cover , participants, in-
cluding , active employees, , former employees
with vested benefits and , retirees and surviving depen-
dents.
Germany:
In Germany, Siemens AG provides pension benefits through
the plan BSAV (Beitragsorientierte Siemens Altersversorgung),
frozen legacy plans and deferred compensation plans. The ma-
jority of Siemens’ active employees participate in the BSAV.
Those benefits are predominantly based on contributions made
by the Company and returns earned on such contributions,
subject to a minimum return guaranteed by the Company. In
connection with the implementation of the BSAV, benefits pro-
vided under the frozen legacy plans were modified to substan-
tially eliminate the effects of compensation increases. How-
ever, these frozen plans still expose the Company to investment
risk, interest rate risk and longevity risk. The pension plans are
funded via contractual trust arrangements (CTA). In Germany
no legal or regulatory minimum funding requirements apply.
U. S.:
Siemens Corporation sponsors the Siemens Pension Plan,
which is vastly frozen to new entrants and accretion of new
benefits. Most of the plan participants’ benefits are calculated
using a cash balance formula. The plan assets are held in a
Master Trust. Siemens Corporation has delegated investment
oversight of the assets to the Investment Committee. The
trustee of the Master Trust, who is responsible for the safe-
keeping of the trust, acts only by direction of the Investment
Committee. Annual contributions are determined by indepen-
dent actuaries. There is a regulatory requirement to maintain a
minimum funding level of  % in the defined benefit plans in
order to avoid benefit restrictions.