Siemens 2009 Annual Report Download - page 293

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 Managing Board statements, Independent auditors’ report, Additional information
 Notes to Consolidated Financial Statements
(in millions of €, except where otherwise
stated and per share amounts)
New orders:
New orders are determined principally as estimated revenue of
accepted purchase orders and order value changes and adjust-
ments, excluding letters of intent. New orders are supplemen-
tary information, provided on a voluntary basis. It is not part of
the audited Consolidated Financial Statements.
Free cash flow definition:
Segment Information discloses Free cash flow and Additions to
intangible assets, property, plant and equipment. Free cash
flow of the Sectors, Equity Investments, and Siemens IT Solu-
tions and Services constitutes net cash provided by (used in)
operating activities less additions to intangible assets and
property, plant and equipment. It excludes Financing interest
as well as income tax related and certain other payments and
proceeds, in accordance with the Company ’s Profit and Asset
measurement definition. Free cash flow of SFS, a financial ser-
vices business, includes related financing interest payments
and proceeds; income tax payments and proceeds of SFS are
excluded.
Amortization, depreciation and impairments:
Amortization, depreciation and impairments presented in Seg-
ment Information includes depreciation and impairments of
property, plant and equipment as well as amortization and im-
pairments of intangible assets (other than goodwill).
Measurement – Other Operations and SRE
Other Operations follows the measurement principles of the
Sectors, Equity Investments, and Siemens IT Solutions and
Services. SRE applies the measurement principles of SFS.
Reconciliation to
Siemens’ Consolidated Financial Statements
The following table reconciles total Assets of the Sectors,
Equity Investments and Cross-Sector Businesses to Total assets
of Siemens’ Consolidated Balance Sheets:
Similarly, decision-making regarding essential pension items
is done centrally. As a consequence, Profit primarily includes
amounts related to service costs of pension plans only, while
all other regularly recurring pension related costs (including
charges for the German pension insurance association and
plan administration costs) are included in the line item Corpo-
rate items and pensions.
Furthermore, income taxes are excluded from Profit since in-
come tax is subject to legal structures, which typically do not
correspond to the structure of the segments.
The effect of certain litigation and compliance issues is ex-
cluded from Profit, if such items are not indicative of the Sec-
tors, Equity Investments, and Siemens IT Solutions and Ser-
vices’ performance, since their related results of operations
may be distorted by the amount and the irregular nature of
such events. This may also be the case for items that refer to
more than one reportable segment, SRE and/or Other Opera-
tions or have a corporate or central character.
Profit of the segment SFS:
Profit of the segment SFS is Income before income taxes. In
contrast to performance measurement principles applied to
the Sectors, Equity Investments, and Siemens IT Solutions and
Services, interest income and expense is an important source
of revenue and expense of SFS.
Asset measurement principles:
Management determined Assets as a measure to assess capital
intensity of the Sectors, Equity Investments and Siemens IT
Solutions and Services (Net capital employed). Its definition
corresponds to the Profit measure. It is based on Total assets of
the Balance Sheet, primarily excluding intragroup financing
receivables, intragroup investments and tax related assets,
since the corresponding positions are excluded from Profit.
The remaining assets are reduced by non-interest-bearing lia-
bilities other than tax related liabilities (e.g. trade payables)
and provisions to derive Assets. In contrast, Assets of SFS is
Total assets. A reconciliation of Assets disclosed in Segment
Information to Total assets in the Consolidated Balance Sheet
is presented below.