Siemens 2013 Annual Report Download - page 246

92 A. To our Shareholders
117 B. Corporate Governance 155 C. Combined Management Report
156 C. Business and economic environment
173 C. Financial performance system
179 C. Results of operations
192 C. Financial position
204 C. Net assets position
207 C. Overall assessment of the economic position
209 C. Subsequent events
210 C. Sustainability
227 C. Report on expected developments and
associated material opportunities and risks

Unlike our Consolidated Financial Statements, which are pre-
pared in accordance with the International Financial Reporting
Standards (IFRS), the Stand-Alone Financial Statements of
Siemens AG have been prepared in accordance with the rules
set out in the German Commercial Code (Handelsgesetzbuch).
C.. Business and
economic environment
Siemens AG is the parent company of the Siemens Group.
Siemens AG is a technology company with core activities in the
fields of energy, healthcare, industry and infrastructure & cities.
Siemens AG includes one additional operating business,
Siemens Real Estate. Furthermore Siemens AG is significantly
influenced by directly or indirectly owned subsidiaries and in-
vestments. Siemens AG holds directly and indirectly  legal
entities including non-controlling interests. Siemens AG also
includes the Group’s corporate headquarters functions.
The economic environment for Siemens AG is largely the same
as for the Siemens Group and is described in detail in C..
ECONOMIC ENVIRONMENT.
C.. Results of operations
Statement of Income of Siemens AG in accordance
with German Commercial Code (condensed)
Year ended September ,
(in millions of €)  
Revenue 30,305 29,913
Cost of sales (22,016) (21,607)
Gross profit 8,289 8,307
Research and development expenses (2,878) (2,904)
Selling and general administrative expenses (4,173) (3,991)
Other operating income (expenses), net (178) 124
Financial income, net
thereof income from investments ,
(prior year ,) 3,631 2,441
Result from ordinary activities 4,692 3,977
Income taxes (840) (943)
Net income 3,852 3,034
Profit carried forward 115 114
Assets reduction due to spin-off (1,800) –
Allocation to other retained earnings 476 (504)
Unappropriated net income 2,643 2,643
C. Siemens AG (Discussion on basis of German Commercial Code)
Revenue rose % due primarily to revenue increases of €
million in the Healthcare Sector, € million in the Infrastruc-
ture & Cities Sector and € million in Siemens Real Estate.
These increases were partly offset by revenue declines of
€ million in the Energy Sector and € million in the
Industry Sector. As a consequence of the mutual agreement
procedure with tax authorities related to transfer pricing,
Siemens AG received compensatory payments from Siemens
Healthcare U.S. The payments amounted to € million, and
were booked as revenue by the Healthcare Sector. On a geo-
graphic basis, revenue grew % year-over-year in the Ameri-
cas region and declined % in the Asia, Australia region. In
the Europe, C.I.S., Africa, Middle East region, revenue was
nearly unchanged from the prior-year level. Exports from Ger-
many accounted for % of revenue in fiscal  and fiscal
. In fiscal , orders for Siemens AG amounted to €.
billion, a significant increase of % from €. billion a year
earlier. The increase was driven mainly by a higher volume
from large orders, including a €. billion contract win for
trains in the U.K. and a €. billion contract win for trains in
Germany at the Infrastructure & Cities Sector’s Transporta-
tion & Logistics Division.
Gross profit was nearly level compared to the prior year, while
gross profit margin decreased slightly from % a year ago to
% in the current period. The decrease was driven by addi-
tional costs relating to project charges. These expenses com-
prised € million related to high-speed trains at the Infra-
structure & Cities Sectors’s Rail Systems Division and € mil-
lion mainly related to grid-connections to offshore wind-farms
at the Energy Sector’s Power Transmission Division. Gross prof-
it also included charges, associated with the company-wide
“Siemens ” productivity improvement program.
Research and development (R&D) expenses decreased %
with nearly unchanged R&D expenses in all four Sectors and
the percentage of revenue (R&D intensity) remained at %.
On an average basis, we employed , people in R&D in
fiscal  compared to , in fiscal . For additional in-
formation see C.. RESEARCH AND DEVELOPMENT.
Other operating income (expenses), net declined € mil-
lion compared to fiscal , resulting from a decrease in other
operating income of € million and a reduction of € mil-
lion in other operating expenses. Other operating income in
fiscal  benefited from a release amounting to € million
related to indirect pension obligations to Siemens Pensions-
fonds AG.