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Industrial productivity
Intelligent infrastructure solutions
Next-generation healthcare
Energy efficiency
siemens.com
Thinking for the long term
Providing answers
Annual Report 

Table of contents

  • Page 1
    Energy efficiency Next-generation healthcare Industrial productivity Intelligent infrastructure solutions Thinking for the long term Providing answers Annual Report 2013 siemens.com

  • Page 2
    Energy efficiency Next-generation healthcare Industrial productivity Intelligent infrastructure solutions Siemens at a glance Fiscal 2013 siemens.com

  • Page 3
    Company Report 2013 Living our visions Achieving our goals

  • Page 4
    ... to further information. WWW.SIEMENS.COM/ANNUAL-REPORT Enhancing industrial productivity Creating efficient solutions USA York Harbor, U.S. Industry solutions pages 40 - 59 York Harbor What are the challenges facing people who need joint replacements? What role can industry software play in...

  • Page 5
    ...the most livable cities in the world. WWW.SIEMENS.COM/AR/REPORT-IC Corporate strategy pages 80 - 85 How can we create sustainable value? What are our goals? And how do we measure the success of our business activities? To find out, take a look at our strategy report, which provides an overview of...

  • Page 6
    Generating power more efficiently Protecting the environment 4

  • Page 7
    ..., I learned how technology enables us to meet the major challenges of our time. At Siemens, I'm now drawing on this experience. As the engineer responsible for servicing and maintaining the upgraded unit at the Kirishi combined cycle power plant, I'm helping drive ecofriendly power generation in...

  • Page 8
    ...to the days of the Soviet Union. As chief engineer at the Kirishi power plant, I personally supervised the plant's modernization, and as general manager of the company that operates it, I'm now seeing the results. What's my conclusion? Siemens' highefficiency combined cycle power plant technology is...

  • Page 9
    7

  • Page 10
    ... operating smoothly at full load." The 27-year-old Siemens engineer is responsible for maintaining and servicing two gas turbines, two generators and the automatic control system at the power plant in Kirishi, a town about 170 kilometers southeast of St. Petersburg. The facility supplies electricity...

  • Page 11
    Generating power more efficiently Protecting the environment 2 1 1 - Siemens engineer and project manager Kirill Gamburger enjoys living and working in St. Petersburg, where he also completed his university studies in engineering. 2 - View of St. Petersburg at night, from St. Isaac's Cathedral. In...

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    10

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    ... project manager, Kirill Gamburger has a great deal of responsibility for the power plant's availability and performance. He also keeps a close eye on operating costs for his customer: "We're now making better use of valuable natural gas, and our customer is benefiting from substantial cost savings...

  • Page 14
    ... power plant of the kind that Siemens has installed in many parts of the world over the last few years. Our advanced technology enables the highly efficient use of fuel (natural gas in Kirishi's case). When the fuel is burned, thermal energy is converted into mechanical energy, which drives a gas...

  • Page 15
    ... of 320 megawatts. Control system 24 hours 13 Extremely reliable and easy to operate, our advanced control system at Kirishi facilitates everyday processes. All employees - from shift supervisors to service engineers - can perform their work from nearly any location in the plant, around the clock...

  • Page 16
    ... by Siemens in 2012. "We can now dispense with the use of environmentally harmful heavy oil." Denis Bashuk is the general manager of the Russian energy utility OGK-2. Before assuming this position, he was chief engineer at the Kirishi power plant, where he headed one of Russia's largest projects to...

  • Page 17
    ... portfolio encompasses energy-saving products, solutions and services in the fields of resource-conserving and climate-friendly power generation, low-loss power transmission and intelligent power distribution via smart grids. er of a major power plant operator ou see the sustainable energy mix of...

  • Page 18
    ...Balanced energy mix Generating power while minimizing resource use and environmental impact Expected increase in capacity from new power plants, 2013 - 2030 (in gigawatts) China 13% 2% 5% 31% 6% 12% 29% 9% 1,584 EU 14% 5% 2% 8% 2% 49% 23% 813 USA 36% 1% 1% 2% 5% 13% 25% 26% 697 India 9% 44...

  • Page 19
    ...re working intensively to develop new solutions for storing large quantities of surplus power. Among other projects, we're testing electrolysis systems that convert surplus electricity into storable hydrogen, which can then be used to power fuel-cell vehicles, for example. er of a major power plant...

  • Page 20
    ... for ser air conditioning systems to lighting, access control, video surveilwith our t lance and fire safety solutions. The updat since 2012. Ha sumption to availability. For example, our demand management systems are helping more and more consumers use power when supplies are high and rates are low...

  • Page 21
    ... dispense with the use of heavy oil for the first time ever. As the general manager of a major power plant operator in Russia, how do you see the sustainable energy mix of the future ? Denis Bashuk : To achieve a sustainable energy mix in the European part of our country, we need to keep improving...

  • Page 22
    Generating power more efficiently Protecting the environment 20

  • Page 23
    ... other Russian power plants that use gas turbines from Siemens. Kirill Gamburger especially enjoys his work at the plant in Kirishi: "There are lots of young people employed in engineering and project management at the Kirishi power plant now. By joining forces, we quickly find solutions - even when...

  • Page 24
    Providing high-quality medical technology Improving healthcare 22

  • Page 25
    ...toward this goal: we deliver healthcare at prices that are 20% to 30% lower than those of comparable facilities in India. And, with support from Siemens, we also operate a mobile clinic that my colleagues take to rural areas, performing checkups, providing free treatment and offering local residents...

  • Page 26
    ... Indian medicine. Our physicians, who are among the most qualified in the country, are also involved in clinical research, training and education. Software solutions and imaging systems from Siemens are helping make outstanding healthcare affordable by ensuring the efficiency of our workflows. 22

  • Page 27
    25

  • Page 28
    ... mother an optimistic prognosis. Enabling access to healthcare "I want to help people and enhance their quality of life." Siemens' healthcare solutions Medanta - The Medicity Gurgaon, New Delhi, India It was during an operation that Dr. Namrata Gaur realized the direction she wanted to take: the...

  • Page 29
    27

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    Providing high-quality medical technology Improving healthcare 28

  • Page 31
    ... positive patient outcomes. "Thanks to the best equipment and digital networks," states hospital head Dr. Naresh Trehan with conviction, "we work very productively, our doctors have more time for their patients, and we can still deliver healthcare at affordable prices." PAGE 38 Siemens technology...

  • Page 32
    ...physician and the nursing staff can access each image on a secure drive at virtually every computer 1 in the hospital. The flow of data is particularly efficient because nearly all the hospital's imaging systems are from Siemens and communicate with the system via uniform data formats and interfaces...

  • Page 33
    ... - 15 uses automated measurement processes to considerably accelerate ultrasound examinations. Mobile clinic > 25 buses are providing basic medical care to people who would otherwise never receive it. Siemens has equipped more than 25 mobile clinics in India with healthcare systems in the last...

  • Page 34
    .... After working many years as a cardiac surgeon in the U.S., he has been making a major contribution to cardiology in India since the mid-1980s. With Medanta, Dr. Trehan aims to set new standards for the quality of healthcare in India while making medical services more widely accessible. Dr. Trehan...

  • Page 35
    ... countries will increase the demand for medical services there, too. For many years, we at Siemens have been working to improve healthcare worldwide - with medical devices, healthcare IT solutions and lab tests. The following pages document the progress we've made in our three key strategic action...

  • Page 36
    ... technology Improving healthcare Fighting the most threatening diseases Faster, more accurate diagnosis reduces the risk of life-threatening illness Number of patients treated worldwide using Siemens medical devices and lab tests 1 90 million 86 million 70 million treated patients Target 2014...

  • Page 37
    ...2010 a year earlier than planned. This achievement both confirms our success and motivates us to further improve the quality and productivity of healthcare services and enable even more patients to benefit from our technologies in 2014. A substantial proportion of healthcare expenditure worldwide is...

  • Page 38
    ... had access to Siemens imaging systems. But we're still not satisfied: by 2014, we want to increase this figure to more than one billion. Our aim is to boost the utilization rates of existing X-ray systems and CT/MRT scanners and improve basic healthcare services by providing robust low-cost medical...

  • Page 39
    .... When Siemens wants to sell us something, they send one person. But when it's a question of providing services, they send us four. And I appreciate that very much. In addition, the company gives us opportunities to cooperate in joint research projects in order to develop technologies that meet our...

  • Page 40
    ...SIEMENS.COM/AR/ REPORT- HEALTHCARE-MOVIE A fulfilling profession that entails making sacrifices The fact that not only the wealthy benefit from her work as a heart surgeon gives Dr. Gaur the strength she needs to do her 38 The statements by Siemens' customers described herein are based on results...

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    39

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    Enhancing industrial productivity Creating efficient solutions 40

  • Page 43
    .... But a few years ago, disease nearly put a stop to all that. Intense pain in my knees was making it harder and harder to get around. Then I decided to get knee replacements. The operations gave me back my mobility and put an end to the pain. Now I'm back in the middle of things. USA York Harbor...

  • Page 44
    ... tool configuration (production engineering) to actual manufacturing and services. By using software solutions to link all these steps in an end-to-end process chain, we can enable implant manufacturers to further simplify, considerably accelerate and, last but not least, cut the cost of designing...

  • Page 45
    43

  • Page 46
    ... of life Back in the game - with new knees Siemens' industry solutions York Harbor, Maine, U.S. Erlangen, Germany Maine, U.S. Ice hockey is one of the toughest sports around. Next to head wounds, knee injuries are the most common result of unintended collisions on the ice. But seventysix-year-old...

  • Page 47
    Enhancing industrial productivity Creating efficient solutions 1 2 1/2 - Five-time grandfather Gordon France sets a fast pace in the rink. Thanks to two artificial knees, he can still play his favorite sport. 45

  • Page 48
    ...Industry solutions for people Siemens engineer Sabine Fietz has big plans: "One of the megatrends in our society relates to demographic development. People are living longer, which means that there's a growing need for healthcare products. As the age pyramid for the industrialized countries clearly...

  • Page 49
    Knee prosthetics 720,000 In the U.S., some 720,000 people receive knee implants every year. 47

  • Page 50
    ...-market expertise and a strong customer focus - enables us to deliver the right products and solutions for every application. With our comprehensive offerings for automation technology, industrial controls, drive technology, industry software and services, we supply and support customers worldwide...

  • Page 51
    ...by increasing plant availability. But service doesn't end here. From planning and installation to operation and modernization, we support industrial customers with product-, system- and application-related services throughout entire plant lifecycles in order to reduce downtime and conserve resources...

  • Page 52
    ... area of simulation, for example, our work is guided by similar concerns. In the area of machine tool programming, there are interfaces with Siemens' product lifecycle management software. As researchers, we develop innovative solutions whose implementation may be several years down the road. That...

  • Page 53
    ...increase their productivity if they don't want to fall behind. And for this, they need innovative manufacturing technologies that allow them to produce more flexibly and at lower cost, with shorter time-to-market. As one of the world's leading providers of automation technology and industry software...

  • Page 54
    ... in the field drives (theand power loom steam engine). Thespecialists second involved of production process and machine development. the division of labor and mass production tool techniques. And the third was ushered in by electronic systems and computer technologies for automating manufacturing...

  • Page 55
    ... processes will slash timeto-market, for example, by speeding up the construction of production facilities. They'll also make it possible to manufacture product variants and even single customized products easily and at low cost. The Siemens solution described in this report - which demonstrates the...

  • Page 56
    ... area of simulation, for example, our work is guided by similar concerns. In the area of machine tool programming, there are interfaces with Siemens' product lifecycle management software. As researchers, we develop innovative solutions whose implementation may be several years down the road. That...

  • Page 57
    ... mobile and active as they grow older. That's why implants can enhance the quality of life by lasting longer and fitting better. If you can get the cost-benefit ratio right, Siemens' approach has excellent market potential. But that means the process chain has to be automated from end to end. What...

  • Page 58
    ... University in Hanover, Germany, Professor Denkena is working on a variety of research and development projects in medical technology and prosthetics. In his view, Siemens' solutions for the industrial production of implants are an important advance - one that points the way to the future. As he...

  • Page 59
    Professor Berend Denkena Leibniz University, Hanover, Germany " Siemens has made a very important advance that can help provide patients with better implants that last longer, work better and, thus, enhance their quality of life." 57

  • Page 60
    ... in a similar situation to have the operation as soon as possible. "I have my life back. I have so many ideas for things I want to paint. And I can finally play ice hockey again with my old friends." WWW.SIEMENS.COM/AR/ REPORT-INDUSTRY WWW.SIEMENS.COM/AR/ REPORT- INDUSTRY-MOVIE Gordon France Ice...

  • Page 61
    Enhancing industrial productivity Creating efficient solutions 59

  • Page 62
    Making infrastructures more intelligent Enhancing quality of life 60

  • Page 63
    ...of beautiful public squares, cultural offerings for every taste, excellent schools, a fantastic transportation infrastructure, plenty of green open spaces - and we feel completely safe here. Best of all: our city is further expanding its infrastructure for a sustainable, livable future. AUT Vienna...

  • Page 64
    ... of life for Vienna's residents by implementing new technologies - in the areas of traffic management and public transportation, for example. And we intend to keep building on our successes by implementing intelligent infrastructure solutions for mobility, power supply and building management. 60

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    Intelligent infrastructure is enhancing the quality of life Environmental awareness and energy efficiency, Viennese style: Austria's capital epitomizes what makes a city livable. Siemens' infrastructure solutions 64 Vienna, Austria

  • Page 67
    ... "intelligent" strategies. And Siemens has provided many of the city's closely integrated infrastructure solutions: metro trains and their electrification, traffic management systems, power distribution solutions, energy-efficient building technologies and security systems for public squares, metro...

  • Page 68
    ...he says. "In recent years, the network has become denser, and the buses, metro and trams run more often." And as the statistics show, ridership is up: thanks to Vienna's master transit plan, the use of public transportation within the city limits rose to a worldwide record of 39% in 2012, up from 34...

  • Page 69
    ... cities, and Siemens technology is playing a pivotal role in this success. Both the city's road traffic management center and its metro control center rely on our intelligent solutions. The metro control center manages both the system's power supply and its operation, centrally monitoring all trains...

  • Page 70
    ...costs and CO2 emissions at 23 public schools in Vienna. In Vienna, as in many cities, buildings account for the lion's share of the energy consumed. As a result, Mayor Michael Häupl has set up a city-wide energy-efficiency program in addition to implementing energy performance contracting solutions...

  • Page 71
    1 2 1 - Located on the site of Vienna's oldest public bath, the city's Theresienbad swimming pool complex is equipped with leading-edge technologies from Siemens. 2 - Carlotta and Max enjoy a swim at the Theresienbad. The metro trip to the pool is fast, comfortable and ecofriendly. 69

  • Page 72
    ...'s systems and solutions for building management and power distribution. In the future, FloriDa will be operated with the help of a data center infrastructure management (DCIM) software solution. Linking facility manage­ ment with IT control, our innovative software integrates information from...

  • Page 73
    ..., plan its operations more efficiently and optimize grid expansion. Our software solutions, which have already been implemented in more than 70 million smart meters around the world, are being used to record consumption data in this pilot project. 100% Vienna's airport In the area of power supply...

  • Page 74
    ... live to work. According to a recent international study, Vienna is the "smartest" major city in the world. Dr. Michael Häupl : When I took office nearly 20 years ago, I saw it as my mission 72 to turn Vienna into a city of science, knowledge, research, innovation and technology. I consider our...

  • Page 75
    ... its charter, provides support for the city's economic development, is the project lead. One of the first buildings constructed in the community was the aspern IQ technology center, pictured above. The Center is home to Aspern Smart City Research, a joint project of Siemens, Wien Energie and Wiener...

  • Page 76
    ... by storms, overloads and aging infrastructure are taking a significant toll on households and businesses alike. Studies have found that storm-related power outages cost the U.S. economy between â,¬15 billion and â,¬41 billion each year. Our end-to-end solutions ensure the reliable and efficient...

  • Page 77
    ... its charter, provides support for the city's economic development, is the project lead. One of the first buildings constructed in the community was the aspern IQ technology center, pictured above. The Center is home to Aspern Smart City Research, a joint project of Siemens, Wien Energie and Wiener...

  • Page 78
    ... 40% of worldwide energy consumption and 21% of CO2 emissions. We're a trusted technology partner for safe, energy-efficient, ecofriendly building infrastructure. Our integrated systems automate the control of heating, air conditioning, lighting, fire safety and security systems. By making buildings...

  • Page 79
    ... its charter, provides support for the city's economic development, is the project lead. One of the first buildings constructed in the community was the aspern IQ technology center, pictured above. The Center is home to Aspern Smart City Research, a joint project of Siemens, Wien Energie and Wiener...

  • Page 80
    Making infrastructures more intelligent Enhancing quality of life 1 2 3 1 / 2 - Austria's progressive capital is one of the few cities in the world to deploy battery-powered electric buses in regular service. Dr. Georg Freimüller never ceases to be amazed by how quiet and comfortable it is to ...

  • Page 81
    ...the aspern community and the research project with Siemens as steps clearly geared toward further enhancing the city's quality of life by introducing smart, automated infrastructure solutions: "This isn't just about building roads and housing. We also want to ensure that future generations enjoy the...

  • Page 82
    ... next-generation healthcare and intelligent infrastructure solutions." Based on this vision, we're steering the Company with a medium-term strategy. Our One Siemens framework concretizes this strategy. Within this Company-wide strategic setup, we formulate business strategies for the various markets...

  • Page 83
    ... strategy? We measure our success primarily in terms of the development of the key financial figures for revenue growth, capital efficiency and profitability as well as for capital structure. For further information, please see C.2 FINANCIAL PERFORMANCE SYSTEM on pages 173-178 of this Annual Report...

  • Page 84
    ...our business activities with major trends of our times, in this case climate change. In addition to its environmental benefits, our Environmental Portfolio enables us to compete successfully in attractive markets and generate profitable growth. In fiscal 2013, revenue from continuing operations from...

  • Page 85
    ... in our product and solutions business to advise our customers effectively and accurately. All in all, more service business can enable us to generate steadier revenue and leverage new potential for profitable growth. Many of our successful products and solutions are developed in close cooperation...

  • Page 86
    ... further enhance our Company's processes. The results of these surveys, which are conducted in 40 languages worldwide, provide us with valuable input that we systematically exploit. Stand for integrity Siemens is committed to fair competition. In our drive to succeed on the world's markets, we aim...

  • Page 87
    ...financial excellence in our industries. We measure and compare the success of our development on the basis of a target system that defines indicators for revenue growth, capital efficiency and profitability as well as for the optimization of our capital structure. Our goal is to sustainably increase...

  • Page 88
    Company Report 2013 Energy solutions Healthcare solutions Industry solutions Infrastructure solutions Company strategy

  • Page 89
    Financial Report 2013 To our Shareholders Corporate Governance Combined Management Report Consolidated Financial Statements Additional Information

  • Page 90
    ...179 Profitability and Capital efficiency FY 2013 FY 2012 % Change Further information Total Sectors Adjusted EBITDA Total Sectors profit in % of revenue (Total Sectors) Continuing operations Adjusted EBITDA Income from continuing operations Basic earnings per share 4 Return on capital employed...

  • Page 91
    ... 220 Page 220 7 13 Consolidated Statements of Changes in Equity 366 E.6 368 E.7 Index Company structure in thousands Sep. 30, 2013 Sep. 30, 2012 Further information 260 D.6 Notes to Consolidated Total employees - continuing operations Financial Statements 5 Europe, C.I.S., Africa, Middle East...

  • Page 92
    ... FY 2013 FY 2012 4 8 Employees Employee turnover rate (in %)6, 7 FY 2013 FY 2012 10.8 10.7 Capital structure and Liquidity Female employees in management positions (percentage of all management positions)6, 8 FY 2013 FY 2012 Cash and cash equivalents Total equity (Shareholders of Siemens AG...

  • Page 93
    ... and discontinued operations. 7 Employee turnover rate is defined as the ratio of voluntary and involuntary exits from Siemens during the fiscal year to the average number of employees. 8 Employees in management positions include all managers with disciplinary responsibility, plus project managers...

  • Page 94
    ...and into the future. Many things at Siemens are going well - some, even very well. Many of our businesses are very well positioned and poised for long-term success, as examples presented in this Annual Report show. This year, for the first time, the Report also includes our Sustainability Report, in...

  • Page 95
    ...over the next Contents Financial Report t in fiscal 2013 but also edecessor as President and CEO, played iod and, in particular, in the . On behalf of the Company and its her and my high regard for he Managing Board who have left esponsible for supply y since 2008. Her work was his year - the most...

  • Page 96
    ... in the future, and sus actions. These values hav commitment to them will endur "Siemens stands for the electrification of the world. Digitization and automation are transforming this value chain - and offering us major opportunities." Many things at Siemens ar nesses are very well positioned and...

  • Page 97
    ...the power grid put pressure on our profits. These burdens in operations were partially offset by the profits from the divestment of Nokia Siemens Networks (NSN) and from the cross-Sector activities of Siemens Real Estate (SRE) and Financial Services (SFS). The spinoff and public listing of OSRAM was...

  • Page 98
    ... decisive action and hard work. We'll work together to make this happen. The entire Managing Board and Siemens' global management team are in the front rank here. I'm aware that you, our shareholders, have high expectations of us - and rightly so. We'll work hard to meet your expectations. In doing...

  • Page 99
    ... same thing about us in 20 or 30 years. Through our work, diligence and dedication, we - the Managing Board and the Company 's more than 360,000 employees around the world - can play a key role in shaping your Company 's future. Joining forces, we'll act as though Siemens were our own company. That...

  • Page 100
    ... Board of Siemens AG Joe Kaeser Corporate Development, Governance & Markets, Communications and Government Affairs, Legal and Compliance Roland Busch Infrastructure & Cities, Corporate Sustainability Office Asia (excluding Japan), Australia Customer proximity Performance and commitment Siemens...

  • Page 101
    ...Resources, Corporate Technology Hermann Requardt Healthcare South America, Japan Quality and innovation Financial solidity Engineering excellence Ralf P. Thomas Finance and Controlling, Financial Services, Siemens Real Estate, Global Shared Services, Equity Investments Michael Süß Energy North...

  • Page 102
    Contents Financial Report To our Shareholders A . B. C. Corporate Governance Letter to our Shareholders Managing Board of Siemens AG Report of the Supervisory Board The Siemens Share / Investor Relations 126 B.3 129 B.4 118 B.1 Corporate Governance Report Corporate Governance statement pursuant to...

  • Page 103
    ... of Cash Flows Consolidated Statements of Changes in Equity Notes to Consolidated Financial Statements Supervisory Board and Managing Board 364 E.5 366 E.6 368 E.7 260 D.6 370 E.8 Key to references REFERENCE WITHIN THE PUBLICATION REFERENCE TO AN EXTERNAL PUBLICATION REFERENCE TO THE COMPANY REPORT...

  • Page 104
    ... of science, research and technology. Barbara Kux's appointment as a full member of the Managing Board expired at the end of November 16, 2013. We thanked Ms. Kux for her achievements as Head of Supply Chain Management and in connection with the Company's sustainability­related activities. 102

  • Page 105
    ... expecta­ he Siemens 2014 program. It is now vital ojects step­by­step and to imple­ he measures initiated will have a long­ o its competitors and achieve a he Company will focus even more ends like digitization, software iented toward profitable, capital­ y leadership in key businesses. This...

  • Page 106
    ... companies for their outstanding commitment." Our most important decisions concer Board. At our meeting on July 31, 2013, w Dr. Gerhard Cromme - Chairman of the Supervisory Board Peter Löscher's appointment as a full member of t and Chief Executive Officer of Siemens his Managing Board employment...

  • Page 107
    ... software and IT. The Company's long­term development must be oriented toward profitable, capital­ efficient growth and the expansion of our technology leadership in key businesses. This is the only way to create sustainable value for our employees and shareholders. In fiscal 2013, the Supervisory...

  • Page 108
    ...to cut costs and strengthen Siemens' core business through major investment and divestment projects. At an extraordinary meeting on October 9, 2012, the Managing Board reported on the state of the Company and informed the Supervisory Board of the implementation status of the Siemens 2014 program. At...

  • Page 109
    ... the capital market regarding the sale of the NSN stake and the successful IPO of OSRAM. At our meeting on July 31, 2013, we discussed the Company's business and financial posi­ tion following the conclusion of the third quarter and the progress made in connection with the Siemens 2014 program. It...

  • Page 110
    ... with the German Corporate Governance Code is permanently available to shareholders on the Company's website and is set out in B.2 CORPORATE GOVERNANCE STATEMENT PURSUANT TO SECTION 289A OF THE GERMAN COMMERCIAL CODE on page 124 of this Annual Report. Work in the Supervisory Board committees To...

  • Page 111
    ... the financial statements Ernst & Young GmbH Wirtschaftsprüfungsgesellschaft audited the stand­alone Financial Statements of Siemens AG, the Consolidated Financial Statements of the Siemens Group and the Combined Management Report for Siemens AG and the Siemens Group for fiscal 2013 and issued an...

  • Page 112
    ..., 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 man­ agement systems. At this meeting, the Managing Board explained the financial statements of Siemens AG and the Siemens Group as...

  • Page 113
    ... Networks (NSN) joint venture to Nokia. A few days later, OSRAM Licht AG was spun off from Siemens. As a result of these events, shareholders profited both from an increase in the Siemens share price and from a grant of OSRAM shares free of charge. At the end of July 2013, our Supervisory Board...

  • Page 114
    ... Siemens shares would have increased to â,¬2,312 by the end of fiscal 2013. This annual return of 8.7% is above the results for MSCI World (7.6%) but below those for the DAX 30 (10.2%). A.4.2 Dividend proposal At the Annual Shareholders' Meeting, the Managing Board and the Supervisory Board...

  • Page 115
    ... segment. Our solid financial position gives us unrestricted access to the international financial and capital markets. At the end of fiscal 2013, the net debt of Siemens AG was â,¬10,663 million, with cash and cash equivalents of â,¬9,190 million. For further information on our credit ratings...

  • Page 116
    ...in which they hold office. For further information on our employee share programs, please see NOTE 33 D.6 NOTES TO CONSOLIDATED FINANCIAL SHARE-BASED PAYMENT in STATEMENTS , pages 323-326. Stock price range (Xetra closing price) High Low Fiscal year-end Number of shares issued (September 30) Market...

  • Page 117
    Corporate Governance Corporate Governance Report Corporate Governance statement Compliance Report Compensation Report Takeover-relevant information 117 B. Corporate Governance B.

  • Page 118
    ... reports. Our CEO and CF with investors through r tion, Siemens holds Sect management of our Sect about the Sectors' busines ments. Stock market information Stock price range (Xetra closing price) High Low Fiscal year-end Number of shares issued (September 30) Market capitalization 2 Basic earnings...

  • Page 119
    ... Corporate Governance Report Management and control structure 148 B.5 122 B.1.2 Purchase or sale of the Company 's shares 122 B.1.3 Annual Shareholders' Meeting and investor relations 122 B.1.4 Significant differences between Siemens ' corporate governance and NYSE Corporate Governance Standards...

  • Page 120
    ... corporate law. It has a two-tier board structure, consisting of a Managing Board and a Supervisory Board. As required by the German Codetermination Act (Mitbestimmungsgesetz), the Company 's shareholders and its employees each select one-half of the Supervisory Board's members. The term of office...

  • Page 121
    ... its management of the Company 's business. At regular intervals, the Supervisory Board discusses business development, planning, strategy and implementation. It reviews the Stand-Alone Financial Statements of Siemens AG, the Consolidated Financial Statements of Siemens Group, Management Reports on...

  • Page 122
    ...Alone Financial Statements of Siemens AG and the Consolidated Financial Statements of Siemens Group. It concerns itself with the Company 's risk monitoring system and oversees the effectiveness of the internal control system as this relates, in particular, to financial reporting, the risk management...

  • Page 123
    ...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 Stand-Alone Financial Statements of Siemens AG and the Consolidated Financial Statements of Siemens Group...

  • Page 124
    ... financial communications and the date of the Annual Shareholders' Meeting, at WWW.SIEMENS. COM/INVESTORS . Details of our investor relations activities are provided in chapter A.4 THE SIEMENS SHARE / INVESTOR RELATIONS on pages 111-114 of this Annual Report. CORPORATE GOVERNANCE GUIDELINES...

  • Page 125
    ... Board of Siemens AG has assigned many of the functions of a nominating and corporate governance committee to its Chairman's Committee and has delegated part of the remaining functions 155 C. Combined Management Report 253 D. Consolidated Financial Statements 357 E. Additional Information...

  • Page 126
    ... Annual Report for 2013. Since making the last Declaration of Conformity dated October 1, 2012, Siemens AG has complied with the recom­ mendations of the Code in the prior version of May 15, 2012. Berlin and Munich, October 1, 2013 Siemens Aktiengesellschaft The Managing Board The Supervisory Board...

  • Page 127
    ...­ tions can be accessed via the Internet on: WWW.SIEMENS.C OM/289A . A general description of the functions and operation of the Managing Board and the Supervisory Board can be found under the heading B.1.1 MANAGEMENT AND CONTROL STRUCTURE under chapter B.1 CORPORATE GOVERNANCE REPORT on pages 118...

  • Page 128
    ....SIEMENS.COM/AR/ANTI-CORRUPTION-REPORTING-INDEX . B.3.3 Compliance training One focus of our preventive measures under the compliance system is to provide training to all managers and employees who hold positions with a particular risk profile. The Compliance Officers of the relevant Company units...

  • Page 129
    ... 2014 will see the Siemens­wide transfer of operational responsibility for data privacy to the compliance organization. The related tasks include risk assessments, monitoring activi­ ties, training for all managers and employees and complaint handling. The corporate legal department is providing...

  • Page 130
    ... LEGAL PROCEEDINGS on pages 306­312 of this Annual Report. OPPORTUNITIES AND RISKS WWW.SIEMENS.COM/COMPLIANCE 92 A. To our Shareholders 117 118 124 B. B.1 B.2 Corporate Governance Corporate Governance Report Corporate Governance statement pursuant to Section 289a of the German Commercial Code...

  • Page 131
    ... by a large majority at the Annual Shareholders' Meeting on Januar y 25, 2011. B.4.1 Remuneration of members of the Managing Board B.4.1.1 REMUNERATION SYSTEM The remuneration system for the Managing Board at Siemens is intended to provide an incentive for successful corporate management with an...

  • Page 132
    ...one free share of Siemens stock for each Stock Award after a restriction period. Beginning with the award for fiscal 2011, the restriction period for Stock Awards ends at the close of the second day after publication of the preliminary operating results for the fourth calendar year after the date of...

  • Page 133
    ...and updated annually there­ after. 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 of...

  • Page 134
    ... Managing Board member 92 A. To our Shareholders 117 118 124 B. B.1 B.2 Corporate Governance Corporate Governance Report Corporate Governance statement pursuant to Section 289a of the German Commercial Code (part of the Combined Management Report) Compliance Report 129 148 B.4 B.5 Compensation...

  • Page 135
    ... of Siemens stock compared to the stock of five competitors (ABB, General Electric, Philips, Rockwell, Schneider) over the coming four years, and will therefore not be determined until after the end of fiscal 2017. 155 C. Combined Management Report 253 D. Consolidated Financial Statements 357...

  • Page 136
    ... to the applicable reporting standards, amounted to â,¬34.58 million (2012: â,¬39.61 million). The granted payout amount presented below is to be used instead of the target value according to the GCGC for the one-year variable compensation (bonus), and service costs for pension benefits are not...

  • Page 137
    .... Löscher's reported total compensation as a member of the Managing Board and as President and CEO, he also received the following compensation for the remaining term of his employment contract in the months of August and September 2013: Fixed compensation of â,¬333,333, fringe benefits of â,¬5,138...

  • Page 138
    ... be paid out in January 2014. 3 Brigitte Ederer resigned from the Managing Board effective at the end of the day on September 30, 2013. 92 A. To our Shareholders 117 118 124 B. B.1 B.2 Corporate Governance Corporate Governance Report Corporate Governance statement pursuant to Section 289a of...

  • Page 139
    ... remaining term of his employment agreement, for the months of August and September 2013: fixed compensation of â,¬333,333, fringe benefits of â,¬5,138, and a proportionate variable compensation (bonus) of â,¬316,721. 155 C. Combined Management Report 253 D. Consolidated Financial Statements...

  • Page 140
    ... â,¬33.1 million (2012: â,¬15.8 million) in fiscal 2013. This figure includes cash compensation for the stock commitments for former Managing Board member Wolfgang Dehen as a result of the spinoff of OSRAM from the corporate group. Furthermore it includes the compensatory payment connected with the...

  • Page 141
    ... members of the Managing Board and their surviving dependents as of September 30, 2013, amounted to â,¬192.5 million (2012: â,¬181.6 million). This figure is included in NO TE 23 POST-EMPLOYMENT BENEFITS in D.6 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS . B.4.1. 3 ADDITIONAL INFORMATION ON STOCK...

  • Page 142
    ... on the award date; this monetary value reflects target attainment of 100% for Stock Awards for which target attainment depends on future stock performance, Brigitte Ederer resigned from the Managing Board effective at the end of the day on September 30, 2013. The Siemens Stock Awards for fiscal...

  • Page 143
    ...2012: â,¬0). The above fair values also take into account that the shares acquired under the Base Share Program as part of the Share Matching Plan were provided with a Company subsidy (for additional inforNO TE 33 in mation on the Base Share Program see D.6 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS...

  • Page 144
    ... Governance Code in the version of May 13, 2013. The remuneration system remains focused on providing an incentive for successful corporate management with an emphasis on sustainability. At the same time, it offers members of the Managing Board a chance to benefit from any sustained increase...

  • Page 145
    ... with deferred payout Performance-based components Including the values of fiscal 2013, a maximum amount of compensation for the compensation overall of â,¬10,608,043 would result. 155 C. Combined Management Report 253 D. Consolidated Financial Statements 357 E. Additional Information 145

  • Page 146
    ... resigned from the Supervisory Board as of the end of the Annual Shareholders' Meeting on January 23, 2013. Dieter Scheitor resigned from the Supervisory Board as of the end of the Annual Shareholders' Meeting on January 24, 2012. 5 In addition, the members of the Supervisory Board are entitled to...

  • Page 147
    ... of a financial loss associated with employment functions. The insurance policy for fiscal 2013 includes a deductible for the members of the Managing Board and the Supervisory Board in compliance with the requirements of the German Stock Corporation Act and the German Corporate Governance Code. 155...

  • Page 148
    ... of stock issued by Siemens AG to employees under its employee share program and / or as stock-based compensation are transferred directly to the employees. The beneficiary employees who hold shares of employee stock may exercise their control rights in the same way as any other shareholder directly...

  • Page 149
    ...registered shares of no par value against contributions in cash (Authorized Capital 2011). Preemptive rights of existing shareholders are excluded. The new shares shall be issued under the condition that they are offered exclusively to employees of Siemens AG and its subsidiaries. The new shares may...

  • Page 150
    ... bonds or warrant bonds issued until January 24, 2016 by the Company or any of its consolidated subsidiaries in accordance with the authorization of the Managing Board adopted by the Annual Shareholders' Meeting on January 25, 2011, the capital stock was conditionally increased by â,¬270 million...

  • Page 151
    ...companies, businesses, parts of businesses or interests therein; (4) sold, with the approval of the Supervisory Board, to third parties against payment in cash if the price at which such Siemens shares are sold is not significantly lower than the market price of Siemens stock at the time of selling...

  • Page 152
    ... grant the counterparty a right of termination upon a third party acquiring the beneficial ownership of equity securities having the power to elect a majority of the Company 's Supervisory Board or otherwise acquiring the power to control the Company 's material policy-making decisions and the...

  • Page 153
    C. Combined Management Report Business and economic environment Financial performance system Results of operations | Financial position | Net assets position ement Overall assessment of the economic position Subsequent events Sustainability Report on expected developments Risks and ...

  • Page 154
    ... explanation of our profit, asset Siemens AG becomes a subsidiar and financial position. We also report person or a group of per tive control over Siemens A on various aspects of sustainability influence over its activities (Ar 139 / 2004). at Siemens and on expected develop­ ments and their...

  • Page 155
    ... 192 C.4 Financial position 245 C.10 192 C.4.1 Principles and objectives of financial management 193 C.4.2 Capital structure 194 C.4.3 Credit rating 195 C.4.4 Investing activities 196 C.4.5 Cash flows 198 C.4.6 Capital resources and requirements Compensation Report, Corporate Governance statement...

  • Page 156
    ... We are a globally operating 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 can look back on a successful history spanning 166 years, with groundbreaking...

  • Page 157
    ... Industry Automation Drive Technologies Infrastructure & Cities Sector Transportation & Logistics Power Grid Solutions & Products Building Technologies Equity Investments Financial Services Reconciliation to Consolidated Financial Statements Centrally managed portfolio activities Siemens Real...

  • Page 158
    ... Fossil Power Generation, Wind Power and Oil & Gas. Financial results relating to the Energy Service Division are included in these Divisions. The Energy Sector distributes its products and services through its own dedicated sales force, supported by Siemens' worldwide network of regional companies...

  • Page 159
    ... of the Oil & Gas Division vary by product; in automation and electrical equipment, they are ABB and Honeywell above all, whereas in compressors and steam 253 357 245 C.10 Compensation Report, Corporate Governance statement pursuant to Section 289a of the German Commercial Code, Takeover-relevant...

  • Page 160
    ... financial results for the Diagnostics Division. 92 117 A. B. To our Shareholders Corporate Governance 155 156 173 179 192 204 C. C.1 C.2 C.3 C .4 C.5 Combined Management Report Business and economic environment Financial performance system Results of operations Financial position Net assets...

  • Page 161
    ... markets. Agenda 2013 also encompasses a realignment of the radiation therapy business unit and a related research and development and sales cooperation with Varian Medical Systems. In addition, Agenda 2013 includes a program to improve the cost position in the Diagnostics Division. The Healthcare...

  • Page 162
    ... the Drive Technologies Division that serve customers in 92 117 A. B. To our Shareholders Corporate Governance 155 156 173 179 192 204 C. C.1 C.2 C.3 C .4 C.5 Combined Management Report Business and economic environment Financial performance system Results of operations Financial position Net...

  • Page 163
    ... and communication solutions. Infrastructure & Cities The Infrastructure & Cities Sector offers a wide range of technologies for increasing the sustainability of metropolitan centers and urban infrastructures worldwide, such as integrated mobility solutions, building and security systems, power...

  • Page 164
    ... to Siemens' shares in AtoS, the shares have been included within Equity Investments since the beginning of fiscal 2014. The Infrastructure & Cities Sector distributes its products and services through its own dedicated sales force, supported by Siemens' worldwide network of regional companies. In...

  • Page 165
    ... mainly comprises internal services provided to Siemens. SFS conducts its business through seven Business Units, one Business Segment (Venture Capital) and two functions: Corporate Pensions and Trade Finance Advisory. The Commercial Finance Business Unit offers a comprehensive range of solutions...

  • Page 166
    ...GDP growth Annual GDP growth forecast 92 117 A. B. To our Shareholders Corporate Governance 155 156 173 179 192 204 C. C.1 C.2 C.3 C .4 C.5 Combined Management Report Business and economic environment Financial performance system Results of operations Financial position Net assets position 207...

  • Page 167
    ... and traded in multiple locations, such as the London Metal Exchange, the risk to Siemens is primarily a price risk rather than a supply risk. 253 357 245 C.10 Compensation Report, Corporate Governance statement pursuant to Section 289a of the German Commercial Code, Takeover-relevant information...

  • Page 168
    ... is generally exposed to energy and fuel prices, both directly (electricity, gas, oil) and indirectly (energy used in the manufacturing processes of suppliers, fuels included in logistics costs). Siemens employs various strategies to reduce the price risk in its project and product businesses, such...

  • Page 169
    ... long-term average growth rate. Markets served by our Drive Technologies Division also saw de-stocking effects within short-cycle industries. Markets for industrial infrastructure industries, including the Division's markets for solutions and products for wind power and rail markets, declined...

  • Page 170
    ... Infrastructure & Cities Sector grew moderately in fiscal 2013. While markets served by the Transportation & Logistics Business showed a steady recovery including tenders for a number of large projects, markets for the Power Grid Solutions & Products Business and the Building Technologies Division...

  • Page 171
    ...-how, products, solutions and key components span the entire energy generation and transmission chain. The Energy Sector focuses its business and portfolio on large and strongly growing markets such as gas turbines, 253 357 245 C.10 Compensation Report, Corporate Governance statement pursuant to...

  • Page 172
    ... based value-added services such as energy and environmental services. In its solution business, it offers a complete set of solutions for specific industries such as Automotive. In addition, its Metals Technologies Business Unit - a life-cycle partner for customers of metallurgical plants - drives...

  • Page 173
    ...One Siemens we seek to work profitably and as efficiently as possible with the capital of our shareholders and lenders. We manage and control our capital efficiency using adjusted return on capital employed, or ROCE (adjusted), for continuing operations. This financial measure assesses our generated...

  • Page 174
    ...FY 2013 FY 2012 0.34 0.24 Target range: 0.5 - 1.0 92 117 A. B. To our Shareholders Corporate Governance 155 156 173 179 192 204 C. C.1 C.2 C.3 C.4 C.5 Combined Management Report Business and economic environment Financial performance system Results of operations Financial position Net assets...

  • Page 175
    ..., Corporate Governance statement pursuant to Section 289a of the German Commercial Code, Takeover-relevant information and explanatory report 246 250 Siemens AG (Discussion on basis of German Commercial Code) C.12 Notes and forward-looking statements C.11 D. E. Consolidated Financial Statements...

  • Page 176
    ...TO CONSOLIDATED FINANCIAL STATEMENTS . 92 117 A. B. To our Shareholders Corporate Governance 155 156 173 179 192 204 C. C.1 C.2 C.3 C.4 C.5 Combined Management Report Business and economic environment Financial performance system Results of operations Financial position Net assets position 207...

  • Page 177
    ... with the allocated equity of SFS as of September 30 of the previous fiscal year. 253 357 245 C.10 Compensation Report, Corporate Governance statement pursuant to Section 289a of the German Commercial Code, Takeover-relevant information and explanatory report 246 250 Siemens AG (Discussion on basis...

  • Page 178
    ...in the future without previous notice. 92 117 A. B. To our Shareholders Corporate Governance 155 156 173 179 192 204 C. C.1 C.2 C.3 C.4 C.5 Combined Management Report Business and economic environment Financial performance system Results of operations Financial position Net assets position 207...

  • Page 179
    ..., Corporate Governance statement pursuant to Section 289a of the German Commercial Code, Takeover-relevant information and explanatory report 246 250 Siemens AG (Discussion on basis of German Commercial Code) C.12 Notes and forward-looking statements C.11 D. E. Consolidated Financial Statements...

  • Page 180
    ... revenue and cost of sales, recognized in prior periods from projects that were still permitted to be provided under these policies. For additional information, see C.9.3 RISKS . Revenue related to external customers declined 2% compared to fiscal 2012. A slight increase in Infrastructure & Cities...

  • Page 181
    ..., Corporate Governance statement pursuant to Section 289a of the German Commercial Code, Takeover-relevant information and explanatory report 246 250 Siemens AG (Discussion on basis of German Commercial Code) C.12 Notes and forward-looking statements C.11 D. E. Consolidated Financial Statements...

  • Page 182
    ... NOTE 35 in D.6 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS . Year ended September 30, (in millions of â,¬) 2013 2012 % Change OSRAM Siemens IT Solutions and Services Other 277 71 (151) (135) 40 (265) n/a 78% 43% 92 117 A. B. To our Shareholders Corporate Governance 155 156 173 179 192 204...

  • Page 183
    ... all Siemens Divisions. Profit at Oil & Gas increased year-over-year on substantially lower charges related to Iran. Wind Power's profit remained on the same level as in fiscal 2012, despite â,¬94 million in charges related to turbine blades. Power Transmission cut its loss nearly in half compared...

  • Page 184
    ... largest national market for Wind Power. New projects in the U.S. were halted or postponed in the latter half of 2012 due to uncertainty regarding continuation of production tax incentives. The resulting order gap led to a steep drop in fiscal 2013 revenue in the Americas compared to a year earlier...

  • Page 185
    ..., Corporate Governance statement pursuant to Section 289a of the German Commercial Code, Takeover-relevant information and explanatory report 246 250 Siemens AG (Discussion on basis of German Commercial Code) C.12 Notes and forward-looking statements C.11 D. E. Consolidated Financial Statements...

  • Page 186
    .... 92 117 A. B. To our Shareholders Corporate Governance 155 156 173 179 192 204 C. C.1 C.2 C.3 C.4 C.5 Combined Management Report Business and economic environment Financial performance system Results of operations Financial position Net assets position 207 209 210 227 C.6 C.7 C.8 C.9 Overall...

  • Page 187
    ...earlier. Profit at Drive Technologies in fiscal 2013 came in at â,¬527 million, a sharp decline from the prior-year level. The main impact was â,¬243 million in charges for "Siemens 2014." Profit development also included a revenue-driven decline due to challenging market conditions for the Division...

  • Page 188
    ... translation and portfolio effects. Profit and Profit margin by Business Profit Year ended September 30, (in millions of â,¬) 2013 2012 % Change 2013 Profit margin Year ended September 30, 2012 Transportation & Logistics Power Grid Solutions & Products Building Technologies (448) 403 351 236...

  • Page 189
    ...-year period. Income before income taxes Total assets 409 18,661 479 17,405 (14)% 7% 253 357 245 C.10 Compensation Report, Corporate Governance statement pursuant to Section 289a of the German Commercial Code, Takeover-relevant information and explanatory report 246 250 Siemens AG (Discussion...

  • Page 190
    ... Automation Drive Technologies Infrastructure & Cities Sector therein: Transportation & Logistics Power Grid Solutions & Products Building Technologies Total Sectors Equity Investments Financial Services (SFS) Reconciliation to Consolidated Financial Statements Centrally managed portfolio activities...

  • Page 191
    ..., Corporate Governance statement pursuant to Section 289a of the German Commercial Code, Takeover-relevant information and explanatory report 246 250 Siemens AG (Discussion on basis of German Commercial Code) C.12 Notes and forward-looking statements C.11 D. E. Consolidated Financial Statements...

  • Page 192
    ... risk in its financial assets and financial derivative instruments very closely. For more detailed information about financial risk management at Siemens, see NOTE 32 in D.6 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS . C.4.1.4 MANAGEMENT OF POST-EMPLOYMENT BENEFITS Our funding policy for post...

  • Page 193
    ...CONSOLIDATED mation on fair value hedges see FINANCIAL STATEMENTS . We believe that sustainable revenue and profit development can be achieved only on the basis of a healthy capital structure. A key consideration of our capital structure management is to maintain ready access to the capital markets...

  • Page 194
    ... other factors, our capital structure, profitability, ability to generate cash flow, geographic and product diversification and our competitive market position. Our current corporate credit ratings from Moody 's Investors Service (Moody 's) and Standard & Poor's Ratings Services (S&P) are noted as...

  • Page 195
    ...Infrastructure & Cities FY 2013 FY 2012 239 290 (18)% For information with respect to acquisitions of businesses, see NOTE 4 in D.6 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS . 253 357 245 C.10 Compensation Report, Corporate Governance statement pursuant to Section 289a of the German Commercial...

  • Page 196
    ... Technologies Business Unit, which was classified as discontinued operations during the fourth quarter of fiscal 2013. Siemens IT Solutions and Services was sold to AtoS in the fourth quarter of fiscal 2011. In July 2013, Siemens successfully completed its spin-off and listing of OSRAM. The cash...

  • Page 197
    ..., Corporate Governance statement pursuant to Section 289a of the German Commercial Code, Takeover-relevant information and explanatory report 246 250 Siemens AG (Discussion on basis of German Commercial Code) C.12 Notes and forward-looking statements C.11 D. E. Consolidated Financial Statements...

  • Page 198
    ... payments, pension plan funding, portfolio activities, and cash outflows in connection with "Siemens 2014," a company-wide program aimed at improving profitability in the Sectors. Net debt results from total debt less total liquidity. Management uses the Net debt measure for internal finance...

  • Page 199
    ..., Corporate Governance statement pursuant to Section 289a of the German Commercial Code, Takeover-relevant information and explanatory report 246 250 Siemens AG (Discussion on basis of German Commercial Code) C.12 Notes and forward-looking statements C.11 D. E. Consolidated Financial Statements...

  • Page 200
    ... repayment of the credit. 92 117 A. B. To our Shareholders Corporate Governance 155 156 173 179 192 204 C. C.1 C.2 C.3 C.4 C.5 Combined Management Report Business and economic environment Financial performance system Results of operations Financial position Net assets position 207 209 210...

  • Page 201
    ..., Corporate Governance statement pursuant to Section 289a of the German Commercial Code, Takeover-relevant information and explanatory report 246 250 Siemens AG (Discussion on basis of German Commercial Code) C.12 Notes and forward-looking statements C.11 D. E. Consolidated Financial Statements...

  • Page 202
    ... communications technology of the German Federal Armed Forces (Bundeswehr). This project is called HERKULES. A project company, BWI Informationstechnik GmbH (BWI), provides the services required by the terms of the contract. Siemens is a shareholder in the project company. The total contract value...

  • Page 203
    ... benefits paid and the annual remeasurement of DBO. For more information on Siemens' pension plans, see in D.6 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS . NOTE 23 C.4.6.5 OTHER CAPITAL RESOURCES AND REQUIREMENTS At the Annual Shareholders' Meeting scheduled for January 28, 2014, the Managing Board...

  • Page 204
    ... of our Consolidated Statements of Financial Position. September 30, (in millions of â,¬) 2013 2012 Goodwill Other intangible assets Property, plant and equipment Investments accounted for using the equity method Other financial assets Deferred tax assets Other assets Total non-current assets 17...

  • Page 205
    ..., Corporate Governance statement pursuant to Section 289a of the German Commercial Code, Takeover-relevant information and explanatory report 246 250 Siemens AG (Discussion on basis of German Commercial Code) C.12 Notes and forward-looking statements C.11 D. E. Consolidated Financial Statements...

  • Page 206
    ... 2013. In fiscal 2013, the main factors relating to the decrease in total equity attributable to shareholders of Siemens AG were: (1) Dividend payments of â,¬2.528 billion (paid for fiscal 2012); (2) measuring OSRAM's spin-off liability at fair value with any changes recognized in retained earnings...

  • Page 207
    ... continuing operations a year earlier was 15.5%. 253 357 245 C.10 Compensation Report, Corporate Governance statement pursuant to Section 289a of the German Commercial Code, Takeover-relevant information and explanatory report 246 250 Siemens AG (Discussion on basis of German Commercial Code) C.12...

  • Page 208
    ... per share, unchanged from a year earlier. 92 117 A. B. To our Shareholders Corporate Governance 155 156 173 179 192 204 C. C.1 C.2 C.3 C.4 C.5 Combined Management Report Business and economic environment Financial performance system Results of operations Financial position Net assets position...

  • Page 209
    ... stock, for issuing shares to current and former employees, to members of the Managing Board and board members of affiliated companies and for meeting obligations from or in connection with convertible bonds or warrant bonds. 253 357 245 C.10 Compensation Report, Corporate Governance statement...

  • Page 210
    ... Customer Services (Industry) Head of Corporate Technology - Research & Technology Center CEO of Low and Medium Voltage (Infrastructure & Cities) Head of Corporate Finance - Reporting and Controlling Head of Corporate Legal and Compliance CTO of Energy (Energy) CEO of Siemens Financial Services...

  • Page 211
    ... to international standards and guidelines for sustainability. For example, we signed on to the 253 357 245 C.10 Compensation Report, Corporate Governance statement pursuant to Section 289a of the German Commercial Code, Takeover-relevant information and explanatory report 246 250 Siemens AG...

  • Page 212
    ... core technology initiatives such as future of automation, data to business or system integration. With its global network of experts, our corporate research unit serves as a strategic partner for Siemens' operating units. CT makes important contributions along the entire value chain, from research...

  • Page 213
    ... power grid to make deep-sea oil and gas extraction more profitable. Examples of research and development in Energy include Type B75 rotor blades for wind turbines, which are 75 meters in length; this makes them, to our knowledge, the longest rotor blades in operation in the world as of the date...

  • Page 214
    ...development of technology-based service concepts such as energy management and remote maintenance systems, as well as the creation of efficient, resource-conserving solutions for steel production. R&D activities in our Infrastructure & Cities Sector focus on urban growth issues. Main research fields...

  • Page 215
    ..., Corporate Governance statement pursuant to Section 289a of the German Commercial Code, Takeover-relevant information and explanatory report 246 250 Siemens AG (Discussion on basis of German Commercial Code) C.12 Notes and forward-looking statements C.11 D. E. Consolidated Financial Statements...

  • Page 216
    ...) and the Healthcare Sector (around 40 major facilities). Key elements of our production strategy include sustained improvement in the cost position for our products and solutions, and locating production sites geographically to support the development of new markets. China, for example, is one...

  • Page 217
    ... founded our first Indian subsidiary in 1924. Sustainable customer relationships are the basis for our longterm success. We employ a structured key account management (KAM) approach throughout the Company to take care of our key customers. This means that we seek to tailor our products and solutions...

  • Page 218
    ... annually regarding the qualification 92 117 A. B. To our Shareholders Corporate Governance 155 156 173 179 192 204 C. C.1 C.2 C.3 C.4 C.5 Combined Management Report Business and economic environment Financial performance system Results of operations Financial position Net assets position...

  • Page 219
    ..., Corporate Governance statement pursuant to Section 289a of the German Commercial Code, Takeover-relevant information and explanatory report 246 250 Siemens AG (Discussion on basis of German Commercial Code) C.12 Notes and forward-looking statements C.11 D. E. Consolidated Financial Statements...

  • Page 220
    ... our Siemens-wide environmental targets. 92 117 A. B. To our Shareholders Corporate Governance 155 156 173 179 192 204 C. C.1 C.2 C.3 C.4 C.5 Combined Management Report Business and economic environment Financial performance system Results of operations Financial position Net assets position...

  • Page 221
    ...people worldwide with a high-performance culture, 253 357 245 C.10 Compensation Report, Corporate Governance statement pursuant to Section 289a of the German Commercial Code, Takeover-relevant information and explanatory report 246 250 Siemens AG (Discussion on basis of German Commercial Code) C.12...

  • Page 222
    ... At many of our locations worldwide, we now provide options for flexible work schedules, part-time work and telecommuting. At the same Healthcare: 52 (14%) 362 Financial Services: 3 (1%) Industry: 100 (28%) Infrastructure & Cities: 90 (25%) 1 Continuing operations. Employees by regions as of...

  • Page 223
    .... Building on this successful program in Germany, Siemens decided in 2008 to extend employee and management participation. Today, Siemens offers approximately 95% of its employees in 60 countries the opportunity to acquire Siemens shares with the Company 's financial support. The Share Matching Plan...

  • Page 224
    ... is supporting these activities. Furthermore Supply Chain Management and Sectors have developed collaborative plans to improve the EHS profile of suppliers. Regrettably, we report five work-related fatalities of Siemens employees and ten work-related fatalities of contractors in fiscal 2013. In...

  • Page 225
    ... leadership by example of our managers for Compliance. 253 357 245 C.10 Compensation Report, Corporate Governance statement pursuant to Section 289a of the German Commercial Code, Takeover-relevant information and explanatory report 246 250 Siemens AG (Discussion on basis of German Commercial Code...

  • Page 226
    .... 92 117 A. B. To our Shareholders Corporate Governance 155 156 173 179 192 204 C. C.1 C.2 C.3 C.4 C.5 Combined Management Report Business and economic environment Financial performance system Results of operations Financial position Net assets position 207 209 210 227 C.6 C.7 C.8 C.9 Overall...

  • Page 227
    ... from investment toward consumption might fail and curb economic activity too strongly. 253 357 245 C.10 Compensation Report, Corporate Governance statement pursuant to Section 289a of the German Commercial Code, Takeover-relevant information and explanatory report 246 250 Siemens AG (Discussion...

  • Page 228
    ... efficient power plants and CO2 reduction 92 117 A. B. To our Shareholders Corporate Governance 155 156 173 179 192 204 C. C.1 C.2 C.3 C.4 C.5 Combined Management Report Business and economic environment Financial performance system Results of operations Financial position Net assets position...

  • Page 229
    ..., Corporate Governance statement pursuant to Section 289a of the German Commercial Code, Takeover-relevant information and explanatory report 246 250 Siemens AG (Discussion on basis of German Commercial Code) C.12 Notes and forward-looking statements C.11 D. E. Consolidated Financial Statements...

  • Page 230
    ... our export business activities for fiscal 2014, 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 2014. We expect "Siemens 2014," our company-wide program for improving profitability in our Sectors...

  • Page 231
    ... 2013, which included â,¬1.3 billion in impacts for the "Siemens 2014" program. Furthermore, we expect 253 357 245 C.10 Compensation Report, Corporate Governance statement pursuant to Section 289a of the German Commercial Code, Takeover-relevant information and explanatory report 246 250 Siemens AG...

  • Page 232
    ... part of how we plan and execute our business strategies, our risk management policy is set by the Managing Board. Our organizational and accountability structure as of September 30, 2013 requires each of the respective managements of our Sectors, SFS, SRE, regions and Corporate Units to implement...

  • Page 233
    ...Supervisory Board. The CRIC is composed of the Chief Risk & Internal Control Officer, as the chairperson, and members of senior management such as the Sector and SFS CEOs, the CFO of Siemens, and selected Heads of Corporate Units. 253 357 245 C.10 Compensation Report, Corporate Governance statement...

  • Page 234
    ...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 235
    ... cash flows. Additionally, if customers are not successful in generating sufficient revenue or securing access to the capital markets, they may not be able to pay, or may delay payment of, the amounts they owe us, which may adversely affect our business, financial condition and results of operations...

  • Page 236
    ... services, and invest in, and develop new technologies. Introducing new products and technologies requires a significant commitment to research and development, which in return requires expenditure of considerable financial resources that may not always result in success. Our sales and profitability...

  • Page 237
    ...of data, defective products, production downtimes and supply shortages, which C.9.3.2 OPERATIONAL RISKS Our business, financial condition and results of operations may be adversely affected by cost overruns or additional payment obligations related to the management of our long-term, fixed price or...

  • Page 238
    ...affect our business, financial condition, results of operations and reputation. We may face operational failures and quality problems in our value chain processes: Our value chain comprises all steps, from research and development to supply chain management, production, marketing, sales and services...

  • Page 239
    ... could increase our cost of capital, may reduce our potential investor base and may negatively affect our business, financial condition and results of operations. Our financing activities subject us to various risks, including credit, interest rate and foreign exchange risk: We provide our customers...

  • Page 240
    ...movements in financial markets or a change in the portfolio mix of invested assets could result in corresponding increases or decreases in the value of plan assets, particularly equity securities. Also, changes in pension plan assumptions could affect net periodic pension cost. For example, a change...

  • Page 241
    ..., Corporate Governance statement pursuant to Section 289a of the German Commercial Code, Takeover-relevant information and explanatory report 246 250 Siemens AG (Discussion on basis of German Commercial Code) C.12 Notes and forward-looking statements C.11 D. E. Consolidated Financial Statements...

  • Page 242
    ...higher positive impact on Siemens than 92 117 A. B. To our Shareholders Corporate Governance 155 156 173 179 192 204 C. C.1 C.2 C.3 C.4 C.5 Combined Management Report Business and economic environment Financial performance system Results of operations Financial position Net assets position 207...

  • Page 243
    ... 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 One Siemens framework. We are realigning our regional organization: As of November, 2013, following the close of...

  • Page 244
    ...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. The preparation of the closing data of most of our subsidiaries is supported by our internal Global Shared Services...

  • Page 245
    ...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 Siemens AG prepared in accordance with the German Commercial Code. The Consolidated Financial Statements...

  • Page 246
    ... million related to indirect pension obligations to Siemens Pensionsfonds AG. C.11.2 Results of operations Statement of Income of Siemens AG in accordance with German Commercial Code (condensed) Year ended September 30, (in millions of â,¬) 2013 2012 Revenue Cost of sales Gross profit Research and...

  • Page 247
    ... 2012 benefited from a gain of â,¬1.290 billion resulting from the contribution in kind measured at fair value of Siemens Wind Power A / S into sinius GmbH. The decrease in other financial income resulted mainly from a decline of â,¬559 million in dividend income from fund shares year-over year...

  • Page 248
    ... company-wide "Siemens 2014" productivity improvement program. Trade payables, liabilities to affiliated companies and other liabilities decreased 5%, due primarily to lower liabilities to affiliated companies as a result of intra-group financing activities. C.11.4 Employees Indicators Year ended...

  • Page 249
    ... market and revenue developments for fiscal 2014 described in statements made by the Siemens Group will be mainly reflected in the revenue of Siemens AG. In fiscal 2014, we expect the profit of Siemens AG to benefit from productivity gains resulting from the company-wide "Siemens 2014" program...

  • Page 250
    ... measures and the related discussion in Siemens' most recent annual report on Form 20-F, which can be found on our Investor Relations website or via the EDGAR system on the website of the United States Securities and Exchange Commission. This document contains statements related to our future...

  • Page 251
    ... Consolidated Statements of Comprehensive Income D. Consolidated Financial Statements Consolidated Statements of Financial Position Consolidated Statements of Cash Flows Consolidated Statements of Changes in Equity Notes to Consolidated Financial Statements Supervisory Board and Managing Board...

  • Page 252
    ... to Sec­ tion 315a (1) of the German Commercial Code and full IFRS as issued by the International Accounting Standards Board (IASB). They give a true and fair view of the net assets, financial position and results of operations of the group in accordance with these requirements. This document...

  • Page 253
    ...hedging activities - Financial risk management - Personnel costs - Earnings per share - Segment information - Information about geographies - Related party transactions - Principal accountant fees and services - Corporate Governance - Subsequent events - List of subsidiaries and associated companies...

  • Page 254
    ... 2013 2012 1 Revenue Cost of sales Gross profit Research and development expenses Selling and general administrative expenses Other operating income Other operating expenses Income (loss) from investments accounted for using the equity method, net Interest income Interest expenses Other financial...

  • Page 255
    ...Statements of Comprehensive Income Consolidated Statements of Financial Position Consolidated Statements of Cash Flows 258 260 348 D.5 D.6 D.7 Consolidated Statements of Changes in Equity Notes to Consolidated Financial Statements Supervisory Board and Managing Board 357 E. Additional Information...

  • Page 256
    ...-term debt Post-employment benefits Deferred tax liabilities Provisions Other financial liabilities Other liabilities Total non-current liabilities Total liabilities Equity Issued capital, no par value 2 Capital reserve Retained earnings Other components of equity Treasury shares, at cost 3 Total...

  • Page 257
    ...Statements of Comprehensive Income Consolidated Statements of Financial Position Consolidated Statements of Cash Flows 258 260 348 D.5 D.6 D.7 Consolidated Statements of Changes in Equity Notes to Consolidated Financial Statements Supervisory Board and Managing Board 357 E. Additional Information...

  • Page 258
    ... plans of â,¬395 million and â,¬(1,783) million, respectively, in the fiscal years ended September 30, 2013 and 2012. Remeasurements of defined benefit plans are included in line item Retained earnings. 92 A. To our Shareholders 117 B. Corporate Governance 155 C. Combined Management Report...

  • Page 259
    ... 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 2 - 2 - 855 857 857...

  • Page 260
    ... 2013 2012 2013 2012 2013 2012 Sectors Energy Healthcare Industry Infrastructure & Cities Total Sectors Equity Investments Financial Services (SFS) Reconciliation to Consolidated Financial Statements Centrally managed portfolio activities Siemens Real Estate (SRE) Corporate items and pensions...

  • Page 261
    ... 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 262
    ... as issued by the International Accounting Standards Board (IASB). Siemens prepares and reports its Consolidated Financial Statements in euros (â,¬). Due to rounding, numbers presented may not add up precisely to totals provided. Siemens is a German based multinational corporation with a business...

  • Page 263
    ...Statements of Comprehensive Income Consolidated Statements of Financial Position Consolidated Statements of Cash Flows 258 260 348 D.5 D.6 D.7 Consolidated Statements of Changes in Equity Notes to Consolidated Financial Statements Supervisory Board and Managing Board 357 E. Additional Information...

  • Page 264
    ... when the right to receive payment is established. Functional costs - In general, operating expenses by types are assigned to the functions following the functional area of the corresponding profit and cost centers. Expenses relating to cross-functional initiatives or projects are assigned...

  • Page 265
    ... generated intangible assets. Other development costs are expensed as incurred. Capitalized development costs are stated at cost less accumulated amortization and impairment losses with an amortization period of generally three to five years. Government grants for research and development activities...

  • Page 266
    ... the asset's value in use and its fair value less costs to sell. If assets do not generate cash inflows that are largely independent of those from other that refer to the Consolidated Statements of Income and the Consolidated Statements of Cash Flow relate to continuing operations. Siemens reports...

  • Page 267
    ... year end, such as a supplemental funding, plan changes or business combinations and disposals. The DBO includes the present value from the effects of taxes payable by the plan on contributions or benefits relating to services already rendered. Service cost and past service cost for post-employment...

  • Page 268
    ... of income taxes. Provided that fair value cannot be reliably determined, Siemens measures available-for-sale financial instruments at cost. This applies to equity instruments that do not have a quoted market price in an active market, and decisive parameters cannot be reliably estimated to be used...

  • Page 269
    ... flows from financing activities to cash flows from operating activities (continuing operations). RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS As of October 1, 2012, the Company early adopted IAS 19, Employee Benefits (revised 2011; IAS 19R), which was issued by the IASB in June 2011. The standard is...

  • Page 270
    affect the Company. The adoption of IAS 19R did not result in significant effects on line items Total comprehensive income as well as Total equity. Consolidated Statements of Financial Position The following tables present the impacts of the changes in accounting policy. Impacts to the opening ...

  • Page 271
    ... the Company 's results of operations, financial positions and cash flows. Critical accounting estimates could also 253 254 255 256 257 D. D.1 D.2 D.3 D.4 Consolidated Financial Statements Consolidated Statements of Income Consolidated Statements of Comprehensive Income Consolidated Statements of...

  • Page 272
    ... of capital markets, interest rate developments, foreign exchange rate fluctuations and the outlook on economic trends. The recoverable amount is the higher of the cash-generating unit's or the group of cash-generating units' fair value less costs to sell and its value in use. The Company generally...

  • Page 273
    ... project and updating the estimate of total contract costs which also requires significant judgment relating to achieving certain performance standards, for example in the Fossil Power Generation Division, in the Power Transmission Division, in the Mobility & Logistics Division, in the Rail Systems...

  • Page 274
    ...'s Industry Automation Division, the NEM B.V. business, a specialist in heat recovery steam generators for combined-cycle (gas and steam) power plants at Energy Sector's Fossil Power Generation Division and eMeter Corporation, a meter data management specialist at Infrastructure & Cities Sector...

  • Page 275
    ..., Siemens decided to sell its Business Unit Water Technologies. The conditions for Water Technologies to be classified as held for disposal and discontinued operations were fulfilled as of the fourth quarter of fiscal 2013. 253 254 255 256 257 D. D.1 D.2 D.3 D.4 Consolidated Financial Statements...

  • Page 276
    ...of fiscal 2011. Facing the market conditions Siemens decided in June 2012 to prepare, parallel and alternatively to the aforementioned plan of an initial public offering, an offering of OSRAM in the form 92 A. To our Shareholders 117 B. Corporate Governance 155 C. Combined Management Report...

  • Page 277
    ... taxes (on costs to sell / spin-off costs), Siemens adjusted deferred tax assets according to the plan of issuing OSRAM shares in the form of a spin-off. In November 2012, Siemens called off the initial public offering plan and made available a spin-off report to its shareholders in December 2012...

  • Page 278
    ...2012 include impairment losses on goodwill, charges related to legal and regulatory matters, losses on sales of property, plant and equipment and intangible assets and losses from the sale of businesses. 92 A. To our Shareholders 117 B. Corporate Governance 155 C. Combined Management Report...

  • Page 279
    ...â,¬) Year ended September 30, 2013 2012 Share of profit (loss), net Gains (losses) on sales, net Impairment Reversals of impairment Income (loss) from investments accounted for using the equity method, net 247 78 (116) 301 510 (371) 103 (68) 4 (333) Interest income from post-employment benefits...

  • Page 280
    ...post­employ­ ment benefits includes the following with respect to financial assets (financial liabilities) not at fair value through profit or loss: NOTE 9 Income taxes Income from continuing operations before income tax is attributable to the following geographic regions: Year ended September...

  • Page 281
    ... Increase (decrease) in income taxes resulting from: Non-deductible losses and expenses Tax-free income Taxes for prior years Change in realizability of deferred tax assets and tax credits Change in tax rates Foreign tax rate differential Tax effect of investments accounted for using the equity...

  • Page 282
    ..., respectively. Unrealized gains (losses) in fiscal 2013 and 2012 resulting from non-current availablefor-sale financial assets at fair value were â,¬401 million and â,¬215 million, respectively. 92 A. To our Shareholders 117 B. Corporate Governance 155 C. Combined Management Report 282

  • Page 283
    ...Statements of Comprehensive Income Consolidated Statements of Financial Position Consolidated Statements of Cash Flows 258 260 348 D.5 D.6 D.7 Consolidated Statements of Changes in Equity Notes to Consolidated Financial Statements Supervisory Board and Managing Board 357 E. Additional Information...

  • Page 284
    ...Siemens revised project calculations for long-term contracts with customers in Iran in accordance with accounting guidance for construction and service contracts. The resulting adjustments reduced income from continuing operations before income tax expenses by â,¬347 million. Investments in finance...

  • Page 285
    ...Statements of Comprehensive Income Consolidated Statements of Financial Position Consolidated Statements of Cash Flows 258 260 348 D.5 D.6 D.7 Consolidated Statements of Changes in Equity Notes to Consolidated Financial Statements Supervisory Board and Managing Board 357 E. Additional Information...

  • Page 286
    ... 2012. Where possible, reference to market prices is made. For the purpose of estimating 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...

  • Page 287
    ...Statements of Comprehensive Income Consolidated Statements of Financial Position Consolidated Statements of Cash Flows 258 260 348 D.5 D.6 D.7 Consolidated Statements of Changes in Equity Notes to Consolidated Financial Statements Supervisory Board and Managing Board 357 E. Additional Information...

  • Page 288
    ... 384 754 196 1,334 Payments from lessees under operating leases primarily relate to buildings, medical equipment and transportation systems. Total contingent rent recognized in income in fiscal 2013 and 2012 amounts to â,¬214 million and â,¬205 million. INVESTMENT PROPERTY The carrying amount of...

  • Page 289
    ... Networks Holding B.V. P.T. Jawa Power 3 Shanghai Electric Power Generation Equipment Co. Ltd. Voith Hydro Holding GmbH & Co. KG 2 50% 50% 49% 26% - 50% 40% 35% 50% 50% 49% 26% 50% 50% 40% 35% (in millions of â,¬) 2013 September 30, 2012 Information related to the Statements of Financial Position...

  • Page 290
    ...papers were outstanding. Siemens' commercial papers have a maturity of generally less than 90 days. Interest rates ranged from 0.01% to 0.37% in fiscal 2013 and from (0.03)% to 0.70% in fiscal 2012. Item Other employee related costs primarily includes vacation payments, accrued overtime and service...

  • Page 291
    ...Statements of Comprehensive Income Consolidated Statements of Financial Position Consolidated Statements of Cash Flows 258 260 348 D.5 D.6 D.7 Consolidated Statements of Changes in Equity Notes to Consolidated Financial Statements Supervisory Board and Managing Board 357 E. Additional Information...

  • Page 292
    ... fair value of â,¬163 million was reclassified from line item Capital reserve to non-current other financial liability. The warrants result in option rights relating to a total of 21.7 million Siemens AG shares. C) ASSIGNABLE AND TERM LOANS The Company has assignable loans. The loans were issued in...

  • Page 293
    ... have been accounted for as financing obligations. These real estate properties are carried on the Company 's Consolidated Statements of Financial Position and no sale and profit has been recognized. NO TE 23 Post-employment benefits Post-employment benefits provided by Siemens are organized...

  • Page 294
    ... board of the pension funds is required by law and by the regulations of the funds to act in the interest of the fund and of all stakeholders in the schemes, i.e. active employees and retirees. The board 92 A. To our Shareholders 117 B. Corporate Governance 155 C. Combined Management Report...

  • Page 295
    ... amounts included in the Company 's Consolidated Financial Statements arising from its post-employment defined benefit plans are as follows: Defined benefit obligation (DBO) September 30, (in millions of â,¬) 2013 2012 2013 Fair value of plan assets September 30, 2012 Effects in connection with...

  • Page 296
    ... currency translation effects Fair value of plan assets at end of year (in millions of â,¬) 2013 2012 Change in defined benefit obligations: Defined benefit obligation at beginning of year Current service cost Past service (benefit) cost Settlement (gains) losses Interest expenses Remeasurements...

  • Page 297
    ... a benefit risk management concept. The Company has identified as a major risk a decline in the plans' funded status as a result of the adverse development of plan assets and / or defined benefit obligations. Siemens monitors its investments and its defined benefit obligations in order to measure...

  • Page 298
    ... and â,¬74 million as of September 30, 2013 and 2012. Future cash flows Employer contributions expected to be paid to the post-employment defined benefit plans in fiscal 2014 are â,¬631 million. 92 A. To our Shareholders 117 B. Corporate Governance 155 C. Combined Management Report 2 98

  • Page 299
    ... installed onshore turbine blades mainly in the U.S. Order related losses and risks - are provided for anticipated losses and risks on uncompleted construction, sales and leasing contracts. Transportation & Logistics of the Infrastructure & Cities Sector incurred project charges of â,¬270 million...

  • Page 300
    ... future cash outflows are expected to occur. Amongst others, the estimated cash outflows related to the asset retirement obligation could alter significantly if, and when, political developments affect the government's plans to develop the so called Schacht Konrad. As of September 30, 2013 and 2012...

  • Page 301
    ... 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 the terms and conditions of the share issue as follows: Authorized Capital 2011 by up...

  • Page 302
    ... than the market price of the Siemens stock at the time of selling; or (6) used to service convertible bonds or warrant bonds issued by the Company or any of its subsidiaries. In addition, the Supervisory Board may use repurchased shares to meet obligations or rights to acquire Siemens shares that...

  • Page 303
    ... financial liabilities as of the date of the approval at the Annual Shareholders' Meeting. The Managing Board and the Supervisory Board proposed a dividend of â,¬3.00 per share of the fiscal 2013 Siemens AG earnings, in total representing approximately â,¬2.5 billion in expected payments. Payment...

  • Page 304
    ..., 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 (Moody 's) and Standard & Poor's Ratings Services (S&P) are...

  • Page 305
    ... communications technology of the German Federal Armed Forces (Bundeswehr). This project is called HERKULES. A project company, BWI Informationstechnik GmbH (BWI), provides the services required by the terms of the contract. Siemens is a shareholder in the project company. The total contract value...

  • Page 306
    ... of September 30, 2013 and 2012, future payment obligations under non-cancellable operating leases are as follows: NO TE 29 Legal proceedings PUBLIC CORRUPTION PROCEEDINGS Governmental and related proceedings As previously reported, in May 2011 Siemens AG voluntarily reported a case of attempted...

  • Page 307
    ... the International Center for Settlement of Investment Disputes (ICSID) of the World Bank. Siemens AG claimed that Argentina had unlawfully terminated its contract with Siemens for the development and operation of a system for the production of identity cards, border control, collection of data and...

  • Page 308
    ... 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 309
    ...Statements of Comprehensive Income Consolidated Statements of Financial Position Consolidated Statements of Cash Flows 258 260 348 D.5 D.6 D.7 Consolidated Statements of Changes in Equity Notes to Consolidated Financial Statements Supervisory Board and Managing Board 357 E. Additional Information...

  • Page 310
    ...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 investigation which confirmed that the proceedings against Siemens Healthcare Diagnostics S.r.l. were closed, but accused...

  • Page 311
    ...ending in September 2013). As previously reported, Siemens is involved in the construction of a power plant in the United States. Siemens Energy, Inc., USA, and Kvaerner North American Construction, Inc., USA (Kvaerner) are consortium partners in this project, commissioned by Longview Power LLC, USA...

  • Page 312
    ...of the DPA, Siemens Electrical agreed to, among other things, forfeit US$10 million. The case will be dismissed after two years if the company meets certain specified conditions under the DPA. In March 2013, Nokia Siemens Networks Holding B.V. (NSN), Nokia Corporation and Nokia Finance International...

  • Page 313
    ...Statements of Comprehensive Income Consolidated Statements of Financial Position Consolidated Statements of Cash Flows 258 260 348 D.5 D.6 D.7 Consolidated Statements of Changes in Equity Notes to Consolidated Financial Statements Supervisory Board and Managing Board 357 E. Additional Information...

  • Page 314
    ... fair value of available-for-sale financial assets quoted in an active market is based on price quotations at the period-end date. The fair value of unquoted debt instruments is estimated by discounting future cash flows using current market interest rates. The Company limits default risks resulting...

  • Page 315
    ... market data. Net gains (losses) of financial instruments are as follows: Year ended September 30, (in millions of â,¬) 2013 2012 Cash and cash equivalents Available-for-sale financial assets Loans and receivables Financial liabilities measured at amortized cost Financial assets and financial...

  • Page 316
    .... This risk results mainly from contracts denominated in US$ both from Siemens' operating units entering into long-term contracts, e.g. project business, and from the standard product business. Cash flow hedges - As of September 30, 2013 and 2012, the ineffective portion of cash flow hedges is...

  • Page 317
    ... risk, Siemens agreed in fiscal 2013 to adjust the fixed rate of several interest rate swaps to market levels in exchange for receiving a fair value compensation. Cash flow hedges of a variable-rate term loan As of September 30, 2012, the Company applied cash flow hedge accounting for 50...

  • Page 318
    .... 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 foreign exchange rates, interest rates, commodity prices and equity prices...

  • Page 319
    ... in the Company 's consolidated equity position. INTEREST RATE RISK Siemens' key consideration with respect to the interest rate risk management is to mitigate the risk resulting from changes in the fair value of future cash flows. Risk arises whenever interest terms of financial assets and...

  • Page 320
    ...in fund shares are mainly transacted for financial reasons. These investments are monitored based on their current market value, affected primarily by fluctuations in the volatile technology-related markets worldwide. The market value of Siemens' portfolio in publicly traded companies increased from...

  • Page 321
    ... from operating and SFS financing activities, including cash outflows related to the announced growth strategy of SFS, dividend payments, pension plan funding, portfolio activities, and cash outflows in connection with "Siemens 2014," a Company-wide program aimed at improving profitability in...

  • Page 322
    ... 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 323
    ... 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 324
    ..., and a market price of â,¬79.70 and â,¬74.14 per SHARE MATCHING PROGRAM AND ITS UNDERLYING PLANS 1. Share Matching Plan In fiscal 2013 and 2012, the Company issued a new tranche under the Share Matching Plan. Senior managers of Siemens AG and participating Siemens companies may invest a specified...

  • Page 325
    ... 2012, the Company issued a new tranche under the Base Share Program. Employees of Siemens AG and participating domestic Siemens companies can invest a fixed amount of their compensation into Siemens shares, sponsored by Siemens with a tax beneficial allowance. The shares are bought at market price...

  • Page 326
    ... earnings per share. Year ended September 30, (in thousands) 2013 2012 Manufacturing and services Sales and marketing Research and development Administration and general services 224.2 73.6 29.8 34.9 362.4 221.3 76.9 29.5 35.2 362.9 92 A. To our Shareholders 117 B. Corporate Governance...

  • Page 327
    ... Financial Statements contains businesses and items not directly related to Siemens' reportable segments: Energy - offers a wide spectrum of products, solutions and services for generating and transmitting power, and for extracting, converting and transporting oil and gas. It primarily addresses...

  • Page 328
    ... of Equity Investments: Siemens' Managing Board is responsible for assessing the performance of the segments. The Company 's profitability measure of the Sectors and Equity Investments is earnings before financing interest, certain pension costs, and income taxes as determined by the chief operating...

  • Page 329
    ...Siemens' Consolidated Statements of Financial Position: Free cash flow definition: Segment information discloses Free cash flow and Additions to property, plant and equipment and intangible assets. Free cash flow of the Sectors and Equity Investments constitutes cash flows from operating activities...

  • Page 330
    ...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 2013 see NO TE 18 INVESTMENTS ACCOUNTED FOR USING THE EQUIT Y NOTE 42 LIST OF SUBSIDIARIES...

  • Page 331
    ... see NO TE 7 INCOME (LOSS) FROM INVESTMENTS ACCOUNTED FOR USING THE EQUIT Y METHOD, NET . RELATED INDIVIDUALS Related individuals include the members of the Managing Board and Supervisory Board. In fiscal 2013 and 2012 members of the Managing Board received cash compensation of â,¬17.0 million and...

  • Page 332
    ... of supply chain management in June 2013 and an attestation service not related to the financial statements. In fiscal 2013, 50% of the total fees related to Ernst & Young GmbH Wirtschaftsprüfungsgesellschaft, Germany. 92 A. To our Shareholders 117 B. Corporate Governance 155 C. Combined...

  • Page 333
    ... fiscal year. The Audit Committee has generally pre-approved the performance by EY of audit and audit-related services, including among others the following: AUDIT SERVICES > Annual audit of Siemens' Consolidated Financial Statements and its internal control over financial reporting; > Quarterly...

  • Page 334
    .... The Managing Board and the Supervisory Board of IBS AG excellence, collaboration, manufacturing, currently Siemens' sole German publicly traded subsidiary which is included in the Consolidated Financial Statements provided the declaration required by Section 161 of the German stock corporation law...

  • Page 335
    ...Siemens Building Technologies Holding GmbH, Grünwald Siemens Convergence Creators GmbH & Co. KG, Hamburg Siemens Convergence Creators Management GmbH, Hamburg Siemens Energy Automation GmbH, Erlangen Siemens Finance & Leasing GmbH, Munich Siemens Financial Services GmbH, Munich Siemens Fonds Invest...

  • Page 336
    ... Solutions Health Services GmbH, Erlangen Siemens Nixdorf Informationssysteme GmbH, Grünwald Siemens Novel Businesses GmbH, Munich Siemens Postal, Parcel & Airport Logistics GmbH & Co. KG, Constance Siemens Postal, Parcel & Airport Logistics Verwaltungs GmbH, Constance Siemens Power Control GmbH...

  • Page 337
    ...Statements of Comprehensive Income Consolidated Statements of Financial Position Consolidated Statements of Cash Flows 258 260 348 D.5 D.6 D.7 Consolidated Statements of Changes in Equity Notes to Consolidated Financial Statements Supervisory Board and Managing Board 357 E. Additional Information...

  • Page 338
    ... Siemens Pension Funding Limited, Frimley, Surrey / Great Britain Siemens plc, Frimley, Surrey / Great Britain Siemens Postal, Parcel & Airport Logistics Limited, Frimley, Surrey / Great Britain Siemens Protection Devices Limited, Frimley, Surrey / Great Britain Siemens Rail Automation Holdings...

  • Page 339
    ...Statements of Comprehensive Income Consolidated Statements of Financial Position Consolidated Statements of Cash Flows 258 260 348 D.5 D.6 D.7 Consolidated Statements of Changes in Equity Notes to Consolidated Financial Statements Supervisory Board and Managing Board 357 E. Additional Information...

  • Page 340
    ... Engineering & Software Services S.L., Barcelona / Spain Siemens Fire & Security Products, S.A., Madrid / Spain Siemens Healthcare Diagnostics S.L., Barcelona / Spain Siemens Holding S.L., Madrid / Spain Siemens Industry Software S.L., Barcelona / Spain Siemens POSTAL, PARCEL & AIRPORT LOGISTICS...

  • Page 341
    ...Statements of Comprehensive Income Consolidated Statements of Financial Position Consolidated Statements of Cash Flows 258 260 348 D.5 D.6 D.7 Consolidated Statements of Changes in Equity Notes to Consolidated Financial Statements Supervisory Board and Managing Board 357 E. Additional Information...

  • Page 342
    .../ USA Siemens Postal, Parcel & Airport Logistics LLC, Wilmington, DE / USA Siemens Power Generation Service Company, Ltd., Wilmington, DE / USA Siemens Product Lifecycle Management Software Inc., Wilmington, DE / USA Siemens Public, Inc., Wilmington, DE / USA Siemens Rail Automation Carborne Systems...

  • Page 343
    ... Bangalore / India Siemens Industry Software (India) Private Limited, New Delhi / India Siemens Ltd., Mumbai / India Siemens Postal and Parcel Logistics Technologies Private Limited, Mumbai / India Siemens Postal Parcel & Airport Logistics Private Limited, Mumbai / India Siemens Rail Automation Pvt...

  • Page 344
    ... Siemens Postal, Parcel & Airport Logistics PTE. LTD., Singapore / Singapore Siemens Pte. Ltd., Singapore / Singapore Siemens Rail Automation Pte. Ltd., Singapore / Singapore Siemens Water Technologies Pte. Ltd., Singapore / Singapore Siemens Industry Software (TW) Co., Ltd., Taipei / Taiwan Siemens...

  • Page 345
    ...Statements of Comprehensive Income Consolidated Statements of Financial Position Consolidated Statements of Cash Flows 258 260 348 D.5 D.6 D.7 Consolidated Statements of Changes in Equity Notes to Consolidated Financial Statements Supervisory Board and Managing Board 357 E. Additional Information...

  • Page 346
    September 30, 2013 Equity interest in % September 30, 2013 Equity interest in % PhSiTh LLC, New Castle, DE / USA Power Properties Inc., Boston, MA / USA Rether networks, Inc., Berkeley, CA / USA Siemens First Capital Commercial Finance, LLC, Oklahoma City, OK / USA Treated Water Outsourcing, a ...

  • Page 347
    ...Statements of Comprehensive Income Consolidated Statements of Financial Position Consolidated Statements of Cash Flows 258 260 348 D.5 D.6 D.7 Consolidated Statements of Changes in Equity Notes to Consolidated Financial Statements Supervisory Board and Managing Board 357 E. Additional Information...

  • Page 348
    ..., 2003 External positions Positions outside Germany: > Belenos Clean Power Holding AG, Switzerland (Deputy Chairman) > EQT Holdings AB, Sweden > Investor AB, Sweden > Royal Dutch Shell plc, Netherlands Gerd von Brandenstein Member of the Supervisory Boards of Siemens AG and degewo AG Date of birth...

  • Page 349
    ...External positions German supervisory board positions: > Axel Springer AG, Berlin > Deutsche Lufthansa AG, Cologne > Voith GmbH, Heidenheim Werner Mönius* (until January 23, 2013) Chairman of the Works Council, Siemens Healthcare Sector, Erlangen, Germany 4 Date of birth: May 16, 1954 Member since...

  • Page 350
    ...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, in...

  • Page 351
    ... of an annual strategy meeting of the Supervisory Board, the Finance and Investment Committee prepares the discussions and resolutions of the Supervisory Board regarding questions relating to the Company's financial situation and structure as well as its fixed asset and financial investments. In...

  • Page 352
    ... phil. nat. Date of birth: February 11, 1955 First appointed: May 1, 2006 Term expires: March 31, 2016 External positions German supervisory board positions: > Software AG, Darmstadt Group Company positions Positions outside Germany: > Siemens Healthcare Diagnostics Inc., USA > Siemens Japan Holding...

  • Page 353
    ... German supervisory board positions: > Herrenknecht AG, Schwanau Ralf P. Thomas, Dr. rer. pol. Date of birth: March 7, 1961 First appointed: September 18, 2013 Term expires: September 17, 2018 Group Company positions Positions outside Germany: > Siemens Holdings plc, UK > Siemens Industry Inc., USA...

  • Page 354
    ... of employee stock as well as the implementation of certain capital measures. It also determines the scope and conditions of the share-based compensation components and / or compensation programs for employees and managers (with the exception of the Managing Board). 3 Since October 1, 2013. 4 Since...

  • Page 355
    E. Additional Information Responsibility statement Independent Auditor's report Statement of the Managing Board Five-year summary Company structure Financial calendar 35 7 E. Additional Information

  • Page 356
    D. 7. 2.1 MANAGING BO Committee Equity and Employee Stock Committee How have the company 's key business figures developed over the past five years? What are the key financial dates for the next twelve months? How is the company structured? All this infor­ mation is available here. A wealth of ...

  • Page 357
    ... Auditor's report E. Additional Information 361 E.3 Statement of the Managing Board 362 E.4 Five-year summary 364 E.5 Glossary 366 E.6 Index 368 E.7 Company structure 370 E.8 Further information and information resources 371 E.9 Financial calendar 357 Due to rounding, numbers presented...

  • Page 358
    ...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 20, 2013 Siemens Aktiengesellschaft The Managing Board the Management Report...

  • Page 359
    ... as issued by the International Accounting Standards Board (IASB), to give a true and fair view of the net assets, financial position and results of operations of the group in accordance with these requirements. The company 's management is also responsible for the internal controls that management...

  • Page 360
    ... 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 20, 2013 Ernst & Young GmbH...

  • Page 361
    ...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 362
    ... per share Stock price range (Xetra closing price) High Low Fiscal year-end Performance of Siemens shares year-over-year Compared to DAX® Compared to MSCI World Number of shares issued (September 30) Market capitalization 6 Credit rating - long-term debt Standard & Poor's Moody's Investors Service...

  • Page 363
    ...253 D. Consolidated Financial Statements 357 358 359 361 362 364 E. E.1 E.2 E.3 E.4 E.5 Additional Information 363 Responsibility statement Independent Auditor ʼs report Statement of the Managing Board Five-year summary Glossary 366 368 370 371 E.6 E.7 E.8 E.9 Index Company structure Further...

  • Page 364
    ... countries in accordance with the International Monetary Fund's definition of "Emerging Market and Developing Economies". C Captive finance unit A financial services unit organized as a busi­ ness within an industrial company that offers financial solutions primarily to customers of the operating...

  • Page 365
    ... in excess of costs and estimated earn­ ings on uncompleted contracts and related advances. Inventory of orders for goods and services based on binding contractual arrangements with customers. Supply Chain Management W Weighted Average Cost of Capital (WACC) The rate that a company is expected to...

  • Page 366
    ... Consolidated Statements of Financial Position Consolidated Statements of Income Continuing education Corporate Governance Report Corporate Governance statement Credit rating Customer focus Customer Services (Industry) Customer Solutions (Healthcare) F Finance and Investment Committee Financial...

  • Page 367
    ... W Wind Power 158, 169, 184, 228 R Rail Systems Related party transactions Report of the Supervisory Board Report on expected developments and associated material opportunities and risks Research and development Responsibility statement Results of operations Results of Siemens Revenue growth Risk...

  • Page 368
    E.7 Company structure Managing Board of Siemens AG Joe Kaeser President and Chief Executive Officer Roland Busch Infrastructure & Cities Klaus Helmrich Human Resources Corporate Technology Hermann Requardt Healthcare South America, Japan Corporate Development Governance & Markets Communications...

  • Page 369
    ... Supply Chain Management Information Technology Michael Süß Energy North America, Middle East Ralf P. Thomas Finance and Controlling Financial Services Siemens Real Estate Global Shared Services Corporate Security Office Equity Investments Europe, C.I.S.,1 Africa Cross-Sector Activities...

  • Page 370
    ... Finance and Controlling Dr. Marcus Mayer Layout / Production hw.design GmbH Publicis München, ZN der PWW GmbH In addition to an Annual Report at the end of each fiscal year, Siemens publishes quarterly consolidated financial statements in the form of press releases. Conference calls and press...

  • Page 371
    ...report Preliminary figures for fiscal 2014 January 2015 Annual Shareholders' Meeting for fiscal 2014 Provisional. Updates will be published at: WWW.SIEMENS.COM/FINANCIAL-CALENDAR 253 D. Consolidated Financial Statements 357 358 359 361 362 364 E. E.1 E. 2 E.3 E.4 E.5 Additional Information...

  • Page 372
    ... that our setup provides. To tap business opportunities in both new and established markets, we've organized our Company into four Sectors: Energy, Healthcare, Industry and Infrastructure & Cities. In fiscal 2013, our roughly 362,000 employees generated revenue from continuing operations of about...