6-K 1 f01612e6vk.htm Q2 EARNINGS RELEASE 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
April 26, 2007
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

Key figures
Earnings Release
Segment Information (continuing operations — unaudited)
Consolidated Statements of Income (unaudited)
Consolidated Statements of Income and Expense Recognized in Equity (unaudited)
Consolidated Statements of Cash Flow (unaudited)
Consolidated Balance Sheets (unaudited)
Update on Compliance and AUB
SIGNATURES


Table of Contents

(SIEMENS LOGO)
Key figures (1)
Effective with the first quarter of fiscal 2007, Siemens prepares its primary financial reporting according to International Financial Reporting Standards (IFRS) on a retroactive basis.
                                 
    2nd quarter (2)
  first six months (3)
(in millions of , except where otherwise stated)   2007   2006   2007   2006

 
 
 
 
 
 
 
 
 
Income from continuing operations
    1,396       897       2,110       1,504  
Income from discontinued operations, net of income taxes
    (137 )     26       (63 )     358  
Net income
    1,259       923       2,047       1,862  
attributable to:
                               
Minority interest
    63       50       112       103  
Shareholders of Siemens AG
    1,196       873       1,935       1,759  
 
   
 
     
 
     
 
     
 
 
Earnings per share from continuing operations (4)
    1.50       0.95       2.26       1.60  
(in euros)
                               
Earnings per share from discontinued operations (4)
    (0.16 )     0.03       (0.09 )     0.38  
(in euros)
                               
Earnings per share (4)
    1.34       0.98       2.17       1.98  
(in euros)
                               
 
   
 
     
 
     
 
     
 
 
Net cash from operating and investing activities (5)
    (901 )     538       (2,061 )     (186 )
therein: Net cash provided by operating activities
    3,582       1,246       3,881       1,732  
Net cash used in investing activities
    (4,483 )     (708 )     (5,942 )     (1,918 )
 
   
 
     
 
     
 
     
 
 
Group profit from Operations (5)
    1,964       1,314       3,595       2,391  
 
   
 
     
 
     
 
     
 
 
New orders (5)
    23,469       21,529       48,051       45,196  
 
   
 
     
 
     
 
     
 
 
Revenue (5)
    20,626       18,824       39,694       36,800  
                                 
    March 31, 2007
  September 30, 2006
    Continuing           Continuing    
    operations   Total (6)   operations   Total (6)
 
 
 
 
 
 
 
 
 
Employees (in thousands)
    436       487       424       475  
Germany
    144       162       143       161  
International
    292       325       281       314  
(1)   Unaudited, focused on continuing operations. (Discontinued operations consist of carrier networks, enterprise networks and mobile devices activities).
(2)   January 1 — March 31, 2007 and 2006, respectively
(3)   October 1, 2006 and 2005 — March 31, 2007 and 2006, respectively.
(4)   Earnings per share — basic, attributable to shareholders of Siemens AG.
(5)   Continuing operations.
(6)   Continuing and discontinued operations.
Note: “Group profit from Operations” is reconciled to “Income before income taxes” of Operations under “Reconciliation to financial statements” on the table “Segment information.”

 


Table of Contents

(SIEMENS LOGO)
Earnings Release
Munich, April 26, 2007


Effective with the first quarter of fiscal 2007, Siemens prepares its primary financial reporting according to International Financial Reporting Standards (IFRS) on a retroactive basis.
Siemens in the second quarter 2007 (ended March 31, 2007)
    Siemens successfully concluded its Fit4More program by achieving the profitability, growth and portfolio goals planned for April 2007.
 
    All Groups reached or exceeded their target earnings margins.
 
    Group profit from Operations rose 49% year-over-year, to 1.964 billion.
 
    Income from continuing operations climbed 56%, to 1.396 billion.
 
    Net income rose 36%, to 1.259 billion.
 
    Revenue rose 10% to 20.626 billion, and orders increased 9% to 23.469 billion. Excluding currency translation and portfolio effects, revenue rose 13% and orders increased 11%.
 
    On a continuing basis, operating and investing activities used net cash of 901 million in the second quarter, including a 3.8 billion cash payment for the diagnostics division of Bayer AG. A year earlier, operating and investing activities provided net cash of 538 million.
“Our financial performance in the second quarter is the result of great teamwork in successfully executing our Fit4More program,” said Siemens CEO Klaus Kleinfeld. “We significantly strengthened our strongest businesses, better aligned the company to take full advantage of global demographic and urbanization trends, and reached or exceeded our margin targets at all Groups. Together these accomplishments are enabling us to outgrow the economy at a higher level of profitability.”
“Going forward, we believe we can do even better. So we are introducing a new program, ‘Fit for 2010,’ with ambitious targets for growth, capital efficiency, and cash conversion at the corporate level, and with higher margin ranges at a majority of our Groups. We look forward to maintaining the operating momentum we have built up in the first half of the fiscal year.”

1


Table of Contents

In the second quarter of fiscal 2007, ended March 31, 2007, Siemens’ net income rose to 1.259 billion, an increase of 36% compared to 923 million in the second quarter a year earlier. Basic earnings per share rose to 1.34 from 0.98 in the prior-year quarter, and diluted earnings per share increased to 1.28 from 0.98 a year earlier. Income from continuing operations was 1.396 billion, an increase of 56% compared to 897 million in the same period a year earlier. Basic earnings per share on a continuing basis rose to 1.50 from 0.95 in the prior-year quarter, and diluted earnings per share increased to 1.44 from 0.95 a year earlier. Discontinued operations reduced net income by 137 million in the second quarter, due primarily to an impairment at the enterprise networks business formerly included in Communications (Com). A year earlier, discontinued operations contributed 26 million to net income in the second quarter.
The dominant driver of income growth was Group profit from Operations, which rose 49% year-over-year, to 1.964 billion. Every Group in Operations reached or exceeded its target Group profit margin in the second quarter and a majority delivered strong double-digit profit growth compared to the same period a year earlier. Automation and Drives (A&D) and Power Transmission and Distribution (PTD) hit new highs in quarterly Group profit on an absolute basis. Other leading earnings contributors included Medical Solutions (Med), Power Generation (PG), Siemens VDO Automotive (SV) and Osram. Improvement in Group profit from Operations year-over-year also included a positive result at Siemens Business Services (SBS), which posted a significant loss in the prior-year period primarily due to substantial severance charges.
Net income growth also benefited from the other two components of Siemens. Financing and Real Estate activities earned 179 million in income before income tax compared to 71 million in the second quarter a year earlier. Corporate Treasury activities contributed 31 million, compared to a negative 230 million a year ago. The difference relates primarily to a cash settlement option on a convertible bond, which resulted in a 257 million negative effect in the prior-year quarter.
In a favorable macroeconomic environment, Siemens’ strengthened business portfolio generated substantial volume growth compared to the prior-year quarter. Revenue increased 10% year-over-year, to 20.626 billion, and orders of 23.469 billion were up 9% compared to the prior-year quarter. Excluding currency translation and portfolio effects, second-quarter revenue rose 13% and orders climbed 11%. Europe excluding Germany was the primary driver of revenue growth, with a 16% increase. Germany expanded by 6%. Order growth was more balanced regionally, with double-digit increases in Europe, Asia-Pacific and the Americas. A&D, Med, PG and PTD all delivered strong revenue and order growth to go along with their margin strength and substantial contributions to Group profit.
On a continuing basis, operating and investing activities within Operations in the second quarter used 1.921 billion in cash compared to cash provided of 269 million in the same period a year earlier. The current period included an approximately 3.8 billion cash payment for the diagnostics division of Bayer AG. Within Financing and Real Estate and Corporate Treasury activities, net cash provided by operating and investing activities in the second quarter was 1.020 billion compared to 269 million in the prior-year quarter. The difference was due primarily to lower receivables at Siemens Financial Services (SFS), including substantial receivables related to telecommunications carrier activities. For Siemens on a continuing basis, operating and investing activities used net cash of 901 million compared to net cash provided of 538 million in the same period a year earlier.

2


Table of Contents

As planned, Siemens brought its Fit4More strategic program to a successful close in the second quarter. In addition to reaching or exceeding target margins throughout Operations and at SFS, Siemens also achieved Fit4More’s April 2007 growth and portfolio goals. To deliver top-line growth at twice the rate of global expansion in gross domestic product (“2X global GDP”), Siemens continued to invest for organic growth while making major acquisitions at its largest and most profitable Groups. For example, A&D increased its capabilities in large drives, gears, and software, PG added wind power and other clean energy offerings, and Med acquired a world-class in vitro diagnostics business.
Fit4More further focused Siemens’ business portfolio goal by reorienting the Information and Communications (I&C) businesses and Logistics and Assembly Systems Group (L&A). Among the notable results is a telecommunications infrastructure joint venture with Nokia, called Nokia Siemens Networks (NSN). This joint venture launched its operations on April 1, 2007. Other businesses were divested or discontinued, including the enterprise networks business which is held for sale.
Operations in the second quarter fiscal 2007
Information and Communications
Siemens Business Services (SBS)
                                 
    Second Quarter
                    % Change
( in millions)   2007   2006   Actual   Adjusted*
 
 
 
 
 
 
 
 
 
Group profit
    63       (199 )                
Group profit margin
    5.2 %     (14.3 )%                
 
   
 
     
 
     
 
     
 
 
Revenue
    1,206       1,393       (13 )%     5 %
New orders
    964       1,360       (29 )%     (14 )%
 
   
 
     
 
     
 
     
 
 
*   Excluding currency translation effects of (1)% on revenue and orders, and portfolio effects of (17)% and (14)% on revenue and orders, respectively.
SBS posted Group profit of 63 million on revenue of 1.206 billion in the second quarter. A year earlier, the Group’s second-quarter result included substantial severance charges. SBS recorded no major orders during the quarter, and both revenue and orders were reduced by divestment of the Product Related Services (PRS) division between the periods under review.

3


Table of Contents

Automation and Control
Automation and Drives (A&D)
                                 
    Second Quarter
                    % Change
( in millions)   2007   2006   Actual   Adjusted*
 
 
 
 
 
 
 
 
 
Group profit
    526       385       37 %        
Group profit margin
    14.2 %     12.0 %                
 
   
 
     
 
     
 
     
 
 
Revenue
    3,711       3,205       16 %     18 %
New orders
    4,154       3,520       18 %     20 %
 
   
 
     
 
     
 
     
 
 
*   Excluding currency translation effects of (3)% on revenue and orders, and portfolio effects of 1% on revenue and orders.
A&D’s second-quarter Group profit grew 37% year-over-year, to a new high of 526 million. Orders climbed 18% compared to the prior-year period, to 4.154 billion, and revenue grew 16%, to 3.711 billion. A&D’s results for the quarter showed good balance both on a regional level and among the divisions. During the current quarter, A&D announced an agreement to acquire UGS Corp., a leading supplier of product lifecycle management software. The Group expects to complete the acquisition for an aggregate consideration of approximately U.S.$3.5 billion (2.6 billion) in the third quarter and incur acquisition-related costs.
Industrial Solutions and Services (I&S)
                                 
    Second Quarter
                    % Change
( in millions)   2007   2006   Actual   Adjusted*
 
 
 
 
 
 
 
 
 
Group profit
    100       81       23 %        
Group profit margin
    4.6 %     3.8 %                
 
   
 
     
 
     
 
     
 
 
Revenue
    2,172       2,132       2 %     5 %
New orders
    2,434       2,447       (1 )%     0 %
 
   
 
     
 
     
 
     
 
 
*   Excluding currency translation effects of (3)% and (4)% on revenue and orders, respectively, and portfolio effects of 3% on orders.
I&S raised its second-quarter Group profit to 100 million, a 23% increase compared to the prior-year period led by higher earnings and margins in the Industrial Services and Metal Technologies divisions. Revenue for the quarter rose to 2.172 billion, and orders were stable at 2.434 billion.

4


Table of Contents

Siemens Building Technologies (SBT)
                                 
    Second Quarter
                    % Change
( in millions)   2007   2006   Actual   Adjusted*
 
 
 
 
 
 
 
 
 
Group profit
    100       54       85 %        
Group profit margin
    7.5 %     4.6 %                
 
   
 
     
 
     
 
     
 
 
Revenue
    1,335       1,169       14 %     19 %
New orders
    1,364       1,318       3 %     8 %
 
   
 
     
 
     
 
     
 
 
*   Excluding currency translation effects of (5)% on revenue and orders.
SBT’s Group profit for the second quarter climbed 85% year-over-year, to 100 million, as all divisions within the Group increased their earnings. Second-quarter revenue rose 14%, to 1.335 billion, and orders of 1.364 billion were up 3% compared to the prior-year period.
Power
Power Generation (PG)
                                 
    Second Quarter
                    % Change
( in millions)   2007   2006   Actual   Adjusted*
 
 
 
 
 
 
 
 
 
Group profit
    330       260       27 %        
Group profit margin
    10.7 %     10.6 %                
 
   
 
     
 
     
 
     
 
 
Revenue
    3,072       2,453       25 %     26 %
New orders
    5,017       3,259       54 %     54 %
 
   
 
     
 
     
 
     
 
 
*   Excluding currency translation effects of (4)% and (5)% on revenue and orders, respectively, and portfolio effects of 3% and 5% on revenue and orders, respectively.
PG generated 330 million in Group profit in the second quarter, a 27% rise compared to the prior-year period. Revenue rose 25%, to 3.072 billion, as PG fulfilled strong demand for fossil, wind, and industrial power systems. Order growth was even more robust, with new contract wins totalling 5.017 billion in the quarter. Highlights included an order for two offshore wind farms in Europe, large fossil power generation systems in Europe and the U.S., and significant demand for maintenance service for new and existing fossil power systems.

5


Table of Contents

Power Transmission and Distribution (PTD)
                                 
    Second Quarter
                    % Change
( in millions)   2007   2006   Actual   Adjusted*
 
 
 
 
 
 
 
 
 
Group profit
    143       77       86 %        
Group profit margin
    8.1 %     5.1 %                
 
   
 
     
 
     
 
     
 
 
Revenue
    1,756       1,496       17 %     22 %
New orders
    2,476       1,797       38 %     43 %
 
   
 
     
 
     
 
     
 
 
*   Excluding currency translation effects of (5)% on revenue and orders.
PTD delivered Group profit of 143 million, up 86% compared to the second quarter a year earlier, as the Group significantly increased capacity utilization on expanded business volume. As with Group profit, revenue and orders in the current quarter rose on a Group-wide basis. Revenue climbed 17% year-over-year, to 1.756 billion. Orders surged 38%, to 2.476 billion, including major orders in Asia-Pacific and the Middle East.
Transportation
Transportation Systems (TS)
                                 
    Second Quarter
                    % Change
( in millions)   2007   2006   Actual   Adjusted*
 
 
 
 
 
 
 
 
 
Group profit
    58       19       205 %        
Group profit margin
    5.0 %     1.9 %                
 
   
 
     
 
     
 
     
 
 
Revenue
    1,161       1,001       16 %     19 %
New orders
    714       1,803       (60 )%     (58 )%
 
   
 
     
 
     
 
     
 
 
*   Excluding currency translation effects of (1)% on revenue, and portfolio effects of (2)% on revenue and orders.
TS recorded Group profit of 58 million compared to 19 million in the second quarter a year earlier. Revenue rose 16% year-over-year, to 1.161 billion, while orders of 714 million included a low number of major new contracts.

6


Table of Contents

Siemens VDO Automotive (SV)
                                 
    Second Quarter
                    % Change
( in millions)   2007   2006   Actual   Adjusted*
 
 
 
 
 
 
 
 
 
Group profit
    169       178       (5 )%        
Group profit margin
    6.3 %     6.8 %                
 
   
 
     
 
     
 
     
 
 
Revenue
    2,687       2,615       3 %     4 %
New orders
    2,678       2,612       3 %     4 %
 
   
 
     
 
     
 
     
 
 
*   Excluding currency translation effects of (3)% on revenue and orders, and portfolio effects of 2% on revenue and orders.
SV was again among Siemens’ earnings leaders, with 169 million in Group profit. A year earlier, the Group posted a higher Group profit and profit margin due to a gain on the sale of an investment. Revenue and orders for the quarter rose 3% year-over-year, to 2.687 billion and 2.678 billion, respectively.
Medical
Medical Solutions (Med)
                                 
    Second Quarter
                    % Change
( in millions)   2007   2006   Actual   Adjusted*
 
 
 
 
 
 
 
 
 
Group profit
    332       260       28 %        
Group profit margin
    13.4 %     12.7 %                
 
   
 
     
 
     
 
     
 
 
Revenue
    2,470       2,047       21 %     4 %
New orders
    2,544       2,096       21 %     5 %
 
   
 
     
 
     
 
     
 
 
*   Excluding currency translation effects of (7)% on revenue and orders, and portfolio effects of 24% and 23% on revenue and orders, respectively.
Med’s second-quarter Group profit climbed 28% year-over-year, to 332 million. The increase is partly attributable to earnings from the Group’s Diagnostics division, which Med formed between the periods under review by acquiring Diagnostic Products Corp. and the diagnostics division of Bayer AG. Group profit benefited also from divestments as well as from the sale of a portion of Med’s stake in a joint venture, Draeger Medical AG & Co. KG. These gains offset purchase price accounting effects and integration costs associated with the acquisitions. Revenue and orders rose to 2.470 billion and 2.544 billion, respectively, including substantial new volume from the Diagnostics division.

7


Table of Contents

Lighting
Osram
                                 
    Second Quarter
                    % Change
( in millions)   2007   2006   Actual   Adjusted*
 
 
 
 
 
 
 
 
 
Group profit
    125       138       (9 )%        
Group profit margin
    10.5 %     11.4 %                
 
   
 
     
 
     
 
     
 
 
Revenue
    1,189       1,206       (1 )%     4 %
New orders
    1,189       1,206       (1 )%     4 %
 
   
 
     
 
     
 
     
 
 
*   Excluding currency translation effects of (5)% on revenue and orders.
Osram posted Group profit of 125 million in the second quarter on revenue of 1.189 billion. The Group’s results in the quarter reflect negative currency effects arising from the strength of the euro.
Strategic Equity Investments
Strategic Equity Investments (SEI) in the second quarter consisted of BSH Bosch und Siemens Hausgeräte GmbH (BSH) and Fujitsu Siemens Computers (Holding) BV. These joint ventures were included within Other Operations in the prior-year quarter. SEI earnings were primarily attributable to BSH, and rose to 99 million from 55 million in the same period a year earlier. Beginning in the third quarter, SEI will include Siemens’ portion of NSN.
Other Operations
Other Operations consist of centrally held operating businesses not related to a Group, including Siemens Home and Office Communication Devices (SHC). Group profit from Other Operations in the second quarter was a negative 81 million, primarily due to a 52 million goodwill impairment at a regional payphone unit. A year earlier, Other Operations posted Group profit of 6 million in the second quarter.
Corporate items, pensions and eliminations
Corporate items, pensions and eliminations totaled a negative 189 million in the second quarter compared to a positive 72 million a year earlier. The change year-over-year is due primarily to effects in the prior-year quarter, including a 95 million gain on the sale of an investment as well as a positive effect related to the settlement of an arbitration proceeding. The current quarter includes 14 million in expenses for outside advisors whom Siemens has engaged in connection with the investigations into alleged violations of anti-corruption laws and related matters as well as remediation activities. These expenses are expected to increase in coming quarters.

8


Table of Contents

Financing and Real Estate
Siemens Financial Services (SFS)
                         
    Second Quarter
( in millions)   2007   2006   % Change
 
 
 
 
 
 
 
Income before income taxes
    137       44       211 %
 
   
 
     
 
     
 
 
                         
    March 31,   Sept. 30,        
    2007   2006        
 
 
 
 
 
 
 
Total assets
    9,583       10,543       (9 )%
 
   
 
     
 
     
 
 
Income before income taxes at SFS was 137 million in the second quarter. Higher financial income included a special dividend resulting from divestment gains by a company in which SFS holds an equity position. Total assets declined compared to the end of fiscal 2006 primarily due to a reduction in accounts receivable associated with carrier activities carved out of Com.
Siemens Real Estate (SRE)
                         
    Second Quarter
( in millions)   2007   2006   % Change
 
 
 
 
 
 
 
Income before income taxes
    42       27       56 %
 
   
 
     
 
     
 
 
Revenue
    414       429       (3 )%
 
   
 
     
 
     
 
 
                         
    March 31,   Sept. 30,        
    2007   2006        
 
 
 
 
 
 
 
Total assets
    3,168       3,221       (2 )%
 
   
 
     
 
     
 
 
Income before income taxes at SRE was 42 million, in part due to lower vacancy charges.
Eliminations, reclassifications and Corporate Treasury
Income before taxes from eliminations, reclassifications and Corporate Treasury in the second quarter was 31 million compared to a negative 230 million a year earlier. The difference resulted primarily from a negative 257 million effect under IFRS in the prior-year quarter, related to mark-to-market valuation of the cash settlement option associated with a 2.5 billion convertible bond issued by Siemens in 2003. This option was irrevocably waived in the third quarter of fiscal 2006, effectively eliminating subsequent earnings effects. In the current quarter, higher interest income from cash and cash equivalents and from intra-company financing was more than offset by higher interest expense associated with the issuance of bonds between the periods under review.
Income statement highlights in the second quarter 2007
Gross profit margin for the second quarter rose to 27.4% from 25.4% in the same period a year earlier. Gross profit climbed significantly on a combination of higher gross margin and higher revenue, including notable increases in gross profit at Med and A&D. Research and development (R&D) expense rose to 874 million from 857 million in the second quarter a year earlier. Due to double-digit revenue growth, R&D declined as percent of sales to 4.2% from 4.6% in the second quarter a year ago. Rising revenue had a similar effect on marketing, selling and general administrative expenses, which remained nearly unchanged at 3.108 billion but fell to 15.1% of sales from 16.5% in the prior-year period.

9


Table of Contents

Other operating income was 112 million, below the 194 million a year earlier which included the positive effect from settlement of an arbitration proceeding mentioned above. Due to the 52 million impairment and 14 million in investigation-related expenses mentioned above, other operating expense increased to 163 million from 35 million in the second quarter of the prior year. Financial income, net was a positive 14 million compared to a negative 37 million a year earlier. While the prior-year period included the 257 million negative effect related to the convertible bond option mentioned above, financial income in the current quarter was held back by higher interest expense, lower income associated with asset retirement obligations, and lower income from financial assets.
Discontinued operations posted a loss of 137 million in the second quarter compared to income of 26 million in the prior-year period. The current quarter included a 148 million impairment and 49 million in pretax expenses related to the investigations mentioned above.
Income and earnings per share in the first six months
Net income for Siemens in the first six months of fiscal 2007 was 2.047 billion, a 10% increase from 1.862 billion in the first half a year earlier. The current period included a penalty of 423 million arising from a previously disclosed European Commission antitrust investigation involving providers of gas-isolated switchgear in the power transmission and distribution industry. Group profit from Operations for the first half of the fiscal year rose 50%, to 3.595 billion, primarily on rising revenue and higher margins at a majority of the Groups in Operations. The change year-over-year was positively influenced by developments at SBS as well, where 363 million in severance charges resulted in a significant loss for the prior-year period but enabled the Group to return to profitability in the current period. Corporate Treasury activities contributed income of 77 million in the first half, compared to a loss of 542 million in the prior-year period resulting primarily from the convertible bond option. Basic and diluted earnings per share for the first six months were 2.17 and 2.09, respectively, compared to 1.98 and 1.97, respectively, in the same period a year earlier.
Income from continuing operations was 2.110 billion in the first half, up 40% from 1.504 billion a year earlier. On a continuing basis, basic and diluted earnings per share were 2.26 and 2.17, respectively, compared to 1.60 and 1.59 in the same period a year earlier. Discontinued operations lost 63 million compared to income of 358 million in the first half of the prior year. The current period includes a 148 million impairment. The prior-year period benefited from a 356 million gain on the sale of shares in Juniper Networks, Inc. (Juniper), partially offset by 164 million in severance charges.
Revenue and order trends for the first half 2007
In the first six months of fiscal 2007, revenue was 39.694 billion, an 8% increase from 36.800 billion in the prior-year period. Orders of 48.051 billion were up 6% from 45.196 billion a year earlier. Excluding currency translation effects and the net effect of acquisitions and dispositions, revenue rose 12% and orders climbed 9%.
International revenue for the first six months climbed 9% year-over-year, to 31.934 billion, and orders for the first six months rose 7%, to 39.354 billion. In Germany, revenue for the first half-year was up 4%, at 7.760 billion, and orders increased 5%, to 8.697 billion. On a regional basis, Europe (excluding Germany) was the strongest contributor to international volume growth, with revenue climbing 10%, to 12.733 billion, and orders rising 13%, to 15.911 billion. Both revenue and orders grew in the Americas as well, where first-half revenue of 10.324 billion was up 3% and orders of 12.716 billion came in 14% above the prior-year level. Adjusting for currency translation and portfolio effects, revenue and orders in the Americas were up 11% and 23%, respectively.

10


Table of Contents

While revenue in Asia-Pacific for the first six months grew 11%, to 5.589 billion, orders of 6.488 billion came in 7% lower. Both developments stemmed from a high level of orders in Asia-Pacific in prior periods. This was particularly evident in China, where revenue of 1.949 billion for the first half was 4% higher than the prior-year level, but orders of 2.209 billion were 21% lower than a year earlier. The Africa/Middle East/Commonwealth of Independent States (CIS) region shared a similar development in the first half. Though orders of 4.239 billion were substantially higher than revenue of 3.288 billion, revenue was up 22% year-over-year, and orders were 10% below the prior-year level.
Liquidity for the first six months
Net cash used in operating and investing activities was 3.777 billion in the first six months of fiscal 2007, including 4.2 billion in cash used to acquire the diagnostics division of Bayer AG. A year earlier, net cash used was 417 million. Discontinued operations was another major factor in the difference year-over-year. In the current period, discontinued operations used net cash of 1.716 billion, including a build-up of net working capital, particularly receivables. In the prior-year period, discontinued operations used net cash of 231 million, benefiting from 465 million in proceeds from the Juniper share sales. On a continuing basis, Siemens in the first six month of fiscal 2007 used 2.061 billion in net cash from operating and investing activities, compared to 186 million used in the same period a year earlier.
                                                 
                    SFS, SRE and    
                    Corporate    
Continuing operations
  Operations
  Treasury *
  Siemens
    Six months ended March 31,
( in millions)
 
  2007
  2006
  2007
  2006
  2007
  2006
Net cash provided by (used in):
                                               
Operating activities
    2,173       865       1,708       867       3,881       1,732  
Investing activities
    (5,496 )     (1,416 )     (446 )     (502 )     (5,942 )     (1,918 )
 
   
 
     
 
     
 
     
 
     
 
     
 
 
Net cash provided by (used in) operating and investing activities — continuing operations
    (3,323 )     (551 )     1,262       365       (2,061 )     (186 )
 
   
 
     
 
     
 
     
 
     
 
     
 
 
*   Also includes eliminations and reclassifications.
Within Operations, net cash used in operating and investing activities was 3.323 billion in the first six months of fiscal 2007 compared to 551 million in net cash used in the same period a year earlier. The increase in net cash provided by operating activities within Operations was due mainly to a significantly lower increase of net working capital compared to the prior period, particularly with regard to net inventories at I&S and PG. Cash used in investing activities within Operations was significantly higher compared to the first six months a year earlier, primarily due to payments totaling 4.2 billion for Bayer’s diagnostics business at Med and cash used to acquire AG Kühnle, Kopp & Kausch at PG. SFS, SRE and Siemens’ Corporate Treasury provided net cash from operating and investing activities of 1.262 billion compared to 365 million in net cash provided in the prior-year period. The change year-over-year is primarily due to higher net cash inflows related to receivables at SFS.

11


Table of Contents

Funding status of pension plans
The estimated underfunding of Siemens’ principal pension plans as of March 31, 2007, amounted to approximately 1.7 billion compared to an underfunding of approximately 2.9 billion at the end of fiscal 2006. The improvement in funding status is primarily due to regular contributions and the actual return on plan assets. The effect of service and interest cost on the defined benefit obligation was offset by an increase in the discount rate assumption at March 31, 2007, reducing Siemens’ estimated defined benefit obligation. The negative impact of increases in interest rates on fixed income investments was more than offset by strong performance in equity markets resulting in an actual return on plan assets of 849 million during the last six months. This represents a 7.3% return on an annualized basis, compared to the expected annual return of 6.5%.
Subsequent event
After the close of the second quarter, Siemens completed the formation of its NSN joint venture with Nokia and the joint venture commenced operations on April 1, 2007. The transaction is expected to result in a significant non-cash gain in the third quarter.
Starting today at 9:00 a.m. CEST, we will provide a live video webcast on the Internet of the semi-annual press conference with CEO Dr. Klaus Kleinfeld and CFO Joe Kaeser. You can access the webcast at www.siemens.com/pressconference. You will also be able to download the presentation. A video of the speeches will be available after the live webcast. Starting at 16:00 a.m. CEST, Siemens CEO Dr. Klaus Kleinfeld and CFO Joe Kaeser will hold a conference with analysts and investors. You can follow the conference live on the Internet by going to www.siemens.com/analystcall.
Note: This Earnings Release should be read in conjunction with information Siemens published today regarding the investigations mentioned above. An update of Siemens’ annual Form 20-F disclosure regarding legal proceedings is provided in the Interim Report.
IFRS Conversion
Beginning with the first quarter of fiscal 2007, Siemens prepares its primary financial reporting according to International Financial Reporting Standards (IFRS). For the years prior to fiscal 2007, Siemens prepared its primary financial reporting according to United States Generally Accepted Accounting Principles (U.S. GAAP). As part of its transition to IFRS, Siemens has published IFRS Consolidated Financial Statements for fiscal 2006 and fiscal 2005 as supplemental information to its U.S. GAAP figures. This document is available at www.siemens.com/investors, where you can also find a presentation explaining major differences between IFRS and U.S. GAAP in Siemens financial results.
     
Siemens AG
  Reference number: AXX200704.75 e
Corporate Communications
  Wolfram Trost
Media Relations
  80312 Munich
80312 Munich
  Tel.: +49 89 636-34794 Fax: -32825
 
  E-mail: wolfram.trost@siemens.com

12


Table of Contents

SIEMENS
SEGMENT INFORMATION (continuing operations — unaudited)
As of and for the three months ended March 31, 2007 and 2006 and as of September 30, 2006
(in millions of )
                                                                                                                                                 
                                                                                                    Net cash from                     Amortization,  
                                    Intersegment                                     Net capital     operating and     Capital     depreciation and  
    New orders
    External revenue
    revenue
    Total revenue
    Group profit(1)
    employed(2)
    investing activities
    spending(3)
    impairments(4)
 
    2007
    2006
    2007
    2006
    2007
    2006
    2007
    2006
    2007
    2006
    3/31/07
    9/30/06
    2007
    2006
    2007
    2006
    2007
    2006
 
 
                                                                                                                                               
Operations Groups (5)
                                                                                                                                               
Siemens Business Services (SBS)
    964       1,360       893       1,107       313       286       1,206       1,393       63       (199 )     394       171       (7 )     (329 )     62       83       68       68  
Automation and Drives (A&D)
    4,154       3,520       3,287       2,854       424       351       3,711       3,205       526       385       4,321       3,837       393       132       135       233       74       85  
Industrial Solutions and Services (I&S)
    2,434       2,447       1,909       1,889       263       243       2,172       2,132       100       81       1,311       1,279       101       114       59       57       29       32  
Siemens Building Technologies (SBT)
    1,364       1,318       1,310       1,147       25       22       1,335       1,169       100       54       1,804       1,764       183       75       26       48       39       28  
Power Generation (PG)
    5,017       3,259       3,067       2,444       5       9       3,072       2,453       330       260       1,932       1,945       703       (51 )     65       130       59       54  
Power Transmission and Distribution (PTD)
    2,476       1,797       1,628       1,388       128       108       1,756       1,496       143       77       1,860       1,701       68       (12 )     47       36       22       30  
Transportation Systems (TS)
    714       1,803       1,151       987       10       14       1,161       1,001       58       19       (51 )     111       145       61       19       38       14       12  
Siemens VDO Automotive (SV)
    2,678       2,612       2,684       2,611       3       4       2,687       2,615       169       178       3,846       3,767       195       221       98       118       108       105  
Medical Solutions (Med)
    2,544       2,096       2,453       2,034       17       13       2,470       2,047       332       260       8,760       4,975       (3,398 )     314       4,009       87       130       66  
Osram
    1,189       1,206       1,173       1,186       16       20       1,189       1,206       125       138       2,076       1,976       177       116       71       73       62       68  
Strategic Equity Investments (SEI) (6)
                                                    99       55       1,172       1,008                                      
Other Operations
    1,079       1,127       743       867       253       239       996       1,106       (81 )     6       121       48       47       (100 )     45       65       80       34  
 
                                                                                                           
Total Operations Groups
    24,613       22,545       20,298       18,514       1,457       1,309       21,755       19,823       1,964       1,314       27,546       22,582       (1,393 )     541       4,636       968       685       582  
Reconciliation to financial statements
                                                                                                                                               
Corporate items, pensions and eliminations
    (1,348 )     (1,249 )     51       22       (1,379 )     (1,251 )     (1,328 )     (1,229 )     (189 )     72       (4,705 )     (6,584 )     (528 )(7)     (272 )(7)     25       (3 )     (1 )     3  
Other interest expense
                                                    (153 )     (93 )                                                
Other assets related and miscellaneous reconciling items
                                                                63,107       64,224                                      
 
                                                                                                           
Total Operations (for columns Group profit/Net capital employed, i.e. Income before income taxes/Total assets)
    23,265       21,296       20,349       18,536       78       58       20,427       18,594       1,622       1,293       85,948       80,222       (1,921 )     269       4,661       965       684       585  
 
                                                                                                           
 
                                                                                                                                               
                                                                    Income before                                                                  
                                                                    income taxes
    Total assets
                                                 
 
                                                                                                                                               
Financing and Real Estate Groups
                                                                                                                                               
Siemens Financial Services (SFS)
    177       159       159       138       18       21       177       159       137       44       9,583       10,543       883       55       118       103       63       57  
Siemens Real Estate (SRE)
    414       429       118       150       296       279       414       429       42       27       3,168       3,221       142       (10 )     40       73       38       50  
Eliminations
    (4 )     (3 )                 (4 )     (3 )     (4 )     (3 )                 (470 )     (462 )     62 (7)     74 (7)                        
 
                                                                                                           
Total Financing and Real Estate
    587       585       277       288       310       297       587       585       179       71       12,281       13,302       1,087       119       158       176       101       107  
 
                                                                                                           
Eliminations, reclassifications and Corporate Treasury
    (383 )     (352 )                 (388 )     (355 )     (388 )     (355 )     31       (230 )     (7,441 )     (5,793 )     (67) (7)     150 (7)                        
 
                                                                                                           
Siemens
    23,469       21,529       20,626       18,824                   20,626       18,824       1,832       1,134       90,788       87,731       (901 )     538       4,819       1,141       785       692  
 
                                                                                                           
 
(1)   Group profit of the Operations Groups is earnings before financing interest, certain pension costs and income taxes.
 
(2)   Net capital employed of the Operations Groups represents total assets less tax assets, provisions and non-interest bearing liabilities other than tax liabilities.
 
(3)   Intangible assets, property, plant and equipment, acquisitions, non-current available-for-sale financial assets and investments accounted for using the equity method.
 
(4)   Includes amortization and impairments of intangible assets, depreciation of property, plant and equipment, and write-downs of non-current available-for-sale financial assets and investments accounted for using the equity method.
 
(5)   Communications (Com) no longer represents an operating segment. The primary business components of Com are reported as discontinued operations.
 
(6)   SEI was created as of October 1, 2006 and includes certain strategic investments accounted for using the equity method. Prior-year information was reclassified for comparability purposes.
 
(7)   Includes cash paid for income taxes according to the allocation of income taxes to Operations, Financing and Real Estate, and Eliminations, reclassifications and Corporate Treasury in the Consolidated Statements of Income. Furthermore, the reclassification of interest payments in the Consolidated Statements of Cash Flow from operating activities into financing activities is shown in Eliminations. Interest payments are external interest paid as well as intragroup interest paid and received.

13


Table of Contents

SIEMENS
SEGMENT INFORMATION (continuing operations — unaudited)
As of and for the six months ended March 31, 2007 and 2006 and as of September 30, 2006
(in millions of )
                                                                                                                                                 
                                                                                                    Net cash from                     Amortization,  
                                    Intersegment                                     Net capital     operating and     Capital     depreciation and  
    New orders
    External revenue
    revenue
    Total revenue
    Group profit(1)
    employed(2)
    investing activities
    spending(3)
    impairments(4)
 
    2007
    2006
    2007
    2006
    2007
    2006
    2007
    2006
    2007
    2006
    3/31/07
    9/30/06
    2007
    2006
    2007
    2006
    2007
    2006
 
 
                                                                                                                                               
Operations Groups (5)
                                                                                                                                               
Siemens Business Services (SBS)
    2,181       2,865       1,781       2,247       605       552       2,386       2,799       87       (431 )     394       171       (138 )     (742 )     130       159       137       136  
Automation and Drives (A&D)
    8,173       7,202       6,281       5,482       820       691       7,101       6,173       976       744       4,321       3,837       512       247       234       349       144       141  
Industrial Solutions and Services (I&S)
    5,491       5,152       3,750       3,651       495       459       4,245       4,110       190       145       1,311       1,279       72       27       85       152       56       65  
Siemens Building Technologies (SBT)
    2,750       2,691       2,505       2,234       43       37       2,548       2,271       172       110       1,804       1,764       125       (72 )     82       164       66       53  
Power Generation (PG)
    10,034       7,319       5,777       4,515       21       12       5,798       4,527       499       438       1,932       1,945       566       165       297       266       114       104  
Power Transmission and Distribution (PTD)
    5,622       4,270       3,241       2,738       243       214       3,484       2,952       273       159       1,860       1,701       121       22       91       67       48       59  
Transportation Systems (TS)
    1,933       3,880       2,212       2,022       22       39       2,234       2,061       105       36       (51 )     111       326       226       44       72       27       24  
Siemens VDO Automotive (SV)
    5,092       5,060       5,100       5,056       5       7       5,105       5,063       315       334       3,846       3,767       216       248       195       282       218       206  
Medical Solutions (Med)
    4,755       4,252       4,541       4,009       31       22       4,572       4,031       636       503       8,760       4,975       (3,619 )     402       4,479       141       205       128  
Osram
    2,363       2,364       2,332       2,325       31       39       2,363       2,364       248       259       2,076       1,976       119       223       144       140       123       130  
Strategic Equity Investments (SEI) (6)
                                                    151       101       1,172       1,008                                      
Other Operations
    2,047       2,426       1,556       1,926       451       439       2,007       2,365       (57 )     (7 )     121       48       (101 )     (293 )     76       159       114       71  
 
                                                                                                           
Total Operations Groups
    50,441       47,481       39,076       36,205       2,767       2,511       41,843       38,716       3,595       2,391       27,546       22,582       (1,801 )     453       5,857       1,951       1,252       1,117  
Reconciliation to financial statements
                                                                                                                                               
Corporate items, pensions and eliminations
    (2,816 )     (2,752 )     74       39       (2,616 )     (2,417 )     (2,542 )     (2,378 )     (852 )     (19 )     (4,705 )     (6,584 )     (1,522 )(7)     (1,004 )(7)     38       63       (3 )     1  
Other interest expense
                                                    (254 )     (178 )                                                
Other assets related and miscellaneous reconciling items
                                                                63,107       64,224                                      
 
                                                                                                           
Total Operations (for columns Group profit/Net capital employed, i.e. Income before income taxes/Total assets)
    47,625       44,729       39,150       36,244       151       94       39,301       36,338       2,489       2,194       85,948       80,222       (3,323 )     (551 )     5,895       2,014       1,249       1,118  
 
                                                                                                           
 
                                                                                                                                               
                                                                    Income before                                                                
                                                                    income taxes
  Total assets
                                               
 
                                                                                                                                               
Financing and Real Estate Groups
                                                                                                                                               
Siemens Financial Services (SFS)
    355       309       307       270       47       39       354       309       220       122       9,583       10,543       988       144       203       216       127       113  
Siemens Real Estate (SRE)
    835       840       237       286       598       554       835       840       111       131       3,168       3,221       142       18       84       130       78       92  
Eliminations
    (7 )     (6 )                 (7 )     (6 )     (7 )     (6 )                 (470 )     (462 )     99 (7)     138 (7)                        
 
                                                                                                           
Total Financing and Real Estate
    1,183       1,143       544       556       638       587       1,182       1,143       331       253       12,281       13,302       1,229       300       287       346       205       205  
 
                                                                                                           
Eliminations, reclassifications and Corporate Treasury
    (757 )     (676 )                 (789 )     (681 )     (789 )     (681 )     77       (542 )     (7,441 )     (5,793 )     33 (7)     65 (7)                        
 
                                                                                                           
Siemens
    48,051       45,196       39,694       36,800                   39,694       36,800       2,897       1,905       90,788       87,731       (2,061 )     (186 )     6,182       2,360       1,454       1,323  
 
                                                                                                           
 
(1)   Group profit of the Operations Groups is earnings before financing interest, certain pension costs and income taxes.
 
(2)   Net capital employed of the Operations Groups represents total assets less tax assets, provisions and non-interest bearing liabilities other than tax liabilities.
 
(3)   Intangible assets, property, plant and equipment, acquisitions, non-current available-for-sale financial assets and investments accounted for using the equity method.
 
(4)   Includes amortization and impairments of intangible assets, depreciation of property, plant and equipment, and write-downs of non-current available-for-sale financial assets and investments accounted for using the equity method.
 
(5)   Communications (Com) no longer represents an operating segment. The primary business components of Com are reported as discontinued operations.
 
(6)   SEI was created as of October 1, 2006 and includes certain strategic investments accounted for using the equity method. Prior-year information was reclassified for comparability purposes.
 
(7)   Includes cash paid for income taxes according to the allocation of income taxes to Operations, Financing and Real Estate, and Eliminations, reclassifications and Corporate Treasury in the Consolidated Statements of Income. Furthermore, the reclassification of interest payments in the Consolidated Statements of Cash Flow from operating activities into financing activities is shown in Eliminations. Interest payments are external interest paid as well as intragroup interest paid and received.

14


Table of Contents

SIEMENS
CONSOLIDATED STATEMENTS OF INCOME (unaudited)
For the three months ended March 31, 2007 and 2006
(in millions of , per share amounts in )
                                                                 
                    Eliminations,                        
                    reclassifications and                     Financing and Real  
    Siemens
    Corporate Treasury
    Operations
    Estate
 
    2007
    2006
    2007
    2006
    2007
    2006
    2007
    2006
 
Revenue
    20,626       18,824       (388 )     (355 )     20,427       18,594       587       585  
Cost of goods sold and services rendered
    (14,965 )     (14,048 )     388       355       (14,891 )     (13,898 )     (462 )     (505 )
 
                                               
Gross profit
    5,661       4,776                   5,536       4,696       125       80  
Research and development expenses
    (874 )     (857 )                 (874 )     (857 )            
Marketing, selling and general administrative expenses
    (3,108 )     (3,104 )           (1 )     (3,015 )     (3,017 )     (93 )     (86 )
Other operating income
    112       194       (17 )     (22 )     85       169       44       47  
Other operating expense
    (163 )     (35 )     (2 )     (1 )     (156 )     (31 )     (5 )     (3 )
Income from investments accounted for using the equity method, net
    190       197                   164       181       26       16  
Financial income (expense), net
    14       (37 )     50       (206 )     (118 )     152       82       17  
 
                                               
Income (loss) from continuing operations before income taxes
    1,832       1,134       31       (230 )     1,622       1,293       179       71  
Income taxes (1)
    (436 )     (237 )     (6 )     47       (390 )     (270 )     (40 )     (14 )
 
                                               
Income (loss) from continuing operations
    1,396       897       25       (183 )     1,232       1,023       139       57  
Income (loss) from discontinued operations, net of income taxes
    (137 )     26                   (137 )     26              
 
                                               
Net income (loss)
    1,259       923       25       (183 )     1,095       1,049       139       57  
 
                                               
Attributable to:
                                                               
Minority interest
    63       50                                                  
Shareholders of Siemens AG
    1,196       873                                                  
Basic earnings per share
                                                               
Income from continuing operations
    1.50       0.95                                                  
Income (loss) from discontinued operations
    (0.16 )     0.03                                                  
 
                                                           
Net income
    1.34       0.98                                                  
 
                                                           
Diluted earnings per share
                                                               
Income from continuing operations
    1.44       0.95                                                  
Income (loss) from discontinued operations
    (0.16 )     0.03                                                  
 
                                                           
Net income
    1.28       0.98                                                  
 
                                                           
 
                                                               
 
                                                               
 
                                                               
 
                                                               
 
                                                               
CONSOLIDATED STATEMENTS OF INCOME AND EXPENSE RECOGNIZED IN EQUITY (unaudited)
For the three months ended March 31, 2007 and 2006
(in millions of )
 
                                                               
    Siemens
                                               
 
  2007
    2006
                                                 
Net income
    1,259       923                                                  
Currency translation differences
    (94 )     (172 )                                                
Available-for-sale financial assets
    (44 )     93                                                  
Derivative financial instruments
          22                                                  
Actuarial gains and losses on pension plans and similar commitments
    116       1,058                                                  
Revaluation effect related to step acquisitions
    3                                                        
 
                                                           
Total income and expense recognized directly in equity, net of tax (2)(3)
    (19 )     1,001                                                  
 
                                                           
Total income and expense recognized in equity
    1,240       1,924                                                  
 
                                                           
Attributable to:
                                                               
Minority interest
    60       38                                                  
Shareholders of Siemens AG
    1,180       1,886                                                  
 
(1)   The income taxes of Eliminations, reclassifications and Corporate Treasury, Operations, and Financing and Real Estate are based on the consolidated effective corporate tax rate applied to income before income taxes.
 
(2)   Includes (35) and (21) in 2007 and 2006, respectively, resulting from investments accounted for using the equity method.
 
(3)   Includes minority interest of (3) and (12) in 2007 and 2006, respectively, relating to currency translation differences.

15


Table of Contents

SIEMENS
CONSOLIDATED STATEMENTS OF INCOME (unaudited)
For the six months ended March 31, 2007 and 2006
(in millions of , per share amounts in )
                                                                 
                    Eliminations,                        
                    reclassifications and                     Financing and Real  
    Siemens     Corporate Treasury     Operations     Estate  
    2007
    2006
    2007
    2006
    2007
    2006
    2007
    2006
 
Revenue
    39,694       36,800       (789 )     (681 )     39,301       36,338       1,182       1,143  
Cost of goods sold and services rendered
    (29,228 )     (27,502 )     789       681       (29,072 )     (27,230 )     (945 )     (953 )
 
                                               
Gross profit
    10,466       9,298                   10,229       9,108       237       190  
Research and development expenses
    (1,655 )     (1,648 )                 (1,655 )     (1,648 )            
Marketing, selling and general administrative expenses
    (5,951 )     (6,110 )     (1 )     (1 )     (5,765 )     (5,945 )     (185 )     (164 )
Other operating income
    340       394       (40 )     (44 )     259       286       121       152  
Other operating expense
    (662 )     (69 )     (2 )     (1 )     (649 )     (61 )     (11 )     (7 )
Income from investments accounted for using the equity method, net
    350       339                   307       308       43       31  
Financial income (expense), net
    9       (299 )     120       (496 )     (237 )     146       126       51  
 
                                               
Income (loss) from continuing operations before income taxes
    2,897       1,905       77       (542 )     2,489       2,194       331       253  
Income taxes (1)
    (787 )     (401 )     (21 )     114       (676 )     (462 )     (90 )     (53 )
 
                                               
Income (loss) from continuing operations
    2,110       1,504       56       (428 )     1,813       1,732       241       200  
Income (loss) from discontinued operations, net of income taxes
    (63 )     358                   (63 )     358              
 
                                               
Net income (loss)
    2,047       1,862       56       (428 )     1,750       2,090       241       200  
 
                                               
Attributable to:
                                                               
Minority interest
    112       103                                                  
Shareholders of Siemens AG
    1,935       1,759                                                  
Basic earnings per share
                                                               
Income from continuing operations
    2.26       1.60                                                  
Income (loss) from discontinued operations
    (0.09 )     0.38                                                  
 
                                                           
Net income
    2.17       1.98                                                  
 
                                                           
Diluted earnings per share
                                                               
Income from continuing operations
    2.17       1.59                                                  
Income (loss) from discontinued operations
    (0.08 )     0.38                                                  
 
                                                           
Net income
    2.09       1.97                                                  
 
                                                           
 
                                                               
 
                                                               
 
                                                               
 
                                                               
 
                                                               
CONSOLIDATED STATEMENTS OF INCOME AND EXPENSE RECOGNIZED IN EQUITY (unaudited)
For the six months ended March 31, 2007 and 2006
(in millions of )
 
    Siemens
                                               
 
  2007
    2006
                                                 
 
                                                               
Net income
    2,047       1,862                                                  
Currency translation differences
    (261 )     (21 )                                                
Available-for-sale financial assets
    (2 )     (127 )                                                
Derivative financial instruments
    53       (47 )                                                
Actuarial gains and losses on pension plans and similar commitments
    625       837                                                  
Revaluation effect related to step acquisitions
    3                                                        
 
                                                           
Total income and expense recognized directly in equity, net of tax (2)(3)
    418       642                                                  
 
                                                           
Total income and expense recognized in equity
    2,465       2,504                                                  
 
                                                           
Attributable to:
                                                               
Minority interest
    97       102                                                  
Shareholders of Siemens AG
    2,368       2,402                                                  
 
(1)   The income taxes of Eliminations, reclassifications and Corporate Treasury, Operations, and Financing and Real Estate are based on the consolidated effective corporate tax rate applied to income before income taxes.
 
(2)   Includes (30) and 1 in 2007 and 2006, respectively, resulting from investments accounted for using the equity method.
 
(3)   Includes minority interest of (15) and (1) in 2007 and 2006, respectively, relating to currency translation differences.

16


Table of Contents

SIEMENS
CONSOLIDATED STATEMENTS OF CASH FLOW (unaudited)
For the six months ended March 31, 2007 and 2006
(in millions of )
                                                                 
                    Eliminations,                        
                    reclassifications and                     Financing and Real  
    Siemens     Corporate Treasury     Operations     Estate  
    2007
    2006
    2007
    2006
    2007
    2006
    2007
    2006
 
Cash flows from operating activities
                                                               
Net income (loss)
    2,047       1,862       56       (428 )     1,750       2,090       241       200  
Adjustments to reconcile net income to cash provided Amortization, depreciation and impairments
    1,620       1,508                   1,415       1,303       205       205  
Income taxes
    754       348       21       (114 )     643       409       90       53  
Interest (income) expense, net
    52       (96 )     (160 )     (218 )     274       199       (62 )     (77 )
(Gains) on sales and disposals of businesses, intangibles and property, plant and equipment
    (188 )     (150 )                 (116 )     (46 )     (72 )     (104 )
(Gains) on sales of investments, net (1)
    (69 )     (91 )                 (37 )     (91 )     (32 )      
(Gains) losses on sales and impairments of current available-for-sale financial assets, net
    5       (454 )                 5       (454 )            
(Income) from investments (1)
    (385 )     (305 )                 (306 )     (275 )     (79 )     (30 )
Other non-cash (income) expenses
    51       148       12       80       51       73       (12 )     (5 )
Change in current assets and liabilities (Increase) decrease in inventories
    (1,045 )     (1,943 )                 (1,002 )     (1,959 )     (43 )     16  
(Increase) decrease in trade and other receivables
    (352 )     5       1,190       359       (1,532 )     (357 )     (10 )     3  
(Increase) decrease in other current assets
    (19 )     (154 )     44       (43 )     (126 )     (172 )     63       61  
Increase (decrease) in trade payables
    (79 )     (228 )     (40 )     (3 )     (38 )     (240 )     (1 )     15  
Increase (decrease) in current provisions
    (366 )     (217 )                 (343 )     (206 )     (23 )     (11 )
Increase (decrease) in other current liabilities
    1,627       1,328       262       679       1,326       618       39       31  
Change in other assets and liabilities
    (795 )     (97 )     (229 )     86       (575 )     (112 )     9       (71 )
Income taxes paid
    (932 )     (603 )     (25 )     (33 )     (801 )     (527 )     (106 )     (43 )
Dividends received
    105       66                   45       50       60       16  
Interest received
    386       320       106       63       76       85       204       172  
 
                                               
Net cash provided by operating activities — continuing and discontinued operations
    2,417       1,247       1,237       428       709       388       471       431  
Net cash provided by operating activities — continuing operations
    3,881       1,732       1,237       436       2,173       865       471       431  
Cash flows from investing activities
                                                               
Additions to intangible assets and property, plant and equipment
    (1,682 )     (1,800 )                 (1,399 )     (1,473 )     (283 )     (327 )
Acquisitions, net of cash acquired
    (4,551 )     (491 )                 (4,551 )     (488 )           (3 )
Purchases of investments (1)
    (127 )     (261 )                 (123 )     (245 )     (4 )     (16 )
Purchases of current available-for-sale financial assets
    (17 )     (43 )                 (2 )     (41 )     (15 )     (2 )
(Increase) decrease in receivables from financing activities
    (340 )     (294 )     (1,204 )     (371 )                 864       77  
Proceeds from sales of investments, intangibles and property, plant and equipment (1)
    466       431                   277       291       189       140  
Proceeds from disposals of businesses
    32       3                   32       3              
Proceeds from sales of current available-for-sale financial assets
    25       791                   18       791       7        
 
                                               
Net cash provided by (used in) investing activities — continuing and discontinued operations
    (6,194 )     (1,664 )     (1,204 )     (371 )     (5,748 )     (1,162 )     758       (131 )
Net cash provided by (used in) investing activities — continuing operations
    (5,942 )     (1,918 )     (1,204 )     (371 )     (5,496 )     (1,416 )     758       (131 )
Cash flows from financing activities
                                                               
Proceeds from issuance of common stock
    343                         343                    
Purchase of common stock
    (101 )     (377 )                 (101 )     (377 )            
Proceeds from re-issuance of treasury stock
    66       277                   66       277              
Proceeds from issuance of debt
          833             833                          
Repayment of debt
    (1,146 )           (1,146 )                              
Change in short-term debt
    3,116       (1,105 )     3,008       (770 )     142       (259 )     (34 )     (76 )
Interest paid
    (469 )     (232 )     (379 )     (139 )     (61 )     (64 )     (29 )     (29 )
Dividends paid
    (1,292 )     (1,201 )                 (1,292 )     (1,201 )            
Dividends paid to minority shareholders
    (102 )     (77 )                 (102 )     (77 )            
Intragroup financing
                (5,708 )     (1,897 )     6,881       2,095       (1,173 )     (198 )
 
                                               
Net cash provided by (used in) financing activities
    415       (1,882 )     (4,225 )     (1,973 )     5,876       394       (1,236 )     (303 )
Effect of exchange rates on cash and cash equivalents
    (6 )           2       (1 )     (8 )     1              
Net increase (decrease) in cash and cash equivalents
    (3,368 )     (2,299 )     (4,190 )     (1,917 )     829       (379 )     (7 )     (3 )
Cash and cash equivalents at beginning of period
    10,214       8,121       9,072       6,603       1,109       1,471       33       47  
 
                                               
Cash and cash equivalents at end of period
    6,846       5,822       4,882       4,686       1,938       1,092       26       44  
Less: Cash and cash equivalents of discontinued operations at end of period
    953                         953                    
 
                                               
Cash and cash equivalents of continuing operations at end of period
    5,893       5,822       4,882       4,686       985       1,092       26       44  
 
                                               
 
(1)   Investments include equity instruments either classified as non-current available-for-sale financial assets or accounted for using the equity method.

17


Table of Contents

SIEMENS
CONSOLIDATED BALANCE SHEETS (unaudited)
As of March 31, 2007 and September 30, 2006
(in millions of )
                                                                 
                    Eliminations,                        
                    reclassifications and                     Financing and Real  
    Siemens     Corporate Treasury     Operations     Estate  
    3/31/07
    9/30/06
    3/31/07
    9/30/06
    3/31/07
    9/30/06
    3/31/07
    9/30/06
 
ASSETS
                                                               
Current assets
                                                               
Cash and cash equivalents
    5,893       10,214       4,882       9,072       985       1,109       26       33  
Available-for-sale financial assets
    551       596       388       416       137       160       26       20  
Trade and other receivables
    15,706       15,148       (1 )           12,552       10,885       3,155       4,263  
Other current financial assets
    2,894       2,370       159       145       1,731       1,314       1,004       911  
Intragroup receivables
                (13,241 )     (15,736 )     13,198       15,680       43       56  
Inventories
    14,198       12,790       (2 )     (2 )     14,101       12,735       99       57  
Income tax receivables
    425       458       1       2       388       445       36       11  
Other current assets
    1,369       1,274             48       1,236       1,122       133       104  
Assets classified as held for disposal
    8,536       7,164       (25 )     (21 )     8,561       7,180             5  
 
                                               
Total current assets
    49,572       50,014       (7,839 )     (6,076 )     52,889       50,630       4,522       5,460  
 
                                               
Goodwill
    12,111       9,689                   11,981       9,557       130       132  
Other intangible assets
    4,112       3,385                   4,098       3,368       14       17  
Property, plant and equipment
    12,419       12,072                   8,736       8,310       3,683       3,762  
Investments accounted for using the equity method
    3,182       2,956                   2,953       2,738       229       218  
Other financial assets
    5,471       5,042       522       215       1,383       1,232       3,566       3,595  
Intragroup receivables
                (177 )     (348 )     177       348              
Deferred tax assets
    3,178       3,860       52       222       3,013       3,532       113       106  
Other assets
    743       713       1       194       718       507       24       12  
 
                                               
Total assets
    90,788       87,731       (7,441 )     (5,793 )     85,948       80,222       12,281       13,302  
 
                                               
LIABILITIES AND EQUITY
                                                               
Current liabilities
                                                               
Short-term debt and current maturities of long-term debt
    4,173       2,175       3,218       1,433       731       530       224       212  
Trade payables
    8,821       8,443       (1 )     28       8,555       8,140       267       275  
Other current financial liabilities
    1,915       1,035       760       508       1,061       483       94       44  
Intragroup liabilities
                (17,606 )     (16,406 )     12,098       9,886       5,508       6,520  
Current provisions
    3,693       3,859                   3,617       3,770       76       89  
Income tax payables
    1,356       1,487       11       2       1,321       1,468       24       17  
Other current liabilities
    16,801       16,485       139       227       16,420       15,974       242       284  
Liabilities associated with assets classified as held for disposal
    5,213       5,385       (16 )     (16 )     5,229       5,401              
 
                                               
Total current liabilities
    41,972       38,869       (13,495 )     (14,224 )     49,032       45,652       6,435       7,441  
 
                                               
Long-term debt
    12,625       13,122       11,580       11,946       640       744       405       432  
Pension plans and similar commitments
    3,841       5,083                   3,839       5,081       2       2  
Deferred tax liabilities
    125       102       (441 )     (397 )     119       95       447       404  
Provisions
    1,898       1,858                   1,792       1,761       106       97  
Other financial liabilities
    289       248       37       19       200       177       52       52  
Other liabilities
    2,355       2,174       41       41       2,265       2,054       49       79  
Intragroup liabilities
                (5,163 )     (3,178 )     2,339       434       2,824       2,744  
 
                                               
Total liabilities
    63,105       61,456       (7,441 )     (5,793 )     60,226       55,998       10,320       11,251  
 
                                               
Equity
                                                               
Common stock, no par value (1)
    2,689       2,673                                                  
Additional paid-in capital
    6,013       5,662                                                  
Retained earnings
    18,353       17,082                                                  
Other components of equity
    (39 )     156                                                  
Treasury shares, at cost (2)
                                                           
 
                                                           
Total equity attributable to shareholders of Siemens AG
    27,016       25,573                                                  
 
                                                           
Minority interest
    667       702                                                  
 
                                               
Total equity
    27,683       26,275                   25,722       24,224       1,961       2,051  
 
                                               
Total liabilities and equity
    90,788       87,731       (7,441 )     (5,793 )     85,948       80,222       12,281       13,302  
 
                                               
 
(1)   Authorized: 1,119,926,600 and 1,116,087,241 shares, respectively.
Issued: 896,216,600 and 891,087,241 shares, respectively.
 
(2)   1,187 and 415 shares, respectively.

18


Table of Contents

(SIEMENS LOGO)   Munich, April 26, 2007
Update on Compliance and AUB
Update on Com and Related Investigations
As previously reported, Munich public prosecutors are conducting an investigation of certain current and former employees of Siemens AG (the Company) on suspicion of embezzlement, bribery and tax evasion. Arrest warrants were issued for former and currently suspended employees of our Com business Group who were taken into custody, questioned and later released. In December 2006, the former Chief Executive Officer (CEO) of Com was arrested, questioned and released. Siemens’ former Chief Financial Officer (CFO) was interrogated as a suspect by the public prosecutor. Both of these individuals are former members of the Corporate Executive Committee of Siemens.
On March 26, 2007, the Munich public prosecutors conducted further searches of the Company’s premises and of private residences in Munich and executed additional arrest warrants for a current and a former employee of Com. The individuals were later released and the current employee has since been suspended. The Munich public prosecutors’ investigation as well as related investigations in Liechtenstein, Switzerland, Italy, Greece and other countries are ongoing.
The U.S. Department of Justice is conducting an investigation of possible criminal violations of U.S. law by Siemens in connection with these matters. During the second quarter of fiscal 2007, Siemens was advised that the U.S. Securities and Exchange Commission’s enforcement division had converted its informal inquiry into these matters into a formal investigation.
With regard to the foregoing matters, the Company has engaged Debevoise & Plimpton LLP (Debevoise), an independent external law firm, to conduct an independent and comprehensive investigation to determine whether anti-corruption regulations have been violated and to conduct an independent and comprehensive assessment of the compliance and control systems of Siemens. Debevoise reports directly and exclusively to the Audit Committee of the Supervisory Board and is being assisted by forensic accountants from the international accounting firm Deloitte Touche. Debevoise’s investigation of allegations of corruption at Com is ongoing. The scope of the independent investigation also includes an investigation of potential anti-corruption violations at the Company’s other Groups which is in the process of being launched.
On February 2, 2007, an alleged ADS holder of the Company filed a derivative lawsuit with the Supreme Court of the State of New York against certain current and former members of the Company’s Managing and Supervisory Boards as well as against the Company as a nominal defendant, seeking various forms of relief relating to the allegations of corruption and related violations at Siemens. The suit is currently stayed.
     
Siemens AG
   
Corporate Communications
   
Media Relations
   
80312 Munich
   

19


Table of Contents

Update on Internal Analyses Undertaken by the Company
In addition to the independent investigation being conducted by Debevoise, the Company has also continued to conduct its own analysis of issues raised by allegations of violations of anti-corruption legislation.
The current status of the Company’s analysis is summarized below:
    Within Com a number of Business Consultant Agreements (BCAs) have been identified. We have identified a multitude of payments made in connection with these contracts for which we have not yet been able either to establish a valid business purpose or to clearly identify the recipient. These payments raise concerns in particular under the Foreign Corrupt Practices Act (FCPA) in the United States, anti-corruption legislation in Germany and similar legislation in other countries.
 
    The payments identified were recorded as deductible business expenses in prior periods in determining income tax provisions. As previously reported, our investigation determined that certain of these payments were nondeductible under German tax regulations, and accordingly, we have recorded additional income tax charges in our financial statements for fiscal 2006 to reflect the correct tax treatment of these expenses. See Note 2 to the Consolidated Financial Statements in the annual report on Form 20-F for the fiscal year ended September 30, 2006 for a further discussion. The Company has already reported this issue to the German tax authorities.
 
    During the first half of fiscal 2007, the Company has continued to analyze payments under these and additional BCAs at Com. An analysis of BCAs and related payments at the other Groups will begin. As a result, the Company expects a significant increase in the total amount of BCA payments under review.
 
    During the second quarter of fiscal 2007, the Company commenced an analysis of cash and check payments at Com which may relate to BCAs, and which may also raise concerns under the FCPA and anti-corruption legislation in Germany and other countries. The Company will be analyzing the deductibility for tax purposes of these payments. The Company is also in the process of making internal inquiries regarding similar cash payments at other Groups.
Potential Impact of the Investigations and the Company’s Internal Analyses on Financial Statements
Due to the ongoing status of the Company’s own analyses described above and the investigations, including the extension of the independent investigation to the other Groups, there remain substantial uncertainties. Accordingly, the Company has not recorded, as of March 31, 2007, any change in tax assets and liabilities with respect to the BCAs and other payments under review. Depending on the future results of the analyses and investigations, there is a risk that the Company will have to make changes in tax assets and liabilities in future periods, including by recording additional tax charges in respect of prior periods beyond those reflected in our financial statements for fiscal 2006. Such changes, as well as the further results from the ongoing investigations, could be material.
     
Siemens AG
   
Corporate Communications
   
Media Relations
   
80312 Munich
   

20


Table of Contents

Other Risks relating to the Investigations
Siemens currently cannot exclude the possibility that criminal or civil sanctions may be brought against the Company itself or against certain of its employees in connection with possible violations of law, including the FCPA. The Company’s operating activities may also be negatively affected, particularly due to imposed penalties, compensatory damages or the exclusion from public procurement contracts. To date, no charges or provisions for any such penalties or damages have been accrued as management does not yet have enough information to reasonably estimate such amounts. Furthermore, changes affecting the Company’s course of business or its compliance programs may turn out to be necessary.
Cost of External Advisors
The current quarter includes a total of 63 million in expenses for outside advisors engaged by Siemens in connection with the investigations into alleged violations of anti-corruption laws and related matters as well as remediation activities.
Update on Compliance Initiatives
The Company has taken a number of significant steps to improve its compliance procedures and internal controls in response to the allegations of corruption. Among the initiatives the Company has implemented or is in the process of implementing are:
    The Managing Board has engaged an external attorney to act as an independent “ombudsman” and to provide a protected communication channel for Siemens employees and third parties.
 
    The Company’s office of corporate compliance has been organizationally embedded in the legal department.
 
    The Company’s audit and compliance departments and an internal task force have been instructed to continue their internal investigation activities and the examination of our compliance and internal control system for gaps and any possibilities of circumvention.
 
    The Company is in the process of enhancing internal controls through centralization of its bank accounts and cash payment systems.
 
    The Company has implemented a moratorium on entering into new BCAs as well as new payments under existing BCAs. Any exceptions require the prior written consent of relevant senior management as well as the written consent of the Company’s chief compliance officer based on a review of the agreements in question.
 
    The Company has launched a formal program of anti-corruption and other legal compliance training for management, group and regional compliance officers and other employees.
The Managing Board and the Audit Committee of Siemens have engaged an independent compliance advisor in order to consult the Managing Board and the Audit Committee with regard to the future structure of the compliance organization, the execution of compliance reviews, the review of related guidelines and controls including potential improvement measures, and the
     
Siemens AG
   
Corporate Communications
   
Media Relations
   
80312 Munich
   

21


Table of Contents

respective communication and training. The independent compliance advisor provides periodic status reports to the Managing Board and Audit Committee.
AUB
On February 14, 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 breach of fiduciary duties (Untreue) against Siemens, tax evasion and a violation of the German Works Council Constitution Act. The investigation relates to an agreement entered into by Siemens with an entity controlled by Mr. Wilhelm Schelsky, the former head of the independent employee association AUB (Arbeitsgemeinschaft Unabhängiger Betriebsangehöriger). The prosecutors are investigating payments made during the period 2001 to 2006 for which Siemens may not have received appropriate services in return. Mr. Schelsky was arrested in February 2007. On March 27, 2007, a second search was conducted at the Company’s premises in Munich and an arrest warrant was issued for a member of the Company’s Corporate Executive Committee, in connection with this investigation, who was taken into custody. In addition to the member of the Corporate Executive Committee, other current and former members of the Company’s senior management were named as suspects in this matter. On April 4, 2007, the member of the Corporate Executive Committee posted bail in the amount of 5.0 million and was released from custody. In this connection, a bank issued a bond (Bankbürgschaft) in the amount of 5.0 million, 4.5 million of which was guaranteed by the Company pursuant to provisions of German law. The member of the Corporate Executive Committee has provided the Company a personal undertaking to cooperate with and fully support the independent investigation conducted by Debevoise and to repay all costs incurred and payments made by the Company in connection with the bank guarantee in the event he is found to have violated his obligations to the Company in connection with the facts under investigation by the Nuremberg prosecutors. The investigation into the allegations involving the Company’s relationship with Mr. Schelsky and AUB has also been included within the scope of the investigation being conducted by Debevoise. On April 2, 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 (Betriebsverfassungsgesetz) by providing undue preferential support to AUB in connection with elections of the members of the Company’s works councils.
 
 
This document contains forward-looking statements and information — that is, statements related to future, not past, events. These statements may be identified by words as “expects”, “looks forward to”, “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “will” 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 its operations, performance, business strategy and results and could cause the actual results, performance or achievements of Siemens worldwide 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); the challenges of integrating major acquisitions and implementing joint ventures and other significant portfolio measures; changes in currency exchange rates and interest rates; introduction of competing products or technologies by other companies; lack of acceptance of new products or services by customers targeted by Siemens worldwide; changes in business strategy; the outcome of pending investigations and legal proceedings; our analysis of the potential impact of such matters on our financial statements; as well as various other factors. More detailed information about our risk factors is contained in Siemens’ 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.
     
Siemens AG
   
Corporate Communications
   
Media Relations
   
80312 Munich
   

22


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: April 26, 2007   /s/ Dr. Ralf P. Thomas    
         
    Name:   Dr. Ralf P. Thomas
    Title:   Corporate Vice President and Controller
 
           
    /s/ Dr. Klaus Patzak    
         
    Name:   Dr. Klaus Patzak
    Title:   Corporate Vice President
        Financial Reporting and Controlling

23