<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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
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PYRAMID TECHNOLOGY CORPORATION
(NAME OF SUBJECT COMPANY)
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SIEMENS NIXDORF MID-RANGE ACQUISITION CORP.
SIEMENS NIXDORF INFORMATIONSSYSTEME AG
SIEMENS AKTIENGESELLSCHAFT
(BIDDERS)
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COMMON STOCK, $.01 PAR VALUE
(TITLE OF CLASS OF SECURITIES)
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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)
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COPY TO:
PETER D. LYONS, ESQ.
SHEARMAN & STERLING
599 LEXINGTON AVENUE
NEW YORK, NEW YORK 10022
TELEPHONE: (212) 848-4000
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<PAGE>
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
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4. Sources of Funds
AF
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5. Check if Disclosure of Legal Proceedings is Required Pursuant to Item
2(d) or 2(f) [_]
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6. Citizen or Place of Organization
Delaware
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7. Aggregate Amount Beneficially Owned by Each Reporting Person
4,047,743
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8. Check if the Aggregate Amount in Row (7) Excludes Certain Shares [_]
- --------------------------------------------------------------------------------
9. Percent of Class Represented by Amount in Row (7)
23.9%
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10. Type of Reporting Person
CO
Page 2 of 7
<PAGE>
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
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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
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7. Aggregate Amount Beneficially Owned by Each Reporting Person
4,047,743
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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
<PAGE>
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%
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10. Type of Reporting Person
CO
Page 4 of 7
<PAGE>
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:
<TABLE>
<S> <C>
(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.
</TABLE>
Page 5 of 7
<PAGE>
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
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NO. EXHIBIT NAME PAGE NO.
------- ------------ --------
<C> <S> <C>
(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................. *
</TABLE>
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* Previously filed.
Page 7 of 7
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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.
<TABLE>
<CAPTION>
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
<S> <C> <C> <C> <C> <C> <C> <C> <C>
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.
</TABLE>
<PAGE>
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.
<TABLE>
<CAPTION>
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
<S> <C> <C> <C> <C> <C> <C> <C> <C>
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
</TABLE>
* Income from continuing operations before income taxes
** Breakdown by domicile of Siemens companies
2
<PAGE>
<TABLE>
<CAPTION>
Consolidated financial statements as of September 30
(in millions of DM)
Siemens worldwide consolidated balance sheet
Assets Note 1994 1993
<S> <C> <C> <C>
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
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
Consolidated financial statements for the fiscal years ended September 30
(in millions of DM)
Siemens worldwide consolidated statement of income
Note 1994 1993
<S> <C> <C> <C>
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)
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
Consolidated financial statements for the fiscal years ended September 30
(in millions of DM)
Siemens worldwide consolidated statement of cash flows
1994 1993
<S> <C> <C>
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
</TABLE>
5
<PAGE>
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
<PAGE>
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
<PAGE>
(6) Intangible assets and property, plant and equipment
<TABLE>
<CAPTION>
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
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
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
--- --- --- --- --- ----- --- --- --- ---
</TABLE>
<TABLE>
<CAPTION>
Property, plant and equipment
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
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
</TABLE>
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.
<TABLE>
<CAPTION>
(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
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
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
</TABLE>
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
<PAGE>
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.
<TABLE>
<CAPTION>
(8) Inventories
(in millions of DM) 9/30/94 9/30/93
<S> <C> <C>
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
</TABLE>
- ---------------------------------------------------
<TABLE>
<CAPTION>
(9) Receivables and miscellaneous assets
Due after Due after
(in millions of DM) 9/30/94 one year 9/30/93 one year
<S> <C> <C> <C> <C>
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
</TABLE>
- -------------------------------------------------------------
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.
<TABLE>
<CAPTION>
(10) Marketable securities and notes
(in millions of DM) 9/30/94 9/30/93
<S> <C> <C>
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
------ ------
</TABLE>
- ---------------------------------------------------
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.
<TABLE>
<CAPTION>
(11) Development of shareholders' equity
September 30, 1993 (in millions of DM) 20,526
<S> <C>
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
</TABLE>
- ---------------------------------------------------
9
<PAGE>
(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
<PAGE>
Consolidated financial statements
Notes
<TABLE>
<CAPTION>
(16) Debt and other liabilities
Due within Due within
(in millions of DM) 9/30/94 one year 9/30/93 one year
<S> <C> <C> <C> <C>
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
</TABLE>
- --------------------------------------------------------------
<TABLE>
<CAPTION>
Bonds (in millions) Foreign currency DM
<S> <C> <C> <C>
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
</TABLE>
- --------------------------------------------------------------
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.
<TABLE>
<CAPTION>
Due within Due within
(in millions of DM) 9/30/94 one year 9/30/93 one year
Other liabilities
<S> <C> <C> <C> <C>
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
</TABLE>
- --------------------------------------------------------------------
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
<PAGE>
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.
<TABLE>
<CAPTION>
(22) Net income from investment in other companies
(in millions of DM) 1994 1993
<S> <C> <C>
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
</TABLE>
- --------------------------------------------------------------------
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.
<TABLE>
<CAPTION>
(23) Net interest income
(in millions of DM) 1994 1993
<S> <C> <C>
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
</TABLE>
- --------------------------------------------------------------------
<TABLE>
<CAPTION>
(24) Other financial gains
(in millions of DM) 1994 1993
<S> <C> <C>
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
</TABLE>
- --------------------------------------------------------------------
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.
<TABLE>
<CAPTION>
(25) Income taxes
(in millions of DM) 1994 1993
<S> <C> <C>
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
</TABLE>
- ------------------------------------------------
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
<PAGE>
Consolidated financial statements
Notes
<TABLE>
<CAPTION>
(27) Personnel costs
(in millions of DM) 1994 1993
<S> <C> <C>
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
</TABLE>
- ---------------------------------------------------------
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:
<TABLE>
<CAPTION>
1994 1993
<S> <C> <C>
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
</TABLE>
- -------------------------------------------------------
(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.
<TABLE>
<CAPTION>
(30) Guarantees and other commitments
(in millions of DM) 9/30/94 9/30/93
<S> <C> <C>
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
</TABLE>
- --------------------------------------------------------
(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):
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
1995 1996 1997 1998 1999 later
323 308 283 266 262 2,046
</TABLE>
- -----------------------------------------------------
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.
<TABLE>
<CAPTION>
Notional amount Fair value
(in millions of DM) 9/30/94 9/30/93 9/30/94 9/30/93
<S> <C> <C> <C> <C>
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
</TABLE>
- ----------------------------------------------------------
13
<PAGE>
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.
<TABLE>
<CAPTION>
Net sales
by business segment
(in millions of DM) 1994 1993
<S> <C> <C>
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
</TABLE>
- -----------------------------------------------------
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.
<TABLE>
<CAPTION>
Net sales
by geographic segment
(in millions of DM) 1994 1993
<S> <C> <C>
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
</TABLE>
- -----------------------------------------------------
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
