Siemens 2010 Annual Report Download - page 161

113 Report on post-balance sheet date events
114 Report on expected developments and associated
material opportunities and risks
128 Information required pursuant to § () and
§ () HGB and explanatory report
133 Information required pursuant to § () and
§ () no.  HGB and explanatory report
135 Compensation and declaration pursuant to §a HGB
135 Additional information for supplemental
financial measures
138 Siemens AG (Discussion on basis of HGB)
147 Consolidated Financial Statements
261 Additional information

Siemens Real Estate
Income before income taxes at SRE was € million in fiscal
, down from € million a year earlier, due in part to
lower income related to the disposal of real estate. For com-
parison, the prior-year period included a gain of € million
on the disposal of Siemens’ residential real estate holdings.
Both periods included costs associated with Siemens’ program
to bundle its real estate assets into SRE and to initiate further
efficiency measures, including impairments. In fiscal ,
these costs totaled € million and came in above the prior-
year period. Assets with a book value of € million were
transferred to SRE during the current fiscal year as part of the
real estate bundling program. SRE will continue to incur costs
associated with the program in coming quarters, and expects
to continue with real estate disposals depending on market
conditions.
Corporate items and pensions
In fiscal , Corporate items and pensions totaled a nega-
tive €. billion compared to a negative €. billion a year
earlier.
Included therein, Corporate items improved from a negative
€. billion to a negative €. billion. Corporate items in
fiscal  included higher gains in connection with compli-
ance-related matters, including a gain of € million related to
an agreement with the provider of the Siemens’ directors and
officers liability insurance, a net gain related to settlements
with former members of Siemens’ Managing Board and Super-
visory Board, and total gains of € million related to the recov-
ery of funds frozen by authorities. Compared to fiscal , the
current period included higher personnel-related expenses,
including expenses of € million related to special remu-
neration for non-management employees. After determining
the allocation of this remuneration in the first quarter of fiscal
, the expenses will be allocated primarily to the Sectors in
fiscal . Fiscal  also included higher expenses associ-
ated with streamlining IT costs for Siemens as a whole, as well
as charges of € million related to the strategic reorientation
of Siemens IT Solutions and Services, primarily including
carve-out costs. Further, the current fiscal year included net
charges related to legal and regulatory matters as well as a
gain of € million from the sale of our Roke Manor activities
in the U.K. In addition, fiscal  included a net loss of €
million related to a major asset retirement obligation, com-
pared to a higher net loss in the prior year. In both periods, the
net result related to the asset retirement obligation included
negative interest-related effects from the measurement of the
obligation and positive effects from related hedging activities
not qualifying for hedge accounting. In addition, the net result
related to the asset retirement obligation included a gain of
€ million in fiscal  due to revised assumptions (for ad-
ditional information, see “Notes to Consolidated Financial
Statements”).
For comparison, Corporate items in fiscal  included net
charges of € million related to the global SG&A program
and other personnel-related restructuring measures. Expenses
for outside advisors engaged in connection with investigations
into alleged violations of anti-corruption laws and related mat-
ters as well as remediation activities amounted to € million
in fiscal . In addition, the prior-year period included a
positive effect related to shifting an employment bonus pro-
gram from cash-based to share-based payment, which was
offset by a charge of € million related to a global settlement
agreement with the World Bank Group.
Centrally carried pension expense was € million in fiscal
, compared to € million a year earlier. The change year-
over-year was due to higher expected return on plan assets and
lower interest cost in the current period, as well as higher in-
surance costs in the prior-year period related to our mandatory
membership in the Pensionssicherungsverein (PSV), the Ger-
man pension insurance association.
Beginning with fiscal , central infrastructure costs cur-
rently included in Corporate items will be allocated primarily to
the Sectors. Financial information for prior periods will be re-
ported on a comparable basis. For example, comparable fiscal
 results will show allocated central infrastructure costs of
€ million.
Centrally managed activities related to establishing Siemens IT
Solutions and Services as a separate legal entity and wholly
owned subsidiary of Siemens are expected to result in substan-
tial charges in coming quarters.
Eliminations, Corporate Treasury
and other reconciling items
In fiscal , income before income taxes from Eliminations,
Corporate Treasury and other reconciling items was a negative
€ million compared to a negative € million a year earlier.
The current period benefited primarily from a decline in refi-
nancing costs due to lower interest rates, partly offset by
changes in fair market value from interest rate derivatives.