Siemens 2008 Annual Report Download - page 159

Management’s discussion and analysis 63
Discontinued operations include former Com activities as well as SV, which was sold to Continental AG in the
rst quarter of scal 2008. The former Com activities include the enterprise networks business (SEN), in which
Siemens divested a 51% stake during the fourth quarter of the current scal year, the telecommunications car-
rier activities transferred into NSN in the third quarter of scal 2007, and the mobile devices business sold to
BenQ Corporation in scal 2005. Income from discontinued operations in scal 2008 was €4.027 billion, up sub-
stantially from €129 million a year earlier, mainly due to SV. A substantial gain on the sale and positive operat-
ing results at SV before the sale contributed approximately €5.5 billion to income from discontinued operations
in scal 2008. This positive contribution was partly offset by effects related to former Com activities, including
a preliminary loss related to the above-mentioned divestment of SEN of approximately €1.0 billion and sever-
ance charges and impairments of long-lived assets at SEN earlier in the year. As as result, former Com activities
reduced income from discontinued operations by €1.433 billion in scal 2008. Therein included is a €120 mil-
lion provision related to expected settlement of a claim by the insolvency administrator of BenQ that was
recorded in the fourth quarter of scal 2008. In scal 2007, discontinued operations included positive results
from former Com activities, primarily a then preliminary, pre-tax non-cash gain of approximately €1.6 billion
associated with the transfer of Siemens’ carrier-related assets into NSN. This gain more than offset impairments
totaling €567 million at SEN, and a €201 million ne related to Com imposed on Siemens in Germany, of which
€200 million was tax deductible. The prior year beneted from positive operating results at SV, more than offset
by approximately €1.1 billion in tax expense related to its carve-out. Expenses for outside advisors engaged in
connection with investigations into alleged violations of anti-corruption laws and related matters were €80 mil-
lion in scal 2008, considerably down from €195 million a year earlier. For additional information regarding
discontinued operations, see “Notes to Consolidated Financial Statements.”
Net income for Siemens in scal 2008 was €5.886 billion, compared to €4.038 billion in the same period a year
earlier. Net income attributable to shareholders of Siemens AG was €5.725 billion, up from €3.806 billion in
scal 2007.