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 1, 2011
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 its interpretations issued by the International Accounting Standards
Board (IASB), 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 2010, 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
Key figures Q3 and first nine months of fiscal 20111,2
(unaudited, in millions of , except where otherwise stated)
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Volume |
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% Change |
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1st nine months |
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% Change |
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Q3 2011 |
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Q3 2010 |
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Actual |
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Adjusted3 |
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2011 |
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2010 |
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Actual |
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Adjusted3 |
Continuing operations |
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New orders |
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22,937 |
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19,179 |
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20 |
% |
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25 |
% |
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64,425 |
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52,466 |
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23 |
% |
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22 |
% |
Revenue |
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17,844 |
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17,425 |
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2 |
% |
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8 |
% |
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53,164 |
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49,575 |
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7 |
% |
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7 |
% |
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Earnings |
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% Change |
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1st nine months |
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% Change |
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Q3 2011 |
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Q3 2010 |
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2011 |
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2010 |
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Total Sectors |
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Adjusted EBITDA |
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2,276 |
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2,541 |
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(10)% |
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7,432 |
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7,192 |
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3% |
Total Sectors Profit8 |
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1,144 |
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2,067 |
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(45)% |
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6,927 |
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5,882 |
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18% |
in % of revenue (Total Sectors) |
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6.5 |
% |
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12.0 |
% |
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13.1 |
% |
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12.0 |
% |
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Continuing operations |
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Adjusted EBITDA |
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2,319 |
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2,667 |
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(13)% |
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8,018 |
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7,756 |
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3% |
Income from continuing operations |
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763 |
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1,428 |
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(47)% |
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5,783 |
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4,304 |
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34% |
Basic earnings per share (in )4 |
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0.83 |
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1.62 |
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(49)% |
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6.48 |
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4.86 |
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33% |
Continuing and discontinued operations5 |
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Net income |
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501 |
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1,435 |
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(65)% |
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5,090 |
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4,464 |
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14% |
Basic earnings per share (in )4 |
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0.53 |
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1.62 |
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(67)% |
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5.70 |
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5.03 |
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13% |
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Capital efficiency |
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1st nine months |
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1st nine months |
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Q3 2011 |
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Q3 2010 |
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2011 |
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2010 |
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Continuing operations |
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Return on capital employed (ROCE) (adjusted) |
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11.3% |
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17.0% |
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26.0% |
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17.6% |
Continuing and discontinued operations5 |
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Return on capital employed (ROCE) (adjusted) |
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7.2% |
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17.1% |
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22.2% |
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18.3% |
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Cash performance |
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1st nine months |
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1st nine months |
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Q3 2011 |
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Q3 2010 |
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2011 |
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2010 |
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Continuing operations |
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Free cash flow |
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992 |
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2,088 |
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2,405 |
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4,112 |
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Cash conversion rate |
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1.30 |
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1.46 |
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0.42 |
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0.96 |
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Continuing and discontinued operations5 |
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Free cash flow |
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861 |
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2,129 |
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1,727 |
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4,058 |
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Cash conversion rate |
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1.72 |
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1.48 |
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0.34 |
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0.91 |
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Liquidity and capital structure |
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June 30, 2011 |
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September 30, 2010 |
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Cash and cash equivalents |
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13,006 |
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14,108 |
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Total equity (shareholders of Siemens AG) |
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30,992 |
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28,346 |
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Net debt |
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5,731 |
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5,560 |
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Adjusted industrial net debt |
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243 |
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2,189 |
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Employees in thousands |
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June 30, 2011 |
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September 30, 2010 |
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Continuing |
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Continuing |
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operations |
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Total6 |
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operations |
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Total6 |
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Employees |
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353 |
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421 |
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336 |
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405 |
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Germany |
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114 |
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131 |
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110 |
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128 |
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Outside Germany |
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239 |
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290 |
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225 |
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277 |
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1 |
|
New orders and order
backlog; adjusted or organic
growth rates of Revenue and new
orders; book-to-bill ratio;
Total Sectors Profit; ROE
(after tax); ROCE (adjusted);
Free cash flow; cash conversion
rate; adjusted EBITDA; adjusted
EBIT; adjusted EBITDA margins,
earnings effect from purchase
price allocation, or PPA
effects; net debt and adjusted
industrial net debt are or may
be non-GAAP financial measures.
Definitions of these
supplemental financial
measures, a discussion of the
most directly comparable IFRS
financial measures, information
regarding the usefulness of
Siemens supplemental financial
measures, the limitations
associated with these measures
and reconciliations to the most
comparable IFRS financial
measures are available on our
Investor Relations website
under www.siemens.com/nonGAAP. |
|
2 |
|
April 1, 2011 June 30, 2011 and
October 1, 2010 June 30, 2011. |
|
3 |
|
Adjusted for portfolio and currency translation effects. |
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4 |
|
Earnings per share
attributable to shareholders of
Siemens AG. For fiscal 2011
and 2010 weighted average
shares outstanding (basic) (in
thousands) for the third
quarter amounted to 873,911 and
868,863 respectively and for
the first nine months to 872,755
and 867,890 shares
respectively. |
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5 |
|
Discontinued operations
primarily consist of OSRAM,
Siemens IT Solutions and
Services and Siemens former
Com activities, comprising
carrier networks, enterprise
networks and mobile devices
activities. |
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6 |
|
Continuing and discontinued operations. |
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7 |
|
Calculated by dividing
adjusted industrial net debt
as of June 30, 2011 and 2010
by annualized adjusted EBITDA. |
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8 |
|
Beginning with fiscal 2011,
central infrastructure costs
which were formerly reported
in Corporate items are
allocated primarily to the
Sectors. The total amount to
be allocated is determined at
the beginning of the fiscal
year and is charged in set
portions in all four quarters.
Presentation of prior-year
information has been adjusted
to conform to the current-year
presentation. |
2
Interim group management report
Overview of financial results for the third quarter of fiscal 2011
(Three months ended June 30, 2011)
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|
Orders climbed 20%, to 22.937 billion, and the order backlog reached a new high of 96
billion. Orders were up 25% on an organic basis, excluding currency translation and
portfolio effects. |
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|
Revenue rose 2%, to 17.844 billion, with increases in all regions driven by emerging
market growth. Organic revenue grew 8% compared to the prior-year period. |
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|
Total Sectors profit was 1.144 billion, including strong profit growth in Industry and
burdens on profit of 682 million related to an arbitration decision and 381 million
related to particle therapy projects. |
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|
Income from continuing operations was 763 million and corresponding basic EPS was
0.83. |
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|
Free cash flow from continuing operations was 992 million, down from 2.088 billion in
the prior-year period due in part to a build-up of net working capital associated with
growth. |
Managements perspective on third-quarter results. We continued to grow in the third quarter
and believe that we are on track to reach our targets for fiscal 2011. New orders again rose
sharply, driven by a large order at Mobility. We are vigorously tackling operating challenges. Our
markets are still robust, although risks are tending to increase in the global economic
environment.
Strong order intake lifts backlog to new high. Orders climbed 20% compared to the third
quarter a year ago, led by a 3.7 billion contract for trains in Germany. This helped lift the
order backlog (defined as the sum of order backlogs of our Sectors) to a new high of 96 billion at
the end of the quarter. Third-quarter revenue rose 2% year-over-year. Currency translation effects
took 5 percentage points from reported growth in both orders and revenue for the quarter. Currency
translation effects had a particularly strong influence on reported results including for the U.S.,
India and China. On an organic basis, excluding portfolio effects along with currency translation
effects, orders increased 25% and revenue rose 8% year-over-year. The book-to-bill ratio for
Siemens overall was 1.29.
Rolling stock contract drives order growth. The large order for trains noted above helped lift
Industry orders by more than 50% compared to the same period a year ago. Energy orders were nearly
level year-over-year. Healthcare orders for the third quarter declined in a challenging
environment. On a geographic basis, substantial order growth came from the region comprising
Europe, the Commonwealth of Independent States (C.I.S.), Africa and the Middle East, due to the
trains order mentioned above, and from the reporting region Asia, Australia, including double-digit
increases in China and India. On a global basis, orders in emerging markets grew 5% compared to the
prior-year period and accounted for 6.378 billion or 28% of total orders for the quarter. On an
organic basis, third-quarter emerging market orders were up 12% year-over-year.
3
Revenue rises in all regions, led by emerging markets. Third-quarter revenue rose in Industry,
including double-digit increases at Drive Technologies and Industry Automation, and in Energy,
including double-digit increases at Fossil Power Generation and Oil & Gas. Reported revenue in
Healthcare came in lower compared to the prior-year period due primarily to strong negative
currency translation effects and a significant revenue reduction effect related to particle therapy
projects. On a geographic basis, demand in emerging markets took revenue higher in all regions.
Revenue in emerging markets globally grew faster than revenue overall, at 8% for the quarter, and
accounted for 5.897 billion, or 33%, of total revenue for the quarter. On an organic basis,
third-quarter emerging market revenue was up 14% year-over-year.
Total
Sectors profit burdened by impacts in Energy and Healthcare. Total Sectors profit in the
third quarter came in at 1.144 billion, down from 2.067 billion in the same period a year earlier
due to substantial profit impacts affecting the Energy and Healthcare Sectors. Following Siemens
previous decision to exit its nuclear power joint venture with Areva S.A., an adverse arbitration
decision resulted in a payment to Areva. This had an associated profit impact of a negative 682
million within the Fossil Power Generation Division. Profit in Healthcare included 381 million in
negative impacts resulting from a reevaluation of the commercial feasibility of particle therapy
for general patient treatment.
Industry increased its third-quarter profit 23% year-over-year, to 872 million. While the
Energy Sector delivered another strong operating performance, the negative impact related to the
arbitration decision mentioned above held third-quarter profit to 263 million, down from 875
million a year earlier. Similarly, Healthcares reported profit was 8 million, primarily due to
the profit impacts mentioned above. For comparison, Healthcare profit of 482 million in the third
quarter a year earlier benefited from a 40 million effect related to a joint venture.
4
Total Sectors profit takes income down. Income from continuing operations was 763 million,
down from 1.428 billion a year earlier. Corresponding basic earnings per share (EPS) were 0.83
compared to 1.62 a year earlier. These declines were due largely to the profit impacts discussed
above for Total Sectors profit. Net income in the current quarter declined to 501 million from
1.435 billion in the same period a year earlier. Corresponding third-quarter EPS decreased to
0.53 from 1.62 a year earlier.
Within net income, discontinued operations swung to a loss of 262 million from income of 7
million in the prior-year period. The largest factor was a loss of 305 million attributable to
Siemens IT Solutions and Services. In the
prior-year period, the result within discontinued operations related to Siemens IT Solutions and
Services was a loss of 62 million (for more information
see Portfolio activities below). Income from discontinued operations related to OSRAM was 56
million in the third quarter, down from 74 million in the same period a year earlier. On a slight
increase in revenue year-over-year, OSRAMs operating results declined substantially due to a
combination of factors, including higher costs for raw materials and pricing pressure. A positive
effect from cessation of depreciation and amortization resulting from classifying OSRAM as
discontinued operations more than offset expenses for legal matters.
Growth in net working capital lowers Free cash flow. Free cash flow from continuing operations
came in at 992 million, down from 2.088 billion in the prior-year period. The change was due
primarily to a build-up of net working capital in the Sectors associated with growth, including a
build-up of inventories. Free cash flow from discontinued operations was a negative 131 million
compared to a positive 41 million in the prior-year quarter. Free cash flow came in lower at OSRAM
and Siemens IT Solutions and Services, including payments related to carve-out activities and
personnel-related matters in connection with establishing Siemens IT Solutions and Services as a
separate legal group. The Free cash flow measure does not include certain cash outflows that
occurred in the third quarter. Among these were a payment of 1.0 billion related to a previously
disclosed purchase of additional shares in Siemens Ltd. in India, and a payment of 0.7 billion
related to the arbitration decision as mentioned earlier.
5
ROCE declines on lower income from continuing operations. On a continuing basis, ROCE
(adjusted) declined to 11.3% in the third quarter from 17.0% a year earlier. The decrease was due
to lower income from continuing operations compared to the prior-year period driven by the negative
profit impacts associated with the arbitration decision and particle therapy projects mentioned
earlier. These effects were only partly offset by a reduction in average capital employed compared
to the prior-year period.
Pension underfunding remains near level of second quarter. The estimated underfunding of
Siemens pension plans as of June 30, 2011, amounted to approximately 5.4 billion, compared to an
underfunding of approximately 5.3 billion at the end of the second quarter. Employer contributions
and a positive actual return on plan assets nearly offset an increase in Siemens defined benefit
obligation (DBO). The DBO rose due to a small decrease in the discount rate assumption as of June
30, 2011 and accrued service and interest costs. As of September 30, 2010, pension plan
underfunding amounted to 7.4 billion.
6
Results of Siemens
Results of Siemens Three months ended June 30, 2011
The following discussion presents selected information for Siemens for the third quarter
of fiscal 2011:
Orders and revenue
Orders climbed to 22.937 billion, up 20% from the third quarter a year earlier, driven by a
large contract win for trains in the Industry Sector. Revenue rose 2% to 17.844 billion, including
growth in all three reporting regions. Currency translation effects took 5 percentage points from
reported growth in both orders and revenue for the quarter. On an organic basis, excluding the net
effect of currency translation and portfolio transactions, orders rose 25% and revenue was up 8%
compared to the prior-year quarter. The combined book-to-bill ratio for the Sectors and Siemens
overall was 1.29. The order backlog climbed to 96 billion as of June 30, 2011.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New orders (location of customer) |
|
|
|
Three months |
|
|
|
|
|
|
|
|
|
|
|
|
|
ended June 30, |
|
|
% Change |
|
|
therein |
|
(in millions of ) |
|
2011 |
|
|
2010 |
|
|
Actual |
|
|
Adjusted(1) |
|
|
Currency |
|
|
Portfolio |
|
Europe, C.I.S.(2), Africa, Middle East |
|
|
13,417 |
|
|
|
10,153 |
|
|
|
32 |
% |
|
|
34 |
% |
|
|
(1 |
)% |
|
|
(1 |
)% |
therein Germany |
|
|
6,187 |
|
|
|
3,109 |
|
|
|
99 |
% |
|
|
99 |
% |
|
|
0 |
% |
|
|
0 |
% |
Americas |
|
|
5,330 |
|
|
|
5,848 |
|
|
|
(9 |
)% |
|
|
1 |
% |
|
|
(10 |
)% |
|
|
0 |
% |
therein U.S. |
|
|
3,906 |
|
|
|
4,190 |
|
|
|
(7 |
)% |
|
|
6 |
% |
|
|
(13 |
)% |
|
|
0 |
% |
Asia, Australia |
|
|
4,189 |
|
|
|
3,178 |
|
|
|
32 |
% |
|
|
39 |
% |
|
|
(5 |
)% |
|
|
(2 |
)% |
therein China |
|
|
1,620 |
|
|
|
1,374 |
|
|
|
18 |
% |
|
|
29 |
% |
|
|
(7 |
)% |
|
|
(4 |
)% |
therein India |
|
|
621 |
|
|
|
505 |
|
|
|
23 |
% |
|
|
31 |
% |
|
|
(8 |
)% |
|
|
0 |
% |
Siemens |
|
|
22,937 |
|
|
|
19,179 |
|
|
|
20 |
% |
|
|
25 |
% |
|
|
(5 |
)% |
|
|
(1 |
)% |
|
|
|
(1) |
|
Excluding currency translation and portfolio effects. |
|
(2) |
|
Commonwealth of Independent States. |
Orders related to external customers rose 20% in the third quarter of fiscal 2011, due to
order growth of more than 50% in the Industry Sector. Order intake increased in the Industry Sector
due to a large order at Mobility for trains in Germany mentioned above and double-digit increases
at Drive Technologies and Industry Solutions. Energy orders were slightly lower compared to the
prior-year period, including a double-digit increase at Fossil Power Generation which was more than
offset by double-digit declines at Renewable Energy and Power Transmission. Orders in Healthcare
came in below the prior-year level across its businesses, primarily reflecting strong negative
currency translation effects. On a global basis, orders in emerging markets grew 5% compared to the
prior-year period and accounted for 6.378 billion or 28% of total orders for the quarter.
On a geographic basis, the regions Europe, C.I.S., Africa, Middle East and Asia, Australia
posted double-digit order growth, partly offset by a decline in the Americas. In the region Europe,
C.I.S., Africa, Middle East our largest reporting region orders increased 32%, due to strong
demand in the Industry Sector, highlighted by the large train order in Germany mentioned above.
Orders in Germany climbed 99% overall. Within the region Europe, C.I.S., Africa, Middle East,
Energy orders were down 14%, driven by a lower order intake at Renewable Energy and Power
Transmission. Healthcare came in 4% lower compared to the prior-year period. The 9% order decline
in the Americas was driven by strong negative currency translation effects, primarily from the U.S.
On an organic basis, orders increased slightly in the Americas and 6% in the U.S. On a reported
basis in the Americas region orders rose in Industry and declined in Energy and Healthcare. The
decline was most pronounced in the Energy Sector, where a 20% drop in order intake was due
primarily to a lower volume of large orders at Fossil Power Generation in the region. Orders rose
32% in the Asia, Australia region year-over-year, driven by strong order growth in the Energy
Sector including double-digit or higher increases at all Divisions. The 23% order increase in India
was driven by substantial growth in Industry and at Fossil Power Generation, due in part to large
contract wins in the current quarter. The 18% order rise in China was highlighted by a large
contract win at Fossil Power Generation.
7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue (location of customer) |
|
|
|
Three months |
|
|
|
|
|
|
|
|
|
|
|
|
|
ended June 30, |
|
|
% Change |
|
|
therein |
|
(in millions of ) |
|
2011 |
|
|
2010 |
|
|
Actual |
|
|
Adjusted(1) |
|
|
Currency |
|
|
Portfolio |
|
Europe, C.I.S.(2), Africa, Middle East |
|
|
9,293 |
|
|
|
9,165 |
|
|
|
1 |
% |
|
|
3 |
% |
|
|
(1 |
)% |
|
|
(1 |
)% |
therein Germany |
|
|
2,554 |
|
|
|
2,579 |
|
|
|
(1 |
)% |
|
|
0 |
% |
|
|
0 |
% |
|
|
(1 |
)% |
Americas |
|
|
5,075 |
|
|
|
4,978 |
|
|
|
2 |
% |
|
|
14 |
% |
|
|
(12 |
)% |
|
|
0 |
% |
therein U.S. |
|
|
3,563 |
|
|
|
3,518 |
|
|
|
1 |
% |
|
|
15 |
% |
|
|
(14 |
)% |
|
|
0 |
% |
Asia, Australia |
|
|
3,475 |
|
|
|
3,284 |
|
|
|
6 |
% |
|
|
12 |
% |
|
|
(5 |
)% |
|
|
(1 |
)% |
therein China |
|
|
1,564 |
|
|
|
1,483 |
|
|
|
5 |
% |
|
|
13 |
% |
|
|
(6 |
)% |
|
|
(2 |
)% |
therein India |
|
|
563 |
|
|
|
452 |
|
|
|
25 |
% |
|
|
34 |
% |
|
|
(10 |
)% |
|
|
0 |
% |
Siemens |
|
|
17,844 |
|
|
|
17,425 |
|
|
|
2 |
% |
|
|
8 |
% |
|
|
(5 |
)% |
|
|
(1 |
)% |
|
|
|
(1) |
|
Excluding currency translation and portfolio effects. |
|
(2) |
|
Commonwealth of Independent States. |
Revenue related to external customers rose 2% compared to the third quarter a year
earlier. Revenue in the Industry Sector increased year-over-year, on double-digit increases at
Industry Automation and Drive Technologies. Energy revenues were up 5% compared to the prior-year
quarter including double-digit increases at Fossil Power Generation and Oil & Gas. Reported revenue
in Healthcare came in lower compared to the prior-year period due primarily to strong negative
currency translation effects and a significant revenue reduction effect related to particle therapy
projects. Revenue in emerging markets globally grew faster than revenue overall, at 8% for the
quarter, and accounted for 5.897 billion or 33% of total revenue for the quarter.
On a geographic basis, revenue increased in all three reporting regions. In the region Europe,
C.I.S., Africa, Middle East, third-quarter revenue rose 1% from the prior-year, on a 6% increase in
the Industry Sector. Sales in Energy came in 2% higher while Healthcare showed a 13% decline in the
region. In the region Americas, revenue grew 2% compared to the prior-year period influenced by
strong negative currency translation effects, primarily from the U.S. Increases in third-quarter
revenue in Industry and Energy were partly offset by a double-digit decline in the Healthcare
Sector in the region. Revenue rose 6% in the Asia, Australia region on increases in all Sectors.
While revenue growth in the region was well balanced among most businesses within Industry and
Healthcare, development in the Energy Sector was driven by substantially higher revenues at Oil &
Gas. Revenue in India increased 25%, including substantially higher sales at Fossil Power
Generation and Oil & Gas.
8
Consolidated Statements of Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
|
|
|
|
June 30, |
|
|
|
|
(in millions of ) |
|
2011 |
|
|
2010 |
|
|
% Change |
|
Gross profit on revenue |
|
|
5,179 |
|
|
|
5,300 |
|
|
|
(2 |
)% |
as percentage of revenue |
|
|
29.0 |
% |
|
|
30.4 |
% |
|
|
|
|
Gross profit for the third quarter decreased 2% compared to the same period a year earlier. On
the Sector level, gross profit rose in Industry and Energy while Healthcare saw a steep decline in
gross profit due largely to the 381 million in negative impacts related to particle therapy
projects as mentioned earlier. In the Industry Sector, gross profit was level or higher
year-over-year in all five Divisions, with strong increases at Drive Technologies and Industry
Automation driven by high capacity utilization. The gross profit increase in Energy was due
primarily to a strong operating performance at Fossil Power Generation. In combination, these
factors resulted in a gross profit margin of 29.0% for Siemens overall, down from 30.4% in the
third quarter a year earlier.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
|
|
|
|
June 30, |
|
|
|
|
(in millions of ) |
|
2011 |
|
|
2010 |
|
|
% Change |
|
Research and development expenses |
|
|
(940 |
) |
|
|
(868 |
) |
|
|
8 |
% |
as percentage of revenue |
|
|
5.3 |
% |
|
|
5.0 |
% |
|
|
|
|
Marketing, selling and general administrative expenses |
|
|
(2,581 |
) |
|
|
(2,510 |
) |
|
|
3 |
% |
as percentage of revenue |
|
|
14.5 |
% |
|
|
14.4 |
% |
|
|
|
|
Other operating income |
|
|
106 |
|
|
|
188 |
|
|
|
(44 |
)% |
Other operating expense |
|
|
(34 |
) |
|
|
(83 |
) |
|
|
(59 |
)% |
Income (loss) from investments accounted for using the equity
method, net |
|
|
(43 |
) |
|
|
41 |
|
|
|
|
|
Interest income |
|
|
550 |
|
|
|
513 |
|
|
|
7 |
% |
Interest expense |
|
|
(424 |
) |
|
|
(436 |
) |
|
|
(3 |
)% |
Other financial income (expense), net |
|
|
(736 |
) |
|
|
(110 |
) |
|
|
>200 |
% |
Research and development (R&D) expenses rose to 940 million or 5.3% of revenue, from 868
million or 5.0% of revenue in the prior-year period, on increases in all Sectors. Marketing,
selling and general administrative (SG&A) expenses in the third quarter rose to 2.581 billion or
14.5% of revenue, from 2.510 billion or 14.4% of revenue a year earlier, including higher expenses
in Industry and Energy associated with business expansion.
Other operating income was 106 million in the third quarter of fiscal 2011, down from 188
million in the same period a year earlier. For comparison, in the prior-year period Siemens ceased
to consolidate a former subsidiary due to a loss of control and recorded a related gain of 40
million. In addition, the third quarter a year earlier included higher gains related to the
disposal of real estate. Other operating expense was 34 million in the third quarter, compared to
83 million in the prior-year period. For additional information, see Notes to Condensed Interim
Consolidated Financial Statements within this Interim Report.
Income (loss) from investments accounted for using the equity method, net was a negative 43
million in the current quarter, compared to a positive 41 million in the third quarter a year
earlier. Within this change, the equity investment loss related to Nokia Siemens Networks B.V.
(NSN) increased to 116 million in the current period, up from 81 million in the prior-year
quarter. For additional information, see Notes to Condensed Interim Consolidated Financial
Statements within this Interim Report.
Interest income increased to 550 million, from 513 million in the same period a year
earlier. Interest expense decreased modestly to 424 million, from 436 million in the prior-year
quarter, including lower interest costs related to pension plans. For additional information, see
Notes to Condensed Interim Consolidated Financial Statements within this Interim Report.
Other financial income (expense), net was a negative 736 million in the third quarter of
fiscal 2011, compared to a negative 110 million in the same period a year earlier. The change
year-over-year was due primarily to a negative impact of 682 million in Energy related to the
arbitration decision as discussed earlier. For additional information, see Notes to Condensed
Interim Consolidated Financial Statements within this Interim Report.
9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
|
|
|
|
June 30, |
|
|
|
|
(in millions of ) |
|
2011 |
|
|
2010 |
|
|
% Change |
|
Income from continuing operations before income taxes |
|
|
1,077 |
|
|
|
2,035 |
|
|
|
(47 |
)% |
Income taxes |
|
|
(314 |
) |
|
|
(607 |
) |
|
|
(48 |
)% |
as percentage of income from continuing operations before
income taxes |
|
|
29 |
% |
|
|
30 |
% |
|
|
|
|
Income from continuing operations |
|
|
763 |
|
|
|
1,428 |
|
|
|
(47 |
)% |
Income (loss) from discontinued operations, net of income taxes |
|
|
(262 |
) |
|
|
7 |
|
|
|
|
|
Net income |
|
|
501 |
|
|
|
1,435 |
|
|
|
(65 |
)% |
Net income attributable to non-controlling interests |
|
|
39 |
|
|
|
24 |
|
|
|
|
|
Net income attributable to shareholders of Siemens AG |
|
|
462 |
|
|
|
1,411 |
|
|
|
(67 |
)% |
Income from continuing operations before income taxes decreased to 1.077 billion in the
current quarter, compared to 2.035 billion in the same period a year earlier. The change
year-over-year was due to the factors mentioned above, primarily including the negative impact of
682 million in Energy related to the arbitration decision and 381 million in negative impacts
related to particle therapy projects in the Healthcare Sector. The effective tax rate was 29% in
the third quarter, slightly below 30% in the prior-year period. As a result, income from continuing
operations was 763 million in the current period, down from 1.428 billion in the third quarter a
year earlier.
Discontinued operations primarily include Siemens IT Solutions and Services which was sold to
Atos S.A. (AtoS) after the close of the third quarter on July 1, 2011, and OSRAM which Siemens
plans to list publicly in the fall of the calendar year 2011. In addition, discontinued operations
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 as well as the former Siemens VDO Automotive activities, which were sold
to Continental AG in the first quarter of fiscal 2008. Income from discontinued operations in the
current quarter was a negative 262 million, compared to a positive 7 million in the same period a
year earlier. The change year-over-year related mainly to a loss of 305 million after tax in the
current period attributable to Siemens IT Solutions and Services, including 309 million in
transaction-related pretax charges as well as pretax charges of 41 million related to establishing
Siemens IT Solutions and Services as a separate legal group, including for carve-out activities and
personnel-related matters. For comparison, the result associated with Siemens IT Solutions and
Services in the prior-year period was a loss of 62 million after tax. Income from discontinued
operations related to OSRAM was 56 million after tax in the third quarter of fiscal 2011, down
from 74 million after tax in the same period a year earlier. On a slight increase in revenue
year-over-year, OSRAMs operating results declined substantially due to a combination of factors,
including higher costs for raw materials and pricing pressure. A positive effect from cessation of
depreciation and amortization resulting from classifying OSRAM as
discontinued operations more than
offset expenses for legal matters. For additional information, see Portfolio activities and
Notes to Condensed Interim Consolidated Financial Statements within this Interim Report.
Net income for Siemens in the third quarter of fiscal 2011 declined to 501 million, compared
to 1.435 billion in the same period a year earlier. Net income attributable to shareholders of
Siemens AG was 462 million, down from 1.411 billion in the prior-year quarter.
10
Results of Siemens Nine months ended June 30, 2011
The following discussion presents selected information for Siemens for the first nine
months of fiscal 2011:
Orders and revenue
In the first nine months of fiscal 2011, orders rose 23% year-over-year, to 64.425 billion,
including a substantially higher volume from major orders compared to the prior-year nine-month
period. Revenue increased to 53.164 billion, up 7% from the prior-year period, due in part to
strong conversion of orders from the Sectors backlogs. This resulted in a book-to-bill ratio for
Siemens of 1.21 for the first nine months. Organic volume development was almost in line with
reported figures, as currency exchange fluctuations within the first nine months were largely
offsetting.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New orders (location of customer) |
|
|
|
Nine months |
|
|
|
|
|
|
|
|
|
|
|
|
|
ended June 30, |
|
|
% Change |
|
|
therein |
|
(in millions of ) |
|
2011 |
|
|
2010 |
|
|
Actual |
|
|
Adjusted(1) |
|
|
Currency |
|
|
Portfolio |
|
Europe, C.I.S.(2), Africa, Middle East |
|
|
36,012 |
|
|
|
28,787 |
|
|
|
25 |
% |
|
|
25 |
% |
|
|
1 |
% |
|
|
(1 |
)% |
therein Germany |
|
|
13,037 |
|
|
|
7,944 |
|
|
|
64 |
% |
|
|
65 |
% |
|
|
0 |
% |
|
|
(1 |
)% |
Americas |
|
|
15,997 |
|
|
|
14,778 |
|
|
|
8 |
% |
|
|
8 |
% |
|
|
0 |
% |
|
|
0 |
% |
therein U.S. |
|
|
11,566 |
|
|
|
10,545 |
|
|
|
10 |
% |
|
|
11 |
% |
|
|
(1 |
)% |
|
|
0 |
% |
Asia, Australia |
|
|
12,416 |
|
|
|
8,901 |
|
|
|
39 |
% |
|
|
37 |
% |
|
|
4 |
% |
|
|
(1 |
)% |
therein China |
|
|
4,749 |
|
|
|
3,768 |
|
|
|
26 |
% |
|
|
27 |
% |
|
|
2 |
% |
|
|
(2 |
)% |
therein India |
|
|
2,617 |
|
|
|
1,468 |
|
|
|
78 |
% |
|
|
75 |
% |
|
|
3 |
% |
|
|
0 |
% |
Siemens |
|
|
64,425 |
|
|
|
52,466 |
|
|
|
23 |
% |
|
|
22 |
% |
|
|
1 |
% |
|
|
(1 |
)% |
|
|
|
(1) |
|
Excluding currency translation and portfolio effects. |
|
(2) |
|
Commonwealth of Independent States. |
Orders related to external customers in the first nine months of fiscal 2011 increased
23% compared to the same period a year earlier, due to higher demand in all Sectors. Order intake
in the Energy Sector climbed 23% year-over-year. The higher volume from major orders in the current
period mentioned above included a particularly strong increase year-over-year at Fossil Power
Generation, which saw a relatively low volume from large orders in the first nine months of fiscal
2010. The Industry Sector reported order growth of 34% on increases in all Divisions. The largest
contribution to this increase came from Mobility, which recorded higher volume from large orders
compared to the prior-year period including the large order for trains mentioned earlier. Drive
Technologies and Industry Automation also contributed strong growth for the Sector. Orders
increased for Healthcare compared to the prior-year period on broad-based growth across its
businesses. Orders in emerging markets on a global basis grew faster than orders overall, at 28%
year-over-year, and accounted for 21.312 billion, or 33%, of total orders for the first nine
months of fiscal 2011.
On a geographic basis, Siemens reported order growth in all three reporting regions in the
first nine months of fiscal 2011. In the region Europe, C.I.S., Africa, Middle East, orders rose
25% on double-digit increases in Energy and Industry. The Energy Sector delivered order growth of
16% in the region, due primarily to a substantially higher volume from major orders at Fossil Power
Generation compared to the prior-year period. Industry orders rose 46% in the Europe, C.I.S.,
Africa, Middle East region. The main factor within Industry for the region was the large order for
trains mentioned above at Mobility, which drove the 64% order growth in Germany. Order growth for
the Sector also included strong demand at Drive Technologies. Healthcares nine-month orders in the
region came in slightly below the level of the prior-year period. In the Americas region, order
intake rose 8% on increases in all Sectors. Industry orders grew 17% in the region, including
strong double-digit increases in most Divisions. Higher orders in the Energy Sector were due
primarily to higher demand at Fossil Power Generation and Power Transmission. Order intake in the
Asia, Australia region climbed 39%, including double-digit growth in all Sectors. Orders in the
Energy Sector almost doubled in the first nine months compared to the prior-year period, including
substantial increases at Fossil Power Generation and Oil & Gas, both of which took in a higher
volume from major orders. Industry reported 17% growth in the region, led by strong demand at Drive
Technologies and Industry Automation. Order intake in India increased significantly compared to the
prior-year period, due primarily to a major contract win at Fossil Power Generation in the first
quarter of fiscal 2011.
11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue (location of customer) |
|
|
|
Nine months |
|
|
|
|
|
|
|
|
|
|
|
|
|
ended June 30, |
|
|
% Change |
|
|
therein |
|
(in millions of ) |
|
2011 |
|
|
2010 |
|
|
Actual |
|
|
Adjusted(1) |
|
|
Currency |
|
|
Portfolio |
|
Europe, C.I.S.(2), Africa, Middle East |
|
|
28,026 |
|
|
|
27,252 |
|
|
|
3 |
% |
|
|
3 |
% |
|
|
1 |
% |
|
|
(1 |
)% |
therein Germany |
|
|
7,847 |
|
|
|
7,368 |
|
|
|
6 |
% |
|
|
7 |
% |
|
|
0 |
% |
|
|
(1 |
)% |
Americas |
|
|
14,962 |
|
|
|
13,270 |
|
|
|
13 |
% |
|
|
13 |
% |
|
|
0 |
% |
|
|
0 |
% |
therein U.S. |
|
|
10,665 |
|
|
|
9,589 |
|
|
|
11 |
% |
|
|
12 |
% |
|
|
(1 |
)% |
|
|
0 |
% |
Asia, Australia |
|
|
10,177 |
|
|
|
9,052 |
|
|
|
12 |
% |
|
|
10 |
% |
|
|
3 |
% |
|
|
(1 |
)% |
therein China |
|
|
4,503 |
|
|
|
3,846 |
|
|
|
17 |
% |
|
|
17 |
% |
|
|
2 |
% |
|
|
(1 |
)% |
therein India |
|
|
1,636 |
|
|
|
1,290 |
|
|
|
27 |
% |
|
|
26 |
% |
|
|
1 |
% |
|
|
0 |
% |
Siemens |
|
|
53,164 |
|
|
|
49,575 |
|
|
|
7 |
% |
|
|
7 |
% |
|
|
1 |
% |
|
|
0 |
% |
|
|
|
(1) |
|
Excluding currency translation and portfolio effects. |
|
(2) |
|
Commonwealth of Independent States. |
Revenue related to external customers rose 7% compared to the first nine months of fiscal
2010, including increases in all Sectors. Strong conversion from the Sectors order backlogs played
a major role in broad-based revenue growth. Revenue in the Industry Sector increased
year-over-year, led by strong double-digit growth at Drive Technologies and Industry Automation.
Energy also reported higher revenue in the first nine months of fiscal 2011 on increases in all
Divisions, led by Fossil Power Generation and Renewable Energy. Revenue in the Healthcare Sector
was slightly above the prior-year period. On a global basis, emerging markets grew faster than
revenue overall, at 12%, and accounted for 16.829 billion, or 32%, of total revenue for the first
nine months of fiscal 2011.
On a geographic basis, revenue increased in all three reporting regions, led by double-digit
growth in the regions Americas and Asia, Australia. In the region Europe, C.I.S., Africa, Middle
East, first nine-month revenue increased 3% year-over-year, including moderate growth in Industry
and Energy and a slight decrease in Healthcare. The 6% revenue growth in Germany was driven by
double-digit increases at Drive Technologies and Industry Automation. In the Americas region,
higher revenue included strong increases in Energy and Industry. Growth in the Energy Sector was
driven by strong backlog conversion at Fossil Power Generation and Renewable Energy. Higher
revenues in Industry in the region included double-digit increases at Industry Solutions, Drive
Technologies and Industry Automation. In the Asia, Australia region, revenue rose 12% on
double-digit increases in Industry and Healthcare as well as more moderate growth in the Energy
Sector. While revenue development in China followed the pattern for the region overall, growth of
27% in India was driven by significantly higher revenue in Energy.
12
Consolidated Statements of Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine months ended |
|
|
|
|
|
|
June 30, |
|
|
|
|
(in millions of ) |
|
2011 |
|
|
2010 |
|
|
% Change |
|
Gross profit on revenue |
|
|
16,349 |
|
|
|
14,844 |
|
|
|
10 |
% |
as percentage of revenue |
|
|
30.8 |
% |
|
|
29.9 |
% |
|
|
|
|
Gross profit for the first nine months of fiscal 2011 rose 10% for Siemens overall compared to
the same period a year earlier, on double-digit increases in Industry and Energy. All Industry
Divisions reported higher gross profits and gross profit margins year-over-year, with the strongest
gross profit increases coming from Industry Automation and Drive Technologies driven by high
capacity utilization. Fossil Power Generation was the primary driver for the gross profit increase
in Energy, including a clear increase in the Divisions gross profit margin due to strong project
execution and a favorable business mix in the current nine-month period. Lower gross profit in
Healthcare was due primarily to negative impacts related to particle therapy projects, including
the impacts mentioned above for the third quarter. For comparison, in fiscal 2010 gross profit in
all Sectors benefited from their respective portions of a previously disclosed pension curtailment
gain. In combination, these factors resulted in a gross profit margin of 30.8% for Siemens overall,
up from 29.9% in the prior-year period.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine months ended |
|
|
|
|
|
|
June 30, |
|
|
|
|
(in millions of ) |
|
2011 |
|
|
2010 |
|
|
% Change |
|
Research and development expenses |
|
|
(2,771 |
) |
|
|
(2,473 |
) |
|
|
12 |
% |
as percentage of revenue |
|
|
5.2 |
% |
|
|
5.0 |
% |
|
|
|
|
Marketing, selling and general administrative expenses |
|
|
(7,498 |
) |
|
|
(6,922 |
) |
|
|
8 |
% |
as percentage of revenue |
|
|
14.1 |
% |
|
|
14.0 |
% |
|
|
|
|
Other operating income |
|
|
444 |
|
|
|
648 |
|
|
|
(31 |
)% |
Other operating expense |
|
|
(320 |
) |
|
|
(166 |
) |
|
|
93 |
% |
Income (loss) from investments accounted for using the equity
method, net |
|
|
172 |
|
|
|
91 |
|
|
|
89 |
% |
Interest income |
|
|
1,641 |
|
|
|
1,504 |
|
|
|
9 |
% |
Interest expense |
|
|
(1,278 |
) |
|
|
(1,309 |
) |
|
|
(2 |
)% |
Other financial income (expense), net |
|
|
674 |
|
|
|
(173 |
) |
|
|
|
|
R&D expenses in the first nine months of fiscal 2011 increased to 2.771 billion or 5.2% of
revenue, from 2.473 billion or 5.0% of revenue in the prior-year period, including higher expenses
in all Sectors. SG&A expenses rose to 7.498 billion or 14.1% of revenue, from 6.922 billion or
14.0% of revenue in the prior-year period, due primarily to business growth in Industry and Energy.
Other operating income in the first nine months was 444 million, down from 648 million in
the same period a year earlier. The current period included 64 million related to a settlement of
legal and regulatory matters in connection with portfolio activities. For comparison, the
prior-year period benefited from a number of positive factors, 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. In addition, the first nine months of fiscal 2010 included a gain of 47 million
related to the sale of Mobilitys airfield solutions business as well as higher gains related to
the disposal of real estate. Further, as noted above, Siemens ceased to consolidate a former
subsidiary in the third quarter of fiscal 2010 due to a loss of control and recorded a related gain
of 40 million. For additional information, see Notes to Condensed Interim Consolidated Financial
Statements within this Interim Report.
Other operating expense in the first nine months was 320 million, compared to 166 million in
the prior-year period. The current period included higher charges related to legal and regulatory
matters. For additional information, see Notes to Condensed Interim Consolidated Financial
Statements within this Interim Report.
Income (loss) from investments accounted for using the equity method, net increased to 172
million from 91 million in the prior-year period. The improvement year-over-year includes a gain
of 91 million on the sale of our 49% stake in Krauss-Maffei Wegmann GmbH & Co. KG (KMW) in the
current period, higher than the equity investment income recorded from our share in KMW in the
first nine months a year earlier. Our equity investment loss related to NSN decreased to 204
million in the current nine-month period, from 291 million a
year earlier. For additional information, see Notes to Condensed Interim Consolidated
Financial Statements within this Interim Report.
13
Interest income for the first nine months increased to 1.641 billion from 1.504 billion a
year earlier. The increase was due in part to a higher expected return on plan assets related to
pension plans, resulting primarily from an increase in pension plan assets between the periods
under review. In addition, Interest income also rose due to an increase in total liquidity compared
to the prior-year period. Interest expense declined to 1.278 billion from 1.309 billion in the
prior-year period, driven by lower interest costs related to pension plans.
Other financial income (expense), net was a positive 674 million in the first nine months of
fiscal 2011, compared to a negative 173 million in the same period a year earlier. The change was
due primarily to a 1.520 billion gain from the divestment of Siemens 34% share in Areva NP S.A.S.
to Areva S.A. in the second quarter of the current fiscal year, partly offset by the negative
impact of 682 million related to the arbitration decision noted above for the third quarter. For
additional information, see Notes to Condensed Interim Consolidated Financial Statements within
this Interim Report.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine months ended |
|
|
|
|
|
|
June 30, |
|
|
|
|
(in millions of ) |
|
2011 |
|
|
2010 |
|
|
% Change |
|
Income from continuing operations before income taxes |
|
|
7,413 |
|
|
|
6,044 |
|
|
|
23 |
% |
Income taxes |
|
|
(1,630 |
) |
|
|
(1,740 |
) |
|
|
(6 |
)% |
as percentage of income from continuing operations before
income taxes |
|
|
22 |
% |
|
|
29 |
% |
|
|
|
|
Income from continuing operations |
|
|
5,783 |
|
|
|
4,304 |
|
|
|
34 |
% |
Income (loss) from discontinued operations, net of income taxes |
|
|
(693 |
) |
|
|
160 |
|
|
|
|
|
Net income |
|
|
5,090 |
|
|
|
4,464 |
|
|
|
14 |
% |
Net income attributable to non-controlling interests |
|
|
117 |
|
|
|
98 |
|
|
|
|
|
Net income attributable to shareholders of Siemens AG |
|
|
4,973 |
|
|
|
4,366 |
|
|
|
14 |
% |
Income from continuing operations before income taxes increased to 7.413 billion in the first
nine months of fiscal 2011, compared to 6.044 billion in the same period a year earlier. The
change year-over-year is due to the factors mentioned above, primarily including double-digit gross
profit increases in Industry and Energy and the net effect related to Areva, partly offset by
higher SG&A and R&D expenses associated with business expansion. The effective tax rate was 22% in
the first nine months of fiscal 2011, clearly below 29% in the prior-year period. The current
nine-month rate benefited from the mainly tax-free Areva disposal gain. Income from continuing
operations was 5.783 billion in the first nine months of fiscal 2011, up from 4.304 billion in
the prior-year period.
Discontinued operations primarily include Siemens IT Solutions and Services which was sold to
AtoS after the close of the third quarter on July 1, 2011, and OSRAM which Siemens plans to list
publicly in the fall of the calendar year 2011. In addition, discontinued operations 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 as well as the former Siemens VDO Automotive activities, which were sold to Continental AG in
the first quarter of fiscal 2008. Income from discontinued operations in the first nine months of
fiscal 2011 was a negative 693 million, compared to a positive 160 million a year earlier. The
change year-over-year related mainly to a loss of 820 million after tax in the current nine months
attributable to Siemens IT Solutions and Services. This result includes a pretax goodwill
impairment of 136 million booked in the first quarter; pretax charges of 464 million for
impairments on long-lived assets booked in the second quarter; 309 million in transaction-related
pretax charges recorded in the third quarter; and pretax charges of 145 million related to
establishing Siemens IT Solutions and Services as a separate legal group, including for carve-out
activities and personnel-related matters. For comparison, the result associated with Siemens IT
Solutions and Services in the first nine months of fiscal 2010 was a loss of 107 million after
tax. OSRAM contributed a positive 255 million after tax to income from discontinued operations,
nearly unchanged from a positive 254 million after tax in the prior-year period. For additional
information, see Portfolio activities and Notes to Condensed Interim Consolidated Financial
Statements within this Interim Report.
Net income for Siemens in the first nine months of fiscal 2011 increased to 5.090 billion,
compared to 4.464 billion in the same period a year earlier. Net income attributable to
shareholders of Siemens AG was 4.973 billion, up from 4.366 billion in the prior-year period.
14
Portfolio activities
In November 2010, Siemens closed the acquisition of a non-controlling interest of 49% in A2SEA
A/S, a supplier of installation services for the construction of offshore wind farms, reported
within the Renewable Energy Division of the Energy Sector.
In December 2010, Siemens completed the transfer of its 19.8% stake in GIG Holding GmbH (owner
of all shares of Gigaset Communications GmbH) to ARQUES Industries AG.
In December 2010, Siemens and Atos S.A. (AtoS) signed an option agreement which granted AtoS
the right to acquire Siemens IT Solutions and Services. In February 2011, AtoS exercised its option
to acquire Siemens IT Solutions and Services in exchange for 12.5 million newly issued shares in
AtoS with a five-year lock-up commitment, a five-year convertible bond of 250 million (nominal
value) and a cash payment of 177 million. Furthermore, Siemens will provide extensive support in
order to foster the Siemens IT Solutions and Services business success including, among others, up
to 250 million to the integration and training costs as well as further protections and
guarantees. Related to the transaction is a seven-year outsourcing contract worth around 5.5
billion, under which AtoS will provide managed services and system integration to Siemens.
Following signing, Siemens classified Siemens IT Solutions and Services as held for disposal and as
discontinued operations. During the second quarter, the transaction was cleared with the antitrust
authorities. On July 1, 2011, after the close of the third quarter, the transaction closed
following the approval by AtoS shareholders. Siemens expects the transaction to have a substantial
negative earnings impact in fiscal 2011, in a high-triple-digit million euro range. In particular
this negative earnings impact consists of impairments, including the previously reported goodwill
impairment of 136 million booked in the first quarter and further impairments on long-lived assets
of 464 million booked in the second quarter, as well as 309 million in transaction-related
charges recorded in the third quarter. In addition to these transaction-related results, and as
previously disclosed, Siemens took charges in fiscal 2011 related to establishing Siemens IT
Solutions and Services as a separate legal group, including for carve-out activities and
personnel-related matters. Such charges reported within discontinued operations amounted to 41
million in the current quarter and to 145 million in the first nine months of fiscal 2011. Siemens
expects the transaction and activities related to establishing Siemens IT Solutions and Services as
a separate legal group will result in further profit impacts as well as substantial cash outflows
in coming quarters. See also Notes to Condensed Interim Consolidated Financial Statements.
At the beginning of January 2011 the sale of Siemens electronics assembly systems business,
reported within Centrally managed portfolio activities, to ASM Pacific Technology Ltd. was closed.
In January 2011, the sale of the 49% interest in KMW to the Wegmann Group was closed after
approval by the antitrust authorities and receipt of the second purchase price installment. The
gain on the sale of KMW, which is reported in Equity Investments amounts to 91 million.
In January 2011, Siemens made a binding offer to purchase additional shares in order to
increase its stake in its publicly listed Indian subsidiary Siemens Ltd. from about 55% to a
maximum of 75%. Siemens offered the shareholders of Siemens Ltd. to purchase their shares for a
price of INR 930 per share (written put). The offer period began on March 25, 2011 and ended on
April 13, 2011. The offer was accepted in full until that date and the transaction was completed at
the end of April 2011.
In February 2011, Siemens signed an agreement to acquire a controlling interest of 100% in
Siteco Lighting GmbH (Siteco) in a share deal transaction. Siteco is a leading European lighting
company that supplies luminaries and lighting systems for urban infrastructures such as public and
commercial buildings, streets, tunnels, airports and sports stadiums. The transaction closed at the
beginning of July 2011. Siteco will be integrated into OSRAM, which is presented in discontinued
operations.
15
In March 2011, an independent expert, appointed by Siemens and Areva based on the rules set
forth in the shareholders agreement, determined the fair market value (purchase price) of Siemens
34% share in the joint venture Areva NP at 1.620 billion upon which Siemens received a payment of
1.747 billion from Areva. In addition to the externally determined fair market value, the sale
proceeds include other adjusting components based on the shareholders agreement and further
contractual arrangements between Siemens and Areva, namely interest accretion on the purchase price
and a reimbursement of a mandatory capital injection from Areva to Siemens. Following the receipt
of the expert opinion and the payment, our shares, previously accounted for as available-for-sale
financial
asset held for disposal at the Energy Sector, were transferred to Areva and derecognized at
Siemens. In May 2011, an arbitral tribunal of the International Chamber of Commerce (ICC) ruled on
the modalities of Siemens exit from the joint venture Areva NP. According to the tribunals
ruling, Siemens had to pay Areva liquidated damages of 0.7 billion including interest.
At the end of March 2011, Siemens announced that it plans to publicly list its subsidiary
OSRAM AG (formerly OSRAM GmbH) in fall 2011. Siemens intends to retain a minority stake in the
OSRAM AG, in which it intends to remain a long-term anchor shareholder.
Siemens completed certain other portfolio transactions during the first nine months of fiscal
2011, which did not have a significant effect on our Interim Consolidated Financial Statements. For
further information on acquisitions and dispositions, see Notes to Condensed Interim Consolidated
Financial Statements.
16
Segment information analysis
Sectors
Industry
Industry Three months ended June 30, 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sector |
|
Three months |
|
|
|
|
|
|
|
|
|
ended June 30, |
|
|
% Change |
|
|
therein |
|
(in millions of ) |
|
2011 |
|
|
2010 |
|
|
Actual |
|
|
Adjusted(1) |
|
|
Currency |
|
|
Portfolio |
|
Profit |
|
|
872 |
|
|
|
710 |
|
|
|
23 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Profit margin |
|
|
10.8 |
% |
|
|
9.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New orders |
|
|
11,806 |
|
|
|
7,657 |
|
|
|
54 |
% |
|
|
58 |
% |
|
|
(4 |
)% |
|
|
0 |
% |
Revenue |
|
|
8,082 |
|
|
|
7,570 |
|
|
|
7 |
% |
|
|
11 |
% |
|
|
(4 |
)% |
|
|
0 |
% |
|
|
|
(1) |
|
Excluding currency translation and portfolio effects. |
In a robust industrial environment, the Industry Sector increased its third-quarter
profit 23%, to 872 million, on strong earnings increases at the Industry Automation and Drive
Technologies Divisions. The Sector continued to invest in innovation and enhancing its regional
footprint with additional sales resources. Third-quarter revenue rose 7% year-over-year, on
double-digit increases at Industry Automation and Drive Technologies. Orders rose 54% compared to
the prior-year period, including growth at all Divisions and a 3.7 billion order at Mobility for
trains in Germany. On a geographic basis, revenue was up in all three regions. Orders rose in
Europe, C.I.S., Africa, Middle East and the Americas, and came in slightly lower year-over-year in
Asia, Australia due to negative currency translation effects. For the Sector as a whole, currency
translation effects took 4 percentage points from reported growth in both revenue and orders.
Industrys book-to-bill ratio was 1.46 and its order backlog increased to 32 billion at the end of
the quarter.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Divisions |
|
New Orders |
|
|
|
Three months |
|
|
|
|
|
|
|
|
|
ended June 30, |
|
|
% Change |
|
|
therein |
|
(in millions of ) |
|
2011 |
|
|
2010 |
|
|
Actual |
|
|
Adjusted(1) |
|
|
Currency |
|
|
Portfolio |
|
Industry Automation |
|
|
1,885 |
|
|
|
1,783 |
|
|
|
6 |
% |
|
|
7 |
% |
|
|
(3 |
)% |
|
|
2 |
% |
Drive Technologies |
|
|
2,101 |
|
|
|
1,859 |
|
|
|
13 |
% |
|
|
17 |
% |
|
|
(4 |
)% |
|
|
0 |
% |
Building Technologies |
|
|
1,910 |
|
|
|
1,823 |
|
|
|
5 |
% |
|
|
9 |
% |
|
|
(5 |
)% |
|
|
0 |
% |
Industry Solutions |
|
|
1,681 |
|
|
|
1,487 |
|
|
|
13 |
% |
|
|
22 |
% |
|
|
(6 |
)% |
|
|
(3 |
)% |
Mobility |
|
|
4,799 |
|
|
|
1,236 |
|
|
|
>200 |
% |
|
|
>200 |
% |
|
|
(4 |
)% |
|
|
1 |
% |
|
|
|
(1) |
|
Excluding currency translation and portfolio effects. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Divisions |
|
Revenue |
|
|
|
Three months |
|
|
|
|
|
|
|
|
|
ended June 30, |
|
|
% Change |
|
|
therein |
|
(in millions of ) |
|
|
2011 |
|
|
|
2010 |
|
|
|
Actual |
|
|
Adjusted(1) |
|
|
Currency |
|
|
Portfolio |
|
Industry Automation |
|
|
1,854 |
|
|
|
1,587 |
|
|
|
17 |
% |
|
|
19 |
% |
|
|
(4 |
)% |
|
|
2 |
% |
Drive Technologies |
|
|
2,082 |
|
|
|
1,815 |
|
|
|
15 |
% |
|
|
18 |
% |
|
|
(3 |
)% |
|
|
0 |
% |
Building Technologies |
|
|
1,818 |
|
|
|
1,738 |
|
|
|
5 |
% |
|
|
9 |
% |
|
|
(5 |
)% |
|
|
0 |
% |
Industry Solutions |
|
|
1,476 |
|
|
|
1,461 |
|
|
|
1 |
% |
|
|
8 |
% |
|
|
(4 |
)% |
|
|
(3 |
)% |
Mobility |
|
|
1,481 |
|
|
|
1,593 |
|
|
|
(7 |
)% |
|
|
(5 |
)% |
|
|
(2 |
)% |
|
|
1 |
% |
|
|
|
(1) |
|
Excluding currency translation and portfolio effects. |
17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Divisions |
|
Profit |
|
|
Profit margin |
|
|
|
Three months |
|
|
|
|
|
|
Three months |
|
|
|
ended June 30, |
|
|
|
|
|
|
ended June 30, |
|
(in millions of ) |
|
2011 |
|
|
2010 |
|
|
% Change |
|
|
2011 |
|
|
2010 |
|
Industry Automation |
|
|
347 |
|
|
|
267 |
|
|
|
30 |
% |
|
|
18.7 |
% |
|
|
16.8 |
% |
Drive Technologies |
|
|
292 |
|
|
|
206 |
|
|
|
42 |
% |
|
|
14.0 |
% |
|
|
11.3 |
% |
Building Technologies |
|
|
74 |
|
|
|
79 |
|
|
|
(7 |
)% |
|
|
4.1 |
% |
|
|
4.6 |
% |
Industry Solutions |
|
|
77 |
|
|
|
63 |
|
|
|
22 |
% |
|
|
5.2 |
% |
|
|
4.3 |
% |
Mobility |
|
|
81 |
|
|
|
95 |
|
|
|
(14 |
)% |
|
|
5.5 |
% |
|
|
6.0 |
% |
Third-quarter profit at Industry Automation was 347 million, up 30% year-over-year. Revenue
growth kept capacity utilization at a high level and also included a more favorable business mix
compared to the prior-year quarter. Revenue climbed 17% on increases in all business units. On a
geographic basis, revenue growth came from Europe, C.I.S., Africa, Middle East and Asia, Australia.
Third-quarter orders were up 6% compared to the prior-year period. Purchase price allocation (PPA)
effects related to the fiscal 2007 acquisition of UGS Corp. (UGS) were 33 million in the current
period compared to 37 million a year earlier.
Drive Technologies generated profit of 292 million, a 42% increase compared to the third
quarter a year earlier. A 15% rise in revenue enabled the Division to increase its capacity
utilization still further, and profit development also included a more favorable business mix. All
business units in the Division delivered growth in both revenue and orders compared to the
prior-year period, led by substantial increases in the Divisions short-cycle businesses. On a
geographic basis, orders and revenues showed double-digit growth in all three regions.
Building Technologies contributed 74 million to Sector profit in the third quarter, below the
prior-year level due partially to higher marketing and selling expenses associated with growth.
Third-quarter revenue and orders each rose 5% year-over-year, with most business units
contributing. On a geographic basis, revenue and order growth were driven by Europe, C.I.S.,
Africa, Middle East and Asia, Australia.
Industry Solutions increased its third-quarter profit to 77 million, including higher
earnings in the metals technologies business. Third-quarter revenue for Industry Solutions as a
whole increased modestly year-over-year. Orders climbed 13% on a higher volume from large orders
compared to the prior-year period.
In the current quarter Mobility took in its largest-ever rolling stock order, for trains in
Germany, worth 3.7 billion. Under the terms of the contract, revenue recognition
related to the order will extend for a number of years ahead. Third-quarter revenue came in 7%
below the level a year earlier, and profit declined to 81 million.
Industry Nine months ended June 30, 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sector |
|
Nine Months |
|
|
|
|
|
|
|
|
|
ended June 30, |
|
|
% Change |
|
|
therein |
|
(in millions of ) |
|
2011 |
|
|
2010 |
|
|
Actual |
|
|
Adjusted(1) |
|
|
Currency |
|
|
Portfolio |
|
Profit |
|
|
2,577 |
|
|
|
1,974 |
|
|
|
30 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Profit margin |
|
|
10.9 |
% |
|
|
9.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New orders |
|
|
28,985 |
|
|
|
21,658 |
|
|
|
34 |
% |
|
|
33 |
% |
|
|
1 |
% |
|
|
0 |
% |
Revenue |
|
|
23,728 |
|
|
|
21,669 |
|
|
|
10 |
% |
|
|
8 |
% |
|
|
1 |
% |
|
|
0 |
% |
|
|
|
(1) |
|
Excluding currency translation and portfolio effects. |
For the first nine months of fiscal 2011 profit at Industry rose to 2.577 billion, up
from 1.974 billion a year earlier. The Industry Automation and Drive Technologies Divisions both
posted sharply higher profit on increased capacity utilization as well as an improved business mix
and made the largest contribution to Sector profit growth year-over-year. Industry Solutions and
Building Technologies also posted higher results while profit at Mobility declined year-over-year.
Sector profit for the current nine months was burdened by the Sectors 128 million share of a
special employee remuneration allocation in the first quarter (for further information see
Reconciliation to consolidated financial statements Corporate items and pensions). In the same
period a year earlier, burdens on profit included charges of 79 million related to a project
engagement with a local partner in the U.S., 72 million for staff reduction measures and a
provision for a supplier-related warranty. These factors were only partly offset by a gain of 53
million related to curtailment of pension plans in
the U.S. and a gain of 47 million on the sale of Mobilitys airfield solutions business.
18
Orders in the first nine months climbed 34% compared to the same period a year earlier, on
increases in all Divisions and all reporting regions. The largest increase year-over-year came from
Mobility, which recorded significantly higher volume from large orders including the 3.7 billion
train order in Germany mentioned above. Revenue for the Sector was 10% higher compared to the
prior-year period, led by double-digit increases at Industry Automation and Drive Technologies.
Revenue rose in all three regions.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Divisions |
|
New orders |
|
|
|
Nine months |
|
|
|
|
|
|
|
|
|
ended June 30, |
|
|
% Change |
|
|
therein |
|
(in millions of ) |
|
2011 |
|
|
2010 |
|
|
Actual |
|
|
Adjusted(1) |
|
|
Currency |
|
|
Portfolio |
|
Industry Automation |
|
|
5,603 |
|
|
|
4,698 |
|
|
|
19 |
% |
|
|
17 |
% |
|
|
1 |
% |
|
|
1 |
% |
Drive Technologies |
|
|
6,817 |
|
|
|
5,246 |
|
|
|
30 |
% |
|
|
28 |
% |
|
|
2 |
% |
|
|
0 |
% |
Building Technologies |
|
|
5,603 |
|
|
|
5,111 |
|
|
|
10 |
% |
|
|
8 |
% |
|
|
1 |
% |
|
|
0 |
% |
Industry Solutions |
|
|
4,539 |
|
|
|
4,148 |
|
|
|
9 |
% |
|
|
12 |
% |
|
|
0 |
% |
|
|
(2 |
)% |
Mobility |
|
|
8,581 |
|
|
|
4,264 |
|
|
|
101 |
% |
|
|
99 |
% |
|
|
2 |
% |
|
|
0 |
% |
|
|
|
(1) |
|
Excluding currency translation and portfolio effects. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Divisions |
|
Revenue |
|
|
|
Nine months |
|
|
|
|
|
|
|
|
|
ended June 30, |
|
|
% Change |
|
|
therein |
|
(in millions of ) |
|
2011 |
|
|
2010 |
|
|
Actual |
|
|
Adjusted(1) |
|
|
Currency |
|
|
Portfolio |
|
Industry Automation |
|
|
5,403 |
|
|
|
4,410 |
|
|
|
23 |
% |
|
|
19 |
% |
|
|
1 |
% |
|
|
2 |
% |
Drive Technologies |
|
|
5,887 |
|
|
|
4,946 |
|
|
|
19 |
% |
|
|
18 |
% |
|
|
1 |
% |
|
|
0 |
% |
Building Technologies |
|
|
5,382 |
|
|
|
4,954 |
|
|
|
9 |
% |
|
|
7 |
% |
|
|
1 |
% |
|
|
0 |
% |
Industry Solutions |
|
|
4,269 |
|
|
|
4,381 |
|
|
|
(3 |
)% |
|
|
(1 |
)% |
|
|
1 |
% |
|
|
(3 |
)% |
Mobility |
|
|
4,618 |
|
|
|
4,751 |
|
|
|
(3 |
)% |
|
|
(4 |
)% |
|
|
1 |
% |
|
|
0 |
% |
|
|
|
(1) |
|
Excluding currency translation and portfolio effects. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Divisions |
|
Profit |
|
|
Profit margin |
|
|
|
Nine months |
|
|
|
|
|
|
Nine months ended |
|
|
|
ended June 30, |
|
|
|
|
|
|
June 30, |
|
(in millions of ) |
|
2011 |
|
|
2010 |
|
|
% Change |
|
|
2011 |
|
|
2010 |
|
Industry Automation |
|
|
1,016 |
|
|
|
681 |
|
|
|
49 |
% |
|
|
18.8 |
% |
|
|
15.4 |
% |
Drive Technologies |
|
|
780 |
|
|
|
534 |
|
|
|
46 |
% |
|
|
13.3 |
% |
|
|
10.8 |
% |
Building Technologies |
|
|
274 |
|
|
|
267 |
|
|
|
3 |
% |
|
|
5.1 |
% |
|
|
5.4 |
% |
Industry Solutions |
|
|
189 |
|
|
|
121 |
|
|
|
56 |
% |
|
|
4.4 |
% |
|
|
2.8 |
% |
Mobility |
|
|
304 |
|
|
|
361 |
|
|
|
(16 |
)% |
|
|
6.6 |
% |
|
|
7.6 |
% |
In the first nine month of fiscal 2011, Industry Automation recorded profit of 1.016 billion,
up 49% year-over-year on higher capacity utilization and an improved business mix. Revenue climbed
23% and orders rose 19% year-over-year on increases in all businesses as well as double-digit
growth in all three regions. Growth rates in emerging markets exceeded growth rates for volume
overall. PPA effects related to the acquisition of UGS were 103 million for the first nine months,
level with the prior-year period.
In the first nine months of fiscal 2011, orders at Drive Technologies were up 30%, including
higher volume from large orders. Revenue grew by 19% year-over-year. While all businesses
contributed to the increase, volume growth was particularly strong in the Divisions short-cycle
businesses. Higher capacity utilization together with an improved business mix led to sharply
higher profit of 780 million in the current nine-month period.
Profit of 274 million at Building Technologies came in slightly above the prior-year level.
While profit development in the current period was held back by higher marketing and selling
expenses associated with growth, profit in the prior-year period was impacted by a charge for the
supplier-related warranty mentioned above, largely offset by the Divisions 24 million portion of
the pension curtailment gain mentioned above for the Sector. Revenue for the current nine months
was up 9% compared to the prior-year period and orders grew 10% year over year. Volume development
benefited from strong demand for energy efficiency solutions. On a geographic basis, orders and
revenue grew in all regions with particular strength in Asia, Australia.
19
In the first nine months, Industry Solutions increased orders by 9% year-over-year on higher
demand at the metals technologies business including strong growth in the Americas. Revenue came in
3% below the prior-year level as double-digit growth in the Americas was more than offset by
declining revenue in the region comprising Europe, C.I.S., Africa, Middle East. Profit for the
current nine months for Industry Solutions was 189 million, compared to 121 million in the same
period a year earlier when the Division took the above-mentioned 79 million in charges related to
a project engagement with a local partner in the U.S. and 39 million in charges for staff
reduction measures.
New orders at Mobility doubled year-over-year, on substantially higher volume from large
orders, including the largest-ever order for trains in Germany mentioned above as well as a major
order for high-speed trains in the U.K. Revenue for the first nine months was down 3%. Profit in
the current period was 304 million compared to 361 million in the same period a year earlier,
which benefited from the 47 million net gain on the sale of the airfield solutions business and
from a portion of the pension curtailment gain mentioned above.
20
Energy Three months ended June 30, 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sector |
|
Three months ended |
|
|
|
|
|
|
|
|
|
June 30, |
|
|
% Change |
|
|
therein |
|
(in millions of ) |
|
2011 |
|
|
2010 |
|
|
Actual |
|
|
Adjusted(1) |
|
|
Currency |
|
|
Portfolio |
|
Profit |
|
|
263 |
|
|
|
875 |
|
|
|
(70 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
Profit margin |
|
|
3.9 |
% |
|
|
13.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New orders |
|
|
8,027 |
|
|
|
8,061 |
|
|
|
0 |
% |
|
|
4 |
% |
|
|
(4 |
)% |
|
|
0 |
% |
Revenue |
|
|
6,776 |
|
|
|
6,462 |
|
|
|
5 |
% |
|
|
10 |
% |
|
|
(5 |
)% |
|
|
0 |
% |
|
|
|
(1) |
|
Excluding currency translation and portfolio effects. |
Energy delivered another impressive quarter on an operating basis, and absorbed the 682
million profit impact related to the arbitration decision discussed earlier. The Fossil Power
Generation Division continued its outstanding project execution and earnings performance of recent
quarters, which more than offset higher expenses in other Divisions for R&D, marketing and selling
associated with strategic business expansion. Taken together, these factors resulted in reported
Sector profit of 263 million in the third quarter, compared to 875 million in the same period a
year earlier.
The slower pace of order intake expected for the second half of the fiscal year was evident in
the third quarter, as orders came in slightly lower compared to the prior year. Within the total,
strong demand in Asia, Australia nearly offset decreases in Europe, C.I.S., Africa, Middle East and
the Americas. In contrast, revenue came in 5% higher, including double-digit increases at Fossil
Power Generation and Oil & Gas and increases in all regions. Negative currency translation effects
took 5 percentage points from reported revenue growth and 4 percentage points from reported order
growth in the quarter. The book-to-bill ratio was 1.18, and Energys order backlog was 57 billion
at the end of the third quarter.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Divisions |
|
New orders |
|
|
|
Three months ended |
|
|
|
|
|
|
|
|
|
June 30, |
|
|
% Change |
|
|
therein |
|
(in millions of ) |
|
2011 |
|
|
2010 |
|
|
Actual |
|
|
Adjusted(1) |
|
|
Currency |
|
|
Portfolio |
|
Fossil Power Generation |
|
|
3,016 |
|
|
|
2,097 |
|
|
|
44 |
% |
|
|
51 |
% |
|
|
(7 |
)% |
|
|
0 |
% |
Renewable Energy |
|
|
1,543 |
|
|
|
2,271 |
|
|
|
(32 |
)% |
|
|
(29 |
)% |
|
|
(3 |
)% |
|
|
0 |
% |
Oil & Gas |
|
|
1,321 |
|
|
|
1,268 |
|
|
|
4 |
% |
|
|
4 |
% |
|
|
(1 |
)% |
|
|
1 |
% |
Power Transmission |
|
|
1,453 |
|
|
|
1,787 |
|
|
|
(19 |
)% |
|
|
(14 |
)% |
|
|
(4 |
)% |
|
|
0 |
% |
Power Distribution |
|
|
883 |
|
|
|
768 |
|
|
|
15 |
% |
|
|
21 |
% |
|
|
(6 |
)% |
|
|
0 |
% |
|
|
|
(1) |
|
Excluding currency translation and portfolio effects. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Divisions |
|
Revenue |
|
|
|
Three months ended |
|
|
|
|
|
|
|
|
|
June 30, |
|
|
% Change |
|
|
therein |
|
(in millions of ) |
|
2011 |
|
|
2010 |
|
|
Actual |
|
|
Adjusted(1) |
|
|
Currency |
|
|
Portfolio |
|
Fossil Power Generation |
|
|
2,595 |
|
|
|
2,348 |
|
|
|
11 |
% |
|
|
16 |
% |
|
|
(5 |
)% |
|
|
0 |
% |
Renewable Energy |
|
|
975 |
|
|
|
953 |
|
|
|
2 |
% |
|
|
13 |
% |
|
|
(10 |
)% |
|
|
0 |
% |
Oil & Gas |
|
|
1,178 |
|
|
|
998 |
|
|
|
18 |
% |
|
|
19 |
% |
|
|
(3 |
)% |
|
|
1 |
% |
Power Transmission |
|
|
1,463 |
|
|
|
1,582 |
|
|
|
(7 |
)% |
|
|
(3 |
)% |
|
|
(4 |
)% |
|
|
0 |
% |
Power Distribution |
|
|
742 |
|
|
|
734 |
|
|
|
1 |
% |
|
|
5 |
% |
|
|
(4 |
)% |
|
|
0 |
% |
|
|
|
(1) |
|
Excluding currency translation and portfolio effects. |
21
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Divisions |
|
Profit |
|
|
Profit margin |
|
|
|
Three months ended |
|
|
|
|
|
|
Three months ended |
|
|
|
June 30, |
|
|
|
|
|
|
June 30, |
|
(in millions of ) |
|
2011 |
|
|
2010 |
|
|
%Change |
|
|
2011 |
|
|
2010 |
|
Fossil Power Generation |
|
|
(97 |
) |
|
|
362 |
|
|
|
|
|
|
|
(3.7 |
)% |
|
|
15.4 |
% |
Renewable Energy |
|
|
68 |
|
|
|
122 |
|
|
|
(45 |
)% |
|
|
7.0 |
% |
|
|
12.8 |
% |
Oil & Gas |
|
|
104 |
|
|
|
100 |
|
|
|
4 |
% |
|
|
8.8 |
% |
|
|
10.0 |
% |
Power Transmission |
|
|
132 |
|
|
|
193 |
|
|
|
(31 |
)% |
|
|
9.1 |
% |
|
|
12.2 |
% |
Power Distribution |
|
|
52 |
|
|
|
96 |
|
|
|
(46 |
)% |
|
|
7.0 |
% |
|
|
13.0 |
% |
Fossil Power Generation maintained its operating performance and earnings capacity at the
outstanding level of the previous two quarters. The Division combined excellent project performance
with a favorable business mix, including conversion of high-margin component orders from its
backlog and an increased contribution from its service business. As noted earlier, the Divisions
third-quarter profit was reduced by the 682 million impact related to the arbitration decision. As
a result, Fossil Power Generation reported a loss of 97 million in the third quarter. Revenue rose
11% compared to the same period a year earlier, with the largest increase on a geographic basis in
the region Europe, C.I.S., Africa, Middle East. With a higher volume from major orders, the
Divisions order intake climbed 44% from the low basis of comparison in the third quarter a year
earlier.
Renewable Energy continued the expansion of its wind business, posting significantly increased
third-quarter expenses primarily for marketing and selling. Combined with increased pricing
pressure in a maturing and more competitive market for wind power, particularly for onshore
projects, this reduced third-quarter profit to 68 million from the prior-year level. The business
environment remains challenging for the solar business, which continued to post negative results.
The Divisions revenue continued to rise year-over-year on conversion of orders from its large
backlog. New orders totaled 1.543 billion, yet came in below the prior-year quarter which included
an exceptionally high volume from major orders.
Profit at Oil & Gas increased to 104 million in the third quarter, driven by a strong
performance in the turbines business. Growth in Asia, Australia, particularly including emerging
markets, took revenue and orders up 18% and 4%, respectively, compared to the same period a year
earlier.
Third-quarter profit at Power Transmission was 132 million, below the prior-year period which
benefited from positive effects related to project performance. Profit in the current quarter was
held back by lower revenue, conversion of lower-margin contracts from the backlog, and further
charges related to optimizing the Divisions global manufacturing footprint. Third-quarter orders
came in 19% lower compared to the prior-year quarter, which included two large orders for grid
access to off-shore wind farms.
Power Distribution again posted higher quarterly expenses year-over-year for marketing,
selling and R&D, for business expansion, along with continuing expenses related to new technologies
such as smart grids. This had a significant impact on profit, which came in lower year-over-year,
at 52 million. Revenue rose 1% from the same period a year earlier, and orders climbed 15% on
double-digit growth in the Americas and Asia, Australia.
22
Energy Nine months ended June 30, 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sector |
|
Nine months ended |
|
|
|
|
|
|
|
|
|
June 30, |
|
|
% Change |
|
|
therein |
|
(in millions of ) |
|
2011 |
|
|
2010 |
|
|
Actual |
|
|
Adjusted(1) |
|
|
Currency |
|
|
Portfolio |
|
Profit |
|
|
3,510 |
|
|
|
2,458 |
|
|
|
43 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Profit margin |
|
|
17.7 |
% |
|
|
13.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New orders |
|
|
25,990 |
|
|
|
21,061 |
|
|
|
23 |
% |
|
|
22 |
% |
|
|
1 |
% |
|
|
0 |
% |
Revenue |
|
|
19,862 |
|
|
|
18,260 |
|
|
|
9 |
% |
|
|
8 |
% |
|
|
1 |
% |
|
|
0 |
% |
|
|
|
(1) |
|
Excluding currency translation and portfolio effects. |
Profit for the Energy Sector rose to 3.510 billion in the first nine months of fiscal
2011, on a strong operating performance, particularly at Fossil Power Generation. Sector profit for
the nine-month period benefited from net positive effects related to Areva, including the 1.520
billion disposal gain in the second quarter and the negative impact of 682 million related to the
arbitration decision in the third quarter. The Sector increased its expenses for R&D, marketing and
selling associated with business expansion year-over-year, particularly at Renewable Energy and
Power Distribution. Energys share of the special employee remuneration allocation mentioned
earlier was 69 million.
Revenue rose 9% year-over-year, to 19.862 billion, on increases in all Divisions and
conversion of the Sectors strong order backlog. On a geographic basis, revenue rose in all
regions, highlighted by a double-digit increase in the Americas. Orders rose 23% compared to the
first nine months a year earlier, driven by a higher volume from major orders at Fossil Power
Generation. On a geographic basis, strong growth in emerging markets took orders higher in all
regions.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Divisions |
|
New orders |
|
|
|
Nine months ended |
|
|
|
|
|
|
|
|
|
June 30, |
|
|
% Change |
|
|
therein |
|
(in millions of ) |
|
2011 |
|
|
2010 |
|
|
Actual |
|
|
Adjusted(1) |
|
|
Currency |
|
|
Portfolio |
|
Fossil Power Generation |
|
|
10,138 |
|
|
|
6,387 |
|
|
|
59 |
% |
|
|
58 |
% |
|
|
1 |
% |
|
|
0 |
% |
Renewable Energy |
|
|
4,455 |
|
|
|
4,475 |
|
|
|
0 |
% |
|
|
(1 |
)% |
|
|
0 |
% |
|
|
0 |
% |
Oil & Gas |
|
|
4,106 |
|
|
|
3,477 |
|
|
|
18 |
% |
|
|
14 |
% |
|
|
3 |
% |
|
|
1 |
% |
Power Transmission |
|
|
5,451 |
|
|
|
4,922 |
|
|
|
11 |
% |
|
|
10 |
% |
|
|
1 |
% |
|
|
0 |
% |
Power Distribution |
|
|
2,470 |
|
|
|
2,273 |
|
|
|
9 |
% |
|
|
7 |
% |
|
|
1 |
% |
|
|
0 |
% |
|
|
|
(1) |
|
Excluding currency translation and portfolio effects. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Divisions |
|
Revenue |
|
|
|
Nine months ended |
|
|
|
|
|
|
|
|
|
June 30, |
|
|
% Change |
|
|
therein |
|
(in millions of ) |
|
2011 |
|
|
2010 |
|
|
Actual |
|
|
Adjusted(1) |
|
|
Currency |
|
|
Portfolio |
|
Fossil Power Generation |
|
|
7,586 |
|
|
|
7,051 |
|
|
|
8 |
% |
|
|
8 |
% |
|
|
0 |
% |
|
|
0 |
% |
Renewable Energy |
|
|
2,774 |
|
|
|
2,295 |
|
|
|
21 |
% |
|
|
23 |
% |
|
|
(2 |
)% |
|
|
0 |
% |
Oil & Gas |
|
|
3,368 |
|
|
|
2,975 |
|
|
|
13 |
% |
|
|
10 |
% |
|
|
3 |
% |
|
|
0 |
% |
Power Transmission |
|
|
4,449 |
|
|
|
4,264 |
|
|
|
4 |
% |
|
|
3 |
% |
|
|
1 |
% |
|
|
0 |
% |
Power Distribution |
|
|
2,211 |
|
|
|
2,096 |
|
|
|
5 |
% |
|
|
4 |
% |
|
|
1 |
% |
|
|
0 |
% |
|
|
|
(1) |
|
Excluding currency translation and portfolio effects. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Divisions |
|
Profit |
|
|
Profit margin |
|
|
|
Nine months ended |
|
|
|
|
|
|
Nine months ended |
|
|
|
June 30, |
|
|
|
|
|
|
June 30, |
|
(in millions of ) |
|
2011 |
|
|
2010 |
|
|
% Change |
|
|
2011 |
|
|
2010 |
|
Fossil Power Generation |
|
|
2,426 |
|
|
|
1,074 |
|
|
|
126 |
% |
|
|
32.0 |
% |
|
|
15.2 |
% |
Renewable Energy |
|
|
152 |
|
|
|
246 |
|
|
|
(38 |
)% |
|
|
5.5 |
% |
|
|
10.7 |
% |
Oil & Gas |
|
|
337 |
|
|
|
337 |
|
|
|
0 |
% |
|
|
10.0 |
% |
|
|
11.3 |
% |
Power Transmission |
|
|
408 |
|
|
|
500 |
|
|
|
(18 |
)% |
|
|
9.2 |
% |
|
|
11.7 |
% |
Power Distribution |
|
|
182 |
|
|
|
281 |
|
|
|
(35 |
)% |
|
|
8.2 |
% |
|
|
13.4 |
% |
23
In the first nine months of fiscal 2011 Fossil Power Generation recorded substantially higher
profit year-over-year on a strong operating performance, and also benefited from the net effect
related to Areva mentioned above for the Sector. The Divisions operating results rose to a high
level, due in part to a favorable business mix, including the conversion of high-margin component
orders and a strong contribution from the service business. Effects related to project performance
were also more favorable compared to the prior-year period, even though Fossil Power Generation had
to absorb project charges of 87 million related to the Olkiluoto project in Finland in the second
quarter of fiscal 2011. For comparison, the Divisions profit in the prior-year period was impacted
by charges of 59 million for capacity adjustments related to a shift of production capacity within
the Americas region. Fossil Power Generation reported a substantially higher volume from major
orders in the first nine months of fiscal 2011, which took orders up 59% from a low basis of
comparison in the prior-year period. Revenue rose 8% year-over-year, including a double-digit
increase in the Americas.
Revenue at Renewable Energy climbed 21% in the first nine months of fiscal 2011, as the
Division continued to convert orders from its large order backlog. New orders came in level
year-over-year, with a high volume from major orders in both periods, and including strong growth
in emerging markets. Profit at Renewable Energy was 152 million in the first nine months of fiscal
2011, lower year-over-year due primarily to higher expenses for R&D, marketing and selling
associated with the ongoing expansion of the Divisions wind business. Renewable Energys solar
business continued to post negative results, with a stronger impact in the current nine-month
period.
Profit at Oil & Gas for the first nine months came in at 337 million, unchanged from the
prior-year period. Revenue rose 13% year-over-year, driven by increases in emerging markets. Orders
at Oil &Gas climbed 18% compared to the prior-year period on broad-based growth across its
businesses.
Nine-month orders at Power Transmission rose 11% year-over-year, led by strong demand at the
Divisions solutions business. Revenue came in 4% higher compared to the prior-year period on
growth in Europe, C.I.S., Africa, Middle East and the Americas. Profit at Power Transmission was
408 million in the first nine months of fiscal 2011, down from 500 million a year earlier. The
current period included higher marketing and selling expenses associated with growth, as well as
charges totaling 53 million, including for staff reduction measures, related to optimizing the
Divisions global manufacturing footprint.
Power Distribution generated 9% order growth and 5% revenue growth compared to the first nine
months a year earlier. All three regions contributed to the order increase, while revenue growth
came from Europe, C.I.S., Africa, Middle East and Asia, Australia. Profit declined to 182 million
in the current nine months, held back by higher expenses year-over-year for R&D, marketing and
selling associated with business expansion and new technologies such as smart grids.
24
Healthcare Three months ended June 30, 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sector |
|
Three months |
|
|
|
|
|
|
|
|
|
ended June 30, |
|
|
% Change |
|
|
therein |
|
(in millions of ) |
|
2011 |
|
|
2010 |
|
|
Actual |
|
|
Adjusted(1) |
|
|
Currency |
|
|
Portfolio |
|
Profit |
|
|
8 |
|
|
|
482 |
|
|
|
(98 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
Profit margin |
|
|
0.3 |
% |
|
|
15.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New orders |
|
|
3,016 |
|
|
|
3,260 |
|
|
|
(7 |
)% |
|
|
(2 |
)% |
|
|
(6 |
)% |
|
|
0 |
% |
Revenue |
|
|
2,858 |
|
|
|
3,152 |
|
|
|
(9 |
)% |
|
|
(4 |
)% |
|
|
(6 |
)% |
|
|
0 |
% |
|
|
|
(1) |
|
Excluding currency translation and portfolio effects. |
In the third quarter the Healthcare Sector reevaluated the commercial feasibility of
particle therapy for general patient treatment. Going forward, the Sector will shift the focus of
certain particle therapy projects primarily to research. In accordance with project accounting
rules, Healthcare took project charges and reduced third-quarter revenue in the imaging and therapy
systems business by the amount of revenue recognized from the projects in prior periods. The
negative impacts related to particle therapy totaled 381 million, including approximately 100
million for the revenue effect, and Sector profit for the quarter came in at 8 million. For
comparison, Sector profit of 482 million in the prior-year period benefited from a gain of 40
million related to the Sector ceasing consolidation of a former subsidiary due to loss of control.
Profit at Diagnostics was 73 million compared to 114 million in the prior-year period.
Factors involved in the decline include lower revenue, a less favorable business mix, and an
increase in valuation allowances for receivables triggered by a debt rating downgrade related to
Greece. PPA effects related to past acquisitions at the diagnostics business were 41 million in
the third quarter. In the same period a year earlier, the business recorded 46 million in PPA
effects.
The business environment for Healthcare remained challenging. Reported revenue came in 9%
lower compared to the prior-year period due primarily to the revenue reduction effect mentioned
above and strong negative currency translation effects that took 6 percentage points from reported
revenue growth for the quarter. Orders also reflected the same strong negative currency translation
effects, coming in 7% below the prior-year level. For comparison, the prior period included a major
order for hospital equipment in Spain. On a geographic basis, revenue and orders declined in the
regions Americas and Europe, C.I.S., Africa, Middle East, which more than offset increases in Asia,
Australia. Emerging markets on a global basis showed positive order growth for the Sector,
including a double-digit increase in China. The backlog for Healthcare was 6 billion at the end of
the quarter, and its book-to-bill ratio was slightly above 1.
Diagnostics posted revenue of 892 million and orders of 904 million in the third quarter,
down from 959 million and 964 million, respectively, in the prior-year period. On a geographic
basis, orders declined in the Americas, more than offsetting an increase in Asia, Australia.
Revenue also declined in the Americas. Orders and revenues were stable year-over-year in Europe,
C.I.S., Africa, Middle East, and grew in emerging markets in all reporting regions.
25
Healthcare Nine months ended June 30, 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sector |
|
Nine months |
|
|
|
|
|
|
|
|
|
ended June 30, |
|
|
% Change |
|
|
therein |
|
(in millions of ) |
|
2011 |
|
|
2010 |
|
|
Actual |
|
|
Adjusted(1) |
|
|
Currency |
|
|
Portfolio |
|
Profit |
|
|
840 |
|
|
|
1,450 |
|
|
|
(42 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
Profit margin |
|
|
9.2 |
% |
|
|
16.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New orders |
|
|
9,304 |
|
|
|
9,075 |
|
|
|
3 |
% |
|
|
2 |
% |
|
|
1 |
% |
|
|
0 |
% |
Revenue |
|
|
9,110 |
|
|
|
8,951 |
|
|
|
2 |
% |
|
|
1 |
% |
|
|
1 |
% |
|
|
0 |
% |
|
|
|
(1) |
|
Excluding currency translation and portfolio effects. |
The Healthcare Sector posted a profit of 840 million for the first nine months of fiscal
2011, down from 1.450 billion in the prior-year period. Nine-month profit was burdened in the
first quarter by 32 million and in the third quarter by 381 million negative impacts related to
particle therapy projects. Profit was also held back by the Sectors 43 million share of the
special employee remuneration allocation mentioned earlier and a reserve of 19 million related to
a customer loan and receivables in the audiology business. In contrast, nine-month profit in the
prior year benefited from 79 million of the pension curtailment gain discussed earlier and the
gain of 40 million related to the Sector ceasing consolidation of a former subsidiary due to loss
of control mentioned above for the third quarter.
Profit at Diagnostics for the first nine months was 238 million, below 338 million in the
prior-year period, due in part to a less favorable business mix and the increase in valuation
allowances for receivables triggered by a debt rating downgrade related to Greece. For comparison,
Diagnostics profit the first nine months a year earlier benefited from 22 million of the pension
curtailment gain. In the current nine months, PPA effects related to past acquisitions were 127
million. A year earlier, PPA effects in the first nine months totaled 131 million.
Year-to-date orders for Healthcare increased 3% compared to the prior-year period on
broad-based growth across its businesses. Nine-month revenue for the Healthcare Sector came in 2%
higher compared to the prior-year period, including the approximately 100 million negative revenue
effect related to shifting the focus of particle therapy projects mentioned above for the quarter.
On a geographic basis, the Sector recorded higher orders and revenue in the regions Asia, Australia
and the Americas offsetting a decline in Europe, C.I.S., Africa, Middle East. On a global basis,
emerging markets showed positive growth for both revenue and orders including a double-digit
increase in China. On an organic basis, Sector volume growth was 2% for orders and 1% for revenue.
Healthcares book-to-bill ratio was slightly above 1 in the first nine months of fiscal 2011.
Orders and revenue for Diagnostics rose 2% compared to the prior-year period. Both orders and
revenue showed double-digit growth in Asia, Australia, a decline in the Americas and stable demand
in Europe, C.I.S., Africa, Middle East.
26
Equity Investments
Equity Investments generated a loss of 85 million in the third quarter of fiscal 2011,
due to an equity investment loss of 116 million related to our share in NSN. NSN reported to
Siemens that it took restructuring charges and integration costs totaling 68 million. In the third
quarter a year earlier, these charges and costs totaled 114 million and the result related to NSN
was a negative 81 million. For Equity Investments overall, the prior-year result was a positive 2
million.
In the first nine months of fiscal 2011, Equity Investments recorded a profit of 22 million
compared to a loss of 10 million in the same period a year earlier. The positive swing includes a
gain of 91 million on the sale of Siemens 49% stake in KMW in the current period, higher than the
equity investment income recorded from our share in KMW in the first nine months a year earlier.
The result related to our share in NSN was an equity investment loss of 204 million compared to a
loss of 291 million in the first nine months a year earlier. NSN reported to Siemens that it took
restructuring charges and integration costs totaling 125 million compared to 329 million a year
earlier.
We expect continued volatility in Equity Investments results in coming quarters.
27
Financial Services (SFS)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months |
|
|
|
|
|
|
Nine months |
|
|
|
|
|
|
ended June 30, |
|
|
|
|
|
|
ended June 30, |
|
|
|
|
|
|
2011 |
|
|
2010 |
|
|
% Change |
|
|
2011 |
|
|
2010 |
|
|
% Change |
|
|
|
(in millions of ) |
|
|
|
|
|
|
(in millions of ) |
|
|
|
|
|
Profit |
|
|
89 |
|
|
|
112 |
|
|
|
(20 |
)% |
|
|
305 |
|
|
|
308 |
|
|
|
(1 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, |
|
|
September 30, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2011 |
|
|
2010 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,832 |
|
|
|
12,506 |
|
|
|
3 |
% |
Financial Services posted 89 million in profit (defined as income before income taxes) in the
third quarter, below the level of the prior-year quarter. The decline is due primarily to an
impairment on its equity stake in a power plant project in the U.S. due to unexpectedly adverse
market conditions.
Financial Services profit of 305 million in the first nine months of fiscal 2011 was nearly
level with the prior-year nine-month period. Lower results in the equity business including the
impairment mentioned above for the third quarter were offset primarily by higher results in the
commercial finance business driven by higher interest results and lower credit hits. Total assets
increased to 12.832 billion, due to net growth in the commercial finance business partly offset by
negative currency translation effects.
In December 2010, Siemens received authorization from Germanys Federal Financial Supervisory
Authority (Bundesanstalt für Finanzdienstleistungsaufsicht BaFin) to engage in banking
operations. The Siemens Bank GmbH will support sales at the companys three Sectors Industry,
Energy and Healthcare by expanding, with loans and guarantees, the product portfolio of Siemens
financial services unit in the area of sales financing, in particular. Through wholesale deposit
banking activities the bank will also increase the flexibility of Siemens internal financing
operations and further improve risk management.
28
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 to SFS
because Management has determined that such items are not indicative of the Sectors and SFS
respective performance.
Centrally managed portfolio activities
Centrally managed portfolio activities posted a loss of 25 million in the third quarter
compared to a loss of 50 million in the same quarter a year earlier. That prior period included
higher losses related to the remaining former business activities of Siemens IT Solutions and
Services that were not classified as discontinued operations and were therefore retroactively
reclassified as Centrally managed portfolio activities. In addition, the prior-year quarter
included a loss of 13 million related to the electronics assembly systems business, which was sold
in the second quarter of fiscal 2011.
For the first nine months of fiscal 2011, the result of Centrally managed portfolio activities
was a loss of 17 million, compared to a loss of 84 million a year earlier. The improvement is due
mainly to the electronics assembly systems business. In the current nine-month period, a loss on
the disposal of the business was more than offset by a positive result from operating activities,
compared to a net loss of 49 million in the same period a year earlier. In addition, the
prior-year period included higher losses related to the remaining former business activities of
Siemens IT Solutions and Services reclassified as Centrally managed portfolio activities.
Siemens Real Estate
Income before income taxes at Siemens Real Estate (SRE) was 49 million in the third quarter,
down from 107 million in the same period a year earlier which included higher income related to
the disposal of real estate. During the current quarter, assets with a book value of 63 million
were transferred to SRE as part of Siemens program to bundle its real estate assets into SRE and
to implement further measures to increase the efficiency of these assets.
Income before income taxes at SRE for the first nine months of fiscal 2011 was 148 million,
down from 275 million in the prior-year period. The change year-over-year was due in part to lower
income related to the disposal of real estate in the current period. Assets with a book value of
476 million were transferred to SRE during the current nine-month period as part of the real
estate bundling program. SRE expects to incur costs associated with the program in coming quarters,
and to continue with real estate disposals depending on market conditions.
Corporate items and pensions
Corporate items and pensions totaled a negative 56 million in the third quarter compared to a
negative 78 million in the same period a year earlier. This improvement was driven by Centrally
carried pension expense, which swung to a positive 10 million from a negative 38 million in the
prior-year period, due primarily to lower interest costs and a higher expected return on plan
assets.
Corporate items were a negative 66 million in the third quarter, compared to a negative 40
million in the same period a year earlier. The net gain related to a major asset retirement
obligation was 2 million in the current quarter, compared to a net gain of 64 million in the
prior-year period which included a gain of 60 million due to revised assumptions, a negative
interest-related effect from the measurement of this obligation, and a positive effect from related
hedging activities not qualifying for hedge accounting.
For the first nine months of fiscal 2011, Corporate items and pensions totaled a positive 141
million, compared to a negative 157 million in the prior-year period. Within this change,
Centrally carried pension expense improved to a positive 57 million in the current nine-month
period, from a negative 137 million in the same period a year earlier, due primarily to a higher
expected return on plan assets and lower interest costs.
29
Corporate items contributed a positive 84 million in the first nine months of fiscal 2011,
compared to a negative 20 million in the same period a year earlier. The current period benefited
from managements allocation of a substantial part of the 267 million in special employee
remuneration
that was accrued within Corporate items in the fourth quarter of fiscal 2010. Within this part
is the 240 million that was debited to the Sectors for management reporting purposes; charges were
made to Industry of 128 million, to Energy of 69 million and to Healthcare of 43 million. In
addition, the current nine-month period included net charges related to legal and regulatory
matters. For comparison, the prior-year period benefited from 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.
Eliminations, Corporate Treasury and other reconciling items
Income before income taxes from Eliminations, Corporate Treasury and other reconciling items
was a negative 38 million in the third quarter compared to a negative 125 million in the same
period a year earlier. The improvement occurred within Corporate Treasury. While both periods were
negatively affected by changes in fair market values for interest rate derivatives not qualifying
for hedge accounting due to declining interest rates, the effect was more modest in the current
period.
Income before income taxes from Eliminations, Corporate Treasury and other reconciling items
was a negative 113 million in the first nine months of fiscal 2011, compared to a negative 169
million in the same period a year earlier. The improvement occurred within Corporate Treasury,
which included positive effects related to the divestment of financial assets as well as positive
changes in fair market values for interest rate derivatives not qualifying for hedge accounting.
30
Reconciliation to adjusted EBITDA (continuing operations)
The following table gives additional information on topics included in Profit and Income before
income taxes and provides a reconciliation to adjusted EBITDA.
We report adjusted EBIT and adjusted EBITDA 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 adjusted EBIT and adjusted EBITDA, please refer to the end of
this Interim group management report.
For the nine months ended June 30, 2011 and 2010 (in millions of )
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and impairments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
accounted for |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of property, plant |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
using the equity |
|
|
Financial income |
|
|
Adjusted |
|
|
|
|
|
|
|
|
|
|
and equipment |
|
|
Adjusted |
|
|
Adjusted |
|
|
|
Profit(1)(2) |
|
|
method, net(3) |
|
|
(expense), net(4) |
|
|
EBIT(5) |
|
|
Amortization(6) |
|
|
and goodwill(7) |
|
|
EBITDA |
|
|
EBITDA margin |
|
|
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
Sectors and Divisions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Industry Sector |
|
|
2,577 |
|
|
|
1,974 |
|
|
|
23 |
|
|
|
8 |
|
|
|
(7 |
) |
|
|
(13 |
) |
|
|
2,561 |
|
|
|
1,979 |
|
|
|
263 |
|
|
|
251 |
|
|
|
317 |
|
|
|
316 |
|
|
|
3,141 |
|
|
|
2,546 |
|
|
|
13.2 |
% |
|
|
11.8 |
% |
Industry Automation |
|
|
1,016 |
|
|
|
681 |
|
|
|
7 |
|
|
|
(2 |
) |
|
|
1 |
|
|
|
2 |
|
|
|
1,009 |
|
|
|
682 |
|
|
|
134 |
|
|
|
133 |
|
|
|
71 |
|
|
|
65 |
|
|
|
1,214 |
|
|
|
880 |
|
|
|
|
|
|
|
|
|
Drive Technologies |
|
|
780 |
|
|
|
534 |
|
|
|
2 |
|
|
|
(1 |
) |
|
|
|
|
|
|
(1 |
) |
|
|
778 |
|
|
|
536 |
|
|
|
34 |
|
|
|
33 |
|
|
|
111 |
|
|
|
106 |
|
|
|
923 |
|
|
|
675 |
|
|
|
|
|
|
|
|
|
Building Technologies |
|
|
274 |
|
|
|
267 |
|
|
|
5 |
|
|
|
5 |
|
|
|
(1 |
) |
|
|
1 |
|
|
|
270 |
|
|
|
261 |
|
|
|
63 |
|
|
|
55 |
|
|
|
63 |
|
|
|
66 |
|
|
|
395 |
|
|
|
382 |
|
|
|
|
|
|
|
|
|
Industry Solutions |
|
|
189 |
|
|
|
121 |
|
|
|
4 |
|
|
|
4 |
|
|
|
(4 |
) |
|
|
(5 |
) |
|
|
189 |
|
|
|
122 |
|
|
|
21 |
|
|
|
19 |
|
|
|
40 |
|
|
|
43 |
|
|
|
249 |
|
|
|
184 |
|
|
|
|
|
|
|
|
|
Mobility |
|
|
304 |
|
|
|
361 |
|
|
|
4 |
|
|
|
3 |
|
|
|
(3 |
) |
|
|
(11 |
) |
|
|
303 |
|
|
|
369 |
|
|
|
11 |
|
|
|
10 |
|
|
|
32 |
|
|
|
35 |
|
|
|
346 |
|
|
|
415 |
|
|
|
|
|
|
|
|
|
Energy Sector |
|
|
3,510 |
|
|
|
2,458 |
|
|
|
38 |
|
|
|
56 |
|
|
|
826 |
|
|
|
(16 |
) |
|
|
2,647 |
|
|
|
2,418 |
|
|
|
63 |
|
|
|
69 |
|
|
|
274 |
|
|
|
252 |
|
|
|
2,984 |
|
|
|
2,738 |
|
|
|
15.0 |
% |
|
|
15.0 |
% |
Fossil Power Generation |
|
|
2,426 |
|
|
|
1,074 |
|
|
|
19 |
|
|
|
14 |
|
|
|
829 |
|
|
|
(11 |
) |
|
|
1,577 |
|
|
|
1,071 |
|
|
|
11 |
|
|
|
13 |
|
|
|
87 |
|
|
|
86 |
|
|
|
1,675 |
|
|
|
1,170 |
|
|
|
|
|
|
|
|
|
Renewable Energy |
|
|
152 |
|
|
|
246 |
|
|
|
(14 |
) |
|
|
8 |
|
|
|
4 |
|
|
|
(3 |
) |
|
|
162 |
|
|
|
240 |
|
|
|
13 |
|
|
|
21 |
|
|
|
50 |
|
|
|
39 |
|
|
|
226 |
|
|
|
300 |
|
|
|
|
|
|
|
|
|
Oil & Gas |
|
|
337 |
|
|
|
337 |
|
|
|
|
|
|
|
|
|
|
|
(3 |
) |
|
|
(1 |
) |
|
|
340 |
|
|
|
338 |
|
|
|
20 |
|
|
|
20 |
|
|
|
45 |
|
|
|
43 |
|
|
|
405 |
|
|
|
401 |
|
|
|
|
|
|
|
|
|
Power Transmission |
|
|
408 |
|
|
|
500 |
|
|
|
31 |
|
|
|
28 |
|
|
|
(2 |
) |
|
|
1 |
|
|
|
379 |
|
|
|
471 |
|
|
|
7 |
|
|
|
8 |
|
|
|
63 |
|
|
|
56 |
|
|
|
450 |
|
|
|
535 |
|
|
|
|
|
|
|
|
|
Power Distribution |
|
|
182 |
|
|
|
281 |
|
|
|
1 |
|
|
|
6 |
|
|
|
(2 |
) |
|
|
(2 |
) |
|
|
183 |
|
|
|
276 |
|
|
|
12 |
|
|
|
8 |
|
|
|
24 |
|
|
|
24 |
|
|
|
220 |
|
|
|
308 |
|
|
|
|
|
|
|
|
|
Healthcare Sector |
|
|
840 |
|
|
|
1,450 |
|
|
|
5 |
|
|
|
11 |
|
|
|
13 |
|
|
|
10 |
|
|
|
822 |
|
|
|
1,429 |
|
|
|
241 |
|
|
|
219 |
|
|
|
244 |
|
|
|
259 |
|
|
|
1,307 |
|
|
|
1,907 |
|
|
|
14.3 |
% |
|
|
21.3 |
% |
therein: Diagnostics |
|
|
238 |
|
|
|
338 |
|
|
|
|
|
|
|
|
|
|
|
5 |
|
|
|
5 |
|
|
|
233 |
|
|
|
333 |
|
|
|
142 |
|
|
|
140 |
|
|
|
164 |
|
|
|
176 |
|
|
|
538 |
|
|
|
648 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Sectors |
|
|
6,927 |
|
|
|
5,882 |
|
|
|
66 |
|
|
|
74 |
|
|
|
831 |
|
|
|
(19 |
) |
|
|
6,029 |
|
|
|
5,826 |
|
|
|
567 |
|
|
|
539 |
|
|
|
835 |
|
|
|
826 |
|
|
|
7,432 |
|
|
|
7,192 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Investments |
|
|
22 |
|
|
|
(10 |
) |
|
|
6 |
|
|
|
(59 |
) |
|
|
11 |
|
|
|
28 |
|
|
|
5 |
|
|
|
22 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5 |
|
|
|
22 |
|
|
|
|
|
|
|
|
|
Financial Services (SFS) |
|
|
305 |
|
|
|
308 |
|
|
|
63 |
|
|
|
66 |
|
|
|
212 |
|
|
|
212 |
|
|
|
31 |
|
|
|
30 |
|
|
|
7 |
|
|
|
5 |
|
|
|
199 |
|
|
|
243 |
|
|
|
236 |
|
|
|
277 |
|
|
|
|
|
|
|
|
|
Reconciliation to Consolidated Financial Statements |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Centrally managed portfolio activities |
|
|
(17 |
) |
|
|
(84 |
) |
|
|
7 |
|
|
|
8 |
|
|
|
|
|
|
|
3 |
|
|
|
(24 |
) |
|
|
(95 |
) |
|
|
2 |
|
|
|
1 |
|
|
|
3 |
|
|
|
8 |
|
|
|
(18 |
) |
|
|
(86 |
) |
|
|
|
|
|
|
|
|
Siemens Real Estate (SRE) |
|
|
148 |
|
|
|
275 |
|
|
|
|
|
|
|
|
|
|
|
(60 |
) |
|
|
(39 |
) |
|
|
207 |
|
|
|
314 |
|
|
|
1 |
|
|
|
1 |
|
|
|
195 |
|
|
|
198 |
|
|
|
404 |
|
|
|
513 |
|
|
|
|
|
|
|
|
|
Corporate items and pensions |
|
|
141 |
|
|
|
(157 |
) |
|
|
|
|
|
|
|
|
|
|
100 |
|
|
|
(90 |
) |
|
|
41 |
|
|
|
(67 |
) |
|
|
9 |
|
|
|
11 |
|
|
|
35 |
|
|
|
37 |
|
|
|
85 |
|
|
|
(19 |
) |
|
|
|
|
|
|
|
|
Eliminations, Corporate Treasury and other
reconciling items |
|
|
(113 |
) |
|
|
(169 |
) |
|
|
30 |
|
|
|
2 |
|
|
|
(57 |
) |
|
|
(73 |
) |
|
|
(87 |
) |
|
|
(98 |
) |
|
|
|
|
|
|
|
|
|
|
(39 |
) |
|
|
(45 |
) |
|
|
(125 |
) |
|
|
(143 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Siemens |
|
|
7,413 |
|
|
|
6,044 |
|
|
|
172 |
|
|
|
91 |
|
|
|
1,037 |
|
|
|
22 |
|
|
|
6,204 |
|
|
|
5,931 |
|
|
|
587 |
|
|
|
557 |
|
|
|
1,227 |
|
|
|
1,267 |
|
|
|
8,018 |
|
|
|
7,756 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Profit of the Sectors and Divisions as well as of Equity Investments 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) |
|
Beginning with fiscal 2011, central infrastructure costs which were formerly reported in
Corporate items will be allocated primarily to the Sectors. The total amount to be allocated
is determined at the beginning of the fiscal year and is charged in set portions in all four
quarters. Presentation of prior-year information has been adjusted to conform to the
current-year presentation. |
|
(3) |
|
Includes impairments and reversals of impairments of investments accounted for using the equity
method. |
|
(4) |
|
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. |
|
(5) |
|
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. |
|
(6) |
|
Amortization and impairments, net of reversals, of intangible assets other than goodwill. |
|
(7) |
|
Depreciation and impairments of property, plant and equipment, net of reversals. Includes
impairments of goodwill of - in the current period and - in the prior-year period, respectively. |
|
Due to rounding, numbers presented may not add up precisely to totals provided. |
31
Liquidity, capital resources and requirements
Cash flow First nine months of fiscal 2011 compared to first nine months of fiscal 2010
The following discussion presents an analysis of our cash flows for the first nine months
of fiscal 2011 and 2010 for both continuing and discontinued operations. Discontinued operations
include primarily OSRAM and Siemens IT Solutions and Services, which were classified as
discontinued operations during the second quarter of fiscal 2011.
We report Free cash flow as a supplemental liquidity 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 that the presentation of Free cash flow provides useful
information to investors because it gives an indication of the long-term cash-generating ability of
our business and our ability 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 the usefulness and limitations of this measure please refer to
Notes and forward-looking statements.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing and |
|
Free Cash Flow |
|
|
|
Continuing operations |
|
|
Discontinued operations |
|
|
discontinued operations |
|
|
|
|
|
Nine months ended June 30, |
|
(in millions of ) |
|
|
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
Net cash provided by (used in):(1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating activities |
|
A |
|
|
3,707 |
|
|
|
5,284 |
|
|
|
(309 |
) |
|
|
128 |
|
|
|
3,398 |
|
|
|
5,412 |
|
Investing activities |
|
|
|
|
(354 |
) |
|
|
(1,240 |
) |
|
|
(865 |
) |
|
|
(318 |
) |
|
|
(1,219 |
) |
|
|
(1,558 |
) |
Herein: Additions to intangible assets
and property, plant and equipment |
|
B |
|
|
(1,302 |
) |
|
|
(1,172 |
) |
|
|
(369 |
) |
|
|
(182 |
) |
|
|
(1,671 |
) |
|
|
(1,354 |
) |
Free cash flow(1), (2) |
|
A+B |
|
|
2,405 |
|
|
|
4,112 |
|
|
|
(678 |
) |
|
|
(54 |
) |
|
|
1,727 |
|
|
|
4,058 |
|
|
|
|
(1) |
|
For information regarding the item 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 the item 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. The item 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. |
Cash flows from operating activities Operating activities in continuing and
discontinued operations provided net cash of 3.398 billion in the first nine months of fiscal
2011, compared to net cash provided of 5.412 billion in the prior-year period.
Within the total, continuing operations provided net cash of 3.707 billion in the first nine
months of fiscal 2011, compared to net cash provided of 5.284 billion in the same period a year
earlier. The decrease in cash flow from operating activities was due primarily to an increased
build-up of net working capital in Total Sectors associated with growth, partly offset by cash
inflows driven by an increase in Siemens profit supported by double-digit gross profit increases
in Industry and Energy. The increase in net working capital primarily included an increased
build-up in inventories mainly in the Energy Sector. The current nine-month period included cash
outflows for personnel-related expenses of 0.3 billion in connection with the previously disclosed
special remuneration for non-management employees. For comparison, the prior-year nine-month period
included higher cash outflows related to staff reduction measures. In addition, in the current
period we received also lower dividends which related mainly to our investment in BSH Bosch und
Siemens Hausgeräte GmbH.
Discontinued operations used net cash of 309 million in the first nine months of fiscal 2011,
compared to net cash provided of 128 million in the prior-year period. The current period included
primarily cash outflows related to establishing Siemens IT Solutions and Services as a separate
legal group, including for carve-out activities and personnel-related matters.
Cash flows from investing activities Investing activities in continuing and discontinued
operations used net cash of 1.219 billion in the first nine months of fiscal 2011, compared to net
cash used of 1.558 billion in the prior-year period.
32
Within the total, net cash used in investing activities for continuing operations amounted to
354 million in the first nine months of fiscal 2011 compared to net cash used of 1.240 billion in
the prior-year period. Lower cash outflows in the current nine months are due mainly to higher
proceeds from sales of investments, intangibles and property, plant and equipment, which rose to
1.966 billion from 455 million in the prior-year period. Sales of investments of 1.543 billion
in the current nine months primarily included proceeds of 1.7 billion from the sale of our stake
in Areva NP in the second quarter of fiscal 2011, subsequently reduced by 0.7 billion in the third
quarter of fiscal 2011 due to the arbitration decision as mentioned earlier, as well as the
proceeds from the sale of our 49% minority stake in KMW. Cash inflows for the current nine-month
period also included higher proceeds from real estate disposals at SRE than in the prior-year
period. In contrast, cash outflows of 595 million for the increase in receivables from financing
activities relate primarily to the net growth in the commercial finance business at SFS. Whereas, a
decrease in receivables from financing activities in the prior-year period resulted in cash inflows
of 27 million. Cash outflows for acquisitions, net of cash acquired, of 243 million in the first
nine months of fiscal 2011 relate primarily to acquisitions of entities within the Industry and
Energy Sectors. For comparison, the prior-year period included cash outflows of 437 million
including 0.3 billion for the acquisition of Solel Solar Systems, a solar thermal power technology
company. Purchases of investments in the first nine months of fiscal 2011 primarily include cash
outflows relating to the build-up of our solar thermal business and the first installment payment
for our equity investment in A2SEA A/S, a supplier of offshore wind park installation services.
Discontinued operations used net cash of 865 million in the first nine months of fiscal 2011,
compared to net cash used of 318 million in the prior-year period. The current period included
payments in advance of 254 million for the acquisition of Siteco, which will be integrated into
OSRAM, supplemental pension plan funding in Germany for the pension liabilities of Siemens IT
Solutions and Services and higher capital expenditures compared to the prior-year period.
Free cash flow from continuing and discontinued operations amounted to a positive 1.727
billion in the first nine months of fiscal 2011 compared to a positive 4.058 billion in the
prior-year period.
Total Free cash flow from continuing operations amounted to a positive 2.405 billion in the
first nine months of fiscal 2011, compared to a positive 4.112 billion a year earlier. The change
year-over-year was due primarily to the decrease in net cash provided by operating activities as
discussed above. Cash used for additions to intangible assets and property, plant and equipment
increased from 1.172 billion in the prior-year period to 1.302 billion in the current nine
months, due primarily to increased capital expenditures in the Industry Sector.
On a sequential basis Free cash flow during fiscal 2010 and the first nine months of fiscal
2011 was as follows:
Cash flows from financing activities Financing activities from continuing and discontinued
operations used net cash of 3.182 billion in the first nine months of fiscal 2011, compared to
2.495 billion of net cash used in the prior-year nine-months period.
33
Within the total, continuing operations used net cash of 4.356 billion in the first nine
months of fiscal 2011, compared to net cash used of 2.685 billion in the same period a year
earlier. The increase in cash outflows was due primarily to a payment of 1.0 billion related to
the binding offer to purchase additional shares in order to increase our stake in our publicly
listed Indian subsidiary Siemens Ltd. from about 55% to a maximum of 75%. In addition dividends
paid to shareholders (for fiscal 2010) in the current nine months period were 2.356 billion, up
from 1.388 billion paid (for fiscal 2009) in the prior-year period. These cash outflows were
partly offset by cash inflows from changes in short-term debt and other financing activities of
354 million, due mainly to cash inflows related to the settlement of financial derivatives used to
hedge currency exposure in our financing activities. For comparison cash outflows from changes in
short-term debt and other financing activities of 755 million in the prior-year period included
the repayment of commercial paper and payments related to the settlement of financial derivatives
used to hedge currency exposure in our financing activities.
In the first nine months of fiscal 2011 we recorded cash outflows of 1.152 billion for
financing of discontinued operations, compared to cash outflows of 194 million in the same period
a year earlier. Discontinued operations are financed principally from Corporate Treasury. The item
Financing discontinued operations includes these intercompany financing transactions.
Capital resources and requirements
Our capital resources consist of a variety of short- and long-term financial instruments
including but not limited to 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, Corporate Treasury and SFS financing
activities, dividend payments, pension plan funding, portfolio activities including substantial
cash outflows in coming quarters in connection with our divestment of Siemens IT Solutions and
Services and cash outflows in connection with restructuring measures.
Siemens defines Net debt as total debt less total liquidity. Management uses the Net debt
measure for internal corporate finance management, as well as for external communication with
investors, analysts and rating agencies, and accordingly we believe that the presentation of Net
debt is useful for those concerned. 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.
A key consideration for us is maintenance of ready access to the capital markets through
various debt products and preservation of our ability to repay and service our debt obligation over
time. As an indicator for optimizing our capital structure, we use the ratio of the item Adjusted
industrial net debt to the item Adjusted EBITDA. Starting in fiscal 2011 we have advanced the
definition of this ratio and present prior-year information on a comparable basis.
For further information on our capital resources and requirements as well as on our capital
structure see Financial position Capital resources and requirements, Financial position
Capital Structure and Notes to Consolidated Financial Statements in our Annual Report for fiscal
2010. For further information about the usefulness and limitations of Net debt and relating to the
ratio of the item Adjusted industrial net debt to the item Adjusted EBITDA and its advanced
definition please refer to Additional information for supplemental financial measures in our
Annual Report for fiscal 2010 and to Notes and forward-looking statements.
34
|
|
|
|
|
|
|
|
|
|
|
June 30, |
|
|
September 30, |
|
(in millions of ) |
|
2011 |
|
|
2010 |
|
Short-term
debt and current maturities of long-term debt(1) |
|
|
4,971 |
|
|
|
2,416 |
|
Plus: Long-term debt(1) |
|
|
14,191 |
|
|
|
17,497 |
|
Less: Cash and cash equivalents |
|
|
(13,006 |
) |
|
|
(14,108 |
) |
Less: Current available-for-sale financial assets |
|
|
(425 |
) |
|
|
(246 |
) |
|
|
|
|
|
|
|
Net debt(2) |
|
|
5,731 |
|
|
|
5,560 |
|
Less: SFS debt |
|
|
(10,384 |
) |
|
|
(10,028 |
) |
Plus: Pension plans and similar commitments |
|
|
5,997 |
|
|
|
8,464 |
|
Plus: Credit guarantees |
|
|
573 |
|
|
|
597 |
|
Less: 50% nominal amount hybrid bond(3) |
|
|
(865 |
) |
|
|
(886 |
) |
Less: Fair value hedge accounting adjustment(4) |
|
|
(808 |
) |
|
|
(1,518 |
) |
|
|
|
|
|
|
|
Adjusted industrial net debt(5) |
|
|
243 |
|
|
|
2,189 |
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
The item Short-term debt and current maturities of long-term debt as well as the item Long-term debt included in total fair value hedge accounting adjustments of 808 million as of June 30, 2011 and 1.518 billion as of September 30, 2010. |
|
(2) |
|
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 comprises components as stated on the Consolidated Statements of Financial
Position. |
|
(3) |
|
The adjustment for our hybrid bond considers the calculation of this financial ratio applied by rating agencies to classify 50% of our hybrid bond as equity and 50% as debt. This assignment reflects the characteristics of our hybrid bond
such as a long maturity date and subordination to all senior and debt obligations. |
|
(4) |
|
Debt is generally reported with a value representing approximately the amount to be repaid. However for debt designated in a hedging relationship (fair value hedges), this amount is adjusted by changes in market value mainly due to
changes in interest rates. Accordingly we deduct these changes in market value in order to end up with an amount of debt that approximately will be repaid. We believe, this is a more meaningful figure for the calculation presented above.
For further information on fair value hedges see Notes to Consolidated Financial Statements in our Annual Report for fiscal 2010. |
|
(5) |
|
Due to rounding, numbers presented may not add up precisely to totals provided. |
The following discussion presents an analysis of changes in the item Adjusted industrial
net debt in the first nine months of fiscal 2011.
Net debt was 5.731 billion as of June 30, 2011, compared to 5.560 billion as of September
30, 2010. Within Net debt, the item Short-term debt and current maturities of long-term debt
increased by 2.555 billion compared to the end of the prior fiscal year, due mainly to the
reclassification of 1.550 billion in 5.25% medium-term notes, USD500 million in floating rate
notes (USD LIBOR + 0.15%) and USD750 million in 5.5% notes from the item Long-term debt to the item
Short-term debt and current maturities of long-term debt. Long-term debt decreased by 3.306
billion compared to the end of the prior fiscal year, primarily due to the above-mentioned
reclassification of notes, a lower fair value hedge accounting adjustment and currency translation
effects. Current available-for-sale financial assets increased from 246 million as of September
30, 2010 to 425 million as of June 30, 2011 due primarily to the reclassification of funds. For
further information regarding the increase in the item Cash and cash equivalents please refer to
Cash flow First nine months of fiscal 2011 compared to first nine months of fiscal 2010 above.
For further information on the decrease in the liability for pension plans and similar commitments
see Funding of pension plans and similar commitments.
The 2.0 billion in 5.75% notes, maturing in July 2011, were repaid after the end of the third
quarter.
The ratio of the item Adjusted industrial net debt to the item Adjusted EBITDA for the three
and the nine months ended June 30, 2011 and for the fiscal year ended September 30, 2010 was as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
Nine months ended |
|
|
Fiscal year ended |
|
(in millions of ) |
|
June 30, 2011 |
|
|
June 30, 2011 |
|
|
September 30, 2010 |
|
Adjusted EBITDA (continuing operations) |
|
|
2,319 |
|
|
|
8,018 |
|
|
|
9,804 |
|
Adjusted industrial net debt / adjusted
EBITDA (continuing
operations) (1) |
|
|
0.03 |
|
|
|
0.02 |
|
|
|
0.22 |
|
|
|
|
(1) |
|
In order to calculate this ratio, adjusted EBITDA (continuing operations) needs to be annualized. |
35
Credit ratings
On April 18, 2011, Standard & Poors (S&P) revised its outlook for Siemens credit rating
from stable to positive. A rating outlook indicates the potential direction of a long-term
credit rating over the medium-term. At the same time, S&P affirmed our A+ long-term credit rating
and raised our short-term corporate credit rating from A-1 to A-1+. This is the highest
short-term rating within the S&Ps short-term rating scale. S&P announced that the rating action
reflects Siemens solid operating and financial performance throughout the 2008 to 2010 global
financial and economic downturn. The upgrade of our short-term rating is based on S&Ps assessment
of Siemens liquidity.
Moodys Investor Service made no rating changes.
We expect no significant impact on our funding costs as a consequence of the revised rating
outlook or the upgrade of our short-term rating by S&P.
36
Funding of pension plans and similar commitments
Funded status, pension plan assets and defined benefit obligation of Siemens pension plans as
well as funded status of Siemens predominantly unfunded other post-employment benefit plans
presented below include combined amounts related to continuing operations as well as discontinued
operations for Siemens IT Solutions and Services and for OSRAM. For more information on Siemens
pension plans and similar commitments and the allocation between continuing and discontinued
operations of the respective net amounts, see Notes to Condensed Interim Consolidated Financial
Statements.
At the end of the first nine months of fiscal 2011, the combined funded status of Siemens
pension plans showed an underfunding of 5.4 billion, compared to an underfunding of 7.4 billion
at the end of fiscal 2010. The improvement in funded status since September 30, 2010 is due
primarily to an increase in the discount rate assumption as of June 30, 2011, which decreased
Siemens estimated defined benefit obligation (DBO). Furthermore contributing to the improvement in
funded status were employer contributions, which included supplemental pension plan fundings in
Germany and in the U.K. The DBO decrease and improvement in funded status was only partly offset by
accrued service and interest costs.
The estimated DBO for Siemens pension plans amounted to 28.6 billion as of June 30, 2011,
2.9 billion lower than the DBO of 31.5 billion as of September 30, 2010. The difference is due to
a significant increase in the discount rate assumption as of June 30, 2011, only slightly offset by
the net of service and interest cost less benefits paid during the nine-month period ended June 30,
2011. Furthermore, during the third quarter of fiscal 2011, Siemens transferred its major pension
plan in the Netherlands to the industry pension fund PME. The PME will be accounted for as a
defined contribution plan with a resulting decrease in DBO amounting to 0.8 billion.
The fair value of plan assets of Siemens funded pension plans as of June 30, 2011, was 23.2
billion, compared to 24.1 billion on September 30, 2010. In the first nine months of fiscal 2011,
employer contributions amounted to 983 million compared to 507 million in the prior-year period.
In fiscal 2011 contributions include 241 million supplemental pension plan funding in Germany for
the pension liabilities of Siemens IT Solutions and Services. The funding was contributed to the
newly established separate Siemens IT Solutions and Services Pension Trusts in anticipation of the
disposal of the business to AtoS. Contributions in the first nine months in both fiscal 2011 and
2010 include a supplemental pension plan funding in the U.K. The decrease in plan assets was due
mainly to benefits paid during the nine-month period as well as due to the transfer of plan assets
to the industry pension fund PME in the Netherlands amounting to 0.7 billion. The actual return on
plan assets of Siemens funded pension plans for the first nine months of fiscal 2011 amounted to a
negative 79 million, compared to the expected return for the first nine months of fiscal 2011 of
1,116 million which corresponds to a 6.4% annual return. While equity investments yielded positive
results in the first nine months, fixed-income investments performed negatively.
The combined funded status of Siemens predominantly unfunded other post-employment benefit
plans amounted to an underfunding of 0.8 billion, both at the end of the first nine months of
fiscal 2011 and as of September 30, 2010.
37
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 2010 we described certain risks which could have a material
adverse effect on our financial condition, including effects on assets, liabilities and cash flows,
and results of operations, certain opportunities as well as the design of our risk management
system.
As previously disclosed, we may be exposed to risks relating to the interruption of the supply
chain, including the inability of third parties to deliver parts, components and services on time,
and we may be subject to rising raw material prices. In particular, we may be exposed to the risk
of delays and interruptions of the supply chain as a consequence of natural disasters, such as
those which have recently occurred in Japan, should we be unable to identify alternative sources of
supply in a timely manner or at all. A general shortage of materials, components or sub-components
as a result of natural disasters also bears the risk of unforeseeable fluctuations in prices and
demand, which might adversely affect our results of operations.
Furthermore we have previously disclosed that our financial condition and results of
operations may be adversely affected by portfolio measures. With respect to dispositions, we may
not be able to divest some of our activities as planned, and the divestitures we do carry out could
have a negative impact on our financial condition, results of operations and, potentially, our
reputation. For information on portfolio measures see Portfolio activities.
During the first nine months of fiscal 2011 we identified no further significant risks and
opportunities besides those presented in our Annual Report for fiscal 2010 and in the sections of
this Interim Report entitled Overview of financial results for the third quarter of fiscal 2011
(Three months ended June 30, 2011), Segment information analysis, and Legal proceedings.
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, please also refer to Notes and
forward-looking statements at the end of this Interim group management report.
38
Legal proceedings
For information on legal proceedings, see Notes to Condensed Interim Consolidated
Financial Statements.
Outlook for fiscal 2011
We expect organic order intake to show a significant increase compared to order intake of
74.055 billion for continuing operations in fiscal 2010. Supported also by our already strong
order backlog, we expect revenue, which was 68.978 billion for continuing operations in fiscal
2010, to return to mid-single-digit organic growth. We further anticipate income from continuing
operations to be at least 7.5 billion. Income from continuing operations in fiscal 2010 was 4.262
billion.
For fiscal 2010, orders, revenue and income from continuing operations exclude results from
OSRAM and Siemens IT Solutions and Services which are reported as discontinued operations in fiscal
2011.
This outlook excludes the negative impact of 472 million after taxes related to the
arbitration decision mentioned earlier and other effects from legal and regulatory matters that may
arise.
39
Notes and forward-looking statements
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 (after tax), or ROE (after tax); return
on capital employed (adjusted), or ROCE (adjusted); Free cash flow; cash conversion rate, or CCR;
adjusted EBITDA; adjusted EBIT; adjusted EBITDA margins, earnings effects from purchase price
allocation, or PPA effects; 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. Definitions
of these supplemental financial measures, a discussion of the most directly comparable IFRS
financial measures, information regarding the usefulness of Siemens supplemental financial
measures, the limitations associated with these measures and reconciliations to the most comparable
IFRS financial measures are available 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 for fiscal 2010, which can be found on
our 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. In
particular, Siemens is strongly affected by changes in general economic and business conditions as
these directly impact its processes, customers and suppliers. This may negatively impact our
revenue development and the realization of greater capacity utilization as a result of growth. Yet
due to their diversity, not all of Siemens businesses are equally affected by changes in economic
conditions; considerable differences exist in the timing and magnitude of the effects of such
changes. This effect is amplified by the fact that, as a global company, Siemens is active in
countries with economies that vary widely in terms of growth rate. Uncertainties arise from, among
other things, the risk of customers delaying the conversion of recognized orders into revenue or
cancelling recognized orders, of prices declining as a result of adverse market conditions by more
than is currently anticipated by Siemens management or of functional costs increasing in
anticipation of growth that is not realized as expected. Other factors that may cause Siemens
results to deviate from expectations include developments in the financial markets, including
fluctuations in interest and exchange rates (in particular in relation to the U.S. dollar and the
currencies of emerging markets such as China, India and Brazil), in commodity and equity prices, in
debt prices (credit spreads) and in the value of financial assets generally. Any changes in
interest rates or other assumptions used in calculating obligations for pension plans and similar
commitments may impact Siemens defined benefit obligations and the anticipated performance of
pension plan assets resulting in unexpected changes in the funded status of Siemens pension and
other post-employment benefit plans. Any increase in market volatility, deterioration in the
capital markets, decline in the conditions for the credit business, uncertainty related to the
subprime, financial market and liquidity crises, or fluctuations in the future financial
performance of the major industries served by Siemens may have unexpected effects on Siemens
results. Furthermore, Siemens faces risks and uncertainties in connection with: disposing of
business activities, certain strategic reorientation measures; the performance of its equity
interests and strategic alliances; the challenge of integrating major acquisitions, implementing
joint ventures and other significant portfolio measures; the introduction of competing products or
technologies by other companies or market entries by new competitors; changing competitive dynamics
(particularly in developing markets); the risk that new products or services will not be accepted
by customers targeted by Siemens; changes in business strategy; the interruption of our supply
chain, including the inability of third parties to deliver parts, components and services on time
resulting for example from natural disasters; the outcome of pending investigations, legal
proceedings and actions resulting from the findings of, or related to the subject matter of, such
investigations; the potential impact of such investigations and proceedings on Siemens business,
including its relationships with governments and other customers; the potential impact of such
matters on Siemens financial statements, and 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 neither
intends to, nor assumes any obligation to, update or revise these forward-looking statements in
light of developments which differ from those anticipated.
40
SIEMENS
CONSOLIDATED STATEMENTS OF INCOME (unaudited)
For the three and nine months ended June 30, 2011 and 2010
(in millions of , per share amounts in )
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months |
|
Nine months |
|
|
|
|
|
|
ended June 30, |
|
ended June 30, |
|
|
Note |
|
2011 |
|
2010 |
|
2011 |
|
2010 |
Revenue |
|
|
|
|
|
|
17,844 |
|
|
|
17,425 |
|
|
|
53,164 |
|
|
|
49,575 |
|
Cost of goods sold and services rendered |
|
|
|
|
|
|
(12,665 |
) |
|
|
(12,125 |
) |
|
|
(36,815 |
) |
|
|
(34,731 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
|
|
|
|
|
5,179 |
|
|
|
5,300 |
|
|
|
16,349 |
|
|
|
14,844 |
|
Research and development expenses |
|
|
|
|
|
|
(940 |
) |
|
|
(868 |
) |
|
|
(2,771 |
) |
|
|
(2,473 |
) |
Marketing, selling and general administrative expenses |
|
|
|
|
|
|
(2,581 |
) |
|
|
(2,510 |
) |
|
|
(7,498 |
) |
|
|
(6,922 |
) |
Other operating income |
|
|
3 |
|
|
|
106 |
|
|
|
188 |
|
|
|
444 |
|
|
|
648 |
|
Other operating expense |
|
|
4 |
|
|
|
(34 |
) |
|
|
(83 |
) |
|
|
(320 |
) |
|
|
(166 |
) |
Income (loss) from investments accounted for using the equity
method, net |
|
|
|
|
|
|
(43 |
) |
|
|
41 |
|
|
|
172 |
|
|
|
91 |
|
Interest income |
|
|
5 |
|
|
|
550 |
|
|
|
513 |
|
|
|
1,641 |
|
|
|
1,504 |
|
Interest expense |
|
|
5 |
|
|
|
(424 |
) |
|
|
(436 |
) |
|
|
(1,278 |
) |
|
|
(1,309 |
) |
Other financial income (expense), net |
|
|
5 |
|
|
|
(736 |
) |
|
|
(110 |
) |
|
|
674 |
|
|
|
(173 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations before income taxes |
|
|
|
|
|
|
1,077 |
|
|
|
2,035 |
|
|
|
7,413 |
|
|
|
6,044 |
|
Income taxes |
|
|
|
|
|
|
(314 |
) |
|
|
(607 |
) |
|
|
(1,630 |
) |
|
|
(1,740 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations |
|
|
|
|
|
|
763 |
|
|
|
1,428 |
|
|
|
5,783 |
|
|
|
4,304 |
|
Income (loss) from discontinued operations, net of income taxes |
|
|
2 |
|
|
|
(262 |
) |
|
|
7 |
|
|
|
(693 |
) |
|
|
160 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income |
|
|
|
|
|
|
501 |
|
|
|
1,435 |
|
|
|
5,090 |
|
|
|
4,464 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attributable to: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlling interests |
|
|
|
|
|
|
39 |
|
|
|
24 |
|
|
|
117 |
|
|
|
98 |
|
Shareholders of Siemens AG |
|
|
|
|
|
|
462 |
|
|
|
1,411 |
|
|
|
4,973 |
|
|
|
4,366 |
|
Basic earnings per share |
|
|
15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations |
|
|
|
|
|
|
0.83 |
|
|
|
1.62 |
|
|
|
6.48 |
|
|
|
4.86 |
|
Income (loss) from discontinued operations |
|
|
|
|
|
|
(0.30 |
) |
|
|
|
|
|
|
(0.78 |
) |
|
|
0.17 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
|
|
|
|
|
0.53 |
|
|
|
1.62 |
|
|
|
5.70 |
|
|
|
5.03 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share |
|
|
15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations |
|
|
|
|
|
|
0.82 |
|
|
|
1.60 |
|
|
|
6.41 |
|
|
|
4.81 |
|
Income (loss) from discontinued operations |
|
|
|
|
|
|
(0.30 |
) |
|
|
|
|
|
|
(0.78 |
) |
|
|
0.17 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
|
|
|
|
|
0.52 |
|
|
|
1.60 |
|
|
|
5.63 |
|
|
|
4.98 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited)
For the three and nine months ended June 30, 2011 and 2010
(in millions of )
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months |
|
Nine months |
|
|
ended June 30, |
|
ended June 30, |
|
|
2011 |
|
2010 |
|
2011 |
|
2010 |
Net income |
|
|
501 |
|
|
|
1,435 |
|
|
|
5,090 |
|
|
|
4,464 |
|
Currency translation differences |
|
|
(101 |
) |
|
|
1,144 |
|
|
|
(308 |
) |
|
|
2,136 |
|
Available-for-sale financial assets |
|
|
16 |
|
|
|
(2 |
) |
|
|
(15 |
) |
|
|
25 |
|
Derivative financial instruments |
|
|
(40 |
) |
|
|
(336 |
) |
|
|
64 |
|
|
|
(653 |
) |
Actuarial gains and losses on pension plans and similar commitments |
|
|
(311 |
) |
|
|
(1,014 |
) |
|
|
799 |
|
|
|
(1,643 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income, net of tax (1) |
|
|
(436 |
) |
|
|
(208 |
) |
|
|
540 |
|
|
|
(135 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income |
|
|
65 |
|
|
|
1,227 |
|
|
|
5,630 |
|
|
|
4,329 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attributable to: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlling interests |
|
|
31 |
|
|
|
65 |
|
|
|
91 |
|
|
|
191 |
|
Shareholders of Siemens AG |
|
|
34 |
|
|
|
1,162 |
|
|
|
5,539 |
|
|
|
4,138 |
|
|
|
|
(1) |
|
Includes income (expense) resulting from investments accounted for using the equity method
of (18) and 46, respectively, for the three months
ended June 30, 2011 and 2010, and 1 and 50 for the nine months ended June 30, 2011 and 2010,
respectively. |
The accompanying Notes are an integral part of these Interim Consolidated Financial
Statements.
41
SIEMENS
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
As of June 30, 2011 (unaudited) and September 30, 2010
(in millions of )
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note |
|
6/30/11 |
|
9/30/10 |
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
|
|
|
|
|
13,006 |
|
|
|
14,108 |
|
Available-for-sale financial assets |
|
|
|
|
|
|
425 |
|
|
|
246 |
|
Trade and other receivables |
|
|
|
|
|
|
13,747 |
|
|
|
14,971 |
|
Other current financial assets |
|
|
|
|
|
|
3,007 |
|
|
|
2,610 |
|
Inventories |
|
|
|
|
|
|
15,874 |
|
|
|
14,950 |
|
Income tax receivables |
|
|
|
|
|
|
808 |
|
|
|
790 |
|
Other current assets |
|
|
|
|
|
|
1,277 |
|
|
|
1,258 |
|
Assets classified as held for disposal |
|
|
2 |
|
|
|
5,708 |
|
|
|
715 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current assets |
|
|
|
|
|
|
53,852 |
|
|
|
49,648 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill |
|
|
6 |
|
|
|
15,241 |
|
|
|
15,763 |
|
Other intangible assets |
|
|
7 |
|
|
|
4,381 |
|
|
|
4,969 |
|
Property, plant and equipment |
|
|
|
|
|
|
9,965 |
|
|
|
11,748 |
|
Investments accounted for using the equity method |
|
|
|
|
|
|
4,450 |
|
|
|
4,724 |
|
Other financial assets |
|
|
|
|
|
|
9,829 |
|
|
|
11,296 |
|
Deferred tax assets |
|
|
|
|
|
|
2,927 |
|
|
|
3,940 |
|
Other assets |
|
|
|
|
|
|
676 |
|
|
|
739 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
|
|
|
|
|
101,321 |
|
|
|
102,827 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
Short-term debt and current maturities of long-term debt |
|
|
8 |
|
|
|
4,971 |
|
|
|
2,416 |
|
Trade payables |
|
|
|
|
|
|
6,634 |
|
|
|
7,880 |
|
Other current financial liabilities |
|
|
|
|
|
|
1,677 |
|
|
|
1,401 |
|
Current provisions |
|
|
10 |
|
|
|
4,809 |
|
|
|
5,138 |
|
Income tax payables |
|
|
|
|
|
|
1,702 |
|
|
|
1,816 |
|
Other current liabilities |
|
|
|
|
|
|
20,387 |
|
|
|
21,794 |
|
Liabilities associated with assets classified as held for disposal |
|
|
2 |
|
|
|
3,126 |
|
|
|
146 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities |
|
|
|
|
|
|
43,306 |
|
|
|
40,591 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt |
|
|
8 |
|
|
|
14,191 |
|
|
|
17,497 |
|
Pension plans and similar commitments |
|
|
9 |
|
|
|
5,997 |
|
|
|
8,464 |
|
Deferred tax liabilities |
|
|
|
|
|
|
687 |
|
|
|
577 |
|
Provisions |
|
|
10 |
|
|
|
2,989 |
|
|
|
3,332 |
|
Other financial liabilities |
|
|
|
|
|
|
739 |
|
|
|
990 |
|
Other liabilities |
|
|
|
|
|
|
1,870 |
|
|
|
2,280 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities |
|
|
|
|
|
|
69,779 |
|
|
|
73,731 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity |
|
|
11 |
|
|
|
|
|
|
|
|
|
Common stock, no par value (1) |
|
|
|
|
|
|
2,743 |
|
|
|
2,743 |
|
Additional paid-in capital |
|
|
|
|
|
|
5,985 |
|
|
|
5,986 |
|
Retained earnings |
|
|
|
|
|
|
25,577 |
|
|
|
22,998 |
|
Other components of equity |
|
|
|
|
|
|
(258 |
) |
|
|
(8 |
) |
Treasury shares, at cost (2) |
|
|
|
|
|
|
(3,055 |
) |
|
|
(3,373 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total equity attributable to shareholders of Siemens AG |
|
|
|
|
|
|
30,992 |
|
|
|
28,346 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-controlling interests |
|
|
|
|
|
|
550 |
|
|
|
750 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total equity |
|
|
|
|
|
|
31,542 |
|
|
|
29,096 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and equity |
|
|
|
|
|
|
101,321 |
|
|
|
102,827 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Authorized: 1,117,803,421 and 1,111,513,421 shares, respectively.
Issued: 914,203,421 and 914,203,421 shares, respectively. |
|
(2) |
|
40,187,119 and 44,366,416 shares, respectively. |
The accompanying Notes are an integral part of these Interim Consolidated Financial Statements.
42
SIEMENS
CONSOLIDATED STATEMENTS OF CASH FLOW (unaudited)
For the nine months ended June 30, 2011 and 2010
(in millions of )
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine months |
|
|
|
|
|
|
ended June 30, |
|
|
Note |
|
2011 |
|
2010 |
Cash flows from operating activities |
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations |
|
|
|
|
|
|
5,783 |
|
|
|
4,304 |
|
Adjustments to reconcile net income to cash provided |
|
|
|
|
|
|
|
|
|
|
|
|
Amortization, depreciation and impairments |
|
|
|
|
|
|
1,814 |
|
|
|
1,824 |
|
Income taxes |
|
|
|
|
|
|
1,630 |
|
|
|
1,740 |
|
Interest (income) expense, net |
|
|
|
|
|
|
(363 |
) |
|
|
(195 |
) |
(Gains) losses on sales and disposals of businesses, intangibles and property, plant and equipment, net |
|
|
|
|
|
|
(176 |
) |
|
|
(301 |
) |
(Gains) losses on sales of investments, net (1) |
|
|
|
|
|
|
(979 |
) |
|
|
(22 |
) |
(Gains) losses on sales and impairments of current available-for-sale financial assets, net |
|
|
|
|
|
|
(2 |
) |
|
|
(2 |
) |
(Income) losses from investments (1) |
|
|
|
|
|
|
(26 |
) |
|
|
(98 |
) |
Other non-cash (income) expenses |
|
|
|
|
|
|
215 |
|
|
|
(377 |
) |
Change in current assets and liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
(Increase) decrease in inventories |
|
|
|
|
|
|
(2,136 |
) |
|
|
(711 |
) |
(Increase) decrease in trade and other receivables |
|
|
|
|
|
|
(285 |
) |
|
|
208 |
|
(Increase) decrease in other current assets |
|
|
|
|
|
|
(464 |
) |
|
|
48 |
|
Increase (decrease) in trade payables |
|
|
|
|
|
|
(274 |
) |
|
|
(547 |
) |
Increase (decrease) in current provisions (2) |
|
|
|
|
|
|
(77 |
) |
|
|
332 |
|
Increase (decrease) in other current liabilities (2) |
|
|
|
|
|
|
274 |
|
|
|
146 |
|
Change in other assets and liabilities (2) |
|
|
|
|
|
|
(241 |
) |
|
|
(349 |
) |
Additions to assets held for rental in operating leases |
|
|
|
|
|
|
(448 |
) |
|
|
(421 |
) |
Income taxes paid |
|
|
|
|
|
|
(1,310 |
) |
|
|
(1,283 |
) |
Dividends received |
|
|
|
|
|
|
209 |
|
|
|
488 |
|
Interest received |
|
|
|
|
|
|
563 |
|
|
|
500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) operating activities continuing operations |
|
|
|
|
|
|
3,707 |
|
|
|
5,284 |
|
Net cash provided by (used in) operating activities discontinued operations |
|
|
|
|
|
|
(309 |
) |
|
|
128 |
|
Net cash provided by (used in) operating activities |
|
|
|
|
|
|
3,398 |
|
|
|
5,412 |
|
Cash flows from investing activities |
|
|
|
|
|
|
|
|
|
|
|
|
Additions to intangible assets and property, plant and equipment |
|
|
|
|
|
|
(1,302 |
) |
|
|
(1,172 |
) |
Acquisitions, net of cash acquired |
|
|
|
|
|
|
(243 |
) |
|
|
(437 |
) |
Purchases of investments (1) |
|
|
|
|
|
|
(345 |
) |
|
|
(146 |
) |
Purchases of current available-for-sale financial assets |
|
|
|
|
|
|
(15 |
) |
|
|
(125 |
) |
(Increase) decrease in receivables from financing activities |
|
|
|
|
|
|
(595 |
) |
|
|
27 |
|
Proceeds and (payments) from sales of investments, intangibles and property, plant and equipment (1) |
|
|
|
|
|
|
1,966 |
|
|
|
455 |
|
Proceeds and (payments) from disposals of businesses |
|
|
|
|
|
|
167 |
|
|
|
117 |
|
Proceeds from sales of current available-for-sale financial assets |
|
|
|
|
|
|
13 |
|
|
|
41 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) investing activities continuing operations |
|
|
|
|
|
|
(354 |
) |
|
|
(1,240 |
) |
Net cash provided by (used in) investing activities discontinued operations |
|
|
|
|
|
|
(865 |
) |
|
|
(318 |
) |
Net cash provided by (used in) investing activities |
|
|
|
|
|
|
(1,219 |
) |
|
|
(1,558 |
) |
Cash flows from financing activities |
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from re-issuance of treasury stock and proceeds (payments) relating to other transactions with owners |
|
|
11 |
|
|
|
(770 |
) |
|
|
92 |
|
Proceeds from issuance of long-term debt |
|
|
|
|
|
|
113 |
|
|
|
|
|
Repayment of long-term debt (including current maturities of long-term debt) |
|
|
|
|
|
|
(37 |
) |
|
|
|
|
Change in short-term debt and other financing activities |
|
|
|
|
|
|
354 |
|
|
|
(755 |
) |
Interest paid |
|
|
|
|
|
|
(364 |
) |
|
|
(343 |
) |
Dividends paid |
|
|
11 |
|
|
|
(2,356 |
) |
|
|
(1,388 |
) |
Dividends paid to non-controlling interest holders |
|
|
|
|
|
|
(144 |
) |
|
|
(97 |
) |
Financing discontinued operations(3) |
|
|
|
|
|
|
(1,152 |
) |
|
|
(194 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) financing activities continuing operations |
|
|
|
|
|
|
(4,356 |
) |
|
|
(2,685 |
) |
Net cash provided by (used in) financing activities discontinued operations |
|
|
|
|
|
|
1,174 |
|
|
|
190 |
|
Net cash provided by (used in) financing activities |
|
|
|
|
|
|
(3,182 |
) |
|
|
(2,495 |
) |
Effect of exchange rates on cash and cash equivalents |
|
|
|
|
|
|
(23 |
) |
|
|
376 |
|
Net increase (decrease) in cash and cash equivalents |
|
|
|
|
|
|
(1,026 |
) |
|
|
1,735 |
|
Cash and cash equivalents at beginning of period |
|
|
|
|
|
|
14,227 |
|
|
|
10,204 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of period |
|
|
|
|
|
|
13,201 |
|
|
|
11,939 |
|
Less: Cash and cash equivalents of assets classified as held for disposal and discontinued operations
at end of period |
|
|
|
|
|
|
195 |
|
|
|
110 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of period (Consolidated Statements of Financial Position) |
|
|
|
|
|
|
13,006 |
|
|
|
11,829 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
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. |
|
(2) |
|
The current portion within provisions and accruals of the prior period was
reclassified to conform to the current period presentation. |
|
(3) |
|
Discontinued operations are financed principally through Corporate Treasury.
The item Financing discontinued operations includes these intercompany financing
transactions. |
The accompanying Notes are an integral part of these Interim Consolidated Financial
Statements.
43
SIEMENS
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (unaudited)
For the nine months ended June 30, 2011 and 2010
(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 |
|
|
differences |
|
|
assets |
|
|
instruments |
|
|
Total |
|
|
at cost |
|
|
of Siemens AG |
|
|
interests |
|
|
equity |
|
Balance at October 1, 2009 |
|
|
2,743 |
|
|
|
5,946 |
|
|
|
22,646 |
|
|
|
(1,294 |
) |
|
|
76 |
|
|
|
161 |
|
|
|
21,589 |
|
|
|
(3,632 |
) |
|
|
26,646 |
|
|
|
641 |
|
|
|
27,287 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
|
|
|
|
|
|
|
|
|
4,366 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,366 |
|
|
|
|
|
|
|
4,366 |
|
|
|
98 |
|
|
|
4,464 |
|
Other comprehensive income, net of tax |
|
|
|
|
|
|
|
|
|
|
(1,640 |
) (1) |
|
|
2,038 |
|
|
|
25 |
|
|
|
(651 |
) |
|
|
(228 |
) |
|
|
|
|
|
|
(228 |
) |
|
|
93 |
|
|
|
(135 |
)(2) |
Dividends |
|
|
|
|
|
|
|
|
|
|
(1,388 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,388 |
) |
|
|
|
|
|
|
(1,388 |
) |
|
|
(173 |
) |
|
|
(1,561 |
) |
Share-based payment |
|
|
|
|
|
|
11 |
|
|
|
(17 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(17 |
) |
|
|
|
|
|
|
(6 |
) |
|
|
|
|
|
|
(6 |
) |
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 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at October 1, 2010 |
|
|
2,743 |
|
|
|
5,986 |
|
|
|
22,998 |
|
|
|
(115 |
) |
|
|
95 |
|
|
|
12 |
|
|
|
22,990 |
|
|
|
(3,373 |
) |
|
|
28,346 |
|
|
|
750 |
|
|
|
29,096 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
|
|
|
|
|
|
|
|
|
4,973 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,973 |
|
|
|
|
|
|
|
4,973 |
|
|
|
117 |
|
|
|
5,090 |
|
Other comprehensive income, net of tax |
|
|
|
|
|
|
|
|
|
|
799 |
(1) |
|
|
(282 |
) |
|
|
(15 |
) |
|
|
64 |
|
|
|
566 |
|
|
|
|
|
|
|
566 |
|
|
|
(26 |
) |
|
|
540 |
(2) |
Dividends |
|
|
|
|
|
|
|
|
|
|
(2,356 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2,356 |
) |
|
|
|
|
|
|
(2,356 |
) |
|
|
(163 |
) |
|
|
(2,519 |
) |
Share-based payment |
|
|
|
|
|
|
(29 |
) |
|
|
(13 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(13 |
) |
|
|
|
|
|
|
(42 |
) |
|
|
|
|
|
|
(42 |
) |
Re-issuance of treasury stock |
|
|
|
|
|
|
28 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
318 |
|
|
|
346 |
|
|
|
|
|
|
|
346 |
|
Transactions with non-controlling
interests (3) |
|
|
|
|
|
|
|
|
|
|
(834 |
) |
|
|
(17 |
) |
|
|
|
|
|
|
|
|
|
|
(851 |
) |
|
|
|
|
|
|
(851 |
) |
|
|
(122 |
) |
|
|
(973 |
) |
Other changes in equity |
|
|
|
|
|
|
|
|
|
|
10 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10 |
|
|
|
|
|
|
|
10 |
|
|
|
(6 |
) |
|
|
4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at June 30, 2011 |
|
|
2,743 |
|
|
|
5,985 |
|
|
|
25,577 |
|
|
|
(414 |
) |
|
|
80 |
|
|
|
76 |
|
|
|
25,319 |
|
|
|
(3,055 |
) |
|
|
30,992 |
|
|
|
550 |
|
|
|
31,542 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Retained earnings includes actuarial gains and losses on pension plans and similar
commitments of 799 and (1,640), respectively, in the nine months ended June 30, 2011 and
2010. |
|
(2) |
|
In the nine months ended June 30, 2011 and 2010, Other comprehensive income, net of tax
includes non-controlling interests of and (3) relating to Actuarial gains and losses on
pension plans and similar commitments, (26) and 98 relating to Currency translation
differences, and relating to Available-for-sale financial assets and and (2)
relating to Derivative financial instruments. |
|
(3) |
|
Includes the acquisition of additional subsidiary shares in Siemens Ltd., India. |
The accompanying Notes are an integral part of these Interim Consolidated Financial Statements.
44
SIEMENS
SEGMENT INFORMATION (continuing operations unaudited)
As of and for the three months ended June 30, 2011 and 2010 and as of September 30, 2010
(in millions of )
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additions to |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
intangible assets |
|
|
Amortization, |
|
|
|
|
|
|
|
|
|
|
|
External |
|
|
Intersegment |
|
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Free |
|
|
and property, plant |
|
|
depreciation and |
|
|
|
New orders(1) |
|
|
revenue |
|
|
revenue |
|
|
revenue |
|
|
Profit(2) |
|
|
Assets(3) |
|
|
cash flow(4) |
|
|
and equipment |
|
|
impairments(5) |
|
|
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
|
6/30/11 |
|
|
9/30/10 |
|
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
Sectors |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Industry |
|
|
11,806 |
|
|
|
7,657 |
|
|
|
7,755 |
|
|
|
7,299 |
|
|
|
327 |
|
|
|
271 |
|
|
|
8,082 |
|
|
|
7,570 |
|
|
|
872 |
|
|
|
710 |
|
|
|
8,418 |
|
|
|
7,823 |
|
|
|
604 |
|
|
|
771 |
|
|
|
161 |
|
|
|
117 |
|
|
|
195 |
|
|
|
194 |
|
Energy |
|
|
8,027 |
|
|
|
8,061 |
|
|
|
6,696 |
|
|
|
6,393 |
|
|
|
80 |
|
|
|
70 |
|
|
|
6,776 |
|
|
|
6,462 |
|
|
|
263 |
|
|
|
875 |
|
|
|
2,519 |
|
|
|
805 |
|
|
|
375 |
|
|
|
1,108 |
|
|
|
158 |
|
|
|
130 |
|
|
|
108 |
|
|
|
117 |
|
Healthcare |
|
|
3,016 |
|
|
|
3,260 |
|
|
|
2,848 |
|
|
|
3,126 |
|
|
|
10 |
|
|
|
26 |
|
|
|
2,858 |
|
|
|
3,152 |
|
|
|
8 |
|
|
|
482 |
|
|
|
10,892 |
|
|
|
11,952 |
|
|
|
574 |
|
|
|
706 |
|
|
|
78 |
|
|
|
85 |
|
|
|
160 |
|
|
|
169 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Sectors |
|
|
22,848 |
|
|
|
18,978 |
|
|
|
17,299 |
|
|
|
16,818 |
|
|
|
417 |
|
|
|
367 |
|
|
|
17,716 |
|
|
|
17,184 |
|
|
|
1,144 |
|
|
|
2,067 |
|
|
|
21,829 |
|
|
|
20,580 |
|
|
|
1,553 |
|
|
|
2,584 |
|
|
|
398 |
|
|
|
331 |
|
|
|
463 |
|
|
|
480 |
|
Equity Investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(85 |
) |
|
|
2 |
|
|
|
2,954 |
|
|
|
3,319 |
|
|
|
117 |
|
|
|
388 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Services (SFS) |
|
|
293 |
|
|
|
195 |
|
|
|
283 |
|
|
|
164 |
|
|
|
10 |
|
|
|
29 |
|
|
|
293 |
|
|
|
193 |
|
|
|
89 |
|
|
|
112 |
|
|
|
12,832 |
|
|
|
12,506 |
|
|
|
71 |
|
|
|
12 |
|
|
|
16 |
|
|
|
36 |
|
|
|
58 |
|
|
|
89 |
|
Reconciliation to Consolidated Financial
Statements |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Centrally managed portfolio activities |
|
|
71 |
|
|
|
237 |
|
|
|
83 |
|
|
|
186 |
|
|
|
1 |
|
|
|
6 |
|
|
|
85 |
|
|
|
191 |
|
|
|
(25 |
) |
|
|
(50 |
) |
|
|
(380 |
) |
|
|
(457 |
) |
|
|
(35 |
) |
|
|
(8 |
) |
|
|
1 |
|
|
|
3 |
|
|
|
1 |
|
|
|
3 |
|
Siemens Real Estate (SRE) |
|
|
545 |
|
|
|
500 |
|
|
|
104 |
|
|
|
119 |
|
|
|
442 |
|
|
|
368 |
|
|
|
546 |
|
|
|
487 |
|
|
|
49 |
|
|
|
107 |
|
|
|
4,861 |
|
|
|
5,067 |
(6) |
|
|
(58 |
) |
|
|
(12 |
) |
|
|
113 |
|
|
|
73 |
|
|
|
65 |
|
|
|
68 |
|
Corporate items and pensions |
|
|
114 |
|
|
|
152 |
|
|
|
75 |
|
|
|
138 |
|
|
|
38 |
|
|
|
27 |
|
|
|
113 |
|
|
|
166 |
|
|
|
(56 |
) |
|
|
(78 |
) |
|
|
(7,407 |
) |
|
|
(9,644 |
) |
|
|
(255 |
) |
|
|
(28 |
) |
|
|
13 |
|
|
|
15 |
|
|
|
15 |
|
|
|
15 |
|
Eliminations, Corporate Treasury and other
reconciling items |
|
|
(934 |
) |
|
|
(883 |
) |
|
|
|
|
|
|
|
|
|
|
(909 |
) |
|
|
(796 |
) |
|
|
(909 |
) |
|
|
(796 |
) |
|
|
(38 |
) |
|
|
(125 |
) |
|
|
66,631 |
|
|
|
71,455 |
|
|
|
(402 |
) |
|
|
(848 |
) |
|
|
(1 |
) |
|
|
(5 |
) |
|
|
(13 |
) |
|
|
(14 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Siemens |
|
|
22,937 |
|
|
|
19,179 |
|
|
|
17,844 |
|
|
|
17,425 |
|
|
|
|
|
|
|
|
|
|
|
17,844 |
|
|
|
17,425 |
|
|
|
1,077 |
|
|
|
2,035 |
|
|
|
101,321 |
|
|
|
102,827 |
|
|
|
992 |
|
|
|
2,088 |
|
|
|
540 |
|
|
|
453 |
|
|
|
590 |
|
|
|
640 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 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 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; since fiscal 2011, Total assets of SRE nets certain
intercompany finance receivables with certain intercompany finance liabilities. |
|
(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 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) |
|
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. |
|
(6) |
|
As of September 30, 2010, Total assets of SRE amounts to 4,554 after netting of
certain intercompany finance receivables with certain intercompany finance
liabilities. |
Due to rounding, numbers presented may not add up precisely to totals provided.
45
SIEMENS
SEGMENT INFORMATION (continuing operations unaudited)
As of and for the nine months ended June 30, 2011 and 2010 and as of September 30, 2010
(in millions of )
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additions to |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
intangible assets |
|
|
Amortization, |
|
|
|
|
|
|
|
|
|
|
|
External |
|
|
Intersegment |
|
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Free |
|
|
and property, plant |
|
|
depreciation and |
|
|
|
New orders(1) |
|
|
revenue |
|
|
revenue |
|
|
revenue |
|
|
Profit(2) |
|
|
Assets(3) |
|
|
cash flow(4) |
|
|
and equipment |
|
|
impairments(5) |
|
|
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
|
6/30/11 |
|
|
9/30/10 |
|
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
Sectors |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Industry |
|
|
28,985 |
|
|
|
21,658 |
|
|
|
22,817 |
|
|
|
20,887 |
|
|
|
911 |
|
|
|
782 |
|
|
|
23,728 |
|
|
|
21,669 |
|
|
|
2,577 |
|
|
|
1,974 |
|
|
|
8,418 |
|
|
|
7,823 |
|
|
|
1,771 |
|
|
|
2,065 |
|
|
|
394 |
|
|
|
293 |
|
|
|
580 |
|
|
|
567 |
|
Energy |
|
|
25,990 |
|
|
|
21,061 |
|
|
|
19,638 |
|
|
|
18,030 |
|
|
|
224 |
|
|
|
230 |
|
|
|
19,862 |
|
|
|
18,260 |
|
|
|
3,510 |
|
|
|
2,458 |
|
|
|
2,519 |
|
|
|
805 |
|
|
|
1,017 |
|
|
|
2,529 |
|
|
|
365 |
|
|
|
327 |
|
|
|
337 |
|
|
|
321 |
|
Healthcare |
|
|
9,304 |
|
|
|
9,075 |
|
|
|
9,067 |
|
|
|
8,897 |
|
|
|
43 |
|
|
|
54 |
|
|
|
9,110 |
|
|
|
8,951 |
|
|
|
840 |
|
|
|
1,450 |
|
|
|
10,892 |
|
|
|
11,952 |
|
|
|
1,255 |
|
|
|
1,602 |
|
|
|
191 |
|
|
|
231 |
|
|
|
485 |
|
|
|
478 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Sectors |
|
|
64,278 |
|
|
|
51,794 |
|
|
|
51,521 |
|
|
|
47,814 |
|
|
|
1,179 |
|
|
|
1,066 |
|
|
|
52,700 |
|
|
|
48,880 |
|
|
|
6,927 |
|
|
|
5,882 |
|
|
|
21,829 |
|
|
|
20,580 |
|
|
|
4,043 |
|
|
|
6,196 |
|
|
|
951 |
|
|
|
852 |
|
|
|
1,402 |
|
|
|
1,366 |
|
Equity Investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22 |
|
|
|
(10 |
) |
|
|
2,954 |
|
|
|
3,319 |
|
|
|
117 |
|
|
|
402 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Services (SFS) |
|
|
737 |
|
|
|
597 |
|
|
|
693 |
|
|
|
545 |
|
|
|
45 |
|
|
|
52 |
|
|
|
737 |
|
|
|
597 |
|
|
|
305 |
|
|
|
308 |
|
|
|
12,832 |
|
|
|
12,506 |
|
|
|
279 |
|
|
|
253 |
|
|
|
33 |
|
|
|
82 |
|
|
|
205 |
|
|
|
247 |
|
Reconciliation to Consolidated Financial
Statements |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Centrally managed portfolio activities |
|
|
381 |
|
|
|
574 |
|
|
|
410 |
|
|
|
467 |
|
|
|
8 |
|
|
|
18 |
|
|
|
417 |
|
|
|
485 |
|
|
|
(17 |
) |
|
|
(84 |
) |
|
|
(380 |
) |
|
|
(457 |
) |
|
|
(83 |
) |
|
|
(111 |
) |
|
|
4 |
|
|
|
7 |
|
|
|
6 |
|
|
|
9 |
|
Siemens Real Estate (SRE) |
|
|
1,607 |
|
|
|
1,408 |
|
|
|
310 |
|
|
|
360 |
|
|
|
1,299 |
|
|
|
1,034 |
|
|
|
1,610 |
|
|
|
1,394 |
|
|
|
148 |
|
|
|
275 |
|
|
|
4,861 |
|
|
|
5,067 |
(6) |
|
|
(138 |
) |
|
|
24 |
|
|
|
280 |
|
|
|
207 |
|
|
|
196 |
|
|
|
199 |
|
Corporate items and pensions |
|
|
349 |
|
|
|
462 |
|
|
|
231 |
|
|
|
389 |
|
|
|
107 |
|
|
|
95 |
|
|
|
337 |
|
|
|
484 |
|
|
|
141 |
|
|
|
(157 |
) |
|
|
(7,407 |
) |
|
|
(9,644 |
) |
|
|
(1,052 |
) |
|
|
(1,016 |
) |
|
|
37 |
|
|
|
35 |
|
|
|
44 |
|
|
|
48 |
|
Eliminations, Corporate Treasury and other
reconciling items |
|
|
(2,928 |
) |
|
|
(2,369 |
) |
|
|
|
|
|
|
|
|
|
|
(2,637 |
) |
|
|
(2,265 |
) |
|
|
(2,637 |
) |
|
|
(2,265 |
) |
|
|
(113 |
) |
|
|
(169 |
) |
|
|
66,631 |
|
|
|
71,455 |
|
|
|
(761 |
) |
|
|
(1,637 |
) |
|
|
(3 |
) |
|
|
(10 |
) |
|
|
(39 |
) |
|
|
(45 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Siemens |
|
|
64,425 |
|
|
|
52,466 |
|
|
|
53,164 |
|
|
|
49,575 |
|
|
|
|
|
|
|
|
|
|
|
53,164 |
|
|
|
49,575 |
|
|
|
7,413 |
|
|
|
6,044 |
|
|
|
101,321 |
|
|
|
102,827 |
|
|
|
2,405 |
|
|
|
4,112 |
|
|
|
1,302 |
|
|
|
1,172 |
|
|
|
1,814 |
|
|
|
1,824 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 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 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; since fiscal 2011, Total assets of SRE nets certain
intercompany finance receivables with certain intercompany finance liabilities. |
|
(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 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) |
|
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. |
|
(6) |
|
As of September 30, 2010, Total assets of SRE amounts to 4,554 after netting of
certain intercompany finance receivables with certain intercompany finance
liabilities. |
Due to rounding, numbers presented may not add up precisely to totals provided.
46
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, 2011, the Consolidated Statements of Income for the three and
nine months ended June 30, 2011 and 2010, the Consolidated Statements of Comprehensive Income for
the three and nine months ended June 30, 2011 and 2010, the Consolidated Statements of Cash Flow
for the nine months ended June 30, 2011 and 2010, the Consolidated Statements of Changes in Equity
for the nine months ended June 30, 2011 and 2010 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, 2010
(Consolidated Financial Statements). The interim financial statements apply the same accounting
principles and practices as those used in the 2010 annual financial statements. 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, 2011, are not necessarily indicative of future
results.
The Interim Consolidated Financial Statements were authorized for issue by the Managing Board
on July 29, 2011.
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 percent to 50 percent 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 combinationsBusiness 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. Uniform accounting policies are
applied. Any changes to contingent consideration classified as a liability at the acquisition date
are recognized in profit and loss. 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.
47
SIEMENS
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(in millions of , except where otherwise stated and per share amounts)
Discontinued operations and non-current assets held for disposalDiscontinued operations
are reported when a component of an entity comprising operations and cash flows that can be clearly
distinguished, operationally and for financial reporting purposes, from the rest of the entity is
classified as held for disposal or has been disposed of, if the component either (a) represents a
separate major line of business or geographical area of operations and (b) is part of a single
co-ordinated plan to dispose of a separate major line of business or geographical area of
operations or (c) is a subsidiary acquired exclusively with a view to resale. In the Consolidated
Statements of Income of the reporting period and of the comparable period, income and expenses from
discontinued operations are reported separately from income and expenses from continuing
operations. In the Consolidated Statements of Cash Flow the cash flows from discontinued operations
are presented separately from cash flows of continuing operations; prior periods are presented on a
comparable basis. In order to present the financial effects of a discontinued operation revenues
and expenses arising from intragroup transactions are eliminated except for those revenues and
expenses that are considered to continue after the disposal of the discontinued operation. In any
case no profit or loss is recognized for intragroup transactions.
Siemens classifies a non-current asset or a disposal group as held for disposal if its
carrying amount will be recovered principally through a sale transaction rather than through
continuing use. For this to be the case, the asset or disposal group must be available for
immediate sale in its present condition subject only to terms that are usual and customary for
sales of such assets or disposal groups and its sale must be highly probable. Non-current assets
classified as held for disposal and disposal groups are measured at the lower of their carrying
amount and fair value less costs to sell.
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.
Recent accounting pronouncements, not yet adoptedIn May 2011, the IASB published its
improvements to the accounting and disclosure requirements for consolidation, off balance sheet
activities and joint arrangements by issuing IFRS 10, Consolidated Financial Statements, IFRS 11,
Joint Arrangements, IFRS 12, Disclosure of Interests in Other Entities and consequential amendments
to IAS 27, Separate Financial Statements (amended 2011) and IAS 28, Investments in Associates and
Joint Ventures (amended 2011).
IFRS 10 supersedes the requirements relating to consolidated financial statements in IAS 27,
Consolidated and Separate Financial Statements (amended 2008) and also supersedes SIC-12,
Consolidation Special Purpose Entities. IFRS 11 supersedes IAS 31, Interests in Joint Ventures
(amended 2008) and SIC-13, Jointly Controlled Entities Non-Monetary Contributions by Venturers.
IFRS 12 replaces disclosure requirements in IAS 27, Consolidated and Separate Financial Statements
(amended 2008), IAS 28, Investments in Associates and IAS 31, Interests in Joint Ventures (amended
2008).
IFRS 10 builds on existing principles by identifying a comprehensive concept of control as the
determining factor in whether an entity should be included within the Consolidated Financial
Statements. The standard provides additional guidance to assist in the determination of control
where this is difficult to assess. An investor controls an investee when it is exposed, or has
rights, to variable returns from its involvement with the investee and has the ability to affect
those returns through its power over the investee. Major changes in relation to current guidance
might relate to the assessment of control in situations when an investor holds less than a majority
of voting rights, however, has the practical ability to direct the relevant activities of the
investee unilaterally by other means.
IFRS 11 provides guidance for the accounting of joint arrangements by focusing on the rights
and obligations of the arrangement, rather than its legal form. IFRS 11 classifies joint
arrangements into two types joint operations and joint ventures: A joint operation is a joint
arrangement whereby the parties that have joint control of the arrangement (i.e. joint operators)
have rights to the assets, and obligations for the liabilities, relating to the arrangement. A
joint venture is a joint arrangement whereby the parties that have joint control of the arrangement
(i.e. joint venturers) have rights to the net assets of the arrangement. IFRS 11 requires a joint
operator to recognize and measure the assets and liabilities (and recognize the related revenues
and expenses) in relation to its interest in the arrangement applicable to the particular assets,
liabilities, revenues and expenses. A joint venturer is required to recognize an investment and to
account for that investment using the equity method.
48
SIEMENS
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(in millions of , except where otherwise stated and per share amounts)
IFRS 12 is a new and comprehensive standard on disclosure requirements for all forms of
interests in other entities, including joint arrangements, associates, structured entities and off
balance sheet vehicles. The standard requires an entity to disclose information that enables users
of financial statements to evaluate the nature of, and risks associated with, its interests in
other entities and the effects of those interests on its financial position, financial performance
and cash flows.
IAS 27 (amended 2011) now only contains requirements relating to separate financial statements
as a result of the issuance of the new standard IFRS 10.
According to the amendment of IAS 28 an entity shall account for an investment, or a portion
of an investment, in an associate or a joint venture as held for sale if it meets the relevant
criteria. Any retained portion of an investment in an associate or a joint venture that has not
been classified as held for sale shall be accounted for using the equity method until disposal of
the portion that is classified as held for sale takes place.
IFRS 10, 11, 12 and the consequential amendments to IAS 27 and IAS 28 are effective for annual
periods beginning on or after January 1, 2013. These new or amended standards may be adopted early,
but must be adopted as a package, that is, all as of the same date, except that an entity may early
adopt the disclosure provisions for IFRS 12 (without adopting the other new standards). The
standards are to be applied on a retrospective basis. IFRS 10, 11, 12, and the consequential
amendments to IAS 27 and IAS 28 are not endorsed by the European Union yet. The Company is
currently assessing the impact of the adoption on the Companys Consolidated Financial Statements
and will determine an adoption date.
In May 2011, the IASB issued IFRS 13, Fair Value Measurement. The new standard does not
determine if a fair value measurement is applicable for certain assets and liabilities, but merely
defines fair value and standardizes disclosure requirements for fair value measurements. The new
standard is applicable for annual periods beginning on or after January 1, 2013; early adoption is
permitted. IFRS 13 is not endorsed by the European Union yet. Regarding financial instruments, the
majority of changes required by IFRS 13 have already been introduced, mainly by amendments to IFRS
7, Financial Instruments: Disclosures. Hence, only a minor impact is expected for financial assets
and financial liabilities. The Company is currently assessing the impact of the adoption concerning
non-financial assets and liabilities on the Companys Consolidated Financial Statements and will
determine an adoption date.
In June 2011, the IASB issued IAS 19, Employee Benefits. The amended IAS 19 eliminates the
corridor approach and requires recognition of actuarial gains and losses in Other Comprehensive
Income. These changes will have no impact on the Company because the Company does not apply the
corridor approach and already recognizes changes in actuarial gains and losses in Other
Comprehensive Income. The amended IAS 19, in addition, replaces the expected return on assets and
interest costs on the defined benefit obligation with a single net interest component. Past service
cost will be recognized fully in the period of the related plan amendment. The amendments to IAS 19
also change the requirements for termination benefits and include enhanced presentation and
disclosure requirements. The standard is effective for annual periods beginning on or after January
1, 2013. Early application is permitted. The Company is currently assessing the impact of adopting
the amended IAS 19 on the Companys Consolidated Financial Statements and will determine an
adoption date.
In October 2010, the IASB issued amendments to IFRS 7, Financial Instruments: Disclosures,
which enhance the disclosure requirements, hence maintain the derecognition model of IAS 39. The
amendments increase the disclosure requirements for transfers of financial assets where the
transferor retains continuing involvement in the transferred asset; additional disclosures are
required if a disproportionate amount of transfer transactions are undertaken around the end of a
reporting period. The amendment is applicable for annual reporting periods beginning on or after
July 1, 2011; early adoption is permitted. The Company expects no material impact on the Companys
Consolidated Financial Statements as a result of adopting the amendment.
The IASB issued various other pronouncements, which do not have a material impact on Siemens
Consolidated Financial Statements.
49
SIEMENS
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(in millions of , except where otherwise stated and per share amounts)
2. Acquisitions, dispositions and discontinued operations
a) Acquisitions
In February 2011, Siemens signed an agreement to acquire a controlling interest of 100 percent
in Siteco Lighting GmbH (Siteco) in a share deal transaction. Siteco is a leading European lighting
company that supplies luminaries and lighting systems for urban infrastructures such as public and
commercial buildings, streets, tunnels, airports and sports stadiums. The transaction closed and
the purchase price allocation was started by Siemens at the beginning of July 2011. The current
period includes purchase price payments in advance of 254 related to the preliminary determined
purchase price for this acquisition. Siteco will be integrated into OSRAM, which is presented in
discontinued operations.
In January 2011, Siemens made a binding offer to purchase additional shares in order to
increase its stake in its publicly listed Indian subsidiary Siemens Ltd. from about 55 percent to a
maximum of 75 percent. The Company offered the shareholders of Siemens Ltd. to purchase their
shares for a price of INR 930 per share (written put). The offer period began on March 25, 2011 and
ended on April 13, 2011. The offer was accepted in full until that date and the transaction was
completed at the end of April 2011. At the date of public announcement, the purchase was accounted
for as acquisition of non-controlling interests qualifying as a transaction between shareholders,
as present ownership was transferred. As a result, line items Retained earnings and Non-controlling
interests decreased by 857 and 121, respectively. Transaction costs, net of tax, were deducted
from equity. Other comprehensive income was proportionally reallocated between line items
Non-controlling interests and Total equity attributable to shareholders of Siemens AG.
At the beginning of November 2009, Siemens completed the acquisition of 100 percent of Solel
Solar Systems Ltd. (Solel), a solar thermal power technology company. The purchase price allocation
(PPA) for the Solel acquisition has been completed during the quarter ended December 31, 2010
resulting in Goodwill of 193 based on the final PPA. The provisional numbers for the fair value
measurement of intangible assets and for the purchase price have been confirmed. For further
information on Solel, see Note 4 to the Companys Consolidated Financial Statements as of September
30, 2010.
b) Dispositions and discontinued operations
|
|
For further information on disposals prior to fiscal 2011 see also Note 4 to the Companys
Consolidated Financial Statements as of September 30, 2010. |
ba) Dispositions not qualifying for discontinued operations: closed transactions
In March 2011, an independent expert, appointed by Siemens and Areva S.A. (Areva) based on the
rules set forth in the shareholders agreement, determined the fair market value (purchase price)
of Siemens 34 percent share in the joint venture Areva NP S.A.S. at 1,620 upon which Siemens
received a payment of 1,747 from Areva. In addition to the externally determined fair market
value, the sale proceeds include other adjusting components based on the shareholders agreement
and further contractual arrangements between Siemens and Areva, namely interest accretion on the
purchase price and a reimbursement of a mandatory capital injection from Areva to Siemens.
Following the receipt of the expert opinion and the payment, our shares, previously accounted for
as available-for-sale financial asset held for disposal at the Energy Sector, were transferred to
Areva and derecognized at Siemens.
In May 2011, an arbitral tribunal of the International Chamber of Commerce (ICC) ruled on
the modalities of Siemens exit from the joint venture Areva NP S.A.S. According to the final award
of the arbitral tribunal, Siemens had to pay Areva an amount of 679 including interest. For
further information on the arbitration proceedings, see Note 13.
The overall earnings impact of the termination of the joint venture Areva NP S.A.S. is
included in line item Other financial income see Note 5 for further information.
In January 2011, the sale of the 49 percent interest in Krauss-Maffei Wegmann GmbH & Co.
KG (KMW) to Wegmann Group was closed after the approval of the antitrust authorities and the
receipt of the second purchase price installment. The gain on the sale of KMW, which used to be
reported in Equity Investments, is included in line item Income from investments accounted for
using the equity method, net and amounts to 91.
50
SIEMENS
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(in millions of , except where otherwise stated and per share amounts)
At the end of July 2010, Siemens signed an agreement to sell its Electronics Assembly
Systems business (EA), which was reported in Centrally managed portfolio activities, to ASM Pacific
Technology Ltd. The transaction closed at the beginning of January 2011. Total losses on disposal
of EA amount to 108, including a gain of 14 and a loss of 1 for the three and nine months ended
June 30, 2011.
In December 2010, Siemens completed the transfer of its 19.8 percent stake in GIG Holding GmbH
(owner of all shares of Gigaset Communications GmbH) to ARQUES Industries AG.
In the three and nine months ended June 30, 2011, Siemens completed the disposition of further
entities which are not significant individually.
At the end of December 2009, Siemens sold its 25 percent 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 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.
Regarding the disposition of the Airfield Solutions business of the Industry Sector in
November 2009, see Note 4 to the Companys Consolidated Financial Statements as of September 30,
2010.
bb) Dispositions not qualifying for discontinued operations: held for disposal
The Consolidated Statement of Financial Position as of June 30, 2011, includes 72 of assets
and 5 of liabilities classified as held for disposal, which do not qualify as discontinued
operations.
bc) Discontinued operations
General
Net results of discontinued operations presented in the Consolidated Statements of Income in
the three and nine months ended June 30, 2011 amounts to (262) (thereof 41 income tax), and
(693) (thereof 78 income tax) compared to the three and nine months ended June 30, 2010 of 7
(thereof (14) income tax) and 160 (thereof (103) income tax), respectively. Those relate to
OSRAM, Siemens IT Solutions and Services, Siemens VDO Automotive (SV) and the former operating
segment Communications (Com).
Net income from continuing operations and from discontinued operations attributable to
shareholders of Siemens AG amount to 722 and (260), respectively, in the three months ended June
30, 2011 and to 1,407 and 4, respectively, in the three months ended June 30, 2010. Net income
from continuing operations and from discontinued operations attributable to the shareholders of
Siemens AG amount to 5,657 and (684), respectively, in the nine months ended June 30, 2011, and
to 4,214 and 152, respectively, in the nine months ended June 30, 2010.
OSRAM discontinued operations, assets and liabilities held for disposal
In March 2011, Siemens announced that it plans to publicly list its subsidiary OSRAM GmbH in
fall of 2011. Siemens intends to retain a minority stake in the future OSRAM AG, in which it
intends to remain a long-term anchor shareholder. The conditions for OSRAM to be classified as held
for disposal and discontinued operations were fulfilled as of the end of the second quarter of
fiscal 2011. For information on the held for disposal criteria, see Note 1.
The results of OSRAM are disclosed as discontinued operations in the Companys Consolidated
Statements of Income for all periods presented.
51
SIEMENS
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(in millions of , except where otherwise stated and per share amounts)
*****
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
Nine months ended |
|
|
|
June 30, |
|
|
June 30, |
|
|
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
Revenue |
|
|
1,162 |
|
|
|
1,153 |
|
|
|
3,703 |
|
|
|
3,429 |
|
Expenses |
|
|
(1,062 |
) |
|
|
(1,037 |
) |
|
|
(3,308 |
) |
|
|
(3,033 |
) |
Costs to sell (carve-out costs) |
|
|
(9 |
) |
|
|
|
|
|
|
(9 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pretax profit from discontinued
operations |
|
|
91 |
|
|
|
116 |
|
|
|
386 |
|
|
|
396 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income taxes on ordinary activities |
|
|
(38 |
) |
|
|
(42 |
) |
|
|
(134 |
) |
|
|
(142 |
) |
Income taxes on costs to sell
(carve-out costs) |
|
|
3 |
|
|
|
|
|
|
|
3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from discontinued
operations, net of income taxes |
|
|
56 |
|
|
|
74 |
|
|
|
255 |
|
|
|
254 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The assets and liabilities of OSRAM are presented as held for disposal in the Consolidated
Statements of Financial Position as of June 30, 2011 and are measured at the lower of their
previous carrying amount and fair value less costs to sell. The carrying amounts of the major
classes of assets and liabilities of OSRAM were as follows:
|
|
|
|
|
|
|
June 30, |
|
|
|
2011 |
|
Trade and other receivables |
|
|
755 |
|
Inventories |
|
|
1,074 |
|
Goodwill |
|
|
127 |
|
Other intangible assets |
|
|
76 |
|
Property, plant and equipment |
|
|
1,475 |
|
Deferred tax assets |
|
|
323 |
|
Financial assets |
|
|
380 |
|
Other assets |
|
|
210 |
|
|
|
|
|
Assets classified as held for disposal |
|
|
4,420 |
|
|
|
|
|
|
|
|
|
|
Trade payables |
|
|
535 |
|
Current provisions |
|
|
72 |
|
Other current liabilities |
|
|
396 |
|
Pension plans and similar commitments |
|
|
294 |
|
Other liabilities |
|
|
234 |
|
|
|
|
|
Liabilities associated with assets classified as held for
disposal |
|
|
1,531 |
|
|
|
|
|
Revenue resulting from transactions between OSRAM and joint ventures and associates of Siemens
in the three months ended June 30, 2011 and 2010 amounted to 39 and 34, respectively. Revenue
resulting from transactions between OSRAM and joint ventures and associates of Siemens in the nine
months ended June 30, 2011 and 2010 amounted to 121 and 95, respectively. Expenses resulting from
transactions between OSRAM and joint ventures and associates of Siemens in the three months ended
June 30, 2011 and 2010 amounted to 2 and 6, respectively. Expenses resulting from transactions
between OSRAM and joint ventures and associates of Siemens in the nine months ended June 30, 2011
and 2010 amounted to 5 and 13, respectively. As of June 30, 2011, receivables from and
liabilities to joint ventures and associates are 35 and 5, respectively. For further information
regarding related party transactions refer to Note 17.
Siemens IT Solutions and Services discontinued operations, assets and liabilities held for
disposal
In December 2010, Siemens and Atos S.A. (AtoS) signed an option agreement (written call
option) which granted AtoS the right to acquire Siemens IT Solutions and Services. In February
2011, AtoS exercised its option to acquire Siemens IT Solutions and Services in exchange for 12.5
million newly issued shares in AtoS with a five-year lock-up commitment, a five-year convertible
bond of 250 (nominal value) and a cash payment of 177 which was initially negotiated at an amount
of 186 and was reduced in the third quarter of fiscal 2011 due to changes in the transaction scope
following further negotiations between the parties. Furthermore, Siemens will provide extensive
support in order to foster the Siemens IT Solutions and Services business success including, among
others, up to 250 to the integration and training costs as well as further protections and
guarantees. Related to the transaction is a seven-year outsourcing contract worth around 5.5
billion, under which AtoS will provide managed services and system integration to Siemens.
Closing
of the transaction was on July 1, 2011 following clearance for the transaction by the antitrust
authorities in March 2011 and approval from AtoS shareholders on July 1, 2011.
The conditions for Siemens IT Solutions and Services to be classified as held for disposal and
discontinued operations were fulfilled from the second quarter of fiscal 2011. For information on
the held for disposal criteria, see Note 1.
52
SIEMENS
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(in millions of , except where otherwise stated and per share amounts)
The results of Siemens IT Solutions and Services with the exception of certain business
activities which remain in the Siemens Group are presented as discontinued operations in the
Companys Consolidated Statements of Income for all periods presented. Business activities which
remain with Siemens primarily relate to project HERKULES, which is reported in line item Centrally
managed portfolio activities of Segment information and continues to be accounted for under the
equity method. For information on HERKULES see Note 29 to the Companys Consolidated Financial
Statements as of September 30, 2010.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
Nine months ended |
|
|
|
June 30, |
|
|
June 30, |
|
|
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
Revenue |
|
|
933 |
|
|
|
968 |
|
|
|
2,705 |
|
|
|
2,830 |
|
Expenses |
|
|
(1,217 |
) |
|
|
(1,035 |
) |
|
|
(3,078 |
) |
|
|
(2,955 |
) |
Loss on the measurement to fair value
less costs to sell and on the disposal
of the disposal group constituting the
discontinued operations |
|
|
(90 |
) |
|
|
(20 |
) |
|
|
(734 |
) |
|
|
(26 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Pretax loss from discontinued operations |
|
|
(374 |
) |
|
|
(87 |
) |
|
|
(1,107 |
) |
|
|
(151 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income taxes on ordinary activities |
|
|
54 |
|
|
|
19 |
|
|
|
89 |
|
|
|
36 |
|
Income taxes on the loss on the
measurement to fair value less costs to
sell
and on the disposal of the
disposal group constituting the
discontinued operations |
|
|
15 |
|
|
|
6 |
|
|
|
198 |
|
|
|
8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from discontinued operations, net
of income taxes |
|
|
(305 |
) |
|
|
(62 |
) |
|
|
(820 |
) |
|
|
(107 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three and nine months ended June 30, 2011, line item Expenses includes
personnel-related matters associated with establishing Siemens IT Solutions and Services as a
separate legal entity which is a wholly-owned, consolidated subsidiary of Siemens AG. Siemens IT
Solutions and Services also initiated the integration program envisaged at signing of the Option
Agreement in December and recorded restructuring charges at an amount of 261 in the third quarter
of fiscal 2011, which are included in line item Expenses. As previously disclosed and presented
above, Siemens will provide support to AtoS at an amount of 250 in relation to this integration
program.
The loss recognised on the measurement of Siemens IT Solutions and Services to fair value less
costs to sell includes impairments that have been recognised in the first quarter of fiscal 2011
and in the second and third quarter of fiscal 2011, respectively. Based on revised expectations
regarding the recoverable amount, the entering into the Option agreement with AtoS in December
2010, represented a triggering event for an impairment test. Siemens IT Solutions and Services was
reviewed for impairment following the accounting guidance for continuing operations as the criteria
for a presentation as held for disposal were not fulfilled as of December 2010. The impairment test
was conducted in the form of a comparison of the fair value less costs to sell with the carrying
amount of Siemens IT Solutions and Services to be disposed. The fair market value was assumed to be
represented by the consideration that AtoS committed itself to pay for the transfer of Siemens IT
Solutions and Services less commitments entered into by Siemens. As a result, an impairment charge
of 136 was recognised in the first quarter of fiscal 2011, to reduce the carrying amount of
goodwill, representing the entire goodwill of Siemens IT Solutions and Services.
Upon
classification as held for disposal and discontinued operations in the second quarter of
fiscal 2011, a further impairment of non-current assets in the measurement scope was recognised.
Other intangible assets and property, plant and equipment (including leased assets) totalling 464
were fully impaired.
The impairment test as of June 30, 2011 led to a further loss of 309. This loss is partly
offset by a reversal of the second quarter impairment in the third quarter of fiscal 2011 to the
extent of 250 related to the integration program: The obligation to provide support to AtoS in
connection with the integration program was already included in the impairment calculation
conducted in the second quarter of fiscal 2011. In the reporting period the restructuring measure
was recognized as employee benefits liability and presented in the line item Expenses, as described
above. In total, the loss identified in the third quarter of fiscal 2011 resulted in an asset
impairment of 59 presented in the line item Loss on the measurement to fair value less costs to
sell, fully writing off all non-current assets of Siemens IT Solutions and Services in the
measurement scope.
53
SIEMENS
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(in millions of , except where otherwise stated and per share amounts)
The assets and liabilities of Siemens IT Solutions and Services are presented as held for
disposal on the Consolidated Statements of Financial Position as of June 30, 2011 and measured at
the lower of their previous carrying amount and fair value less costs to sell. The carrying amounts
of the major classes of assets and liabilities of Siemens IT Solutions and Services were as
follows:
|
|
|
|
|
|
|
June 30, |
|
|
|
2011 |
|
Trade and other receivables |
|
|
421 |
|
Inventories |
|
|
198 |
|
Deferred tax assets |
|
|
229 |
|
Financial assets |
|
|
214 |
|
Other assets |
|
|
154 |
|
|
|
|
|
Assets classified as held for disposal |
|
|
1,216 |
|
|
|
|
|
|
|
|
|
|
Trade payables |
|
|
350 |
|
Current provisions |
|
|
79 |
|
Other current liabilities |
|
|
633 |
|
Pension plans and similar commitments |
|
|
183 |
|
Deferred tax liabilities |
|
|
67 |
|
Other liabilities |
|
|
278 |
|
|
|
|
|
Liabilities associated with assets classified as held for
disposal |
|
|
1,590 |
|
|
|
|
|
Revenue resulting from transactions between Siemens IT Solutions and Services and joint
ventures and associates of Siemens in the three months ended June 30, 2011 and 2010 amounted to 32
and 43, respectively. Revenue resulting from transactions between Siemens IT Solutions and
Services and joint ventures and associates of Siemens in the nine months ended June 30, 2011 and
2010 amounted to 100 and 156, respectively. Expenses resulting from transactions between Siemens
IT Solutions and Services and joint ventures and associates of Siemens in the three months ended
June 30, 2011 and 2010 amounted to 11 and 10, respectively. Expenses resulting from transactions
between Siemens IT Solutions and Services and joint ventures and associates of Siemens in the nine
months ended June 30, 2011 and 2010 amounted to 24 and 29, respectively. As of June 30, 2011,
receivables from and liabilities to joint ventures and associates are 38 and 9, respectively. For
further information regarding related party transactions refer to Note 17.
In the third quarter of fiscal 2011, Siemens contributed an amount of 241 to separate pension
plans in connection with the disposal of Siemens IT Solutions and Services. The cash outflows are
shown under net cash provided by (used in) investing activities (discontinued operations). For
further information regarding pensions refer to Note 9.
Former segments SV and Com discontinued operations
Net results of discontinued operations of SV activities and the former operating segment Com
presented in the Consolidated Statements of Income in the three and nine months ended June 30, 2011
amounted to (13) (thereof 7 income tax) and (127) (thereof (77) income tax), compared to the
three and nine months ended June 30, 2010 of (6) (thereof 3 income tax) and 13 (thereof (5)
income tax), respectively. The Company recorded a reserve in the second quarter of fiscal 2011 with
regard to the restructuring measures before the sale of the SV activities in December 2007. Siemens
sold its SV activities in December 2007. For information on the disposal of the former operating
segment Com see Note 4 to the Companys Consolidated Financial Statements as of September 30, 2010.
3. Other operating income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
Nine months ended |
|
|
|
June 30, |
|
|
June 30, |
|
|
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
Gains on disposals of businesses |
|
|
|
|
|
|
33 |
|
|
|
23 |
|
|
|
87 |
|
Gains on sales of property, plant
and equipment and intangibles |
|
|
66 |
|
|
|
95 |
|
|
|
189 |
|
|
|
244 |
|
Other |
|
|
40 |
|
|
|
60 |
|
|
|
232 |
|
|
|
317 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other operating income |
|
|
106 |
|
|
|
188 |
|
|
|
444 |
|
|
|
648 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
54
SIEMENS
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(in millions of , except where otherwise stated and per share amounts)
Line item 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,
see Note 2.
In the second quarter of fiscal 2010, 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 line item 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.
Line item Other in the nine months ended June 30, 2011, includes 64 income related to a
settlement of legal and regulatory matters in connection with portfolio activities. For further
information on legal and regulatory matters in the three and nine months ended June 30, 2011, see
Note 13. Line item Other in the nine months ended June 30, 2010, includes gains from settlement
agreements with former Managing Board and Supervisory Board members in conjunction with compliance
matters, from Siemens directors and officers insurance of 84 and 40 related to the agreed
recovery of funds frozen by authorities. For further information on legal and regulatory matters in
the three and nine months ended June 30, 2010, 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 derivative financial liabilities held by
the investee.
4. Other operating expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
Nine months ended |
|
|
|
June 30, |
|
|
June 30, |
|
|
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
Losses on
disposals of
businesses and on
sales of property,
plant and equipment
and intangibles |
|
|
2 |
|
|
|
(22 |
) |
|
|
(36 |
) |
|
|
(30 |
) |
Other |
|
|
(36 |
) |
|
|
(61 |
) |
|
|
(284 |
) |
|
|
(136 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other operating expense |
|
|
(34 |
) |
|
|
(83 |
) |
|
|
(320 |
) |
|
|
(166 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Line item Other in the three and nine months ended June 30, 2011 includes charges related to
legal and regulatory matters.
5. Interest income, interest expense and other financial income (expense), net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
Nine months ended |
|
|
|
June 30, |
|
|
June 30, |
|
|
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
Pension related interest income |
|
|
332 |
|
|
|
322 |
|
|
|
1,025 |
|
|
|
956 |
|
Interest income, other than pension |
|
|
218 |
|
|
|
191 |
|
|
|
616 |
|
|
|
548 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
|
550 |
|
|
|
513 |
|
|
|
1,641 |
|
|
|
1,504 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension related interest expense |
|
|
(299 |
) |
|
|
(338 |
) |
|
|
(921 |
) |
|
|
(998 |
) |
Interest expense, other than pension |
|
|
(125 |
) |
|
|
(98 |
) |
|
|
(357 |
) |
|
|
(311 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
(424 |
) |
|
|
(436 |
) |
|
|
(1,278 |
) |
|
|
(1,309 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (expense) from available-for-sale
financial assets, net |
|
|
(707 |
) |
|
|
(3 |
) |
|
|
835 |
|
|
|
28 |
|
Miscellaneous financial income (expense), net |
|
|
(29 |
) |
|
|
(107 |
) |
|
|
(161 |
) |
|
|
(201 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other financial income (expense), net |
|
|
(736 |
) |
|
|
(110 |
) |
|
|
674 |
|
|
|
(173 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
55
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, |
|
|
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
Expected return on plan assets |
|
|
332 |
|
|
|
322 |
|
|
|
1,025 |
|
|
|
956 |
|
Interest cost |
|
|
(299 |
) |
|
|
(338 |
) |
|
|
(921 |
) |
|
|
(998 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (expense) from pension
plans and similar commitments, net |
|
|
33 |
|
|
|
(16 |
) |
|
|
104 |
|
|
|
(42 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total amounts of interest income and (expense), other than pension, were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
Nine months ended |
|
|
|
June 30, |
|
|
June 30, |
|
|
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
Interest income, other than pension |
|
|
218 |
|
|
|
191 |
|
|
|
616 |
|
|
|
548 |
|
Interest (expense), other than pension |
|
|
(125 |
) |
|
|
(98 |
) |
|
|
(357 |
) |
|
|
(311 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income (expense), net, other than pension |
|
|
93 |
|
|
|
93 |
|
|
|
259 |
|
|
|
237 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thereof: Interest income (expense) of
operations, net |
|
|
|
|
|
|
8 |
|
|
|
(21 |
) |
|
|
18 |
|
Thereof: Other interest income (expense), net |
|
|
93 |
|
|
|
85 |
|
|
|
280 |
|
|
|
219 |
|
Line item 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. Line item 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.
Line item Interest income (expense) other than pension includes 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, |
|
|
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
Total interest income on financial assets |
|
|
211 |
|
|
|
184 |
|
|
|
607 |
|
|
|
534 |
|
Total interest expenses on financial liabilities1) |
|
|
(239 |
) |
|
|
(245 |
) |
|
|
(732 |
) |
|
|
(748 |
) |
|
|
|
(1) |
|
Relating to hedged positions, herein only the interest expense on hedged items not at
fair value through profit and loss is included, whereas line item Interest expense, other
than pension also contains the offsetting effect on interest of the hedging instrument. The
difference is due to the disparities of interest rate swap contracts further explained in
Note 32 to the Companys Consolidated Financial Statements as of September 30, 2010. |
The components of line item Income (expense) from available-for-sale financial assets,
net were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
Nine months ended |
|
|
|
June 30, |
|
|
June 30, |
|
|
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
Gains (losses) on sales, net |
|
|
(682 |
) |
|
|
2 |
|
|
|
853 |
|
|
|
14 |
|
Dividends received |
|
|
3 |
|
|
|
|
|
|
|
14 |
|
|
|
22 |
|
Impairment |
|
|
(28 |
) |
|
|
(5 |
) |
|
|
(32 |
) |
|
|
(8 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (expense) from
available-for-sale financial
assets, net |
|
|
(707 |
) |
|
|
(3 |
) |
|
|
835 |
|
|
|
28 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In the three months ended June 30, 2011 line item Gains (losses) on sales, net includes a
loss of 682 on the arbitrational ruling related to Siemens exit from the joint venture Areva NP
S.A.S.
The payment to Areva of 679 includes liquidated damages of 40 percent of the purchase price
for Siemens shares, i.e. an amount of 648 plus an amount of 31 for repayment of interest on the
purchase price paid by Areva as well as interest accretion on the liquidated damages. Additionally,
Siemens incurred 3 expenses from procedural and further transaction fees.
In the nine months ended June 30, 2011, line item Gains (losses) on sales, net includes,
besides the loss on the arbitrational ruling presented above, 1,520 disposal gain related to the
termination of the Areva NP S.A.S. joint venture. The gain comprises (1) the payment from Areva to
Siemens of 1,747 including the purchase price of Siemens 34 percent share of 1,620, as defined
in the shareholders agreement and further contractual arrangements between Siemens and Areva,
other adjusting components of 76, mainly relating to interest accretion on the purchase price
granted to Siemens as a component of fair market value since the termination of the
shareholders agreement in early 2009, and a reimbursement of a mandatory capital injection from
Areva to Siemens of 51 after the issuance of the put notice in January 2009, (2) the carrying
amount of the 34 percent share in Areva NP S.A.S. of 190 to be derecognized and (3) transaction
costs as well as other derecognition effects of (37). For further information on the transaction,
see Note 2.
56
SIEMENS
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(in millions of , except where otherwise stated and per share amounts)
Line item Impairment includes 17 impairment charges in the three and nine months ended
June 30, 2011 for an investment of SFS in a power plant project in the U.S. due to unexpectedly
adverse market conditions.
Line item Miscellaneous financial income (expense), net, in the nine months ended June 30,
2011 and 2010 primarily comprises gains and losses related to derivative financial instruments as
well as interest income (expense) related to long-term liabilities and provisions of 201 and
(189). Included in interests from long-term liabilities and provisions is the effect resulting
from the change in the discount rate of asset retirement obligations for environmental clean up
costs, compensating the effects of these derivatives to a large extent. Expense from write offs of
finance receivables amounted to 51 and 83 in the nine months ended June 30, 2011 and 2010.
6. Goodwill
|
|
|
|
|
|
|
|
|
|
|
June 30, |
|
|
September 30, |
|
|
|
2011 |
|
|
2010 |
|
Sectors |
|
|
|
|
|
|
|
|
Industry |
|
|
5,033 |
|
|
|
5,196 |
|
Energy |
|
|
2,515 |
|
|
|
2,507 |
|
Healthcare |
|
|
7,586 |
|
|
|
7,826 |
|
Cross-Sector Businesses |
|
|
|
|
|
|
|
|
Siemens IT Solutions and Services |
|
|
|
|
|
|
132 |
|
Financial Services (SFS) |
|
|
107 |
|
|
|
102 |
|
|
|
|
|
|
|
|
Siemens |
|
|
15,241 |
|
|
|
15,763 |
|
|
|
|
|
|
|
|
The net decrease in goodwill of 522 in the nine months ended June 30, 2011, is attributable
to 410 negative foreign currency adjustments, 136 impairment related to Siemens IT Solutions and
Services, see Note 2 for further information, as well as 152 acquisitions and purchase accounting
adjustments; which is offset by dispositions and reclassifications to held for disposal of 128.
7. Other intangible assets
|
|
|
|
|
|
|
|
|
|
|
June 30, |
|
|
September 30, |
|
|
|
2011 |
|
|
2010 |
|
Software and other internally generated intangible assets |
|
|
2,834 |
|
|
|
3,068 |
|
Less: accumulated amortization |
|
|
(1,707 |
) |
|
|
(1,876 |
) |
|
|
|
|
|
|
|
Software and other internally generated intangible assets, net |
|
|
1,127 |
|
|
|
1,192 |
|
|
|
|
|
|
|
|
Patents, licenses and similar rights |
|
|
6,405 |
|
|
|
7,008 |
|
Less: accumulated amortization |
|
|
(3,151 |
) |
|
|
(3,231 |
) |
|
|
|
|
|
|
|
Patents, licenses and similar rights, net |
|
|
3,254 |
|
|
|
3,777 |
|
|
|
|
|
|
|
|
Other intangible assets |
|
|
4,381 |
|
|
|
4,969 |
|
|
|
|
|
|
|
|
Amortization expense reported in line item Income from continuing operations before income
taxes amounted to 198 and 197, respectively, in the three months ended June 30, 2011 and 2010,
and to 590 and 558 in the nine months ended June 30, 2011 and 2010, respectively.
57
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, |
|
|
|
2011 |
|
|
2010 |
|
Short-term |
|
|
|
|
|
|
|
|
Notes and bonds |
|
|
4,452 |
|
|
|
2,062 |
|
Loans from banks |
|
|
475 |
|
|
|
283 |
|
Other financial indebtedness |
|
|
27 |
|
|
|
22 |
|
Obligations under finance leases |
|
|
17 |
|
|
|
49 |
|
|
|
|
|
|
|
|
Short-term debt and current maturities of long-term debt |
|
|
4,971 |
|
|
|
2,416 |
|
|
|
|
|
|
|
|
Long-term |
|
|
|
|
|
|
|
|
Notes and bonds (maturing until 2066) |
|
|
11,910 |
|
|
|
15,238 |
|
Loans from banks (maturing until 2023) |
|
|
2,003 |
|
|
|
1,981 |
|
Other financial indebtedness (maturing until 2018) |
|
|
147 |
|
|
|
156 |
|
Obligations under finance leases |
|
|
131 |
|
|
|
122 |
|
|
|
|
|
|
|
|
Long-term debt |
|
|
14,191 |
|
|
|
17,497 |
|
|
|
|
|
|
|
|
|
|
|
|
19,162 |
|
|
|
19,913 |
|
|
|
|
|
|
|
|
9. Pension plans and similar commitments
Beginning with fiscal 2011, figures presented cover both principal and non-principal pension
and other post-employment benefits provided by Siemens and include continuing and discontinued
operations. The presentation of prior-year information has been adjusted to conform to the
current-year presentation.
Service cost for pension plans and similar commitments are allocated among functional costs
(line items Cost of goods sold and services rendered, Research and development expenses, Marketing,
selling and general administrative expenses) following the functional area of the corresponding
profit and cost centers.
Pension benefits: Components of net periodic benefit cost
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
Three months ended |
|
|
|
June 30, 2011 |
|
|
June 30, 2010 |
|
|
|
Total |
|
|
Domestic |
|
|
Foreign |
|
|
Total |
|
|
Domestic |
|
|
Foreign |
|
Service cost |
|
|
119 |
|
|
|
80 |
|
|
|
39 |
|
|
|
134 |
|
|
|
75 |
|
|
|
59 |
|
Interest cost |
|
|
318 |
|
|
|
193 |
|
|
|
125 |
|
|
|
358 |
|
|
|
211 |
|
|
|
147 |
|
Expected return on plan assets |
|
|
(360 |
) |
|
|
(221 |
) |
|
|
(139 |
) |
|
|
(352 |
) |
|
|
(210 |
) |
|
|
(142 |
) |
Amortization of past service cost (benefit) |
|
|
(2 |
) |
|
|
|
|
|
|
(2 |
) |
|
|
(1 |
) |
|
|
|
|
|
|
(1 |
) |
Loss (gain) due to settlements and
curtailments |
|
|
(2 |
) |
|
|
|
|
|
|
(2 |
) |
|
|
(24 |
) |
|
|
|
|
|
|
(24 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net periodic benefit cost (income) |
|
|
73 |
|
|
|
52 |
|
|
|
21 |
|
|
|
115 |
|
|
|
76 |
|
|
|
39 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Germany |
|
|
52 |
|
|
|
52 |
|
|
|
|
|
|
|
76 |
|
|
|
76 |
|
|
|
|
|
U.S. |
|
|
(1 |
) |
|
|
|
|
|
|
(1 |
) |
|
|
36 |
|
|
|
|
|
|
|
36 |
|
U.K. |
|
|
6 |
|
|
|
|
|
|
|
6 |
|
|
|
7 |
|
|
|
|
|
|
|
7 |
|
Other |
|
|
16 |
|
|
|
|
|
|
|
16 |
|
|
|
(4 |
) |
|
|
|
|
|
|
(4 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine months ended |
|
|
Nine months ended |
|
|
|
June 30, 2011 |
|
|
June 30, 2010 |
|
|
|
Total |
|
|
Domestic |
|
|
Foreign |
|
|
Total |
|
|
Domestic |
|
|
Foreign |
|
Service cost |
|
|
382 |
|
|
|
240 |
|
|
|
142 |
|
|
|
398 |
|
|
|
225 |
|
|
|
173 |
|
Interest cost |
|
|
980 |
|
|
|
579 |
|
|
|
401 |
|
|
|
1,060 |
|
|
|
633 |
|
|
|
427 |
|
Expected return on plan assets |
|
|
(1,116 |
) |
|
|
(665 |
) |
|
|
(451 |
) |
|
|
(1,040 |
) |
|
|
(631 |
) |
|
|
(409 |
) |
Amortization of past service cost (benefit) |
|
|
(7 |
) |
|
|
|
|
|
|
(7 |
) |
|
|
26 |
|
|
|
|
|
|
|
26 |
|
Loss (gain) due to settlements and
curtailments |
|
|
(8 |
) |
|
|
|
|
|
|
(8 |
) |
|
|
(221 |
) |
|
|
|
|
|
|
(221 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net periodic benefit cost (income) |
|
|
231 |
|
|
|
154 |
|
|
|
77 |
|
|
|
223 |
|
|
|
227 |
|
|
|
(4 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Germany |
|
|
154 |
|
|
|
154 |
|
|
|
|
|
|
|
227 |
|
|
|
227 |
|
|
|
|
|
U.S. |
|
|
27 |
|
|
|
|
|
|
|
27 |
|
|
|
(88 |
) |
|
|
|
|
|
|
(88 |
) |
U.K. |
|
|
10 |
|
|
|
|
|
|
|
10 |
|
|
|
21 |
|
|
|
|
|
|
|
21 |
|
Other |
|
|
40 |
|
|
|
|
|
|
|
40 |
|
|
|
63 |
|
|
|
|
|
|
|
63 |
|
Line item Net periodic benefit cost (income) in the tables above includes amounts related to
discontinued operations for Siemens IT Solutions and Services and for OSRAM. In the nine months
ended June 30, 2011 and 2010, net periodic benefit cost (income) related to discontinued operations
were 46 and 28, respectively. Net periodic benefit cost (income) related to discontinued
operations in the three months ended June 30, 2011 and 2010 amounted to 14 and (17),
respectively.
58
SIEMENS
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(in millions of , except where otherwise stated and per share amounts)
Line item Net periodic benefit cost (income) for the three and nine months ended June 30,
2010, includes a 192 curtailment gain resulting from a freeze of two defined benefit pension plans
in the U.S.
Pension obligations and funded status
At the end of the first nine months of fiscal 2011, the combined funded status of Siemens
pension plans states an underfunding of 5.4 billion, compared to an underfunding of 7.4 billion
at the end of fiscal 2010.
The weighted-average discount rate used to determine the estimated DBO of Siemens pension
plans as of June 30, 2011 and September 30, 2010, is 4.9 percent and 4.2 percent, respectively.
During the third quarter of fiscal 2011, Siemens transferred pension liabilities and plan
assets of its major pension plan in the Netherlands to the industry pension fund PME. The PME will
be accounted for as a defined contribution plan with a resulting decrease in DBO and plan assets.
In fiscal 2011, contributions include 241 supplemental pension plan funding in Germany for
the pension liabilities of Siemens IT Solutions and Services. The funding was contributed to the
newly established separate Siemens IT Solutions and Services Pension Trusts in anticipation of the
disposal of the business to AtoS. Contributions during the nine months ended June 30, 2011 and
2010, include a supplemental pension plan funding in the U.K. Contributions made by the Company to
its pension plans during the nine months ended June 30, 2011 and 2010, were 983 and 507,
respectively. In the three months ended June 30, 2011 and 2010, contributions made by the Company
amounted to 422 and 81, respectively.
Other post-employment benefits
Net periodic benefit cost for other post-employment benefit plans for the nine months ended
June 30, 2011 and 2010, were 42 and 45, respectively. During the three months ended June 30, 2011
and 2010, net periodic benefit cost amounted to 11 and 16, respectively. The aforementioned net
periodic benefit cost include amounts related to discontinued operations for Siemens IT Solutions
and Services and for OSRAM. In the nine months ended June 30, 2011 and 2010, net periodic benefit
cost (income) related to discontinued operations were 1 and 2, respectively. Net periodic benefit
cost (income) related to discontinued operations in the three months ended June 30, 2011 and 2010
amounted to (1) and 1, respectively.
The combined funded status of Siemens predominantly unfunded other post-employment benefit
plans, including discontinued operations, amounted to 0.8 billion, both at the end of the first
nine months of fiscal 2011 and as of September 30, 2010.
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, 2010. In the nine months ended June
30, 2011, the parameters related to the life-span of the German nuclear reactors generally changed
to a planned phase-out until 2022. Using the input of an independent advisor, management updated
its valuation of the liability in the three months ended June 30, 2011, accordingly. The valuation
uses revised assumptions to reflect current and detailed cost estimates as well as a shorter time
span of future cash outflows, reflecting the shorter life-span of the German nuclear reactors. The
updated valuation as of June 30, 2011 assumes a continuous outflow until 2075 instead of 2084 in
the prior valuation. The change in estimates resulted in a minor increase of the related provision.
As of June 30, 2011 and September 30, 2010, the provision totals 798 and 1,004, respectively, and
is recorded net of a present value discount of 1,924 and 1,924 respectively.
In the three months ended June 30, 2011, Healthcare reevaluated the commercial feasibility of
its particle therapy venture and as a result, will shift the focus of certain particle therapy
projects primarily to research resulting in a significant reduction in the scope of certain
projects. This led to (381) pretax effects on the income statement in the three months ended June
30, 2011 including provisions for order related losses and risks.
59
SIEMENS
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(in millions of , except where otherwise stated and per share amounts)
11. Shareholders equity
Transactions with non-controlling interests
In the three and nine months ended June 30, 2011, Siemens completed transactions with
non-controlling interest shareholders of which the acquisition of additional subsidiary shares in
Siemens Ltd., India qualifies as individually significant, see Note 2.
Treasury stock
In the nine months ended June 30, 2011, Siemens transferred a total of 4,179,297 of Treasury
stock in connection with share-based payment plans.
Resolutions at the Annual Shareholders Meeting
At the Annual Shareholders Meeting on January 25, 2011, the Companys shareholders passed
resolutions with respect to the Companys equity, approving and authorizing:
|
|
|
a dividend of 2.70 per share, representing 2.4 billion in dividend payments; |
|
|
|
the Company to acquire Treasury stock of up to 10 percent of its capital stock
existing at the date of the Shareholders resolution, which represents up to 91,420,342
Treasury shares or if this value is lower as of the date on which the authorization
is exercised. The authorization becomes effective on March 1, 2011, and remains in force
through January 24, 2016. The previous authorization, granted at the January 26, 2010
Shareholders Meeting terminates as of the effective date of the new authorization. The
permitted use of Treasury stock primarily remained unchanged. The authorization is
supplemented by an authorization to repurchase up to 5 percent of its capital stock
existing at the date of the Shareholders resolution by using equity derivatives or
forward purchases (which represents up to 45,710,171 Treasury shares) with a maximum
maturity term of 18 months; the repurchase of Treasury stock upon the exercise of the
equity derivative or forward purchases shall be no later than January 24, 2016; |
|
|
|
Authorized Capital 2011, replacing Authorized Capital 2006 which expired as of January
25, 2011. The Managing Board, with the approval of the Supervisory Board, is authorized
to increase capital stock once or several times until January 24, 2016 by up to 90
(nominal) through the issuance of up to 30 million shares of no par value registered in
the names of the holders against contributions in cash. Subscription rights of existing
shareholders are excluded. The new shares shall be issued exclusively to employees of
Siemens AG and its consolidated subsidiaries as final recipient. The Managing Board is
authorized to determine, with the approval of the Supervisory Board, the further content
of the rights embodied in the shares and the terms and conditions of the share issue; |
|
|
|
Conditional Capital 2011 to service the issuance of bonds in an aggregate principal
amount of up to 15,000 with conversion rights or with warrants attached or a combination
thereof, entitling the holders to subscribe to up to 90 million shares of Siemens AG with
no par value, representing up to 270 of capital stock. The bonds shall be issued for
cash consideration. The authorization will expire on January 24, 2016. |
60
SIEMENS
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(in millions of , except where otherwise stated and per share amounts)
Other comprehensive income
The changes in line item Other comprehensive income including non-controlling interests are as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
Three months ended |
|
|
|
June 30, 2011 |
|
|
June 30, 2010 |
|
|
|
|
|
|
|
Tax |
|
|
|
|
|
|
|
|
|
|
Tax |
|
|
|
|
|
|
Pretax |
|
|
effect |
|
|
Net |
|
|
Pretax |
|
|
effect |
|
|
Net |
|
Unrealized holding gains (losses)
on available-for-sale financial assets |
|
|
17 |
|
|
|
|
|
|
|
17 |
|
|
|
(4 |
) |
|
|
2 |
|
|
|
(2 |
) |
Reclassification adjustments for
(gains) losses included in net income |
|
|
|
|
|
|
(1 |
) |
|
|
(1 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net unrealized gains (losses) on
available-for-sale financial assets |
|
|
17 |
|
|
|
(1 |
) |
|
|
16 |
|
|
|
(4 |
) |
|
|
2 |
|
|
|
(2 |
) |
Unrealized gains (losses) on derivative
financial instruments |
|
|
8 |
|
|
|
(4 |
) |
|
|
4 |
|
|
|
(509 |
) |
|
|
143 |
|
|
|
(366 |
) |
Reclassification adjustments for
(gains) losses included in net income |
|
|
(63 |
) |
|
|
19 |
|
|
|
(44 |
) |
|
|
44 |
|
|
|
(14 |
) |
|
|
30 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net unrealized gains (losses) on
derivative financial instruments |
|
|
(55 |
) |
|
|
15 |
|
|
|
(40 |
) |
|
|
(465 |
) |
|
|
129 |
|
|
|
(336 |
) |
Foreign-currency translation differences |
|
|
(101 |
) |
|
|
|
|
|
|
(101 |
) |
|
|
1,144 |
|
|
|
|
|
|
|
1,144 |
|
Actuarial gains and losses on
pension plans and similar commitments |
|
|
(408 |
) |
|
|
97 |
|
|
|
(311 |
) |
|
|
(1,323 |
) |
|
|
309 |
|
|
|
(1,014 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income |
|
|
(547 |
) |
|
|
111 |
|
|
|
(436 |
) |
|
|
(648 |
) |
|
|
440 |
|
|
|
(208 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine months ended |
|
|
Nine months ended |
|
|
|
June 30, 2011 |
|
|
June 30, 2010 |
|
|
|
|
|
|
|
Tax |
|
|
|
|
|
|
|
|
|
|
Tax |
|
|
|
|
|
|
Pretax |
|
|
effect |
|
|
Net |
|
|
Pretax |
|
|
effect |
|
|
Net |
|
Unrealized holding gains (losses)
on available-for-sale financial assets |
|
|
4 |
|
|
|
4 |
|
|
|
8 |
|
|
|
32 |
|
|
|
(3 |
) |
|
|
29 |
|
Reclassification adjustments for
(gains) losses included in net income |
|
|
(29 |
) |
|
|
6 |
|
|
|
(23 |
) |
|
|
(5 |
) |
|
|
1 |
|
|
|
(4 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net unrealized gains (losses) on
available-for-sale financial assets |
|
|
(25 |
) |
|
|
10 |
|
|
|
(15 |
) |
|
|
27 |
|
|
|
(2 |
) |
|
|
25 |
|
Unrealized gains (losses) on derivative
financial instruments |
|
|
194 |
|
|
|
(44 |
) |
|
|
150 |
|
|
|
(851 |
) |
|
|
244 |
|
|
|
(607 |
) |
Reclassification adjustments for
(gains) losses included in net income |
|
|
(123 |
) |
|
|
37 |
|
|
|
(86 |
) |
|
|
(66 |
) |
|
|
20 |
|
|
|
(46 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net unrealized gains (losses) on
derivative financial instruments |
|
|
71 |
|
|
|
(7 |
) |
|
|
64 |
|
|
|
(917 |
) |
|
|
264 |
|
|
|
(653 |
) |
Foreign-currency translation differences |
|
|
(308 |
) |
|
|
|
|
|
|
(308 |
) |
|
|
2,136 |
|
|
|
|
|
|
|
2,136 |
|
Actuarial gains and losses on
pension plans and similar commitments |
|
|
1,157 |
|
|
|
(358 |
) |
|
|
799 |
|
|
|
(2,237 |
) |
|
|
594 |
|
|
|
(1,643 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income |
|
|
895 |
|
|
|
(355 |
) |
|
|
540 |
|
|
|
(991 |
) |
|
|
856 |
|
|
|
(135 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Line item Actuarial gains and losses on pension plans and similar commitments in the nine
months ended June 30, 2011 primarily changed due to an increase in the discount rate, partly offset
by actuarial losses due to actual returns below expected returns. Foreign currency translation
differences in the nine months ended June 30, 2011, primarily resulted from the strengthening of
the Euro compared to the U.S.$. In the nine months ended June 30, 2010, line item Actuarial gains
and losses on pension plans and similar commitments primarily changed due to a decrease of the
discount rate. Foreign currency translation differences in the three and nine months ended June 30,
2010, primarily resulted from the strengthening of the U.S.$.
61
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, |
|
|
|
2011 |
|
|
2010 |
|
Credit guarantees |
|
|
573 |
|
|
|
597 |
|
Guarantees of third-party performance |
|
|
1,020 |
|
|
|
1,093 |
|
HERKULES obligations(1) |
|
|
2,690 |
|
|
|
3,090 |
|
Other guarantees |
|
|
3,250 |
|
|
|
3,216 |
|
|
|
|
|
|
|
|
Guarantees |
|
|
7,533 |
|
|
|
7,996 |
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
For additional information on the HERKULES obligations, see the Companys
Consolidated Financial Statements as of September 30, 2010. |
13. Legal proceedings
Information regarding investigations and other legal proceedings, as well as the potential
risks associated with such proceedings and their potential financial impact on Siemens, is included
in the Companys Consolidated Financial Statements as of September 30, 2010 (Consolidated Financial
Statements).
Significant developments regarding investigations and other legal proceedings that have
occurred since the preparation of the Consolidated Financial Statements are described below.
Public corruption proceedings
Governmental and related proceedings
In May 2011, Siemens AG voluntarily reported a case of attempted public corruption in
connection with a project in Kuwait to the U.S. Department of Justice, the U.S. Securities and
Exchange Commission, and the Munich public prosecutor. Siemens is cooperating with the authorities
in the ongoing investigations which also relate to certain employees.
As previously reported, authorities in Russia were conducting an investigation into alleged
misappropriation of public funds in connection with the award of contracts to Siemens for the
delivery of medical equipment to public authorities in Yekaterinburg in the years 2003 to 2005. On
July 5, 2011, the investigation against the Siemens employee concerned has been closed with respect
to all material charges.
On March 9, 2009, Siemens AG received a decision by the Vendor Review Committee of the United
Nations Secretariat Procurement Division (UNPD) suspending Siemens AG from the UNPD vendor database
for a minimum period of six months. The suspension applied to contracts with the UN Secretariat and
stemmed from Siemens AGs guilty plea in December 2008 to violations of the U.S. Foreign Corrupt
Practices Act. On December 22, 2009, Siemens AG filed a request to lift the existing suspension. On
January 14, 2011, Siemens was informed that the Vendor Review Committee of the UNPD had recommended
that the existing suspension be lifted and that Siemens AG be invited to re-register with the UNPD.
As previously reported, in February 2010 a Greek Parliamentary Investigation Committee
(GPIC) was established to investigate whether any politicians or other state officials in Greece
were involved in alleged wrong-doing of Siemens in Greece. GPICs investigation is focused on
possible criminal liability of politicians and other state officials. Greek public prosecutors are
separately investigating certain fraud and bribery allegations involving among others former
board members and former executives of Siemens A.E. Greece (Siemens A.E.) and Siemens AG. Both
investigations may have a negative impact on civil proceedings currently pending against Siemens AG
and Siemens A.E. and may affect the future business activities of Siemens in Greece. In January
2011, the GPIC alleged in a letter to Siemens that the damage suffered by the Greek state amounts
to at least 2 billion. Furthermore, the GPIC issued a report repeating these allegations. In
addition, the Hellenic Republic Minister of State indicated in a letter to Siemens that the Greek
state will seek compensation from Siemens for the alleged damage. While Siemens rejects these
allegations as unfounded and continues to defend itself, Siemens and the Greek state have engaged
in discussions to resolve the matter.
As previously reported, the Nigerian Economic and Financial Crimes Commission (EFCC) was
conducting an investigation into alleged illegal payments by Siemens to Nigerian public officials
between 2002 and 2005. In October 2010, the EFCC filed charges with the Federal High Court in Abuja
and the High Court of the Federal Capital Territory against among others Siemens Ltd. Nigeria
(Siemens Nigeria), Siemens AG and former board members of Siemens Nigeria. On November 22, 2010,
the Nigerian Government and Siemens Nigeria entered into an out of court settlement, obligating
Siemens Nigeria to make a payment in the mid double-digit million range to Nigeria in exchange
for the Nigerian Government withdrawing these criminal charges and refraining from the initiation
of any criminal, civil or other actions such as a debarment against Siemens Nigeria, Siemens
AG, and Siemens employees.
62
SIEMENS
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(in millions of , except where otherwise stated and per share amounts)
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 as a
result of penalties, fines, disgorgements, compensatory damages, third-party litigation, including
with competitors, the formal or informal exclusion from public invitations to tender, 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.
Civil litigation
As previously reported, Siemens was approached by a competitor to discuss claims it believed
it had against the Company. The alleged claims related to allegedly improper payments by the
Company in connection with the procurement of public and private contracts. Siemens and the
competitor were able to resolve the matter on mutually agreeable terms.
As previously disclosed, 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. In March 2011, the Court granted the Companys motion
to dismiss the action. The plaintiffs motion to reconsider was denied by the court. Plaintiffs did
not appeal the courts decision. Accordingly, the dismissal is final.
Antitrust proceedings
As previously reported, in April 2007, Siemens AG and former VA Tech companies filed actions
before the European Court of First Instance in Luxemburg against the decisions of the European
Commission dated January 24, 2007, to fine Siemens and former VA Tech companies for alleged
antitrust violations in the European Market of high-voltage gas-insulated switchgear between 1988
and 2004. Gas-insulated switchgear is electrical equipment used as a major component for power
substations. The fine imposed on Siemens AG amounted to 396.6 and was paid by the Company
in 2007. The fine imposed on former VA Tech companies, which Siemens AG acquired in July 2005,
amounted to 22.1. Former VA Tech companies were declared jointly liable with Schneider
Electric for a separate fine of 4.5. On March 3, 2011, the European Court of First
Instance dismissed the case regarding the fine imposed on Siemens AG and re-calculated the fines
for the former VA Tech companies. Former VA Tech companies were declared jointly liable with
Schneider Electric for a fine of 8.1. Siemens AG has appealed the decision.
In addition to the proceedings mentioned in this document, authorities in Brazil, the Czech
Republic and Slovakia are conducting investigations into comparable possible antitrust violations.
In October 2010, the High Court of New Zealand dismissed corresponding charges against Siemens.
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 United States including, among others, Siemens AG. In
April 2010, authorities in Korea and Mexico informed the Company that similar proceedings had been
initiated. The official investigations in connection with flexible power transmission systems have
been closed. Siemens had been cooperating with all authorities.
On November 16, 2010, the Greek Competition Authority searched the premises of Siemens
S.A. in Athens, in response to allegations of anti-competitive practices in the field of
telecommunication and security. Siemens is cooperating with the authority.
On December 15, 2010, and on March 7, 2011, the Turkish Antitrust Authority searched the
premises of several diagnostic companies including, among others, Siemens Healthcare Diagnostik
Ticaret Limited Sirketi in Istanbul, in response to allegations of anti-competitive agreements.
Siemens is cooperating with the authority.
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, based on
alleged breaches of law, 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 April 2011, the Supreme Court sustained the extraordinary appeal of the
Competition Authority and remanded the case for a new decision to another chamber of the Court of
Appeal.
63
SIEMENS
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(in millions of , except where otherwise stated and per share amounts)
As previously reported, on February 11, 2010, the Italian Antitrust Authority searched the
premises of several healthcare companies, amongst others those of Siemens Healthcare Diagnostics
S.r.l. and Siemens S.p.A. The investigation addresses allegations of anti-competitive agreements in
relation to a tender of the procurement entity for the public healthcare sector in the region of
Campania, So.Re.Sa., for the supply of medical equipment in 2009. On May 5, 2011, the Italian
Antitrust Authority sent a Statement of Objections to the companies under investigation. The
statement of objections states that the proceedings against Siemens Healthcare Diagnostics S.r.l.
were closed, but accuses Siemens S.p.A. of having participated in an anti-competitive arrangement.
Other proceedings
As previously reported, Siemens AG 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. Siemens AGs share of the consideration to be paid to the supplier consortium under
the contract is approximately 27 percent. The other member of the supplier consortium is a further
consortium consisting of Areva NP S.A.S. and its wholly-owned subsidiary, 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 in dispute. In December 2008, the supplier consortium filed a
request for arbitration against TVO demanding an extension of the construction time, additional
compensation, milestone payments, damages and interest. In June 2011, the supplier consortium
increased its monetary claim; it now amounts to 1.94 billion. In April 2009, TVO rejected the
claims and made counterclaims against the supplier consortium. These consist primarily of damages
due to the delay amounting to approximately 1.43 billion based on an estimated completion of the
plant in June 2012 with a delay of 38 months. Since then the estimated time of completion of the
plant has been further delayed, which could increase the counterclaims.
In early 2009, Siemens AG terminated its joint venture with Areva S.A. (Areva). Thereafter
Siemens AG entered into negotiations with the State Atomic Energy Corporation Rosatom (Rosatom)
with a view to forming a new partnership active in the construction of nuclear power plants, in
which it would be a minority shareholder. In April 2009, Areva filed a request for arbitration with
the ICC against Siemens AG. Areva sought an order enjoining Siemens AG from pursuing such
negotiations with Rosatom, a declaration that Siemens AG is in material breach of its contractual
obligations and a reduction of the price payable to Siemens AG for its stake in the Areva NP S.A.S.
joint venture. The final award of the arbitral tribunal was notified on May 19, 2011. According to
this award, Siemens has to pay Areva liquidated damages of 648 plus interest. Further, the
disputed non-compete obligation was reduced to four years; it will now expire on September 25,
2013.
Siemens is involved in a power plant construction project in the United States, in which one
of the other parties to the project filed an arbitration proceeding in June 2011 asserting material
claims against certain other parties to the project. While no claims are being asserted against
Siemens in the arbitration at this time, it is possible that such claims against Siemens may follow
as matters progress.
OSRAM is currently party to a number of patent lawsuits. On the one hand, OSRAM itself has
sued Samsung group companies and LG group companies in markets such as the United States, Germany,
China and Japan for patent infringements, and is requesting injunctions against unauthorized use
and, in some cases, import bans and compensation. Samsung group companies and LG group companies
have, on the other hand, initiated patent invalidation lawsuits relating to OSRAM patents on Light
Emitting Diode (LED) technology, in particular white LED, in the Republic of Korea and in China. In
addition, a Samsung group company and LG group companies have filed patent infringement lawsuits in
various jurisdictions, requesting injunctions against unauthorized use and, in some cases, import
bans and compensation from OSRAM. OSRAM is defending itself in these lawsuits.
In December 2008, the Polish Agency of Internal Security (AWB) remanded into custody an
employee of Siemens Healthcare Poland, in connection with an investigation regarding a public
tender issued by the hospital of Wroclaw in 2008. According to the AWB, the Siemens employee and
the deputy hospital director were accused of having manipulated the tender procedure. In October
2010, the investigation was closed.
Russian authorities are conducting widespread investigations regarding possible fraudulent
activities of resellers relating to procurement of medical equipment in the public sector. As is
the case with other providers of medical equipment, OOO Siemens Russia has received numerous
information requests and inquiries were made on-site by the authorities regarding tenders in the
public healthcare sector. OOO Siemens Russia is cooperating with the ongoing investigations which
also relate to certain individual employees.
64
SIEMENS
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(in millions of , except where otherwise stated and per share amounts)
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 Consolidated
Financial Statements 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 Consolidated Financial Statements 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, it cannot be excluded that 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 resolutions of the matters discussed in
this section could have a material effect on Siemens business, results of operations and financial
condition for any reporting period in which adverse decisions are rendered. Siemens currently does
not 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 are predominantly designed as equity-settled plans and to
a certain extent as cash-settled plans. Total pretax expense for share-based payment recognized in
line item Income from continuing operations in the three months ended June 30, 2011 and 2010
amounted to 33 and 23, respectively, and to 117 and 94, respectively, in the nine months ended
June 30, 2011 and 2010.
For further information on Siemens share-based payment plans, see Note 34 to the Companys
Consolidated Financial Statements as of September 30, 2010.
Share-based compensation of Managing Board members
The Supervisory Board decided to make further adjustments to the remuneration system for the
Managing Board and to focus even more sharply on sustainable corporate management. Revisions to the
remuneration system for the Managing Board, the details of which are set forth in the Compensation
report within Siemens Annual Report as of September 30, 2010, became effective as of October 1,
2010.
Variable compensation component (bonus): In fiscal 2011 agreements were entered into
which entitle members of the Managing Board to Bonus Awards contingent upon the target attainment.
The fair value of these entitlements amounting to 5 was determined by calculating the present
value of the target amount. Compensation expense related to Bonus Awards is generally recognized
over one-year until they vest. Beneficiaries will receive one free share of Siemens stock for each
Bonus Award, following an additional waiting period of four years.
Long-term stock-based compensation: In fiscal 2011 agreements were entered into which
entitle members of the Managing Board to stock awards contingent upon the target attainment. Half
of the annual target amount for stock awards will be linked to the average of published earnings
per share (basic EPS) for the past three fiscal years. The fair value of these entitlements
amounting to 5 was determined by calculating the present value of the target amount. The other
half of the target amount for stock swards is based on the performance of Siemens stock relative to
five competitors (ABB, General Electric, Philips, Rockwell, Schneider). The fair value of these
entitlements amounting to 6 was calculated by applying a local volatility model. Inputs to that
model include an expected weighted volatility of Siemens shares of 30 percent and 29 percent and a
market price of 88.09 and 92.98 per Siemens share in the first and third quarter, respectively.
Expected volatility was determined by reference to implied volatilities. The model applies a
risk-free interest rate of up to 2.4 percent and up to 3.0 percent and an expected dividend yield
of 3 percent and 2.4 percent in the first and third quarter, respectively. Compensation expense
related to stock awards is generally recognized over five years until they vest, including a
restriction period of four years. The total carrying amount for liabilities arising from stock
awards settled in cash amounts to as of June 30, 2011.
65
SIEMENS
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(in millions of , except where otherwise stated and per share amounts)
In addition to share-based compensation described above, members of the Managing Board
received stock awards as part of their remuneration for fiscal 2010 and could also participate in
the Base Share Program and in the Share Matching Plan for the last time.
Stock awards
In the nine months ended June 30, 2011 and 2010, respectively, the Company granted 1,378,185
and 1,361,586 stock awards to employees and members of the Managing Board, of which 128,284 and
154,226 awards were granted to the Managing Board. Details on stock award activity and weighted
average grant-date fair value for continuing and discontinued operations in the nine months ended
June 30, 2011 and 2010 are:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine months ended |
|
|
Nine months ended |
|
|
|
June 30, 2011 |
|
|
June 30, 2010 |
|
|
|
|
|
|
|
Weighted average |
|
|
|
|
|
|
Weighted average |
|
|
|
Number of |
|
|
grant-date |
|
|
Number of |
|
|
grant-date |
|
|
|
awards |
|
|
fair value |
|
|
awards |
|
|
fair value |
|
Outstanding, beginning of period |
|
|
4,787,318 |
|
|
|
58.06 |
|
|
|
4,438,303 |
|
|
|
57.22 |
|
Granted |
|
|
1,378,185 |
|
|
|
77.79 |
|
|
|
1,361,586 |
|
|
|
60.79 |
|
Vested |
|
|
(1,558,938 |
) |
|
|
79.93 |
|
|
|
(824,694 |
) |
|
|
57.28 |
|
Forfeited/settled |
|
|
(136,237 |
)(1) |
|
|
53.79 |
(1) |
|
|
(137,589 |
) |
|
|
63.73 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding, end of period |
|
|
4,470,328 |
|
|
|
56.64 |
|
|
|
4,837,606 |
|
|
|
58.03 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Consists of 122,794 forfeited and 13,443 settled awards with weighted average
grant-date fair values of 53.55 and 55.97, respectively, in the nine months ended June 30, 2011. |
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
weighted average grant-date fair value of 77.79 and 60.79 per stock award granted in the nine
months ended June 30, 2011 and 2010, respectively. Total fair value of stock awards granted in the
nine months ended June 30, 2011 and 2010, amounted to 107 and 83, respectively.
Line item Forfeited/settled in the nine months ended June 30, 2010, includes rights to stock
awards granted to former Managing Board 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 34 to the Companys
Consolidated Financial Statements as of September 30, 2010.
Stock Option Plans
Details on stock option activities for continuing and discontinued operations in the nine
months ended June 30, 2011 and 2010 are:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine months ended June 30, 2011 |
|
|
|
|
|
|
|
|
|
|
|
Weighted |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
average |
|
|
|
|
|
|
|
|
|
|
Weighted |
|
|
remaining |
|
|
Aggregate |
|
|
|
|
|
|
|
average exercise |
|
|
contractual term |
|
|
intrinsic value |
|
|
|
Number of options |
|
|
price |
|
|
(years) |
|
|
(in millions of ) |
|
Outstanding, beginning of period |
|
|
935,432 |
|
|
|
74.59 |
|
|
|
|
|
|
|
|
|
Options exercised |
|
|
(916,137 |
) |
|
|
74.59 |
|
|
|
|
|
|
|
|
|
Options expired |
|
|
(12,220 |
) |
|
|
74.59 |
|
|
|
|
|
|
|
|
|
Options forfeited |
|
|
(7,075 |
) |
|
|
74.59 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding, end of period |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercisable, end of period |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
66
SIEMENS
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(in millions of , except where otherwise stated and per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine months ended June 30, 2010 |
|
|
|
|
|
|
|
|
|
|
|
Weighted |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
average |
|
|
|
|
|
|
|
|
|
|
Weighted |
|
|
remaining |
|
|
Aggregate |
|
|
|
|
|
|
|
average exercise |
|
|
contractual term |
|
|
intrinsic value |
|
|
|
Number of Options |
|
|
price |
|
|
(years) |
|
|
(in millions of ) |
|
Outstanding, beginning of period |
|
|
2,627,742 |
|
|
|
73.89 |
|
|
|
|
|
|
|
|
|
Options exercised |
|
|
(134,805 |
) |
|
|
74.59 |
|
|
|
|
|
|
|
|
|
Options expired |
|
|
(888,210 |
) |
|
|
72.54 |
|
|
|
|
|
|
|
|
|
Options forfeited |
|
|
(105,015 |
) |
|
|
74.40 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding, end of period |
|
|
1,499,712 |
|
|
|
74.59 |
|
|
|
0.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercisable, end of period |
|
|
1,499,712 |
|
|
|
74.59 |
|
|
|
0.4 |
|
|
|
|
|
Share Matching Program and its underlying plans
a) Base Share Program
Under the Base Share Program, employees of Siemens AG and participating Siemens companies can
purchase Siemens shares under favorable conditions once a year; members of the Managing Board, for
the last time, can participate in the Base Share Program. 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 the three
months ended December 31, 2010, Siemens issued a new tranche of the Base Share Program (Base Share
Program 2011) under the same terms as the Base Share Program 2010.
In fiscal 2011 and 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 the market price at a predetermined date in
the second quarter. In fiscal 2011 and 2010, the Company incurred pretax expense from continuing
and discontinued operations of 31 and 27.
b) Share Matching Plan
In the first quarter of fiscal 2011, Siemens issued a new tranche under the Share Matching
Plan (Share Matching Plan 2011) under the same terms as the Share Matching Plan 2010. For the Share
Matching Plan 2011 and 2010, senior managers of Siemens AG and participating Siemens companies may
invest a certain amount of their compensation in Siemens shares; for the last time, members of the
Managing Board may invest a certain amount of their bonus payout relating to fiscal 2010 in Siemens
shares. 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, plan participants 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 will decide, each fiscal year, whether a new Share
Matching Plan will be issued. In fiscal 2011 and 2010, 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.
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.
67
SIEMENS
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(in millions of , except where otherwise stated and per share amounts)
In October 2010, the Managing Board decided that shares acquired under the Monthly Investment
Plan 2010 will be transferred to the Share Matching Plan as of February 2011. Accordingly,
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.
In the three months ended December 31, 2010, the Managing Board decided to issue a new Monthly
Investment Plan (Monthly Investment Plan 2011) under the same terms as the 2010 Monthly Investment
Plan.
d) Resulting Matching Shares
Details on matching share activities for continuing and discontinued operations in the nine
months ended June 30, 2011 and 2010 are:
|
|
|
|
|
|
|
|
|
|
|
Nine months ended |
|
|
Nine months ended |
|
|
|
June 30, 2011 |
|
|
June 30, 2010 |
|
|
|
Number of matching shares |
|
|
Number of matching shares |
|
Outstanding, beginning of period |
|
|
1,614,729 |
|
|
|
1,266,444 |
|
Granted |
|
|
579,806 |
|
|
|
445,148 |
|
Forfeited |
|
|
(59,965 |
) |
|
|
(45,322 |
) |
Settled |
|
|
(44,010 |
) |
|
|
(28,775 |
) |
|
|
|
|
|
|
|
Outstanding, end of period |
|
|
2,090,560 |
|
|
|
1,637,495 |
|
|
|
|
|
|
|
|
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 values of matching shares granted amounted to 58.15 and 71.09, per share, respectively,
depending on the respective grant-dates in the first quarter of fiscal 2011. The fair value of
matching shares granted in the first quarter of fiscal 2010, amounts to 47.18 per share. In fiscal
2011 and 2010, the weighted average grant-date fair value of the resulting matching shares is
66.13 and 47.18 per share, respectively, based on the number of instruments granted. Total fair
value of matching shares granted in fiscal 2011 and 2010 amounted to 38 and 21, respectively.
15. Earnings per share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
Nine months ended |
|
|
|
June 30, |
|
|
June 30, |
|
(shares in thousands) |
|
2011 |
|
|
2010 |
|
|
2011 |
|
|
2010 |
|
Income from continuing operations |
|
|
763 |
|
|
|
1,428 |
|
|
|
5,783 |
|
|
|
4,304 |
|
Less: Portion attributable to non-controlling interest |
|
|
(41 |
) |
|
|
(21 |
) |
|
|
(126 |
) |
|
|
(90 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations attributable to shareholders of Siemens AG |
|
|
722 |
|
|
|
1,407 |
|
|
|
5,657 |
|
|
|
4,214 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstandingbasic |
|
|
873,911 |
|
|
|
868,863 |
|
|
|
872,755 |
|
|
|
867,890 |
|
Effect of dilutive share-based payment |
|
|
9,485 |
|
|
|
8,928 |
|
|
|
9,623 |
|
|
|
8,805 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstandingdiluted |
|
|
883,396 |
|
|
|
877,791 |
|
|
|
882,378 |
|
|
|
876,695 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share (from continuing operations) |
|
|
0.83 |
|
|
|
1.62 |
|
|
|
6.48 |
|
|
|
4.86 |
|
Diluted earnings per share (from continuing operations) |
|
|
0.82 |
|
|
|
1.60 |
|
|
|
6.41 |
|
|
|
4.81 |
|
68
SIEMENS
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(in millions of , except where otherwise stated and per share amounts)
In the nine months ended June 30, 2010, the dilutive earnings per share computation does not
contain weighted average shares of 1,823 thousand since its inclusion would have been anti-dilutive.
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, 2010.
Regarding our discontinued operations Siemens IT Solutions and Services and OSRAM, see Note 2.
Energy
At the beginning of November 2010, Siemens closed the acquisition of a non-controlling
interest of 49 percent in A2SEA A/S, a supplier of installation services for the construction of
offshore wind farms. The aggregate consideration amounts to 115 of which 47 were paid as of
closing. The second purchase price installment becomes payable latest in November 2011. The
investment, presented under Energy Sectors Renewable Energy Division, is accounted for using the
equity method.
Equity Investments
See Note 17 for information on the fiscal 2011 conversion of our loan receivable from NSN into
interests in NSNs preferred shares, increasing our NSN investment accounted for using the equity
method.
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 include businesses and activities which generally are
intended for divestment or closure. It primarily includes effects from the Electronics Assembly
Systems business sold in the second quarter of fiscal 2011, see Note 2, as well as activities
remaining from divestments and discontinued operations such as from Siemens IT Solutions and
Services and from the former Com business.
Siemens Real Estate (SRE) 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, 2011 and 2010, assets with a
carrying amount of 476 and 579 were transferred to SRE.
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 or when the
activities are classified as discontinued operations. Pensions includes the Companys pension
related income (expense) not allocated to the segments, SRE or Centrally managed portfolio
activities. Regarding the allocation of central infrastructure costs, see Profit definition below.
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.
69
SIEMENS
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(in millions of , except where otherwise stated and per share amounts)
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, 2010.
Lease transactions, however, are classified as operating leases for internal and segment reporting.
Corporate overhead is generally not allocated to segments, except for central infrastructure costs
which are primarily allocated to the Sectors. Intersegment transactions are based on market prices.
Profit of the Sectors and Equity Investments
Siemens Managing Board is responsible for assessing the performance of the segments. The
Companys profitability measure of the Sectors and Equity Investments 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, not allocated to the Sectors and
Equity Investments which Management does not regard 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 and
Equity Investments, and interest expense on payables to suppliers. 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.
Similarly, decision-making regarding essential pension items is done centrally. As a
consequence, Profit primarily includes amounts related to service cost 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 line item Corporate items
and pensions. Curtailments are a partial payback with regard to past service cost 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 and Equity Investments 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.
Beginning with fiscal 2011, central infrastructure costs, which were formerly reported in
Corporate items, are allocated primarily to the Sectors. The total amount to be allocated is
determined at the beginning of the fiscal year and will be charged in equal installments in all
four quarters. Prior period financial information is reported on a comparable basis.
For fiscal 2010, Companys management approved a special remuneration, which was presented in
Corporate items in fiscal 2010; in the nine months ended June 30, 2011, the remuneration totaling
267 for continuing operations was primarily allocated to the Sectors based on management approach,
which resulted in a positive impact at Corporate items. The Sectors were charged as follows:
Industry 128, Energy 69 and Healthcare 43.
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 and Equity Investments, interest income and expense is an
important source of revenue and expense of SFS.
70
SIEMENS
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(in millions of , except where otherwise stated and per share amounts)
Asset measurement principles
Management determined Assets as a measure to assess capital intensity of the Sectors and
Equity Investments (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 may include certain shareholder loans granted to
investments reported in Equity Investments. 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 purchase orders and
order value changes and adjustments, excluding letters of intent. New orders are supplementary
information, 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 and Equity Investments 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 cost 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.
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 and
Equity Investments. SRE applies the same measurement principles as SFS; since fiscal 2011, Total
assets of SRE nets certain intercompany finance