Siemens 2010 Annual Report Download - page 168

6 To our shareholders 21 Corporate Governance 49 Combined management’s discussion and analysis
50 Business and operating environment
78 Fiscal  – Financial summary
81 Results of operations
98 Financial position
110 Net assets position
113 Overall assessment of the economic position

Operating activities provided net cash of €. billion in fis-
cal , compared to net cash provided of €. billion a year
earlier. These results include both continuing and discontin-
ued operations. Within the total, continuing operations pro-
vided net cash of €. billion, compared to net cash provided
of €. billion in fiscal . In fiscal  Total Sectors
Profit was burdened by impairment charges of €. billion,
posted at Diagnostics in the fourth quarter, which had no im-
pact on cash flow. Cash flow from operating activites was sup-
ported by a strong operating performance in the Sectors (dis-
regarding the impairment charges), particularly in the Health-
care and Industry Sectors. Cash flow from operating activities
also benefited from positive changes in net working capital
including substantially higher billings in excess of costs, par-
ticularly in the Energy Sector, compared to a decrease of these
payments in fiscal . In contrast, fiscal  included
higher cash outflows related to income taxes and pension
plans. Both periods included approximately €. billion in
outflows related to staff reduction measures. For comparison,
negative changes in net working capital in fiscal  included
€. billion in cash outflows paid to authorities in the US
and Germany associated with the settlement of legal proceed-
ings and substantial payments for charges related to project
reviews in Fossil Power Generation, Mobility and Siemens IT
Solutions and Services.
Discontinued operations improved to net cash used of € mil-
lion in fiscal , compared to net cash used of € million
in the prior-year period. These cash outflows relate primarily
to former Com activities.
Investing activities in continuing and discontinued operations
used net cash of €. billion in fiscal , compared to net
cash used of €. billion in the prior-year period. Within the
total, net cash used in investing activities for continuing op-
erations amounted to €. billion in fiscal  and €.
billion a year earlier. Within continuing operations, cash out-
flows for Acquisitions, net of cash acquired, were € million
including € million for the acquisition of Solel Solar Sys-
tems, a solar thermal power technology company. Compared
to a year earlier, higher early terminations and reduced SFS fi-
nancing activities resulted in lower cash outflows relating to
receivables from financing activities. Proceeds from sales of
investments, intangibles and property, plant and equipment
provided net cash of € million primarily due to the sale of
land and buildings at SRE and the sale of our % minority stake
in Dräger Medical AG & Co. KG to the majority shareholder
Drägerwerk AG & Co. KGaA. For comparison the prior-year pe-
riod included net cash provided of €. billion mainly from
the sale of our residential real estate holdings Siemens Woh-
nungsgesellschaft mbH & Co. OHG and the sale of our % stake
in FSC to Fujitsu Limited. In contrast, cash outflows for Pur-
chases of investments of € million a year earlier included
€ million resulting from a drawdown request by NSN under
a Shareholder Loan Agreement between Siemens and NSN.
Discontinued operations in fiscal  used net cash of €
million for investing activities primarily for former Com activi-
ties. In the prior year, discontinued operations used net cash
of € million. In fiscal , cash outflows related to the fis-
cal  divestment of our mobile devices business included
€. billion for a settlement with the insolvency administrator
Free cash flow
Continuing operations Discontinued operations Continuing and
discontinued operations
Year ended September , Year ended September , Year ended September ,
(in millions of €)      
Net cash provided by (used in): 
Operating activities A 9,447 6,246 3(98) (145) 9,349 6,101 3
Investing activities (2,768) (2,968) 3(79) (194) (2,847) (3,162) 3
Herein: Additions to intangible assets
and property, plant and equipment B (2,336) (2,460) 3– – (2,336) (2,460) 3
Free cash flow ,  A+B 7,111 3,786 (98) (145) 7,013 3,641
1 For information regarding Net cash provided by (used in) financing activities please refer to the discussion below.
2 The closest comparable financial measure of Free cash flow under IFRS is Net cash provided by (used in) operating activities. Net cash provided by (used in) operating activities
from continuing operations as well as from continuing and discontinued operations is reported in our “Consolidated Statements of Cash Flow.” Additions to intangible assets
and property, plant and equipment from continuing operations is reconciled to the figures as reported in the “Consolidated Statements of Cash Flow” in the “Notes to Consolidated
Financial Statements.” Other companies that report Free cash flow may define and calculate this measure differently.
3 Following a change in accounting pronouncements as of the beginning of fiscal year 2010 Additions to assets held for rental in operating leases, which were previously reported
under Additions to intangible assets and property, plant and equipment, were retroactively reclassified from Net cash provided by (used in) investing activities to Net cash provided
by (used in) operating activities. For further information, see “Notes to Consolidated Financial Statements.”