e6vk
Table of Contents

 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934
May 5, 2009
Commission File Number: 1-15174
Siemens Aktiengesellschaft
(Translation of registrant’s name into English)
Wittelsbacherplatz 2
D-80333 Munich
Federal Republic of Germany
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
Form 20-F þ Form 40-F o
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):
Yes o No þ
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):
Yes o No þ
Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes o No þ
If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-
 
 


 

Table of contents
         
       
       
       
       
       
       
       
       
       
       
       
 
 
 
 
 
Introduction
Siemens AG’s Interim Report for the Siemens Group complies with the applicable legal requirements of the Securities Trading Act (Wertpapierhandelsgesetz — WpHG) regarding the half yearly financial report, and comprises Condensed Interim Consolidated Financial Statements, an Interim group management report and a responsibility statement in accordance with § 37w (2) WpHG. The Condensed Interim Consolidated Financial Statements have been prepared in accordance with International Financial Reporting Standards (IFRS) and its interpretations issued by the International Accounting Standards Board (IASB), as adopted by the European Union (EU). The Condensed Interim Consolidated Financial Statements also comply with IFRS as issued by the IASB. This Interim Report should be read in conjunction with our Annual Report of fiscal 2008, which includes detailed analysis of our operations and activities.
Due to rounding, numbers presented throughout this document may not add up precisely to the totals provided and percentages may not precisely reflect the absolute figures.

1


Table of Contents

Key figures
(KEY FIGURES)

 


Table of Contents

Interim group management report
Overview of financial results for the second quarter of fiscal 2009
(Three months ended March 31, 2009)
    Revenue rose 5% to 18.955 billion on competitive strength at Energy and Healthcare.
 
    While orders of 20.864 billion came in 11% below the prior-year quarter, book-to-bill remained above 1. The order backlog of Siemens’ three Sectors increased to 87 billion, and included no material cancellations during the quarter.
 
    Total Sectors profit rose 43% from the prior-year level, to 1.844 billion, led by broad-based profit growth in Energy. A year earlier, Total Sectors profit included substantial charges stemming from reviews of large projects.
 
    Income from continuing operations climbed 69%, to 955 million, primarily on higher Total Sectors profit. SG&A expenses declined significantly compared to the prior-year quarter.
 
    Net income was 1.013 billion, up from 412 million in the second quarter a year earlier.
 
    Free cash flow from continuing operations was 1.138 billion including cash outflows relating to charges for the global SG&A program, project reviews and structural initiatives.
Headwinds from macroeconomics. During the first half of fiscal 2009, the macroeconomic environment has significantly turned down. Main indicators like gross domestic product, the Purchasing Managers Index in the U.S., the Euro-zone Manufacturing Purchasing Managers Index (PMI) and the development of order intake reported by the Verband Deutscher Maschinen- und Anlagenbau (VDMA) declined significantly. Leading economic research institutes continuously revised their economic estimates, e.g. Global Insight, Inc. revised the estimate for global GDP growth for 2009 since November 2008 from plus 1.1% to minus 0.5% in January 2009 to minus 2.5% as of April 14, 2009. The current macroeconomic and financing environment shows no evidence of near-term improvement.
Revenue rose and book-to-bill remained above 1. Revenue rose to 18.955 billion, up 5% from the second quarter a year earlier. Order intake was down 11% in a significantly weaker macroeconomic and financing environment, yet orders of 20.864 billion kept the book-to-bill ratio above 1 for the quarter and for the first half. On an organic basis, excluding currency translation effects and portfolio transactions, revenue rose 5% and orders came in 10% lower compared to the prior-year quarter. Customers slowed conversion of booked orders to revenue, and also postponed potential new orders.
The Energy and Healthcare Sectors took revenue higher. Energy delivered double-digit growth in Sector revenue and higher revenues at Healthcare benefited from positive currency translation effects. This more than offset a 4% decrease at Industry driven by lower demand in short-cycle businesses.
On a geographic basis, Siemens showed particular strength in the Americas and the region comprising Europe, the Commonwealth of Independent States (C.I.S.), Africa, Middle East. Energy and Healthcare led revenue higher in the Americas, which benefited from positive currency translation effects in the U.S. Fossil Power Generation and Mobility were the primary revenue drivers in Europe, C.I.S., Africa, Middle East.
Macroeconomic conditions held back order intake. Global macroeconomic and financing conditions continued to reduce consumer spending, business confidence and capital expenditures in the second quarter. This was particularly evident in such short-cycle industries as automotive, manufacturing and lighting. Longer-cycle energy and infrastructure customers postponed potential new business. Healthcare orders rose due mainly to positive currency translation effects, while Industry and Energy saw reduced order intake in most Divisions.
On a geographic basis, orders declined significantly in Europe, C.I.S., Africa, Middle East and the Americas. In contrast, Asia, Australia posted higher orders compared to the prior-year period on the strength of major contract wins for high-speed trains in China and energy infrastructure in Iraq.

2


Table of Contents

Total Sectors profit climbed, led by Energy and Healthcare. Total Sectors profit for the second quarter climbed 43% year-over-year, to 1.844 billion. A year earlier, Total Sectors profit included charges of 768 million stemming from project reviews in the Fossil Power Generation Division and former Transportation Systems Group. Energy was again the primary driver of Total Sectors profit growth, with all Divisions generating increases year-over-year. A year earlier, Fossil Power Generation took 559 million of the charges mentioned above. Healthcare also increased its Sector profit despite challenging market conditions. Sector profit declined significantly at Industry primarily due to volume-driven margin pressure.
Income from continuing operations rose on higher Total Sectors profit and lower corporate expenses. Income from continuing operations was 955 million, up 69% compared to the second quarter a year earlier. Basic EPS on a continuing basis rose to 1.05 from 0.59 in the prior-year period. The primary factor in these increases was higher Total Sectors profit. Other contributors included lower expenses for Corporate items and higher profits from Cross-Sector businesses, due mainly to significantly lower project charges at Siemens IT Solutions and Services. In contrast, Equity Investments turned negative due to Nokia Siemens Networks B.V. (NSN) and the loss from Other Operations increased compared to the prior-year period.
SG&A expenses fell. Positive results from Siemens’ SG&A program were already evident in the quarter, with SG&A expenses coming in significantly below the second-quarter level a year earlier.
Net income increased strongly on higher income from continuing operations. Net income was 1.013 billion, up from 412 million in the second quarter a year earlier. Basic EPS rose to 1.11 from 0.42 in the prior-year period. Income from continuing operations was the dominant factor in net income. Discontinued operations benefited from settlement of legal matters related to the former Communications Group (Com). A year earlier, discontinued operations included severance charges in the enterprise networks business, which was divested between the periods under review.
Free cash flow from total Sectors level year-over-year. At the Sector level, Free cash flow was 1.901 billion, nearly level compared to the prior-year quarter despite cash outflows relating to charges for project reviews and structural initiatives. Free cash flow from continuing operations was lower than in the prior-year period. The current period included the cash outflows mentioned above as well as for charges for the SG&A program and payments related to settlements of financial derivatives.
ROCE rose on higher income. On a continuing basis, return on capital employed (ROCE) for the second quarter increased to 9.2% from 5.5% in the prior-year period. This improvement was due primarily to higher income from continuing operations. For comparison, income from continuing operations in the second quarter a year ago was burdened by significant charges resulting from project reviews as mentioned above.
Liquidity increased with a successful bond issue. We enhanced our liquidity position with 4.0 billion in proceeds from a second-quarter bond issue, which was heavily oversubscribed.
Pension underfunding grew larger. The estimated underfunding of our principal pension plans as of March 31, 2009, amounted to 5.3 billion, compared to an underfunding of 4.3 billion at the end of the first quarter and 2.5 billion at the end of fiscal 2008. The decline in funding status since December 31, 2008 is due primarily to a negative return on plan assets. While the change in funding status in general does not affect earnings for the current fiscal year, it reduces equity on the balance sheet.
Electronics Assembly Systems (EA) was transferred to Other Operations. Following a strategic review during the current period, the EA business was classified as held for disposal and management responsibility was transferred from the Drive Technologies Division to Other Operations. This business had a loss of 86 million in the second quarter, contributing to the increased loss from Other Operations mentioned above. Financial information for EA is now presented within Other Operations on a retrospective basis. This transfer resulted in a change to Total Sectors profit for fiscal year 2008, which increased from 6.520 billion to 6.606 billion.

3


Table of Contents

Results of Siemens
Results of Siemens — Three months ended March 31, 2009
The following discussion presents selected information for Siemens for the second quarter of fiscal 2009:
Revenue rose 5% year-over-year, to 18.955 billion. Order intake was down 11% from the prior-year period, as global macroeconomic and financing conditions continued to reduce consumer spending, business confidence and capital expenditures. New orders of 20.864 billion kept the book-to-bill ratio at 1.10. As a consequence, the total order backlog for the three Sectors grew to 87 billion, and included no material cancellations during the second quarter. On an organic basis, excluding the net effect of currency translation and portfolio transactions, revenue rose 5% year-over-year and orders decreased by 10%. Customers slowed conversion of booked orders to revenue, and also postponed potential new orders.
                                                 
    New Orders (location of customer)  
    Three months              
    ended March 31,     % Change     therein  
( in millions)   2009     2008     Actual     Adjusted*     Currency     Portfolio  
Europe, C.I.S.**, Africa, Middle East
    10,779       13,730       (21)  %     (16)  %     (3)  %     (2)  %
therein Germany
    3,240       3,786       (14) %     (12) %     0 %     (2) %
Americas
    4,667       5,834       (20)  %     (26)  %     7  %     (1)  %
therein U.S.
    3,452       4,487       (23) %     (33) %     11 %     (1) %
Asia, Australia
    5,418       3,807       42  %     38  %     4  %     0  %
therein China
    1,937       1,355       43 %     30 %     13 %     0 %
therein India
    560       551       2 %     7 %     (5) %     0 %
Siemens
    20,864       23,371       (11)  %     (10)  %     1  %     (2)  %
 
*   Excluding currency translation and portfolio effects.
 
**   Commonwealth of Independent States.
Orders related to external customers decreased in the second quarter of fiscal 2009 on substantial declines in Industry and Energy. The Industry Sector — Siemens’ largest Sector — saw orders decline by 12% compared to the prior-year period. All Divisions in the Sector except for Mobility reported lower order intake, particularly in such short-cycle industries as automotive, manufacturing and lighting. The order increase at Mobility included a major contract win for high-speed trains in China. In the Energy Sector, customer postponements of potential new business contributed to lower order intake. Orders slowed at nearly all Divisions, leading to a decline of 9% for the Sector compared to the strong prior-year period. Higher reported orders at Healthcare benefited significantly from positive currency translation effects related to the Sector’s substantial U.S. business. In addition, streamlining of Other Operations continued to reduce its contribution to order volume.
In the region comprising Europe, C.I.S., Africa and the Middle East — Siemens’ largest reporting region — orders declined 21% on decreases in all Sectors, led by Energy and Industry. The decline in Energy was driven primarily by lower volume from large orders compared to the prior-year quarter, despite a major contract win for offshore wind-farm turbines in Europe. A broad-based order decrease in Industry in the region was led by rapidly slowing demand in the Drive Technologies and Industry Automation Divisions. In the Americas, the order decline of 20% followed a similar pattern as in Europe, C.I.S., Africa, Middle East, with all Sectors posting lower orders. Reported order intake in this region benefited from positive currency translation effects from the U.S. On an organic basis, orders declined 26% in the Americas and 33% in the U.S. In Asia, Australia orders rose 42% year-over-year, with all three Sectors achieving double-digit increases as well as significant new contract wins. The largest among these were orders won by the Fossil Power Generation and Power Transmission Divisions for energy infrastructure in Iraq, totaling 1.5 billion, and the above-mentioned train order in China. The latter contract was the main factor in increasing order intake in China compared to the prior-year quarter.

4


Table of Contents

                                                 
    Revenue (location of customer)  
    Three months              
    ended March 31,     % Change     therein  
( in millions)   2009     2008     Actual     Adjusted*     Currency     Portfolio  
Europe, C.I.S.**, Africa, Middle East
    10,381       10,069       3 %     9 %     (3) %     (3) %
therein Germany
    2,811       2,918       (4) %     (2) %     0 %     (2) %
Americas
    5,362       4,921       9 %     0 %     10 %     (1) %
therein U.S
    4,139       3,674       13 %     (2) %     16 %     (1) %
Asia, Australia
    3,212       3,104       3 %     0 %     3 %     0 %
therein China
    1,215       1,121       8 %     (4) %     12 %     0 %
therein India
    402       416       (3) %     6 %     (8) %     (1) %
Siemens
    18,955       18,094       5  %     5  %     2  %     (2)  %
 
*   Excluding currency translation and portfolio effects.
 
**   Commonwealth of Independent States.
Revenue related to external customers rose 5% year-over-year in the second quarter, on broad-based, double-digit increase in Energy and a 10% rise in Healthcare. In the Industry Sector, revenue decreased 4% on double-digit declines at Industry Automation, OSRAM and Drive Technologies. These Divisions all experienced demand drops in their short-cycle businesses. At Industry Solutions and Building Technologies, customers began to postpone booked orders from prior periods. The Energy Sector recorded a revenue increase of 28% year-over-year, led by Fossil Power Generation and Renewable Energy. Revenue growth in Healthcare benefited from positive currency translation effects. Revenue from Other Operations declined significantly, due primarily to the continuing streamlining actions within its portfolio.
In Europe, C.I.S., Africa, Middle East, revenue rose 3% year-over-year. Energy and Healthcare delivered higher revenue compared to the prior-year period, while revenue declined in the Industry Sector on lower sales in the Divisions Industry Automation, Drive Technologies and OSRAM. Revenue in Germany decreased 4%, as revenue growth in Healthcare and Energy was more than offset by a decline in Other Operations, in part related to the divestment of Siemens Home and Office Communication Devices GmbH & Co. KG (SHC) between the periods under review. The Americas region posted a 9% increase in revenue, benefiting from positive currency translation effects from the U.S. In both the Americas and the U.S., revenue rose by double-digits in Energy and at a lower rate in Healthcare, and declined in Industry. Asia, Australia saw a 3% expansion in revenue, on growth in all Sectors. The revenue increase for Industry in this region was due primarily to strong growth in its Industry Solutions Division.
                         
    Three months        
    ended March 31,        
( in millions)   2009     2008     % Change  
Gross profit on revenue
    4,961       4,916       1 %
as percentage of revenue
    26.2 %     27.2 %        
Gross profit for the second quarter of fiscal 2009 increased 1% year-over-year, as Energy significantly improved its gross profit compared to the prior-year period which included substantial project charges at Fossil Power Generation. In contrast, gross profit decreased in Industry, mainly due to a volume-driven reduction in capacity utilization, resulting in a reversal of economies of scale. That was particularly evident at Industry Automation and Drive Technologies which generated peak level margins in the prior-year quarter. In Healthcare, gross profit rose year-over-year, but at a lower rate than revenue. In combination, these factors led to a decline in gross profit margin for Siemens, which came in at 26.2%, compared to 27.2% a year earlier.

5


Table of Contents

                         
    Three months        
    ended March 31,        
( in millions)   2009     2008     % Change  
Research and development expenses
    (972 )     (918 )     6 %
as percentage of revenue
    5.1 %     5.1 %      
Marketing, selling and general administrative expenses
    (2,520 )     (3,243 )     (22 )%
as percentage of revenue
    13.3 %     17.9 %      
Other operating income
    99     187       (47) %
Other operating expense
    (168 )     (257 )     (35) %
Income from investments accounted for using the equity method, net
    (49 )     101        
Financial income (expense), net
    (16 )     3        
Research and development (R&D) expenses increased to 972 million, from 918 million in the second quarter of fiscal 2008, led by higher outlays in Industry and Energy. R&D expenses as a percentage of revenue remained stable at 5.1%. Marketing, selling and general administrative (SG&A) expenses declined to 2.520 billion, or 13.3% of revenues, from 3.243 billion or 17.9% of revenue in the prior-year period. Even though the prior-year period included a 32 million donation to the Siemens Foundation in the U.S. and 64 million, including an impairment, related to a regional sales organization in Germany, the improvement in SG&A expenses reflects positive results from our SG&A program.
Other operating income decreased to 99 million in the second quarter, compared to 187 million a year earlier. The prior-year period included a gain of 30 million on the sale of the hydrocarbon business at the Industry Solutions Division, as well as higher gains from sales of real estate. Other operating expense was 168 million, down from 257 million in the second quarter a year earlier. The difference was due primarily to substantially lower expenses for outside advisors engaged in connection with investigations into alleged violations of anti-corruption laws and related matters as well as remediation activities, amounting to 33 million in the current period, compared to 148 million a year earlier.
Income from investments accounted for using the equity method, net was a negative 49 million, down from a positive 101 million in the prior-year period. The change was due mainly to a higher equity investment loss related to NSN, which amounted to 136 million in the second quarter, compared to 45 million a year earlier.
Financial income (expense), net decreased slightly to a negative 16 million, down from a positive 3 million in the second quarter of the prior fiscal year. Within this change, Income (expense) from pension plans and similar commitments, net, swung from a positive 36 million in the prior-year period to a negative 58 million, due to higher interest cost and lower expected return on plan assets. This effect more than offset positive results of hedging activities not qualifying for hedge accounting.
                         
    Three months        
    ended March 31,        
( in millions)   2009     2008     % Change  
Income from continuing operations before income taxes
    1,335       789       69 %
Income taxes
    (380 )     (224 )     70 %
as percentage of income from continuing operations before income taxes
    28 %     28 %      
Income from continuing operations
    955       565       69 %
Income (loss) from discontinued operations, net of income taxes
    58       (153 )      
Net income
    1,013       412       146 %
Net income attributable to minority interest
    51       28        
Net income attributable to shareholders of Siemens AG
    962       384       151 %
Income from continuing operations before income taxes was 1.335 billion in the second quarter of fiscal 2009, compared to 789 million a year earlier. The change year-over-year was due to the factors mentioned above, primarily to significant decline in SG&A expenses partly offset by a negative swing in equity investment income. The effective tax rate on income from continuing operations was 28% for both periods under review. As a result, income from continuing operations after taxes was 955 million, up from 565 million in the second quarter of fiscal 2008.

6


Table of Contents

Discontinued operations include former Com activities as well as Siemens VDO Automotive (SV), which was sold to Continental AG in the first quarter of fiscal 2008. The former Com activities include the enterprise networks business, 51% of which were divested during the fourth quarter of fiscal 2008; telecommunications carrier activities transferred into NSN in the third quarter of fiscal 2007; and the mobile devices business sold to BenQ Corporation in fiscal 2005. Income from discontinued operations in the current quarter was a positive 58 million, compared to a negative 153 million a year earlier. In the current period, discontinued operations benefited from a positive effect from the settlement of legal matters related to the former Com activities. In comparison, the loss in the prior-year period included 109 million in severance charges and a 12 million asset impairment at the enterprise networks business. For additional information regarding discontinued operations, see “Notes to Interim Consolidated Financial Statements” within this Interim Report.
Net income for Siemens in the second quarter of fiscal 2009 was 1.013 billion, compared to 412 million in the same period a year earlier. Net income attributable to shareholders of Siemens AG was 962 million, up from 384 million in the second quarter of fiscal 2008.
Results of Siemens — Six months ended March 31, 2009
The following discussion presents selected information for Siemens for the first six months of fiscal 2009:
In the first six months of fiscal 2009, revenue rose 6% year-over-year, to 38.589 billion, while orders came in at 43.084 billion, down 10% from the prior-year period. This resulted in a book-to-bill ratio of 1.12. On an organic basis, excluding the net effect of currency translation and portfolio transactions, revenue rose 6% year-over-year and orders decreased by 9%.
                                                 
    New Orders (location of customer)  
    Six months              
    ended March 31,     % Change     therein  
( in millions)   2009     2008     Actual     Adjusted*     Currency     Portfolio  
Europe, C.I.S.**, Africa, Middle East
    23,855       27,601       (14) %     (10) %     (2) %     (2) %
therein Germany
    7,170       7,291       (2) %     0 %     0 %     (2) %
Americas
    10,165       11,936       (15) %     (20) %     6 %     (1) %
therein U.S.
    7,710       8,849       (13) %     (22) %     10 %     (1) %
Asia, Australia
    9,064       8,076       12 %     10 %     2 %     0 %
therein China
    3,113       2,800       11 %     0 %     11 %     0 %
therein India
    1,145       1,189       (4) %     3 %     (7) %     0 %
Siemens
    43,084       47,613       (10) %     (9)  %     1  %     (2)  %
 
*   Excluding currency translation and portfolio effects.
 
**   Commonwealth of Independent States.
Orders related to external customers decreased in the first half of fiscal 2009, driven by declines in Industry and Energy. In the Industry Sector, order intake decreased 12% compared to the prior-year period, as all Divisions in the Sector except for Mobility reported lower orders led by declines at Drive Technologies, Industry Solutions and Industry Automation. Experiencing the postponement of potential new business by customers, the Energy Sector saw orders fall 8% from the high level of the first half a year earlier, which included high order levels at Oil & Gas, Power Transmission and Power Distribution. Orders at Renewable Energy came in above the prior-year period, primarily due to major contract wins in the second quarter. Orders rose 5% at Healthcare, benefiting from positive currency translation effects from the U.S. Due to substantial dispositions and other streamlining actions, orders at Other Operations declined significantly in the current period.

7


Table of Contents

     In Europe, C.I.S., Africa, Middle East, orders declined 14% on double-digit decreases in Energy and Industry, while Healthcare came in almost level with the first half a year earlier. A lower volume from large orders in Fossil Power Generation and Power Transmission was an important factor for the decline in the Energy Sector, while the order drop in Industry was more broad-based. In Germany, major contract wins at Mobility and Renewable Energy brought orders near the prior-year level. In the Americas, orders decreased 15% despite positive currency translation effects, primarily from the U.S. Within the region, the contraction of order intake was strongest in Energy, mainly due to a lower volume from major orders compared to the prior-year period. Orders in Industry also declined by double digits in the Americas, while currency translation effects resulted in slightly increased orders at Healthcare. In Asia, Australia, orders rose 12% on substantial increases in Energy and Healthcare, including the above-mentioned contracts for energy infrastructure in Iraq. Orders at Industry declined in the region, due primarily to lower demand at Industry Solutions and Drive Technologies. Within the region, order intake increased in China, due mainly to the large order for high-speed trains at Mobility.
                                                 
    Revenue (location of customer)  
    Six months              
    ended March 31,     % Change     therein  
( in millions)   2009     2008     Actual     Adjusted*     Currency     Portfolio  
Europe, C.I.S.**, Africa, Middle East
    21,470       20,955       2 %     8 %     (3) %     (3) %
therein Germany
    5,976       6,073       (2) %     0 %     0 %     (2) %
Americas
    10,732       9,584       12 %     4 %     8 %     0 %
therein U.S.
    8,202       7,185       14 %     1 %     13 %     0 %
Asia, Australia
    6,387       5,955       7 %     5 %     2 %     0 %
therein China
    2,415       2,216       9 %     (1) %     10 %     0 %
therein India
    763       796       (4) %     5 %     (9) %     0 %
Siemens
    38,589       36,494       6 %     6 %     1 %     (1) %
 
*   Excluding currency translation and portfolio effects.
 
**   Commonwealth of Independent States.
First-half revenue related to external customers rose 6% year-over-year, as all Divisions in Energy and Healthcare reported higher revenue. Fossil Power Generation and Renewable Energy were the primary drivers for a 26% revenue increase in Energy, while a 10% rise in Healthcare included more balanced growth rates among Divisions. The Industry Sector came in just below the level of the first half a year earlier, as increases at Mobility, Industry Solutions and Building Technologies were offset by declines at Industry Automation, OSRAM and Drive Technologies. As with orders, streamlining of Other Operations continued to significantly reduce revenue year-over-year.
In Europe, C.I.S., Africa, Middle East, revenue rose 2% year-over-year, held back by negative currency translation and portfolio effects, the latter mainly in Other Operations. Revenue rose at Energy and Healthcare and decreased slightly at Industry in this region. Revenue in Germany for the first half came in below the level of the prior-year period, primarily due to portfolio transactions including the divestment of SHC within Other Operations. In the Americas, revenue rose 12%, benefiting from positive currency translation effects from the U.S. Revenue growth in the region was strongest in the Energy Sector, on the basis of at least double-digit increases in all Divisions. Healthcare also delivered double-digit growth in the Americas, while revenue in Industry fell primarily on declines at OSRAM and Industry Automation. Asia, Australia saw a 7% expansion in revenue on growth in all Sectors, led by Energy and Healthcare.
                         
    Six months        
    ended March 31,        
( in millions)   2009     2008     % Change  
Gross profit on revenue
    10,601       10,221       4 %
as percentage of revenue
    27.5 %     28.0 %        
Gross profit for the first six months of fiscal 2009 increased 4% year over year, slightly less than the growth in revenue. As a result, the gross profit margin decreased to 27.5%, from 28.0% in the prior-year. The Energy Sector significantly increased its gross profit in total and as a percentage of revenue compared to the first six months of fiscal 2008, which included the substantial second-quarter project charges mentioned above. In contrast, Industry posted lower gross profit, primarily due to declines at Industry Automation and OSRAM. Gross profit also decreased in Healthcare, which took charges in its particle therapy business in the first quarter of the current fiscal year.

8


Table of Contents

                         
    Six months        
    ended March 31,        
( in millions)   2009     2008     % Change  
Research and development expenses
    (1,886 )     (1,765 )     7 %
as percentage of revenue
    4.9 %     4.8 %      
Marketing, selling and general administrative expenses
    (5,388 )     (6,298 )     (14) %
as percentage of revenue
    14.0 %     17.3 %      
Other operating income
    284       377       (25) %
Other operating expense
    (285 )     (463 )     (38) %
Income from investments accounted for using the equity method, net
    68       209       (67) %
Financial income (expense), net
    (324 )     25         
R&D expenses increased to 1.886 billion, or 4.9% of revenue, from 1.765 billion, or 4.8% of revenue a year earlier, led by higher outlays in Industry and Energy. SG&A expenses declined considerably to 5.388 billion, or 14.0% of revenue, from 6.298 billion, or 17.3% of revenue in the prior-year period, with Siemens’ global SG&A program showing first results.
Other operating income for the first half was lower than in the prior-year period, which included higher gains from sales of real estate and businesses. Other operating expense came in below the level in the first six months a year earlier. This was due primarily to substantially lower expenses for outside advisors engaged in connection with investigations into alleged violations of anti-corruption laws and related matters as well as remediation activities, which totaled 82 million in the current period compared to 241 million a year earlier. In addition, the prior-year period included a goodwill impairment of 70 million related to a building and infrastructure business, 50% of which was divested between the periods under review.
Income from investments accounted for using the equity method, net was a positive 68 million, down from a positive 209 million in the prior-year period. Within this change, the equity investment loss related to NSN increased to 143 million from a loss of 82 million in the first half a year earlier. In addition, the prior-year period included equity investment income related to Fujitsu Siemens Computers B.V. (FSC). At the end of September 2008, Siemens classified its investment in FSC as assets held for disposal.
Financial income (expense), net decreased to a negative 324 million in the first six months of fiscal 2009, down from a positive 25 million a year earlier. This change is due mainly to Income (expense) from pension plans and similar commitments, net, which swung from a positive 71 million in the prior-year period to a negative 116 million, due to higher interest cost and lower expected return on plan assets. The current period also includes negative effects from hedging not qualifying for hedge accounting as well as higher interest-related expenses associated with asset retirement obligations.
                         
    Six months        
    ended March 31,        
( in millions)   2009     2008     % Change  
Income from continuing operations before income taxes
    3,070       2,306       33 %
Income taxes
    (855 )     (663 )     29 %
as percentage of income from continuing operations before income taxes
    28 %     29 %      
Income from continuing operations
    2,215       1,643       35 %
Income from discontinued operations, net of income taxes
    28       5,244       (99) %
Net income
    2,243       6,887       (67) %
Net income attributable to minority interest
    78       71        
Net income attributable to shareholders of Siemens AG
    2,165       6,816       (68) %
Income from continuing operations before income taxes was 3.070 billion for the first half of fiscal 2009, compared to 2.306 billion a year earlier. The change year-over-year was due to the factors mentioned above, primarily increased gross profit in the Energy Sector and a significant, broad-based decline in SG&A expenses, partly offset by a negative swing in Financial income. The effective tax rate on income from continuing operations was 28%, down from 29% in the prior-year period. As a result, income from continuing operations after taxes was 2.215 billion, up from 1.643 billion in the first six months of fiscal 2008.

9


Table of Contents

Discontinued operations include former Com activities as well as SV, which was sold to Continental AG in the first quarter of fiscal 2008. The former Com activities include the enterprise networks business, 51% of which were divested during the fourth quarter of fiscal 2008; telecommunications carrier activities transferred into NSN in the third quarter of fiscal 2007; and the mobile devices business sold to BenQ Corporation in fiscal 2005. Income from discontinued operations in the current period was 28 million, compared to 5.244 billion a year earlier. The difference is due mainly to 5.4 billion in the prior-year period related to SV, including operating results along with a substantial gain on the sale of the business. Discontinued operations in the first half a year earlier also included severance charges and an impairment of long-lived assets at the enterprise networks business. For additional information regarding discontinued operations, see “Notes to Interim Consolidated Financial Statements” within this Interim Report.
Net income for Siemens in the first six months was 2.243 billion, compared to 6.887 billion in the same period a year earlier, primarily due to the development in discontinued operations discussed above. Net income attributable to shareholders of Siemens AG was 2.165 billion, down from 6.816 billion in the prior-year period.
Portfolio activities
At the beginning of October 2008, Siemens completed the transfer of an 80.2% stake in SHC, reported in Other Operations, to ARQUES Industries AG. The transaction resulted in a preliminary net loss of 123 million (including an impairment loss of 78 million) and additional costs of 21 million related mainly to carve-out activities, of which the majority has been accrued in fiscal 2008.
We completed certain other portfolio transactions during the first six months of fiscal 2009 which did not have a significant effect on our Interim Consolidated Financial Statements. For further information on acquisitions and dispositions, see “Notes to Interim Consolidated Financial Statements.”

10


Table of Contents

Segment information analysis
Sectors
Industry — Three months ended March 31, 2009
                                                 
Sector*   Three months              
    ended March 31,     % Change     therein  
( in millions)   2009     2008     Actual     Adjusted**     Currency     Portfolio  
Profit
    671       941       (29 )%                        
Profit margin
    7.8 %     10.5 %                                
New orders
    8,801       9,928       (11 )%     (12 )%     2 %     (1 )%
Revenue
    8,645       8,980       (4 )%     (6 )%     2 %     0 %
 
*   The EA business has been transferred to Other Operations and financial information is now presented accordingly on a retrospective basis. For details regarding the reclassification of prior-year information, see below.
 
**   Excluding currency translation and portfolio effects.
     As expected, the Industry Sector experienced significant impact from the macroeconomic environment. This was particularly evident at Industry Automation, Drive Technologies and OSRAM, where cost-reduction measures are still ramping up. Revenue declines in these Divisions reversed economies of scale that produced peak margins in prior periods, and Sector profit fell to 671 million. While revenue increased at Industry Solutions and Building Technologies, customers at both Divisions began to postpone booked orders from prior periods. With improved execution and lower exposure to macroeconomic conditions, the Mobility Division delivered profitable growth in the second quarter.
     On a geographic basis, revenue and orders declined in the Europe, C.I.S., Africa, Middle East region and the Americas. Order growth in Asia, Australia included a particularly large train order in China, which kept the Sector’s book-to-bill ratio above 1 and its order backlog at 32 billion. Industry expects continued impacts from the macroeconomic environment, especially in its short-cycle activities.
                                                 
Divisions   New Orders  
    Three months              
    ended March 31,     % Change     therein  
( in millions)   2009     2008     Actual     Adjusted*     Currency     Portfolio  
Industry Automation
    1,618       2,237       (28 )%     (26 )%     1 %     (3 )%
Drive Technologies**
    1,627       2,571       (37 )%     (38 )%     1 %     0 %
Building Technologies
    1,379       1,559       (12 )%     (15 )%     2 %     1 %
OSRAM
    971       1,188       (18 )%     (19 )%     4 %     (3 )%
Industry Solutions
    1,737       1,994       (13 )%     (15 )%     1 %     1 %
Mobility
    2,208       1,306       69 %     67 %     2 %     0 %
 
*   Excluding currency translation and portfolio effects.
 
**   For the three months ended March 31, 2008, the EA business reported new orders of 103 million.
                                                 
Divisions   Revenue  
    Three months              
    ended March 31,     % Change     therein  
( in millions)   2009     2008     Actual     Adjusted*     Currency     Portfolio  
Industry Automation
    1,685       2,122       (21 )%     (19 )%     1 %     (3 )%
Drive Technologies**
    1,954       2,106       (7 )%     (10 )%     2 %     1 %
Building Technologies
    1,443       1,432       1 %     (3 )%     3 %     1 %
OSRAM
    971       1,188       (18 )%     (19 )%     4 %     (3 )%
Industry Solutions
    1,759       1,586       11 %     7 %     2 %     2 %
Mobility
    1,542       1,351       14 %     15 %     (1 )%     0 %
 
*   Excluding currency translation and portfolio effects.
 
**   For the three months ended March 31, 2008, the EA business reported revenue of 100 million.

11


Table of Contents

                                         
Divisions   Profit     Profit Margin  
    Three months             Three months  
    ended March 31,             ended March 31,  
( in millions)   2009     2008     %Change     2009     2008  
Industry Automation
    97       371       (74 )%     5.8 %     17.5 %
Drive Technologies*
    244       332       (27 )%     12.5 %     15.8 %
Building Technologies
    97       109       (11 )%     6.7 %     7.6 %
OSRAM
    8       122       (93 )%     0.8 %     10.3 %
Industry Solutions
    118       121       (2 )%     6.7 %     7.6 %
Mobility
    106       (116 )           6.9 %     (8.6 )%
 
*   For the three months ended March 31, 2008, the EA business reported a loss of 10 million.
     The factors discussed above for the Sector were most pronounced at Industry Automation, producing substantially reduced results compared to both the prior-year period and the preceding quarter. Destocking continued among the Division’s manufacturing customers. Revenues declined 21% and orders fell 28%, led by Europe, C.I.S., Africa, Middle East, the Division’s largest regional market. With smaller business volumes and lower capacity utilization, Industry Automation saw profit margins fall in all business units. As a result, profit came in at 97 million, well below the prior-year quarter. Both periods included margin impacts from the Division’s acquisition of UGS in fiscal 2007. Purchase price accounting (PPA) effects were 36 million in the current quarter. In the prior-year period, PPA effects were 26 million along with integration costs of 2 million.
     Continuing deterioration in market conditions took revenue down 7% at Drive Technologies. Lower capacity utilization in turn pressured profit margins in all business units. Profit declined compared to the second quarter a year earlier, and also fell for the third consecutive quarter. The current and prior-year periods both included 9 million in PPA effects from the acquisition of Flender Holding GmbH (Flender) in 2005. PPA effects are expected to continue at this level in coming quarters. Orders fell sharply in all regions compared to the prior-year quarter, with the sharpest declines in the Europe, C.I.S., Africa, Middle East region and the Americas. Following a strategic review during the second quarter, the EA business, for which Siemens initiated a carve-out during fiscal 2008, was classified as held for disposal and management responsibility was transferred from Drive Technologies to Other Operations. The presentation of prior-year financial information has been reclassified accordingly.
     The slowdown in the global construction industry began reaching Building Technologies in the second quarter. Orders fell throughout the division, including customer postponement of projects. As a result, the Division’s book-to-bill ratio came in below 1 for the quarter. On a geographic basis, orders declined in all regions, most notably in Europe, C.I.S., Africa, Middle East. While revenue remained stable compared to the same period a year earlier, customers began to delay execution of booked orders. Profit fell to 97 million due to a less favorable business mix.
     Macroeconomic conditions remained challenging for OSRAM throughout the Division. Revenue fell 18%, including substantial demand declines in the automotive, construction and semiconductor markets. Lower capacity utilization took profits and profit margins down in all business units. OSRAM posted a profit of 8 million compared to 122 million in the prior-year period.
     Industry Solutions delivered profit of 118 million. For comparison, the prior-year quarter benefited from a 30 million gain on the sale of a business. Revenue was up 11% due to peak orders in metals technologies in prior periods. In contrast, new orders for metals technologies fell sharply in the current quarter. Orders overall declined 13% year-over-year, including customer postponement of projects. During the quarter, customers began to delay execution of booked orders.
     Mobility contributed another strong quarter, including order growth of 69%, revenue growth of 14%, and 106 million in profit. The Division’s profit margin improved on execution of higher-margin orders compared to the second quarter a year earlier. In addition, the prior-year period included 209 million in charges related to extensive project reviews. Orders in the rolling stock business rose substantially from a low base in the prior-year period. The increase year-over-year includes a particularly large contract for high-speed trains in China.

12


Table of Contents

Industry — Six months ended March 31, 2009
                                                 
Sector   Six months              
    ended March 31,     % Change     therein  
( in millions)   2009     2008     Actual     Adjusted*     Currency     Portfolio  
Profit
    1,605       1,944       (17 )%                        
Profit margin
    8.9 %     10.8 %                                
New orders
    18,577       20,801       (11 )%     (12 )%     1 %     0 %
Revenue
    17,933       18,052       (1 )%     (2 )%     1 %     0 %
 
*   Excluding currency translation and portfolio effects.
     While Industry remained the top profit contributor for Siemens in the first six months of fiscal 2009, the profit and profitability of the Sector were severely affected by increasingly deteriorating macroeconomic conditions in the course of the first half of fiscal 2009. This development was particularly evident at Industry Automation and OSRAM and to a lesser but increasing extent at Drive Technologies.
     Orders for Industry in the first six months came in 11% lower compared to the first half of fiscal 2008, while revenue remained nearly level with the prior-year period. Orders declined in all Divisions except for Mobility, which won a significantly higher order volume from major contracts in the current period compared to the first six months a year earlier. Revenue declined at Industry Automation and OSRAM, whereas the other Divisions increased revenue or kept it stable year-over-year. On a geographic basis, declines in orders were spread nearly evenly over the regions. Revenue was slightly down in the regions Europe, C.I.S., Africa, Middle East and the Americas, whereas it increased 4% in Asia, Australia.
                                                 
Divisions   New Orders  
    Six months              
    ended March 31,     % Change     therein  
( in millions)   2009     2008     Actual     Adjusted*     Currency     Portfolio  
Industry Automation
    3,571       4,518       (21 )%     (19 )%     1 %     (3 )%
Drive Technologies**
    3,713       4,948       (25 )%     (26 )%     1 %     0 %
Building Technologies
    2,924       3,098       (6 )%     (9 )%     1 %     2 %
OSRAM
    2,068       2,381       (13 )%     (13 )%     3 %     (3 )%
Industry Solutions
    3,653       4,561       (20 )%     (20 )%     0 %     0 %
Mobility
    4,132       3,081       34 %     34 %     0 %     0 %
 
*   Excluding currency translation and portfolio effects.
 
**   For the six months ended March 31, 2008, the EA business reported new orders of 231 million. For the fiscal year ended September 30, 2008, EA reported new orders of 421 million.
                                                 
Divisions   Revenue  
    Six months              
    ended March 31,     % Change     therein  
( in millions)   2009     2008     Actual     Adjusted*     Currency     Portfolio  
Industry Automation
    3,662       4,211       (13 )%     (12 )%     1 %     (2 )%
Drive Technologies**
    4,014       3,978       1 %     (1 )%     1 %     1 %
Building Technologies
    2,974       2,866       4 %     0 %     2 %     2 %
OSRAM
    2,068       2,381       (13 )%     (13 )%     3 %     (3 )%
Industry Solutions
    3,555       3,294       8 %     5 %     1 %     2 %
Mobility
    3,106       2,791       11 %     12 %     (1 )%     0 %
 
*   Excluding currency translation and portfolio effects.
 
**   For the six months ended March 31, 2008, the EA business reported revenue of 202 million. For the fiscal year ended September 30, 2008, EA reported revenue of 432 million.

13


Table of Contents

                                         
Divisions   Profit     Profit Margin  
    Six months             Six months  
    ended March 31,             ended March 31,  
( in millions)   2009     2008     %Change     2009     2008  
Industry Automation
    352       786       (55 )%     9.6 %     18.7 %
Drive Technologies*
    504       566       (11 )%     12.6 %     14.2 %
Building Technologies
    221       202       9 %     7.4 %     7.0 %
OSRAM
    100       248       (60 )%     4.8 %     10.4 %
Industry Solutions
    237       212       12 %     6.7 %     6.4 %
Mobility
    191       (72 )           6.1 %     (2.6 )%
 
*   For the six months ended March 31, 2008, the EA business reported a loss of 19 million. For the fiscal year ended September 30, 2008, EA reported a loss of 86 million.
     Orders and revenue at Industry Automation decreased sharply in the first six months compared to the prior-year period, with the decline in demand accelerating in the second quarter of the current period. Both orders and revenue contracted most strongly in Europe, C.I.S., Africa, Middle East, the Division’s largest regional market. Profit declined by more than half compared to the first six months a year earlier, mainly due to lower capacity utilization and a less favorable business mix. In the prior-year period, profit benefited from a 36 million gain on the sale of a business in the first quarter. In the current period, PPA effects associated with the acquisition of UGS were 71 million, equivalent to 1.9 percentage points of profit margin. In the same period a year ago, PPA effects of 74 million and integration costs of 7 million related to UGS were also equivalent to 1.9 percentage points of profit margin.
     Orders at Drive Technologies for the first six months of fiscal 2009 were down 25%, with double-digit decreases in all three regions and the biggest decline in Europe, C.I.S., Africa, Middle East, the Division’s largest region. First-half revenue was level year-over-year, on strong conversion of prior-period orders in the first quarter. In contrast, capacity utilization declined on lower revenue in the second quarter, and first-half profit came in 11% below the same period a year ago. The Division recorded PPA effects of 18 million in the current period and 19 million in the first half of fiscal 2008 related to the acquisition of Flender.
     Order intake at Building Technologies for the first six months contracted by 6% compared to the prior-year period due to the general slowdown in commercial construction particularly in the region Europe, C.I.S., Africa, Middle East and the U.S. market, while revenue increased slightly year-over-year. First-half profit for Building Technologies rose 9%, to 221 million, on strong first-quarter results.
     Challenging market conditions led to a 13% decline in first-half revenue at OSRAM, with the sharpest decreases coming in the automotive and semiconductor businesses. Due to the resulting decrease in capacity utilization, OSRAM’s profit fell to 100 million for the first six months despite a positive effect from currency hedging activities not qualifying for hedge accounting.
     Orders at Industry Solutions contracted sharply year-over-year, as the Division’s large metals technologies business experienced a significant reversal of demand compared to recent quarters. In contrast, conversion of prior-period orders in metals technologies led first-half revenue 8% higher, with the strongest regional contribution coming from Asia, Australia. This in turn improved the Division’s profit compared to the first six months a year earlier. Profit in the prior-year period benefited from a 30 million gain on the sale of a business mentioned above.
     Orders at Mobility surged by 34% in the first six months compared to the prior-year period, including a significantly higher volume from major contracts. In the current period these included the large train order in China mentioned above as well as several major contract wins in Germany. Revenue in the current period was up 11% compared to the first six months a year earlier. On a geographic basis, revenue increased by 19% in the Europe, C.I.S., Africa, Middle East region, with particular strength in Germany, while the Americas and Asia, Australia were near the level of the prior-year period. First-half profit was 191 million compared to a loss of 72 million a year earlier. While the current period benefited from a 10 million positive effect related to the settlement of a claim in the rolling stock business and the execution of higher-margin orders compared to the first half a year ago, that prior-year period was burdened by charges of 209 million related to the project review mentioned above as well as an additional 32 million in charges related to Combino.

14


Table of Contents

Energy — Three months ended March 31, 2009
                                                 
Sector   Three months              
    ended March 31,     % Change     therein  
( in millions)   2009     2008     Actual     Adjusted*     Currency     Portfolio  
Profit
    818       6       >200 %                        
Profit margin
    12.9 %     0.1 %                                
New orders
    8,206       9,026       (9 )%     (8 )%     (1 )%     0 %
Revenue
    6,364       4,964       28 %     28 %     0 %     0 %
 
*   Excluding currency translation and portfolio effects.
     With a strong performance across all Divisions, the Energy Sector was the top contributor to Total Sectors profit in the second quarter. Sector profit rose to 818 million, as Energy combined economies of scale with improvements in project execution compared to the prior-year quarter. For comparison, that period included charges of 559 million stemming from a review of projects in the fossil power generation business. All Divisions within the Sector posted at least double-digit increases in profit year-over-year, and profit margins remained in their target ranges at all Divisions.
     Revenue for Energy climbed 28% compared to the prior-year period, including growth in all regions. Due to deterioration in the macroeconomic and financing environment, customers postponed potential new business. Order intake slowed at nearly all Divisions, and orders for the Sector overall came in 9% below the high level of the prior-year period. Nevertheless, the book-to-bill ratio was 1.29 and there were no material order cancellations during the quarter, so Energy’s order back-log grew to 48 billion, including 1.5 billion in new contracts for power generation and transmission in Iraq. The Sector expects continued pressure on order intake through fiscal 2009.
                                                 
Divisions   New Orders  
    Three months              
    ended March 31,     % Change     therein  
( in millions)   2009     2008     Actual     Adjusted*     Currency     Portfolio  
Fossil Power Generation
    3,475       4,192       (17 )%     (19 )%     2 %     0 %
Renewable Energy
    1,587       961       65 %     75 %     (10 )%     0 %
Oil & Gas
    920       1,096       (16 )%     (12 )%     (3 )%     (1 )%
Power Transmission
    1,594       1,993       (20 )%     (19 )%     (1 )%     0 %
Power Distribution
    757       917       (17 )%     (15 )%     (2 )%     0 %
 
*   Excluding currency translation and portfolio effects.
                                                 
Divisions   Revenue  
    Three months              
    ended March 31,     % Change     therein  
( in millions)   2009     2008     Actual     Adjusted*     Currency     Portfolio  
Fossil Power Generation
    2,377       1,732       37 %     35 %     2 %     0 %
Renewable Energy
    800       417       92 %     88 %     3 %     1 %
Oil & Gas
    1,040       981       6 %     12 %     (5 )%     (1 )%
Power Transmission
    1,503       1,256       20 %     21 %     (1 )%     0 %
Power Distribution
    846       699       21 %     23 %     (2 )%     0 %
 
*   Excluding currency translation and portfolio effects.
                                         
Divisions   Profit     Profit Margin  
    Three months             Three months  
    ended March 31,             ended March 31,  
( in millions)   2009     2008     %Change     2009     2008  
Fossil Power Generation
    312       (328 )           13.1 %     (18.9 )%
Renewable Energy
    105       35       200 %     13.1 %     8.4 %
Oil & Gas
    121       78       55 %     11.6 %     8.0 %
Power Transmission
    168       144       17 %     11.2 %     11.5 %
Power Distribution
    106       77       38 %     12.5 %     11.0 %

15


Table of Contents

     The Fossil Power Generation Division was the top profit contributor among all Siemens Divisions, producing 312 million in profit in the second quarter, including a strong contribution from the service business. In the same period a year earlier, the Division took the 559 million in charges mentioned above following a review of turnkey projects, and subsequently focused on improving its margin quality and project execution. The project review also resulted in a 200 million revenue reduction in the prior-year period, lowering the basis of comparison for the Division’s 37% increase in revenue in the current quarter. While orders included 1.1 billion from the contracts in Iraq mentioned above, customers postponed potential new projects. This reduced the volume from major orders year-over-year. As a result, second-quarter orders for Fossil Power Generation came in 17% lower compared to a peak level in the prior-year quarter. Siemens announced that it would exit its Areva NP joint venture, and its equity stake is now accounted for as held for disposal. These changes are expected to substantially reduce volatility in the Division’s equity investment income.
     The Renewable Energy Division delivered sharp increases in profit, revenue and orders in the second quarter. Profit climbed to 105 million from 35 million, driven by a combination of improved business mix and economies of scale. Orders surged to 1.587 billion after two quarters at relatively reduced levels, driven by a large order for turbines for offshore wind-farms in Europe. This and other major contract wins have weighted the Division’s backlog toward long-lead-time offshore projects.
     The Oil & Gas Division produced 121 million in profit in the second quarter, and all business units increased their profit margins compared to the same quarter a year earlier. Macroeconomic and financing conditions slowed order intake compared to the same quarter a year earlier.
     Power Transmission brought in 168 million in profit on a 20% increase in revenue. Orders fell 20% from the prior-year level, as the macroeconomic and financing environment led customers to postpone a significant volume of planned projects. This trend had a similar effect on orders at Power Distribution, and is expected to have an impact on revenue in coming quarters because the Division’s business mix includes a significant proportion of industrial customers whose postponements affect near-term order conversion into revenue. In the current quarter Power Distribution generated 106 million in profit and revenue rose 21% in part due to a low basis of comparison in the prior-year period.
Energy — Six months ended March 31, 2009
                                                 
Sector   Six months              
    ended March 31,     % Change     therein  
( in millions)   2009     2008     Actual     Adjusted*     Currency     Portfolio  
Profit
    1,574       353       >200 %                        
Profit margin
    12.5 %     3.5 %                                
New orders
    16,740       18,105       (8 )%     (8 )%     0 %     0 %
Revenue
    12,596       9,999       26 %     26 %     0 %     0 %
 
*   Excluding currency translation and portfolio effects.
     With all Divisions delivering higher profits compared to the prior-year period, the Energy Sector turned in a strong first half in fiscal 2009, improving six-month Sector profit to 1.574 billion from 353 million a year earlier. Profit growth year-over-year was driven by Fossil Power Generation, as its prior-year results were burdened by the 559 million in second-quarter project charges mentioned above as well as charges of more than 200 million taken in the first quarter of fiscal 2008.
     Revenue for Energy rose 26% in the first six months of fiscal 2009, on double-digit increases in all Divisions and regions, led by strong growth at Fossil Power Generation and Renewable Energy. Orders decreased 8% compared to the strong first half a year earlier, which included peak order levels at Oil & Gas, Power Transmission and Power Distribution. On a geographic basis, revenue grew strongest in the regions Europe, C.I.S., Africa, Middle East and the Americas, while orders climbed in Asia, Australia due mainly to the above-mentioned energy infrastructure orders from Iraq.

16


Table of Contents

                                                 
Divisions   New Orders  
    Six months              
    ended March 31,     % Change     therein  
( in millions)   2009     2008     Actual     Adjusted*     Currency     Portfolio  
Fossil Power Generation
    7,472       7,623       (2 )%     (4 )%     2 %     0 %
Renewable Energy
    2,235       1,993       12 %     17 %     (5 )%     0 %
Oil & Gas
    2,280       2,943       (23 )%     (20 )%     (2 )%     (1 )%
Power Transmission
    3,509       3,917       (10 )%     (9 )%     (1 )%     0 %
Power Distribution
    1,614       1,837       (12 )%     (11 )%     (1 )%     0 %
 
*   Excluding currency translation and portfolio effects.
                                                 
Divisions   Revenue  
    Six months              
    ended March 31,     % Change     therein  
( in millions)   2009     2008     Actual     Adjusted*     Currency     Portfolio  
Fossil Power Generation
    4,750       3,633       31 %     29 %     2 %     0 %
Renewable Energy
    1,513       834       81 %     80 %     1 %     0 %
Oil & Gas
    2,088       1,808       15 %     21 %     (5 )%     (1 )%
Power Transmission
    3,003       2,500       20 %     20 %     0 %     0 %
Power Distribution
    1,651       1,431       15 %     17 %     (2 )%     0 %
 
*   Excluding currency translation and portfolio effects.
                                         
Divisions   Profit     Profit Margin  
    Six months             Six months  
    ended March 31,             ended March 31,  
( in millions)   2009     2008     %Change     2009     2008  
Fossil Power Generation
    601       (303 )           12.7 %     (8.3 )%
Renewable Energy
    206       87       137 %     13.6 %     10.4 %
Oil & Gas
    227       144       58 %     10.9 %     8.0 %
Power Transmission
    320       269       19 %     10.7 %     10.8 %
Power Distribution
    213       155       37 %     12.9 %     10.8 %
     Fossil Power Generation led all Siemens Divisions with 601 million in profit for the first six months of fiscal 2009. For comparsion, the first-half loss of 303 million a year earlier included the substantial project charges mentioned above. The Division’s revenue rose 31% on higher sales in Europe, C.I.S., Africa, Middle East and the Americas. In contrast, strong order growth in Asia, Australia was the main factor in bringing the Division’s orders near to the prior-year level, including Fossil Power Generation’s portion of the large second-quarter energy infrastructure orders from Iraq.
     Profit of 206 million at Renewable Energy more than doubled compared to 87 million in the first half of fiscal 2008, driven by an 81% increase in revenue on strong growth in all regions. The Division’s order increase of 12% includes high volume from major orders in both periods under review.
     Oil & Gas brought in 227 million in profits in the first half, compared to 144 million in the same period a year earlier. Orders declined 23% compared to the first six months of the prior fiscal year, as the Division took in a lower volume of large orders in all regions.
     The Power Transmission Division posted first-half profit of 320 million, up 19% from the prior-year period on double-digit revenue increases in all regions. Power Distribution grew profit by 37% to 213 million, on a 15% increase in revenue. Both power grid infrastructure Divisions reported a decline in order intake compared to the first half of fiscal 2008.

17


Table of Contents

Healthcare — Three months ended March 31, 2009
                                                 
Sector   Three months              
    ended March 31,     % Change     therein  
( in millions)   2009     2008     Actual     Adjusted*     Currency     Portfolio  
Profit
    355       341       4 %                        
Profit margin
    11.9 %     12.5 %                                
New orders
    2,951       2,790       6 %     1 %     5 %     0 %
Revenue
    2,984       2,722       10 %     4 %     6 %     0 %
 
*   Excluding currency translation and portfolio effects.
     The Healthcare Sector again showed its strength under tough market conditions, as the financing and macroeconomic environment continued to depress demand and increase competitive pressure. Sector profit increased 4%, to 355 million. The Diagnostics Division recorded a total of 64 million in PPA effects and integration costs associated with acquisitions. PPA effects and integration costs reduced Sector profit margin by 2.1 percentage points in the second quarter, compared to 3.7 percentage points in the prior-year period.
     Healthcare posted a 10% increase in revenue and 6% rise in orders. Excluding the benefit of positive currency translation effects, revenue was up 4% and orders were up 1%. The book-to-bill ratio came in just below 1 and the backlog remained at 7 billion. Healthcare expects continued deterioration in market conditions.
                                                 
Divisions   New Orders  
    Three months              
    ended March 31,     % Change     therein  
( in millions)   2009     2008     Actual     Adjusted*     Currency     Portfolio  
Imaging & IT
    1,661       1,594       4 %     (1 )%     5 %     0 %
Workflow & Solutions
    489       459       7 %     4 %     3 %     0 %
Diagnostics
    867       822       5 %     0 %     5 %     0 %
 
*   Excluding currency translation and portfolio effects.
                                                 
Divisions   Revenue  
    Three months              
    ended March 31,     % Change     therein  
( in millions)   2009     2008     Actual     Adjusted*     Currency     Portfolio  
Imaging & IT
    1,774       1,629       9 %     3 %     6 %     0 %
Workflow & Solutions
    412       376       10 %     7 %     3 %     0 %
Diagnostics
    867       816       6 %     0 %     6 %     0 %
 
*   Excluding currency translation and portfolio effects.
                                         
Divisions   Profit     Profit Margin  
    Three months             Three months  
    ended March 31,             ended March 31,  
( in millions)   2009     2008     %Change     2009     2008  
Imaging & IT
    265       236       12 %     14.9 %     14.5 %
Workflow & Solutions
    30       63       (52 )%     7.3 %     16.8 %
Diagnostics
    54       49       10 %     6.2 %     6.0 %
     Imaging & IT was again a top earnings performer for Siemens, with second-quarter profit rising to 265 million on an increase in profit margin year-over-year. Tight credit and the economic downturn continued to constrain market growth, particularly in the U.S. and Japan. Growth in the region Asia, Australia excluding Japan and in Europe, C.I.S., Africa, Middle East offset this weakness. On an organic basis, revenue for the Division was up 3% and orders declined 1%. The book-to-bill ratio was below 1.

18


Table of Contents

     Challenges related to the macroeconomic and financing environment intensified at Workflow & Solutions. While the Division posted higher revenue overall, key solutions businesses experienced revenue declines that reduced their profitability compared to the prior-year period. Combined with pricing pressure, this reduced profit and profit margin for the Division overall.
     Profit at Diagnostics rose to 54 million for the second quarter, up 10% from the prior-year quarter. The Division’s profit margin was reduced by PPA effects of 47 million and integration costs of 17 million associated with acquisitions. These factors together amounted to 7.5 percentage points. A year earlier, second-quarter PPA and integration costs at Diagnostics were 50 million and 52 million, respectively, and cut 12.4 percentage points from profit margin. Profit margin was influenced by effects related to new product introduction and write-downs of receivables. Second-quarter revenue was up 6% year-over-year and orders rose 5%. On an organic basis, primarily excluding currency translation effects, both revenue and orders were level with the prior-year period, as growth in Asia, Australia excluding Japan offset weakness in the Division’s large U.S. market.
Healthcare — Six months ended March 31, 2009
                                                 
Sector   Six months              
    ended March 31,     % Change     therein  
( in millions)   2009     2008     Actual     Adjusted*     Currency     Portfolio  
Profit
    697       673       4 %                        
Profit margin
    11.8 %     12.5 %                                
New orders
    5,847       5,596       4 %     (2 )%     4 %     2 %
Revenue
    5,920       5,375       10 %     3 %     5 %     2 %
 
*   Excluding currency translation and portfolio effects.
     For the first six months of fiscal 2009, Healthcare posted Sector profit of 697 million, up 4% compared to 673 million in the first six months a year earlier. The Imaging & IT Division again was one of Siemens’ top profit contributors in the period. Profit in both periods was negatively influenced by PPA effects and integration costs arising from acquisitions in fiscals 2007 and 2008 relating to the Diagnostics Division. Diagnostics recorded a total of 130 million in PPA effects and integration costs associated with acquisitions, including Dade Behring. PPA effects and integration costs were equivalent to 2.2 percentage points of Sector profit margin in the first half, compared to 3.5 percentage points in the prior-year period. Furthermore charges related to a major project at Workflow & Solutions held back profit growth year-over-year.
     First-half revenue for Healthcare rose 10% and new orders increased 4%. Within order development, Asia, Australia posted a double-digit increase, while orders in the Americas were up 2% and orders in Europe, C.I.S., Africa, Middle East came in slightly below the prior-year period. On an organic basis, revenue rose 3% and orders decreased 2%. In the first half the book-to-bill ratio for the Sector was just below 1, compared to 1.04 in the prior-year period.
                                                 
Divisions   New Orders  
    Six months              
    ended March 31,     % Change     therein  
( in millions)   2009     2008     Actual     Adjusted*     Currency     Portfolio  
Imaging & IT
    3,430       3,349       2 %     (2 )%     4 %     0 %
Workflow & Solutions
    824       855       (4 )%     (6 )%     2 %     0 %
Diagnostics
    1,731       1,535       13 %     0 %     5 %     8 %
 
*   Excluding currency translation and portfolio effects.
                                                 
Divisions   Revenue  
    Six months              
    ended March 31,     % Change     therein  
( in millions)   2009     2008     Actual     Adjusted*     Currency     Portfolio  
Imaging & IT
    3,543       3,279       8 %     3 %     5 %     0 %
Workflow & Solutions
    785       724       8 %     6 %     2 %     0 %
Diagnostics
    1,739       1,528       14 %     1 %     5 %     8 %
 
*   Excluding currency translation and portfolio effects.

19


Table of Contents

                                         
Divisions   Profit     Profit Margin  
    Six months             Six months  
    ended March 31,             ended March 31,  
( in millions)   2009     2008     %Change     2009     2008  
Imaging & IT
    527       468       13 %     14.9 %     14.3 %
Workflow & Solutions
    24       98       (76 )%     3.1 %     13.5 %
Diagnostics
    137       116       18 %     7.9 %     7.6 %
     Similar to the first half a year earlier, the Imaging & IT Division contributed the majority of Sector profit. Profit for the Division in the first six months of fiscal 2009 increased 13% to 527 million compared to 468 million a year earlier. Despite challenging conditions in the U.S., Imaging & IT achieved a 3% rise in revenue on an organic basis, while organic orders declined 2% compared to the prior-year period.
     Workflow & Solutions posted first-half profit of 24 million, down from 98 million in the prior-year period. The decline is due to the profitability issues mentioned above as well as charges related to project delays in the particle therapy business, only partly offset by 11 million in divestment gains.
     The Diagnostics Division contributed 137 million to Sector profit in the first half compared to 116 million in the first half of fiscal 2008. For comparison, the prior-year six-month period included only five months of income from Dade Behring. PPA effects and integration costs related to acquisitions were equivalent to 7.5 percentage points of profit margin in the first half, including PPA effects of 93 million and integration costs of 37 million. A year earlier, first-half PPA and integration costs at Diagnostics were 101 million and 87 million, respectively, equivalent to 12.3 percentage points of profit margin. The Division posted double-digit growth in both revenue and orders in the first six months. On an organic basis, revenue rose 1% and orders were flat compared to the first half a year earlier.
Equity Investments
     Equity Investments includes equity stakes not allocated to a Sector or Cross-Sector Business by reason of strategic fit as well as investments. Major components of Equity Investments include our shares in NSN and BSH Bosch und Siemens Hausgeräte GmbH. Equity Investments recorded a loss of 113 million in the second quarter compared to a profit of 35 million a year earlier. The difference was mainly due to NSN, which posted a loss of 136 million compared to a loss of 45 million in the prior-year period. The change year-over-year included an operating loss as well as higher restructuring and integration costs, which were 123 million in the current period compared to 100 million in the second quarter of fiscal 2008.
     Equity Investments incurred a loss of 28 million in the first six months of fiscal 2009 compared to a profit of 71 million a year earlier. The decrease was mainly due to NSN, which recorded restructuring and integration costs of 409 million in the current six months compared to 220 million in the first six months of fiscal 2008. The equity investment loss related to NSN increased to 143 million in the first half of fiscal 2009 compared to 82 million a year earlier. Profit from Equity Investments is expected to be volatile in coming quarters.
Cross-Sector Businesses
Siemens IT Solutions and Services — Three months ended March 31, 2009
                                                 
    Three months              
    ended March 31,     % Change     therein  
( in millions)   2009     2008     Actual     Adjusted*     Currency     Portfolio  
Profit
    25       (35 )                              
Profit margin
    2.2 %     (2.8 )%                                
New orders
    1,081       1,445       (25 )%     (21 )%     (1 )%     (3 )%
Revenue
    1,136       1,266       (10 )%     (4 )%     (2 )%     (4 )%
 
*   Excluding currency translation and portfolio effects.

20


Table of Contents

     Siemens IT Solutions and Services posted a profit of 25 million compared to a loss of 35 million in the second quarter a year earlier, which included significant charges related to large projects in the U.K. Project charges were significantly lower in the current period. Profitability was held back by pricing pressure and a 10% decline in revenue year-over-year. Orders fell 25% compared to the prior-year period, which included two major orders.
Siemens IT Solutions and Services — Six months ended March 31, 2009
                                                 
    Six months              
    ended March 31,     % Change     therein  
( in millions)   2009     2008     Actual     Adjusted*     Currency     Portfolio  
Profit
    71       35       103 %                        
Profit margin
    2.9 %     1.3 %                                
New orders
    2,312       2,670       (13 )%     (9 )%     (1 )%     (3 )%
Revenue
    2,425       2,606       (7 )%     (2 )%     (2 )%     (3 )%
 
*   Excluding currency translation and portfolio effects.
     Profit at Siemens IT Solutions and Services for the first six months of fiscal 2009 was 71 million. First-half profit a year earlier was 35 million, including the charges mentioned above. Profitability in the current six months was negatively influenced by pricing pressure and lower revenue.
Siemens Financial Services (SFS) — Three and six months ended March 31, 2009
                                                 
    Three months             Six months        
    ended March 31,             ended March 31,        
( in millions)   2009     2008     %Change     2009     2008     %Change  
Profit
    117       101       16 %     183       178       3%   
                         
    March 31,     Sept. 30,          
    2009     2008          
Total assets
    11,923       11,328       5 %
     Income before income taxes at Siemens Financial Services (SFS) was 117 million in the second quarter compared to 101 million in the same period a year earlier. The current quarter included higher interest income and higher results from internal services business, partly offset by a further increase in reserves for the commercial finance business. In the prior-year quarter the equity business benefited from higher dividends.
     In the first half of fiscal 2009 income before income taxes at Siemens Financial Services (SFS) was 183 million compared to 178 million in the same period a year earlier. The first six months of fiscal 2009 included higher interest income and higher results from internal services business, partly offset by a significant increase in reserves for the commercial finance business. Total assets rose to 11.923 billion, driven in part by growth in customer financing activity.
Reconciliation to Consolidated Financial Statements
     Reconciliation to Consolidated Financial Statements includes Other Operations, Siemens Real Estate (SRE) and various categories of items which are not allocated to the Sectors and Cross-Sector Businesses because Management has determined that such items are not indicative of the Sectors’ and Cross-Sector Businesses’ respective performance.

21


Table of Contents

Other Operations
     Other Operations consist primarily of operating business activities not allocated to a Sector or Cross-Sector Business which are to be integrated into a Siemens Sector or Cross-Sector Business, divested, moved to a joint venture, or closed. Progress with these actions reduced revenue from Other Operations to 211 million in the second quarter, down from 730 million in the same period a year earlier. Following a strategic review during the current period the EA business was classified as held for disposal. Management responsibility was transferred from Drive Technologies to Other Operations and financial information for EA is now presented within Other Operations on a retroactive basis. EA posted a loss of 86 million including charges related to impairments and severance expenses in the current quarter, compared to a loss of 10 million a year earlier. This in turn increased the loss from Other Operations to 105 million from a loss of 64 million in the prior-year quarter. A loss related to the divestment of an industrial manufacturing unit in Austria was mostly offset by positive effects related to former Com activities. The prior-year period included expenses of 46 million related to the closure of a regional payphone unit in Europe, primarily for severance.
     For the first half of the fiscal year, the result of Other Operations was a negative 145 million, compared to a negative 137 million a year earlier. In addition to the factors mentioned above, the change year-over-year also included a first-quarter loss of 27 million related to EA in fiscal 2009, resulting in a loss of 113 million for that business for the first six months, compared to 19 million in the first half a year earlier. In the prior-year period, Other Operations also included a goodwill impairment of 70 million related to a building and infrastructure business. Sales for Other Operations in the first six months of fiscal 2009 were 538 million, down from 1.540 billion a year earlier, with the prior-year period also including higher revenue related to EA.
Siemens Real Estate
     Income before income taxes at SRE was 37 million in the second quarter, down from 60 million in the same period a year earlier, primarily due to lower gains from sales of real estate. During the second quarter, Siemens sold residential real estate holdings to a consortium comprising Wohnbau GmbH, the GBW Gruppe and the Volkswohnung GmbH. This transaction is expected to produce a substantial gain in the third quarter.
     Income before income tax for the first half of fiscal 2009 was 82 million, down from 199 million in the prior-year period, also mainly due to lower gains from sales of real estate. SRE intends to continue real estate disposals in coming quarters, depending on market conditions.
Corporate items and pensions
     Corporate items and pensions totaled a negative 442 million in the second quarter compared to a negative 522 million in the same period a year earlier. The improvement was due to Corporate items, which were a negative 359 million compared to a negative 526 million in the prior-year period. Within this change, expenses for outside advisors engaged in connection with investigations into alleged violations of anti-corruption laws and related matters as well as remediation activities declined again, to 33 million from 148 million in the second quarter a year earlier. This more than offset a charge related to legal and regulatory matters and net expenses of 33 million, which includes new termination benefits incurred in the second quarter of fiscal 2009 under the SG&A program and other personnel-related restructuring measures. It also includes a gain attributable to the reversal of termination benefits recognized as of September 30, 2008 for the German part of SG&A and related programs which is due to a change in estimate on the respective program measures, i.e. more intensive use of the early retirement arrangements as compared to severance payments in conjunction with transfer companies. The prior-year period included 64 million related to a regional sales organization in Germany, including an impairment, as well as a 32 million donation to the Siemens Foundation in the U.S. Similar to the first quarter, centrally carried pension expense swung to a negative 83 million from a positive 4 million in the second quarter a year earlier, due primarily to higher interest cost and lower expected return on plan assets.
     In the first half of the fiscal year, Corporate items and pensions totaled a negative 678 million compared to a negative 837 million in the prior-year period. Therein included, Corporate items declined from a negative 864 million to a negative 525 million. A major factor in this change was lower expenses for outside advisors engaged in connection with investigations into alleged violations of anti-corruption laws and related matters as well as remediation activities, which declined to 82 million from 241 million a year earlier. In addition to the other factors mentioned above for the second quarter, the first half benefited from a positive effect related to shifting an employment bonus program from cash-based to share-based payment. Centrally carried pension expense swung to a negative 153 million from a positive 27 million in the first half a year earlier, for the reasons mentioned above.

22


Table of Contents

Eliminations, Corporate Treasury and other reconciling items
     Income before income taxes from Eliminations, Corporate Treasury and other reconciling items in the second quarter of fiscal 2009 was a negative 28 million, compared to a negative 74 million in the prior-year period. The difference was due mainly to positive results from hedging activities not qualifying for hedge accounting related in particular to a decline in euro interest rates.
     In the first half of fiscal 2009, income before income taxes from Eliminations, Corporate Treasury and other reconciling items was a negative 291 million compared to a negative 173 million in the first half a year earlier. The decline was due mainly to negative results of hedging activities not qualifying for hedge accounting related in particular to a decline in U.S. dollar interest rates partly offset by positive results mentioned above.

23


Table of Contents

Reconciliation to EBITDA (continuing operations)
The following table gives additional information on topics included in Profit and Income before income taxes and provides a reconciliation to EBITDA (adjusted):
For the six months ended March 31, 2009 and 2008 (in millions of )
                                                                                                                 
                    Income (loss)                                                   Depreciation    
                    from investments                                                   and impairments    
                    accounted for                                                   of property, plant    
                    using the equity   Financial income   EBIT                   and equipment   EBITDA
    Profit(1)   method, net(2)   (expense), net(3)   (adjusted)(4)   Amortization(5)   and goodwill(6)   (adjusted)
    2009   2008   2009   2008   2009   2008   2009   2008   2009   2008   2009   2008   2009   2008
Sectors and Divisions
                                                                                                               
Industry Sector
    1,605       1,944             9       (8 )     2       1,613       1,933       183       161       328       316       2,124       2,410  
Industry Automation
    352       786       1       (1 )     2       4       349       783       94       79       53       48       496       910  
Drive Technologies
    504       566             1       (1 )     (1 )     505       566       24       24       69       63       598       653  
Building Technologies
    221       202             1       (2 )     3       223       198       31       33       39       38       293       269  
OSRAM
    100       248       1       2       (2 )           101       246       14       12       109       102       224       360  
Industry Solutions
    237       212             3       1             236       209       17       12       31       27       284       248  
Mobility
    191       (72 )     (2 )     1       (6 )     (4 )     199       (69 )     4       2       26       40       229       (27 )
Energy Sector
    1,574       353       24       48       (13 )     (4 )     1,563       309       35       37       139       120       1,737       466  
Fossil Power Generation
    601       (303 )     12       34       (13 )     (6 )     602       (331 )     8       8       46       40       656       (283 )
Renewable Energy
    206       87       2       2                   204       85       3       2       18       11       225       98  
Oil & Gas
    227       144                               227       144       14       14       27       27       268       185  
Power Transmission
    320       269       9       11       1       2       310       256       5       5       31       25       346       286  
Power Distribution
    213       155       1       1       (1 )     (1 )     213       155       4       6       15       14       232       175  
Healthcare Sector
    697       673       24       15       6       9       667       649       147       135       173       164       987       948  
Imaging & IT
    527       468       4       3       1       1       522       464       53       55       41       44       616       563  
Workflow & Solutions
    24       98       11       1       (1 )     3       14       94       2       2       12       9       28       105  
Diagnostics
    137       116             3       5       5       132       108       91       78       117       108       340       294  
 
                                                       
Total Sectors
    3,876       2,970       48       72       (15 )     7       3,843       2,891       365       333       640       600       4,848       3,824  
 
                                                       
Equity Investments
    (28 )     71       (44 )     71       24             (8 )                                   (8 )      
Cross-Sector Businesses
                                                                                                               
Siemens IT Solutions and Services
    71       35       14       23       1       7       56       5       21       23       82       88       159       116  
Siemens Financial Services (SFS)
    183       178       85       35       50       113       48       30       2       2       157       139       207       171  
Reconciliation to Consolidated Financial Statements
                                                                                                               
Other Operations
    (145 )     (137 )           1       1       1       (146 )     (139 )     12       17       53       107       (81 )     (15 )
Siemens Real Estate (SRE)
    82       199                   (16 )     (26 )     98       225                   74       79       172       304  
Corporate items and pensions
    (678 )     (837 )           (1 )     (188 )     67       (490 )     (903 )     2       40       17       15       (471 )     (848 )
Eliminations, Corporate Treasury and other reconciling items
    (291 )     (173 )     (35 )     8       (181 )     (144 )     (75 )     (37 )           2       (36 )     (33 )     (111 )     (68 )
 
                                                       
Siemens
    3,070       2,306       68       209       (324 )     25       3,326       2,072       402       417       987       995       4,715       3,484  
 
                                                       
 
(1)   Profit of the Sectors and Divisions as well as of Equity Investments, Siemens IT Solutions and Services and Other Operations is earnings before financing interest, certain pension costs and income taxes. Certain other items not considered performance indicative by Management may be excluded. Profit of SFS and SRE is Income before income taxes.
(2)   Includes impairments and reversals of impairments of investments accounted for using the equity method.
(3)   Includes impairment of non-current available-for-sale financial assets.
(4)   Adjusted EBIT is Income from continuing operations before income taxes less Financial income (expense), net and Income (loss) from investments accounted for using the equity method, net.
(5)   Amortization and impairments of intangible assets other than goodwill.
(6)   Includes impairments of goodwill of 16 and 73 for the six months ended March 31, 2009 and 2008, respectively.
Electronics Assembly Systems was reclassified from Industry to Other Operations in the second quarter of fiscal 2009. Prior-year amounts were reclassified for comparison purposes.

24


Table of Contents

Liquidity, capital resources and capital requirements
Cash flow — First six months of fiscal 2009 compared to first six months of fiscal 2008
The following discussion presents an analysis of Siemens’ cash flows for the first six months of fiscal 2009 and 2008. The table below presents cash flows for both continuing and discontinued operations. In the periods under review discontinued operations include SV, which was sold to Continental AG in fiscal 2008, as well as the former Com activities. For information on the disposal of the former operating segment Com see Note 4 to the Company’s Consolidated Financial Statements as of September 30, 2008.
Siemens reports Free cash flow as a performance measure, which is defined as “Net cash provided by (used in) operating activities” less cash used for “Additions to intangible assets and property, plant and equipment.” We believe this measure is helpful to our investors as an indicator of our ability to generate cash from operations and to pay for discretionary and non-discretionary expenditures not included in the measure, such as dividends, debt repayment or acquisitions. We also use Free cash flow to compare cash generation among the segments of our business. Free cash flow should not be considered in isolation as an alternative to measures of cash flow calculated in accordance with IFRS. For further information about this measure, refer to “Notes to Interim Consolidated Financial Statements — Segment information” and to the end of this Interim group management report.
                                                     
                                        Continuing and  
        Continuing operations     Discontinued operations     discontinued operations  
        Six months ended March 31,  
        2009     2008     2009     2008     2009     2008  
( in millions)  
Net cash provided by (used in):
                                                   
Operating activities
  A     850       2,756       (112 )     (583 )     738       2,173  
Investing activities
        (2,026 )     (5,947 )     (218 )     10,853       (2,244 )     4,906  
Herein: Additions to intangible assets and property, plant and equipment
  B     (1,286 )     (1,350 )           (127 )     (1,286 )     (1,477 )
Free cash flow*
  A+B     (436 )     1,406       (112 )     (710 )     (548 )     696  
 
*   The closest comparable financial measure under IFRS is “Net cash provided by (used in) operating activities.” “Net cash provided by (used in) operating activities” from continuing operations as well as from continuing and discontinued operations is reported within the “Consolidated Statements of Cash Flow” for Siemens. “Additions to intangible assets and property, plant and equipment” from continuing operations is reconciled to the figures as reported in the “Consolidated Statements of Cash Flow” in the “Notes to Interim Consolidated Financial Statements.” Other companies that report Free cash flow may define and calculate it differently.
Operating activities provided net cash of 738 million in the first six months of fiscal 2009, compared to net cash provided of 2.173 billion in the prior-year period. These results include both continuing and discontinued operations. Within the total, continuing operations provided net cash of 850 million, compared to net cash provided of 2.756 billion in the same period a year earlier. In the first six months of fiscal 2009 Siemens posted substantial cash outflows in connection with previously disclosed charges to income in the previous fiscal year. These outflows primarily include 1.008 billion paid to authorities in Germany and in the U.S. related to the resolution of legal proceedings and a total of 574 million related to global SG&A reduction, project charges in Fossil Power Generation, Mobility and at Siemens IT Solutions and Services, and structural initiatives at Healthcare, OSRAM and Mobility. In contrast, the prior period benefited from a substantial increase in billings in excess, especially at the Energy Sector. Discontinued operations improved to net cash used of 112 million in the first six months of fiscal 2009. For comparison, net cash used of 583 million in the prior-year period included a payment of a 201 million fine related to former Com activities.
Investing activities in continuing and discontinued operations used net cash of 2.244 billion in the first six months, compared to net cash provided of 4.906 billion in the prior-year period. Within the total, net cash used in investing activities for continuing operations amounted to 2.026 billion in the current first six months and 5.947 billion in the prior-year period. The current period included cash outflows of 0.5 billion related to a drawdown request by NSN in relation to a Shareholder Loan Agreement between Siemens and NSN. In the prior-year period, cash outflows related primarily to the acquisition of Dade Behring at Healthcare for 4.4 billion (net of 69 million cash acquired). Discontinued operations in the first six months of fiscal 2009 used net cash of 218 million. This total includes cash outflows related to the divestment of our mobile devices business in fiscal 2005, including 300 million related to a settlement with the insolvency administrator of BenQ Mobile GmbH & Co. OHG as well as cash outflows related to the settlement of legal matters. In the same period a year earlier, discontinued operations provided 10.853 billion in net cash due primarily to proceeds of 11.4 billion from the sale of SV.

25


Table of Contents

Free cash flow from continuing and discontinued operations for Siemens amounted to a negative 548 million in the first half of fiscal 2009, compared to positive 696 million in the prior-year period. Within the total, Free cash flow for continuing operations in the current period amounted to a negative 436 million, compared to a positive 1.406 billion in the first half a year earlier. The change year-over-year was due primarily to the decrease in net cash provided by operating activities as discussed above. Cash used for capital expenditure within continuing operations was 1.286 billion in the first six months of fiscal 2009, down from cash used of 1.350 billion in the prior-year period. The cash conversion rate for continuing operations, calculated as Free cash flow from continuing operations divided by income from continuing operations, was a negative 0.20 for the first half of fiscal 2009 compared to a positive 0.86 in the prior-year period.
Financing activities from continuing and discontinued operations provided net cash of 2.279 billion in the first half of fiscal 2009, compared to net cash used of 6.005 billion in the prior-year period. The increase in net cash is due primarily to the issuance of 4.0 billion in medium-term notes. In the first six months of fiscal 2009 we received net cash inflows of 72 million from short-term debt and other financing activities. Cash provided by an increase of outstanding commercial paper of 1.1 billion was largely offset by payments related to settlements of financial derivatives used to hedge currency exposure regarding our financing activities. In the same period a year earlier, short-term debt and other financing activities were reduced by 1.571 billion, primarily due to the repayment of commercial paper and repayment of debt originally raised by Dade Behring in the amount of 0.4 billion. In addition, the prior-year period included cash used for the purchase of common stock of 1.998 billion. Dividends paid to shareholders (for fiscal 2008) in the current six months amounted to 1.380 billion, compared to 1.462 billion (paid for fiscal 2007) in the prior-year period.
Capital resources and requirements
Our capital resources consist of a variety of short- and long-term financial instruments including loans from financial institutions, commercial paper, medium-term notes and bonds. In addition, other capital resources consist of liquid resources such as cash and cash equivalents, future cash flows from operating activities and current available-for-sale financial assets.
We have an EMTN program under which we may issue medium-term notes. In December 2008 we increased the maximum issuable amount under this program from 5.0 billion to 10.0 billion. In February 2009, we issued 4.0 billion fixed-interest notes in two tranches comprising 2.0 billion 4,125% note due February 20, 2013 and 2.0 billion 5,125% note due February 20, 2017. The total nominal amount outstanding under the medium-term note program was 8.9 billion as of March 31, 2009. For further information see “Notes to Interim Consolidated Financial Statements.”
Our capital requirements include, among others, scheduled debt service, regular capital spending, ongoing cash requirements from operating activities, dividend payments and capital requirements for our share buyback plan if continued in fiscal 2010. In the first half of fiscal 2009, cash outflows totaled 1.582 billion in connection with fiscal 2008 charges for the resolution of legal proceedings in Germany and the U.S., as well as charges related to the global SG&A program, project reviews and structural initiatives. These outflows represent two-thirds of the total expected cash outflows in the current fiscal year related to these charges.
For further information regarding recent capital market transactions and our capital resources and capital requirements, please refer to “Liquidity and capital resources” and Note 23 of the “Notes to Consolidated Financial Statements” in our Annual Report for fiscal 2008.
Total debt relates to our notes and bonds, loans from banks, obligations under finance leases and other financial indebtedness such as commercial paper. Total debt comprises short-term debt and current maturities of long-term debt as well as long-term debt, as stated on the Consolidated Balance Sheets. Total liquidity refers to the liquid financial assets we had available at the respective balance sheet dates to fund our business operations and pay for near-term obligations. Total liquidity comprises Cash and cash equivalents as well as current Available-for-sale financial assets, as stated on the Consolidated Balance Sheets. Net debt results from total debt less total liquidity. Management uses the net debt measure for internal corporate finance management, as well as for external communication with rating agencies, and accordingly we believe that presentation of net debt is useful for investors. Net debt should not be considered in isolation as an alternative to short-term debt and long-term debt as presented in accordance with IFRS. For further information to Net debt, please refer to the end of this Interim group management report.

26


Table of Contents

                 
    March 31,     September 30,  
    2009     2008  
( in millions)  
Short-term debt and current maturities of long-term debt
    3,019       1,819  
Long-term debt
    19,697       14,260  
Total debt
    22,716       16,079  
Cash and cash equivalents
    7,684       6,893  
Available-for-sale financial assets (current)
    162       152  
Total liquidity
    7,846       7,045  
 
           
Net debt*
    14,870       9,034  
 
*   Siemens typically needs a considerable portion of its cash and cash equivalents as well as current available-for-sale financial assets at any given time for purposes other than debt reduction. The deduction of these items from total debt in the calculation of net debt therefore should not be understood to mean that these items are available exclusively for debt reduction at any given time.
Net debt was 14.870 billion as of March 31, 2009, compared to 9.034 billion as of September 30, 2008. Within net debt, short-term debt and current maturities of long-term debt increased by 1.200 billion compared to the end of the prior fiscal year, mainly on a higher net amount of outstanding commercial paper of 1.1 billion. The Company’s long-term debt increased by 5.437 billion compared to the end of the prior fiscal year, mainly due to the issuance of 4.0 billion in medium-term notes under the EMTN program and the effect of fair value hedge accounting. For further information on changes in net debt please refer to “Cash flow — First six months of fiscal 2009 compared to first six months of fiscal 2008 — Financing activities” above. For further information on fair value hedges see Note 32 of the “Notes to Consolidated Financial Statements” in our Annual Report for fiscal 2008.
Pension plan funding
At the end of the first six months of fiscal 2009, the combined funding status of Siemens’ principal pension plans showed an underfunding of 5.3 billion, compared to an underfunding of 2.5 billion at the end of fiscal 2008. The decline in funding status is due primarily to a negative actual return on plan assets and furthermore due to a decrease in the discount rate assumption as of March 31, 2009, which increased Siemens’ estimated defined benefit obligation (DBO), and negative effects of service and interest cost on the defined benefit obligation. While fixed-income investments yielded positive results in the first six months, equity investments performed negatively, resulting in an actual return on plan assets of a negative 1.248 billion. This represents a return of a negative 12.2% on an annualized basis, compared to the expected annual return of 6.5%.
The fair value of plan assets of Siemens’ principal funded pension plans as of March 31, 2009, was 18.4 billion, compared to 20.2 billion on September 30, 2008. In the first six months of fiscal 2009, employer contributions amounted to 70 million compared to 450 million in the prior-year period. Besides the negative actual return on plan assets, the decrease in plan assets was due to benefits paid and currency translation effects.
The estimated DBO for Siemens’ principal pension plans amounted to 23.7 billion as of March 31, 2009, 1.0 billion higher than the DBO of 22.7 billion as of September 30, 2008. The difference is due to a decrease in the discount rate assumption as of March 31, 2009 and to a minor extent due to the net of service and interest cost less benefits paid during the six months period. Currency translation effects had a slightly compensating effect.
For more information on Siemens’ pension plans, see “Notes to Interim Consolidated Financial Statements.”
Report on risks and opportunities
Within the scope of its entrepreneurial activities and the variety of its operations, Siemens is exposed to numerous risks which could negatively affect business development. For the early recognition and successful management of relevant risks we employ a number of coordinated risk management and control systems. Risk management facilitates the sustainable protection of our future corporate success as an integral part of all decisions and business processes of the Company.
In Siemens’ Annual Report for fiscal 2008 we described certain risks which could have a material adverse effect on our financial condition or results of operations and the design of our risk management system.

27


Table of Contents

Compared with the first quarter of fiscal 2009, the global economic situation has taken a significant turn for the worse leading to a decline in consumer and business confidence, increased unemployment and a reduced level of capital expenditures. Especially our Industry Sector is directly affected by weaker demand in the short cycle business. For significant developments regarding the impact of slowing global economic growth and tight credit markets on Siemens’ revenue, income and cash flows, as well as risks related to legal, compliance and regulatory developments, please refer to the sections entitled “Overview of financial results for the second quarter of fiscal 2009 (Three months ended March 31, 2009),” “Segment information analysis,” “Legal proceedings” and “Outlook” within this Interim Report.
During the first six months of fiscal 2009 we identified no further significant risks besides those presented in the Annual Report for fiscal 2008 and in the sections of this Interim Report entitled “Overview of financial results for the second quarter of fiscal 2009 (Three months ended March 31, 2009),” “Segment information analysis,” “Legal proceedings” and “Outlook.” Additional risks not known to us or that we currently consider immaterial could also impair our business operations. We do not expect to incur any risks that alone or in combination would appear to jeopardize the continuity of the Company’s business.
For information regarding opportunities, please refer to the section “Outlook” in the Annual Report for fiscal 2008.
For information concerning forward-looking statements and additional information, please also refer to the “Disclaimer” at the end of the “Interim group management report.”
Legal proceedings
For information on legal proceedings, see “Notes to Interim Consolidated Financial Statements.”
Subsequent events
After the close of the second quarter, Siemens completed the previously announced sale of its stake in Fujitsu Siemens Computers B.V. to Fujitsu Limited. Siemens expects to realize a gain on the transaction in the third quarter of fiscal 2009.
On April 24, 2009, after the close of the second quarter, Siemens and The Gores Group agreed to a settlement regarding pending requirements for purchase price adjustment and further mutual obligations in connection with the sale of a stake in Siemens Enterprise Communications GmbH & Co. KG. Siemens expects this settlement to result in a positive income effect within discontinued operations in the third quarter.
Outlook
During the first half of fiscal 2009, the macroeconomic environment has significantly turned down. Main indicators like gross domestic product, the Purchasing Managers Index in the U.S., the Euro-zone Manufacturing Purchasing Managers Index (PMI) and the development of order intake reported by the Verband Deutscher Maschinen- und Anlagenbau (VDMA) declined significantly. Leading economic research institutes continuously revised their economic estimates, e.g. Global Insight, Inc. revised the estimate for global GDP growth for 2009 since November 2008 from plus 1.1% to minus 0.5% in January 2009 to minus 2.5% as of April 14, 2009. In light of these developments, management updated the outlook for fiscal 2009.
The current macroeconomic and financing environment shows no evidence of near-term improvement. Despite these conditions, Total Sectors profit for fiscal 2009 is expected to exceed the prior-year level of 6.6 billion. We expect growth in income from continuing operations in fiscal 2009 to exceed growth in Total Sectors profit. This outlook excludes portfolio effects and impacts from legal and regulatory matters. For fiscal 2009 Siemens targeted revenue growth at least twice the rate of actual global GDP growth. If GDP growth is negative, this means that a percentage decline in revenue for Siemens would be targeted at less than half the rate of decline in global GDP.

28


Table of Contents

Adjusted or organic growth rates of revenue and new orders; Return on equity, or ROE; Return on capital employed, or ROCE; Cash conversion rate, or CCR; Free cash flow; Earnings before interest, taxes, depreciation and amortization, or EBITDA (adjusted); and Net debt are or may be non-GAAP financial measures. These supplemental financial measures should not be viewed in isolation as alternatives to measures of our financial condition, results of operations or cash flows as presented in accordance with IFRS in our Consolidated Financial Statements. A definition of these supplemental financial measures, a reconciliation to the most directly comparable IFRS financial measures and information regarding the usefulness and limitations of these supplemental financial measures can be found on our Investor Relations website at www.siemens.com/nonGAAP.
This document contains forward-looking statements and information — that is, statements related to future, not past, events. These statements may be identified by words such as “expects,” “looks forward to,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “will,” “project” or words of similar meaning. Such statements are based on our current expectations and certain assumptions, and are, therefore, subject to certain risks and uncertainties. A variety of factors, many of which are beyond Siemens’ control, affect our operations, performance, business strategy and results and could cause the actual results, performance or achievements of Siemens to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements. For us, particular uncertainties arise, among others, from changes in general economic and business conditions (including margin developments in major business areas and recessionary trends); the possibility that customers will delay conversion of booked orders into revenue or that our pricing power will be diminished by continued adverse market developments, to a greater extent than we currently expect; the behavior of financial markets, including fluctuations in interest and exchange rates, commodity and equity prices, debt prices (credit spreads) and financial assets generally; continued volatility and further deterioration of the capital markets; the commercial credit environment and, in particular, additional uncertainties arising out of the subprime, financial market and liquidity crises; future financial performance of major industries that we serve, including, without limitation, the Sectors Industry, Energy and Healthcare; the challenges of integrating major acquisitions and implementing joint ventures and other significant portfolio measures; introduction of competing products or technologies by other companies; lack of acceptance of new products or services by customers targeted by Siemens; changes in business strategy; the outcome of pending investigations and legal proceedings, including corruption investigations to which we are currently subject and actions resulting from the findings of these investigations; the potential impact of such investigations and proceedings on our ongoing business including our relationships with governments and other customers; the potential impact of such matters on our financial statements; as well as various other factors. More detailed information about certain of these factors is contained throughout this report and in our other filings with the SEC, which are available on the Siemens website, www.siemens.com, and on the SEC’s website, www.sec.gov. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in the relevant forward-looking statement as expected, anticipated, intended, planned, believed, sought, estimated or projected. Siemens does not intend or assume any obligation to update or revise these forward-looking statements in light of developments which differ from those anticipated.

29


Table of Contents

SIEMENS
CONSOLIDATED STATEMENTS OF INCOME (unaudited)
For the three and six months ended March 31, 2009 and 2008
(in millions of , per share amounts in )
                                     
        Three months   Six months
        ended March 31,   ended March 31,
    Note   2009   2008   2009   2008
Revenue
        18,955       18,094       38,589       36,494  
Cost of goods sold and services rendered
        (13,994 )     (13,178 )     (27,988 )     (26,273 )
 
                                   
Gross profit
        4,961       4,916       10,601       10,221  
Research and development expenses
        (972 )     (918 )     (1,886 )     (1,765 )
Marketing, selling and general administrative expenses
        (2,520 )     (3,243 )     (5,388 )     (6,298 )
Other operating income
  3     99       187       284       377  
Other operating expense
  4     (168 )     (257 )     (285 )     (463 )
Income (loss) from investments accounted for using the equity method, net
        (49 )     101       68       209  
Financial income (expense), net
  5     (16 )     3       (324 )     25  
 
                                   
Income from continuing operations before income taxes
        1,335       789       3,070       2,306  
Income taxes
        (380 )     (224 )     (855 )     (663 )
 
                                   
Income from continuing operations
        955       565       2,215       1,643  
Income (loss) from discontinued operations, net of income taxes
        58       (153 )     28       5,244  
 
                                   
Net income
        1,013       412       2,243       6,887  
 
                                   
Attributable to:
                                   
Minority interest
        51       28       78       71  
Shareholders of Siemens AG
        962       384       2,165       6,816  
Basic earnings per share
  14                                
Income from continuing operations
        1.05       0.59       2.48       1.73  
Income (loss) from discontinued operations
        0.06       (0.17 )     0.03       5.76  
 
                                   
Net income
        1.11       0.42       2.51       7.49  
 
                                   
Diluted earnings per share
  14                                
Income from continuing operations
        1.04       0.59       2.46       1.72  
Income (loss) from discontinued operations
        0.06       (0.17 )     0.03       5.74  
 
                                   
Net income
        1.10       0.42       2.49       7.46  
 
                                   
CONSOLIDATED STATEMENTS OF INCOME AND EXPENSE RECOGNIZED IN EQUITY (unaudited)
For the three and six months ended March 31, 2009 and 2008
(in millions of )
                                     
        Three months   Six months
        ended March 31,   ended March 31,
        2009   2008   2009   2008
Net income
        1,013       412       2,243       6,887  
Currency translation differences
        148       (545 )     (308 )     (812 )
Available-for-sale financial assets
        2       (82 )     9       (72 )
Derivative financial instruments
        (105 )     140       (11 )     184  
Actuarial gains and losses on pension plans and similar commitments
        (626 )     168       (2,177 )     187  
 
                                   
Total income and expense recognized directly in equity, net of tax (1) (2)
        (581 )     (319 )     (2,487 )     (513 )
 
                                   
Total income and expense recognized in equity
        432       93       (244 )     6,374  
 
                                   
Attributable to:
                                   
Minority interest
        67       1       110       41  
Shareholders of Siemens AG
        365       92       (354 )     6,333  
 
(1)   Includes income and (expense) resulting from investments accounted for using the equity method of (46) and 102 for the three months ended March 31, 2009 and 2008, respectively, and (9) and 127 for the six months ended March 31, 2009 and 2008, respectively.
(2)   Includes minority interest relating to currency translation differences of 16 and (27) for the three months ended March 31, 2009 and 2008, respectively, and 32 and (30) for the six months ended March 31, 2009 and 2008, respectively.
The accompanying Notes are an integral part of these Interim Consolidated Financial Statements.

30


Table of Contents

SIEMENS
CONSOLIDATED BALANCE SHEETS
As of March 31, 2009 (unaudited) and September 30, 2008
(in millions of )
                     
    Note   3/31/09     9/30/08  
ASSETS
Current assets
                   
Cash and cash equivalents
        7,684       6,893  
Available-for-sale financial assets
        162       152  
Trade and other receivables
        15,230       15,785  
Other current financial assets
        3,459       3,116  
Inventories
        15,488       14,509  
Income tax receivables
        582       610  
Other current assets
        1,390       1,368  
Assets classified as held for disposal
  2     771       809  
 
               
Total current assets
        44,766       43,242  
 
               
Goodwill
  6     16,491       16,004  
Other intangible assets
  7     5,384       5,413  
Property, plant and equipment
        11,380       11,258  
Investments accounted for using the equity method
        6,822       7,017  
Other financial assets
        10,084       7,785  
Deferred tax assets
        3,142       3,009  
Other assets
        673       735  
 
               
Total assets
        98,742       94,463  
 
               
 
                   
LIABILITIES AND EQUITY
Current liabilities
                   
Short-term debt and current maturities of long-term debt
        3,019       1,819  
Trade payables
        7,831       8,860  
Other current financial liabilities
        2,701       2,427  
Current provisions
        3,993       5,165  
Income tax payables
        1,778       1,970  
Other current liabilities
        20,689       21,644  
Liabilities associated with assets classified as held for disposal
  2     147       566  
 
               
Total current liabilities
        40,158       42,451  
 
               
Long-term debt
  8     19,697       14,260  
Pension plans and similar commitments
  9     7,131       4,361  
Deferred tax liabilities
        790       726  
Provisions
        2,594       2,533  
Other financial liabilities
        307       376  
Other liabilities
        2,091       2,376  
 
               
Total liabilities
        72,768       67,083  
 
               
Equity
  10                
Common stock, no par value (1)
        2,743       2,743  
Additional paid-in capital
        5,923       5,997  
Retained earnings
        21,597       22,989  
Other components of equity
        (1,295 )     (953 )
Treasury shares, at cost (2)
        (3,632 )     (4,002 )
 
               
Total equity attributable to shareholders of Siemens AG
        25,336       26,774  
 
               
Minority interest
        638       606  
 
               
Total equity
        25,974       27,380  
 
               
Total liabilities and equity
        98,742       94,463  
 
               
 
(1)   Authorized: 1,111,513,421 and 1,137,913,421 shares, respectively.
Issued: 914,203,421 and 914,203,421 shares, respectively.
(2)   47,777,538 and 52,645,665 shares, respectively.
The accompanying Notes are an integral part of these Interim Consolidated Financial Statements.

31


Table of Contents

SIEMENS
CONSOLIDATED STATEMENTS OF CASH FLOW (unaudited)
For the six months ended March 31, 2009 and 2008
(in millions of )
                 
    2009   2008
Cash flows from operating activities
               
Net income
    2,243       6,887  
Adjustments to reconcile net income to cash provided
               
Amortization, depreciation and impairments
    1,349       1,467  
Income taxes
    862       604  
Interest (income) expense, net
    (38 )     13  
(Gains) losses on sales and disposals of businesses, intangibles and property, plant and equipment, net
    10       (5,743 )
(Gains) on sales of investments, net (1)
    (22 )     (15 )
(Gains) losses on sales and impairments of current available-for-sale financial assets, net
    7       (2 )
(Income) from investments (1)
    (34 )     (252 )
Other non-cash (income) expenses
    238       558  
Change in current assets and liabilities
               
(Increase) decrease in inventories
    (1,212 )     (1,281 )
(Increase) decrease in trade and other receivables
    524       8  
(Increase) decrease in other current assets
    (728 )     (700 )
Increase (decrease) in trade payables
    (948 )     (400 )
Increase (decrease) in current provisions
    (979 )     416  
Increase (decrease) in other current liabilities
    (230 )     1,494  
Change in other assets and liabilities
    (159 )     (344 )
Income taxes paid
    (717 )     (989 )
Dividends received
    159       59  
Interest received
    413       393  
 
               
Net cash provided by (used in) operating activities — continuing and discontinued operations
    738       2,173  
Net cash provided by (used in) operating activities — continuing operations
    850       2,756  
Cash flows from investing activities
               
Additions to intangible assets and property, plant and equipment
    (1,286 )     (1,477 )
Acquisitions, net of cash acquired
    (172 )     (4,528 )
Purchases of investments (1)
    (644 )     (109 )
Purchases of current available-for-sale financial assets
    (26 )     (8 )
(Increase) decrease in receivables from financing activities
    (180 )     (594 )
Proceeds from sales of investments, intangibles and property, plant and equipment (1)
    296       404  
Proceeds and payments from disposals of businesses
    (244 )     11,188  
Proceeds from sales of current available-for-sale financial assets
    12       30  
 
               
Net cash provided by (used in) investing activities — continuing and discontinued operations
    (2,244 )     4,906  
Net cash provided by (used in) investing activities — continuing operations
    (2,026 )     (5,947 )
Cash flows from financing activities
               
Purchase of common stock
          (1,998 )
Proceeds from re-issuance of treasury stock
    134       243  
Proceeds from issuance of long-term debt
    3,973        
Repayment of long-term debt (including current maturities of long-term debt)
          (643 )
Change in short-term debt and other financing activities
    72       (1,571 )
Interest paid
    (432 )     (499 )
Dividends paid
    (1,380 )     (1,462 )
Dividends paid to minority shareholders
    (88 )     (75 )
 
               
Net cash provided by (used in) financing activities — continuing and discontinued operations
    2,279       (6,005 )
Net cash provided by (used in) financing activities — continuing operations
    1,949       4,949  
Effect of exchange rates on cash and cash equivalents
    33       (149 )
Net increase (decrease) in cash and cash equivalents
    806       925  
Cash and cash equivalents at beginning of period
    6,929       4,940  
 
               
Cash and cash equivalents at end of period
    7,735       5,865  
Less: Cash and cash equivalents of assets classified as held for disposal and discontinued operations at end of period
    51       251  
 
               
Cash and cash equivalents at end of period (Consolidated Balance Sheets)
    7,684       5,614  
 
               
 
(1)   Investments include equity instruments either classified as non-current available-for-sale financial assets or accounted for using the equity method.
The accompanying Notes are an integral part of these Interim Consolidated Financial Statements.

32


Table of Contents

SIEMENS
CONSOLIDATED CHANGES IN EQUITY (unaudited)
For the six months ended March 31, 2009 and 2008
(in millions of )
                                                                                           
                            Other components of equity                            
                                    Available-                             Total equity              
            Additional             Currency     for-sale     Derivative             Treasury     attributable              
    Common     paid-in     Retained     translation     financial     financial             shares     to shareholders     Minority     Total  
    stock     capital     earnings     differences     assets     instruments     Total     at cost     of Siemens AG     interest     equity  
Balance at October 1, 2007
    2,743       6,080       20,453       (475 )     126       69       (280 )           28,996       631       29,627  
 
                                                                 
Income and expense recognized in equity
                7,003       (782 )     (72 )     184       (670 )           6,333       41       6,374  
Dividends
                (1,462 )                                   (1,462 )     (76 )     (1,538 )
Issuance of common stock and share-based payment
          41                                           41             41  
Purchase of common stock
                                              (1,998 )     (1,998 )           (1,998 )
Re-issuance of treasury stock
          (67 )                                   343       276             276  
Other changes in equity
          (14 )     (11 )                                   (25 )     (42 )     (67 )
 
                                                                 
Balance at March 31, 2008
    2,743       6,040       25,983       (1,257 )     54       253       (950 )     (1,655 )     32,161       554       32,715  
 
                                                                 
 
                                                                                       
Balance at October 1, 2008
    2,743       5,997       22,989       (789 )     4       (168 )     (953 )     (4,002 )     26,774       606       27,380  
 
                                                                 
Income and expense recognized in equity
                (12 )     (340 )     9       (11 )     (342 )           (354 )     110       (244 )
Dividends
                (1,380 )                                   (1,380 )     (67 )     (1,447 )
Issuance of common stock and share-based payment
          39                                           39             39  
Purchase of common stock
                                                                 
Re-issuance of treasury stock
          (113 )                                   370       257             257  
Other changes in equity
                                                          (11 )     (11 )
 
                                                                 
Balance at March 31, 2009
    2,743       5,923       21,597       (1,129 )     13       (179 )     (1,295 )     (3,632 )     25,336       638       25,974  
 
                                                                 

33


Table of Contents

SIEMENS
SEGMENT INFORMATION (continuing operations — unaudited)
As of and for the three months ended March 31, 2009 and 2008 and as of September 30, 2008
(in millions of )
                                                                                                                                                 
                                                                                                                    Additions to        
                                                                                                                    intangible assets     Amortization,  
                    External     Intersegment     Total                                     Free     and property, plant     depreciation and  
    New orders     revenue     revenue     revenue     Profit(1)     Assets(2)     cash flow(3)     and equipment     impairments(4)  
    2009     2008     2009     2008     2009     2008     2009     2008     2009     2008     3/31/09     9/30/08     2009     2008     2009     2008     2009     2008  
Sectors
                                                                                                                                               
Industry
    8,801       9,928       8,371       8,712       274       268       8,645       8,980       671       941       12,555       11,923       1,061       843       176       233       258       244  
Energy
    8,206       9,026       6,265       4,901       99       63       6,364       4,964       818       6       1,850       913       446       754       144       88       89       79  
Healthcare
    2,951       2,790       2,972       2,705       12       17       2,984       2,722       355       341       13,875       13,257       394       349       112       110       162       149  
 
                                                                                                           
Total Sectors
    19,958       21,744       17,608       16,318       385       348       17,993       16,666       1,844       1,288       28,280       26,093       1,901       1,946       432       431       509       472  
Equity Investments
                                                    (113 )     35       5,939       5,587       11                                
Cross-Sector Businesses
                                                                                                                                               
Siemens IT Solutions and Services
    1,081       1,445       859       879       277       387       1,136       1,266       25       (35 )     351       241       25       5       35       25       60       54  
Siemens Financial Services (SFS)
    191       186       171       169       20       17       191       186       117       101       11,923       11,328       66       200       98       121       80       70  
Reconciliation to Consolidated Financial Statements
                                                                                                                                               
Other Operations
    175       720       206       622       5       108       211       730       (105 )     (64 )     (857 )     (1,468 )     (104 )     (140 )     11       25       36       28  
Siemens Real Estate (SRE)
    437       416       97       93       340       323       437       416       37       60       3,634       3,489       8       24       93       48       37       40  
Corporate items and pensions
    15       23       14       13       4       4       18       17       (442 )     (522 )     (8,066 )     (6,483 )     (557 )     (359 )     4       6       8       46  
Eliminations, Corporate Treasury and other reconciling items
    (993 )     (1,163 )                 (1,031 )     (1,187 )     (1,031 )     (1,187 )     (28 )     (74 )     57,538       55,676       (212 )     (53 )     (19 )     (10 )     (21 )     (14 )
 
                                                                                                           
Siemens
    20,864       23,371       18,955       18,094                   18,955       18,094       1,335       789       98,742       94,463       1,138       1,623       654       646       709       696  
 
                                                                                                           
 
(1)   Profit of the Sectors as well as of Equity Investments, Siemens IT Solutions and Services and Other Operations is earnings before financing interest, certain pension costs and income taxes. Certain other items not considered performance indicative by Management may be excluded. Profit of SFS and SRE is Income before income taxes.
 
(2)   Assets of the Sectors as well as of Equity Investments, Siemens IT Solutions and Services and Other Operations is defined as Total assets less income tax assets, less non-interest bearing liabilities/provisions other than tax liabilities. Assets of SFS and SRE is Total assets.
 
(3)   Free cash flow represents net cash provided by (used in) operating activities less additions to intangible assets and property, plant and equipment. Free cash flow of the Sectors, Equity Investments, Siemens IT Solutions and Services and Other Operations primarily exclude income tax, financing interest and certain pension related payments and proceeds. Free cash flow of SFS, a financial services business, and of SRE includes related financing interest payments and proceeds; income tax payments and proceeds of SFS and SRE are excluded.
 
(4)   Amortization, depreciation and impairments contains amortization and impairments of intangible assets other than goodwill and depreciation and impairments of property, plant and equipment, net of reversals of impairments. Siemens’ Goodwill impairment and impairment of non-current available-for-sale financial assets and investments accounted for under the equity method amount to 20 expense and 5 expense for the three months ended March 31, 2009 and 2008, respectively.
Electronics Assembly Systems was reclassified from Industry to Other Operations in the second quarter of fiscal 2009. Prior-year amounts were reclassified for comparison purposes.
Due to rounding, numbers presented may not add up precisely to totals provided.

34


Table of Contents

SIEMENS
SEGMENT INFORMATION (continuing operations — unaudited)
As of and for the six months ended March 31, 2009 and 2008 and as of September 30, 2008
(in millions of )
                                                                                                                                                 
                                                                                                                    Additions to        
                                                                                                                    intangible assets     Amortization,  
                    External     Intersegment     Total                                     Free     and property, plant     depreciation and  
    New orders     revenue     revenue     revenue     Profit(1)     Assets(2)     cash flow(3)     and equipment     impairments(4)  
    2009     2008     2009     2008     2009     2008     2009     2008     2009     2008     3/31/09     9/30/08     2009     2008     2009     2008     2009     2008  
Sectors
                                                                                                                                               
Industry
    18,577       20,801       17,383       17,529       550       523       17,933       18,052       1,605       1,944       12,555       11,923       1,225       1,421       388       460       508       474  
Energy
    16,740       18,105       12,399       9,852       197       147       12,596       9,999       1,574       353       1,850       913       512       1,087       260       176       174       157  
Healthcare
    5,847       5,596       5,890       5,346       30       29       5,920       5,375       697       673       13,875       13,257       551       418       236       250       320       299  
 
                                                                                                           
Total Sectors
    41,164       44,502       35,672       32,727       777       699       36,449       33,426       3,876       2,970       28,280       26,093       2,288       2,926       884       886       1,002       930  
Equity Investments
                                                    (28 )     71       5,939       5,587       79                                
Cross-Sector Businesses
                                                                                                                                               
Siemens IT Solutions and Services
    2,312       2,670       1,856       1,886       569       720       2,425       2,606       71       35       351       241       (145 )     (139 )     63       47       103       111  
Siemens Financial Services (SFS
    379       368       326       325       53       42       379       367       183       178       11,923       11,328       218       80       220       264       159       141  
 
                                                                                                           
Reconciliation to Consolidated Financial Statements
                                                                                                                                               
Other Operations
    456       1,583       507       1,321       31       219       538       1,540       (145 )     (137 )     (857 )     (1,468 )     (300 )     (316 )     23       52       52       54  
Siemens Real Estate (SRE)
    866       810       193       192       673       618       866       810       82       199       3,634       3,489       12       (8 )     118       103       74       79  
Corporate items and pensions
    47       54       35       43       6       7       41       50       (678 )     (837 )     (8,066 )     (6,483 )     (1,898 )     (1,158 )     7       18       19       55  
Eliminations, Corporate Treasury and other reconciling items
    (2,140 )     (2,374 )                 (2,109 )     (2,305 )     (2,109 )     (2,305 )     (291 )     (173 )     57,538       55,676       (690 )     21       (29 )     (20 )     (36 )     (31 )
 
                                                                                                           
Siemens
    43,084       47,613       38,589       36,494                   38,589       36,494       3,070       2,306       98,742       94,463       (436 )     1,406       1,286       1,350       1,373       1,339  
 
                                                                                                           
 
(1)   Profit of the Sectors as well as of Equity Investments, Siemens IT Solutions and Services and Other Operations is earnings before financing interest, certain pension costs and income taxes. Certain other items not considered performance indicative by Management may be excluded. Profit of SFS and SRE is Income before income taxes.
 
(2)   Assets of the Sectors as well as of Equity Investments, Siemens IT Solutions and Services and Other Operations is defined as Total assets less income tax assets, less non-interest bearing liabilities/provisions other than tax liabilities. Assets of SFS and SRE is Total assets.
 
(3)   Free cash flow represents net cash provided by (used in) operating activities less additions to intangible assets and property, plant and equipment. Free cash flow of the Sectors, Equity Investments, Siemens IT Solutions and Services and Other Operations primarily exclude income tax, financing interest and certain pension related payments and proceeds. Free cash flow of SFS, a financial services business, and of SRE includes related financing interest payments and proceeds; income tax payments and proceeds of SFS and SRE are excluded.
 
(4)   Amortization, depreciation and impairments contains amortization and impairments of intangible assets other than goodwill and depreciation and impairments of property, plant and equipment, net of reversals of impairments. Siemens’ Goodwill impairment and impairment of non-current available-for-sale financial assets and investments accounted for under the equity method amount to 24 income and 92 expense for the six months ended March 31, 2009 and 2008, respectively.
Electronics Assembly Systems was reclassified from Industry to Other Operations in the second quarter of fiscal 2009. Prior-year amounts were reclassified for comparison purposes.
Due to rounding, numbers presented may not add up precisely to totals provided.

35


Table of Contents

SIEMENS
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(in millions of , except where otherwise stated and per share amounts)
1. Basis of presentation
The accompanying Condensed Interim Consolidated Financial Statements (Interim Consolidated Financial Statements) present the operations of Siemens AG and its subsidiaries, (the Company or Siemens). The Interim Consolidated Financial Statements have been prepared in accordance with International Financial Reporting Standards (IFRS) and its interpretations issued by the International Accounting Standards Board (IASB), as adopted by the European Union (EU). The Interim Consolidated Financial Statements also comply with IFRS as issued by the IASB.
Siemens prepares and reports its Interim Consolidated Financial Statements in euros (). Siemens is a German based multinational corporation with a balanced business portfolio of activities predominantly in the fields of electronics and electrical engineering.
Interim Consolidated Financial Statements—The accompanying Consolidated Balance Sheet as of March 31, 2009, the Consolidated Statements of Income and Income and Expense Recognized in Equity for the three and six months ended March 31, 2009 and 2008, the Consolidated Statements of Cash Flow for the six months ended March 31, 2009 and 2008 and the explanatory Notes to Consolidated Financial Statements (Notes) are unaudited and have been prepared for interim financial information. These Interim Consolidated Financial Statements are condensed and prepared in compliance with International Accounting Standard (IAS) 34, Interim Financial Reporting, and shall be read in connection with Siemens’ Annual IFRS Consolidated Financial Statements as of September 30, 2008. The Interim Consolidated Financial Statements apply the same accounting principles and practices as those used in the 2008 annual financial statements. In the opinion of management, these unaudited Interim Consolidated Financial Statements include all adjustments of a normal and recurring nature necessary for a fair presentation of results for the interim periods. Results for the three and six months ended March 31, 2009, are not necessarily indicative of future results.
Financial statement presentation—In fiscal 2008, Siemens rearranged its organization and streamlined its reporting processes. Information disclosed in the Notes relates to Siemens unless stated otherwise.
Basis of consolidation—The Interim Consolidated Financial Statements include the accounts of Siemens AG and its subsidiaries, which are directly or indirectly controlled. Control is generally conveyed by ownership of the majority of voting rights. Additionally, the Company consolidates special purpose entities (SPEs) when, based on the evaluation of the substance of the relationship with Siemens, the Company concludes that it controls the SPE. Associated companies—companies in which Siemens has the ability to exercise significant influence over operating and financial policies (generally through direct or indirect ownership of 20% to 50% of the voting rights)—are recorded in the Consolidated Financial Statements using the equity method of accounting. Companies in which Siemens has joint control are also accounted for under the equity method.
Use of estimates—The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent amounts at the date of the financial statements as well as reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Income taxes—In interim periods, tax expense is based on the current estimated annual effective tax rate.
Reclassification—The presentation of certain prior-year information has been reclassified to conform to the current year presentation.
New Accounting Pronouncements— In March 2009, the IASB issued Improving Disclosures about Financial Instruments (Amendments to IFRS 7 Financial Instruments: Disclosures) which enhances disclosures about fair value measurements of Financial Instruments. A three-level fair value disclosure hierarchy is introduced, that distinguishes fair value measurements by the significance of the inputs used and reflects the availability of observable market inputs when estimating fair values. Amendments are also made to enhance disclosures on liquidity risks, by clarifying the scope of liabilities to be disclosed in a maturity analysis. The amendments are applicable for annual reporting periods beginning on or after January 1, 2009; early adoption is permitted. The company is currently determining an adoption date.

36


Table of Contents

SIEMENS
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(in millions of , except where otherwise stated and per share amounts)
2. Acquisitions, dispositions and discontinued operations
     a) Acquisitions
The preliminary purchase price allocation for the Dade Behring acquisition has been completed in the first quarter of fiscal 2009 and the provisional numbers have been confirmed.
     b) Dispositions and discontinued operations
Former operating segment Communications (Com) — discontinued operation
For information on the disposal of the former operating segment Communications (Com) see Note 4 to the Company’s Consolidated Financial Statements as of September 30, 2008. The net results of discontinued operations presented in the Consolidated Statements of Income for the three and six months ended March 31, 2009, relate mainly to legal matters in connection with the former Com activities and the loss on disposal of the SEN business. In April 2009, after the close of the second quarter, Siemens and The Gores Group agreed to a settlement regarding pending requirements for purchase price adjustment and further mutual obligations. Siemens expects a positive income effect in the third quarter.
Other Dispositions
At the beginning of October 2008, Siemens completed the transfer of an 80.2% stake in Siemens Home and Office Communication Devices GmbH & Co. KG (SHC), reported in Other Operations, to ARQUES Industries AG. The transaction resulted in a preliminary net loss of 123 (including an impairment loss of 78) and additional costs of 21 related mainly to carve-out activities, of which the majority has been accrued in fiscal 2008.
In January 2009, Siemens announced that it will terminate the Shareholders Agreement of the joint venture Areva NP S.A.S., effective latest by January 30, 2012 and sell its 34% interest in Areva NP S.A.S. to the majority shareholder Areva S.A. under the terms of a put agreement. The investment is held by the Energy Sector. The transaction is subject to the approval of antitrust authorities.
The Consolidated Balance Sheet as of March 31, 2009, includes 767 of assets and 145 of liabilities classified as held for disposal and relating to transactions not presented as discontinued operations. Included in these figures are amounts relating to Electronics Assembly Systems (EA) which was reclassified from the Industry Sector to Other Operations in the second quarter of fiscal 2009, Areva NP S.A.S., held by Energy Sector, Fujitsu Siemens Computers (Holding) BV reported in the segment Equity Investments (see subsequent event) and Siemens Wohnungsgesellschaft mbH & Co. OHG, presented in Siemens Real Estate.
3. Other operating income
                                 
    Three months ended     Six months ended  
    March 31,     March 31,  
    2009     2008     2009     2008  
Gains on disposals of businesses
    20       42       55       87  
Gains on sales of property, plant and equipment and intangibles
    17       46       25       158  
Other
    62       99       204       132  
 
                       
 
    99       187       284       377  
 
                       
Other in the three and six months ended March 31, 2009, includes income related to legal and regulatory matters.

37


Table of Contents

SIEMENS
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(in millions of , except where otherwise stated and per share amounts)
4. Other operating expense
                                 
    Three months ended     Six months ended  
    March 31,     March 31,  
    2009     2008     2009     2008  
Losses on disposals of businesses
    (65 )     (3 )     (79 )     (8 )
Impairment of goodwill
    (16 )           (16 )     (73 )
Losses on sales of property, plant and equipment and intangibles
    (6 )     (12 )     (12 )     (19 )
Other
    (81 )     (242 )     (178 )     (363 )
 
                       
 
    (168 )     (257 )     (285 )     (463 )
 
                       
Other includes fees for outside advisors engaged in connection with investigations into alleged violations of anti-corruption laws and related matters as well as remediation activities of (33) and (82) for the three and six months ended March 31, 2009, respectively. In the three and six months ended March 31, 2008, those matters resulted in (148) and (241), respectively.
Impairment of goodwill of (70) in the six months ended March 31, 2008 relates to the buildings and infrastructure activities of VA Technologie AG acquired in fiscal 2005, which was presented in Other Operations.
5. Financial income (expense), net
                                 
    Three months ended     Six months ended  
    March 31,     March 31,  
    2009     2008     2009     2008  
Income (expense) from pension plans and similar commitments, net
    (58 )     36       (116 )     71  
Interest income (expense), net
    25       7       31       3  
Income (expense) from available-for-sale financial assets, net
    12       42       3       53  
Other financial income (expense), net
    5       (82 )     (242 )     (102 )
 
                       
 
    (16 )     3       (324 )     25  
 
                       
The components of Income (expense) from pension plans and similar commitments, net were as follows:
                                 
    Three months ended     Six months ended  
    March 31,     March 31,  
    2009     2008     2009     2008  
Expected return on plan assets
    327       377       655       746  
Interest cost
    (385 )     (341 )     (771 )     (675 )
 
                       
Income (expense) from pension plans and similar commitments, net
    (58 )     36       (116 )     71  
 
                       
Service cost for pension plans and similar commitments are allocated among functional costs (Cost of goods sold and services rendered, Research and development expenses, Marketing, selling and general administrative expenses).
Total amounts of interest income (expense), net, were:
                                 
    Three months ended     Six months ended  
    March 31,     March 31,  
    2009     2008     2009     2008  
Interest income
    202       199       451       428  
Interest expense
    (177 )     (192 )     (420 )     (425 )
 
                       
Interest income (expense), net
    25       7       31       3  
 
                       
Thereof: Interest income (expense) of Operations, net
    12       4       12       25  
Thereof: Other interest income (expense), net
    13       3       19       (22)  

38


Table of Contents

SIEMENS
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(in millions of , except where otherwise stated and per share amounts)
Interest income (expense) of Operations, net includes interest income and expense primarily related to receivables from customers and payables to suppliers, interest on advances from customers and advanced financing of customer contracts. Other interest income (expense), net includes all other interest amounts primarily consisting of interest relating to corporate debt and related hedging activities, as well as interest income on corporate assets.
The components of Income (expense) from available-for-sale financial assets, net were as follows:
                                 
    Three months ended     Six months ended  
    March 31,     March 31,  
    2009     2008     2009     2008  
Dividends received
    16       35       18       43  
Impairment
    (4 )     (5 )     (33 )     (16 )
Gains on sales, net
          10       17       17  
Other
          2       1       9  
 
                       
Income from available-for-sale financial assets, net
    12       42       3       53  
 
                       
Other financial income (expense), net, in the six months ended March 31, 2009, comprises primarily gains and losses related to derivative financial instruments; a loss as a result of the decrease in the discount rate of asset retirement obligations for environmental clean up costs of 92, and expenses as a result of allowances and write offs of finance receivables of 78.
6. Goodwill
                 
    March 31,     September 30,  
    2009     2008  
Sectors
         
Industry
    5,120       4,894  
Energy
    2,214       2,240  
Healthcare
    8,942       8,617  
Cross-Sector Businesses
         
Siemens IT Solutions and Services
    114       123  
Siemens Financial Services (SFS)
    95       111  
Other Operations
    6       19  
 
           
Siemens
    16,491       16,004  
 
           
The net increase in goodwill of 487 during the six months ended March 31, 2009, is attributable to 365 of foreign currency adjustments, 164 of acquisitions and purchase accounting adjustments, offset by (26) of dispositions and (16) of impairments.
7. Other intangible assets
                 
    March 31,     September 30,  
    2009     2008  
Software and other internally generated intangible assets
    2,683       2,492  
Less: accumulated amortization
    (1,639 )     (1,532 )
 
           
Software and other internally generated intangible assets, net
    1,044       960  
 
           
Patents, licenses and similar rights
    6,734       6,524  
Less: accumulated amortization
    (2,394 )     (2,071 )
 
         
Patents, licenses and similar rights, net
    4,340       4,453  
 
           
Other intangible assets
    5,384       5,413  
 
           
Amortization expense reported in Income from continuing operations before income taxes amounted to 203 and 215, respectively, for the three months ended March 31, 2009 and 2008, respectively and 402 and 411 for the six months ended March 31, 2009 and 2008, respectively.

39


Table of Contents

SIEMENS
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(in millions of , except where otherwise stated and per share amounts)
8. Debt
Notes and bonds
In the three months ended December 31, 2008, the Company increased its medium-term notes program from 5 billion as of September 30, 2008 to 10 billion. In February 2009, the Company issued 4.0 billion fixed-interest notes under the program in two tranches comprising a 2.0 billion 4.125% note due February 20, 2013 and a 2.0 billion 5.125% note due February 20, 2017. The nominal amount outstanding under the medium term note program was 8.9 billion as of March, 31, 2009.
In the three months ended March 31, 2009, the Company entered into fair value hedges of fixed-rate debt obligations in relation to the 2 billion 4.125% EMTN tranche, paying a variable rate of 3 months Euribor plus 1.5890% on 1.5 billion as well as 3 months Euribor plus 1.5930% on 500 and receiving a fixed rate of 4.125%. The net fair value of the related interest rate swap contracts amounts to 9 as of March 31, 2009. An additional 250 of the 5.125% 2 billion tranche were hedged in April 2009, paying a variable rate of 3 months Euribor plus 1.765% and receiving a fixed rate of 5.125%. For further information on fair value hedges of fixed-rate debt obligations see Note 32 of the Company’s Consolidated Financial Statements as of September 30, 2008.
9. Pension plans and similar commitments
Principal pension benefits: Components of net periodic benefit cost
                                                 
    Three months ended     Three months ended  
    March 31, 2009     March 31, 2008  
    Total     Domestic     Foreign     Total     Domestic     Foreign  
Service cost
    111       67       44       127       82       45  
Interest cost
    342       214       128       310       190       120  
Expected return on plan assets
    (312 )     (194 )     (118 )     (368 )     (233 )     (135 )
Amortization of past service cost (benefit)
    (1 )           (1 )     (1 )           (1 )
Loss (gain) due to settlements and curtailments
    (8 )           (8 )                  
 
                                   
Net periodic benefit cost
    132       87       45       68       39       29  
 
                                   
Germany
    87                       39                  
U.S.
    36                       24                  
U.K.
    6                       1                  
Other
    3                       4                  
                                                 
    Six months ended     Six months ended  
    March 31, 2009     March 31, 2008  
    Total     Domestic     Foreign     Total     Domestic     Foreign  
Service cost
    222       134       88       263       158       105  
Interest cost
    686       427       259       630       383       247  
Expected return on plan assets
    (625 )     (387 )     (238 )     (742 )     (465 )     (277 )
Amortization of past service cost (benefit)
    (2 )           (2 )     (2 )           (2 )
Loss (gain) due to settlements and curtailments
    (14 )     (1 )     (13 )     (35 )     (21 )     (14 )
 
                                   
Net periodic benefit cost
    267       173       94       114       55       59  
 
                                   
Germany
    173                       55                  
U.S.
    74                       53                  
U.K.
    15                       14                  
Other
    5                       (8)                  
Net periodic benefit cost for the three and six months ended March 31, 2009, do not include any amounts related to discontinued operations. Net periodic benefit cost included amounts related to discontinued operations during the three months ended March 31, 2008 of 7. During the six months ended March 31, 2008, net periodic benefit cost included amounts related to discontinued operations of (10), thereof (43) settlement gain as a result of the disposal of the Siemens VDO Automotive (SV) pension liabilities and 33 other net periodic benefit cost of SV and Siemens enterprise networks business.

40


Table of Contents

SIEMENS
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(in millions of , except where otherwise stated and per share amounts)
Principal pension benefits: Pension obligations and funded status
At the end of the first six months of fiscal 2009, the combined funding status of Siemens’ principal pension plans showed an underfunding of 5.3 billion, compared to an underfunding of 2.5 billion at the end of fiscal 2008. The decline in funding status is primarily due to a negative actual return on plan assets and furthermore due to a decrease in the discount rate assumption at March 31, 2009, which increased Siemens’ estimated defined benefit obligation (DBO), and negative effects of service and interest cost on the defined benefit obligation.
The weighted-average discount rate used to determine the estimated DBO as of March 31, 2009 and 2008 as well as of September 30, 2008, is 5.8%, 6.0% and 6.2%, respectively.
Contributions made by the Company to its principal pension benefit plans during the six months ended March 31, 2009 and 2008, were 70 and 450, respectively. During the three months ended March 31, 2009 and 2008, contributions made by the Company amounted to 42 and 57, respectively.
10. Shareholders’ equity
Treasury Stock
In the six months ended March 31, 2009, Siemens repurchased a total of 66 shares and re-issued a total of 4,868,193 of Treasury Stock in connection with share-based payment plans. In the six months ended March 31, 2008, Siemens repurchased a total of 23,315,163 shares at an average price of 85.72 per share. During the six months ended March 31, 2008, a total of 3,489,775 shares of Treasury Stock were issued, of which 2,763,282 shares were issued to share-based compensation plan participants to accommodate the exercise of stock options and 719,885 shares were issued to employees under the compensatory employee share purchase program.
At the Annual Shareholders’ Meeting on January 27, 2009, the Company’s shareholders passed resolutions with respect to the Company’s equity, approving and authorizing:
    a dividend of 1.60 per share. In the second quarter of fiscal 2009, 1,380 of the fiscal 2008 Siemens AG earnings were distributed to the shareholders as an ordinary dividend.
 
    the Company to acquire up to 10 % of its capital stock existing at the date of the Shareholders’ resolution, which represents 91,420,342 Treasury shares. The authorization became effective on March 1, 2009, and remains in force through July 26, 2010. The previous authorization, granted at the January 24, 2008 Shareholders’ Meeting terminated as of the effective date of the new resolution. The use of treasury stock primarily remained the same as stated in the Company’s Consolidated Financial Statements as of September 30, 2008.
 
    the Managing Board, with the approval 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, until January 26, 2014 by up to 520.8 (nominal) through the issuance of up to 173,600 thousand shares in exchange for contributions in cash and/or in kind (Authorized Capital 2009). Authorized Capital 2004 expired in January 2009 (for further information to the Authorized Capital 2004 see Note 27 to our Consolidated Financial Statements as of September 30, 2008).
 
    the Managing Board to issue bonds in an aggregate principal amount of up to 15,000 with conversion rights or with warrants entitling the holders to subscribe to up to 200,000 thousand new shares of Siemens AG with no par value, representing up to 600 of capital stock (Conditional Capital 2009). The authorization will expire on January 26, 2014. The previous authorization to issue bonds with conversion rights or warrants, which was granted in January 2004, expired in January 2009.

41


Table of Contents

SIEMENS
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(in millions of , except where otherwise stated and per share amounts)
11. Commitments and contingencies
Guarantees and other commitments
The following table presents the undiscounted amount of maximum potential future payments for each major group of guarantees:
                 
    March 31,     September 30,  
    2009     2008  
Guarantees:
               
Herkules obligations
    3,490       3,890  
Guarantees of third-party performance
    1,431       1,726  
Credit guarantees
    320       480  
Other guarantees
    3,388       3,435  
 
           
 
    8,629       9,531  
 
           
12. Legal proceedings
For information regarding investigations and other legal proceedings in which Siemens is involved, as well as the potential risks associated with such proceedings and their potential financial impact on the Company, please refer to Siemens’ Annual Report for the fiscal year ended September 30, 2008 (Annual Report) and its annual report on Form 20-F for the fiscal year ended September 30, 2008 (Form 20-F), and, in particular, to the information contained in “Item 3: Key Information – Risk Factors,” “Item 4: Information on the Company – Legal Proceedings,” and “Item 15: Controls and Procedures” of the Form 20-F.
Significant developments regarding investigations and other legal proceedings that have occurred since the publication of Siemens’ Annual Report and Form 20-F are described below.
Public corruption proceedings
Governmental and related proceedings
On December 15, 2008, Siemens AG announced that legal proceedings against it arising from allegations of bribing public officials were concluded on the same day in Munich, Germany, and in Washington, DC.
The Munich public prosecutor announced the termination of legal proceedings alleging the failure of the former Managing Board of Siemens AG to fulfill its supervisory duties. Siemens agreed to pay a fine of 395. The payment of the fine marks the conclusion of this legal proceeding against the Company by the Munich public prosecutor. The investigations of former members of the Managing Board, employees of the Company and other individuals remain unaffected by this resolution.
In Washington, DC, Siemens AG pleaded guilty in federal court to criminal charges of knowingly circumventing and failing to maintain adequate internal controls and failing to comply with the books and records provisions of the U.S. Foreign Corrupt Practices Act (FCPA). In related cases, three Siemens foreign subsidiaries, Siemens S.A. (Argentina), Siemens Bangladesh Ltd. and Siemens S.A. (Venezuela), pleaded guilty to individual counts of conspiracy to violate the FCPA. In connection with these pleas, Siemens AG and the three subsidiaries agreed to pay a fine of US$450 million to resolve the charges of the United States Department of Justice (DOJ). At the same time, Siemens AG settled a civil action against it brought by the U.S. Securities and Exchange Commission (SEC) for violations of the FCPA. Without admitting or denying the allegations of the SEC complaint, Siemens agreed to the entry of a court judgment permanently restraining and enjoining Siemens AG from violations of the FCPA and to the disgorgement of profits in the amount of US$350 million.
The agreement reflects the U.S. prosecutors’ express recognition of Siemens’ extraordinary cooperation as well as Siemens’ new and comprehensive compliance program and extensive remediation efforts. Based on these facts, the lead agency for U.S. federal government contracts, the Defense Logistics Agency (DLA), issued a formal determination that Siemens remains a responsible contractor for U.S. government business.

42


Table of Contents

SIEMENS
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(in millions of , except where otherwise stated and per share amounts)
Under the terms of the plea and settlement agreements reached in the United States, Siemens has engaged Dr. Theo Waigel, former German federal minister of finance, as compliance monitor to evaluate and report, for a period of up to four years, on the Company’s progress in implementing and operating its new compliance programs.
In the fourth quarter of fiscal 2008, the Company accrued a provision in the amount of approximately 1 billion in connection with the discussions with the Munich public prosecutor, the SEC and DOJ for the purpose of resolving their respective investigations. Cash outflows relating to the fines and disgorgements referred to above during the first quarter of fiscal 2009 amounted to 1.008 billion.
As previously reported, in October 2007, the Munich public prosecutor terminated a similar investigation relating to Siemens’ former telecommunications or Communications (Com) Group. Siemens paid 201 in connection with the termination of this investigation. This brings the total amount paid to authorities in Germany in connection with these legal proceedings to 596.
As previously reported, in August 2007, the Nuremberg-Fürth prosecutor began an investigation into possible violations of law in connection with the United Nations Oil-for-Food Program. In December 2008, the prosecutor dismissed charges against all accused.
As previously reported, the Sao Paulo, Brazil, Public Prosecutor’s Office is conducting an investigation against Siemens relating to the use of business consultants and suspicious payments in connection with the former Transportation Systems Group in or after 2000.
On March 9, 2009, Siemens received a decision by the Vendor Review Committee of the United Nations Secretariat Procurement Division (UNPD) suspending Siemens AG from the UNPD vendor database for a minimum period of six months. The suspension applies to contracts with the UN Secretariat and stems from Siemens’ guilty plea in December 2008 to violations of the U.S. Foreign Corrupt Practices Act. Siemens does not expect a significant financial impact from this decision. The review of the decision is pending.
In April 2009, the Company received a “Notice of Commencement of Administrative Proceedings and Recommendations of the Evaluation and Suspension Officer” from the World Bank in connection with allegations of sanctionable practices during the period 2004-2006 relating to a World Bank-financed project in Russia. Based on allegations by the World Bank’s Department of Institutional Integrity, the Evaluation and Suspension Officer of the World Bank (the Officer) has determined that, assuming the facts alleged by the World Bank’s Department of Institutional Integrity to be true, the evidence is sufficient to support a finding of sanctionable conduct. The Officer has recommended to the World Bank’s Sanctions Board (the Sanctions Board) that the Sanctions Board determine that Siemens AG, together with any organization directly or indirectly controlled by Siemens AG, should be declared ineligible to be awarded a contract under any World Bank-financed or World Bank-executed project (the Projects) and to receive the proceeds of any loan made by the World Bank or otherwise to participate further in the preparation or implementation of any Project. The recommended period of ineligibility, if it were to be imposed by the Sanctions Board, would last up to eight years, but could be reduced by up to seven years if Siemens AG has taken appropriate steps to cooperate with the World Bank and has maintained an effective corporate compliance program acceptable to the World Bank. If imposed, the recommended ineligibility would extend across the World Bank Group, including the International Finance Corporation, the Multilateral Insurance Guarantee Agency and investment projects guaranteed by the World Bank. Siemens has not yet had an opportunity to be heard on the matter and intends, in accordance with the World Bank’s administrative sanctions proceedings, to submit a written response and to contest the Officer’s recommendation. In accordance with the World Bank’s administrative sanctions proceedings, Siemens will request a hearing of the Sanctions Board on the matter. Upon such contest and request, the matter will be referred to the Sanctions Board which will decide after a hearing, whether the evidence supports a finding of sanctionable practices and will determine the sanctions, if any, to be imposed on Siemens AG or any other Siemens entity. In determining the appropriate sanction, the Sanctions Board will not be bound by the recommendation of the Officer. Pending a final outcome of the sanctions proceedings, Siemens AG will be temporarily suspended from eligibility to be awarded additional Projects and to participate in new activities under the Projects, unless the Officer determines, upon a written submission by Siemens AG, that a suspension should not come into effect. Siemens AG intends to make such a submission.

43


Table of Contents

SIEMENS
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(in millions of , except where otherwise stated and per share amounts)
The Company remains subject to corruption-related investigations in several jurisdictions around the world. As a result, additional criminal or civil sanctions could be brought against the Company itself or against certain of its employees in connection with possible violations of law. In addition, the scope of pending investigations may be expanded and new investigations commenced in connection with allegations of bribery and other illegal acts. The Company’s operating activities, financial results and reputation may also be negatively affected, particularly due to imposed penalties, fines, disgorgements, compensatory damages, third- party litigation, including by competitors, the formal or informal exclusion from public procurement contracts or the loss of business licenses or permits. Additional expenses and provisions may need to be recorded in the future for penalties, fines, damages or other charges, which could be material, in connection with the investigations.
Civil litigation
As previously reported, an alleged holder of Siemens AG American Depositary Shares filed a derivative lawsuit in February 2007 with the Supreme Court of the State of New York against certain current and former members of Siemens AG’s Managing and Supervisory Boards as well as against Siemens AG as a nominal defendant, seeking various forms of relief relating to the allegations of corruption and related violations at Siemens. The stay agreement with respect to the suit was terminated in December 2008.
As previously disclosed, in June 2008, the Republic of Iraq filed an action requesting unspecified damages against 93 named defendants with the United States District Court for the Southern District of New York on the basis of findings made in the IIC Report. Siemens S.A.S France, Siemens A.S. Turkey and OSRAM Middle East FZE, Dubai are among the 93 named defendants. During the second quarter of fiscal 2009, Siemens S.A.S France and Siemens A.S. Turkey received service of process.
The Company has been approached by a competitor to discuss claims it believes it has against the Company with respect to alleged improper payments by the Company in connection with the procurement of public and private contracts. The Company has not received sufficient information to evaluate whether any basis exists for such claims.
Siemens’ response
As previously reported, the Company investigates evidence of bank accounts at various locations, as well as the amount of the funds. Certain funds have been frozen by authorities. During the first six months of fiscal 2009, the Company recorded an amount of 21 in other operating income from the recovery of funds from certain such accounts.
Antitrust proceedings
As previously reported, in February 2007, the Norwegian Competition Authority launched an investigation into possible antitrust violations involving Norwegian companies active in the field of fire security, including Siemens Building Technologies AS. In December 2008, the Norwegian Competition Authority issued a final decision that Siemens Building Technologies AS had not violated antitrust regulations.
As previously reported, in February 2007, the European Commission launched an investigation into possible antitrust violations involving European producers of power transformers, including Siemens AG and VA Tech, which Siemens acquired in July 2005. The German Antitrust Authority (Bundeskartellamt) has become involved in the proceeding and is responsible for investigating those allegations that relate to the German market. Power transformers are electrical equipment used as major components in electric transmission systems in order to adapt voltages. The Company is cooperating in the ongoing investigation with the European Commission and the German Antitrust Authority. In November 2008, the European Commission finalized its investigation and forwarded its statement of objections to the involved companies.
As previously reported, on October 25, 2007, upon the Company’s appeal, a Hungarian competition court reduced administrative fines imposed on Siemens AG for alleged antitrust violations in the market of high-voltage gas-insulated switchgear from 0.320 to 0.120 and from 0.640 to 0.110 regarding VA Tech. The Company and the Competition Authority appealed the decision. In November 2008, the Court of Appeal confirmed the reduction of the fines. On December 5, 2008, the Competition Authority filed an extraordinary challenge with the Supreme Court based on alleged violations of law.

44


Table of Contents

SIEMENS
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(in millions of , except where otherwise stated and per share amounts)
As previously reported, a suit and motion for approval of a class action was filed in Israel in December 2007 to commence a class action based on the fines imposed by the European Commission for alleged antitrust violations in the high-voltage gas-insulated switchgear market. Thirteen companies were named as defendants in the suit and motion, among them Siemens AG Germany, Siemens AG Austria and Siemens Israel Ltd. The class action alleged damages to electricity consumers in Israel in the amount of approximately 575 related to higher electricity prices claimed to have been paid because of the alleged antitrust violations. At a hearing on December 11, 2008, the plaintiff requested to withdraw from the action and from the motion to certify the action as a class action. The court approved the request and dismissed the action and the motion to certify.
In November 2008, a claim was issued by National Grid Electricity Transmission Plc. (National Grid) in the High Court of England and Wales in connection with the January 24, 2007 decision of the European Commission regarding alleged antitrust violations in the high-voltage gas-insulated switchgear market. Twenty-one companies have been named as defendants, including Siemens AG and Siemens affiliates. National Grid asserts claims in the aggregate amount of approximately £249 million for damages and compound interest. Siemens believes National Grid’s claim to be without merit and intends to contest it.
In December 2008, the Company was informed that the Turkish Competition Authority has opened an investigation into violations of competition law in the area of medical equipment spare parts and service keys.
Other proceedings
In February 2007, the Company announced that public prosecutors in Nuremberg are conducting an investigation of certain current and former employees of the Company on suspicion of criminal breach of fiduciary duties against Siemens, tax evasion and a violation of the German Works Council Constitution Act (Betriebsverfassungsgesetz). The investigation related to an agreement entered into by Siemens with an entity controlled by the former head of the independent employee association AUB (Arbeitsgemeinschaft Unabhängiger Betriebsangehöriger) and payments made during the period 2001 to 2006 for which Siemens may not have received commensurate services in return. In April 2007, the labor union IG Metall lodged a criminal complaint against unknown individuals on suspicion that the Company breached the provisions of Section 119 of the Works Council Constitution Act by providing undue preferential support to AUB in connection with elections of the members of the Company’s works councils. In November 2008, the Regional Court of Nuremberg-Fürth found a former member of the Managing Board of Siemens AG guilty of criminal breach of fiduciary duty and tax evasion. The Nuremberg-Fürth prosecutor is also conducting an investigation against two other former members of the Managing Board on suspicion of abetting breach of fiduciary duty.
Pursuant to an agreement dated June 6, 2005, the Company sold its mobile devices business to Qisda Corp. (formerly named BenQ Corp.), a Taiwanese company. As previously reported, a dispute arose in 2006 between the Company and Qisda concerning the calculation of the purchase price. From September 2006 onwards, several subsidiaries in different countries used by Qisda for purposes of the acquisition of various business assets from the Company filed for insolvency protection and failed to fulfill their obligations under various contracts transferred to them by the Company under the 2005 agreement. On December 8, 2006, the Company initiated arbitration proceedings against Qisda requesting a declaratory award that certain allegations made by Qisda in relation to the purchase price calculation are unjustified. The Company further requested an order that Qisda perform its obligations and/or the obligations of its local subsidiaries assumed in connection with the acquisition or, in the alternative, that Qisda indemnify the Company for any losses. The Company’s request for arbitration was filed with the International Chamber of Commerce in Paris (ICC). The seat of arbitration is Zurich, Switzerland. In March 2007, Qisda raised a counterclaim alleging that the Company made misrepresentations in connection with the sale of the mobile devices business and asserted claims for the adjustment of the purchase price. In November 2007, the Company expanded its claims that Qisda indemnify the Company in relation to any losses suffered as a result of Qisda’s failure to perform its obligations and/or the obligations of its locally incorporated subsidiaries. Qisda amended its counterclaim in March 2008 by (i) changing its request for declaratory relief with regard to the alleged misrepresentations to a request for substantial damages, and (ii) raising further claims for substantial damages and declaratory relief. The parties have resolved their disputes relating to Qisda Corp.’s purchase of the mobile device business. Upon joint request of the parties, the ICC issued an Award by Consent in March 2009.
As reported, the Company is member of a supplier consortium contracted by Teollisuuden Voima Oyj (TVO) for the construction of the nuclear power plant “Olkiluoto 3” in Finland. The Company’s share in the contract price payable to the supplier consortium is approximately 27%. The other member of the supplier consortium is a further consortium consisting of Areva NP SAS and its wholly-owned affiliate Areva NP GmbH. The agreed completion date for the nuclear power plant was April 30, 2009. The supplier consortium announced in January 2009 that it expected the project to be delayed by 38 months in total. Since the reasons for the delay are disputed, the supplier consortium filed a request for arbitration against TVO in December 2008. The supplier consortium has demanded an extension of the construction time and the payment of approximately 1 billion in outstanding down payments, as well as additional compensation. In its response to the request for arbitration, TVO rejected the demand for an extension of time and made counterclaims for damages relating to the delay, and interest on purportedly prematurely made down payments. Based on a delay of 38 months, TVO estimates that its total counterclaims against the supplier consortium amount to up to 1.4 billion.

45


Table of Contents

SIEMENS
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(in millions of , except where otherwise stated and per share amounts)
On November 25, 2008, Siemens announced that the Company and the BenQ Mobile GmbH & Co. OHG Insolvency Administrator had reached a settlement after constructive discussions that began in 2006. In the settlement agreement, Siemens agreed to a gross payment of 300, which was paid in December 2008. However, the settlement is expected to result in a net payment of approximately 255 after taking into account Siemens’ creditor claims. Since Siemens had made a sufficient provision for the expected settlement, the settlement will not have any material negative impact on results of operations for fiscal 2009.
In April 2009, Areva S.A. (Areva) filed an ICC arbitration against Siemens. Areva seeks an order that would prevent Siemens from taking any further steps with regard to a possible joint venture with Rosatom, a declaration that Siemens is in material breach of its obligations under the shareholder agreement and damages in an amount to be ascertained. Siemens intends to file for a dismissal of the request for arbitration.
In December 2008, the Polish Agency of Internal Security (AWB) remanded into custody an employee of Siemens Healthcare Poland, in connection with an investigation regarding a public tender issued by the hospital of Wroczlaw in 2008. According to the AWB, the Siemens employee and the deputy hospital director are accused of having manipulated the tender procedure.
In April 2009, the Defense Criminal Investigative Service of the U.S. Department of Defense conducted a search at the premises of Siemens Medical Solutions USA, Inc. in Malvern, Pennsylvania, in connection with an investigation relating to a Siemens contract with the U.S. Department of Defense for the provision of medical equipment.
For certain legal proceedings information required under IAS 37 Provisions, Contingent Liabilities and Contingent Assets is not disclosed, if the Company concludes that the disclosure can be expected to prejudice seriously the outcome of the litigation.
In addition to the investigations and legal proceedings described in Siemens’ Annual Report as well as in Form 20-F and as updated above, Siemens AG and its subsidiaries have been named as defendants in various other legal actions and proceedings arising in connection with their activities as a global diversified group. Some of these pending proceedings have been previously disclosed. Some of the legal actions include claims for substantial compensatory or punitive damages or claims for indeterminate amounts of damages. Siemens is from time to time also involved in regulatory investigations beyond those described in its Annual Report as well as Form 20-F and as updated above. Siemens is cooperating with the relevant authorities in several jurisdictions and, where appropriate, conducts internal investigations regarding potential wrongdoing with the assistance of in-house and external counsel. Given the number of legal actions and other proceedings to which Siemens is subject, some may result in adverse decisions. Siemens contests actions and proceedings when it considers it appropriate. In view of the inherent difficulty of predicting the outcome of such matters, particularly in cases in which claimants seek substantial or indeterminate damages, Siemens may not be able to predict what the eventual loss or range of loss related to such matters will be. The final resolution of the matters discussed in this paragraph could have a material effect on Siemens’ consolidated operating results for any reporting period in which an adverse decision is rendered. However, Siemens does not currently expect its consolidated financial position to be materially affected by the additional legal matters discussed in this paragraph.
13. Share-based payment
Share-based payment plans at Siemens, including the share matching program and its underlying plans as well as the jubilee program, which were introduced in fiscal 2009, are predominantly designed as equity-settled plans and to a certain extent as cash-settled plans. Total pre-tax expense for share-based payment recognized in Net income in the three months ended March 31, 2009 and 2008 amounted to 20 and 2, respectively, and for the six months ended March 31, 2009 and 2008 to 167 and 60.
For further information on Siemens’ share-based payment plans, see the Company’s Consolidated Financial Statements as of September 30, 2008.

46


Table of Contents

SIEMENS
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(in millions of , except where otherwise stated and per share amounts)
Stock awards
In the six months ended March 31, 2009, the Company granted 1,992,392 stock awards: 1,740,063 awards were granted to 4,156 employees and 252,329 awards were granted to members of the Managing Board. Details on stock award activity and weighted average grant-date fair value for the six months ended March 31, 2009 are:
                 
            Weighted Average
Grant-Date Fair
    Awards   Value
Outstanding, beginning of the period
    3,489,768     67.56  
Granted
    1,992,392     37.65  
Vested
    (881,097 )   55.63  
Forfeited
    (128,489 )   48.14  
 
               
Outstanding, end of period
    4,472,574     57.15  
 
               
Fair value was determined as the market price of Siemens shares less the present value of expected dividends as stock awards do not carry dividend rights during the vesting period, which resulted in a fair value of 37.65 and 97.94 per stock award granted in November 2008 and 2007, respectively. Total fair value of stock awards granted in the six months ended March 31, 2009 and 2008, amounted to 75 and 72, respectively.
Stock Option Plans
Details on option activity and weighted average exercise prices for the six months ended March 31, 2009 are:
                                 
    Six months ended March 31, 2009
                    Weighted    
                    Average    
            Weighted   Remaining   Aggregate
            Average   Contractual   intrinsic value
    Options   Exercise Price   Term (years)   (in millions of )
Outstanding, beginning of the period
    5,097,083     73.60                  
Options exercised
                           
Options forfeited
    2,410,416     73.27                  
 
                               
Outstanding, end of period
    2,686,667     73.89       1.3        
 
                               
Exercisable, end of period
    2,686,667     73.89       1.3        
Share Matching Program and its underlying plans:
a) Base Share Program
In the first quarter of fiscal 2009, Siemens replaced its previous employee share purchase program by the Base Share Program. Under the Base Share Program, members of the Managing Board and employees of Siemens AG and participating Siemens companies may purchase a limited number of Siemens shares at a preferential price once a year. Up to a stipulated date in the first quarter of the fiscal year, employees may order the shares, which are issued in the second quarter of the fiscal year. The Base Share Program is measured at fair value at grant-date. In the six months ended March 31, 2009, the Company incurred pre-tax expense of 42, based on a preferential share price of 22 per share and a grant-date fair value of the equity instrument of 25.56 per share. In the six months ended March 31, 2008, under the previous employee share purchase program, the Company incurred pre-tax compensation expense of 27, based on a preferential price of 69.19 per share, and a grant-date fair value of 37.20, per share. Shares purchased under the Base Share Program, grant the right to receive matching shares under the same conditions described below at Share Matching Plan.
b) Share Matching Plan
In the first quarter of fiscal 2009, the Company introduced the Share Matching Plan to members of the Managing Board and to employees of Siemens AG and Siemens companies. Plan participants may invest a certain percentage of their compensation in Siemens shares at a predetermined price set at the resolution date (investment shares). In exchange, plan participants receive the right to one free share (matching share) for every three investment shares continuously held over a period of three years (vesting period) provided the plan participant has been continuously employed by Siemens AG or another Siemens company until the end of the vesting period. Up to the stipulated grant-dates in the first quarter of each fiscal year, employees may order the investment shares, which are issued in the second quarter of the fiscal year. During the vesting period, matching shares are not entitled to dividends. The right to receive matching shares forfeits if the underlying investment shares are transferred, sold, pledged or otherwise encumbered. The Managing Board and the Supervisory Board of the Company will decide, each fiscal year, whether a new Share Matching Plan will be issued.

47


Table of Contents

SIEMENS
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(in millions of , except where otherwise stated and per share amounts)
Investment Shares are measured at fair value at grant-date, which is determined as the market price of Siemens shares less the present value of expected dividends as investment shares do not carry dividend rights until they are issued in the second quarter, less the share price paid by the participating employee. Depending on the grant-date being either November 30, 2008 or December 17, 2008, the fair values amount to 3.47 and 5.56, respectively, per instrument. The weighted average grant-date fair value amounts to 5.39, based on the number of instruments granted.
c) Resulting Matching Shares
As of the grant-date, shares purchased through the programs as described above at a) and b) resulted in 1,324,637 matching shares of which 25,962 relate to the Managing Board. In the six months ended March 31, 2009, 20,592 matching shares forfeited, resulting in a March 31, 2009 ending balance of 1,304,045 non-vested matching shares.
Fair value was determined as the market price of Siemens shares less the present value of expected dividends during the vesting period as matching shares do not carry dividend rights during the vesting period. Non-vesting conditions, i.e. the condition neither to transfer, sell, pledge nor otherwise encumber the underlying shares, were considered in determining the fair values. Depending on the grant date being either November 30, 2008 or December 17, 2008, the fair values of the granted instruments amounted to 20.32 and 21.34 per share. In the six months ended March 31, 2009, the weighted average grant-date fair value of the resulting matching shares is 21.29 per share, based on the number of instruments granted. Total fair value of matching shares granted in the six months ended March 31, 2009 and 2008, amounts to 28 and —, respectively.
Jubilee Share Program
In the six months ended March 31, 2009, Siemens changed its jubilee benefit program, which applies to certain Siemens companies, from cash to share-based compensation including amounts under the previous program. Under the share-based jubilee program, eligible employees are granted a certain number of shares after having been (continuously) employed with the Company for 25 and 40 years (vesting period), respectively. Settlement of the jubilee grants is in shares only. The share awards are measured at fair value considering biometrical factors. The fair value was determined as the market price of Siemens shares at grant date less the present value of dividends expected to be paid during the years of service until the jubilee date as share awards do not carry dividend rights during the vesting period. The weighted average fair value of each share award granted under the jubilee share program for the 25th and the 40th jubilee is 24.47 and 19.18, respectively, based on the number of instruments granted. In the six months ended March 31, 2009, 4.4 million jubilee shares were granted.
14. Earnings per share
                                 
    Three months ended     Six months ended  
    March 31,     March 31,  
(shares in thousands)   2009     2008     2009     2008  
Income from continuing operations
    955       565       2,215       1,643  
Less: Portion attributable to minority interest
    (51 )     (28 )     (78 )     (67 )
 
                       
Income from continuing operations attributable to shareholders of Siemens AG
    904       537       2,137       1,576  
Weighted average shares outstanding—basic
    864,415       906,316       863,210       910,207  
Effect of dilutive share-based payment
    5,819       2,507       5,502       3,586  
 
                       
Weighted average shares outstanding—diluted
    870,234       908,823       868,712       913,793  
Basic earnings per share (from continuing operations)
    1.05       0.59       2.48       1.73  
Diluted earnings per share (from continuing operations)
    1.04       0.59       2.46       1.72  

48


Table of Contents

SIEMENS
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(in millions of , except where otherwise stated and per share amounts)
15. Segment information
Segment information is presented for continuing operations. Accordingly, current and prior period segment information excludes discontinued operations. Electronics Assembly Systems was reclassified from Industry to Other Operations in the second quarter of fiscal 2009. Prior year amounts were reclassified for comparison purpose. For a description of the Siemens segments see Note 37 of the Company’s Consolidated Financial Statements as of September 30, 2008.
Reconciliation to Consolidated Financial Statements
Reconciliation to Consolidated Financial Statements contains businesses and items not directly related to Siemens’ reportable segments:
Other Operations primarily refers to operating activities not associated with a Siemens segment and certain net assets acquired recently as part of acquisitions for which the allocation to the cash generating units and segments are not yet finalized. Siemens determined a course of action for each of the activities within Other Operations and began executing corresponding measures. Alternatives under this transformation program include integration into Siemens segments, divestment, joint venture or closure.
Siemens Real Estate (SRE), which no longer exists as a segment, owns and manages a substantial part of Siemens’ real estate portfolio and offers a range of services encompassing real estate development, real estate disposal and asset management, as well as lease and services management.
Corporate items and pensions include corporate charges such as personnel costs, corporate projects and non-operating investments or results of corporate-related derivative activities. Pensions includes the Company’s pension related income (expense) not allocated to the segments, SRE or Other Operations.
Eliminations, Corporate Treasury and other reconciling items comprise consolidation of transactions within the segments, 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 Other Operations (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 based on those used for Siemens, which are described in Note 2 of the Company’s Consolidated Financial Statements as of September 30, 2008, except as discussed below. Corporate overhead is generally not allocated to segments. Intersegment transactions are generally based on market prices.
Profit of the Sectors, Equity Investments, and Siemens IT Solutions and Services:
Siemens’ Managing Board is responsible for assessing the performance of the segments. The Company’s profitability measure of the Sectors, Equity Investments, and Siemens IT Solutions and Services is earnings before financing interest, certain pension costs, and income taxes (Profit) as determined by the chief operating decision maker. Profit excludes various categories of items, which are not allocated to the Sectors, Equity Investments, and Siemens IT Solutions and Services since Management does not regard such items as indicative of their performance, e.g. certain charges for legal and regulatory matters or restructuring. Profit represents a performance measure focused on operational success excluding the effects of capital market financing issues. The major categories of items excluded from Profit are presented below.
Financing interest, excluded from Profit, is any interest income or expense other than interest income related to receivables from customers, from cash allocated to the Sectors, Equity Investments, and Siemens IT Solutions and Services and interest expense on payables to suppliers. Financing interest is excluded from Profit because decision-making regarding financing is typically made at the corporate level.
Similarly, decision-making regarding essential pension items is done centrally. As a consequence, Profit primarily includes amounts related to service costs of pension plans only, while all other regularly recurring pension related costs (including charges for the German pension insurance association and plan administration costs) are included in the line item Corporate items and pensions.

49


Table of Contents

SIEMENS
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(in millions of , except where otherwise stated and per share amounts)
Furthermore, income taxes are excluded from Profit since income tax is subject to legal structures, which typically do not correspond to the reporting structure of the segments.
The effect of certain litigation and compliance issues is excluded from Profit, if such items are not indicative of the Sectors, Equity Investments, and Siemens IT Solutions and Services’ performance, since their related results of operations may be distorted by the amount and the irregular nature of such events. This may also be the case for items that refer to more than one reportable segment, SRE and/or Other Operations or have a corporate or central character.
Profit of the segment SFS:
Profit of the segment SFS is Income before income taxes. In contrast to performance measurement principles applied to the Sectors, Equity Investments, and Siemens IT Solutions and Services, interest income and expense is an important source of revenue and expense of SFS.
Asset measurement principles:
Management determined Assets as a measure to assess capital intensity of the Sectors, Equity Investments and Siemens IT Solutions and Services (Net capital employed). Its definition corresponds to the Profit measure. It is based on Total assets of the Balance Sheet, primarily excluding intragroup financing receivables, intragroup investments and tax related assets, since the corresponding positions are excluded from Profit. The remaining assets are reduced by non-interest-bearing liabilities other than tax related liabilities (e.g. trade payables) and provisions to derive Assets. In contrast, Assets of SFS is Total assets. A reconciliation of Assets disclosed in Segment Information to Total assets in the Consolidated Balance Sheet is presented below.
New orders:
New orders are determined principally as estimated revenue of accepted customer purchase orders plus or minus order value changes and adjustments, excluding letters of intent.
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, Equity Investments, and Siemens IT Solutions and Services constitutes net cash provided by (used in) operating activities less additions to intangible assets and property, plant and equipment. It excludes Financing interest as well as income tax related and certain other payments and proceeds, in accordance with the Company’s Profit and Asset measurement definition. Free cash flow of SFS, a financial services business, includes related financing interest payments and proceeds; income tax payments and proceeds of SFS are excluded.
Amortization, depreciation and impairments:
Amortization, depreciation and impairments presented in Segment Information includes depreciation and impairments of property, plant and equipment as well as amortization and impairments of intangible assets other than goodwill and other than impairment of non-current available-for-sale financial assets and investments accounted for using the equity method.
Measurement — Other Operations and SRE
Other Operations follows the measurement principles of the Sectors, Equity Investments, and Siemens IT Solutions and Services. SRE applies the measurement principles of SFS.

50


Table of Contents

SIEMENS
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(in millions of , except where otherwise stated and per share amounts)
Reconciliation to Siemens’ Consolidated Financial Statements
The following table reconciles total Assets of the Sectors, Equity Investments and Cross-Sector Businesses to Total assets of Siemens’ Consolidated Balance Sheets:
                 
    March 31,     September 30,  
    2009     2008  
Assets of Sectors
    28,280       26,093  
Assets of Equity Investments
    5,939       5,587  
Assets of Cross-Sector Businesses
    12,274       11,569  
 
           
Total Segment Assets
    46,493       43,249  
 
           
Reconciliation:
               
Assets Other Operations
    (857 )     (1,468 )
Assets SRE
    3,634       3,489  
Assets of Corporate items and pensions
    (8,066 )     (6,483 )
Eliminations, Corporate Treasury and other reconciling items of Segment Information:
               
Asset-based adjustments:
               
Intra-group financing receivables and investments
    24,943       27,441  
Tax-related assets
    2,987       2,734  
Liability-based adjustments:
               
Pension plans and similar commitments
    7,131       4,361  
Liabilities
    38,842       42,415  
Assets classified as held for disposal and associated liabilities
    2       17  
Eliminations, Corporate Treasury, other items
    (16,367 )     (21,292 )
 
           
Total Eliminations, Corporate Treasury and other reconciling items of Segment Information
    57,538       55,676  
 
           
Total Assets in Siemens’ Consolidated Balance Sheets
    98,742       94,463  
 
           
In the six months ended March 31, 2009 and 2008, Corporate items and pensions in the column Profit in the Segment Information includes (525) and (864), respectively, related to corporate items, as well as (153) and 27, respectively, related to pensions.
In the six months ended March 31, 2009 and 2008, Corporate items include fees amounting to (82) and (241), respectively, for outside advisors engaged by the Company in connection with investigations into alleged violations of anti-corruption laws and related matters as well as remediation activities.
Corporate items, in the six months ended March 31, 2009, comprise net expenses of 33, which includes new termination benefits incurred in the second quarter of fiscal 2009 under the SG&A program and other personnel-related restructuring measures. It also includes a gain attributable to the reversal of termination benefits recognized as of September 30, 2008 for the German part of SG&A and related programs which is due to a change in estimate on the respective program measures, i.e. more intensive use of the early retirement arrangements as compared to severance payments in conjunction with transfer companies.

51


Table of Contents

SIEMENS
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(in millions of , except where otherwise stated and per share amounts)
The following table reconciles Free cash flow, Additions to intangible assets and property, plant and equipment and Amortization, depreciation and impairments as disclosed in Segment Information to the corresponding consolidated amount for the Company.
                                                                 
                    Net cash provided by     Additions to intangible        
                    (used in) operating     assets and property,     Amortization,  
    Free cash flow     activities     plant and equipment     depreciation and  
    (I)= (II)+(III)     (II)     (III)     impairments  
    Six months ended     Six months ended     Six months ended     Six months ended  
    March 31,     March 31,     March 31,     March 31,  
    2009     2008     2009     2008     2009     2008     2009     2008  
Segment Information - based on continuing operations
    (436 )     1,406       850       2,756       (1,286 )     (1,350 )     1,373       1,339  
Discontinued operations
    (112 )     (710 )     (112 )     (583 )           (127 )           36  
Impairment*
                                        (24 )     92  
 
                                               
 
                                                               
Siemens Consolidated Statements of Cash Flow
    (548 )     696       738       2,173       (1,286 )     (1,477 )     1.349       1,467  
 
                                               
 
*   Goodwill impairment and impairment of non-current available-for-sale financial assets and investments accounted for using the equity method, net of reversals of impairment — continuing operations.
In the six months ended March 31, 2009, Amortization, depreciation and impairments as well as the income statement line item income from investments accounted for under the equity method, net includes income of 51 related to the reversal of a previously recognized impairment of an investment.
16. Related party transactions
Joint ventures and associates
The Company has relationships with many of its joint ventures and associates in the ordinary course of business whereby the Company buys and sells a wide variety of products and services on arm’s length terms. Principal joint ventures and associates of the Company as of March 31, 2009 are Nokia Siemens Networks B.V. (NSN), BSH Bosch und Siemens Hausgeräte GmbH and Areva NP S.A.S.
In the six months ended March 31, 2009 sales of goods and services and other income from transactions with related parties amounted to 685 whereas purchases of goods and services and other expense from transactions with related parties amounted to 284. As of March 31, 2009, receivables from related parties were 215 and liabilities to related parties were 84. In addition as of March 31, 2009, loans given to related parties amounted to 619, including a previously reported shareholder loan to NSN. During the three months ended March 31, 2009 the maturity of this shareholder loan was expanded to 2013. In the normal course of business the Company reviews loans and receivables associated with related parties, including NSN. In the six months ended March 31, 2009 this review resulted in an impairment loss totaling 37.
As of March 31, 2009, the Herkules obligations amounted to 3,490. For information regarding the Herkules obligations see Note 11 as well as for additional information on the Herkules obligations, see Note 29 to the Company’s Consolidated Financial Statements as of September 30, 2008.
For information regarding the funding of our principal pension plans refer to Note 9.
Related individuals
In the first six months ended March 31, 2009, no major transactions took place between the Company and members of the Managing Board and the Supervisory Board.
Some of the members of the Company’s Supervisory Board and Managing Board hold positions of significant responsibility with other entities. Siemens has relationships with almost all of these entities in the ordinary course of our business whereby the Company buys and sells a wide variety of products and service on arm’s length terms.

52


Table of Contents

SIEMENS
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(in millions of , except where otherwise stated and per share amounts)
17. Subsequent events
At the beginning of April 2009, the Company completed the sale of its 50% stake in Fujitsu Siemens Computers (Holding) BV to Fujitsu Limited. The Company is expecting a gain from the transaction.
In April 2009, after the close of the second quarter, Siemens and The Gores Group agreed to a settlement regarding SEN related pending requirements for purchase price adjustment and further mutual obligations. Siemens expects a positive income effect in the third quarter.
Supervisory Board and Managing Board changes
Supervisory Board member and remuneration changes
Effective as of the conclusion of the Annual Shareholders’ Meeting on January 27, 2009, Mr. Ralf Heckmann left the Supervisory Board. In his place, Mr. Hans-Jürgen Hartung was appointed by court resolution as new member of the Supervisory Board. Effective April 1, 2009, Sibylle Wankel is a substitute member of the Supervisory Board, succeeding Heinz Hawreliuk, who left the Supervisory Board.
Regarding the components of the Supervisory Board remuneration see Siemens’ Annual Report for the fiscal year ended September 30, 2008. A resolution was passed at the Annual Shareholders’ Meeting on January 27, 2009, to increase the variable compensation components of the Supervisory Board members as of October 1, 2008; the fixed compensation component remains unchanged. The revised long-term compensation component is now 250 for each 1 cent by which the average earnings per share as disclosed in the Consolidated Financial Statements for the three previous fiscal years exceed the amount of 2.00 (minimum amount). The minimum amount is increased annually by 10% beginning with the fiscal year starting on October 1, 2009. Payments will be made annually. The Chairman of the Supervisory Board receives triple, and each Deputy Chairman 1.5 times the amounts of the fixed, short- and long-term compensation of an ordinary member. Members of the Audit Committee and the Chairman’s Committee receive an additional one-half; their chairmen an additional full rate, members of the Compliance Committee and the Finance and Investment Committee receive an additional one-forth, their chairmen an additional one-half of the fixed, short- and long-term compensation of an ordinary member. In addition, Euro thousand attendance fee will be paid to each member for each meeting of the Supervisory Board and its committees they attend. Total remuneration of the chairman of the Supervisory Board shall not exceed four times the amounts of the fixed, short- and long-term compensation of an ordinary member. If a Supervisory Board member fails to attend a meeting, one-third of total remuneration is reduced by the percentage of meetings the member has not attended compared to the total number of meetings held in the fiscal year. The members of the Supervisory Board are reimbursed for expenses incurred and for sales taxes to be paid on their remuneration. In addition, Supervisory Board members will be included in an insurance policy maintained by the Company that will provide reasonable coverage for personal liability for financial loss associated with supervisory or management functions. Premiums for this insurance policy will be paid by Siemens.
Managing Board changes
Effective November 17, 2008, Ms. Barbara Kux was appointed as member of the Managing Board of Siemens AG. Mr. Jim Reid-Anderson resigned from the Managing Board of Siemens AG effective November 30, 2008.

53


Table of Contents

Responsibility statement
To the best of our knowledge, and in accordance with the applicable reporting principles for interim financial reporting, the interim consolidated financial statements give a true and fair view of the assets, liabilities, financial position and profit or loss of the group, and the interim management report of the group includes a fair review of the development and performance of the business and the position of the group, together with a description of the principal opportunities and risks associated with the expected development of the group for the remaining months of the financial year.
Munich, May 4, 2009
         
Siemens AG
       
The Managing Board
       
 
       
Peter Löscher
  Wolfgang Dehen   Dr. Heinrich Hiesinger
Joe Kaeser
  Barbara Kux   Prof. Dr. Hermann Requardt
Dr. Siegfried Russwurm
  Peter Y. Solmssen    

54


Table of Contents

Review report
To Siemens Aktiengesellschaft, Berlin and Munich
We have reviewed the condensed interim consolidated financial statements comprising the consolidated balance sheets, the consolidated statements of income, consolidated statements of income and expense recognized in equity, consolidated statements of cash flow and selected explanatory notes, together with the interim group management report, of Siemens Aktiengesellschaft, Berlin and Munich for the period from October 1, 2008 to March 31, 2009 which are part of the half-year financial report pursuant to Sec. 37w (2) WpHG (“Wertpapierhandelsgesetz”: German Securities Trading Act). The preparation of the condensed interim consolidated financial statements in accordance with IFRS applicable to interim financial reporting as issued by the IASB and as adopted by the EU and of the group management report in accordance with the requirements of the WpHG applicable to interim group management reports is the responsibility of the Company’s management. Our responsibility is to issue a report on the condensed interim consolidated financial statements and the interim group management report based on our review.
We conducted our review of the condensed interim consolidated financial statements and the interim group management report in accordance with German generally accepted standards for the review of financial statements promulgated by the Institut der Wirtschaftsprüfer (IDW — Institute of Public Auditors in Germany) and in accordance with the International Standard on Review Engagements 2410, “Review on Interim Financial Information Performed by the Independent Auditor of the Entity”. Those standards require that we plan and perform the review so that we can preclude through critical evaluation, with a certain level of assurance, that the condensed interim consolidated financial statements have not been prepared, in all material respects, in accordance with IFRSs applicable to interim financial reporting as issued by the IASB and as adopted by the EU, and that the interim group management report has not been prepared, in all material respects, in accordance with the requirements of the WpHG applicable to interim group management reports. A review is limited primarily to making inquiries of company personnel and applying analytical procedures and thus does not provide the assurance that we would obtain from an audit of financial statements. In accordance with our engagement, we have not performed a financial statement audit and, accordingly, we do not express an audit opinion.
Based on our review nothing has come to our attention that causes us to believe that the condensed interim consolidated financial statements have not been prepared, in all material respects, in accordance with IFRSs applicable to interim financial reporting as issued by the IASB and as adopted by the EU and that the interim group management report has not been prepared, in all material respects, in accordance with the provisions of the WpHG applicable to interim group management reports.
Munich, May 4, 2009
Ernst & Young AG
Wirtschaftsprüfungsgesellschaft
Steuerberatungsgesellschaft
     
Prof. Dr. Pfitzer
  Krämmer
Wirtschaftsprüfer
  Wirtschaftsprüfer

55


Table of Contents

Quarterly summary
(in unless otherwise indicated)
                                                 
    Fiscal year 2009     Fiscal year 2008  
    2nd Quarter     1st Quarter     4th Quarter     3rd Quarter     2nd Quarter     1st Quarter  
Revenue (in millions of )(1)
    18,955       19,634       21,651       19,182       18,094       18,400  
Income from continuing operations
(in millions of )
    955       1,260       (1,259 )     1,475       565       1,078  
Net income (in millions of )
    1,013       1,230       (2,420 )     1,419       412       6,475  
Free cash flow (in millions of )(1) (2)
    1,138       (1,574 )     2,786       1,547       1,623       (217 )
 
                                               
Key capital market data
                                               
 
Basic earnings per share(1)
    1.05       1.43       (1.51 )     1.61       0.59       1.14  
Diluted earnings per share(1)
    1.04       1.42       (1.51 )     1.61       0.59       1.13  
 
                                               
Siemens stock price(3)
                                               
High
    56.19       63.73       79.38       77.10       107.29       108.86  
Low
    38.36       35.52       64.91       67.90       66.42       89.75  
Period-end
    43.01       52.68       65.75       70.52       68.65       108.86  
Siemens stock performance on a quarterly basis
(in percentage points)
                                               
Compared to DAX® index
    (0.46 )     (2.37 )     2.39       4.51       (16.74 )     10.28  
Compared to Dow Jones STOXX®index
    (5.14 )     2.24       4.33       6.51       (20.14 )     16.10  
 
                                               
Number of shares issued (in millions)
    914       914       914       914       914       914  
 
                                               
Market capitalization (in millions of )(4)
    37,265       45,434       56,647       61,840       61,399       99,452  
 
                                               
Credit rating of long-term debt
                                               
Standard & Poor’s
    AA-       AA-       AA-       AA-       AA-       AA-  
Moody’s
    A1       A1       A1       A1       A1       A1  
 
(1)   Continuing operations.
 
(2)   Net cash provided by (used in) operating activities less Additions to intangible assets and property, plant and equipment.
 
(3)   XETRA closing prices, Frankfurt.
 
(4)   Based on shares outstanding.

56


Table of Contents

Siemens financial calendar*
         
Third-quarter financial report
  July 30, 2009
Annual Press Conference
  Dec. 3, 2009
Annual Shareholders’ Meeting for fiscal 2009
  Jan. 26, 2010
 
*   Provisional. Updates will be posted at: www.siemens.com/financial_calendar
Information resources
     
Telephone
  +49 89 636-33032 (Press Office)
 
  +49 89 636-32474 (Investor Relations)
Fax
  +49 89 636-30085 (Press Office)
 
  +49 89 636-32830 (Investor Relations)
E-mail
  press@siemens.com
 
  investorrelations@siemens.com
Address
Siemens AG
Wittelsbacherplatz 2
D-80333 Munich
Germany
Internet          www.siemens.com
Designations used in this Report may be trademarks, the use of which by third parties for their own purposes could violate the rights of the trademark owners.
© 2009 by Siemens AG, Berlin and Munich

57


Table of Contents

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
         
    SIEMENS AKTIENGESELLSCHAFT
 
       
Date: May 5, 2009   /s/ Dr. Klaus Patzak
     
 
  Name:   Dr. Klaus Patzak
 
  Title:   Corporate Vice President and Controller
 
       
    /s/ Dr. Juergen M. Wagner
     
 
  Name:   Dr. Juergen M. Wagner
 
  Title:   Head of Financial Disclosure and
 
      Corporate Performance Controlling