Siemens 2014 Annual Report Download - page 200

108 A. To our Shareholders 131 B. Corporate Governance 171 C. Combined Management Report
172 C. Business and economic environment
187 C. Financial performance system
193 C. Results of operations
205 C. Financial position
210 C. Net assets position

Transportation & Logistics contributed a profit of €  mil-
lion in the current fiscal year, compared to a loss of €  mil-
lion a year earlier. Profit development in the current fiscal was
driven primarily by significantly higher revenue and solid proj-
ect execution. Profit also benefited from a €  million net effect
from the release of accruals related to the “Siemens ” pro-
gram and a €  million positive effect stemming from a change
in risk assessment for a rail project. For comparison, the loss in
the prior fiscal year was due to substantial profit impacts, in-
cluding the above-mentioned €  million in project charges,
which stemmed from delays for receiving certification for new
high-speed trains, and €  million in “Siemens ” charges.
Prior-year profit was also burdened by €  million in trans-
action and integration costs and PPA effects of €  million
related to the acquisition of Invensys Rail, which closed during
the third quarter of fiscal . In fiscal , full-year PPA ef-
fects related to the acquisition of Invensys Rail were €  mil-
lion and integration costs amounted to €  million. Revenue at
Transportation & Logistics rose substantially year-over-year, as
the Business has been executing a number of its large roll-
ing-stock orders. Orders declined  % compared to fiscal ,
due primar ily to lower volume from large orders. For example,
fiscal  included the Business’s share of the above-men-
tioned € . billion order from Saudi Arabia, while the prior fis-
cal year included the entire € . billion order from the U.K.
mentioned above. Both revenue and order development in
fiscal  benefited from the acquisition of Invensys rail.
Profit at Power Grid Solutions & Products rose to €  million
from €  million in the prior fiscal year. Profit grew on im-
proved productivity as well as a more favorable revenue mix.
For comparison, profit in fiscal  was burdened by €  mil-
lion in “Siemens ” charges. Slightly lower revenue year-
over-year included declines in the Americas and the Asia,
Australia regions. A slight increase in orders included the Busi-
ness’s share of the above-mentioned order from Saudi Arabia.
Revenue and order development in fiscal  was strongly
affected by negative currency translation effects. On an organic
basis, revenue was up  % and orders rose  % year-over-year.
Building Technologies increased its profit to €  million
compared to €  million in the prior fiscal year. Profit growth
year-over-year was supported by higher productivity and a
more favorable business mix related to the Division’s high-
er-margin product and service businesses. For comparison,
profit in fiscal  was held back by €  million in “Siemens
” charges. Both revenue and orders declined  % year- over-
year. On a regional basis, lower volume was due mainly to the
Americas.
C... EQUITY INVESTMENTS
In fiscal , Equity Investments generated €  million in
profit, down from €  million a year earlier. Profit at Equity
Investments in both fiscal years included equity investment
income related to our stake in BSH. Beginning with the second
quarter of fiscal , we started to report results related to our
stake in BSH in phase with results of Siemens, rather than with
the lag of one quarter. This one-time catch-up effect contrib-
uted €  million to profit at Equity Investments in fiscal .
Late in the fourth quarter of fiscal , we announced an
agreement to sell our stake in BSH to Robert Bosch GmbH.
Profit at Equity Investments in the prior year benefited from a
positive effect of €  million stemming from a partial reversal
of a fiscal  impairment of our stake in NSN, which was sold
at the end of fiscal . This positive effect was only partly
offset by an equity investment loss related to our share in Unify
Holdings B.V. (formerly named Enterprise Networks) of €  mil-
lion. This loss was due largely to additions to our net invest-
ment in Unify, which required us to recognize previously un-
recognized losses.
C... FINANCIAL SERVICES (SFS)
(in millions of €)
Year ended September , % Change
 
Income before income taxes 465 409 14%
Total assets 21,970 18,661 18%
SFS delivered €  million in profit (defined as income before
income taxes) in fiscal . For comparison, profit of €  mil-
lion in the prior-year period was burdened primarily by a
€  million impairment of an equity stake in a power plant
project in the U.S. SFS continued to successfully support
Siemens business and grow in its focus areas leading to higher
interest income and associated expenses. Total assets rose to
€ . billion at the end of fiscal , compared to € . bil-
lion at the end of fiscal , including positive currency trans-
lation effects and substantial early terminations of financings.
C... RECONCILIATION TO CONSOLIDATED
FINANCIAL STATEMENTS
Reconciliation to Consolidated Financial Statements includes
Centrally managed portfolio activities, Siemens Real Estate
(SRE) and various categories of items which are not allocated to
the Sectors and to SFS because the Company’s management
has determined that such items are not indicative of the Sec-
tors’ and SFS’ respective performance.