Siemens 2014 Annual Report Download - page 312

108 A. To our Shareholders 131 B. Corporate Governance 171 C. Combined Management Report
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DESCRIPTION OF REPORTABLE SEGMENTS
The four Sectors comprise manufacturing, industrial and com-
mercial goods, solutions and services in areas more or less
related to Siemens’ origins in the electrical business field.
Energy – offers a wide spectrum of products, solutions and
services for generating and transmitting power, and for extract -
ing, converting and transporting oil and gas.
Healthcare – offers customers a comprehensive portfolio of
medical solutions across the treatment chain – from preven-
tion and early detection to diagnosis, treatment and follow-up
care. Healthcare also provides technical maintenance, profes-
sional and consulting services, and, together with Financial
Services (SFS), financing to assist customers in purchasing our
products.
Industry – a supplier of innovative and environmentally
friendly products and solutions for industrial companies, par-
ticularly those in the process and manufacturing industries.
Industry’s end-to-end automation solutions, drive technolo-
gies, industrial IT and industry software, in-depth industry
expertise and technology-based services help Industry’s cus-
tomers use resources and energy more efficiently, improve
productivity, and increase flexibility.
Infrastructure & Cities – offers a wide range of technologies
that increase the functionality and sustainability of metropoli-
tan centers and urban infrastructures worldwide, such as inte-
grated mobility solutions, building and security systems, power
distribution equipment, grid automation and control products
and solutions, smart grid applications and low and medium-
voltage products.
Equity Investments – in general, comprises equity stakes
held by Siemens that are accounted for by the equity method or
as available-for-sale financial assets and that for strategic rea-
sons are not allocated to a Sector or a Division, respectively,
SFS, Centrally managed portfolio activities, Siemens Real Estate
(SRE), Corporate items or Corporate Treasury.
Financial Services (SFS) – provides business-to-business
finan cial solutions. With its specialist financing and technology
expertise in the areas of Siemens businesses, SFS supports cus-
tomer investments with leasing solutions and equipment, proj-
ect and structured financing. SFS provides capital for Siemens
customers as well as other companies and manages financial
risks of Siemens.
RECONCILIATION
TO CONSOLIDATED FINANCIAL STATEMENTS
Reconciliation to Consolidated Financial Statements contains
businesses and items not directly related to Siemens’ report-
able segments:
Centrally managed portfolio activities – generally includes
activities intended for divestment or closure as well as activities
remaining from divestments and discontinued operations.
Siemens Real Estate (SRE) – is the real estate service pro-
vider at Siemens, who manages the Group’s entire real estate
business portfolio, operates the properties, and is responsible
for building projects and the purchase and sale of real estate.
Corporate items and pensions – includes corporate charges
such as personnel costs for corporate headquarters, corporate
projects and non-operating investments or results of corpo-
rate-related derivative activities and costs for carve out activi-
ties managed by corporate, which are charged to the respective
segment when the disposal gain or loss is realized or when the
activities are classified as discontinued operations. Pensions
includes the Company’s pension related income (expense) not
allocated to the segments, SRE or Centrally managed portfolio
activities.
Eliminations, Corporate Treasury and other reconciling
items – comprise consolidation of transactions within the seg-
ments, certain reconciliation and reclassification items and the
activities of the Company’s Corporate Treasury. It also includes
interest income and expense, such as, for example, interest not
allocated to segments or Centrally managed portfolio activities
(referred to as financing interest), interest related to Corporate
Treasury activities or resulting consolidation and reconciliation
effects on interest.
MEASUREMENT – SEGMENTS
Accounting policies for Segment information are generally
the same as those used for Siemens, described in NOTE 
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES. Lease transactions,
however, are classified as operating leases for internal and seg-
ment reporting purposes. Intersegment transactions are based
on market prices.
Profit of the Sectors and of Equity Investments:
Siemens’ Managing Board is responsible for assessing the per-
formance of the segments. The Company’s profitability mea-
sure of the Sectors and Equity Investments is earnings before
financing interest, certain pension costs, and income taxes as
determined by the chief operating decision maker (Profit).
Profit excludes various categories of items, not allocated to the