Siemens AG (SI) | Analysis of Investments

Investment Accounting Policy

Cash and cash equivalents

Siemens considers all highly liquid investments with less than three months maturity from the date of acquisition to be cash equivalents. Cash and cash equivalents are measured at cost.

Available-for-sale financial assets

Investments in equity instruments, debt instruments and fund shares are all classified as available-for-sale financial assets and are measured at fair value, if reliably measurable. Unrealized gains and losses, net of applicable deferred income taxes, are recognized in line item Other comprehensive income, net of tax. Provided that fair value cannot be reliably determined, Siemens measures available-for-sale financial instruments at cost. This applies to equity instruments that do not have a quoted market price in an active market, and decisive parameters cannot be reliably estimated to be used in valuation models for the determination of fair value.

When available-for-sale financial assets incur a decline in fair value below acquisition cost and there is objective evidence that the asset is impaired, the cumulative loss that has been recognized in equity is removed from equity and recognized in the Consolidated Statements of Income. Siemens considers all available evidence such as market conditions and prices, investee-specific factors and the duration as well as the extent to which fair value is less than acquisition cost in evaluating potential impairment of its available-for-sale financial assets. Siemens considers a decline in fair value as objective evidence of impairment, if the decline exceeds 20% of costs or continues for more than six months. An impairment loss for debt instruments is reversed in subsequent periods, if the reasons for the impairment no longer exist.

Source: Siemens AG, Annual Report

Adjustment to Net Income (Loss): Mark to Market Available-for-sale Securities

Siemens AG, adjustment to Net Income Attributable To Shareholders Of Siemens AG

	12 months ended	Sep 30, 2011	Sep 30, 2010	Sep 30, 2009	Sep 30, 2008	Sep 30, 2007	Sep 30, 2006
	Net income attributable to shareholders of Siemens AG (as reported)
	Add: Available-for-sale financial assets
	Net income attributable to shareholders of Siemens AG (adjusted)

Adjusted Ratios: Mark to Market Available-for-sale Securities (Summary)

Siemens AG, adjusted ratios

		Sep 30, 2011	Sep 30, 2010	Sep 30, 2009	Sep 30, 2008	Sep 30, 2007	Sep 30, 2006
	Net Profit Margin
	Reported net profit margin	%	%	%	%	%	%
	Adjusted net profit margin	%	%	%	%	%	%
	Return on Equity (ROE)
	Reported ROE	%	%	%	%	%	%
	Adjusted ROE	%	%	%	%	%	%
	Return on Assets (ROA)
	Reported ROA	%	%	%	%	%	%
	Adjusted ROA	%	%	%	%	%	%

Adjusted Net Profit Margin

		Sep 30, 2011	Sep 30, 2010	Sep 30, 2009	Sep 30, 2008	Sep 30, 2007	Sep 30, 2006
	As Reported
	Net income attributable to shareholders of Siemens AG (USD $ in millions, translated from EUR €)
	Revenue (USD $ in millions, translated from EUR €)
	Net profit margin1	%	%	%	%	%	%
	Adjusted: Mark to Market Available-for-sale Securities
	Adjusted net income attributable to shareholders of Siemens AG (USD $ in millions, translated from EUR €)
	Revenue (USD $ in millions, translated from EUR €)
	Adjusted net profit margin2	%	%	%	%	%	%

2011 Calculations

Adjusted Return On Equity (ROE)

		Sep 30, 2011	Sep 30, 2010	Sep 30, 2009	Sep 30, 2008	Sep 30, 2007	Sep 30, 2006
	As Reported
	Net income attributable to shareholders of Siemens AG (USD $ in millions, translated from EUR €)
	Equity attributable to shareholders of Siemens AG (USD $ in millions, translated from EUR €)
	ROE1	%	%	%	%	%	%
	Adjusted: Mark to Market Available-for-sale Securities
	Adjusted net income attributable to shareholders of Siemens AG (USD $ in millions, translated from EUR €)
	Equity attributable to shareholders of Siemens AG (USD $ in millions, translated from EUR €)
	Adjusted ROE2	%	%	%	%	%	%

2011 Calculations

Adjusted Return On Assets (ROA)

		Sep 30, 2011	Sep 30, 2010	Sep 30, 2009	Sep 30, 2008	Sep 30, 2007	Sep 30, 2006
	As Reported
	Net income attributable to shareholders of Siemens AG (USD $ in millions, translated from EUR €)
	Total assets (USD $ in millions, translated from EUR €)
	ROA1	%	%	%	%	%	%
	Adjusted: Mark to Market Available-for-sale Securities
	Adjusted net income attributable to shareholders of Siemens AG (USD $ in millions, translated from EUR €)
	Total assets (USD $ in millions, translated from EUR €)
	Adjusted ROA2	%	%	%	%	%	%

2011 Calculations