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IFX » Topics » Reductions in the amount of government subsidies we receive or demands for repayment could increase our reported expenses or limit our ability to fund our capital expenditures.This excerpt taken from the IFX 20-F filed Dec 29, 2008. Reductions in
the amount of government subsidies we receive or demands for
repayment could increase our reported expenses or limit our
ability to fund our capital expenditures.
As is the case with many other semiconductor companies, our
reported expenses have been reduced in recent years by various
subsidies received from governmental entities. In particular, we
have received, and expect to continue to receive, subsidies for
investment projects as well as for research and development
projects. We recognized governmental subsidies as a reduction of
R&D expenses and cost of sales in an aggregate amount of
€54 million in the 2006 fiscal year,
€122 million in the 2007 fiscal year and
€88 million in the 2008 fiscal year.
As the general availability of government funding is outside our
control, we cannot assure you that we will continue to benefit
from such support, that sufficient alternative funding would be
available if necessary or that any such alternative funding
would be provided on terms as favorable to us as those we
currently receive.
The application for and implementation of such subsidies often
involves compliance with extensive regulatory requirements,
including, in the case of subsidies to be granted within the
European Union, notification to the European Commission of the
contemplated grant prior to disbursement. In particular,
establishment of compliance with project-related ceilings on
aggregate subsidies defined under European Union law often
involves highly complex economic evaluations. If we fail to meet
applicable requirements, we may not be able to receive the
relevant subsidies or may be obliged to repay them, which could
have a material adverse effect on our business.
The terms of certain of the subsidies we have received impose
conditions that may limit our flexibility to utilize the
subsidized facility as we deem appropriate, to divert equipment
to other facilities, to reduce employment at the site, or to use
related intellectual property outside the European Union. This
could impair our ability to operate our business in the manner
we believe to be most cost effective.
Table of Contents
This excerpt taken from the IFX 20-F filed Dec 7, 2007. Reductions in
the amount of government subsidies we receive or demands for
repayment could increase our reported expenses or limit our
ability to fund our capital expenditures.
As is the case with many other semiconductor companies, our
reported expenses have been reduced in recent years by various
subsidies received from governmental entities. In particular, we
have received, and expect to continue to receive, subsidies for
investment projects as well as for research and development
projects. We recognized governmental subsidies as a reduction of
R&D expenses and cost of sales in an aggregate amount of
€171 million in the 2005 fiscal year,
€153 million in the 2006 fiscal year and
€248 million in the 2007 fiscal year. In addition, we
reduced the carrying value of fixed assets by
€0 million, €49 million and
€1 million during the 2005, 2006 and 2007 fiscal
years, respectively.
As the general availability of government funding is outside our
control, we cannot assure you that we will continue to benefit
from such support, that sufficient alternative funding would be
available if necessary or that any such alternative funding
would be provided on terms as favorable to us as those we
currently receive.
The application for and implementation of such subsidies often
involves compliance with extensive regulatory requirements,
including, in the case of subsidies to be granted within the
European Union, notification to the European Commission of the
contemplated grant prior to disbursement. In particular,
establishment of compliance with project-related ceilings on
aggregate subsidies defined under European Union law often
involves highly complex economic evaluations. If we fail to meet
applicable formal or informal requirements, we may not be able
to receive the relevant subsidies or may be obliged to repay
them, which could have a material adverse effect on our business.
The terms of certain of the subsidies we have received impose
conditions that may limit our flexibility to utilize the
subsidized facility as we deem appropriate, to divert equipment
to other facilities, to reduce employment at the site, or to use
related intellectual property outside the European Union. This
could impair our ability to operate our business in the manner
we believe to be most cost effective.
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