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296 Notes to Consolidated Financial Statements

(in millions of €, except where otherwise stated and per share amounts)

The tables below show the net foreign exchange transaction exposure by major

currencies as of September 30, 2007 and 2006. In some currencies Siemens has

both substantial sales and costs, which have been off-set in the table:

Effects of currency translation

Many Siemens subsidiaries are located outside the Euro zone. Since the ﬁ nancial

reporting currency of Siemens is the Euro, the ﬁ nancial statements of these sub-

sidiaries are translated into euros so that the ﬁ nancial results can be included in

the Consolidated Financial Statements of Siemens. To consider the effects of for-

eign exchange translation risk within risk management, the assumption is that

investments in foreign-based operations are permanent and that reinvestment is

continuous. Whenever a divestment of a particular asset or entity is made, the

value of this transaction risk is included in the sensitivity analyses. Effects from

currency ﬂ uctuations on the translation of net asset amounts into Euro are

reﬂ ected in the Company’s consolidated equity position.

September 30, 2007*

USD GBP Other Total

Gross balance sheet exposure 223 321 208 752

Thereof: Financial assets 7,858 3,642 4,769 16,269

Thereof: Financial liabilities (7,635) (3,321) (4,561) (15,517)

Gross exposure from ﬁ rm commitments

and anticipated transactions 3,730 392 1,193 5,315

Foreign exchange transaction exposure 3,952 713 1,398 6,063

Economically hedged exposure (3,893) (567) (1,132) (5,592)

Change in future cash ﬂ ows after hedging activities

resulting from a 10% appreciation of the Euro (6) (15) (27) (47)

September 30, 2006*

USD GBP Other Total

Gross balance sheet exposure 2,210 332 553 3,095

Thereof: Financial assets 13,778 3,483 5,522 22,783

Thereof: Financial liabilities (11,568) (3,151) (4,969) (19,688)

Gross exposure from ﬁ rm commitments

and anticipated transactions 5,344 (65) 279 5,558

Foreign exchange transaction exposure 7,554 267 832 8,653

Economically hedged exposure (7,291) (409) (576) (8,276)

Change in future cash ﬂ ows after hedging activities

resulting from a 10% appreciation of the Euro (26) 14 (26) (38)

* Including SV.