Siemens 2011 Annual Report Download - page 186

6 A. To our shareholders
23 B. Corporate Governance 51 C. Combined management’s discussion and analysis
52 C. Business and operating environment
80 C.2 Fiscal  – Financial summary
83 C. Results of operations
101 C. Financial position
114 C. Net assets position
117 C. Overall assessment of the economic position
118 C. Report on post-balance sheet date events
119 C. Report on expected developments and
associated material opportunities and risks
135 C. Information required pursuant to Section  ()
and Section  () of the German Commercial
Code (HGB) and explanatory report

Other operating income was € million in fiscal , com-
pared to € million in fiscal . The current year includes
€ million related to a settlement of legal matters in connec-
tion with portfolio activities. For comparison, the prior year
benefited from gains in connection with compliance-related
matters, including a gain of € million related to an agree-
ment with the provider of the Siemens’ directors and officers
liability insurance, a net gain related to settlements with for-
mer members of Siemens’ Managing Board and Supervisory
Board, and total gains of € million related to the recovery of
funds frozen by authorities. In addition, fiscal  included a
gain of € million related to the sale of our airfield lighting
business at Mobility, a gain of € million from the sales of
our Roke Manor activities in the U.K. that were reported with-
in Corporate items, and higher gains related to the disposal of
real estate. Further, Siemens ceased to consolidate a subsid-
iary in the third quarter of fiscal  due to a loss of control
and recorded a related gain of € million. For additional in-
formation, see D. Notes to Consolidated Financial State-
ments.
Other operating expense was € million, compared to
€. billion in the prior year. The difference was due primar-
ily to impairment charges at the Diagnostics Division in the
fourth quarter of fiscal , including €. billion for good-
will and € million for real estate. In addition, the prior year
included € million provided for in connection with an ex-
pected loss from the sale of our electronics assembly systems
business to ASM Pacific Technology. The transaction was an-
nounced in the fourth quarter of fiscal  and closed in the
second quarter of fiscal . Fiscal  included goodwill im-
pairment charges of € million related to our solar business
as well as higher charges year-over-year related to legal and
regulatory matters. For additional information, see D. Notes
to Consolidated Financial Statements.
Income from investments accounted for using the equity
method, net was € million in fiscal , up from € mil-
lion in the prior fiscal year. In the current year, the equity in-
vestment loss related to NSN decreased to € million, down
from a loss of € million a year earlier. In contrast, equity in-
vestment income related to our stakes in Enterprise Networks
Holdings B.V. (EN), BSH Bosch und Siemens Hausgeräte GmbH
(BSH) and Krauss-Maffei Wegmann & Co. KG (KMW) declined
to a total of € million in fiscal  from a total of € mil-
lion in fiscal . In addition, the current year included a
gain of € million on the sale of our % interest in KMW to
the Wegmann Group and impairment charges of € million
related to an equity interest held in our concentrated solar
power business. For comparison, fiscal  included a gain
of € million from the sale of a stake in an investment at SFS.
For additional information, see D. Notes to Consolidated
Financial Statements.
Interest income increased to €. billion in fiscal ,
from €. billion a year earlier. The increase was due in part
to a higher expected return on plan assets related to pension
plans, resulting primarily from an increase in pension plan as-
sets. The increase in interest income also included higher in-
terest income related to an increase in average total liquidity
compared to the prior year. Interest expense declined to
€. billion from €. billion in the prior year, driven by
lower interest costs related to pension plans due to a decrease
in discount rates. For additional information, see D. Notes
to Consolidated Financial Statements.
Other financial income (expense), net was a positive €
million in fiscal , compared to a negative € million a
year earlier. The change was due primarily to a pretax €.
billion gain from the divestment of Siemens’ % share in Are-
va NP S.A.S. to Areva S.A. in the second quarter of fiscal ,
partly offset by the third-quarter pretax loss of € million
related to the arbitration decision in connection with Siemens’
exit from this joint venture. Changes in the fair market value
of interest rate and foreign currency derivatives not qualifying
for hedge accounting also contributed to the increase year-
over-year. For additional information, see D. Notes to Con-
solidated Financial Statements.
Year ended September , % Change
(in millions of €)  
Income from continuing
operations before income
taxes 9,242 5,974 55%
Income taxes (2,231) (1,712) 30%
as percentage of income
from continuing operations
before income taxes 24% 29% –
Income from continuing
operations 7,011 4,262 65%
Loss from discontinued
operations, net of income
taxes (690) (194) > 200%
Net income 6,321 4,068 55%
Net income attributable to
non-controlling interests 176 169 –
Net income attributable to
shareholders of Siemens AG 6,145 3,899 58%