Siemens 2008 Annual Report Download - page 154

58 Management’s discussion and analysis
As of September 30, 2007, the reportable segment Strategic Equity Investments (SEI) comprised the Company’s
investments in Nokia Siemens Networks B.V. (NSN), BSH Bosch und Siemens Hausgeräte GmbH (BSH) and
Fujitsu Siemens Computers (Holding) B.V. (FSC). During the fourth quarter of scal 2008, the scope of the seg-
ment was expanded and SEI was renamed Equity Investments. Prior-year gures were adjusted for purposes of
comparison. Equity Investments includes equity investments not allocated to a Sector, Cross-Sector Business,
SRE, Pensions or Treasury for strategic reasons; assets held for disposal; and available-for-sale nancial assets.
As of September 30, 2008, equity investments not allocated to a Sector or Cross Sector Business include NSN and
BSH, both of which were previously included in SEI; our 49% stake in Enterprise Networks Holding, BV; and our
49% investment in Krauss-Maffei Wegmann GmbH & Co. KG, which was reported within Corporate Items as of
September 30, 2007. Assets held for disposal include FSC, which was previously included in SEI.
While we implemented a new organizational structure in scal 2008, we largely retained our previous segment
performance measures. In the following discussion and analysis, we provide data and comment on these seg-
ment performance measures for each Division as well as for the Sectors in which they are included. For further
information on our reportable segments, denitions of our performance measures and reconciliations to our
Consolidated Financial Statements, see “Notes to Consolidated Financial Statements.”
Under our policy for the recognition of new orders, we generally recognize a new order when we enter into
a contract that we consider “effective and binding” based on our review of a number of different criteria. In gen-
eral, if a contract is considered effective and binding, we recognize the total contract value as promptly as practi-
cable. Contract value is the agreed price or fee of the irrevocable portion of the contract to deliver goods and/or
render services. Agreed fees on service, maintenance and outsourcing contracts with a remaining contractual
term of more than 12 months, for which management believes that it is highly uncertain whether all the con-
tract terms will be met by the customer, are recognized as new orders on a revolving basis for the next 12
months. In case an order is cancelled during the current year or its amount is modied, we adjust our new order
total for the current period accordingly, rather than retroactively adjusting previously published new order
totals. However, if an order from previous year(s) is cancelled, generally, current period new orders are not
adjusted, instead, existing orders on hand are revised if the adjustment exceeds a certain threshold. There is no
standard system for compiling new order information among companies in our elds of activities. Accordingly,
our new order totals may not be comparable with new order totals reported by other companies. Our new order
totals are not audited, however we do subject our new orders to internal documentation and review require-
ments. We may change our policies for recognizing new orders in the future without previous notice.
Further, Siemens implemented a new geographical structure in accordance with Managing Board responsibili-
ties. Accordingly, beginning with the third quarter of scal 2008, external nancial reporting for Siemens is
based on the three regions
 “Europe, Commonwealth of Independent States (C.I.S.), Africa”,
 “Americas” and
 “Asia, Australia, Middle East”.
In addition, information for Germany which is part of the region “Europe, C.I.S., Africa”, for the United States,
which are part of the region “Americas,” and for China and India, which are part of the region “Asia, Australia,
Middle East,” is reported separately on a Siemens level. As of September 30, 2007, ve regions were externally
reported, including Germany.