UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 6-K

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934

May 6, 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			2
Interim group management report			3
Condensed Interim Consolidated Financial Statements			39
Notes to Condensed Interim Consolidated Financial Statements			43
Supervisory Board and Managing Board			69
Responsibility statement			70
Review report			71
Quarterly summary			72
Financial calendar			73

      

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 half-year financial reports, and comprises Condensed Interim Consolidated Financial Statements, an Interim group management report and a Responsibility statement in accordance with § 37w 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 Q2 and first six months of fiscal 2011^1,2

(unaudited, in millions of euro, except where otherwise stated)

Interim group management report

Overview of financial results for the second quarter of fiscal 2011
(Three months ended March 31, 2011)

	•		For the fourth straight quarter, all Sectors of Siemens delivered order and revenue growth compared to the prior-year period, including growth in all reporting regions. Our emerging economies grew faster than orders and revenue overall.
	•		Revenue rose 7% and orders climbed 28%. The book-to-bill ratio was 1.17 and the combined backlog for the Sectors was €92 billion.
	•		Total Sectors profit of €3.695 billion including strong profit growth in Energy and Industry and a €1.520 billion gain from the divestment of Siemens’ stake in Areva NP S.A.S. (Areva NP).
	•		Income from continuing operations up to €3.174 billion. Corresponding basic EPS up to €3.58.
	•		Free cash flow from continuing operations down to €354 million on increases in net working capital.
	•		During the second quarter of fiscal 2011, OSRAM and Siemens IT Solutions and Services were classified as discontinued operations. Prior-period results are presented on a comparable basis.

     In the second quarter of fiscal 2011 Siemens achieved outstanding, broad-based order growth. We are raising our forecast for income from continuing operations for fiscal 2011 to at least €7.5 billion.

     Substantial order growth continues in the second quarter. All Sectors delivered higher orders and revenue in the second quarter. Orders climbed 28% on growth across all Sectors and large contract wins, which led to a new high in order intake in the Energy Sector. Revenue increased 7% with growth in all three reporting regions. On an organic basis, excluding currency translation and portfolio effects, orders increased 27% and revenue rose 6%. The combined book-to-bill ratio for Siemens was 1.17. At the end of the second quarter of fiscal 2011 the Sectors’ combined order backlog remained at €92 billion, level with order backlog reached at the end of the first quarter of the current fiscal year, despite significant negative currency translation effects within the quarter.

     Global order growth in established and emerging markets. Energy orders climbed more than 50% on the strength of a number of large contract wins at Fossil Power Generation, Renewable Energy and Power Transmission. Double-digit order growth in Industry included strong increases at all Divisions. Order growth in Healthcare was solid across its businesses.

     All regions delivered double-digit order growth, led by the region comprising Europe, the Commonwealth of Independent States (C.I.S.), Africa and the Middle East and the region Asia, Australia. Within Europe, C.I.S., Africa, Middle East, strong growth in Germany included several large Energy orders. Globally, emerging markets again grew significantly faster than orders overall, at 52%, and accounted for €7.475 billion, or 36%, of total orders for the quarter.

     Revenue rises in all Sectors and regions. Revenue in Industry was up 9%, due primarily to strong double-digit growth at Drive Technologies and Industry Automation. All Divisions contributed to broad-based revenue growth in Energy. Higher revenue in Healthcare came primarily from its imaging and therapy solutions businesses. Revenue rose in all three regions, led by the Americas and Asia, Australia. More modest increases in Europe, C.I.S., Africa, Middle East included double-digit growth in the Middle East. Emerging markets on a global basis grew faster than revenue overall, at 12% year-over-year, and accounted for €5.579 billion, or 31%, of total revenue for the quarter.

     Double-digit growth in Sector profit before Areva NP gain. In the second quarter, Total Sectors profit climbed to €3.695 billion, up from €1.849 billion a year earlier. The increase was driven mainly by higher Sector profit at Energy of €2.421 billion. This result was due largely but not only to a pretax €1.520 billion gain from the sale of the Sector’s 34% share in Areva NP to Areva S.A. (Areva). Operating results in Energy included a strong earnings performance by the Fossil Power Generation Division. Profit for Industry also increased substantially year-over-year, with continued strong execution in an improved market environment lifting Sector profit to €824 million.

     In the current quarter, Total Sectors profit benefited from positive currency effects in all Sectors, particularly in Industry and Energy. For comparison, Total Sectors profit in the prior-year period included gains of €157 million related to curtailment of pension plans in the U.S. The Healthcare Sector benefited most strongly from this effect, and as a result its profit of €450 million in the current quarter was lower than in the prior-year quarter. The pension curtailment gains for Energy and Industry were largely offset by charges for capacity adjustments, which totaled €125 million for all Sectors in the prior-year period.

     Income from continuing operations more than doubles. Income from continuing operations in the second quarter increased to €3.174 billion from €1.427 billion, and corresponding basic EPS climbed to €3.58 up from €1.62 a year earlier. These increases were due predominantly to higher Total Sectors profit which includes the gain from the sale of Siemens’ share in Areva NP.

     Net income was impacted by discontinued operations. In the current period, net income rose to €2.836 billion compared to €1.498 billion a year earlier. Corresponding basic EPS increased to €3.20 compared to €1.70 a year earlier.

     Siemens has previously announced plans to divest Siemens IT Solutions and Services (for more information see “Portfolio activities” below) and to publicly offer OSRAM. Siemens intends to retain a minority stake in the future OSRAM, in which it intends to remain a long-term anchor shareholder. Both businesses were classified as discontinued operations during the second quarter of fiscal 2011. Prior-period results are presented on a comparable basis.

     Discontinued operations posted a loss of €338 million compared to income of €71 million in the second quarter a year earlier. The main reason for the difference was a loss of €345 million attributable to Siemens IT Solutions and Services including a pretax impairment of €464 million of non-current assets and major project charges of €55 million pretax in the current period. The loss related to Siemens IT Solutions and Services in the prior-year period was €34 million. OSRAM contributed €87 million after tax to income from discontinued operations on higher revenue in all businesses and regions compared to the prior-year period. OSRAM’s result was higher a year earlier, at €91 million after tax, due to a portion of the pension curtailment gain mentioned above.

     Net working capital rises on broad-based growth. After several quarters of strong cash performance, Free cash flow from continuing operations decreased from €1.311 billion in the second quarter a year ago to €354 million in the current quarter. The decline was due primarily to a build-up of net working capital at the Sector level associated with broad-based growth, and also lower billings in excess. Furthermore, the current period included higher cash outflows in connection with personnel-related expenses comprising the previously disclosed special remuneration for non-management employees (for further information see “Reconciliation to consolidated financial statements — Corporate items and pensions”).

Free cash flow from discontinued operations was a negative €416 million, down from a negative €79 million in the prior-year quarter. The decline includes payments related to establishing Siemens IT Solutions and Services as a separate legal group, including for carve-out activities and personnel-related matters. During the second quarter Siemens received €1.7 billion in proceeds from the sale of its stake in Areva NP mentioned earlier. These proceeds are not included in our measure for Free cash flow.

     ROCE rises on higher income from continuing operations. On a continuing basis, ROCE (adjusted) increased to 42.7% in the second quarter of fiscal 2011, up from 17.4% a year earlier. The difference was mainly due to higher income from continuing operations, which included the gain on the sale of Siemens’ share in Areva NP.

     Pension plan funded status further improves. The estimated underfunding of Siemens’ pension plans of continuing and discontinued operations as of March 31, 2011, amounted to approximately €5.3 billion, compared to an underfunding of approximately €6.1 billion at the end of the first quarter. The improvement in funded status since December 31, 2010, is due mainly to a decrease in Siemens’ defined benefit obligation (DBO) resulting from an increase in the discount rate assumption as of March 31, 2011. As of September 30, 2010, pension plan underfunding amounted to €7.4 billion.

     New organizational structure announced. At the end of March 2011, Siemens announced a change in its organizational structure. Siemens is going to establish a fourth Sector, Infrastructure & Cities. The new Sector will comprise Industry Sector’s activities of Building Technologies, Mobility and — until its public offering — OSRAM as well as Energy Sector’s activities of Power Distribution including Smart Grid applications. The new Sector will focus on the integration of technologies and customized energy-efficient solutions for public and private infrastructures.

     In the future, the Industry Sector will concentrate exclusively on industry customers. The Sector will optimize its industry orientation and better exploit service business potential. Activities of the Industry Solutions Division will be allocated among the Industry Automation and Drive Technologies Divisions as well as the planned Customer Services Division.

     Financial reporting in the new structure will begin as of October 1, 2011.

     Furthermore, Siemens intends to further strengthen its position in technology by creating a dedicated separate Managing Board position.

Results of Siemens

Results of Siemens — Three months ended March 31, 2011

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

     Orders and revenue

     For the fourth straight quarter, Siemens delivered year-over-year growth in both orders and revenue. Orders climbed to €20.651 billion, up 28% from the second quarter a year earlier, driven by large contract wins that contributed to a new high in order intake in the Energy Sector. Revenue rose 7% to €17.717 billion, including growth in all Sectors and all three reporting regions. On an organic basis, excluding the net effect of currency translation and portfolio transactions, orders rose 27% and revenue was up 6% compared to the prior-year quarter. The combined book-to-bill ratio for the Sectors and Siemens overall was 1.17. The combined order backlog for the three Sectors remained at the level of €92 billion as of March 31, 2011, despite significant negative currency translation effects within the quarter.

		New orders (location of customer)
		Three months
		ended March 31								% Change								therein
(in millions of €)		2011				2010				Actual				Adjusted(1)				Currency				Portfolio
Europe, C.I.S.(2), Africa, Middle East			11,895				8,951				33	%			33	%			1	%			(1	)%
therein Germany			4,143				2,336				77	%			79	%			0	%			(1	)%
Americas			4,873				4,263				14	%			13	%			1	%			0	%
therein U.S.			3,340				2,896				15	%			15	%			0	%			0	%
Asia, Australia			3,884				2,951				32	%			29	%			4	%			(2	)%
therein China			1,489				1,300				15	%			15	%			3	%			(3	)%
therein India			810				513				58	%			58	%			1	%			0	%
Siemens			20,651				16,166				28	%			27	%			2	%			(1	)%

     Orders related to external customers rose 28% in the second quarter of fiscal 2011 on growth in all three Sectors. Energy orders climbed more than 50% compared to the prior-year period, driven by a number of large contract wins at Fossil Power Generation, Renewable Energy and Power Transmission. Order intake also increased by double digits in the Industry Sector, including strong increases at all Divisions led by Drive Technologies, Mobility and Industry Automation. Order growth in Healthcare was solid across its businesses. On a global basis, orders in emerging markets grew significantly faster than orders overall, at 52%, and accounted for €7.475 billion, or 36%, of total orders for the quarter.

     On a geographic basis, all three reporting regions posted double-digit order growth, led by strong demand in the regions Europe, C.I.S., Africa, Middle East and Asia, Australia. In the region Europe, C.I.S., Africa, Middle East — our largest reporting region — orders increased 33%, due primarily to high demand in the Energy Sector, highlighted by a particularly large order in Saudi Arabia. Industry orders were up 17% in the region and order intake in Healthcare came in level with the prior-year period. Within the region Europe, C.I.S., Africa, Middle East, orders in Germany climbed 77% overall, driven by a number of large orders for offshore wind power generation and grid access. Order growth in the region Americas included double-digit increases in all three Sectors. Industry reported the strongest increase in the region, 22%, driven by strong demand in the U.S. Large orders at Fossil Power Generation were the primary driver for strong order growth in the Americas’ emerging markets. Orders rose 32% in the region Asia, Australia year-over-year, led by Energy and Industry. Order growth in the Energy Sector was due primarily to Oil & Gas and Power Transmission, while higher demand in Industry included double-digit increases at all Divisions in the Asia, Australia region. The 58% order rise in India was driven by substantial growth at Mobility and Industry Solutions, including large contract wins in both Divisions.

		Revenue (location of customer)
		Three months
		ended March 31								% Change								therein
(in millions of €)		2011				2010				Actual				Adjusted(1)				Currency				Portfolio
Europe, C.I.S.(2), Africa, Middle East			9,288				9,135				2	%			1	%			1	%			(1	)%
therein Germany			2,523				2,429				4	%			5	%			0	%			(1	)%
Americas			4,991				4,378				14	%			13	%			1	%			0	%
therein U.S.			3,534				3,243				9	%			9	%			0	%			0	%
Asia, Australia			3,438				3,009				14	%			11	%			4	%			0	%
therein China			1,438				1,198				20	%			18	%			3	%			(1	)%
therein India			550				457				20	%			19	%			1	%			0	%
Siemens			17,717				16,523				7	%			6	%			2	%			0	%

     Revenue related to external customers rose 7% compared to the second quarter a year earlier, including growth in all Sectors. Revenue in the Industry Sector increased 9% year-over-year, driven by strong double-digit growth at Drive Technologies and Industry Automation. Energy revenues were up 8% compared to the prior-year quarter on consistent revenue conversion from the Sector’s large order backlog. Higher revenue in the Healthcare Sector was due primarily to increases at its imaging and therapy solutions businesses. Emerging markets on a global basis grew faster than revenue overall, at 12% year-over-year, and accounted for €5.579 billion, or 31%, of total revenue for the quarter.

     On a geographic basis, revenue increased in all three reporting regions, led by double-digit growth in the regions Americas and Asia, Australia. In the region Europe, C.I.S., Africa, Middle East, second-quarter revenue rose 2% from the prior-year quarter, on a 5% increase in the Industry Sector. Sales in Energy and Healthcare in the region came in level year-over-year. In the region Americas, increases in all Sectors were led by revenue growth of 25% in the Energy Sector, including strong backlog conversion at Renewable Energy and Fossil Power Generation. Revenue rose 14% in the region Asia, Australia on double-digit increases in all Sectors. While revenue growth in the region was well balanced among most businesses of Industry and Healthcare, development in the Energy Sector was driven by substantially higher revenues at Oil & Gas.

Consolidated Statements of Income

		Three months ended
		March 31,
(in millions of €)		2011				2010				% Change
Gross profit on revenue			5,522				4,763				16	%
as percentage of revenue			31.2	%			28.8	%

     Gross profit for the second quarter increased 16% for Siemens overall compared to the same period a year earlier. Gross profit margin was 31.2%, up from 28.8% in the same period a year earlier. The increase was due primarily to volume-driven gross profit growth on a Sector level. Industry reported higher gross profit and higher gross profit margins for all Divisions compared to the prior-year period, driven by Industry Automation. Increase in gross profit for Energy strongly benefited from Fossil Power Generation. Healthcare reported an increase in gross profit on a Sector level.

		Three months ended
		March 31,
(in millions of €)		2011				2010				% Change
Research and development expenses			(967	)			(847	)			14	%
as percentage of revenue			5.5	%			5.1	%			—
Marketing, selling and general administrative expenses			(2,506	)			(2,192	)			14	%
as percentage of revenue			14.1	%			13.3	%			—
Other operating income			78				293				(73	)%
Other operating expense			(72	)			(29	)			148	%
Income (loss) from investments accounted for using the equity method, net			92				(63	)			—
Interest income			543				499				9	%
Interest expense			(435	)			(438	)			(1	)%
Other financial income (expense), net			1,482				(49	)			—

     Research and development (R&D) expenses increased to €967 million or 5.5% of revenue, from €847 million or 5.1% of revenue in the prior-year period, on increases in all Sectors. Marketing, selling and general administrative (SG&A) expenses in the second quarter rose to €2.506 billion from €2.192 billion on increases in all Sectors associated primarily with growth. General administrative expenses as a percentage of revenue decreased slightly at Industry and remained stable for Energy and Healthcare compared to the prior-year quarter.

     Other operating income was €78 million in the current quarter. For comparison, other operating income of €293 million in the same period a year earlier benefited from a number of positive factors. These included gains from settlement agreements with former Managing and Supervisory Board members in conjunction with compliance matters, €84 million from Siemens’ directors and officers insurance and €38 million related to the agreed recovery of funds frozen by authorities. In addition, the prior-year quarter included higher gains related to the disposal of real estate, including a gain of €69 million on a transaction at Siemens Real Estate (SRE). For additional information, see “Notes to Condensed Interim Consolidated Financial Statements” within this Interim Report.

     Other operating expense was €72 million in the second quarter, compared to €29 million in the same period a year earlier. The current quarter included charges related to legal and regulatory matters. 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 a positive €92 million, compared to a negative €63 million in the second quarter a year earlier. The current period included a gain of €91 million on the sale of our 49% interest in Krauss-Maffei Wegmann GmbH & Co. KG (KMW) to the Wegmann Group. Nokia Siemens Networks (NSN) posted a loss of €107 million in the second quarter of fiscal 2011, compared to a loss of €169 million in the prior-year period. For additional information, see “Notes to Condensed Interim Consolidated Financial Statements” within this Interim Report.

     Interest income increased to €543 million, from €499 million in the same period a year earlier, due in part 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 between the periods under review. The increase in interest income also included higher interest income relating to an increase in total liquidity compared to the prior-year period.

     Interest expense of €435 million for the current period was level with the prior-year quarter. Lower interest expenses related to our pension plans was partly offset by higher interest expenses on a liability associated with a binding offer to purchase additional shares in order to increase its stake in its publicly listed Indian subsidiary Siemens Ltd. For additional information, see “Notes to Condensed Interim Consolidated Financial Statements” within this Interim Report.

     Other financial income (expense), net was a positive €1.482 billion, compared to a negative €49 million in the same period a year earlier. The change was due mainly to a pretax €1.520 billion gain from the divestment of the 34% share in Areva NP to Areva within the Energy Sector in the current period. Results related to a major asset retirement obligation swung from a net loss in the prior-year period to a net gain in the current period. For additional information, see “Notes to Condensed Interim Consolidated Financial Statements” within this Interim Report.

		Three months ended
		March 31,
(in millions of €)		2011				2010				% Change
Income from continuing operations before income taxes			3,737				1,937				93	%
Income taxes			(563	)			(510	)			10	%
as percentage of income from continuing operations before income taxes			15	%			26	%			—
Income from continuing operations			3,174				1,427				122	%
Income (loss) from discontinued operations, net of income taxes			(338	)			71				—
Net income			2,836				1,498				89	%
Net income attributable to non-controlling interests			43				20				—
Net income attributable to shareholders of Siemens AG			2,793				1,478				89	%

     Income from continuing operations before income taxes increased to €3.737 billion, compared to €1.937 billion in the same period a year earlier. The largest factor in the increase was the pretax Areva NP gain of €1.520 billion. Income also rose on higher gross profit for all Sectors. The effective tax rate was lower year-over-year, at 15%, influenced strongly by the mainly tax-free Areva disposal gain. As a result, income from continuing operations was €3.174 billion, up from €1.427 billion in the prior-year period.

     Discontinued operations primarily includes Siemens IT Solutions and Services and OSRAM, which were classified as discontinued operations during the second quarter of fiscal 2011 as mentioned earlier. In addition, discontinued operations 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 as well as former Siemens VDO Automotive (SV) activities, which was sold to Continental AG in the first quarter of fiscal 2008. Income from discontinued operations in the current quarter was a negative €338 million, compared to a positive €71 million a year earlier. The change year-over-year related mainly to a loss of €345 million after tax attributable to Siemens IT Solutions and Services, including a pretax impairment charge of €464 million of non-current assets as well as project charges of €55 million pretax in the current period. For comparison, the loss within discontinued operations related to Siemens IT Solutions and Services in the prior-year period was €34 million after tax. OSRAM contributed a positive €87 million after tax to income from discontinued operations, compared to a positive €91 million in the prior-year period. The prior-year period benefited from a portion of the pension curtailment gain mentioned earlier. For additional information regarding discontinued operations, see “Notes to Condensed Interim Consolidated Financial Statements” within this Interim Report.

     Net income for Siemens in the second quarter increased to €2.836 billion, compared to €1.498 billion in the same period a year earlier. Net income attributable to shareholders of Siemens AG was €2.793 billion, up from €1.478 billion in the prior-year quarter.

Results of Siemens — Six months ended March 31, 2011

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

     Orders and revenue

     In the first six months of fiscal 2011, orders rose 25% year-over-year, to €41.488 billion, including a substantially higher volume from major orders in the current period. Revenue increased to €35.320 billion, up 10% from the prior-year period, due in part to strong conversion of orders from the Sectors’ backlogs. This resulted in a book-to-bill ratio for Siemens of 1.17 for the first half. On an organic basis, orders increased 21% and revenue came in 6% above the same period a year earlier.

		New Orders (location of customer)
		Six months
		ended March 31,								% Change								therein
(in millions of €)		2011				2010				Actual				Adjusted(1)				Currency				Portfolio
Europe, C.I.S.(2), Africa, Middle East			22,595				18,634				21	%			20	%			2	%			(1	)%
therein Germany			6,850				4,835				42	%			42	%			0	%			(1	)%
Americas			10,667				8,930				19	%			12	%			7	%			0	%
therein U.S.			7,660				6,356				21	%			13	%			7	%			0	%
Asia, Australia			8,227				5,723				44	%			36	%			9	%			(1	)%
therein China			3,129				2,394				31	%			26	%			7	%			(2	)%
therein India			1,996				963				107	%			98	%			9	%			0	%
Siemens			41,488				33,287				25	%			21	%			4	%			0	%

     Orders related to external customers in the first six months of fiscal 2011 increased 25% compared to the same period a year earlier, including higher demand in all Sectors. Order intake in the Energy Sector climbed 38% year-over-year. A substantially higher volume from major orders in the current period was most evident at Fossil Power Generation. For comparison, demand in Energy in the prior-year period was constrained by challenging market conditions. The Industry Sector reported order growth of more than 20% on increases in all Divisions, including strong demand at Drive Technologies and Industry Automation as well as a higher volume from major orders at Mobility. Broad-based order growth of 8% in the Healthcare Sector benefited strongly from positive currency translation effects. Orders in emerging markets on a global basis grew significantly faster than orders overall, at 41% year-over-year, and accounted for €14.935 billion, or 36%, of total orders for the first half of fiscal 2011.

     On a geographic basis, Siemens reported double-digit order growth in all three reporting regions in the first half of fiscal 2011. In the region Europe, C.I.S., Africa, Middle East, orders rose 21% on increases in Energy and Industry. The Energy Sector delivered order growth of 35% in the region, due primarily to a substantially higher volume from major orders at Fossil Power Generation and Renewable Energy compared to the prior-year period. Industry orders rose 19% in the Europe, C.I.S., Africa, Middle East region, due in part to a higher volume from large orders at Mobility as well as strong demand at Drive Technologies. Healthcare’s first-half orders in the region came in just below the level of the prior year. The 42% order growth in Germany was due primarily to large second-quarter orders for offshore wind power generation and grid access. Benefiting from positive currency translation effects, order intake rose 19% in the region Americas on double-digit increases in all Sectors, led by Industry and Energy. Industry orders grew 22% in the region, including double-digit increases in most Divisions. Higher orders in the Energy Sector were driven by strong demand at Fossil Power Generation which took in a higher volume from major orders. In the region Asia, Australia, orders climbed 44%, including double-digit growth in all Sectors. Orders in the Energy Sector rose 82% in the first half, including substantial increases at Fossil Power Generation and Oil & Gas. Industry reported 29% growth in the region, led by strong demand at Drive Technologies and Industry Automation. Order intake more than doubled in India compared to the prior-year period, due primarily to a major contract win at Fossil Power Generation in the first quarter of fiscal 2011.

		Revenue (location of customer)
		Six months
		ended March 31,								% Change								therein
(in millions of €)		2011				2010				Actual				Adjusted(1)				Currency				Portfolio
Europe, C.I.S.(2), Africa, Middle East			18,732				18,088				4	%			2	%			2	%			(1	)%
therein Germany			5,293				4,788				11	%			11	%			0	%			0	%
Americas			9,886				8,293				19	%			13	%			7	%			0	%
therein U.S.			7,103				6,071				17	%			11	%			6	%			0	%
Asia, Australia			6,702				5,768				16	%			9	%			7	%			0	%
therein China			2,939				2,363				24	%			18	%			6	%			0	%
therein India			1,073				838				28	%			21	%			7	%			0	%
Siemens			35,320				32,150				10	%			6	%			4	%			0	%

     Revenue related to external customers rose 10% compared to the first six months of fiscal 2010, including increases in all Sectors. Strong conversion from the Sectors’ order backlogs played a major role in broad-based revenue growth as did beneficial currency translation effects. Revenue in the Industry Sector increased 11% year-over-year, led by strong double-digit growth at Drive Technologies and Industry Automation. Energy also reported revenue growth of 11% in the first half of fiscal 2011 on increases in all Divisions, led by Renewable Energy. Broad-based revenue growth in the Healthcare Sector included a double-digit increase at its imaging and therapy solutions businesses. On a global basis, emerging markets grew faster than revenue overall, at 14%, and accounted for €10.932 billion, or 31%, of total revenue for the first six months of fiscal 2011.

     On a geographic basis, revenue increased in all three reporting regions, led by double-digit growth in the regions Americas and Asia, Australia. In the region Europe, C.I.S., Africa, Middle East, first-half revenue increased 4% year-over-year, including moderate growth in all Sectors. Within the region, double-digit growth in Germany was due primarily to strong increases in the Industry Sector. In the region Americas, higher revenue included strong increases in Energy and Industry. Growth in the Energy Sector was driven by strong backlog conversion at Fossil Power Generation and Renewable Energy. Higher revenues in Industry in the region included double-digit increases at all Divisions. In the region Asia, Australia, first-half revenue rose 16% on double-digit increases in Industry and Healthcare as well as more moderate growth in the Energy Sector. While revenue development in China followed the pattern for the region overall, growth of 28% in India was driven by substantially higher revenue in Energy.

Consolidated Statements of Income

		Six months ended
		March 31,
(in millions of €)		2011				2010				% Change
Gross profit on revenue			11,170				9,544				17	%
as percentage of revenue			31.6	%			29.7	%

     Gross profit for the first six months of fiscal 2011 increased 17% for Siemens overall compared to the same period a year earlier. Gross profit margin was 31.6%, up from 29.7% in the same period a year earlier. The increase was due primarily to volume-driven gross profit growth on a Sector level. Increase in gross profit for Industry was driven by Industry Automation and Drive Technologies. Gross profit for Energy benefited from a strong increase in Fossil Power Generation.

		Six months ended
		March 31,
(in millions of €)		2011				2010				% Change
Research and development expenses			(1,831	)			(1,605	)			14	%
as percentage of revenue			5.2	%			5.0	%			—
Marketing, selling and general administrative expenses			(4,917	)			(4,412	)			11	%
as percentage of revenue			13.9	%			13.7	%			—
Other operating income			338				460				(27	)%
Other operating expense			(286	)			(83	)			>200	%
Income (loss) from investments accounted for using the equity method, net			215				50				>200	%
Interest income			1,091				991				10	%
Interest expense			(854	)			(873	)			(2	)%
Other financial income (expense), net			1,410				(63	)			—

     Research and development (R&D) expenses in the first half of fiscal 2011 increased to €1.831 billion or 5.2% of revenue, from €1.605 billion or 5.0% of revenue in the prior-year period, due to higher expenses in all Sectors. Marketing, selling and general administrative (SG&A) expenses rose to €4.917 billion, due primarily to business growth. General administrative expenses as a percentage of revenue decreased at Industry and remained stable for Energy and Healthcare compared to the first half a year earlier.

     Other operating income in the first six months was €338 million, compared to €460 million in the same period a year earlier. The current period included €64 million related to a settlement of legal and regulatory matters in connection with portfolio activities. For comparison, the prior-year period benefited from the factors mentioned above in the second-quarter discussion. These included gains related to settlement agreements with former Managing and Supervisory Board members in conjunction with compliance matters, Siemens’ directors and officers insurance and the recovery of funds frozen by authorities. In addition, the prior-year period included higher real estate disposal gains and a €44 million gain related to the sale of our Airfield Solutions Business at Mobility. For additional information, see “Notes to Condensed Interim Consolidated Financial Statements” within this Interim Report.

     Other operating expense in the first half was €286 million, compared to €83 million in the prior-year period. The current period included higher charges related to legal and regulatory matters. 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 increased to €215 million from €50 million in the first half of the prior year. The current period benefited from the above-mentioned sale of our interest in KMW. In addition, the first-half result related to our stake in NSN improved to a loss of €88 million, compared to a loss of €211 million in the prior-year period. For additional information, see “Notes to Condensed Interim Consolidated Financial Statements” within this Interim Report.

     Interest income for the first six months increased to €1.091 billion from €991 million a year earlier. The increase was due in part to a higher expected return on plan assets related to our pension plans, resulting primarily from an increase in pension plan assets between the periods under review. The increase in interest income also included higher interest income relating to an increase in total liquidity compared to the prior-year period.

     Interest expense declined to €854 million from €873 million in the prior-year period, due primarily to lower interest cost related to our pension plans.

     Other financial income (expense), net was a positive €1.410 billion, compared to a negative €63 million in the same period a year earlier. The change was due mainly to the pretax €1.520 billion Areva NP gain mentioned above. Results related to a major asset retirement obligation swung from a net loss in the prior-year period to a net gain in the current period. For additional information, see “Notes to Condensed Interim Consolidated Financial Statements” within this Interim Report.

		Six months ended
		March 31,
(in millions of €)		2011				2010				% Change
Income from continuing operations before income taxes			6,336				4,009				58	%
Income taxes			(1,316	)			(1,133	)			16	%
as percentage of income from continuing operations before income taxes			21	%			28	%			—
Income from continuing operations			5,020				2,876				75	%
Income (loss) from discontinued operations, net of income taxes			(431	)			153				—
Net income			4,589				3,029				52	%
Net income attributable to non-controlling interests			78				74				—
Net income attributable to shareholders of Siemens AG			4,511				2,955				53	%

     Income from continuing operations before income taxes increased to €6.336 billion in the first six months of fiscal 2011, compared to €4.009 billion in the same period a year earlier. The change year-over-year is due to the factors mentioned earlier, including the pretax Areva NP gain of 1.520 billion. Income also rose on higher gross profit for all Sectors. The effective tax rate was lower year-over-year, at 21%, influenced by the mainly tax-free Areva disposal gain. Income from continuing operations was €5.020 billion in the first six months of fiscal 2011, up from €2.876 billion in the prior-year period.

     Discontinued operations primarily includes Siemens IT Solutions and Services and OSRAM, which were classified as discontinued operations during the second quarter of fiscal 2011 as mentioned earlier. In addition, discontinued operations 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 as well as former SV activities, which was sold to Continental AG in the first quarter of fiscal 2008. Income from discontinued operations in the first six months of fiscal 2011 was a negative €431 million, compared to a positive €153 million a year earlier. The change year-over-year related mainly to a current period loss of €515 million after tax attributable to Siemens IT Solutions and Services, including the pretax impairment charge of €464 million mentioned earlier for the second quarter of fiscal 2011, a pretax goodwill impairment of €136 million booked in the first quarter of fiscal 2011 as well as the project charges in the second quarter of fiscal 2011 also mentioned earlier. For comparison, the loss after tax related to Siemens IT Solutions and Services in the prior-year period was €45 million. OSRAM contributed a positive €199 million after tax to income from discontinued operations, compared to a positive €180 million in the prior-year period. The prior-year period benefited from a portion of the pension curtailment gain mentioned above. 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 six months of fiscal 2011 increased to €4.589 billion, compared to €3.029 billion in the same period a year earlier. Net income attributable to shareholders of Siemens AG was €4.511 billion, up from €2.955 billion in the prior-year period.

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.

     In December 2010, Siemens completed the transfer of its 19.8% stake in GIG Holding GmbH (owner of all shares of Gigaset Communications GmbH) to ARQUES Industries AG.

     In December 2010, Siemens and Atos Origin S.A. (Atos) signed an option agreement which granted Atos the right to acquire Siemens IT Solutions and Services. On February 1, 2011, Atos exercised the option and signed an agreement to acquire Siemens IT Solutions and Services. During the second quarter, the transaction was cleared with the antitrust authorities. Pending approval by Atos’ shareholder meeting, closing of the transaction is expected in the fourth quarter of fiscal 2011. Following signing, Siemens classified Siemens IT Solutions and Services as held for disposal and as discontinued operations. Siemens expects the transaction to have a substantial negative earnings impact in fiscal 2011, in a mid- to high-triple-digit million euro range, depending, among other things, on the final value of the consideration at closing. In particular this negative earnings impact is expected to consist of impairments, including the previously reported goodwill impairment of €136 million booked in the first quarter as well as further impairments on long-lived assets of €464 million booked in the current quarter of fiscal 2011. In addition to the transaction related results and as previously disclosed, Siemens expects further substantial charges in fiscal 2011 related to establishing Siemens IT Solutions and Services as a separate legal group, including for carve-out activities and personnel-related matters. Such charges reported within discontinued operations amounted to €47 million in the current quarter and to €104 million in the first half of fiscal 2011. See also “Notes to Condensed Interim Consolidated Financial Statements.”

     At the beginning of January 2011 the sale of Siemens’ electronics assembly systems business, reported within Centrally managed portfolio activities, to ASM Pacific Technology Ltd. was closed.

     In January 2011, the sale of the 49% interest in KMW to the Wegmann Group was closed after approval by the antitrust authorities and receipt of the second purchase price installment. The gain on the sale of KMW, which is reported in Equity Investments amounts to €91 million.

     In January 2011, Siemens made a binding offer to purchase additional shares in order to increase its stake in its publicly listed Indian subsidiary Siemens Ltd. from about 55% to a maximum of 75%. Siemens offered the shareholders of Siemens Ltd. to purchase their shares for a price of INR 930 per share (written put). The offer period began on March 25, 2011 and ended on April 13, 2011. The offer was accepted in full until that date and the transaction was completed at the end of April 2011, resulting in a cash outflow of €968 million paid after the end of the second quarter of fiscal 2011.

     In February 2011, Siemens signed an agreement to acquire a controlling interest of 100% in Siteco Lighting GmbH (Siteco) in a share deal transaction. Siteco is a leading European lighting company that supplies luminaires and lighting systems for urban infrastructures such as public and commercial buildings, streets, tunnels, airports and sports stadiums. Pending certain closing conditions, including the approval by the relevant antitrust authorities, closing of the transaction is expected in the third quarter of fiscal 2011. Siteco will be integrated into OSRAM, now presented as discontinued operations.

     In March 2011, an independent expert, appointed by Siemens and Areva based on the rules set forth in the shareholders’ agreement, determined the fair market value (purchase price) of Siemens’ 34% share in the joint venture Areva NP at €1.620 billion upon which Siemens received a payment of €1.747 billion from Areva. In addition to the externally determined fair market value, the sale proceeds include other adjusting components based on the shareholders’ agreement and further contractual arrangements between Siemens and Areva, namely interest accretion on the purchase price and a reimbursement of a mandatory capital injection from Areva to Siemens. Following the receipt of the expert opinion and the payment, our shares, previously accounted for as available-for-sale financial asset held for disposal at Energy Sector, were transferred to Areva and derecognized at Siemens. Ongoing arbitration proceedings between Siemens and Areva will decide, among others, on the possibility of a payment between the parties of up to 40% of the purchase price. A decision by the arbitral tribunal is expected in the third quarter of fiscal 2011 and could have a material impact on profit. For further information on arbitration proceedings see “Notes to Consolidated Financial Statements” in our Annual Report for fiscal 2010.

     At the end of March 2011, Siemens announced that it plans to publicly list its subsidiary OSRAM GmbH in fall 2011. Siemens intends to retain a minority stake in the future OSRAM AG, in which it intends to remain a long-term anchor shareholder.

     Siemens completed certain other portfolio transactions during the first six 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

Industry — Three months ended March 31, 2011

Sector		Three months
		ended March 31,								% Change								therein
(in millions of €)		2011				2010				Actual				Adjusted(1)				Currency				Portfolio
Profit			824				567				45	%
Profit margin			10.5	%			7.9	%
New orders			8,371				6,880				22	%			20	%			2	%			0	%
Revenue			7,812				7,156				9	%			8	%			2	%			0	%

     Beginning in the second quarter of fiscal 2011, results for the Industry Sector no longer include OSRAM, which is classified as discontinued operation in connection with Siemens’ plans for a public offering of OSRAM shares in fall 2011. Prior-period results for the Sector are presented on a comparable basis.

     Profit, revenue and orders for the Sector all rose compared to the second quarter a year ago, on continued strong execution in an improved market environment. Profit climbed to €824 million on strong earnings increases at Industry Automation and Drive Technologies. With profit and growth momentum restored following the downturn, the Sector invested further in innovation and enhanced its regional footprint by adding sales resources as previously announced. For comparison, profit of €567 million in the prior-year period included charges of €63 million related to a project engagement with a local partner in the U.S., €50 million for staff reduction measures and a provision for a supplier-related warranty, which were partly offset by €53 million of the pension curtailment gain mentioned earlier.

     Second-quarter orders rose 22% on double-digit growth at all Divisions and in all three reporting regions. Revenue increased 9%, with growth in all regions. The Sector’s book-to-bill ratio was 1.07 and its order backlog was €29 billion at the end of the quarter.

Divisions		New orders
		Three months
		ended March 31,								% Change								therein
(in millions of €)		2011				2010				Actual				Adjusted(1)				Currency				Portfolio
Industry Automation			1,862				1,509				23	%			20	%			2	%			1	%
Drive Technologies			2,262				1,813				25	%			23	%			2	%			0	%
Building Technologies			1,859				1,677				11	%			9	%			2	%			0	%
Industry Solutions			1,572				1,427				10	%			12	%			0	%			(2	)%
Mobility			1,448				1,141				27	%			25	%			2	%			1	%

Divisions		Revenue
		Three months
		ended March 31,								% Change								therein
(in millions of €)		2011				2010				Actual				Adjusted(1)				Currency				Portfolio
Industry Automation			1,746				1,425				23	%			19	%			2	%			2	%
Drive Technologies			1,978				1,620				22	%			20	%			2	%			0	%
Building Technologies			1,785				1,656				8	%			6	%			2	%			0	%
Industry Solutions			1,430				1,484				(4	)%			(2	)%			1	%			(3	)%
Mobility			1,502				1,576				(5	)%			(6	)%			1	%			0	%

Divisions		Profit												Profit margin
		Three months												Three months
		ended March 31,												ended March 31,
(in millions of €)		2011				2010				% Change				2011				2010
Industry Automation			306				191				60	%			17.5	%			13.4	%
Drive Technologies			259				176				47	%			13.1	%			10.9	%
Building Technologies			84				94				(11	)%			4.7	%			5.7	%
Industry Solutions			64				(10	)			—				4.5	%			(0.7	)%
Mobility			106				114				(7	)%			7.1	%			7.2	%

     Second-quarter profit at Industry Automation was €306 million, up 60% 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 both rose 23%, led by strong growth in the Asia, Australia region. Emerging markets, particularly China, 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 €34 million a year earlier.

     Drive Technologies delivered sharply higher second-quarter profit of €259 million year-over-year, due to a 22% rise in revenue that increased capacity utilization. Higher revenue and profit were most evident in the Division’s short cycle business. New orders for the Division climbed 25%. Both revenue and orders rose in all three regions as market conditions continued to improve.

     Profit at Building Technologies was €84 million in the second quarter, below the prior-period level due to higher marketing and selling expenses associated with growth. Profit in the prior-year period included the supplier-related warranty, which was largely offset by a portion of €24 million of the pension curtailment gain mentioned above. Revenue rose 8% and orders climbed 11% compared to the prior-year period, with increases in all three reporting regions and strong demand for the Division’s energy efficiency solutions.

     Industry Solutions contributed second-quarter profit of €64 million. For comparison, the Division’s loss in the prior-year period included the charges related to a project engagement with a local partner in the U.S. mentioned above and €38 million in charges for staff reduction measures. Second-quarter revenue came in 4% lower year-over-year, due to low order intake in prior periods. Orders rose 10%, due primarily to higher orders in the metals technologies business compared to the second quarter a year ago.

     Mobility delivered €106 million in profit in the second quarter. A year earlier, profit of €114 million benefited from a portion of the pension curtailment gain mentioned above. Orders rose 27% for the quarter, due primarily to a low basis of comparison in the prior-year period. The low level of orders in prior periods also influenced revenue in the current period, which came in 5% below the level a year earlier.

Industry — Six months ended March 31, 2011

Sector		Six months
		ended March 31,								% Change								therein
(in millions of €)		2011				2010				Actual				Adjusted(1)				Currency				Portfolio
Profit			1,704				1,264				35	%
Profit margin			10.9	%			9.0	%
New orders			17,179				14,001				23	%			19	%			4	%			0	%
Revenue			15,646				14,099				11	%			7	%			4	%			0	%

     Industry increased its profit for the first half of fiscal 2011 to €1.704 billion from €1.264 billion in the same period a year earlier. All Divisions except Mobility contributed to the increase. For comparison, Mobility’s profit in the prior-year period benefited from a €44 million net gain on the sale of its airfield solutions business. Industry Automation and Drive Technologies were the primary earnings contributors, both posting sharply higher profit on increased capacity utilization. Sector profit for the current six months was burdened by €128 million of a special remuneration allocation (for further information see “Reconciliation to consolidated financial statements — Corporate items and pensions”). In the same period a year earlier, burdens on profit included the above-mentioned charges of €63 million related to a project engagement with a local partner in the U.S., €50 million for staff reduction measures and a provision for a supplier-related warranty, only partly offset by €53 million of the pension curtailment gain mentioned earlier as well as the gain on the sale of Mobility’s airfield solutions business mentioned before.

     Revenue and orders for the Sector increased by 11% and 23%, respectively. The growth was driven mainly by the Industry Automation and Drive Technologies Divisions, which saw improved market conditions compared to the prior-year period. While orders rose in all Divisions, revenue at Industry Solutions and Mobility came in slightly below the prior-year level. On a geographical basis, revenue and orders climbed in all regions with the highest growth rates in the Asia, Australia region.

Divisions		New orders
		Six months
		ended March 31,								% Change								therein
(in millions of €)		2011				2010				Actual				Adjusted(1)				Currency				Portfolio
Industry Automation			3,718				2,915				28	%			22	%			4	%			1	%
Drive Technologies			4,716				3,387				39	%			35	%			5	%			0	%
Building Technologies			3,692				3,288				12	%			8	%			5	%			0	%
Industry Solutions			2,858				2,661				7	%			6	%			3	%			(2	)%
Mobility			3,782				3,028				25	%			21	%			4	%			0	%

Divisions		Revenue
		Six months
		ended March 31,								% Change								therein
(in millions of €)		2011				2010				Actual				Adjusted(1)				Currency				Portfolio
Industry Automation			3,549				2,823				26	%			20	%			4	%			2	%
Drive Technologies			3,805				3,131				22	%			18	%			4	%			0	%
Building Technologies			3,564				3,216				11	%			6	%			5	%			0	%
Industry Solutions			2,794				2,921				(4	)%			(5	)%			3	%			(3	)%
Mobility			3,136				3,158				(1	)%			(4	)%			3	%			0	%

Divisions		Profit												Profit margin
		Six months												Six months
		ended March 31,												ended March 31,
(in millions of €)		2011				2010				% Change				2011				2010
Industry Automation			670				414				62	%			18.9	%			14.7	%
Drive Technologies			488				329				48	%			12.8	%			10.5	%
Building Technologies			200				187				7	%			5.6	%			5.8	%
Industry Solutions			112				58				93	%			4.0	%			2.0	%
Mobility			222				267				(17	)%			7.1	%			8.4	%

     For the first six month of fiscal 2011, profit at Industry Automation rose substantially year-over-year to €670 million on a higher capacity utilization and an improved business mix. Revenue rose 26% and orders grew 28% year-over-year on double-digit increases in all businesses and regions. Growth rates in emerging markets exceeded growth rates for volume overall. PPA effects related to the acquisition of UGS Corp. were €70 million in the current period, compared to €66 million in the first six months of the prior fiscal year.

     Orders and revenue at Drive Technologies increased in all three regions on improved market conditions. Orders at Drive Technologies for the first six months climbed 39% compared to the prior year including higher volume from large orders and revenue increased by 22% year-over-year. Higher capacity utilization led to sharply higher profit compared to the first six months a year earlier.

     Building Technologies increased its first-half profit to €200 million despite increased marketing and selling expenses associated with growth. Demand for energy efficiency solutions drove first-half orders up 12% year-over-year, including double-digit growth in all regions, and took revenue up 11%. For comparison, first-half profit of €187 million a year earlier included a charge for the supplier-related warranty mentioned above, largely offset by a portion of €24 million of the pension curtailment gain mentioned above.

     Orders at Industry Solutions grew 7% in the first six months on higher orders in the metals technologies business including strong demand in the Americas. Revenue declined 4% year-over-year, as lower revenue in Europe, C.I.S., Africa, Middle East more than offset higher revenue in other regions. Profit for Industry Solutions was €112 million in the current period, compared to €58 million in the first half a year earlier, when the Division took the above-mentioned €63 million in charges related to a project engagement with a local partner in the U.S. and €38 million in charges for staff reduction measures.

     Mobility posted profit of €222 million in the first six months of fiscal 2011. For comparison, profit of €267 million in the prior-year period benefited from the €44 million net gain on the sale of the airfield solutions business and from a portion of the pension curtailment gain mentioned above. First-half orders for the Division increased by 25% year-over-year on higher volume from large orders, which included a major order for high-speed trains in the U.K. Revenue came in near the level of the prior-year period.

Energy — Three months ended March 31, 2011

Sector		Three months ended
		March 31,								% Change								therein
(in millions of €)		2011				2010				Actual				Adjusted(1)				Currency				Portfolio
Profit			2,421				813				198	%
Profit margin			36.1	%			13.1	%
New orders			9,205				6,081				51	%			50	%			1	%			0	%
Revenue			6,707				6,182				8	%			7	%			1	%			0	%

     The Energy Sector delivered strong operating results in the second quarter, and also recorded the €1.520 billion Areva NP disposal gain at Fossil Power Generation mentioned earlier. Profit overall was €2.421 billion, with Fossil Power Generation again leading all Siemens Divisions in earnings contribution. Sector profit for the quarter includes higher expenses for R&D, marketing and selling associated with growth. Energy also recorded charges associated with proactively optimizing capacities within its global footprint. For comparison, Sector profit in the prior-year period was burdened by charges for capacity adjustments related to a shift of production capacity within the Americas, partly offset by the €25 million pension curtailment gain mentioned earlier.

     All Divisions posted higher revenue and orders compared to the same quarter a year ago. Sector revenue came in 8% higher year-over-year, as Energy continued to execute well in converting its large order backlog into current business. Orders jumped 51% compared to the prior-year quarter, to a new high of €9.205 billion. Higher orders in all regions were highlighted by a particularly large order in Saudi Arabia and three large offshore wind-farms in Germany. Energy expects the pace of order intake to slow in coming quarters following three consecutive quarters of particularly high market demand. The book-to-bill ratio in the current period was 1.37, and the Sector’s order backlog increased to €57 billion, compared to €56 billion at the end of the first quarter in fiscal 2011.

Divisions		New orders
		Three months ended
		March 31,								% Change								therein
(in millions of €)		2011				2010				Actual				Adjusted(1)				Currency				Portfolio
Fossil Power Generation			3,206				2,250				42	%			42	%			0	%			0	%
Renewable Energy			1,967				628				>200	%			>200	%			2	%			0	%
Oil & Gas			1,390				1,178				18	%			14	%			4	%			1	%
Power Transmission			2,040				1,424				43	%			43	%			1	%			0	%
Power Distribution			785				777				1	%			(1	)%			2	%			0	%

Divisions		Revenue
		Three months ended
		March 31,								% Change								therein
(in millions of €)		2011				2010				Actual				Adjusted(1)				Currency				Portfolio
Fossil Power Generation			2,538				2,447				4	%			3	%			0	%			0	%
Renewable Energy			931				862				8	%			7	%			1	%			0	%
Oil & Gas			1,123				981				15	%			11	%			4	%			0	%
Power Transmission			1,557				1,363				14	%			13	%			2	%			0	%
Power Distribution			711				667				7	%			4	%			2	%			0	%

Divisions		Profit												Profit margin
		Three months ended												Three months ended
		March 31,												March 31,
(in millions of €)		2011				2010				% Change				2011				2010
Fossil Power Generation			2,049				329				>200	%			80.7	%			13.4	%
Renewable Energy			48				100				(53	)%			5.1	%			11.7	%
Oil & Gas			125				119				5	%			11.2	%			12.1	%
Power Transmission			142				149				(5	)%			9.1	%			11.0	%
Power Distribution			54				94				(42	)%			7.6	%			14.1	%

     Fossil Power Generation continued its strong execution and earnings performance, and also recorded a €1.520 billion gain on the divestment of its stake in Areva NP. These factors combined to lift profit to €2.049 billion for the quarter. The Division’s operating results rose to a high level due in part to a favorable business mix, including conversion of high-margin component orders from prior periods. Furthermore, the Division’s service business made an especially strong contribution in the quarter. These factors more than offset €87 million charges related to the Olkiluoto project in Finland. The prior-year period was burdened by €59 million in charges for capacity adjustments related to a shift of production capacity within the Americas region. Second-quarter revenue rose 4% compared to the same period a year earlier, including strong growth in the Americas. Fossil Power Generation recorded a higher volume from large orders compared to the prior-year period, particularly including a large order for a combined-cycle power plant in Saudi Arabia. For further information regarding ongoing arbitration proceedings between Siemens and Areva refer to “Legal Proceedings” in our Consolidated Financial Statements as of September 30, 2010. For further information regarding the Olkiluoto project refer to “Notes to Condensed Interim Consolidated Financial Statements” within this report.

     Renewable Energy won new contracts for offshore wind-farms in Germany which took orders up substantially compared to the second quarter a year ago, which included significantly lower volume from large orders. The Division reported revenue 8% above the prior-year period, continuing its growth trend. Second-quarter profit came in lower year-over-year mainly due to higher expenses for R&D, marketing and selling associated with the ongoing expansion of the wind business in emerging markets. In addition, current period profit for the Division was impacted by substantial expenses associated with the ongoing development of our solar business.

     Oil & Gas contributed €125 million to Sector profit in the second quarter. Orders climbed 18% compared to the prior-year period, including strong growth in emerging markets. Revenue grew 15%, including high double-digit increases in Asia, Australia and the Americas.

     Second-quarter orders at Power Transmission climbed 43%, driven in part by a large order for connecting offshore wind-farms to regional power grids. Revenue rose 14%, mainly driven by strong project execution in the solutions business. Profit of €142 million was held back by €41 million charges, including for staff reduction measures, associated with optimizing the Division’s global manufacturing footprint.

     Power Distribution generated 7% revenue growth. Second-quarter orders were up slightly year-over-year, as double-digit growth in Asia, Australia offset declines in other regions. Profit of €54 million was held back by higher expenses year-over-year for marketing and selling as well as R&D associated with ongoing activities related to new technologies such as smart grids.

Energy — Six months ended March 31, 2011

Sector		Six months ended
		March 31,								% Change								therein
(in millions of €)		2011				2010				Actual				Adjusted(1)				Currency				Portfolio
Profit			3,247				1,583				105	%
Profit margin			24.8	%			13.4	%
New orders			17,964				13,000				38	%			34	%			4	%			0	%
Revenue			13,085				11,798				11	%			7	%			4	%			0	%