Siemens 2007 Annual Report Download - page 134

134 Management’s discussion and analysis
Corporate items, pensions and eliminations
Corporate items, pensions and eliminations was a negative €1.672 billion in fi scal
2007 compared to a negative €527 million a year earlier. The major factor in this
change was Corporate items, which increased to a negative €1.728 billion from a
negative €553 million in fi scal 2006 due largely to €843 million in costs related to
legal and regulatory matters. Within this fi gure, signifi cant effects included €440
million stemming from sanctions on major suppliers of gas-isolated switchgear,
€152 million in expenses for outside experts engaged to assist with internal and
external investigations, and €81 million in funding primarily for job placement
companies for former Siemens employees affected by the bankruptcy of BenQ
Mobile GmbH & Co. OHG (BenQ). Corporate items also included higher expenses
related to a major asset retirement obligation. Finally, Corporate items in fi scal
2007 also includes €106 million related to Siemens’ regional sales organization in
Germany, primarily including an impairment. A year earlier, Corporate items ben-
efi ted from a €95 million gain on the sale of an investment, as well as €70 million
in positive effects from settlement of an arbitration proceeding.
Other interest expense
Other interest expense of Operations for fi scal 2007 was €497 million compared
to interest expense of €325 million a year earlier. The change was mainly due to
increased intra-company fi nancing of Operations by Corporate Treasury year-
over-year.