Siemens 2006 Annual Report Download - page 225

Notes to Consolidated Financial Statements
(in millions of €, except where otherwise stated and per share amounts) 221
Financing and Real Estate
The Company’s performance measurement for its Financing and Real Estate Groups is
Income before income taxes. In contrast to the performance measurement used for the Opera-
tions Groups, interest income and expense is an important source of revenue and expense for
Financing and Real Estate.
For the years ended September 30, 2006 and 2005, Income before income taxes at SFS
includes interest revenue of €557 and €491, respectively, and interest expense of €331 and
€257, respectively. In addition, Income before income taxes includes earnings from equity
investees for the years ended September 30, 2006 and 2005 of €57 and €46, respectively.
For the years ended September 30, 2006 and 2005, Income before income taxes at SRE
includes interest revenue of €49 and €51, respectively, and interest expense of €138 and €147,
respectively.
Eliminations, reclassifications and Corporate Treasury
Income before income taxes consists primarily of interest income due to cash management
activities, corporate finance, and certain currency and interest rate derivative instruments.
Description of business segments
The Operations Groups are comprised of the following businesses:
Communications (Com) – Com develops, manufactures and sells a full-range portfolio of
complex network infrastructure for enterprises and carriers and related services including
convergent technologies, products and services for wireless, fixed and enterprise networks.
For information on the Company’s discontinued MD operation see Note 3.
Siemens Business Services (SBS) – SBS provides information and communications ser-
vices to customers primarily in the manufacturing industry, the public sector, financial ser-
vices, utilities, telecommunications and media. SBS designs, builds and operates both discrete
and large-scale information and communications-systems and solutions and also provides
related maintenance and support services.
Automation and Drives (A&D) – A&D produces and installs manufacturing automation
systems, drives systems, low voltage controllers and distributors, and process automation
products and instrument systems and provides related solutions and services.
Industrial Solutions and Services (I&S) – I&S provides a range of facilities systems, solu-
tions and services to raw materials processing companies and infrastructure customers. I&S
aims to optimize the production and operational processes of customers in the sectors water,
metals, traffic control, airport logistics, postal automation, marine solutions, oil and gas,
paper, cement and opencast mining sectors.
Siemens Building Technologies (SBT) – SBT provides products, systems and services for
monitoring and regulating the temperature and ventilation, fire safety, security and energy
efficiency of commercial and industrial property, as well as special applications for airports,
tunnels, harbors or stadiums.
Power Generation (PG) – PG provides customers worldwide with a full range of equipment
necessary for the efficient conversion of energy into electricity and heat. It customizes gas and
steam turbines in the smaller output range, which can be used as drives for compressors or
large pumps, to meet specific project needs. It offers a broad range of power plant technology,
with activities that include: development and manufacture of key components, equipment, and
systems; planning, engineering and construction of new power plants; and comprehensive
servicing, retrofitting and modernizing of existing facilities.
Notes to Consolidated Financial Statements