ML20126K341
| ML20126K341 | |
| Person / Time | |
|---|---|
| Site: | Framatome ANP Richland |
| Issue date: | 12/28/1992 |
| From: | Maas L SIEMENS POWER CORP. (FORMERLY SIEMENS NUCLEAR POWER |
| To: | Jim Hickey NRC OFFICE OF NUCLEAR MATERIAL SAFETY & SAFEGUARDS (NMSS) |
| References | |
| NUDOCS 9301070098 | |
| Download: ML20126K341 (26) | |
Text
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4 SI EM E NS December 20,1992 U.S. Nuclear Ro0ulatory Commit.
Washin0 ton, D.C. 20555 Attn: John W. N. Hickey, Chlol Fuel Cyclo Safety Branch Division of industrial and Medical Nuclear Safety Offico of Nue; ear Material Satoty and Safo0uards Re:
Docket No. 70-1257 Licenso No. SNM 1227 Decommissioning Funding Plan Gentiomen:
In accordanco with our lotter to you dated Docomber 14, 1912, and in complianco with applicablo regulations, Slomons Power Corporation horowith submits an annual updato to the Financici Assuranco Instruments of its Decommissioning Funding Plan. Also includod is a copy of tho latost consolidated financial statomonts for Slomons Corporation.
Vorq in.ly your:;,
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'n Loren J. Maas, Manager Rogulatory Complianco LJM:sah 9301070098 921220 PDH ADOCK 07001257 C
PDR Slomons Power Corporation
'p1 Nuclear Division En0 ncering and Manufactunng Facihty i
I-2101 Horn Rapids Road, PO Dox 130 Richland, WA 99352-0130 Tot: (509) 375-8100 Fax: (509) 375-8402
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E-Siemens Corporation 12 (A wholly owned subsidiary of Siemens AG)
'I Notes to the Consolidated Financini Statomonts Septornbor 30,1992 and 1991 I
15.
Other Long Term Liabilities l
Other long term liabilities consist of the following:
l September 30, 1992 1991
($ in isauds)
I Accrued pension costs 81,855 58,976 Accrued postrctirement benefit costs 292,997 256,664 I
Supplemental executive retirement plan 12,906 11,843 Other 43,325_
39,298
$ 431.083
$ 366.781 I
16.
Income Taxes The income tax provision consists of the following:
September 30, I
1992 1991
($ in thousands)
Federal
$ 38,102
$ 35,800 State and local 15,500 18,100 g
Foreign 1,800 470 55,402 54,370 Denefits of operating loss carryforwards (34,600)
(32,100)
Total provision for income taxes
$ 20 802
$ 22,270 1
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Slomons Corporation 13 l
(A wholly owned subsidiary of S. mens AG)
Notes to the Consolidated Financial Statements September 30,1992 and 1991 The federal current tax expense was reduced in 1992 and 1991 by $34.6 million and
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$32.1 million, respectively, reflecting the use of tax operating loss carryforwards. The I
Company does not recognize tax benefits for losses which can only be carried forward.
At September 30,1992, the Company had unused loss carryforwards of $195 million and $1,408 million for tax and financial reporting purposes, respectively. The I
Company's tax operating loss carryforward expires in 2005.
The Intemal Revenue Service has completed its examination of the Company's income I
tax returns through September 30, 1985. Adjustments have been proposed dealing primarily with transactions between the Company and its parent. These proposed I
adjustments would not affect the conso:idated financial position of the Company as reported but may significantly reduce the tax net operating loss carryforward.
Management is vigorously contesting the proposed adjustments and believes the Company will prevail in its efforts.
The Company has unused investment tax credits of $13.5 million at the end of 1992 I
which may be carried forward and expire in years 1993 through 2001. These amounts represent the investment tax credits available to be carried forward after giving effect to the 35% post-1986 reduction imposed by the Tax Reform Act of 1986.
In 1992 and 1991, the effective income tax rate differs from the federal statutory rate due to the inability to carry back the respective year's losses and foreign, state and local l
income taxes.
Total taxes paid were $22 million and $21 million in 1992 and 1991, respectively.
I In February 1992, the Financial Accounting Standards Board released Standard No.109,
" Accounting for income Taxes." The impact of this standard on the Company's results of operations and financial position is not expected to be material.
t Siemens Corporation 14 L,
(A wholly owned subsidiary of Siemens AG)
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Notes to the Consolidated Financial Statements September 30,1992 and 1991
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17.
Employee lienefit Plans The Company has noncontributory defined benefit pension plans covering most of its employees, as well as cenain employees of affiliated companies. The benefits for these plans are based primarily on years of service and employces' compensation. Annual contributions to the plans are determined by an independent actuary and are at least equal to the minimum required by law and reflect estimates of long-term funding requirements to maintain these plans.
The actuarial computations of 1992 and 1991 net periodic pension cost assumed discount rates of 8.0% to 8.25% and 8.0% to 8.5%, respectively, expected rates of retum on plan assets of 8.0% to 8.5% and annual salary increases ranging from 3.0% to 8.0%
and 3.8% to 8.0%, respectively. The actuarially computed net periodic pension cost for 1992 and 1991 included the following components:
Year Ended September 30, 1992 1991 l
($ in thousands)
Current service cost
$ 53,557
$ 45,377 Interest cost on projected benefit obligations 44,477 34,204 Actual return on plan assets
((0,823)
(58,833)
Net amortiration and deferral 13,807 22,703 Subtotal 51,018 43,451 Amounts allocated to affiliated companies (9,469)
(9,302)
Net periodic pension cost
$ 41,549
$ 34.149
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Siemens Corporation 15
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(A wholly owned subsidiary of Slomons AG)
Notes to the Consolidated Financial Statomonts September 30,1992 and 1991
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The following tables set forth the funded status of the plans and the amounts recorded i
in the Company's consolidated balance sheets at September 30,1992 and 1991:
September 30,1992 Overfunded Underfunded Plans Plans
{
($ in thousands)
Actuarial present value of accumulated benefit obligations Vested S 424,045
$ 39,614 t
Nonvested 18,501 689 Total accumulated benefit obligations
$ 442.546
$ 40.303 Projected benent obligations
$ 676,080
$ 40,898 1
Plan net assets at fair value 646,108 36,836 j
Plan net assets under projected benent obligations 29,972 4,062 Unrecognized prior service costs 2,181 452 s
Unrecognized net gains (losses) 29,546 (3,354)
Unrecognized net transition asset (liability) 52,369 (13,506)
Additional minimum liability 15,622 l
Subtotal 114,068 3,276 Amounts allocated to afRliated companies (31,355)
Net acenied pension cost S
82.713 5 3.276
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1 Siemens Corporation 16 L
(A wholly owned subsidiary of Siemens AG)
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Notes to the Consolidated Fina.icial Sta oments L
September 30,1992 and 1991
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September 30,1991 Overfunded Underfunded Plans Plans
($ in thousands)
Actuanal present value of accumulated benetit
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obligations Vested 5 292,137
$ 37,103 Ncavested 16,859 235 Total necumulated benefit obligations
$ 308,046
}, 37.3'4R Projected benefit obligations
$ 456,260
$ 37,338 Plan act assets at fair value 444,743 32,456 Plan net assets under projected benefit obligations 11,517 4,882 Unrecognized prior service costs 5,184 Unrecognized net gains (losses) 15,283 (2,123) l Unrecognized net transition asset (liability) 44,826 (14,523) l Additional minimum liability 16,646 l
Subtotal 76,810 4,882 Amounts allocated to affiliated companies
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Net accrued pension cost i
56,657 L 4,882 Contributions to the Company's eparate defined contribution plans are made in accordance with matching programs based upon certain contributions by participating j
cmployees. The Company's contributions amounted to $28 million and $25 million in I
1992 and in 1991, respectively.
l 18.
Postretirement lienefits Other Than Pensions The Company sponsors 14 postretirement benefit plans which cover substantially all of the Company's management and hourly employees (and in some cases spouses) who satisfy certain minimum age and service requirements while working for the Company.
The plans provide either defined medical, dental and life insurance benefits or a defined company contribution toward the cost of such benefits. The postrctirement healthcare plans are contributory, with retirce and Company contiibutions adjusted annually at the i
Company's discretion; the life insurance plans are noncontributory.
i Siemens Corporation 17
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(A wholly owned subsidiary of Siemens AG)
Notes to the Consolidated Financial Statements September 30,1992 and 1991 Effective October 1,1990, the Company adopted the accounting requirements of Statement of Financial Accounting Standards No.106 ("SFAS 106") " Employers Accounting for Postrctirement Benefits other than Pensions." In adopting SFAS 106, the Company electe/ o recognize the full amount of the accumulated postretirement benefit obligation as tne effect of a change in accounting principle during the year ended September 30,1991.
The following table sets forth the postretirement benefit plans' combined fmancial status included in the consolidated balance sheet at September 30,1992 and 1991. The s
Company funds the plans as benefit obligations are paid.
September 30, 1992 1991
($ in thousands)
Accumulated postretirement benefit obligation:
Retirees
$ 131,280
$ 112,510 Fully eligible active plan participants 39,516 42,905 Other active plan participants 121,005 111,216 Accumulated postretirement benefit obligation 291,801 266,631 Unrecognized net actuarial gain 11,114 Accrued postretirement benefit cost
$ 302.915
$ 266.631 Net periodic postrctirement benefit cost for 1992 and 1991 included the following components Service cost benefits attributed to service during the period
$ 10,757
$ 10,411 Interest cost on accumulated benciit obligation 21,669 19,923 Net periodic postretirement benefit cost
$ 32.426
$ 30.334 During 1992, the accumulated postretirement benefit obligation increased by $11 million, net, as a result of acqaisitions and dispositions. The Compar.y paid retirce healthcare and life insurance benefits of $10 mi!! ion and $9 million in 1992 and 1991, a
respectively.
l Siemens Corporation 18 (A wholly owned subsidiary of Siemens AG)
Notes to the Consolldnted Financial Statomonts September 30,1992 and 1991 I
For measuicment purposes, an 18% annual rate of increase in the per capita cost of covered healthcare benefits for retirecs not eligibl: for Medicare benefits was assumed l
for 1992 and a 17% annual rate was assumed for 1993 (11% was assumed for 1992 and 10.5% was assumed for 1993 for retirecs eligible for Medicare benefits); both rates were assumed to decrease gradually to 6% in 2011 and, for certain plans, to 5% in 2026 l
and remain at 5% thereafter. The healthcare cost trend rate assumptions have a signifiumt effect on the amounts reported. As of September 30,1992,1% increases in 1
the assumed healthcare cost trend rates in each year would increase the accumulated postretirement benefit obligation by $31.5 million and the aggregate of the service and interest cost components of the net periodic postictirement benefit cost for the year then ended by $4.6 million.
I The weighted average discount rate used in determining the accumulated postrctirement benefit obligation was 8.25% at September 30,1992 and 1991.
19.
l'inancial Instnnuents l'oreign exchange At September 30, 1992, the Company had entered into forward foreign exchhnge contracts with domestic and foreign financial institutions for the purchase and sale of I
certain foreign currencies to hedge foreign currency denominated receivables, payables and firm commitments. The contracts call for total purchases of the equivalent of $114 I
million, maturing through fiscal 1999, and total sales of the equivalent of $129 million, maturing through fiscal 1993.
I The net gains and losses resulting from the translation of foreign currency-denominated receivables and payables, forward foreign exchange agreements and foreign currency transactions are included in operations and are not significant.
Guarantees and letters of credit The Company has provided certain guarantees and lettets of credit for various affiliated l
compasies in North and South America of $490 million at September 30,1992. The Company does not require collateral or other security to support the guarantees and letters of credit.
I Interest rate swap agreements The Company may enter into interest rate swap agreements to effectively manage l
interest rate exposure. The effects of these agreements are included in operations as components of interest income, net and are not significant.
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i Siemens Corporation 19 L
(A wholly owned subsidiary of Siemens AG) f Notes to the Consolidated Financial Statements L
September 30,1992 and 1991 At September 30,1992, the Company had 14 outstanding interest rate swap agreements with commercial banks having a total notional principal of $732 million.
The l
agreements provide for the Company to pay and rxcive both vari ole and fixed interest rates ranging from 3.3% to 8.0% on the notional principal. The notional principal amount relating to agreements which mature over the next year is $60 million and the l
remaining agreements mature through 2002.
While the Company is exposed to credit risk (only to the extent of the interest on the l
notional principal amounts) in the event of nonperformance by the counterparties to these financialinstruments, the Company does not anticipate any such nonperformance.
l 20.
Commitments l
The Company has entered into various leases for sales, service, office and l
manufacturing facilities and equipment. Some leases require, in addition to rental payments, the payment of property taxes, assessments and maintenance costs. Net rental expense, under all operating leases for the years ended September 30,1992 and 1991, I
was $73 million and $60 million, respectively. Total minimum rental payments under noncancellable leases that have initial or remaining noncancellable lease terms in excess
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of one year as of September 30,1992 are $328 million. Total minimum rental payments I
in each of the following five fiscal years are as follows:
($ in thousands) 1993
$59,112 1994 49,248 1995 40,421 1996 34,451 l
1997 30,425 21.
Contingeneles On August 26,1992, a patent infringement dispute with a publicly held company was settled. The settlement resulted in the Company making a $50 million nonrefundable payment, a $25 million prepayment of certain royalty fees which is refundable under specific conditions and continued payment of royalties based upon future sales of pacemakers b'eginning August 1,1992 for a period of ten years.
Siemens Corporation 20 (A wholly owned subsidiary of Siemens AG)
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Notes to the Consolldated Financial Statomonts September 30,1992 and 1991 41 Tel Plus Communications, Inc.
In November 1991, the Company settled a dispute which resulted from the 1986 Stock Purchase Agreement between Siemens Information Systems, Inc. (* SIS"), a wholly owned subsidiary of the Company and TPI Enterprises, Inc. by $43 million being g
transfened to TPI by SIS, and general releases being exchanged. The impact of this E
agreement has been reflected in the consolidated financial statements as of September 30,1991.
Other At September 30,1992, there were various other pending suits, including environmental matters, incident to the Company's busincu,es. hianagement believes any liabilities I
resulting from such suits will not materially affect the consolidated financial position of the Company.
22.
Subsequent Events Effective October 1,1992, the operations t,f ROLhi Systems and ROLhi Systems Technologies, both partnerships 1% owned by a subsidiary of the Company and 99%
owned by affiliate of the Company, were trerged into ROLhi Company.
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Siemens Corporation g
(A wholly owned subsidiary of Siemens AG)
Consolidated Financial Statements l
September 30,1992 and 1991 I
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153 f ast s3rd Street leichere 212 3712000 litw YpA, NY 10022 leccper 55 P iB 5
Piicv IIliterItorise Report ofIndependent Accountants l
November 1,1992 i
l To the Board of Directors and Stockholder of Siemens Corporation
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In our opinion, the accompanying consolidated balance sheets and the related I
consolidated statements of operations and accumulated deficit and of cash flows present fairly, in all material respects, the financial position of Siemens Corporation and its l
subsidiaries at September 30,1992 and 1991, and the results of their operations and I
their cash flows for the years then ended in conformity with generally accepted accounting principles. These financial statements are the resp %sibility of Siemens Corporation management; our responsibility is to express an opin!m on these fimancial statements based on our audits. We conducted our audits of taese statements in accordance with generally accepted auditing standards which require that we plan and l
perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for the opinion expressed above.
As discussed in Note 18 to the consolidated financial statements, the Company changed its method of accounting for postretirement benefits other than pensions during the year ended September 30,1991.
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m Siemens Corporation (A wholly owned subsidiary of Siemens AG)
Consolidated Balance Sheets ($ in Thousands) l 3
September 30, E
1992 1991 Assets l
Current assets Cash and cash equivalents 115,610 80,155 Marketable securities 12,459 17,082 I
Notes and accounts receivable, net 1,893,N6 1,309,554 Investments in sales-type leases, net 90,221 68,618 Inventory, net -
1,125,085 908,614 Other 221,693 150,960 Total current assets 3,458,114 2,534,983 Long-term receivables and other assets 493,307 344,192 Investments in sales-type leases, net 224,708 194,378 Investments in and advances to less tlka majority-owned companies 97,230 104,891 Fixed assets, net 895,145 687,558 Intangible assets, net 282,384 219,774
'l Total assets S 5.450.888
$ 4.085,776 Liabilities and Stockholder's Equity j
Current liabilities Accounts payable and accrued expenses
$ 1,524,016
$ 1,122,303 Loans and notes payable 955,848 1,103,284 Other 503,047 290,222 Total current liabilities 2,982,911 2,515,809 E
Long-term debt 1,1M,947 97,875 g
Other long-term liabilities 431,083 366,781 Total liabilities 4,518,941 2,980,465 Minority interest 103,336 103.194-Stockholder's equity Common stock - $1.00 par value; 1,000 shares authorized, issued and outstanding 1
1 Additional paid-in capital 2,250,515 2,250,515 Ac6umulated deficit (1,421,905)
(1,248,399)'
Total stockholder's equity 828,611 1,002,117 Commitments and contingencies Total liabilities and stockholder's equity
$ 5,450.888
$ 4.085,776 The accompanying notes are an integral part of these consolidated financial statements.
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Siemens Corporation L
(A wholly owned subsidiary of Siemens AG)
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Consolidated Statements of Operations and L
Accumulated Deficit ($ in Thousands)
For the Years Ended
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September 30, 1992 1991 Net sales
$ 4,407,120
$ 3,970,414 Cost of products sold 3,294,754 2,938,609 I
Gross profit 1,112,366 1,031,805 Selling, general and administrative expenses 1,306,306 1,077,999 Interest income, net 18,155 12,995 l
Other income, net 656 84,681 I
(Loss) income before equity in losses of associated and affiliated companies, income tax provision, minority interest and change in accounting policy (175,129) 51,482 Equity in losses of associated and affiliated companies (7.826)
(21,920)
(Loss) income before income tax provision, minority interest and change in accounting policy (182,955) 29,562 Income tax provision (20,802)
(22,270)
(Loss) income before minority interest and change in accounting policy (203,757) 7,292 Minority interest in losses of consolidated 1
subsidiary companies 30,251 l
(Loss) income before change in accounting policy (173,506) 7,292 I
Transition effect of change in accounting for postretirement benefits other than pensions (242,190)
I Net loss (173,506)
(234,898) f Accumulated deficit at beginning of year
($1,248,399)
(1,013,501)
Accumulated deficit at end of year
($1,421,905)
($1,248.399)
The accompanyiy notes are an integral part of these consolidated financial statements, I
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Siemens Corporation
-(A wholly owned subsidiary of Siemens AG)
I Consolidated Statements of Cash Flows ($ In Thousands)
For the Years Ended September 30, Cash flows from operating activities Net loss
$ (173,506)
$(234,898)
I Adjustments to reconcile net loss to net cash provided by (used for) operating activities Depreciation and amortization 211,323 144,671 Minority interest (30,251) 1 Equity m losses of associated and affiliated companies 7,826 21,920 242,190 Transition effect of change in accounting policy (80,483)
Gain on sale of investments I
Change in assets and liabilities net of effects of acquisitions and dispositions Notes and accounts receivable, net (437,659)
(378,255)
Investments in sales-type leases, net (51,933)
(44,807)
I Inventory, net (106,805)
(70,251)
Accounts payable and accrued expenses 26,899 150,267 Other current assets and liabilities 74,689 173,328 I
Other long-term liabilities 60,955 27,602 Dividends received 6,763 4,650 4.788 Other Net cash used for operating activities (411,699)
(39,278)
I Cash flows from investing aedvities Capital expenditures, net of disposals (210,861)
(183,590)
Cost of acquisitions, net of cash acquired (59,029)
(16,M3)
Proceeds from sale of marketable securities and investments 4,623 122,601 Net cash used for investing activities (265,267)
(77,632)
Cash flows from financing activities I
Proceeds from issuance of commercial paper 1,202,350 685,440 Repayments of commercial paper (1,202,350)
(854,145)
Proceeds from Eurobond issuance 995,377 Proceeds (repayments) of loans and notes payable (282,956) 329,256 Net cash provided by financing activities 712,421 160,551 Net increase in cash and cash equivalents 35,455
- 3,M1 Cash and cash equivalents at beginning of year 80,155 36,514 Cash and casa equivalents at end of year S 115.610 80.155 The accompanying notes are an integral part of these consolidated financial statements.
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T Siemens Corporation (A wholly owned subsidiary of Siemens AG)
J Notes to the Consolidated Financial Statements j
L September 30,1992 and 1991 1.
Ilusiness Siemens Corporation is a United States holding and finance company. Its subsidiaries, in cooperation with the Siemens AG worldwide groups, develop, manufacture and market equipment for the generation, distribution, regulation and control of electrical g
E energy; medical equipment for diagnostic imagery and therapy; cardiac pacemakers; electronic equipment for telephone applications; factory automation systems; rail transport systems; air traffic control; lighting equipment and electronic components. In I
addition, Siemens Corporation subsidiaries import from their ultimate parent, Siemens AG, or its affiliates, medical, power engineering, communication and electronic component and lighting products which are sold or leased in the United States. Included I
in the accompanying consolidated statements of operations are amounts received from affiliates principally to cover the costs of certain projects and services carried out by various units of Siemens Corporation under agreements with and for the benefit of those I
affiliates. Such amounts are recorded as sales and other revenue or offset related expenses.
2.
Summary of Significant Accounting Policies I
Principles of consolidation The consolidated financial statements include the accounts of Siemens Corporation and majority-owned subsidiaries (the " Company"). Investments in companies owned 20%
l to 50% are generally accounted for under the equity method Companies owned less than 20% are generally accounted for under the cost method.
All significant intercompany accounts and transactions have been eliminated.
Research and development Research and development costs are expensed as incurred and amounted to $225 million and $155 million in 1992 and 1991, respectively.
Net sales Net sales includes $438 million and $458 million to affiliated and associated companies for fiscal 1992 and 1991, respectively.
Other income, net Other income, net includes $80.5 million relating to gains on the sale of investments during the year ended September 30,1991.
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Siemens Corporation 2
(A wholly owned subsidiary of Siemens AG)
Notes to the Consolidated Financial Statomonts September 30,1992 and 1991
!l Income taxes l
The United States federal income tax return of the Company includes all 80% or more l
owned domestic subsidiaries. Income taxes have been determined under Statement of Financial Accoundng Standards No. 96, " Accounting For Income Taxes" which requires that any deferred tax liability or asset be determined based upon the differences between l
the financial statement and tax bases of assets and liabilities as measured by enacted tax rates in effect when these differences are expected to reverse. The principal types of differences between the Company's bases of assets and liabilities for financial statement l
and tax purposes are the accrued postretirement benefit and pension cost, acquisitions accounted for by the purchase method, recognition of installment sales, inventory valu-ations, provisions for warranty and certain other accrued expenses and depreciation of I
fixed assets.
6 Revenue recognition Sales are recognized generally when products are shipped. Certain equipment lease agreements are accounted for as sales-type leases, whereby unearned income is recognized through amortization over the life of the lease. Long-term contracts are generally accounted for under the completed contract method.
Cash and cash equivalents Highly liquid debt instruments purchased with maturities of three months or less are considered cash equivalents, Marketable securities hbrketable securities are carried at the lower of cost or market. Net realized gains and losses from sales are determined on a specific identification cost basis. At September 30,1992 and 1991, cost approximated market value.
Inventory Inventories are stated at the lower of cost or market.
The primary methods of determining cost are first in, first out and average cost. Market is determined based upon net realizable value.
Fixed assets and depreciation Fixed assets are recorded at cost and depreciated using the straight-line method over their estimated useful lives.
Additions and betterments are capitalized. Maintenance and repairs are charged to operations as incurred, l
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Siemens Corporation 3
(A wholly owned subsidiary of Siemens AG)
I Notes to the Consolidated Financial Statements September 30,1992 and 1991 I
Intangible assets and amortization Intangible assets are recorded at cost, less accumulated amortization. The excess of cost l
over the fair value of net assets of businesses acquired, at the date of acquisition, is generally amortized over a period of 30 years on a straight-line basis.
- Patents, trademarks and other intangible assets are amortized over their estimated useful lives (3 to 20 years) on a straight line basis.
The Company determined during 1992 that certain intangible assets were impaired and accordingly, a provision of approximately $40 million was recorded as selling, general and r:ministrative expense for the year ended September 30,1992.
Accumulated amortization at September 30,1992 and 1991 was $146 million and $85 million, respectively.
Presentation The Company has reclassified the presentation of certain prior year information to conform with the current year's presentation.
3.
Business Changes Acquisitions
!I On October 1,1991, the Company acquired the net assets of the domestic operations of -
the Industrial Controls Business of Texas Instmments, Inc. v'hich primarily
. I manufactures factory automation systems, for approximately $86.5 million.
Pursuant to a Joint Venture and Transaction Agreement ("JVTA") entered into in 1989, the Company and an unconsolidated affiliate of the Company acquired '1% and 49%
interest, respectively, in ROLM Company (a partnership), from International Business Machines (" IBM"). ROLM Company is engaged in the business of marketing, selling iI and servicing telecommunications products manufactured by ROLM Systems, a partnership which is owned 1% by the Company and 99% by an affiliate of the l--
Company. On June 10,1992, under the terms of a Master Business Agreement ("MBA")
between the Company, Siemens AG and IBM, IBM surrendered its 50% interest in ROLM to the Company, and the Company agreed to assume all of the future financial
- l obligations of IBM under the JVTA in exchange for a $98.8 million net cash payment l
by IBM to the Company. Simultaneous with the execution of the MBA, ROLM Company entered into an agreement with ROLM Systems whereby Rolm Company will
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be responsible for alllosses incurred by Rolm Systems subsequent to the effective date of the MBA.
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4 Siemens Corporation L
(A wholly owned subsidiary of S!cmens AG)
Notes to the Consolidated Financial Statements September 30,1992 and 1991 As a result of the MBA transaction described above, the Company achieved 51%
ownership of ROLM Company. Accordingly, this transaction has been accounted for l
under the purchase method and the results of operations of ROLM Company have been included in the consolidated financial statements from June 30,1992, the effective date of the MBA.
l In December 1990, a subsidiary of the Company contributed net assets and cash with an aggregate book value of approximately $94 million and Stromberg Carlson Coq > oration contributed net assets of approximately $94 million, with each company I
receiving a 50% partnership interest in Siemens-Stromberg Carlson. In accordance with the Joint Venture Agreement, Siemens has achieved control over the management of the partnership, has agreed to absorb 100% of the losses of the partnership through I
September 30,1994 and is to receive a reimbursement of up to $28 million payable on or before September 30, 1994. Stromberg-Carlson Corporation has been granted the right to sellits 50% partnership interest to the Company during the period from October j
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1,1994 to September 30,1995 for $97.5 million. The 50% interest in Siemens-Stromberg Carlson which is owned by Stromberg Carlson Corporation is included in minority interest in the consolidated balance sheet.
During the years ended September 30,1992 and 1991, the Company completed various other acquisitions, all of which have been accounted for under the purchase method.
The excess of the total recorded purchase price over the estimated fair value of the
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aggregate net assets acquired approximated $48.3 million for fiscal 1992 and $14 million i
for fiscal 1991. The results of operations of businesses acquired have been included in the consolidated financial statements from the respective dates of acquisition.
Dispositions l
The Company completed certain dispositions in 1992 which wete not significant to the consolidated financial statements.
4.
Cash and Cash Equivalents At September 30,1992 and 1991, the Company had time deposits of $85 million and
$32 million, respectively.
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4 Siemens Corporation 5
(A wholly owned subsidiary of Siemens AG)
Notes to the Consolidated Financial Statements September 30,1992 and 1991 l
5.
Notes and Accounts Receivable, Net f
Notes and accounts receivable included in current assets consist of the following:
September 30, 1992 1991
($ in thousands) i l
Third party receivables 947,479
$ 786,227 Less - Allowance for doubtful accounts (69,043)
(46,6M) 878,436 739,563 Receivables from affiliated companies, nel 1,014,610 569,991
$1,893.046
$1,309.554 f
At September 30,1992, notes and accounts receivable, net includes $122.6 million due from an affiliate for its 49% minority interest in ROLM Company, f
I.ong-term receivables and other assets of $493 million ard $344 million at September 30,1992 and 1991 include amounts due from affiliates of $281 and $100 million at September 30,1992 and 1991, respectively. Long-term receivables earn interest at rates vhrying from approximately 4.1% to approximately 9.0% and mature in varying amounts through 1999. Long-term receivables and other assets also include amounts due from employees which bear interest at rates ranging from 6.5% to 8.5%.
6.
Investments in Sales-Type lease, Net Investments in sales-type leases included in current and long-term assets consist of the following:
l September 30, 1992 1991
($ in tbot! sands)
Total minimum lease payments to be received
$ 379,300
$ 321,740 Less - Unearned income (64,371)
(58,744)
$ 314.429
$ 262.996 l
].*
Siemens Corporation 6
l (A wholly owned subsidiary of Siemens AG)
Notes to the Consolidated Financial Statements September 30,1992 and 1991 The Company's leasing operations consist principally of leasing medical, telecommunications and electronic printing equipment. The terms of these leases l
generally allow the lessee to purchase the equipment at the end of the lease period at a specified amount.
Minimum lease payments receivable in each of the following five fiscal years are as follows:
($ in Thousands) 1993
$119,669 g
1994 95,305 I
1995 73,998 1996 54,614 1997 32,009-7.
Inventory, Net Inventory consists of the following:
September 30, I
1992 1991
($ in thousands)
Raw materials
$ 276,797
$ 186,297 Work-in-process 390,862 297,913 Finished goods 457,426 424,404
$ 1.125,085
$ 908,614 l
Work-in-process includes $184 million and $71 million of inventoried costs relating to long-term contracts at September 30,1992 and 1991, respectively.
4 Y
Siemens Corporation 7
(A wholly owned subsidiary of Siemens AG)
Notes to the Consolidated Financial Statements September 30,1992 and 1991 r
8.
Other Current Assets l
Other current assets consist of the following:
September 30, 1992 1991 f
($ in thousands)
Receivables from associated companies 30,090 44,391 l
Prepaid expenses 29,136 19,972 Income and other taxes receivable 6,389 4,865 Other receivables and deposits 156,078 81,732
$ 221,603
$ 150.960 1
9.
Investments in and Advances to less Than Majority-Owned Companies l
At September 30, 1992, investments in and advances to less than majority-owned companies include investments of 50% in Siccor Corporation and CTI Pet, Inc. which are accounted for by the equity method, i
Summary financial information for all associated companies accounted for using the equity method is shown below:
September 30, 1992 1991 g
(Unaudited)
[
($ in thousands) g Total assets
$ 237,607
$ 260,161 g
Total liabilities (99,638)
(195,635)
Net assets
$ 137,969 64.526 Revenues S 435,560
$ 469,848 Net income /(loss) 24,432 (14,190)
Company's equity in net assets 68,978 44,106 Company's equity in net loss (7,826)
(21,920)
i Siemens Corporation 8
(A wholly owned subsidiary of Siemens AG)
I Notes to the Consolidated Financial Statements September 30,1992 and 1991 The Company's equity in net loss of associated companies exceeds its ownership interest
.g due to a contractual requirement. The excess of the Company's investments over its 3
equity in values assigned to net tangible assets amounted to $29 million and $39 million at September 30,1992 and 1991, respectively, Amortization of such excess investment costs amounted to $8 million and $2 million in 1992 and 1991, respectively. The
.I Company's share of the undistributed earnings of all such companies at September 30, 1992 was not significant in relation to the consolidated financial statements. During June 1992, the Company purchased the remaining interests of Siemens infusion Systems I
which had been accounted for using the equity method.
10.
Fixed Assets, Net Major classes of fixed assets are summarized below:
September 30, 1992 1991
($ in thousands)
Land 88,040 68,986 Buildings, including leaschold improvements 346,734 283,416 I
Equipment under operating leases 93,220 60,635 Machinery, equipment and other 1,022,820 81G,755 1,550,814 1,232,822
~
Less - Accumulated depreciation (655,669)
(545,264) 895,145 5
687,558 Minimum future rental income on noncancellable operating leases for each of the next
~I five fiscal years is as follows:
($ in thousands) 1993 24,034 1994 18,921 l
1995 14,683 V
1996 9,471 1997 3,694 I
I
I. -
Siemens Corporation 9
(A wholly owned subsidiary of Siemens AG)
Notes to the Consolidated Financial Statements September 30,1992 and 1991 I
11.
Atcounts Payable and Accrued Expenses Accounts payable and accrued expenses are summarized below:
September 30, l
1992 1991
($ in thousands)
Accounts payable Third parties 258,578 $
179,089 AfGliates 373,994 331,659 Accrued expenses I
Third parties 878,136 601,995 Affiliates 13,308 9,560 l
$ 1,524,016 $ 1,122,303 12.
Loans and Notes Payable Loans and notes payable are summarized below:
September 30, 1992 1991 I
($ in thousands)
Demand and other loans payable to affiliates (3.1% to 8.0% in 1992 and 5.5% to 9.1% in 1991) 771,824 $ 962,925 Notes, loans payable and commercial poper (3.1% to 10.4% in 1992 and 4.0% to 10.0% in 1991) 184,024 140.359 955,848 $ 1.103,284 g
The Company may issue up to $1.8 billion of commercial paper which is guaranteed by 3
Siemens AG. In addition, the Company has available formal bank lines of credit in the amount of $190 million.
I
- I I
I
Siemens Corporation 10 (A wholly owned subsidiary of Siemens AG)
I Notes to the Consolidated Financial Statements September 30,1992 and 1991 I
13.
Other Current Llabilitics Other current liabilities are summarized below:
September 30, 1992 1991
($ in thousands)
Deferred income
$ 100,693 42,051 Customer advances 284,223 146,783 Income and other taxes payable 78,W3 54,240 I
Miscellaneous 40_.'J38 47,148
$ 5f3.047
$ 290,222 Customer advances include, among other items, payments received under long-term contracts.
14.
Long-Term Debt I
i Long term debt consists of the following:
I September 30, 1992 1991
($ in thousands)
Eurobonds payable, net of unamortized discount (8.0% due June 24,2002)
$ 998,443 l
Loans payable to affiliates (3.9% to 9.3%.in 1992 and 6.3% to 9.3% in 1991; due in varying amounts through 1998) 50,676 50,715
_l Mortgages, loans and notes payable (3.9% to 10.4% in 1992 and 4.0% to 10.0% m 1991; due in varying amounts through 2017) 57,890 50,782 I
Less - Current portion (included in loans and notes payable)
(2,062)
(3,622)
$ 1.104.9_47 97,875 l.
I
11' Siemens Corporation (A wholly owned subsidiary of Siemens AG)
I Notes to the Consolidated Financial Statements September 30,1992 and 1991 On June 24,1992, a subsidiary of the Company issued Eurobonds with a face value of
$1 billion which are payable on June 24,2002. The bonds bear interest at the stated I
interest rate of 8%, payable annual:y in arrears.
In connection with the issuance of the Eurobonds, the subsidiary agreed to set aside I
$375 million of the proceeds for use by Siemens AG. The bond offering was part of a joint offering by Siemens AG which included detachable warrants for the purchase of common shares of Siemens AG. Repayment of principal and interest on the bonds is 4
I guaranteed by Siemens AG.
Mortgages and notes payable of $22 million are collateralized by certain real estate and 1
other assets.
Total interest expense on short and long-term borrowings amounted to $99 and I
$91 million in 1992 and 1991, respectively, including $22 million and $18 million to affiliates in 1992 and 1991, respectively. Total interest paid was $54 million and $72 million in 1992 and 1991, respectively.
Total scheduled payments oflong-term obligations for each of the following five fiscal years and the period thereafter are as follows:
($ in thousands) 1993 2,062 1994 3,104 1995 22,499 I
1996 660 1997 500 Thereafter 1,078,184 j
I I
I I
I