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siemens.com/answers
Trust unites us
Annual Report 

Table of contents

  • Page 1
    Trust unites us Annual Report 2012 siemens.com/answers

  • Page 2
    ... patient care Technology and innovation - page 20 Strength How efficient technologies are shaping the future of energy Portfolio management - page 34 Networking How intelligent IT solutions are creating unimagined value Cross-business activities - page 54 Diversity How our employees' wealth...

  • Page 3
    ...a new international airport is being planned, when a doctor recommends a treatment to a patient, when political leaders and society want to ensure reliable energy supplies for the future, when a company wants to offer tailor-made service solutions, when the development of innovative products demands...

  • Page 4
    ...future of Portfolio management - page 34 Siemens establishes a pension fund for employees energy and their families. Networking How intelligent IT solutions are creating unimagined value Cross-business activities - page 54 1870 After only two years of construction, Siemens begins operation of the...

  • Page 5
    ... its financial base, Siemens & Halske is reorganized as a publicly listed company. control system, enabling it to capture a leading position in automation technology. 2011 In Irsching, Germany, Siemens sets a world record for combined cycle power plant efficiency. 1983 In Germany, Siemens installs...

  • Page 6
    ... care Technology and innovation - page 20 Proximity With activities in some 190 countries, we're close to our customers worldwide. The construction of Bengaluru International Airport is a prime example. Siemens employees are on site, providing the airport's operators with products and solutions...

  • Page 7
    ... Our Company-wide training and continuing education programs - coupled with measures to make our teams more diverse - are strengthening our employees and our management culture and enabling us to rigorously leverage the power of Siemens across our entire organization. A specialized software platform...

  • Page 8
    ... of energy Portfolio management - page 34 The reports provide a look behind the scenes at how we're leveraging the potential of our integrated technology company and turning it Networking into reality every day. How intelligent IT solutions are creating unimagined value Cross-business activities...

  • Page 9

  • Page 10
    ... built with the help of an innovative public-private partnership initiated and supported by Siemens, is part of this impressive infrastructure development. Close, trust-based collaboration ensured the huge project's success. As Managing Director of the international airports in Bangalore and Mumbai...

  • Page 11
    Proximity Ideas, page 20 The integrated technology company Strength, page 34 Networking, page 54 Diversity, page 66 The challenge for Bangalore Population growth of roughly 50 % between 2001 and 2011 9

  • Page 12
    ... meet the needs of its booming population - which already totals about 8.5 million - the Indian metropolis needs a high-performance infrastructure. Aerospace industry High levels of air pollution India's third-largest city The challenge for Bangalore 8.5 million inhabitants in 2011 Overburdened...

  • Page 13
    .... Today, experts at the center are conducting research in areas like software technology and decentralized energy systems. IT location India's Silicon Valley Right - As Vice Chairman of the Indian conglomerate GVK, G.V. Sanjay Reddy is Managing Director of the international airports in Mumbai and...

  • Page 14
    ... the company to recoup its investment, the Indian government has granted it long-term rights to collect airline and passenger fees. Siemens has been active in India since 1867. Today, the Company has some 17,700 employees in the country. Bengaluru International Airport Public-private partnership...

  • Page 15
    Left/Right - Its international airport is helping make Bangalore the Gateway to South India. All key airport data is collected in the airport's control tower. About 12 million passengers in fiscal 2010 / 2011 Sharply increasing passenger numbers India's most advanced major airport Innovative ...

  • Page 16
    Abwve - Countless planes take off from Bengaluru International Airport every day, linking South India with cities throughout the world. July 2004 Contract signed by the Indian government and the airport operator May 2008 Official opening 14 July 2005 Construction begun

  • Page 17
    .... For example, all sub-solutions were internally coordinated in advance. In line with the Siemens One approach, a key account management team advised the project company every step of the way. We tackled the challenge head-on, delivering electrical systems on a turnkey basis, supplying energy for...

  • Page 18
    ...infrastructure solutions for which we're responsible include the provision of security and electrical systems - from design to commissioning. As planned, we're scaling back our own financial commitment in view of the airport's successful business development. In fiscal 2012, we announced the sale of...

  • Page 19
    ... Sector, which supplies integrated products, solutions and services from a single source - from mobility and logistics solutions to intelligent power distribution systems to highly efficient building technologies. Financial Services (SFS) is an international provider of financing solutions. With its...

  • Page 20
    ... activities in the booming markets of the emerging countries. Long-term customer relationships have been the hallmark of our business for 165 years. To support major customers, we've set up a Company-wide Key Account Management Program that enables us to tailor our products, solutions and services...

  • Page 21
    ... 28 major R&D facilities (15% of total worldwide) 3 4 As part of Siemens' Executive Relationship Program, our 100 most important customers are personally supported by members of Siemens' Managing Board. To determine if this program is actually meeting our customers' expectations, we conduct annual...

  • Page 22
    20

  • Page 23
    ...8 Ideas The integrated technology company Strength: page 34 Integration: page 54 Diversity: page 66 Trust based on ideas "My son has new hope." Fifteen-year-old Christian from the town of Beuren in southwest Germany has been diagnosed with cancer. In the summer of 2011, doctors discovered a tumor...

  • Page 24
    ...chemotherapy was working." The tube, as Christian calls the Siemens Biograph mMR, is an innovative combination of MRI and PET technology that helps physicians monitor the impact of chemotherapy treatments. The system can simultaneously display structures in the body and their metabolic activity. 22

  • Page 25
    Confidence Solidarity July 9, 2012 10: 34 a. m. -- Having ice cream in Beuren Family A summer's day 23

  • Page 26
    July 10, 2012 Examination 2 : 02 p.m. -- Preliminary discussion at Tübingen University Hospital Successful therapy Trust Diagnosis 24

  • Page 27
    ...contain tumor cells? And if so, how active are they? In their examinations, the Tübingen cancer specialists never lose sight of Christian's particular situation. "Children aren't just small versions of adults. That means we have to consider a wide range of factors when evaluating their symptoms and...

  • Page 28
    ... patient. "Right now, it looks very good," reports the head of pediatric radiology in the Department for Diagnostic and Interventional Radiology. "The functional and metabolic findings show that the therapy has been successful. The tumor is no longer showing increased metabolic activity." Greater...

  • Page 29
    Certainty Magnetic field Contrast agent July 10, 2012 4 : 17 p.m. -- Biograph mMR examination Monitoring 27

  • Page 30
    Professor Dr. Claus Claussen, Tübingen University Hospital "Our cooperation with Siemens is based on enormous trust, which has grown continually over the years." 28

  • Page 31
    .... This example highlights how important it is for an industrial company like Siemens, which is geared to research and development, to leverage its customers' potential and pursue open innovation through joint research projects. LEFT - Professor Dr. Claussen (left) and Professor Dr. Schäfer (right...

  • Page 32
    ... in terms of treatment quality, this definitely represents a big step forward. But it will certainly be years before we can measure this innovation's full impact on healthcare. If you could make a wish, what would you want from Siemens for the next generation of diagnostic imaging systems? PROFEssOR...

  • Page 33
    ... superimposed using special software. This second step reduced precision since patients - and thus organ positions - often shifted between scans. The Siemens Biograph mMR features new PET detectors whose operation is not disturbed by the MRI's strong magnetic field. That's why the innovative system...

  • Page 34
    ... to the challenges of our day - in the areas of healthcare, energy, industry and infrastructure. Few companies have more researchers and developers working to create innovative products and solutions worldwide. In a record number of research partnerships, our R&D employees are shaping technological...

  • Page 35
    ...: In fiscal 2012, Siemens had roughly 29,500 R&D employees working at some 188 locations in more than 30 countries worldwide to create and develop new solutions in the areas of energy, industry, infrastructure and healthcare. Inventions and patents: In fiscal 2012, Siemens reported around 8,900...

  • Page 36
    ...working every day to make our energy supply a little bit greener - one step at a time. Making a successful transition to a new energy system will require implementing a complex puzzle of measures. As an integrated technology company, we offer a virtually unrivaled portfolio of products and solutions...

  • Page 37
    Proximity, page 8 Ideas, page 20 The integrated technology company Strength Networking, page 54 Diversity, page 66 35

  • Page 38
    ... just to transport the siemens B75 rotor blades 320 kilometers from the Danish port of esbjerg to Østerild. LgfT - Clear instructions for the team: siemens engineer Jens hald Jensen (left) oversees the assembly of the wind turbine with the longest rotor blade currently in operation worldwide...

  • Page 39
    ... coast of the uK between 2014 and 2017. Transitioning to a new energy system will require implementing diverse measures that need to fit together like the pieces of a puzzle. our engineers are continually developing and honing a wide variety of solutions that promise to drive this transition. 37

  • Page 40
    ...meter tower. The culmination of more than 20 years of experience in offshore projects, the sWT 6.0 is remarkable not only for its output but also for its new drive technology, which is entirely gearless. such innovations have enabled our engineers to reduce the number of components by about 50%. The...

  • Page 41
    .... Michael Süß, member of the Managing Board of Siemens AG and CEO of the Energy Sector "The transition to a new energy system is Germany's project of the century. It's the right strategy, and it's feasible. But we still have a long way to go in order to make it happen. The greatest challenges are...

  • Page 42
    ... to leadership." Our technologies are bringing the future of energy closer siemens offers its customers not only wind power installations but also a broad portfolio of other products and solutions that will facilitate the transition to a new energy infrastructure: long-distance low-loss high-voltage...

  • Page 43
    ... a total diameter of 154 meters - specialists connect it directly to the generator shaft. ABovg - smiles all around following the successful assembly of the wind turbine: Dr. Felix Ferlemann, Ceo of siemens Wind Power (center), and Jens hald Jensen, project manager in Østerild (back right), share...

  • Page 44
    Dr. Hans-Josef Zimmer, Chief Technology Officer, EnBW "Renewables will be a vital pillar of our future energy supply. As an energy company, we need strong, reliable partners for the challenges ahead." 42

  • Page 45
    ...The grid development plan prepared by our With revenue of more than â,¬18 billion in 2011 and some 20,000 employees, enBW is one of the largest energy companies in germany and in europe. Dr. hans-Josef Zimmer (54), Chief Technology officer of enBW, is a mechanical engineer who has been employed at...

  • Page 46
    ... production, distribution and consumption of energy is extremely complex, system providers like Siemens have major market opportunities. In your view, what factors are most crucial for the successful transition to a new energy system? Dr. Zimmgr: We need a wide range of technical solutions to make...

  • Page 47
    ... the construction of the world's most efficient natural gas power plant - an order placed by stadtwerke Düsseldorf, a municipal utility in which enBW holds a majority stake. here enBW Chief Technology officer hans-Josef Zimmer examines up-to-date project planning information from siemens. The plant...

  • Page 48
    Electricity for 1,500 households Two 600-kW turbines 2008 Tidal current power plant In operation since hours / days 24 / 365 Making renewables competitive Security of Northern ireland's strangford Lough is home to the world's first commercial tidal current power plant. supply Smart ...

  • Page 49
    ... of 500,000 kWh conventional power plants in annual savings Saving electricity and using it more efficiently Building low-loss power superhighways Renewable resources, like wind on the high seas and sun in warm regions, are best harvested where they're most abundant. And that's why long­distance...

  • Page 50
    ... value through enhanced marketing scope. 24 / 365 hours / days Ensuring a reliable power supply Better forecasts for electricity production Grid forecast software Our self­learning software system is stabilizing the power grid operated by Swissgrid in Laufenburg, Switzerland. The program...

  • Page 51
    ... first commercial tidal current power plant. since November 2008, two turbines have been producing a combined output of 1.2 megawatts - enough electricity to meet the needs of 1,500 households. To date, the installation has fed more than five gigawatt-hours of electrical energy into the grid, making...

  • Page 52
    ... brick-making plant, located in the town of alfonsine, showcases the potential of energy-efficient technologies. Thanks to our highly efficient asynchronous motors, the amount of power consumed by the factory's electric drives - 170 motors with a total capacity of 1,065 kilowatts are in operation on...

  • Page 53
    ... an hour. When electricity from renewable sources is used for electrolysis, hydrogen production is virtually climate-neutral. The next generation of electrolyzers, which will have a rated power of two megawatts, is expected to be ready for use in the medium term. Researchers are aiming to develop an...

  • Page 54
    ... to generate profitable growth and increase our Company's value in the long term. A look at our past confirms that we've always been particularly successful when we've been a market and technology leader. And we want our pioneering achievements to continue driving our business success in the future...

  • Page 55
    ... are just three examples of how we're actively gearing our portfolio to attractive growth markets while equipping our Company for market leadership and sustainable growth. COMBINED MANAGEMENT REPORT, PAGES 43-44 www.SIEMENS.COM/POR tfolio The businesses and markets associated with the energy system...

  • Page 56
    ... with customers to develop ePs Network services - an iT-supported service offering that maximizes transparency in manufacturing processes and creates added value. With ePs, everyone's a winner - as the network linking a german manufacturer of highly specialized machine tools with its Dutch partners...

  • Page 57
    Proximity, page 8 ideas, page 20 the integrated technology company strength, page 34 Networking Diversity, page 66 55

  • Page 58
    ... solution siegel was looking for. "siemens' ePs network services were market-ready at that point," heinz explains. "we've continued developing them with partners like sw ever since." headquartered in southwestern germany, schwäbische werkzeugmaschinen has around 300 employees and produces highly...

  • Page 59
    ..., for example," explains siegel. the payoff is closer customer relationships, increased revenue and valuable ideas for new machine development. and siemens profits too: "ePs enables us to support our customers and our customers' customers," says Jochen heinz. the result: new business opportunities...

  • Page 60
    ... Mexico Johannes Zuckschwerdt, head of new services development at Schwäbische Werkzeugmaschinen 9,285 km "As a highly specialized medium-sized company, we can't maintain a local presence worldwide. But with Siemens' outstanding online services, we can still keep very close to our customers." 58

  • Page 61
    ... that benefit both partners." Norway 2 1,25 Schwäbische Werkzeugmaschinen schwäbische Werkzeugmaschinen (sW) supplies customers in 29 countries with innovative machining centers, which are networked with the company 's headquarters in southwestern germany via siemens' iT-supported services. km...

  • Page 62
    ... operations alone, the company uses 17 machines from schwäbische werkzeugmachinen. Value-creating services siemens' iT-supported services also create value for sW's customers. Brinks Metaalbewerking B. V., located in the Dutch town of Vriezenveen, is a prime example. The company's 150 employees...

  • Page 63
    ... with valve blocks used in active spring systems for automobiles - is proud of his company's products. so there's no room for error. That's why Brinks has been using sW's online services for several years now. "it's not just that sW provides us with immediate support from germany in the event of an...

  • Page 64
    ... in the areas of customer support, consulting and, above all, proactive services that help manufacturers keep their production lines running smoothly. Jochen heinz, siegel's siemens partner for many years, sees huge potential in online equipment monitoring. "using the system with machine tools has...

  • Page 65
    ... innovative IT-supported services benefit machine operators as well as machine manufacturers. By making machine utilization more effective, enhancing competitiveness and enabling companies to tap lucrative new business fields, these services create value all along the value chain - for our customers...

  • Page 66
    ... in the related Siemens Leadership Framework - we apply Company-wide standards that help us foster the development of our future top managers in an individual, targeted manner, while motivating them to work toward our common goals. Continuous knowledge transfer and information exchange are making...

  • Page 67
    ... our strengths as an integrated technology company in order to expand our innovative services. We're also exploiting our Company-wide expertise in the area of procurement. We've established a uniform system of supply chain management to realize synergies, cut costs, guarantee high quality, ensure on...

  • Page 68
    66

  • Page 69
    ... and cultures. At Siemens, our Teamcenter software solution is promoting international cooperation at many company locations. What are the aims of Teamcenter? To better leverage the opportunities presented by diversity, increase work efficiency, develop the best solutions and bring them to market...

  • Page 70
    ... have developers working close to our customers, on site in key markets. and that includes Tucker, georgia, one of the 15 worldwide locations of Control Components and Systems engineering (Ce). Siemens Control Components and Systems engineering (Ce) is a business unit in the Industry Automation (IA...

  • Page 71
    ...." Teamcenter - Collaborative software helmut staufer from Ce's product management center in Fürth, germany goes even further: "New and redesigned products should work in lots of markets or must be easily adaptable. i'm continually discussing this issue with our international developers - by web...

  • Page 72
    ...: "Our development teams used to work with lots of different software solutions. That made data transfer much more difficult. Now Teamcenter gives us a single platform for sharing product and design data and managing the entire product lifecycle - from the initial idea to the design, manufacture and...

  • Page 73
    ... assigns to the Siemens test lab in Tucker. Benefits across the board - for employees and customers What are the advantages of using Teamcenter? streamlined workflows, no more reduplicated processes and even faster solutions. and something that wasn't a primary objective but may just be Teamcenter...

  • Page 74
    ...an opportunity at siemens, our unwavering commitment to diversity is firmly anchored in our corporate strategy. For a company that's active in some 190 countries and generates more than two-thirds of its revenues outside its home market, diversity is more than simply a business necessity. Our people...

  • Page 75
    ... the new material has been granted internal approval. He then requests that prototypes be manufactured in Suzhou and sent to Tucker. The global Siemens family Despite all the differences in cultural and educational background, the members of the extended siemens family have many things in common...

  • Page 76
    ... world, she will always have online access to all the details of the project through Teamcenter. This will make it possible to respond quickly to requests for service, spare parts and follow-up orders, which in turn will increase customer satisfaction. Brigitte Ederer, Member of the Managing Board...

  • Page 77
    ... location that's accessible worldwide. The system's unique open architecture enables users to work with various specialized development tools, even those of other companies. Teamcenter is the name of the Siemens software that makes smart product lifecycle management (PLM) across borders and time...

  • Page 78
    ... Programs worldwide to make cooperation within our integrated technology company even more effective by enhancing employee knowhow in key areas like project management, software development, procurement and human resources. Our central intranet education portal alone offers our global workforce...

  • Page 79
    ... Worldwide presence: We're active in all regions of the world. and our workforce reflects it. The number of siemens employees outside europe has grown continuously in recent fiscal years. Employee shareholders: We're proud that roughly 127,000 Siemens employees took part in employee share programs...

  • Page 80
    ... technology company, we have a strong setup. One Siemens - which defines metrics for revenue growth, capital efficiency, profitability and the optimization of our capital structure - is the framework for our Company's sustainable development. Framework for sustainable value creation To increase...

  • Page 81
    Use the power of Siemens Focus on innovation-driven growth markets Get closer to our customers Revenue growth growth > most relevant competitors Capital structure adjusted industrial net debt / eBiTDa Capital efficiency / Profitability Return on capital employed / top margins throughout business...

  • Page 82
    ...outstanding position on the technology market worldwide and is one of our strategic growth drivers. In fiscal 2012, the Portfolio generated revenue of â,¬33.2 billion and made a substantial contribution to climate protection. At the same time, our ecofriendly products and solutions enabled customers...

  • Page 83
    ....siemens.com/ one-siemens We want to be close to our markets and a strong local partner to our customers throughout the world. That's why - besides playing a leading role in the industrial countries - we're also successfully developing and producing more and more innovative products and solutions...

  • Page 84
    ... countries and cultural backgrounds. Our clear and unambiguous commitment to integrity guides us in our ongoing pursuit of business success. Our actions are governed by binding principles to which we expect our customers, suppliers and employees to adhere. To learn more, please see: www.siemens...

  • Page 85
    ... the way forward. As an integrated technology company, we have a virtually unparalleled position in our global markets - a position that's made us a true partner of trust to our customers, our shareholders and our employees worldwide. Trust unites us - Building strong partnerships for 165 years

  • Page 86

  • Page 87
    Financial Repor t 2012 Trust unites us - Building strong partnerships for 165 years

  • Page 88
    ... cash flow Cash conversion rate fy 2012 fy 2011 4,790 0.92 4,562 0.99 5,918 0.80 5,150 0.81 adjusted industrial net deBt / adjusted eBitda - continuing operations 5 fy 2012 fy 2011 0.24 (0.14) liquidity and capital structure Cash and cash equivalents Total equity (Shareholders of Siemens AG...

  • Page 89
    ... equipment, smart grid applications and low- and medium-voltage products. Equity Investments Profit â,¬ (549) million Financial Services Profit Total assets â,¬ 479 million â,¬ 17.405 billion In general, the segment equity Investments comprises equity stakes held by Siemens that are accounted...

  • Page 90
    Website PDF version www pdf www The world of Siemens' Annual Report annual shareholders' Meeting Key figures / segment information Mobile application

  • Page 91
    ... forward-looking statements To move forward, we've launched a new Company-wide program. Presented in November 2012, This year, our Annual Report highlights the ways in which we're creating trust by partnering closely with our customers worldwide and developing innovative technologies that meet the...

  • Page 92
    ... business success and improving the www lives of people worldwide through our investments in research and development - investments that totaled â,¬4.2 billion in fiscal 2012. The world of Siemens' Annual Report annual shareholders' Meeting 2 Key figures / segment information Mobile...

  • Page 93
    ... position Subsequent events Sustainability Report on expected developments and associated material opportunities and risks Compensation Report, Corporate Governance statement pursuant to Section 289a of the German Commercial Code, Takeover-relevant information and explanatory report Siemens AG...

  • Page 94
    ... plant controls and building management systems to healthcare solutions and manufacturing technologies. NASA, the U.S. space agency, utilized IT of this kind to develop the Mars rover Curiosity, whose fascinating images are yet further testimony to our engineering excellence. We know the challenges...

  • Page 95
    ... Consolidated Statements of Changes in Equity D.5 142 in the area of renewable energies, to exit from the water D.6 Notes to Consolidated Financial Statements technologies business, which is highly frag232 D.7 Supervisory Board and our Managing mented by region, and to reinforce marketBoard position...

  • Page 96
    ... lowest to date on the European capital market - yet further proof of the great trust that our Company enjoys within the business community and beyond. The unchanged dividend proposal of â,¬3.00 that the Managing Board and the Supervisory Board will make to the 2013 Annual Shareholders' Meeting is...

  • Page 97
    ... position Subsequent events Sustainability Report on expected developments and associated material opportunities and risks Compensation Report, Corporate Governance statement pursuant to Section 289a of the German Commercial Code, Takeover-relevant information and explanatory report Siemens AG...

  • Page 98
    ... fascinating urban www projects. And see for yourself what the future holds for the world's metropolises. www.thECrystAl.org Key figures / segment information Mobile application The world of Siemens' Annual Report The Crystal - A vision of the urban future annual shareholders' Meeting 8

  • Page 99

  • Page 100
    Managing Board of Siemens AG Hermann Requardt healthcare Michael Süß energy 10 Barbara Kux Corporate supply Chain Management, Corporate sustainability, global shared services Peter Y. Solmssen Corporate Legal and Compliance, americas

  • Page 101
    ... and government affairs, Corporate Development Joe Kaeser Corporate Finance and Controlling, Financial services, siemens Real estate, equity investments Brigitte Ederer Corporate human Resources, europe, Commonwealth of independent states Klaus Helmrich Technology, Corporate Technology Siegfried...

  • Page 102
    ...the Managing Board's activities. We were directly involved in all major decisions regarding the Company. In written and oral reports, the Managing Board regularly provided us with timely and comprehensive information on Company planning and business operations as well as on the strategic development...

  • Page 103
    Dr. Gerhard Cromme Chairman 13

  • Page 104
    ... by the Annual Shareholders' Meeting of Siemens AG on January 23, 2013. When preparing the list of candidates to be proposed to the Supervisory Board, the Nominating Committee took into account the requirements of the German Stock Corporation Act, the German Corporate Governance Code and the...

  • Page 105
    ... at the Supervisory Board's plenary meetings were revenue, profit and employment development at Siemens AG, at the Sectors and at Siemens worldwide as well as the Company 's financial position, profitability and major investment and divestment projects. The Managing Board reported to us regularly...

  • Page 106
    ... Governance Code is permanently available to shareholders on the Company 's website. Detailed discussion of the financial statements Ernst & Young GmbH Wirtschaftsprüfungsgesellschaft audited the Annual Financial Statements of Siemens AG, the Consolidated Financial Statements of Siemens worldwide...

  • Page 107
    ..., who reported on the main findings of their audit. The independent auditors also reported that there were no major weaknesses in the Company 's internal audit or risk management systems. At this meeting, the Managing Board explained the financial statements of Siemens AG and Siemens worldwide as...

  • Page 108
    ...success again this year. As a result, the Managing Board and Supervisory Board will propose a dividend payment of â,¬3.00 per share for fiscal 2012, representing a payout ratio of 56%. Siemens AG continues to have a very sound financial basis. In an environment in which the ratings of many countries...

  • Page 109
    ... dividends to our investors. A.4.4 Shareholder structure With some 740,000 shareholders, Siemens AG is one of the world's largest publicly owned companies. An analysis of our shareholder structure conducted in August 2012 showed that shareholders in Germany hold the largest percentage of our share...

  • Page 110
    ... with the capital market very seriously. Cultivating close contacts with our shareholders, we keep them informed of all major developments throughout Siemens. As part of our investor relations work, we provide information on the Company's development in quarterly, semiannual and annual reports. Our...

  • Page 111
    ... Report Management and control structure Purchase or sale of the Company's shares Shareholder relations Significant differences between Siemens' corporate governance and NYSE Corporate Governance Standards 28 B.2 Corporate Governance statement pursuant to Section 289a of the German Commercial Code...

  • Page 112
    ... of Siemens' activities. > Taking the Company 's international orientation into account, care shall also be taken to ensure that the Supervisory Board has an adequate number of members with extensive international experience. The goal for the next Supervisory Board election in 2013 is to make sure...

  • Page 113
    ...in its management of the Company 's business. At regular intervals, the Supervisory Board discusses business development, planning, strategy and implementation. It reviews the Annual Financial Statements of Siemens AG, the Consolidated Financial Statements of Siemens worldwide, Management Reports of...

  • Page 114
    ...to the Supervisory Board regarding the approval of the Annual Financial Statements of Siemens AG and the Consolidated Financial Statements of Siemens worldwide. It concerns itself with the Company 's risk monitoring system and oversees the effectiveness of the internal control system as this relates...

  • Page 115
    ... basic issues of business policy and corporate strategy as well as on the Company 's annual and multi-year plans. The Managing Board prepares the Company 's quarterly and half-yearly reports, the Annual Financial Statements of Siemens AG and the Consolidated Financial Statements of Siemens worldwide...

  • Page 116
    ... presentations and press releases as well as the financial calendar for the current year, which contains the publication dates of significant financial communications and the date of the Annual Shareholders' Meeting, at WWW.SIemenS.cOm/InVeStORS. Details of our investor relations activities are...

  • Page 117
    ... generally require that the domestic, i.e. U.S. companies listed on the NYSE obtain shareholder approval of all equity compensation plans (including stock option plans) and of any material revisions to such plans. Under German law, the creation of authorized or contingent capital in order to issue...

  • Page 118
    ...The Managing Board The Supervisory Board" Our Company's values and Business Conduct Guidelines In the 165 years of its existence, our Company has built an ex­ cellent reputation around the world. Technical performance, innovation, quality reliability, and international engagement have made Siemens...

  • Page 119
    ... for our own internal regulations. For us, compliance is not just a program but the way we do business and uphold integrity at our Company. Our compliance system instills a permanent awareness of these responsibilities in all our managers and employees. We actively support the ratification and...

  • Page 120
    ...'ll begin introducing our integrity dialogues Company-wide in fiscal 2013. Compliance Officers will support managers throughout the process. They'll also support the business units in selecting the employees for whom participation in compliance training programs and integrity dialogues is obligatory...

  • Page 121
    .... Members of the Managing Board are expected to make a long-term commitment to and on behalf of the Company, and may benefit from any sustained increase in the Company's value. In the interest REMUNERATION SYSTEM fOR MANAgINg BOARd MEMBERS Compensation Long-term compensation (target parameter: stock...

  • Page 122
    ... 2011, the restriction period for Stock Awards ends at the close of the second day after publication of the operating results for the fourth calendar year after the date of the award. In the event of extraordinary unforeseen developments that have an impact on the stock price, the Supervisory Board...

  • Page 123
    ...stockbased employee investment plans. If the value of the accrued holdings declines below the minimum to be evidenced from time to time because the market price of Siemens stock has fluctuated, the member of the Managing Board must acquire additional shares. Pension benefit commitments The members...

  • Page 124
    ... member of the Managing Board has the right to terminate his or her contract with the Company for good cause. A change of control exists if one or more shareholders acting jointly or in concert acquire a majority of the voting rights in Siemens AG and exercise a controlling influence, or if Siemens...

  • Page 125
    ... BOARd fOR fISCAl 2012 On the basis of our One Siemens target system, at the beginning of the fiscal year the Supervisory Board set the targets and weighting for the unchanged parameters compared to the previous year: organic revenue growth, return on capital employed (ROCE) adjusted, and free cash...

  • Page 126
    ... without long-term incentive effect non-stock-based Base compensation Other compensation 1 Variable compensation component (bonus) - Cash component FY 2012 FY 2011 FY 2012 FY 2012 FY 2011 FY 2012 FY 2011 (Amounts in number of units or â,¬) Shares Fair value 4 Managing Board members serving...

  • Page 127
    ... on the Managing Board of Siemens AG. 10 Wolfgang Dehen resigned from the Managing Board effective March 31, 2011. Due to rounding, numbers presented may not add up precisely to totals provided. 6 49 C. Combined Management Report 135 D. Consolidated Financial statements 239 e. additional...

  • Page 128
    ... 2012, the members of the Managing Board were granted contributions under the BSAV totaling â,¬5.7 million (2011: â,¬5.2 million), based on the resolution of the Supervisory Board dated November 7, 2012. Of this amount, â,¬0.1 million (2011: â,¬0.1 million) related to funding of pension commitments...

  • Page 129
    ...Managing Board that were components of stock-based compensation in fiscal 2012 and prior years, and also about the Managing Board members' entitlements to matching shares under the Siemens Share Matching Plan. Other No loans or advances from the Company are provided to members of the Managing Board...

  • Page 130
    ...2012, or in the prior year. Shares from the Share Matching Plan In fiscal 2011, the members of the Managing Board were entitled for the last time to participate in the Siemens Share Matching Plan, and under the plan were entitled to invest up to 50% of the annual gross amount of their variable cash...

  • Page 131
    ...23,417 24,722 122,305 March 2016 March 2015 March 2016 March 2013 March 2016 2 Based on the average XETRA opening price of â,¬72.81 for the fourth quarter of 2011 (October - December) 49 C. Combined Management Report 135 D. Consolidated Financial statements 239 e. additional information 41

  • Page 132
    ... of members of the Supervisory Board The current remuneration policies for the Supervisory Board were authorized at the Annual Shareholders' Meeting held on Januar y 25, 2011. Details are set out in Section 17 of the Articles of Association of Siemens AG. The remuneration of the Supervisory Board...

  • Page 133
    ... The Company provides a group insurance policy for board and committee members and certain employees of the Siemens organization that is taken out for one year and renewed annually. The insurance covers the personal liability of the insured in the case of a financial loss associated with employment...

  • Page 134
    ... hold the shares issued to them under the rules of the Plan for a vesting period of about three years, during which the participants have to have been continuously employed by Siemens AG or another Siemens company, in order to receive one matching share free B.5.5 System of control of any employee...

  • Page 135
    ... exclusively to employees of Siemens AG and its subsidiaries. The new shares may also be issued to a suitable bank that assumes the obligation to use these shares for the sole purpose 49 C. Combined Management Report 135 D. Consolidated Financial statements 239 e. additional information 45

  • Page 136
    ... of the Managing Board adopted by the Annual Shareholders' Meeting on January 25, 2011, the capital stock was conditionally increased by â,¬270 million through the issuance of up to 90 million no-par value shares registered in the names of the holders (Conditional Capital 2011). The total of the...

  • Page 137
    ... detached are listed by Deutsche Bank AG in the Open Market segment of the Frankfurt Stock Exchange (Freiverkehr). On January 25, 2011, the Annual Shareholders' Meeting authorized the Company to acquire until January 24, 2016 up to 10% of its 914,203,421 shares of stock existing at the date of...

  • Page 138
    ...within the meaning of Section 291 of the German Stock Corporation Act, or if Siemens AG is to be merged into another company - any member of the Managing Board has the right to terminate the contract of employment if such change of control results in a substantial change in position (for example due...

  • Page 139
    ... Combined Management Report 50 C.1 50 C.1.1 58 C.1.2 63 C.1.3 Business and economic environment The Siemens Group Economic environment Strategy 64 C. 2 64 64 65 65 C.2.1 C.2.2 C.2.3 C.2.4 Financial performance measures Revenue growth Capital efficiency and profitability Capital structure Dividend...

  • Page 140
    ... The Siemens Group C.1.1.1 OrganizatiOn and basis Of presentatiOn We are a globally operating, integrated technology company with core activities in the fields of energy, healthcare, industry, and infrastructure, and we occupy leading market positions worldwide in the majority of our businesses. We...

  • Page 141
    ...Oil & Gas Power Transmission Healthcare Sector Diagnostics Industry Sector Industry Automation Drive Technologies Infrastructure & Cities Sector Transportation & Logistics Power Grid Solutions & Products Building Technologies Equity Investments Financial Services Reconciliation to Consolidated...

  • Page 142
    ...using advanced plant diagnostics and systems engineering. The Division also offers power plant maintenance and operation services and emissions control services and systems. Financial results relating to the Energy Service Division are reflected in the Fossil Power Generation Division, the Oil & Gas...

  • Page 143
    ... partners and has a joint venture with Infineon Technologies in Germany for design, manufacturing and sale of high performance semiconductors. The Energy Sector distributes its products and services through its own dedicated sales force, supported by Siemens' worldwide network of regional companies...

  • Page 144
    ... and physician office laboratories and outpatient clinics. The Sector sells the majority of its products and services through in-house sales staff, which is grouped in its Customer Solutions Operational Unit, supported by dedicated product specialists. In some countries, it also uses dealers...

  • Page 145
    ... for electric cars for the automotive industry. Drive Technologies offers products such as automation systems and services for production machinery and machine tools. The Division's portfolio includes standard products as well as industry-specific control and drive solutions for wind power, metal...

  • Page 146
    ... a wide range of sustainable technologies for metropolitan centers and urban infrastructures worldwide, such as integrated mobility solutions, building and security systems, power distribution equipment, smart grid applications and low- and medium-voltage products. revenue share in % (loCation of...

  • Page 147
    ... its products and services through its own dedicated sales force, supported by Siemens' worldwide network of regional companies. In addition, the Divisions of the Sector use, to varying degrees, thirdparty distributors, panel builders, original equipment manufacturers, value added partners...

  • Page 148
    ..., Financial Services intends to grow its business in a profitable, controlled manner. SFS' business can be divided into capital business and fee business. The capital businesses support activities for Siemens' sales as well as third party vendors and customers and consist of leasing, loans, asset...

  • Page 149
    ... growth rate of 2.3% is caused mainly by increased government spending, with a boost from stronger 135 D. 239 E. 129 C.10 Compensation Report, Corporate Governance statement pursuant to Section 289a of the German Commercial Code, Takeover-relevant information and explanatory report Siemens AG...

  • Page 150
    ... 2009 FY 2010 FY 2011 FY 2012 Source: Bloomberg 1 21 A. B. To our Shareholders Corporate Governance 49 50 64 69 82 93 C. C.1 C.2 C.3 C.4 C.5 Combined Management Report Business and economic environment Financial performance measures Results of operations Financial position Net assets position...

  • Page 151
    ... (electricity, gas, oil) and indirectly (energy used in the manufacturing processes of suppliers). Some of our continuing operations face price and supply risks related to rare earth metals, particularly the Industry Sector's Drive Technologies Division and the Energy Sector's Wind Power Division...

  • Page 152
    ... Management Report Business and economic environment Financial performance measures Results of operations Financial position Net assets position 95 96 97 111 C.6 C.7 C.8 C.9 Overall assessment of the economic position Subsequent events Sustainability Report on expected developments and associated...

  • Page 153
    ... established markets. We plan to offer more products, solutions and services for the rapidly growing entry-level segments, which are more price-sensitive and mostly found in emerging markets. A second focus C.1.3 Strategy C.1.3.1 glObal megatrends Global megatrends are long-term developments that...

  • Page 154
    ... as the growth rate of reported revenue as presented in the Consolidated Financial Statements. revenue grOwth Revenue current period - 1 Revenue prior-year period Ã- 100% Actual FY 2012 FY 2011 7% 6% C.2.2 Capital efficiency and profitability Our aim is to work profitably and as efficiently...

  • Page 155
    ...fiscal year 2012 existing at the date of the Annual Shareholders' Meeting, with the remaining amount to be carried forward. Payment of the proposed dividend is 135 D. 239 E. 129 C.10 Compensation Report, Corporate Governance statement pursuant to Section 289a of the German Commercial Code, Takeover...

  • Page 156
    ...09/30/2012 06/30/2012 03/31/2012 12/31/2011 09/30/2011 Capital employed Fiscal 2012 Total equity Plus: Long-term debt Plus: Short-term debt and current maturities of long-term debt Less: Cash and cash equivalents Plus: Pension plans and similar commitments Less: SFS Debt Less: Fair value hedge...

  • Page 157
    ... employed Fiscal 2011 Total equity Plus: Long-term debt Plus: Short-term debt and current maturities of long-term debt Less: Cash and cash equivalents Plus: Pension plans and similar commitments Less: SFS Debt Less: Fair value hedge accounting adjustment 1 Capital employed (continuing operations...

  • Page 158
    ... based on a number of different criteria. 1 21 A. B. To our Shareholders Corporate Governance 49 50 64 69 82 93 C. C.1 C.2 C.3 C.4 C.5 Combined Management Report Business and economic environment Financial performance measures Results of operations Financial position Net assets position 95 96...

  • Page 159
    ... by quarter throughout fiscal 2012 and came in at â,¬78.296 billion, up 7% from the prioryear period. Revenue growth included increases in all Sectors and all three reporting regions, supported by Siemens' strong order backlog. Slowing growth in the world economy was evident in the development of...

  • Page 160
    ... Management Report Business and economic environment Financial performance measures Results of operations Financial position Net assets position 95 96 97 111 C.6 C.7 C.8 C.9 Overall assessment of the economic position Subsequent events Sustainability Report on expected developments and associated...

  • Page 161
    ...of goods sold; research and development expenses; marketing, selling and general administrative expenses; and income (loss) from investments accounted for using the equity method, net. In addition, the prior year included substantially higher financial income associated with a major divestment. Each...

  • Page 162
    ...the Annual Shareholders' Meeting on January 23, 2013. While revenue rose 7% year-over-year, benefiting from currency translation and portfolio effects, ongoing market challenges held back profit development. In addition, discontinued operations include Siemens' solar business, which posted losses of...

  • Page 163
    ... at Oil & Gas. Energy also recorded burdens of â,¬152 million associated with the Olkiluoto project in Finland. In addition, Energy 's business expansion strategy resulted in higher marketing, selling and general administrative expenses as well as higher research and development expenses, and profit...

  • Page 164
    ... the technically complex gridconnection projects mentioned above and structural issues in certain businesses. C.3.2.2 healthCare seCtOr Year ended September 30, (in millions of â,¬) 2012 2011 Actual % Change Adjusted 1 Currency therein Portfolio Profit Profit margin New orders Total revenue...

  • Page 165
    ... systems businesses. Results for the year were influenced by "Agenda 2013", including â,¬184 million in charges. The Sector expects additional charges in coming quarters. Profit development also included higher expenses for research and development as well as higher marketing, selling and general...

  • Page 166
    .... Profit at Drive Technologies in fiscal 2012 came in at â,¬970 million, down significantly from a year earlier also due mainly to a less favorable business mix, lower earnings from its offerings for renewable energy, and higher research and development as well as marketing, selling and general...

  • Page 167
    ... year-over-year. While the Power Grid Solutions & Products business and the Building Technologies Division both improved profit year-over-year, profit at Transportation & Logistics declined substantially due mainly to â,¬86 million in charges at a rolling stock project in Germany. Profit development...

  • Page 168
    ... in the Americas. Profit at Building Technologies increased moderately yearover-year. Profit development in fiscal 2012 was held back by higher research and development, marketing, selling and general administrative expenses associated with growth initiatives. Growth in revenue and orders was driven...

  • Page 169
    ... mainly to positive changes in the fair market value of interest rate derivatives not qualifying for hedge accounting used for interest rate management, partly offset by negative currency effects relating to corporate financing activities. C.3.2.7 reCOnCiliatiOn tO COnsOlidated finanCial statements...

  • Page 170
    ...: Transportation & Logistics Power Grid Solutions & Products Building Technologies Total Sectors Equity Investments Financial Services (SFS) Reconciliation to Consolidated Financial Statements Centrally managed portfolio activities Siemens Real Estate (SRE) Corporate items and pensions Eliminations...

  • Page 171
    ... Compensation Report, Corporate Governance statement pursuant to Section 289a of the German Commercial Code, Takeover-relevant information and explanatory report Siemens AG (Discussion on basis of German Commercial Code) 134 C.12 Notes and forward-looking statements 130 C.11 Consolidated Financial...

  • Page 172
    ... C.4.4.3 Funding oF pension pLans and simiLar Commitments. C.4.1.5 CapitaL struCture management and Credit rating To effectively manage its capital structure, Siemens seeks to maintain ready access to the capital markets through various debt products and to preserve its ability to repay and service...

  • Page 173
    ...a revision of the shareholder distribution policy from 30%-50% payout range to 40%-60% including share buybacks. Within S&P's long-term credit rating definitions "A" has the C.4.2. Capital structure Given the favorable capital market conditions at the end of fiscal 2012, Siemens announced in August...

  • Page 174
    ... in C.5 net assets position, the capital structure changed as follows: (loss) from investments accounted for using the equity method, net. For further information, see C.3.3 reConCiLiation to ConsoLidated FinanCiaL statements. Year ended September 30, (in millions of â,¬) 2012 2011 % Change (in...

  • Page 175
    ... operations Year ended September 30, 2012 2011 Net cash provided by (used in): Operating activities Investing activities therein: Additions to intangible assets and property, plant and equipment Free cash flow 1 Financing activities 1 The closest comparable financial measure of Free cash...

  • Page 176
    ... service, regular capital spending, ongoing cash requirements from operating and SFS financing activities, including higher cash outflows related to the growth strategy of SFS, dividend payments, pension plan funding, portfolio activities, and cash outflows in connection with restructuring measures...

  • Page 177
    ...-for-sale financial assets, as stated on the Consolidated Statements of Financial Position. Net debt results from total debt less total liquidity. Management uses the Net debt measure for internal corporate finance management, as well as for external communication with investors, analysts and rating...

  • Page 178
    ... the orderly repayment of the credit. 1 21 A. B. To our Shareholders Corporate Governance 49 50 64 69 82 93 C. C .1 C. 2 C.3 C.4 C.5 Combined Management Report Business and economic environment Financial performance measures Results of operations Financial position Net assets position 95...

  • Page 179
    ... at the Power Grid Solutions & Products business, mainly for investments in innovations at Low and Medium Voltage. The Sector also invested significant amounts for strengthening its regional footprint in emerging markets and its position in fast-growing market segments. FY 2012 FY 2011 354 284...

  • Page 180
    ... in coming quarters relating to charges for program-related productivity measures in Sectors in connection with "Siemens 2014," a company-wide program supporting our One Siemens framework for sustainable value creation. With our ability to generate positive operating cash flows, our total liquidity...

  • Page 181
    ... companies accounted for using the equity method. Total credit guarantees were â,¬635 million as of September 30, 2012. Furthermore, Siemens issues guarantees of third-party performance, which include performance bonds and guarantees of advanced payments in cases where Siemens Capital commitments...

  • Page 182
    ... siemens' pension pLans (in billions oF â,¬)1 September 30, 2012 September 30, 2011 (9.0) (6.2) defined benefit obligations in order to measure such prime risk. A risk budget on the Group level forms the basis for determining of our investment strategy, i.e. the strategic allocation of plan assets...

  • Page 183
    ... derivatives used for our hedging activities and an increase in the market value of our shares in AtoS. 135 D. 239 E. 129 C .10 Compensation Report, Corporate governance statement pursuant to Section 289a of the German Commercial Code, Takeover-relevant information and explanatory report Siemens AG...

  • Page 184
    ... Management Report Business and economic environment Financial performance measures Results of operations Financial position Net assets position 95 96 97 111 C.6 C.7 C.8 C.9 Overall assessment of the economic position Subsequent events Sustainability Report on expected developments and associated...

  • Page 185
    ... end of fiscal 2012. In fiscal 2012, the main factors relating to the change in total equity attributable to shareholders of Siemens AG were: (1) Dividend payments of â,¬2.629 billion (paid for fiscal 2011); (2) cancellation of 33,203,421 treasury shares, which reduced common stock from 914 million...

  • Page 186
    ...-related charges in Healthcare. In the fourth quarter of fiscal 2012, we initiated a share buyback program of up to â,¬3.0 billion, to be financed partly by long-term debt, and issued bonds totaling â,¬2.7 billion. These measures are aimed at taking advantage of favorable capital market conditions...

  • Page 187
    ... Corporate Finance - Reporting and Controlling Head of Corporate Legal and Compliance CTO of Energy (Energy) CEO of Siemens Financial Services CEO of Cluster Brazil 135 D. 239 E. 129 C .10 Compensation Report, Corporate governance statement pursuant to Section 289a of the German Commercial Code...

  • Page 188
    ... of rules is generally binding for all companies controlled by Siemens. Furthermore, we believe that close collaboration with stakeholders supports us in addressing complex, interlocking sustainability challenges and topics. Maintaining an intensive dialogue with partners along the supply chain and...

  • Page 189
    ..., technical systems, energy technologies, sensors, and electronic components. CT also conducts research into new solutions for automation, medical information systems, and imaging processes. This portfolio is supplemented by innovation projects for electric mobility, sustainable urban development...

  • Page 190
    ...by monitoring the effect of medications more accurately and exploiting the evaluation and analytical capabilities of modern computer technology. The Sector also develops products that meet the specific, targeted requirements of the healthcare systems of emerging countries. 2011 2010 2009 Germany...

  • Page 191
    ... as energy management and remote maintenance systems, and the creation of efficient solutions for steel production that also conserve resources. R&D activities in our Infrastructure & Cities Sector focus on urban growth issues. Main research fields therefore cover sustainable technologies for major...

  • Page 192
    ... to ensure long-term cost leadership, realize shared growth potential and sustainably increase innovation capabilities. To promote outstanding suppliers for their excellence, we have introduced the Siemens Supplier Awards for a number of categories. As in previous years, the supply chain management...

  • Page 193
    ... worldwide basis by means of customer surveys, measures the referral rate of our customers. The NPS for 135 D. 239 E. 129 C .10 Compensation Report, Corporate governance statement pursuant to Section 289a of the German Commercial Code, Takeover-relevant information and explanatory report Siemens AG...

  • Page 194
    ...standards in our worldwide customer relationship management. In fiscal 2012 we successfully implemented our Key Account Manager Certification Program to ensure high quality and consistent standards at our customer interfaces. An elementary component of all our global marketing and selling activities...

  • Page 195
    ... international standard that applies across companies for qualifying products, systems, solutions and services for environmental and climate protection, or for compiling and calculating the respective revenues and the 135 D. 239 E. 129 C .10 Compensation Report, Corporate governance statement...

  • Page 196
    ... Management Report Business and economic environment Financial performance measures Results of operations Financial position Net assets position 95 96 97 111 C.6 C.7 C.8 C.9 Overall assessment of the economic position Subsequent events Sustainability Report on expected developments and associated...

  • Page 197
    ... on a high-performance culture, encourage life-long learning and development, offer an attractive working environment and ensure occupational health and safety. empLoyees by segments as oF september 30, 2012 (in thousands)1 Energy: 86 (23%) Other: 36 (10%) Financial Services: 3 (1%) Healthcare: 51...

  • Page 198
    ... identify more closely with the company they work for - a fundamental prerequisite for the sustainable development of Siemens. In 2011, the Global Equity Organization (GEO), the largest international organization concerned with share plans and equitybased compensation, presented Siemens AG with the...

  • Page 199
    ... healthy work environment, psychosocial well-being, physical activity, healthy nutrition and medical care. We also defined requirements for a Siemens health management system (HMS) which provides a Siemens-wide approach to controlling health management in a systematic and sustainable manner. Company...

  • Page 200
    ... a total contractual funding volume of US$37.7 million was presented to the World Bank in March 2012, based on the first annual report on the Siemens Integrity Initiative which is online publicly available. CompLianCe priorities eFFeCtive Fy 2013 On October 12, 2012, the Company received the Year...

  • Page 201
    ...be markedly higher in emerging markets than in industrialized countries. 135 D. 239 E. 129 C .10 Compensation Report, Corporate governance statement pursuant to Section 289a of the German Commercial Code, Takeover-relevant information and explanatory report Siemens AG (Discussion on basis of German...

  • Page 202
    ...forecasts presented here for gross domestic product, gross fixed investment and manufacturing value are based on a report from IHS Global Insight dated October 15, 2012. Siemens has not independently verified this data. C.9.1.2 market deveLopment We expect the growth of markets served by our Energy...

  • Page 203
    ... of large projects in fiscal 2014 and an associated slowdown in market growth. Overall, the development of the markets for products, solutions and services for rail transportation and logistics is largely driven by public spending. As customers in these markets usually have multi- year planning and...

  • Page 204
    ... our export business activities for fiscal 2013, see note 31 in d.6 notes to ConsoLidated FinanCiaL statements. We expect these steps to help to limit effects on income related to currency in fiscal 2013. Our most important financial goal is capital efficiency, which we measure in terms of adjusted...

  • Page 205
    ... cash requirements from operating and SFS financing activities, dividend payments, pension plan funding and portfolio activities. Also in our opinion, our working capital is sufficient for the Company's present requirements. For the medium-term we set ourselves a target for our capital structure...

  • Page 206
    ...-wide program supporting our One Siemens framework for sustainable value creation. The goal of the program is to raise our Total Sectors profit margin to at least 12% by fiscal 2014. In the first year of the program, we expect moderate order growth and revenue approaching the level of fiscal 2012...

  • Page 207
    ... relating to the implementation, operation and oversight of the risk and internal control system and 135 D. 239 E. 129 C .10 Compensation Report, Corporate governance statement pursuant to Section 289a of the German Commercial Code, Takeover-relevant information and explanatory report Siemens AG...

  • Page 208
    ...supports the Managing Board in matters relating to the implementation, operation and oversight of an effective Risk and Internal Control System. Chief Risk & Internal Control Officer Chairman of the CRIC. Defines and monitors application of ERM strategy, policy and methodology. Consolidates Siemens...

  • Page 209
    ... may be material to our business, financial condition, results of operations and our ability to access capital. For example, it may become more difficult for our customers to obtain financing and as a result they may modify, delay or cancel plans to purchase our products and services or to execute...

  • Page 210
    ... with companies with which we have strategic alliances. 1 21 A. B. To our Shareholders Corporate Governance 49 50 64 69 82 93 C. C .1 C. 2 C.3 C.4 C.5 Combined Management Report Business and economic environment Financial performance measures Results of operations Financial position Net assets...

  • Page 211
    ...business, financial condition and results of operations. 135 D. 239 E. 129 C .10 Compensation Report, Corporate governance statement pursuant to Section 289a of the German Commercial Code, Takeover-relevant information and explanatory report Siemens AG (Discussion on basis of German Commercial Code...

  • Page 212
    ... steps, from research and development to supply chain management, production, marketing, sales and services. Operational failures in our value chain processes could result in quality problems or potential product, labor safety, regulatory or environmental risks. Such risks are particularly present...

  • Page 213
    ... debt financing, and/or may significantly increase our refinancing costs. Deteriorating credit quality and/or default of business partners may adversely affect our business, financial conditions and results of operations. 135 D. 239 E. 129 C .10 Compensation Report, Corporate governance statement...

  • Page 214
    ... C.3.1.1 new orders and revenue, we have issued, and regularly update, restrictive internal guidelines governing business with customers in Iran. We may, however, still conduct certain business activities and provide products and services to customers in Iran under limited circumstances. Although...

  • Page 215
    ... and business operations. We are regularly examined by tax authorities in various jurisdictions. 135 D. 239 E. 129 C .10 Compensation Report, Corporate governance statement pursuant to Section 289a of the German Commercial Code, Takeover-relevant information and explanatory report Siemens AG...

  • Page 216
    ... increase our revenues by serving large and fast-growing regional markets, where customers may consider price more strongly than product features when making a purchase decision. Localizing value chain activities in low cost countries could further improve our cost position: Localizing certain value...

  • Page 217
    ... our global competitive position and secure our market presence against emerging and incumbent competitors. For example, we expect to create sustainable value from productivity measures in the Sectors in connection with "Siemens 2014," as mentioned earlier a company-wide program supporting our...

  • Page 218
    ... the Consolidated Financial Statements consists of the closing data reported by the operations of Siemens AG and its subsidiaries, which are derived from the various accounting records. Our internal Global Shared Services organization provides services to the individual subsidiaries. In the field of...

  • Page 219
    ... ag (german CommerCiaL Code) Siemens AG as the parent company of the Siemens Group is integrated into the company-wide accounting-related internal control system described above. Generally, the information set out above also applies for Stand-alone Financial Statements of C.10 ComPensation rePort...

  • Page 220
    ... german CommerCiaL Code (Condensed) Year ended September 30, (in millions of â,¬) 2012 2011 C.11.1 Business and economic environment Siemens AG is the parent company of the Siemens Group. Siemens AG is a globally operating, integrated technology company with core activities in the fields of energy...

  • Page 221
    ... driven mainly by additional costs of â,¬633 million relating to project charges in the Energy Sector's Power Transmission Division. Research and development (R&D) expenses increased 5% and rose as a percentage of revenue (R&D intensity) from 9% a year earlier to 10% in fiscal 2012. The increase was...

  • Page 222
    ... and were almost level with the prior year. sTATement oF FinanCiaL position oF siemens ag in aCCordanCe with german CommerCiaL Code (Condensed) September 30, (in millions of â,¬) 2012 2011 Financial assets rose 8%. The increase resulted primarily from a capital increase at sinius GmbH amounting to...

  • Page 223
    ...risk management. The description of the internal control system for Siemens AG required by Section 289 para. 5 of the German Commercial Code is included in C.9.5 signiFiCant CharaCteristiCs oF the aCCounting-reLated internaL ControL and risk management system. Employee fluctuation rate 1 Proportion...

  • Page 224
    ... may be non-GAAP financial measures. New orders and order backlog; adjusted or organic growth rates of revenue and new orders; book-to-bill ratio; Total Sectors profit; return on equity (after tax), or ROE (after tax); return on capital employed (adjusted), or ROCE (adjusted); Free cash flow, or FCF...

  • Page 225
    ... accountant fees and services 218 Note 40 - Corporate governance 218 Note 41 - Subsequent events 219 Note 42 - List of subsidiaries and associated companies pursuant to Section 313 para. 2 of the German Commercial Code 232 D.7 Supervisory Board and Managing Board 232 D.7.1 Supervisory Board...

  • Page 226
    ... share amounts in â,¬) Note 2012 2011 Revenue Cost of goods sold and services rendered Gross profit Research and development expenses Marketing, selling and general administrative expenses Other operating income Other operating expense Income (loss) from investments accounted for using the equity...

  • Page 227
    ... Available-for-sale financial assets Derivative financial instruments Other comprehensive income, net of tax 1 Total comprehensive income Attributable to: Non-controlling interests Shareholders of Siemens AG 1 Includes income (expense) resulting from investments accounted for using the equity method...

  • Page 228
    ... Other financial liabilities Other liabilities Total liabilities Equity Common stock, no par value 1 Additional paid-in capital Retained earnings Other components of equity Treasury shares, at cost 2 Total equity attributable to shareholders of Siemens AG Non-controlling interests Total equity Total...

  • Page 229
    ... assets (Increase) decrease in receivables from financing activities Proceeds and (payments) from sales of investments, intangibles and property, plant and equipment 1 Proceeds and (payments) from disposals of businesses Proceeds from sales of current available-for-sale financial assets Net cash...

  • Page 230
    D.5 ConsoliDateD statements of Changes in equity For the Fiscal years eNDeD september 30, 2012 aND 2011 Common stock Additional paid-in capital Retained earnings (in millions of â,¬) Balance at October 1, 2010 Net income Other comprehensive income, net of tax Dividends Share-based payment Re-...

  • Page 231
    ...may be reclassified subsequently to profit or loss Currency translation differences Available-for-sale financial assets Derivative financial instruments Total Treasury shares at cost Total equity attributable to shareholders of Siemens AG Non-controlling interests Total equity (115) - 134 - - - (17...

  • Page 232
    ... revenue (in millions of â,¬) 2012 2011 2012 2011 2012 2011 2012 2011 Sectors 1 Energy Healthcare Industry Infrastructure & Cities Total Sectors Equity Investments Financial Services (SFS) Reconciliation to Consolidated Financial Statements Centrally managed portfolio activities Siemens...

  • Page 233
    ... intangible assets and property, plant and equipment. Free cash flow of the Sectors, Equity Investments and Centrally managed portfolio activities primarily exclude income tax, financing interest and certain pension related payments and proceeds. Free cash flow of SFS, a financial services business...

  • Page 234
    ... a business portfolio of activities predominantly in the field of electronics and electrical engineering. The Consolidated Financial Statements were authorised for issue by the Managing Board on November 21, 2012. The Consolidated Financial Statements are generally prepared on the historical cost...

  • Page 235
    ...to 50% of the voting rights) and jointly controlled entities are recorded in the Consolidated Financial Statements using the equity method of accounting and are initially recognized at cost. The following policies equally apply to associated companies and jointly controlled entities. Where necessary...

  • Page 236
    ... rate of return on the net investment using the effective interest method. A selling profit component on manufacturing leases is recognized based on the policies for outright sales. Profit from sale and leaseback Rendering of services: Revenues from service transactions are recognized as services...

  • Page 237
    ...capitalized if (1) development costs can be measured reliably, the product or process is (2) technically and (3) commercially feasible, (4) future economic benefits are probable and (5) Siemens intends, and (6) has sufficient resources, to complete development and to use or sell the asset. The costs...

  • Page 238
    ... office buildings Other buildings Technical machinery & equipment Furniture & office equipment Equipment leased to others 20 to 50 years 5 to 10 years 5 to 10 years generally 5 years generally 3 to 5 years Other intangible assets - Other intangible assets consist of software and other internally...

  • Page 239
    ...or benefit increases. For post-employment healthcare benefits, Siemens considers health care trends in the actuarial valuations. For unfunded plans, Siemens recognizes a pension liability equal to the DBO adjusted by unrecognized past service cost. For funded plans, Siemens offsets the fair value of...

  • Page 240
    ...bonds, loans from banks, trade payables, finance lease payables and derivative financial instruments with a negative fair value. Siemens does not make use of the option to designate financial assets or financial liabilities at fair value through profit or loss at inception (Fair Value Option). Based...

  • Page 241
    ... financial assets or liabilities. awards are re-measured at fair value at the end of each reporting period and upon settlement. Siemens uses an option pricing model to determine the fair value of stock options. The fair value of other share-based awards, such as stock awards, matching shares...

  • Page 242
    ... be level to the adjusted expenses from pensions in fiscal 2012. In May 2011, the IASB published its improvements to the accounting and disclosure requirements for consolidation, off balance sheet activities and joint arrangements by issuing IFRS 10, Consolidated Financial Statements, IFRS...

  • Page 243
    ...flow projections take into account past experience and represent management's best estimate about future developments. Cash flows after the planning period are extrapolated using individual growth rates. Key assumptions on which management has based its determination of fair value less costs to sell...

  • Page 244
    ... other capital matters suggested for approval at the general shareholders' meeting, feedback from the financial market and the economic rationale of the decision from a shareholder perspective. In fiscal 2011, the disposal group Siemens IT Solutions and Services was measured at fair value less costs...

  • Page 245
    ... the Company 's Consolidated Financial Statements since the date of acquisition. aa) Acquisitions in fiscal 2012 At the beginning of May 2012, Siemens acquired all of the shares of five entities constituting the Connectors and Measurements division of Expro Holdings UK 3 Ltd. The acquired business...

  • Page 246
    ... forth in the shareholders' agreement, determined the fair market value (purchase price) of Siemens' 34% share in the joint venture Areva NP S.A.S. Following this, the shares, previously accounted for as an available-for-sale financial asset held for disposal at the Energy Sector, were transferred...

  • Page 247
    ...results of the solar business are disclosed as discontinued operations in the Company 's Consolidated Statements of Income for all periods presented. Year ended September 30, (in millions of â,¬) 2012 2011 Revenue Expenses Loss on the measurement to fair value less costs to sell or on the disposal...

  • Page 248
    ... less costs to sell applying a discounted cash flow method, which assumed a discount rate of 9.1% and a terminal value growth rate of 0%. The assets and liabilities of the solar business are presented as held for disposal in the Consolidated Statements of Financial Position as of September 30, 2012...

  • Page 249
    ... of July 2011, Siemens acquired a controlling interest of 100% in Siteco Lighting GmbH (Siteco) in a share deal transaction. Siteco is a leading European lighting company that supplies luminaires and lighting systems for urban infrastructures such as public and commercial buildings, streets, tunnels...

  • Page 250
    ... managed portfolio activities of Segment information and continues to be accounted for under the equity method. provide support to AtoS in connection with integration and training program which was recognized as restructuring expenses at Siemens IT Solutions and Services in the third quarter...

  • Page 251
    ... Losses on sales of property, plant and equipment and intangibles Other (39) (28) (209) (276) (30) (38) (306) (374) Line item Other in fiscal 2012 and 2011 includes charges related to legal matters. NOTE 7 Income (loss) from investments accounted for using the equity method, net Year...

  • Page 252
    ...income on financial assets Total interest expenses on financial liabilities 1 913 (792) 826 (959) (in millions of â,¬) Year ended September 30, 2012 2011 Germany 1 Relating to hedged positions, herein only the interest expense on hedged items not at fair value through profit and loss is included...

  • Page 253
    ... income tax rate of 31% as follows: Year ended September 30, (in millions of â,¬) 2012 2011 Assets: Financial assets Other intangible assets Property, plant and equipment Inventories Receivables Pension plans and similar commitments Provisions Liabilities Tax loss and credit carryforward Other...

  • Page 254
    ...30, 2011 (in millions of â,¬) Cost Fair value Unrealized gain Unrealized loss Equity instruments Debt instruments Fund shares 5 272 208 485 8 268 201 477 3 - 3 6 - (4) (10) (14) Non-current available-for-sale financial assets, which are included in line item Other financial assets are measured...

  • Page 255
    ... allowance as of fiscal year-end 142 168 23 (40) 6 5 (2) 134 34 (65) 7 (2) - 142 Investments in finance leases primarily relate to equipment for information technology and office machines, industrial machinery, medical equipment and transportation systems. Actual cash flows will vary from...

  • Page 256
    ... losses recognized in fiscal 2011 relate to activities classified as discontinued operations. Impacts on the Consolidated Statements of Income are presented in discontinued operations for all years presented. 1 A. To our Shareholders 21 B. Corporate Governance 49 C. Combined Management...

  • Page 257
    ... the fair value less costs to sell of the Divisions or equivalents, cash flows were projected for the next five years based on past experience, actual operating results and management's best estimate about future developments as well as market assumptions. The fair value less costs to sell is mainly...

  • Page 258
    ... at the Healthcare Sector. Amortization expense on intangible assets is included in line items Cost of goods sold and services rendered, Research and development expenses or Marketing, selling and general administrative expenses, depending on the use of the asset. As of September 30, 2012 and 2011...

  • Page 259
    ...Statements of Income Consolidated Statements of Comprehensive Income Consolidated Statements of Financial Position Consolidated Statements of Cash Flow 140 D.5 Consolidated Statements of Changes in Equity 142 D.6 Notes to Consolidated Financial Statements 232 D.7 Supervisory Board and Managing Board...

  • Page 260
    ... Hydro Holding GmbH & Co. KG 50% 50% 49% 26% 50% 50% 40% 35% 50% 50% 49% 26% 50% 50% 40% 35% Information related to the Statements of Financial Position is presented as of the date used in applying the equity method of accounting. September 30, (in millions of â,¬) 2012 2011 Total assets Total...

  • Page 261
    ... 2012 2011 Loans receivable Receivables from finance leases, see NOTE 11 TradE aNd OThEr rEcEivablES Derivative financial instruments Available-for-sale financial assets Other 6,085 3,148 2,798 1,021 1,614 14,666 4,396 2,983 2,424 714 1,609 12,126 Item Other employee related costs primarily...

  • Page 262
    ... September 30, 2012 and 2011 no commercial papers were outstanding. Siemens' commercial papers have a maturity of generally less than 90 days. Interest rates ranged from -0.03% to 0.7% in fiscal 2012 and from 0.1% to 0.29% in fiscal 2011. US$ Medium Term Notes In August 2006, the Company issued US...

  • Page 263
    ...Statements of Income Consolidated Statements of Comprehensive Income Consolidated Statements of Financial Position Consolidated Statements of Cash Flow 140 D.5 Consolidated Statements of Changes in Equity 142 D.6 Notes to Consolidated Financial Statements 232 D.7 Supervisory Board and Managing Board...

  • Page 264
    ... post-employment benefit plans qualify as defined benefit plans under IFRS. The Consolidated Statements of Financial Position include the following significant components related to pension plans and similar commitments as of September 30, 2012 and 2011: Pension benefits provided by Siemens are...

  • Page 265
    ... status of the pension benefit plans to the amounts recognized in the Consolidated Statements of Financial Position is as follows: September 30, 2012 (in millions of â,¬) Total Domestic Foreign Total September 30, 2011 Domestic Foreign Fair value of plan assets Total defined benefit obligation De...

  • Page 266
    ... of â,¬) Total Domestic Foreign Total September 30, 2011 Domestic Foreign Change in plan assets: Fair value of plan assets at beginning of year Foreign currency exchange rate changes Expected return on plan assets Actuarial gains (losses) on plan assets Acquisitions and other Settlements Employer...

  • Page 267
    ...53 In addition to net periodic benefit cost for continuing operations presented in the table above, â,¬26 million, â,¬(70) million and â,¬44 million were recognized for Siemens IT Solutions and Services and for OSRAM for the years ended September 30, 2012 and 2011. The amount of â,¬(70) million for...

  • Page 268
    ... in the Consolidated Statements of Comprehensive Income, net of tax which relates to OSRAM. with long-term rates of return on plan assets vary according to the economic conditions of the country in which the retirement plans are situated or where plan assets are invested as well as capital market...

  • Page 269
    ... or government bonds of consistent duration and currency at the period-end date. The expected return on plan assets is determined on a uniform basis, considering long-term historical returns, asset allocation, and future estimates of long-term investment returns. In fiscal 2012 and fiscal 2011, the...

  • Page 270
    ... above include amounts related to Siemens IT Solutions and Services and OSRAM. As pension benefit payments for Siemens' funded pension benefit plans reduce the DBO and plan assets by the same amount, there is no impact on the funded status of such plans. Actual return on plan assets 3,390 2,323...

  • Page 271
    ... of plan assets and a reconciliation of the funded status to the amounts recognized in the Consolidated Statements of Financial Position are as follows: September 30, 2012 (in millions of â,¬) Total Domestic Foreign Total September 30, 2011 Domestic Foreign Fair value of plan assets Total defined...

  • Page 272
    ...million past service cost and â,¬(30) million curtailment gain resulting from a plan change of the main health care plan in the U.S., occurring in fiscal 2012. Other post-employment benefits: amounts recognized in the Consolidated Statements of Comprehensive Income The actuarial gains and losses on...

  • Page 273
    ...for the year ended September 30, 2011 in the table above include amounts related to Siemens IT Solutions and Services and OSRAM. Since the benefit obligations for other post-employment benefits are generally not funded, such payments will impact the current operating cash flow of the Company. Other...

  • Page 274
    ...in cash outflows during the next one to 15 years. Warranties - mainly relate to products sold. Order related losses and risks - are provided for anticipated losses and risks on uncompleted construction, sales and leasing contracts. In fiscal 2012, the Power Transmission Division of the Energy Sector...

  • Page 275
    ...Statements of Income Consolidated Statements of Comprehensive Income Consolidated Statements of Financial Position Consolidated Statements of Cash Flow 140 D.5 Consolidated Statements of Changes in Equity 142 D.6 Notes to Consolidated Financial Statements 232 D.7 Supervisory Board and Managing Board...

  • Page 276
    ... ISSUED) The Company 's shareholders authorized the Managing Board, with the approval of the Supervisory Board, to increase capital stock through the issuance of no par value shares registered in the names of the holders and to determine the further content of the rights embodied in the shares and...

  • Page 277
    ... in cash if the price at which such Siemens shares are to be sold is not significantly lower than the market price of the Siemens stock at the time of selling; or (6) used to service convertible bonds or warrants granted by the Company or any of its subsidiaries. In addition, the Supervisory Board...

  • Page 278
    ...of Siemens AG as reported in its statutory financial statements determined in accordance with the German Commercial Code (Handelsgesetzbuch). In fiscal 2012, Siemens AG management distributed an ordinary dividend of â,¬2,629 million (â,¬3.00 per share) of the fiscal 2011 earnings to its shareholders...

  • Page 279
    ...other factors, Siemens' capital structure, profitability, ability to generate cash flow, geographic and product diversification as well as Siemens' competitive market position. Siemens' current corporate credit ratings from Moody 's Investors Service and Standard & Poor's Ratings Services' (S&P) are...

  • Page 280
    ... relating to credit guarantees. Furthermore, Siemens issues guarantees of third-party performance, which include performance bonds and guarantees of advanced payments in cases where Siemens is the general or subsidiary partner in a consortium. In the event of non-fulfill- 1 A. To our Shareholders...

  • Page 281
    ...-cancellable operating leases are as follows: September 30, (in millions of â,¬) 2012 2011 As previously reported, in July 2011 the Munich public prosecutor notified Siemens AG of an investigation against an employee in connection with payments to a supplier related to the oil and gas business in...

  • Page 282
    ..., Siemens AG, and Siemens employees. As previously reported, the Vienna public prosecutor, Austria, is conducting an investigation into payments between calendar 1999 and 2006 relating to Siemens Aktiengesellschaft Ã-sterreich, Austria, and its subsidiary Siemens VAI Metal Technologies GmbH & Co...

  • Page 283
    ... in the course of international business transactions in calendar 2003 to 2006 and the resulting financial burdens for the Company. The Annual Shareholders' Meeting approved all nine settlements between the Company and the former members of the Managing and Supervisory Board in January 2010. The...

  • Page 284
    ... for the public healthcare sector in the region of Campania for the supply of medical equipment in calendar 2009. In May 2011, the Italian Antitrust Authority sent a Statement of Objections to the companies under investiga- 1 A. To our Shareholders 21 B. Corporate Governance 49 C. Combined...

  • Page 285
    ...Statements of Income Consolidated Statements of Comprehensive Income Consolidated Statements of Financial Position Consolidated Statements of Cash Flow 140 D.5 Consolidated Statements of Changes in Equity 142 D.6 Notes to Consolidated Financial Statements 232 D.7 Supervisory Board and Managing Board...

  • Page 286
    ...regarding tenders in the public healthcare sector. OOO Siemens is cooperating in the ongoing investigations which also relate to certain individual employees. As previously reported, in April 2009, the Defense Criminal Investigative Service of the U.S. Department of Defense conducted a search at the...

  • Page 287
    ...Statements of Income Consolidated Statements of Comprehensive Income Consolidated Statements of Financial Position Consolidated Statements of Cash Flow 140 D.5 Consolidated Statements of Changes in Equity 142 D.6 Notes to Consolidated Financial Statements 232 D.7 Supervisory Board and Managing Board...

  • Page 288
    ..., 2012 (in millions of â,¬) Fair value Carrying amount September 30, 2011 Fair value Carrying amount Financial assets measured at cost or amortized cost Trade and other receivables 1 Receivables from finance leases Cash and cash equivalents Other non-derivative financial assets Available-for-sale...

  • Page 289
    ... â,¬) 2012 2011 Financial assets measured at fair value Available-for-sale financial assets Derivative financial instruments Not designated in a hedge accounting relationship In connection with fair value hedges Foreign currency exchange derivatives Interest rate derivatives In connection with cash...

  • Page 290
    ...exchange rates, interest rates and commodity prices. The fair values of each type of derivative financial instruments recorded as financial assets or financial liabilities are as follows: Year ended September 30, (in millions of â,¬) 2012 2011 Cash and cash equivalents Available-for-sale financial...

  • Page 291
    ... (losses) relating to such embedded foreign currency derivatives are reported in line item Cost of goods sold and services rendered in the Consolidated Statements of Income. Fair value hedges - As of September 30, 2012 and 2011, the Company hedged firm commitments using foreign currency exchange...

  • Page 292
    ... to manage the Company-wide risks associated with fluctuations in commodity prices from firm commitments and forecast transactions by entering into commodity swaps and commodity options. Such a strategy does not qualify for hedge accounting treatment. Cash flow hedging activities The Company...

  • Page 293
    ... being consistent with the overall policy established by the Managing Board. Increasing market fluctuations may result in significant cash flow and earnings volatility risk for Siemens. The Company 's operating business as well as its investment and financing activities are affected by changes in...

  • Page 294
    ... rate risk relating to the SFS business and to the remaining group are managed separately. For additional information see NOTE 31 DERIvATIvE FINANCIAL INSTRUMENTS AND HEDgINg ACTIvITIES. If there are no conflicting country-specific regulations, all Siemens segments and entities generally obtain...

  • Page 295
    ... from operating activities. In addition to having implemented effective working capital and cash management, Siemens mitigates liquidity risk by arranged credit facilities with highly rated financial institutions, via a debt issuance program and via a global multi-currency commercial paper program...

  • Page 296
    ...capital spending, ongoing cash requirements from operating and SFS financing activities, including higher cash outflows related to the announced growth strategy of SFS, dividend payments, pension plan funding, portfolio activities, and cash outflows in connection with restructuring measures. CREDIT...

  • Page 297
    ...transfer business partner data as a basis for a centralized rating process. In addition, numerous operating units transfer their trade receivables with a remaining term up to one year along with the inherent credit risk to the Siemens Credit Warehouse, but remain responsible for servicing activities...

  • Page 298
    ... the Company 's Base Share Program. STOCk AwARDS The Company grants stock awards as a means for providing share-based compensation to members of the Managing Board, members of the senior management of Siemens AG and its domestic and foreign subsidiaries and other eligible employees. Stock awards...

  • Page 299
    ... as the market price of Siemens shares less the present value of expected dividends. The remuneration system of the Managing Board and the changes in the stock awards held by Managing Board members are explained in detail in the Compensation report within the Corporate Governance report. Year ended...

  • Page 300
    ...Plan. The Managing Board decided that shares acquired under the tranches issued in fiscal 2011 are transferred to the Share Matching Plan as of February 2012 and February 2011, respectively. Fair value was determined as the market price of Siemens shares less the present value of expected dividends...

  • Page 301
    .... Year ended September 30, (in thousands) 2012 2011 Manufacturing and services Sales and marketing Research and development Administration and general services 224.3 77.6 29.5 35.3 366.7 214.3 73.6 27.7 34.3 349.9 oTHER SHARE-BASED PAYMENT AwARDS Siemens maintains other share-based payment...

  • Page 302
    ... to Siemens' reportable segments: DESCRIPTION OF REPORTABLE SEgMENTS The four Sectors comprise manufacturing, industrial and commercial goods, solutions and services in areas more or less related to Siemens' origins in the electrical business field. Energy - offers a wide spectrum of products...

  • Page 303
    ... Sectors and Equity Investments (Net capital employed). Its definition corresponds to the Profit measure. It is based on Total assets of the Consolidated Statements of Financial Position, primarily excluding intragroup financing receivables, intragroup investments and tax related assets, since the...

  • Page 304
    ...the audited Consolidated Financial Statements. September 30, (in millions of â,¬) 2012 2011 Assets of Sectors Assets of Equity Investments Assets of SFS Total Segment Assets Reconciliation: Assets Centrally managed portfolio activities Assets SRE Assets of Corporate items and pensions Eliminations...

  • Page 305
    ... of business whereby Siemens buys and sells a wide variety of products and services generally on arm's length terms. For information regarding our subsidiaries, joint ventures and associated companies in fiscal 2012 see NOTE 18 INvESTMENTS ACCOUNTED FOR USINg THE EqUITY NOTE 42 LIST OF SUBSIDIARIES...

  • Page 306
    ... Report is presented within the Corporate Governance report (see B.4). In fiscal 2012 and 2011, no other major transactions took place between the Company and the other members of the Managing Board and the Supervisory Board. Some of our board members hold, or in the last year have held, positions...

  • Page 307
    ... pricing issues. In fiscal 2012 and 2011, 47% and 52%, respectively, of the total fees related to Ernst & Young GmbH Wirtschaftsprüfungsgesellschaft, Germany. AUDIT SERvICES > Annual audit of Siemens' Consolidated Financial Statements and its internal control over financial reporting > Quarterly...

  • Page 308
    ... German stock corporation law (AktG) as of October 1, 2012, which is available on the Company 's website at www.SIEMENS.COM/CORPORATE-gOvERNANCE. The Managing board and the Supervisory board of IBS AG excellence, collaboration, manufacturing, currently Siemens' sole German publicly traded subsidiary...

  • Page 309
    ... Management GmbH, Grünwald Siemens Beteiligungen USA GmbH, Munich Siemens Beteiligungsverwaltung GmbH & Co. OHG, Grünwald Siemens Building Technologies Holding GmbH, Grünwald Siemens Energy Automation GmbH, Erlangen Siemens Finance & Leasing GmbH, Munich Siemens Financial Services GmbH...

  • Page 310
    ...2012 Equity interest in % Siemens Industriegetriebe GmbH, Penig Siemens Industriepark Karlsruhe GmbH & Co. KG, Grünwald Siemens Industry Automation Holding AG, Munich Siemens Industry Software GmbH & Co. KG, Cologne Siemens Industry Software Management GmbH, Cologne Siemens Insulation Center GmbH...

  • Page 311
    ...Statements of Income Consolidated Statements of Comprehensive Income Consolidated Statements of Financial Position Consolidated Statements of Cash Flow 140 D.5 Consolidated Statements of Changes in Equity 142 D.6 Notes to Consolidated Financial Statements 232 D.7 Supervisory Board and Managing Board...

  • Page 312
    ...Siemens Gas Turbine Technologies Holding B.V., The Hague / Netherlands Siemens Healthcare Diagnostics B.V., Amersfoort / Netherlands Siemens Industry Software B.V., s-Hertogenbosch / Netherlands Siemens International Holding B.V., The Hague / Netherlands Siemens Medical Solutions Diagnostics Holding...

  • Page 313
    ...Statements of Income Consolidated Statements of Comprehensive Income Consolidated Statements of Financial Position Consolidated Statements of Cash Flow 140 D.5 Consolidated Statements of Changes in Equity 142 D.6 Notes to Consolidated Financial Statements 232 D.7 Supervisory Board and Managing Board...

  • Page 314
    ...S.A. de C.V., Mexico City / Mexico Siemens Medical Solutions Diagnostics S. de R.L. de C.V., Mexico City / Mexico 6 Significant influence due to contractual arrangements or legal circumstances. 7 Not consolidated due to immateriality. 8 Not accounted for using the equity method due to immateriality...

  • Page 315
    ...TN / USA Siemens Power Generation Service Company, Ltd., Orlando, FL / USA Siemens Product Lifecycle Management Software II (US) Inc., Plano, TX / USA Siemens Product Lifecycle Management Software Inc., Plano, TX / USA Siemens Public, Inc., Wilmington, DE / USA Siemens Treated Water Outsourcing Corp...

  • Page 316
    ...Medical Solutions Diagnostics Ltd., Beijing / China Siemens Medium Voltage Switching Technologies (Wuxi) Ltd., Wuxi / China Siemens Numerical Control Ltd., Nanjing / China Siemens PLM Software (Shenzhen) Limited, Shenzhen / China Siemens Power Automation Ltd., Nanjing / China Siemens Power Equipment...

  • Page 317
    ...30, 2012 Equity interest in % Siemens Industry Software (India) Private Limited, New Delhi / India Siemens Ltd., Mumbai / India Siemens Nixdorf Information Systems Pvt. Ltd., Mumbai / India Siemens Power Engineering Pvt. Ltd., Gurgaon / India Siemens Technology and Services Private Limited, Mumbai...

  • Page 318
    ...Alexandria / Egypt Siemens Healthcare Diagnostics S.A.E, Cairo / Egypt Siemens Ltd. for Trading, Cairo / Egypt Siemens Technologies S.A.E., Cairo / Egypt Siemens Kenya Ltd., Nairobi / Kenya SCIENTIFIC MEDICAL SOLUTION DIAGNOSTICS S.A.R.L., Casablanca / Morocco Siemens Plant Operations Tahaddart SARL...

  • Page 319
    ...Statements of Income Consolidated Statements of Comprehensive Income Consolidated Statements of Financial Position Consolidated Statements of Cash Flow 140 D.5 Consolidated Statements of Changes in Equity 142 D.6 Notes to Consolidated Financial Statements 232 D.7 Supervisory Board and Managing Board...

  • Page 320
    ... / USA Siemens First Capital Commercial Finance, LLC, Oklahoma City, OK / USA Treated Water Outsourcing J.V., Naperville, IL / USA Valeo Sylvania LLC, Seymour, IN / USA Zargis Medical Corp., Princeton, NJ / USA Innovex Capital En Tecnologia, C.A., Caracas / Venezuela Asia (32 companies) Oil and Gas...

  • Page 321
    ... AG, Grünwald Siemens Venture Capital Fund 2 GmbH i.L., Munich SIM 9. Grundstücksverwaltungs- und -beteiligungs-GmbH, Munich Europe (without Germany) (3 companies) Atos S.A., Bezons Cedex / France Medical Systems S.p.A., Genoa / Italy Corporate XII S.A. (SICAV-FIS), Luxembourg / Luxembourg America...

  • Page 322
    ... Managing Board Member, IG Metall Date of birth: January 22, 1969 Member since: January 25, 2012 External positions German supervisory board positions: > MAN SE, Munich > Premium Aerotec GmbH, Augsburg (Deputy Chairman) Gerd von Brandenstein Member of the Supervisory Boards of Siemens AG and...

  • Page 323
    .... The present Supervisory Board's term of office will expire at the conclusion of the Annual Shareholders' Meeting on January 23, 2013. 1 Advisory board as comparable supervisory body As of September 30, 2012 135 D. 136 137 138 139 D.1 D.2 D.3 D.4 Consolidated Financial Statements Consolidated...

  • Page 324
    ... related to them. The Audit Committee's duties include, in particular, preparing Supervisory Board reviews of the Annual Financial Statements of Siemens AG and of the Consolidated Financial Statements of Siemens worldwide. The Committee also discusses the Company 's quarterly reports and half-year...

  • Page 325
    ...is the subject of an annual strategy meeting of the Supervisory Board - for the Supervisory Board's negotiations and decisions regarding the Company's financial situation and structure, its investments in property, plant and equipment and its financial investments. In addition, the Committee decides...

  • Page 326
    ... positions German supervisory board positions: > EOS Holding AG, Krailling Group Company positions German supervisory board positions: > BSH Bosch und Siemens Hausgeräte GmbH, Munich Positions outside Germany: > Siemens Technology and Services Private Ltd., India (Chairman) Barbara Kux Date...

  • Page 327
    ...Holding 1 GmbH, Wiesbaden Peter Y. Solmssen Date of birth: January 24, 1955 First appointed: October 1, 2007 Term expires: March 31, 2017 2 Group Company positions German supervisory board positions: > OSRAM AG,1 Munich Positions outside Germany: > Nokia Siemens Networks B.V., Netherlands > Siemens...

  • Page 328
    ... of various capital measures. It also determines the scope and conditions of the stock-based compensation components and / or compensation programs offered to employees and managers (excluding the Managing Board). Joe Kaeser Brigitte Ederer Further information on corporate governance at Siemens is...

  • Page 329
    ...240 E.1 Responsibility statement 241 E.2 Independent Auditors' Report 243 E.3 Statement of the Managing Board 244 E.4 Five-year summary 246 E.5 Glossary 248 E.6 Index 250 E.7 Further information and information resources 251 E.8 Financial calendar 252 E.9 Company structure E. Additional Information

  • Page 330
    ... the Consolidated Financial Statements give a true and fair view of the assets, liabilities, financial position and profit or loss of the group, and the Group Management Report, which has been combined with Munich, November 21, 2012 Siemens Aktiengesellschaft The Managing Board the Management Report...

  • Page 331
    ... income, financial position, cash flow and changes in equity, and notes to the consolidated financial statements for the business year from October 1, 2011 to September 30, 2012. Management's Responsibility for the Consolidated Financial Statements The management of Siemens Aktiengesellschaft is...

  • Page 332
    ... and group management report, the group management report is consistent with the consolidated financial statements, and as a whole provides a suitable view of the Group's position and suitably presents the opportunities and risks of future development. Munich, November 21, 2012 Ernst & Young GmbH...

  • Page 333
    ...as issued by the International Accounting Standards Board (IASB). The Group Management Report is consistent with the Consolidated Financial Statements and is combined with the Management Report of Siemens Aktiengesellschaft. Siemens employs extensive internal controls, company-wide uniform reporting...

  • Page 334
    ... of Siemens shares year-over-year (in percentage points) Compared to DAX® Compared to MSCI World Number of shares issued (September 30, in millions) Market capitalization (in millions of â,¬) 5 Credit rating - long-term debt Standard & Poor's Moody's Investors Service 1 Regarding activities...

  • Page 335
    ... 241 243 244 246 E.1 E.2 E.3 E.4 E.5 Additional Information 245 Responsibility statement Independent Auditors' Report Statement of the Managing Board Five-year summary Glossary 248 250 251 252 E.6 E.7 E.8 E.9 Index Further information and information resources Financial calendar Company structure

  • Page 336
    ... developed economies in accordance with the definition by the International Monetary Fund (IMF). Asset management F C Captive finance unit A financial services unit organized as a busi­ ness within an industrial enterprise that offers financial solutions primarily to custom­ ers of the operating...

  • Page 337
    ... with supplier selection, procurement and logistics. Supply Chain Management W Weighted Average Cost of Capital (WACC) The rate that a company is expected to pay on average to all its providers of capital to finance its assets. 135 D. Consolidated Financial Statements 239 E. 240 241 243 244...

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    ... Report Corporate Governance statement Credit ratings Cross-business activities Customer focus Customer Services (Industry) Customer Solutions (Energy) F Finance and Investment Committee Financial calendar Financial performance measures Financial position Financial Services (SFS) Five-year...

  • Page 339
    ... II 1ff. II 57 R Related party transactions Report of the Supervisory Board Report on expected developments and associated material opportunities and risks Research and development (R&D) Responsibility statement Results of operations Results of Siemens Revenue growth Risk management II 93ff. II 68f...

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    ... each fiscal year, Siemens publishes quarterly consolidated financial statements in the form of press releases. Conference calls and press conferences supplement these reports, giving journalists and analysts further opportunities to review developments in our businesses. Financial reporting for the...

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    ... 2014 August 1 Third-quarter financial report November 7 Preliminary figures for fiscal 2013 Januar y 28 Annual Shareholders' Meeting for fiscal 2013 1 Provisional. Updates will be published at www.siemens.com/financial-calendar E.9 Company structure 135 D. Consolidated Financial Statements...

  • Page 342
    ... Klaus Helmrich Corporate Technology Joe Kaeser Corporate Finance and Controlling Financial Services Siemens Real Estate Equity Investments Corporate Communications and Government Affairs Corporate Development Asia, Australia Sectors Energy Michael Süß Healthcare Hermann Requardt Industry...

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    ... Energy Cross-Sector Activities Separate Business Infrastructure & Cities Roland Busch Building Technologies Johannes Milde Low and Medium Voltage Ralf Christian Mobility and Logistics Sami Atiya Rail Systems Jochen Eickholt Smart Grid Jan Mrosik Financial Services Roland Chalons-Browne Global...

  • Page 344
    ...165 years, making us strong and linking us to our shareholders, employees and customers as a partner of trust. We're one of the world's largest providers of green technologies. Products and solutions from our Environmental Portfolio already account for some 42 % of our total revenue. In fiscal 2012...