Siemens 2011 Annual Report Download - page 187

153 D. Consolidated Financial Statements
273 E. Additional information
143 C.2 Additional information for supplemental
financial measures
145 C. Siemens AG (Discussion on basis of
German Commercial Code)
151 C. Notes and forward-looking statements
140 C. Information required pursuant to Section  ()
and Section  () no.  of the German Commer-
cial Code (HGB) and explanatory report
142 C. Compensation report and Corporate Governance
statement pursuant to Section a of the German
Commercial Code (HGB)

Income from continuing operations before income taxes
increased to €. billion in fiscal , compared to €.
billion in fiscal . The change is due to the factors men-
tioned above, including the strong double-digit gross profit
increase in the Industry Sector. In addition, the amount for fis-
cal  benefited from the net effect from the disposal gain
and the arbitration decision in connection with Siemens’ exit
from Areva, while in the prior year income was negatively im-
pacted by impairment charges at the Diagnostics Division.
These effects were partly offset by higher SG&A and R&D ex-
penses year-over-year associated with business expansion.
The effective tax rate was % in fiscal  and benefited
from the income tax treatment of the Areva disposal gain,
which was mainly tax-free. For comparison, the effective tax
rate of % in the prior year was adversely affected by the
goodwill impairment charges at the Diagnostics Division, the
majority of which was not deductible for tax purposes. This
effect was more than offset in fiscal  by the release of tax
provisions after the conclusion of tax audits, and the release
of tax liabilities after the positive decision on appeal related to
non-deductible expenses in connection with certain foreign
dividends. As a result, Income from continuing operations
was €. billion in fiscal , up from €. billion in the
prior year.
Discontinued operations primarily include Siemens IT Solu-
tions and Services, which was sold to AtoS in the fourth quar-
ter of fiscal , and OSRAM which Siemens plans to list pub-
licly. In addition, discontinued operations include former Com
activities, comprising telecommunications carrier activities
transferred to NSN in the third quarter of fiscal ; the en-
terprise networks business, % of which was divested during
the fourth quarter of fiscal ; and the mobile devices busi-
ness sold to BenQ Corporation in fiscal  as well as the for-
mer Siemens VDO Automotive activities, which were sold to
Continental AG in the first quarter of fiscal . The loss
from discontinued operations, net of income taxes, in fiscal
 was € million, compared to a loss of € million a
year earlier. The change year-over-year related mainly to a loss
of € million after tax in the current period attributable to
Siemens IT Solutions and Services. This loss included pretax
charges of € million for impairments of long-lived assets,
including € million for goodwill; € million in pretax
charges in connection with the integration and training pro-
gram related to the transfer of the business to AtoS; as well as
pretax charges of € million related to establishing Siemens
IT Solutions and Services as a separate legal group, including
€ million for carve-out activities and € million related to
personnel-related matters. For comparison, the result associ-
ated with Siemens IT Solutions and Services in fiscal  was
a loss of € million after tax, including pretax charges of
€ million related to the completion of staff reduction mea-
sures related to the strategic reorientation of Siemens IT Solu-
tions and Services aimed at strengthening the competitive
position of the business. OSRAM contributed a positive €
million after tax to income from discontinued operations in
fiscal , nearly unchanged from a positive € million af-
ter tax a year earlier. OSRAM reported a % revenue increase
compared to the previous fiscal year. Growth was driven by
demand for specialty lighting products as well as by increased
LED business. For additional information, see D. Notes to
Consolidated Financial Statements.
Net income for Siemens in fiscal  increased to €. bil-
lion, compared to €. billion a year earlier. Net income at-
tributable to shareholders of Siemens AG was €. billion,
up from €. billion in fiscal .
Reconciliation for Consolidated Statements of Income (in billions of €)
FY  FY  FY 
Revenue 73.5 69.0 70.0
Cost of goods sold (51.4) (49.0) (50.9)
Gross profit 22.1 20.0 19.1
R&D expenses (3.9) (3.6) (3.6)
SG&A expenses (10.3) (9.7) (9.5)
Other/Taxes (0.9) (2.4) (3.5)
Income 7.0 4.3 2.5
All percentage figures in % of Revenue.
1 Continuing operations.
(73)% (71)% (70)%
(5)% (5)% (5)%
% % %
27% 29% %
(14)% (14)% (14)%