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

January 31, 2011

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.

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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

Interim group management report

Condensed Interim Consolidated Financial Statements

Notes

Supervisory Board and Managing Board

Review report

Quarterly summary

Siemens financial calendar

      

Introduction

     Siemens AG’s Interim Report for the Siemens Group complies with the applicable legal requirements of the German Securities Trading Act (Wertpapierhandelsgesetz — WpHG) regarding quarterly financial reports, and comprises Condensed Interim Consolidated Financial Statements and an Interim group management report in accordance with § 37x (3) WpHG. The Condensed Interim Consolidated Financial Statements have been prepared in accordance with International Financial Reporting Standards (IFRS) and its interpretations issued by the International Accounting Standards Board (IASB), as adopted by the European Union (EU). The Condensed Interim Consolidated Financial Statements also comply with IFRS as issued by the IASB. This Interim Report should be read in conjunction with our Annual Report for fiscal 2010, which includes a detailed analysis of our operations and activities.

     Due to rounding, numbers presented throughout this and other documents may not add up precisely to the totals provided and percentages may not precisely reflect the absolute figures.

Key figures Q1 20111,2

(unaudited; in millions of €, except where otherwise stated)

Interim group management report

Overview of financial results for the first quarter of fiscal 2011
(Three months ended December 31, 2010)

	•		For the third straight quarter, all Sectors of Siemens delivered order and revenue growth compared to the prior-year period, including growth in all reporting regions and double-digit increases in emerging economies.
	•		Revenue rose 12% and orders climbed 19%, benefiting from a currency translation tailwind. The book-to-bill ratio was 1.16 and the order backlog for the Sectors increased to €92 billion.
	•		Total Sectors Profit rose to €2.229 billion, even after the previously announced allocation of €261 million related to special employee remuneration.
	•		During the first quarter, Siemens and Atos Origin S.A. (Atos) signed an option agreement which grants Atos the right to acquire Siemens IT Solutions and Services, subject to necessary approvals. Pretax impacts on income in the first quarter include a goodwill impairment of €136 million and charges related to establishing the business as a separate legal entity.
	•		Income from continuing operations climbed 17%, to €1.787 billion. Basic EPS was €2.00.
	•		Free cash flow from continuing operations climbed to €908 million from €725 million in the first quarter a year earlier.

     Management’s perspective on first-quarter results. We aim for capital-efficient growth which we successfully achieved in the first quarter of fiscal 2011. In the first quarter, orders and revenue grew in all regions, particularly in emerging markets. That benefits us in Germany as well. We delivered excellent bottom-line performance and are fully on track to reach the targets we set for fiscal 2011.

     Fiscal year begins with strong growth momentum. Siemens delivered year-over-year growth in both orders and revenue for the third straight quarter. With all Sectors and all three of Siemens’ reporting regions contributing increases, orders climbed 19% and revenue was up 12%. Both revenue and orders benefited clearly from positive currency translation effects. On an organic basis, excluding currency translation and portfolio effects, orders increased 13% and revenue rose 6%. The combined book-to-bill ratio for Siemens was 1.16, and the Sectors’ combined order backlog increased to €92 billion, in part due to positive currency translation effects.

     Emerging markets drive order growth. All Sectors reported double-digit order growth compared to the prior-year period, highlighted by a higher volume from large orders in Energy and Industry, particularly at Fossil Power Generation and Mobility. Order volumes also benefited from currency translation effects as noted above. All regions delivered order growth in the first quarter, led by Asia, Australia and the Americas. India led growth within the region Asia, Australia, due in part to a large order in Energy. The Americas combined higher orders in the established U.S. market with fast growth in emerging markets. On a global basis, emerging markets grew significantly faster than orders overall, at 31%, and accounted for €7.834 billion or 35% of total orders for the quarter.

     Revenue rises in all Sectors and regions, with boost from currency. Revenue growth was well balanced in the first quarter, with double-digit increases in all Sectors. Strong conversion from the Sectors’ respective order backlogs played a major role in broad-based revenue growth, as did a strong tailwind from currency translation effects as noted above. Revenue rose in all three regions, led by the Americas and Asia, Australia. More modest growth in the region comprising Europe, the Commonwealth of Independent States (C.I.S.), Africa, Middle East included a strong increase in Germany. Emerging markets on a global basis grew faster than revenue overall, at 16% year-over-year, and accounted for €5.748 billion or 29% of total revenue for the quarter.

     Industry and Energy take Total Sectors Profit higher. Total Sectors Profit for the first quarter rose 6% year-over-year, to €2.229 billion, burdened by €261 million related to previously announced special employee remuneration. This amount was accrued centrally in the fourth quarter of fiscal 2010 and allocated to the Sectors during the current quarter (see below). This impact cut 1.4 percentage points from Total Sectors Profit as a percent of revenue, which was 12.0%. All Divisions in the Sectors took a charge for a portion of these costs based on their number of non-management employees. In contrast, positive currency effects benefited profit in all Sectors, particularly in Industry. The Industry Sector drove the increase in Total Sectors Profit for the quarter, with 22% profit growth compared to the prior-year period. Profit in Energy rose 7%, on particularly strong earnings conversion at Fossil Power Generation. Profit in the Healthcare Sector declined on lower profit at Diagnostics and €32 million in charges related to particle therapy contracts, among other factors.

     Beginning with fiscal 2011 central infrastructure costs, which were formerly reported in Corporate items, will be allocated primarily to the Sectors. The total amount to be allocated is determined at the beginning of the fiscal year and will be charged in equal installments in all four quarters. Prior period financial information is reported on a comparable basis. For further information see “Segment information analysis—Reconciliation to financial statements—Corporate items and pensions.”

     Income climbs on Sectors profit, higher results below Total Sectors. Income from continuing operations climbed 17% year-over-year, to €1.787 billion, and corresponding basic EPS rose to €2.00 up from €1.70 a year earlier. These increases were due to growth in Total Sectors Profit and improved results below Total Sectors, including higher contributions from Siemens Real Estate (SRE), Equity Investments and Financial Services (SFS). Corporate items and pensions was a positive €231 million compared to a negative €142 million in the first quarter a year earlier. The current quarter presents the allocation primarily to the Sectors of a substantial part of the €310 million in special employee remuneration that was accrued in the fourth quarter of fiscal 2010. Within this part is the €261 million that was debited to the Sectors for management reporting purposes as mentioned earlier. Siemens IT Solutions and Services posted a loss of €129 million due to a €136 million goodwill impairment in connection with the option agreement mentioned earlier. Net income increased 15% year-over-year to €1.753 billion. Basic EPS improved to €1.97 from €1.70 a year earlier. The primary driver of net income in both periods was continuing operations and the related factors discussed above.

     Free cash flow rises for Siemens and Sectors. Free cash flow from continuing operations rose to €908 million from €725 million in the first quarter a year earlier, including higher Free cash flow at the Sector level. Other factors in the increase included higher cash inflows from Corporate Treasury activities and lower cash outflows related to staff reduction measures, partly offset by higher payments for income taxes. The cash conversion rate for the first quarter was 0.51, up from the prior-year period.

     ROCE rises on higher income from continuing operations. On a continuing basis, ROCE (adjusted) increased to 23.0% from 19.2% in the first quarter a year earlier. The difference was due mainly to higher income from continuing operations. To a lesser extent, ROCE (adjusted) also benefited from lower average capital employed compared to the prior-year period. Beginning with fiscal 2011, we changed the definition of our ROCE calculation and adjusted prior-year information accordingly. For further information see Annual Report for fiscal 2010.

     Improvement in pension plan underfunding. Beginning with fiscal 2011 the figures presented below cover both principal and non-principal pension plans. The presentation of prior-year information has been adjusted to conform to the current-year presentation. The estimated underfunding of Siemens’ pension plans as of December 31, 2010 amounted to approximately €6.1 billion, compared to an underfunding of approximately €7.4 billion at the end of fiscal 2010. The improvement in funded status since September 30, 2010 is due mainly to a decrease in Siemens’ defined benefit obligation (DBO) resulting from an increase in the discount rate assumption as of December 31, 2010. This was partly offset by a negative actual return on plan assets.

Results of Siemens

Results of Siemens — First quarter of fiscal 2011

     The following discussion presents selected information for Siemens for the first quarter of fiscal 2011:

     Orders and revenue

     In the first quarter, orders and revenue increased year-over-year in all Sectors. Orders climbed 19% to €22.588 billion, including a higher volume from large orders compared to the prior-year period. Order growth in all Sectors benefited from an improved market environment and a low basis of comparison in the same period a year earlier. Revenue rose 12% to €19.489 billion, due in part to strong conversion of orders from the Sectors’ backlogs. Both revenue and orders benefited clearly from positive currency translation effects. On an organic basis, excluding the net effect of currency translation and portfolio transactions, orders rose 13% and revenue was up 6% compared to the prior-year quarter. The combined book-to-bill ratio for the Sectors was 1.18, and 1.16 for Siemens overall. The combined order backlog for the three Sectors increased to €92 billion as of December 31, 2010, benefiting from positive currency translation effects.

		New orders (location of customer)
		First three months
		of fiscal								% Change								therein
(in millions of €)		2011				2010				Actual				Adjusted(1)				Currency				Portfolio
Europe, C.I.S.(2), Africa, Middle East			11,621				10,823				7	%			6	%			3	%			(1	)%
therein Germany			2,985				2,906				3	%			3	%			0	%			0	%
Americas			6,296				5,134				23	%			11	%			12	%			0	%
therein U.S.			4,680				3,798				23	%			11	%			13	%			0	%
Asia, Australia			4,670				3,019				55	%			41	%			14	%			0	%
therein China			1,728				1,160				49	%			38	%			11	%			0	%
therein India			1,212				467				160	%			141	%			19	%			0	%
Siemens			22,588				18,976				19	%			13	%			7	%			(1	)%

     Orders related to external customers rose 19% in the first quarter of fiscal 2011. All Sectors reported double-digit order growth compared to the prior-year period, highlighted by a higher volume from large orders in Energy and Industry, particularly at Fossil Power Generation and Mobility. Order volumes also benefited from currency translation effects as noted above. On a global basis, emerging markets grew significantly faster than orders overall, at 31%, and accounted for €7.834 billion or 35% of total orders for the quarter.

     In the region Europe, C.I.S., Africa, Middle East — our largest reporting region — orders increased in Industry and Energy. Order growth of 20% in Industry was due partly to a higher volume from large orders at Mobility. Healthcare orders declined 2% in the region. Order growth in the Americas was driven by Energy, with particularly strong demand in the U.S. Both Fossil Power Generation and Power Transmission contributed high double-digit increases. Industry posted a 20% increase in the region overall and also drove the region’s growth in emerging markets. Orders rose 55% in the region Asia, Australia year-over-year, led by Energy and Industry. Fossil Power Generation was a major growth driver, with a higher volume of major orders in the region. All Sectors saw strong growth in emerging markets. The substantial growth in India by 160% is due to a combination of a major order won by Fossil Power Generation and a low basis of comparison in the prior-year period.

		Revenue (location of customer)
		First three months
		of fiscal								% Change								therein
(in millions of €)		2011				2010				Actual				Adjusted(1)				Currency				Portfolio
Europe, C.I.S.(2), Africa, Middle East			10,499				9,970				5	%			3	%			3	%			0	%
therein Germany			3,090				2,681				15	%			15	%			0	%			0	%
Americas			5,405				4,376				24	%			12	%			12	%			(1	)%
therein U.S.			3,927				3,167				24	%			12	%			13	%			0	%
Asia, Australia			3,586				3,005				19	%			8	%			11	%			0	%
therein China			1,589				1,231				29	%			19	%			10	%			0	%
therein India			550				399				38	%			25	%			13	%			0	%
Siemens			19,489				17,352				12	%			6	%			7	%			0	%

     Revenue related to external customers rose 12% compared to the first quarter a year earlier. Revenue growth was well balanced in the first quarter, including double-digit increases in all Sectors. Strong conversion from the Sectors’ respective order backlogs played a major role in broad-based revenue growth as did currency translation effects, which were clearly beneficial. Emerging markets on a global basis grew faster than revenue overall, at 16% year-over-year, and accounted for €5.748 billion or 29% of total revenue for the quarter.

     In Europe, C.I.S., Africa, Middle East, first-quarter revenue rose 5% year-over-year, including an increase of 11% in Energy. The largest share of this increase came from Renewable Energy, which saw a short-term drop in revenue in the prior-year period. Within the region, revenue in Germany rose 15% due primarily to strong growth in Industry. In the Americas, all Sectors recorded a double-digit increase in revenue, led by Energy and Industry. The Energy Sector recorded an increase of 32%, including double-digit increases at most Divisions. Revenue growth in the region clearly benefited from currency translation effects. Revenue rose 19% in Asia, Australia on double-digit increases in Industry and Healthcare. Revenue development in China followed the pattern for the region overall, including strong positive currency translation effects.

Consolidated Statements of Income

		First three months
		of fiscal
(in millions of €)		2011				2010				% Change
Gross profit on revenue			6,195				5,294				17	%
as percentage of revenue			31.8	%			30.5	%

     Gross profit for the first quarter increased 17% compared to the same period a year earlier, due primarily to volume-driven profit growth in the Sectors. Industry posted a substantial increase in gross profit and also took its gross profit margin up compared to the prior-year period, led by Industry Automation and Drive Technologies. Gross profit rose in Energy and was nearly level year-over-year in Healthcare despite a charge of €32 million related to particle therapy contracts.

		First three months
		of fiscal
(in millions of €)		2011				2010				% Change
Research and development expenses			(935	)			(822	)			14	%
as percentage of revenue			4.8	%			4.7	%			—
Marketing, selling and general administrative expenses			(2,763	)			(2,543	)			9	%
as percentage of revenue			14.2	%			14.7	%			—
Other operating income			262				169				55	%
Other operating expense			(367	)			(56	)			>200	%
Income (loss) from investments accounted for using the equity method, net			130				115				13	%
Interest income			581				517				12	%
Interest expense			(450	)			(466	)			(3	)%
Other financial income (expense), net			(71	)			(14	)			>200	%

     Research and development (R&D) expenses increased to €935 million or 4.8% of revenue, from €822 million or 4.7% of revenue in the prior-year period, on increases in all Sectors. Marketing, selling and general administrative (SG&A) expenses rose to €2.763 billion from €2.543 billion. An increase in marketing and selling expenses in all Sectors was associated primarily with growth. General administrative expenses remained stable compared to the prior-year period. SG&A expenses declined as a percentage of revenue to 14.2% from 14.7% in the first quarter a year earlier.

     Other operating income increased to €262 million in the first quarter from €169 million in the same period a year earlier. The current period includes €64 million related to a settlement of legal and regulatory matters in connection with portfolio activities, as well as higher gains on real estate disposals at SRE. For comparison, the prior-year quarter included a €44 million gain related to the sale of our airfield solutions business. For additional information, see “Notes to Condensed Interim Consolidated Financial Statements” within this Interim Report.

     Other operating expense was €367 million, compared to €56 million in the first quarter a year earlier. The current quarter included the goodwill impairment of €136 million related to Siemens IT Solutions and Services mentioned above, charges related to legal and regulatory matters, and impacts related to portfolio activities. For additional information, see “Notes to Condensed Interim Consolidated Financial Statements” within this Interim Report.

     Income (loss) from investments accounted for using the equity method, net was €130 million, compared to €115 million in the first quarter a year earlier. Income related to our stake in Nokia Siemens Networks (NSN) was €18 million compared to a loss of €42 million in the prior-year period.

     Interest income increased to €581 million in the first quarter, from €517 million in the same period a year earlier, due primarily to a higher expected return on plan assets related to our pension plans. This in turn resulted primarily from an increase in pension plan assets as of September 30, 2010 compared to September 30, 2009. The increase in interest income also includes higher interest income relating to an increase in total liquidity compared to the prior-year period. Interest expense was €450 million, compared to €466 million in the prior-year quarter. The reduction in interest expense was due primarily to lower interest cost related to our pension plans.

     Other financial income (expense), net was a negative €71 million in the first quarter, compared to a negative €14 million in the same period a year earlier. The change was due mainly to higher expenses related to hedging activities not qualifying for hedge accounting. For additional information, see “Notes to Condensed Interim Consolidated Financial Statements” within this Interim Report.

		First three months
		of fiscal
(in millions of €)		2011				2010				% Change
Income from continuing operations before income taxes			2,582				2,194				18	%
Income taxes			(795	)			(668	)			19	%
as percentage of income from continuing operations before income taxes			31	%			30	%			—
Income from continuing operations			1,787				1,526				17	%
Income (loss) from discontinued operations, net of income taxes			(34	)			5				—
Net income			1,753				1,531				15	%
Net income attributable to non-controlling interests			35				54				—
Net income attributable to shareholders of Siemens AG			1,718				1,477				16	%

     Income from continuing operations before income taxes increased to €2.582 billion in the first quarter, compared to €2.194 billion in the same period a year earlier. The change year-over-year is due to the factors mentioned above, primarily including higher gross profit partly offset by an impairment of goodwill related to Siemens IT Solutions and Services. The effective tax rate was higher year-over-year, at 31%, due in part to the mostly non-tax-deductible goodwill impairment just mentioned. Income from continuing operations was €1.787 billion in the first quarter of fiscal 2011, up from €1.526 billion in the prior-year period.

     Discontinued operations primarily include former Com activities, comprising telecommunications carrier activities transferred into NSN in the third quarter of fiscal 2007; the enterprise networks business, 51% of which was divested during the fourth quarter of fiscal 2008; and the mobile devices business sold to BenQ Corporation in fiscal 2005. Income from discontinued operations in the current quarter was a negative €34 million, compared to a positive €5 million in the first quarter a year earlier. The current period included a negative effect from legal and regulatory matters related to former Com activities. For additional information regarding discontinued operations, see “Notes to Condensed Interim Consolidated Financial Statements” within this Interim Report.

     Net income for Siemens in the first quarter increased to €1.753 billion compared to €1.531 billion in the same period a year earlier. Net income attributable to shareholders of Siemens AG was €1.718 billion, up from €1.477 billion in the first quarter of fiscal 2010.

Portfolio activities

     In November 2010, Siemens closed the acquisition of a non-controlling interest of 49% in A2SEA A/S, a supplier of installation services for the construction of offshore wind farms, reported within the Renewable Energy Division of the Energy Sector.

     During the first quarter of fiscal 2011 we resolved legal matters and transferred our 19.8% stake in GIG Holding GmbH, which owns all shares of Gigaset Communications GmbH, to ARQUES Industries AG.

     In December 2010, we announced an agreement to sell our 49% stake in Krauss-Maffei Wegmann GmbH & Co. KG (KMW), reported within Equity Investments, to the Wegmann Group. This transaction closed in January 2011, after the close of the first quarter. The first installment of the purchase price is included in cash flows from investing activities for the first quarter of the current fiscal year.

     Also in December 2010, Siemens and Atos signed an option agreement which grants Atos the right to acquire Siemens IT Solutions and Services. For further information, see “Segment information analysis.”

     In January 2011, we closed the sale of our electronics assembly systems business, reported within Centrally managed portfolio activities.

     Siemens completed certain other portfolio transactions during the first three months of fiscal 2011, which did not have a significant effect on our Interim Consolidated Financial Statements. For further information on acquisitions and dispositions, see “Notes to Condensed Interim Consolidated Financial Statements.”

Segment information analysis

Sectors

Industry

Sector		First three months
		of fiscal								% Change								therein
(in millions of €)		2011				2010				Actual				Adjusted(1)				Currency				Portfolio
Profit			1,022				840				22	%
Profit margin			11.2	%			10.4	%
New orders			10,083				8,249				22	%			16	%			7	%			(1	)%
Revenue			9,114				8,070				13	%			7	%			6	%			0	%

     Industry delivered higher profit, revenue and orders compared to the first quarter a year ago, on continued strong execution in an improved market environment. Profit climbed to €1.022 billion, even after €149 million of the special employee remuneration allocation mentioned earlier. For comparison, profit of €840 million in the prior-year period benefited from a gain on the sale of the airfield solutions business at the Mobility Division as mentioned in “Results of Siemens.”

     Industry’s growth momentum was most evident in new orders. With increases at all Divisions and double-digit growth in all three reporting regions, new orders rose 22%, to €10.083 billion. Revenue rose 13%, to €9.114 billion, on increases in all three regions and at all Divisions except Industry Solutions. Within these increases, currency translation effects added 6 percentage points to revenue and 7 percentage points to orders. The Sector’s book-to-bill ratio was 1.11 and its order backlog increased to €29 billion at the end of the quarter.

Divisions		New orders
		First three months
		of fiscal																therein
(in millions of €)		2011				2010				Actual				Adjusted(1)				Currency				Portfolio
Industry Automation			1,856				1,406				32	%			24	%			7	%			1	%
Drive Technologies			2,454				1,575				56	%			48	%			8	%			0	%
Building Technologies			1,833				1,611				14	%			7	%			7	%			0	%
OSRAM			1,284				1,130				14	%			8	%			8	%			(3	)%
Industry Solutions			1,286				1,233				4	%			0	%			6	%			(2	)%
Mobility			2,335				1,887				24	%			19	%			5	%			0	%

Divisions		Revenue
		First three months
		of fiscal								% Change								therein
(in millions of €)		2011				2010				Actual				Adjusted(1)				Currency				Portfolio
Industry Automation			1,803				1,397				29	%			20	%			6	%			2	%
Drive Technologies			1,827				1,510				21	%			15	%			6	%			0	%
Building Technologies			1,779				1,560				14	%			7	%			7	%			0	%
OSRAM			1,284				1,130				14	%			8	%			8	%			(3	)%
Industry Solutions			1,364				1,437				(5	)%			(8	)%			5	%			(3	)%
Mobility			1,634				1,582				3	%			(1	)%			4	%			0	%

Divisions		Profit												Profit margin
		First three months												First three months
		of fiscal												of fiscal
(in millions of €)		2011				2010				% Change				2011				2010
Industry Automation			363				223				63	%			20.2	%			16.0	%
Drive Technologies			229				153				50	%			12.5	%			10.1	%
Building Technologies			117				93				25	%			6.6	%			6.0	%
OSRAM			141				143				(2	)%			11.0	%			12.7	%
Industry Solutions			48				68				(30	)%			3.5	%			4.8	%
Mobility			116				152				(24	)%			7.1	%			9.6	%

     First-quarter profit at Industry Automation was €363 million, up 63% year-over-year. Revenue growth drove high capacity utilization and also included a more favorable business mix compared to the prior-year quarter. Revenue and orders climbed 29% and 32%, respectively, on increases in all business units and in all regions. Emerging markets grew even faster than revenue and orders overall. Purchase price allocation (PPA) effects related to the fiscal 2007 acquisition of UGS Corp. were €35 million in the current period compared to €32 million a year earlier.

     Drive Technologies posted a 21% increase in revenue in the first quarter. Higher capacity utilization took profit up sharply year-over-year, to €229 million. Improved market conditions in the current quarter were particularly evident in new orders, which climbed 56% due in part to higher volume from large orders.

     Profit at Building Technologies rose to €117 million on a 14% increase in revenue. Orders also rose 14% compared to the prior-year period. Revenue and orders came in higher in all business units and all three reporting regions, including continued improvement in the low-voltage business. Emerging markets grew faster than revenue and orders overall.

     OSRAM kept profit near the high level of the prior-year period, at €141 million, while continuing to expand its production capacity and marketing and selling activities. First-quarter revenue rose 14% year-over-year on strong sales of LEDs and increases in all business units. Revenue climbed in all regions, led by the region Asia, Australia and emerging markets. The Division intends to continue investing in market expansion and production capacity in coming quarters.

     Profit and revenue at Industry Solutions came in lower in the first quarter compared to the prior-year period. The difference is due primarily to the Division’s metals technologies business, which posted lower revenue and profit in the current period due to low order intake in prior periods. In the current period orders in the metals technologies business helped lift orders for the Division overall.

     Mobility delivered €116 million in profit in the first quarter. For comparison, profit in the prior-year period included a gain on the sale of the Division’s airfield solutions business as mentioned before. Orders climbed 24%. A significantly higher volume from large orders in Europe, C.I.S., Africa, Middle East included a major order for high-speed trains in the U.K.

Energy

Sector		First three months
		of fiscal								% Change								therein
(in millions of €)		2011				2010				Actual				Adjusted(1)				Currency				Portfolio
Profit			826				771				7	%
Profit margin			13.0	%			13.7	%
New orders			8,759				6,918				27	%			19	%			7	%			0	%
Revenue			6,378				5,616				14	%			7	%			6	%			0	%

     In strengthening global energy markets, the Energy Sector delivered double-digit increases in orders and revenue compared to the first quarter a year earlier, and profit rose 7%, to €826 million, driven by a strong earnings increase at Fossil Power Generation. Sector profit for the first quarter includes higher expenses for R&D, marketing and selling associated with growth, particularly at Renewable Energy. Energy was allocated €69 million of the special employee remuneration as part of the allocation mentioned earlier.

     Revenue rose 14% year-over-year, to €6.378 billion, on strong conversion of orders from the backlog. All Divisions contributed to the increase, and revenue also rose in all three regions. Orders for the first quarter climbed 27%, to €8.759 billion, with the strongest growth coming from Fossil Power Generation and Oil & Gas. For comparison, the prior-year quarter included significantly lower volume from large orders. Orders grew in all three regions, particularly in emerging markets in Asia, Australia. Currency translation effects accounted for 6 percentage points of revenue growth and 7 percentage points of order growth. The book-to-bill ratio in the current period was 1.37, and the Sector’s order backlog increased to €56 billion.

Divisions		New orders
		First three months
		of fiscal								% Change								therein
(in millions of €)		2011				2010				Actual				Adjusted(1)				Currency				Portfolio
Fossil Power Generation			3,916				2,040				92	%			83	%			9	%			0	%
Renewable Energy			945				1,576				(40	)%			(45	)%			5	%			0	%
Oil & Gas			1,394				1,030				35	%			25	%			9	%			1	%
Power Transmission			1,957				1,712				14	%			8	%			6	%			0	%
Power Distribution			802				727				10	%			3	%			7	%			0	%

Divisions		Revenue
		First three months
		of fiscal								% Change								therein
(in millions of €)		2011				2010				Actual				Adjusted(1)				Currency				Portfolio
Fossil Power Generation			2,454				2,257				9	%			4	%			5	%			0	%
Renewable Energy			868				480				81	%			74	%			7	%			0	%
Oil & Gas			1,066				997				7	%			0	%			7	%			0	%
Power Transmission			1,428				1,319				8	%			1	%			7	%			0	%
Power Distribution			758				695				9	%			2	%			7	%			0	%

Divisions		Profit												Profit margin
		First three months												First three months
		of fiscal												of fiscal
(in millions of €)		2011				2010				% Change				2011				2010
Fossil Power Generation			473				383				24	%			19.3	%			17.0	%
Renewable Energy			36				23				58	%			4.2	%			4.8	%
Oil & Gas			108				118				(8	)%			10.2	%			11.8	%
Power Transmission			134				158				(15	)%			9.4	%			12.0	%
Power Distribution			76				91				(17	)%			10.0	%			13.0	%

     Fossil Power Generation reached a new high in profit, at €473 million. The Division continued its strong project execution, and the revenue mix included conversion of high-margin component orders from the Sector’s backlog as well as positive effects related to project developments. Revenue rose 9% compared to the first quarter a year earlier, including strong growth in the Americas. The global market environment for fossil power generation showed continued signs of recovery. The Division recorded a higher volume from large orders compared to the prior-year period, all three regions reported strong growth, and orders more than doubled in emerging markets on a global basis. As a result, first-quarter orders for the Division came in at €3.916 billion, well above the prior-year level.

     Renewable Energy posted a strong rise in revenue, to €868 million, on conversion of large orders from prior periods. This helped lift first-quarter profit above the prior-year level despite significantly higher expenses for R&D, marketing and selling associated with expansion of its wind business and integration of its solar thermal business, which are expected to continue to hold back profitability in the coming quarter. Orders came in above revenue, but well below the prior-year quarter which included a higher volume from large orders. During the quarter, Renewable Energy closed the acquisition of a stake in A2SEA A/S, a supplier of offshore wind-farm installation services.

     Oil & Gas contributed €108 million to Sector profit in the first quarter. Orders climbed 35% compared to the first quarter a year earlier, due in part to higher volume from large orders, and revenue rose 7%. Both revenue and orders grew in all three regions.

     Orders at Power Transmission rose 14% and revenue increased 8% compared to the first quarter a year ago, led by the transformers business. Profit of €134 million was held back by higher marketing and selling expenses associated with growth and by pricing pressure. The Division expects negative impacts on profit in coming quarters related to optimizing its global footprint.

     As its markets continued to stabilize, Power Distribution generated 10% order growth and 9% revenue growth compared to the first quarter a year earlier. All three regions contributed to the order increase, while revenue growth came from the regions Europe, C.I.S., Africa, Middle East and Asia, Australia. Profit of €76 million was also held back by higher expenses year-over-year for marketing, selling and expanding activities related to new technologies such as smart grids. These activities are expected to intensify in coming quarters.

Healthcare

Sector		First three months
		of fiscal								% Change								therein
(in millions of €)		2011				2010				Actual				Adjusted(1)				Currency				Portfolio
Profit			381				499				(24	)%
Profit margin			12.2	%			17.6	%
New orders			3,168				2,869				10	%			2	%			8	%			0	%
Revenue			3,135				2,831				11	%			3	%			8	%			0	%

     Effective with the first quarter of fiscal 2011, financial disclosure for the Healthcare Sector follows its new organizational structure. The new alignment achieves greater integration of the Sectors’ businesses, and also unifies sales and service in one Sector-wide organization. The audiology business unit is now managed at the Sector level.

     First-quarter profit for Healthcare declined to €381 million, due in part to higher functional costs compared to the prior-year period. The Sector’s portion of the special employee remuneration allocation mentioned earlier was €43 million. Imaging & Therapy Systems took €32 million in charges stemming from increased cost estimates for completing particle therapy contracts, and the Sector built up a reserve of €19 million related to a customer loan and receivables in the audiology business. In addition, profit at Diagnostics came in lower year- over-year, at €78 million compared to €115 million, due in part to a less favorable business mix. PPA effects related to past acquisitions at Diagnostics were €44 million in the first quarter. A year earlier, Diagnostics re-corded €41 million in PPA effects.

     Revenue and orders for Healthcare rose 11% and 10%, respectively, compared to the first quarter a year earlier, led by double-digit growth in the regions Asia, Australia and the Americas. In addition to organic growth, volume for Healthcare overall benefited from currency translation effects amounting to 8 percentage points for revenue and 8 percentage points for orders. The Healthcare Sector’s book-to-bill ratio was slightly above 1 for the quarter, and its order backlog was €7 billion. Diagnostics posted revenue of €916 million and orders of €926 million, compared to €830 million and €832 million in the prior-year quarter, respectively, and showed nearly the same development as the Sector with regard to regional growth and currency translation effects.

Equity Investments

     Equity Investments recorded a profit of €85 million, compared to €76 million in the prior-year period. The result related to Siemens’ share in Nokia Siemens Networks B.V. (NSN) was equity income of €18 million, compared to a loss of €42 million in the first quarter a year earlier. NSN reported to Siemens that it took restructuring charges and integration costs totaling €29 million, compared to €90 million in the prior-year period.

     In December 2010, Siemens and Nokia Corporation each converted €266 million in NSN shareholder loans including deferred interest into preferred shares. The conversion, which does not have an impact on our cash flow, resulted in an increase of €266 million in our investment in NSN and does not result in a shift in the existing shareholding ratios between Siemens and Nokia Corporation.

     For information on portfolio measures taken in Equity Investments see “Portfolio activities.”

     Profit from Equity Investments is expected to be volatile in coming quarters.

Cross-Sector Businesses

Siemens IT Solutions and Services

		First three months
		of fiscal								% Change								therein
(in millions of €)		2011				2010				Actual				Adjusted(1)				Currency				Portfolio
Profit			(129	)			17				—
Profit margin			(13.4	)%			1.7	%
New orders			824				1,143				(28	)%			(22	)%			3	%			(9	)%
Revenue			958				1,029				(7	)%			(7	)%			4	%			(3	)%

     Siemens IT Solutions and Services posted a loss of €129 million in the first quarter, due to a goodwill impairment of €136 million taken in connection with the above-mentioned option agreement for Atos Origin S.A. (Atos) to acquire the business. More information on this transaction is provided below. For further information on the goodwill impairment see “Notes to Condensed Consolidated Interim Financial Statements.” Both revenue and orders declined year-over-year in highly competitive markets. At the beginning of fiscal 2011, Siemens IT Solutions and Services’ software development solutions for the telecommunication industry were transferred to Centrally managed portfolio activities.

     During the first quarter, Siemens and Atos signed an option agreement which grants Atos the right to acquire Siemens IT Solutions and Services in exchange for 12.5 million newly issued shares in Atos with a five-year lock-up commitment, a five-year convertible bond of €250 million and a cash payment of €186 million with a total value of €850 million at the time of announcement. The final value of the consideration will depend on the price of Atos shares and the bond value at closing. Furthermore, Siemens will provide extensive support in order to foster the company’s business success including, among others, up to €250 million to the integration and training costs and further protections and guarantees. Related to the transaction is a seven-year outsourcing contract worth around €5.5 billion, under which Atos would provide managed services and systems integration to Siemens. It is expected that Atos will exercise the option and sign the related agreements in the second quarter of fiscal 2011. Pending certain closing conditions, including receipt of the necessary approvals from regulatory authorities and governing bodies of Atos, closing of the transaction is expected in the fourth quarter of fiscal 2011.

     Siemens expects the transaction and related activities to have a substantial negative earnings impact primarily in the first half of fiscal 2011, within a mid- to high-triple-digit million euro range, depending, beyond others, on the final value of the consideration at closing. In particular this negative earnings impact will consist of impairments, including the above-mentioned goodwill impairment of €136 million booked in the current quarter. In addition, and as previously disclosed, Siemens expects further substantial charges in fiscal 2011 related to establishing Siemens IT Solutions and Services as a separate legal entity, including for carve-out activities. Of these charges, including Siemens IT Solutions and Services’ share of the allocated special employee remuneration, €75 million were presented within Corporate items in the current quarter. Following signing, Siemens will again assess whether to present Siemens IT Solutions and Services as an asset held for disposal and as discontinued operations.

Financial Services (SFS)

		First three months
		of fiscal
(in millions of €)		2011				2010				% Change
Profit			102				99				3	%
		Dec. 31,				Sept. 30,
		2010				2010
Total assets			12,597				12,506				1	%

     Financial Services (SFS) delivered €102 million in profit (defined as income before income taxes), up from €99 million a year earlier. The commercial finance business recorded higher interest results, and benefited from a decline in defaults compared to the prior-year quarter. The equity business also made a significant earnings contribution, even though its results came in below the high level recorded a year earlier. Total assets increased slightly, to €12.597 billion.

     In December 2010, Siemens received authorization from Germany’s Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht, BaFin) to engage in banking operations. The Siemens Bank GmbH will support sales at the company’s three Sectors — Industry, Energy and Healthcare — by expanding, with loans and guarantees, the product portfolio of Siemens’ financial services unit in the area of sales financing, in particular. Through wholesale deposit banking activities the bank will also increase the flexibility of Siemens’ internal financing operations and further improve risk management.

Reconciliation to Consolidated Financial Statements

     Reconciliation to Consolidated Financial Statements includes Centrally managed portfolio activities, SRE and various categories of items which are not allocated to the Sectors and Cross-Sector Businesses because Management has determined that such items are not indicative of the Sectors’ and Cross-Sector Businesses’ respective performance.

Centrally managed portfolio activities

     Centrally managed portfolio activities posted a loss of €2 million in the first quarter compared to a loss of €15 million in the prior-year period. The difference is due mainly to electronics assembly systems, which contributed a net positive result of €6 million. The remaining difference is due to net expenses related to divested businesses in both periods. Effective with the beginning of fiscal 2011, software development solutions for the telecommunication industry were transferred from Siemens IT Solutions and Services to Centrally managed portfolio activities.

Siemens Real Estate

     Income before income taxes at Siemens Real Estate (SRE) was €97 million in the first quarter, compared to €60 million in the same period a year earlier. The change includes significantly higher net gains related to sales of real estate. During the current quarter, assets with a book value of €350 million were transferred to SRE as part of Siemens’ program to bundle its real estate assets into SRE and to implement further measures to increase the efficiency of these assets. SRE expects to incur costs associated with the program in coming quarters, and to continue with real estate disposals depending on market conditions.

Corporate items and pensions

     Corporate items and pensions totaled a positive €231 million in the first quarter compared to a negative €142 million in the same period a year earlier. The difference was due primarily to Corporate items, which were a positive €202 million compared to a negative €82 million in the first quarter of fiscal 2010. The current quarter benefited from management’s allocation of a substantial part of personnel-related costs which were accrued in the fourth quarter of fiscal 2010, including the €310 million in special employee remuneration discussed earlier. Within this part is the €261 million that was allocated to the Sectors as mentioned earlier.

     The current period includes costs of €75 million related to establishing Siemens IT Solutions and Services as a separate legal entity, including for carve-out activities, as well as Siemens IT Solutions and Services’ share of the allocated special employee remuneration mentioned earlier. Profit of the current period also includes a net charge related to legal and regulatory matters. The prior-year period included expenses associated with streamlining IT costs for Siemens as a whole. Centrally carried pension expenses totaled a positive €29 million in the first quarter, compared to a negative €60 million in the prior-year period. The change is due primarily to a positive effect resulting from lower interest costs and a higher expected return on plan assets.

     Beginning with fiscal 2011, central infrastructure costs which were formerly reported in Corporate items are allocated primarily to the Sectors. The total amount to be allocated is determined at the beginning of the fiscal year and is charged in set portions in all four quarters. Presentation of prior-year information has been adjusted to conform to the current-year presentation. Central infrastructure costs allocated for the complete fiscal year 2010 amounted to €585 million. Costs to be allocated for the complete fiscal year 2011 amount to €531 million.

Eliminations, Corporate Treasury and other reconciling items

     Income before income taxes from Eliminations, Corporate Treasury and other reconciling items was a negative €32 million in the first quarter compared to a negative €11 million in the same period a year earlier. The primary factor in the change were Corporate Treasury activities. Due mainly to an increase in interest rates during the first quarter, income at Corporate Treasury declined on changes in the fair market value of interest rate derivatives used for interest rate management. This was partly offset by higher interest income relating to an increase in total liquidity compared to the prior-year period.

     

Reconciliation to adjusted EBITDA (continuing operations)

The following table gives additional information on topics included in Profit and Income before income taxes and provides a reconciliation to adjusted EBITDA.

We report adjusted EBIT and adjusted EBITDA as a performance measure. The closest comparable GAAP figure under IFRS is Net income as reported in our “Consolidated Statements of Income.”

For further information regarding adjusted EBIT and adjusted EBITDA, please refer to the end of this Interim group management report.

For the first three months of fiscal 2011 and 2010 ended December 31, 2010 and 2009 (in millions of €)

										Income (loss)																																Depreciation
										from investments																																and impairments
										accounted for																																of property, plant
										using the equity								Financial income								Adjusted																and equipment								Adjusted								Adjusted
		Profit(1)(2)								method, net(3)								(expense), net(4)								EBIT(5)								Amortization(6)								and goodwill(7)								EBITDA								EBITDA margin
		2011				2010				2011				2010				2011				2010				2011				2010				2011				2010				2011				2010				2011				2010				2011				2010
Sectors and Divisions
Industry Sector			1,022				840				9				1				(4	)			(5	)			1,017				845				91				85				159				153				1,267				1,083				13.9	%			13.4	%
Industry Automation			363				223				—				(1	)			—				—				363				224				46				43				22				20				432				287
Drive Technologies			229				153				—				(1	)			—				(1	)			228				154				11				11				36				34				276				200
Building Technologies			117				93				2				1				—				—				115				92				20				18				20				22				155				132
OSRAM			141				143				6				1				—				—				136				143				4				5				56				52				196				200
Industry Solutions			48				68				1				1				(1	)			(3	)			48				70				7				6				13				14				68				90
Mobility			116				152				—				—				(3	)			(2	)			120				154				3				3				11				10				133				167
Energy Sector			826				771				8				15				(4	)			(6	)			822				762				22				21				91				75				935				858				14.7	%			15.3	%
Fossil Power Generation			473				383				3				(4	)			(3	)			(4	)			473				392				4				3				29				25				505				420
Renewable Energy			36				23				(6	)			10				3				(1	)			40				14				6				5				17				10				63				29
Oil & Gas			108				118				—				—				(1	)			—				109				118				7				7				14				13				130				138
Power Transmission			134				158				11				8				(2	)			1				125				149				3				3				23				18				151				169
Power Distribution			76				91				—				—				(1	)			(1	)			76				92				3				3				8				8				87				102
Healthcare Sector			381				499				1				8				2				3				378				488				81				67				82				83				541				638				17.3	%			22.5	%
therein: Diagnostics			78				115				—				—				3				2				75				113				49				43				56				57				180				213
Total Sectors			2,229				2,109				17				23				(6	)			(9	)			2,217				2,095				194				174				332				311				2,743				2,579
Equity Investments			85				76				72				61				7				11				5				3				—				—				—				—				5				3
Cross-Sector Businesses
Siemens IT Solutions and Services			(129	)			17				4				5				—				—				(132	)			12				11				10				160				23				39				45
Financial Services (SFS)			102				99				26				22				73				68				3				9				2				1				77				76				82				86
Reconciliation to Consolidated Financial Statements
Centrally managed portfolio activities			(2	)			(15	)			—				—				—				1				(2	)			(15	)			1				—				2				1				1				(14	)
Siemens Real Estate (SRE)			97				60				—				—				(15	)			(12	)			113				72				—				—				65				49				179				121
Corporate items and pensions			231				(142	)			—				—				17				(38	)			214				(104	)			3				4				11				13				228				(88	)
Eliminations, Corporate Treasury and other reconciling items			(32	)			(11	)			10				3				(16	)			17				(26	)			(31	)			—				—				(13	)			(15	)			(39	)			(46	)
Siemens			2,582				2,194				130				115				60				37				2,392				2,041				212				189				634				457				3,238				2,687