-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, Dd2XkzGXUDtlWjTvFUB/v59O3DM0Tkfq894hREaGe6HkSDs2yLlZAdO6BuQ39zUs HIcagK4FCtNBYdBIleXzTA== 0000950130-95-000150.txt : 19950608 0000950130-95-000150.hdr.sgml : 19950608 ACCESSION NUMBER: 0000950130-95-000150 CONFORMED SUBMISSION TYPE: SC 14D1/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 19950131 SROS: NONE SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: PYRAMID TECHNOLOGY CORP CENTRAL INDEX KEY: 0000714865 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRONIC COMPUTERS [3571] IRS NUMBER: 942781589 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: SC 14D1/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-37353 FILM NUMBER: 95504371 BUSINESS ADDRESS: STREET 1: 3860 N FIRST ST CITY: SAN JOSE STATE: CA ZIP: 95134 BUSINESS PHONE: 4084288000 MAIL ADDRESS: STREET 1: 3860 N FIRST STREET CITY: SAN JOSE STATE: CA ZIP: 95134 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: SIEMENS NIXDORF INFORMATIONS SYSTEME AG /FI CENTRAL INDEX KEY: 0000818858 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 14D1/A BUSINESS ADDRESS: STREET 1: HEINZ NIXDORF RING1 CITY: 33102 PADERBORN STATE: I8 MAIL ADDRESS: STREET 1: 1301 AVENUE OF THE AMERICAS STREET 2: ATTN E ROBERT LUPONE ESQ CITY: NEW YORK STATE: NY ZIP: 10019-6022 FORMER COMPANY: FORMER CONFORMED NAME: SIEMENS NIXDORF INFORMATIONS SYSTEME AG /FI DATE OF NAME CHANGE: 19950106 SC 14D1/A 1 SCHEDULE 14D1 AND 13D AMENDMENTS - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------------- SCHEDULE 14D-1 TENDER OFFER STATEMENT (AMENDMENT NO. 1) PURSUANT TO SECTION 14(D)(1) OF THE SECURITIES EXCHANGE ACT OF 1934 AND SCHEDULE 13D (AMENDMENT NO. 6) UNDER THE SECURITIES EXCHANGE ACT OF 1934 ---------------- PYRAMID TECHNOLOGY CORPORATION (NAME OF SUBJECT COMPANY) ---------------- SIEMENS NIXDORF MID-RANGE ACQUISITION CORP. SIEMENS NIXDORF INFORMATIONSSYSTEME AG SIEMENS AKTIENGESELLSCHAFT (BIDDERS) ---------------- COMMON STOCK, $.01 PAR VALUE (TITLE OF CLASS OF SECURITIES) ---------------- 747236107 (CUSIP NUMBER OF CLASS OF SECURITIES) ---------------- E. ROBERT LUPONE, ESQ. SIEMENS CORPORATION 1301 AVENUE OF THE AMERICAS NEW YORK, NEW YORK 10019-6022 (212) 258-4000 (NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO RECEIVE NOTICES AND COMMUNICATIONS ON BEHALF OF BIDDER) ---------------- COPY TO: PETER D. LYONS, ESQ. SHEARMAN & STERLING 599 LEXINGTON AVENUE NEW YORK, NEW YORK 10022 TELEPHONE: (212) 848-4000 ---------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- CUSIP NO. 747236107 1. Name of Reporting Person S.S. or I.R.S. Identification No. of Above Person Siemens Nixdorf Mid-Range Acquisition Corp. - -------------------------------------------------------------------------------- 2. Check the Appropriate Box if a Member of Group (a) [_] (b) [_] - -------------------------------------------------------------------------------- 3. SEC Use only - -------------------------------------------------------------------------------- 4. Sources of Funds AF - -------------------------------------------------------------------------------- 5. Check if Disclosure of Legal Proceedings is Required Pursuant to Item 2(d) or 2(f) [_] - -------------------------------------------------------------------------------- 6. Citizen or Place of Organization Delaware - -------------------------------------------------------------------------------- 7. Aggregate Amount Beneficially Owned by Each Reporting Person 4,047,743 - -------------------------------------------------------------------------------- 8. Check if the Aggregate Amount in Row (7) Excludes Certain Shares [_] - -------------------------------------------------------------------------------- 9. Percent of Class Represented by Amount in Row (7) 23.9% - -------------------------------------------------------------------------------- 10. Type of Reporting Person CO Page 2 of 7 CUSIP NO. 747236107 1. Name of Reporting Person S.S. or I.R.S. Identification No. of Above Person Siemens Nixdorf Informationssysteme AG - -------------------------------------------------------------------------------- 2. Check the Appropriate Box if a Member of Group (a) [_] (b) [_] - -------------------------------------------------------------------------------- 3. SEC Use only - -------------------------------------------------------------------------------- 4. Sources of Funds AF - -------------------------------------------------------------------------------- 5. Check if Disclosure of Legal Proceedings is Required Pursuant to Item 2(d) or 2(f) [_] - -------------------------------------------------------------------------------- 6. Citizen or Place of Organization Federal Republic of Germany - -------------------------------------------------------------------------------- 7. Aggregate Amount Beneficially Owned by Each Reporting Person 4,047,743 - -------------------------------------------------------------------------------- 8. Check if the Aggregate Amount in Row (7) Excludes Certain Shares [_] - -------------------------------------------------------------------------------- 9. Percent of Class Represented by Amount in Row (7) 23.9% - -------------------------------------------------------------------------------- 10. Type of Reporting Person CO Page 3 of 7 CUSIP NO. 747236107 1. Name of Reporting Person S.S. or I.R.S. Identification No. of Above Person Siemens Aktiengesellschaft - -------------------------------------------------------------------------------- 2. Check the Appropriate Box if a Member of Group (a) [_] (b) [_] - -------------------------------------------------------------------------------- 3. SEC Use only - -------------------------------------------------------------------------------- 4. Sources of Funds WC - -------------------------------------------------------------------------------- 5. Check if Disclosure of Legal Proceedings is Required Pursuant to Item 2(d) or 2(f) [_] - -------------------------------------------------------------------------------- 6. Citizen or Place of Organization Federal Republic of Germany - -------------------------------------------------------------------------------- 7. Aggregate Amount Beneficially Owned by Each Reporting Person 4,047,743 - -------------------------------------------------------------------------------- 8. Check if the Aggregate Amount in Row (7) Excludes Certain Shares [_] - -------------------------------------------------------------------------------- 9. Percent of Class Represented by Amount in Row (7) 23.9% - -------------------------------------------------------------------------------- 10. Type of Reporting Person CO Page 4 of 7 This Amendment No. 1 to the Tender Offer Statement on Schedule 14D-1 and Amendment No. 6 to Schedule 13D relates to the offer by Siemens Nixdorf Mid- Range Acquisition Corp., a Delaware corporation ("Purchaser") and an indirect wholly owned subsidiary of Siemens Nixdorf Informationssysteme AG, a corporation organized under the laws of the Federal Republic of Germany ("SNI AG") and a direct wholly owned subsidiary of Siemens Aktiengesellschaft, a corporation organized under the laws of the Federal Republic of Germany ("Siemens AG"), to purchase all outstanding shares of Common Stock, par value $.01 per share (the "Shares"), of Pyramid Technology Corporation, a Delaware corporation (the "Company") at a price of $16.00 per Share, net to the seller in cash, upon the terms and subject to the conditions set forth in Purchaser's Offer to Purchase dated January 27, 1995 (the "Offer to Purchase") and in the related Letter of Transmittal (which together constitute the "Offer"), copies of which are attached hereto as Exhibits (a)(1) and (a)(2), respectively. Capitalized terms not defined in this Amendment No. 1 to the Tender Offer Statement on Schedule 14D-1 and Amendment No. 6 to Schedule 13D have the meanings assigned to them in the Offer to Purchase. ITEM 11. MATERIAL TO BE FILED AS EXHIBITS. Item 11 is hereby amended to read in its entirety as follows: (a)(1) Form of Offer to Purchase dated January 27, 1995. (a)(2) Form of Letter of Transmittal. (a)(3) Form of Notice of Guaranteed Delivery. (a)(4) Form of Letter from Goldman, Sachs & Co. to Brokers, Dealers, Commercial Banks, Trust Companies and Nominees. (a)(5) Form of Letter from Brokers, Dealers, Commercial Banks, Trust Companies and Nominees to Clients. (a)(6) Form of Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9. (a)(7) Summary Advertisement as published in The Wall Street Journal on January 27, 1995. (a)(8) Press Release issued by SNI AG and the Company on January 23, 1995. (a)(9) Press Release issued by SNI AG and the Company on January 27, 1995. (a)(10) Consolidated Financial Statements of Siemens AG for the fiscal year ended September 30, 1994. (b) None. (c)(1) Agreement and Plan of Merger, dated as of January 20, 1995, among SNI AG, Purchaser and the Company. (c)(2) Management Retention Agreement, dated as of January 20, 1995, between John S. Chen and the Company. (d) None. (e) Not applicable. (f) None.
Page 5 of 7 SIGNATURE After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this Statement is true, complete and correct. January 31, 1995 Siemens Nixdorf Mid-range Acquisition Corp. /s/ Gerhard Schulmeyer By: _________________________________ Name: Gerhard Schulmeyer Title: President Siemens Nixdorf Informationssysteme AG /s/ Gerhard Schulmeyer By: _________________________________ Name: Gerhard Schulmeyer Title: President, CEO Siemens Aktiengesellschaft /s/ Adrienne Whitehead By: _________________________________ Name: Adrienne Whitehead Title: Attorney-in-Fact Page 6 of 7 EXHIBIT INDEX
EXHIBIT NO. EXHIBIT NAME PAGE NO. ------- ------------ -------- (a)(1) Form of Offer to Purchase dated January 27, 1995............ * (a)(2) Form of Letter of Transmittal............................... * (a)(3) Form of Notice of Guaranteed Delivery....................... * (a)(4) Form of Letter from Goldman, Sachs & Co. to Brokers, Dealers, Commercial Banks, Trust Companies and Nominees.... * (a)(5) Form of Letter from Brokers, Dealers, Commercial Banks, Trust Companies and Nominees to Clients.................... * (a)(6) Form of Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9............... * (a)(7) Summary Advertisement as published in The Wall Street Journal on January 27, 1995................................ * (a)(8) Press Release issued by SNI AG and the Company on January 23, 1995................................................... * (a)(9) Press Release issued by SNI AG and the Company on January 27, 1995................................................... * (a)(10) Consolidated Financial Statements of Siemens AG for the fiscal year ended September 30, 1994....................... (c)(1) Agreement and Plan of Merger, dated as of January 20, 1995, among SNI AG, Purchaser and the Company.................... * (c)(2) Management Retention Agreement, dated as of January 20, 1995, between John S. Chen and the Company................. *
- -------- * Previously filed. Page 7 of 7 EX-99.A.10 2 CONSOLIDATED FINANCIAL STATEMENTS EXHIBIT 99.(A)(10) Consolidated financial Commentary statements and analysis Earnings and business trends Declining domestic business, continuing strong price erosion, climbing restructuring charges and lower financial results had a strong adverse effect on income from continuing operations. Income before extraordinary gain slipped to DM1.649 (1993: DM1.982) billion. The sale of the Company's worldwide pacemaker activities resulted in an extraordinary gain after taxes of DM344 million. Since the sale took effect on September 30, 1994, revenues, expenses and net earnings from these activities are included in the income from continuing operations. Net income including the extraordinary gain, at DM1.993 billion, edged up from the prior year's figure of DM1.982 billion. The return on shareholders' equity declined to 9.4% from 10% in fiscal 1993. Acceleration of the "top Siemens" program designed to improve productivity and cut costs required provisions and expenses for restructuring measures of DM2.7 billion, up from DM1.9 billion in 1993. This figure includes DM2.3 (1993: DM1.8) billion for employee related costs, as well as depreciation, amortization and write-downs, and accruals covering the anticipated costs associated with the closing of facilities. The operating units particularly affected by restructuring measures included the Industrial and Building Systems Group, which was impacted by structural changes in the labor market for technical services; the Public Communication Networks Group, which faced a decline in business volume due to eroding domestic prices; SNI which continued to downsize its workforce to boost competitiveness; and KWU, which had charges for decommissioning its old facility for the production of mixed oxide fuel elements as well as part of the uranium processing facility at Hanau. As a result of improved productivity in nearly all operating units, income from continuing operations rose before these extraordinary charges. Productivity was boosted some 6%, a significant increase over the previous year's figure. Benefiting from its sweeping restructuring program and high growth, the Semiconductors Group showed the greatest jump in productivity. Savings achieved from these measures offset a DM2.8 billion loss of sales revenue due to deteriorating selling prices and a DM1.3 billion increase in costs. Earnings in the business segments, in which various related activities are consolidated, were mixed. Income before income taxes includes restructuring costs and part of the financial results, insofar as they are immediately related to the business. The extraordinary gain on the sale of the pacemaker activities was not included in the figure of Medical Engineering. The components segment soared past the break-even point to show a profit of DM300 million, thanks to a surge in sales and comprehensive restructuring measures implemented by the Semiconductors and Passive Components and Electron Tubes Groups. The lighting segment achieved considerably higher profits as a result of the initial consolidation of OSRAM SYLVANIA in the U.S. The energy and industry segments saw declines in earnings due to lower sales, eroding prices and high restructuring charges. Income in the communications segment declined due to reduced business related to expanding the telephone system in eastern Germany and to a drop in prices in the public communication networks sector. In the information systems segment, SNI was able to further reduce its losses before income taxes despite the continuing loss of revenue through deteriorating selling prices and unchanged high restructuring charges.
Business segments New orders in DM billion Sales in DM billion Pre-tax income* in DM million Capital expenditures Employees in in DM million thousands 1994 % change 1994 % change 1994 % of sales 1994 9/30/94 Energy 15.1 2 13.2 -10 104 0.8 384 45 Industry 21.8 2 21.4 3 119 0.6 439 95 Communications 20.3 -3 20.7 -3 1,118 5.4 879 70 Information systems 11.7 -3 11.7 -2 (319) -2.7 442 39 Transportation 8.4 7 7.3 19 201 2.8 338 26 Medical systems 7.8 -2 7.5 -5 239 3.2 276 25 Components 6.6 25 5.8 23 300 5.2 894 31 Lighting 5.4 82 5.4 82 291 5.4 286 27 Other 1.3 25 1.3 20 67 5.3 1 Consolidations (10.0) (9.7) (20) - ------------------------------------------------------------------------------------------------------------------------------------ Total business segments 88.4 5 84.6 4 2,100 2.5 3,938 359 Other, consolidations 10 595 23 Siemens Worldwide 88.4 5 84.6 4 2,110 2.5 4,533 382 * Income from continuing operations before income taxes.
The difficult economic climate in Germany, combined with a sharp price erosion and required restructuring measures, burdened domestic income. In the rest of Europe, however, an earlier upward swing of the economy generated satisfactory results. Earnings in the Asia-Pacific region profited from dynamic business developments. Financial results - i.e. net income from investment in other companies, net interest income, and other financial gains - were below the exceptionally high previous year's level, because earnings from financial investments declined notably due to the strong price decline in equity and bond markets. Income taxes declined to 22% (1993: 32%) of income from continuing operations, essentially as a result of reduced taxable income in Germany. Financial situation Liquidity grew by DM2.2 billion to DM 24.0 billion. The increase in liquid assets was primarily attributable to the net cash of DM6.8 billion provided from operating activities, which resulted from the cash flow of DM7.5 billion. Capital spending, at DM5.7 billion, fell below the 1993 level of DM6.7 billion, in particular for equity investments. Proceeds from the sale of intangibles, fixed assets and investments, notably from the sale of the Company's pacemaker activities, amounted to DM1.4 billion. The debentures and bonds issued by Siemens Beteillgungen AG, Zurich, and Siemens Nixdorf International Finance B.V., Vianen, were repaid in the year under review, while a principal amount of US$375 million of the bonds issued by Siemens Capital Corporation, Wilmington, Delaware, was redeemed. On the other hand, short-term debt, especially in the U.S., was increased on the commercial paper market. Overall, net cash used for financing activities, at DM0.3 billion, declined from DM1.3 billion in fiscal 1993. Assets and capital structure The Company's assets and capital structure continued to improve in fiscal 1994. Total assets at year end amounted to DM78.4 billion, a DM3.0 billion increase over the year-earlier figure, but representing a more modest growth than in fiscal 1993. Measures for accelerating operating processes made possible a more intensive utilization of Company assets for expanding business. Total intangibles, fixed assets and investments of DM21.4 billion are now covered by 102% (1993: 98%) of shareholders' equity. Inventory quantities increased by DM1.3 billion, particularly for long-term contracts. This increase, however, was wholly financed by advances received from customers. Inventories of finished products decreased due to a further reduction in production cycle times. Shareholders' equity rose by DM1.3 billion to DM21.8 billion, primarily as a result of transfers from net income. It accounted for 28% of total funds employed, a 1% increase from fiscal 1993. Accrued liabilities accounted for an unchanged 48% of the increased balance sheet total. A contribution of DM0.6 billion was made to the accruals for pension plans. Other accrued liabilities rose primarily due to provisions for restructuring measures. Debt decreased to DM4.5 (1993: DM4.6) billion, representing only 21% (1993: 23%) of shareholders' equity, a debt-to-equity ratio of 1 to 4.8.
Capital New orders Sales Pre-tax income* expenditures Employees Geographic segments** in DM billion in DM billion in DM million in DM million in thousands 1994 % change 1994 % change 1994 % of sales 1994 9/30/94 Germany 62.9 2 59.4 0 833 1.4 2,440 222 Europe (excluding Germany) 23.4 5 23.1 2 1,040 4.5 890 74 America 15.7 26 15.0 25 14 0.1 871 64 Asia-Pacific 4.1 11 4.2 16 177 4.2 285 17 Other 0.8 18 0.8 13 58 7.3 47 5 Consolidations (18.5) (17.9) (22) - ------------------------------------------------------------------------------------------------------------------------------------ Total geographic segments 88.4 5 84.6 4 2,100 2.5 4,533 382 Other, consolidations 10 Siemens worldwide 88.4 5 84.6 4 2,110 2.5 4,533 382
* Income from continuing operations before income taxes ** Breakdown by domicile of Siemens companies 2
Consolidated financial statements as of September 30 (in millions of DM) Siemens worldwide consolidated balance sheet Assets Note 1994 1993 Intangibles, fixed assets and investments Intangible assets.......................... (6) 592 277 Property, plant and equipment.............. (6) At cost.................................... 48,134 45,774 Less -- Accumulated depreciation........... (30,737) (28,855) ------ ------ 17,397 16,919 Investments................................ (7) 3,459 3,726 ------ ------ 21,448 20,922 Current assets Inventories................................ (8) 26,429 25,087 Less -- Advances received from customers... (21,185) (19,859) ------ ------ 5,244 5,228 Receivables and miscellaneous assets (9) Accounts receivable -- trade............... 15,123 14,713 Other receivables and miscellaneous assets. 12,520 12,740 ------ ------ 27,643 27,453 Marketable securities and notes............ (10) 21,249 18,233 Other liquid assets........................ 2,780 3,580 ------ ------ 56,916 54,494 Prepaid expenses........................... 74 66 Total assets............................... 78,438 75,482 Shareholders' equity and liabilities Note 1994 1993 Shareholders' equity (11) Capital stock of Siemens AG (12) Common stock (total number of votes 55,059,206).............................. 2,753 2,753 Preferred stock (total number of votes 923,634)................................ 46 46 ------ ------ 2,799 2,799 Additional paid-in capital................. (12) 8,611 8,605 Retained earnings.......................... (13) 9,128 7,953 Unappropriated consolidated net income..... 728 728 Minority interest.......................... (14) 1,458 1,407 Translation adjustment..................... (914) (966) ------ ------ 21,810 20,526 Accrued liabilities (15) Pension plans and similar commitments...... 16,669 16,012 Other accrued liabilities.................. 21,202 20,322 ------ ------ 37,871 36,334 Debt....................................... (16) 4,518 4,645 Other liabilities (16) Accounts payable -- trade.................. 6,480 5,964 Additional liabilities..................... 7,306 7,524 ------ ------ 13,786 13,488 Deferred income............................ 453 489 Total shareholders' equity and liabilities 78,438 75,482
3
Consolidated financial statements for the fiscal years ended September 30 (in millions of DM) Siemens worldwide consolidated statement of income Note 1994 1993 Net Sales (17) 84,598 81,648 Cost of sales......................... (18) (58,254) (55,907) ------ ------ Gross profit on sales................. 26,344 25,741 Research and development expenses..... (18) (7,508) (7,606) Marketing and selling expenses........ (18) (12,831) (12,602) General administration expenses....... (18) (2,514) (2,528) Other operating income................ (19) 1,872 2,382 Other operating expenses.............. (20) (1,876) (2,456) Restructuring provisions and expenses. (21) (2,678) (1,874) ------ ------ 809 1,057 Net income from investment in other companies (22) 389 122 Net interest income (23) 865 1,019 Other financial gains................. (24) 47 714 ------ ------ Income from continuing operations before income taxes................ 2,110 2,912 Taxes on income from continuing operations (25) (461) (930) Income before extraordinary gain 1,649 1,982 Extraordinary gain net of DM29 million in income taxes................... (26) 344 -- Net income 1,993 1,982 Appropriation of net income 1994 1993 Net income............................ 1,993 1,982 Minority interest in net income of consolidated subsidiaries.......... (232) (218) Minority interest in net loss of consolidated subsidiaries.......... 8 39 Balance brought forward from prior year............................... 4 7 Transfers to retained earnings........ (1,045) (1,082) Unappropriated consolidated net income 728 728 (dividend of Siemens AG)
4
Consolidated financial statements for the fiscal years ended September 30 (in millions of DM) Siemens worldwide consolidated statement of cash flows 1994 1993 Net cash provided from operating activities Net income..................................................................... 1,993 1,982 Reconciliation of net income to net cash provided from operating activities Depreciation, amortization and write-downs.................................. 4,538 4,605 Increase in accrued liabilities............................................. 1,471 1,673 Disposition of intangibles, fixed assets and investments.................... (375) (122) Net income retained by associated companies................................. (97) 1 Cash flow..................................... [7,530] [8,139] Change in current assets and other liabilities Decrease (increase) in inventories...................................... (1,109) 1,149 Increase (decrease) in advances received from customers................. 1,394 (53) Increase in receivables................................................. (1,387) (1,571) Increase in liabilities................................................. 407 1,439 ----- ----- Net cash provided from operating activities.................................... 6,835 9,103 Net cash used for investing activities Additions to property, plant and equipment..................................... (4,533) (4,793) Payments for acquisition of investments........................................ (1,188) (1,881) Proceeds from sale of pacemaker business....................................... 792 - Other proceeds from sale of intangibles, fixed assets and investments.......... 642 1,039 ----- ----- Net cash used for investing activities......................................... (4,287) (5,635) Net cash used for financing activities Issuance of new shares of stock................................................ 6 16 Repayment/redemption of bonds and debentures................................... (1,183) - Increase (decrease) in other debt.............................................. 1,224 (141) Prior year's dividends paid.................................................... (721) (720) Other financing transactions................................................... 394 (416) ----- ----- Net cash used for financing activities......................................... (280) (1,261) Impact of exchange rate fluctuations on liquid assets.......................... (52) (71) Change in liquid assets 2,216 2,136 Included therein: Marketable securities and notes.......................... 3,016 1,633 Other liquid assets...................................... (800) 503 Liquid assets at September 30 24,029 21,813
5 Consolidated financial statements Notes (1) Acquisition of subsidiaries The North American lamp business, which was acquired in fiscal 1993 from GTE Corporation, Stamford, Connecticut, and which now operates under the name of OSRAM SYLVANIA INC., Danvers, Massachusetts, was included in the consolidated financial statements for the first time, together with five subsidiaries. During the fiscal year, a majority interest was acquired in SGP Verkehrstechnik Ges.m.b.H., Vienna. This company has been included in the consolidated balance sheet as of September 30, 1994. In addition, a majority interest in Teleco cavi S.p.A., Roseto degli Abruzzi, together with 11 subsidiaries, was acquired during the fiscal year. These companies will be included in the consolidated financial statements as of fiscal 1995. A total of six subsidiaries in Germany and 20 subsidiaries in other countries were consolidated for the first time, while 11 German companies and 17 companies outside Germany are no longer included in the consolidated financial statements. As a result of the initial consolidation of subsidiaries, total assets and net sales increased by DM0.7 billion and DM2.5 billion, respectively. In addition, goodwill in the amount of DM316 million was capitalized as an intangible asset. (2) Principles of consolidation The worldwide consolidation financial statements include virtually all the domestic (German) and foreign subsidiaries. In addition to Siemens AG, 57 (1993: 62) subsidiaries in Germany and 225 (1993: 222) subsidiaries in foreign countries have been consolidated. 352 (1993: 325) companies that are either inactive or have a low business volume are not included in the consolidated financial statements, because they have little or no significance for the presentation of Siemens' overall position. Full consolidation of these companies would have increased consolidated sales by approximately 2%. In addition, we have omitted retirement benefit corporations and housing companies, whose assets are assigned for a specific purpose, as well as those companies whose shares were acquired exclusively as financial investments. Interim statements are used for consolidated subsidiaries whose fiscal year differs from that of Siemens AG. Investments in 33 (1993: 32) associated companies and in one (1993: two) subsidiary have been accounted for under the equity method. An additional 133 (1993: 126) other associated companies were not accounted for in this manner because of their relative immateriality. The principal subsidiaries and associated companies are listed on pages 58 and 59. A complete list of the Siemens organization's holdings is being filed with the Commercial Registries of the Berlin-Charlottenburg and Munich District Courts. In consolidating our investment in subsidiaries, we offset the purchase price against the value of Siemens' interests in the shareholders' equity of the consolidated subsidiaries at the time of their acquisition or initial consolidation. Any resulting goodwill is capitalized as an intangible asset and amortized. The same principles are applied in consolidating companies under the equity method, with any resulting goodwill being reflected in the valuation basis of the investment in these companies. All intercompany transactions between consolidated companies have been eliminated from the consolidated financial statements. (3) Foreign currency translation In the individual financial statements, receivables and liabilities in foreign currency are translated at the rate existing on the transaction date or at the respective lower or higher rate on the balance sheet date. When foreign currency receivables and liabilities of our subsidiaries outside Germany have been hedged by forward exchange transactions, they are valued at the corresponding hedging rate. The Company's foreign subsidiaries' financial statements are translated using the year-end current rate method. Under this method, intangibles, fixed assets and investments as well as the other assets and liabilities are translated at the year-end current rate (the average of the buying and selling rates). Revenues and expenses as well as net income are translated at the average rate of exchange for the year. The cumulative currency gains or losses resulting from the translation of net worth are recorded as a separate component of shareholders' equity. Intangibles, fixed assets and investments as well as the non-monetary assets and liabilities of the Company's subsidiaries in the highly inflationary economies of Brazil and, for the first time, Turkey are stated at their current value or replacement cost and translated at the year-end current rate of exchange. Revenues and expenses of these subsidiaries are valued and translated in the same manner. 6 Consolidated financial statements Notes (4) Principles of accounting and valuation The annual financial statements of the companies included in the consolidated financial statements are prepared according to uniform principles of accounting and valuation. The tax-deductible special reserves included in the individual financial statements of the domestic companies have been reversed in the consolidated financial statements. Valuations in the annual statements of companies accounted for under the equity method that deviate from these uniform principles have not been adjusted on the basis of immateriality. Acquired intangible assets are amortized over a period not exceeding five years, while capitalized goodwill is amortized up to a maximum of 15 years. Property, plant and equipment is valued at acquisition of production cost less scheduled depreciation generally using the straight-line method or, for companies in Germany, also the declining balance method. Depreciation is taken on residential, office and factory buildings for a maximum of 50 years, on technical equipment and machinery for a maximum of ten years, and on other equipment and plant and office equipment, in general, over five years. Equipment leased to customers is depreciated over periods not exceeding five years. Additional depreciation is taken where a write-down in book value is deemed necessary. Minor fixed assets are fully expended in the year of acquisition. Investments in major associated companies are accounted for under the equity method. Interests in nonconsolidated subsidiaries and other associated and related companies are valued at the lower of cost or fair value. Long-term loans bearing nominal or no interest are stated at their discounted cash value. Inventories are carried at the lower of acquisition or production cost or market value. Production cost includes reasonable portions of material and production overheads. We use the LIFO method for certain inventories. A reasonable and sufficient allowance is made for declines in value due to slow-moving items, technical obsolescence and reductions in fair value. Receivables with current maturities of more than one year which bear nominal or no interest have been discounted. Reasonable and sufficient allowances are made for credit risks. Marketable securities and notes are stated at the lower of cost or market. In Germany, lower valuations are retained if permissible under the tax laws. The accruals for pension plans in Germany are set up according to actuarial principles on the basis of a method provided for in the German Income Tax Act, using an assumed rate of interest of 6%. Foreign subsidiaries establish accruals for pension plans, as required, according to comparable actuarial principles using local interest rates. The other accrued liabilities include reasonable and sufficient allowance for all perceivable risks. Anticipated losses on derivative financial instruments at the balance sheet date are covered by accruals in the amount of the negative market values. Deferred taxes are recorded following the liability method. These taxes are based on the temporary differences existing between the amounts of assets and liabilities of the consolidated companies for financial reporting purposes and such amounts for tax purposes, as well as the temporary differences resulting from consolidation entries. A net deferred tax asset balance resulting from temporary differences in the earnings of the consolidated companies will not be recorded. Certain items on the consolidated balance sheet and in the consolidated statement of income have been combined. These items are shown separately in the Notes to consolidated financial statements (Notes). The consolidated financial statements are denominated in millions of German marks (DM). (5) Statement of cash flows In line with international reporting practice, the flow of funds in the consolidated statement of cash flows is classified into three categories: operating activities, investing activities, and financing activities. The financial resources shown represent the Company's liquid funds, i.e. marketable securities, notes, and other liquid assets. The effects resulting from changes in the number of consolidated companies have been eliminated from the relevant items of the three categories. The same applies to exchange rate related adjustments in value, which are shown separately as impact of exchange rate fluctuations on liquid assets. 7 (6) Intangible assets and property, plant and equipment
Accu- Deprecia- Trans- mulated- tion/amor- lation- deprecia- Net value Net value tization adjust- Addi- Reclassi- Retire- tion/amor- as of as of during the (in millions of DM) 9/30/93 ment tions fications ments 9/30/94 tization 9/30/94 9/30/93 fiscal year Intangible assets Patents, licenses and similar rights..... 582 (25) 273 - 207 623 380 243 214 176 Goodwill........... 79 (20) 342 - 14 387 38 349 63 35 --- --- --- --- --- ----- --- --- --- --- 661 (45) 615 - 221 1,010 418 592 277 211 --- --- --- --- --- ----- --- --- --- ---
Property, plant and equipment Land, equivalent rights to real property, and buildings, including buildings on land not owned.............. 13,522 29 868 372 534 14,257 5,657 8,600 8,275 535 Technical equipment and machinery...... 12,610 31 1,331 528 737 13,763 9,968 3,795 3,365 1,199 Other equipment, plant and office equipment 15,784 141 2,021 275 1,779 16,442 13,112 3,330 3,407 2,101 Equipment leased to customers.......... 2,759 (7) 583 7 567 2,775 1,983 792 794 461 Advances to suppliers and construction in progress........... 1,099 (15) 1,004 (1,182) 9 897 17 880 1,078 1 ------ --- ----- ------ ----- ------ ------ ------ ------ ----- 45,774 179 5,807 - 3,626 48,134 30,737 17,397 16,919 4,297 46,435 134 6,422 - 3,847 49,144 31,155 17,989 17,196 4,508
The translation adjustment column shows the adjustments year-end current rate for the consolidated companies outside of accumulated acquisition or production cost to the prevailing Germany.
(7) Investments Trans- Accu- Accu- lation- mulated- mulated Net value Net value adjust- Addi- Reclassi- Retire- write- equity as of as of (in millions of DM) 9/30/93 ment tions fications ments 9/30/94 downs adjustment 9/30/94 9/30/93 Interests in subsidiaries. 1,500 7 614 233 985 1,369 144 (19) 1,206 1,368 Interest in associated companies................. 2,388 (7) 137 15 14 2,519 - (1,086) 1,433 1,274 Miscellaneous investments 1,339 2 389 (248) 415 1,067 247 - 820 1,084 5,227 2 1,140 - 1,414 4,955 391 (1,105) 3,459 3,726
The additions to interests in subsidiaries relate predominantly to acquisitions and the formation of new companies. Retirements resulted primarily from initial consolidations. Miscellaneous investments include interests in other companies as well as long- term loans. The retirements are primarily accounted for by loans made to OSRAM SYLVANIA, which has now been consolidated. 8 Consolidated financial statements Notes Write-downs of DM20 million on interests in subsidiaries and of DM10 million on miscellaneous investments were made during the fiscal year.
(8) Inventories (in millions of DM) 9/30/94 9/30/93 Materials and supplies....... 2,779 2,402 Work in process.............. 4,428 4,348 Finished products and merchandise................ 4,522 4,741 Cost of unbilled contracts... 12,814 12,049 Advances to suppliers........ 1,886 1,547 ------ ------ 26,429 25,087
- ---------------------------------------------------
(9) Receivables and miscellaneous assets Due after Due after (in millions of DM) 9/30/94 one year 9/30/93 one year Accounts receivable - trade... 15,123 1,244 14,713 1,199 Other receivables and miscellaneous assets Receivables from nonconsolidated subsidiaries...... 2,169 117 2,352 696 Receivables from associated and related companies. 3,293 1,071 3,464 1,492 Miscellaneous assets............ 7,058 731 6,924 922 ------ ----- ------ ----- 12,520 1,919 12,740 3,110 ------ ----- ------ ----- 27,643 3,163 27,453 4,309
- ------------------------------------------------------------- Miscellaneous assets include DM269 (1993: DM380) million in net deferred tax receivables derived from consolidation entries. In addition, miscellaneous assets include interests in subsidiaries in the amount of DM855 (1993: DM1,249) million, which were acquired exclusively as financial investments, as well as a substantial amount of accrued interest income.
(10) Marketable securities and notes (in millions of DM) 9/30/94 9/30/93 Treasury stock............. 26 45 Stock certificates......... 928 1,385 Fixed-income securities.... 1,495 7,438 Fund shares................ 18,687 8,424 Notes...................... 113 941 21,249 18,233 ------ ------
- --------------------------------------------------- In fiscal 1994, Siemens AG purchased 270,329 shares of common stock, with a total par value of DM14 million, or 0.5% of the capital stock, at an average price of DM717.70 per share, in order to offer them to employees for purchase. Including the 113,876 shares of treasury stock held at the beginning of the fiscal year, 315,722 shares, with a total par value of DM16 million, or 0.6% of the capital stock, were sold to employees at a preferential price of DM390 per share. At the close of the fiscal year, 68,483 shares of common stock, having a total par value of DM3 million, or 0.1% of the capital stock, remained in treasury. They are valued at DM376.50 per share. The market value of the marketable securities and notes exceeds their book value by DM973 million. For tax reasons, write-downs of DM7 million made in prior years were not reversed in fiscal 1994, although the market price of such securities increased during the year. This reduced net income in fiscal 1994 by DM3 million.
(11) Development of shareholders' equity September 30, 1993 (in millions of DM) 20,526 Capital increases of Siemens AG............ 6 Transfers to retained earnings from net income of fiscal 1994.................. 1,045 Retirement of goodwill..................... 163 Other changes in retained earnings......... (33) 1,175 ------ Payment of prior year's dividend by Siemens AG.............................. (728) Unappropriated consolidated net income of fiscal 1994.................. 728 ------ Change in minority interest................ 51 Change in translation adjustment........... 52 ------ September 30, 1994 21,810
- --------------------------------------------------- 9 (12) Capital stock and additional paid-in capital The capital stock of Siemens AG amounts to DM2,799 million and is divided into 55,059,206 common shares and 923,634 preferred shares, each with a par value of DM50. Each share is entitled to one vote. Under conditions set forth in (S) 23 of the Articles of Association, preferred stock is entitled to six votes per share in a second vote that may be demanded by the holders of preferred stock. During the fiscal year, capital stock increased by a total of DM0.4 million through the issuance of 8,781 common shares from the other authorized capital as a result of the settlement offered to former shareholders of Siemens Nixdorf Informationssysteme AG (SNI AG), Paderborn. The premium of DM5.6 million was recorded as additional paid-in capital. The authorized capital of Siemens AG remained unchanged at DM800 million. On March 28, 1991, the Annual Shareholders Meeting authorized the Managing Board to issue DM500 million in new shares with subscription rights for shareholders as well as for holders of stock warrants (authorized capital I). A lawsuit brought by a shareholder contesting this resolution was dismissed by the competent courts. The German Federal High Court of Justice did not accept the appeal lodged by the plaintiff on the grounds that the case was of no fundamental importance and, in addition, the appeal had ultimately no prospect of success. The same shareholder also brought a lawsuit contesting the resolution by the Annual Shareholders' Meeting on March 28, 1991 authorizing the Managing Board to issue DM300 million in new shares for which the subscription right of shareholders is excluded (authorized capital II). This complaint was affirmed by the competent courts. The appeal lodged by the Company against this order was accepted by the Federal High Court of Justice for final resolution of the case. The other authorized capital amounts to DM162 (1993: DM163) million. Of this amount, DM150 million is reserved to secure the rights to purchase common shares of Siemens AG under the warrants attached to the 8% U.S. dollar bonds of 1992/2002 issued by Siemens Capital Corporation, Wilmington, Delaware. The stock warrants grant option rights for a total of 3,000,000 common shares, which may be exercised until June 2, 1998. The option period is automatically extended for periods of one year terms - but not more than two years - if the market price of the Siemens share is less than the option price at the end of the option period. The option price is DM693. The other authorized capital of DM4 million provides for the settlement offered to former shareholders of SNI AG who have not tendered their shares of SNI AG by September 30, 1994 under the settlement offered by Siemens AG pursuant to (S) 320 par. 5. German Corporation Act. The remaining other authorized capital of DM8 million secures the rights to purchase common shares of Siemens AG that were granted to the holders of the Nixdorf 1989/97 convertible loans following the integration of SNI AG into Siemens AG. (13) Retained earnings Retained earnings include a reserve for treasury stock in the amount of DM26 (1993: DM45) million. The reserve was reduced by DM19 million through transfers to other retained earnings. After deducting the treasury stock reserve, other retained earnings amounted to DM9,102 (1993: DM7,908) million. We transferred DM1,045 (1993: DM1,082) million to other retained earnings from the consolidated net income of DM1,993 (1993: DM1,982) million. Other retained earnings include DM382 million of special reserves pursuant to (S) 17 of the German DM Opening Balance Sheet Act (DMBilG) which remained after offsetting such reserves against special loss accounts. (14) Minority interest Minority interest represents the minority shareholders' proportionate share of the equity of consolidated subsidiaries, primarily Siemens AG Osterreich, Vienna; Siemens-Albis AG, Zurich; Siemens Ltd., Johannesburg; and Siemens Stromberg-Carlson, Boca Raton, Florida. (15) Accrued liabilities The accruals for pension plans at Siemens AG and its domestic subsidiaries provide for the contractual retirement benefits of our employees and retirees. Retirement benefit corporations in Germany provide for 20% of Siemens AG's pension obligations to employees subject to collective bargaining agreements and to their surviving dependents. In addition, accruals are established for the retirement benefits of the employees and retirees of our foreign subsidiaries, unless the obligations are covered by pension funds. The existing pension commitments of the independent retirement benefit corporations and pension funds amount to DM4,332 (1993: DM3,816) million and are covered by these organizations' assets of DM5,370 (1993: DM4,768) million. Moreover, the accruals for pension plans include the obligations of our U.S. subsidiaries to provide post-retirement benefits other than pension for active and retired employees. During 1994, exceptional contributions applicable to the fiscal year were made to the accruals for pension plans in Germany to account for the prospective commitment to raise future retirement benefits. Other accrued liabilities include DM2,099 (1993: DM2,392) million in provisions for taxes. Also recorded here are accruals for deferred taxes of DM91 (1993: DM404) million based on the temporary differences between the financial reporting basis and the tax basis of the consolidated companies' assets and liabilities. In addition, this item consists primarily of accruals for personnel costs, warranty obligations, anticipated losses on contracts and penalties for contract performance delays. 10 Consolidated financial statements Notes
(16) Debt and other liabilities Due within Due within (in millions of DM) 9/30/94 one year 9/30/93 one year Debt Bonds................. 1,199 -- 2,447 614 Loans from banks...... 1,569 1,280 1,764 1,459 Notes and other loans. 1,750 1,573 434 235 ----- ----- ----- ----- 4,518 2,853 4,645 2,308
- --------------------------------------------------------------
Bonds (in millions) Foreign currency DM Siemens Capital Corporation, Wilmington, Delaware 8% 1992/2002 U.S. dollar bonds.. US$ 625 990 Siemens Western Finance N.V., Willemstad, Curacao 1986/2001 U.S. dollar zero coupon bonds with warrants. US$ 128 209 ----- 1,199
- -------------------------------------------------------------- The bonds issued by Siemens Capital Corporation, Wilmington, Delaware, were reduced by US$375 million due to the redemption of individual bonds that were held by the company.
Due within Due within (in millions of DM) 9/30/94 one year 9/30/93 one year Other liabilities Accounts payable - - trade.................. 6,480 6,288 5,964 5,725 Additional liabilities Liabilities to noncon- solidated subsidiaries. 434 429 422 391 Liabilities to associated and related companies.............. 549 432 508 409 Miscellaneous liabilities............ 6,323 5,686 6,594 5,997 ------ ------ ------ ------ 7,306 6,547 7,524 6,797 ------ ------ ------ ------ 13,786 12,835 13,488 12,522
- -------------------------------------------------------------------- Tax liabilities totaling DM911 (1993: DM1,284) million are included in miscellaneous liabilities. Furthermore, this item contains liabilities amounting to DM 993 (1993: DM1,031) million mandated by the social security program, which consist of outstanding statutory social welfare contributions and statutory retirement benefit obligations in foreign countries. We have furnished security for debt and other liabilities totaling DM209 (1993: DM249) million. Debt in the amount of DM54 (1993: DM123) million, primarily outside Germany, is secured by mortgages. In Germany, debt in the amount of DM18 million is secured by claims under a Hermes export credit guaranty. In some countries, we have executed promissory notes and pledged securities, in conformity with local practice, to secure our debt. Debt and other liabilities with a remaining term of more than five years totaled DM1,608 (1993: DM2,302) million. (17) Net Sales Net sales include our income from leasing and license agreements. A breakdown of net sales by business and geographic segments is given on page 57. (18) Functional costs Cost of sales, research and development expenses, marketing and selling expense, and general administration expenses do not include charges for restructuring and the closing of facilities. These charges are recorded under a separate heading in the statement of income. In order to facilitate comparability with the prior year, cost of sales for fiscal 1993 was reduced by DM1,042 million, research and development expenses by DM92 million, and marketing and selling expenses by DM740 million. Government subsidies in the amount of DM196 (1993: DM190) million were offset against research and development expenses. (19) Other operating income Other operating income includes, in particular, foreign exchange gains and gains on the sale of real property. (20) Other operating expenses Other operating expenses include essentially foreign exchange losses, exceptional contributions made to the accruals for pension plans, and the amortization of intangible assets resulting from acquisitions. (21) Restructuring provisions and expenses This item includes employee related costs for early retirement and termination plans including associated accruals; non-scheduled write-downs; gains and losses on the retirement of property, plant, equipment, and inventories; and accrued liabilities established in connection with the discontinuance of operations or the closing of facilities. DM2,299 (1993: DM1,850) million of the aggregate amount are accounted for by employee related costs. 11 Also included are accruals and nonscheduled write-downs related to the decommissioning of the aging facility for the production of mixed oxide fuel elements as well as part of the uranium processing facility at the Hanau location.
(22) Net income from investment in other companies (in millions of DM) 1994 1993 Income from investment in other companies.......................... 84 119 Income under profit-and-loss transfer agreements......................... 51 31 Share in earnings resulting from equity consolidation...................... 268 223 Losses absorbed under profit-and-loss transfer agreements................ (14) (251) --- ---- 389 122
- -------------------------------------------------------------------- Income from investment in other companies includes DM38 (1993: DM41) million in income from subsidiaries. Earnings resulting from equity consolidation consist primarily of our share in the earnings of Bosche-Siemens Hausgerate GmbH, Munich; GPT Holdings Ltd., London; and Equitel S.A., Curitiba. Losses absorbed in fiscal 1993 under profit-and-loss transfer agreements included charges related to restructuring measures at companies in Germany and in other countries.
(23) Net interest income (in millions of DM) 1994 1993 Interest and similar income........ 3,025 2,747 Attributable to subsidiaries.... (180) (176) Less - Interest and similar expenses (1,210) (840) Attributable to subsidiaries.... (39) (36) Interest cost component of allocation to pension accruals................ (950) (888) ------ ----- 865 1,019
- --------------------------------------------------------------------
(24) Other financial gains (in millions of DM) 1994 1993 Other financial gains.............. 1,339 1,359 Other financial losses............. (930) (517) Write-downs on investments and on marketable securities and notes.... (362) (128) ----- ----- 47 714
- -------------------------------------------------------------------- The items other financial gains and other financial losses include gains or losses resulting from the retirement of investments in other companies. In addition, this item includes gains or losses resulting from the retirement of marketable securities and notes. Of total other financial gains or losses, gains of DM123 (1993: DM727) million are accounted for by financing activities and losses of DM76 (1993: DM13) million are due to investments in other companies.
(25) Income taxes (in millions of DM) 1994 1993 Income tax expense Domestic................ 94 371 Foreign................. 542 447 ---- --- 636 818 Deferred taxes............. (175) 112 ---- --- Taxes on income from continuing operations...... 461 930 Income taxes on extraordinary gain....................... 29 -- ---- --- 490 930
- ------------------------------------------------ Income tax expense includes German corporate income and local income taxes, as well as the comparable foreign taxes relating to income. Such taxes are determined in accordance with the tax laws applicable to the individual companies. Income tax expense in Germany decreased due to the lower taxable income. (26) Extraordinary gain The extraordinary gain relates to the disposition, at September 30, 1994, of the pacemaker activities, primarily in the U.S. and Sweden, at a selling price of DM792 million. This sale resulted in a gain of DM373 million, which is shown net of DM29 million in income taxes in the statement of income. The income and expenses of the pacemaker activities until their disposition on September 30, 1994 are included in income from continuing operations. 12 Consolidated financial statements Notes
(27) Personnel costs (in millions of DM) 1994 1993 Wages and salaries.................... 28,505 28,443 Statutory social welfare contributions and expense related to employee benefits 4,698 4,546 Expense for pension plans............. 2,796 2,258 ------ ------ 35,999 35,247
- --------------------------------------------------------- The expense for pension plans was reduced by the interest cost component in the addition to accrued pension liabilities in the amount of DM950 (1993: DM888) million. This amount is classified as expense under net interest income. The average number of employees in fiscal 1994 was 393,900 (1993: 403,800); they were engaged in the following activities:
1994 1993 Manufacturing......................... 159,600 158,900 Sales and marketing................... 135,900 144,800 Research and development.............. 48,100 48,100 Administration and general services... 50,300 52,000 ------- ------- 393,900 403,800
- ------------------------------------------------------- (28) Other taxes Other taxes not based on income in the amount of DM359 (1993: DM416) million are included under functional costs. (29) Remuneration of the Supervisory Board and the Managing Board, and loans granted Provided that shareholders approve the proposed dividend at their Annual Shareholders' Meeting on February 23, 1995, the amount authorized to be paid for the fiscal year will be DM1.1 (1993: DM1.1) million for the Supervisory Board; DM17.2 (1993: DM19.1) million for the Managing Board; and DM20.5 (1993: DM22.1) million for former members of the Managing Board and their surviving dependents. Pension commitments to former members of the Managing Board and their surviving dependents are covered by an accrual of DM153.1 (1993: DM144.5) million. Loans to members of the Managing Board totaled DM2.2 (1993: DM2.3) million (repaid in 1994: DM0.3 million). These loans bear interest of up to 6% and have contractual terms of up to 12 years. The members of the Managing and Supervisory Boards of Siemens AG are listed on pages 42 and 43.
(30) Guarantees and other commitments (in millions of DM) 9/30/94 9/30/93 Contingent liabilities on notes....... 305 204 Guarantees............................ 194 61 Warranties............................ 1,601 1,680 included therein: to subsidiaries.. (4) -- Collateral for third party liabilities 1 4
- -------------------------------------------------------- (31) Leasing agreements At September 30, 1994, we had payment o bligations under real estate property leases and under long-term lease agreements for movable assets and real property with a n aggregate discounted value of DM3,488 (1993: DM2,055) million, in cluding DM75 million to nonconsolidated subsidiaries. Under th e terms of the leases, the agreements do not convey the ownership rights to the leased properties. Therefore, they are not capitalized in the consolidated financial statements. Total future payment obligations under noncancelable leases over the next fiscal years are as follows (in millions of DM):
1995 1996 1997 1998 1999 later 323 308 283 266 262 2,046
- ----------------------------------------------------- The total rental expense in fiscal 1994 amounted to DM324 (1993: DM299) million. (32) Derivative financial instruments Currency and interest rate exposure caused by our operational business as well as investment and other financing activities are being hedged through both listed and over-the-counter (OTC) derivative financial instruments.
Notional amount Fair value (in millions of DM) 9/30/94 9/30/93 9/30/94 9/30/93 Forward foreign exchange contracts..... 15,292 14,915 146 138 Interest rate and combined interest rate/ currency swaps......... 2,878 4,350 (45) 120 Options................ 2,564 9,899 (30) (50) Other forward contracts 5,041 7,450 -- (3) ------ ------ --- --- 25,775 36,614 71 205
- ---------------------------------------------------------- 13 The notional amount is the sum of all purchases and sales. The fair value of such financial instruments is based on available quoted market prices or derived from such prices. Our credit exposure under derivative financial instruments amounted to DM325 million. To limit this credit risk we are dealing exclusively with creditworthy domestic and foreign banks and are increasingly using master netting agreements. (33) Other financial obligations We are committed to making capital contributions of DM19 (1993: DM20) million to other companies, including DM15 (1993: DM8) million to subsidiaries. We are liable for contributions in the amount of DM728 (1993: DM629) million that were not fully paid in, including DM716 (1993: DM617) million to nonconsolidated subsidiaries, as limited partners pursuant to (S) 171 of the German Commercial Code. We are jointly and severally liable and have capital contribution obligations as a partner in companies formed under the German Civil Code, through which we have concluded profit-and-loss transfer agreements with other companies, as partners in general partnerships and in a European Economic Community of Interests (EECI), as a former member of residential building cooperatives, and as a participant in various joint activities. (34) Segment Information Sales of the domestic and foreign subsidiaries are assigned to the Group that has the worldwide responsibility for that business activity. Related activities have been combined into business segments in the table below.
Net sales by business segment (in millions of DM) 1994 1993 Energy........................... 13,193 14,643 Industry......................... 21,437 20,849 Communications................... 20,738 21,402 Information systems.............. 11,669 11,922 Transportation................... 7,317 6,160 Medical systems.................. 7,548 7,905 Components....................... 5,750 4,675 Lighting......................... 5,442 2,990 Other............................ 1,227 1,061 Less - Intersegment shipments.... (9,723) (9,959) ------ ------ 84,598 81,648
- ----------------------------------------------------- Siemens does an extensive international business. Fifty-eight percent of total sales are made to customers outside Germany. A geographic breakdown of sales by customer location is shown on page 9. A regional breakdown of the net sales of Siemens AG and its domestic and foreign subsidiaries is shown in the table below.
Net sales by geographic segment (in millions of DM) 1994 1993 Germany....................... 59,438 59,206 Attributable to exports..... [23,667] [21,935] Europe (excluding Germany).... 23,093 22,727 America....................... 15,027 12,061 Asia-Pacific.................. 4,179 3,546 Other......................... 798 704 Less - Intersegment shipments. (17,937) (16,596) ------- ------- 84,598 81,648
- ----------------------------------------------------- Berlin and Munich, December 2, 1994 Siemens Aktiengesellschaft The Managing Board The consolidated financial statements, which we have audited in accordance with professional standards, comply with the German legal provisions. With due regard to the generally accepted accounting principles, the consolidated financial statements present a true and fair view of the Siemens group's assets, liabilities, financial position and earnings. The general review of the Managing Board is consistent with the consolidated financial statements. Munich, December 7, 1994 KPMG Deutsche Treuhand-Gesellschaft Aktiengesellschaft Wirtschaftsprufungsgesellschaft Lanfermann Dr. Hoyos Wirtschaftsprufer Wirtschaftsprufer (independent auditors) 14 -----END PRIVACY-ENHANCED MESSAGE-----