Siemens 2013 Annual Report Download - page 181

253 D. Consolidated Financial Statements
357 E. Additional Information
245 C. Compensation Report, Corporate Governance
statement pursuant to Section a of the
German Commercial Code, Takeover-relevant
information and explanatory report
246 C. Siemens AG ( Discussion on basis of
German Commercial Code)
250 C. Notes and forward-looking statements

C... CONSOLIDATED STATEMENTS OF INCOME
Year ended September , % Change
(in millions of €)  
Gross profit 20,829 21,925 (5)%
as percentage of revenue 27.4% 28.3% –
Research and development
expenses (4,291) (4,245) (1)%
as percentage of revenue 5.7% 5.5% –
Selling and general
administrative expenses (11,286) (11,043) (2)%
as percentage of revenue 14.9% 14.3% –
Other operating income 503 523 (4)%
Other operating expenses (427) (364) (17)%
Income (loss) from invest-
ments accounted for using the
equity method, net 510 (333) n/a
Interest income 948 939 1%
Interest expenses (789) (760) (4)%
Other financial income
(expenses), net (154) (5) < (200)%
Income from continuing
operations before
income taxes 5,843 6,636 (12)%
Income tax expenses (1,630) (1,994) 18%
as percentage of income
from continuing operations
before income taxes 28% 30% –
Income from continuing
operations 4,212 4,642 (9)%
Income (loss) from
discontinued operations,
net of income taxes 197 (360) n/a
Net income 4,409 4,282 3%
Net income attributable to
non-controlling interests 126 132 –
Net income attributable to
shareholders of Siemens AG 4,284 4,151 3%
Income from continuing operations before income taxes
for fiscal  declined to €. billion from €. billion a
year earlier.
The largest factor in the decline was €. billion in charges
in the Sectors for the “Siemens ” program. These charges
resulted from measures taken in fiscal  to reduce costs by
improving regional footprints, adjusting capacity, and increas-
ing process efficiency. The charges are included in the follow-
ing functional costs:
Year ended
September ,

(in millions of €)
Cost of sales (and accordingly, gross profit) 762
Research and development expenses 37
Selling and general administrative expenses 374
In addition, charges of € million were included in other line
items, predominantly in Other operating expenses. For com-
parison, in fiscal , Healthcare reported charges of €
million under its “Agenda ” initiative, which began a year
before the “Siemens ” program. In fiscal , the Sector’s
charges under this initiative are included within “Siemens
” charges.
A number of factors in addition to the “Siemens ” charges
reduced gross profit year-over-year. These included continuing
market challenges, such as lower capacity utilization in Indus-
try, pricing pressure and a less favorable revenue mix in a
number of our businesses. In addition, both years included
various charges and gains, including project charges in the
Sectors Energy and Infrastructure & Cities. The most relevant of
these charges are disclosed in C.. SEGMENT INFORMATION
ANALYSIS. While the net amounts of these items were signifi-
cant at Group level in fiscal  and fiscal , there was only
a small change in the net amount year-over-year.