e6vk
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934
August 2, 2010
Commission File Number: 1-15174
Siemens Aktiengesellschaft
(Translation of registrants name into English)
Wittelsbacherplatz 2
D-80333 Munich
Federal Republic of Germany
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
Form 20-F þ Form 40-F o
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):
Yes o No þ
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):
Yes o No þ
Indicate by check mark whether by furnishing the information contained in this Form, the registrant
is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the
Securities Exchange Act of 1934.
Yes o No þ
If Yes is marked, indicate below the file number assigned to the registrant in connection with
Rule 12g3-2(b): 82-
Table of contents
Introduction
Siemens AGs Interim Report for the Siemens Group complies with the applicable legal requirements
of the German Securities Trading Act (Wertpapierhandelsgesetz WpHG) regarding quarterly financial
reports, and comprises Condensed Interim Consolidated Financial Statements and an Interim group
management report in accordance with § 37x (3) WpHG. The Condensed Interim Consolidated Financial
Statements have been prepared in accordance with International Financial Reporting Standards (IFRS)
and interpretations thereof as issued by the International Accounting Standards Board (IASB) and as
adopted by the European Union (EU). The Condensed Interim Consolidated Financial Statements also
comply with IFRS as issued by the IASB. This Interim Report should be read in conjunction with our
Annual Report for fiscal 2009, which includes a detailed analysis of our operations and activities.
Due to rounding, numbers presented throughout this and other documents may not add up precisely to
the totals provided and percentages may not precisely reflect the absolute figures.
1
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Key figures1
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Q3 and first nine months of fiscal 20102 |
(unaudited; in millions of , except where otherwise stated)
1 |
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New orders and order backlog; adjusted or organic growth rates of Revenue and new orders;
book-to-bill ratio; Total Sectors profit; ROE; ROCE; Free cash flow; cash conversion rate;
EBITDA (adjusted); EBIT (adjusted); earnings effect from purchase price allocation (PPA effects)
and integration costs; net debt and adjusted industrial net debt are or may be non-GAAP financial measures.
A definition of these supplemental financial measures, a reconciliation to the most directly
comparable IFRS financial measures and information regarding the usefulness and limitations of these supplemental
financial measures are available on our Investor Relations website under www.siemens.com/nonGAAP. |
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2 |
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April 1, 2010 June 30, 2010 and October 1, 2009 June 30, 2010. |
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3 |
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Adjusted for portfolio and currency translation effects. |
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4 |
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Earnings per share attributable to shareholders of Siemens AG. For fiscal 2010 and 2009
weighted average shares outstanding (basic) (in thousands) for the third quarter
amounted to 868,863 and 866,426 respectively and for the first nine months to 867,890
and 864,282 shares respectively. |
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5 |
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Discontinued operations primarily consist of former Com activities, comprising carrier networks,
enterprise networks and mobile devices activities. |
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6 |
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Continuing and discontinued operations. |
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7 |
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Profit margin including PPA effects is 16.0% for Healthcare and 12.6% for Diagnostics. |
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8 |
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Return on equity is calculated as annualized Income before income taxes of Q3 divided by average
allocated equity for Q3 of fiscal 2010 (1.475 billion). |
2
Interim group management report
Overview of financial results for the third quarter of fiscal 2010
(Three months ended June 30, 2010)
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For the first time since the fourth quarter of fiscal 2008, both revenue and orders
increased year-over-year. Revenue also increased sequentially for the second quarter in a
row in fiscal 2010. |
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Orders of 20.871 billion were up 22% compared to the prior-year quarter (16%
organically), including order growth in all three Sectors and all three reporting regions.
The combined order backlog for the Sectors increased to 89 billion. |
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Revenue of 19.170 billion was 4% higher (level organically), despite substantial order
declines throughout the prior fiscal year. |
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Total Sectors profit for the quarter rose 40% year-over-year, to 2.331 billion. |
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Income from continuing operations was 1.441 billion (basic EPS 1.63), up 18% from the
third quarter a year earlier, and net income of 1.435 billion (basic EPS 1.62) was 9%
higher. |
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Free cash flow from continuing operations improved substantially, to 2.145 billion from
1.064 billion in the third quarter a year ago. |
Managements perspective on third-quarter results. In the third quarter of fiscal 2010, Siemens
gained further momentum. Such rapid order growth last occurred in 2008. Strong demand took the
combined order backlog for the Sectors to the highest level since we adopted our Sector reporting
structure at the beginning of fiscal 2008. Profit Total Sectors also reached its highest point
under this Sector structure.
Strong order growth lifts Sectors backlog. All three Sectors delivered topline growth in the third
quarter, and our short-cycle businesses grew particularly quickly. Orders climbed 22%, the first
quarterly increase in new orders compared to a prior-year period since the fourth quarter of fiscal
2008. Revenue rose more modestly at 4%, due to lower order intake during prior periods. Reported
orders and revenue both benefited from currency translation effects. On an organic basis, excluding
currency translation and portfolio effects, orders rose 16% and revenue came in level with the
prior-year quarter. The Total Sectors book-to-bill ratio was 1.10. The combined order backlog for
the three Sectors, which benefited from positive currency translation effects, increased to 89
billion. This is the highest level since we adopted our Sector structure at the beginning of fiscal
2008.
Sequential revenue growth continues in all Sectors in the third quarter of fiscal 2010. Revenue in
Industry rose 7% compared to the prior-year period on higher sales in five of the Sectors six
Divisions. Healthcare revenue increased 10% year-over-year with contributions from all Divisions.
Reported revenue in Energy came in just above the prior-year level. All three Sectors posted their
second straight quarter of sequential revenue growth in fiscal 2010. On a geographic basis, higher
revenue included double-digit increases in Asia, Australia and the Americas, again including strong
growth in emerging markets. Within an overall decline in the region comprising Europe, the
Commonwealth of Independent States (C.I.S.), Africa and the Middle East, revenue rose 9% in
Germany.
3
Double-digit order growth in all Sectors. Order intake increased in all Sectors, led by a 33% rise
in Industry including double-digit growth in all Divisions. Energy reported order growth of 18%,
due mainly to substantially higher volume from major orders. Healthcare also posted double-digit
demand growth with all Divisions contributing to the increase. Orders grew in all three regions.
The Americas reported the sharpest increase, due in part to a number of large Energy contracts won
during the quarter. Double-digit growth in Europe, C.I.S., Africa, Middle East was led by Industry.
Within an overall increase for Asia, Australia, orders came in lower in India due to a large power
transmission order in the prior-year period.
Total Sectors profit reached 2.331 billion in the third quarter. This is the highest total
since
we adopted our Sector structure at the beginning of fiscal 2008. All three Sectors delivered profit
increases compared to the prior-year period. Energy remained the top earnings contributor, again
executing well on its large order backlog. Industry produced high double-digit profit growth, due
mainly to recovery of its short cycle businesses as well as tight cost management. Healthcare also
posted high double-digit profit growth, in part because the prior-year period was burdened by
charges of 128 million associated with particle therapy contracts.
Income climbs on strong rise in Total Sectors profit. Income from continuing operations for the
third quarter rose 18% year-over-year, to 1.441 billion. Basic earnings per share (EPS) on a
continuing basis rose to 1.63 from 1.35 a year earlier. Higher Total Sectors profit was the main
driver of these increases. Corporate items and pensions for the third quarter improved
year-over-year, and Centrally managed portfolio activities recorded a lower loss. These
improvements were more than offset by significantly lower profit from Equity Investments, lower
gains from disposals of real estate at Siemens Real Estate (SRE), a loss at Siemens IT Solutions
and Services, and negative results from Corporate Treasury activities. Net income rose to 1.435
billion in the third quarter. A year earlier, net income of 1.317 billion included 93 million in
income from discontinued operations, which benefited from a 154 million effect related to the sale
of a stake in the enterprise networks business. Basic EPS increased to 1.62 compared to 1.45 a
year earlier.
4
Sectors generate substantial increase in Free cash flow. Free cash flow at the Sector level climbed
to 2.867 billion in the third quarter, taking Free cash flow from continuing operations up to
2.145 billion from 1.064 billion in the prior-year period. Free cash flow from continuing
operations rose on the strong increase in Total Sectors profit compared to the prior-year period
and positive changes in net working capital. The current period included approximately 0.1 billion
in outflows for severance charges relating to structural initiatives as well as SG&A reduction. The
prior-year quarter included approximately 0.3 billion in outflows stemming from previous charges
related to project reviews and structural initiatives as well as to SG&A reduction. The cash
conversion rate climbed to 1.49 compared to 0.87 in the same quarter a year earlier.
ROCE rises on higher income. On a continuing basis, return on capital employed (ROCE) rose to 14.2%
from 11.7% in the third quarter a year earlier. The increase was due mainly to higher income from
continuing operations. To a lesser extent, ROCE improved on a decline in average capital employed.
Pension underfunding increases. The estimated underfunding of Siemens principal pension plans as
of June 30, 2010, amounted to approximately 6.1 billion, compared to an underfunding of
approximately 4.0 billion at the end of fiscal 2009 and approximately 4.6 billion at the end of
the second quarter.
The decline in funded status since March 31, 2010 is due primarily to an increase in Siemens
defined benefit obligation (DBO) and, to a lesser extent, a negative return on plan assets. The DBO
rose due to a decrease in the discount rate assumption as of June 30, 2010 as well as with accrued
service and interest costs.
5
Results of Siemens
Results of Siemens Three months ended June 30, 2010
The following discussion presents selected information for Siemens for the third quarter of fiscal
2010:
Orders and revenue
In the third quarter, demand increased in all Sectors, with particular strength in our short-cycle
businesses. As a result, orders climbed 22%, to 20.871 billion, the first quarterly increase in
new orders compared to a prior-year period since the fourth quarter of fiscal 2008. Revenue rose
more modestly at 4%, to 19.170 billion, due to lower order intake during prior periods. Reported
orders and revenue both benefited from currency translation effects. On an organic basis, excluding
the net effect of currency translation and portfolio transactions, orders rose 16% and revenue came
in level with the prior-year quarter. The book-to-bill ratio for Total Sectors was 1.10, and 1.09
for Siemens overall. The combined order backlog for the three Sectors increased to 89 billion as
of June 30, 2010, benefiting from positive currency translation effects.
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New Orders (location of customer) |
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Three months |
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ended June 30, |
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% Change |
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therein |
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(in millions of ) |
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2010 |
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2009(1) |
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Actual |
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Adjusted(2) |
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Currency |
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Portfolio |
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Europe, C.I.S.(3), Africa, Middle East |
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11,043 |
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9,750 |
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13 |
% |
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11 |
% |
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3 |
% |
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(1 |
)% |
therein Germany |
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3,363 |
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2,327 |
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45 |
% |
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44 |
% |
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0 |
% |
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0 |
% |
Americas |
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6,350 |
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4,322 |
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47 |
% |
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35 |
% |
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12 |
% |
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(1 |
)% |
therein U.S. |
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4,556 |
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3,008 |
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51 |
% |
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40 |
% |
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13 |
% |
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(1 |
)% |
Asia, Australia |
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3,478 |
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3,088 |
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13 |
% |
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3 |
% |
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10 |
% |
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0 |
% |
therein China |
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1,457 |
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1,077 |
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35 |
% |
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29 |
% |
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7 |
% |
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0 |
% |
therein India |
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528 |
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592 |
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(11 |
)% |
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(20 |
)% |
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9 |
% |
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0 |
% |
Siemens |
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20,871 |
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17,160 |
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22 |
% |
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16 |
% |
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7 |
% |
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(1 |
)% |
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(1) |
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Certain prior-year information was reclassified to conform to the current
regional presentation. |
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(2) |
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Excluding currency translation and portfolio effects. |
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(3) |
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Commonwealth of Independent States. |
Orders related to external customers rose 22% in the third quarter of fiscal 2010. The Industry
Sector our largest Sector by revenue saw orders climb 33% compared to a low basis of
comparison in the same period a year earlier. The steadily increasing demand in the Sectors
short-cycle businesses was accompanied by more stable long-cycle businesses, resulting in
double-digit order growth at all Industry Divisions for the quarter. Order intake increased 18% in
the Energy Sector, largely due to a higher volume from major orders at Power Transmission,
Renewable Energy and Oil & Gas. In contrast, order intake at Fossil Power Generation came in 14%
below the prior-year period. The Healthcare Sector recorded double-digit order growth, on higher
order intake at all Divisions.
Orders rose 13% in the region Europe, C.I.S., Africa, Middle East our largest reporting region.
Order intake in the Industry Sector increased 29% in the region, led by Mobility which took in a
large rolling stock order in Russia during the third quarter. Orders also rose in Energy and
Healthcare, due primarily to a number of major orders at Power Transmission and higher demand at
Imaging & IT. Major orders won by the Energy Sector in the current period were the primary driver
of the 45% order growth in Germany. Order intake rose 47% in the Americas, driven by substantially
higher demand in the Energy Sector, including a higher volume from major orders at Fossil Power
Generation and Renewable Energy. Order development was also influenced by positive currency
translation effects, primarily from the U.S. dollar. Orders in Industry and Healthcare also came in above
the prior-year level in the Americas region. In Asia, Australia orders increased 13% year-over-year
on strong growth in Industry and Healthcare, and on positive currency translation effects. Order
intake came in well below the prior-year level in the Energy Sector, due primarily to a lower
volume from major orders. Order growth of 35% in China was driven by higher demand in Industry and
Healthcare. Lower order intake in India was due primarily to comparison to the prior-year period,
which included a large contract win at Power Transmission.
6
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Revenue (location of customer) |
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Three months |
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ended June 30, |
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% Change |
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therein |
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(in millions of ) |
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2010 |
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2009(1) |
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Actual |
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Adjusted(2) |
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Currency |
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Portfolio |
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Europe, C.I.S.(3), Africa, Middle East |
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10,103 |
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10,303 |
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(2 |
)% |
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(3 |
)% |
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2 |
% |
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(1 |
)% |
therein Germany |
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2,859 |
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2,612 |
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9 |
% |
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9 |
% |
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0 |
% |
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0 |
% |
Americas |
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5,485 |
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4,922 |
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11 |
% |
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3 |
% |
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9 |
% |
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(1 |
)% |
therein U.S. |
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3,885 |
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3,742 |
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4 |
% |
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(3 |
)% |
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8 |
% |
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(1 |
)% |
Asia, Australia |
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3,582 |
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3,123 |
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15 |
% |
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6 |
% |
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9 |
% |
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0 |
% |
therein China |
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1,566 |
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1,376 |
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14 |
% |
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9 |
% |
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5 |
% |
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0 |
% |
therein India |
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474 |
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386 |
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23 |
% |
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8 |
% |
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15 |
% |
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0 |
% |
Siemens |
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19,170 |
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18,348 |
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4 |
% |
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0 |
% |
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5 |
% |
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0 |
% |
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(1) |
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Certain prior-year information was reclassified to conform to the current
regional presentation. |
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(2) |
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Excluding currency translation and portfolio effects. |
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(3) |
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Commonwealth of Independent States. |
Revenue related to external customers rose 4% compared to third quarter a year earlier, including
positive currency translation effects that contributed to revenue increases in all Sectors. Revenue
in the Industry Sector came in 7% above the prior-year period, due primarily to strong growth at
the Sectors short-cycle businesses led by Industry Automation and OSRAM. Revenue rose 10% in the
Healthcare Sector, with Imaging & IT leading higher absolute sales at all of Healthcares
Divisions. Reported revenue came in just above the prior-year quarter in the Energy Sector, due to
lower order intake in prior periods. On an organic basis, only Renewable Energy recorded higher
revenue in the Sector.
In Europe, C.I.S., Africa, Middle East, third-quarter revenue decreased 2% year-over-year,
including lower sales in Energy and Healthcare. Revenue in the Industry Sector came in just above
the prior-year period, with only Industry Automation and OSRAM reporting increases compared to the
third quarter a year earlier. Higher sales in Germany included growth in all Sectors, including a
strong revenue contribution from the Mobility Division and growth at
Industrys short-cycle businesses. Due primarily to positive currency
translation effects, particularly from the U.S. dollar, revenue rose 11% in the Americas, including
increases in reported revenue in all Sectors. On an organic basis, only the Healthcare Sector
recorded a modest sales increase in the U.S. year-over-year. Revenue rose 15% in Asia, Australia,
benefiting from positive currency translation effects. Double-digit revenue increases in Industry
and Healthcare were only partly offset by a decline in the Energy Sector. Revenue development in
China followed a similar pattern as for the Asia, Australia region overall. Revenue increased 23%
in India, including strong positive currency translation effects and substantially higher sales at
Power Transmission.
7
Consolidated Statements of Income
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Three months |
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ended June 30, |
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(in millions of ) |
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2010 |
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2009 |
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% Change |
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Gross profit on revenue |
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5,787 |
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4,981 |
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16 |
% |
as percentage of revenue |
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30.2 |
% |
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27.1 |
% |
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|
Gross profit for the third quarter rose 16% compared to the same period a year earlier as all
Sectors reported higher gross profits and increased gross profit margins year-over-year with
Industry and Healthcare delivering the strongest gross profit increases. Gross profit growth in
Industry year-over-year notably included volume-driven increases in capacity utilization in the
Sectors short-cycle businesses, primarily at Industry Automation and OSRAM. In the Healthcare
Sector, a significant factor in the year-over-year gross profit increase was the comparison to the
prior-year period that included a charge of 128 million related to particle therapy contracts at
Workflow & Solutions. While revenue remained flat in the Energy Sector, gross profit rose on higher
gross profit margins at all Divisions. In combination, the above factors resulted in a gross profit
margin of 30.2% for Siemens overall, significantly up from 27.1% in the third quarter a year
earlier.
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Three months |
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ended June 30, |
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(in millions of ) |
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2010 |
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2009 |
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% Change |
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Research and development expenses |
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(936 |
) |
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(989 |
) |
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(5 |
)% |
as percentage of revenue |
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4.9 |
% |
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|
5.4 |
% |
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|
Marketing, selling and general administrative expenses |
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(2,871 |
) |
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(2,586 |
) |
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|
11 |
% |
as percentage of revenue |
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|
15.0 |
% |
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|
14.1 |
% |
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|
|
Other operating income |
|
|
188 |
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|
597 |
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|
(69 |
)% |
Other operating expense |
|
|
(100 |
) |
|
|
(206 |
) |
|
|
(51 |
)% |
Income (loss) from investments accounted for using the equity method, net |
|
|
34 |
|
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|
(97 |
) |
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|
Interest income |
|
|
543 |
|
|
|
512 |
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|
|
6 |
% |
Interest expense |
|
|
(470 |
) |
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|
(508 |
) |
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|
(7 |
)% |
Other financial income (expense), net |
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(111 |
) |
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|
(42 |
) |
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|
164 |
% |
Research and development (R&D) expenses decreased to 936 million or 4.9% of revenues,
from 989
million or 5.4% of revenues in the prior-year period, including lower outlays in Energy and
Industry. Marketing, selling and general administrative (SG&A) expenses rose to 2.871 billion or
15.0% of revenues, from 2.586 billion or 14.1% of revenues in the third quarter a year earlier, on
increases in all Sectors.
Other operating income decreased to 188 million in the third quarter from 597 million in the same
period a year earlier. The prior-year quarter included a 309 million gain on the sale of our stake
in Fujitsu Siemens Computers (Holding) B.V. (FSC) to Fujitsu Limited as well as higher income
related to the disposal of real estate, including a gain of 221 million on the disposal of
Siemens residential real estate holdings. For comparison, in the current period Siemens ceased to
consolidate a subsidiary due to loss of control and recorded a related gain of 40 million. For
additional information regarding this gain, see Notes to Condensed Interim Consolidated Financial
Statements within this Interim Report.
Other operating expense was 100 million, down from
206 million in the third quarter of fiscal
2009. The prior-year quarter included a charge of 54 million related to a global settlement
agreement with the World Bank Group.
Income (loss) from investments accounted for using the equity method, net was a positive 34
million, compared to a negative 97 million in the third quarter a year earlier. The difference was
due primarily to an equity investment loss in the prior-year period of 121 million related to
Enterprise Networks Holding B.V. (EN).
Interest income increased to 543 million in the third quarter, from 512 million in the same
period a year earlier, due primarily to a higher expected return on plan assets related to our
pension plans. Interest expense was 470 million, down from 508 million in the prior-year quarter.
The reduction in interest expense included lower interest rates compared to the prior-year period.
8
Other financial income (expense), net was a negative 111 million in the third quarter,
compared to
a negative 42 million in the same period a year earlier.
The difference is due primarily to changes in fair market values for
derivatives, including interest rate derivatives, not qualifying for
hedge accounting.
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Three months |
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ended June 30, |
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|
(in millions of ) |
|
2010 |
|
|
2009 |
|
|
% Change |
|
Income from continuing operations before income taxes |
|
|
2,064 |
|
|
|
1,662 |
|
|
|
24 |
% |
Income taxes |
|
|
(623 |
) |
|
|
(438 |
) |
|
|
42 |
% |
as percentage of income from continuing operations before income taxes |
|
|
30 |
% |
|
|
26 |
% |
|
|
|
|
Income from continuing operations |
|
|
1,441 |
|
|
|
1,224 |
|
|
|
18 |
% |
Income (loss) from discontinued operations, net of income taxes |
|
|
(6 |
) |
|
|
93 |
|
|
|
|
|
Net income |
|
|
1,435 |
|
|
|
1,317 |
|
|
|
9 |
% |
Net income attributable to non-controlling interests |
|
|
24 |
|
|
|
57 |
|
|
|
|
|
Net income attributable to shareholders of Siemens AG |
|
|
1,411 |
|
|
|
1,260 |
|
|
|
12 |
% |
Income from continuing operations before income taxes was 2.064 billion in the third
quarter,
compared to 1.662 billion in the same period a year earlier. The change year-over-year was due to
the factors mentioned above, primarily including higher gross profit in all Sectors driven by
higher revenue and improved gross profit margins, partly offset by the gain on the sale of our
stake in FSC in the prior-year period. The effective tax rate was 30%, up from 26% in the third
quarter a year earlier. The prior-period rate was positively affected by the tax-free gain on the
sale of our stake in FSC, partly offset by the negative result from investments accounted for using
the equity method. As a result, Income from continuing operations after taxes was 1.441 billion in
the third quarter of fiscal 2010, up from 1.224 billion in the prior-year period.
Discontinued operations primarily include former Com activities, comprising telecommunications
carrier activities transferred into Nokia Siemens Networks B.V. (NSN) in the third quarter of
fiscal 2007; the enterprise networks business, 51% of which was divested during the fourth quarter
of fiscal 2008; and the mobile devices business sold to BenQ Corporation in fiscal 2005. Income
from discontinued operations in the current quarter was a negative 6 million, compared to a
positive 93 million in the third quarter a year earlier. The prior-year period included a positive
effect of 154 million from a settlement between Siemens and The Gores Group in connection with the
sale of the stake in the enterprise networks business. For additional information regarding
discontinued operations, see Notes to Condensed Interim Consolidated Financial Statements within
this Interim Report.
Net income for Siemens in the third quarter was 1.435 billion compared to 1.317 billion in the
same period a year earlier. Net income attributable to shareholders of Siemens AG was 1.411
billion, up from 1.260 billion in the third quarter of fiscal 2009.
9
Results of Siemens Nine months ended June 30, 2010
The following discussion presents selected information for Siemens for the first nine months of
fiscal 2010:
Orders and revenue
Both revenue and orders for the first nine months of fiscal 2010 came in 4% lower than the
prior-year period, at 54.749 billion and 57.691 billion, respectively. Organic volume development
was in line with reported figures, as currency exchange fluctuations within the first nine months
were largely offsetting. The combined book-to-bill ratio was 1.06 for Total Sectors and 1.05 for
Siemens overall for the current period.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New Orders (location of customer) |
|
|
|
Nine months |
|
|
|
|
|
|
|
|
|
ended June 30, |
|
|
% Change |
|
|
therein |
|
(in millions of ) |
|
2010 |
|
|
2009(1) |
|
|
Actual |
|
|
Adjusted(2) |
|
|
Currency |
|
|
Portfolio |
|
Europe, C.I.S.(3), Africa, Middle East |
|
|
31,755 |
|
|
|
35,643 |
|
|
|
(11 |
)% |
|
|
(11 |
)% |
|
|
1 |
% |
|
|
(1 |
)% |
therein Germany |
|
|
8,895 |
|
|
|
9,497 |
|
|
|
(6 |
)% |
|
|
(6 |
)% |
|
|
0 |
% |
|
|
0 |
% |
Americas |
|
|
16,232 |
|
|
|
14,487 |
|
|
|
12 |
% |
|
|
12 |
% |
|
|
0 |
% |
|
|
0 |
% |
therein U.S. |
|
|
11,607 |
|
|
|
10,718 |
|
|
|
8 |
% |
|
|
11 |
% |
|
|
(2 |
)% |
|
|
0 |
% |
Asia, Australia |
|
|
9,704 |
|
|
|
10,114 |
|
|
|
(4 |
)% |
|
|
(6 |
)% |
|
|
2 |
% |
|
|
0 |
% |
therein China |
|
|
3,986 |
|
|
|
4,190 |
|
|
|
(5 |
)% |
|
|
(4 |
)% |
|
|
(1 |
)% |
|
|
0 |
% |
therein India |
|
|
1,526 |
|
|
|
1,737 |
|
|
|
(12 |
)% |
|
|
(13 |
)% |
|
|
1 |
% |
|
|
0 |
% |
Siemens |
|
|
57,691 |
|
|
|
60,244 |
|
|
|
(4 |
)% |
|
|
(4 |
)% |
|
|
1 |
% |
|
|
(1 |
)% |
|
|
|
(1) |
|
Certain prior-year information was reclassified to conform to the current
regional presentation. |
|
(2) |
|
Excluding currency translation and portfolio effects. |
|
(3) |
|
Commonwealth of Independent States. |
Orders related to external customers in the first nine months of fiscal 2010 decreased 4%
year-over-year, due primarily to lower demand in the Energy Sector. Orders declined 11% in Energy,
primarily due to Fossil Power Generation which saw market contraction resulting in a significantly
lower volume from major orders compared to the prior-year period. In Industry, a rebound in orders
in short-cycle businesses, primarily at OSRAM and Industry Automation, was offset by lower order
intake at Mobility and Industry Solutions which recorded a lower volume from major orders
year-over-year. Nine-month Healthcare orders came in 5% above the prior-year level, due to strong
order intake at Imaging & IT.
On a geographic basis, double-digit order growth in the Americas was more than offset by declines
in other regions. In Europe, C.I.S., Africa, Middle East orders fell 11% driven by a decline in the
Energy Sector. Energy orders decreased 22%, largely due to lower volume from major orders at Fossil
Power Generation and Renewable Energy. In the Industry Sector, orders for the region came in
slightly lower year-over-year, as growth at the Sectors short-cycle businesses was offset by
slower demand at other Divisions, particularly at Industry Solutions. Healthcare orders remained
stable in the region. Within the region, orders in Germany came in 6% lower compared to the
prior-year period, which included large contract wins at Mobility. In the Americas orders rose 12%
on growth in all Sectors. The increase was driven by a 32% surge in the Energy Sector, due largely
to a higher volume from major orders at Renewable Energy. Order growth in the U.S. included a
substantial part of these large contract wins. In Asia, Australia nine-month orders came in 4%
lower compared to the prior-year period, due in part to a significantly lower volume from major
orders in Industry and Energy, primarily at Mobility and Fossil Power Generation. Healthcare orders
in the region came in above the prior-year level, led by strong demand at Imaging & IT. The lower
volume from major orders mentioned above for the region was evident in China and India. The
prior-year period included a large contract win for high-speed trains in China and major orders for
Power Transmission and Industry Solutions in India.
10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue (location of customer) |
|
|
|
Nine months |
|
|
|
|
|
|
|
|
|
ended June 30, |
|
|
% Change |
|
|
therein |
|
(in millions of ) |
|
2010 |
|
|
2009(1) |
|
|
Actual |
|
|
Adjusted(2) |
|
|
Currency |
|
|
Portfolio |
|
Europe, C.I.S.(3), Africa, Middle East |
|
|
30,169 |
|
|
|
32,151 |
|
|
|
(6 |
)% |
|
|
(6 |
)% |
|
|
0 |
% |
|
|
(1 |
)% |
therein Germany |
|
|
8,270 |
|
|
|
8,588 |
|
|
|
(4 |
)% |
|
|
(3 |
)% |
|
|
0 |
% |
|
|
0 |
% |
Americas |
|
|
14,724 |
|
|
|
15,654 |
|
|
|
(6 |
)% |
|
|
(6 |
)% |
|
|
0 |
% |
|
|
0 |
% |
therein U.S. |
|
|
10,654 |
|
|
|
11,944 |
|
|
|
(11 |
)% |
|
|
(8 |
)% |
|
|
(2 |
)% |
|
|
0 |
% |
Asia, Australia |
|
|
9,857 |
|
|
|
9,132 |
|
|
|
8 |
% |
|
|
5 |
% |
|
|
3 |
% |
|
|
0 |
% |
therein China |
|
|
4,063 |
|
|
|
3,791 |
|
|
|
7 |
% |
|
|
8 |
% |
|
|
(1 |
)% |
|
|
0 |
% |
therein India |
|
|
1,350 |
|
|
|
1,149 |
|
|
|
17 |
% |
|
|
13 |
% |
|
|
4 |
% |
|
|
0 |
% |
Siemens |
|
|
54,749 |
|
|
|
56,937 |
|
|
|
(4 |
)% |
|
|
(4 |
)% |
|
|
1 |
% |
|
|
0 |
% |
|
|
|
(1) |
|
Certain prior-year information was reclassified to conform to the current
regional presentation. |
|
(2) |
|
Excluding currency translation and portfolio effects. |
|
(3) |
|
Commonwealth of Independent States. |
Revenue related to external customers declined 4% compared to the first nine months a year earlier,
on decreases in Industry and Energy. Revenue in Industry came in 4% below the prior-year level,
driven by lower sales at Drive Technologies and Industry Solutions. In contrast, nine-month revenue
at OSRAM rose by double digits year-over-year. The Energy Sector also posted a revenue decline of
4% on lower revenue in four of its five Divisions. Healthcare revenue for the first nine months
came in 2% above the prior-year period, including modest growth at Imaging & IT and Diagnostics.
On a geographic basis, growth in Asia, Australia was more than offset by declines in other regions.
In Europe, C.I.S., Africa, Middle East revenue decreased 6% year-over-year due primarily to lower
sales in the Industry Sector. Apart from OSRAM, all Divisions in the Sector reported lower
nine-month revenues year-over-year, including double-digit declines at Drive Technologies and
Industry Solutions. Revenue for Energy and Healthcare declined slightly in the region. In Germany,
higher sales in Energy and Healthcare were more than offset by a revenue decline in the Industry
Sector. In the Americas, revenue fell 6% year-over-year on lower sales in the U.S. and decreases in
all Sectors. In Asia, Australia, revenue rose 8% in the first nine months of fiscal 2010 on
double-digit growth in Industry and Healthcare. Revenue came in higher at five of the Industry
Sectors six Divisions, and all Healthcare Divisions reported double-digit revenue increases
year-over-year. The Energy Sector recorded a revenue decline in the region. Higher revenue in India
includes double-digit increases in all Sectors.
Consolidated Statements of Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine months |
|
|
|
|
|
|
ended June 30, |
|
|
|
|
(in millions of ) |
|
2010 |
|
|
2009 |
|
|
% Change |
|
Gross profit on revenue |
|
|
16,348 |
|
|
|
15,582 |
|
|
|
5 |
% |
as percentage of revenue |
|
|
29.9 |
% |
|
|
27.4 |
% |
|
|
|
|
Gross profit for the first nine months came in 5% above the prior-year period on higher gross
profit margins in all Sectors, benefiting from a previously disclosed pension curtailment gain in
the second quarter of fiscal 2010. A double-digit gross profit increase in the Healthcare Sector
included higher gross profits and margins in all Divisions. These increases benefited from a
positive effect from currency hedging in the current period, and from comparison with the
prior-year period which was burdened by charges of 169 million related to particle therapy
contracts. While Energy and Industry recorded lower nine-month revenues year-over-year, both
Sectors reported higher gross profits. Gross profit in Energy rose on a more favorable revenue mix
and strong project performance. Higher gross profit in Industry included volume-driven increases in
capacity utilization at OSRAM, and to a lesser extent, at Industry Automation as well as growth at
Mobility. The other Divisions in Industry reported lower gross profits year-over-year. In
combination, the above factors resulted in a gross profit margin of 29.9% for Siemens overall,
significantly up from 27.4% in the first nine months a year earlier.
11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine months |
|
|
|
|
|
|
ended June 30, |
|
|
|
|
(in millions of ) |
|
2010 |
|
|
2009 |
|
|
% Change |
|
Research and development expenses |
|
|
(2,678 |
) |
|
|
(2,875 |
) |
|
|
(7 |
)% |
as percentage of revenue |
|
|
4.9 |
% |
|
|
5.0 |
% |
|
|
|
|
Marketing, selling and general administrative expenses |
|
|
(7,941 |
) |
|
|
(7,974 |
) |
|
|
0 |
% |
as percentage of revenue |
|
|
14.5 |
% |
|
|
14.0 |
% |
|
|
|
|
Other operating income |
|
|
656 |
|
|
|
881 |
|
|
|
(26 |
)% |
Other operating expense |
|
|
(190 |
) |
|
|
(491 |
) |
|
|
(61 |
)% |
Income (loss) from investments accounted for using the equity method, net |
|
|
85 |
|
|
|
(29 |
) |
|
|
|
|
Interest income |
|
|
1,590 |
|
|
|
1,618 |
|
|
|
(2 |
)% |
Interest expense |
|
|
(1,406 |
) |
|
|
(1,699 |
) |
|
|
(17 |
)% |
Other financial income (expense), net |
|
|
(174 |
) |
|
|
(281 |
) |
|
|
(38 |
)% |
R&D expenses decreased to 2.678 billion or 4.9% of revenues, from 2.875 billion or 5.0% of
revenues in the prior-year nine-month period, including lower outlays in Industry and Healthcare.
SG&A expenses came in at 7.941 billion, nearly unchanged from 7.974 billion in the first nine
months of fiscal 2009. As revenue declined in the current period, the SG&A expense ratio rose to
14.5% compared to 14.0% a year earlier.
Other operating income decreased to 656 million in the first nine months of fiscal 2010.
The
current period includes a gain on the sale of the Mobility Divisions airfield lighting business.
In addition, as mentioned above for the third quarter, Siemens ceased to consolidate a subsidiary
due to loss of control and recorded a related gain of 40 million in the current period. Further,
the first nine months of fiscal 2010 benefited from higher gains in connection with
compliance-related matters, including a gain of 84 million related to an agreement with the
provider of the Siemens directors and officers liability insurance, a net gain related to
settlements with former members of Siemens Managing Board and Supervisory Board, and total gains
of 40 million related to the recovery of funds frozen by authorities. For comparison, Other
operating income of 881 million in the first nine months a year earlier included a gain of 327
million on the sale of our stake in FSC, higher gains related to the disposal of real estate, most
notably Siemens residential real estate holdings as mentioned earlier for the third quarter, as
well as income related to legal and regulatory matters.
Other operating expense was 190 million, down from
491 million in the first nine months a year
earlier. The difference is due partly to expenses in the prior-year period for outside advisors
engaged in connection with investigations into alleged violations of anti-corruption laws and
related matters as well as remediation activities, which amounted to 90 million. In addition, the
first nine months of fiscal 2009 included the above-mentioned third quarter charge of 54 million
related to a global settlement agreement with the World Bank Group as well as expenses related to
the divestment of an industrial manufacturing unit in Austria.
Income (loss) from investments accounted for using the equity method, net improved to a positive
85 million compared to a negative 29 million in the first nine months a year earlier, which
included an equity investment loss of 119 million related to EN.
Interest income decreased slightly to 1.590 billion in the first nine months, from 1.618 billion
in the same period a year earlier. Interest expense was 1.406 billion, down from 1.699 billion in
the first nine months of fiscal 2009. The decline in interest expense included lower interest rates
compared to the prior-year period.
Other financial income (expense), net was a negative 174 million in the first nine months
compared
to a negative 281 million a year earlier. While the current nine-month period included higher
expenses related to the interest component associated with the measurement of provisions, primarily
related to a major asset retirement obligation, the same period a year earlier included higher
expenses resulting from allowances and write offs of finance receivables, as well as negative
results of hedging activities not qualifying for hedge accounting.
12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine months |
|
|
|
|
|
|
ended June 30, |
|
|
|
|
(in millions of ) |
|
2010 |
|
|
2009 |
|
|
% Change |
|
Income from continuing operations before income taxes |
|
|
6,290 |
|
|
|
4,732 |
|
|
|
33 |
% |
Income taxes |
|
|
(1,839 |
) |
|
|
(1,293 |
) |
|
|
42 |
% |
as percentage of income from continuing operations before income taxes |
|
|
29 |
% |
|
|
27 |
% |
|
|
|
|
Income from continuing operations |
|
|
4,451 |
|
|
|
3,439 |
|
|
|
29 |
% |
Income from discontinued operations, net of income taxes |
|
|
13 |
|
|
|
121 |
|
|
|
(89 |
)% |
Net income |
|
|
4,464 |
|
|
|
3,560 |
|
|
|
25 |
% |
Net income attributable to non-controlling interests |
|
|
98 |
|
|
|
135 |
|
|
|
|
|
Net income attributable to shareholders of Siemens AG |
|
|
4,366 |
|
|
|
3,425 |
|
|
|
27 |
% |
Income from continuing operations before income taxes was 6.290 billion in the first nine
months,
compared to 4.732 billion in the same period a year earlier. The change year-over-year was due to
the factors mentioned above, primarily including higher gross profit in all Sectors, an improved
financial result, and a reduction in R&D expenses compared to the prior-year period. The effective
tax rate was 29%, up from 27% in the first nine months a year earlier. The effective tax rate in
the prior-year period was positively affected by the tax-free gain on the sale of our stake in FSC.
As a result, Income from continuing operations after taxes was 4.451 billion in the first nine
months of fiscal 2010, up from 3.439 billion in the prior-year period.
Discontinued operations primarily include former Com activities, comprising telecommunications
carrier activities transferred into NSN in the third quarter of fiscal 2007; the enterprise
networks business, 51% of which was divested during the fourth quarter of fiscal 2008; and the
mobile devices business sold to BenQ Corporation in fiscal 2005. Income from discontinued
operations in the first nine months of fiscal 2010 was a positive 13 million, down from a positive
121 million in the same period a year earlier. The net result in the prior-year period related
mainly to legal matters in connection with the former Com activities and a loss on the sale of the
stake in the enterprise networks business which was compensated by a positive income effect of 154
million from a settlement between Siemens and The Gores Group in the third quarter of fiscal 2009.
For additional information regarding discontinued operations, see Notes to Condensed Interim
Consolidated Financial Statements within this Interim Report.
Net income for Siemens in the first nine months was 4.464 billion compared to 3.560 billion in
the same period a year earlier. Net income attributable to shareholders of Siemens AG was 4.366
billion, up from 3.425 billion in the first nine months of fiscal 2009.
Portfolio activities
At the beginning of November 2009, Siemens completed the acquisition of 100% of Solel Solar Systems
Ltd. (Solel), a solar thermal power technology company. Solel, which was consolidated as of
November 2009, will be integrated into the Energy Sectors Renewable Energy Division. The aggregate
consideration amounts to approximately 279 million (including cash acquired).
At the beginning of November 2009, Siemens sold its airfield lighting business, which was part of
the Industry Sectors Mobility Division.
At the end of December 2009, Siemens sold its 25% minority stake in Dräger Medical AG & Co. KG to
the majority shareholder Drägerwerk AG & Co. KGaA. The investment was accounted for using the
equity method in the Healthcare Sector.
Siemens completed certain other portfolio transactions during the first nine months of fiscal 2010,
which did not have a significant effect on its Interim Consolidated Financial Statements. For
further information on acquisitions and dispositions, see Notes to Condensed Interim Consolidated
Financial Statements.
13
Segment information analysis
Sectors
Industry Three months ended June 30, 2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sector |
|
Three months |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ended June 30, |
|
|
% Change |
|
|
therein |
|
(in millions of ) |
|
2010 |
|
|
2009 |
|
|
Actual |
|
|
Adjusted(1) |
|
|
Currency |
|
|
Portfolio |
|
Profit |
|
|
900 |
|
|
|
534 |
|
|
|
69 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Profit margin |
|
|
10.3 |
% |
|
|
6.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New orders |
|
|
8,805 |
|
|
|
6,597 |
|
|
|
33 |
% |
|
|
27 |
% |
|
|
7 |
% |
|
|
(1 |
)% |
Revenue |
|
|
8,720 |
|
|
|
8,129 |
|
|
|
7 |
% |
|
|
3 |
% |
|
|
5 |
% |
|
|
(1 |
)% |
|
|
|
(1) |
|
Excluding currency translation and portfolio effects. |
Industry increased its third-quarter profit, revenue and orders compared to the prior-year period,
when the Sector saw substantial weakness in its end markets. With an improved macroeconomic
environment in the current quarter and continued execution on profitability initiatives, Industry
generated Sector profit of 900 million. The Sectors steadily recovering short-cycle businesses
posted strong revenue growth and volume-driven profit increases, led by Industry Automation and
OSRAM. Revenue grew more slowly for Industry overall, at 7%. New orders climbed 33% year-over-year
on growth at all Divisions. In addition to organic growth, the Sectors revenue and order totals
benefited from currency translation effects amounting to seven percentage points for orders and
five percentage points for revenue. Growth in orders was well-distributed geographically, with all
three regions posting double-digit increases. While all three regions posted higher revenue, growth
was driven by a double-digit increase in Asia, Australia, particularly including China. Industrys
book-to-bill ratio was above 1 for the quarter, and its order backlog increased to 29 billion.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Divisions |
|
New Orders |
|
|
|
Three months |
|
|
|
|
|
|
|
|
|
ended June 30, |
|
|
% Change |
|
|
therein |
|
(in millions of ) |
|
2010 |
|
|
2009 |
|
|
Actual |
|
|
Adjusted(1) |
|
|
Currency |
|
|
Portfolio |
|
Industry Automation(2)(3) |
|
|
1,783 |
|
|
|
1,265 |
|
|
|
41 |
% |
|
|
35 |
% |
|
|
6 |
% |
|
|
0 |
% |
Drive Technologies |
|
|
1,859 |
|
|
|
1,358 |
|
|
|
37 |
% |
|
|
31 |
% |
|
|
6 |
% |
|
|
0 |
% |
Building Technologies(2) |
|
|
1,823 |
|
|
|
1,599 |
|
|
|
14 |
% |
|
|
8 |
% |
|
|
6 |
% |
|
|
0 |
% |
OSRAM |
|
|
1,153 |
|
|
|
911 |
|
|
|
27 |
% |
|
|
21 |
% |
|
|
8 |
% |
|
|
(2 |
)% |
Industry Solutions |
|
|
1,487 |
|
|
|
1,170 |
|
|
|
27 |
% |
|
|
19 |
% |
|
|
8 |
% |
|
|
0 |
% |
Mobility |
|
|
1,236 |
|
|
|
880 |
|
|
|
40 |
% |
|
|
34 |
% |
|
|
11 |
% |
|
|
(4 |
)% |
|
|
|
(1) |
|
Excluding currency translation and portfolio effects. |
|
(2) |
|
At the beginning of fiscal 2010, the low-voltage switchgear business was transferred from
Industry Automation to Building Technologies. Prior-year amounts were reclassified for comparison purposes. |
|
(3) |
|
At the beginning of fiscal 2010, a production site was transferred from Industry Automation
to Drive Technologies. Prior-year amounts were reclassified for comparison purposes. |
14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Divisions |
|
Revenue |
|
|
|
Three months |
|
|
|
|
|
|
|
|
|
ended June 30, |
|
|
% Change |
|
|
therein |
|
(in millions of ) |
|
2010 |
|
|
2009 |
|
|
Actual |
|
|
Adjusted(1) |
|
|
Currency |
|
|
Portfolio |
|
Industry Automation(2)(3) |
|
|
1,587 |
|
|
|
1,279 |
|
|
|
24 |
% |
|
|
19 |
% |
|
|
5 |
% |
|
|
0 |
% |
Drive Technologies |
|
|
1,815 |
|
|
|
1,699 |
|
|
|
7 |
% |
|
|
3 |
% |
|
|
4 |
% |
|
|
0 |
% |
Building Technologies(2) |
|
|
1,738 |
|
|
|
1,657 |
|
|
|
5 |
% |
|
|
0 |
% |
|
|
5 |
% |
|
|
0 |
% |
OSRAM |
|
|
1,153 |
|
|
|
911 |
|
|
|
27 |
% |
|
|
21 |
% |
|
|
8 |
% |
|
|
(2 |
)% |
Industry Solutions |
|
|
1,461 |
|
|
|
1,562 |
|
|
|
(6 |
)% |
|
|
(11 |
)% |
|
|
5 |
% |
|
|
0 |
% |
Mobility |
|
|
1,593 |
|
|
|
1,590 |
|
|
|
0 |
% |
|
|
(1 |
)% |
|
|
4 |
% |
|
|
(2 |
)% |
|
|
|
(1) |
|
Excluding currency translation and portfolio effects. |
|
(2) |
|
At the beginning of fiscal 2010, the low-voltage switchgear business was transferred from
Industry Automation to Building Technologies. Prior-year amounts were reclassified for comparison purposes. |
|
(3) |
|
At the beginning of fiscal 2010, a production site was transferred from Industry Automation
to Drive Technologies. Prior-year amounts were reclassified for comparison purposes. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Divisions |
|
Profit |
|
|
Profit margin |
|
|
|
Three months |
|
|
|
|
|
|
Three months |
|
|
|
ended June 30, |
|
|
|
|
|
|
ended June 30, |
|
(in millions of ) |
|
2010 |
|
|
2009 |
|
|
% Change |
|
|
2010 |
|
|
2009 |
|
Industry Automation(1) |
|
|
278 |
|
|
|
100 |
|
|
|
178 |
% |
|
|
17.5 |
% |
|
|
7.8 |
% |
Drive Technologies |
|
|
219 |
|
|
|
171 |
|
|
|
28 |
% |
|
|
12.0 |
% |
|
|
10.1 |
% |
Building Technologies(1) |
|
|
93 |
|
|
|
69 |
|
|
|
35 |
% |
|
|
5.4 |
% |
|
|
4.2 |
% |
OSRAM |
|
|
127 |
|
|
|
8 |
|
|
|
>200 |
% |
|
|
11.0 |
% |
|
|
0.9 |
% |
Industry Solutions |
|
|
75 |
|
|
|
90 |
|
|
|
(16 |
)% |
|
|
5.2 |
% |
|
|
5.8 |
% |
Mobility |
|
|
107 |
|
|
|
98 |
|
|
|
10 |
% |
|
|
6.7 |
% |
|
|
6.2 |
% |
|
|
|
(1) |
|
At the beginning of fiscal 2010, the low-voltage switchgear business was transferred from
Industry Automation to Building Technologies. Prior-year amounts were reclassified for comparison purposes. |
Industry Automation was the Sectors top profit contributor, delivering third-quarter profit of
278 million. Profit rose sharply compared to the prior-year period, due in part to economies of
scale on significantly higher revenue. The Division also improved its business mix while
maintaining cost discipline. Industry Automation recorded double-digit increases in revenue and
orders in all three regions, with the fastest growth coming from Asia, Australia. Purchase price
accounting (PPA) effects related to the fiscal 2007 acquisition of UGS Corp. were 37 million
compared to 34 million in the third quarter a year earlier.
Third-quarter profit at Drive Technologies rose 28% year-over-year, to 219 million. The
increase
was driven by a strong earnings improvement in the Divisions fast-growing short-cycle activities,
which increased capacity utilization on higher revenue. Third-quarter revenue rose slowly for the
Division overall due to the Divisions longer cycle businesses. Against a low basis of comparison
in the prior-year quarter, orders came in 37% higher with increases in all business units and all
three regions.
Building Technologies increased its third-quarter profit year-over-year to 93 million, due
mainly
to earnings improvement in its low-voltage business. Revenue and orders grew in Asia, Australia and
the Americas, even though the commercial construction market in the U.S. remained weak.
Strong demand for OSRAMs LEDs and automotive solutions fueled a 27% rise in third quarter revenue
at OSRAM. The Division combined higher capacity utilization with an improved product mix and
streamlined cost structure to generate 127 million in profit. Revenue climbed strongly in all
geographic regions compared to the prior-year quarter. With increasing demand for next-generation
solid-state and LED lighting solutions, OSRAM intends to continue investing in market expansion and
LED production capacity in coming quarters.
Industry Solutions posted profit of 75 million in the third quarter, below the level of the
prior-year period. Third-quarter revenue declined 6% year-over-year, influenced by lower order
intake in recent periods particularly in the metals technologies business. Against a low basis of
comparison, orders came in 27% above the level of the prior-year quarter on growth in Asia,
Australia and the Americas.
15
Mobility increased third-quarter profit to 107 million on level revenue, as the Division
benefited
from the execution of programs to improve performance in its project business. Order growth came
primarily from
significantly higher orders in the rolling stock business, including a major order
in Russia.
Industry Nine months ended June 30, 2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sector |
|
Nine months |
|
|
|
|
|
|
|
|
|
ended June 30, |
|
|
% Change |
|
|
therein |
|
(in millions of ) |
|
2010 |
|
|
2009 |
|
|
Actual |
|
|
Adjusted(1) |
|
|
Currency |
|
|
Portfolio |
|
Profit |
|
|
2,595 |
|
|
|
2,139 |
|
|
|
21 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Profit margin |
|
|
10.3 |
% |
|
|
8.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New orders |
|
|
25,076 |
|
|
|
25,174 |
|
|
|
0 |
% |
|
|
(1 |
)% |
|
|
1 |
% |
|
|
0 |
% |
Revenue |
|
|
25,088 |
|
|
|
26,062 |
|
|
|
(4 |
)% |
|
|
(4 |
)% |
|
|
1 |
% |
|
|
0 |
% |
|
|
|
(1) |
|
Excluding currency translation and portfolio effects. |
Industry recorded a 21% increase in profit for the first nine months due to profitability measures
as well as a recovery in the markets of its short-cycle businesses beginning in the second quarter
of the current fiscal year. Most Divisions increased their profit compared to the first nine months
a year earlier, with the largest contributions coming from the Sectors short-cycle businesses at
Industry Automation and OSRAM. Profit declined significantly in longer-cycle businesses at Industry
Solutions and Drive Technologies.
Nine-month profit benefited from 76 million in gains related to curtailment of pension plans in
the U.S., which positively affected results at all Divisions. Profit also included a 44 million
net gain at Mobility on the sale of its airfield lighting business. These gains were partly offset
by charges related to a project engagement with a local partner in the U.S. and a provision for a
supplier-related warranty. Industry also took 78 million in expenses for staff reduction measures
in the current period.
Strong order growth in the third quarter enabled nine-month orders at Industry to reach the level
of the prior-year period. Order growth in most Divisions, most notably Industry Automation and
OSRAM, were offset by declines at Mobility, which saw lower volume from major orders
year-over-year, and at Industry Solutions. Revenue for the first nine months was 4% below the
prior-year level due to double-digit declines at Drive Technologies and Industry Solutions
resulting from lower demand in their longer-cycle manufacturing and process businesses. These
declines were only partly offset by a 15% revenue increase year-over-year at OSRAM. On a geographic
basis, the Sectors order intake in all three regions came in near prior-year levels. Higher
revenue in Asia, Australia was more than offset by declines in the Europe, C.I.S., Africa, Middle
East region and the Americas.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Divisions |
|
New Orders |
|
|
|
Nine months |
|
|
|
|
|
|
|
|
|
ended June 30, |
|
|
% Change |
|
|
therein |
|
(in millions of ) |
|
2010 |
|
|
2009 |
|
|
Actual |
|
|
Adjusted(1) |
|
|
Currency |
|
|
Portfolio |
|
Industry Automation(2)(3) |
|
|
4,698 |
|
|
|
4,193 |
|
|
|
12 |
% |
|
|
11 |
% |
|
|
1 |
% |
|
|
0 |
% |
Drive Technologies |
|
|
5,246 |
|
|
|
5,071 |
|
|
|
3 |
% |
|
|
3 |
% |
|
|
1 |
% |
|
|
0 |
% |
Building Technologies(2) |
|
|
5,111 |
|
|
|
5,066 |
|
|
|
1 |
% |
|
|
0 |
% |
|
|
1 |
% |
|
|
0 |
% |
OSRAM |
|
|
3,429 |
|
|
|
2,979 |
|
|
|
15 |
% |
|
|
15 |
% |
|
|
0 |
% |
|
|
0 |
% |
Industry Solutions |
|
|
4,148 |
|
|
|
4,823 |
|
|
|
(14 |
)% |
|
|
(15 |
)% |
|
|
1 |
% |
|
|
0 |
% |
Mobility |
|
|
4,264 |
|
|
|
5,012 |
|
|
|
(15 |
)% |
|
|
(15 |
)% |
|
|
1 |
% |
|
|
(1 |
)% |
|
|
|
(1) |
|
Excluding currency translation and portfolio effects. |
|
(2) |
|
At the beginning of fiscal 2010, the low-voltage switchgear business was transferred from
Industry Automation to Building Technologies. Prior-year amounts were reclassified for comparison purposes. |
|
(3) |
|
At the beginning of fiscal 2010, a production site was transferred from Industry Automation
to Drive Technologies. Prior-year amounts were reclassified for comparison purposes. |
16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Divisions |
|
Revenue |
|
|
|
Nine months |
|
|
|
|
|
|
|
|
|
ended June 30, |
|
|
% Change |
|
|
therein |
|
(in millions of ) |
|
2010 |
|
|
2009 |
|
|
Actual |
|
|
Adjusted(1) |
|
|
Currency |
|
|
Portfolio |
|
Industry Automation(2)(3) |
|
|
4,410 |
|
|
|
4,268 |
|
|
|
3 |
% |
|
|
3 |
% |
|
|
1 |
% |
|
|
0 |
% |
Drive Technologies |
|
|
4,946 |
|
|
|
5,713 |
|
|
|
(13 |
)% |
|
|
(14 |
)% |
|
|
1 |
% |
|
|
0 |
% |
Building Technologies(2) |
|
|
4,954 |
|
|
|
5,185 |
|
|
|
(4 |
)% |
|
|
(5 |
)% |
|
|
1 |
% |
|
|
0 |
% |
OSRAM |
|
|
3,429 |
|
|
|
2,979 |
|
|
|
15 |
% |
|
|
15 |
% |
|
|
0 |
% |
|
|
0 |
% |
Industry Solutions |
|
|
4,381 |
|
|
|
5,117 |
|
|
|
(14 |
)% |
|
|
(15 |
)% |
|
|
1 |
% |
|
|
0 |
% |
Mobility |
|
|
4,751 |
|
|
|
4,696 |
|
|
|
1 |
% |
|
|
1 |
% |
|
|
1 |
% |
|
|
(1 |
)% |
|
|
|
(1) |
|
Excluding currency translation and portfolio effects. |
|
(2) |
|
At the beginning of fiscal 2010, the low-voltage switchgear business was transferred from
Industry Automation to Building Technologies. Prior-year amounts were reclassified for comparison purposes. |
|
(3) |
|
At the beginning of fiscal 2010, a production site was transferred from Industry Automation
to Drive Technologies. Prior-year amounts were reclassified for comparison purposes. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Divisions |
|
Profit |
|
|
Profit margin |
|
|
|
Nine months |
|
|
|
|
|
|
Nine months |
|
|
|
ended June 30, |
|
|
|
|
|
|
ended June 30, |
|
(in millions of ) |
|
2010 |
|
|
2009 |
|
|
% Change |
|
|
2010 |
|
|
2009 |
|
Industry Automation(1) |
|
|
714 |
|
|
|
473 |
|
|
|
51 |
% |
|
|
16.2 |
% |
|
|
11.1 |
% |
Drive Technologies |
|
|
573 |
|
|
|
675 |
|
|
|
(15 |
)% |
|
|
11.6 |
% |
|
|
11.8 |
% |
Building Technologies(1) |
|
|
308 |
|
|
|
269 |
|
|
|
14 |
% |
|
|
6.2 |
% |
|
|
5.2 |
% |
OSRAM |
|
|
432 |
|
|
|
108 |
|
|
|
>200 |
% |
|
|
12.6 |
% |
|
|
3.6 |
% |
Industry Solutions |
|
|
158 |
|
|
|
327 |
|
|
|
(52 |
)% |
|
|
3.6 |
% |
|
|
6.4 |
% |
Mobility |
|
|
399 |
|
|
|
289 |
|
|
|
38 |
% |
|
|
8.4 |
% |
|
|
6.2 |
% |
|
|
|
(1) |
|
At the beginning of fiscal 2010, the low-voltage switchgear business was transferred from
Industry Automation to Building Technologies. Prior-year amounts were reclassified for comparison purposes. |
Accelerating customer demand during the first three quarters of fiscal 2010 fueled a broad-based
increase in orders at Industry Automation year-over-year. Orders grew in all three regions, with
the strongest contribution coming from Asia, Australia. Revenue growth lagged behind order
development as strong growth in Asia, Australia was largely offset by lower revenue in Europe,
C.I.S., Africa, Middle East. Profit rose sharply year-over-year on an improved business mix,
stronger capacity utilization and as a consequence of profitability measures. PPA effects related
to the acquisition of UGS Corp. were 103 million in the current period compared to 105 million in
the first nine months a year earlier.
Orders rose slightly at Drive Technologies for the first nine months, driven by the Divisions
short-cycle businesses and demand from Asia, Australia. Revenue came in 13% below the prior-year
level including double-digit declines in the regions Europe, C.I.S., Africa, Middle East and the
Americas. Declining revenue and lower capacity utilization led to a 15% decrease in profit
year-over-year.
Building Technologies orders came in slightly above the prior-year level due mainly to higher
demand in Asia, Australia, whereas revenue declined 4% compared to the prior-year period as higher
revenue in Asia, Australia was more than offset by lower revenue in Europe, C.I.S., Africa, Middle
East and the Americas. Despite a decline in revenue, cost discipline enabled Building Technologies
to increase its profit year-over-year. The Divisions low-voltage business contributed strongly to
positive profit development. Nine-month profit included the charge for the supplier-related
warranty mentioned above, which was largely offset by the Divisions portion of the pension
curtailment gain also mentioned above.
OSRAM achieved a double-digit increase in nine-month revenue year-over-year, on strong demand in
its LED and automotive businesses. A year earlier, these businesses were heavily affected by the
economic downturn. Increased capacity utilization, an improved business mix and a streamlined cost
structure led to sharply improved profit compared to the prior-year period. Profit in the current
period benefited from 23 million of the pension gain mentioned above, while the prior-year period
included a positive effect from currency hedging activities not qualifying for hedge accounting.
17
Orders and revenue at Industry Solutions both declined 14% compared to the first nine months a year
earlier. The sharpest drop came in the Divisions large metal technologies business. Profit
declined by more than
half year-over-year due in part to lower revenue and reduced capacity utilization.
Furthermore, profit in the current period was burdened by 79 million in charges related to a
project engagement with a local partner in the U.S. and 39 million in expenses for staff reduction
measures.
Nine-month profit at Mobility improved significantly year-over-year due partly to selective
order intake in prior periods and the execution of programs to improve the performance in its
project business. Profit also benefited from the 44 million net gain on the sale of the airfield
lighting business and from a portion of the pension gain mentioned above. Profit in the prior-year
period included a positive 10 million effect related to the settlement of a claim in the rolling
stock business. Revenue was up slightly year-over-year on strong growth in Asia, Australia. New
orders at Mobility declined year-over-year due to a higher volume from major orders in the nine
months of the previous fiscal year, including a large train order in China. As a result, order
intake was lower in all regions, particularly in Asia, Australia.
Energy Three months ended June 30, 2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sector |
|
Three months |
|
|
|
|
|
|
|
|
|
ended June 30, |
|
|
% Change |
|
|
therein |
|
(in millions of ) |
|
2010 |
|
|
2009 |
|
|
Actual |
|
|
Adjusted(1) |
|
|
Currency |
|
|
Portfolio |
|
Profit |
|
|
925 |
|
|
|
863 |
|
|
|
7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Profit margin |
|
|
14.3 |
% |
|
|
13.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New orders |
|
|
8,061 |
|
|
|
6,849 |
|
|
|
18 |
% |
|
|
12 |
% |
|
|
6 |
% |
|
|
0 |
% |
Revenue |
|
|
6,462 |
|
|
|
6,436 |
|
|
|
0 |
% |
|
|
(5 |
)% |
|
|
5 |
% |
|
|
0 |
% |
|
|
|
(1) |
|
Excluding currency translation and portfolio effects. |
The Energy Sector was again the top contributor to Total Sectors profit, generating 925
million in profit in the third quarter. The Sector continued to execute well on its substantial
order backlog, particularly at Fossil Power Generation, Renewable Energy and Power Transmission. As
a result, third-quarter profit was up 7% year-over-year on higher earnings in nearly all Divisions.
The broad energy market showed signs of improvement, and for the first time in more than a
year the Sector posted a quarterly increase in new orders compared to a prior-year period. Major
orders played a substantial role in the Sectors 18% order increase, most notably at Power
Transmission, Renewable Energy and Oil & Gas. In addition to organic growth, the Sectors order
total benefited from currency translation effects amounting to six percentage points. On a
geographic basis, orders in the current period rose in Europe, C.I.S., Africa, Middle East and the
Americas, and declined in Asia, Australia. Third-quarter revenue remained flat year-over-year, due
in part to a positive currency translation effect that added five percentage points to reported
revenue. This result was due primarily to lower order intake in prior periods. Revenue was higher
in the Americas and came in lower in Asia, Australia and Europe, C.I.S., Africa, Middle East.
Energys book-to-bill ratio was 1.25 for the quarter. In combination with positive currency
translation effects, this took the Sectors order backlog up to 54 billion.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Divisions |
|
New Orders |
|
|
|
Three months |
|
|
|
|
|
|
|
|
|
ended June 30, |
|
|
% Change |
|
|
therein |
|
(in millions of ) |
|
2010 |
|
|
2009 |
|
|
Actual |
|
|
Adjusted(1) |
|
|
Currency |
|
|
Portfolio |
|
Fossil Power Generation |
|
|
2,097 |
|
|
|
2,447 |
|
|
|
(14 |
)% |
|
|
(20 |
)% |
|
|
5 |
% |
|
|
0 |
% |
Renewable Energy |
|
|
2,271 |
|
|
|
1,802 |
|
|
|
26 |
% |
|
|
22 |
% |
|
|
4 |
% |
|
|
0 |
% |
Oil & Gas |
|
|
1,268 |
|
|
|
807 |
|
|
|
57 |
% |
|
|
48 |
% |
|
|
10 |
% |
|
|
0 |
% |
Power Transmission |
|
|
1,787 |
|
|
|
1,215 |
|
|
|
47 |
% |
|
|
39 |
% |
|
|
8 |
% |
|
|
0 |
% |
Power Distribution |
|
|
768 |
|
|
|
739 |
|
|
|
4 |
% |
|
|
(2 |
)% |
|
|
6 |
% |
|
|
0 |
% |
|
|
|
(1) |
|
Excluding currency translation and portfolio effects. |
18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Divisions |
|
Revenue |
|
|
|
Three months |
|
|
|
|
|
|
|
|
|
ended June 30, |
|
|
% Change |
|
|
therein |
|
(in millions of ) |
|
2010 |
|
|
2009 |
|
|
Actual |
|
|
Adjusted(1) |
|
|
Currency |
|
|
Portfolio |
|
Fossil Power Generation |
|
|
2,348 |
|
|
|
2,397 |
|
|
|
(2 |
)% |
|
|
(5 |
)% |
|
|
3 |
% |
|
|
0 |
% |
Renewable Energy |
|
|
953 |
|
|
|
761 |
|
|
|
25 |
% |
|
|
16 |
% |
|
|
7 |
% |
|
|
3 |
% |
Oil & Gas |
|
|
998 |
|
|
|
1,098 |
|
|
|
(9 |
)% |
|
|
(15 |
)% |
|
|
6 |
% |
|
|
0 |
% |
Power Transmission |
|
|
1,582 |
|
|
|
1,532 |
|
|
|
3 |
% |
|
|
(3 |
)% |
|
|
6 |
% |
|
|
0 |
% |
Power Distribution |
|
|
734 |
|
|
|
770 |
|
|
|
(5 |
)% |
|
|
(10 |
)% |
|
|
6 |
% |
|
|
0 |
% |
|
|
|
(1) |
|
Excluding currency translation and portfolio effects. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Divisions |
|
Profit |
|
|
Profit margin |
|
|
|
Three months |
|
|
|
|
|
|
Three months |
|
|
|
ended June 30, |
|
|
|
|
|
|
ended June 30, |
|
(in millions of ) |
|
2010 |
|
|
2009 |
|
|
% Change |
|
|
2010 |
|
|
2009 |
|
Fossil Power Generation |
|
|
379 |
|
|
|
347 |
|
|
|
9 |
% |
|
|
16.2 |
% |
|
|
14.5 |
% |
Renewable Energy |
|
|
129 |
|
|
|
100 |
|
|
|
29 |
% |
|
|
13.5 |
% |
|
|
13.1 |
% |
Oil & Gas |
|
|
108 |
|
|
|
132 |
|
|
|
(18 |
)% |
|
|
10.8 |
% |
|
|
12.0 |
% |
Power Transmission |
|
|
205 |
|
|
|
183 |
|
|
|
12 |
% |
|
|
12.9 |
% |
|
|
11.9 |
% |
Power Distribution |
|
|
102 |
|
|
|
97 |
|
|
|
5 |
% |
|
|
13.8 |
% |
|
|
12.6 |
% |
Fossil Power Generation led all Siemens Divisions with 379 million in profit, an increase
of
9% compared to the third quarter a year earlier. The Division continued to execute well in its
project business and benefited from a more favorable revenue mix. While the fossil power generation
market remained challenging, the Divisions 14% decline in new orders was smaller than the declines
in recent quarters. Third-quarter revenue came in only slightly lower year-over-year, in part
benefiting from Fossil Power Generations large order backlog.
Renewable Energy delivered a strong performance in the third quarter, reaching new highs for
profit, revenue and orders. Third-quarter profit climbed 29% year-over-year, to 129 million, on a
25% rise in revenue. The Division demonstrated its global leadership in the off-shore wind-farm
market by winning a number of major orders in Europe, and also took in its largest-ever onshore
order. New orders overall came in at 2.271 billion, a 26% increase compared to the third quarter a
year earlier.
Oil & Gas posted third-quarter profit of 108 million, a volume-driven decline compared
to the
prior-year period. The Divisions 9% revenue decline was strongly influenced by a drop in orders in
prior periods. Against a low basis of comparison, third-quarter orders came in higher
year-over-year due in part to a higher volume from major orders.
Power Transmission increased its third-quarter profit to 205 million on higher revenue and
strong project performance. Orders surged 47% on the strength of two large contract wins for grid
access to off-shore wind-farms.
Third-quarter profit at Power Distribution rose to 102 million on a more favorable revenue
mix, even as overall revenue came in lower due to weak order development during prior periods. The
power distribution market continued to show signs of stabilization, and third-quarter orders came
in 4% higher year-over-year.
Energy Nine months ended June 30, 2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sector |
|
Nine months |
|
|
|
|
|
|
|
|
|
ended June 30, |
|
|
% Change |
|
|
therein |
|
(in millions of ) |
|
2010 |
|
|
2009 |
|
|
Actual |
|
|
Adjusted(1) |
|
|
Currency |
|
|
Portfolio |
|
Profit |
|
|
2,608 |
|
|
|
2,437 |
|
|
|
7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Profit margin |
|
|
14.3 |
% |
|
|
12.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New orders |
|
|
21,061 |
|
|
|
23,589 |
|
|
|
(11 |
)% |
|
|
(11 |
)% |
|
|
1 |
% |
|
|
0 |
% |
Revenue |
|
|
18,260 |
|
|
|
19,032 |
|
|
|
(4 |
)% |
|
|
(5 |
)% |
|
|
1 |
% |
|
|
1 |
% |
|
|
|
(1) |
|
Excluding currency translation and portfolio effects. |
19
The Energy Sector turned in a strong performance in the first nine months of fiscal 2010,
increasing Sector profit 7% year-over-year to 2.608 billion. Profit growth year-over-year was
driven by Fossil Power Generation.
While market conditions remain challenging in the Energy Sector, the overall energy market
showed signs of improvement in recent months. In this environment, nine-month orders for Energy
came in 11% below the prior-year period. This was primarily due to a decline in orders at Fossil
Power Generation, the Sectors largest Division by volume. In contrast, strong order growth in the
third quarter led to higher nine-month orders intake at Renewable Energy, Oil & Gas and Power
Transmission. On a geographic basis, orders rose in the Americas and declined in Europe, C.I.S.,
Africa, Middle East and in Asia, Australia. Revenue in the Sector was 4% lower in the first nine
months compared to the same period a year earlier, including declines in four of the Sectors five
Divisions and in all regions. The Sectors book-to-bill ratio was 1.15 in the current nine-month
period.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Divisions |
|
New Orders |
|
|
|
Nine months |
|
|
|
|
|
|
|
|
|
ended June 30, |
|
|
% Change |
|
|
therein |
|
(in millions of ) |
|
2010 |
|
|
2009 |
|
|
Actual |
|
|
Adjusted(1) |
|
|
Currency |
|
|
Portfolio |
|
Fossil Power Generation |
|
|
6,387 |
|
|
|
9,919 |
|
|
|
(36 |
)% |
|
|
(36 |
)% |
|
|
0 |
% |
|
|
0 |
% |
Renewable Energy |
|
|
4,475 |
|
|
|
4,037 |
|
|
|
11 |
% |
|
|
11 |
% |
|
|
0 |
% |
|
|
0 |
% |
Oil & Gas |
|
|
3,477 |
|
|
|
3,087 |
|
|
|
13 |
% |
|
|
10 |
% |
|
|
3 |
% |
|
|
0 |
% |
Power Transmission |
|
|
4,922 |
|
|
|
4,724 |
|
|
|
4 |
% |
|
|
3 |
% |
|
|
1 |
% |
|
|
0 |
% |
Power Distribution |
|
|
2,273 |
|
|
|
2,353 |
|
|
|
(3 |
)% |
|
|
(5 |
)% |
|
|
1 |
% |
|
|
0 |
% |
|
|
|
(1) |
|
Excluding currency translation and portfolio effects. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Divisions |
|
Revenue |
|
|
|
Nine months |
|
|
|
|
|
|
|
|
|
ended June 30, |
|
|
% Change |
|
|
therein |
|
(in millions of ) |
|
2010 |
|
|
2009 |
|
|
Actual |
|
|
Adjusted(1) |
|
|
Currency |
|
|
Portfolio |
|
Fossil Power Generation |
|
|
7,051 |
|
|
|
7,147 |
|
|
|
(1 |
)% |
|
|
(1 |
)% |
|
|
0 |
% |
|
|
0 |
% |
Renewable Energy |
|
|
2,295 |
|
|
|
2,274 |
|
|
|
1 |
% |
|
|
(4 |
)% |
|
|
1 |
% |
|
|
4 |
% |
Oil & Gas |
|
|
2,975 |
|
|
|
3,186 |
|
|
|
(7 |
)% |
|
|
(9 |
)% |
|
|
3 |
% |
|
|
0 |
% |
Power Transmission |
|
|
4,264 |
|
|
|
4,535 |
|
|
|
(6 |
)% |
|
|
(7 |
)% |
|
|
1 |
% |
|
|
0 |
% |
Power Distribution |
|
|
2,096 |
|
|
|
2,421 |
|
|
|
(13 |
)% |
|
|
(15 |
)% |
|
|
1 |
% |
|
|
0 |
% |
|
|
|
(1) |
|
Excluding currency translation and portfolio effects. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Divisions |
|
Profit |
|
|
Profit margin |
|
|
|
Nine months |
|
|
|
|
|
|
Nine months |
|
|
|
ended June 30, |
|
|
|
|
|
|
ended June 30, |
|
(in millions of ) |
|
2010 |
|
|
2009 |
|
|
% Change |
|
|
2010 |
|
|
2009 |
|
Fossil Power Generation |
|
|
1,127 |
|
|
|
948 |
|
|
|
19 |
% |
|
|
16.0 |
% |
|
|
13.3 |
% |
Renewable Energy |
|
|
265 |
|
|
|
306 |
|
|
|
(13 |
)% |
|
|
11.5 |
% |
|
|
13.5 |
% |
Oil & Gas |
|
|
361 |
|
|
|
359 |
|
|
|
1 |
% |
|
|
12.1 |
% |
|
|
11.3 |
% |
Power Transmission |
|
|
536 |
|
|
|
503 |
|
|
|
7 |
% |
|
|
12.6 |
% |
|
|
11.1 |
% |
Power Distribution |
|
|
298 |
|
|
|
310 |
|
|
|
(4 |
)% |
|
|
14.2 |
% |
|
|
12.8 |
% |
Fossil Power Generation delivered substantially higher profit year-over-year, combining strong
project execution and a more favorable revenue mix, including a higher contribution from the
service business. As a result, Fossil Power Generation led all Siemens Divisions with 1.127
billion in profit for the first nine months of fiscal 2010, despite charges of 59 million for
capacity adjustments related to a shift of production capacity within the Americas region, partly
offset by the Divisions share in the previously disclosed pension curtailment gain in the U.S.,
both in the second quarter. In contrast, order development was heavily influenced by market
contraction, as the Division reported a 36% decrease in order intake year-over-year, including a
substantially lower volume from major orders. Fossil Power Generations strong order backlog
reduced the effect of market conditions on revenue for the first nine months, which came in only
slightly below the prior-year period.
Profit at Renewable Energy declined 13% compared to the first nine months of fiscal 2009, due
primarily to a volume-driven drop in the first quarter of the current fiscal year. The current
nine-month period also includes transaction and integration costs related to consolidation of the
solar company Solel. Nine-month revenue came in just above the prior-year level, as revenue decline in
the first quarter was offset by strong sales development in the following two quarters. The Division took in large wind-farm orders in both
periods under review, and order intake was up 11% year-over-year.
20
Profit at Oil & Gas for the first nine months came in at 361 million, nearly unchanged
from
359 million a year earlier, despite a 7% decrease in revenues. This was due in part to a more
favorable revenue mix including a strong contribution from the service business. In uncertain
market conditions, order intake rose 13% year-over-year, including a higher volume from major
orders.
Power Transmission posted a year-over-year increase in nine-month profit, to 536 million.
In
addition to strong project performance in the current period, the increase benefited from a
positive swing in effects from commodity hedging. Revenue for the current period came in 6% lower
than in the first nine months a year earlier, due in part to a generally declining order trend in
fiscal 2009. The Divisions order intake rose 4% year-over-year.
Power Distribution contributed profit of 298 million in the first nine months of fiscal
2010,
down from 310 million in the prior-year period, due primarily to a volume-driven profit decline in
the Divisions medium voltage business. Overall revenue came in 13% below the prior-year level for
the Division, partly as a consequence of declining order intake throughout fiscal 2009. Orders for
the first nine months of fiscal 2010 came in lower compared to the prior-year period, even though
orders rose year-over-year in both the second and third quarters.
Healthcare Three months ended June 30, 2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sector |
|
Three months |
|
|
|
|
|
|
|
|
|
ended June 30, |
|
|
% Change |
|
|
therein |
|
(in millions of ) |
|
2010 |
|
|
2009 |
|
|
Actual |
|
|
Adjusted(1) |
|
|
Currency |
|
|
Portfolio |
|
Profit |
|
|
506 |
|
|
|
270 |
|
|
|
87 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Profit margin |
|
|
16.0 |
% |
|
|
9.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New orders |
|
|
3,260 |
|
|
|
2,772 |
|
|
|
18 |
% |
|
|
10 |
% |
|
|
7 |
% |
|
|
0 |
% |
Revenue |
|
|
3,152 |
|
|
|
2,865 |
|
|
|
10 |
% |
|
|
4 |
% |
|
|
7 |
% |
|
|
0 |
% |
|
|
|
(1) |
|
Excluding currency translation and portfolio effects. |
The Healthcare Sector showed strong growth in profit, revenue and orders in a more
favorable market environment. Third-quarter profit rose to 506 million on higher revenue and
strong execution, including continued cost discipline. For comparison, profit in the same period a
year earlier was burdened by 128 million in charges at the Workflow & Solutions Division while the
current period benefited from a gain of 40 million, taken at the Sector level, as the Sector
ceased to consolidate a subsidiary due to loss of control. PPA effects related to past acquisitions
at Diagnostics were 46 million in the third quarter. In addition, Healthcare recorded 18 million
of integration costs associated with the next phase of integration activities at Diagnostics. In
the same quarter a year earlier, PPA effects and integration costs totaled 52 million.
Third-quarter orders for Healthcare climbed 18% and revenue rose 10%. Orders came in higher in
all three geographic regions compared to the prior-year quarter, while revenue rose in Asia,
Australia and the Americas. In addition to organic growth, the Sectors order and revenue totals
benefited from currency translation effects amounting to seven percentage points for orders and
seven percentage points for revenue. Healthcares book-to-bill ratio was 1.03 for the quarter, and
its order backlog was 7 billion.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Divisions |
|
New Orders |
|
|
|
Three months |
|
|
|
|
|
|
|
|
|
ended June 30, |
|
|
% Change |
|
|
therein |
|
(in millions of ) |
|
2010 |
|
|
2009 |
|
|
Actual |
|
|
Adjusted(1) |
|
|
Currency |
|
|
Portfolio |
|
Imaging & IT |
|
|
1,920 |
|
|
|
1,589 |
|
|
|
21 |
% |
|
|
13 |
% |
|
|
8 |
% |
|
|
0 |
% |
Workflow & Solutions |
|
|
432 |
|
|
|
345 |
|
|
|
25 |
% |
|
|
19 |
% |
|
|
6 |
% |
|
|
0 |
% |
Diagnostics |
|
|
964 |
|
|
|
891 |
|
|
|
8 |
% |
|
|
2 |
% |
|
|
7 |
% |
|
|
0 |
% |
|
|
|
(1) |
|
Excluding currency translation and portfolio effects. |
21
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Divisions |
|
Revenue |
|
|
|
Three months |
|
|
|
|
|
|
|
|
|
ended June 30, |
|
|
% Change |
|
|
therein |
|
(in millions of ) |
|
2010 |
|
|
2009 |
|
|
Actual |
|
|
Adjusted(1) |
|
|
Currency |
|
|
Portfolio |
|
Imaging & IT |
|
|
1,868 |
|
|
|
1,688 |
|
|
|
11 |
% |
|
|
4 |
% |
|
|
7 |
% |
|
|
0 |
% |
Workflow & Solutions |
|
|
382 |
|
|
|
333 |
|
|
|
15 |
% |
|
|
8 |
% |
|
|
6 |
% |
|
|
0 |
% |
Diagnostics |
|
|
959 |
|
|
|
887 |
|
|
|
8 |
% |
|
|
1 |
% |
|
|
7 |
% |
|
|
0 |
% |
|
|
|
(1) |
|
Excluding currency translation and portfolio effects. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Divisions |
|
Profit |
|
|
Profit margin |
|
|
|
Three months |
|
|
|
|
|
|
Three months |
|
|
|
ended June 30, |
|
|
|
|
|
|
ended June 30, |
|
(in millions of ) |
|
2010 |
|
|
2009 |
|
|
% Change |
|
|
2010 |
|
|
2009 |
|
Imaging & IT |
|
|
329 |
|
|
|
277 |
|
|
|
19 |
% |
|
|
17.6 |
% |
|
|
16.4 |
% |
Workflow & Solutions |
|
|
22 |
|
|
|
(107 |
) |
|
|
|
|
|
|
5.8 |
% |
|
|
(32.1 |
)% |
Diagnostics |
|
|
121 |
|
|
|
104 |
|
|
|
17 |
% |
|
|
12.6 |
% |
|
|
11.7 |
% |
Imaging & IT delivered strong profit growth and double-digit increases in revenue and orders
compared to the third quarter a year ago. Profit climbed to 329 million on higher revenue and
structural cost savings. Third-quarter revenue came in 11% higher year-over-year, and orders
climbed 21%, with most business units recording increases in both revenue and orders. Growth was
driven by strong demand in Asia, Australia, particularly including China, and in the Americas,
which saw rapid growth in Brazil from a small base. On an organic basis, revenue was up 4% and
orders rose 13% compared to the prior-year quarter.
Workflow & Solutions contributed 22 million to Sector profit compared to a loss of
107
million in the prior-year period, when the Division took the 128 million in project charges
mentioned earlier. Double-digit order growth included a major order for hospital equipment in
Spain.
Revenue at Diagnostics rose 8% compared to the third quarter a year earlier, or 1% on an
organic basis, excluding currency translation effects. The increase came from the Americas and
Asia, Australia, particularly including double-digit growth in Brazil and China from a small base.
Revenue declined in Europe, C.I.S., Africa, Middle East. Profit rose to 121 million despite an
increase in total PPA effects and integration costs. In the third quarter a year earlier, these
impacts were
45 million and 7 million, respectively. In the current period, PPA effects were
46
million, and the Division also recorded 18 million in costs for integration activities.
Healthcare Nine months ended June 30, 2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sector |
|
Nine months |
|
|
|
|
|
|
|
|
|
ended June 30, |
|
|
% Change |
|
|
therein |
|
(in millions of ) |
|
2010 |
|
|
2009 |
|
|
Actual |
|
|
Adjusted(1) |
|
|
Currency |
|
|
Portfolio |
|
Profit |
|
|
1,521 |
|
|
|
967 |
|
|
|
57 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Profit margin |
|
|
17.0 |
% |
|
|
11.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New orders |
|
|
9,075 |
|
|
|
8,619 |
|
|
|
5 |
% |
|
|
5 |
% |
|
|
1 |
% |
|
|
0 |
% |
Revenue |
|
|
8,951 |
|
|
|
8,785 |
|
|
|
2 |
% |
|
|
1 |
% |
|
|
1 |
% |
|
|
0 |
% |
|
|
|
(1) |
|
Excluding currency translation and portfolio effects. |
For the first nine months of fiscal 2010 the Healthcare Sector delivered substantially
higher profit of 1.521 billion compared to 967 million in the prior-year period, due in part to a
favorable product mix in combination with continued cost discipline. In the current nine months,
profit benefited from a favorable currency hedge during the first and second quarter, a gain of 79
million related to a curtailment of pension plans in the U.S. in the second quarter, and the gain
of 40 million taken at the Sector level in the third quarter, mentioned earlier. In contrast,
Sector profit for the first nine months a year earlier included 169 million in charges at the
Workflow & Solutions Division. In the current nine months, PPA effects related to past acquisitions
at Diagnostics were 131 million. In addition, the Sector recorded 54 million of integration costs
associated with the next phase of integration activities at Diagnostics. A year earlier, PPA
effects and integration costs in the first nine months of fiscal 2009 totaled 182 million.
22
Nine-month orders for the Healthcare Sector came in higher compared to the prior-year period.
In the current period the Sector recorded higher orders in Asia, Australia and the Americas, while
orders in Europe, C.I.S., Africa, Middle East were stable. The slight increase in nine-month
revenue came primarily from Asia, Australia for all Divisions. Healthcares book-to-bill ratio was
1.01 in the first nine months of fiscal 2010.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Divisions |
|
New Orders |
|
|
|
Nine months |
|
|
|
|
|
|
|
|
|
ended June 30, |
|
|
% Change |
|
|
therein |
|
(in millions of ) |
|
2010 |
|
|
2009 |
|
|
Actual |
|
|
Adjusted(1) |
|
|
Currency |
|
|
Portfolio |
|
Imaging & IT |
|
|
5,462 |
|
|
|
5,019 |
|
|
|
9 |
% |
|
|
8 |
% |
|
|
0 |
% |
|
|
0 |
% |
Workflow & Solutions |
|
|
1,091 |
|
|
|
1,169 |
|
|
|
(7 |
)% |
|
|
(8 |
)% |
|
|
1 |
% |
|
|
0 |
% |
Diagnostics |
|
|
2,696 |
|
|
|
2,622 |
|
|
|
3 |
% |
|
|
2 |
% |
|
|
0 |
% |
|
|
0 |
% |
|
|
|
(1) |
|
Excluding currency translation and portfolio effects. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Divisions |
|
Revenue |
|
|
|
Nine months |
|
|
|
|
|
|
|
|
|
ended June 30, |
|
|
% Change |
|
|
therein |
|
(in millions of ) |
|
2010 |
|
|
2009 |
|
|
Actual |
|
|
Adjusted(1) |
|
|
Currency |
|
|
Portfolio |
|
Imaging & IT |
|
|
5,337 |
|
|
|
5,231 |
|
|
|
2 |
% |
|
|
2 |
% |
|
|
0 |
% |
|
|
0 |
% |
Workflow & Solutions |
|
|
1,100 |
|
|
|
1,118 |
|
|
|
(2 |
)% |
|
|
(3 |
)% |
|
|
1 |
% |
|
|
0 |
% |
Diagnostics |
|
|
2,690 |
|
|
|
2,626 |
|
|
|
2 |
% |
|
|
2 |
% |
|
|
0 |
% |
|
|
0 |
% |
|
|
|
(1) |
|
Excluding currency translation and portfolio effects. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Divisions |
|
Profit |
|
|
Profit margin |
|
|
|
Nine months |
|
|
|
|
|
|
Nine months |
|
|
|
ended June 30, |
|
|
|
|
|
|
ended June 30, |
|
(in millions of ) |
|
2010 |
|
|
2009 |
|
|
% Change |
|
|
2010 |
|
|
2009 |
|
Imaging & IT |
|
|
1,060 |
|
|
|
804 |
|
|
|
32 |
% |
|
|
19.9 |
% |
|
|
15.4 |
% |
Workflow & Solutions |
|
|
88 |
|
|
|
(83 |
) |
|
|
|
|
|
|
8.0 |
% |
|
|
(7.4 |
)% |
Diagnostics |
|
|
358 |
|
|
|
241 |
|
|
|
49 |
% |
|
|
13.3 |
% |
|
|
9.2 |
% |
Profit at Imaging & IT increased to 1.060 billion from
804 million in the prior-year period,
on a favorable product mix and continued cost savings. In addition, profit in the first nine months
benefited from a favorable currency hedge during the first and second quarter and 44 million of
the pension gain mentioned above for the Sector. Orders for Imaging & IT rose 9% compared to the
nine-month period a year earlier, due primarily to double-digit growth in Asia, Australia,
particularly in Japan and China. The Division also recorded order growth in the Americas,
particularly in the U.S. Nine-month revenue for Imaging & IT rose 2% compared to the prior-year
period, including double-digit growth in Asia, Australia which offset declines in other regions. On
an organic basis, orders and revenue rose 8% and 2%, respectively, compared to the prior-year
nine-month period.
Workflow & Solutions generated 88 million in profit compared to a loss of 83 million in the
first nine months a year earlier. The prior-year period included 169 million in charges related
primarily to project delays in the particle therapy business. Orders for the first nine months came
in 7% lower compared to the prior year. Both nine-month periods included a large order. Revenue for
the first nine months declined 2% year-over-year.
Profit at Diagnostics for the first nine months increased to 358 million from 241 million a
year earlier, benefiting from 22 million of the pension gain mentioned above for the Sector. PPA
effects related to past acquisitions were 131 million. In addition, the Division recorded 54
million of integration costs associated with the next phase of integration activities at
Diagnostics. A year earlier, PPA effects and integration costs in the first nine months totaled
182 million. Overall, orders for Diagnostics rose 3% compared to the prior-year period benefiting
from growth in Asia, Australia and the Americas, particularly China and Brazil which grew rapidly
from a small base. Revenue for Diagnostics rose 2% compared to the prior-year period. Double-digit
growth in Asia, Australia and single-digit growth in the Americas offset a decline in Europe,
C.I.S., Africa, Middle East. The Divisions largest markets including the U.S. and Europe remained
challenging due to economic conditions as well as competitive pressures. Organic revenue and order
growth for the first nine months was 2%.
23
Given the market challenges facing Diagnostics, management continues to monitor business
development closely. As in past years, management will conduct its annual impairment test for
goodwill at the end of the fiscal year based on then-current business assumptions. For further
information regarding goodwill at Diagnostics, refer to Notes to Consolidated Financial
Statements as of September 30, 2009.
Equity Investments
Major components of Equity Investments include our stakes in NSN, BSH Bosch und Siemens
Hausgeräte GmbH (BSH), EN and Krauss-Maffei Wegmann GmbH & Co. KG (KMW). Profit at Equity
Investments was 2 million in the third quarter compared to 157 million a year earlier. The
difference year-over-year is mainly due to a gain of 309 million in the prior-year period from the
sale of Siemens stake in FSC, partly offset by a loss of 121 million related to our share in EN.
Both periods included equity investment losses related to NSN, amounting to 81 million in the
current period and 72 million a year earlier. NSN reported to Siemens that it took restructuring
charges and integration costs totaling 114 million in the current quarter, compared to 69 million
in the same period a year earlier.
In the first nine months of fiscal 2010, Equity Investments recorded a loss of 10 million
compared to a profit of 129 million in the same period a year earlier. As mentioned above for the
third quarter, the difference year-over-year was due mainly to a 327 million gain on the sale of
our stake in FSC in the prior nine-month period, partly offset by a loss of 119 million related to
our stake in EN. Results of Equity Investments in the current nine months also includes a higher
loss related to our stake in NSN, totaling 291 million compared to 215 million in the same period
a year earlier. NSN recorded restructuring charges and integration costs totaling 329 million in
the current nine months, compared to 478 million in the same period a year earlier. Improved
results related to other equity stakes year-over-year more than offset the higher losses related to
NSN. Profit from Equity Investments is expected to be volatile in coming quarters.
At the end of March 2010, Siemens and Nokia each converted 500 million in shareholder loans
to NSN into preferred shares. The conversion resulted in an increase of 500 million in our
investment in NSN and does not result in a shift in the existing shareholding ratios between
Siemens and Nokia. After the end of the third quarter, NSN announced that it entered into an
agreement with Motorola, Inc. to acquire the majority of Motorolas wireless network infrastructure
assets subject to regulatory approval. Subject to the closing of the acquisition, Siemens and Nokia
each intend to convert a further 250 million in shareholder loans to NSN into preferred shares.
Cross-Sector Businesses
Siemens IT Solutions and Services Three months ended June 30, 2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months |
|
|
|
|
|
|
|
|
|
ended June 30, |
|
|
% Change |
|
|
therein |
|
(in millions of ) |
|
2010 |
|
|
2009 |
|
|
Actual |
|
|
Adjusted(1) |
|
|
Currency |
|
|
Portfolio |
|
Profit |
|
|
(81 |
) |
|
|
19 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit margin |
|
|
(7.8 |
)% |
|
|
1.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New orders |
|
|
993 |
|
|
|
1,091 |
|
|
|
(9 |
)% |
|
|
(12 |
)% |
|
|
2 |
% |
|
|
0 |
% |
Revenue |
|
|
1,045 |
|
|
|
1,102 |
|
|
|
(5 |
)% |
|
|
(8 |
)% |
|
|
2 |
% |
|
|
0 |
% |
|
|
|
(1) |
|
Excluding currency translation and portfolio effects. |
Siemens IT Solutions and Services posted a loss of 81 million in the third quarter,
including charges of 38 million related to a loss contract in Europe, C.I.S., Africa, Middle East.
The business continued to face operational challenges while operating in highly competitive
markets.
24
Siemens IT Solutions and Services Nine months ended June 30, 2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine months |
|
|
|
|
|
|
|
|
|
ended June 30, |
|
|
% Change |
|
|
therein |
|
(in millions of ) |
|
2010 |
|
|
2009 |
|
|
Actual |
|
|
Adjusted(1) |
|
|
Currency |
|
|
Portfolio |
|
Profit |
|
|
(74 |
) |
|
|
90 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit margin |
|
|
(2.4 |
)% |
|
|
2.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New orders |
|
|
3,096 |
|
|
|
3,403 |
|
|
|
(9 |
)% |
|
|
(8 |
)% |
|
|
0 |
% |
|
|
(1 |
)% |
Revenue |
|
|
3,069 |
|
|
|
3,527 |
|
|
|
(13 |
)% |
|
|
(12 |
)% |
|
|
0 |
% |
|
|
(1 |
)% |
|
|
|
(1) |
|
Excluding currency translation and portfolio effects. |
The factors mentioned above for the third quarter led to similar results for the first
nine months. Orders and revenue at Siemens IT Solutions and Services came in lower year-over-year
and the business posted a loss. The current nine-month period included the impact of a loss
contract mentioned above while the prior-year period included charges related to large customer
projects in the UK. The impact of events in the prior year was lower than in the current period.
Siemens previously announced plans to put Siemens IT Solutions and Services on a solid long-term
foundation. These include the transformation of the business into a separate legal entity,
additional investments in the business and reduction of some 4,200 positions worldwide. The latter
measure is expected to result in substantial charges in coming quarters.
Siemens Financial Services (SFS) Three and nine months ended June 30, 2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months |
|
|
Nine months |
|
|
|
ended June 30, |
|
|
ended June 30, |
|
( in millions) |
|
2010 |
|
|
2009 |
|
|
% Change |
|
|
2010 |
|
|
2009 |
|
|
% Change |
|
Profit |
|
|
113 |
|
|
|
87 |
|
|
|
30 |
% |
|
|
310 |
|
|
|
270 |
|
|
|
15 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, |
|
|
Sept. 30, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2010 |
|
|
2009 |
|
|
|
|
|
Total assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,050 |
|
|
|
11,704 |
|
|
|
12 |
% |
Siemens Financial Services delivered 113 million in profit (defined as income before income
taxes) in the third quarter, up from 87 million in the prior-year quarter. The increase in profit
compared to the prior-year period came mainly from the commercial finance business, which benefited
from a favorable credit environment as well as from income related to the early termination of
financings. These factors more than offset lower results from SFSs internal services business.
Total assets rose to 13.050 billion, due primarily to currency translation effects.
SFS raised its profit in the first nine months of fiscal 2010 from 270 million in the
prior-year period to 310 million. The increase in profit compared to the prior-year period came
mainly from higher results in the commercial finance business, driven by significantly lower loss
reserves and higher interest result, partly offset by lower income from SFSs internal services.
Siemens has filed an application with the German Federal Financial Supervisory Authority
(Bundesanstalt für Finanzdienstleistungsaufsicht, BaFin) for the grant of a license to conduct
banking business. The authority is currently reviewing the application. With the help of a licensed
credit institution, Siemens aims to expand the product portfolio, particularly in the sales finance
area, add flexibility to Group financing and optimize its risk management.
Reconciliation to Consolidated Financial Statements
Reconciliation to Consolidated Financial Statements includes Centrally managed portfolio
activities, SRE and various categories of items which are not allocated to the Sectors and
Cross-Sector Businesses because Management has determined that such items are not indicative of the
Sectors and Cross-Sector Businesses respective performance.
25
Centrally managed portfolio activities
Centrally managed portfolio activities posted a loss of 16 million in the third quarter
compared to a loss of 99 million in the prior-year period. The current period includes a loss of
13 million related to Electronics Assembly Systems. For comparison, the third quarter a year
earlier included a higher loss related to Electronics Assembly Systems, primarily including 59
million in operating losses and severance expenses.
For the first nine months of the fiscal year, the result of Centrally managed portfolio
activities was a loss of 56 million compared to a loss of 233 million a year earlier. Within this
improvement, the loss related to Electronics Assembly Systems declined to 49 million from a higher
loss in the prior-year period, which primarily included 172 million in operating losses and
charges related to impairments and severance expenses. Divestment of the electronics assembly
systems business is expected to result in a loss. For additional
information, see Subsequent event within this Interim
Report. In addition, the prior-year period included a
loss related to the divestment of an industrial manufacturing unit in Austria. Due primarily to
portfolio streamlining activities, revenue from Centrally managed portfolio activities fell to 223
million from 461 million in the first nine months a year earlier, despite higher sales from the
electronics assembly systems business.
Siemens Real Estate
Income before income taxes at SRE was 107 million in the third quarter. For comparison,
income before income taxes of 244 million in the same period a year earlier included a gain of
221 million on the disposal of Siemens residential real estate holdings. Assets with a book value
of 130 million were transferred to SRE during the quarter as part of Siemens program to bundle
its real estate assets into SRE.
Income before income taxes for the first nine months of fiscal 2010 was 275 million, down
from 326 million in the prior-year period, due in part to lower income related to the disposal of
real estate. Assets with a book value of 579 million were transferred to SRE during the first nine
months of fiscal 2010 as part of the real estate bundling program. SRE will continue to incur costs
associated with the program in coming quarters, and expects to continue with real estate disposals
depending on market conditions.
Corporate items and pensions
Corporate items and pensions totaled a negative 266 million in the third quarter compared to
a negative 431 million in the same period a year earlier. The difference was due primarily to
Corporate items, which were a negative 223 million compared to a negative 326 million in the
third quarter of fiscal 2009. Results related to an asset retirement obligation swung from a loss
in the prior-year period to a net gain of 64 million in the current quarter, including a gain of
60 million due to revised assumptions (for additional information, see Notes to Condensed Interim
Consolidated Financial Statements within this Interim Report), a negative interest-related effect
from the measurement of this obligation, and a positive effect from related hedging activities not
qualifying for hedge accounting. In addition, Corporate items in the third quarter included
carve-out costs related to Siemens IT Solutions and Services. For comparison, the third quarter a
year earlier included a charge of 54 million related to a global settlement agreement with the
World Bank Group, as well as severance expenses of 33 million related to the global SG&A program.
Centrally carried pension expense was 44 million in the current period, compared to 105 million
in the third quarter a year earlier. The change year-over-year was due primarily to higher
insurance costs in the prior-year period related to our mandatory membership in the
Pensionssicherungsverein (PSV), the German pension insurance association.
In the first nine months of the fiscal year, Corporate items and pensions totaled a negative
710 million compared to a negative 1.120 billion in the prior-year period. Included therein,
Corporate items improved from a negative 862 million to a negative 556 million. In addition to
the factors mentioned above for the third quarter, the change year-over-year in Corporate items was
influenced by a number of positive factors in the current period. These include higher gains in
connection with compliance-related matters, including a gain of 84 million related to an agreement
with the provider of the Siemens directors and officers liability insurance, a net gain related to
settlements with former members of Siemens Managing Board and Supervisory Board, and total gains
of 40 million related to the recovery of funds frozen by authorities. The net gain related to the
above-mentioned asset retirement obligation was 19 million for the nine-month period. The above
gains were partly offset by higher expenses associated with streamlining IT costs for Siemens as a
whole compared to the prior-year period. For comparison, the prior-year period included a positive
effect related to shifting an employment bonus program from cash-based to share-based payment, a
charge related to legal and regulatory matters and higher net
expenses, including an additional
33 million
in the first half of fiscal 2009, related
to our global SG&A program and other personnel-related restructuring matters. Expenses for outside
advisors engaged in connection with investigations into alleged violations of anti-corruption laws
and related matters as well as remediation activities amounted to 90 million
in the prior-year period.
26
Centrally carried pension expense improved to 155 million from 258
million in the first nine months a year earlier, due to higher expected return on plan assets and
lower interest cost in the current period, as well as higher insurance costs in the prior-year
period as mentioned above.
Eliminations, Corporate Treasury and other reconciling items
Income before income taxes from Eliminations, Corporate Treasury and other reconciling items
was a negative 125 million in the third quarter compared to a positive 18 million in the same
period a year earlier. The difference is due primarily to changes in fair market values for
interest rate derivatives not qualifying for hedge accounting, which resulted from a decline in
interest rates within the current quarter.
Income before income taxes from Eliminations, Corporate Treasury and other reconciling items
was a negative 169 million in the first nine months of fiscal 2010, compared to a negative 273
million in the same period a year earlier. The improvement was due mainly to Corporate Treasury,
where a decline in refinancing costs due to lower interest rates was partly offset by changes in
fair market value from interest rate derivatives not qualifying for hedge accounting.
27
Reconciliation to EBITDA (adjusted) (continuing operations)
The following table gives additional information on topics included in Profit and Income before
income taxes and provides a reconciliation to EBITDA (adjusted).
We report EBIT (adjusted) and EBITDA (adjusted) as a performance measure. The closest comparable
GAAP figure under IFRS is Net income as reported in our
Consolidated Statements of Income.
For further information regarding EBIT (adjusted) and EBITDA (adjusted), please refer to the end of
this Interim group management report.
For the nine months ended June 30, 2010 and 2009 (in millions of )
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and impairments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
accounted for |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of property, plant |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
using the equity |
|
|
Financial income |
|
|
EBIT |
|
|
|
|
|
|
|
|
|
|
and equipment |
|
|
EBITDA |
|
|
|
Profit(1) |
|
|
method, net(2) |
|
|
(expense), net(3) |
|
|
(adjusted)(4) |
|
|
Amortization(5) |
|
|
and goodwill(6) |
|
|
(adjusted) |
|
|
|
2010 |
|
|
2009 |
|
|
2010 |
|
|
2009 |
|
|
2010 |
|
|
2009 |
|
|
2010 |
|
|
2009 |
|
|
2010 |
|
|
2009 |
|
|
2010 |
|
|
2009 |
|
|
2010 |
|
|
2009 |
|
Sectors and Divisions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Industry Sector |
|
|
2,595 |
|
|
|
2,139 |
|
|
|
(3 |
) |
|
|
|
|
|
|
(13 |
) |
|
|
(10 |
) |
|
|
2,611 |
|
|
|
2,149 |
|
|
|
265 |
|
|
|
273 |
|
|
|
477 |
|
|
|
503 |
|
|
|
3,353 |
|
|
|
2,925 |
|
Industry Automation |
|
|
714 |
|
|
|
473 |
|
|
|
(2 |
) |
|
|
(2 |
) |
|
|
2 |
|
|
|
1 |
|
|
|
715 |
|
|
|
474 |
|
|
|
133 |
|
|
|
136 |
|
|
|
65 |
|
|
|
71 |
|
|
|
913 |
|
|
|
681 |
|
Drive Technologies |
|
|
573 |
|
|
|
675 |
|
|
|
(1 |
) |
|
|
(2 |
) |
|
|
(1 |
) |
|
|
(2 |
) |
|
|
575 |
|
|
|
679 |
|
|
|
33 |
|
|
|
34 |
|
|
|
106 |
|
|
|
107 |
|
|
|
714 |
|
|
|
820 |
|
Building Technologies |
|
|
308 |
|
|
|
269 |
|
|
|
5 |
|
|
|
3 |
|
|
|
1 |
|
|
|
(2 |
) |
|
|
302 |
|
|
|
268 |
|
|
|
55 |
|
|
|
52 |
|
|
|
66 |
|
|
|
69 |
|
|
|
423 |
|
|
|
389 |
|
OSRAM |
|
|
432 |
|
|
|
108 |
|
|
|
(10 |
) |
|
|
1 |
|
|
|
|
|
|
|
1 |
|
|
|
443 |
|
|
|
106 |
|
|
|
13 |
|
|
|
19 |
|
|
|
162 |
|
|
|
166 |
|
|
|
618 |
|
|
|
291 |
|
Industry Solutions |
|
|
158 |
|
|
|
327 |
|
|
|
4 |
|
|
|
2 |
|
|
|
(5 |
) |
|
|
|
|
|
|
159 |
|
|
|
325 |
|
|
|
19 |
|
|
|
25 |
|
|
|
43 |
|
|
|
48 |
|
|
|
221 |
|
|
|
398 |
|
Mobility |
|
|
399 |
|
|
|
289 |
|
|
|
3 |
|
|
|
(2 |
) |
|
|
(11 |
) |
|
|
(7 |
) |
|
|
407 |
|
|
|
298 |
|
|
|
10 |
|
|
|
7 |
|
|
|
35 |
|
|
|
43 |
|
|
|
453 |
|
|
|
348 |
|
Energy Sector |
|
|
2,608 |
|
|
|
2,437 |
|
|
|
56 |
|
|
|
44 |
|
|
|
(16 |
) |
|
|
(16 |
) |
|
|
2,568 |
|
|
|
2,409 |
|
|
|
69 |
|
|
|
52 |
|
|
|
252 |
|
|
|
220 |
|
|
|
2,889 |
|
|
|
2,681 |
|
Fossil Power Generation |
|
|
1,127 |
|
|
|
948 |
|
|
|
14 |
|
|
|
21 |
|
|
|
(11 |
) |
|
|
(16 |
) |
|
|
1,124 |
|
|
|
943 |
|
|
|
13 |
|
|
|
12 |
|
|
|
86 |
|
|
|
72 |
|
|
|
1,223 |
|
|
|
1,027 |
|
Renewable Energy |
|
|
265 |
|
|
|
306 |
|
|
|
8 |
|
|
|
3 |
|
|
|
(3 |
) |
|
|
(1 |
) |
|
|
259 |
|
|
|
304 |
|
|
|
21 |
|
|
|
5 |
|
|
|
39 |
|
|
|
31 |
|
|
|
319 |
|
|
|
340 |
|
Oil & Gas |
|
|
361 |
|
|
|
359 |
|
|
|
|
|
|
|
|
|
|
|
(1 |
) |
|
|
(1 |
) |
|
|
363 |
|
|
|
360 |
|
|
|
20 |
|
|
|
20 |
|
|
|
43 |
|
|
|
41 |
|
|
|
425 |
|
|
|
421 |
|
Power Transmission |
|
|
536 |
|
|
|
503 |
|
|
|
28 |
|
|
|
19 |
|
|
|
1 |
|
|
|
4 |
|
|
|
508 |
|
|
|
480 |
|
|
|
8 |
|
|
|
8 |
|
|
|
56 |
|
|
|
48 |
|
|
|
571 |
|
|
|
536 |
|
Power Distribution |
|
|
298 |
|
|
|
310 |
|
|
|
6 |
|
|
|
1 |
|
|
|
(2 |
) |
|
|
(2 |
) |
|
|
294 |
|
|
|
311 |
|
|
|
8 |
|
|
|
7 |
|
|
|
24 |
|
|
|
24 |
|
|
|
325 |
|
|
|
342 |
|
Healthcare Sector |
|
|
1,521 |
|
|
|
967 |
|
|
|
11 |
|
|
|
25 |
|
|
|
10 |
|
|
|
8 |
|
|
|
1,501 |
|
|
|
934 |
|
|
|
219 |
|
|
|
232 |
|
|
|
259 |
|
|
|
260 |
|
|
|
1,978 |
|
|
|
1,426 |
|
Imaging & IT |
|
|
1,060 |
|
|
|
804 |
|
|
|
5 |
|
|
|
5 |
|
|
|
2 |
|
|
|
1 |
|
|
|
1,053 |
|
|
|
798 |
|
|
|
74 |
|
|
|
91 |
|
|
|
59 |
|
|
|
63 |
|
|
|
1,187 |
|
|
|
952 |
|
Workflow & Solutions |
|
|
88 |
|
|
|
(83 |
) |
|
|
|
|
|
|
10 |
|
|
|
1 |
|
|
|
1 |
|
|
|
88 |
|
|
|
(94 |
) |
|
|
4 |
|
|
|
4 |
|
|
|
19 |
|
|
|
17 |
|
|
|
111 |
|
|
|
(73 |
) |
Diagnostics |
|
|
358 |
|
|
|
241 |
|
|
|
|
|
|
|
|
|
|
|
5 |
|
|
|
7 |
|
|
|
353 |
|
|
|
234 |
|
|
|
140 |
|
|
|
137 |
|
|
|
176 |
|
|
|
174 |
|
|
|
669 |
|
|
|
545 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Sectors |
|
|
6,724 |
|
|
|
5,543 |
|
|
|
64 |
|
|
|
69 |
|
|
|
(19 |
) |
|
|
(18 |
) |
|
|
6,679 |
|
|
|
5,492 |
|
|
|
553 |
|
|
|
557 |
|
|
|
988 |
|
|
|
983 |
|
|
|
8,219 |
|
|
|
7,032 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Investments |
|
|
(10 |
) |
|
|
129 |
|
|
|
(59 |
) |
|
|
(195 |
) |
|
|
28 |
|
|
|
26 |
|
|
|
22 |
|
|
|
298 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22 |
|
|
|
298 |
|
Cross-Sector Businesses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Siemens IT Solutions and Services |
|
|
(74 |
) |
|
|
90 |
|
|
|
13 |
|
|
|
21 |
|
|
|
|
|
|
|
2 |
|
|
|
(87 |
) |
|
|
67 |
|
|
|
34 |
|
|
|
32 |
|
|
|
67 |
|
|
|
110 |
|
|
|
15 |
|
|
|
209 |
|
Siemens Financial Services (SFS) |
|
|
310 |
|
|
|
270 |
|
|
|
66 |
|
|
|
112 |
|
|
|
212 |
|
|
|
95 |
|
|
|
33 |
|
|
|
63 |
|
|
|
5 |
|
|
|
4 |
|
|
|
243 |
|
|
|
235 |
|
|
|
280 |
|
|
|
302 |
|
Reconciliation to Consolidated Financial Statements |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Centrally managed portfolio activities |
|
|
(56 |
) |
|
|
(233 |
) |
|
|
|
|
|
|
|
|
|
|
3 |
|
|
|
1 |
|
|
|
(59 |
) |
|
|
(234 |
) |
|
|
1 |
|
|
|
1 |
|
|
|
5 |
|
|
|
44 |
|
|
|
(53 |
) |
|
|
(189 |
) |
Siemens Real Estate (SRE) |
|
|
275 |
|
|
|
326 |
|
|
|
|
|
|
|
|
|
|
|
(39 |
) |
|
|
(25 |
) |
|
|
314 |
|
|
|
351 |
|
|
|
1 |
|
|
|
1 |
|
|
|
198 |
|
|
|
115 |
|
|
|
513 |
|
|
|
467 |
|
Corporate items and pensions |
|
|
(710 |
) |
|
|
(1,120 |
) |
|
|
|
|
|
|
(1 |
) |
|
|
(101 |
) |
|
|
(300 |
) |
|
|
(610 |
) |
|
|
(819 |
) |
|
|
11 |
|
|
|
19 |
|
|
|
37 |
|
|
|
46 |
|
|
|
(561 |
) |
|
|
(754 |
) |
Eliminations, Corporate Treasury and other reconciling items |
|
|
(169 |
) |
|
|
(273 |
) |
|
|
2 |
|
|
|
(35 |
) |
|
|
(73 |
) |
|
|
(144 |
) |
|
|
(98 |
) |
|
|
(94 |
) |
|
|
|
|
|
|
|
|
|
|
(45 |
) |
|
|
(51 |
) |
|
|
(143 |
) |
|
|
(145 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Siemens |
|
|
6,290 |
|
|
|
4,732 |
|
|
|
85 |
|
|
|
(29 |
) |
|
|
10 |
|
|
|
(362 |
) |
|
|
6,194 |
|
|
|
5,124 |
|
|
|
605 |
|
|
|
614 |
|
|
|
1,493 |
|
|
|
1,482 |
|
|
|
8,292 |
|
|
|
7,220 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Profit of the Sectors and Divisions as well as of Equity Investments, Siemens IT Solutions
and Services and Centrally managed portfolio activities is earnings before financing interest,
certain pension costs and income taxes. Certain other items not considered performance
indicative by Management may be excluded. Profit of SFS and SRE is Income before income taxes.
Profit of Siemens is Income from continuing operations before income taxes. For a
reconciliation of Income from continuing operations before income taxes to Net income see
Consolidated Statements of Income. |
|
(2) |
|
Includes impairments and reversals of impairments of investments accounted for using the
equity method. |
|
(3) |
|
Includes impairment of non-current available-for-sale financial assets. For Siemens,
Financial income (expense), net comprises Interest income, Interest expense and Other
financial income (expense), net as reported in the Consolidated Statements of Income. |
|
(4) |
|
Adjusted EBIT is Income from continuing operations before income taxes less Financial income
(expense), net and Income (loss) from investments accounted for using the equity method, net. |
|
(5) |
|
Amortization and impairments, net of reversals, of intangible assets other than goodwill. |
|
(6) |
|
Depreciation and impairments of property, plant and equipment net of reversals. Includes
impairments of goodwill of and 23 for the nine months ended June 30, 2010 and 2009,
respectively. |
|
Due to rounding, numbers presented may not add up precisely to totals provided. |
28
Liquidity, capital resources and requirements
Cash flow First nine months of fiscal 2010 compared to first nine months of fiscal 2009
The following discussion presents an analysis of our cash flows for the first nine months
of fiscal 2010 and 2009 for both continuing and discontinued operations.
We report Free cash flow as a performance measure, which is defined as Net cash provided by
(used in) operating activities less cash used for Additions to intangible assets and property,
plant and equipment. We believe this measure is helpful to our investors as an indicator of our
long-term ability to generate cash flows from operations and to pay for discretionary and
non-discretionary expenditures not included in the measure, such as dividends, debt repayment or
acquisitions. We also use Free cash flow to compare cash generation among the segments of our
business. Free cash flow should not be considered in isolation or as an alternative to measures of
cash flow calculated in accordance with IFRS. For further information about this measure, refer to
Notes to Condensed Interim Consolidated Financial Statements Segment information and to the
end of this Interim group management report.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing and |
|
Free cash flow |
|
|
|
Continuing operations |
|
|
Discontinued operations |
|
|
discontinued operations |
|
|
|
|
|
Nine months ended June 30, |
|
(in millions of ) |
|
|
|
2010 |
|
|
2009 |
|
|
2010 |
|
|
2009 |
|
|
2010 |
|
|
2009 |
|
Net cash provided by (used in):(1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating activities |
|
A |
|
|
5,475 |
|
|
|
2,230 |
(3) |
|
|
(63 |
) |
|
|
(109 |
) |
|
|
5,412 |
|
|
|
2,121 |
(3) |
Investing activities |
|
|
|
|
(1,485 |
) |
|
|
(1,589) |
(3) |
|
|
(73 |
) |
|
|
(185 |
) |
|
|
(1,558 |
) |
|
|
(1,774) |
(3) |
Herein: Additions to intangible assets and
property, plant and equipment |
|
B |
|
|
(1,354 |
) |
|
|
(1,602 |
)(3) |
|
|
|
|
|
|
|
|
|
|
(1,354 |
) |
|
|
(1,602 |
)(3) |
Free cash flow(1)(2) |
|
A+B |
|
|
4,121 |
|
|
|
628 |
|
|
|
(63 |
) |
|
|
(109 |
) |
|
|
4,058 |
|
|
|
519 |
|
|
|
|
(1) |
|
For information regarding Net cash provided by (used in) financing activities please refer to
the discussion below. |
|
(2) |
|
The closest comparable financial measure of Free cash flow under IFRS is Net cash provided by
(used in) operating activities. Net cash provided by (used in) operating activities from
continuing operations as well as from continuing and discontinued operations is reported in
our Consolidated Statements of Cash Flow. Additions to intangible assets and property, plant
and equipment from continuing operations is reconciled to the figures as reported in the
Consolidated Statements of Cash Flow in the Notes to Condensed Interim Consolidated
Financial Statements. Other companies that report Free cash flow may define and calculate
this measure differently. |
|
(3) |
|
Following a change in accounting pronouncements with the beginning of fiscal year 2010
Additions to assets held for rental in operating leases , in previous years reported under
Additions to intangible assets and property, plant and equipment , were retrospectively
reclassified from Net cash provided by (used in) investing activities to Net cash provided by
(used in) operating activities . For further information, see Notes to Condensed Interim
Consolidated Financial Statements. |
Operating activities provided net cash of 5.412 billion in the first nine months of
fiscal 2010, compared to net cash provided of 2.121 billion in the prior-year period. These
results include both continuing and discontinued operations. Within the total, continuing
operations provided net cash of 5.475 billion, compared to net cash provided of 2.230 billion in
the same period a year earlier. Supported by a strong growth in Total Sectors profit, particularly
in the Healthcare and Industry Sectors, cash flow from operating activities primarily improved on a
substantial reduction in the build-up of net working capital, particularly in the Energy Sector.
The current period included approximately 0.6 billion in outflows related to severance charges
relating to structural initiatives as well as the global SG&A reduction program initiated in prior
periods. For comparison, the prior-year nine-month period included 1.008 billion in cash outflows
associated with the settlement of legal proceedings as well as approximately 0.8 billion in
outflows stemming from previous charges related to project reviews, structural initiatives and the
global SG&A reduction program.
Discontinued operations improved to net cash used of 63 million in the first nine months of
fiscal 2010, compared to net cash used of 109 million in the prior-year period.
Investing activities in continuing and discontinued operations used net cash of 1.558 billion
in the first nine months, compared to net cash used of 1.774 billion in the prior-year period.
Within the total, net cash used in investing activities for continuing operations amounted to
1.485 billion in the first nine months of fiscal 2010 and 1.589 billion in the prior-year period.
Within continuing operations, cash outflows for Acquisitions, net of cash acquired, were 488
million including approximately 0.3 billion for the acquisition of Solel Solar Systems, a solar
thermal power technology company.
29
Within continuing operations, Proceeds from sales of investments,
intangibles and property, plant and equipment provided net cash of 459 million primarily due to the sale of land and buildings at SRE and the sale of our 25% minority stake in
Dräger Medical
AG & Co. KG to the majority shareholder Drägerwerk AG & Co. KgaA. For comparison the prior-year
period included net cash provided of 1.103 billion mainly from the sale of our residential real
estate holdings Siemens Wohnungsgesellschaft mbH & Co. OHG and the sale of our 50% stake in FSC to
Fujitsu Limited. In contrast, cash outflows for Purchases of investments in the prior-year period
included 0.5 billion resulting from a drawdown request by NSN under a Shareholder Loan Agreement
between Siemens and NSN.
Discontinued operations in the first nine months of fiscal 2010 used net cash of 73 million
primarily for former Com activities. In the prior-year period discontinued operations used net cash
of 185 million. In the prior-year period, cash outflows related to the fiscal 2005 divestment of
our mobile devices business included 0.3 billion for a settlement with the insolvency
administrator of BenQ Mobile GmbH & Co. OHG as well as cash outflows related to the settlement of
legal matters. Cash outflows from discontinued operations in the prior-year period were partially
offset by cash inflows resulting from a settlement between The Gores Group and us regarding pending
requirements for purchase price adjustments and further mutual obligations related to the disposal
of the former enterprise networks business.
Free cash flow from continuing and discontinued operations amounted to a positive 4.058
billion in the first nine months of fiscal 2010, compared to a positive 519 million in the
prior-year period. Total Free cash flow from continuing operations in the current period amounted
to a positive 4.121 billion, compared to a positive 628 million a year earlier. The change
year-over-year was due primarily to the increase in net cash provided by operating activities as
discussed above. Due to tight control of capital expenditures, cash used for Additions to
intangible assets and property, plant and equipment decreased to 1.354 billion from 1.602 billion
in the same period a year earlier. The cash conversion rate for continuing operations, calculated
as Free cash flow from continuing operations divided by income from continuing operations, was a
positive 0.93 for the nine months of fiscal 2010, compared to a positive 0.18 in the prior-year
period.
Free cash flows during fiscal 2009 and the first three quarters of fiscal 2010 were as
follows:
Financing activities from continuing and discontinued operations used net cash of 2.495
billion in the first nine months of fiscal 2010, compared to a net cash inflow of 1.774 billion in
the prior-year period. The earlier nine-month period included inflows of 4.0 billion from the
issuance of medium-term notes partly offset by the repayment of a 0.5 billion floating-rate
extendible note. In the current period Changes in short-term debt and other financing activities
used net cash of 751 million, resulting mainly from the repayment of outstanding commercial paper
and the settlements of financial derivatives used to hedge currency exposure in our financing
activities. For comparison, the prior-year period included net cash inflows of 296 million due to
an increase in outstanding commercial paper of 1.1 billion. These inflows were largely offset by
payments related to the settlements of financial derivatives used to hedge currency exposure in our
financing activities, and also by net repayments of loans from banks. Dividends paid to
shareholders (for fiscal 2009) in the current nine-month period amounted to 1.388 billion,
compared to 1.380 billion (paid for fiscal 2008) in the prior-year period.
30
Capital resources and requirements
Our capital resources consist of a variety of short- and long-term financial instruments
including loans from financial institutions, commercial paper, medium-term notes and bonds. In
addition, other capital resources consist of liquid resources such as Cash and cash equivalents,
future cash flows from operating activities and current Available-for-sale financial assets.
Our capital requirements include, among others, scheduled debt service, regular capital
spending, ongoing cash requirements from operating and SFS financing activities, dividend payments,
pension plan funding, portfolio activities and capital requirements for our share buyback plan, if
continued in fiscal 2010. Other expected capital requirements include cash outflows in connection
with restructuring measures.
For further information see Financial position Capital resources and requirements and
Notes to Consolidated Financial Statements in our Annual Report for fiscal 2009.
Total debt comprises our Notes and bonds , Loans from banks , Obligations under finance leases
and Other financial indebtedness such as commercial paper. Total debt comprises Short-term debt and
current maturities of long-term debt as well as Long-term debt , as stated on the Consolidated
Statements of Financial Position. Total liquidity refers to the liquid financial assets we had
available at the respective balance sheet dates to fund our business operations and pay for
near-term obligations. Total liquidity comprises Cash and cash equivalents as well as current
Available-for-sale financial assets , as stated on the Consolidated Statements of Financial
Position. Net debt results from total debt less total liquidity. Management uses the Net debt
measure for internal corporate finance management, as well as for external communication with
rating agencies, and accordingly we believe that presentation of Net debt is useful for investors.
Net debt should not, however, be considered in isolation or as an alternative to short-term debt
and long-term debt as presented in accordance with IFRS. For further information regarding Net
debt , please refer to the end of this Interim group management report.
Net debt
|
|
|
|
|
|
|
|
|
|
|
June 30, |
|
|
September 30, |
|
(in millions of ) |
|
2010 |
|
|
2009 |
|
Short-term debt and current maturities of long-term debt |
|
|
458 |
|
|
|
698 |
|
Long-term debt |
|
|
20,032 |
|
|
|
18,940 |
|
Total debt |
|
|
20,490 |
|
|
|
19,638 |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
|
11,829 |
|
|
|
10,159 |
|
Available-for-sale financial assets (current) |
|
|
262 |
|
|
|
170 |
|
Total liquidity |
|
|
12,091 |
|
|
|
10,329 |
|
|
|
|
|
|
|
|
Net debt(1) |
|
|
8,399 |
|
|
|
9,309 |
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
We typically need a considerable portion of our Cash and cash equivalents as well as current
Available-for-sale financial assets at any given time for purposes other than debt reduction.
The deduction of these items from total debt in the calculation of Net debt therefore should
not be understood to mean that these items are available exclusively for debt reduction at any
given time. |
Net debt was 8.399 billion as of June 30, 2010, compared to 9.309 billion as of
September 30, 2009. Within Net debt , Short-term debt and current maturities of long-term debt
decreased by 240 million compared to the end of the prior fiscal year, mainly due to the repayment
of commercial paper. Our Long-term debt increased by 1.092 billion compared to the end of the
prior fiscal year, primarily due to foreign currency translation effects. For further information
regarding the increase in Cash and cash equivalents please refer to Cash flow First nine months
of fiscal 2010 compared to first nine months of fiscal 2009 above.
31
Pension plan funding
At the end of the first nine months of fiscal 2010, the combined funded status of Siemens
principal pension plans showed an underfunding of 6.1 billion, compared to an underfunding of 4.0
billion at the end of fiscal 2009. The decline in funded status was due primarily to a decrease in
the discount rate assumption as of June 30, 2010, which increased Siemens estimated defined
benefit obligation (DBO). For the nine-month period in fiscal 2010, actuarial losses in the DBO,
primarily related to the decrease in the discount assumption, amounted to 2.2 billion. To a lesser
extent, DBO and underfunding increased due to accrued service and interest cost. The decline in
funded status was partly offset by a positive actual return on plan assets, employer contributions,
which included supplemental employer contributions in the U.K. in the second quarter, and a
reduction in the DBO of 192 million due to a curtailment of pension plans in the U.S. in the
second quarter. The actual return on plan assets for the first nine months of fiscal 2010,
resulting predominantly from fixed-income investments, amounted to 978 million, compared to the
expected return for the first nine months of 1,005 million, which represents a 6.4% expected
annual return. For the nine-month period in fiscal 2010, actuarial losses for plan assets amounted
to 27 million. While the change in funded status generally does not affect earnings for the
current fiscal year, it affects Other comprehensive income and equity on the Consolidated
Statements of Financial Position.
The fair value of plan assets of Siemens principal funded pension plans as of June 30, 2010,
was 22.7 billion, compared to 21.1 billion on September 30, 2009. In the first nine months of
fiscal 2010, employer contributions amounted to 469 million compared to 108 million in the
prior-year period. The increase in plan assets was due to currency translation effects of
1.1 billion, the positive actual return on plan assets mentioned earlier, and to a minor extent
due to employer contributions. These effects more than offset the benefits paid during the first
nine months.
The estimated DBO for Siemens principal pension plans amounted to 28.8 billion as of June
30, 2010, 3.7 billion higher than the DBO of 25.1 billion as of September 30, 2009. The
difference is due to a decrease in the discount rate assumption as of June 30, 2010,
currency translation effects of 1.3 billion, and to a minor extent due to the net of service and
interest cost less benefits paid during the nine months period. These effects were slightly
compensated by the positive impact of the curtailment of the U.S. pension plans in the second
quarter.
For more information on our pension plans, see Notes to Condensed Interim Consolidated
Financial Statements.
Report on risks and opportunities
Within the scope of its entrepreneurial activities and the variety of its operations,
Siemens encounters numerous risks and opportunities which could negatively or positively affect
business development. For the early recognition and successful management of relevant risks and
opportunities we employ a number of coordinated risk management and control systems. Risk
management facilitates the sustainable protection of our future corporate success and is an
integral part of all our decisions and business processes.
In our Annual Report for fiscal 2009 we described certain risks which could have a material
adverse effect on our financial condition or results of operations and the design of our risk
management system.
As previously disclosed, we conduct business with customers in countries that are subject to
export controls, embargos or other forms of trade restrictions imposed by the U.S., the European
Union or other countries or organizations. If our activities in sanctioned countries were deemed to
violate applicable regulations, we could become subject to penalties and suffer reputational harm.
32
Business with customers in Iran has recently become subject to significant further regulation under
Resolution 1929 (2010) of the Security Council of the
United Nations, the U.S. Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010
enacted on July 1, 2010 as well as the Council Implementing Regulation (EU) No 668/2010 of 26 July
2010 implementing Article 7(2) of Regulation (EC) No 423/2007 concerning restrictive measures
against Iran and the Council Decision of 26 July 2010 concerning restrictive measures against
Iran and repealing Common Position 2007/140/CFSP by the European Union. Even though we have
decided, as a general rule, not to enter into new contracts with customers in Iran, we may still
conduct certain business activities and provide products and services to customers in Iran under
limited circumstances in accordance with the detailed policies implementing this general rule, as
described in more detail in the Siemens Interim Report for the second quarter and the first half of
fiscal 2010. New or tightened export controls, embargos or other forms of trade restrictions
imposed on Iran or on other sanctioned countries in which we do business may result in a
curtailment of our existing business in such countries and in an adaptation of our policies. In
addition, the termination of our activities in Iran or other sanctioned countries may expose us to
customer claims and other actions. We are currently in the process of evaluating the potential
impact, if any, of the Iran legislation referenced above on, among other things, our Energy
business in Iran.
During the first nine months of fiscal 2010 we identified no further significant risks and
opportunities besides those presented in our Annual Report for fiscal 2009 and in the sections of
this Interim Report entitled Overview of financial results for the third quarter of fiscal 2010,
Segment information analysis, Legal proceedings and Outlook. Additional risks not known to us
or that we currently consider immaterial could also impair our business operations. We do not
expect to incur any risks that alone or in combination would appear to jeopardize the continuity of
our business.
For information concerning forward-looking statements and additional information, please also
refer to the Disclaimer at the end of this Interim group management report.
Legal proceedings
For information on legal proceedings, see Notes to Condensed Interim Consolidated
Financial Statements.
Subsequent event
After the end of the third quarter, Siemens announced that it had signed an agreement to
sell its electronics assembly systems business (Siemens Electronics Assembly Systems) to ASM
Pacific Technology, headquartered in Hong Kong. The transaction is subject to certain approvals,
including by regulatory authorities.
Outlook
We continue to expect a mid-single-digit percentage decline in organic revenue in fiscal
2010 due in part to the stabilizing effect of our strong order backlog. We expect Total Sectors
profit for fiscal 2010 above the prior-year level of 7.466 billion. This increase from our earlier
guidance of 6.0 to 6.5 billion correspondingly raises our expectation for after-tax growth in
income from continuing operations. This outlook excludes major impacts that may arise from
restructuring, portfolio transactions, impairments, and legal and regulatory matters.
33
New orders and order backlog; adjusted or organic growth rates of Revenue and new orders;
book-to-bill ratio; Total Sectors profit; return on equity, or ROE; return on capital employed, or
ROCE; Free cash flow; cash conversion rate, or CCR; EBITDA (adjusted); EBIT (adjusted); earnings
effect from purchase price allocation (PPA effects) and integration costs; net debt and adjusted
industrial net debt are or may be non-GAAP financial measures. These supplemental financial
measures should not be viewed in isolation as alternatives to measures of Siemens financial
condition, results of operations or cash flows as presented in accordance with IFRS in its
Consolidated Financial Statements. Other companies that report or describe similarly titled
financial measures may calculate them differently. A definition of these supplemental financial
measures, a reconciliation to the most directly comparable IFRS financial measures and information
regarding the usefulness and limitations of these supplemental financial measures can be found on
Siemens Investor Relations website at www.siemens.com/nonGAAP. For additional information, see
Supplemental financial measures and the related discussion in Siemens annual report on Form
20-F, which can be found on Siemens Investor Relations website or via the EDGAR system on the
website of the United States Securities and Exchange Commission.
This document contains forward-looking statements and information that is, statements
related to future, not past, events. These statements may be identified by words such as expects,
looks forward to, anticipates, intends, plans, believes, seeks, estimates, will,
project or words of similar meaning. Such statements are based on the current expectations and
certain assumptions of Siemens management, and are, therefore, subject to certain risks and
uncertainties. A variety of factors, many of which are beyond Siemens control, affect Siemens
operations, performance, business strategy and results and could cause the actual results,
performance or achievements of Siemens to be materially different from any future results,
performance or achievements that may be expressed or implied by such forward-looking statements.
For Siemens, particular uncertainties arise, among others, from changes in general economic and
business conditions (including margin developments in major business areas and recessionary
trends); the possibility that customers may delay the conversion of booked orders into revenue or
that prices will decline as a result of continued adverse market conditions to a greater extent
than currently anticipated by Siemens management; developments in the financial markets, including
fluctuations in interest and exchange rates, commodity and equity prices, debt prices (credit
spreads) and financial assets generally; continued volatility and a further deterioration of the
capital markets; a worsening in the conditions of the credit business and, in particular,
additional uncertainties arising out of the subprime, financial market and liquidity crises; future
financial performance of major industries that Siemens serves, including, without limitation, the
Sectors Industry, Energy and Healthcare; the challenges of integrating major acquisitions and
implementing joint ventures and other significant portfolio measures; the introduction of competing
products or technologies by other companies; a lack of acceptance of new products or services by
customers targeted by Siemens; changes in business strategy; the outcome of pending investigations
and legal proceedings and actions resulting from the findings of these investigations; the
potential impact of such investigations and proceedings on Siemens ongoing business including its
relationships with governments and other customers; the potential impact of such matters on
Siemens financial statements; as well as various other factors. More detailed information about
certain of the risk factors affecting Siemens is contained throughout this report and in Siemens
other filings with the SEC, which are available on the Siemens website, www.siemens.com, and on the
SECs website, www.sec.gov. Should one or more of these risks or uncertainties materialize, or
should underlying assumptions prove incorrect, actual results may vary materially from those
described in the relevant forward-looking statement as expected, anticipated, intended, planned,
believed, sought, estimated or projected. Siemens does not intend or assume any obligation to
update or revise these forward-looking statements in light of developments which differ from those
anticipated.
34
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
For the three and nine months ended June 30, 2010 and 2009
(in millions of , per share amounts in )
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months |
|
|
Nine months |
|
|
|
|
|
|
|
ended June 30, |
|
|
ended June 30, |
|
|
|
Note |
|
|
2010 |
|
|
2009 |
|
|
2010 |
|
|
2009 |
|
Revenue |
|
|
|
|
|
|
19,170 |
|
|
|
18,348 |
|
|
|
54,749 |
|
|
|
56,937 |
|
Cost of goods sold and services rendered |
|
|
|
|
|
|
(13,383 |
) |
|
|
(13,367 |
) |
|
|
(38,401 |
) |
|
|
(41,355 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
|
|
|
|
|
5,787 |
|
|
|
4,981 |
|
|
|
16,348 |
|
|
|
15,582 |
|
Research and development expenses |
|
|
|
|
|
|
(936 |
) |
|
|
(989 |
) |
|
|
(2,678 |
) |
|
|
(2,875 |
) |
Marketing, selling and general administrative expenses |
|
|
|
|
|
|
(2,871 |
) |
|
|
(2,586 |
) |
|
|
(7,941 |
) |
|
|
(7,974 |
) |
Other operating income |
|
|
3 |
|
|
|
188 |
|
|
|
597 |
|
|
|
656 |
|
|
|
881 |
|
Other operating expense |
|
|
4 |
|
|
|
(100 |
) |
|
|
(206 |
) |
|
|
(190 |
) |
|
|
(491 |
) |
Income (loss) from investments accounted for using the equity method, net |
|
|
|
|
|
|
34 |
|
|
|
(97 |
) |
|
|
85 |
|
|
|
(29 |
) |
Interest income |
|
|
5 |
|
|
|
543 |
|
|
|
512 |
|
|
|
1,590 |
|
|
|
1,618 |
|
Interest expense |
|
|
5 |
|
|
|
(470 |
) |
|
|
(508 |
) |
|
|
(1,406 |
) |
|
|
(1,699 |
) |
Other financial income (expense), net |
|
|
5 |
|
|
|
(111 |
) |
|
|
(42 |
) |
|
|
(174 |
) |
|
|
(281 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations before income taxes |
|
|
|
|
|
|
2,064 |
|
|
|
1,662 |
|
|
|
6,290 |
|
|
|
4,732 |
|
Income taxes |
|
|
|
|
|
|
(623 |
) |
|
|
(438 |
) |
|
|
(1,839 |
) |
|
|
(1,293 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations |
|
|
|
|
|
|
1,441 |
|
|
|
1,224 |
|
|
|
4,451 |
|
|
|
3,439 |
|
Income (loss) from discontinued operations, net of income taxes |
|
|
|
|
|
|
(6 |
) |
|
|
93 |
|
|
|
13 |
|
|
|
121 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
|
|
|
|
|
1,435 |
|
|
|
1,317 |
|
|
|
4,464 |
|
|
|
3,560 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attributable to: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlling interests |
|
|
|
|
|
|
24 |
|
|
|
57 |
|
|
|
98 |
|
|
|
135 |
|
Shareholders of Siemens AG |
|
|
|
|
|
|
1,411 |
|
|
|
1,260 |
|
|
|
4,366 |
|
|
|
3,425 |
|
Basic earnings per share |
|
|
15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations |
|
|
|
|
|
|
1.63 |
|
|
|
1.35 |
|
|
|
5.02 |
|
|
|
3.82 |
|
Income (loss) from discontinued operations |
|
|
|
|
|
|
(0.01 |
) |
|
|
0.10 |
|
|
|
0.01 |
|
|
|
0.14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
|
|
|
|
|
1.62 |
|
|
|
1.45 |
|
|
|
5.03 |
|
|
|
3.96 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share |
|
|
15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations |
|
|
|
|
|
|
1.61 |
|
|
|
1.34 |
|
|
|
4.97 |
|
|
|
3.80 |
|
Income (loss) from discontinued operations |
|
|
|
|
|
|
(0.01 |
) |
|
|
0.10 |
|
|
|
0.01 |
|
|
|
0.13 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
|
|
|
|
|
1.60 |
|
|
|
1.44 |
|
|
|
4.98 |
|
|
|
3.93 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(unaudited)
For the three and nine months ended June 30, 2010 and 2009
(in millions of )
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months |
|
|
Nine months |
|
|
|
ended June 30, |
|
|
ended June 30, |
|
|
|
2010 |
|
|
2009 |
|
|
2010 |
|
|
2009 |
|
Net income |
|
|
1,435 |
|
|
|
1,317 |
|
|
|
4,464 |
|
|
|
3,560 |
|
Currency translation differences |
|
|
1,144 |
|
|
|
(37 |
) |
|
|
2,136 |
|
|
|
(345 |
) |
Available-for-sale financial assets |
|
|
(2 |
) |
|
|
36 |
|
|
|
25 |
|
|
|
45 |
|
Derivative financial instruments |
|
|
(336 |
) |
|
|
195 |
|
|
|
(653 |
) |
|
|
184 |
|
Actuarial gains and losses on pension plans and similar commitments |
|
|
(1,014 |
) |
|
|
320 |
|
|
|
(1,643 |
) |
|
|
(1,857 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income, net of tax (1) |
|
|
(208 |
) |
|
|
514 |
|
|
|
(135 |
) |
|
|
(1,973 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income |
|
|
1,227 |
|
|
|
1,831 |
|
|
|
4,329 |
|
|
|
1,587 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attributable to: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlling interests |
|
|
65 |
|
|
|
39 |
|
|
|
191 |
|
|
|
149 |
|
Shareholders of Siemens AG |
|
|
1,162 |
|
|
|
1,792 |
|
|
|
4,138 |
|
|
|
1,438 |
|
|
|
|
(1) |
|
Includes income (expense) resulting from investments accounted for using the equity method
of 46 and 43, respectively, for the three months ended June 30, 2010 and 2009, and 50 and
34 for the nine months ended June 30, 2010 and 2009, respectively. |
The accompanying Notes are an integral part of these Interim Consolidated Financial
Statements.
35
SIEMENS
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
As of June 30, 2010 (unaudited) and September 30, 2009
(in millions of )
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note |
|
|
6/30/10 |
|
|
9/30/09 |
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
|
|
|
|
|
11,829 |
|
|
|
10,159 |
|
Available-for-sale financial assets |
|
|
|
|
|
|
262 |
|
|
|
170 |
|
Trade and other receivables |
|
|
|
|
|
|
15,272 |
|
|
|
14,449 |
|
Other current financial assets (1) |
|
|
|
|
|
|
2,508 |
|
|
|
2,407 |
|
Inventories |
|
|
|
|
|
|
16,304 |
|
|
|
14,129 |
|
Income tax receivables |
|
|
|
|
|
|
777 |
|
|
|
612 |
|
Other current assets |
|
|
|
|
|
|
1,317 |
|
|
|
1,191 |
|
Assets classified as held for disposal |
|
|
2 |
|
|
|
680 |
|
|
|
517 |
|
|
|
|
|
|
|
|
|
|
|
|
Total current assets |
|
|
|
|
|
|
48,949 |
|
|
|
43,634 |
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill |
|
|
6 |
|
|
|
17,975 |
|
|
|
15,821 |
|
Other intangible assets |
|
|
7 |
|
|
|
5,363 |
|
|
|
5,026 |
|
Property, plant and equipment |
|
|
|
|
|
|
11,982 |
|
|
|
11,323 |
|
Investments accounted for using the equity method |
|
|
|
|
|
|
4,879 |
|
|
|
4,679 |
|
Other financial assets (1) |
|
|
|
|
|
|
11,138 |
|
|
|
10,525 |
|
Deferred tax assets |
|
|
|
|
|
|
3,783 |
|
|
|
3,291 |
|
Other assets |
|
|
|
|
|
|
714 |
|
|
|
627 |
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
|
|
|
|
|
104,783 |
|
|
|
94,926 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
Short-term debt and current maturities of long-term debt |
|
|
8 |
|
|
|
458 |
|
|
|
698 |
|
Trade payables |
|
|
|
|
|
|
7,578 |
|
|
|
7,593 |
|
Other current financial liabilities (1) |
|
|
|
|
|
|
2,457 |
|
|
|
1,600 |
|
Current provisions |
|
|
|
|
|
|
4,771 |
|
|
|
4,191 |
|
Income tax payables |
|
|
|
|
|
|
2,194 |
|
|
|
1,936 |
|
Other current liabilities |
|
|
|
|
|
|
21,218 |
|
|
|
20,311 |
|
Liabilities associated with assets classified as held for disposal |
|
|
|
|
|
|
141 |
|
|
|
157 |
|
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities |
|
|
|
|
|
|
38,817 |
|
|
|
36,486 |
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt |
|
|
8 |
|
|
|
20,032 |
|
|
|
18,940 |
|
Pension plans and similar commitments |
|
|
9 |
|
|
|
8,054 |
|
|
|
5,938 |
|
Deferred tax liabilities |
|
|
|
|
|
|
802 |
|
|
|
776 |
|
Provisions |
|
|
10 |
|
|
|
3,015 |
|
|
|
2,771 |
|
Other financial liabilities (1) |
|
|
|
|
|
|
1,517 |
|
|
|
706 |
|
Other liabilities |
|
|
|
|
|
|
2,335 |
|
|
|
2,022 |
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities |
|
|
|
|
|
|
74,572 |
|
|
|
67,639 |
|
|
|
|
|
|
|
|
|
|
|
|
Equity |
|
|
11 |
|
|
|
|
|
|
|
|
|
Common stock, no par value (2) |
|
|
|
|
|
|
2,743 |
|
|
|
2,743 |
|
Additional paid-in capital |
|
|
|
|
|
|
5,937 |
|
|
|
5,946 |
|
Retained earnings |
|
|
|
|
|
|
23,914 |
|
|
|
22,646 |
|
Other components of equity |
|
|
|
|
|
|
359 |
|
|
|
(1,057 |
) |
Treasury shares, at cost (3) |
|
|
|
|
|
|
(3,431 |
) |
|
|
(3,632 |
) |
|
|
|
|
|
|
|
|
|
|
|
Total equity attributable to shareholders of Siemens AG |
|
|
|
|
|
|
29,522 |
|
|
|
26,646 |
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlling interests |
|
|
|
|
|
|
689 |
|
|
|
641 |
|
|
|
|
|
|
|
|
|
|
|
|
Total equity |
|
|
|
|
|
|
30,211 |
|
|
|
27,287 |
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and equity |
|
|
|
|
|
|
104,783 |
|
|
|
94,926 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Due to the retrospective application of an amended accounting pronouncement in fiscal
2010, certain derivatives, not qualifying for hedge accounting, were reclassified from
current to non-current (see Note 1 to Interim Consolidated Financial Statements). |
|
(2) |
|
Authorized: 1,111,513,421 and 1,111,513,421 shares, respectively. |
|
|
Issued: 914,203,421 and 914,203,421 shares, respectively. |
|
(3) |
|
45,130,237 and 47,777,661 shares, respectively. |
The accompanying Notes are an integral part of these Interim Consolidated Financial
Statements.
36
SIEMENS
CONSOLIDATED STATEMENTS OF CASH FLOW
(unaudited)
For the nine months ended June 30, 2010 and 2009
(in millions of )
|
|
|
|
|
|
|
|
|
|
|
Nine months |
|
|
|
ended June 30, |
|
|
|
2010 |
|
|
2009 |
|
Cash flows from operating activities |
|
|
|
|
|
|
|
|
Net income |
|
|
4,464 |
|
|
|
3,560 |
|
Adjustments to reconcile net income to cash provided |
|
|
|
|
|
|
|
|
Amortization, depreciation and impairments (1) |
|
|
2,098 |
|
|
|
2,096 |
|
Income taxes |
|
|
1,844 |
|
|
|
1,349 |
|
Interest (income) expense, net (2) |
|
|
(184 |
) |
|
|
73 |
|
(Gains) losses on sales and disposals of businesses, intangibles and property, plant and equipment, net |
|
|
(333 |
) |
|
|
(351 |
) |
(Gains) losses on sales of investments, net (3) |
|
|
(22 |
) |
|
|
(346 |
) |
(Gains) losses on sales and impairments of current available-for-sale financial assets, net |
|
|
(2 |
) |
|
|
12 |
|
(Income) losses from investments (1)(3) |
|
|
(88 |
) |
|
|
33 |
|
Other non-cash (income) expenses |
|
|
(384 |
) |
|
|
237 |
|
Change in current assets and liabilities |
|
|
|
|
|
|
|
|
(Increase) decrease in inventories |
|
|
(898 |
) |
|
|
(983 |
) |
(Increase) decrease in trade and other receivables |
|
|
221 |
|
|
|
1,044 |
|
(Increase) decrease in other current assets (4) |
|
|
(58 |
) |
|
|
(177 |
) |
Increase (decrease) in trade payables |
|
|
(511 |
) |
|
|
(1,666 |
) |
Increase (decrease) in current provisions |
|
|
222 |
|
|
|
(1,064 |
) |
Increase (decrease) in other current liabilities (4) |
|
|
114 |
|
|
|
(1,145 |
) |
Change in other assets and liabilities (2)(4) |
|
|
(312 |
) |
|
|
(11 |
) |
Additions to assets held for rental in operating leases (5) |
|
|
(421 |
) |
|
|
(324 |
) |
Income taxes paid |
|
|
(1,335 |
) |
|
|
(1,159 |
) |
Dividends received |
|
|
495 |
|
|
|
359 |
|
Interest received |
|
|
502 |
|
|
|
584 |
|
|
|
|
|
|
|
|
Net cash provided by (used in) operating activities continuing and discontinued operations |
|
|
5,412 |
|
|
|
2,121 |
|
Net cash provided by (used in) operating activities continuing operations |
|
|
5,475 |
|
|
|
2,230 |
|
Cash flows from investing activities |
|
|
|
|
|
|
|
|
Additions to intangible assets and property, plant and equipment (5) |
|
|
(1,354 |
) |
|
|
(1,602 |
) |
Acquisitions, net of cash acquired |
|
|
(488 |
) |
|
|
(199 |
) |
Purchases of investments (3) |
|
|
(161 |
) |
|
|
(705 |
) |
Purchases of current available-for-sale financial assets |
|
|
(125 |
) |
|
|
(30 |
) |
(Increase) decrease in receivables from financing activities |
|
|
27 |
|
|
|
(117 |
) |
Proceeds from sales of investments, intangibles and property, plant and equipment (3) |
|
|
459 |
|
|
|
1,106 |
|
Proceeds and (payments) from disposals of businesses |
|
|
43 |
|
|
|
(254 |
) |
Proceeds from sales of current available-for-sale financial assets |
|
|
41 |
|
|
|
27 |
|
|
|
|
|
|
|
|
Net cash provided by (used in) investing activities continuing and discontinued operations |
|
|
(1,558 |
) |
|
|
(1,774 |
) |
Net cash provided by (used in) investing activities continuing operations |
|
|
(1,485 |
) |
|
|
(1,589 |
) |
Cash flows from financing activities |
|
|
|
|
|
|
|
|
Proceeds from re-issuance of treasury stock |
|
|
92 |
|
|
|
134 |
|
Proceeds from issuance of long-term debt |
|
|
|
|
|
|
3,973 |
|
Repayment of long-term debt (including current maturities of long-term debt) |
|
|
|
|
|
|
(500 |
) |
Change in short-term debt and other financing activities |
|
|
(751 |
) |
|
|
296 |
|
Interest paid |
|
|
(345 |
) |
|
|
(639 |
) |
Dividends paid |
|
|
(1,388 |
) |
|
|
(1,380 |
) |
Dividends paid to non-controlling interest holders |
|
|
(103 |
) |
|
|
(110 |
) |
|
|
|
|
|
|
|
Net cash provided by (used in) financing activities continuing and discontinued operations |
|
|
(2,495 |
) |
|
|
1,774 |
|
Net cash provided by (used in) financing activities continuing operations |
|
|
(2,631 |
) |
|
|
1,480 |
|
Effect of exchange rates on cash and cash equivalents |
|
|
376 |
|
|
|
27 |
|
Net increase (decrease) in cash and cash equivalents |
|
|
1,735 |
|
|
|
2,148 |
|
Cash and cash equivalents at beginning of period |
|
|
10,204 |
|
|
|
6,929 |
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of period |
|
|
11,939 |
|
|
|
9,077 |
|
Less: Cash and cash equivalents of assets classified as held for disposal and discontinued operations
at end of period |
|
|
110 |
|
|
|
59 |
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of period (Consolidated Statements of Financial Position) |
|
|
11,829 |
|
|
|
9,018 |
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Impairments, net of reversals of impairments, on investments accounted for using the
equity method and non-current available-for-sale investments are reclassified
retrospectively to conform to the current year presentation. |
|
(2) |
|
Pension related interest income (expense) is reclassified retrospectively to conform to
the current year presentation. |
|
(3) |
|
Investments include equity instruments either classified as non-current
available-for-sale financial assets, accounted for using the equity method or classified
as held for disposal. Purchases of Investments includes certain loans to Investments
accounted for using the equity method. |
|
(4) |
|
Includes effects from the retrospective application of an amended accounting
pronouncement in fiscal 2010, which resulted in the reclassification of certain
derivatives, not qualifying for hedge accounting, from current to non-current. In
addition, the prior year presentation related to derivatives qualifying for cash flow
hedge accounting was reclassified to conform to the current year presentation. |
|
(5) |
|
Following a change in accounting pronouncements with the beginning of fiscal year 2010
additions to assets held for rental in operating leases, in previous years reported under
additions to intangible assets and property, plant and equipment, were retrospectively
reclassified from net cash provided by (used in) investing activities to net cash provided
by (used in) operating activities. For further information, see Notes to Condensed Interim
Consolidated Financial Statements. |
The accompanying Notes are an integral part of these Interim Consolidated Financial
Statements.
37
SIEMENS
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(unaudited)
For the nine months ended June 30, 2010 and 2009
(in millions of )
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other components of equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Available- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional |
|
|
|
|
|
|
Currency |
|
|
for-sale |
|
|
Derivative |
|
|
|
|
|
|
Treasury |
|
|
attributable |
|
|
|
|
|
|
|
|
|
Common |
|
|
paid-in |
|
|
Retained |
|
|
translation |
|
|
financial |
|
|
financial |
|
|
|
|
|
|
shares |
|
|
to shareholders |
|
|
Non-controlling |
|
|
Total |
|
|
|
stock |
|
|
capital |
|
|
earnings(1) |
|
|
differences |
|
|
assets |
|
|
instruments |
|
|
Total |
|
|
at cost |
|
|
of Siemens AG |
|
|
interests |
|
|
equity |
|
Balance at October 1, 2008 |
|
|
2,743 |
|
|
|
5,997 |
|
|
|
22,989 |
|
|
|
(789 |
) |
|
|
4 |
|
|
|
(168 |
) |
|
|
22,036 |
|
|
|
(4,002 |
) |
|
|
26,774 |
|
|
|
606 |
|
|
|
27,380 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income |
|
|
|
|
|
|
|
|
|
|
1,568 |
(1) |
|
|
(359 |
) |
|
|
45 |
|
|
|
184 |
|
|
|
1,438 |
|
|
|
|
|
|
|
1,438 |
|
|
|
149 |
|
|
|
1,587 |
(2) |
Dividends |
|
|
|
|
|
|
|
|
|
|
(1,380 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,380 |
) |
|
|
|
|
|
|
(1,380 |
) |
|
|
(101 |
) |
|
|
(1,481 |
) |
Issuance of common stock and share-based payment |
|
|
|
|
|
|
61 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
61 |
|
|
|
|
|
|
|
61 |
|
Purchase of common stock |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Re-issuance of treasury stock |
|
|
|
|
|
|
(113 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
370 |
|
|
|
257 |
|
|
|
|
|
|
|
257 |
|
Other changes in equity |
|
|
|
|
|
|
|
|
|
|
(6 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(6 |
) |
|
|
|
|
|
|
(6 |
) |
|
|
(8 |
) |
|
|
(14 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at June 30, 2009 |
|
|
2,743 |
|
|
|
5,945 |
|
|
|
23,171 |
|
|
|
(1,148 |
) |
|
|
49 |
|
|
|
16 |
|
|
|
22,088 |
|
|
|
(3,632 |
) |
|
|
27,144 |
|
|
|
646 |
|
|
|
27,790 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at October 1, 2009 |
|
|
2,743 |
|
|
|
5,946 |
|
|
|
22,646 |
|
|
|
(1,294 |
) |
|
|
76 |
|
|
|
161 |
|
|
|
21,589 |
|
|
|
(3,632 |
) |
|
|
26,646 |
|
|
|
641 |
|
|
|
27,287 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income |
|
|
|
|
|
|
|
|
|
|
2,726 |
(1) |
|
|
2,038 |
|
|
|
25 |
|
|
|
(651 |
) |
|
|
4,138 |
|
|
|
|
|
|
|
4,138 |
|
|
|
191 |
|
|
|
4,329 |
(2) |
Dividends |
|
|
|
|
|
|
|
|
|
|
(1,388 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,388 |
) |
|
|
|
|
|
|
(1,388 |
) |
|
|
(173 |
) |
|
|
(1,561 |
) |
Issuance of common stock and share-based payment |
|
|
|
|
|
|
11 |
|
|
|
(17 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(17 |
) |
|
|
|
|
|
|
(6 |
) |
|
|
|
|
|
|
(6 |
) |
Purchase of common stock |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Re-issuance of treasury stock |
|
|
|
|
|
|
(20 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
201 |
|
|
|
181 |
|
|
|
|
|
|
|
181 |
|
Other changes in equity |
|
|
|
|
|
|
|
|
|
|
(53 |
) |
|
|
4 |
|
|
|
|
|
|
|
|
|
|
|
(49 |
) |
|
|
|
|
|
|
(49 |
) |
|
|
30 |
|
|
|
(19 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at June 30, 2010 |
|
|
2,743 |
|
|
|
5,937 |
|
|
|
23,914 |
|
|
|
748 |
|
|
|
101 |
|
|
|
(490 |
) |
|
|
24,273 |
|
|
|
(3,431 |
) |
|
|
29,522 |
|
|
|
689 |
|
|
|
30,211 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Retained earnings includes actuarial gains and losses on pension plans and similar
commitments of (1,640) and (1,857), respectively, in the nine months ended June 30, 2010 and
2009. |
|
(2) |
|
In the nine months ended June 30, 2010 and 2009, Total comprehensive income is net of tax. In
the nine months ended June 30, 2010, Total comprehensive income in Total equity includes non
controlling interests of (3) relating to Actuarial gains and losses on pension plans and
similar commitments, 98 relating to Currency translation differences, relating to
Available-for-sale financial assets and (2) relating to Derivative financial instruments. |
The accompanying Notes are an integral part of these Interim Consolidated Financial
Statements.
38
SIEMENS
SEGMENT INFORMATION (continuing operations unaudited)
As of and for the three months ended June 30, 2010 and 2009 and as of September 30, 2009
(in millions of )
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additions to |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
intangible assets |
|
|
Amortization, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intersegment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and property, plant |
|
|
depreciation and |
|
|
|
New orders(1) |
|
|
External revenue |
|
|
revenue |
|
|
Total revenue |
|
|
Profit(2) |
|
|
Assets(3) |
|
|
Free cash flow(4) |
|
|
and equipment(5) |
|
|
impairments(6) |
|
|
|
2010 |
|
|
2009 |
|
|
2010 |
|
|
2009 |
|
|
2010 |
|
|
2009 |
|
|
2010 |
|
|
2009 |
|
|
2010 |
|
|
2009 |
|
|
6/30/10 |
|
|
9/30/09 |
|
|
2010 |
|
|
2009 |
|
|
2010 |
|
|
2009 |
|
|
2010 |
|
|
2009 |
|
Sectors |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Industry |
|
|
8,805 |
|
|
|
6,597 |
|
|
|
8,441 |
|
|
|
7,871 |
|
|
|
278 |
|
|
|
258 |
|
|
|
8,720 |
|
|
|
8,129 |
|
|
|
900 |
|
|
|
534 |
|
|
|
10,953 |
|
|
|
10,551 |
|
|
|
979 |
|
|
|
673 |
|
|
|
177 |
|
|
|
171 |
|
|
|
253 |
|
|
|
264 |
|
Energy |
|
|
8,061 |
|
|
|
6,849 |
|
|
|
6,392 |
|
|
|
6,350 |
|
|
|
70 |
|
|
|
86 |
|
|
|
6,462 |
|
|
|
6,436 |
|
|
|
925 |
|
|
|
863 |
|
|
|
1,461 |
|
|
|
1,594 |
|
|
|
1,158 |
|
|
|
489 |
|
|
|
130 |
|
|
|
139 |
|
|
|
117 |
|
|
|
98 |
|
Healthcare |
|
|
3,260 |
|
|
|
2,772 |
|
|
|
3,126 |
|
|
|
2,849 |
|
|
|
26 |
|
|
|
16 |
|
|
|
3,152 |
|
|
|
2,865 |
|
|
|
506 |
|
|
|
270 |
|
|
|
13,967 |
|
|
|
12,813 |
|
|
|
729 |
|
|
|
527 |
|
|
|
85 |
|
|
|
85 |
|
|
|
169 |
|
|
|
172 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Sectors |
|
|
20,126 |
|
|
|
16,218 |
|
|
|
17,959 |
|
|
|
17,070 |
|
|
|
374 |
|
|
|
360 |
|
|
|
18,334 |
|
|
|
17,430 |
|
|
|
2,331 |
|
|
|
1,667 |
|
|
|
26,380 |
|
|
|
24,958 |
|
|
|
2,867 |
|
|
|
1,689 |
|
|
|
392 |
|
|
|
395 |
|
|
|
539 |
|
|
|
534 |
|
Equity Investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2 |
|
|
|
157 |
|
|
|
3,463 |
|
|
|
3,833 |
|
|
|
388 |
|
|
|
152 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cross-Sector Businesses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Siemens IT Solutions and Services |
|
|
993 |
|
|
|
1,091 |
|
|
|
798 |
|
|
|
844 |
|
|
|
247 |
|
|
|
258 |
|
|
|
1,045 |
|
|
|
1,102 |
|
|
|
(81 |
) |
|
|
19 |
|
|
|
336 |
|
|
|
241 |
|
|
|
1 |
|
|
|
(71 |
) |
|
|
27 |
|
|
|
25 |
|
|
|
35 |
|
|
|
39 |
|
Siemens Financial Services (SFS) |
|
|
195 |
|
|
|
189 |
|
|
|
149 |
|
|
|
154 |
|
|
|
44 |
|
|
|
34 |
|
|
|
193 |
|
|
|
188 |
|
|
|
113 |
|
|
|
87 |
|
|
|
13,050 |
|
|
|
11,704 |
|
|
|
13 |
|
|
|
55 |
|
|
|
36 |
|
|
|
24 |
|
|
|
89 |
|
|
|
80 |
|
Reconciliation to Consolidated Financial Statements |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Centrally managed portfolio activities |
|
|
136 |
|
|
|
99 |
|
|
|
103 |
|
|
|
107 |
|
|
|
3 |
|
|
|
19 |
|
|
|
106 |
|
|
|
126 |
|
|
|
(16 |
) |
|
|
(99 |
) |
|
|
(461 |
) |
|
|
(543 |
) |
|
|
(12 |
) |
|
|
(32 |
) |
|
|
2 |
|
|
|
2 |
|
|
|
2 |
|
|
|
(1 |
) |
Siemens Real Estate (SRE) |
|
|
500 |
|
|
|
429 |
|
|
|
73 |
|
|
|
85 |
|
|
|
413 |
|
|
|
344 |
|
|
|
487 |
|
|
|
429 |
|
|
|
107 |
|
|
|
244 |
|
|
|
4,843 |
|
|
|
4,489 |
|
|
|
(12 |
) |
|
|
3 |
|
|
|
73 |
|
|
|
87 |
|
|
|
68 |
|
|
|
42 |
|
Corporate items and pensions |
|
|
104 |
|
|
|
104 |
|
|
|
89 |
|
|
|
88 |
|
|
|
27 |
|
|
|
21 |
|
|
|
116 |
|
|
|
109 |
|
|
|
(266 |
) |
|
|
(431 |
) |
|
|
(9,211 |
) |
|
|
(7,445 |
) |
|
|
(235 |
) |
|
|
(298 |
) |
|
|
15 |
|
|
|
12 |
|
|
|
15 |
|
|
|
21 |
|
Eliminations, Corporate Treasury and other reconciling items |
|
|
(1,183 |
) |
|
|
(970 |
) |
|
|
|
|
|
|
|
|
|
|
(1,109 |
) |
|
|
(1,036 |
) |
|
|
(1,109 |
) |
|
|
(1,036 |
) |
|
|
(125 |
) |
|
|
18 |
|
|
|
66,383 |
|
|
|
57,689 |
|
|
|
(865 |
) |
|
|
(434 |
) |
|
|
(5 |
) |
|
|
|
|
|
|
(14 |
) |
|
|
(15 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Siemens |
|
|
20,871 |
|
|
|
17,160 |
|
|
|
19,170 |
|
|
|
18,348 |
|
|
|
|
|
|
|
|
|
|
|
19,170 |
|
|
|
18,348 |
|
|
|
2,064 |
|
|
|
1,662 |
|
|
|
104,783 |
|
|
|
94,926 |
|
|
|
2,145 |
|
|
|
1,064 |
|
|
|
539 |
|
|
|
545 |
|
|
|
733 |
|
|
|
700 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
This supplementary information on New orders is provided on a voluntary basis. It
is not part of the Interim Consolidated Financial Statements subject to the review
opinion. |
|
(2) |
|
Profit of the Sectors as well as of Equity Investments, Siemens IT Solutions and
Services and Centrally managed portfolio activities is earnings before financing
interest, certain pension costs and income taxes. Certain other items not considered
performance indicative by Management may be excluded. Profit of SFS and SRE is
Income before income taxes. |
|
(3) |
|
Assets of the Sectors as well as of Equity Investments, Siemens IT Solutions and
Services and Centrally managed portfolio activities is defined as Total assets less
income tax assets, less non-interest bearing liabilities/provisions other than tax
liabilities. Assets of SFS and SRE is Total assets. |
|
(4) |
|
Free cash flow represents net cash provided by (used in) operating activities less
additions to intangible assets and property, plant and equipment. Free cash flow of
the Sectors, Equity Investments, Siemens IT Solutions and Services and Centrally
managed portfolio activities primarily exclude income tax, financing interest and
certain pension related payments and proceeds. Free cash flow of SFS, a financial
services business, and of SRE includes related financing interest payments and
proceeds; income tax payments and proceeds of SFS and SRE are excluded. |
|
(5) |
|
To correspond with the presentation in the Consolidated Statements of Cash Flow,
with the beginning of fiscal year 2010, additions to intangible assets and property,
plant and equipment are reported excluding additions to assets held for rental in
operating leases. Additions to assets held for rental in operating leases amount to
183 and 95 in the three months ended June 30, 2010 and 2009, respectively. For
further information, see Notes to Condensed Interim Consolidated Financial
Statements. |
|
(6) |
|
Amortization, depreciation and impairments contains amortization and impairments,
net of reversals of impairments, of intangible assets other than goodwill as well as
depreciation and impairments of property, plant and equipment, net of reversals of
impairments. |
Due to rounding, numbers presented may not add up precisely to totals provided.
39
SIEMENS
SEGMENT INFORMATION (continuing operations unaudited)
As of and for the nine months ended June 30, 2010 and 2009 and as of September 30, 2009
(in millions of )
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additions to |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
intangible assets |
|
|
Amortization, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intersegment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and property, plant |
|
|
depreciation and |
|
|
|
New orders(1) |
|
|
External revenue |
|
|
revenue |
|
|
Total revenue |
|
|
Profit(2) |
|
|
Assets(3) |
|
|
Free cash flow(4) |
|
|
and equipment(5) |
|
|
impairments(6) |
|
|
|
2010 |
|
|
2009 |
|
|
2010 |
|
|
2009 |
|
|
2010 |
|
|
2009 |
|
|
2010 |
|
|
2009 |
|
|
2010 |
|
|
2009 |
|
|
6/30/10 |
|
|
9/30/09 |
|
|
2010 |
|
|
2009 |
|
|
2010 |
|
|
2009 |
|
|
2010 |
|
|
2009 |
|
Sectors |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Industry |
|
|
25,076 |
|
|
|
25,174 |
|
|
|
24,283 |
|
|
|
25,254 |
|
|
|
805 |
|
|
|
808 |
|
|
|
25,088 |
|
|
|
26,062 |
|
|
|
2,595 |
|
|
|
2,139 |
|
|
|
10,953 |
|
|
|
10,551 |
|
|
|
2,701 |
|
|
|
1,898 |
|
|
|
416 |
|
|
|
552 |
|
|
|
742 |
|
|
|
772 |
|
Energy |
|
|
21,061 |
|
|
|
23,589 |
|
|
|
18,030 |
|
|
|
18,749 |
|
|
|
230 |
|
|
|
283 |
|
|
|
18,260 |
|
|
|
19,032 |
|
|
|
2,608 |
|
|
|
2,437 |
|
|
|
1,461 |
|
|
|
1,594 |
|
|
|
2,679 |
|
|
|
1,001 |
|
|
|
327 |
|
|
|
399 |
|
|
|
321 |
|
|
|
272 |
|
Healthcare |
|
|
9,075 |
|
|
|
8,619 |
|
|
|
8,895 |
|
|
|
8,739 |
|
|
|
55 |
|
|
|
46 |
|
|
|
8,951 |
|
|
|
8,785 |
|
|
|
1,521 |
|
|
|
967 |
|
|
|
13,967 |
|
|
|
12,813 |
|
|
|
1,674 |
|
|
|
1,078 |
|
|
|
231 |
|
|
|
242 |
|
|
|
478 |
|
|
|
492 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Sectors |
|
|
55,212 |
|
|
|
57,382 |
|
|
|
51,209 |
|
|
|
52,742 |
|
|
|
1,091 |
|
|
|
1,137 |
|
|
|
52,299 |
|
|
|
53,879 |
|
|
|
6,724 |
|
|
|
5,543 |
|
|
|
26,380 |
|
|
|
24,958 |
|
|
|
7,053 |
|
|
|
3,977 |
|
|
|
974 |
|
|
|
1,193 |
|
|
|
1,540 |
|
|
|
1,536 |
|
Equity Investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(10 |
) |
|
|
129 |
|
|
|
3,463 |
|
|
|
3,833 |
|
|
|
402 |
|
|
|
231 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cross-Sector Businesses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Siemens IT Solutions and Services |
|
|
3,096 |
|
|
|
3,403 |
|
|
|
2,356 |
|
|
|
2,700 |
|
|
|
712 |
|
|
|
827 |
|
|
|
3,069 |
|
|
|
3,527 |
|
|
|
(74 |
) |
|
|
90 |
|
|
|
336 |
|
|
|
241 |
|
|
|
(135 |
) |
|
|
(216 |
) |
|
|
62 |
|
|
|
88 |
|
|
|
102 |
|
|
|
142 |
|
Siemens Financial Services (SFS) |
|
|
597 |
|
|
|
568 |
|
|
|
502 |
|
|
|
480 |
|
|
|
94 |
|
|
|
87 |
|
|
|
597 |
|
|
|
567 |
|
|
|
310 |
|
|
|
270 |
|
|
|
13,050 |
|
|
|
11,704 |
|
|
|
255 |
|
|
|
273 |
|
|
|
82 |
|
|
|
79 |
|
|
|
247 |
|
|
|
239 |
|
Reconciliation to Consolidated Financial Statements |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Centrally managed portfolio activities |
|
|
306 |
|
|
|
425 |
|
|
|
212 |
|
|
|
422 |
|
|
|
10 |
|
|
|
39 |
|
|
|
223 |
|
|
|
461 |
|
|
|
(56 |
) |
|
|
(233 |
) |
|
|
(461 |
) |
|
|
(543 |
) |
|
|
(92 |
) |
|
|
(199 |
) |
|
|
5 |
|
|
|
8 |
|
|
|
6 |
|
|
|
27 |
|
Siemens Real Estate (SRE) |
|
|
1,408 |
|
|
|
1,295 |
|
|
|
225 |
|
|
|
278 |
|
|
|
1,169 |
|
|
|
1,017 |
|
|
|
1,394 |
|
|
|
1,295 |
|
|
|
275 |
|
|
|
326 |
|
|
|
4,843 |
|
|
|
4,489 |
|
|
|
24 |
|
|
|
15 |
|
|
|
207 |
|
|
|
205 |
|
|
|
199 |
|
|
|
116 |
|
Corporate items and pensions |
|
|
318 |
|
|
|
281 |
|
|
|
245 |
|
|
|
315 |
|
|
|
97 |
|
|
|
38 |
|
|
|
342 |
|
|
|
353 |
|
|
|
(710 |
) |
|
|
(1,120 |
) |
|
|
(9,211 |
) |
|
|
(7,445 |
) |
|
|
(1,699 |
) |
|
|
(2,329 |
) |
|
|
35 |
|
|
|
36 |
|
|
|
48 |
|
|
|
64 |
|
Eliminations, Corporate Treasury and other
reconciling items |
|
|
(3,246 |
) |
|
|
(3,110 |
) |
|
|
|
|
|
|
|
|
|
|
(3,174 |
) |
|
|
(3,145 |
) |
|
|
(3,174 |
) |
|
|
(3,145 |
) |
|
|
(169 |
) |
|
|
(273 |
) |
|
|
66,383 |
|
|
|
57,689 |
|
|
|
(1,689 |
) |
|
|
(1,124 |
) |
|
|
(10 |
) |
|
|
(7 |
) |
|
|
(45 |
) |
|
|
(51 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Siemens |
|
|
57,691 |
|
|
|
60,244 |
|
|
|
54,749 |
|
|
|
56,937 |
|
|
|
|
|
|
|
|
|
|
|
54,749 |
|
|
|
56,937 |
|
|
|
6,290 |
|
|
|
4,732 |
|
|
|
104,783 |
|
|
|
94,926 |
|
|
|
4,121 |
|
|
|
628 |
|
|
|
1,354 |
|
|
|
1,602 |
|
|
|
2,098 |
|
|
|
2,073 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
This supplementary information on New orders is provided on a voluntary basis. It
is not part of the Interim Consolidated Financial Statements subject to the review
opinion. |
|
(2) |
|
Profit of the Sectors as well as of Equity Investments, Siemens IT Solutions and
Services and Centrally managed portfolio activities is earnings before financing
interest, certain pension costs and income taxes. Certain other items not considered
performance indicative by Management may be excluded. Profit of SFS and SRE is
Income before income taxes. |
|
(3) |
|
Assets of the Sectors as well as of Equity Investments, Siemens IT Solutions and
Services and Centrally managed portfolio activities is defined as Total assets less
income tax assets, less non-interest bearing liabilities/provisions other than tax
liabilities. Assets of SFS and SRE is Total assets. |
|
(4) |
|
Free cash flow represents net cash provided by (used in) operating activities less
additions to intangible assets and property, plant and equipment. Free cash flow of
the Sectors, Equity Investments, Siemens IT Solutions and Services and Centrally
managed portfolio activities primarily exclude income tax, financing interest and
certain pension related payments and proceeds. Free cash flow of SFS, a financial
services business, and of SRE includes related financing interest payments and
proceeds; income tax payments and proceeds of SFS and SRE are excluded. |
|
(5) |
|
To correspond with the presentation in the Consolidated Statements of Cash Flow,
with the beginning of fiscal year 2010 additions to intangible assets and property,
plant and equipment are reported excluding additions to assets held for rental in
operating leases. Additions to assets held for rental in operating leases amount to
421 and 324 in the nine months ended June 30, 2010 and 2009, respectively. For
further information, see Notes to Condensed Interim Consolidated Financial
Statements. |
|
(6) |
|
Amortization, depreciation and impairments contains amortization and impairments,
net of reversals of impairments, of intangible assets other than goodwill as well as
depreciation and impairments of property, plant and equipment, net of reversals of
impairments. |
Due to rounding, numbers presented may not add up precisely to totals provided.
40
SIEMENS
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(in millions of , except where otherwise stated and per share amounts)
1. Basis of presentation
The accompanying Condensed Interim Consolidated Financial Statements (Interim Consolidated
Financial Statements) present the operations of Siemens AG and its subsidiaries (the Company or
Siemens). The Interim Consolidated Financial Statements have been prepared in accordance with
International Financial Reporting Standards (IFRS) and its interpretations issued by the
International Accounting Standards Board (IASB), as adopted by the European Union (EU). The Interim
Consolidated Financial Statements also comply with IFRS as issued by the IASB.
Siemens prepares and reports its Interim Consolidated Financial Statements in euros (). Siemens is
a German based multinational corporation with a balanced business portfolio of activities
predominantly in the fields of electronics and electrical engineering.
Interim Consolidated Financial StatementsThe accompanying Consolidated Statement of Financial
Position as of June 30, 2010, the Consolidated Statements of Income for the three and nine months
ended June 30, 2010 and 2009, the Consolidated Statements of Comprehensive Income for the three and
nine months ended June 30, 2010 and 2009, the Consolidated Statements of Cash Flow for the nine
months ended June 30, 2010 and 2009, the Consolidated Statements of Changes in Equity for the nine
months ended June 30, 2010 and 2009 and the explanatory Notes to Consolidated Financial Statements
are unaudited and have been prepared for interim financial information. These Interim Consolidated
Financial Statements are condensed and prepared in compliance with International Accounting
Standard (IAS) 34, Interim Financial Reporting, and shall be read in connection with Siemens
Annual IFRS Consolidated Financial Statements as of September 30, 2009. The interim financial
statements apply the same accounting principles and practices as those used in the 2009 annual
financial statements, except for the adoption of new pronouncements in fiscal 2010 which did not
have a material impact on the Companys Consolidated Financial Statements and which primarily
relate to IAS 1, Presentation of Financial Statements: A Revised Presentation (IAS 1 revised),
(applied retrospectively), IFRS 3, Business Combinations (IFRS 3 (2008)), IAS 27, Consolidated and
Separate Financial Statements (IAS 27 (2008)); as well as to IAS 7 Statement of Cash Flows (applied
retrospectively) and IAS 16 Property, Plant and Equipment in conjunction with the 2008 Improvements
to IFRSs and IAS 23 Borrowing Costs (as revised 2007). For further information on impacts of the
new pronouncements on the Companys Consolidated Financial Statements see Note 2 to the Companys
Consolidated Financial Statements as of September 30, 2009. In the opinion of management, these
unaudited Interim Consolidated Financial Statements include all adjustments of a normal and
recurring nature necessary for a fair presentation of results for the interim periods. Results for
the three and nine months ended June 30, 2010, are not necessarily indicative of future results.
The Interim Consolidated Financial Statements were authorized for issue by the Managing Board
on July 30, 2010.
Financial statement presentationInformation disclosed in the Notes relates to Siemens unless
stated otherwise.
Basis of consolidationThe Interim Consolidated Financial Statements include the accounts of
Siemens AG and its subsidiaries, which are directly or indirectly controlled. Control is generally
conveyed by ownership of the majority of voting rights. Additionally, the Company consolidates
special purpose entities (SPEs) when, based on the evaluation of the substance of the relationship
with Siemens, the Company concludes that it controls the SPE. To determine when the Company should
consolidate based on substance, Siemens considers the circumstances listed in SIC-12.10 as
additional indicators regarding a relationship in which Siemens controls an SPE. Siemens looks at
these SIC-12.10 circumstances as indicators and always privileges an analysis of individual facts
and circumstances on a case-by-case basis. Associated companiescompanies in which Siemens has the
ability to exercise significant influence over operating and financial policies (generally through
direct or indirect ownership of 20% to 50% of the voting rights)are recorded in the Consolidated
Financial Statements using the equity method of accounting. Companies in which Siemens has joint
control are also accounted for under the equity method.
Business combinations IFRS 3, Business Combinations (IFRS 3 (2008)) and IAS 27, Consolidated and
Separate Financial Statements (IAS 27 (2008)) have been applied by Siemens starting in fiscal 2010.
All business combinations are accounted for under the acquisition method. The cost of an
acquisition is measured at the fair value of the assets given and liabilities incurred or assumed
at the date of exchange. Acquisition-related costs are expensed in the period incurred.
Identifiable assets acquired and liabilities assumed in a business combination (including
contingent liabilities) are measured initially at their fair values at the acquisition date,
irrespective of the extent of any non-controlling interest. Any changes to contingent consideration
classified as a liability at the acquisition date are recognized in profit and loss.
41
SIEMENS
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(in millions of , except where otherwise stated and per share amounts)
Non-controlling interests may be measured at their fair value (full-goodwill-methodology) or at the
proportional fair value of assets acquired and liabilities assumed. After initial recognition
non-controlling interests may show a deficit balance since both profits and losses are allocated to
the shareholders based on their equity interests. In business combinations achieved in stages, any
previously held equity interest in the acquiree is remeasured to its acquisition date fair value.
If there is no loss of control, transactions with non-controlling interests are accounted for as
equity transactions not affecting profit and loss. At the date control is lost, any retained equity
interests are re-measured to fair value.
Use of estimatesThe preparation of financial statements requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent
amounts at the date of the financial statements as well as reported amounts of income and expenses
during the reporting period. Actual results could differ from those estimates.
Income taxesIn interim periods, tax expense is based on the current estimated annual effective tax
rate.
ReclassificationsThe presentation of certain prior-year information has been reclassified to
conform to the current year presentation. In May 2008 the IASB issued a standard for improvements
to International Financial Reporting Standards. In the cash flow statement, according to an
amendment of IAS 7, Statement of Cash Flows, cash flows to manufacture or acquire
assets held for rental and subsequent sale in the course of the ordinary activities are presented
as cash flows from operating activities. Previously, cash outflows in the context of operating
leases have been presented as cash flows from investing activities. The amended IAS 7 is effective
for annual periods beginning on or after January 1, 2009. Siemens applies the amendment
retrospectively in the cash flow statement in fiscal year 2010. The amended IAS 1, applied
retrospectively in fiscal 2010, resulted in the reclassification of certain derivative financial
instruments, not qualifying for hedge accounting, from current to non-current. Beginning in fiscal
2010, the Company presents total interest income and expense separately in the Consolidated
Statements of Income in accordance with Part II of the Annual Improvements Project 2008 of the
IASB. Additionally, pension related interest income (expense) as well as Impairments, net of
reversals of impairments, on investments accounted for using the equity method and non-current
available-for-sale investments are reclassified retrospectively in the Consolidated Statements of
Cash Flow to conform to the current year presentation.
Recent accounting pronouncements, not yet adoptedIn November 2009, the IASB issued IFRS 9
Financial Instruments. This standard is the first phase of the IASBs three-phase project to
replace IAS 39 Financial Instruments: Recognition and Measurement. IFRS 9 amends the classification
and measurement requirements for financial assets, including some hybrid contracts. It uses a
single approach to determine whether a financial asset is measured at amortized cost or fair value,
replacing the different rules in IAS 39. The approach in IFRS 9 is based on how an entity manages
its financial instruments (its business model) and the contractual cash flow characteristics of the
financial assets. The new standard also requires a single impairment method to be used, replacing
the different impairment methods in IAS 39. The new standard is applicable for annual reporting
periods beginning on or after January 1, 2013; early adoption is permitted. The European Financial
Reporting Advisory Group postponed its endorsement advice, to take more time to consider the output
from the IASB project to improve accounting for financial instruments. The Company is currently
assessing the impacts of the adoption on the Companys Consolidated Financial Statements.
The IASB issued various other pronouncements, which do not have a material impact on Siemens
Consolidated Financial Statements.
2. Acquisitions, dispositions and discontinued operations
a) Acquisitions
At the beginning of November 2009, Siemens completed the acquisition of 100 percent of Solel Solar
Systems Ltd., a solar thermal power technology company. Solel Solar Systems Ltd., which was
consolidated as of November 2009, will be integrated into Energy Sectors Renewable Energy
Division. The aggregate consideration amounts to approximately 279 (including cash acquired). The
Company further proceeded in the purchase price allocation in the third quarter of fiscal 2010, but
has not yet finalized it. As such the amounts recognized as a result of the measurement of assets
acquired and liabilities assumed have been determined provisionally. Based on the preliminary fair
value assessment 185 was recorded as goodwill.
42
SIEMENS
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(in millions of , except where otherwise stated and per share amounts)
b) Dispositions and discontinued operations
Discontinued operations
Net results of discontinued operations presented in the Consolidated Statements of Income in the
three and nine months ended June 30, 2010 amounted to (6) (thereof 3 income tax) and 13 (thereof
(5) income tax) compared to the three and nine months ended June 30, 2009 of 93 (thereof (49)
income tax) and 121 (thereof (56) income tax), respectively. Those mainly relate to the former
operating segment Communications (Com). In 2009, net results of discontinued operations relate
mainly to legal matters in connection with the former Com activities and a loss on disposal of the
SEN business which was compensated by a positive income effect of 154 from a settlement between
Siemens and The Gores Group in the third quarter of fiscal 2009 regarding pending requirements for
purchase price adjustment and further mutual obligations in relation to the disposal of the SEN
business. For information on the disposal of Com see Note 4 to the Companys Consolidated Financial
Statements as of September 30, 2009.
Other Dispositions: consummated transactions
At the beginning of November 2009, the Company sold its Airfield Solutions Business, which was part
of the Industry Sectors Mobility Division. The transaction resulted in a preliminary pre-tax gain,
net of related costs of 47, which is included in Other operating income.
At the end of December 2009, Siemens sold its 25% minority stake of Dräger Medical AG & Co. KG to
the majority shareholder Drägerwerk AG & Co. KGaA. The investment was accounted for using the
equity method at the Healthcare Sector. The sale proceeds include a cash component, a vendor loan
component and an option component, which is dependent on the share-price performance of the
Drägerwerk AG & Co. KGaA.
In the first quarter of fiscal 2009, Siemens completed the transfer of an 80.2% stake in Siemens
Home and Office Communication Devices GmbH & Co. KG (SHC) to ARQUES Industries AG. At the beginning
of November 2008, Siemens signed an agreement to sell its 50% stake of Fujitsu Siemens Computers
(Holding) BV (FSC), which was presented in the segment Equity Investments, to Fujitsu Limited. The
transaction closed at the beginning of April 2009. The Siemens Wohnungsgesellschaft mbH & Co. OHG
real estate transaction closed in the third quarter of
fiscal 2009. For information on these transfers see Note 4 to the Companys Consolidated Financial
Statements as of September 30, 2009.
Other Dispositions: held for disposal
The Consolidated Statement of Financial Position as of June 30, 2010 includes 680 of assets and
141 of liabilities classified as held for disposal, which primarily relate to Electronics Assembly
Systems (EA) and Areva NP S.A.S. The Company is actively pursuing the disposal of EA business reported in Centrally managed portfolio activities (previously Other
Operations). For Areva NP S.A.S., held by the Energy Sector, the Company expects to close the
transaction within calendar year 2010.
3. Other operating income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
Nine months ended |
|
|
|
June 30, |
|
|
June 30, |
|
|
|
2010 |
|
|
2009 |
|
|
2010 |
|
|
2009 |
|
Gains on sales of property, plant and equipment and intangibles |
|
|
95 |
|
|
|
251 |
|
|
|
244 |
|
|
|
276 |
|
Gains on disposals of businesses |
|
|
32 |
|
|
|
324 |
|
|
|
88 |
|
|
|
379 |
|
Other |
|
|
61 |
|
|
|
22 |
|
|
|
324 |
|
|
|
226 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
188 |
|
|
|
597 |
|
|
|
656 |
|
|
|
881 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate, which we had recognized as a lessee finance lease under a previous sale and lease back
transaction, was sold by the lessor (entities controlled by the Siemens Pension-Trust e.V.) in the
nine months ended June 30, 2010, which resulted in the dissolution of our liability from continuing
lease involvement of 191 (non-cash transaction), the removal of real estate with a carrying amount
of 122 and a gain of 69 reported in Gains on sales of property, plant and equipment and
intangibles. In connection with the new real estate operating lease, entered into in the second
quarter of fiscal 2010, the Company receives lease subsidies amounting to 43 which are deferred
and recognized in income over the term of the new lease. Gains on sales of property, plant and
equipment and intangibles in the three and nine months ended June 30, 2009, includes a pre-tax gain
of 221, net of related costs, from the sale of Siemens residential real estate holdings. The
transaction is presented in Siemens Real Estate.
43
SIEMENS
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(in millions of , except where otherwise stated and per share amounts)
Gains on disposals of businesses, in the nine months ended June 30, 2010, includes 47 gain
at
Siemens group level related to the sale of our Airfield Solutions Business. Gains on disposals of
businesses in the three and nine months ended June 30, 2009, include 309 and 327, respectively,
from the sale of Siemens investment in FSC presented in the segment Equity Investments. For
further information on the transactions see Note 2.
Other, in the nine months ended June 30, 2010, includes gains from settlement agreements with
former Managing and Supervisory Board members in conjunction with compliance matters, from Siemens
directors and officers insurance of 84 and 40 related to the recovery of funds frozen by
authorities. For further information on legal and regulatory matters included in Other for the
three and nine months ended June 30, 2010 and 2009 see Note 13. In the third quarter of fiscal
2010, the Company ceased to consolidate a subsidiary because of a loss of control and began
accounting for the investment using the equity method of accounting. This loss of control resulted
in a gain of 40 that is primarily attributable to the dilution of derivatives financial
liabilities held by the investee. Other in the three and nine months ended June 30, 2009, includes
income related to legal and regulatory matters.
4. Other operating expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
Nine months ended |
|
|
|
June 30, |
|
|
June 30, |
|
|
|
2010 |
|
|
2009 |
|
|
2010 |
|
|
2009 |
|
Losses on disposals of businesses |
|
|
(7 |
) |
|
|
(41 |
) |
|
|
(12 |
) |
|
|
(61 |
) |
Losses on sales of property, plant
and equipment and intangibles |
|
|
(18 |
) |
|
|
(43 |
) |
|
|
(22 |
) |
|
|
(55 |
) |
Impairment of goodwill |
|
|
|
|
|
|
(7 |
) |
|
|
|
|
|
|
(23 |
) |
Other |
|
|
(75 |
) |
|
|
(115 |
) |
|
|
(156 |
) |
|
|
(352 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(100 |
) |
|
|
(206 |
) |
|
|
(190 |
) |
|
|
(491 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other in the three and nine months ended June 30, 2009, includes fees for outside advisors engaged
in connection with investigations into alleged violations of anti-corruption laws and related
matters as well as remediation activities of (8) and (90), respectively. Other in the three and
nine months ended June 30, 2009 includes 54 in connection with a settlement agreement with the
World Bank Goup see Note 13.
5. Interest income, interest expense and other financial income (expense), net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
Nine months ended |
|
|
|
June 30, |
|
|
June 30, |
|
|
|
2010 |
|
|
2009 |
|
|
2010 |
|
|
2009 |
|
Pension related interest income |
|
|
351 |
|
|
|
321 |
|
|
|
1,040 |
|
|
|
976 |
|
Interest income, other than pension |
|
|
192 |
|
|
|
191 |
|
|
|
550 |
|
|
|
642 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
|
543 |
|
|
|
512 |
|
|
|
1,590 |
|
|
|
1,618 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension related interest expense |
|
|
(370 |
) |
|
|
(374 |
) |
|
|
(1,092 |
) |
|
|
(1,145 |
) |
Interest expense, other than pension |
|
|
(100 |
) |
|
|
(134 |
) |
|
|
(314 |
) |
|
|
(554 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
(470 |
) |
|
|
(508 |
) |
|
|
(1,406 |
) |
|
|
(1,699 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (expense) from available-for-sale
financial assets, net |
|
|
(2 |
) |
|
|
1 |
|
|
|
29 |
|
|
|
4 |
|
Miscellaneous financial income (expense), net |
|
|
(109 |
) |
|
|
(43 |
) |
|
|
(203 |
) |
|
|
(285 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other financial income (expense), net |
|
|
(111 |
) |
|
|
(42 |
) |
|
|
(174 |
) |
|
|
(281 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
44
SIEMENS
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(in millions of , except where otherwise stated and per share amounts)
The components of Income (expense) from pension plans and similar commitments, net were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
Nine months ended |
|
|
|
June 30, |
|
|
June 30, |
|
|
|
2010 |
|
|
2009 |
|
|
2010 |
|
|
2009 |
|
Expected return on plan assets |
|
|
351 |
|
|
|
321 |
|
|
|
1,040 |
|
|
|
976 |
|
Interest cost |
|
|
(370 |
) |
|
|
(374 |
) |
|
|
(1,092 |
) |
|
|
(1,145 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (expense) from pension
plans and similar commitments, net |
|
|
(19 |
) |
|
|
(53 |
) |
|
|
(52 |
) |
|
|
(169 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total amounts of interest income and (expense), other than pension, were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
Nine months ended |
|
|
|
June 30, |
|
|
June 30, |
|
|
|
2010 |
|
|
2009 |
|
|
2010 |
|
|
2009 |
|
Interest income, other than pension |
|
|
192 |
|
|
|
191 |
|
|
|
550 |
|
|
|
642 |
|
Interest (expense), other than pension |
|
|
(100 |
) |
|
|
(134 |
) |
|
|
(314 |
) |
|
|
(554 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income (expense), net, other than pension |
|
|
92 |
|
|
|
57 |
|
|
|
236 |
|
|
|
88 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thereof: Interest income (expense) of
Operations, net |
|
|
7 |
|
|
|
8 |
|
|
|
17 |
|
|
|
20 |
|
Thereof: Other interest income (expense), net |
|
|
85 |
|
|
|
49 |
|
|
|
219 |
|
|
|
68 |
|
Interest income (expense) of Operations, net includes interest income and expense primarily related
to receivables from customers and payables to suppliers, interest on advances from customers and
advanced financing of customer contracts. Other interest income (expense), net includes all other
interest amounts primarily consisting of interest relating to corporate debt and related hedging
activities, as well as interest income on corporate assets.
Interest income (expense) other than pension include the following with respect to financial assets
(financial liabilities) not at fair value through profit or loss.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
Nine months ended |
|
|
|
June 30, |
|
|
June 30, |
|
|
|
2010 |
|
|
2009 |
|
|
2010 |
|
|
2009 |
|
Total interest income on financial assets |
|
|
186 |
|
|
|
182 |
|
|
|
536 |
|
|
|
629 |
|
Total interest expenses on financial liabilities |
|
|
(249 |
) |
|
|
(233 |
) |
|
|
(751 |
) |
|
|
(737 |
) |
The components of Income (expense) from available-for-sale financial assets, net were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
Nine months ended |
|
|
|
June 30, |
|
|
June 30, |
|
|
|
2010 |
|
|
2009 |
|
|
2010 |
|
|
2009 |
|
Dividends received |
|
|
1 |
|
|
|
8 |
|
|
|
22 |
|
|
|
26 |
|
Gains on sales, net |
|
|
2 |
|
|
|
(7 |
) |
|
|
15 |
|
|
|
10 |
|
Impairment |
|
|
(5 |
) |
|
|
|
|
|
|
(8 |
) |
|
|
(33 |
) |
Other |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (expense) from
available-for-sale
financial assets, net |
|
|
(2 |
) |
|
|
1 |
|
|
|
29 |
|
|
|
4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Miscellaneous financial income (expense), net, in the nine months ended June 30, 2010 and 2009,
primarily comprises gains and losses related to derivative financial instruments, gains (losses) of
(190) and (124), respectively, as a result of the accretion of provisions and the increase
(decrease) in the discount rate, as well as expenses as a result of allowances and write offs of
finance receivables, net of reversals of
(46) and (109), respectively.
45
SIEMENS
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(in millions of , except where otherwise stated and per share amounts)
Interest rate risk management
Interest rate risk arises from the sensitivity of financial assets and liabilities to changes in
market rates of interest. Starting with the first quarter of fiscal 2010 the interest rate risk
management relating to the group excluding the SFS business was realigned with the current
financial market environment. The objective of such interest rate management is to manage interest
rate risk relative to a benchmark, consisting of medium-term interest rate swaps and forward rates
for the current fiscal year. To manage interest rate risk towards the benchmark, derivative
financial instruments are used as part of an active interest rate management, which do not qualify
for hedge accounting treatment due to a portfolio-based approach. Compared to the former interest
rate overlay management the benchmark approach generally results in longer interest periods of
derivatives and a higher nominal volume. The interest rate management relating to the SFS business
is not affected. Such interest rate risk is managed separately considering durations of financial
assets.
6. Goodwill
|
|
|
|
|
|
|
|
|
|
|
June 30, |
|
|
September 30, |
|
|
|
2010 |
|
|
2009 |
|
Sectors |
|
|
|
|
|
|
|
|
Industry |
|
|
5,489 |
|
|
|
4,925 |
|
Energy |
|
|
2,604 |
|
|
|
2,208 |
|
Healthcare |
|
|
9,638 |
|
|
|
8,476 |
|
Cross-Sector Businesses |
|
|
|
|
|
|
|
|
Siemens IT Solutions and Services |
|
|
136 |
|
|
|
115 |
|
Siemens Financial Services (SFS) |
|
|
108 |
|
|
|
97 |
|
|
|
|
|
|
|
|
Siemens |
|
|
17,975 |
|
|
|
15,821 |
|
|
|
|
|
|
|
|
The net increase in goodwill of 2,154
during the nine months ended June 30,
2010, is attributable to 1,937 of
positive foreign currency adjustments,
mainly due to the strengthening of the
U.S. $ as well as to 234 of acquisitions
and purchase accounting adjustments; which
is offset by (17) of dispositions.
7. Other intangible assets
|
|
|
|
|
|
|
|
|
|
|
June 30, |
|
|
September 30, |
|
|
|
2010 |
|
|
2009 |
|
Software and other internally
generated intangible assets |
|
|
3,120 |
|
|
|
2,664 |
|
Less: accumulated
amortization |
|
|
(1,910 |
) |
|
|
(1,609 |
) |
|
|
|
|
|
|
|
Software and
other internally generated intangible
assets, net |
|
|
1,210 |
|
|
|
1,055 |
|
|
|
|
|
|
|
|
Patents, licenses
and similar rights |
|
|
7,412 |
|
|
|
6,519 |
|
Less: accumulated amortization |
|
|
(3,259 |
) |
|
|
(2,548 |
) |
|
|
|
|
|
|
|
Patents, licenses and
similar rights,net |
|
|
4,153 |
|
|
|
3,971 |
|
|
|
|
|
|
|
|
Other intangible assets |
|
|
5,363 |
|
|
|
5,026 |
|
|
|
|
|
|
|
|
Amortization expense reported in
Income from continuing operations
before income taxes amounted to
(215) and (212), respectively, in
the three months ended June 30, 2010
and 2009, and to (605) and (614)
in the nine months ended June 30,
2010 and 2009, respectively.
46
SIEMENS
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(in millions of , except where otherwise stated and per share amounts)
8. Debt
|
|
|
|
|
|
|
|
|
|
|
June 30, |
|
|
September 30, |
|
|
|
2010 |
|
|
2009 |
|
Short-term |
|
|
|
|
|
|
|
|
Loans from banks |
|
|
350 |
|
|
|
261 |
|
Other financial indebtedness |
|
|
59 |
|
|
|
392 |
|
Obligations under finance leases |
|
|
49 |
|
|
|
45 |
|
|
|
|
|
|
|
|
Short-term debt and current maturities of long-term debt |
|
|
458 |
|
|
|
698 |
|
Long-term |
|
|
|
|
|
|
|
|
Notes and bonds (maturing until 2066) |
|
|
17,691 |
|
|
|
16,502 |
|
Loans from banks (maturing until 2023) |
|
|
2,059 |
|
|
|
1,910 |
|
Other financial indebtedness (maturing until 2029) |
|
|
160 |
|
|
|
379 |
|
Obligations under finance leases |
|
|
122 |
|
|
|
149 |
|
|
|
|
|
|
|
|
Long-term debt |
|
|
20,032 |
|
|
|
18,940 |
|
|
|
|
|
|
|
|
|
|
|
20,490 |
|
|
|
19,638 |
|
|
|
|
|
|
|
|
9. Pension plans and similar commitments
Principal pension benefits: Components of net periodic benefit cost
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
Three months ended |
|
|
|
June 30, 2010 |
|
|
June 30, 2009 |
|
|
|
Total |
|
|
Domestic |
|
|
Foreign |
|
|
Total |
|
|
Domestic |
|
|
Foreign |
|
Service cost |
|
|
122 |
|
|
|
74 |
|
|
|
48 |
|
|
|
112 |
|
|
|
66 |
|
|
|
46 |
|
Interest cost |
|
|
335 |
|
|
|
206 |
|
|
|
129 |
|
|
|
343 |
|
|
|
213 |
|
|
|
130 |
|
Expected return on plan assets |
|
|
(339 |
) |
|
|
(210 |
) |
|
|
(129 |
) |
|
|
(312 |
) |
|
|
(192 |
) |
|
|
(120 |
) |
Amortization of past service cost (benefit) |
|
|
(1 |
) |
|
|
|
|
|
|
(1 |
) |
|
|
(1 |
) |
|
|
|
|
|
|
(1 |
) |
Loss (gain) due to settlements and curtailments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(10 |
) |
|
|
|
|
|
|
(10 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net periodic benefit cost |
|
|
117 |
|
|
|
70 |
|
|
|
47 |
|
|
|
132 |
|
|
|
87 |
|
|
|
45 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Germany |
|
|
70 |
|
|
|
70 |
|
|
|
|
|
|
|
87 |
|
|
|
87 |
|
|
|
|
|
U.S. |
|
|
36 |
|
|
|
|
|
|
|
36 |
|
|
|
40 |
|
|
|
|
|
|
|
40 |
|
U.K. |
|
|
6 |
|
|
|
|
|
|
|
6 |
|
|
|
8 |
|
|
|
|
|
|
|
8 |
|
Other |
|
|
5 |
|
|
|
|
|
|
|
5 |
|
|
|
(3 |
) |
|
|
|
|
|
|
(3 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine months ended |
|
|
Nine months ended |
|
|
|
June 30, 2010 |
|
|
June 30, 2009 |
|
|
|
Total |
|
|
Domestic |
|
|
Foreign |
|
|
Total |
|
|
Domestic |
|
|
Foreign |
|
Service cost |
|
|
362 |
|
|
|
224 |
|
|
|
138 |
|
|
|
334 |
|
|
|
200 |
|
|
|
134 |
|
Interest cost |
|
|
991 |
|
|
|
618 |
|
|
|
373 |
|
|
|
1,029 |
|
|
|
640 |
|
|
|
389 |
|
Expected return on plan assets |
|
|
(1,005 |
) |
|
|
(630 |
) |
|
|
(375 |
) |
|
|
(937 |
) |
|
|
(579 |
) |
|
|
(358 |
) |
Amortization of past service cost (benefit) |
|
|
26 |
|
|
|
|
|
|
|
26 |
|
|
|
(3 |
) |
|
|
|
|
|
|
(3 |
) |
Loss (gain) due to settlements and curtailments |
|
|
(184 |
) |
|
|
|
|
|
|
(184 |
) |
|
|
(24 |
) |
|
|
(1 |
) |
|
|
(23 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net periodic benefit cost |
|
|
190 |
|
|
|
212 |
|
|
|
(22 |
) |
|
|
399 |
|
|
|
260 |
|
|
|
139 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Germany |
|
|
212 |
|
|
|
212 |
|
|
|
|
|
|
|
260 |
|
|
|
260 |
|
|
|
|
|
U.S. |
|
|
(87 |
) |
|
|
|
|
|
|
(87 |
) |
|
|
114 |
|
|
|
|
|
|
|
114 |
|
U.K. |
|
|
19 |
|
|
|
|
|
|
|
19 |
|
|
|
23 |
|
|
|
|
|
|
|
23 |
|
Other |
|
|
46 |
|
|
|
|
|
|
|
46 |
|
|
|
2 |
|
|
|
|
|
|
|
2 |
|
Service cost for pension plans and similar commitments are allocated among functional costs (Cost
of goods sold and services rendered, Research and development expenses, Marketing, selling and
general administrative expenses).
Net periodic benefit cost for the nine months ended June 30, 2010, include a 192 curtailment gain
resulting from a freeze of two defined benefit pension plans in the U.S. Employees will keep
benefits earned, however, will not earn future benefits under these plans. Instead, employer
contributions will be made to existing defined contribution plans.
47
SIEMENS
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(in millions of , except where otherwise stated and per share amounts)
Pensions in the line item Corporate items and pensions of Segment information in the nine months
ended June 30, 2010 includes (39) related to our mandatory membership in the German pension
insurance association Pensionssicherungsverein (PSV).
Principal pension benefits: Pension obligations and funded status
At the end of the first nine months of fiscal 2010, the combined funded status of Siemens
principal pension plans states an underfunding of 6.1 billion, compared to an underfunding of 4.0
billion at the end of fiscal 2009.
The weighted-average discount rate used to determine the estimated DBO as of June 30, 2010 and
2009 as well as of September 30, 2009, is 4.6%, 5.7% and 5.3%, respectively.
Contributions include a supplemental pension plan funding in the U.K. in the second quarter of
fiscal 2010. Contributions made by the Company to its principal pension benefit plans in the three
months ended June 30, 2010 and 2009 were 61 and 38, respectively, and 469
and 108,
respectively, in the nine months ended June 30, 2010 and 2009.
10. Provisions
Asset retirement obligations contain the remediation and environmental protection liabilities for
the estimated costs of decommissioning facilities for the production of uranium and mixed-oxide
fuel elements in Hanau and Karlstein, Germany. For further information, see Note 25 to the
Companys Consolidated Financial Statements as of September 30, 2009. In the nine months ended June
30, 2010, several parameters relating to the development of a final storage facility for
radioactive waste, were specified on the so-called Schacht Konrad final storage. Using the input of
an independent advisor, management updated its valuation of the liability in the three months ended
June 30, 2010. The valuation uses revised assumptions to reflect current and detailed cost
estimates, price inflation and discount rates as well as a longer spread of future cash outflows.
While the valuation as of September 30, 2009 assumed a lump sum payment in 2033 related to the
costs for the final storage, the revised accounting estimates applied as of June 30, 2010, now
assume a continuous outflow until 2084 related to the costs for dismantling, intermediate and final
storage. The change in estimates resulted in a decrease of the related provision of 60. As of June
30, 2010 and September 30, 2009, the provision totals 889 and 780, respectively.
11. Shareholders equity
Treasury Stock
In the nine months ended June 30, 2010, Siemens re-issued a total of 2,647,424 of Treasury Stock in
connection with share-based payment plans.
At the Annual Shareholders Meeting on January 26, 2010, the Companys shareholders passed
resolutions with respect to the Companys equity, approving and authorizing:
|
|
|
a dividend of 1.60 per share. |
|
|
|
|
the Company to acquire up to 10 percent of its capital stock existing at the date of the
Shareholders resolution, which represents 91,420,342 Treasury shares. The authorization
became effective on March 1, 2010, and remains in force through July 25, 2011. The previous
authorization, granted at the January 27, 2009 Shareholders Meeting was superseded as of
the effective date of the new resolution. The use of treasury stock primarily remained
unchanged. |
|
|
|
|
the Managing Board to issue bonds in an aggregate principal amount of up to 15,000 with
conversion rights or with warrants or a combination thereof, entitling the holders to
subscribe to up to 200,000 thousand new shares of Siemens AG with no par value, representing
up to 600 of capital stock. In order to service the issuance of such bonds, up to 200,000
thousand new shares with no par value, representing up to 600 of capital stock was provided
(Conditional Capital 2010). Conditional Capital 2010 became effective with its registration
in the German Commercial Registry (Handelsregister) in April 2010. The authorization will
expire on January 25, 2015. The previous authorization to issue bonds with conversion rights
or warrants and Conditional Capital 2009 was cancelled and superseded by Conditional Capital
2010. |
48
SIEMENS
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(in millions of , except where otherwise stated and per share amounts)
Other Comprehensive Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
Three months ended |
|
|
|
June 30, 2010 |
|
|
June 30, 2009 |
|
|
|
|
|
|
|
Tax |
|
|
|
|
|
|
|
|
|
|
Tax |
|
|
|
|
|
|
Pretax |
|
|
effect |
|
|
Net |
|
|
Pretax |
|
|
effect |
|
|
Net |
|
Unrealized holding gains (losses) on available-for-sale financial assets |
|
|
(4 |
) |
|
|
2 |
|
|
|
(2 |
) |
|
|
40 |
|
|
|
(6 |
) |
|
|
34 |
|
Reclassification adjustments for (gains) losses included in net income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2 |
|
|
|
|
|
|
|
2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net unrealized gains (losses) on available-for-sale financial assets |
|
|
(4 |
) |
|
|
2 |
|
|
|
(2 |
) |
|
|
42 |
|
|
|
(6 |
) |
|
|
36 |
|
Unrealized gains (losses) on derivative financial instruments |
|
|
(509 |
) |
|
|
143 |
|
|
|
(366 |
) |
|
|
269 |
|
|
|
(82 |
) |
|
|
187 |
|
Reclassification adjustments for (gains) losses included in net income |
|
|
44 |
|
|
|
(14 |
) |
|
|
30 |
|
|
|
11 |
|
|
|
(3 |
) |
|
|
8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net unrealized gains (losses) on derivative financial instruments |
|
|
(465 |
) |
|
|
129 |
|
|
|
(336 |
) |
|
|
280 |
|
|
|
(85 |
) |
|
|
195 |
|
Foreign-currency translation differences |
|
|
1,144 |
|
|
|
|
|
|
|
1,144 |
|
|
|
(37 |
) |
|
|
|
|
|
|
(37 |
) |
Actuarial gains and losses on pension plans and similar commitments |
|
|
(1,323 |
) |
|
|
309 |
|
|
|
(1,014 |
) |
|
|
296 |
|
|
|
24 |
|
|
|
320 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income |
|
|
(648 |
) |
|
|
440 |
|
|
|
(208 |
) |
|
|
581 |
|
|
|
(67 |
) |
|
|
514 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine months ended |
|
|
Nine months ended |
|
|
|
June 30, 2010 |
|
|
June 30, 2009 |
|
|
|
|
|
|
|
Tax |
|
|
|
|
|
|
|
|
|
|
Tax |
|
|
|
|
|
|
Pretax |
|
|
effect |
|
|
Net |
|
|
Pretax |
|
|
effect |
|
|
Net |
|
Unrealized holding gains (losses) on available-for-sale financial assets |
|
|
32 |
|
|
|
(3 |
) |
|
|
29 |
|
|
|
7 |
|
|
|
(2 |
) |
|
|
5 |
|
Reclassification adjustments for (gains) losses included in net income |
|
|
(5 |
) |
|
|
1 |
|
|
|
(4 |
) |
|
|
51 |
|
|
|
(11 |
) |
|
|
40 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net unrealized gains (losses) on available-for-sale financial assets |
|
|
27 |
|
|
|
(2 |
) |
|
|
25 |
|
|
|
58 |
|
|
|
(13 |
) |
|
|
45 |
|
Unrealized gains (losses) on derivative financial instruments |
|
|
(851 |
) |
|
|
244 |
|
|
|
(607 |
) |
|
|
102 |
|
|
|
(33 |
) |
|
|
69 |
|
Reclassification adjustments for (gains) losses included in net income |
|
|
(66 |
) |
|
|
20 |
|
|
|
(46 |
) |
|
|
166 |
|
|
|
(51 |
) |
|
|
115 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net unrealized gains (losses) on derivative financial instruments |
|
|
(917 |
) |
|
|
264 |
|
|
|
(653 |
) |
|
|
268 |
|
|
|
(84 |
) |
|
|
184 |
|
Foreign-currency translation differences |
|
|
2,136 |
|
|
|
|
|
|
|
2,136 |
|
|
|
(345 |
) |
|
|
|
|
|
|
(345 |
) |
Actuarial gains and losses on pension plans and similar commitments |
|
|
(2,237 |
) |
|
|
594 |
|
|
|
(1,643 |
) |
|
|
(2,316 |
) |
|
|
459 |
|
|
|
(1,857 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income |
|
|
(991 |
) |
|
|
856 |
|
|
|
(135 |
) |
|
|
(2,335 |
) |
|
|
362 |
|
|
|
(1,973 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation differences are primarily a result of the strengthening of the U.S. $
in the three and nine months ended June 30, 2010. Actuarial gains and losses on pension plans and
similar commitments in the three months ended June 30, 2010 primarily changed due to an adjustment
of the discount rate and due to actual returns varying from expected returns.
49
SIEMENS
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(in millions of , except where otherwise stated and per share amounts)
12. Commitments and contingencies
Guarantees and other commitments
The following table presents the undiscounted amount of maximum potential future payments for
each major group of guarantees:
|
|
|
|
|
|
|
|
|
|
|
June 30, |
|
|
September 30, |
|
|
|
2010 |
|
|
2009 |
|
Guarantees: |
|
|
|
|
|
|
|
|
Credit guarantees |
|
|
527 |
|
|
|
313 |
|
Guarantees of third-party performance |
|
|
1,213 |
|
|
|
1,092 |
|
HERKULES obligations(1) |
|
|
3,090 |
|
|
|
3,490 |
|
Other guarantees |
|
|
2,280 |
|
|
|
2,253 |
|
|
|
|
|
|
|
|
|
|
|
7,110 |
|
|
|
7,148 |
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
For additional information on the HERKULES obligations, see the Companys
Consolidated Financial Statements as of September 30, 2009. |
13. Legal proceedings
For information regarding investigations and other legal proceedings in which Siemens is
involved, as well as the potential risks associated with such proceedings and their potential
financial impact on the Company, please refer to Siemens Annual Report for the fiscal year ended
September 30, 2009 (Annual Report) and its annual report on Form 20-F for the fiscal year ended
September 30, 2009 (Form 20-F), and, in particular, to the information contained in Item 3: Key
InformationRisk factors and Item 4: Information on the CompanyLegal proceedings.
Significant developments regarding investigations and other legal proceedings that have
occurred since the publication of Siemens Annual Report and Form 20-F are described below.
Public corruption proceedings
Governmental and related proceedings
On March 9, 2009, Siemens received a decision by the Vendor Review Committee of the United
Nations Secretariat Procurement Division (UNPD) suspending Siemens from the UNPD vendor database
for a minimum period of six months. The suspension applies to contracts with the UN Secretariat and
stems from Siemens guilty plea in December 2008 to violations of the U.S. Foreign Corrupt
Practices Act. Siemens does not expect a significant impact on its business, results of operations
or financial condition from this decision. On December 22, 2009, Siemens filed a request to lift
the existing suspension.
In April 2009, the Company received a Notice of Commencement of Administrative Proceedings
and Recommendations of the Evaluation and Suspension Officer from the World Bank, which comprises
the International Bank for Reconstruction and Development as well as the International Development
Association, in connection with allegations of sanctionable practices during the period 2004-2006
relating to a World Bank-financed project in Russia. On July 2, 2009, the Company entered into a
global settlement agreement with the International Bank for Reconstruction and Development, the
International Development Association, the International Finance Corporation and the Multilateral
Investment Guarantee Agency (collectively, the World Bank Group) to resolve World Bank Group
investigations involving allegations of corruption by Siemens. In the agreement, Siemens
voluntarily undertakes to refrain from bidding in connection with any project, program, or other
investment financed or guaranteed by the World Bank Group (Bank Group Projects) for a period of
two years, commencing on January 1, 2009 and ending on December 31, 2010. Siemens is not prohibited
by the voluntary restraint from continuing work on existing contracts under Bank Group Projects or
concluded in connection with World Bank Group corporate procurement provided such contracts were
signed by Siemens and all other parties thereto prior to January 1, 2009. The agreement provides
for exemptions to the voluntary restraint in exceptional circumstances upon approval of the World
Bank Group. Siemens must also withdraw all pending bids, including proposals for consulting
contracts, in connection with Bank Group Projects and World Bank Group corporate procurement where
the World Bank Group has not provided its approval prior to July 2, 2009. Furthermore, Siemens is
also required to voluntarily disclose to the World Bank Group any potential
50
SIEMENS
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(in millions of , except where otherwise stated and per share amounts)
misconduct in connection with any Bank Group Projects. Finally, Siemens has undertaken to pay
US$100 million to agreed anti-corruption organizations over a period of not more than 15 years. In
fiscal 2009, the Company took a charge to Other operating expense to accrue a provision in the
amount of 53 relating to the global settlement agreement with the World Bank Group. In November
2009, Siemens Russia OOO and all its controlled subsidiaries were, in a separate proceeding before
the World Bank Group, debarred for four years from participating in Bank Group Projects. Siemens
Russia OOO did not contest the debarment.
In November 2009 and in February 2010, a subsidiary of Siemens AG voluntarily self-reported
possible violations of South African anti-corruption regulations in the period before 2007 to the
responsible South African authorities.
On December 30, 2009, the Anti Corruption Commission of Bangladesh (ACC) sent a request for
information to Siemens Bangladesh Ltd. (Siemens Bangladesh) related to telecommunications projects
of Siemens former Communications (Com) Group undertaken prior to 2007. On January 4, 2010, Siemens
Bangladesh was informed that in a related move the Anti Money Laundering Department of the Central
Bank of Bangladesh is conducting a special investigation into certain accounts of Siemens
Bangladesh and of former employees of Siemens Bangladesh in connection with transactions for Com
projects undertaken in the period from 2002 to 2006. On February 16, 2010, the ACC sent a request
for additional information.
On June 23, 2010, the Frankfurt public prosecutor searched premises of Siemens in Germany in
response to allegations of questionable payments relating to an Industry project in Thailand.
Siemens is cooperating with the authority.
The Company remains subject to corruption-related investigations in several jurisdictions
around the world. As a result, additional criminal or civil sanctions could be brought against the
Company itself or against certain of its employees in connection with possible violations of law.
In addition, the scope of pending investigations may be expanded and new investigations commenced
in connection with allegations of bribery and other illegal acts. The Companys operating
activities, financial results and reputation may also be negatively affected, particularly due to
imposed penalties, fines, disgorgements, compensatory damages, third-party litigation, including by
competitors, the formal or informal exclusion from public tenders or the loss of business licenses
or permits. Additional expenses and provisions, which could be material, may need to be recorded in
the future for penalties, fines, damages or other charges in connection with the investigations.
As previously reported, the Company investigates evidence of bank accounts at various
locations, as well as the amount of the funds. Certain funds have been frozen by authorities.
During the first nine months of fiscal 2010, based on binding agreements including with the
relevant authority, the Company recognized an amount of 40 in Other operating income from the
agreed recovery of funds from one of these accounts.
Civil litigation
As already disclosed by the Company in press releases, Siemens AG asserted claims for damages
against former members of the Managing and Supervisory Board. The Company based its claims on
breaches of organizational and supervisory duties in view of the accusations of illegal business
practices that occurred in the course of international business transactions in the years 2003 to
2006 and the resulting financial burdens for the Company. On December 2, 2009 Siemens reached a
settlement with nine out of eleven former members of the Managing and Supervisory Board. As
required by law, the settlements between the Company and individual board members were subject to
approval by the Annual Shareholders Meeting. The Company reached a settlement agreement with its
directors and officers (D&O) insurers regarding claims in connection with the D&O insurance of up
to 100. The Annual Shareholders Meeting approved all nine settlements between the Company and the
former members of the Managing and Supervisory Board on January 26, 2010. The shareholders also
agreed to the settlement with respect to claims under the D&O insurance. During the second quarter
of fiscal 2010, Siemens AG received certain benefits as required under the aforementioned
settlement agreements with the result that an amount of 96 net of related cost was recognized
primarily in Other operating income. Thereof 84 resulted from the settlement agreement with the
D&O insurers and 12 resulted from settlement agreements with former board members. The former
board members used claims they had against the Company to set off a portion of their obligations
under the aforementioned settlement agreements. The remaining amount was or will be settled by the
former board members in cash. On January 25, 2010 Siemens AG filed a lawsuit with the Munich
District Court I against the two former board members who were not willing to settle, Thomas
Ganswindt and Heinz-Joachim Neubürger. The defendants have not yet replied to the complaint filed
by Siemens AG.
51
SIEMENS
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(in millions of , except where otherwise stated and per share amounts)
As previously disclosed, in June 2008, the Republic of Iraq filed an action requesting
unspecified damages against 93 named defendants with the United States District Court for the
Southern District of New York on the basis of findings made in the Report of the Independent
Inquiry Committee into the United Nations Oil-for-Food
Programme. Siemens S.A.S. France, Siemens
A. Ş. Turkey and OSRAM Middle East FZE, Dubai are among the 93 named defendants. Process was served
upon all three Siemens affiliates.
As previously reported, the Company has been approached by a competitor to discuss claims it
believes it has against the Company. The alleged claims relate to allegedly improper payments by
the Company in connection with the procurement of public and private contracts. The Company is
assessing whether any basis exists for such claims.
A securities class action was filed in December 2009 against Siemens AG with the United States
District Court for the Eastern District of New York seeking damages for alleged violations of U.S.
securities laws. The Company will defend itself against the lawsuit.
Antitrust proceedings
As previously reported, on October 25, 2007, upon the Companys appeal, a Hungarian
competition court reduced administrative fines imposed on Siemens AG for alleged antitrust
violations in the market of high-voltage gas-insulated switchgear from 0.320 to 0.120 and from
0.640 to 0.110 regarding VA Technologie AG. The Company and the Competition Authority both
appealed the decision. In November 2008, the Court of Appeal confirmed the reduction of the fines.
On December 5, 2008, the Competition Authority filed an extraordinary appeal with the Supreme
Court. In December 2009, Siemens AG was notified that the Supreme Court had remanded the case to
the Court of Appeal, with instructions to take a new decision on the amount of the fines. The
extraordinary appeal from the Competition Authority was rejected with legally binding effect by the
Court of Appeal on January 27, 2010. On April 6, 2010, the Competition Authority filed another
extraordinary appeal with the Supreme Court.
In January 2010, the European Commission launched an investigation related to previously
reported investigations into potential antitrust violations involving producers of flexible current
transmission systems in New Zealand and the USA including, among others, Siemens AG. In April 2010,
authorities in Korea and Mexico informed the Company that similar proceedings had been initiated.
Siemens is cooperating with the authorities. On June 1, 2010, the New Zealand Commerce Commission
notified Siemens that their investigation had been closed.
On February 11, 2010, the Italian Antitrust Authority searched the premises of several
healthcare companies, including Siemens Healthcare Diagnostics S.r.l. and Siemens S.p.A., in
response to allegations of anti-competitive agreements relating to a 2009 public tender process for
the supply of medical equipment to the procurement entity for the public healthcare sector in the
region of Campania, So.Re.Sa. Siemens is cooperating with the authority.
Other proceedings
As previously reported, the Company is a member of a supplier consortium that has contracted
to construct the nuclear power plant Olkiluoto 3 in Finland for Teollisuuden Voima Oyj (TVO) on a
turnkey basis. The Companys share of the consideration to be paid to the supplier consortium under
the contract is approximately 27%. The other member of the supplier consortium is a further
consortium consisting of Areva NP S.A.S. and its wholly-owned affiliate, Areva NP GmbH. The agreed
completion date for the nuclear power plant was April 30, 2009. Completion of the power plant has
been delayed for reasons which are disputed. In December 2008, the supplier consortium filed a
request for arbitration against TVO demanding an extension of the construction time, additional
compensation and damages in the amount of approximately 1 billion. TVO rejected the demand for an
extension of time and made counterclaims against the supplier consortium. These consist primarily
of damages due to the delay, claimed to amount to 1.4 billion based on estimated completion of the
plant in June 2012 with a delay of 38 months. Assuming the full cooperation of all involved
parties, nuclear fuel is expected to be loaded into the reactor at the end of 2012 in order to
commence the commissioning phase of the overall plant. This testing phase will last several months.
As of today, completion is expected to occur by the end of the 2013 calendar year.
52
SIEMENS
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(in millions of , except where otherwise stated and per share amounts)
Investigations and proceedings currently being conducted by the Greek Parliamentary
Investigation Committee, the public prosecutor and the criminal courts in Greece against among
others former board members and executives of Siemens A.E. based on bribery and fraud allegations
might have a negative impact on civil proceedings currently pending against Siemens AG and Siemens
A.E. and also affect the future business activities of Siemens A.E. in Greece.
The Greek tax authorities have audited Siemens A.E.s books for the 1997 to 2003 and 2004 to
2007 tax years. In the third quarter of fiscal 2010, based on a preliminary communication of the
findings of the tax audits, Siemens A.E. made payments under a tax act enacted in April 2010 to
settle certain matters for which provisions had been established.
The EU Anti-Fraud Office OLAF, its Romanian equivalent DELAF and the Romanian prosecutor DNA
are currently investigating allegations of fraud in connection with the 2007 award of a contract to
FORTE Business Services (now SIS Romania) to modernize the IT infrastructure of the Romanian
judiciary.
For certain legal proceedings information required under IAS 37, Provisions, Contingent
Liabilities and Contingent Assets, is not disclosed, if the Company concludes that the disclosure
can be expected to seriously prejudice the outcome of the litigation.
In addition to the investigations and legal proceedings described in Siemens Annual Report as
well as in Form 20-F and as updated above, Siemens AG and its subsidiaries have been named as
defendants in various other legal actions and proceedings arising in connection with their
activities as a global diversified group. Some of these pending proceedings have been previously
disclosed. Some of the legal actions include claims or potential claims for punitive damages or
claims for indeterminate amounts of damages. Siemens is from time to time also involved in
regulatory investigations beyond those described in its Annual Report as well as in Form 20-F and
as updated above. Siemens is cooperating with the relevant authorities in several jurisdictions
and, where appropriate, conducts internal investigations regarding potential wrongdoing with the
assistance of in-house and external counsel. Given the number of legal actions and other
proceedings to which Siemens is subject, some may result in adverse decisions. Siemens contests
actions and proceedings when it considers it appropriate. In view of the inherent difficulty of
predicting the outcome of such matters, particularly in cases in which claimants seek indeterminate
damages, Siemens may not be able to predict what the eventual loss or range of loss related to such
matters will be. The final resolution of the matters discussed in this paragraph could have a
material effect on Siemens business, results of operations and financial condition for any
reporting period in which an adverse decision is rendered. However, Siemens does not currently
expect its business, results of operations and financial condition to be materially affected by the
additional legal matters not separately discussed in this section.
14. Share-based payment
Share-based payment plans at Siemens, including the Share Matching Program and its underlying
plans as well as the jubilee program which were introduced in fiscal 2009, are predominantly
designed as equity-settled plans and to a certain extent as cash-settled plans. Total pre-tax
expense for share-based payment recognized in Net income in the three months ended June 30, 2010
and 2009 amounted to 26 and 23, respectively, and to 102 and 190 in the nine months ended June
30, 2010 and 2009.
For further information on Siemens share-based payment plans, see the Companys Consolidated
Financial Statements as of September 30, 2009.
53
SIEMENS
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(in millions of , except where otherwise stated and per share amounts)
Stock awards
In the nine months ended June 30, 2010 and 2009, respectively, the Company granted 1,361,586
and 1,992,392 stock awards to 4,314 and 4,156 employees and members of the Managing Board, of which
154,226 and 252,329 awards were granted to the Managing Board. Details on stock award activity and
weighted average grant-date fair value for the nine months ended June 30, 2010 and 2009 are:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine months ended |
|
|
Nine months ended |
|
|
|
June 30, 2010 |
|
|
June 30, 2009 |
|
|
|
|
|
|
|
Weighted Average |
|
|
|
|
|
|
Weighted Average |
|
|
|
|
|
|
|
Grant-Date |
|
|
|
|
|
|
Grant-Date |
|
|
|
Awards |
|
|
Fair Value |
|
|
Awards |
|
|
Fair Value |
|
Outstanding, beginning of period |
|
|
4,438,303 |
|
|
|
57.22 |
|
|
|
3,489,768 |
|
|
|
67.56 |
|
Granted |
|
|
1,361,586 |
|
|
|
60.79 |
|
|
|
1,992,392 |
|
|
|
37.65 |
|
Vested |
|
|
(824,694 |
) |
|
|
57.28 |
|
|
|
(881,097 |
) |
|
|
55.63 |
|
Forfeited/settled |
|
|
(137,589 |
) |
|
|
63.73 |
|
|
|
(131,353 |
) |
|
|
45.15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding, end of period |
|
|
4,837,606 |
|
|
|
58.03 |
|
|
|
4,469,710 |
|
|
|
57.24 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair value was determined as the market price of Siemens shares less the present value of
expected dividends, as stock awards do not carry dividend rights until vested, which resulted in a
fair value of 60.79 and 37.65 per stock award granted in November 2009 and 2008, respectively.
Total fair value of stock awards granted in the nine months ended June 30, 2010 and 2009, amounted
to 83 and 75, respectively.
Forfeited/settled in the nine months ended June 30, 2010, includes rights to stock awards
granted to former Managing and Supervisory Board members, who used their stock award rights to net
their obligations towards the Company, which resulted from settlement agreements in connection with
compliance matters. For further information see Note 13.
Stock Option Plans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Options |
|
|
|
Nine months ended June 30, 2010 |
|
|
|
|
|
|
|
|
|
|
|
Weighted Average |
|
|
|
|
|
|
|
|
|
|
|
|
|
Remaining |
|
|
Aggregate intrinsic |
|
|
|
|
|
|
|
Weighted Average |
|
|
Contractual |
|
|
value |
|
|
|
Options |
|
|
Exercise Price |
|
|
Term (years) |
|
|
(in millions of ) |
|
Outstanding, beginning of period |
|
|
2,627,742 |
|
|
|
73.89 |
|
|
|
|
|
|
|
|
|
Options forfeited |
|
|
(105,015 |
) |
|
|
74.40 |
|
|
|
|
|
|
|
|
|
Options exercised |
|
|
(134,805 |
) |
|
|
74.59 |
|
|
|
|
|
|
|
|
|
Options expired |
|
|
(888,210 |
) |
|
|
72.54 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding, end of period |
|
|
1,499,712 |
|
|
|
74.59 |
|
|
|
0.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercisable, end of period |
|
|
1,499,712 |
|
|
|
74.59 |
|
|
|
0.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Options |
|
|
|
Nine months ended June 30, 2009 |
|
|
|
|
|
|
|
|
|
|
|
Weighted Average |
|
|
|
|
|
|
|
|
|
|
|
|
|
Remaining |
|
|
Aggregate intrinsic |
|
|
|
|
|
|
|
Weighted Average |
|
|
Contractual |
|
|
value |
|
|
|
Options |
|
|
Exercise Price |
|
|
Term (years) |
|
|
(in millions of ) |
|
Outstanding, beginning of period |
|
|
5,097,083 |
|
|
|
73.60 |
|
|
|
|
|
|
|
|
|
Options forfeited |
|
|
(119,080 |
) |
|
|
73.74 |
|
|
|
|
|
|
|
|
|
Options exercised |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Options expired |
|
|
(2,213,111 |
) |
|
|
73.25 |
|
|
|
|
|
|
|
|
|
Options settled |
|
|
(104,215 |
) |
|
|
73.39 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding, end of period |
|
|
2,660,677 |
|
|
|
73.89 |
|
|
|
1.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercisable, end of period |
|
|
2,660,677 |
|
|
|
73.89 |
|
|
|
1.0 |
|
|
|
|
|
54
SIEMENS
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(in millions of , except where otherwise stated and per share amounts)
Share Matching Program and its underlying plans
a) Base Share Program
Under the Base Share Program, members of the Managing Board and employees of Siemens AG and
participating Siemens companies can purchase Siemens shares under favorable conditions once a year.
The Base Share Program is measured at fair value at grant-date. Shares purchased under the Base
Share Program grant the right to receive matching shares under the same conditions described below
at Share Matching Plan.
In fiscal 2010, the Base Share Program allowed members of the Managing Board and employees of
Siemens AG and participating Siemens companies to make an investment of a fixed amount of their
compensation into Siemens shares, which is sponsored by Siemens with a tax beneficial allowance per
plan participant. Shares were bought at market price at a predetermined date in the second quarter.
In the nine months ended June 30, 2010, the Company incurred pre-tax expense of 27.
In fiscal 2009, the Base Share Program allowed members of the Managing Board and employees of
Siemens AG and participating Siemens companies to purchase a fixed number of Siemens shares at a
preferential price once a year. Up to a stipulated date in the first quarter of the fiscal year,
employees were allowed to order the shares, which were issued in the second quarter of the fiscal
year. The Company incurred pre-tax expense of 42, in the nine months ended June 30, 2009, based on
a preferential share price of 22 per share and a grant-date fair value of the equity instrument of
25.56 per share, which was determined as the market price of Siemens shares less the present value
of expected dividends as investment shares of the Base Share Program do not carry dividend rights
until they are issued in the second quarter, less the share price paid by the participating
employee.
b) Share Matching Plan
In the first quarter of fiscal 2010, Siemens issued a new Share Matching Plan (Share Matching
Plan 2010). In contrast to the Share Matching Plan 2009 (described below), the Share Matching Plan
2010 is restricted to senior managers only. Senior managers of Siemens AG and participating Siemens
companies may invest a certain amount of their compensation in Siemens shares. While for the Share
Matching Plan 2009, the price of the investment shares was fixed at the resolution date, for the
Share Matching Plan 2010 the shares are purchased at the market price at a predetermined date in
the second quarter. Up to the stipulated grant-dates in the first quarter of each fiscal year,
senior managers have to decide on their investment amount for which investment shares are
purchased. The investment shares are then issued in the second quarter of the fiscal year. In
exchange, plan participants receive the right to one free share (matching share) for every three
investment shares continuously held over a period of three years (vesting period) provided the plan
participant has been continuously employed by Siemens AG or another Siemens company until the end
of the vesting period. During the vesting period, matching shares are not entitled to dividends.
The right to receive matching shares forfeits if the underlying investment shares are transferred,
sold, pledged or otherwise encumbered. The Managing Board and the Supervisory Board of the Company
will decide, each fiscal year, whether a new Share Matching Plan will be issued. The fair value at
grant date of investment shares resulting from the Share Matching Plan 2010 is as the investment
shares are offered at market price.
In the first quarter of fiscal 2009, the Company introduced the Share Matching Plan 2009 to
members of the Managing Board and to employees of Siemens AG and participating Siemens companies.
Plan participants could invest a certain percentage of their compensation in Siemens shares at a
predetermined price set at the resolution date (investment shares). In exchange, plan participants
receive the right to one free share (matching share) for every three investment shares continuously
held over a period of three years (vesting period) provided the plan participant has been
continuously employed by Siemens AG or another Siemens company until the end of the vesting period.
Up to the stipulated grant-dates in the first quarter of fiscal year 2009 employees could order the
investment shares, which were issued in the second quarter of the fiscal year. During the vesting
period, matching shares are not entitled to dividends. The right to receive matching shares
forfeits if the underlying investment shares are transferred, sold, pledged or otherwise
encumbered. Investment Shares resulting from the Share Matching Plan 2009 are measured at fair
value at grant-date, which is determined as the market price of Siemens shares less the present
value of expected dividends as investment shares do not carry dividend rights until they are issued
in the second quarter, less the share price paid by the participating employee. Depending on the
grant-date being either November 30, 2008 or December 17, 2008, the fair values amount to 3.47 and
5.56, respectively, per instrument. The weighted average grant-date fair value amounts to 5.39
per instrument, based on the number of instruments granted.
55
SIEMENS
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(in millions of , except where otherwise stated and per share amounts)
c) Monthly Investment Plan
In the first quarter of fiscal 2010, the Company introduced the Monthly Investment Plan as a
further component of the Share Matching Plan. The Monthly Investment Plan is available for
employees other than senior managers of Siemens AG and participating Siemens companies. Plan
participants may invest a certain percentage of their compensation in Siemens shares on a monthly
basis. The Managing Board of the Company will decide annually, whether shares acquired under the
Monthly Investment Plan (investment shares) may be transferred to the Share Matching Plan the
following year. If management decides that shares acquired under the Monthly Investment Plan are
transferred to the Share Matching Plan, plan participants will receive the right to one free share
(matching share) for every three investment shares continuously held over a period of three years
(vesting period) provided the plan participant had been continuously employed by Siemens AG or
another Siemens company until the end of the vesting period. Up to the stipulated grant-dates in
the first quarter of each fiscal year, employees may decide their participation in the Monthly
Investment Plan and consequently the Share Matching Plan. The Managing Board will decide, each
fiscal year, whether a new Monthly Investment Plan will be issued.
d) Resulting Matching Shares
|
|
|
|
|
|
|
|
|
|
|
Nine months ended |
|
|
Nine months ended |
|
|
|
June 30, 2010 |
|
|
June 30, 2009 |
|
|
|
Matching Shares |
|
|
Matching Shares |
|
Outstanding, beginning of period |
|
|
1,266,444 |
|
|
|
|
|
Granted |
|
|
445,148 |
|
|
|
1,324,637 |
|
Forfeited/settled |
|
|
(74,097 |
) |
|
|
(42,917 |
) |
|
|
|
|
|
|
|
Outstanding, end of period |
|
|
1,637,495 |
|
|
|
1,281,720 |
|
|
|
|
|
|
|
|
Fair value was determined as the market price of Siemens shares less the present value of
expected dividends during the vesting period as matching shares do not carry dividend rights during
the vesting period. Non-vesting conditions, i.e. the condition neither to transfer, sell, pledge
nor otherwise encumber the underlying shares, were considered in determining the fair values. The
fair value of matching shares granted on December 17, 2009, amounts to 47.18 per share. The fair
values of matching shares granted amounted to 20.32 and 21.34, per share, respectively, depending
on the grant date being either November 30, 2008 or December 17, 2008. In fiscal 2010 and 2009, the
weighted average grant-date fair value of the resulting matching shares is 47.18 and 21.29 per
share respectively, based on the number of instruments granted. Total fair value of matching shares
granted in fiscal 2010 and 2009 amounted to 21 and 28, respectively.
15. Earnings per share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
Nine months ended |
|
|
|
June 30, |
|
|
June 30, |
|
(shares in thousands) |
|
2010 |
|
|
2009 |
|
|
2010 |
|
|
2009 |
|
Income from continuing operations |
|
|
1,441 |
|
|
|
1,224 |
|
|
|
4,451 |
|
|
|
3,439 |
|
Less: Portion attributable to non-controlling interest |
|
|
(24 |
) |
|
|
(57 |
) |
|
|
(98 |
) |
|
|
(135 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations attributable to
shareholders of Siemens AG |
|
|
1,417 |
|
|
|
1,167 |
|
|
|
4,353 |
|
|
|
3,304 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstandingbasic |
|
|
868,863 |
|
|
|
866,426 |
|
|
|
867,890 |
|
|
|
864,282 |
|
Effect of dilutive share-based payment |
|
|
8,928 |
|
|
|
6,789 |
|
|
|
8,805 |
|
|
|
6,121 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstandingdiluted |
|
|
877,791 |
|
|
|
873,215 |
|
|
|
876,695 |
|
|
|
870,403 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share (from continuing operations) |
|
|
1.63 |
|
|
|
1.35 |
|
|
|
5.02 |
|
|
|
3.82 |
|
Diluted earnings per share (from continuing operations) |
|
|
1.61 |
|
|
|
1.34 |
|
|
|
4.97 |
|
|
|
3.80 |
|
The dilutive earnings per share computation do not contain weighted average shares of 1,823
thousand and 3,091 thousand, in the nine months ended June 30, 2010 and 2009, respectively, since
its inclusion would have been anti-dilutive in the periods presented.
56
SIEMENS
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(in millions of , except where otherwise stated and per share amounts)
16. Segment Information
Segment Information is presented for continuing operations. Accordingly, current and prior
period Segment Information excludes discontinued operations. For a description of the Siemens
segments see Note 37 of the Companys Consolidated Financial Statements as of September 30, 2009.
Reconciliation to Consolidated Financial Statements
Reconciliation to Consolidated Financial Statements contains businesses and items not directly
related to Siemens reportable segments:
Centrally managed portfolio activities
Siemens completed the streamlining of Other Operations in the fourth quarter of fiscal 2009.
Beginning with the first quarter of fiscal 2010, Segment Information includes a new line item for
centrally managed activities generally intended for divestment or closure, which at present
primarily includes the Electronics Assembly Systems business and activities remaining from the
divestment of the former Communications (Com) business. Results for the new line item, Centrally
managed portfolio activities, are stated on a comparable basis.
Siemens Real Estate (SRE)
Siemens Real Estate owns and manages a substantial part of Siemens real estate portfolio and
offers a range of services encompassing real estate development, real estate disposal and asset
management, as well as lease and services management. SRE is in the process of bundling additional
corporate real estate. In the nine months ended June 30, 2010, assets with a carrying amount of
579 were transferred to SRE.
Corporate items and pensions
Corporate items and pensions includes corporate charges such as personnel costs for corporate
headquarters, corporate projects and non-operating investments or results of corporate-related
derivative activities and, since fiscal 2010, costs for carve out activities managed by corporate,
which are charged to the respective segment when the disposal gain or loss is realized. Pensions
includes the Companys pension related income (expense) not allocated to the segments, SRE or
Centrally managed portfolio activities. In fiscal 2010, Centrally managed portfolio activities was
implemented. The implementation resulted in reclassifications of prior period amounts to conform to
the current period presentation.
Eliminations, Corporate Treasury and other reconciling items
Eliminations, Corporate Treasury and other reconciling items comprise consolidation of
transactions within the segments, certain reconciliation and reclassification items and the
activities of the Companys Corporate Treasury. It also includes interest income and expense, such
as, for example, interest not allocated to segments or Centrally managed portfolio activities
(referred to as financing interest), interest related to Corporate Treasury activities or resulting
consolidation and reconciliation effects on interest.
Measurement Segments
Accounting policies for Segment Information are based on those used for Siemens, which are
described in Note 2 of the Companys Consolidated Financial Statements as of September 30, 2009.
Corporate overhead is generally not allocated to segments. Intersegment transactions are generally
based on market prices.
Profit of the Sectors, Equity Investments, and Siemens IT Solutions and Services
Siemens Managing Board is responsible for assessing the performance of the segments. The
Companys profitability measure of the Sectors, Equity Investments, and Siemens IT Solutions and
Services is earnings before financing interest, certain pension costs, and income taxes (Profit) as
determined by the chief operating decision maker. Profit excludes various categories of items,
which are not allocated to the Sectors, Equity Investments, and Siemens IT Solutions and Services
since Management does not regard such items as indicative of their performance. Profit represents a
performance measure focused on operational success excluding the effects of capital market
financing issues (for financing issues regarding Equity Investments see paragraph below). The major
categories of items excluded from Profit are presented below.
Financing interest, excluded from Profit, is any interest income or expense other than
interest income related to receivables from customers, from cash allocated to the Sectors, Equity
Investments, and Siemens IT Solutions and Services and interest expense on payables to suppliers.
57
SIEMENS
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(in millions of , except where otherwise stated and per share amounts)
Financing interest is excluded from Profit
because decision-making regarding financing is typically made at the corporate level. Equity
Investments include interest and impairments as well as reversals of impairments on long-term loans
granted to investments reported in Equity Investments, primarily NSN.
Similarly, decision-making regarding essential pension items is done centrally. As a
consequence, Profit primarily includes amounts related to service costs of pension plans only,
while all other regularly recurring pension related costs (including charges for the German pension
insurance association and plan administration costs) are included in the line item Corporate items
and pensions. Curtailments are a partial payback with regard to past service costs that affect
Segment Profit.
Furthermore, income taxes are excluded from Profit since income tax is subject to legal
structures, which typically do not correspond to the structure of the segments.
The effect of certain litigation and compliance issues is excluded from Profit, if such items
are not indicative of the Sectors, Equity Investments, and Siemens IT Solutions and Services
performance, since their related results of operations may be distorted by the amount and the
irregular nature of such events. This may also be the case for items that refer to more than one
reportable segment, SRE and/or Centrally managed portfolio activities or have a corporate or
central character.
Profit of Equity Investments mainly comprises income (loss) from investments presented in
Equity Investments, such as the share in the earnings of associates or dividends from investments
not accounted for under the equity method, income (loss) from the sale of interests in investments,
impairment of investments and reversals of impairments. It also includes interest and impairments
as well as reversals of impairments on long-term loans granted to investments reported in Equity
Investments, primarily NSN.
Profit of the segment SFS
Profit of the segment SFS is Income before income taxes. In contrast to performance
measurement principles applied to the Sectors, Equity Investments, and Siemens IT Solutions and
Services, interest income and expense is an important source of revenue and expense of SFS.
Asset measurement principles
Management determined Assets as a measure to assess capital intensity of the Sectors, Equity
Investments and Siemens IT Solutions and Services (Net capital employed). Its definition
corresponds to the Profit measure. It is based on Total assets of the Consolidated Statements of
Financial Position, primarily excluding intragroup financing receivables, intragroup investments
and tax related assets, since the corresponding positions are excluded from Profit. The remaining
assets are reduced by non-interest-bearing liabilities other than tax related liabilities (e.g.
trade payables) and provisions to derive Assets. Equity Investments include certain shareholder
loans granted to investments reported in Equity Investments, primarily NSN. In contrast, Assets of
SFS is Total assets. A reconciliation of Assets disclosed in Segment Information to Total assets in
the Consolidated Statements of Financial Position is presented below.
New orders
New orders are determined principally as estimated revenue of accepted customer purchase
orders and order value changes and adjustments, excluding letters of intent. New orders are
provided on a voluntary basis. It is not part of the Interim Consolidated Financial Statements
subject to the review opinion.
Free cash flow definition
Segment Information discloses Free cash flow and Additions to property, plant and equipment
and intangible assets. Free cash flow of the Sectors, Equity Investments, and Siemens IT Solutions
and Services constitutes net cash provided by (used in) operating activities less additions to
intangible assets and property, plant and equipment. It excludes Financing interest as well as
income tax related and certain other payments and proceeds, in accordance with the Companys Profit
and Asset measurement definition. Free cash flow of Equity Investments includes interest from
shareholder loans granted to investments reported in Equity Investments, primarily NSN. Pension
curtailments are a partial payback with regard to past service costs that affect Segment Free cash
flow. Free cash flow of SFS, a financial services business, includes related financing interest
payments and proceeds; income tax payments and proceeds of SFS are excluded.
58
SIEMENS
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(in millions of , except where otherwise stated and per share amounts)
Amortization, depreciation and impairments
Amortization, depreciation and impairments presented in Segment Information includes
depreciation and impairments of property, plant and equipment, net of reversals of impairments as
well as amortization and impairments of intangible assets, net of reversals of impairment. Goodwill
impairment is excluded.
Measurement Centrally managed portfolio activities and SRE
Centrally managed portfolio activities follow the measurement principles of the Sectors. SRE
applies the measurement principles of SFS.
Reconciliation to Siemens Consolidated Financial Statements
The following table reconciles total Assets of the Sectors, Equity Investments and
Cross-Sector Businesses to Total assets of Siemens Consolidated Statements of Financial Position:
|
|
|
|
|
|
|
|
|
|
|
June 30, |
|
|
September 30, |
|
|
|
2010 |
|
|
2009 |
|
Assets of Sectors |
|
|
26,380 |
|
|
|
24,958 |
|
Assets of Equity Investments |
|
|
3,463 |
|
|
|
3,833 |
|
Assets of Cross-Sector Businesses |
|
|
13,386 |
|
|
|
11,945 |
|
|
|
|
|
|
|
|
Total Segment Assets |
|
|
43,229 |
|
|
|
40,736 |
|
|
|
|
|
|
|
|
Reconciliation: |
|
|
|
|
|
|
|
|
Assets Centrally managed portfolio activities |
|
|
(461 |
) |
|
|
(543 |
) |
Assets SRE |
|
|
4,843 |
|
|
|
4,489 |
|
Assets of Corporate items and pensions |
|
|
(9,211 |
) |
|
|
(7,445 |
) |
Eliminations, Corporate Treasury and other reconciling items of
Segment Information: |
|
|
|
|
|
|
|
|
Asset-based adjustments: |
|
|
|
|
|
|
|
|
Intra-group financing receivables and investments |
|
|
25,097 |
|
|
|
28,083 |
|
Tax-related assets |
|
|
4,700 |
|
|
|
2,870 |
|
Liability-based adjustments: |
|
|
|
|
|
|
|
|
Pension plans and similar commitments |
|
|
8,054 |
|
|
|
5,938 |
|
Liabilities |
|
|
40,871 |
|
|
|
38,112 |
|
Eliminations, Corporate Treasury, other items |
|
|
(12,339 |
) |
|
|
(17,314 |
) |
|
|
|
|
|
|
|
Total Eliminations, Corporate Treasury and other reconciling items of
Segment Information |
|
|
66,383 |
|
|
|
57,689 |
|
|
|
|
|
|
|
|
Total Assets in Siemens Consolidated Statements of Financial Position |
|
|
104,783 |
|
|
|
94,926 |
|
|
|
|
|
|
|
|
In the nine months ended June 30, 2010 and 2009, Corporate items and pensions in the column
Profit includes (556) and (862), respectively, related to corporate items, as well as (155) and
(258), respectively, related to pensions.
In the nine months ended June 30, 2010, Corporate items includes 96 gains, net of related
costs, from Siemens directors and officers insurance and from settlement agreements with former
Managing and Supervisory Board members in conjunction with compliance matters as well as 40
related to the agreed recovery of funds frozen by authorities. For further information see Note 13.
Corporate items in the nine months ended June 30, 2010 and 2009 include net expenses of 20
and 66 related to centrally charged termination benefits. In the three months ended June
30, 2010 and 2009, Corporate items include a net gain (loss) of 64 and (53), respectively,
associated with an asset retirement obligation; the nine months ended June 30, 2010 and 2009
include a net gain (loss) of 19 and (53), respectively, associated with the asset retirement
obligation. The three and nine months ended June 30, 2010 also include carve out costs related to
Siemens IT Solutions and Services. The nine months ended June 30, 2009, include fees amounting to
90 for outside advisors engaged by the Company in connection with investigations into alleged
violations of anti-corruption laws and related matters as well as remediation activities.
In the nine months ended June 30, 2010 Capital Meters Holdings Ltd., an investment accounted
under the
equity method, held by Energy was sold, which resulted in a gain of 6 reported in Income
(loss) from investments accounted for using the equity method, net.
59
SIEMENS
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(in millions of , except where otherwise stated and per share amounts)
The following table reconciles Free cash flow, Additions to intangible assets and property,
plant and equipment and Amortization, depreciation and impairments as disclosed in Segment
Information to the corresponding consolidated amount for the Company.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by |
|
|
Additions to intangible |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(used in) operating |
|
|
assets and property, |
|
|
Amortization, |
|
|
|
Free cash flow |
|
|
activities |
|
|
plant and equipment |
|
|
depreciation and |
|
|
|
(I)= (II)+(III) |
|
|
(II) |
|
|
(III) |
|
|
impairments |
|
|
|
Nine months ended |
|
|
Nine months ended |
|
|
Nine months ended |
|
|
Nine months ended |
|
|
|
June 30, |
|
|
June 30, |
|
|
June 30, |
|
|
June 30, |
|
|
|
2010 |
|
|
2009 |
|
|
2010 |
|
|
2009 |
|
|
2010 |
|
|
2009 |
|
|
2010 |
|
|
2009 |
|
Segment Information
- based on continuing
operations |
|
|
4,121 |
|
|
|
628 |
|
|
|
5,475 |
|
|
|
2,230 |
|
|
|
(1,354 |
) |
|
|
(1,602 |
) |
|
|
2,098 |
|
|
|
2,073 |
|
Discontinued operations |
|
|
(63 |
) |
|
|
(109 |
) |
|
|
(63 |
) |
|
|
(109 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill impairment |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Siemens
Consolidated Statements
of Cash Flow |
|
|
4,058 |
|
|
|
519 |
|
|
|
5,412 |
|
|
|
2,121 |
|
|
|
(1,354 |
) |
|
|
(1,602 |
) |
|
|
2,098 |
|
|
|
2,096 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17. Related party transactions
Joint ventures and associates
The Company has relationships with many of its joint ventures and associates in the ordinary
course of business whereby the Company buys and sells a wide variety of products and services
generally on arms length terms.
Sales of goods and services and other income from transactions with joint ventures and
associates as well as purchases of goods and services and other expense from transactions with
joint ventures and associates are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchases of goods and |
|
|
|
Sales of goods and |
|
|
services and other |
|
|
|
services and other income |
|
|
expense |
|
|
|
Three months ended |
|
|
Three months ended |
|
|
|
June 30, |
|
|
June 30, |
|
|
|
2010 |
|
|
2009 |
|
|
2010 |
|
|
2009 |
|
Joint ventures |
|
|
22 |
|
|
|
23 |
|
|
|
10 |
|
|
|
5 |
|
Associates |
|
|
219 |
|
|
|
247 |
|
|
|
70 |
|
|
|
50 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
241 |
|
|
|
270 |
|
|
|
80 |
|
|
|
55 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchases of goods and |
|
|
|
Sales of goods and |
|
|
services and other |
|
|
|
services and other income |
|
|
expense |
|
|
|
Nine months ended |
|
|
Nine months ended |
|
|
|
June 30, |
|
|
June 30, |
|
|
|
2010 |
|
|
2009 |
|
|
2010 |
|
|
2009 |
|
Joint ventures |
|
|
76 |
|
|
|
153 |
|
|
|
24 |
|
|
|
211 |
|
Associates |
|
|
692 |
|
|
|
802 |
|
|
|
194 |
|
|
|
150 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
768 |
|
|
|
955 |
|
|
|
218 |
|
|
|
361 |
|
60
SIEMENS
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(in millions of , except where otherwise stated and per share amounts)
Receivables from joint ventures and associates and liabilities to joint ventures and
associates are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Receivables |
|
|
Liabilities |
|
|
|
June 30, |
|
|
September 30, |
|
|
June 30, |
|
|
September 30, |
|
|
|
2010 |
|
|
2009 |
|
|
2010 |
|
|
2009 |
|
Joint ventures |
|
|
41 |
|
|
|
25 |
|
|
|
5 |
|
|
|
13 |
|
Associates |
|
|
162 |
|
|
|
129 |
|
|
|
144 |
|
|
|
73 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
203 |
|
|
|
154 |
|
|
|
149 |
|
|
|
86 |
|
As of June 30, 2010, liabilities to associates include capital commitments of 100 related to
the formation of an associate. As of June 30, 2010, loans given to joint ventures and associates
amount to 432 in total including a tranche of 250 in relation to a Shareholder Loan Agreement
between Siemens and NSN. As of September 30, 2009, loans given to joint ventures and associates
amounted to 869 including three tranches of 250 each in relation to a Shareholder Loan Agreement
between Siemens and NSN. At the end of March 2010, both Siemens and Nokia converted an amount of
500 each of the Shareholder loan into preferred shares. The conversion resulted in an increase of
500 of our investment in NSN. The conversion does not result in a change to the existing
shareholding ratios between Siemens and Nokia. Loans given to joint ventures amount to 24 as of
June 30, 2010 (as of September 30, 2009: 24). In the normal course of business the Company
regularly reviews loans and receivables associated with joint ventures and associates, including
NSN. In the three months ended June 30, 2010 the review resulted in net gains related to valuation
allowances totaling 12. In the three months ended June 30, 2009 the review resulted in net losses
related to valuation allowances totaling 1. In the nine months ended June 30, 2010 and 2009 the
review resulted in net gains (losses) related to valuation allowances totaling 24 and (38),
respectively. As of June 30, 2010, valuation allowances amount to 38. As of September 30, 2009,
valuation allowances amounted to 47.
As of June 30, 2010, guarantees to joint ventures and associates amount to 5,431, including
the HERKULES obligations of 3,090 (as of September 30, 2009: 5,740, including the HERKULES
obligations of 3,490). As of June 30, 2010, guarantees to joint ventures amount to 440 (as of
September 30, 2009: 48).
Pension entities
For information regarding the funding of our principal pension plans refer to Note 9. In the
first nine months ended June 30, 2010, a liability from continuing lease involvement related to a
previous sale and lease back transaction with entities controlled by the Siemens Pension-Trust e.V.
was derecognized. For further information please refer to Note 3.
Related individuals
Related individuals include the members of the Managing Board and Supervisory Board.
In the first nine months ended June 30, 2010 and 2009, no major transactions took place
between the Company and members of the Managing Board and Supervisory Board.
Some of the members of the Companys Managing Board and Supervisory Board hold positions of
significant responsibilities with other entities. Siemens has relationships with almost all of
these entities in the ordinary course of business whereby the Company buys and sells a wide variety
of products and services generally at arms length terms.
For information regarding the settlement agreements with former Managing and Supervisory board
members refer to Note 13.
18. Supervisory Board and Managing Board
At the Annual Shareholders Meeting on January 26, 2010, among others, the shareholders
approved Siemens Managing Board member remuneration system in accordance with the German Act on
the Appropriateness of Managing Board Remuneration (VorstAG) and the settlement agreements with
former Managing and Supervisory Board members.
61
SIEMENS
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(in millions of , except where otherwise stated and per share amounts)
The Supervisory Board extended the appointments of the Managing Board members CFO Joe Kaeser
and Healthcare Sector CEO Hermann Requardt for an additional five years. The decision is effective
as of April 1,
2011, the date on which their current appointments expire.
Dr. Heinrich Hiesinger will leave the Managing Board of Siemens AG at his own request on
September 30, 2010 and resigned his responsibilites as Industry Sector CEO on June 30, 2010. Prof.
Dr. Siegfried Russwurm assumed the responsibilites of Industry Sector CEO, effective July 1, 2010.
Brigitte Ederer has been appointed a member of the Managing Board of Siemens AG effective July
1, 2010.
62
Review report
To Siemens Aktiengesellschaft, Berlin and Munich
We have reviewed the condensed interim consolidated financial statements comprising the
consolidated statements of financial position, the consolidated statements of income, consolidated
statements of comprehensive income, consolidated statements of changes in equity, consolidated
statements of cash flow and selected explanatory notes, together with the interim group management
report, of Siemens Aktiengesellschaft, Berlin and Munich for the period from October 1, 2009 to
June 30, 2010 which are part of the quarterly financial report pursuant to Sec. 37x (3) WpHG
(Wertpapierhandelsgesetz: German Securities Trading Act). The preparation of the condensed
interim consolidated financial statements in accordance with IFRS applicable to interim financial
reporting as issued by the IASB and as adopted by the EU and of the interim group management report
in accordance with the requirements of the WpHG applicable to interim group management reports is
the responsibility of the Companys management. Our responsibility is to issue a report on the
condensed interim consolidated financial statements and the interim group management report based
on our review.
We conducted our review of the condensed interim consolidated financial statements and the
interim group management report in accordance with German generally accepted standards for the
review of financial statements promulgated by the Institut der Wirtschaftsprüfer (IDW Institute
of Public Auditors in Germany) and in accordance with the International Standard on Review
Engagements 2410, Review on Interim Financial Information Performed by the Independent Auditor of
the Entity. Those standards require that we plan and perform the review so that we can preclude
through critical evaluation, with a certain level of assurance, that the condensed interim
consolidated financial statements have not been prepared, in all material respects, in accordance
with IFRSs applicable to interim financial reporting as issued by the IASB and as adopted by the
EU, and that the interim group management report has not been prepared, in all material respects,
in accordance with the requirements of the WpHG applicable to interim group management reports. A
review is limited primarily to making inquiries of company personnel and applying analytical
procedures and thus does not provide the assurance that we would obtain from an audit of financial
statements. In accordance with our engagement, we have not performed a financial statement audit
and, accordingly, we do not express an audit opinion.
Based on our review nothing has come to our attention that causes us to believe that the
condensed interim consolidated financial statements have not been prepared, in all material
respects, in accordance with IFRSs applicable to interim financial reporting as issued by the IASB
and as adopted by the EU and that the interim group management report has not been prepared, in all
material respects, in accordance with the provisions of the WpHG applicable to interim group
management reports.
Munich, July 30, 2010
Ernst & Young GmbH
Wirtschaftsprüfungsgesellschaft
| | | | |
|
|
/s/ Prof. Dr. Pfitzer
|
|
/s/ Krämmer |
| |
Wirtschaftsprüfer
|
|
Wirtschaftsprüfer |
63
Quarterly summary
(in unless otherwise indicated)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year 2010 |
|
|
Fiscal Year 2009 |
|
|
|
3rd Quarter |
|
|
2nd Quarter |
|
|
1st Quarter |
|
|
4th Quarter |
|
|
3rd Quarter |
|
|
2nd Quarter |
|
|
1st Quarter |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue (in millions of )(1) |
|
|
19,170 |
|
|
|
18,227 |
|
|
|
17,352 |
|
|
|
19,714 |
|
|
|
18,348 |
|
|
|
18,955 |
|
|
|
19,634 |
|
Income from continuing operations
(in millions of ) |
|
|
1,441 |
|
|
|
1,484 |
|
|
|
1,526 |
|
|
|
(982 |
) |
|
|
1,224 |
|
|
|
955 |
|
|
|
1,260 |
|
Net income (in millions of ) |
|
|
1,435 |
|
|
|
1,498 |
|
|
|
1,531 |
|
|
|
(1,063 |
) |
|
|
1,317 |
|
|
|
1,013 |
|
|
|
1,230 |
|
Free cash flow (in millions of )(1) (2) |
|
|
2,145 |
|
|
|
1,251 |
|
|
|
725 |
|
|
|
3,158 |
|
|
|
1,064 |
|
|
|
1,138 |
|
|
|
(1,574 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Key capital market data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share(1) |
|
|
1.63 |
|
|
|
1.69 |
|
|
|
1.70 |
|
|
|
(1.21 |
) |
|
|
1.35 |
|
|
|
1.05 |
|
|
|
1.43 |
|
Diluted earnings per share(1) |
|
|
1.61 |
|
|
|
1.67 |
|
|
|
1.68 |
|
|
|
(1.21 |
) |
|
|
1.34 |
|
|
|
1.04 |
|
|
|
1.42 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Siemens stock price (3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
High |
|
|
79.23 |
|
|
|
74.42 |
|
|
|
69.00 |
|
|
|
66.45 |
|
|
|
54.99 |
|
|
|
56.19 |
|
|
|
63.73 |
|
Low |
|
|
68.25 |
|
|
|
61.67 |
|
|
|
60.20 |
|
|
|
46.00 |
|
|
|
42.97 |
|
|
|
38.36 |
|
|
|
35.52 |
|
Period-end |
|
|
74.02 |
|
|
|
74.15 |
|
|
|
64.21 |
|
|
|
63.28 |
|
|
|
49.16 |
|
|
|
43.01 |
|
|
|
52.68 |
|
Siemens stock performance on a quarterly basis (in
percentage points) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compared to DAX ® index |
|
|
2.88 |
|
|
|
14.95 |
|
|
|
(3.50 |
) |
|
|
10.70 |
|
|
|
(3.42 |
) |
|
|
(0.46 |
) |
|
|
(2.37 |
) |
Compared to Dow Jones STOXX ®index |
|
|
6.15 |
|
|
|
13.89 |
|
|
|
(3.66 |
) |
|
|
10.42 |
|
|
|
(4.51 |
) |
|
|
(5.14 |
) |
|
|
2.24 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of shares issued (in millions) |
|
|
914 |
|
|
|
914 |
|
|
|
914 |
|
|
|
914 |
|
|
|
914 |
|
|
|
914 |
|
|
|
914 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Market capitalization (in millions of
)(4) |
|
|
64,329 |
|
|
|
64,417 |
|
|
|
55,686 |
|
|
|
54,827 |
|
|
|
42,593 |
|
|
|
37,265 |
|
|
|
45,434 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Credit rating of long-term debt |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Standard & Poors |
|
|
A+ |
|
|
|
A+ |
|
|
|
A+ |
|
|
|
A+ |
|
|
|
A+ |
(5) |
|
AA- |
|
|
AA- |
|
Moodys |
|
|
A1 |
|
|
|
A1 |
|
|
|
A1 |
|
|
|
A1 |
|
|
|
A1 |
|
|
|
A1 |
|
|
|
A1 |
|
|
|
|
(1) |
|
Continuing operations. |
|
(2) |
|
Net cash provided by (used in) operating activities less Additions to intangible assets and property, plant and equipment. |
|
(3) |
|
XETRA closing prices, Frankfurt. |
|
(4) |
|
Based on shares outstanding. |
|
(5) |
|
Changed from AA- to A+ on June 5, 2009. |
64
Siemens financial calendar(1)
|
|
|
Preliminary figures for fiscal 2010/Press conference
|
|
Nov. 11, 2010 |
Annual Shareholders Meeting for fiscal 2010
|
|
Jan. 25, 2011 |