##### Table of Contents



As filed with the Securities and Exchange Commission on
December 7, 2005








UNITED STATES SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549





FORM 20-F




|  |                                                                                                   
|- | --------------------------------------------------------------------------------------------------
|o | REGISTRATION STATEMENT PURSUANT
    TO SECTION 12(b) OR (g)
OF THE SECURITIES EXCHANGE ACT OF 1934

OR




|  |                                                                                     
|- | ------------------------------------------------------------------------------------
|þ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended September 30, 2005.


OR




|  |                                                                                         
|- | ----------------------------------------------------------------------------------------
|o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to ___________.


OR




|  |                                                                                            
|- | -------------------------------------------------------------------------------------------
|o | SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

Date of event requiring this
shell company report ____________


Commission file number: 1-15174


Siemens Aktiengesellschaft


(Exact name of Registrant as specified in its charter)


Federal Republic of Germany


(Jurisdiction of incorporation or organization)


Wittelsbacherplatz 2


D-80333 Munich


Federal Republic of Germany


(Address of principal executive offices)




|                                                  |  |                                          
|------------------------------------------------- |  | -----------------------------------------
|Title of each class                               |  | Name of each exchange on which registered
|                                                  |  |                                          
|American Depositary Shares, each representing one |  |                                          
|Common Share, no par value                        |  | New York Stock Exchange                  
|Common Shares, no par value*                      |  | New York Stock Exchange                  






|  |                                                                                                                                                                                                              
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|* | Listed, not for trading or quotation purposes, but only in
    connection with the registration of American Depositary Shares
    pursuant to the requirements of the Securities and Exchange
    Commission.





















þ o o




o þ




o þ










---










TABLE OF CONTENTS


|          |  |                                                                                  |  |      |       | 
|--------- |  | -------------------------------------------------------------------------------- |  | ---- | ----- | 
|          |  |                                                                                  |  | Page |      
|          |  |                                                                                  |  |      |      
|Item 1:   |  | Identity of Directors, Senior Management
    and Advisers                        |  |      | 1     | 
|Item 2:   |  | Offer Statistics and Expected Timetable                                          |  |      | 1     | 
|Item 3:   |  | Key Information                                                                  |  |      | 1     | 
|Item 4:   |  | Information on the Company                                                       |  |      | 7     | 
|Item 5:   |  | Operating and Financial Review and
    Prospects                                 |  |      | 37    | 
|Item 6:   |  | Directors, Senior Management and
    Employees                                   |  |      | 74    | 
|Item 7:   |  | Major Shareholders and Related Party
    Transactions                            |  |      | 89    | 
|Item 8:   |  | Financial Information                                                            |  |      | 89    | 
|Item 9:   |  | The Offer and Listing                                                            |  |      | 89    | 
|Item 10:  |  | Additional Information                                                           |  |      | 92    | 
|Item 11:  |  | Quantitative and Qualitative Disclosure
    About Market Risk                    |  |      | 104   | 
|Item 12:  |  | Description of Securities Other than Equity
    Securities                       |  |      | 107   | 
|Item 13:  |  | Defaults, Dividend Arrearages and
    Delinquencies                              |  |      | 107   | 
|Item 14:  |  | Material Modifications to the Rights of
    Security Holders and Use of Proceeds |  |      | 107   | 
|Item 15:  |  | Controls and Procedures                                                          |  |      | 107   | 
|Item 16A: |  | Audit Committee Financial Expert                                                 |  |      | 108   | 
|Item 16B: |  | Code of Ethics                                                                   |  |      | 108   | 
|Item 16C: |  | Principal Accountant Fees and Services                                           |  |      | 109   | 
|Item 16D: |  | Exemptions from the Listing Standards for
    Audit Committees                   |  |      | 110   | 
|Item 16E: |  | Purchases of Equity Securities by the
    Issuer and Affiliated Purchasers       |  |      | 111   | 
|Item 18:  |  | Financial Statements                                                             |  |      | F-1   | 
|Item 19:  |  | Exhibits                                                                         |  |      | III-1 | 
|EX 1.1   
|EX 8.1   
|EX 12.1  
|EX 12.2  
|EX 13.1  
|EX 13.2  
|EX 14.1  



FORWARD LOOKING STATEMENTS






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##### Table of Contents



PART I





ITEM 1:      IDENTITY OF
DIRECTORS, SENIOR MANAGEMENT AND ADVISERS







ITEM 2:      OFFER STATISTICS
AND EXPECTED TIMETABLE







ITEM 3:      KEY INFORMATION


Selected Consolidated
Financial and Statistical Data




Income Statement
Data


|                                                                                                     |                                                                                     |                                        |        |       |         |  |        |         |   |  |         |      |  |         |        |      |  |  |        |      | 
|---------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------- | -------------------------------------- | ------ | ----- | ------- |  | ------ | ------- | - |  | ------- | ---- |  | ------- | ------ | ---- |  |  | ------ | ---- | 
|                                                                                                     |                                                                                     | Year ended September 30,               |       
|                                                                                                     |                                                                                     |                                        |       
|                                                                                                     |                                                                                     | 2005(1)                                |        |       | 2004(1) |  |        | 2003(1) |   |  | 2002(2) |      |  | 2001(2) |       
|                                                                                                     |                                                                                     |                                        |        |       |         |  |        |         |   |  |         |      |  |         |       
|                                                                                                     |                                                                                     | ( in millions, except per share data) |       
|Net sales                                                                                            |                                                                                     |                                        | 75,445 |       |         |  | 70,237 |         |   |  | 69,775  |      |  |         | 84,016 |      |  |  | 87,000 |     
|Income from continuing operations before income taxes and
    cumulative effect of accounting change |                                                                                     |                                        | 4,185  |       |         |  | 4,369  |         |   |  | 3,320   |      |  |         | 3,475  |      |  |  | 2,678  |     
|Income from continuing operations before cumulative effect of
    accounting change                  |                                                                                     |                                        | 3,058  |       |         |  | 3,450  |         |   |  | 2,355   |      |  |         |       |      |  |  |       |     
|Income (loss) from discontinued operations, net of income taxes                                      |                                                                                     |                                        | (810   | )     |         |  | (45    | )       |   |  | 54      |      |  |         |       |      |  |  |       |     
|Net income                                                                                           |                                                                                     |                                        | 2,248  |       |         |  | 3,405  |         |   |  | 2,445   |      |  |         | 2,597  |      |  |  | 2,088  |     
|Basic earnings per share                                                                             |                                                                                     |                                        |        |       |         |  |        |         |   |  |         |      |  |         |        |      |  |  |        |     
|                                                                                                     | Income from continuing operations before cumulative effect of
    accounting change |                                        |        | 3.43  |         |  |        | 3.87    |   |  |         | 2.65 |  |         |        |     |  |  |        |     | 
|                                                                                                     | Income (loss) from discontinued operations                                          |                                        |        | (0.91 | )       |  |        | (0.05   | ) |  |         | 0.06 |  |         |        |     |  |  |        |     | 
|                                                                                                     | Net income                                                                          |                                        |        | 2.52  |         |  |        | 3.82    |   |  |         | 2.75 |  |         |        | 2.92 |  |  |        | 2.36 | 
|Diluted earnings per share                                                                           |                                                                                     |                                        |        |       |         |  |        |         |   |  |         |      |  |         |        |      |  |  |        |     
|                                                                                                     | Income from continuing operations before cumulative effect of
    accounting change |                                        |        | 3.29  |         |  |        | 3.71    |   |  |         | 2.61 |  |         |        |     |  |  |        |     | 
|                                                                                                     | Income (loss) from discontinued operations                                          |                                        |        | (0.87 | )       |  |        | (0.05   | ) |  |         | 0.06 |  |         |        |     |  |  |        |     | 
|                                                                                                     | Net income                                                                          |                                        |        | 2.42  |         |  |        | 3.66    |   |  |         | 2.71 |  |         |        | 2.92 |  |  |        | 2.36 | 








|   
|---
|   
|(1)
|   
|(2)

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##### Table of Contents



Balance Sheet
Data


|                     |  |                  |        |  |      |  |        |      |  |  |        |  |  |      |        |  |  |  |        | 
|-------------------- |  | ---------------- | ------ |  | ---- |  | ------ | ---- |  |  | ------ |  |  | ---- | ------ |  |  |  | ------ | 
|                     |  | At September 30, |       
|                     |  |                  |       
|                     |  | 2005             |        |  | 2004 |  |        | 2003 |  |  | 2002   |  |  | 2001 |       
|                     |  |                  |        |  |      |  |        |      |  |  |        |  |  |      |       
|                     |  | ( in millions)  |       
|Total assets         |  |                  | 86,205 |  |      |  | 79,518 |      |  |  | 77,605 |  |  |      | 77,939 |  |  |  | 90,118 | 
|Long-term debt       |  |                  | 8,436  |  |      |  | 9,785  |      |  |  | 11,433 |  |  |      | 10,243 |  |  |  | 9,973  | 
|Shareholders equity |  |                  | 27,117 |  |      |  | 26,855 |      |  |  | 23,715 |  |  |      | 23,521 |  |  |  | 23,812 | 
|Common stock         |  |                  | 2,673  |  |      |  | 2,673  |      |  |  | 2,673  |  |  |      | 2,671  |  |  |  | 2,665  | 



Dividends




|                         |  |               |      |   |        |  |      | 
|------------------------ |  | ------------- | ---- | - | ------ |  | ---- | 
|                         |  | Dividend paid |     
|                         |  | per share     |     
|                         |  |               |     
|Year ended September 30, |  | Euro          |      |   | Dollar | 
|                         |  |               |      |   |        | 
|2001                     |  |               | 1.00 |   |        |  | 1.14 | 
|2002                     |  |               | 1.00 |   |        |  | 1.08 | 
|2003                     |  |               | 1.10 |   |        |  | 1.40 | 
|2004                     |  |               | 1.25 |   |        |  | 1.63 | 
|2005                     |  |               | 1.35 | * |        |  |     | 








| 
|-
| 
|*



Exchange Rate
Information







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##### Table of Contents



|                                |  |         |        | 
|------------------------------- |  | ------- | ------ | 
|Fiscal year ended September 30, |  | Average |       
|                                |  |         |       
|2001                            |  |         | 0.8886 | 
|2002                            |  |         | 0.9208 | 
|2003                            |  |         | 1.0919 | 
|2004                            |  |         | 1.2199 | 
|2005                            |  |         | 1.2727 | 



|          |  |      |        |     |  |  |        | 
|--------- |  | ---- | ------ | --- |  |  | ------ | 
|2005      |  | High |        | Low
|          |  |      |        |    
|June      |  |      | 1.2320 |     |  |  | 1.2035 | 
|July      |  |      | 1.2200 |     |  |  | 1.1917 | 
|August    |  |      | 1.2434 |     |  |  | 1.2147 | 
|September |  |      | 1.2538 |     |  |  | 1.2011 | 
|October   |  |      | 1.2148 |     |  |  | 1.1914 | 
|November  |  |      | 1.2067 |     |  |  | 1.1667 | 






Risk Factors




Our business is affected by the uncertainties of economic
and political conditions:






3



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We operate in highly competitive markets, which are
subject to price pressure and rapid changes:


Our businesses must keep pace with technological changes
and develop new products and services to remain competitive:


We may have difficulty in identifying and executing
portfolio measures:


Our financial results and cash flows may be adversely
affected by cost overruns or additional payment obligations
particularly with respect to our long-term contracts:


We face operational risks in our value chain processes:


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We are dependent upon the ability of third parties to
deliver parts, components and services on time:


We may be adversely affected by rising raw material
prices:


We are exposed to currency risks and interest rate risks:


Our financing activities subject us to various risks
including credit and interest rate risk:


The funded status of our off-balance sheet pension benefit
plans and its financial statement impact is dependent on several
factors:


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We are dependent upon hiring and retaining highly
qualified management and technical personnel:


We are subject to risks associated with our international
operations:


We are subject to environmental and other government
regulations:


Our business could suffer as a result of current or future
litigation:


6



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ITEM 4:      INFORMATION
ON THE COMPANY


Overview







Performance and
Portfolio, Operational Excellence, People Excellence Corporate Responsibility.




Fit4More
program


Performance and Portfolio


Operational Excellence 


7



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People Excellence


Corporate Responsibility


Portfolio
Activities




Acquisitions




| |   |                                                                                                                                                                                                                                                                                                                                                           
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Meds acquisition of CTI Molecular Imaging, Inc.,
    U.S. (CTI) in May 2005 to strengthen Siemens
    commitment to molecular imaging development;                                                                                                                                                                                                      
|
| |  | Acquisition completed in July 2005 of the Austrian engineering
    group VA Technologie AG (VA Tech), primarily integrated into
    I&S and PTD;                                                                                                                                                                                                          
|
| |  | A&Ds acquisition in July 2005 of Flender Holding GmbH,
    Germany (Flender), a supplier of gear systems;                                                                                                                                                                                                                                                
|
| |  | Acquisition of two entities at Power Generation (PG) and A&D
    in fiscal 2005, which are not significant individually: Bonus
    Energy A/S (Bonus), Denmark, a supplier of wind energy systems,
    and Robicon Corporation (Robicon), U.S., a manufacturer of
    medium-voltage converters for AC motors;                                            
|
| |  | I&S acquisition in the fourth quarter of fiscal 2004
    of USFilter Corporation (USFilter), which offers water systems
    and services in the municipal and industrial water treatment and
    supply market;                                                                                                                                          
|
| |  | Acquisition of three entities in fiscal 2004, which are not
    significant individually: Trench Electric Holdings BV (Trench),
    Netherlands at PTD, BBC Technology Holdings Ltd. (BBC), U.K. at
    SBS and the Huntsville, Alabama, U.S. business group of an
    automotive electronics manufacturer at SV; and                                     
|
| |  | Acquisition of the industrial turbine business of Alstom S.A.
    (Alstom), Paris, which was structured in two transactions; in
    the first transaction in April 2003, PG acquired the small gas
    turbine business of Alstom; and in the second transaction in
    July 2003, PG acquired Alstoms medium-sized gas and steam
    turbine businesses.

Dispositions




| |   |                                                                                                                                                                                                                                                               
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | In the fourth quarter of fiscal 2004, Siemens divested a 74.9%
    interest in SBS banking software company KORDOBA
    Gesellschaft für Bankensoftware mbH & Co. KG (Kordoba);
    in fiscal 2005, the remaining 25.1% interest in Kordoba was
    sold; and

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| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Siemens contributed the Patient Care System and Electro
    Cardiography System businesses of the Medical business Group
    into a joint venture with Drägerwerk AG in exchange
    for a 35% interest in the joint venture Dräger
    Medical AG & Co. KGaA (Dräger Medical) in
    June 2003. In October 2003, Siemens completed the sale of its
    Life Support Systems business to Getinge AB, Sweden and
    contributed the net proceeds from this sale to Dräger
    Medical.

Discontinued Operations




| |   |                                                                                                                                                                                                                                                                
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | In September 2005, we sold our Mobile Device business, which
    lacked the necessary scale to compete effectively in a
    consolidating market. These business activities are reported in
    discontinued operations for both the current and prior periods.



Economic Value Added
(EVA)




9



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Description of
Business












|   |                                                                                                                                                                                                                                                                                                                                                                                  
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|*  | The Groups ICN and ICM were combined into one Group named
    Communications (Com) as of October 1, 2004.                                                                                                                                                                                                                                                                        
|  
|** | L&A was dissolved as of October 1, 2005. As of this
    date, Postal Automation and Airport Logistics were integrated
    into I&S and Electronics Assembly Systems became part of
    A&D. The Distribution and Industry Logistics division and
    Material Handling Products division formerly reported in L&A
    are reported in Other Operations for all periods presented.

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Information and
Communications


Communications (Com)


|                                                  |  |                    |  | 
|------------------------------------------------- |  | ------------------ |  | 
|                                                  |  | Year ended         | 
|                                                  |  | September 30, 2005 | 
|                                                  |  |                    | 
|Total sales                                       |  | 13.141 billion   
|External sales as percentage of Siemens net sales |  | 17.00%            
|Group profit                                      |  | 454 million      



Mobile
Devices




Customer Premises Equipment
Devices Wireless Modules


Customer Premises Equipment Devices


Wireless Modules


Enterprise Systems Enterprise Services


Enterprise Systems


Enterprise Services


11



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Mobile
Networks, Fixed Networks Carrier Services


Mobile Networks


Fixed Networks


Carrier Services








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Siemens Business Services (SBS)


|                                                  |  |                    |  | 
|------------------------------------------------- |  | ------------------ |  | 
|                                                  |  | Year ended         | 
|                                                  |  | September 30, 2005 | 
|                                                  |  |                    | 
|Total sales                                       |  | 5.373 billion    
|External sales as percentage of Siemens net sales |  | 5.25%             
|Group profit                                      |  | (690) million    









| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Solution Business offers project-oriented consulting,
    design and implementation services. These include selecting,
    adapting and introducing new solutions to support business
    processes, as well as integration of systems and enterprise
    applications.                                                                                                                                                            
|
| |  | Operation-Related Services provides outsourcing services
    (operation of a customers IT infrastructure or of selected
    business processes), with a focus on full-scale IT operations
    spanning hosting, call center, network and desktop services.                                                                                                                                                                        
|
| |  | Product-Related Services offers infrastructure
    maintenance, including hardware and software maintenance and
    infrastructure service solutions, such as security services and
    concepts designed to minimize business process interruption
    caused by failures in the IT infrastructure. In fiscal 2005, SBS
    sold its subsidiary Sinitec, which provides services for IT
    hardware in Germany, to a&o iTec GmbH.

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| |   |                                                                                                                                                                                                                                                                                            
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Business Process Outsourcing offers business process
    outsourcing, especially in the areas of human resources
    administration and financial service back-office operations. As
    of October 1, 2005, this division will be included in the
    Operation-Related Services division.





| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | customer relationship management, to assist businesses in
    aligning their organizations to better serve the needs and
    requirements of their customers, including solutions for
    integrated management systems, operation of call centers and the
    supply of sales control systems;                                                                                                                                                                                                                                                  
|
| |  | business information management, to improve our customers
    business processes, including services and solutions for
    business information, document and product data management;                                                                                                                                                                                                                                                                                                                                                          
|
| |  | supply chain management, to facilitate the efficient interplay
    of all of a business operational processes with those of
    its suppliers. SBS provides a complete portfolio of offerings in
    this area, from planning, design and implementation of a
    customers production and logistics information technology
    systems to the operation of production and logistics systems as
    an outsourced services provider;                                                                                                           
|
| |  | enterprise resource management, to optimize a customers
    internal management and production processes through the supply
    and support of configurable software packages for integrated
    management of a wide variety of the customers business
    processes, from procurement to manufacturing and distribution,
    as well as treasury management and accounting functions across
    different industries. SBS tailors standard software packages
    according to customer requirements to create and optimize
    solutions; and
|
| |  | e-commerce systems and solutions in a range of industries, to
    allow customers to offer a variety of Internet-based services
    through design and implementation of software for on-line media,
    communications and transactions applications.                                                                                                                                                                                                                                                                                           









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Automation and
Control


Automation and Drives (A&D)


|                                                  |  |                    |  | 
|------------------------------------------------- |  | ------------------ |  | 
|                                                  |  | Year ended         | 
|                                                  |  | September 30, 2005 | 
|                                                  |  |                    | 
|Total sales                                       |  | 9.844 billion    
|External sales as percentage of Siemens net sales |  | 11.32%            
|Group profit                                      |  | 1.210 billion    



Manufacturing automation Process
automation Electrical instrumentation for buildings








15



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16



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Industrial Solutions and Services (I&S)


|                                                  |  |                    |  | 
|------------------------------------------------- |  | ------------------ |  | 
|                                                  |  | Year ended         | 
|                                                  |  | September 30, 2005 | 
|                                                  |  |                    | 
|Total sales                                       |  | 5.390 billion    
|External sales as percentage of Siemens net sales |  | 5.77%             
|Group profit                                      |  | 139 million      





Industrial Plants


Industrial Services


Water Technologies


Intelligent Traffic Systems


Siemens VAI.


IT Plant Solutions






17



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Logistics and Assembly Systems (L&A)


|                                                  |  |                    |  | 
|------------------------------------------------- |  | ------------------ |  | 
|                                                  |  | Year ended         | 
|                                                  |  | September 30, 2005 | 
|                                                  |  |                    | 
|Total sales                                       |  | 1.472 billion    
|External sales as percentage of Siemens net sales |  | 1.84%             
|Group profit                                      |  | 69 million       



Distribution and Industry Logistics


Airport Logistics


Postal Automation


Electronics Assembly Systems


18



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Materials Handling Products














Siemens Building Technologies (SBT)


|                                                  |  |                    |  | 
|------------------------------------------------- |  | ------------------ |  | 
|                                                  |  | Year ended         | 
|                                                  |  | September 30, 2005 | 
|                                                  |  |                    | 
|Total sales                                       |  | 4.415 billion    
|External sales as percentage of Siemens net sales |  | 5.70%             
|Group profit                                      |  | 181 million      





Security Systems


19



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Fire Safety and Security Products


Building Automation


HVAC Products










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Power


Power Generation (PG)


|                                                  |  |                    |  | 
|------------------------------------------------- |  | ------------------ |  | 
|                                                  |  | Year ended         | 
|                                                  |  | September 30, 2005 | 
|                                                  |  |                    | 
|Total sales                                       |  | 8.061 billion    
|External sales as percentage of Siemens net sales |  | 10.66%            
|Group profit                                      |  | 951 million      







Fossil Power Generation


Industrial Applications


Instrumentation and Control


Wind Power










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Power Transmission and Distribution (PTD)


|                                                  |  |                    |  | 
|------------------------------------------------- |  | ------------------ |  | 
|                                                  |  | Year ended         | 
|                                                  |  | September 30, 2005 | 
|                                                  |  |                    | 
|Total sales                                       |  | 4.250 billion    
|External sales as percentage of Siemens net sales |  | 5.21%             
|Group profit                                      |  | 212 million      





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| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | power systems control equipment and information
    technology systems, including computerized power management
    systems used to operate power transmission networks, determine
    customer needs and regulate the flow of power from power plants
    to the distribution network (offered through our Energy
    Automation division);                                                                                                                                                     
|
| |  | transformers including both the power transformers used
    at the beginning of the transmission process to step-up the
    voltage of the power generated by power plants to a voltage that
    can be carried efficiently on the power network, and the
    distribution transformers and their components used at the end
    of the distribution process to step-down power from high voltage
    to lower voltage levels for the end-user;                                                  
|
| |  | high voltage products and ready-to-use systems, in both
    alternating and direct current, used in the physical
    transmission of power from power plants to the distribution
    network before the voltage is stepped-down for distribution in
    populated areas, including ready-to-operate indoor and outdoor
    high voltage substations and the switchgear and protection
    systems required to control the flow of power and prevent damage
    to the power transmission network;
|
| |  | protection and substation control systems including
    equipment and systems used at power distribution network
    substations, such as relays and computerized protection and
    control equipment (offered through our Energy Automation
    division); and                                                                                                                                                                                                                                 
|
| |  | medium voltage equipment including circuit breakers and
    distribution switchgear systems and components that regulate the
    flow of power on the distribution network before it is
    stepped-down to a low voltage level for the end-user.                                                                                                                                                                                                                                                







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








Transportation


Transportation Systems (TS)


|                                                  |  |                    |  | 
|------------------------------------------------- |  | ------------------ |  | 
|                                                  |  | Year ended         | 
|                                                  |  | September 30, 2005 | 
|                                                  |  |                    | 
|Total sales                                       |  | 4.190 billion    
|External sales as percentage of Siemens net sales |  | 5.50%             
|Group profit                                      |  | 45 million       







| |   |                                                                                                                                                                                                                                                                                                                                                          
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Mass TransitOur products include subway and
    suburban rapid transit trains, subway cars, as well as their
    subsystems and components and streetcars, light rail vehicles
    and their components.                                                                                                                                                
|
| |  | LocomotiveOur products include electric and
    diesel-electrical locomotives for passenger or freight rail. In
    addition to our manufacturing operations, we also refurbish and
    maintain locomotives and locomotive pools and provide locomotive
    leasing services tailored to meet the requirements of
    deregulated local rail operators.
|
| |  | TrainsOur products comprise rail vehicles with
    traction equipment integrated into the running gear and
    distributed over the entire train, including high speed trains,
    tilting trains, regional and rapid transit units and passenger
    coaches, as well as subsystems and components.                                                    





| |   |                                                                                                                                                                                                               
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Rail AutomationFor passenger and freight railway
    operations, we develop, manufacture and sell central control
    systems, signaling systems and equipment, interlockings and
    automated train control

24



---



##### Table of Contents



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   | systems that regulate a trains speed through automatic
    application of its brakes when it exceeds speed limits or fails
    to respond to a signal. We sell entire systems and networks, as
    well as individual products for integration into existing
    signaling systems. For mass transit, we develop, manufacture and
    sell operation control centers for the operation of signals and
    switches in rail yards and between destinations, and signaling
    and vehicle control systems (including automated, driverless
    systems).
|
| |  | ElectrificationFor high speed, main line and mass
    transit, we supply products and systems for contact line and
    rail power supply.                                                                                                                                                                                                                                                                                                                                                                                                              

Turnkey Systems


Integrated Services












25



---



##### Table of Contents



Siemens VDO Automotive (SV)


|                                                  |  |                    |  | 
|------------------------------------------------- |  | ------------------ |  | 
|                                                  |  | Year ended         | 
|                                                  |  | September 30, 2005 | 
|                                                  |  |                    | 
|Total sales                                       |  | 9.610 billion    
|External sales as percentage of Siemens net sales |  | 12.71%            
|Group profit                                      |  | 630 million      







| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Powertrain, including components, modules and systems for
    use in diesel and gasoline fuel injection handling, drive train
    transmission management and air intake systems, fuel pumps and
    supply units, as well as engine actuators and emissions controls
    and sensors;                                                                                                                                                                                                                                                                                                                                                       
|
| |  | Chassis & Car body, including active and passive
    electronic safety systems such as crash and occupant sensors for
    controlling airbags and seatbelts and for monitoring air
    pressure in tires; chassis electronics used in steering and
    braking; electric motor drives for use in antilock brakes,
    heating, ventilation and engine cooling systems and power
    windows and sunroofs; drive systems for electric and hybrid
    vehicles; access control and security systems with electric door
    and seat controls and radio receivers within the vehicle;
    intelligent switching units and climate control units;
|
| |  | Interior & Infotainment, including complete cockpit
    systems, drivers workplace systems in commercial vehicles,
    instrument clusters, tachographs, human-machine interface
    displays, heads-up displays for passenger and commercial
    vehicles; car audio, navigation and telematics and complex
    multimedia systems; and                                                                                                                                                                                                                                                                                                    
|
| |  | Service & Special Solutions, which offers spare parts
    and accessories for passenger and commercial vehicles, fleet
    management systems and hardware and software products for car
    audio, navigation, and telematics.                                                                                                                                                                                                                                                                                                                                                                                                              













26



---



##### Table of Contents









Medical


Medical Solutions (Med)


|                                                  |  |                    |  | 
|------------------------------------------------- |  | ------------------ |  | 
|                                                  |  | Year ended         | 
|                                                  |  | September 30, 2005 | 
|                                                  |  |                    | 
|Total sales                                       |  | 7.626 billion    
|External sales as percentage of Siemens net sales |  | 10.04%            
|Group profit                                      |  | 976 million      







| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | medical imaging systems, representing a full range of
    systems including x-ray, computed tomography, magnetic
    resonance, molecular imaging and ultrasound, as well as related
    computer-based workstations enabling the health care
    professional to retrieve and process relevant information. Our
    imaging systems are used to generate morphological and
    functional images of, and related information concerning, the
    human body, such as internal organs. This information is used
    both for diagnostic purposes and in preparation for potential
    treatment, including interventional and minimally-invasive
    procedures.
|
| |  | information technology systems, which are used to
    digitally store, retrieve and transmit medical images and other
    clinical and administrative information, facilitating efficient
    workflows in health care environments;                                                                                                                                                                                                                                                                                                                                                                                                                            

27



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##### Table of Contents





| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | oncology care systems, including linear accelerators,
    which are used for cancer treatment;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|
| |  | hearing aids and related products and supplies;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|
| |  | electromedical systems, which are primarily used in
    critical care situations and during surgery for the purpose of
    patient transport, monitoring vital functions via body sensors,
    supporting breathing and administering anesthetic agents. Our
    product portfolio also includes respiratory machines designed
    for systems for intensive neonatal care and home care. We
    provide such electromedical systems primarily through our joint
    venture Dräger Medical of Lübeck, Germany, in which we
    hold a 35% share. For additional information with respect to our
    joint venture with Dräger Medical, see Notes to
    Consolidated Financial Statements.











Lighting


Osram


|                                                  |  |                    |  | 
|------------------------------------------------- |  | ------------------ |  | 
|                                                  |  | Year ended         | 
|                                                  |  | September 30, 2005 | 
|                                                  |  |                    | 
|Total sales                                       |  | 4.300 billion    
|External sales as percentage of Siemens net sales |  | 5.60%              | 
|Group profit                                      |  | 465 million      





| |   |                                                                                                                                                                                                              
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | General Lighting: incandescent, halogen, compact
    fluorescent, fluorescent and high-intensity discharge lamps for
    household and commercial applications, and public buildings,
    spaces and streets;

28



---



##### Table of Contents





| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Automotive Lighting: halogen, incandescent and xenon
    discharge lamps for use in motor vehicle headlights, brake
    lights, turn signals and instrument panels, and, through an
    equal joint venture with Valeo, completed head- and tail-light
    assemblies for distribution in North America;                                                                                                                                                                                            
|
| |  | Display/ Optic: special purpose halogen and
    high-intensity discharge lamps for lighting airport runways,
    film studios, microchip manufacturing plants, video and overhead
    projectors and medical and other applications requiring very
    intense lighting;                                                                                                                                                                                                                            
|
| |  | Opto-Semiconductors: light emitting diodes (LED), organic
    light emitting diodes (OLED), high power laser diodes and other
    semiconductor devices that generate visible light and
    ultraviolet and infrared radiation for use in interior and
    exterior automotive lighting and other applications, electronic
    equipment displays, traffic and signal lighting, signs and
    decorative lighting and infrared transmitters and sensors for
    industrial and consumer electronics;
|
| |  | Ballasts and Luminaires: electronic ballasts for
    optimized operation of compact fluorescent, fluorescent,
    high-intensity discharge low-voltage halogen lamps and LED
    modules, as well as consumer fixtures and, increasingly,
    lighting control systems; and                                                                                                                                                                                                                         
|
| |  | Precision Materials and Components: glass for bulbs,
    phosphor powders for fluorescent lamps, computer monitors and
    television screens, tungsten and other metals for filaments in
    incandescent lamps and heavy duty tools and electronic
    components and materials for lamps and applications in the
    automotive industry, as well as equipment used in the production
    of lighting products.                                                                                  















29



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##### Table of Contents







Financing and Real
Estate


Siemens Financial Services (SFS)


|                                             |  |                    |  | 
|-------------------------------------------- |  | ------------------ |  | 
|                                             |  | Year ended         | 
|                                             |  | September 30, 2005 | 
|                                             |  |                    | 
|Total assets                                 |  | 10.148 billion   
|Total assets as percentage of Siemens assets |  | 11.77%            
|Income before income taxes                   |  | 319 million      



 


Equipment and Sales Financing.




| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Midmarket Financeour principal product is equipment lease
    financing, where we typically purchase equipment supplied by
    various Siemens Groups or third-party manufacturers and lease it
    to the customer for a specified term, generally with an option
    for the customer to purchase the equipment or renew the lease at
    the end of the term. Capital leases account for the largest
    portion of our leasing business (more than 79% of the total book
    value of our leased assets at September 30, 2005). We also
    offer our clients services complementary to our leasing
    business, including services relating to the management of their
    leased equipment base and product upgrade services. Other
    products include asset-based lending, underwriting and
    syndication for larger credits.
|
| |  | Credit Portfolio Managementwe purchase, without recourse,
    receivables from other Siemens Groups, as well as from third
    parties to a very limited extent. The selling companies remain
    responsible for collection and documentation. Our portfolio
    consists primarily of trade receivables. Centralizing a portion
    of the Siemens Groups receivables risk allows Siemens to
    more effectively manage its overall receivables exposure.                                                                                                                                                                                                                                                                                                                                                                            



30



---



##### Table of Contents





Equity.


Project and Export Financing.


Treasury and Financing Services.


Investment Management.


Insurance.






Siemens Real Estate (SRE)


|                                                  |  |                    |  | 
|------------------------------------------------- |  | ------------------ |  | 
|                                                  |  | Year ended         | 
|                                                  |  | September 30, 2005 | 
|                                                  |  |                    | 
|Total sales                                       |  | 1.621 billion    
|External sales as percentage of Siemens net sales |  | 0.35%             
|Income before income taxes                        |  | 144 million      



31



---



##### Table of Contents



Real Estate Management


Development, Projects & Sales





SRE Balance Sheet and Statistical Data


|                                               |  |                  |       |  |      |  |       | 
|---------------------------------------------- |  | ---------------- | ----- |  | ---- |  | ----- | 
|                                               |  | At September 30, |      
|                                               |  |                  |      
|                                               |  | 2005             |       |  | 2004 | 
|                                               |  |                  |       |  |      | 
|                                               |  | ( and           |      
|                                               |  | square meters    |      
|                                               |  | in millions)     |      
|Total assets (in euros)                        |  |                  | 3,496 |  |      |  | 3,455 | 
|Real estate assets under management (in euros) |  |                  | 2,912 |  |      |  | 2,826 | 
|Total site area (in square meters)             |  |                  | 19.1  |  |      |  | 20.1  | 
|Total building area (in square meters)         |  |                  | 9.9   |  |      |  | 10.0  | 



32



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##### Table of Contents



Employees and Labor
Relations




Employees by Business
Group


|                                      |  |                  |     |  |      |  |     |      |  |  |     | 
|------------------------------------- |  | ---------------- | --- |  | ---- |  | --- | ---- |  |  | --- | 
|                                      |  | At September 30, |    
|                                      |  |                  |    
|                                      |  | 2005             |     |  | 2004 |  |     | 2003 | 
|                                      |  |                  |     |  |      |  |     |      | 
|                                      |  | (in thousands)   |    
|Communications(1)                     |  |                  | 54  |  |      |  | 54  |      |  |  | 54  | 
|Siemens Business Services             |  |                  | 39  |  |      |  | 36  |      |  |  | 35  | 
|Automation and Drives                 |  |                  | 61  |  |      |  | 52  |      |  |  | 50  | 
|Industrial Solutions and Services     |  |                  | 32  |  |      |  | 30  |      |  |  | 26  | 
|Logistics and Assembly
    Systems(2) |  |                  | 6   |  |      |  | 5   |      |  |  | 6   | 
|Siemens Building Technologies         |  |                  | 28  |  |      |  | 28  |      |  |  | 33  | 
|Power Generation                      |  |                  | 34  |  |      |  | 31  |      |  |  | 30  | 
|Power Transmission and Distribution   |  |                  | 26  |  |      |  | 19  |      |  |  | 16  | 
|Transportation Systems                |  |                  | 18  |  |      |  | 18  |      |  |  | 18  | 
|Siemens VDO Automotive                |  |                  | 51  |  |      |  | 48  |      |  |  | 44  | 
|Medical Solutions                     |  |                  | 33  |  |      |  | 32  |      |  |  | 31  | 
|Osram                                 |  |                  | 38  |  |      |  | 37  |      |  |  | 36  | 
|Siemens Financial Services            |  |                  | 2   |  |      |  | 2   |      |  |  | 1   | 
|Siemens Real Estate                   |  |                  | 2   |  |      |  | 2   |      |  |  | 2   | 
|Other(3)                              |  |                  | 37  |  |      |  | 30  |      |  |  | 29  | 
|                                      |  |                  |     |  |      |  |     |      | 
|Total                                 |  |                  | 461 |  |      |  | 424 |      |  |  | 411 | 
|                                      |  |                  |     |  |      |  |     |      | 








|    |                                                                                                                                                                                                                                                                                                                               
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Effective October 1, 2004, the Groups ICN and ICM were
    combined into one Group named Communications. As of
    September 30, 2005, the Company has reported its Mobile
    Devices business as discontinued operations and employees of
    that business are excluded from the table above for all periods
    presented.
|   
|(2) | The Distribution and Industry Logistics division and the
    Material Handling Products division of L&A were reported in
    Other Operations for all periods presented.                                                                                                                                                      
|   
|(3) | Includes employees in corporate functions and services and
    business units not allocated to any business Group.                                                                                                                                                                                                            

33



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##### Table of Contents



Employees by Geographic
Region*


|                            |  |                  |     |  |      |  |     |      |  |  |     | 
|--------------------------- |  | ---------------- | --- |  | ---- |  | --- | ---- |  |  | --- | 
|                            |  | At September 30, |    
|                            |  |                  |    
|                            |  | 2005             |     |  | 2004 |  |     | 2003 | 
|                            |  |                  |     |  |      |  |     |      | 
|                            |  | (in thousands)   |    
|Germany                     |  |                  | 165 |  |      |  | 161 |      |  |  | 166 | 
|Europe (other than Germany) |  |                  | 125 |  |      |  | 109 |      |  |  | 107 | 
|The Americas                |  |                  | 101 |  |      |  | 95  |      |  |  | 87  | 
|Asia-Pacific                |  |                  | 58  |  |      |  | 50  |      |  |  | 43  | 
|Africa, Middle East, CIS    |  |                  | 12  |  |      |  | 9   |      |  |  | 8   | 
|                            |  |                  |     |  |      |  |     |      | 
|Total                       |  |                  | 461 |  |      |  | 424 |      |  |  | 411 | 
|                            |  |                  |     |  |      |  |     |      | 








|  |                                                                                    
|- | -----------------------------------------------------------------------------------
|* | Employees of our Mobile Devices business have been excluded as
    mentioned above.

Betriebsverfassungsgesetz




Environmental
Matters









34



---



##### Table of Contents









Property










35



---



##### Table of Contents



Intellectual
Property




Legal
Proceedings
















36



---



##### Table of Contents








ITEM 5:      OPERATING AND
FINANCIAL REVIEW AND PROSPECTS


Introduction




37



---



##### Table of Contents



TABLE OF CONTENTS


|                                                             |                                                |      |    |    | 
|------------------------------------------------------------ | ---------------------------------------------- | ---- | -- | -- | 
|                                                             |                                                | Page |   
|                                                             |                                                |      |   
|Business Overview                                            |                                                |      | 39 |   
|Basis of Presentation                                        |                                                |      | 41 |   
|Fiscal 2005 Compared to Fiscal 2004                          |                                                |      | 43 |   
|                                                             | Consolidated Operations of Siemens             |      |    | 43 | 
|                                                             | Segment Information Analysis                   |      |    | 45 | 
|Fiscal 2004 Compared to Fiscal 2003                          |                                                |      | 52 |   
|                                                             | Consolidated Operations of Siemens             |      |    | 52 | 
|                                                             | Segment Information Analysis                   |      |    | 54 | 
|Liquidity and Capital Resources                              |                                                |      | 61 |   
|                                                             | Cash Flow Fiscal 2005 Compared to Fiscal 2004 |      |    | 61 | 
|                                                             | Cash Flow Fiscal 2004 Compared to Fiscal 2003 |      |    | 62 | 
|                                                             | Capital Resources and Capital Requirements     |      |    | 64 | 
|Overview Financial Position                                  |                                                |      | 68 |   
|Subsequent Events                                            |                                                |      | 70 |   
|Critical Accounting Estimates                                |                                                |      | 71 |   
|Recent Accounting Pronouncements                             |                                                |      | 72 |   
|Accounting Under International Financial Reporting Standards |                                                |      | 73 |   
|Outlook                                                      |                                                |      | 74 |   





38



---



##### Table of Contents



Business
Overview


Fiscal
2005  Highlights




    


           


         


          


  


Strategic
Overview






39



---



##### Table of Contents



 






| |   |                                                                                                                                                                                                                                                                                        
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | In December 2004 (the first quarter of fiscal 2005), we entered
    the fast-growing alternative energy market by acquiring a wind
    power company, Bonus Energy A/S (Bonus) in Denmark.                                                                                             
|
| |  | In May 2005, we expanded our position in the growing field of
    molecular imaging by acquiring CTI Molecular Imaging,
    Inc. (CTI) in the U.S.                                                                                                                                     
|
| |  | In July 2005, we strengthened our existing industrial automation
    portfolio by acquiring Flender Holding GmbH (Flender), a
    German-based industrial gear manufacturer, and Robicon
    Corporation (Robicon), a U.S.-based maker of voltage converters
    for industrial motors.
|
| |  | In July 2005, we completed the acquisition of VA Technologie AG
    (VA Tech) of Austria to enhance business opportunities in power
    transmission and distribution and in industrial engineering.                                                                                   
|
| |  | In September 2005, we sold our Mobile Devices business, which
    lacked the necessary scale to compete effectively in a
    consolidating market. These business activities are reported in
    discontinued operations for both the current and prior periods.                       








Research and
Development


  


40



---



##### Table of Contents





Basis of
Presentation














41



---



##### Table of Contents








42



---



##### Table of Contents



Fiscal 2005 Compared to
Fiscal 2004


Consolidated Operations
of Siemens


Results of Siemens




|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                          |                 |         |        |      |  |         |        |  
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------ | --------------- | ------- | ------ | ---- |  | ------- | ------ | -
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                          | 2005            |         |        | 2004 | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                          |                 |         |        |      | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                          | ( in millions) |        
|New orders                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                          |                 | 83,791  |        |      |  | 75,789  |       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | New orders in Germany    |                 |         | 16,333 |      |  |         | 15,173 |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | New international orders |                 |         | 67,458 |      |  |         | 60,616 |  
|Sales                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                          |                 | 75,445  |        |      |  | 70,237  |       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | Sales in Germany         |                 |         | 15,685 |      |  |         | 16,223 |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | International sales      |                 |         | 59,760 |      |  |         | 54,014 |  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Orders for fiscal 2005 increased 11%, to
83.791 billion
from 75.789 billion,
on growing demand particularly in Asia-Pacific and the Americas.
Sales were 75.445 billion,
a 7% increase from 70.237 billion
in the prior-year period. Excluding the net effects of
acquisitions and dispositions and currency translation effects,
sales were up 3% and orders rose 7%.
     International sales and orders rose 11%, to
59.760 billion
and 67.458 billion,
respectively. In Germany, sales declined 3% year-over-year, to
15.685 billion,
while orders rose 8%, to 16.333 billion,
due primarily to major orders at PG and outsourcing contracts at
SBS. In Europe outside Germany, sales for fiscal 2005 rose 7%
year-over-year, to
24.429 billion,
and orders were nearly level, at
26.150 billion.
Within the Americas, sales in the U.S. for the full year
increased 10%, to
14.686 billion,
and orders rose 15%, to
15.867 billion,
as growth from acquisitions more than offset negative currency
translation effects. Asia-Pacific sales of
10.057 billion
were 12% higher than in fiscal 2004, while orders climbed 23%
year-over-year, to
11.918 billion.
Within Asia-Pacific, sales in China were up 19%, at
3.202 billion,
while orders in China surged 40%, to
4.142 billion.
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                          | 2005            |         |        | 2004 | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                          |                 |         |        |      | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                          | ( in millions) |        
|Gross profit on sales                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                          |                 | 21,943  |        |      |  | 20,645  |       
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | as percentage of sales   |                 |         | 29.1   | %    |  |         | 29.4   | %
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|Gross profit as a percentage of sales in fiscal 2005 was 29.1%
compared to 29.4% in the prior year. Despite this overall margin
decline, the majority of the Groups in Operations increased
their gross profit in fiscal 2005, led by TS, A&D, SV and
I&S. Gross profit at TS in the prior year included
significantly higher charges in the Groups rolling stock
business. A&D improved gross profit with strong growth at
the Industrial Automation and Motion Control divisions, as well
as through higher revenues. In fiscal 2005, SVs gross
profit primarily benefited from increased revenues and a
favorable sales mix. I&S higher gross profit was
mainly due to a full-year contribution of the Groups water
systems business. Negative operating results and charges for
severance and capacity adjustments led to a significant gross
profit decline at SBS.                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                          | 2005            |         |        | 2004 | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                          |                 |         |        |      | 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                          | ( in millions) |        
|Research and development expenses                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                          |                 | (5,155  | )      |      |  | (4,650  | )     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | as percentage of sales   |                 |         | 6.8    | %    |  |         | 6.6    | %
|Marketing, selling and general administrative expenses                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                          |                 | (13,684 | )      |      |  | (12,828 | )     
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | as percentage of sales   |                 |         | 18.1   | %    |  |         | 18.3   | %
|Other operating income (expense), net                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                          |                 | (9      | )      |      |  | (172    | )     
|Income from investments in other companies, net                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                          |                 | 584     |        |      |  | 1,031   |       
|Income from financial assets and marketable securities, net                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                          |                 | 297     |        |      |  | 69      |       
|Interest income (expense) of Operations, net                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                          |                 | (32     | )      |      |  | 20      |       
|Other interest income, net                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                          |                 | 241     |        |      |  | 254     |       

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##### Table of Contents



  


 


       


     


|                                                                |                                                                            |                 |       |    |      |  |       |    |  
|--------------------------------------------------------------- | -------------------------------------------------------------------------- | --------------- | ----- | -- | ---- |  | ----- | -- | -
|                                                                |                                                                            | 2005            |       |    | 2004 | 
|                                                                |                                                                            |                 |       |    |      | 
|                                                                |                                                                            | ( in millions) |      
|Income from continuing operations before income taxes           |                                                                            |                 | 4,185 |    |      |  | 4,369 |   
|Income taxes                                                    |                                                                            |                 | (979  | )  |      |  | (767  | ) 
|                                                                | as percentage of income from continuing operations before
    income taxes |                 |       | 23 | %    |  |       | 18 | %
|Income from continuing operations                               |                                                                            |                 | 3,058 |    |      |  | 3,450 |   
|Income (loss) from discontinued operations, net of income taxes |                                                                            |                 | (810  | )  |      |  | (45   | ) 
|Net income                                                      |                                                                            |                 | 2,248 |    |      |  | 3,405 |   




            


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##### Table of Contents



Segment Information
Analysis


Operations


Information and Communications


Communications (Com)


|                    |  |                 |        |   |          |  |        |        |  |  |           |    |  |  |   |  
|------------------- |  | --------------- | ------ | - | -------- |  | ------ | ------ |  |  | --------- | -- |  |  | - | -
|                    |  | Year ended      |        |   |         
|                    |  | September 30,   |        |   | % Change | 
|                    |  |                 |        |   |          | 
|                    |  | 2005            |        |   | 2004     |  |        | Actual |  |  | Adjusted* |   
|                    |  |                 |        |   |          |  |        |        |  |  |           |   
|                    |  | ( in millions) |        |   |          |  |       
|Group profit        |  |                 | 454    |   |          |  | 707    |        |  |  | (36       | )% |  |  |   |  
|Group profit margin |  |                 | 3.5    | % |          |  | 5.6    | %      |  |  |           |    |  |  |   |  
|Sales               |  |                 | 13,141 |   |          |  | 12,709 |        |  |  | 3         | %  |  |  | 2 | %
|New orders          |  |                 | 13,802 |   |          |  | 13,031 |        |  |  | 6         | %  |  |  | 5 | %
|                   






|  |                                                       
|- | ------------------------------------------------------
|* | Excluding portfolio effects of 1% on sales and orders.



    


Siemens Business Services (SBS)


|                    |  |                 |       |    |          |  |       |        |  |  |           |   |  |  |    |   
|------------------- |  | --------------- | ----- | -- | -------- |  | ----- | ------ |  |  | --------- | - |  |  | -- | --
|                    |  | Year ended      |       |    |         
|                    |  | September 30,   |       |    | % Change | 
|                    |  |                 |       |    |          | 
|                    |  | 2005            |       |    | 2004     |  |       | Actual |  |  | Adjusted* |  
|                    |  |                 |       |    |          |  |       |        |  |  |           |  
|                    |  | ( in millions) |       |    |          |  |      
|Group profit        |  |                 | (690  | )  |          |  | 40    |        |  |  |           |   |  |  |    |   
|Group profit margin |  |                 | (12.8 | )% |          |  | 0.8   | %      |  |  |           |   |  |  |    |   
|Sales               |  |                 | 5,373 |    |          |  | 4,716 |        |  |  | 14        | % |  |  | 5  | % 
|New orders          |  |                 | 6,531 |    |          |  | 6,293 |        |  |  | 4         | % |  |  | (6 | )%
|                   






|  |                                                                                 
|- | --------------------------------------------------------------------------------
|* | Excluding portfolio effects of 9% and 10% on sales and orders,
    respectively.

     


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##### Table of Contents






Automation and Control


Automation and Drives (A&D)


|                    |  |                 |        |   |          |  |       |        |  |  |           |   |  |  |    |  
|------------------- |  | --------------- | ------ | - | -------- |  | ----- | ------ |  |  | --------- | - |  |  | -- | -
|                    |  | Year ended      |        |   |         
|                    |  | September 30,   |        |   | % Change | 
|                    |  |                 |        |   |          | 
|                    |  | 2005            |        |   | 2004     |  |       | Actual |  |  | Adjusted* |  
|                    |  |                 |        |   |          |  |       |        |  |  |           |  
|                    |  | ( in millions) |        |   |          |  |      
|Group profit        |  |                 | 1,210  |   |          |  | 1,077 |        |  |  | 12        | % |  |  |    |  
|Group profit margin |  |                 | 12.3   | % |          |  | 12.2  | %      |  |  |           |   |  |  |    |  
|Sales               |  |                 | 9,844  |   |          |  | 8,829 |        |  |  | 11        | % |  |  | 7  | %
|New orders          |  |                 | 10,190 |   |          |  | 8,980 |        |  |  | 13        | % |  |  | 10 | %
|                   






|  |                                                                                                               
|- | --------------------------------------------------------------------------------------------------------------
|* | Excluding currency translation effects of (1)% on orders, and
    portfolio effects of 4% on sales and orders.

  


Industrial Solutions and Services (I&S)


|                    |  |                 |       |   |          |  |       |        |  |  |           |   |  |  |    |  
|------------------- |  | --------------- | ----- | - | -------- |  | ----- | ------ |  |  | --------- | - |  |  | -- | -
|                    |  | Year ended      |       |   |         
|                    |  | September 30,   |       |   | % Change | 
|                    |  |                 |       |   |          | 
|                    |  | 2005            |       |   | 2004     |  |       | Actual |  |  | Adjusted* |  
|                    |  |                 |       |   |          |  |       |        |  |  |           |  
|                    |  | ( in millions) |       |   |          |  |      
|Group profit        |  |                 | 139   |   |          |  | 95    |        |  |  | 46        | % |  |  |    |  
|Group profit margin |  |                 | 2.6   | % |          |  | 2.2   | %      |  |  |           |   |  |  |    |  
|Sales               |  |                 | 5,390 |   |          |  | 4,290 |        |  |  | 26        | % |  |  | 6  | %
|New orders          |  |                 | 5,686 |   |          |  | 4,356 |        |  |  | 31        | % |  |  | 15 | %
|                   






|  |                                                                                                                                                    
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------
|* | Excluding currency translation effects of (1)% on sales and
    orders, and portfolio effects of 21% and 17% on sales and
    orders, respectively.

   


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##### Table of Contents





Logistics and Assembly Systems (L&A)


|                    |  |                 |       |   |          |  |       |        |  |  |           |   |  |  |    |  
|------------------- |  | --------------- | ----- | - | -------- |  | ----- | ------ |  |  | --------- | - |  |  | -- | -
|                    |  | Year ended      |       |   |         
|                    |  | September 30,   |       |   | % Change | 
|                    |  |                 |       |   |          | 
|                    |  | 2005            |       |   | 2004     |  |       | Actual |  |  | Adjusted* |  
|                    |  |                 |       |   |          |  |       |        |  |  |           |  
|                    |  | ( in millions) |       |   |          |  |      
|Group profit        |  |                 | 69    |   |          |  | 45    |        |  |  | 53        | % |  |  |    |  
|Group profit margin |  |                 | 4.7   | % |          |  | 3.2   | %      |  |  |           |   |  |  |    |  
|Sales               |  |                 | 1,472 |   |          |  | 1,419 |        |  |  | 4         | % |  |  | 8  | %
|New orders          |  |                 | 2,015 |   |          |  | 1,799 |        |  |  | 12        | % |  |  | 16 | %
|                   






|  |                                                                                                                           
|- | --------------------------------------------------------------------------------------------------------------------------
|* | Excluding currency translation effects of (1)% on sales and
    orders, and portfolio effects of (3)% on sales and orders.



   


Siemens Building Technologies (SBT)


|                    |  |                 |       |   |          |  |       |        |  |  |           |   |  |  |   |  
|------------------- |  | --------------- | ----- | - | -------- |  | ----- | ------ |  |  | --------- | - |  |  | - | -
|                    |  | Year ended      |       |   |         
|                    |  | September 30,   |       |   | % Change | 
|                    |  |                 |       |   |          | 
|                    |  | 2005            |       |   | 2004     |  |       | Actual |  |  | Adjusted* |  
|                    |  |                 |       |   |          |  |       |        |  |  |           |  
|                    |  | ( in millions) |       |   |          |  |      
|Group profit        |  |                 | 181   |   |          |  | 108   |        |  |  | 68        | % |  |  |   |  
|Group profit margin |  |                 | 4.1   | % |          |  | 2.5   | %      |  |  |           |   |  |  |   |  
|Sales               |  |                 | 4,415 |   |          |  | 4,247 |        |  |  | 4         | % |  |  | 3 | %
|New orders          |  |                 | 4,518 |   |          |  | 4,358 |        |  |  | 4         | % |  |  | 4 | %
|                   






|  |                                                                                                                                                  
|- | -------------------------------------------------------------------------------------------------------------------------------------------------
|* | Excluding currency translation effects of (1)% on sales and
    orders, and portfolio effects of 2% and 1% on sales and orders,
    respectively.

  


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##### Table of Contents



Power


Power Generation (PG)


|                    |  |                 |        |   |          |  |       |        |  |  |           |    |  |  |    |  
|------------------- |  | --------------- | ------ | - | -------- |  | ----- | ------ |  |  | --------- | -- |  |  | -- | -
|                    |  | Year ended      |        |   |         
|                    |  | September 30,   |        |   | % Change | 
|                    |  |                 |        |   |          | 
|                    |  | 2005            |        |   | 2004     |  |       | Actual |  |  | Adjusted* |   
|                    |  |                 |        |   |          |  |       |        |  |  |           |   
|                    |  | ( in millions) |        |   |          |  |      
|Group profit        |  |                 | 951    |   |          |  | 961   |        |  |  | (1        | )% |  |  |    |  
|Group profit margin |  |                 | 11.8   | % |          |  | 12.8  | %      |  |  |           |    |  |  |    |  
|Sales               |  |                 | 8,061  |   |          |  | 7,527 |        |  |  | 7         | %  |  |  | 3  | %
|New orders          |  |                 | 10,964 |   |          |  | 9,243 |        |  |  | 19        | %  |  |  | 14 | %
|                   






|  |                                                                                                                                                  
|- | -------------------------------------------------------------------------------------------------------------------------------------------------
|* | Excluding currency translation effects of (1)% on sales and
    orders, and portfolio effects of 5% and 6% on sales and orders,
    respectively.

    


Power Transmission and Distribution (PTD)


|                    |  |                 |       |   |          |  |       |        |  |  |           |    |  |  |    |  
|------------------- |  | --------------- | ----- | - | -------- |  | ----- | ------ |  |  | --------- | -- |  |  | -- | -
|                    |  | Year ended      |       |   |         
|                    |  | September 30,   |       |   | % Change | 
|                    |  |                 |       |   |          | 
|                    |  | 2005            |       |   | 2004     |  |       | Actual |  |  | Adjusted* |   
|                    |  |                 |       |   |          |  |       |        |  |  |           |   
|                    |  | ( in millions) |       |   |          |  |      
|Group profit        |  |                 | 212   |   |          |  | 238   |        |  |  | (11       | )% |  |  |    |  
|Group profit margin |  |                 | 5.0   | % |          |  | 6.6   | %      |  |  |           |    |  |  |    |  
|Sales               |  |                 | 4,250 |   |          |  | 3,611 |        |  |  | 18        | %  |  |  | 3  | %
|New orders          |  |                 | 5,283 |   |          |  | 3,863 |        |  |  | 37        | %  |  |  | 26 | %
|                   






|  |                                                                                                                                          
|- | -----------------------------------------------------------------------------------------------------------------------------------------
|* | Excluding currency translation effects of (1)% on orders, and
    portfolio effects of 15% and 12% on sales and orders,
    respectively.

  


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##### Table of Contents



Transportation


Transportation Systems (TS)


|                    |  |                 |       |   |          |  |       |        |  |  |           |    |  |  |    |   
|------------------- |  | --------------- | ----- | - | -------- |  | ----- | ------ |  |  | --------- | -- |  |  | -- | --
|                    |  | Year ended      |       |   |         
|                    |  | September 30,   |       |   | % Change | 
|                    |  |                 |       |   |          | 
|                    |  | 2005            |       |   | 2004     |  |       | Actual |  |  | Adjusted* |   
|                    |  |                 |       |   |          |  |       |        |  |  |           |   
|                    |  | ( in millions) |       |   |          |  |      
|Group profit        |  |                 | 45    |   |          |  | (434  | )      |  |  |           |    |  |  |    |   
|Group profit margin |  |                 | 1.1   | % |          |  | (10.1 | )%     |  |  |           |    |  |  |    |   
|Sales               |  |                 | 4,190 |   |          |  | 4,310 |        |  |  | (3        | )% |  |  | (3 | )%
|New orders          |  |                 | 4,599 |   |          |  | 4,321 |        |  |  | 6         | %  |  |  | 6  | % 
|                   






|  |                                        
|- | ---------------------------------------
|* | Excluding currency translation effects.

   


Siemens VDO Automotive (SV)


|                    |  |                 |       |   |          |  |       |        |  |  |           |   |  |  |   |  
|------------------- |  | --------------- | ----- | - | -------- |  | ----- | ------ |  |  | --------- | - |  |  | - | -
|                    |  | Year ended      |       |   |         
|                    |  | September 30,   |       |   | % Change | 
|                    |  |                 |       |   |          | 
|                    |  | 2005            |       |   | 2004     |  |       | Actual |  |  | Adjusted* |  
|                    |  |                 |       |   |          |  |       |        |  |  |           |  
|                    |  | ( in millions) |       |   |          |  |      
|Group profit        |  |                 | 630   |   |          |  | 562   |        |  |  | 12        | % |  |  |   |  
|Group profit margin |  |                 | 6.6   | % |          |  | 6.2   | %      |  |  |           |   |  |  |   |  
|Sales               |  |                 | 9,610 |   |          |  | 9,001 |        |  |  | 7         | % |  |  | 2 | %
|New orders          |  |                 | 9,787 |   |          |  | 9,029 |        |  |  | 8         | % |  |  | 3 | %
|                   






|  |                                                       
|- | ------------------------------------------------------
|* | Excluding portfolio effects of 5% on sales and orders.

  


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##### Table of Contents



Medical


Medical Solutions (Med)


|                    |  |                 |       |   |          |  |       |        |  |  |           |    |  |  |   |  
|------------------- |  | --------------- | ----- | - | -------- |  | ----- | ------ |  |  | --------- | -- |  |  | - | -
|                    |  | Year ended      |       |   |         
|                    |  | September 30,   |       |   | % Change | 
|                    |  |                 |       |   |          | 
|                    |  | 2005            |       |   | 2004     |  |       | Actual |  |  | Adjusted* |   
|                    |  |                 |       |   |          |  |       |        |  |  |           |   
|                    |  | ( in millions) |       |   |          |  |      
|Group profit        |  |                 | 976   |   |          |  | 1,046 |        |  |  | (7        | )% |  |  |   |  
|Group profit margin |  |                 | 12.8  | % |          |  | 14.8  | %      |  |  |           |    |  |  |   |  
|Sales               |  |                 | 7,626 |   |          |  | 7,072 |        |  |  | 8         | %  |  |  | 9 | %
|New orders          |  |                 | 8,641 |   |          |  | 8,123 |        |  |  | 6         | %  |  |  | 8 | %






|  |                                                                                                              
|- | -------------------------------------------------------------------------------------------------------------
|* | Excluding currency translation effects of (2)% on sales and
    orders, and portfolio effects of 1% on sales.

   


Lighting


Osram


|                    |  |                 |       |   |          |  |       |        |  |  |           |   |  |  |   |  
|------------------- |  | --------------- | ----- | - | -------- |  | ----- | ------ |  |  | --------- | - |  |  | - | -
|                    |  | Year ended      |       |   |         
|                    |  | September 30,   |       |   | % Change | 
|                    |  |                 |       |   |          | 
|                    |  | 2005            |       |   | 2004     |  |       | Actual |  |  | Adjusted* |  
|                    |  |                 |       |   |          |  |       |        |  |  |           |  
|                    |  | ( in millions) |       |   |          |  |      
|Group profit        |  |                 | 465   |   |          |  | 445   |        |  |  | 4         | % |  |  |   |  
|Group profit margin |  |                 | 10.8  | % |          |  | 10.5  | %      |  |  |           |   |  |  |   |  
|Sales               |  |                 | 4,300 |   |          |  | 4,240 |        |  |  | 1         | % |  |  | 3 | %
|New orders          |  |                 | 4,300 |   |          |  | 4,240 |        |  |  | 1         | % |  |  | 3 | %






|  |                                                                        
|- | -----------------------------------------------------------------------
|* | Excluding currency translation effects of (2)% on sales and
    orders.

 


Other Operations


    


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##### Table of Contents



Corporate items, pensions and eliminations


       


Financing and Real Estate


Siemens Financial Services (SFS)


|                           |  |                 |        |  |      |  |       |          |  |  |     | 
|-------------------------- |  | --------------- | ------ |  | ---- |  | ----- | -------- |  |  | --- | 
|                           |  | Year ended      |        |  |     
|                           |  | September 30,   |        |  |     
|                           |  |                 |        |  |     
|                           |  | 2005            |        |  | 2004 |  |       | % Change | 
|                           |  |                 |        |  |      |  |       |          | 
|                           |  | ( in millions) |        |  |     
|Income before income taxes |  |                 | 319    |  |      |  | 250   |          |  |  | 28% | 
|Total assets               |  |                 | 10,148 |  |      |  | 9,055 |          |  |  | 12% | 

 


Siemens Real Estate (SRE)


|                           |  |                 |       |  |      |  |       |          |  |  |     | 
|-------------------------- |  | --------------- | ----- |  | ---- |  | ----- | -------- |  |  | --- | 
|                           |  | Year ended      |       |  |     
|                           |  | September 30,   |       |  |     
|                           |  |                 |       |  |     
|                           |  | 2005            |       |  | 2004 |  |       | % Change | 
|                           |  |                 |       |  |      |  |       |          | 
|                           |  | ( in millions) |       |  |     
|Income before income taxes |  |                 | 144   |  |      |  | 106   |          |  |  | 36% | 
|Sales                      |  |                 | 1,621 |  |      |  | 1,578 |          |  |  | 3%  | 
|Total assets               |  |                 | 3,496 |  |      |  | 3,455 |          |  |  | 1%  | 

  


Eliminations, reclassifications and Corporate Treasury


 


51



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##### Table of Contents



Economic Value
Added




Fiscal 2004 Compared to
Fiscal 2003


Consolidated Operations
of Siemens


Results of Siemens




|           |                          |                 |        |        |      |  |        |        | 
|---------- | ------------------------ | --------------- | ------ | ------ | ---- |  | ------ | ------ | 
|           |                          | 2004            |        |        | 2003 | 
|           |                          |                 |        |        |      | 
|           |                          | ( in millions) |       
|New orders |                          |                 | 75,789 |        |      |  | 70,373 |       
|           | New orders in Germany    |                 |        | 15,173 |      |  |        | 15,867 | 
|           | New international orders |                 |        | 60,616 |      |  |        | 54,506 | 
|Sales      |                          |                 | 70,237 |        |      |  | 69,775 |       
|           | Sales in Germany         |                 |        | 16,223 |      |  |        | 16,277 | 
|           | International sales      |                 |        | 54,014 |      |  |        | 53,498 | 

      


       


 


|                      |                        |                 |        |      |      |  |        |      |  
|--------------------- | ---------------------- | --------------- | ------ | ---- | ---- |  | ------ | ---- | -
|                      |                        | 2004            |        |      | 2003 | 
|                      |                        |                 |        |      |      | 
|                      |                        | ( in millions) |       
|Gross profit on sales |                        |                 | 20,645 |      |      |  | 19,836 |     
|                      | as percentage of sales |                 |        | 29.4 | %    |  |        | 28.4 | %

52



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##### Table of Contents





|                                                            |                        |                 |         |      |      |  |         |      |  
|----------------------------------------------------------- | ---------------------- | --------------- | ------- | ---- | ---- |  | ------- | ---- | -
|                                                            |                        | 2004            |         |      | 2003 | 
|                                                            |                        |                 |         |      |      | 
|                                                            |                        | ( in millions) |        
|Research and development expenses                           |                        |                 | (4,650  | )    |      |  | (4,730  | )   
|                                                            | as percentage of sales |                 |         | 6.6  | %    |  |         | 6.8  | %
|Marketing, selling and general administrative expenses      |                        |                 | (12,828 | )    |      |  | (12,877 | )   
|                                                            | as percentage of sales |                 |         | 18.3 | %    |  |         | 18.5 | %
|Other operating income (expense), net                       |                        |                 | (172    | )    |      |  | 642     |     
|Income from investments in other companies, net             |                        |                 | 1,031   |      |      |  | 142     |     
|Income from financial assets and marketable securities, net |                        |                 | 69      |      |      |  | 61      |     
|Interest income of Operations, net                          |                        |                 | 20      |      |      |  | 31      |     
|Other interest income, net                                  |                        |                 | 254     |      |      |  | 215     |     

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    


|                                                                |                                                                            |                 |       |    |      |  |       |    |  
|--------------------------------------------------------------- | -------------------------------------------------------------------------- | --------------- | ----- | -- | ---- |  | ----- | -- | -
|                                                                |                                                                            | 2004            |       |    | 2003 | 
|                                                                |                                                                            |                 |       |    |      | 
|                                                                |                                                                            | ( in millions) |      
|Income from continuing operations before income taxes           |                                                                            |                 | 4,369 |    |      |  | 3,320 |   
|Income taxes                                                    |                                                                            |                 | (767  | )  |      |  | (881  | ) 
|                                                                | as percentage of income from continuing operations before
    income taxes |                 |       | 18 | %    |  |       | 27 | %
|Income from continuing operations                               |                                                                            |                 | 3,450 |    |      |  | 2,355 |   
|Income (loss) from discontinued operations, net of income taxes |                                                                            |                 | (45   | )  |      |  | 54    |   
|Net income                                                      |                                                                            |                 | 3,405 |    |      |  | 2,445 |   




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##### Table of Contents





        


Accounting for Asset Retirement
Obligations   


Segment Information
Analysis


Operations


Information and Communications


Communications (Com)


|                    |  |                 |        |   |          |  |        |        |  |  |           |   |  |  |    |  
|------------------- |  | --------------- | ------ | - | -------- |  | ------ | ------ |  |  | --------- | - |  |  | -- | -
|                    |  | Year ended      |        |   |         
|                    |  | September 30,   |        |   | % Change | 
|                    |  |                 |        |   |          | 
|                    |  | 2004            |        |   | 2003     |  |        | Actual |  |  | Adjusted* |  
|                    |  |                 |        |   |          |  |        |        |  |  |           |  
|                    |  | ( in millions) |        |   |          |  |       
|Group profit        |  |                 | 707    |   |          |  | (237   | )      |  |  |           |   |  |  |    |  
|Group profit margin |  |                 | 5.6    | % |          |  | (1.9   | )%     |  |  |           |   |  |  |    |  
|Sales               |  |                 | 12,709 |   |          |  | 12,283 |        |  |  | 3         | % |  |  | 4  | %
|New orders          |  |                 | 13,031 |   |          |  | 12,009 |        |  |  | 9         | % |  |  | 10 | %






|  |                                                                                                                         
|- | ------------------------------------------------------------------------------------------------------------------------
|* | Excluding currency translation effects of (2)% on sales and
    orders, and portfolio effects of 1% on sales and orders.





  


Siemens Business Services (SBS)


|                    |  |                 |       |   |          |  |       |        |  |  |           |    |  |  |    |   
|------------------- |  | --------------- | ----- | - | -------- |  | ----- | ------ |  |  | --------- | -- |  |  | -- | --
|                    |  | Year ended      |       |   |         
|                    |  | September 30,   |       |   | % Change | 
|                    |  |                 |       |   |          | 
|                    |  | 2004            |       |   | 2003     |  |       | Actual |  |  | Adjusted* |   
|                    |  |                 |       |   |          |  |       |        |  |  |           |   
|                    |  | ( in millions) |       |   |          |  |      
|Group profit        |  |                 | 40    |   |          |  | 13    |        |  |  | 208       | %  |  |  |    |   
|Group profit margin |  |                 | 0.8   | % |          |  | 0.2   | %      |  |  |           |    |  |  |    |   
|Sales               |  |                 | 4,716 |   |          |  | 5,205 |        |  |  | (9        | )% |  |  | (9 | )%
|New orders          |  |                 | 6,293 |   |          |  | 5,226 |        |  |  | 20        | %  |  |  | 8  | % 






|  |                                              
|- | ---------------------------------------------
|* | Excluding portfolio effects of 12% on orders.

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##### Table of Contents



     


Automation and Control


Automation and Drives (A&D)


|                    |  |                 |       |   |          |  |       |        |  |  |           |   |  |  |   |  
|------------------- |  | --------------- | ----- | - | -------- |  | ----- | ------ |  |  | --------- | - |  |  | - | -
|                    |  | Year ended      |       |   |         
|                    |  | September 30,   |       |   | % Change | 
|                    |  |                 |       |   |          | 
|                    |  | 2004            |       |   | 2003     |  |       | Actual |  |  | Adjusted* |  
|                    |  |                 |       |   |          |  |       |        |  |  |           |  
|                    |  | ( in millions) |       |   |          |  |      
|Group profit        |  |                 | 1,077 |   |          |  | 806   |        |  |  | 34        | % |  |  |   |  
|Group profit margin |  |                 | 12.2  | % |          |  | 9.6   | %      |  |  |           |   |  |  |   |  
|Sales               |  |                 | 8,829 |   |          |  | 8,375 |        |  |  | 5         | % |  |  | 7 | %
|New orders          |  |                 | 8,980 |   |          |  | 8,476 |        |  |  | 6         | % |  |  | 8 | %






|  |                                                                                                     
|- | ----------------------------------------------------------------------------------------------------
|* | Excluding currency translation effects of (3)%, and portfolio
    effects of 1% on sales and orders.

  


Industrial Solutions and Services (I&S)


|                    |  |                 |       |   |          |  |       |        |  |  |           |   |  |  |   |  
|------------------- |  | --------------- | ----- | - | -------- |  | ----- | ------ |  |  | --------- | - |  |  | - | -
|                    |  | Year ended      |       |   |         
|                    |  | September 30,   |       |   | % Change | 
|                    |  |                 |       |   |          | 
|                    |  | 2004            |       |   | 2003     |  |       | Actual |  |  | Adjusted* |  
|                    |  |                 |       |   |          |  |       |        |  |  |           |  
|                    |  | ( in millions) |       |   |          |  |      
|Group profit        |  |                 | 95    |   |          |  | (41   | )      |  |  |           |   |  |  |   |  
|Group profit margin |  |                 | 2.2   | % |          |  | (1.0  | )%     |  |  |           |   |  |  |   |  
|Sales               |  |                 | 4,290 |   |          |  | 4,012 |        |  |  | 7         | % |  |  | 7 | %
|New orders          |  |                 | 4,356 |   |          |  | 3,955 |        |  |  | 10        | % |  |  | 9 | %






|  |                                                                                                                                                  
|- | -------------------------------------------------------------------------------------------------------------------------------------------------
|* | Excluding currency translation effects of (3)% on sales and
    orders, and portfolio effects of 3% and 4% on sales and orders,
    respectively.

  


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##### Table of Contents



Logistics and Assembly Systems (L&A)


|                    |  |                 |       |   |          |  |       |        |  |  |           |    |  |  |    |   
|------------------- |  | --------------- | ----- | - | -------- |  | ----- | ------ |  |  | --------- | -- |  |  | -- | --
|                    |  | Year ended      |       |   |         
|                    |  | September 30,   |       |   | % Change | 
|                    |  |                 |       |   |          | 
|                    |  | 2004            |       |   | 2003     |  |       | Actual |  |  | Adjusted* |   
|                    |  |                 |       |   |          |  |       |        |  |  |           |   
|                    |  | ( in millions) |       |   |          |  |      
|Group profit        |  |                 | 45    |   |          |  | (197  | )      |  |  |           |    |  |  |    |   
|Group profit margin |  |                 | 3.2   | % |          |  | (13.1 | )%     |  |  |           |    |  |  |    |   
|Sales               |  |                 | 1,419 |   |          |  | 1,504 |        |  |  | (6        | )% |  |  | (3 | )%
|New orders          |  |                 | 1,799 |   |          |  | 1,515 |        |  |  | 19        | %  |  |  | 25 | % 






|  |                                                                                                                                                    
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------
|* | Excluding currency translation effects of (5)% and (8)% on sales
    and orders, respectively, and portfolio effects of 2% on sales
    and orders.



 


Siemens Building Technologies (SBT)


|                    |  |                 |       |   |          |  |       |        |  |  |           |    |  |  |    |   
|------------------- |  | --------------- | ----- | - | -------- |  | ----- | ------ |  |  | --------- | -- |  |  | -- | --
|                    |  | Year ended      |       |   |         
|                    |  | September 30,   |       |   | % Change | 
|                    |  |                 |       |   |          | 
|                    |  | 2004            |       |   | 2003     |  |       | Actual |  |  | Adjusted* |   
|                    |  |                 |       |   |          |  |       |        |  |  |           |   
|                    |  | ( in millions) |       |   |          |  |      
|Group profit        |  |                 | 108   |   |          |  | 101   |        |  |  | 7         | %  |  |  |    |   
|Group profit margin |  |                 | 2.5   | % |          |  | 2.0   | %      |  |  |           |    |  |  |    |   
|Sales               |  |                 | 4,247 |   |          |  | 4,990 |        |  |  | (15       | )% |  |  | (4 | )%
|New orders          |  |                 | 4,358 |   |          |  | 4,775 |        |  |  | (9        | )% |  |  | 2  | % 






|  |                                                                                                       
|- | ------------------------------------------------------------------------------------------------------
|* | Excluding currency translation effects of (4)%, and portfolio
    effects of (7)% on sales and orders.

   


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##### Table of Contents



Power


Power Generation (PG)


|                    |  |                 |       |   |          |  |       |        |  |  |           |    |  |  |    |  
|------------------- |  | --------------- | ----- | - | -------- |  | ----- | ------ |  |  | --------- | -- |  |  | -- | -
|                    |  | Year ended      |       |   |         
|                    |  | September 30,   |       |   | % Change | 
|                    |  |                 |       |   |          | 
|                    |  | 2004            |       |   | 2003     |  |       | Actual |  |  | Adjusted* |   
|                    |  |                 |       |   |          |  |       |        |  |  |           |   
|                    |  | ( in millions) |       |   |          |  |      
|Group profit        |  |                 | 961   |   |          |  | 1,171 |        |  |  | (18       | )% |  |  |    |  
|Group profit margin |  |                 | 12.8  | % |          |  | 16.8  | %      |  |  |           |    |  |  |    |  
|Sales               |  |                 | 7,527 |   |          |  | 6,967 |        |  |  | 8         | %  |  |  | 0  | %
|New orders          |  |                 | 9,243 |   |          |  | 7,302 |        |  |  | 27        | %  |  |  | 14 | %






|  |                                                                                                                                                    
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------
|* | Excluding currency translation effects of (4)% on sales and
    orders, and portfolio effects of 12% and 17% on sales and
    orders, respectively.

     


Power Transmission and Distribution (PTD)


|                    |  |                 |       |   |          |  |       |        |  |  |           |   |  |  |    |  
|------------------- |  | --------------- | ----- | - | -------- |  | ----- | ------ |  |  | --------- | - |  |  | -- | -
|                    |  | Year ended      |       |   |         
|                    |  | September 30,   |       |   | % Change | 
|                    |  |                 |       |   |          | 
|                    |  | 2004            |       |   | 2003     |  |       | Actual |  |  | Adjusted* |  
|                    |  |                 |       |   |          |  |       |        |  |  |           |  
|                    |  | ( in millions) |       |   |          |  |      
|Group profit        |  |                 | 238   |   |          |  | 207   |        |  |  | 15        | % |  |  |    |  
|Group profit margin |  |                 | 6.6   | % |          |  | 6.1   | %      |  |  |           |   |  |  |    |  
|Sales               |  |                 | 3,611 |   |          |  | 3,399 |        |  |  | 6         | % |  |  | 9  | %
|New orders          |  |                 | 3,863 |   |          |  | 3,586 |        |  |  | 8         | % |  |  | 11 | %






|  |                                                                                                                                                                         
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|* | Excluding currency translation effects of (4)% and (5)% on sales
    and orders, respectively, and portfolio effects of 1% and 2% on
    sales and orders, respectively.

  


Transportation


Transportation Systems (TS)


|                    |  |                 |       |    |          |  |       |        |  |  |           |    |  |  |    |   
|------------------- |  | --------------- | ----- | -- | -------- |  | ----- | ------ |  |  | --------- | -- |  |  | -- | --
|                    |  | Year ended      |       |    |         
|                    |  | September 30,   |       |    | % Change | 
|                    |  |                 |       |    |          | 
|                    |  | 2004            |       |    | 2003     |  |       | Actual |  |  | Adjusted* |   
|                    |  |                 |       |    |          |  |       |        |  |  |           |   
|                    |  | ( in millions) |       |    |          |  |      
|Group profit        |  |                 | (434  | )  |          |  | 284   |        |  |  |           |    |  |  |    |   
|Group profit margin |  |                 | (10.1 | )% |          |  | 6.0   | %      |  |  |           |    |  |  |    |   
|Sales               |  |                 | 4,310 |    |          |  | 4,697 |        |  |  | (8        | )% |  |  | (7 | )%
|New orders          |  |                 | 4,321 |    |          |  | 4,674 |        |  |  | (8        | )% |  |  | (7 | )%






|  |                                        
|- | ---------------------------------------
|* | Excluding currency translation effects.

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##### Table of Contents



  


Siemens VDO Automotive (SV)


|                    |  |                 |       |   |          |  |       |        |  |  |           |   |  |  |    |  
|------------------- |  | --------------- | ----- | - | -------- |  | ----- | ------ |  |  | --------- | - |  |  | -- | -
|                    |  | Year ended      |       |   |         
|                    |  | September 30,   |       |   | % Change | 
|                    |  |                 |       |   |          | 
|                    |  | 2004            |       |   | 2003     |  |       | Actual |  |  | Adjusted* |  
|                    |  |                 |       |   |          |  |       |        |  |  |           |  
|                    |  | ( in millions) |       |   |          |  |      
|Group profit        |  |                 | 562   |   |          |  | 418   |        |  |  | 34        | % |  |  |    |  
|Group profit margin |  |                 | 6.2   | % |          |  | 5.0   | %      |  |  |           |   |  |  |    |  
|Sales               |  |                 | 9,001 |   |          |  | 8,375 |        |  |  | 7         | % |  |  | 9  | %
|New orders          |  |                 | 9,029 |   |          |  | 8,375 |        |  |  | 8         | % |  |  | 10 | %






|  |                                                                                                     
|- | ----------------------------------------------------------------------------------------------------
|* | Excluding currency translation effects of (3)%, and portfolio
    effects of 1% on sales and orders.

  


Medical


Medical Solutions (Med)


|                    |  |                 |       |   |          |  |       |        |  |  |           |    |  |  |    |  
|------------------- |  | --------------- | ----- | - | -------- |  | ----- | ------ |  |  | --------- | -- |  |  | -- | -
|                    |  | Year ended      |       |   |         
|                    |  | September 30,   |       |   | % Change | 
|                    |  |                 |       |   |          | 
|                    |  | 2004            |       |   | 2003     |  |       | Actual |  |  | Adjusted* |   
|                    |  |                 |       |   |          |  |       |        |  |  |           |   
|                    |  | ( in millions) |       |   |          |  |      
|Group profit        |  |                 | 1,046 |   |          |  | 1,118 |        |  |  | (6        | )% |  |  |    |  
|Group profit margin |  |                 | 14.8  | % |          |  | 15.1  | %      |  |  |           |    |  |  |    |  
|Sales               |  |                 | 7,072 |   |          |  | 7,422 |        |  |  | (5        | )% |  |  | 6  | %
|New orders          |  |                 | 8,123 |   |          |  | 7,835 |        |  |  | 4         | %  |  |  | 15 | %






|  |                                                                                                                                                                             
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|* | Excluding currency translation effects of (6)% and (7)% on sales
    and orders, respectively, and portfolio effects of (5)% and (4)%
    on sales and orders, respectively.

    


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##### Table of Contents



Lighting


Osram


|                    |  |                 |       |   |      |        |       |          |           |  |   |   |  |  |   |  
|------------------- |  | --------------- | ----- | - | ---- | ------ | ----- | -------- | --------- |  | - | - |  |  | - | -
|                    |  | Year ended      |       |   |      |        |      
|                    |  | September 30,   |       |   |      |        |      
|                    |  |                 |       |   |     
|                    |  | 2004            |       |   | 2003 |        |       | % Change |          
|                    |  |                 |       |   |      |        |       |          |          
|                    |  |                 |       |   |      | Actual |       |          | Adjusted* | 
|                    |  |                 |       |   |      |        |       |         
|                    |  | ( in millions) |       |   |      |        |      
|Group profit        |  |                 | 445   |   |      |        | 410   |          |           |  | 9 | % |  |  |   |  
|Group profit margin |  |                 | 10.5  | % |      |        | 9.8   | %        |           |  |   |   |  |  |   |  
|Sales               |  |                 | 4,240 |   |      |        | 4,172 |          |           |  | 2 | % |  |  | 8 | %
|New orders          |  |                 | 4,240 |   |      |        | 4,172 |          |           |  | 2 | % |  |  | 8 | %






|  |                                        
|- | ---------------------------------------
|* | Excluding currency translation effects.

 


Other Operations


   


Corporate items, pensions and eliminations


         


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##### Table of Contents



Financing and Real Estate


Siemens Financial Services (SFS)


|                           |  |                 |       |  |          |  |       |        |  |  |    |   
|-------------------------- |  | --------------- | ----- |  | -------- |  | ----- | ------ |  |  | -- | --
|                           |  | Year ended      |       |  |         
|                           |  | September 30,   |       |  | % Change | 
|                           |  |                 |       |  |          | 
|                           |  | 2004            |       |  | 2003     |  |       | Actual | 
|                           |  |                 |       |  |          |  |       |        | 
|                           |  | ( in millions) |       |  |         
|Income before income taxes |  |                 | 250   |  |          |  | 269   |        |  |  | (7 | )%
|Total assets               |  |                 | 9,055 |  |          |  | 8,445 |        |  |  | 7  | % 

 


Siemens Real Estate (SRE)


|                           |  |                 |       |  |          |  |       |        |  |  |     |   
|-------------------------- |  | --------------- | ----- |  | -------- |  | ----- | ------ |  |  | --- | --
|                           |  | Year ended      |       |  |         
|                           |  | September 30,   |       |  | % Change | 
|                           |  |                 |       |  |          | 
|                           |  | 2004            |       |  | 2003     |  |       | Actual | 
|                           |  |                 |       |  |          |  |       |        | 
|                           |  | ( in millions) |       |  |         
|Income before income taxes |  |                 | 106   |  |          |  | 204   |        |  |  | (48 | )%
|Sales                      |  |                 | 1,578 |  |          |  | 1,587 |        |  |  | (1  | )%

 


Eliminations, reclassifications and Corporate Treasury


  


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##### Table of Contents



Liquidity and Capital
Resources


Cash FlowFiscal
2005 Compared to Fiscal 2004




|                                                                      |                      |                          |        |        |              |                |       |              |   |  |        |        |   |      |     |      |      |  |        |        |   |  |       |        |  
|--------------------------------------------------------------------- | -------------------- | ------------------------ | ------ | ------ | ------------ | -------------- | ----- | ------------ | - |  | ------ | ------ | - | ---- | --- | ---- | ---- |  | ------ | ------ | - |  | ----- | ------ | -
|                                                                      |                      |                          |        |        |              | Continuing and |      
|                                                                      |                      | Continuing               |        |        | Discontinued |                |       | discontinued |  
|                                                                      |                      | operations               |        |        | operations   |                |       | operations   |  
|                                                                      |                      |                          |        |        |              |                |       |              |  
|                                                                      |                      | Year ended September 30, |       
|                                                                      |                      |                          |       
|                                                                      |                      | 2005                     |        |        | 2004         |                |       | 2005         |   |  | 2004   |        |   | 2005 |     |      | 2004 | 
|                                                                      |                      |                          |        |        |              |                |       |              |   |  |        |        |   |      |     |      |      | 
|                                                                      |                      | ( in millions)          |       
|Net cash provided by (used in):                                       |                      |                          |        |        |              |                |       |              |   |  |        |        |   |      |     |      |      |  |        |        |   |  |       |       
|                                                                      | Operating activities |                          |        | 4,217  |              |                |       | 4,704        |   |  |        | (1,096 | ) |      |     | 376  |      |  |        | 3,121  |   |  |       | 5,080  |  
|                                                                      | Investing activities |                          |        | (5,706 | )            |                |       | (1,689       | ) |  |        | (118   | ) |      |     | (129 | )    |  |        | (5,824 | ) |  |       | (1,818 | )
|                                                                      |                      |                          |        |        |              |                |       |              |   |  |        |        |   |      |     |      |      | 
|Net cash provided by (used in) operating and investing
    activities |                      |                          | (1,489 | )      |              |                | 3,015 |              |   |  | (1,214 | )      |   |      | 247 |      |      |  | (2,703 | )      |   |  | 3,262 |       
|                                                                      |                      |                          |        |        |              |                |       |              |   |  |        |        |   |      |     |      |      | 

       


|                                                                                              |                      |                          |        |           |           |              |       |         |   |  |      |      |   |      |     |       |      |  |        |        |   |  |       |        |  
|--------------------------------------------------------------------------------------------- | -------------------- | ------------------------ | ------ | --------- | --------- | ------------ | ----- | ------- | - |  | ---- | ---- | - | ---- | --- | ----- | ---- |  | ------ | ------ | - |  | ----- | ------ | -
|                                                                                              |                      |                          |        |           |           | SFS, SRE and |       |         |   |  |     
|                                                                                              |                      |                          |        | Corporate |           |              |      
|                                                                                              |                      | Operations               |        |           | Treasury* |              |       | Siemens |  
|                                                                                              |                      |                          |        |           |           |              |       |         |  
|                                                                                              |                      | Year ended September 30, |       
|                                                                                              |                      |                          |       
|Continuing operations                                                                         |                      | 2005                     |        |           | 2004      |              |       | 2005    |   |  | 2004 |      |   | 2005 |     |       | 2004 | 
|                                                                                              |                      |                          |        |           |           |              |       |         |   |  |      |      |   |      |     |       |      | 
|                                                                                              |                      | ( in millions)          |       
|Net cash provided by (used in):                                                               |                      |                          |        |           |           |              |       |         |   |  |      |      |   |      |     |       |      |  |        |        |   |  |       |       
|                                                                                              | Operating activities |                          |        | 3,565     |           |              |       | 3,635   |   |  |      | 652  |   |      |     | 1,069 |      |  |        | 4,217  |   |  |       | 4,704  |  
|                                                                                              | Investing activities |                          |        | (4,787    | )         |              |       | (1,394  | ) |  |      | (919 | ) |      |     | (295  | )    |  |        | (5,706 | ) |  |       | (1,689 | )
|                                                                                              |                      |                          |        |           |           |              |       |         |   |  |      |      |   |      |     |       |      | 
|Net cash provided by (used in) operating and investing
    activities  continuing operations |                      |                          | (1,222 | )         |           |              | 2,241 |         |   |  | (267 | )    |   |      | 774 |       |      |  | (1,489 | )      |   |  | 3,015 |       
|                                                                                              |                      |                          |        |           |           |              |       |         |   |  |      |      |   |      |     |       |      | 






|  |                                                  
|- | -------------------------------------------------
|* | Also includes eliminations and reclassifications.

   


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  


            


     


Cash Flow 
Fiscal 2004 Compared to Fiscal 2003




|                                                        |                      |                          |       |        |              |                |       |              |   |  |      |      |   |      |     |     |      |  |       |        |   |  |       |        |  
|------------------------------------------------------- | -------------------- | ------------------------ | ----- | ------ | ------------ | -------------- | ----- | ------------ | - |  | ---- | ---- | - | ---- | --- | --- | ---- |  | ----- | ------ | - |  | ----- | ------ | -
|                                                        |                      |                          |       |        |              | Continuing and |      
|                                                        |                      | Continuing               |       |        | Discontinued |                |       | discontinued |  
|                                                        |                      | operations               |       |        | operations   |                |       | operations   |  
|                                                        |                      |                          |       |        |              |                |       |              |  
|                                                        |                      | Year ended September 30, |      
|                                                        |                      |                          |      
|                                                        |                      | 2004                     |       |        | 2003         |                |       | 2004         |   |  | 2003 |      |   | 2004 |     |     | 2003 | 
|                                                        |                      |                          |       |        |              |                |       |              |   |  |      |      |   |      |     |     |      | 
|                                                        |                      | ( in millions)          |      
|Net cash provided by (used in):                         |                      |                          |       |        |              |                |       |              |   |  |      |      |   |      |     |     |      |  |       |        |   |  |       |       
|                                                        | Operating activities |                          |       | 4,704  |              |                |       | 5,419        |   |  |      | 376  |   |      |     | 293 |      |  |       | 5,080  |   |  |       | 5,712  |  
|                                                        | Investing activities |                          |       | (1,689 | )            |                |       | (3,848       | ) |  |      | (129 | ) |      |     | (91 | )    |  |       | (1,818 | ) |  |       | (3,939 | )
|                                                        |                      |                          |       |        |              |                |       |              |   |  |      |      |   |      |     |     |      | 
|Net cash provided by operating and investing activities |                      |                          | 3,015 |        |              |                | 1,571 |              |   |  | 247  |      |   |      | 202 |     |      |  | 3,262 |        |   |  | 1,773 |       
|                                                        |                      |                          |       |        |              |                |       |              |   |  |      |      |   |      |     |     |      | 

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     


|                                                                                    |                      |                          |       |           |           |              |     |         |   |  |      |       |   |      |       |       |      |  |       |        |   |  |       |        |  
|----------------------------------------------------------------------------------- | -------------------- | ------------------------ | ----- | --------- | --------- | ------------ | --- | ------- | - |  | ---- | ----- | - | ---- | ----- | ----- | ---- |  | ----- | ------ | - |  | ----- | ------ | -
|                                                                                    |                      |                          |       |           |           | SFS, SRE and |     |         |   |  |     
|                                                                                    |                      |                          |       | Corporate |           |              |    
|                                                                                    |                      | Operations               |       |           | Treasury* |              |     | Siemens |  
|                                                                                    |                      |                          |       |           |           |              |     |         |  
|                                                                                    |                      | Year ended September 30, |      
|                                                                                    |                      |                          |      
|Continuing operations                                                               |                      | 2004                     |       |           | 2003      |              |     | 2004    |   |  | 2003 |       |   | 2004 |       |       | 2003 | 
|                                                                                    |                      |                          |       |           |           |              |     |         |   |  |      |       |   |      |       |       |      | 
|                                                                                    |                      | ( in millions)          |      
|Net cash provided by (used in):                                                     |                      |                          |       |           |           |              |     |         |   |  |      |       |   |      |       |       |      |  |       |        |   |  |       |       
|                                                                                    | Operating activities |                          |       | 3,635     |           |              |     | 3,834   |   |  |      | 1,069 |   |      |       | 1,585 |      |  |       | 4,704  |   |  |       | 5,419  |  
|                                                                                    | Investing activities |                          |       | (1,394    | )         |              |     | (3,564  | ) |  |      | (295  | ) |      |       | (284  | )    |  |       | (1,689 | ) |  |       | (3,848 | )
|                                                                                    |                      |                          |       |           |           |              |     |         |   |  |      |       |   |      |       |       |      | 
|Net cash provided by operating and investing
    activities  continuing operations |                      |                          | 2,241 |           |           |              | 270 |         |   |  | 774  |       |   |      | 1,301 |       |      |  | 3,015 |        |   |  | 1,571 |       
|                                                                                    |                      |                          |       |           |           |              |     |         |   |  |      |       |   |      |       |       |      | 






|  |                                                  
|- | -------------------------------------------------
|* | Also includes eliminations and reclassifications.

       


      


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  


Capital Resources and
Capital Requirements




Ratings




|                |  |                   |  |  |            |  |  | 
|--------------- |  | ----------------- |  |  | ---------- |  |  | 
|                |  | Moodys           |  |  | Standard & | 
|                |  | Investors Service |  |  | Poors     | 
|                |  |                   |  |  |            | 
|Long-term debt  |  | Aa3               |  |  | AA        | 
|Short-term debt |  | P-1               |  |  | A-1+       | 















Capital Resources


 


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 


 


  


 


 






Capital Requirements


  


 


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Contractual Obligations






|                                   |  |                 |        |                        |        |  |        |           |       |  |           |  |  |         |       |  |  |  |       | 
|---------------------------------- |  | --------------- | ------ | ---------------------- | ------ |  | ------ | --------- | ----- |  | --------- |  |  | ------- | ----- |  |  |  | ----- | 
|                                   |  |                 |        | Payments due by period |       
|                                   |  |                 |        |                        |       
|                                   |  |                 |        | Less than              |        |  |        |           | After | 
|                                   |  | Total           |        |                        | 1 year |  |        | 1-3 years |       |  | 4-5 years |  |  | 5 years |      
|                                   |  |                 |        |                        |        |  |        |           |       |  |           |  |  |         |      
|                                   |  | ( in millions) |       
|Debt                               |  |                 | 12,435 |                        |        |  | 3,999  |           |       |  | 2,968     |  |  |         | 2,763 |  |  |  | 2,705 | 
|Purchase obligations               |  |                 | 10,456 |                        |        |  | 8,912  |           |       |  | 1,132     |  |  |         | 324   |  |  |  | 88    | 
|Operating leases                   |  |                 | 2,681  |                        |        |  | 628    |           |       |  | 924       |  |  |         | 546   |  |  |  | 583   | 
|                                   |  |                 |        |                        |        |  |        |           |       |  |           |  |  |         |      
|Total contractual cash obligations |  |                 | 25,572 |                        |        |  | 13,539 |           |       |  | 5,024     |  |  |         | 3,633 |  |  |  | 3,376 | 
|                                   |  |                 |        |                        |        |  |        |           |       |  |           |  |  |         |      

Debt    




|                                 |  |                 |       |  |           |  |       |       |  |  |        | 
|-------------------------------- |  | --------------- | ----- |  | --------- |  | ----- | ----- |  |  | ------ | 
|                                 |  | Short-Term      |       |  | Long-Term |  |       | Total | 
|                                 |  |                 |       |  |           |  |       |       | 
|                                 |  | ( in millions) |      
|Notes and bonds                  |  |                 | 1,625 |  |           |  | 6,826 |       |  |  | 8,451  | 
|Loans from banks                 |  |                 | 673   |  |           |  | 613   |       |  |  | 1,286  | 
|Other financial indebtedness     |  |                 | 1,612 |  |           |  | 733   |       |  |  | 2,345  | 
|Obligations under capital leases |  |                 | 89    |  |           |  | 264   |       |  |  | 353    | 
|                                 |  |                 |       |  |           |  |       |       | 
|Total debt                       |  |                 | 3,999 |  |           |  | 8,436 |       |  |  | 12,435 | 
|                                 |  |                 |       |  |           |  |       |       | 



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 


 


 




|                     |                                    |                 |        |       |               |  |       |     |  |  |       |       |  |  |       |       | 
|-------------------- | ---------------------------------- | --------------- | ------ | ----- | ------------- |  | ----- | --- |  |  | ----- | ----- |  |  | ----- | ----- | 
|                     |                                    | September 30,   |        |       | September 30, | 
|                     |                                    | 2005            |        |       | 2004          | 
|                     |                                    |                 |        |       |               | 
|                     |                                    | SFS             |        |       | SRE           |  |       | SFS |  |  | SRE   |      
|                     |                                    |                 |        |       |               |  |       |     |  |  |       |      
|                     |                                    | ( in millions) |       
|Assets               |                                    |                 | 10,148 |       |               |  | 3,496 |     |  |  | 9,055 |       |  |  | 3,455 |      
|Allocated equity     |                                    |                 | 983    |       |               |  | 920   |     |  |  | 1,015 |       |  |  | 920   |      
|Total debt           |                                    |                 | 8,529  |       |               |  | 1,349 |     |  |  | 7,245 |       |  |  | 1,420 |      
|                     | Therein intracompany financing     |                 |        | 8,041 |               |  |       | 930 |  |  |       | 6,975 |  |  |       | 1,061 | 
|                     | Therein debt from external sources |                 |        | 488   |               |  |       | 419 |  |  |       | 270   |  |  |       | 359   | 
|Debt to equity ratio |                                    |                 | 8.68   |       |               |  | 1.47  |     |  |  | 7.14  |       |  |  | 1.54  |      





Purchase obligations 


Operating leases 


 


Off-Balance Sheet Arrangements


Guarantees  


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 


Variable Interest Entities


Pension Plan Funding


       








Overview Financial
Position


  


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|                          |                      |                 |        |        |      |  |        |        | 
|------------------------- | -------------------- | --------------- | ------ | ------ | ---- |  | ------ | ------ | 
|                          |                      | September 30,   |       
|                          |                      |                 |       
|                          |                      | 2005            |        |        | 2004 | 
|                          |                      |                 |        |        |      | 
|                          |                      | ( in millions) |       
|Cash and cash equivalents |                      |                 | 8,121  |        |      |  | 12,190 |       
|Marketable securities     |                      |                 | 1,789  |        |      |  | 1,386  |       
|Accounts receivable, net  |                      |                 | 17,122 |        |      |  | 15,470 |       
|Inventories, net          |                      |                 | 12,812 |        |      |  | 11,358 |       
|Deferred income taxes     |                      |                 | 1,484  |        |      |  | 1,144  |       
|Assets held for sale      |                      |                 | 245    |        |      |  |       |       
|Other current assets      |                      |                 | 5,230  |        |      |  | 4,398  |       
|                          |                      |                 |        |        |      | 
|                          | Total current assets |                 |        | 46,803 |      |  |        | 45,946 | 

     




|                                   |                        |                 |        |        |      |  |        |        | 
|---------------------------------- | ---------------------- | --------------- | ------ | ------ | ---- |  | ------ | ------ | 
|                                   |                        | September 30,   |       
|                                   |                        |                 |       
|                                   |                        | 2005            |        |        | 2004 | 
|                                   |                        |                 |        |        |      | 
|                                   |                        | ( in millions) |       
|Long-term investments              |                        |                 | 3,768  |        |      |  | 4,122  |       
|Goodwill                           |                        |                 | 8,930  |        |      |  | 6,476  |       
|Other intangible assets, net       |                        |                 | 3,107  |        |      |  | 2,514  |       
|Property, plant and equipment, net |                        |                 | 12,012 |        |      |  | 10,683 |       
|Deferred income taxes              |                        |                 | 6,321  |        |      |  | 4,811  |       
|Other assets                       |                        |                 | 5,264  |        |      |  | 4,966  |       
|                                   |                        |                 |        |        |      | 
|                                   | Total long-term assets |                 |        | 39,402 |      |  |        | 33,572 | 

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|                                                         |                             |                 |        |        |      |  |        |        | 
|-------------------------------------------------------- | --------------------------- | --------------- | ------ | ------ | ---- |  | ------ | ------ | 
|                                                         |                             | September, 30   |       
|                                                         |                             |                 |       
|                                                         |                             | 2005            |        |        | 2004 | 
|                                                         |                             |                 |        |        |      | 
|                                                         |                             | ( in millions) |       
|Short-term debt and current maturities of long-term debt |                             |                 | 3,999  |        |      |  | 1,434  |       
|Accounts payable                                         |                             |                 | 10,171 |        |      |  | 9,326  |       
|Accrued liabilities                                      |                             |                 | 10,169 |        |      |  | 9,240  |       
|Deferred income taxes                                    |                             |                 | 1,938  |        |      |  | 1,522  |       
|Liabilities held for sale                                |                             |                 | 289    |        |      |  |       |       
|Other current liabilities                                |                             |                 | 13,267 |        |      |  | 11,850 |       
|                                                         |                             |                 |        |        |      | 
|                                                         | Total current liabilities   |                 |        | 39,833 |      |  |        | 33,372 | 
|                                                        
|Long-term debt                                           |                             |                 | 8,436  |        |      |  | 9,785  |       
|Pension plans and similar commitments                    |                             |                 | 4,917  |        |      |  | 4,392  |       
|Deferred income taxes                                    |                             |                 | 427    |        |      |  | 569    |       
|Other accruals and provisions                            |                             |                 | 4,819  |        |      |  | 4,016  |       
|                                                         |                             |                 |        |        |      | 
|                                                         | Total long-term liabilities |                 |        | 18,599 |      |  |        | 18,762 | 

       




|                           |              |                 |        |        |      |  |        |        | 
|-------------------------- | ------------ | --------------- | ------ | ------ | ---- |  | ------ | ------ | 
|                           |              | September, 30   |       
|                           |              |                 |       
|                           |              | 2005            |        |        | 2004 | 
|                           |              |                 |        |        |      | 
|                           |              | ( in millions) |       
|Total shareholders equity |              |                 | 27,117 |        |      |  | 26,855 |       
|Equity ratio               |              |                 | 31     | %      |      |  | 34     | %     
|                           | Total assets |                 |        | 86,205 |      |  |        | 79,518 | 

    




Subsequent
Events




 


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Critical Accounting
Estimates




Revenue Recognition on Long-Term Construction
Contracts


Accounts Receivable  


Goodwill  


71



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##### Table of Contents



Pension and Postretirement Benefit
Accounting


    


Accruals


Recent Accounting
Pronouncements


Share-Based
Payment Accounting for Stock-Based Compensation Accounting for Stock Issued to Employees


72



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Accounting for Early Retirement or
Postemployment Programs with Specific Features (such as Terms
Specified in Altersteilzeit Early Retirement Arrangements)


Accounting
Changes and Error Corrections a replacement of APB
No. 20 and FASB Statement No. 3


Accounting under
International Financial Reporting Standards (IFRS)


EU Regulation regarding
IFRS






Impact of Differences
Between IFRS and U.S. GAAP




73



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Research and development costs


Compound financial instruments Convertible
instruments


Pension accounting Fresh start First-time Adoption of International
Financial Reporting Standards Employee
Benefits


Outlook


4





ITEM 6: DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES


Management


Aktiengesetz




74



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##### Table of Contents









Supervisory
Board










| |   |                                                                                                                                                                                                                                                                                                                                                                      
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | to monitor the management of the Company;                                                                                                                                                                                                                                                                                                                            
|
| |  | to appoint and dismiss members of our Managing Board;                                                                                                                                                                                                                                                                                                                
|
| |  | to represent the Company in its dealings with the Managing Board
    or when its interests are adverse to those of the Managing
    Board, for example, when the Company enters into an employment
    agreement with a Managing Board member, the Supervisory Board
    determines the salary and other compensation components,
    including pension benefits; and
|
| |  | to approve matters in any areas that the Supervisory Board has
    made subject to its approval, either generally or in a specific
    case.                                                                                                                                                                                                                         



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|                              |  |         |            |  |         |  |           |                      |  |                                                                                            |  |                                                                                                                                                                                          
|----------------------------- |  | ------- | ---------- |  | ------- |  | --------- | -------------------- |  | ------------------------------------------------------------------------------------------ |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                              |  |         |            |  |         |  |           | Companies at which  
|                              |  | Date of |            |  | Term    |  |           | Board position and   |  | Supervisory Board and similar                                                             
|Name                          |  | birth   |            |  | expires |  |           | principal occupation |  | positions were held                                                                       
|                              |  |         |            |  |         |  |           |                      |  |                                                                                           
|Dr. Heinrich v.
    Pierer(1) |  |         | 01/26/1941 |  |         |  | 1/24/2008 |                      |  | Chairman of the Supervisory Board                                                          |  | Deutsche Bank AG; Hochtief AG; Münchener
    Rückversicherungs- Gesellschaft AG;
    ThyssenKrupp AG;
    Volkswagen AG                                                                  
|                             
|Ralf
    Heckmann(2)          |  |         | 07/19/1949 |  |         |  | 1/24/2008 |                      |  | First Deputy Chairman; Chairman of the Central Works Council,
    Siemens AG               |  |                                                                                                                                                                                         
|                             
|Dr. Josef Ackermann           |  |         | 02/07/1948 |  |         |  | 1/24/2008 |                      |  | Second Deputy Chairman; Spokesman of the Board of Managing
    Directors, Deutsche Bank AG |  | Bayer AG; Deutsche Lufthansa AG; Linde AG                                                                                                                                                
|                             
|Lothar
    Adler(2)           |  |         | 02/22/1949 |  |         |  | 1/24/2008 |                      |  | Member; Deputy Chairman of the Central Works Council,
    Siemens AG                       |  |                                                                                                                                                                                         
|                             
|Gerhard
    Bieletzki(2)      |  |         | 05/16/1947 |  |         |  | 1/24/2008 |                      |  | Member; Member of the Combined Works Council, Siemens AG                                   |  |                                                                                                                                                                                         
|                             
|John David Coombe             |  |         | 03/17/1945 |  |         |  | 1/24/2008 |                      |  | Member; Chartered Accountant (FCA)                                                         |  | GUS plc; HSBC Holdings plc                                                                                                                                                               
|                             
|Hildegard
    Cornudet(2)     |  |         | 04/16/1949 |  |         |  | 1/24/2008 |                      |  | Member; Chairperson of the Works Council, SBS GmbH & Co. OHG                               |  |                                                                                                                                                                                         
|                             
|Dr. Gerhard Cromme            |  |         | 02/25/1943 |  |         |  | 1/24/2008 |                      |  | Member; Chairman of the Supervisory Board, ThyssenKrupp AG                                 |  | Allianz AG; Axel Springer Verlag AG;
    Deutsche Lufthansa AG; E.ON AG; Hochtief AG;
    ThyssenKrupp AG; Volkswagen AG; BNP Paribas S.A.;
    Compagnie de Saint-Gobain S.A.; SUEZ S.A.
|                             
|Birgit
    Grube(2)           |  |         | 08/21/1945 |  |         |  | 1/24/2008 |                      |  | Member; Office clerk                                                                       |  |                                                                                                                                                                                         
|                             
|Heinz
    Hawreliuk(2)        |  |         | 03/20/1947 |  |         |  | 1/24/2008 |                      |  | Member; Head of the Company Co-determination Department, IG
    Metall(4)                  |  | DaimlerChrysler Aerospace AG; DaimlerChrysler Luft und
    Raumfahrt Holding AG; EADS Astrium GmbH; Eurocopter
    Deutschland GmbH                                                      
|                             
|Berthold
    Huber(2)         |  |         | 02/15/1950 |  |         |  | 1/24/2008 |                      |  | Member; Second Chairman, IG Metall                                                         |  | Audi AG; Heidelberger Druckmaschinen AG; RWE AG                                                                                                                                          
|                             
|Prof. Dr. Walter Kröll        |  |         | 05/30/1938 |  |         |  | 1/24/2008 |                      |  | Member; Consultant                                                                         |  | MTU Aero Engines GmbH; Wincor Nixdorf AG                                                                                                                                                 
|                             
|Wolfgang
    Müller(2)        |  |         | 01/14/1948 |  |         |  | 1/24/2008 |                      |  | Member; Head of the Siemens team, IG Metall                                                |  |                                                                                                                                                                                         

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|                             |  |         |            |  |         |  |           |                      |  |                                                                                       |  |                                                                                                                                  
|---------------------------- |  | ------- | ---------- |  | ------- |  | --------- | -------------------- |  | ------------------------------------------------------------------------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------
|                             |  |         |            |  |         |  |           | Companies at which  
|                             |  | Date of |            |  | Term    |  |           | Board position and   |  | Supervisory Board and similar                                                        
|Name                         |  | birth   |            |  | expires |  |           | principal occupation |  | positions were held                                                                  
|                             |  |         |            |  |         |  |           |                      |  |                                                                                      
|                            
|Georg
    Nassauer(2)        |  |         | 03/08/1948 |  |         |  | 1/24/2008 |                      |  | Member; Steel casting constructor                                                     |  |                                                                                                                                 
|                            
|Dr. Albrecht Schmidt         |  |         | 03/13/1938 |  |         |  | 1/24/2008 |                      |  | Member; Chairman of the Supervisory Board, Bayerische Hypo- und
    Vereinsbank AG(3) |  | Bayerische Hypo- und Vereinsbank AG; Münchener
    Rückversicherungs-Gesellschaft AG; Thyssensche
    Handelsgesellschaft m.b.H.
|                            
|Dr. Henning Schulte-Noelle   |  |         | 08/26/1942 |  |         |  | 1/24/2008 |                      |  | Member; Chairman of the Supervisory Board, Allianz AG                                 |  | Allianz AG; E.ON AG; ThyssenKrupp AG                                                                                             
|                            
|Peter von Siemens            |  |         | 08/10/1937 |  |         |  | 1/24/2008 |                      |  | Member; Industrial manager                                                            |  | Münchener Tierpark Hellabrunn AG                                                                                                 
|                            
|Jerry I. Speyer              |  |         | 06/23/1940 |  |         |  | 1/24/2008 |                      |  | Member; President, TishmanSpeyer Properties                                           |  |                                                                                                                                 
|                            
|Lord Iain Vallance of Tummel |  |         | 05/20/1943 |  |         |  | 1/24/2008 |                      |  | Member; Chairman, Nations Healthcare Ltd.                                             |  |                                                                                                                                 
|                            
|Klaus
    Wigand(2)          |  |         | 11/19/1945 |  |         |  | 1/24/2008 |                      |  | Member; Industrial manager                                                            |  |                                                                                                                                 






|    |                                                                                                                                                 
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Dr. Karl-Hermann Baumann ceased to be a member of the
    Supervisory Board on January 27, 2005. He was succeeded by
    Dr. Heinrich v. Pierer.
|   
|(2) | Elected by employees.                                                                                                                           
|   
|(3) | Dr. Schmidt resigned from this position effective
    November 26, 2005.                                                                        
|   
|(4) | Mr. Hawreliuk held this position through September 30,
    2005.                                                                                



|                           |  |                                                                                                                      
|-------------------------- |  | ---------------------------------------------------------------------------------------------------------------------
|Name of committee          |  | Current members                                                                                                      
|                           |  |                                                                                                                      
|Chairmans Committee       |  | Chairman Dr. Heinrich v. Pierer, First Deputy Chairman Ralf
    Heckmann,* Second Deputy Chairman Dr. Josef Ackermann
|Audit Committee            |  | Chairman Dr. Gerhard Cromme, Dr. Heinrich v. Pierer,
    Ralf Heckmann,* Heinz Hawreliuk,* Dr. Henning Schulte-Noelle
|Ownership Rights Committee |  | Chairman Dr. Heinrich v. Pierer, Dr. Josef Ackermann,
    Dr. Albrecht Schmidt                                       
|Mediation Committee        |  | Chairman Dr. Heinrich v. Pierer, Ralf Heckmann,*
    Dr. Josef Ackermann, Heinz Hawreliuk*                           






|  |                      
|- | ---------------------
|* | Elected by employees.



Managing
Board




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| |   |                                                                                                          
| | - | ---------------------------------------------------------------------------------------------------------
| |  | preparation of the annual financial statements;                                                          
|
| |  | the calling of the Annual Shareholders Meeting and
    preparation and execution of the resolutions; and
|
| |  | reports to the Supervisory Board and the Annual
    Shareholders Meeting concerning certain matters.    









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|                             |  |               |            |  |              |  |           |                               |  |                                  |  |                                                                             
|---------------------------- |  | ------------- | ---------- |  | ------------ |  | --------- | ----------------------------- |  | -------------------------------- |  | ----------------------------------------------------------------------------
|                             |  |               |            |  |              |  |           | Companies at which           
|                             |  |               |            |  |              |  |           | Supervisory Board and similar
|Name                         |  | Date of birth |            |  | Term expires |  |           | Current position              |  | positions were held             
|                             |  |               |            |  |              |  |           |                               |  |                                 
|Dr. Klaus Kleinfeld          |  |               | 11/06/1957 |  |              |  | 9/30/2007 |                               |  | President and CEO                |  | Bayer AG; Alcoa Inc.; Citigroup Inc.                                        
|                            
|Johannes Feldmayer           |  |               | 10/16/1956 |  |              |  | 9/30/2007 |                               |  | Executive Vice-President         |  | Exxon Mobile Central Europe Holding GmbH; Infineon Technologies
    AG      
|                            
|Dr. Thomas Ganswindt         |  |               | 11/18/1960 |  |              |  | 9/30/2007 |                               |  | Executive Vice-President         |  |                                                                            
|                            
|Prof. Dr. Edward G. Krubasik |  |               | 01/19/1944 |  |              |  | 9/30/2006 |                               |  | Executive Vice-President         |  | Dresdner Bank AG                                                            
|                            
|Rudi Lamprecht               |  |               | 10/12/1948 |  |              |  | 3/31/2009 |                               |  | Executive Vice-President         |  | O2 plc                                                                      
|                            
|Heinz-Joachim Neubürger      |  |               | 01/11/1953 |  |              |  | 9/30/2007 |                               |  | Executive Vice-President and CFO |  | Allianz Versicherungs-AG; Bayerische Börse AG; Merrill
    Lynch & Co., Inc.
|                            
|Dr. Jürgen Radomski*         |  |               | 10/26/1941 |  |              |  | 9/30/2006 |                               |  | Executive Vice-President         |  | Deutsche Krankenversicherung AG; Dräger Medical AG                          
|                            
|Prof. Dr. Erich R. Reinhardt |  |               | 10/03/1946 |  |              |  | 9/30/2006 |                               |  | Senior Vice-President            |  | BioMAG; Dräger Medical AG                                                   
|                            
|Dr. Uriel J. Sharef          |  |               | 08/19/1944 |  |              |  | 3/31/2008 |                               |  | Executive Vice-President         |  |                                                                            
|                            
|Prof. Dr. Claus Weyrich      |  |               | 01/06/1944 |  |              |  | 9/30/2006 |                               |  | Senior Vice-President            |  | HERAEUS Holding GmbH                                                        
|                            
|Prof. Dr. Klaus Wucherer     |  |               | 07/09/1944 |  |              |  | 3/31/2008 |                               |  | Executive Vice-President         |  | Deutsche Messe AG; Infineon Technologies AG                                 






|  |                                                                                                                                           
|- | ------------------------------------------------------------------------------------------------------------------------------------------
|* | At its meeting on December 7, 2005, the Supervisory Board
    extended Dr. Jürgen Radomskis term of office
    through December 31, 2007.



Compensation






Managing Board Remuneration






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| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | The fixed compensation is paid as a monthly salary.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|
| |  | The variable bonus is based on the level of the Companys
    attainment of certain EVA targets and other financial goals, if
    any, that are set at the start of the fiscal year by the
    Chairmans Committee of the Supervisory Board. One-half of
    the bonus is paid as an annual bonus and is contingent upon
    achieving the Company-wide EVA target established for the fiscal
    year. The other half is granted as a long-term bonus (LT bonus),
    the amount of which depends on the average attainment of EVA
    targets over a three-year period. In any year, the annual bonus
    and the LT bonus may not exceed 250 percent of the base
    amount applicable to the variable compensation component. One
    half of the LT bonus is paid in cash. The other half is paid in
    the form of a commitment to issue or transfer shares of Siemens
    (stock awards) which will be settled four years after the
    commitment is made.
|
| |   | The same principles for determining the bonus apply to Managing
Board members who are not members of the Corporate Executive
Committee. Their goals, however, depend primarily on the
financial performance of the corporate units they lead. In
addition, the LT bonus for those Managing Board members is paid
out fully in cash.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | The third component of Managing Board remuneration for fiscal
    year 2005 is stock-based compensation determined by the
    Chairmans Committee of the Supervisory Board. It consists
    of stock options issued under the terms of the 2001 Siemens
    Stock Option Plan as authorized by shareholders at the Annual
    Shareholders Meeting of Siemens AG on February 22,
    2001 (for details on the Siemens Stock Option Plans, see
    Notes to Consolidated Financial Statements), and of
    a commitment to issue or transfer shares of Siemens (stock
    awards). The Supervisory Board may restrict or cap the exercise
    of stock options in the event of extraordinary, unforeseen
    changes in the market price of the Siemens share.
|
| |  | Under the Siemens Defined Contribution Benefit Plan (BSAV),
    members of the Managing Board receive contributions, the
    individual amounts of which are determined annually on the basis
    of a percentage of their respective target annual compensation
    established by the Chairmans Committee of the Supervisory
    Board. A portion of these contributions is accounted for by
    funding of pension commitments earned prior to transfer to the
    BSAV. In addition, special contributions may be granted on the
    basis of individual decisions.                                                                                                                                                                                         







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   




|                                     |  |                   |            |                      |                    |  |            |       |  |  |           |  |  |      |           |  |      |  |            |  |  |  |            | 
|------------------------------------ |  | ----------------- | ---------- | -------------------- | ------------------ |  | ---------- | ----- |  |  | --------- |  |  | ---- | --------- |  | ---- |  | ---------- |  |  |  | ---------- | 
|                                     |  |                   |            | Fair value of stock- |                    |  |           
|                                     |  | Cash compensation |            |                      | based compensation |  |            | Total | 
|                                     |  |                   |            |                      |                    |  |            |       | 
|                                     |  | 2005              |            |                      | 2004               |  |            | 2005  |  |  | 2004      |  |  | 2005 |           |  | 2004 | 
|                                     |  |                   |            |                      |                    |  |            |       |  |  |           |  |  |      |           |  |      | 
|                                     |  | (Amounts in )(1) |           
|Dr. Heinrich v.
    Pierer(2)        |  |                   | 958,389    |                      |                    |  | 3,560,053  |       |  |  | 244,414   |  |  |      | 1,077,993 |  |      |  | 1,202,803  |  |  |  | 4,638,046  | 
|Dr. Klaus
    Kleinfeld(2)           |  |                   | 2,323,193  |                      |                    |  | 2,679,904  |       |  |  | 946,911   |  |  |      | 641,286   |  |      |  | 3,270,104  |  |  |  | 3,321,190  | 
|Johannes Feldmayer                   |  |                   | 1,821,301  |                      |                    |  | 2,339,465  |       |  |  | 716,666   |  |  |      | 719,638   |  |      |  | 2,537,967  |  |  |  | 3,059,103  | 
|Dr. Thomas
    Ganswindt(3)          |  |                   | 1,764,948  |                      |                    |  | 1,634,261  |       |  |  | 641,515   |  |  |      | 149,990   |  |      |  | 2,406,463  |  |  |  | 1,784,251  | 
|Prof. Dr. Edward G. Krubasik         |  |                   | 1,832,685  |                      |                    |  | 2,278,056  |       |  |  | 716,666   |  |  |      | 719,638   |  |      |  | 2,549,351  |  |  |  | 2,997,694  | 
|Rudi
    Lamprecht(3)                |  |                   | 1,730,431  |                      |                    |  | 1,741,472  |       |  |  | 625,190   |  |  |      | 149,990   |  |      |  | 2,355,621  |  |  |  | 1,891,462  | 
|Heinz-Joachim Neubürger              |  |                   | 1,822,925  |                      |                    |  | 2,260,585  |       |  |  | 716,666   |  |  |      | 719,638   |  |      |  | 2,539,591  |  |  |  | 2,980,223  | 
|Dr. Jürgen Radomski                  |  |                   | 1,818,389  |                      |                    |  | 2,252,307  |       |  |  | 716,666   |  |  |      | 719,638   |  |      |  | 2,535,055  |  |  |  | 2,971,945  | 
|Dr. Uriel J. Sharef                  |  |                   | 1,831,833  |                      |                    |  | 2,264,607  |       |  |  | 716,666   |  |  |      | 719,638   |  |      |  | 2,548,499  |  |  |  | 2,984,245  | 
|Prof. Dr. Klaus Wucherer             |  |                   | 1,822,218  |                      |                    |  | 2,261,306  |       |  |  | 716,666   |  |  |      | 719,638   |  |      |  | 2,538,884  |  |  |  | 2,980,944  | 
|Prof. Dr. Erich R. Reinhardt
    (4) |  |                   | 1,756,836  |                      |                    |  | 1,823,818  |       |  |  | 200,034   |  |  |      | 149,990   |  |      |  | 1,956,870  |  |  |  | 1,973,808  | 
|Prof. Dr. Claus
    Weyrich(4)       |  |                   | 1,381,990  |                      |                    |  | 1,649,402  |       |  |  | 150,007   |  |  |      | 129,989   |  |      |  | 1,531,997  |  |  |  | 1,779,391  | 
|                                     |  |                   |            |                      |                    |  |            |       |  |  |           |  |  |      |           |  |      | 
|Total                                |  |                   | 20,865,138 |                      |                    |  | 26,745,236 |       |  |  | 7,108,067 |  |  |      | 6,617,066 |  |      |  | 27,973,205 |  |  |  | 33,362,302 | 
|                                     |  |                   |            |                      |                    |  |            |       |  |  |           |  |  |      |           |  |      | 






|   
|---
|   
|(1)
|   
|(2)
|   
|(3)
|   
|(4)

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|                                    |  |                   |           |  |              |  |           |                       |  |  |           |  |  |       |            |  |      |  |           |      |  |  |           |  |  |      |         |  |      |  |         |  |  |  |            |  |  |  |            | 
|----------------------------------- |  | ----------------- | --------- |  | ------------ |  | --------- | --------------------- |  |  | --------- |  |  | ----- | ---------- |  | ---- |  | --------- | ---- |  |  | --------- |  |  | ---- | ------- |  | ---- |  | ------- |  |  |  | ---------- |  |  |  | ---------- | 
|                                    |  | Cash compensation |          
|                                    |  |                   |          
|                                    |  | Salary            |           |  | Annual bonus |  |           | LT bonus cash portion |  |  | Other(1)  |  |  | Total |           
|                                    |  |                   |           |  |              |  |           |                       |  |  |           |  |  |       |           
|                                    |  | 2005              |           |  | 2004         |  |           | 2005                  |  |  | 2004      |  |  | 2005  |            |  | 2004 |  |           | 2005 |  |  | 2004      |  |  | 2005 |         |  | 2004 | 
|                                    |  |                   |           |  |              |  |           |                       |  |  |           |  |  |       |            |  |      |  |           |      |  |  |           |  |  |      |         |  |      | 
|                                    |  | (Amounts in )    |          
|Dr. Heinrich v. Pierer
    (2)      |  |                   | 405,000   |  |              |  | 1,215,000 |                       |  |  | 299,257   |  |  |       | 1,581,250  |  |      |  | 244,445   |      |  |  | 738,078   |  |  |      | 9,687   |  |      |  | 25,725  |  |  |  | 958,389    |  |  |  | 3,560,053  | 
|Dr. Klaus
    Kleinfeld(2)          |  |                   | 950,040   |  |              |  | 762,627   |                       |  |  | 768,794   |  |  |       | 883,116    |  |      |  | 571,883   |      |  |  | 510,387   |  |  |      | 32,476  |  |      |  | 523,774 |  |  |  | 2,323,193  |  |  |  | 2,679,904  | 
|Johannes Feldmayer                  |  |                   | 755,040   |  |              |  | 755,040   |                       |  |  | 571,280   |  |  |       | 1,006,200  |  |      |  | 466,627   |      |  |  | 469,639   |  |  |      | 28,354  |  |      |  | 108,586 |  |  |  | 1,821,301  |  |  |  | 2,339,465  | 
|Dr. Thomas
    Ganswindt(3)         |  |                   | 755,040   |  |              |  | 500,040   |                       |  |  | 571,280   |  |  |       | 602,617    |  |      |  | 391,452   |      |  |  | 480,380   |  |  |      | 47,176  |  |      |  | 51,224  |  |  |  | 1,764,948  |  |  |  | 1,634,261  | 
|Prof. Dr. Edward G. Krubasik        |  |                   | 755,040   |  |              |  | 755,040   |                       |  |  | 571,280   |  |  |       | 1,006,200  |  |      |  | 466,627   |      |  |  | 469,639   |  |  |      | 39,738  |  |      |  | 47,177  |  |  |  | 1,832,685  |  |  |  | 2,278,056  | 
|Rudi
    Lamprecht(3)               |  |                   | 755,040   |  |              |  | 550,020   |                       |  |  | 571,280   |  |  |       | 575,240    |  |      |  | 375,136   |      |  |  | 589,982   |  |  |      | 28,975  |  |      |  | 26,230  |  |  |  | 1,730,431  |  |  |  | 1,741,472  | 
|Heinz-Joachim Neubürger             |  |                   | 755,040   |  |              |  | 755,040   |                       |  |  | 571,280   |  |  |       | 1,006,200  |  |      |  | 466,627   |      |  |  | 469,639   |  |  |      | 29,978  |  |      |  | 29,706  |  |  |  | 1,822,925  |  |  |  | 2,260,585  | 
|Dr. Jürgen Radomski                 |  |                   | 755,040   |  |              |  | 755,040   |                       |  |  | 571,280   |  |  |       | 1,006,200  |  |      |  | 466,627   |      |  |  | 469,639   |  |  |      | 25,442  |  |      |  | 21,428  |  |  |  | 1,818,389  |  |  |  | 2,252,307  | 
|Dr. Uriel Sharef                    |  |                   | 755,040   |  |              |  | 755,040   |                       |  |  | 571,280   |  |  |       | 1,006,200  |  |      |  | 466,627   |      |  |  | 469,639   |  |  |      | 38,886  |  |      |  | 33,728  |  |  |  | 1,831,833  |  |  |  | 2,264,607  | 
|Prof. Dr. Klaus Wucherer            |  |                   | 755,040   |  |              |  | 755,040   |                       |  |  | 571,280   |  |  |       | 1,006,200  |  |      |  | 466,627   |      |  |  | 469,639   |  |  |      | 29,271  |  |      |  | 30,427  |  |  |  | 1,822,218  |  |  |  | 2,261,306  | 
|Prof. Dr. Erich R.
    Reinhardt(4) |  |                   | 525,030   |  |              |  | 500,040   |                       |  |  | 506,841   |  |  |       | 607,153    |  |      |  | 692,671   |      |  |  | 686,692   |  |  |      | 32,294  |  |      |  | 29,933  |  |  |  | 1,756,836  |  |  |  | 1,823,818  | 
|Prof. Dr. Claus Weyrich
    (4)     |  |                   | 450,000   |  |              |  | 450,000   |                       |  |  | 344,205   |  |  |       | 606,250    |  |      |  | 562,285   |      |  |  | 565,922   |  |  |      | 25,500  |  |      |  | 27,230  |  |  |  | 1,381,990  |  |  |  | 1,649,402  | 
|                                    |  |                   |           |  |              |  |           |                       |  |  |           |  |  |       |            |  |      |  |           |      |  |  |           |  |  |      |         |  |      | 
|Total                               |  |                   | 8,370,390 |  |              |  | 8,507,967 |                       |  |  | 6,489,337 |  |  |       | 10,892,826 |  |      |  | 5,637,634 |      |  |  | 6,389,275 |  |  |      | 367,777 |  |      |  | 955,168 |  |  |  | 20,865,138 |  |  |  | 26,745,236 | 
|                                    |  |                   |           |  |              |  |           |                       |  |  |           |  |  |       |            |  |      |  |           |      |  |  |           |  |  |      |         |  |      | 






|   
|---
|   
|(1)
|   
|(2)
|   
|(3)
|   
|(4)

   




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|                                     |  |  |      |                          |  |  |                                        |  |       |            |        |        |           |  |         |           |  |  |            |  |  |       |           |  |  |  |           |  |  |  |           | 
|------------------------------------ |  |  | ---- | ------------------------ |  |  | -------------------------------------- |  | ----- | ---------- | ------ | ------ | --------- |  | ------- | --------- |  |  | ---------- |  |  | ----- | --------- |  |  |  | --------- |  |  |  | --------- | 
|                                     |  |  |      | Stock-based compensation |  |  | Fair value of stock-based compensation | 
|                                     |  |  |      |                          |  |  |                                        | 
|                                     |  |  |      | Stock                    |  |  |                                        |  | Stock |            |        |       
|                                     |  |  |      | awards                   |  |  | Other                                  |  |       |            |        | awards |           |  | Other   |           |  | 
|                                     |  |  |      | (from LT                 |  |  | stock                                  |  |       | Stock      |        |        | (from LT  |  |         | stock     |  |  | Stock      |  |  |      
|                                     |  |  |      | bonus)(1)                |  |  | awards(1)                              |  |       | options(2) |        |        | bonus)(1) |  |         | awards(1) |  |  | options(2) |  |  | Total |          
|                                     |  |  |      |                          |  |  |                                        |  |       |            |        |        |           |  |         |           |  |  |            |  |  |       |          
|                                     |  |  |      | (Number of units)        |  |  | (Expressed in )                       | 
|Dr. Heinrich v. Pierer
    (3)       |  |  | 2005 |                          |  |  | 4,267                                  |  |       |            |       |        |           |  |        |           |  |  | 244,414    |  |  |       |          |  |  |  |          |  |  |  | 244,414   | 
|                                     |  |  | 2004 |                          |  |  | 13,266                                 |  |       |            | 3,056  |        |           |  | 37,445  |           |  |  | 737,988    |  |  |       | 170,005   |  |  |  | 170,000   |  |  |  | 1,077,993 | 
|                                    
|Dr. Klaus Kleinfeld
    (3)          |  |  | 2005 |                          |  |  | 9,984                                  |  |       |            | 3,470  |        |           |  | 43,415  |           |  |  | 571,884    |  |  |       | 198,762   |  |  |  | 176,265   |  |  |  | 946,911   | 
|                                     |  |  | 2004 |                          |  |  | 6,674                                  |  |       |            | 2,427  |        |           |  | 29,735  |           |  |  | 371,275    |  |  |       | 135,014   |  |  |  | 134,997   |  |  |  | 641,286   | 
|                                    
|Johannes Feldmayer                   |  |  | 2005 |                          |  |  | 8,146                                  |  |       |            | 2,314  |        |           |  | 28,945  |           |  |  | 466,603    |  |  |       | 132,546   |  |  |  | 117,517   |  |  |  | 716,666   | 
|                                     |  |  | 2004 |                          |  |  | 8,442                                  |  |       |            | 2,247  |        |           |  | 27,535  |           |  |  | 469,628    |  |  |       | 125,001   |  |  |  | 125,009   |  |  |  | 719,638   | 
|                                    
|Thomas Ganswindt
    (4)             |  |  | 2005 |                          |  |  | 6,834                                  |  |       |            | 2,314  |        |           |  | 28,945  |           |  |  | 391,452    |  |  |       | 132,546   |  |  |  | 117,517   |  |  |  | 641,515   | 
|                                     |  |  | 2004 |                          |  |  |                                       |  |       |            | 1,348  |        |           |  | 16,520  |           |  |  |           |  |  |       | 74,989    |  |  |  | 75,001    |  |  |  | 149,990   | 
|                                    
|Prof. Dr. Edward G. Krubasik         |  |  | 2005 |                          |  |  | 8,146                                  |  |       |            | 2,314  |        |           |  | 28,945  |           |  |  | 466,603    |  |  |       | 132,546   |  |  |  | 117,517   |  |  |  | 716,666   | 
|                                     |  |  | 2004 |                          |  |  | 8,442                                  |  |       |            | 2,247  |        |           |  | 27,535  |           |  |  | 469,628    |  |  |       | 125,001   |  |  |  | 125,009   |  |  |  | 719,638   | 
|                                    
|Rudi Lamprecht
    (4)               |  |  | 2005 |                          |  |  | 6,549                                  |  |       |            | 2,314  |        |           |  | 28,945  |           |  |  | 375,127    |  |  |       | 132,546   |  |  |  | 117,517   |  |  |  | 625,190   | 
|                                     |  |  | 2004 |                          |  |  |                                       |  |       |            | 1,348  |        |           |  | 16,520  |           |  |  |           |  |  |       | 74,989    |  |  |  | 75,001    |  |  |  | 149,990   | 
|                                    
|Heinz-Joachim Neubürger              |  |  | 2005 |                          |  |  | 8,146                                  |  |       |            | 2,314  |        |           |  | 28,945  |           |  |  | 466,603    |  |  |       | 132,546   |  |  |  | 117,517   |  |  |  | 716,666   | 
|                                     |  |  | 2004 |                          |  |  | 8,442                                  |  |       |            | 2,247  |        |           |  | 27,535  |           |  |  | 469,628    |  |  |       | 125,001   |  |  |  | 125,009   |  |  |  | 719,638   | 
|                                    
|Dr. Jürgen Radomski                  |  |  | 2005 |                          |  |  | 8,146                                  |  |       |            | 2,314  |        |           |  | 28,945  |           |  |  | 466,603    |  |  |       | 132,546   |  |  |  | 117,517   |  |  |  | 716,666   | 
|                                     |  |  | 2004 |                          |  |  | 8,442                                  |  |       |            | 2,247  |        |           |  | 27,535  |           |  |  | 469,628    |  |  |       | 125,001   |  |  |  | 125,009   |  |  |  | 719,638   | 
|                                    
|Dr. Uriel J. Sharef                  |  |  | 2005 |                          |  |  | 8,146                                  |  |       |            | 2,314  |        |           |  | 28,945  |           |  |  | 466,603    |  |  |       | 132,546   |  |  |  | 117,517   |  |  |  | 716,666   | 
|                                     |  |  | 2004 |                          |  |  | 8,442                                  |  |       |            | 2,247  |        |           |  | 27,535  |           |  |  | 469,628    |  |  |       | 125,001   |  |  |  | 125,009   |  |  |  | 719,638   | 
|                                    
|Prof. Dr. Klaus Wucherer             |  |  | 2005 |                          |  |  | 8,146                                  |  |       |            | 2,314  |        |           |  | 28,945  |           |  |  | 466,603    |  |  |       | 132,546   |  |  |  | 117,517   |  |  |  | 716,666   | 
|                                     |  |  | 2004 |                          |  |  | 8,442                                  |  |       |            | 2,247  |        |           |  | 27,535  |           |  |  | 469,628    |  |  |       | 125,001   |  |  |  | 125,009   |  |  |  | 719,638   | 
|                                    
|Prof. Dr. Erich R. Reinhardt
    (5) |  |  | 2005 |                          |  |  |                                       |  |       |            | 1,851  |        |           |  | 23,155  |           |  |  |           |  |  |       | 106,025   |  |  |  | 94,009    |  |  |  | 200,034   | 
|                                     |  |  | 2004 |                          |  |  |                                       |  |       |            | 1,348  |        |           |  | 16,520  |           |  |  |           |  |  |       | 74,989    |  |  |  | 75,001    |  |  |  | 149,990   | 
|                                    
|Prof. Dr. Claus Weyrich
    (5)      |  |  | 2005 |                          |  |  |                                       |  |       |            | 1,388  |        |           |  | 17,365  |           |  |  |           |  |  |       | 79,505    |  |  |  | 70,502    |  |  |  | 150,007   | 
|                                     |  |  | 2004 |                          |  |  |                                       |  |       |            | 1,168  |        |           |  | 14,320  |           |  |  |           |  |  |       | 64,976    |  |  |  | 65,013    |  |  |  | 129,989   | 
|                                     |  |  |      |                          |  |  |                                        |  |       |            |        |        |           |  |         |           |  |  |            |  |  |       |           | 
|                                    
|                                     |  |  | 2005 |                          |  |  | 76,510                                 |  |       |            | 25,221 |        |           |  | 315,495 |           |  |  | 4,382,495  |  |  |       | 1,444,660 |  |  |  | 1,280,912 |  |  |  | 7,108,067 | 
|Total                                |  |  | 2004 |                          |  |  | 70,592                                 |  |       |            | 24,177 |        |           |  | 296,270 |           |  |  | 3,927,031  |  |  |       | 1,344,968 |  |  |  | 1,345,067 |  |  |  | 6,617,066 | 
|                                     |  |  |      |                          |  |  |                                        |  |       |            |        |        |           |  |         |           |  |  |            |  |  |       |           | 






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                        
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | After a holding period of four years, the stock awards will be
    settled on November 11, 2009 (awards granted in 2004 on
    November 12, 2008). Under the stock award agreement, the
    eligible recipients will receive a corresponding number of
    Siemens shares without additional payment.                                                                                                                                  
|   
|(2) | After a holding period of two years, the stock options will be
    exercisable between November 19, 2007 and November 18,
    2010 (stock options issued in 2004 between November 20,
    2006 and November 19, 2009) at a price of
    74.59 (2004:
    72.54) per share
    on the terms and conditions specified in the 2001 Siemens Stock
    Option Plan (for details see the Notes to Consolidated
    Financial Statements).
|   
|(3) | Effective January 27, 2005, Dr. Heinrich v. Pierer was
    elected to the Supervisory Board of Siemens. Dr. Klaus
    Kleinfeld was appointed to succeed Dr. Heinrich v. Pierer
    as CEO and President of the Managing Board of Siemens, effective
    January 27, 2005.                                                                                                                                                             
|   
|(4) | Dr. Thomas Ganswindt and Rudi Lamprecht were appointed full
    members of the Managing Board of Siemens and elected to the
    Corporate Executive Committee, effective October 1, 2004.                                                                                                                                                                                                                                              
|   
|(5) | Deputy members of the Managing Board.                                                                                                                                                                                                                                                                                                                                                                                                  

Pension benefit commitments


83



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  


 


 


 




Supervisory Board Remuneration












| |   |                                                                         
| | - | ------------------------------------------------------------------------
| |  | a fixed component,                                                      
|
| |  | a short-term compensation component based on earnings per share,
    and
|
| |  | a long-term compensation component based on earnings per share.         

84



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     


|                                      |  |                |           |            |              |  |           |              |  |  |       |  |       |                 |           |          |                 |  |             |                 |  |  |           |  |  |  |         |  |  |  |           | 
|------------------------------------- |  | -------------- | --------- | ---------- | ------------ |  | --------- | ------------ |  |  | ----- |  | ----- | --------------- | --------- | -------- | --------------- |  | ----------- | --------------- |  |  | --------- |  |  |  | ------- |  |  |  | --------- | 
|                                      |  | 2005           |           |            | 2004         | 
|                                      |  |                |           |            |              | 
|                                      |  |                |           | Short-term |              |  | Long-term |              |  |  |       |  |       | Fair value of   |           |          |                
|                                      |  | Fixed          |           |            | variable     |  |           | variable     |  |  |       |  | Fixed |                 |           | Variable |                 |  | stock-based |                 |  | 
|                                      |  | compensation   |           |            | compensation |  |           | compensation |  |  | Total |  |       | compensation(1) |           |          | compensation(1) |  |             | compensation(1) |  |  | Total     | 
|                                      |  |                |           |            |              |  |           |              |  |  |       |  |       |                 |           |          |                 |  |             |                 |  |  |           | 
|                                      |  | (Amounts in ) |          
|Dr. Karl-Hermann Baumann(2)
    (3)   |  |                | 50,000    |            |              |  | 22,800    |              |  |  |      |  |       |                 | 72,800    |          |                 |  | 18,000      |                 |  |  | 220,500   |  |  |  | 6,810   |  |  |  | 245,310   | 
|Dr. Heinrich v.
    Pierer(2)
    (3) |  |                | 93,750    |            |              |  | 42,750    |              |  |  |      |  |       |                 | 136,500   |          |                 |  |            |                 |  |  |          |  |  |  |        |  |  |  |          | 
|Ralf
    Heckmann(3)                  |  |                | 100,000   |            |              |  | 45,600    |              |  |  |      |  |       |                 | 145,600   |          |                 |  | 12,000      |                 |  |  | 147,000   |  |  |  | 6,810   |  |  |  | 165,810   | 
|Dr. Josef
    Ackermann(3)            |  |                | 83,333    |            |              |  | 38,000    |              |  |  |      |  |       |                 | 121,333   |          |                 |  | 12,000      |                 |  |  | 147,000   |  |  |  | 6,810   |  |  |  | 165,810   | 
|Lothar Adler                          |  |                | 50,000    |            |              |  | 22,800    |              |  |  |      |  |       |                 | 72,800    |          |                 |  | 6,000       |                 |  |  | 73,500    |  |  |  | 6,810   |  |  |  | 86,310    | 
|Gerhard Bieletzki                     |  |                | 50,000    |            |              |  | 22,800    |              |  |  |      |  |       |                 | 72,800    |          |                 |  | 6,000       |                 |  |  | 73,500    |  |  |  | 6,810   |  |  |  | 86,310    | 
|John David Coombe                     |  |                | 50,000    |            |              |  | 22,800    |              |  |  |      |  |       |                 | 72,800    |          |                 |  | 6,000       |                 |  |  | 73,500    |  |  |  | 6,810   |  |  |  | 86,310    | 
|Hildegard
    Cornudet(4)             |  |                | 50,000    |            |              |  | 22,800    |              |  |  |      |  |       |                 | 72,800    |          |                 |  | 3,000       |                 |  |  | 36,750    |  |  |  | 3,405   |  |  |  | 43,155    | 
|Dr. Gerhard
    Cromme(3)             |  |                | 87,500    |            |              |  | 39,900    |              |  |  |      |  |       |                 | 127,400   |          |                 |  | 6,000       |                 |  |  | 73,500    |  |  |  | 6,810   |  |  |  | 86,310    | 
|Rolf
    Dittmar(4)                   |  |                |          |            |              |  |          |              |  |  |      |  |       |                 |          |          |                 |  | 3,000       |                 |  |  | 36,750    |  |  |  | 3,405   |  |  |  | 43,155    | 
|Bertin
    Eichler(5)                 |  |                |          |            |              |  |          |              |  |  |      |  |       |                 |          |          |                 |  | 4,500       |                 |  |  | 55,125    |  |  |  | 5,108   |  |  |  | 64,733    | 
|Birgit Grube                          |  |                | 50,000    |            |              |  | 22,800    |              |  |  |      |  |       |                 | 72,800    |          |                 |  | 6,000       |                 |  |  | 73,500    |  |  |  | 6,810   |  |  |  | 86,310    | 
|Heinz
    Hawreliuk(3)                |  |                | 75,000    |            |              |  | 34,200    |              |  |  |      |  |       |                 | 109,200   |          |                 |  | 9,000       |                 |  |  | 110,250   |  |  |  | 6,810   |  |  |  | 126,060   | 
|Berthold
    Huber(5)                 |  |                | 50,000    |            |              |  | 22,800    |              |  |  |      |  |       |                 | 72,800    |          |                 |  | 1,500       |                 |  |  | 18,375    |  |  |  | 1,703   |  |  |  | 21,578    | 
|Prof. Dr. Walter Kröll                |  |                | 50,000    |            |              |  | 22,800    |              |  |  |      |  |       |                 | 72,800    |          |                 |  | 6,000       |                 |  |  | 73,500    |  |  |  | 6,810   |  |  |  | 86,310    | 
|Wolfgang Müller                       |  |                | 50,000    |            |              |  | 22,800    |              |  |  |      |  |       |                 | 72,800    |          |                 |  | 6,000       |                 |  |  | 73,500    |  |  |  | 6,810   |  |  |  | 86,310    | 
|Georg Nassauer                        |  |                | 50,000    |            |              |  | 22,800    |              |  |  |      |  |       |                 | 72,800    |          |                 |  | 6,000       |                 |  |  | 73,500    |  |  |  | 6,810   |  |  |  | 86,310    | 
|Dr. Albrecht Schmidt                  |  |                | 50,000    |            |              |  | 22,800    |              |  |  |      |  |       |                 | 72,800    |          |                 |  | 6,000       |                 |  |  | 73,500    |  |  |  | 6,810   |  |  |  | 86,310    | 
|Dr. Henning
    Schulte-Noelle(3)     |  |                | 75,000    |            |              |  | 34,200    |              |  |  |      |  |       |                 | 109,200   |          |                 |  | 9,000       |                 |  |  | 110,250   |  |  |  | 6,810   |  |  |  | 126,060   | 
|Peter von Siemens                     |  |                | 50,000    |            |              |  | 22,800    |              |  |  |      |  |       |                 | 72,800    |          |                 |  | 6,000       |                 |  |  | 73,500    |  |  |  | 6,810   |  |  |  | 86,310    | 
|Jerry I. Speyer                       |  |                | 50,000    |            |              |  | 22,800    |              |  |  |      |  |       |                 | 72,800    |          |                 |  | 6,000       |                 |  |  | 73,500    |  |  |  | 6,810   |  |  |  | 86,310    | 
|Lord Iain Vallance of Tummel          |  |                | 50,000    |            |              |  | 22,800    |              |  |  |      |  |       |                 | 72,800    |          |                 |  | 6,000       |                 |  |  | 73,500    |  |  |  | 6,810   |  |  |  | 86,310    | 
|Klaus Wigand                          |  |                | 50,000    |            |              |  | 22,800    |              |  |  |      |  |       |                 | 72,800    |          |                 |  | 6,000       |                 |  |  | 73,500    |  |  |  | 6,810   |  |  |  | 86,310    | 
|                                      |  |                |           |            |              |  |           |              |  |  |       |  |       |                 |           |          |                 |  |             |                 |  |  |           | 
|Total                                 |  |                | 1,264,583 |            |              |  | 576,650   |              |  |  |      |  |       |                 | 1,841,233 |          |                 |  | 150,000     |                 |  |  | 1,837,500 |  |  |  | 136,201 |  |  |  | 2,123,701 | 
|                                      |  |                |           |            |              |  |           |              |  |  |       |  |       |                 |           |          |                 |  |             |                 |  |  |           | 






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | In fiscal year 2004, the compensation of Supervisory Board
    members was comprised of a fixed component, a variable component
    depending on the annual dividend, and a long-term component
    based on the development of the stock market price granted in
    the form of 1,500 stock appreciation rights (SARs) per year. On
    the grant date, the stock appreciation rights had a fair value
    of 4.54 each, as
    calculated using the Black-Scholes option pricing model.

85



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|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Dr. Heinrich v. Pierer, former CEO and President of the
    Managing Board of Siemens, succeeded Dr. Karl-Hermann
    Baumann as Chairman of the Supervisory Board, effective
    January 27, 2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   
|(3) | Each of Dr. Heinrich v. Pierer as Chairman of the
    Supervisory Board and a member of the Audit Committee;
    Dr. Josef Ackermann as Deputy Chairman of the Supervisory
    Board; Dr. Gerhard Cromme as Chairman of the Audit
    Committee; Ralf Heckmann as Deputy Chairman of the Supervisory
    Board and a member of the Audit Committee; and Heinz Hawreliuk
    and Dr. Henning Schulte-Noelle as members of the Audit
    Committee, received higher fixed and variable compensation. For
    his period of office on the Supervisory Board,
    Dr. Karl-Hermann Baumann, as former Chairman of the
    Supervisory Board and the Audit Committee, also received higher
    compensation on a pro-rata basis. The same applies to
    Dr. Ackermann as a former member of the Audit Committee.
|   
|(4) | Hildegard Cornudet, formerly a substitute member of the
    Supervisory Board of Siemens, became a member of the Supervisory
    Board as a successor to Rolf Dittmar with effect from
    April 1, 2004.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   
|(5) | Berthold Hubers appointment to the Supervisory Board of
    Siemens as a successor to Bertin Eichler was approved by the
    registry court with effect from July 1, 2004.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 





Other




Stock-Based
Compensation


Stock Option Plan






86



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|                          |  |                    |                   |  |                    |  |                   |                    |  |  |                   | 
|------------------------- |  | ------------------ | ----------------- |  | ------------------ |  | ----------------- | ------------------ |  |  | ----------------- | 
|                          |  | With respect to    |                   |  | With respect to    |  |                   | With respect to    | 
|                          |  | options granted in |                   |  | options granted in |  |                   | options granted in | 
|                          |  | fiscal 2006        |                   |  | fiscal 2005        |  |                   | fiscal 2004        | 
|                          |  |                    |                   |  |                    |  |                   |                    | 
|Number of options granted |  |                    | 315,495           |  |                    |  | 296,270           |                    |  |  | 262,500           | 
|Exercise price            |  |                    | 74.59            |  |                    |  | 72.54            |                    |  |  | 73.25            | 
|Expiration date           |  |                    | November 18, 2010 |  |                    |  | November 19, 2009 |                    |  |  | November 21, 2008 | 









Stock Awards










87



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##### Table of Contents





|                                    |  |                         |               |  |                         |  |               | 
|----------------------------------- |  | ----------------------- | ------------- |  | ----------------------- |  | ------------- | 
|                                    |  | With respect to         |               |  | With respect to         | 
|                                    |  | stock awards granted in |               |  | stock awards granted in | 
|                                    |  | fiscal 2006             |               |  | fiscal 2005             | 
|                                    |  |                         |               |  |                         | 
|Number of stock awards granted      |  |                         | 1,076,860     |  |                         |  | 1,152,508    
|Value per stock award at grant date |  |                         | 57.28        |  |                         |  | 55.63       
|Total value of stock awards granted |  |                         | 61.7 million |  |                         |  | 64.1 million







Share
ownership







|            |            |  |      |                    |  |                          |  |               |          |  |         |      |           |  |       |       |  |            |        |  |      |  |       |         |  |                                                           |  |  |  |  |  |  |  | 
|----------- | ---------- |  | ---- | ------------------ |  | ------------------------ |  | ------------- | -------- |  | ------- | ---- | --------- |  | ----- | ----- |  | ---------- | ------ |  | ---- |  | ----- | ------- |  | --------------------------------------------------------- |  |  |  |  |  |  |  | 
|            |            |  |      |                    |  |                          |  | WKN/          |          |  |         |      | Number of |  |       | Price |  |            |       
|Trading Day |            |  | Name |                    |  | Function                 |  |               | Security |  |         | ISIN |           |  | Trade |       |  | Securities |        |  | in  |  |       | Comment | 
|            |            |  |      |                    |  |                          |  |               |          |  |         |      |           |  |       |       |  |            |        |  |      |  |       |         | 
|            | 08/01/2005 |  |      | Johannes Feldmayer |  | Managing Board member    |  | Siemens Share |          |  | 7236101 |      |           |  | Sale  |       |  |            | 12,000 |  |      |  | 64.05 |         |  | Sale in the context of the Siemens Stock Option Plan 2001
|            | 08/01/2005 |  |      | Johannes Feldmayer |  | Managing Board member    |  | Siemens Share |          |  | 7236101 |      |           |  | Sale  |       |  |            | 3,900  |  |      |  | 64.05 |         |  | Sale in the context of the Siemens Stock Option Plan 1999
|            | 08/12/2005 |  |      | Klaus Wigand       |  | Supervisory Board member |  | Siemens Share |          |  | 7236101 |      |           |  | Sale  |       |  |            | 4,000  |  |      |  | 64.53 |         |  | Sale in the context of the Siemens Stock Option Plan 2001
|            | 09/12/2005 |  |      | Rudi Lamprecht     |  | Managing Board member    |  | Siemens Share |          |  | 7236101 |      |           |  | Sale  |       |  |            | 8,625  |  |      |  | 64.25 |         |  | Sale in the context of the Siemens Stock Option Plan 1999

88



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ITEM 7: MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS


Major
Shareholders






Related Party
Transactions











ITEM 8: FINANCIAL INFORMATION







ITEM 9: THE OFFER AND LISTING


Trading
Markets




89



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##### Table of Contents



Market Price
Information




|                         |  |                    |        |  |     |  |         |              |         |  |         |  |  |           |         |  |  |  |       | 
|------------------------ |  | ------------------ | ------ |  | --- |  | ------- | ------------ | ------- |  | ------- |  |  | --------- | ------- |  |  |  | ----- | 
|                         |  | Price per ordinary |        |  |     |  | Average |             
|                         |  | share              |        |  | DAX |  |         | daily        |        
|                         |  |                    |        |  |     |  |         | trading      |        
|                         |  | High               |        |  | Low |  |         | High         |         |  | Low     |  |  | volume(1) |        
|                         |  |                    |        |  |     |  |         |              |         |  |         |  |  |           |        
|                         |  |                    |        |  |     |  |         | (millions of |        
|                         |  | ()                |        |  |     |  |         |              | shares) | 
|Annual highs and lows    |  |                    |        |  |     |  |         |              |         |  |         |  |  |           |         |  |  |  |       | 
|2001                     |  |                    | 105.77 |  |     |  | 37.50   |              |         |  | 6,795.1 |  |  |           | 3,787.2 |  |  |  | 5.771 | 
|2002                     |  |                    | 78.52  |  |     |  | 32.05   |              |         |  | 5,462.6 |  |  |           | 2,597.9 |  |  |  | 6.226 | 
|2003                     |  |                    | 64.85  |  |     |  | 32.55   |              |         |  | 3,965.2 |  |  |           | 2,203.0 |  |  |  | 6.274 | 
|2004                     |  |                    | 68.30  |  |     |  | 53.40   |              |         |  | 4,261.8 |  |  |           | 3,647.0 |  |  |  | 4.783 | 
|2005(2)                  |  |                    | 66.18  |  |     |  | 56.20   |              |         |  | 5,199.5 |  |  |           | 4,178.1 |  |  |  | 4.671 | 
|Quarterly highs and lows |  |                    |        |  |     |  |         |              |         |  |         |  |  |           |         |  |  |  |       | 
|2003                     |  |                    |        |  |     |  |         |              |         |  |         |  |  |           |         |  |  |  |       | 
|First quarter            |  |                    | 45.04  |  |     |  | 32.55   |              |         |  | 3,157.3 |  |  |           | 2,203.0 |  |  |  | 6.982 | 
|Second quarter           |  |                    | 46.15  |  |     |  | 37.80   |              |         |  | 3,304.2 |  |  |           | 2,450.2 |  |  |  | 6.655 | 
|Third quarter            |  |                    | 58.32  |  |     |  | 41.35   |              |         |  | 3,668.7 |  |  |           | 3,146.6 |  |  |  | 6.179 | 
|Fourth quarter           |  |                    | 64.85  |  |     |  | 52.02   |              |         |  | 3,965.2 |  |  |           | 3,276.6 |  |  |  | 5.273 | 
|2004                     |  |                    |        |  |     |  |         |              |         |  |         |  |  |           |         |  |  |  |       | 
|First quarter            |  |                    | 68.30  |  |     |  | 57.30   |              |         |  | 4,151.8 |  |  |           | 3,726.1 |  |  |  | 5.426 | 
|Second quarter           |  |                    | 65.05  |  |     |  | 54.95   |              |         |  | 4,134.1 |  |  |           | 3,754.4 |  |  |  | 4.885 | 
|Third quarter            |  |                    | 61.06  |  |     |  | 53.40   |              |         |  | 4,035.0 |  |  |           | 3,647.0 |  |  |  | 4.564 | 
|Fourth quarter           |  |                    | 62.54  |  |     |  | 57.50   |              |         |  | 4,261.8 |  |  |           | 3,854.4 |  |  |  | 4.266 | 
|2005                     |  |                    |        |  |     |  |         |              |         |  |         |  |  |           |         |  |  |  |       | 
|First quarter            |  |                    | 63.60  |  |     |  | 59.08   |              |         |  | 4,428.1 |  |  |           | 4,201.8 |  |  |  | 4.697 | 
|Second quarter           |  |                    | 63.20  |  |     |  | 56.20   |              |         |  | 4,627.5 |  |  |           | 4,178.1 |  |  |  | 4.625 | 
|Third quarter            |  |                    | 66.18  |  |     |  | 60.28   |              |         |  | 5,048.7 |  |  |           | 4,530.2 |  |  |  | 4.760 | 
|Fourth
    quarter(2)    |  |                    | 65.40  |  |     |  | 60.08   |              |         |  | 5,199.5 |  |  |           | 4,806.1 |  |  |  | 4.546 | 
|Monthly highs and lows   |  |                    |        |  |     |  |         |              |         |  |         |  |  |           |         |  |  |  |       | 
|2005                     |  |                    |        |  |     |  |         |              |         |  |         |  |  |           |         |  |  |  |       | 
|June                     |  |                    | 63.20  |  |     |  | 60.34   |              |         |  | 4,627.5 |  |  |           | 4,497.3 |  |  |  | 5.408 | 
|July                     |  |                    | 66.18  |  |     |  | 60.28   |              |         |  | 4,892.5 |  |  |           | 4,530.2 |  |  |  | 5.666 | 
|August                   |  |                    | 64.53  |  |     |  | 61.13   |              |         |  | 4,990.6 |  |  |           | 4,783.8 |  |  |  | 3.932 | 
|September                |  |                    | 64.25  |  |     |  | 61.64   |              |         |  | 5,048.7 |  |  |           | 4,837.8 |  |  |  | 4.759 | 
|October                  |  |                    | 65.15  |  |     |  | 60.08   |              |         |  | 5,138.0 |  |  |           | 4,806.1 |  |  |  | 4.728 | 
|November(2)              |  |                    | 65.40  |  |     |  | 61.99   |              |         |  | 5,199.5 |  |  |           | 4,922.6 |  |  |  | 4.364 | 






|    |                                       
|--- | --------------------------------------
|(1) | Data from Datastream International.   
|   
|(2) | Up to and including November 30, 2005.




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Trading on the New York
Stock Exchange






|                         |  |               |       |  |     |  |       | 
|------------------------ |  | ------------- | ----- |  | --- |  | ----- | 
|                         |  | Price per ADS |      
|                         |  |               |      
|                         |  | High          |       |  | Low | 
|                         |  |               |       |  |     | 
|                         |  | ($)           |      
|Annual highs and lows    |  |               |       |  |     |  |       | 
|2001                     |  |               | 79.31 |  |     |  | 38.10 | 
|2002                     |  |               | 70.45 |  |     |  | 30.85 | 
|2003                     |  |               | 79.98 |  |     |  | 36.61 | 
|2004                     |  |               | 87.50 |  |     |  | 65.48 | 
|2005(1)                  |  |               | 84.67 |  |     |  | 71.73 | 
|Quarterly highs and lows |  |               |       |  |     |  |       | 
|2003                     |  |               |       |  |     |  |       | 
|First quarter            |  |               | 47.12 |  |     |  | 36.61 | 
|Second quarter           |  |               | 52.55 |  |     |  | 41.20 | 
|Third quarter            |  |               | 64.79 |  |     |  | 48.65 | 
|Fourth quarter           |  |               | 79.98 |  |     |  | 61.15 | 
|2004                     |  |               |       |  |     |  |       | 
|First quarter            |  |               | 87.50 |  |     |  | 69.75 | 
|Second quarter           |  |               | 77.35 |  |     |  | 65.71 | 
|Third quarter            |  |               | 75.66 |  |     |  | 65.48 | 
|Fourth quarter           |  |               | 85.00 |  |     |  | 72.48 | 
|2005                     |  |               |       |  |     |  |       | 
|First quarter            |  |               | 84.67 |  |     |  | 77.19 | 
|Second quarter           |  |               | 80.40 |  |     |  | 71.73 | 
|Third quarter            |  |               | 80.00 |  |     |  | 72.55 | 
|Fourth
    quarter(1)    |  |               | 77.33 |  |     |  | 72.50 | 
|Monthly highs and lows   |  |               |       |  |     |  |       | 
|2005                     |  |               |       |  |     |  |       | 
|June                     |  |               | 76.83 |  |     |  | 72.65 | 
|July                     |  |               | 80.00 |  |     |  | 72.55 | 
|August                   |  |               | 80.00 |  |     |  | 75.05 | 
|September                |  |               | 79.90 |  |     |  | 75.17 | 
|October                  |  |               | 77.33 |  |     |  | 72.50 | 
|November(1)              |  |               | 77.21 |  |     |  | 72.87 | 






|    |                                       
|--- | --------------------------------------
|(1) | Up to and including November 30, 2005.



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ITEM 10: ADDITIONAL INFORMATION


Articles of Association
and Relevant Provisions of German Law


Satzung


Organization


Aktiengesetz Handelsregister


Corporate
Governance








Management and Control
StructureThe Supervisory Board






92



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Chairmans Committee


Audit Committee




Mediation Committee Ownership Rights Committee


The Managing
Board




Shareholder
Relations




93



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




Business Conduct
Guidelines and Code of Ethics




Corporate Governance Guidelines


Significant Differences
From NYSE Corporate Governance Standards






94



---



##### Table of Contents





Two-Tier Board




Independence


Committees






Shareholder Approval of Equity Compensation Plans; Stock
Repurchases


95



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Declaration of
Conformity with the Codex






Objects and
Purposes






| |   |                                                                                                                                                                                                                                                                                                          
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | to manufacture, distribute and supply industrial products in the
    fields of electrical engineering and electronics, mechanical
    engineering, precision mechanics, as well as related sectors of
    engineering, including research and development in these fields;                               
|
| |  | to develop, plan, distribute, supply, assemble and commission
    trade-specific and customer-specific systems, solutions and
    facilities in the fields of electrical engineering and
    electronics, mechanical engineering, precision mechanics, as
    well as related sectors of engineering; and
|
| |  | to render industrial and other business-related services.                                                                                                                                                                                                                                                



Directors










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Rights, Preferences and
Restrictions Attaching To Our Shares


Voting Rights













| |   |                                                                                                                                                                                                                                                                                 
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | amendments of our Articles of Association (except amendments
    that would impose an additional duty upon our shareholders or
    change certain rights and obligations attaching to our shares,
    which in addition require the approval of all shareholders
    concerned);
|
| |  | capital increases and decreases;                                                                                                                                                                                                                                                
|
| |  | exclusion of preemptive rights in connection with a capital
    increase;                                                                                                                                                                                                       
|
| |  | the creation of authorized capital or conditional capital or the
    issue of convertible bonds and bonds with warrants attached;                                                                                                                                               
|
| |  | the dissolution of our Company;                                                                                                                                                                                                                                                 
|
| |  | merger or consolidation of our Company with another stock
    corporation or certain other corporate transformation;                                                                                                                                                            
|
| |  | transfer of all or virtually all of our assets; and                                                                                                                                                                                                                             
|
| |  | the approval of any direct control, profit and loss pooling or
    similar intercompany agreements.                                                                                                                                                                             





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Dividend
Rights






Liquidation
Rights




Preemptive
Rights








| |   |                                                                                                                                                                 
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | to the extent that we have an obligation to grant new shares to
    holders of warrants or convertible bonds that we or any of our
    subsidiaries have issued;

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| |   |                                                                                                                                                                                                                                                                                                     
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | if the newly issued shares represent 10% or less of our existing
    share capital at the time we register the authorized capital or
    issue the new shares, and the issue price of the new shares is
    not substantially less than the stock exchange price as defined
    under German law; or
|
| |  | to the extent necessary to avoid fractional amounts that may
    arise in the case of share issuance upon the exercise of
    preemptive rights.                                                                                                                                                    





| |   |                                                                                                                                                                                    
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | if the issue price of the bond is not significantly lower than
    its fair market value determined in accordance with generally
    accepted actuarial methods;                   
|
| |  | if this is necessary with regard to small residual amounts that
    result from the exchange ratio; or                                                                             
|
| |  | to the extent holders of such rights are entitled, upon their
    exercise, to subscribe for our common shares in order to avoid
    dilution of the economic value of such rights.

Disclosure
Requirement


Wertpapierhandelsgesetz Bundesanstalt für
Finanzdienstleistungsaufsicht Wertpapiererwerbs- und Übernahmegesetz





Repurchase of Our Own
Shares






99



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Jurisdiction




Exchange
Controls




   


Report on the United
Nations Oil-for-Food Programme




Taxation


German
Taxation




100



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##### Table of Contents





Taxation of the Company in Germany









Taxation of Dividends




Imposition of Withholding Tax






Refund Procedure for U.S. Shareholders




101



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Capital Gains






Inheritance and Gift Tax






| |       |                                                                                                                                                                                                                                                                                                             
| | ----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (i)   | the decedent or donor, or the heir, donee or other transferee
    has his residence or habitual abode (gewöhnlicher
    Aufenthalt) in Germany at the time of the transfer;                                                                                                                               
|
| | (ii)  | the shares or ADSs are part of the business property of a
    permanent establishment in Germany;                                                                                                                                                                                                           
|
| | (iii) | the decedent or donor, or the heir, donee or other transferee is
    a citizen of Germany, is not a resident in Germany, but has not
    been continuously outside of Germany for a period of more than
    five years; or                                                                                  
|
| | (iv)  | the shares or ADSs subject to such transfer form part of a
    portfolio that represents 10% or more of the registered share
    capital of the company and has been held, directly or
    indirectly, by the decedent or donor, respectively, actually or
    constructively together with related parties.



102



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Other Taxes




U.S. Federal
income Taxation






| |   |                                                                                                        
| | - | -------------------------------------------------------------------------------------------------------
| |  | tax-exempt entities;                                                                                   
|
| |  | life insurance companies;                                                                              
|
| |  | dealers in securities;                                                                                 
|
| |  | traders in securities that elect a mark-to-market method of
    accounting for securities holdings;    
|
| |  | investors liable for alternative minimum tax;                                                          
|
| |  | partnerships, or other entities classified as partnerships, for
    U.S. federal income tax purposes;  
|
| |  | investors that actually or constructively own 10% or more of our
    voting stock;                     
|
| |  | investors that hold shares or ADSs as part of a straddle or a
    hedging or conversion transaction; or
|
| |  | investors whose functional currency is not the U.S. dollar.                                            









Taxation of Dividends




103



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Taxation of Sales or Other Taxable Dispositions




Documents on
Display







ITEM 11: QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET
RISK




104



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| |   |                                                                                                                           
| | - | --------------------------------------------------------------------------------------------------------------------------
| |  | a 20% decrease in equity prices of all our investments in
    marketable securities;                                      
|
| |  | a simultaneous, parallel foreign exchange rates shift in which
    the euro appreciates against all currencies by 10%; and
|
| |  | a parallel shift of 100 basis points of the interest rate yield
    curves in all currencies.                             



Financial Market Risk
Management


Equity Price
Risk


  


Foreign Currency
Exchange Rate Risk


Transaction Risk and Currency Management




105



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|                                                                           |  |     |    |   |     |  |    |       |  |  |    |  
|-------------------------------------------------------------------------- |  | --- | -- | - | --- |  | -- | ----- |  |  | -- | -
|                                                                           |  | USD |    |   | GBP |  |    | Other | 
|                                                                           |  |     |    |   |     |  |    |       | 
|Net foreign exchange transaction exposure as a percentage of the
    total |  |     | 78 | % |     |  | 12 | %     |  |  | 10 | %

 


Effects of Currency Translation


translation risk transaction risk


Interest Rate
Exposure




106



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##### Table of Contents





 


 







ITEM
12:      DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES







ITEM
13:      DEFAULTS,
DIVIDEND ARREARAGES AND DELINQUENCIES







ITEM 14:      MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS
AND
                       USE OF PROCEEDS







ITEM 15:      CONTROLS AND
PROCEDURES




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Managements
Annual Report on Internal Control Over Financial
Reporting














Attestation Report of
the Registered Public Accounting Firm




Changes in Internal
Control Over Financial Reporting







ITEM 16A:      AUDIT COMMITTEE
FINANCIAL EXPERT







ITEM 16B:      CODE OF
ETHICS




108



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ITEM 16C:      PRINCIPAL
ACCOUNTANT FEES AND SERVICES




|                   |  |                 |      |  |      |  |      | 
|------------------ |  | --------------- | ---- |  | ---- |  | ---- | 
|                   |  | Year ended      |     
|                   |  | September 30,   |     
|                   |  |                 |     
|Type of Fees       |  | 2005            |      |  | 2004 | 
|                   |  |                 |      |  |      | 
|                   |  | ( in millions) |     
|Audit Fees         |  |                 | 56.6 |  |      |  | 41.9 | 
|Audit-Related Fees |  |                 | 13.5 |  |      |  | 5.9  | 
|Tax Fees           |  |                 | 4.3  |  |      |  | 4.2  | 
|All Other Fees     |  |                 | 0.4  |  |      |  | 0.9  | 
|                   |  |                 |      |  |      | 
|Total              |  |                 | 74.8 |  |      |  | 52.9 | 
|                   |  |                 |      |  |      | 



Audit Committee
Pre-Approval Policies






109



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Audit
Services




| |   |                                                                                                                                                       
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Annual U.S. GAAP audit of Siemens Consolidated
    Financial Statements                                                                              
|
| |  | Quarterly review of Siemens interim financial statements                                                                                             
|
| |  | Statutory audits of financial statements of Siemens AG and of
    its subsidiaries under the rules of their respective countries                      
|
| |  | Attestation of internal controls as part of the external audit                                                                                        
|
| |  | Attestation of regulatory filing and other compliance
    requirements, including regulatory advice, such as carve out
    reports and comfort letters

Audit-Related
Services




| |   |                                                                                                               
| | - | --------------------------------------------------------------------------------------------------------------
| |  | Accounting advice relating to actual transactions or events                                                   
|
| |  | Due diligence relating to carve outs, including consultation in
    accounting matters and post-closing audits
|
| |  | Due diligence relating to contemplated acquisitions                                                           
|
| |  | Accounting advice relating to contemplated transactions or events                                             
|
| |  | Attestation of compliance with provisions or calculations
    required by agreements                          
|
| |  | Employee benefit plan audits                                                                                  
|
| |  | Agreed-upon procedures engagements                                                                            

Tax Services




| |   |                                                                                   
| | - | ----------------------------------------------------------------------------------
| |  | Tax advice relating to actual transactions or events, including
    tax compliance
|
| |  | Tax advice relating to contemplated transactions or events                        
|
| |  | Expatriate employee tax services                                                  
|
| |  | Transfer pricing studies                                                          

All Other
Services




| |   |                  
| | - | -----------------
| |  | Forensic services






ITEM 16D:   EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES




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ITEM 16E:   PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS




|                          |  |                     |           |                   |                |                   |             |                 |                  |                 |              |  |  |  |     | 
|------------------------- |  | ------------------- | --------- | ----------------- | -------------- | ----------------- | ----------- | --------------- | ---------------- | --------------- | ------------ |  |  |  | --- | 
|                          |  |                     |           |                   |                | (c) Total number  |             |                 | (d) Maximum      |                
|                          |  |                     |           |                   |                | of shares         |             |                 | number of shares |                
|                          |  |                     |           |                   |                | purchased as part |             |                 | that may yet be  |                
|                          |  |                     |           | (b) Average price |                |                   | of publicly |                 |                  | purchased under |             
|                          |  | (a) Total number of |           |                   | paid per share |                   |             | announced plans |                  |                 | the plans or | 
|Period                    |  | shares purchased*   |           |                   | (in )         |                   |             | or programs     |                  |                 | programs     | 
|                          |  |                     |           |                   |                |                   |             |                 |                  |                 |              | 
|October 10/1/04-10/31/04  |  |                     | 0         |                   |                |                   | 0.00        |                 |                  |                 | N/A          |  |  |  | N/A | 
|November 11/1/04-11/30/04 |  |                     | 1,293,318 |                   |                |                   | 61.01       |                 |                  |                 | N/A          |  |  |  | N/A | 
|December 12/1/04-12/31/04 |  |                     | 567,676   |                   |                |                   | 61.60       |                 |                  |                 | N/A          |  |  |  | N/A | 
|January 1/1/05-1/30/05    |  |                     | 3,000     |                   |                |                   | 62.97       |                 |                  |                 | N/A          |  |  |  | N/A | 
|February 2/1/05-2/28/05   |  |                     | 449,563   |                   |                |                   | 60.77       |                 |                  |                 | N/A          |  |  |  | N/A | 
|March 3/1/05-3/31/05      |  |                     | 142,950   |                   |                |                   | 61.94       |                 |                  |                 | N/A          |  |  |  | N/A | 
|April 4/1/05-4/30/05      |  |                     | 2,387     |                   |                |                   | 61.06       |                 |                  |                 | N/A          |  |  |  | N/A | 
|May 5/1/05-5/31/05        |  |                     | 18,346    |                   |                |                   | 57.53       |                 |                  |                 | N/A          |  |  |  | N/A | 
|June 6/1/05-6/30/05       |  |                     | 327,524   |                   |                |                   | 62.25       |                 |                  |                 | N/A          |  |  |  | N/A | 
|July 7/1/05-7/31/05       |  |                     | 8         |                   |                |                   | 60.10       |                 |                  |                 | N/A          |  |  |  | N/A | 
|August 8/1/05-8/31/05     |  |                     | 488,481   |                   |                |                   | 63.76       |                 |                  |                 | N/A          |  |  |  | N/A | 
|September 9/1/05-9/30/05  |  |                     | 255,898   |                   |                |                   | 63.70       |                 |                  |                 | N/A          |  |  |  | N/A | 
|                          |  |                     |           |                   |                |                   |             |                 |                  |                 |              | 
|Total                     |  |                     | 3,549,151 |                   |                |                   | 61.78       |                 |                  |                 | N/A          |  |  |  | N/A | 
|                          |  |                     |           |                   |                |                   |             |                 |                  |                 |              | 
|                         




|  |                                                                                                                                                                                                                                                                                                   
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|* | Siemens repurchased its own common stock to accommodate the
    Siemens employee share purchase plan and its other stock-based
    compensation plans. For further information on the
    Companys authorization to repurchase common stock see
    Notes to Consolidated Financial Statements.




111



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PART III





ITEM 18:      FINANCIAL
STATEMENTS


Siemens AG


Index to Consolidated Financial Statements


|                                                                                                                                                            |  |      |      | 
|----------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---- | ---- | 
|                                                                                                                                                            |  | Page |     
|                                                                                                                                                            |  |      |     
|Independent Auditors Report                                                                                                                                |  |      | F-2  | 
|Consolidated Financial Statements                                                                                                                           |  |      |      | 
|Consolidated Statements of Income for the fiscal years ended
    September 30, 2005, September 30, 2004 and
    September 30, 2003                          |  |      | F-4  | 
|Consolidated Balance Sheets as of September 30, 2005 and
    September 30, 2004                                                                             |  |      | F-6  | 
|Consolidated Statements of Cash Flow for the fiscal years ended
    September 30, 2005, September 30, 2004 and
    September 30, 2003                       |  |      | F-8  | 
|Consolidated Statements of Changes in Shareholders Equity
    for the fiscal years ended September 30, 2005,
    September 30, 2004 and September 30, 2003 |  |      | F-10 | 
|Notes to Consolidated Financial Statements                                                                                                                  |  |      | F-12 | 

F-1



---



##### Table of Contents



INDEPENDENT AUDITORS REPORT
















F-2



---



##### Table of Contents











| |                                    
| | -----------------------------------
| | KPMG Deutsche Treuhand-Gesellschaft
| | Aktiengesellschaft                 
| | Wirtschaftsprüfungsgesellschaft    





F-3



---



##### Table of Contents



SIEMENS AG


CONSOLIDATED STATEMENTS OF INCOME


For the fiscal years ended September 30, 2005, 2004 and
2003


(in millions of
, per share
amounts in )


|                                                                             |                                                                                                      |      |      |         |      |  |         |       |   |  |         |       |   |  |         |       | 
|---------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------- | ---- | ---- | ------- | ---- |  | ------- | ----- | - |  | ------- | ----- | - |  | ------- | ----- | 
|                                                                             |                                                                                                      |      |      | Siemens |     
|                                                                             |                                                                                                      |      |      |         |     
|                                                                             |                                                                                                      | Note |      |         | 2005 |  |         | 2004  |   |  | 2003    |      
|                                                                             |                                                                                                      |      |      |         |      |  |         |       |   |  |         |      
|Net sales                                                                    |                                                                                                      |      |      |         |      |  | 75,445  |       |   |  | 70,237  |       |   |  | 69,775  |      
|Cost of sales                                                                |                                                                                                      |      |      |         |      |  | (53,502 | )     |   |  | (49,592 | )     |   |  | (49,939 | )    
|                                                                             |                                                                                                      |      |      |         |      |  |         |       |   |  |         |      
|Gross profit on sales                                                        |                                                                                                      |      |      |         |      |  | 21,943  |       |   |  | 20,645  |       |   |  | 19,836  |      
|Research and development expenses                                            |                                                                                                      |      |      |         |      |  | (5,155  | )     |   |  | (4,650  | )     |   |  | (4,730  | )    
|Marketing, selling and general administrative expenses                       |                                                                                                      |      |      |         |      |  | (13,684 | )     |   |  | (12,828 | )     |   |  | (12,877 | )    
|Other operating income (expense), net                                        |                                                                                                      |      | 3, 4 |         |      |  | (9      | )     |   |  | (172    | )     |   |  | 642     |      
|Income from investments in other companies, net                              |                                                                                                      |      | 5    |         |      |  | 584     |       |   |  | 1,031   |       |   |  | 142     |      
|Income (expense) from financial assets and marketable
    securities, net    |                                                                                                      |      | 6    |         |      |  | 297     |       |   |  | 69      |       |   |  | 61      |      
|Interest income (expense) of Operations, net                                 |                                                                                                      |      | 7    |         |      |  | (32     | )     |   |  | 20      |       |   |  | 31      |      
|Other interest income (expense), net                                         |                                                                                                      |      | 7    |         |      |  | 241     |       |   |  | 254     |       |   |  | 215     |      
|                                                                             |                                                                                                      |      |      |         |      |  |         |       |   |  |         |      
|                                                                             | Income from continuing operations before income taxes and
    cumulative effect of accounting change |      |      |         |      |  |         | 4,185 |   |  |         | 4,369 |   |  |         | 3,320 | 
|Income
    taxes(1)                                                          |                                                                                                      |      | 8    |         |      |  | (979    | )     |   |  | (767    | )     |   |  | (881    | )    
|Minority interest                                                            |                                                                                                      |      |      |         |      |  | (148    | )     |   |  | (152    | )     |   |  | (84     | )    
|                                                                             |                                                                                                      |      |      |         |      |  |         |       |   |  |         |      
|                                                                             | Income from continuing operations before cumulative effect of
    accounting change                  |      |      |         |      |  |         | 3,058 |   |  |         | 3,450 |   |  |         | 2,355 | 
|Income (loss) from discontinued operations, net of income taxes              |                                                                                                      |      |      |         |      |  | (810    | )     |   |  | (45     | )     |   |  | 54      |      
|Cumulative effect of change in accounting principle, net of
    income taxes |                                                                                                      |      |      |         |      |  |        |       |   |  |        |       |   |  | 36      |      
|                                                                             |                                                                                                      |      |      |         |      |  |         |       |   |  |         |      
|                                                                             | Net income                                                                                           |      |      |         |      |  |         | 2,248 |   |  |         | 3,405 |   |  |         | 2,445 | 
|                                                                             |                                                                                                      |      |      |         |      |  |         |       |   |  |         |      
|Basic earnings per share                                                     |                                                                                                      |      | 29   |         |      |  |         |       |   |  |         |       |   |  |         |      
|                                                                             | Income from continuing operations before cumulative effect of
    accounting change                  |      |      |         |      |  |         | 3.43  |   |  |         | 3.87  |   |  |         | 2.65  | 
|                                                                             | Income (loss) from discontinued operations                                                           |      |      |         |      |  |         | (0.91 | ) |  |         | (0.05 | ) |  |         | 0.06  | 
|                                                                             | Cumulative effect of change in accounting principle                                                  |      |      |         |      |  |         |      |   |  |         |      |   |  |         | 0.04  | 
|                                                                             |                                                                                                      |      |      |         |      |  |         |       |   |  |         |      
|                                                                             | Net income                                                                                           |      |      |         |      |  |         | 2.52  |   |  |         | 3.82  |   |  |         | 2.75  | 
|                                                                             |                                                                                                      |      |      |         |      |  |         |       |   |  |         |      
|Diluted earnings per share                                                   |                                                                                                      |      | 29   |         |      |  |         |       |   |  |         |       |   |  |         |      
|                                                                             | Income from continuing operations before cumulative effect of
    accounting change                  |      |      |         |      |  |         | 3.29  |   |  |         | 3.71  |   |  |         | 2.61  | 
|                                                                             | Income (loss) from discontinued operations                                                           |      |      |         |      |  |         | (0.87 | ) |  |         | (0.05 | ) |  |         | 0.06  | 
|                                                                             | Cumulative effect of change in accounting principle                                                  |      |      |         |      |  |         |      |   |  |         |      |   |  |         | 0.04  | 
|                                                                             |                                                                                                      |      |      |         |      |  |         |       |   |  |         |      
|Net income                                                                   |                                                                                                      |      |      |         |      |  | 2.42    |       |   |  | 3.66    |       |   |  | 2.71    |      
|                                                                             |                                                                                                      |      |      |         |      |  |         |       |   |  |         |      
|                                                                            






|    |                                                                                                                                                                                                                                    
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The income taxes of Eliminations, reclassifications and
    Corporate Treasury, Operations, and Financing and Real
    Estate are based on the consolidated effective corporate tax
    rate applied to income before income taxes.



F-4



---



##### Table of Contents







| |  |                                 |        |   |            |  |        |                           |  |  |        |   |  |      |         |   |      |  |         |      |  |  |         |   |  |      |        |   |  |  |        |   |  |  |        |  
| |  | ------------------------------- | ------ | - | ---------- |  | ------ | ------------------------- |  |  | ------ | - |  | ---- | ------- | - | ---- |  | ------- | ---- |  |  | ------- | - |  | ---- | ------ | - |  |  | ------ | - |  |  | ------ | -
| |  | Eliminations, reclassifications |        |   |            |  |       
| |  | and Corporate Treasury          |        |   | Operations |  |        | Financing and Real Estate | 
| |  |                                 |        |   |            |  |        |                           | 
| |  | 2005                            |        |   | 2004       |  |        | 2003                      |  |  | 2005   |   |  | 2004 |         |   | 2003 |  |         | 2005 |  |  | 2004    |   |  | 2003 |       
| |  |                                 |        |   |            |  |        |                           |  |  |        |   |  |      |         |   |      |  |         |      |  |  |         |   |  |      |       
| |  |                                 | (1,677 | ) |            |  | (1,517 | )                         |  |  | (1,602 | ) |  |      | 74,969  |   |      |  | 69,627  |      |  |  | 69,270  |   |  |      | 2,153  |   |  |  | 2,127  |   |  |  | 2,107  |  
| |  |                                 | 1,677  |   |            |  | 1,517  |                           |  |  | 1,604  |   |  |      | (53,383 | ) |      |  | (49,372 | )    |  |  | (49,869 | ) |  |      | (1,796 | ) |  |  | (1,737 | ) |  |  | (1,674 | )
| |  |                                 |        |   |            |  |        |                           |  |  |        |   |  |      |         |   |      |  |         |      |  |  |         |   |  |      |       
| |  |                                 |       |   |            |  |       |                           |  |  | 2      |   |  |      | 21,586  |   |      |  | 20,255  |      |  |  | 19,401  |   |  |      | 357    |   |  |  | 390    |   |  |  | 433    |  
| |  |                                 |       |   |            |  |       |                           |  |  |       |   |  |      | (5,155  | ) |      |  | (4,650  | )    |  |  | (4,730  | ) |  |      |       |   |  |  |       |   |  |  |       |  
| |  |                                 | (1     | ) |            |  | (1     | )                         |  |  |       |   |  |      | (13,395 | ) |      |  | (12,545 | )    |  |  | (12,586 | ) |  |      | (288   | ) |  |  | (282   | ) |  |  | (291   | )
| |  |                                 | (87    | ) |            |  | (76    | )                         |  |  | (77    | ) |  |      | (136    | ) |      |  | (192    | )    |  |  | 555     |   |  |      | 214    |   |  |  | 96     |   |  |  | 164    |  
| |  |                                 |       |   |            |  |       |                           |  |  |       |   |  |      | 492     |   |      |  | 972     |      |  |  | 66      |   |  |      | 92     |   |  |  | 59     |   |  |  | 76     |  
| |  |                                 | 92     |   |            |  | 24     |                           |  |  | 135    |   |  |      | 255     |   |      |  | 70      |      |  |  | (69     | ) |  |      | (50    | ) |  |  | (25    | ) |  |  | (5     | )
| |  |                                 |       |   |            |  |       |                           |  |  |       |   |  |      | (32     | ) |      |  | 20      |      |  |  | 31      |   |  |      |       |   |  |  |       |   |  |  |       |  
| |  |                                 | 294    |   |            |  | 277    |                           |  |  | 206    |   |  |      | (191    | ) |      |  | (141    | )    |  |  | (87     | ) |  |      | 138    |   |  |  | 118    |   |  |  | 96     |  
| |  |                                 |        |   |            |  |        |                           |  |  |        |   |  |      |         |   |      |  |         |      |  |  |         |   |  |      |       
| |  |                                 | 298    |   |            |  | 224    |                           |  |  | 266    |   |  |      | 3,424   |   |      |  | 3,789   |      |  |  | 2,581   |   |  |      | 463    |   |  |  | 356    |   |  |  | 473    |  
| |  |                                 | (70    | ) |            |  | (39    | )                         |  |  | (71    | ) |  |      | (801    | ) |      |  | (665    | )    |  |  | (685    | ) |  |      | (108   | ) |  |  | (63    | ) |  |  | (125   | )
| |  |                                 |       |   |            |  |       |                           |  |  |       |   |  |      | (148    | ) |      |  | (152    | )    |  |  | (84     | ) |  |      |       |   |  |  |       |   |  |  |       |  
| |  |                                 |        |   |            |  |        |                           |  |  |        |   |  |      |         |   |      |  |         |      |  |  |         |   |  |      |       
| |  |                                 | 228    |   |            |  | 185    |                           |  |  | 195    |   |  |      | 2,475   |   |      |  | 2,972   |      |  |  | 1,812   |   |  |      | 355    |   |  |  | 293    |   |  |  | 348    |  
| |  |                                 |       |   |            |  |       |                           |  |  |       |   |  |      | (814    | ) |      |  | (47     | )    |  |  | 52      |   |  |      | 4      |   |  |  | 2      |   |  |  | 2      |  
| |  |                                 |       |   |            |  |       |                           |  |  |       |   |  |      |        |   |      |  |        |      |  |  | 39      |   |  |      |       |   |  |  |       |   |  |  | (3     | )
| |  |                                 |        |   |            |  |        |                           |  |  |        |   |  |      |         |   |      |  |         |      |  |  |         |   |  |      |       
| |  |                                 | 228    |   |            |  | 185    |                           |  |  | 195    |   |  |      | 1,661   |   |      |  | 2,925   |      |  |  | 1,903   |   |  |      | 359    |   |  |  | 295    |   |  |  | 347    |  
| |  |                                 |        |   |            |  |        |                           |  |  |        |   |  |      |         |   |      |  |         |      |  |  |         |   |  |      |       

F-5



---



##### Table of Contents



SIEMENS AG


CONSOLIDATED BALANCE SHEETS


As of September 30, 2005 and 2004


(in millions of
)


|                                      |                                                             |                                                                                                                                   |    |         |         |  |        |         |        |  |        |        |        | 
|------------------------------------- | ----------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------- | -- | ------- | ------- |  | ------ | ------- | ------ |  | ------ | ------ | ------ | 
|                                      |                                                             |                                                                                                                                   |    | Siemens |        
|                                      |                                                             |                                                                                                                                   |    |         |        
|                                      |                                                             | Note                                                                                                                              |    |         | 9/30/05 |  |        | 9/30/04 |       
|                                      |                                                             |                                                                                                                                   |    |         |         |  |        |         |       
|ASSETS                                |                                                             |                                                                                                                                   |    |         |         |  |        |         |        |  |        |       
|Current assets                        |                                                             |                                                                                                                                   |    |         |         |  |        |         |        |  |        |       
|                                      | Cash and cash equivalents                                   |                                                                                                                                   |    |         |         |  |        | 8,121   |        |  |        | 12,190 |       
|                                      | Marketable securities                                       |                                                                                                                                   |    | 9       |         |  |        | 1,789   |        |  |        | 1,386  |       
|                                      | Accounts receivable, net                                    |                                                                                                                                   |    | 10      |         |  |        | 17,122  |        |  |        | 15,470 |       
|                                      | Intracompany receivables                                    |                                                                                                                                   |    |         |         |  |        |        |        |  |        |       |       
|                                      | Inventories, net                                            |                                                                                                                                   |    | 11      |         |  |        | 12,812  |        |  |        | 11,358 |       
|                                      | Deferred income taxes                                       |                                                                                                                                   |    | 8       |         |  |        | 1,484   |        |  |        | 1,144  |       
|                                      | Assets held for sale                                        |                                                                                                                                   |    |         |         |  |        | 245     |        |  |        |       |       
|                                      | Other current assets                                        |                                                                                                                                   |    | 12      |         |  |        | 5,230   |        |  |        | 4,398  |       
|                                      |                                                             |                                                                                                                                   |    |         |         |  |        |         |       
|                                      |                                                             | Total current assets                                                                                                              |    |         |         |  |        |         | 46,803 |  |        |        | 45,946 | 
|                                      |                                                             |                                                                                                                                   |    |         |         |  |        |         |       
|Long-term investments                 |                                                             |                                                                                                                                   | 13 |         |         |  | 3,768  |         |        |  | 4,122  |       
|Goodwill                              |                                                             |                                                                                                                                   | 14 |         |         |  | 8,930  |         |        |  | 6,476  |       
|Other intangible assets, net          |                                                             |                                                                                                                                   | 15 |         |         |  | 3,107  |         |        |  | 2,514  |       
|Property, plant and equipment, net    |                                                             |                                                                                                                                   | 16 |         |         |  | 12,012 |         |        |  | 10,683 |       
|Deferred income taxes                 |                                                             |                                                                                                                                   | 8  |         |         |  | 6,321  |         |        |  | 4,811  |       
|Other assets                          |                                                             |                                                                                                                                   | 17 |         |         |  | 5,264  |         |        |  | 4,966  |       
|Other intracompany receivables        |                                                             |                                                                                                                                   |    |         |         |  |       |         |        |  |       |       
|                                      |                                                             |                                                                                                                                   |    |         |         |  |        |         |       
|                                      |                                                             | Total assets                                                                                                                      |    |         |         |  |        |         | 86,205 |  |        |        | 79,518 | 
|                                      |                                                             |                                                                                                                                   |    |         |         |  |        |         |       
|LIABILITIES AND SHAREHOLDERS EQUITY  |                                                             |                                                                                                                                   |    |         |         |  |        |         |        |  |        |       
|Current liabilities                   |                                                             |                                                                                                                                   |    |         |         |  |        |         |        |  |        |       
|                                      | Short-term debt and current maturities of long-term debt    |                                                                                                                                   |    | 20      |         |  |        | 3,999   |        |  |        | 1,434  |       
|                                      | Accounts payable                                            |                                                                                                                                   |    |         |         |  |        | 10,171  |        |  |        | 9,326  |       
|                                      | Intracompany liabilities                                    |                                                                                                                                   |    |         |         |  |        |        |        |  |        |       |       
|                                      | Accrued liabilities                                         |                                                                                                                                   |    | 18      |         |  |        | 10,169  |        |  |        | 9,240  |       
|                                      | Deferred income taxes                                       |                                                                                                                                   |    | 8       |         |  |        | 1,938   |        |  |        | 1,522  |       
|                                      | Liabilities held for sale                                   |                                                                                                                                   |    |         |         |  |        | 289     |        |  |        |       |       
|                                      | Other current liabilities                                   |                                                                                                                                   |    | 19      |         |  |        | 13,267  |        |  |        | 11,850 |       
|                                      |                                                             |                                                                                                                                   |    |         |         |  |        |         |       
|                                      |                                                             | Total current liabilities                                                                                                         |    |         |         |  |        |         | 39,833 |  |        |        | 33,372 | 
|                                      |                                                             |                                                                                                                                   |    |         |         |  |        |         |       
|Long-term debt                        |                                                             |                                                                                                                                   | 20 |         |         |  | 8,436  |         |        |  | 9,785  |       
|Pension plans and similar commitments |                                                             |                                                                                                                                   | 21 |         |         |  | 4,917  |         |        |  | 4,392  |       
|Deferred income taxes                 |                                                             |                                                                                                                                   | 8  |         |         |  | 427    |         |        |  | 569    |       
|Other accruals and provisions         |                                                             |                                                                                                                                   | 22 |         |         |  | 4,819  |         |        |  | 4,016  |       
|Other intracompany liabilities        |                                                             |                                                                                                                                   |    |         |         |  |       |         |        |  |       |       
|                                      |                                                             |                                                                                                                                   |    |         |         |  |        |         |       
|                                      |                                                             |                                                                                                                                   |    |         |         |  | 58,432 |         |        |  | 52,134 |       
|                                      |                                                             |                                                                                                                                   |    |         |         |  |        |         |       
|Minority interests                    |                                                             |                                                                                                                                   |    |         |         |  | 656    |         |        |  | 529    |       
|Shareholders equity                  |                                                             |                                                                                                                                   | 23 |         |         |  |        |         |        |  |        |       
|                                      | Common stock, no par value                                  |                                                                                                                                   |    |         |         |  |        |         |        |  |        |        |       
|                                      |                                                             | Authorized: 1,113,295,461 and 1,113,285,711 shares,
    respectively
    Issued: 891,085,461 and 891,075,711 shares, respectively |    |         |         |  |        |         | 2,673  |  |        |        | 2,673  | 
|                                      | Additional paid-in capital                                  |                                                                                                                                   |    |         |         |  |        | 5,167   |        |  |        | 5,121  |       
|                                      | Retained earnings                                           |                                                                                                                                   |    |         |         |  |        | 26,583  |        |  |        | 25,447 |       
|                                      | Accumulated other comprehensive income (loss)               |                                                                                                                                   |    |         |         |  |        | (7,305  | )      |  |        | (6,386 | )     
|                                      | Treasury stock, at cost: 9,004 and 250 shares, respectively |                                                                                                                                   |    |         |         |  |        | (1      | )      |  |        |       |       
|                                      |                                                             |                                                                                                                                   |    |         |         |  |        |         |       
|                                      |                                                             | Total shareholders equity                                                                                                        |    |         |         |  |        |         | 27,117 |  |        |        | 26,855 | 
|                                      |                                                             |                                                                                                                                   |    |         |         |  |        |         |       
|                                      |                                                             | Total liabilities and shareholders equity                                                                                        |    |         |         |  |        |         | 86,205 |  |        |        | 79,518 | 
|                                      |                                                             |                                                                                                                                   |    |         |         |  |        |         |       



F-6



---



##### Table of Contents







| |  |                       |         |   |            |  |                    |         |  |  |         |  |  |         |        |  |         |  |        |  |  |  |        | 
| |  | --------------------- | ------- | - | ---------- |  | ------------------ | ------- |  |  | ------- |  |  | ------- | ------ |  | ------- |  | ------ |  |  |  | ------ | 
| |  | Eliminations,         |         |   |            |  |                    |         | 
| |  | reclassifications and |         |   |            |  | Financing and Real |        
| |  | Corporate Treasury    |         |   | Operations |  |                    | Estate  | 
| |  |                       |         |   |            |  |                    |         | 
| |  | 9/30/05               |         |   | 9/30/04    |  |                    | 9/30/05 |  |  | 9/30/04 |  |  | 9/30/05 |        |  | 9/30/04 | 
| |  |                       |         |   |            |  |                    |         |  |  |         |  |  |         |        |  |         | 
| |  |                       | 6,603   |   |            |  | 11,251             |         |  |  | 1,471   |  |  |         | 908    |  |         |  | 47     |  |  |  | 31     | 
| |  |                       |        |   |            |  | 8                  |         |  |  | 1,772   |  |  |         | 1,361  |  |         |  | 17     |  |  |  | 17     | 
| |  |                       | (6      | ) |            |  | (8                 | )       |  |  | 12,758  |  |  |         | 11,275 |  |         |  | 4,370  |  |  |  | 4,203  | 
| |  |                       | (15,489 | ) |            |  | (12,257            | )       |  |  | 15,362  |  |  |         | 12,251 |  |         |  | 127    |  |  |  | 6      | 
| |  |                       | (4      | ) |            |  | (2                 | )       |  |  | 12,744  |  |  |         | 11,295 |  |         |  | 72     |  |  |  | 65     | 
| |  |                       | (178    | ) |            |  | 61                 |         |  |  | 1,580   |  |  |         | 1,018  |  |         |  | 82     |  |  |  | 65     | 
| |  |                       |        |   |            |  |                   |         |  |  | 245     |  |  |         |       |  |         |  |       |  |  |  |       | 
| |  |                       | 506     |   |            |  | 710                |         |  |  | 3,746   |  |  |         | 2,793  |  |         |  | 978    |  |  |  | 895    | 
| |  |                       |         |   |            |  |                    |         |  |  |         |  |  |         |        |  |         | 
| |  |                       | (8,568  | ) |            |  | (237               | )       |  |  | 49,678  |  |  |         | 40,901 |  |         |  | 5,693  |  |  |  | 5,282  | 
| |  |                       |         |   |            |  |                    |         |  |  |         |  |  |         |        |  |         | 
| |  |                       |        |   |            |  |                   |         |  |  | 3,463   |  |  |         | 3,790  |  |         |  | 305    |  |  |  | 332    | 
| |  |                       |        |   |            |  |                   |         |  |  | 8,799   |  |  |         | 6,394  |  |         |  | 131    |  |  |  | 82     | 
| |  |                       |        |   |            |  |                   |         |  |  | 3,092   |  |  |         | 2,501  |  |         |  | 15     |  |  |  | 13     | 
| |  |                       |        |   |            |  | 1                  |         |  |  | 8,217   |  |  |         | 7,242  |  |         |  | 3,795  |  |  |  | 3,440  | 
| |  |                       | 1,541   |   |            |  | 1,133              |         |  |  | 4,743   |  |  |         | 3,598  |  |         |  | 37     |  |  |  | 80     | 
| |  |                       | 106     |   |            |  | 44                 |         |  |  | 1,836   |  |  |         | 2,217  |  |         |  | 3,322  |  |  |  | 2,705  | 
| |  |                       | (1,632  | ) |            |  | (1,284             | )       |  |  | 1,626   |  |  |         | 1,284  |  |         |  | 6      |  |  |  |       | 
| |  |                       |         |   |            |  |                    |         |  |  |         |  |  |         |        |  |         | 
| |  |                       | (8,553  | ) |            |  | (343               | )       |  |  | 81,454  |  |  |         | 67,927 |  |         |  | 13,304 |  |  |  | 11,934 | 
| |  |                       |         |   |            |  |                    |         |  |  |         |  |  |         |        |  |         | 
| |  |                       | 3,049   |   |            |  | 850                |         |  |  | 564     |  |  |         | 451    |  |         |  | 386    |  |  |  | 133    | 
| |  |                       | (1      | ) |            |  | (3                 | )       |  |  | 9,965   |  |  |         | 9,109  |  |         |  | 207    |  |  |  | 220    | 
| |  |                       | (15,998 | ) |            |  | (7,449             | )       |  |  | 9,134   |  |  |         | 1,703  |  |         |  | 6,864  |  |  |  | 5,746  | 
| |  |                       | 115     |   |            |  | 6                  |         |  |  | 9,898   |  |  |         | 9,055  |  |         |  | 156    |  |  |  | 179    | 
| |  |                       | (475    | ) |            |  | (282               | )       |  |  | 2,203   |  |  |         | 1,528  |  |         |  | 210    |  |  |  | 276    | 
| |  |                       |        |   |            |  |                   |         |  |  | 289     |  |  |         |       |  |         |  |       |  |  |  |       | 
| |  |                       | 222     |   |            |  | 452                |         |  |  | 12,768  |  |  |         | 11,173 |  |         |  | 277    |  |  |  | 225    | 
| |  |                       |         |   |            |  |                    |         |  |  |         |  |  |         |        |  |         | 
| |  |                       | (13,088 | ) |            |  | (6,426             | )       |  |  | 44,821  |  |  |         | 33,019 |  |         |  | 8,100  |  |  |  | 6,779  | 
| |  |                       |         |   |            |  |                    |         |  |  |         |  |  |         |        |  |         | 
| |  |                       | 6,937   |   |            |  | 8,538              |         |  |  | 978     |  |  |         | 750    |  |         |  | 521    |  |  |  | 497    | 
| |  |                       |        |   |            |  |                   |         |  |  | 4,917   |  |  |         | 4,392  |  |         |  |       |  |  |  |       | 
| |  |                       | (26     | ) |            |  | 184                |         |  |  | 274     |  |  |         | 274    |  |         |  | 179    |  |  |  | 111    | 
| |  |                       | 91      |   |            |  | 25                 |         |  |  | 4,310   |  |  |         | 3,586  |  |         |  | 418    |  |  |  | 405    | 
| |  |                       | (2,467  | ) |            |  | (2,664             | )       |  |  | 284     |  |  |         | 457    |  |         |  | 2,183  |  |  |  | 2,207  | 
| |  |                       |         |   |            |  |                    |         |  |  |         |  |  |         |        |  |         | 
| |  |                       | (8,553  | ) |            |  | (343               | )       |  |  | 55,584  |  |  |         | 42,478 |  |         |  | 11,401 |  |  |  | 9,999  | 
| |  |                       |         |   |            |  |                    |         |  |  |         |  |  |         |        |  |         | 
| |  |                       |        |   |            |  |                   |         |  |  | 656     |  |  |         | 529    |  |         |  |       |  |  |  |       | 
| |  |                       |         |   |            |  |                    |         |  |  |         |  |  |         |        |  |         | 
| |  |                       |        |   |            |  |                   |         |  |  | 25,214  |  |  |         | 24,920 |  |         |  | 1,903  |  |  |  | 1,935  | 
| |  |                       |         |   |            |  |                    |         |  |  |         |  |  |         |        |  |         | 
| |  |                       | (8,553  | ) |            |  | (343               | )       |  |  | 81,454  |  |  |         | 67,927 |  |         |  | 13,304 |  |  |  | 11,934 | 
| |  |                       |         |   |            |  |                    |         |  |  |         |  |  |         |        |  |         | 

F-7



---



##### Table of Contents



SIEMENS AG


CONSOLIDATED STATEMENTS OF CASH FLOW


For the fiscal years ended September 30, 2005, 2004 and
2003


(in millions of
)


|                                                      |                                                                                                 |                                                                           |                                                                |                                                                                                |                                                                               |      |        |        |        |      |        |        |        |       |        |        |  
|----------------------------------------------------- | ----------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------- | -------------------------------------------------------------- | ---------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------- | ---- | ------ | ------ | ------ | ---- | ------ | ------ | ------ | ----- | ------ | ------ | -
|                                                      |                                                                                                 | Siemens                                                                   |                                                               
|                                                      |                                                                                                 |                                                                           |                                                               
|                                                      |                                                                                                 | 2005                                                                      |                                                                |                                                                                                | 2004                                                                          |      |        | 2003   |       
|                                                      |                                                                                                 |                                                                           |                                                                |                                                                                                |                                                                               |      |        |        |       
|Cash flows from operating activities                  |                                                                                                 |                                                                           |                                                                |                                                                                                |                                                                               |      |        |        |        |      |        |       
|                                                      | Net income                                                                                      |                                                                           |                                                                | 2,248                                                                                          |                                                                               |      |        | 3,405  |        |      |        | 2,445  |       
|                                                      | Adjustments to reconcile net income to cash provided                                            |                                                                           |                                                                |                                                                                                |                                                                               |      |        |        |        |      |        |        |       
|                                                      |                                                                                                 | Minority interest                                                         |                                                                |                                                                                                | 158                                                                           |      |        |        | 166    |      |        |        | 96     |      
|                                                      |                                                                                                 | Amortization, depreciation and impairments                                |                                                                |                                                                                                | 3,426                                                                         |      |        |        | 3,344  |      |        |        | 3,334  |      
|                                                      |                                                                                                 | Deferred taxes                                                            |                                                                |                                                                                                | (628                                                                          | )    |        |        | (309   | )    |        |        | 262    |      
|                                                      |                                                                                                 | Gains on sales and disposals of businesses and real estate, net           |                                                                |                                                                                                | (226                                                                          | )    |        |        | (246   | )    |        |        | (232   | )    
|                                                      |                                                                                                 | Losses (gains) on sales of investments, net                               |                                                                |                                                                                                | (49                                                                           | )    |        |        | (612   | )    |        |        | 2      |      
|                                                      |                                                                                                 | Losses (gains) on sales and impairments of marketable
    securities, net |                                                                |                                                                                                | (239                                                                          | )    |        |        | (47    | )    |        |        | 23     |      
|                                                      |                                                                                                 | Loss (income) from equity investees, net of dividends received            |                                                                |                                                                                                | (277                                                                          | )    |        |        | (287   | )    |        |        | 10     |      
|                                                      |                                                                                                 | Change in current assets and liabilities                                  |                                                                |                                                                                                |                                                                               |      |        |        |        |      |        |        |        |      
|                                                      |                                                                                                 |                                                                           | (Increase) decrease in inventories, net                        |                                                                                                |                                                                               | (717 | )      |        |        | (941 | )      |        |        | 8     |       
|                                                      |                                                                                                 |                                                                           | (Increase) decrease in accounts receivable, net                |                                                                                                |                                                                               | 27   |        |        |        | (866 | )      |        |        | 623   |       
|                                                      |                                                                                                 |                                                                           | Increase (decrease) in outstanding balance of receivables sold |                                                                                                |                                                                               | (7   | )      |        |        | 133  |        |        |        | (291  | )     
|                                                      |                                                                                                 |                                                                           | (Increase) decrease in other current assets                    |                                                                                                |                                                                               | 248  |        |        |        | 661  |        |        |        | 1,416 |       
|                                                      |                                                                                                 |                                                                           | Increase (decrease) in accounts payable                        |                                                                                                |                                                                               | 89   |        |        |        | 857  |        |        |        | (396  | )     
|                                                      |                                                                                                 |                                                                           | Increase (decrease) in accrued liabilities                     |                                                                                                |                                                                               | (144 | )      |        |        | 302  |        |        |        | (621  | )     
|                                                      |                                                                                                 |                                                                           | Increase (decrease) in other current liabilities               |                                                                                                |                                                                               | 39   |        |        |        | (323 | )      |        |        | (668  | )     
|                                                      |                                                                                                 | Supplemental contributions to pension trusts                              |                                                                |                                                                                                | (1,496                                                                        | )    |        |        | (1,255 | )    |        |        | (1,192 | )    
|                                                      |                                                                                                 | Change in other assets and liabilities                                    |                                                                |                                                                                                | 669                                                                           |      |        |        | 1,098  |      |        |        | 893    |      
|                                                      |                                                                                                 |                                                                           |                                                                |                                                                                                |                                                                               |      |        |        |       
|                                                      |                                                                                                 |                                                                           |                                                                | Net cash provided by (used in) operating
    activitiescontinuing and discontinued operations |                                                                               |      | 3,121  |        |        |      | 5,080  |        |        |       | 5,712  |       
|                                                      |                                                                                                 |                                                                           |                                                                |                                                                                                | Net cash provided by (used in) operating
    activitiescontinuing operations |      |        | 4,217  |        |      |        | 4,704  |        |       |        | 5,419  |  
|Cash flows from investing activities                  |                                                                                                 |                                                                           |                                                                |                                                                                                |                                                                               |      |        |        |        |      |        |       
|                                                      | Additions to intangible assets and property, plant and equipment                                |                                                                           |                                                                | (3,544                                                                                         | )                                                                             |      |        | (2,764 | )      |      |        | (2,852 | )     
|                                                      | Acquisitions, net of cash acquired                                                              |                                                                           |                                                                | (2,450                                                                                         | )                                                                             |      |        | (1,477 | )      |      |        | (1,055 | )     
|                                                      | Purchases of investments                                                                        |                                                                           |                                                                | (652                                                                                           | )                                                                             |      |        | (374   | )      |      |        | (736   | )     
|                                                      | Purchases of marketable securities                                                              |                                                                           |                                                                | (34                                                                                            | )                                                                             |      |        | (106   | )      |      |        | (221   | )     
|                                                      | (Increase) decrease in receivables from financing activities                                    |                                                                           |                                                                | (511                                                                                           | )                                                                             |      |        | (247   | )      |      |        | (94    | )     
|                                                      | Increase (decrease) in outstanding balance of receivables sold
    by SFS                       |                                                                           |                                                                |                                                                                               |                                                                               |      |        |       |        |      |        |       |       
|                                                      | Proceeds from sales of long-term investments, intangibles and
    property, plant and equipment |                                                                           |                                                                | 977                                                                                            |                                                                               |      |        | 2,639  |        |      |        | 839    |       
|                                                      | Proceeds from sales and dispositions of businesses                                              |                                                                           |                                                                | 34                                                                                             |                                                                               |      |        | 325    |        |      |        | 119    |       
|                                                      | Proceeds from sales of marketable securities                                                    |                                                                           |                                                                | 356                                                                                            |                                                                               |      |        | 186    |        |      |        | 61     |       
|                                                      |                                                                                                 |                                                                           |                                                                |                                                                                                |                                                                               |      |        |        |       
|                                                      |                                                                                                 |                                                                           |                                                                | Net cash provided by (used in) investing
    activitiescontinuing and discontinued operations |                                                                               |      | (5,824 | )      |        |      | (1,818 | )      |        |       | (3,939 | )     
|                                                      |                                                                                                 |                                                                           |                                                                |                                                                                                | Net cash provided by (used in) investing
    activitiescontinuing operations |      |        | (5,706 | )      |      |        | (1,689 | )      |       |        | (3,848 | )
|Cash flows from financing activities                  |                                                                                                 |                                                                           |                                                                |                                                                                                |                                                                               |      |        |        |        |      |        |       
|                                                      | Proceeds from issuance of common stock                                                          |                                                                           |                                                                |                                                                                               |                                                                               |      |        | 4      |        |      |        |       |       
|                                                      | Purchase of common stock                                                                        |                                                                           |                                                                | (219                                                                                           | )                                                                             |      |        |       |        |      |        |       |       
|                                                      | Proceeds from re-issuance of treasury stock                                                     |                                                                           |                                                                | 173                                                                                            |                                                                               |      |        |       |        |      |        | 4      |       
|                                                      | Proceeds from issuance of debt                                                                  |                                                                           |                                                                |                                                                                               |                                                                               |      |        |       |        |      |        | 2,702  |       
|                                                      | Repayment of debt                                                                               |                                                                           |                                                                | (848                                                                                           | )                                                                             |      |        | (1,564 | )      |      |        | (1,742 | )     
|                                                      | Change in short-term debt                                                                       |                                                                           |                                                                | 711                                                                                            |                                                                               |      |        | (469   | )      |      |        | (445   | )     
|                                                      | Dividends paid                                                                                  |                                                                           |                                                                | (1,112                                                                                         | )                                                                             |      |        | (978   | )      |      |        | (896   | )     
|                                                      | Dividends paid to minority shareholders                                                         |                                                                           |                                                                | (108                                                                                           | )                                                                             |      |        | (101   | )      |      |        | (110   | )     
|                                                      | Intracompany financing                                                                          |                                                                           |                                                                |                                                                                               |                                                                               |      |        |       |        |      |        |       |       
|                                                      |                                                                                                 |                                                                           |                                                                |                                                                                                |                                                                               |      |        |        |       
|                                                      |                                                                                                 |                                                                           |                                                                | Net cash provided by (used in) financing activities                                            |                                                                               |      | (1,403 | )      |        |      | (3,108 | )      |        |       | (487   | )     
|Effect of exchange rates on cash and cash equivalents |                                                                                                 |                                                                           | 37                                                             |                                                                                                |                                                                               |      | (113   | )      |        |      | (333   | )     
|Net increase (decrease) in cash and cash equivalents  |                                                                                                 |                                                                           | (4,069                                                         | )                                                                                              |                                                                               |      | 41     |        |        |      | 953    |       
|Cash and cash equivalents at beginning of period      |                                                                                                 |                                                                           | 12,190                                                         |                                                                                                |                                                                               |      | 12,149 |        |        |      | 11,196 |       
|                                                      |                                                                                                 |                                                                           |                                                                |                                                                                                |                                                                               |      |        |        |       
|Cash and cash equivalents at end of period            |                                                                                                 |                                                                           | 8,121                                                          |                                                                                                |                                                                               |      | 12,190 |        |        |      | 12,149 |       
|                                                      |                                                                                                 |                                                                           |                                                                |                                                                                                |                                                                               |      |        |        |       
|Supplemental disclosure of cash paid for:             |                                                                                                 |                                                                           |                                                                |                                                                                                |                                                                               |      |        |        |        |      |        |       
|                                                      | Interest                                                                                        |                                                                           |                                                                | 441                                                                                            |                                                                               |      |        | 385    |        |      |        | 545    |       
|                                                      | Income taxes                                                                                    |                                                                           |                                                                | 1,093                                                                                          |                                                                               |      |        | 746    |        |      |        | 795    |       



F-8



---



##### Table of Contents







| |  |                       |        |   |            |  |        |                           |  |  |        |   |  |      |        |   |      |  |        |      |  |  |        |   |  |      |      |   |  |  |       |   |  |  |      |  
| |  | --------------------- | ------ | - | ---------- |  | ------ | ------------------------- |  |  | ------ | - |  | ---- | ------ | - | ---- |  | ------ | ---- |  |  | ------ | - |  | ---- | ---- | - |  |  | ----- | - |  |  | ---- | -
| |  | Eliminations,         |        |   |            |  |        |                           |  |  |        |   |  |      |       
| |  | reclassifications and |        |   |            |  |       
| |  | Corporate Treasury    |        |   | Operations |  |        | Financing and Real Estate | 
| |  |                       |        |   |            |  |        |                           | 
| |  | 2005                  |        |   | 2004       |  |        | 2003                      |  |  | 2005   |   |  | 2004 |        |   | 2003 |  |        | 2005 |  |  | 2004   |   |  | 2003 |     
| |  |                       |        |   |            |  |        |                           |  |  |        |   |  |      |        |   |      |  |        |      |  |  |        |   |  |      |     
| |  |                       | 228    |   |            |  | 185    |                           |  |  | 195    |   |  |      | 1,661  |   |      |  | 2,925  |      |  |  | 1,903  |   |  |      | 359  |   |  |  | 295   |   |  |  | 347  |  
| |  |                       |       |   |            |  |       |                           |  |  |       |   |  |      | 158    |   |      |  | 166    |      |  |  | 96     |   |  |      |     |   |  |  |      |   |  |  |     |  
| |  |                       |       |   |            |  |       |                           |  |  |       |   |  |      | 3,001  |   |      |  | 2,951  |      |  |  | 2,894  |   |  |      | 425  |   |  |  | 393   |   |  |  | 440  |  
| |  |                       | (5     | ) |            |  | (12    | )                         |  |  | 23     |   |  |      | (614   | ) |      |  | (278   | )    |  |  | 200    |   |  |      | (9   | ) |  |  | (19   | ) |  |  | 39   |  
| |  |                       |       |   |            |  |       |                           |  |  |       |   |  |      | (98    | ) |      |  | (222   | )    |  |  | (145   | ) |  |      | (128 | ) |  |  | (24   | ) |  |  | (87  | )
| |  |                       |       |   |            |  |       |                           |  |  |       |   |  |      | (49    | ) |      |  | (612   | )    |  |  | 2      |   |  |      |     |   |  |  |      |   |  |  |     |  
| |  |                       |       |   |            |  | (12    | )                         |  |  | 9      |   |  |      | (239   | ) |      |  | (33    | )    |  |  | 13     |   |  |      |     |   |  |  | (2    | ) |  |  | 1    |  
| |  |                       |       |   |            |  |       |                           |  |  |       |   |  |      | (263   | ) |      |  | (293   | )    |  |  | 70     |   |  |      | (14  | ) |  |  | 6     |   |  |  | (60  | )
| |  |                       |       |   |            |  |       |                           |  |  |       |   |  |      | (709   | ) |      |  | (962   | )    |  |  | 14     |   |  |      | (8   | ) |  |  | 21    |   |  |  | (6   | )
| |  |                       | 148    |   |            |  | (658   | )                         |  |  | (527   | ) |  |      | (143   | ) |      |  | (208   | )    |  |  | 1,141  |   |  |      | 22   |   |  |  |      |   |  |  | 9    |  
| |  |                       | (28    | ) |            |  | 65     |                           |  |  | (21    | ) |  |      | 21     |   |      |  | 68     |      |  |  | (270   | ) |  |      |     |   |  |  |      |   |  |  |     |  
| |  |                       | 113    |   |            |  | 107    |                           |  |  | 1,149  |   |  |      | 140    |   |      |  | 276    |      |  |  | 247    |   |  |      | (5   | ) |  |  | 278   |   |  |  | 20   |  
| |  |                       | (1     | ) |            |  | (6     | )                         |  |  | 3      |   |  |      | 103    |   |      |  | 827    |      |  |  | (396   | ) |  |      | (13  | ) |  |  | 36    |   |  |  | (3   | )
| |  |                       | (39    | ) |            |  |       |                           |  |  |       |   |  |      | (39    | ) |      |  | 210    |      |  |  | (571   | ) |  |      | (66  | ) |  |  | 92    |   |  |  | (50  | )
| |  |                       | (332   | ) |            |  | 129    |                           |  |  | 152    |   |  |      | 321    |   |      |  | (409   | )    |  |  | (647   | ) |  |      | 50   |   |  |  | (43   | ) |  |  | (173 | )
| |  |                       |       |   |            |  |       |                           |  |  |       |   |  |      | (1,496 | ) |      |  | (1,255 | )    |  |  | (1,192 | ) |  |      |     |   |  |  |      |   |  |  |     |  
| |  |                       | (47    | ) |            |  | 156    |                           |  |  | 137    |   |  |      | 709    |   |      |  | 857    |      |  |  | 764    |   |  |      | 7    |   |  |  | 85    |   |  |  | (8   | )
| |  |                       |        |   |            |  |        |                           |  |  |        |   |  |      |        |   |      |  |        |      |  |  |        |   |  |      |     
| |  |                       | 37     |   |            |  | (46    | )                         |  |  | 1,120  |   |  |      | 2,464  |   |      |  | 4,008  |      |  |  | 4,123  |   |  |      | 620  |   |  |  | 1,118 |   |  |  | 469  |  
| |  |                       | 37     |   |            |  | (46    | )                         |  |  | 1,120  |   |  |      | 3,565  |   |      |  | 3,635  |      |  |  | 3,834  |   |  |      | 615  |   |  |  | 1,115 |   |  |  | 465  |  
| |  |                       |       |   |            |  |       |                           |  |  |       |   |  |      | (2,871 | ) |      |  | (2,328 | )    |  |  | (2,468 | ) |  |      | (673 | ) |  |  | (436  | ) |  |  | (384 | )
| |  |                       |       |   |            |  |       |                           |  |  |       |   |  |      | (2,369 | ) |      |  | (1,472 | )    |  |  | (1,055 | ) |  |      | (81  | ) |  |  | (5    | ) |  |  |     |  
| |  |                       |       |   |            |  |       |                           |  |  |       |   |  |      | (631   | ) |      |  | (367   | )    |  |  | (714   | ) |  |      | (21  | ) |  |  | (7    | ) |  |  | (22  | )
| |  |                       | (12    | ) |            |  | (20    | )                         |  |  | (92    | ) |  |      | (8     | ) |      |  | (86    | )    |  |  | (127   | ) |  |      | (14  | ) |  |  |      |   |  |  | (2   | )
| |  |                       | (81    | ) |            |  | 569    |                           |  |  | 276    |   |  |      |       |   |      |  |       |      |  |  |       |   |  |      | (430 | ) |  |  | (816  | ) |  |  | (370 | )
| |  |                       | 28     |   |            |  | (65    | )                         |  |  | 21     |   |  |      |       |   |      |  |       |      |  |  |       |   |  |      | (28  | ) |  |  | 65    |   |  |  | (21  | )
| |  |                       |       |   |            |  | 19     |                           |  |  |       |   |  |      | 641    |   |      |  | 2,357  |      |  |  | 556    |   |  |      | 336  |   |  |  | 263   |   |  |  | 283  |  
| |  |                       |       |   |            |  |       |                           |  |  |       |   |  |      | 12     |   |      |  | 306    |      |  |  | 119    |   |  |      | 22   |   |  |  | 19    |   |  |  |     |  
| |  |                       | 20     |   |            |  | 104    |                           |  |  | 26     |   |  |      | 321    |   |      |  | 67     |      |  |  | 34     |   |  |      | 15   |   |  |  | 15    |   |  |  | 1    |  
| |  |                       |        |   |            |  |        |                           |  |  |        |   |  |      |        |   |      |  |        |      |  |  |        |   |  |      |     
| |  |                       | (45    | ) |            |  | 607    |                           |  |  | 231    |   |  |      | (4,905 | ) |      |  | (1,523 | )    |  |  | (3,655 | ) |  |      | (874 | ) |  |  | (902  | ) |  |  | (515 | )
| |  |                       | (45    | ) |            |  | 607    |                           |  |  | 231    |   |  |      | (4,787 | ) |      |  | (1,394 | )    |  |  | (3,564 | ) |  |      | (874 | ) |  |  | (902  | ) |  |  | (515 | )
| |  |                       |       |   |            |  |       |                           |  |  |       |   |  |      |       |   |      |  | 4      |      |  |  |       |   |  |      |     |   |  |  |      |   |  |  |     |  
| |  |                       |       |   |            |  |       |                           |  |  |       |   |  |      | (219   | ) |      |  |       |      |  |  |       |   |  |      |     |   |  |  |      |   |  |  |     |  
| |  |                       |       |   |            |  |       |                           |  |  |       |   |  |      | 173    |   |      |  |       |      |  |  | 4      |   |  |      |     |   |  |  |      |   |  |  |     |  
| |  |                       |       |   |            |  |       |                           |  |  | 2,702  |   |  |      |       |   |      |  |       |      |  |  |       |   |  |      |     |   |  |  |      |   |  |  |     |  
| |  |                       | (596   | ) |            |  | (1,270 | )                         |  |  | (1,700 | ) |  |      | (231   | ) |      |  | (266   | )    |  |  | (12    | ) |  |      | (21  | ) |  |  | (28   | ) |  |  | (30  | )
| |  |                       | 1,065  |   |            |  | (414   | )                         |  |  | (106   | ) |  |      | (270   | ) |      |  | (170   | )    |  |  | (323   | ) |  |      | (84  | ) |  |  | 115   |   |  |  | (16  | )
| |  |                       |       |   |            |  |       |                           |  |  |       |   |  |      | (1,112 | ) |      |  | (978   | )    |  |  | (896   | ) |  |      |     |   |  |  |      |   |  |  |     |  
| |  |                       |       |   |            |  |       |                           |  |  |       |   |  |      | (108   | ) |      |  | (101   | )    |  |  | (110   | ) |  |      |     |   |  |  |      |   |  |  |     |  
| |  |                       | (5,112 | ) |            |  | 1,115  |                           |  |  | (907   | ) |  |      | 4,738  |   |      |  | (765   | )    |  |  | 787    |   |  |      | 374  |   |  |  | (350  | ) |  |  | 120  |  
| |  |                       |        |   |            |  |        |                           |  |  |        |   |  |      |        |   |      |  |        |      |  |  |        |   |  |      |     
| |  |                       | (4,643 | ) |            |  | (569   | )                         |  |  | (11    | ) |  |      | 2,971  |   |      |  | (2,276 | )    |  |  | (550   | ) |  |      | 269  |   |  |  | (263  | ) |  |  | 74   |  
| |  |                       | 3      |   |            |  | (86    | )                         |  |  | (264   | ) |  |      | 33     |   |      |  | (26    | )    |  |  | (66    | ) |  |      | 1    |   |  |  | (1    | ) |  |  | (3   | )
| |  |                       | (4,648 | ) |            |  | (94    | )                         |  |  | 1,076  |   |  |      | 563    |   |      |  | 183    |      |  |  | (148   | ) |  |      | 16   |   |  |  | (48   | ) |  |  | 25   |  
| |  |                       | 11,251 |   |            |  | 11,345 |                           |  |  | 10,269 |   |  |      | 908    |   |      |  | 725    |      |  |  | 873    |   |  |      | 31   |   |  |  | 79    |   |  |  | 54   |  
| |  |                       |        |   |            |  |        |                           |  |  |        |   |  |      |        |   |      |  |        |      |  |  |        |   |  |      |     
| |  |                       | 6,603  |   |            |  | 11,251 |                           |  |  | 11,345 |   |  |      | 1,471  |   |      |  | 908    |      |  |  | 725    |   |  |      | 47   |   |  |  | 31    |   |  |  | 79   |  
| |  |                       |        |   |            |  |        |                           |  |  |        |   |  |      |        |   |      |  |        |      |  |  |        |   |  |      |     

F-9



---



##### Table of Contents



SIEMENS AG


CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS
EQUITY


For the fiscal years ended September 30, 2005, 2004 and
2003


(in millions of
)


|                                                      |                            |        |       |            |         |  |       |          |  |  |        |       | 
|----------------------------------------------------- | -------------------------- | ------ | ----- | ---------- | ------- |  | ----- | -------- |  |  | ------ | ----- | 
|                                                      |                            |        |       | Additional |         |  |      
|                                                      |                            | Common |       |            | paid-in |  |       | Retained | 
|                                                      |                            | stock  |       |            | capital |  |       | earnings | 
|                                                      |                            |        |       |            |         |  |       |          | 
|Balance at October 1, 2002                            |                            |        | 2,671 |            |         |  | 5,053 |          |  |  | 21,471 |      
|                                                      |                            |        |       |            |         |  |       |          | 
|Net income                                            |                            |        |      |            |         |  |      |          |  |  | 2,445  |      
|Change in currency translation adjustment             |                            |        |      |            |         |  |      |          |  |  |       |      
|Change in unrealized gains and losses                 |                            |        |      |            |         |  |      |          |  |  |       |      
|                                                      |                            |        |       |            |         |  |       |          | 
|                                                      | Total comprehensive income |        |       |           |         |  |       |         |  |  |        | 2,445 | 
|Dividends paid                                        |                            |        |      |            |         |  |      |          |  |  | (896   | )    
|Issuance of common stock and stock-based compensation |                            |        | 2     |            |         |  | 20    |          |  |  |       |      
|Purchase of common stock                              |                            |        |      |            |         |  |      |          |  |  |       |      
|Re-issuance of treasury stock                         |                            |        |      |            |         |  |      |          |  |  |       |      
|                                                      |                            |        |       |            |         |  |       |          | 
|Balance at September 30, 2003                         |                            |        | 2,673 |            |         |  | 5,073 |          |  |  | 23,020 |      
|                                                      |                            |        |       |            |         |  |       |          | 
|Net income                                            |                            |        |      |            |         |  |      |          |  |  | 3,405  |      
|Change in currency translation adjustment             |                            |        |      |            |         |  |      |          |  |  |       |      
|Change in unrealized gains and losses                 |                            |        |      |            |         |  |      |          |  |  |       |      
|                                                      |                            |        |       |            |         |  |       |          | 
|                                                      | Total comprehensive income |        |       |           |         |  |       |         |  |  |        | 3,405 | 
|Dividends paid                                        |                            |        |      |            |         |  |      |          |  |  | (978   | )    
|Issuance of common stock and stock-based compensation |                            |        |      |            |         |  | 50    |          |  |  |       |      
|Purchase of common stock                              |                            |        |      |            |         |  |      |          |  |  |       |      
|Re-issuance of treasury stock                         |                            |        |      |            |         |  | (2    | )        |  |  |       |      
|                                                      |                            |        |       |            |         |  |       |          | 
|Balance at September 30, 2004                         |                            |        | 2,673 |            |         |  | 5,121 |          |  |  | 25,447 |      
|                                                      |                            |        |       |            |         |  |       |          | 
|Net income                                            |                            |        |      |            |         |  |      |          |  |  | 2,248  |      
|Change in currency translation adjustment             |                            |        |      |            |         |  |      |          |  |  |       |      
|Change in unrealized gains and losses                 |                            |        |      |            |         |  |      |          |  |  |       |      
|                                                      |                            |        |       |            |         |  |       |          | 
|                                                      | Total comprehensive income |        |       |           |         |  |       |         |  |  |        | 2,248 | 
|Dividends paid                                        |                            |        |      |            |         |  |      |          |  |  | (1,112 | )    
|Issuance of common stock and stock-based compensation |                            |        |      |            |         |  | 60    |          |  |  |       |      
|Purchase of common stock                              |                            |        |      |            |         |  |      |          |  |  |       |      
|Re-issuance of treasury stock                         |                            |        |      |            |         |  | (14   | )        |  |  |       |      
|                                                      |                            |        |       |            |         |  |       |          | 
|Balance at September 30, 2005                         |                            |        | 2,673 |            |         |  | 5,167 |          |  |  | 26,583 |      
|                                                      |                            |        |       |            |         |  |       |          | 



F-10



---



##### Table of Contents







| |  |                             |        |   |            |  |      |             |  |         |           |   |  |       |          |   |         |  |        |       |  |  |      |   |  |  |        |  
| |  | --------------------------- | ------ | - | ---------- |  | ---- | ----------- |  | ------- | --------- | - |  | ----- | -------- | - | ------- |  | ------ | ----- |  |  | ---- | - |  |  | ------ | -
| |  | Accumulated other           |        |   |            |  |     
| |  | comprehensive income (loss) |        |   |            |  |     
| |  |                             |        |   |            |  |     
| |  | Cumulative                  |        |   | Available- |  |      |             |  | Minimum |           |   |  |       | Treasury |   |         | 
| |  | translation                 |        |   | for-sale   |  |      | Derivative  |  |         | pension   |   |  | AOCI  |          |   | shares  |  |        |      
| |  | adjustment                  |        |   | securities |  |      | instruments |  |         | liability |   |  | Total |          |   | at cost |  |        | Total | 
| |  |                             |        |   |            |  |      |             |  |         |           |   |  |       |          |   |         |  |        |       | 
| |  |                             | (132   | ) |            |  | (185 | )           |  |         | 59        |   |  |       | (5,412   | ) |         |  | (5,670 | )     |  |  | (4   | ) |  |  | 23,521 |  
| |  |                             |        |   |            |  |      |             |  |         |           |   |  |       |          |   |         |  |        |       | 
| |  |                             |       |   |            |  |     |             |  |         |          |   |  |       |         |   |         |  |       |       |  |  |     |   |  |  | 2,445  |  
| |  |                             | (695   | ) |            |  |     |             |  |         |          |   |  |       |         |   |         |  | (695   | )     |  |  |     |   |  |  | (695   | )
| |  |                             |       |   |            |  | 268  |             |  |         | 24        |   |  |       | (978     | ) |         |  | (686   | )     |  |  |     |   |  |  | (686   | )
| |  |                             |        |   |            |  |      |             |  |         |           |   |  |       |          |   |         |  |        |       | 
| |  |                             | (695   | ) |            |  | 268  |             |  |         | 24        |   |  |       | (978     | ) |         |  | (1,381 | )     |  |  |     |   |  |  | 1,064  |  
| |  |                             |       |   |            |  |     |             |  |         |          |   |  |       |         |   |         |  |       |       |  |  |     |   |  |  | (896   | )
| |  |                             |       |   |            |  |     |             |  |         |          |   |  |       |         |   |         |  |       |       |  |  |     |   |  |  | 22     |  
| |  |                             |       |   |            |  |     |             |  |         |          |   |  |       |         |   |         |  |       |       |  |  | (127 | ) |  |  | (127   | )
| |  |                             |       |   |            |  |     |             |  |         |          |   |  |       |          |   |         |  |       |       |  |  | 131  |   |  |  | 131    |  
| |  |                             |        |   |            |  |      |             |  |         |           |   |  |       |          |   |         |  |        |       | 
| |  |                             | (827   | ) |            |  | 83   |             |  |         | 83        |   |  |       | (6,390   | ) |         |  | (7,051 | )     |  |  |     |   |  |  | 23,715 |  
| |  |                             |        |   |            |  |      |             |  |         |           |   |  |       |          |   |         |  |        |       | 
| |  |                             |       |   |            |  |     |             |  |         |          |   |  |       |         |   |         |  |       |       |  |  |     |   |  |  | 3,405  |  
| |  |                             | (249   | ) |            |  |     |             |  |         |          |   |  |       |         |   |         |  | (249   | )     |  |  |     |   |  |  | (249   | )
| |  |                             |       |   |            |  | 77   |             |  |         | (28       | ) |  |       | 865      |   |         |  | 914    |       |  |  |     |   |  |  | 914    |  
| |  |                             |        |   |            |  |      |             |  |         |           |   |  |       |          |   |         |  |        |       | 
| |  |                             | (249   | ) |            |  | 77   |             |  |         | (28       | ) |  |       | 865      |   |         |  | 665    |       |  |  |     |   |  |  | 4,070  |  
| |  |                             |       |   |            |  |     |             |  |         |          |   |  |       |         |   |         |  |       |       |  |  |     |   |  |  | (978   | )
| |  |                             |       |   |            |  |     |             |  |         |          |   |  |       |         |   |         |  |       |       |  |  |     |   |  |  | 50     |  
| |  |                             |       |   |            |  |     |             |  |         |          |   |  |       |         |   |         |  |       |       |  |  | (106 | ) |  |  | (106   | )
| |  |                             |       |   |            |  |     |             |  |         |          |   |  |       |         |   |         |  |       |       |  |  | 106  |   |  |  | 104    |  
| |  |                             |        |   |            |  |      |             |  |         |           |   |  |       |          |   |         |  |        |       | 
| |  |                             | (1,076 | ) |            |  | 160  |             |  |         | 55        |   |  |       | (5,525   | ) |         |  | (6,386 | )     |  |  |     |   |  |  | 26,855 |  
| |  |                             |        |   |            |  |      |             |  |         |           |   |  |       |          |   |         |  |        |       | 
| |  |                             |       |   |            |  |     |             |  |         |          |   |  |       |         |   |         |  |       |       |  |  |     |   |  |  | 2,248  |  
| |  |                             | 483    |   |            |  |     |             |  |         |          |   |  |       |         |   |         |  | 483    |       |  |  |     |   |  |  | 483    |  
| |  |                             |       |   |            |  | (13  | )           |  |         | (144      | ) |  |       | (1,245   | ) |         |  | (1,402 | )     |  |  |     |   |  |  | (1,402 | )
| |  |                             |        |   |            |  |      |             |  |         |           |   |  |       |          |   |         |  |        |       | 
| |  |                             | 483    |   |            |  | (13  | )           |  |         | (144      | ) |  |       | (1,245   | ) |         |  | (919   | )     |  |  |     |   |  |  | 1,329  |  
| |  |                             |       |   |            |  |     |             |  |         |          |   |  |       |         |   |         |  |       |       |  |  |     |   |  |  | (1,112 | )
| |  |                             |       |   |            |  |     |             |  |         |          |   |  |       |         |   |         |  |       |       |  |  |     |   |  |  | 60     |  
| |  |                             |       |   |            |  |     |             |  |         |          |   |  |       |         |   |         |  |       |       |  |  | (219 | ) |  |  | (219   | )
| |  |                             |       |   |            |  |     |             |  |         |          |   |  |       |         |   |         |  |       |       |  |  | 218  |   |  |  | 204    |  
| |  |                             |        |   |            |  |      |             |  |         |           |   |  |       |          |   |         |  |        |       | 
| |  |                             | (593   | ) |            |  | 147  |             |  |         | (89       | ) |  |       | (6,770   | ) |         |  | (7,305 | )     |  |  | (1   | ) |  |  | 27,117 |  
| |  |                             |        |   |            |  |      |             |  |         |           |   |  |       |          |   |         |  |        |       | 

F-11



---



##### Table of Contents



SIEMENS AG


SEGMENT INFORMATION (continuing operations)


As of and for the fiscal years ended September 30, 2005,
2004 and 2003


(in millions of
)


|                                                       |                                                          |                                                                                                                      |        |        |                |  |        |                    |        |  |        |        |        |      |        |        |        |  |        |        |        |  |        |        |        |      |        |        |       |  |        |        |       |  |        |        |       | 
|------------------------------------------------------ | -------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------- | ------ | ------ | -------------- |  | ------ | ------------------ | ------ |  | ------ | ------ | ------ | ---- | ------ | ------ | ------ |  | ------ | ------ | ------ |  | ------ | ------ | ------ | ---- | ------ | ------ | ----- |  | ------ | ------ | ----- |  | ------ | ------ | ----- | 
|                                                       |                                                          | New orders (unaudited)                                                                                               |        |        | External sales |  |        | Intersegment sales |       
|                                                       |                                                          |                                                                                                                      |        |        |                |  |        |                    |       
|                                                       |                                                          | 2005                                                                                                                 |        |        | 2004           |  |        | 2003               |        |  | 2005   |        |        | 2004 |        |        | 2003   |  |        | 2005   |        |  | 2004   |        |        | 2003 |       
|                                                       |                                                          |                                                                                                                      |        |        |                |  |        |                    |        |  |        |        |        |      |        |        |        |  |        |        |        |  |        |        |        |      |       
|Operations Groups                                      |                                                          |                                                                                                                      |        |        |                |  |        |                    |        |  |        |        |        |      |        |        |        |  |        |        |        |  |        |        |        |      |        |        |       |  |        |        |       |  |        |       
|                                                       | Communications
    (Com)(5)                              |                                                                                                                      |        | 13,802 |                |  |        | 13,031             |        |  |        | 12,009 |        |      |        | 12,823 |        |  |        | 12,258 |        |  |        | 11,929 |        |      |        | 318    |       |  |        | 451    |       |  |        | 354    |      
|                                                       | Siemens Business Services (SBS)                          |                                                                                                                      |        | 6,531  |                |  |        | 6,293              |        |  |        | 5,226  |        |      |        | 3,964  |        |  |        | 3,598  |        |  |        | 3,964  |        |      |        | 1,409  |       |  |        | 1,118  |       |  |        | 1,241  |      
|                                                       | Automation and Drives (A&D)                              |                                                                                                                      |        | 10,190 |                |  |        | 8,980              |        |  |        | 8,476  |        |      |        | 8,537  |        |  |        | 7,569  |        |  |        | 7,159  |        |      |        | 1,307  |       |  |        | 1,260  |       |  |        | 1,216  |      
|                                                       | Industrial Solutions and Services (I&S)                  |                                                                                                                      |        | 5,686  |                |  |        | 4,356              |        |  |        | 3,955  |        |      |        | 4,350  |        |  |        | 3,147  |        |  |        | 2,907  |        |      |        | 1,040  |       |  |        | 1,143  |       |  |        | 1,105  |      
|                                                       | Logistics and Assembly Systems
    (L&A)(6)              |                                                                                                                      |        | 2,015  |                |  |        | 1,799              |        |  |        | 1,515  |        |      |        | 1,386  |        |  |        | 1,297  |        |  |        | 1,364  |        |      |        | 86     |       |  |        | 122    |       |  |        | 140    |      
|                                                       | Siemens Building Technologies (SBT)                      |                                                                                                                      |        | 4,518  |                |  |        | 4,358              |        |  |        | 4,775  |        |      |        | 4,301  |        |  |        | 4,174  |        |  |        | 4,706  |        |      |        | 114    |       |  |        | 73     |       |  |        | 284    |      
|                                                       | Power Generation (PG)                                    |                                                                                                                      |        | 10,964 |                |  |        | 9,243              |        |  |        | 7,302  |        |      |        | 8,042  |        |  |        | 7,505  |        |  |        | 6,949  |        |      |        | 19     |       |  |        | 22     |       |  |        | 18     |      
|                                                       | Power Transmission and Distribution (PTD)                |                                                                                                                      |        | 5,283  |                |  |        | 3,863              |        |  |        | 3,586  |        |      |        | 3,930  |        |  |        | 3,292  |        |  |        | 3,188  |        |      |        | 320    |       |  |        | 319    |       |  |        | 211    |      
|                                                       | Transportation Systems (TS)                              |                                                                                                                      |        | 4,599  |                |  |        | 4,321              |        |  |        | 4,674  |        |      |        | 4,146  |        |  |        | 4,284  |        |  |        | 4,668  |        |      |        | 44     |       |  |        | 26     |       |  |        | 29     |      
|                                                       | Siemens VDO Automotive (SV)                              |                                                                                                                      |        | 9,787  |                |  |        | 9,029              |        |  |        | 8,375  |        |      |        | 9,591  |        |  |        | 8,987  |        |  |        | 8,365  |        |      |        | 19     |       |  |        | 14     |       |  |        | 10     |      
|                                                       | Medical Solutions (Med)                                  |                                                                                                                      |        | 8,641  |                |  |        | 8,123              |        |  |        | 7,835  |        |      |        | 7,577  |        |  |        | 6,969  |        |  |        | 7,345  |        |      |        | 49     |       |  |        | 103    |       |  |        | 77     |      
|                                                       | Osram                                                    |                                                                                                                      |        | 4,300  |                |  |        | 4,240              |        |  |        | 4,172  |        |      |        | 4,222  |        |  |        | 4,143  |        |  |        | 4,113  |        |      |        | 78     |       |  |        | 97     |       |  |        | 59     |      
|                                                       | Other
    Operations(7)                                  |                                                                                                                      |        | 3,236  |                |  |        | 3,215              |        |  |        | 2,924  |        |      |        | 1,770  |        |  |        | 2,050  |        |  |        | 2,209  |        |      |        | 1,352  |       |  |        | 1,242  |       |  |        | 744    |      
|                                                       |                                                          |                                                                                                                      |        |        |                |  |        |                    |        |  |        |        |        |      |        |        |        |  |        |        |        |  |        |        |        |      |       
|                                                       |                                                          | Total Operations Groups                                                                                              |        |        | 89,552         |  |        |                    | 80,851 |  |        |        | 74,824 |      |        |        | 74,639 |  |        |        | 69,273 |  |        |        | 68,866 |      |        |        | 6,155 |  |        |        | 5,990 |  |        |        | 5,488 | 
|Reconciliation to financial statements                 |                                                          |                                                                                                                      |        |        |                |  |        |                    |        |  |        |        |        |      |        |        |        |  |        |        |        |  |        |        |        |      |        |        |       |  |        |        |       |  |        |       
|                                                       | Corporate items, pensions and eliminations               |                                                                                                                      |        | (6,293 | )              |  |        | (7,202             | )      |  |        | (6,573 | )      |      |        | 77     |        |  |        | 208    |        |  |        | 192    |        |      |        | (5,902 | )     |  |        | (5,844 | )     |  |        | (5,276 | )    
|                                                       | Other interest expense                                   |                                                                                                                      |        |       |                |  |        |                   |        |  |        |       |        |      |        |       |        |  |        |       |        |  |        |       |        |      |        |       |       |  |        |       |       |  |        |       |      
|                                                       | Other assets related and miscellaneous reconciling items |                                                                                                                      |        |       |                |  |        |                   |        |  |        |       |        |      |        |       |        |  |        |       |        |  |        |       |        |      |        |       |       |  |        |       |       |  |        |       |      
|                                                       |                                                          |                                                                                                                      |        |        |                |  |        |                    |        |  |        |        |        |      |        |        |        |  |        |        |        |  |        |        |        |      |       
|                                                       |                                                          | Total Operations (for columns Group profit/ Net capital
    employed, i.e. Income before income taxes/ Total assets) |        |        | 83,259         |  |        |                    | 73,649 |  |        |        | 68,251 |      |        |        | 74,716 |  |        |        | 69,481 |  |        |        | 69,058 |      |        |        | 253   |  |        |        | 146   |  |        |        | 212   | 
|                                                       |                                                          |                                                                                                                      |        |        |                |  |        |                    |        |  |        |        |        |      |        |        |        |  |        |        |        |  |        |        |        |      |       
|Financing and Real Estate Groups                       |                                                          |                                                                                                                      |        |        |                |  |        |                    |        |  |        |        |        |      |        |        |        |  |        |        |        |  |        |        |        |      |        |        |       |  |        |        |       |  |        |       
|                                                       | Siemens Financial Services (SFS)                         |                                                                                                                      |        | 542    |                |  |        | 562                |        |  |        | 532    |        |      |        | 464    |        |  |        | 453    |        |  |        | 433    |        |      |        | 78     |       |  |        | 109    |       |  |        | 99     |      
|                                                       | Siemens Real Estate (SRE)                                |                                                                                                                      |        | 1,621  |                |  |        | 1,578              |        |  |        | 1,587  |        |      |        | 265    |        |  |        | 303    |        |  |        | 281    |        |      |        | 1,356  |       |  |        | 1,275  |       |  |        | 1,306  |      
|                                                       | Eliminations                                             |                                                                                                                      |        | (10    | )              |  |        |                   |        |  |        |       |        |      |        |       |        |  |        |       |        |  |        |       |        |      |        | (10    | )     |  |        | (13    | )     |  |        | (12    | )    
|                                                       |                                                          |                                                                                                                      |        |        |                |  |        |                    |        |  |        |        |        |      |        |        |        |  |        |        |        |  |        |        |        |      |       
|                                                       |                                                          | Total Financing and Real Estate                                                                                      |        |        | 2,153          |  |        |                    | 2,140  |  |        |        | 2,119  |      |        |        | 729    |  |        |        | 756    |  |        |        | 714    |      |        |        | 1,424 |  |        |        | 1,371 |  |        |        | 1,393 | 
|                                                       |                                                          |                                                                                                                      |        |        |                |  |        |                    |        |  |        |        |        |      |        |        |        |  |        |        |        |  |        |        |        |      |       
|Eliminations, reclassifications and Corporate Treasury |                                                          |                                                                                                                      | (1,621 | )      |                |  |       |                    |        |  | 3      |        |        |      |       |        |        |  |       |        |        |  | 3      |        |        |      | (1,677 | )      |       |  | (1,517 | )      |       |  | (1,605 | )     
|                                                       |                                                          |                                                                                                                      |        |        |                |  |        |                    |        |  |        |        |        |      |        |        |        |  |        |        |        |  |        |        |        |      |       
|Siemens                                                |                                                          |                                                                                                                      | 83,791 |        |                |  | 75,789 |                    |        |  | 70,373 |        |        |      | 75,445 |        |        |  | 70,237 |        |        |  | 69,775 |        |        |      |       |        |       |  |       |        |       |  |       |       
|                                                       |                                                          |                                                                                                                      |        |        |                |  |        |                    |        |  |        |        |        |      |        |        |        |  |        |        |        |  |        |        |        |      |       
|                                                      






|    |                                                                                                                                                                                                                                                                                                             
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Group profit of the OperationsGroups is earnings before
    financing interest, certain pension costs and income taxes.                                                                                                                                                                                     
|   
|(2) | Net capital employed of the OperationsGroups represents
    total assets less tax assets, certain accruals and non-interest
    bearing liabilities other than tax liabilities.                                                                                                                             
|   
|(3) | Intangible assets, property, plant and equipment, acquisitions,
    and investments.                                                                                                                                                                                                                        
|   
|(4) | Includes amortization and impairments of intangible assets,
    depreciation of property, plant and equipment, and write-downs
    of investments.                                                                                                                                                          
|   
|(5) | The Groups ICN and ICM were combined into one Group named
    Communications (Com) as of October 1, 2004.                                                                                                                                                                                                   
|   
|(6) | L&As Distribution and Industry Logistics (DI) as
    well as Material Handling Products (MHP) divisions were
    reclassified to Other Operationsas of September 30,
    2005. Prior year information was reclassified for comparability
    purposes.                                                     
|   
|(7) | Other Operationsprimarily refer to certain
    centrally-held equity investments and other operating activities
    not associated with a Group.                                                                                                                                                            
|   
|(8) | Includes (for Eliminationswithin Financing and Real
    Estate consists of) cash paid for income taxes according to
    the allocation of income taxes to Operations, Financing and
    Real Estate, and Eliminations, reclassifications and
    Corporate Treasuryin the Consolidated Statements of Income.

F-12



---



##### Table of Contents







|            |        |   |                 |  |        |                         |  |  |                          |   |                  |                                |        |              |                |  |        |         |  |  |         |              |  |         |        |   |      |  |        |      |  |  |        |   |  |      |        |       |      |  |        |       |  |  |        |       |  |      |       |  |      |  |       |  |  |  |       |  |  |  |       |  |  |  |       |  |  |  |       | 
|----------- | ------ | - | --------------- |  | ------ | ----------------------- |  |  | ------------------------ | - | ---------------- | ------------------------------ | ------ | ------------ | -------------- |  | ------ | ------- |  |  | ------- | ------------ |  | ------- | ------ | - | ---- |  | ------ | ---- |  |  | ------ | - |  | ---- | ------ | ----- | ---- |  | ------ | ----- |  |  | ------ | ----- |  | ---- | ----- |  | ---- |  | ----- |  |  |  | ----- |  |  |  | ----- |  |  |  | ----- |  |  |  | ----- | 
|            |        |   |                 |  |        |                         |  |  |                          |   |                  |                                |        |              |                |  |        |         |  |  |         | Amortization | 
|            |        |   |                 |  |        | Net cash from operating |  |  |                          |   | depreciation and |                               
|Total sales |        |   | Group profit(1) |  |        | Net capital employed(2) |  |  | and investing activities |   |                  | Capital spending(3)            |        |              | impairments(4) | 
|            |        |   |                 |  |        |                         |  |  |                          |   |                  |                                |        |              |                | 
|2005        |        |   | 2004            |  |        | 2003                    |  |  | 2005                     |   |                  | 2004                           |        |              | 2003           |  |        | 9/30/05 |  |  | 9/30/04 |              |  | 9/30/03 |        |   | 2005 |  |        | 2004 |  |  | 2003   |   |  | 2005 |        |       | 2004 |  |        | 2003  |  |  | 2005   |       |  | 2004 |       |  | 2003 | 
|            |        |   |                 |  |        |                         |  |  |                          |   |                  |                                |        |              |                |  |        |         |  |  |         |              |  |         |        |   |      |  |        |      |  |  |        |   |  |      |        |       |      |  |        |       |  |  |        |       |  |      |       |  |      | 
|            | 13,141 |   |                 |  | 12,709 |                         |  |  | 12,283                   |   |                  |                                | 454    |              |                |  | 707    |         |  |  | (237    | )            |  |         | 1,883  |   |      |  | 2,134  |      |  |  | 2,089  |   |  |      | 655    |       |      |  | 390    |       |  |  | 599    |       |  |      | 509   |  |      |  | 443   |  |  |  | 467   |  |  |  | 433   |  |  |  | 486   |  |  |  | 671   | 
|            | 5,373  |   |                 |  | 4,716  |                         |  |  | 5,205                    |   |                  |                                | (690   | )            |                |  | 40     |         |  |  | 13      |              |  |         | 296    |   |      |  | 632    |      |  |  | 294    |   |  |      | (258   | )     |      |  | (263   | )     |  |  | (62    | )     |  |      | 340   |  |      |  | 428   |  |  |  | 193   |  |  |  | 516   |  |  |  | 213   |  |  |  | 255   | 
|            | 9,844  |   |                 |  | 8,829  |                         |  |  | 8,375                    |   |                  |                                | 1,210  |              |                |  | 1,077  |         |  |  | 806     |              |  |         | 3,570  |   |      |  | 1,951  |      |  |  | 1,925  |   |  |      | 333    |       |      |  | 1,026  |       |  |  | 1,060  |       |  |      | 1,182 |  |      |  | 312   |  |  |  | 281   |  |  |  | 245   |  |  |  | 209   |  |  |  | 231   | 
|            | 5,390  |   |                 |  | 4,290  |                         |  |  | 4,012                    |   |                  |                                | 139    |              |                |  | 95     |         |  |  | (41     | )            |  |         | 1,563  |   |      |  | 1,003  |      |  |  | 167    |   |  |      | 324    |       |      |  | (725   | )     |  |  | 54     |       |  |      | 55    |  |      |  | 892   |  |  |  | 45    |  |  |  | 95    |  |  |  | 47    |  |  |  | 52    | 
|            | 1,472  |   |                 |  | 1,419  |                         |  |  | 1,504                    |   |                  |                                | 69     |              |                |  | 45     |         |  |  | (197    | )            |  |         | 302    |   |      |  | 501    |      |  |  | 491    |   |  |      | 224    |       |      |  | (81    | )     |  |  | (152   | )     |  |      | 32    |  |      |  | 23    |  |  |  | 26    |  |  |  | 23    |  |  |  | 23    |  |  |  | 47    | 
|            | 4,415  |   |                 |  | 4,247  |                         |  |  | 4,990                    |   |                  |                                | 181    |              |                |  | 108    |         |  |  | 101     |              |  |         | 1,453  |   |      |  | 1,359  |      |  |  | 1,447  |   |  |      | 122    |       |      |  | 195    |       |  |  | 375    |       |  |      | 149   |  |      |  | 75    |  |  |  | 82    |  |  |  | 104   |  |  |  | 127   |  |  |  | 144   | 
|            | 8,061  |   |                 |  | 7,527  |                         |  |  | 6,967                    |   |                  |                                | 951    |              |                |  | 961    |         |  |  | 1,171   |              |  |         | 2,625  |   |      |  | 1,997  |      |  |  | 1,712  |   |  |      | 239    |       |      |  | 687    |       |  |  | (448   | )     |  |      | 556   |  |      |  | 214   |  |  |  | 1,120 |  |  |  | 196   |  |  |  | 181   |  |  |  | 163   | 
|            | 4,250  |   |                 |  | 3,611  |                         |  |  | 3,399                    |   |                  |                                | 212    |              |                |  | 238    |         |  |  | 207     |              |  |         | 1,869  |   |      |  | 1,162  |      |  |  | 798    |   |  |      | 19     |       |      |  | 102    |       |  |  | 387    |       |  |      | 161   |  |      |  | 228   |  |  |  | 65    |  |  |  | 84    |  |  |  | 73    |  |  |  | 65    | 
|            | 4,190  |   |                 |  | 4,310  |                         |  |  | 4,697                    |   |                  |                                | 45     |              |                |  | (434   | )       |  |  | 284     |              |  |         | 584    |   |      |  | 49     |      |  |  | (252   | ) |  |      | (551   | )     |      |  | (495   | )     |  |  | (217   | )     |  |      | 185   |  |      |  | 83    |  |  |  | 120   |  |  |  | 57    |  |  |  | 65    |  |  |  | 65    | 
|            | 9,610  |   |                 |  | 9,001  |                         |  |  | 8,375                    |   |                  |                                | 630    |              |                |  | 562    |         |  |  | 418     |              |  |         | 3,823  |   |      |  | 3,542  |      |  |  | 3,949  |   |  |      | 341    |       |      |  | 1,030  |       |  |  | 184    |       |  |      | 623   |  |      |  | 515   |  |  |  | 569   |  |  |  | 427   |  |  |  | 394   |  |  |  | 400   | 
|            | 7,626  |   |                 |  | 7,072  |                         |  |  | 7,422                    |   |                  |                                | 976    |              |                |  | 1,046  |         |  |  | 1,118   |              |  |         | 3,685  |   |      |  | 3,173  |      |  |  | 3,128  |   |  |      | 396    |       |      |  | 762    |       |  |  | 845    |       |  |      | 1,025 |  |      |  | 449   |  |  |  | 321   |  |  |  | 229   |  |  |  | 202   |  |  |  | 227   | 
|            | 4,300  |   |                 |  | 4,240  |                         |  |  | 4,172                    |   |                  |                                | 465    |              |                |  | 445    |         |  |  | 410     |              |  |         | 2,065  |   |      |  | 2,011  |      |  |  | 2,074  |   |  |      | 464    |       |      |  | 453    |       |  |  | 528    |       |  |      | 307   |  |      |  | 256   |  |  |  | 280   |  |  |  | 261   |  |  |  | 264   |  |  |  | 268   | 
|            | 3,122  |   |                 |  | 3,292  |                         |  |  | 2,953                    |   |                  |                                | 45     |              |                |  | 246    |         |  |  | 191     |              |  |         | 1,639  |   |      |  | 1,708  |      |  |  | 1,901  |   |  |      | 231    |       |      |  | 277    |       |  |  | (380   | )     |  |      | 142   |  |      |  | 87    |  |  |  | 536   |  |  |  | 193   |  |  |  | 86    |  |  |  | 72    | 
|            |        |   |                 |  |        |                         |  |  |                          |   |                  |                                |        |              |                |  |        |         |  |  |         |              |  |         |        |   |      |  |        |      |  |  |        |   |  |      |        |       |      |  |        |       |  |  |        |       |  |      |       |  |      | 
|            | 80,794 |   |                 |  | 75,263 |                         |  |  | 74,354                   |   |                  |                                | 4,687  |              |                |  | 5,136  |         |  |  | 4,244   |              |  |         | 25,357 |   |      |  | 21,222 |      |  |  | 19,723 |   |  |      | 2,539  |       |      |  | 3,358  |       |  |  | 2,773  |       |  |      | 5,266 |  |      |  | 4,005 |  |  |  | 4,105 |  |  |  | 2,863 |  |  |  | 2,370 |  |  |  | 2,660 | 
|            | (5,825 | ) |                 |  | (5,636 | )                       |  |  | (5,084                   | ) |                  |                                | (1,072 | )            |                |  | (1,206 | )       |  |  | (1,575  | )            |  |         | (3,690 | ) |      |  | (3,116 | )    |  |  | (3,781 | ) |  |      | (3,761 | ) (8) |      |  | (1,117 | ) (8) |  |  | (2,503 | ) (8) |  |      | 470   |  |      |  | 28    |  |  |  | 33    |  |  |  | 29    |  |  |  | 487   |  |  |  | 132   | 
|            |       |   |                 |  |       |                         |  |  |                         |   |                  |                                | (191   | )            |                |  | (141   | )       |  |  | (88     | )            |  |         |       |   |      |  |       |      |  |  |       |   |  |      |       |       |      |  |       |       |  |  |       |       |  |      |      |  |      |  |      |  |  |  |      |  |  |  |      |  |  |  |      |  |  |  |      | 
|            |       |   |                 |  |       |                         |  |  |                         |   |                  |                                |       |              |                |  |       |         |  |  |        |              |  |         | 59,787 |   |      |  | 49,821 |      |  |  | 48,533 |   |  |      |       |       |      |  |       |       |  |  |       |       |  |      |      |  |      |  |      |  |  |  |      |  |  |  |      |  |  |  |      |  |  |  |      | 
|            |        |   |                 |  |        |                         |  |  |                          |   |                  |                                |        |              |                |  |        |         |  |  |         |              |  |         |        |   |      |  |        |      |  |  |        |   |  |      |        |       |      |  |        |       |  |  |        |       |  |      |       |  |      | 
|            | 74,969 |   |                 |  | 69,627 |                         |  |  | 69,270                   |   |                  |                                | 3,424  |              |                |  | 3,789  |         |  |  | 2,581   |              |  |         | 81,454 |   |      |  | 67,927 |      |  |  | 64,475 |   |  |      | (1,222 | )     |      |  | 2,241  |       |  |  | 270    |       |  |      | 5,736 |  |      |  | 4,033 |  |  |  | 4,138 |  |  |  | 2,892 |  |  |  | 2,857 |  |  |  | 2,792 | 
|            |        |   |                 |  |        |                         |  |  |                          |   |                  |                                |        |              |                |  |        |         |  |  |         |              |  |         |        |   |      |  |        |      |  |  |        |   |  |      |        |       |      |  |        |       |  |  |        |       |  |      |       |  |      | 
|            |        |   |                 |  |        |                         |  |  |                          |   |                  | Income before
    income taxes |        | Total assets |                |  |        |         |  |  |         |              |  |         |        |   |      |  |        |      |  |  |        |   |  |      |        |       |      |  |        |       |  |  |        |       |  |      |       | 
|            |        |   |                 |  |        |                         |  |  |                          |   |                  |                                |        |              |                |  |        |         |  |  |         |              |  |         |        |   |      |  |        |      |  |  |        |   |  |      |        |      
|            | 542    |   |                 |  | 562    |                         |  |  | 532                      |   |                  |                                | 319    |              |                |  | 250    |         |  |  | 269     |              |  |         | 10,148 |   |      |  | 9,055  |      |  |  | 8,445  |   |  |      | (344   | )     |      |  | (159   | )     |  |  | (312   | )     |  |      | 563   |  |      |  | 311   |  |  |  | 237   |  |  |  | 221   |  |  |  | 194   |  |  |  | 220   | 
|            | 1,621  |   |                 |  | 1,578  |                         |  |  | 1,587                    |   |                  |                                | 144    |              |                |  | 106    |         |  |  | 204     |              |  |         | 3,496  |   |      |  | 3,455  |      |  |  | 3,607  |   |  |      | 202    |       |      |  | 454    |       |  |  | 347    |       |  |      | 212   |  |      |  | 137   |  |  |  | 169   |  |  |  | 203   |  |  |  | 197   |  |  |  | 218   | 
|            | (10    | ) |                 |  | (13    | )                       |  |  | (12                      | ) |                  |                                |       |              |                |  |       |         |  |  |        |              |  |         | (340   | ) |      |  | (576   | )    |  |  | (465   | ) |  |      | (117   | ) (8) |      |  | (82    | ) (8) |  |  | (85    | ) (8) |  |      |      |  |      |  |      |  |  |  |      |  |  |  |      |  |  |  |      |  |  |  |      | 
|            |        |   |                 |  |        |                         |  |  |                          |   |                  |                                |        |              |                |  |        |         |  |  |         |              |  |         |        |   |      |  |        |      |  |  |        |   |  |      |        |       |      |  |        |       |  |  |        |       |  |      |       |  |      | 
|            | 2,153  |   |                 |  | 2,127  |                         |  |  | 2,107                    |   |                  |                                | 463    |              |                |  | 356    |         |  |  | 473     |              |  |         | 13,304 |   |      |  | 11,934 |      |  |  | 11,587 |   |  |      | (259   | )     |      |  | 213    |       |  |  | (50    | )     |  |      | 775   |  |      |  | 448   |  |  |  | 406   |  |  |  | 424   |  |  |  | 391   |  |  |  | 438   | 
|            |        |   |                 |  |        |                         |  |  |                          |   |                  |                                |        |              |                |  |        |         |  |  |         |              |  |         |        |   |      |  |        |      |  |  |        |   |  |      |        |       |      |  |        |       |  |  |        |       |  |      |       |  |      | 
|            | (1,677 | ) |                 |  | (1,517 | )                       |  |  | (1,602                   | ) |                  |                                | 298    |              |                |  | 224    |         |  |  | 266     |              |  |         | (8,553 | ) |      |  | (343   | )    |  |  | 1,543  |   |  |      | (8     | ) (8) |      |  | 561    | (8)   |  |  | 1,351  | (8)   |  |      |      |  |      |  |      |  |  |  |      |  |  |  |      |  |  |  |      |  |  |  |      | 
|            |        |   |                 |  |        |                         |  |  |                          |   |                  |                                |        |              |                |  |        |         |  |  |         |              |  |         |        |   |      |  |        |      |  |  |        |   |  |      |        |       |      |  |        |       |  |  |        |       |  |      |       |  |      | 
|            | 75,445 |   |                 |  | 70,237 |                         |  |  | 69,775                   |   |                  |                                | 4,185  |              |                |  | 4,369  |         |  |  | 3,320   |              |  |         | 86,205 |   |      |  | 79,518 |      |  |  | 77,605 |   |  |      | (1,489 | )     |      |  | 3,015  |       |  |  | 1,571  |       |  |      | 6,511 |  |      |  | 4,481 |  |  |  | 4,544 |  |  |  | 3,316 |  |  |  | 3,248 |  |  |  | 3,230 | 
|            |        |   |                 |  |        |                         |  |  |                          |   |                  |                                |        |              |                |  |        |         |  |  |         |              |  |         |        |   |      |  |        |      |  |  |        |   |  |      |        |       |      |  |        |       |  |  |        |       |  |      |       |  |      | 

F-13



---



##### Table of Contents



SIEMENS AG


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(in millions of
, except where
otherwise stated and per share amounts)


1.   Basis of presentation







Financial statement presentation






| |   |                                                                                                                                                                                                                                                                                                                   
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Siemens Represents the Consolidated Financial
    Statements of the Company.                                                                                                                                                                                                                                     
|
| |  | Operations Defined as Siemens twelve
    operating Groups including certain operating activities not
    associated with these Groups and centrally managed items
    including corporate headquarters, but excluding the activities
    of the Financing and Real Estate Groups and the Corporate
    Treasury.
|
| |  | Financing and Real EstateSiemens
    Financing and Real Estate Groups are responsible for the
    Companys international leasing, finance, credit and real
    estate management activities.                                                                                                                   
|
| |  | Eliminations, reclassifications and Corporate
    Treasury Captures separately the consolidation of
    transactions among Operations and Financing and Real
    Estate, as well as certain reclassifications. This component
    also includes the Companys Corporate Treasury activities.                     

Operations, Financing and
Real Estate Corporate Treasury Siemens Financing and Real Estate Operations Eliminations, reclassifications and Corporate Treasury,
Operations Financing and Real Estate Siemens Operations Financing and Real Estate Eliminations, reclassifications and Corporate Treasury


Siemens


2.   Summary of significant accounting
policies


Basis of consolidation


F-14



---



##### Table of Contents



SIEMENS AG


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS(Continued)


(in millions of
, except where
otherwise stated and per share amounts)




Foreign currency translation




|              |  |          |     |                            |      |  |                                      |      |  |  |       |  |  |      |       |  |      |  |       |  |  |  |       | 
|------------- |  | -------- | --- | -------------------------- | ---- |  | ------------------------------------ | ---- |  |  | ----- |  |  | ---- | ----- |  | ---- |  | ----- |  |  |  | ----- | 
|              |  |          |     | Year-end exchange rate     |      |  | Annual average rate                  |     
|              |  |          |     | 1  quoted into currencies |      |  | 1  quoted into currencies specified |     
|              |  |          |     | specified below            |      |  | below                                |     
|              |  |          |     | September 30,              |      |  | Fiscal year                          |     
|              |  |          |     |                            |      |  |                                      |     
|Currency      |  | ISO Code |     |                            | 2005 |  |                                      | 2004 |  |  | 2005  |  |  | 2004 |       |  | 2003 | 
|              |  |          |     |                            |      |  |                                      |      |  |  |       |  |  |      |       |  |      | 
|Swiss francs  |  |          | CHF |                            |      |  | 1.556                                |      |  |  | 1.554 |  |  |      | 1.542 |  |      |  | 1.549 |  |  |  | 1.498 | 
|British pound |  |          | GBP |                            |      |  | 0.682                                |      |  |  | 0.686 |  |  |      | 0.688 |  |      |  | 0.680 |  |  |  | 0.676 | 
|U.S. Dollar   |  |          | USD |                            |      |  | 1.204                                |      |  |  | 1.233 |  |  |      | 1.273 |  |      |  | 1.215 |  |  |  | 1.085 | 

Revenue recognition


Revenue
Arrangements with Multiple Deliverables


F-15



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##### Table of Contents



SIEMENS AG


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS(Continued)


(in millions of
, except where
otherwise stated and per share amounts)


Product-related expenses and contract loss
provisions


Earnings per share


Cash and cash equivalents


Marketable securities and investments Accumulated other comprehensive income AOCI)




Inventories


Goodwill and Other intangible assets


Property, plant and equipment


F-16



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##### Table of Contents



SIEMENS AG


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS(Continued)


(in millions of
, except where
otherwise stated and per share amounts)




|                                |  |  |                         | 
|------------------------------- |  |  | ----------------------- | 
|Factory and office buildings    |  |  | 20 to 50 years          | 
|Other buildings                 |  |  | 5 to 10 years           | 
|Technical machinery & equipment |  |  | 5 to 10 years           | 
|Furniture & office equipment    |  |  | generally 5 years       | 
|Equipment leased to others      |  |  | generally 3 to 5  years | 

Impairment of long-lived assets Accounting changesStandards
implemented


Derivative instruments and hedging activities Accounting for Derivative
Instruments and Hedging Activities Derivative instruments and hedging
activities


Taxes Accounting for Income Taxes


Asset retirement obligations Accounting for Asset
Retirement Obligations. cumulative effect of a
change in accounting principle .


F-17



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##### Table of Contents



SIEMENS AG


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS(Continued)


(in millions of
, except where
otherwise stated and per share amounts)


Use of estimates


Reclassification


Accounting changesStandards implemented Accounting for
Stock-Based Compensation Accounting for Stock-Based
CompensationTransition and Disclosure Accounting
for Stock Issued to Employees,


|                                                                                                                             |             |                          |       |      |      |  |       |      |  |  |       |      | 
|---------------------------------------------------------------------------------------------------------------------------- | ----------- | ------------------------ | ----- | ---- | ---- |  | ----- | ---- |  |  | ----- | ---- | 
|                                                                                                                             |             | Year ended September 30, |      
|                                                                                                                             |             |                          |      
|                                                                                                                             |             | 2005                     |       |      | 2004 |  |       | 2003 | 
|                                                                                                                             |             |                          |       |      |      |  |       |      | 
|Net income                                                                                                                   |             |                          |       |      |      |  |       |      |  |  |       |     
|As reported                                                                                                                  |             |                          | 2,248 |      |      |  | 3,405 |      |  |  | 2,445 |     
|Plus: Stock-based employee compensation expense included in
    reported net income, net of income taxes                     |             |                          | 60    |      |      |  | 63    |      |  |  | 28    |     
|Less: Stock-based employee compensation expense determined under
    fair value based accounting method, net of income taxes |             |                          | (59   | )    |      |  | (115  | )    |  |  | (147  | )   
|                                                                                                                             |             |                          |       |      |      |  |       |      | 
|Pro forma                                                                                                                    |             |                          | 2,249 |      |      |  | 3,353 |      |  |  | 2,326 |     
|                                                                                                                             |             |                          |       |      |      |  |       |      | 
|Basic earnings per share                                                                                                     |             |                          |       |      |      |  |       |      |  |  |       |     
|                                                                                                                             | As reported |                          |       | 2.52 |      |  |       | 3.82 |  |  |       | 2.75 | 
|                                                                                                                             | Pro forma   |                          |       | 2.52 |      |  |       | 3.76 |  |  |       | 2.61 | 
|Diluted earnings per share                                                                                                   |             |                          |       |      |      |  |       |      |  |  |       |     
|                                                                                                                             | As reported |                          |       | 2.42 |      |  |       | 3.66 |  |  |       | 2.71 | 
|                                                                                                                             | Pro forma   |                          |       | 2.42 |      |  |       | 3.60 |  |  |       | 2.58 | 





F-18



---



##### Table of Contents



SIEMENS AG


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS(Continued)


(in millions of
, except where
otherwise stated and per share amounts)





Consolidation of
Variable Interest Entities, Consolidated
Financial Statements


Accounting for the Impairment or Disposal of Long-Lived
Assets, Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to
Be Disposed Of Reporting the Results of
Operations  Reporting the Effects of Disposal of a
Segment of a Business, and Extraordinary, Unusual and
Infrequently Occurring Events and Transactions


Accounting changesRecent accounting pronouncements to
be implemented Share-Based Payment Accounting for Stock-Based Compensation Accounting for Stock Issued to Employees


F-19



---



##### Table of Contents



SIEMENS AG


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS(Continued)


(in millions of
, except where
otherwise stated and per share amounts)




Accounting
for Early Retirement or Postemployment Programs with Specific
Features (such as Terms Specified in Altersteilzeit Early
Retirement Arrangements).


Accounting
Changes and Error Corrections  a replacement of APB
No. 20 and FASB Statement No. 3


3.   Acquisitions, dispositions and
discontinued operations


a)  Acquisitions






   


 


F-20



---



##### Table of Contents



SIEMENS AG


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS(Continued)


(in millions of
, except where
otherwise stated and per share amounts)


 


  







       







       


F-21



---



##### Table of Contents



SIEMENS AG


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS(Continued)


(in millions of
, except where
otherwise stated and per share amounts)




b)  Dispositions


 Other operating income (expense), net  Income (loss) from investments in other companies, net


  


c)   Discontinued Operations


    




F-22



---



##### Table of Contents



SIEMENS AG


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS(Continued)


(in millions of
, except where
otherwise stated and per share amounts)




|                                                           |                           |               |     |     | 
|---------------------------------------------------------- | ------------------------- | ------------- | --- | --- | 
|                                                           |                           | September 30,
|                                                           |                           | 2005         
|                                                           |                           |              
|Inventories, net                                           |                           |               | 104 |    
|Accounts receivable, net                                   |                           |               | 89  |    
|Other (thereof Property, plant and equipment, net
    43) |                           |               | 52  |    
|                                                           |                           |               |    
|                                                           | Assets held for sale      |               |     | 245 | 
|                                                           |                           |               |    
|Accounts payable                                           |                           |               | 228 |    
|Other liabilities                                          |                           |               | 61  |    
|                                                           |                           |               |    
|                                                           | Liabilities held for sale |               |     | 289 | 
|                                                           |                           |               |    

Income loss) from
discontinued operations, net of income taxes.


     




4.   Other operating income (expense), net


|                                                |  |                          |      |   |      |  |      |      |  |  |     | 
|----------------------------------------------- |  | ------------------------ | ---- | - | ---- |  | ---- | ---- |  |  | --- | 
|                                                |  | Year ended September 30, |     
|                                                |  |                          |     
|                                                |  | 2005                     |      |   | 2004 |  |      | 2003 | 
|                                                |  |                          |      |   |      |  |      |      | 
|Impairment of goodwill                          |  |                          | (262 | ) |      |  | (433 | )    |  |  |    | 
|Gains on sales of real estate, net              |  |                          | 177  |   |      |  | 64   |      |  |  | 131 | 
|Gains on sales and disposals of businesses, net |  |                          | 49   |   |      |  | 182  |      |  |  | 101 | 
|Other, net                                      |  |                          | 27   |   |      |  | 15   |      |  |  | 410 | 
|                                                |  |                          |      |   |      |  |      |      | 
|                                                |  |                          | (9   | ) |      |  | (172 | )    |  |  | 642 | 
|                                                |  |                          |      |   |      |  |      |      | 

Impairment of goodwill  


Gains on sales and disposals of businesses, net   


Other, net 


F-23



---



##### Table of Contents



SIEMENS AG


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS(Continued)


(in millions of
, except where
otherwise stated and per share amounts)




|   |                                                       
|-- | ------------------------------------------------------
|5. | Income (loss) from investments in other companies, net

|                                                      |  |                          |     |   |      |  |       |      |  |  |      |  
|----------------------------------------------------- |  | ------------------------ | --- | - | ---- |  | ----- | ---- |  |  | ---- | -
|                                                      |  | Year ended September 30, |    
|                                                      |  |                          |    
|                                                      |  | 2005                     |     |   | 2004 |  |       | 2003 | 
|                                                      |  |                          |     |   |      |  |       |      | 
|Share in earnings (losses) from equity investees, net |  |                          | 499 |   |      |  | 460   |      |  |  | 236  |  
|Write-downs on investments                            |  |                          | (85 | ) |      |  | (84   | )    |  |  | (159 | )
|Income from investments                               |  |                          | 95  |   |      |  | 35    |      |  |  | 42   |  
|Gains on sales of investments                         |  |                          | 58  |   |      |  | 617   |      |  |  | 21   |  
|Loss on sales of investments                          |  |                          | (9  | ) |      |  | (5    | )    |  |  | (23  | )
|Other                                                 |  |                          | 26  |   |      |  | 8     |      |  |  | 25   |  
|                                                      |  |                          |     |   |      |  |       |      | 
|                                                      |  |                          | 584 |   |      |  | 1,031 |      |  |  | 142  |  
|                                                      |  |                          |     |   |      |  |       |      | 

Share in earnings (losses) from equity investees, net    AOCI,  Gains on sales of investments 




|   |                                                                
|-- | ---------------------------------------------------------------
|6. | Income from financial assets and marketable securities,
    net

|                                                              |  |                          |     |  |      |  |    |      |  |  |    |  
|------------------------------------------------------------- |  | ------------------------ | --- |  | ---- |  | -- | ---- |  |  | -- | -
|                                                              |  | Year ended September 30, |    
|                                                              |  |                          |    
|                                                              |  | 2005                     |     |  | 2004 |  |    | 2003 | 
|                                                              |  |                          |     |  |      |  |    |      | 
|Gains (losses) on sales of available-for-sale securities, net |  |                          | 243 |  |      |  | 54 |      |  |  | (6 | )
|Other financial gains (losses), net                           |  |                          | 54  |  |      |  | 15 |      |  |  | 67 |  
|                                                              |  |                          |     |  |      |  |    |      | 
|                                                              |  |                          | 297 |  |      |  | 69 |      |  |  | 61 |  
|                                                              |  |                          |     |  |      |  |    |      | 

Gains (losses) on sales of available-for-sale
securities, net 


Other financial gains
(losses) net   


7.   Interest income, net


|                                             |                                       |                          |     |      |      |  |     |      |   |  |     |      |  
|-------------------------------------------- | ------------------------------------- | ------------------------ | --- | ---- | ---- |  | --- | ---- | - |  | --- | ---- | -
|                                             |                                       | Year ended September 30, |    
|                                             |                                       |                          |    
|                                             |                                       | 2005                     |     |      | 2004 |  |     | 2003 |  
|                                             |                                       |                          |     |      |      |  |     |      |  
|Other interest income, net                   |                                       |                          | 241 |      |      |  | 254 |      |   |  | 215 |     
|Interest income (expense) of Operations, net |                                       |                          | (32 | )    |      |  | 20  |      |   |  | 31  |     
|                                             |                                       |                          |     |      |      |  |     |      |  
|Total interest income, net                   |                                       |                          | 209 |      |      |  | 274 |      |   |  | 246 |     
|                                             |                                       |                          |     |      |      |  |     |      |  
|                                             | Thereof: Interest and similar income  |                          |     | 720  |      |  |     | 723  |   |  |     | 789  |  
|                                             | Thereof: Interest and similar expense |                          |     | (511 | )    |  |     | (449 | ) |  |     | (543 | )

F-24



---



##### Table of Contents



SIEMENS AG


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS(Continued)


(in millions of
, except where
otherwise stated and per share amounts)


Interest income(expense) of Operations, net Other interest income, net


8.   Income taxes




|        |  |                          |       |  |      |  |       |      |  |  |       | 
|------- |  | ------------------------ | ----- |  | ---- |  | ----- | ---- |  |  | ----- | 
|        |  | Year ended September 30, |      
|        |  |                          |      
|        |  | 2005                     |       |  | 2004 |  |       | 2003 | 
|        |  |                          |       |  |      |  |       |      | 
|Germany |  |                          | 521   |  |      |  | 1,234 |      |  |  | 561   | 
|Foreign |  |                          | 3,664 |  |      |  | 3,135 |      |  |  | 2,759 | 
|        |  |                          |       |  |      |  |       |      | 
|        |  |                          | 4,185 |  |      |  | 4,369 |      |  |  | 3,320 | 
|        |  |                          |       |  |      |  |       |      | 



|                        |                                    |                          |       |      |      |  |      |      |   |  |     |     | 
|----------------------- | ---------------------------------- | ------------------------ | ----- | ---- | ---- |  | ---- | ---- | - |  | --- | --- | 
|                        |                                    | Year ended September 30, |      
|                        |                                    |                          |      
|                        |                                    | 2005                     |       |      | 2004 |  |      | 2003 |  
|                        |                                    |                          |       |      |      |  |      |      |  
|Current:                |                                    |                          |       |      |      |  |      |      |   |  |     |    
|                        | German corporation and trade taxes |                          |       | 178  |      |  |      | 315  |   |  |     | 149 | 
|                        | Foreign income taxes               |                          |       | 931  |      |  |      | 603  |   |  |     | 430 | 
|                        |                                    |                          |       |      |      |  |      |      |  
|                        |                                    |                          | 1,109 |      |      |  | 918  |      |   |  | 579 |    
|                        |                                    |                          |       |      |      |  |      |      |  
|Deferred:               |                                    |                          |       |      |      |  |      |      |   |  |     |    
|                        | Germany                            |                          |       | (11  | )    |  |      | (176 | ) |  |     | 48  | 
|                        | Foreign                            |                          |       | (119 | )    |  |      | 25   |   |  |     | 254 | 
|                        |                                    |                          |       |      |      |  |      |      |  
|                        |                                    |                          | (130  | )    |      |  | (151 | )    |   |  | 302 |    
|                        |                                    |                          |       |      |      |  |      |      |  
|Income tax expense, net |                                    |                          | 979   |      |      |  | 767  |      |   |  | 881 |    
|                        |                                    |                          |       |      |      |  |      |      |  





F-25



---



##### Table of Contents



SIEMENS AG


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS(Continued)


(in millions of
, except where
otherwise stated and per share amounts)




|                            |                                                     |                                                            |       |  |      |   |       |      |      |   |       |  |      |  
|--------------------------- | --------------------------------------------------- | ---------------------------------------------------------- | ----- |  | ---- | - | ----- | ---- | ---- | - | ----- |  | ---- | -
|                            |                                                     | Year ended September 30,                                   |      
|                            |                                                     |                                                            |      
|                            |                                                     | 2005                                                       |       |  | 2004 |   |       | 2003 |     
|                            |                                                     |                                                            |       |  |      |   |       |      |     
|Expected income tax expense |                                                     |                                                            | 1,632 |  |      |   | 1,704 |      |      |   | 1,361 | 
|                            | Increase (decrease) in income taxes resulting from: |                                                            |       |  |      |   |       |      |      |   |       |  |     
|                            |                                                     | Non-deductible losses and expenses                         |       |  | 116  |   |       |      | 101  |   |       |  | 88   |  
|                            |                                                     | Goodwill and acquired in-process research and development* |       |  | (139 | ) |       |      | 139  |   |       |  | 26   |  
|                            |                                                     | Tax-free income                                            |       |  | (77  | ) |       |      | (110 | ) |       |  | (158 | )
|                            |                                                     | Change in tax base of investments                          |       |  |     |   |       |      | 78   |   |       |  | 148  |  
|                            |                                                     | Tax-free gains from sales of business interests            |       |  | (34  | ) |       |      | (476 | ) |       |  | (66  | )
|                            |                                                     | Taxes for prior years                                      |       |  |     |   |       |      | 55   |   |       |  |     |  
|                            |                                                     | Effect of change in German tax rates                       |       |  |     |   |       |      | 6    |   |       |  |     |  
|                            |                                                     | Foreign tax rate differential                              |       |  | (448 | ) |       |      | (650 | ) |       |  | (381 | )
|                            |                                                     | Tax effect of equity method investments                    |       |  | (121 | ) |       |      | (109 | ) |       |  | (153 | )
|                            |                                                     | Other                                                      |       |  | 50   |   |       |      | 29   |   |       |  | 16   |  
|                            |                                                     |                                                            |       |  |      |   |       |      |     
|Actual income tax expense   |                                                     |                                                            | 979   |  |      |   | 767   |      |      |   | 881   | 
|                            |                                                     |                                                            |       |  |      |   |       |      |     








|  |                                                                                                                                                                                                                                          
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|* | Fiscal 2005 includes
    (233) in tax
    benefits related to previously unrecognized tax deductions
    arising from a partial reorganization of certain businesses for
    which related goodwill was written off in previous periods.

F-26



---



##### Table of Contents



SIEMENS AG


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS(Continued)


(in millions of
, except where
otherwise stated and per share amounts)




|                                             |                                      |                                                                        |       |       |       |   |       |       |       |  
|-------------------------------------------- | ------------------------------------ | ---------------------------------------------------------------------- | ----- | ----- | ----- | - | ----- | ----- | ----- | -
|                                             |                                      | September 30,                                                          |      
|                                             |                                      |                                                                        |      
|                                             |                                      | 2005                                                                   |       |       | 2004  |  
|                                             |                                      |                                                                        |       |       |       |  
|Current assets:                              |                                      |                                                                        |       |       |       |   |       |      
|                                             | Inventories                          |                                                                        |       | 733   |       |   |       | 514   |      
|                                             | Receivables                          |                                                                        |       | 226   |       |   |       | 284   |      
|                                             | Accrued liabilities                  |                                                                        |       | 959   |       |   |       | 736   |      
|                                             | Liabilities                          |                                                                        |       | 468   |       |   |       | 400   |      
|                                             | Tax loss and credit carryforward     |                                                                        |       | 52    |       |   |       | 197   |      
|                                             | Other                                |                                                                        |       | 212   |       |   |       | 283   |      
|                                             |                                      |                                                                        |       |       |       |  
|                                             |                                      | Total current deferred tax assets, before valuation allowances         |       |       | 2,650 |   |       |       | 2,414 |  
|                                             |                                      |                                                                        |       |       |       |  
|                                             |                                      | Valuation allowances                                                   |       |       | (6    | ) |       |       | (42   | )
|                                             |                                      |                                                                        |       |       |       |  
|                                             |                                      | Current deferred tax assets                                            |       |       | 2,644 |   |       |       | 2,372 |  
|                                             |                                      |                                                                        |       |       |       |  
|Current liabilities:                         |                                      |                                                                        |       |       |       |   |       |      
|                                             | Inventories                          |                                                                        |       | 1,766 |       |   |       | 1,751 |      
|                                             | Receivables                          |                                                                        |       | 436   |       |   |       | 341   |      
|                                             | Accrued liabilities                  |                                                                        |       | 192   |       |   |       | 303   |      
|                                             | Liabilities                          |                                                                        |       | 51    |       |   |       | 164   |      
|                                             | Other                                |                                                                        |       | 653   |       |   |       | 191   |      
|                                             |                                      |                                                                        |       |       |       |  
|                                             |                                      | Current deferred tax liabilities                                       |       |       | 3,098 |   |       |       | 2,750 |  
|                                             |                                      |                                                                        |       |       |       |  
|Current deferred tax (liability) assets, net |                                      |                                                                        | (454  | )     |       |   | (378  | )    
|                                             |                                      |                                                                        |       |       |       |  
|Non-current assets:                          |                                      |                                                                        |       |       |       |   |       |      
|                                             | Long-term investments                |                                                                        |       | 629   |       |   |       | 223   |      
|                                             | Intangibles                          |                                                                        |       | 232   |       |   |       | 235   |      
|                                             | Property, plant and equipment        |                                                                        |       | 285   |       |   |       | 205   |      
|                                             | Retirement plans                     |                                                                        |       | 4,565 |       |   |       | 3,199 |      
|                                             | Accrued liabilities                  |                                                                        |       | 564   |       |   |       | 672   |      
|                                             | Liabilities                          |                                                                        |       | 357   |       |   |       | 406   |      
|                                             | Tax loss and credit carryforward     |                                                                        |       | 2,361 |       |   |       | 1,770 |      
|                                             | Other                                |                                                                        |       | 415   |       |   |       | 226   |      
|                                             |                                      |                                                                        |       |       |       |  
|                                             |                                      | Total non-current deferred tax assets, before valuation
    allowances |       |       | 9,408 |   |       |       | 6,936 |  
|                                             |                                      | Valuation allowances                                                   |       |       | (619  | ) |       |       | (417  | )
|                                             |                                      |                                                                        |       |       |       |  
|                                             |                                      | Non-current deferred tax assets                                        |       |       | 8,789 |   |       |       | 6,519 |  
|                                             |                                      |                                                                        |       |       |       |  
|Non-current liabilities:                     |                                      |                                                                        |       |       |       |   |       |      
|                                             | Intangibles                          |                                                                        |       | 528   |       |   |       | 300   |      
|                                             | Property, plant and equipment        |                                                                        |       | 771   |       |   |       | 503   |      
|                                             | Accrued liabilities                  |                                                                        |       | 292   |       |   |       | 141   |      
|                                             | Liabilities                          |                                                                        |       | 46    |       |   |       | 11    |      
|                                             | Other                                |                                                                        |       | 1,258 |       |   |       | 1,322 |      
|                                             |                                      |                                                                        |       |       |       |  
|                                             |                                      | Non-current deferred tax liabilities                                   |       |       | 2,895 |   |       |       | 2,277 |  
|                                             |                                      |                                                                        |       |       |       |  
|                                             | Non-current deferred tax assets, net |                                                                        |       | 5,894 |       |   |       | 4,242 |      
|                                             |                                      |                                                                        |       |       |       |  
|Total deferred tax assets, net               |                                      |                                                                        | 5,440 |       |       |   | 3,864 |      
|                                             |                                      |                                                                        |       |       |       |  

F-27



---



##### Table of Contents



SIEMENS AG


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS(Continued)


(in millions of
, except where
otherwise stated and per share amounts)


   




 


AOCI


|                                                    |  |                          |      |   |      |  |       |      |  |  |      |  
|--------------------------------------------------- |  | ------------------------ | ---- | - | ---- |  | ----- | ---- |  |  | ---- | -
|                                                    |  | Year ended September 30, |     
|                                                    |  |                          |     
|                                                    |  | 2005                     |      |   | 2004 |  |       | 2003 | 
|                                                    |  |                          |      |   |      |  |       |      | 
|Provision for income taxes                          |  |                          | 979  |   |      |  | 767   |      |  |  | 881  |  
|Discontinued operations                             |  |                          | (498 | ) |      |  | (106  | )    |  |  | (14  | )
|Cumulative effect of change in accounting principle |  |                          |     |   |      |  |      |      |  |  | 23   |  
|Shareholders equity for other comprehensive income |  |                          | (763 | ) |      |  | 588   |      |  |  | (394 | )
|                                                    |  |                          |      |   |      |  |       |      | 
|                                                    |  |                          | (282 | ) |      |  | 1,249 |      |  |  | 496  |  
|                                                    |  |                          |      |   |      |  |       |      | 

9.   Marketable securities




|                  |  |                    |       |            |            |  |       |      |  |  |      |  |  |  |   | 
|----------------- |  | ------------------ | ----- | ---------- | ---------- |  | ----- | ---- |  |  | ---- |  |  |  | - | 
|                  |  | September 30, 2005 |      
|                  |  |                    |      
|                  |  |                    |       | Unrealized |           
|                  |  |                    |       |            |           
|                  |  | Cost               |       |            | Fair Value |  |       | Gain |  |  | Loss | 
|                  |  |                    |       |            |            |  |       |      |  |  |      | 
|Equity securities |  |                    | 1,308 |            |            |  | 1,695 |      |  |  | 388  |  |  |  | 1 | 
|Debt securities   |  |                    | 79    |            |            |  | 80    |      |  |  | 1    |  |  |  |  | 
|Fund securities   |  |                    | 14    |            |            |  | 14    |      |  |  |     |  |  |  |  | 
|                  |  |                    |       |            |            |  |       |      |  |  |      | 
|                  |  |                    | 1,401 |            |            |  | 1,789 |      |  |  | 389  |  |  |  | 1 | 
|                  |  |                    |       |            |            |  |       |      |  |  |      | 

F-28



---



##### Table of Contents



SIEMENS AG


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS(Continued)


(in millions of
, except where
otherwise stated and per share amounts)


|                  |  |                    |       |            |            |  |       |      |  |  |      |  |  |  |   | 
|----------------- |  | ------------------ | ----- | ---------- | ---------- |  | ----- | ---- |  |  | ---- |  |  |  | - | 
|                  |  | September 30, 2004 |      
|                  |  |                    |      
|                  |  |                    |       | Unrealized |           
|                  |  |                    |       |            |           
|                  |  | Cost               |       |            | Fair Value |  |       | Gain |  |  | Loss | 
|                  |  |                    |       |            |            |  |       |      |  |  |      | 
|Equity securities |  |                    | 1,219 |            |            |  | 1,301 |      |  |  | 85   |  |  |  | 3 | 
|Debt securities   |  |                    | 77    |            |            |  | 77    |      |  |  |     |  |  |  |  | 
|Fund securities   |  |                    | 8     |            |            |  | 8     |      |  |  |     |  |  |  |  | 
|                  |  |                    |       |            |            |  |       |      |  |  |      | 
|                  |  |                    | 1,304 |            |            |  | 1,386 |      |  |  | 85   |  |  |  | 3 | 
|                  |  |                    |       |            |            |  |       |      |  |  |      | 

AOCI  AOCI


           Long-term
investments Marketable securities Accumulated other comprehensive income
(loss)


Infineon-Transactions









F-29



---



##### Table of Contents



SIEMENS AG


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS(Continued)


(in millions of
, except where
otherwise stated and per share amounts)




10. Accounts receivable, net


|                                                           |  |               |        |  |      |  |        | 
|---------------------------------------------------------- |  | ------------- | ------ |  | ---- |  | ------ | 
|                                                           |  | September 30, |       
|                                                           |  |               |       
|                                                           |  | 2005          |        |  | 2004 | 
|                                                           |  |               |        |  |      | 
|Trade receivables from the sale of goods and services, net |  |               | 15,465 |  |      |  | 13,978 | 
|Receivables from sales and direct finance leases, net      |  |               | 1,488  |  |      |  | 1,365  | 
|Receivables from associated and related companies, net     |  |               | 169    |  |      |  | 127    | 
|                                                           |  |               |        |  |      | 
|                                                           |  |               | 17,122 |  |      |  | 15,470 | 
|                                                           |  |               |        |  |      | 





|                                                                                                       |  |                          |      |   |      |  |       |      |  |  |       |  
|------------------------------------------------------------------------------------------------------ |  | ------------------------ | ---- | - | ---- |  | ----- | ---- |  |  | ----- | -
|                                                                                                       |  | Year ended September 30, |     
|                                                                                                       |  |                          |     
|                                                                                                       |  | 2005                     |      |   | 2004 |  |       | 2003 | 
|                                                                                                       |  |                          |      |   |      |  |       |      | 
|Valuation allowance as of beginning of fiscal year                                                     |  |                          | 918  |   |      |  | 1,122 |      |  |  | 1,585 |  
|Increase (decrease) in valuation allowances recorded in the
    income statement in the current period |  |                          | 190  |   |      |  | 59    |      |  |  | (50   | )
|Write-offs charged against the allowance                                                               |  |                          | (179 | ) |      |  | (280  | )    |  |  | (383  | )
|Recoveries of amounts previously written-off                                                           |  |                          | 34   |   |      |  | 32    |      |  |  | 23    |  
|Foreign exchange translation adjustment                                                                |  |                          | 18   |   |      |  | (15   | )    |  |  | (53   | )
|                                                                                                       |  |                          |      |   |      |  |       |      | 
|Valuation allowance as of fiscal year-end                                                              |  |                          | 981  |   |      |  | 918   |      |  |  | 1,122 |  
|                                                                                                       |  |                          |      |   |      |  |       |      | 



|                                                   |  |               |        |   | 
|-------------------------------------------------- |  | ------------- | ------ | - | 
|                                                   |  | September 30, |       
|                                                   |  | 2005          |       
|                                                   |  |               |       
|2006                                               |  |               | 1,692  |   | 
|2007                                               |  |               | 1,202  |   | 
|2008                                               |  |               | 847    |   | 
|2009                                               |  |               | 532    |   | 
|2010                                               |  |               | 288    |   | 
|Thereafter                                         |  |               | 255    |   | 
|                                                   |  |               |        |  
|Minimum future lease payments                      |  |               | 4,816  |   | 
|Less: Unearned income                              |  |               | (645   | ) | 
|Less: Allowance for doubtful accounts              |  |               | (139   | ) | 
|Plus: Unguaranteed residual values                 |  |               | 355    |   | 
|                                                   |  |               |        |  
|Net investment in lease receivables                |  |               | 4,387  |   | 
|Less: Long-term portion                            |  |               | (2,899 | ) | 
|                                                   |  |               |        |  
|Receivables from sales and finance leases, current |  |               | 1,488  |   | 
|                                                   |  |               |        |  

F-30



---



##### Table of Contents



SIEMENS AG


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS(Continued)


(in millions of
, except where
otherwise stated and per share amounts)




11. Inventories, net


|                                                                  |                           |               |        |        |      |  |        |        |  
|----------------------------------------------------------------- | ------------------------- | ------------- | ------ | ------ | ---- |  | ------ | ------ | -
|                                                                  |                           | September 30, |       
|                                                                  |                           |               |       
|                                                                  |                           | 2005          |        |        | 2004 | 
|                                                                  |                           |               |        |        |      | 
|Raw materials and supplies                                        |                           |               | 2,452  |        |      |  | 2,282  |       
|Work in process                                                   |                           |               | 2,724  |        |      |  | 2,261  |       
|Costs and earnings in excess of billings on uncompleted contracts |                           |               | 7,242  |        |      |  | 6,650  |       
|Finished goods and products held for resale                       |                           |               | 2,696  |        |      |  | 2,777  |       
|Advances to suppliers                                             |                           |               | 558    |        |      |  | 651    |       
|                                                                  |                           |               |        |        |      | 
|                                                                  |                           |               | 15,672 |        |      |  | 14,621 |       
|                                                                  | Advance payments received |               |        | (2,860 | )    |  |        | (3,263 | )
|                                                                  |                           |               |        |        |      | 
|                                                                  |                           |               | 12,812 |        |      |  | 11,358 |       
|                                                                  |                           |               |        |        |      | 

12. Other current assets


|                                                        |  |               |       |  |      |  |       | 
|------------------------------------------------------- |  | ------------- | ----- |  | ---- |  | ----- | 
|                                                        |  | September 30, |      
|                                                        |  |               |      
|                                                        |  | 2005          |       |  | 2004 | 
|                                                        |  |               |       |  |      | 
|Taxes receivable                                        |  |               | 1,247 |  |      |  | 1,033 | 
|Loans receivable                                        |  |               | 535   |  |      |  | 446   | 
|Other receivables from associated and related companies |  |               | 258   |  |      |  | 304   | 
|Other                                                   |  |               | 3,190 |  |      |  | 2,615 | 
|                                                        |  |               |       |  |      | 
|                                                        |  |               | 5,230 |  |      |  | 4,398 | 
|                                                        |  |               |       |  |      | 

13. Long-term investments


|                                    |  |               |       |  |      |  |       | 
|----------------------------------- |  | ------------- | ----- |  | ---- |  | ----- | 
|                                    |  | September 30, |      
|                                    |  |               |      
|                                    |  | 2005          |       |  | 2004 | 
|                                    |  |               |       |  |      | 
|Investments in associated companies |  |               | 2,976 |  |      |  | 2,823 | 
|Miscellaneous investments           |  |               | 792   |  |      |  | 1,299 | 
|                                    |  |               |       |  |      | 
|                                    |  |               | 3,768 |  |      |  | 4,122 | 
|                                    |  |               |       |  |      | 

Miscellaneous investments Long-term
investments Marketable securities   


F-31



---



##### Table of Contents



SIEMENS AG


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS(Continued)


(in millions of
, except where
otherwise stated and per share amounts)


14. Goodwill


|                          |                                           |         |       |             |           |              |              |             |  |  |              |     |  |             |   |   |           |  |     |     |  |  |       |       | 
|------------------------- | ----------------------------------------- | ------- | ----- | ----------- | --------- | ------------ | ------------ | ----------- |  |  | ------------ | --- |  | ----------- | - | - | --------- |  | --- | --- |  |  | ----- | ----- | 
|                          |                                           |         |       |             |           | Acquisitions |              |             |  |  |              |     | 
|                          |                                           |         |       | Translation |           |              | and Purchase |             |  |  |              |     |  |            
|                          |                                           |         |       | adjustment  |           |              | Accounting   |             |  |  |              |     |  |            
|                          |                                           | 10/1/04 |       |             | and other |              |              | Adjustments |  |  | Dispositions |     |  | Impairments |   |   | 9/30/2005 | 
|                          |                                           |         |       |             |           |              |              |             |  |  |              |     |  |             |   |   |           | 
|Operations                |                                           |         |       |             |           |              |              |             |  |  |              |     |  |             |   |   |           |  |     |     |  |  |       |      
|                          | Communications (Com)                      |         |       | 367         |           |              |              | 14          |  |  |              | 73  |  |             |   |  |           |  |     | 17  |  |  |       | 437   | 
|                          | Siemens Business Services (SBS)           |         |       | 269         |           |              |              | 4           |  |  |              | 117 |  |             |   |  |           |  |     | 262 |  |  |       | 128   | 
|                          | Automation and Drives (A&D)               |         |       | 388         |           |              |              | 8           |  |  |              | 540 |  |             |   |  |           |  |     |    |  |  |       | 936   | 
|                          | Industrial Solutions and Services (I&S)   |         |       | 258         |           |              |              | 6           |  |  |              | 544 |  |             |   |  |           |  |     |    |  |  |       | 808   | 
|                          | Logistics and Assembly Systems (L&A)      |         |       | 123         |           |              |              |            |  |  |              |    |  |             |   |  |           |  |     |    |  |  |       | 123   | 
|                          | Siemens Building Technologies (SBT)       |         |       | 415         |           |              |              | 8           |  |  |              | 21  |  |             |   |  |           |  |     |    |  |  |       | 444   | 
|                          | Power Generation (PG)                     |         |       | 1,027       |           |              |              | 14          |  |  |              | 183 |  |             |   |  |           |  |     |    |  |  |       | 1,224 | 
|                          | Power Transmission and Distribution (PTD) |         |       | 320         |           |              |              | 15          |  |  |              | 294 |  |             |   |  |           |  |     |    |  |  |       | 629   | 
|                          | Transportation Systems (TS)               |         |       | 111         |           |              |              |            |  |  |              | 61  |  |             |   |  |           |  |     |    |  |  |       | 172   | 
|                          | Siemens VDO Automotive (SV)               |         |       | 1,524       |           |              |              |            |  |  |              | 5   |  |             |   |  |           |  |     |    |  |  |       | 1,529 | 
|                          | Medical Solutions (Med)                   |         |       | 1,514       |           |              |              | 79          |  |  |              | 512 |  |             |   | 5 |           |  |     |    |  |  |       | 2,100 | 
|                          | Osram                                     |         |       | 78          |           |              |              | 4           |  |  |              | 4   |  |             |   |  |           |  |     |    |  |  |       | 86    | 
|                          | Other Operations                          |         |       |            |           |              |              |            |  |  |              | 183 |  |             |   |  |           |  |     |    |  |  |       | 183   | 
|Financing and Real Estate |                                           |         |       |             |           |              |              |             |  |  |              |     |  |             |   |   |           |  |     |     |  |  |       |      
|                          | Siemens Financial Services (SFS)          |         |       | 82          |           |              |              |            |  |  |              | 49  |  |             |   |  |           |  |     |    |  |  |       | 131   | 
|                          | Siemens Real Estate (SRE)                 |         |       |            |           |              |              |            |  |  |              |    |  |             |   |  |           |  |     |    |  |  |       |      | 
|                          |                                           |         |       |             |           |              |              |             |  |  |              |     |  |             |   |   |           | 
|Siemens                   |                                           |         | 6,476 |             |           |              | 152          |             |  |  | 2,586        |     |  |             | 5 |   |           |  | 279 |     |  |  | 8,930 |      
|                          |                                           |         |       |             |           |              |              |             |  |  |              |     |  |             |   |   |           | 

|                          |                                           |         |       |             |           |              |              |             |   |  |              |     |  |             |    |    |           |  |     |     |  |  |       |       | 
|------------------------- | ----------------------------------------- | ------- | ----- | ----------- | --------- | ------------ | ------------ | ----------- | - |  | ------------ | --- |  | ----------- | -- | -- | --------- |  | --- | --- |  |  | ----- | ----- | 
|                          |                                           |         |       |             |           | Acquisitions |              |             |   |  |              |     | 
|                          |                                           |         |       | Translation |           |              | and Purchase |             |   |  |              |     |  |            
|                          |                                           |         |       | adjustment  |           |              | Accounting   |             |   |  |              |     |  |            
|                          |                                           | 10/1/03 |       |             | and other |              |              | Adjustments |   |  | Dispositions |     |  | Impairments |    |    | 9/30/2004 | 
|                          |                                           |         |       |             |           |              |              |             |   |  |              |     |  |             |    |    |           | 
|Operations                |                                           |         |       |             |           |              |              |             |   |  |              |     |  |             |    |    |           |  |     |     |  |  |       |      
|                          | Communications (Com)                      |         |       | 345         |           |              |              | (8          | ) |  |              | 30  |  |             |    |   |           |  |     |    |  |  |       | 367   | 
|                          | Siemens Business Services (SBS)           |         |       | 281         |           |              |              | (9          | ) |  |              |    |  |             |    | 3  |           |  |     |    |  |  |       | 269   | 
|                          | Automation and Drives (A&D)               |         |       | 328         |           |              |              | (6          | ) |  |              | 66  |  |             |    |   |           |  |     |    |  |  |       | 388   | 
|                          | Industrial Solutions and Services (I&S)   |         |       | 67          |           |              |              | (6          | ) |  |              | 197 |  |             |    |   |           |  |     |    |  |  |       | 258   | 
|                          | Logistics and Assembly Systems (L&A)      |         |       | 564         |           |              |              | (8          | ) |  |              |    |  |             |    |   |           |  |     | 433 |  |  |       | 123   | 
|                          | Siemens Building Technologies (SBT)       |         |       | 429         |           |              |              | (7          | ) |  |              |    |  |             |    | 7  |           |  |     |    |  |  |       | 415   | 
|                          | Power Generation (PG)                     |         |       | 943         |           |              |              | (14         | ) |  |              | 98  |  |             |    |   |           |  |     |    |  |  |       | 1,027 | 
|                          | Power Transmission and Distribution (PTD) |         |       | 141         |           |              |              | 3           |   |  |              | 182 |  |             |    | 6  |           |  |     |    |  |  |       | 320   | 
|                          | Transportation Systems (TS)               |         |       | 115         |           |              |              | (4          | ) |  |              |    |  |             |    |   |           |  |     |    |  |  |       | 111   | 
|                          | Siemens VDO Automotive (SV)               |         |       | 1,524       |           |              |              |            |   |  |              |    |  |             |    |   |           |  |     |    |  |  |       | 1,524 | 
|                          | Medical Solutions (Med)                   |         |       | 1,602       |           |              |              | (72         | ) |  |              | 17  |  |             |    | 33 |           |  |     |    |  |  |       | 1,514 | 
|                          | Osram                                     |         |       | 82          |           |              |              | (4          | ) |  |              |    |  |             |    |   |           |  |     |    |  |  |       | 78    | 
|Financing and Real Estate |                                           |         |       |             |           |              |              |             |   |  |              |     |  |             |    |    |           |  |     |     |  |  |       |      
|                          | Siemens Financial Services (SFS)          |         |       | 80          |           |              |              | 2           |   |  |              |    |  |             |    |   |           |  |     |    |  |  |       | 82    | 
|                          | Siemens Real Estate (SRE)                 |         |       |            |           |              |              |            |   |  |              |    |  |             |    |   |           |  |     |    |  |  |       |      | 
|                          |                                           |         |       |             |           |              |              |             |   |  |              |     |  |             |    |    |           | 
|Siemens                   |                                           |         | 6,501 |             |           |              | (133         | )           |   |  | 590          |     |  |             | 49 |    |           |  | 433 |     |  |  | 6,476 |      
|                          |                                           |         |       |             |           |              |              |             |   |  |              |     |  |             |    |    |           | 

 


F-32



---



##### Table of Contents



SIEMENS AG


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS(Continued)


(in millions of
, except where
otherwise stated and per share amounts)


  





  


15. Other intangible assets, net


|                                     |  |         |       |             |            |  |    |           |  |  |             |  |             |         |     |       |              |  |              |         |  |       |              |  |               |         |       |  |           |  |       |  |  |  |       |  |  |  |     | 
|------------------------------------ |  | ------- | ----- | ----------- | ---------- |  | -- | --------- |  |  | ----------- |  | ----------- | ------- | --- | ----- | ------------ |  | ------------ | ------- |  | ----- | ------------ |  | ------------- | ------- | ----- |  | --------- |  | ----- |  |  |  | ----- |  |  |  | --- | 
|                                     |  |         |       |             |            |  |    |           |  |  |             |  |             | Net     |     |       |              |  | Net          |         |  |      
|                                     |  |         |       |             |            |  |    |           |  |  |             |  |             | book    |     |       |              |  | book         |         |  |      
|                                     |  |         |       |             |            |  |    |           |  |  |             |  |             | value   |     |       | Accumulated  |  |              | value   |  |       | Amortization | 
|                                     |  |         |       | Translation |            |  |    |           |  |  |             |  | Accumulated |         |     | as of |              |  | amortization |         |  | as of |              |  | during fiscal |        
|                                     |  | 10/1/04 |       |             | adjustment |  |    | Additions |  |  | Retirements |  |             | 9/30/05 |     |       | amortization |  |              | 9/30/05 |  |       | 10/1/04      |  |               | 10/1/04 |       |  | year 2005 | 
|                                     |  |         |       |             |            |  |    |           |  |  |             |  |             |         |     |       |              |  |              |         |  |       |              |  |               |         |       |  |           | 
|Software                             |  |         | 1,880 |             |            |  | 34 |           |  |  | 480         |  |             |         | 141 |       |              |  | 2,253        |         |  |       | 1,312        |  |               |         | 941   |  |           |  | 949   |  |  |  | 931   |  |  |  | 410 | 
|Patents, licenses and similar rights |  |         | 2,778 |             |            |  | 29 |           |  |  | 1,006       |  |             |         | 138 |       |              |  | 3,675        |         |  |       | 1,509        |  |               |         | 2,166 |  |           |  | 1,195 |  |  |  | 1,583 |  |  |  | 306 | 
|                                     |  |         |       |             |            |  |    |           |  |  |             |  |             |         |     |       |              |  |              |         |  |       |              |  |               |         |       |  |           | 
|Other intangible assets              |  |         | 4,658 |             |            |  | 63 |           |  |  | 1,486       |  |             |         | 279 |       |              |  | 5,928        |         |  |       | 2,821        |  |               |         | 3,107 |  |           |  | 2,144 |  |  |  | 2,514 |  |  |  | 716 | 
|                                     |  |         |       |             |            |  |    |           |  |  |             |  |             |         |     |       |              |  |              |         |  |       |              |  |               |         |       |  |           | 

 


Other intangible
assets, net


|            |  |  |     | 
|----------- |  |  | --- | 
|Fiscal year |  | 
|            |  | 
|2006        |  |  | 579 | 
|2007        |  |  | 451 | 
|2008        |  |  | 345 | 
|2009        |  |  | 278 | 
|2010        |  |  | 244 | 

F-33



---



##### Table of Contents



SIEMENS AG


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS(Continued)


(in millions of
, except where
otherwise stated and per share amounts)


16. Property, plant and equipment, net


|                                                   |  |         |        |             |            |  |     |           |           |  |           |  |  |             |      |             |         |  |             |              |      |              |         |              |            |         |        |               |         |  |        |           |  |  |        |  |  |  |        |  |  |  |       | 
|-------------------------------------------------- |  | ------- | ------ | ----------- | ---------- |  | --- | --------- | --------- |  | --------- |  |  | ----------- | ---- | ----------- | ------- |  | ----------- | ------------ | ---- | ------------ | ------- | ------------ | ---------- | ------- | ------ | ------------- | ------- |  | ------ | --------- |  |  | ------ |  |  |  | ------ |  |  |  | ----- | 
|                                                   |  |         |        |             |            |  |     |           |           |  |           |  |  |             |      | Net         |         |  |             |              | Net  |              |         | Depreciation |           
|                                                   |  |         |        |             |            |  |     |           |           |  |           |  |  |             |      | book        |         |  |             |              | book |              |         | and          |           
|                                                   |  |         |        |             |            |  |     |           |           |  |           |  |  |             |      | value       |         |  | Accumulated |              |      | value        |         |              | impairment |        
|                                                   |  |         |        | Translation |            |  |     |           | Reclassi- |  |           |  |  |             |      | Accumulated |         |  | as of       |              |      | depreciation |         |              | as of      |         |        | during fiscal |        
|                                                   |  | 10/1/04 |        |             | adjustment |  |     | Additions |           |  | fications |  |  | Retirements |      |             | 9/30/05 |  |             | depreciation |      |              | 9/30/05 |              |            | 10/1/04 |        |               | 10/1/04 |  |        | year 2005 | 
|                                                   |  |         |        |             |            |  |     |           |           |  |           |  |  |             |      |             |         |  |             |              |      |              |         |              |            |         |        |               |         |  |        |           | 
|Land and buildings                                 |  |         | 9,162  |             |            |  | 89  |           |           |  | 987       |  |  |             | 81   |             |         |  | 446         |              |      |              | 9,873   |              |            |         | 4,878  |               |         |  | 4,995  |           |  |  | 4,516  |  |  |  | 4,646  |  |  |  | 360   | 
|Technical machinery and equipment                  |  |         | 8,690  |             |            |  | 166 |           |           |  | 1,206     |  |  |             | 225  |             |         |  | 529         |              |      |              | 9,758   |              |            |         | 6,757  |               |         |  | 3,001  |           |  |  | 5,987  |  |  |  | 2,703  |  |  |  | 685   | 
|Furniture and office equipment                     |  |         | 9,608  |             |            |  | 149 |           |           |  | 1,805     |  |  |             | 201  |             |         |  | 1,868       |              |      |              | 9,895   |              |            |         | 7,635  |               |         |  | 2,260  |           |  |  | 7,498  |  |  |  | 2,110  |  |  |  | 1,110 | 
|Equipment leased to others                         |  |         | 1,472  |             |            |  | 56  |           |           |  | 532       |  |  |             | (82  | )           |         |  | 322         |              |      |              | 1,656   |              |            |         | 786    |               |         |  | 870    |           |  |  | 819    |  |  |  | 653    |  |  |  | 168   | 
|Advances to suppliers and construction in progress |  |         | 571    |             |            |  | 21  |           |           |  | 768       |  |  |             | (425 | )           |         |  | 44          |              |      |              | 891     |              |            |         | 5      |               |         |  | 886    |           |  |  |       |  |  |  | 571    |  |  |  | 5     | 
|                                                   |  |         |        |             |            |  |     |           |           |  |           |  |  |             |      |             |         |  |             |              |      |              |         |              |            |         |        |               |         |  |        |           | 
|Property, plant and equipment                      |  |         | 29,503 |             |            |  | 481 |           |           |  | 5,298     |  |  |             |     |             |         |  | 3,209       |              |      |              | 32,073  |              |            |         | 20,061 |               |         |  | 12,012 |           |  |  | 18,820 |  |  |  | 10,683 |  |  |  | 2,328 | 
|                                                   |  |         |        |             |            |  |     |           |           |  |           |  |  |             |      |             |         |  |             |              |      |              |         |              |            |         |        |               |         |  |        |           | 




17. Other assets


|                                                                                 |  |               |       |  |      |  |       | 
|-------------------------------------------------------------------------------- |  | ------------- | ----- |  | ---- |  | ----- | 
|                                                                                 |  | September 30, |      
|                                                                                 |  |               |      
|                                                                                 |  | 2005          |       |  | 2004 | 
|                                                                                 |  |               |       |  |      | 
|Long-term portion of receivables from sales and finance leases
    (see Note 10) |  |               | 2,899 |  |      |  | 2,309 | 
|Prepaid pension assets                                                           |  |               | 166   |  |      |  | 442   | 
|Long-term loans receivable                                                       |  |               | 736   |  |      |  | 584   | 
|Other                                                                            |  |               | 1,463 |  |      |  | 1,631 | 
|                                                                                 |  |               |       |  |      | 
|                                                                                 |  |               | 5,264 |  |      |  | 4,966 | 
|                                                                                 |  |               |       |  |      | 

18. Accrued liabilities




|                                        |  |               |        |  |      |  |       | 
|--------------------------------------- |  | ------------- | ------ |  | ---- |  | ----- | 
|                                        |  | September 30, |       
|                                        |  |               |       
|                                        |  | 2005          |        |  | 2004 | 
|                                        |  |               |        |  |      | 
|Employee related costs                  |  |               | 2,876  |  |      |  | 2,317 | 
|Product warranties                      |  |               | 2,027  |  |      |  | 2,096 | 
|Income and other taxes                  |  |               | 1,592  |  |      |  | 1,384 | 
|Accrued losses on uncompleted contracts |  |               | 1,185  |  |      |  | 1,061 | 
|Other                                   |  |               | 2,489  |  |      |  | 2,382 | 
|                                        |  |               |        |  |      | 
|                                        |  |               | 10,169 |  |      |  | 9,240 | 
|                                        |  |               |        |  |      | 

Employee related costs


F-34



---



##### Table of Contents



SIEMENS AG


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS(Continued)


(in millions of
, except where
otherwise stated and per share amounts)




|                                                                                   |  |               |        |   |      |  |       |  
|---------------------------------------------------------------------------------- |  | ------------- | ------ | - | ---- |  | ----- | -
|                                                                                   |  | Year ended    |       
|                                                                                   |  | September 30, |       
|                                                                                   |  |               |       
|                                                                                   |  | 2005          |        |   | 2004 | 
|                                                                                   |  |               |        |   |      | 
|Accrual as of beginning of fiscal year (thereof current
    2,096 and
    1,830) |  |               | 2,824  |   |      |  | 2,353 |  
|Amount charged to expense in current period (additions)                            |  |               | 1,137  |   |      |  | 1,013 |  
|Reduction due to payments in cash or in kind (usage)                               |  |               | (1,007 | ) |      |  | (920  | )
|Foreign exchange translation adjustment                                            |  |               | 30     |   |      |  | (24   | )
|Changes related to existing warranties and other changes                           |  |               | (161   | ) |      |  | 402   |  
|                                                                                   |  |               |        |   |      | 
|Accrual as of fiscal year-end (thereof current
    2,027 and
    2,096)          |  |               | 2,823  |   |      |  | 2,824 |  
|                                                                                   |  |               |        |   |      | 

19. Other current liabilities


|                                                                                                     |  |               |        |  |      |  |        | 
|---------------------------------------------------------------------------------------------------- |  | ------------- | ------ |  | ---- |  | ------ | 
|                                                                                                     |  | September 30, |       
|                                                                                                     |  |               |       
|                                                                                                     |  | 2005          |        |  | 2004 | 
|                                                                                                     |  |               |        |  |      | 
|Billings in excess of costs and estimated earnings on
    uncompleted contracts and related advances |  |               | 4,752  |  |      |  | 4,585  | 
|Payroll and social security taxes                                                                    |  |               | 2,631  |  |      |  | 2,515  | 
|Bonus obligations                                                                                    |  |               | 1,202  |  |      |  | 1,151  | 
|Sales and other taxes                                                                                |  |               | 953    |  |      |  | 924    | 
|Deferred income                                                                                      |  |               | 724    |  |      |  | 634    | 
|Liabilities to associated and related companies                                                      |  |               | 392    |  |      |  | 368    | 
|Accrued interest                                                                                     |  |               | 136    |  |      |  | 128    | 
|Other liabilities                                                                                    |  |               | 2,477  |  |      |  | 1,545  | 
|                                                                                                     |  |               |        |  |      | 
|                                                                                                     |  |               | 13,267 |  |      |  | 11,850 | 
|                                                                                                     |  |               |        |  |      | 

20. Debt


|           |                                                   |                                                          |        |       |       |  |        |       |       | 
|---------- | ------------------------------------------------- | -------------------------------------------------------- | ------ | ----- | ----- |  | ------ | ----- | ----- | 
|           |                                                   | September 30,                                            |       
|           |                                                   |                                                          |       
|           |                                                   | 2005                                                     |        |       | 2004  | 
|           |                                                   |                                                          |        |       |       | 
|Short-term |                                                   |                                                          |        |       |       |  |        |      
|           | Notes and bonds                                   |                                                          |        | 1,625 |       |  |        | 621   |      
|           | Loans from banks                                  |                                                          |        | 673   |       |  |        | 478   |      
|           | Other financial indebtedness                      |                                                          |        | 1,612 |       |  |        | 295   |      
|           | Obligations under capital leases                  |                                                          |        | 89    |       |  |        | 40    |      
|           |                                                   |                                                          |        |       |       | 
|           |                                                   | Short-term debt and current maturities of long-term debt |        |       | 3,999 |  |        |       | 1,434 | 
|Long-term  |                                                   |                                                          |        |       |       |  |        |      
|           | Notes and bonds (maturing 2006-2011)              |                                                          |        | 6,826 |       |  |        | 8,345 |      
|           | Loans from banks (maturing 2006-2016)             |                                                          |        | 613   |       |  |        | 266   |      
|           | Other financial indebtedness (maturing 2006-2018) |                                                          |        | 733   |       |  |        | 971   |      
|           | Obligations under capital leases                  |                                                          |        | 264   |       |  |        | 203   |      
|           |                                                   |                                                          |        |       |       | 
|           |                                                   | Long-term debt                                           |        |       | 8,436 |  |        |       | 9,785 | 
|           |                                                   |                                                          |        |       |       | 
|           |                                                   |                                                          | 12,435 |       |       |  | 11,219 |      
|           |                                                   |                                                          |        |       |       | 

F-35



---



##### Table of Contents



SIEMENS AG


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS(Continued)


(in millions of
, except where
otherwise stated and per share amounts)




    


  


   


Other financial indebtedness  




|                                   |  |  |     |  
|---------------------------------- |  |  | --- | -
|Fiscal year                        |  | 
|                                   |  | 
|2006                               |  |  | 108 |  
|2007                               |  |  | 53  |  
|2008                               |  |  | 47  |  
|2009                               |  |  | 42  |  
|2010                               |  |  | 45  |  
|Thereafter                         |  |  | 150 |  
|                                   |  |  |    
|Minimum lease payment obligation   |  |  | 445 |  
|Less: unamortized interest expense |  |  | (92 | )
|                                   |  |  |    
|Obligations under capital leases   |  |  | 353 |  
|Less: current portion              |  |  | (89 | )
|                                   |  |  |    
|                                   |  |  | 264 |  
|                                   |  |  |    

F-36



---



##### Table of Contents



SIEMENS AG


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS(Continued)


(in millions of
, except where
otherwise stated and per share amounts)




|            |  |  |        | 
|----------- |  |  | ------ | 
|Fiscal year |  | 
|            |  | 
|2006        |  |  | 3,910  | 
|2007        |  |  | 1,881  | 
|2008        |  |  | 1,006  | 
|2009        |  |  | 87     | 
|2010        |  |  | 2,608  | 
|Thereafter  |  |  | 2,590  | 
|            |  |  |       
|            |  |  | 12,082 | 
|            |  |  |       



|                                       |  |                    |     |  |                    |  |       |                   |  |  |       |  |  |  |     |  |  |  |       |  |  |  |       | 
|-------------------------------------- |  | ------------------ | --- |  | ------------------ |  | ----- | ----------------- |  |  | ----- |  |  |  | --- |  |  |  | ----- |  |  |  | ----- | 
|                                       |  | September 30, 2005 |     |  | September 30, 2004 | 
|                                       |  |                    |     |  |                    | 
|                                       |  | Currency           |     |  | Currency           | 
|                                       |  |                    |     |  |                    | 
|                                       |  | (notional amount)  |     |  | *                 |  |       | (notional amount) |  |  | *    | 
|                                       |  |                    |     |  |                    |  |       |                   |  |  |       | 
|1.0% 2000/2005 EUR exchangeable notes  |  |                    |    |  |                    |  |      |                   |  |  |      |  |  |  | EUR |  |  |  | 596   |  |  |  | 621   | 
|5.0% 2001/2006 EUR bonds               |  |                    | EUR |  |                    |  | 1,595 |                   |  |  | 1,625 |  |  |  | EUR |  |  |  | 1,595 |  |  |  | 1,655 | 
|2.5% 2001/2007 Swiss franc bonds       |  |                    | CHF |  |                    |  | 250   |                   |  |  | 158   |  |  |  | CHF |  |  |  | 250   |  |  |  | 165   | 
|5.5% 1997/2007 EUR bonds               |  |                    | EUR |  |                    |  | 991   |                   |  |  | 991   |  |  |  | EUR |  |  |  | 991   |  |  |  | 998   | 
|6% 1998/2008 U.S.$ notes               |  |                    | USD |  |                    |  | 970   |                   |  |  | 865   |  |  |  | USD |  |  |  | 970   |  |  |  | 870   | 
|1.375% 2003/2010 EUR convertible notes |  |                    | EUR |  |                    |  | 2,500 |                   |  |  | 2,500 |  |  |  | EUR |  |  |  | 2,500 |  |  |  | 2,500 | 
|11% 2003/2010 EUR senior notes         |  |                    | EUR |  |                    |  | 74    |                   |  |  | 86    |  |  |  |    |  |  |  |      |  |  |  |      | 
|5.75% 2001/2011 EUR bonds              |  |                    | EUR |  |                    |  | 2,000 |                   |  |  | 2,226 |  |  |  | EUR |  |  |  | 2,000 |  |  |  | 2,157 | 
|                                       |  |                    |     |  |                    |  |       |                   |  |  |       |  |  |  |     |  |  | 
|                                       |  |                    |     |  |                    |  |       |                   |  |  | 8,451 |  |  |  |     |  |  |  |       |  |  |  | 8,966 | 
|                                       |  |                    |     |  |                    |  |       |                   |  |  |       |  |  |  |     |  |  | 








|  |                                                      
|- | -----------------------------------------------------
|* | includes adjustments for fair value hedge accounting.

 


 


  


F-37



---



##### Table of Contents



SIEMENS AG


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS(Continued)


(in millions of
, except where
otherwise stated and per share amounts)


     


21. Pension plans and similar commitments






Accounting for defined benefit plans


Consolidated
Balance Sheets


accumulated benefit obligation (ABO)


projected benefit obligation (PBO)




Consolidated Statements of Income AOCI


F-38



---



##### Table of Contents



SIEMENS AG


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS(Continued)


(in millions of
, except where
otherwise stated and per share amounts)


Consolidated Balance Sheets


|                                                            |  |               |         |   |      |  |        |  
|----------------------------------------------------------- |  | ------------- | ------- | - | ---- |  | ------ | -
|                                                            |  | September 30, |        
|                                                            |  |               |        
|                                                            |  | 2005          |         |   | 2004 | 
|                                                            |  |               |         |   |      | 
|Accumulated other comprehensive income                      |  |               | (10,879 | ) |      |  | (8,943 | )
|thereof principal pension benefit plans                     |  |               | (10,573 | ) |      |  | (8,760 | )
|Less income tax effect                                      |  |               | 4,109   |   |      |  | 3,418  |  
|thereof principal pension benefit plans                     |  |               | 3,824   |   |      |  | 3,353  |  
|                                                            |  |               |         |   |      | 
|Accumulated other comprehensive income, net of income taxes |  |               | (6,770  | ) |      |  | (5,525 | )
|thereof principal pension benefit plans                     |  |               | (6,749  | ) |      |  | (5,407 | )
|Accruals for pension plans and similar commitments          |  |               | 4,917   |   |      |  | 4,392  |  
|thereof principal pension benefit plans                     |  |               | 2,749   |   |      |  | 2,391  |  
|thereof principal other postretirement benefit plans        |  |               | 1,317   |   |      |  | 1,317  |  
|thereof other                                               |  |               | 851     |   |      |  | 684    |  

Consolidated
Statements of Income


net periodic pension cost (NPPC) service cost, interest cost discount rate; expected return on
plan assets Consolidated Statements of Income




 


Consolidated
Statements of Cash Flow




   


F-39



---



##### Table of Contents



SIEMENS AG


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS(Continued)


(in millions of
, except where
otherwise stated and per share amounts)


Principal pension benefits












| |   |                                                                                                
| | - | -----------------------------------------------------------------------------------------------
| |  | Pension obligations and funded status,                                                         
| |  | Recognition of an additional minimum liability (AML),                                          
| |  | Components of NPPC,                                                                            
| |  | Assumptions for the calculation of the PBO and NPPC,                                           
| |  | Sensitivity analysis,                                                                          
| |  | Additional information concerning changes of the AML and the
    actual returns on plan assets,
| |  | Plan assets,                                                                                   
| |  | Pension plan funding, and                                                                      
| |  | Pension benefit payments.                                                                      

F-40



---



##### Table of Contents



SIEMENS AG


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS(Continued)


(in millions of
, except where
otherwise stated and per share amounts)


Pension benefits: Pension obligations and funded
status




|                                                                  |                                      |                    |        |        |                    |  |        |         |   |  |        |        |   |          |        |        |         |  |        |        |   |  |        |      |  
|----------------------------------------------------------------- | ------------------------------------ | ------------------ | ------ | ------ | ------------------ |  | ------ | ------- | - |  | ------ | ------ | - | -------- | ------ | ------ | ------- |  | ------ | ------ | - |  | ------ | ---- | -
|                                                                  |                                      | September 30, 2005 |        |        | September 30, 2004 | 
|                                                                  |                                      |                    |        |        |                    | 
|                                                                  |                                      | Total              |        |        | Domestic           |  |        | Foreign |   |  | Total  |        |   | Domestic |        |        | Foreign | 
|                                                                  |                                      |                    |        |        |                    |  |        |         |   |  |        |        |   |          |        |        |         | 
|Fair value of plan assets                                         |                                      |                    | 21,479 |        |                    |  | 14,349 |         |   |  | 7,130  |        |   |          | 17,708 |        |         |  | 11,965 |        |   |  | 5,743  |     
|Projected benefit obligation (PBO)                                |                                      |                    | 24,977 |        |                    |  | 15,932 |         |   |  | 9,045  |        |   |          | 20,794 |        |         |  | 13,851 |        |   |  | 6,943  |     
|                                                                  |                                      |                    |        |        |                    |  |        |         |   |  |        |        |   |          |        |        |         | 
|Funded
    status(1)                                              |                                      |                    | (3,498 | )      |                    |  | (1,583 | )       |   |  | (1,915 | )      |   |          | (3,086 | )      |         |  | (1,886 | )      |   |  | (1,200 | )   
|                                                                  | Germany                              |                    |        | (1,583 | )                  |  |        |         |   |  |        |        |   |          |        | (1,886 | )       |  |        |        |   |  |        |      |  
|                                                                  | U.S.                                 |                    |        | (858   | )                  |  |        |         |   |  |        |        |   |          |        | (392   | )       |  |        |        |   |  |        |      |  
|                                                                  | U.K.                                 |                    |        | (779   | )                  |  |        |         |   |  |        |        |   |          |        | (537   | )       |  |        |        |   |  |        |      |  
|                                                                  | Other                                |                    |        | (278   | )                  |  |        |         |   |  |        |        |   |          |        | (271   | )       |  |        |        |   |  |        |      |  
|Unrecognized net
    losses(2)                                    |                                      |                    | 11,835 |        |                    |  | 9,198  |         |   |  | 2,637  |        |   |          | 10,419 |        |         |  | 8,625  |        |   |  | 1,794  |     
|Unrecognized prior service cost (benefit)                         |                                      |                    | (285   | )      |                    |  | (270   | )       |   |  | (15    | )      |   |          | (219   | )      |         |  | (289   | )      |   |  | 70     |     
|                                                                  |                                      |                    |        |        |                    |  |        |         |   |  |        |        |   |          |        |        |         | 
|Net amount recognized                                             |                                      |                    | 8,052  |        |                    |  | 7,345  |         |   |  | 707    |        |   |          | 7,114  |        |         |  | 6,450  |        |   |  | 664    |     
|                                                                  |                                      |                    |        |        |                    |  |        |         |   |  |        |        |   |          |        |        |         | 
|Amounts recognized in the Consolidated Balance Sheets consist of: |                                      |                    |        |        |                    |  |        |         |   |  |        |        |   |          |        |        |         |  |        |        |   |  |        |     
|                                                                  | Prepaid pension assets               |                    |        | 166    |                    |  |        |        |   |  |        | 166    |   |          |        | 442    |         |  |        |       |   |  |        | 442  |  
|                                                                  | Accrued pension liability            |                    |        | (2,749 | )                  |  |        | (1,504  | ) |  |        | (1,245 | ) |          |        | (2,391 | )       |  |        | (1,792 | ) |  |        | (599 | )
|                                                                  | Intangible assets                    |                    |        | 62     |                    |  |        |        |   |  |        | 62     |   |          |        | 303    |         |  |        | 289    |   |  |        | 14   |  
|                                                                  | Accumulated other comprehensive loss |                    |        | 10,573 |                    |  |        | 8,849   |   |  |        | 1,724  |   |          |        | 8,760  |         |  |        | 7,953  |   |  |        | 807  |  
|                                                                  |                                      |                    |        |        |                    |  |        |         |   |  |        |        |   |          |        |        |         | 
|Net amount recognized                                             |                                      |                    | 8,052  |        |                    |  | 7,345  |         |   |  | 707    |        |   |          | 7,114  |        |         |  | 6,450  |        |   |  | 664    |     
|                                                                  |                                      |                    |        |        |                    |  |        |         |   |  |        |        |   |          |        |        |         | 








|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Funded status: The funded status shows the surplus/(deficit) of
    the PBO relative to the plan assets as of the measurement date,
    and, where applicable, fundings between the measurement date and
    the balance sheet date. The PBO is calculated based on the
    projected or the traditional unit credit method and reflects the
    net present value as of the measurement date of the accumulated
    pension entitlements of active employees, former employees with
    vested rights and of retirees and their surviving dependents
    with consideration of future compensation and pension increases.
|   
|(2) | Unrecognized net losses: The NPPC is determined at the beginning
    of the relevant measurement period based on assumptions for the
    discount rate, compensation increase rate and pension
    progression rate as well as the long-term rate of return on plan
    assets. The cumulative effect of differences between the actual
    experience and the assumed assumptions and changes in the
    assumptions are disclosed in the line item unrecognized net
    losses.                                                                                                                                         



F-41



---



##### Table of Contents



SIEMENS AG


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS(Continued)


(in millions of
, except where
otherwise stated and per share amounts)




|                                            |                                                   |                                        |        |        |                    |   |        |         |       |   |       |       |       |          |        |        |         |   |        |        |      |   |       |       |      |  
|------------------------------------------- | ------------------------------------------------- | -------------------------------------- | ------ | ------ | ------------------ | - | ------ | ------- | ----- | - | ----- | ----- | ----- | -------- | ------ | ------ | ------- | - | ------ | ------ | ---- | - | ----- | ----- | ---- | -
|                                            |                                                   | September 30, 2005                     |        |        | September 30, 2004 |  
|                                            |                                                   |                                        |        |        |                    |  
|                                            |                                                   | Total                                  |        |        | Domestic           |   |        | Foreign |       |   | Total |       |       | Domestic |        |        | Foreign |  
|                                            |                                                   |                                        |        |        |                    |   |        |         |       |   |       |       |       |          |        |        |         |  
|Change in projected benefit obligations:    |                                                   |                                        |        |        |                    |   |        |         |       |   |       |       |       |          |        |        |         |   |        |        |      |   |       |      
|                                            | Projected benefit obligation at beginning of year |                                        |        | 20,794 |                    |   |        | 13,851  |       |   |       | 6,943 |       |          |        | 20,878 |         |   |        | 14,156 |      |   |       | 6,722 |     
|                                            |                                                   | Foreign currency exchange rate changes |        |        | 185                |   |        |         |      |   |       |       | 185   |          |        |        | (140    | ) |        |        |     |   |       |       | (140 | )
|                                            |                                                   | Service cost                           |        |        | 579                |   |        |         | 307   |   |       |       | 272   |          |        |        | 469     |   |        |        | 212  |   |       |       | 257  |  
|                                            |                                                   | Interest cost                          |        |        | 1,121              |   |        |         | 726   |   |       |       | 395   |          |        |        | 1,105   |   |        |        | 742  |   |       |       | 363  |  
|                                            |                                                   | Settlements and curtailments           |        |        | (5                 | ) |        |         |      |   |       |       | (5    | )        |        |        |        |   |        |        |     |   |       |       |     |  
|                                            |                                                   | Plan participants contributions       |        |        | 46                 |   |        |         |      |   |       |       | 46    |          |        |        | 48      |   |        |        |     |   |       |       | 48   |  
|                                            |                                                   | Amendments and other                   |        |        | (85                | ) |        |         |      |   |       |       | (85   | )        |        |        | (313    | ) |        |        | (301 | ) |       |       | (12  | )
|                                            |                                                   | Actuarial (gains) losses, net          |        |        | 2,897              |   |        |         | 1,736 |   |       |       | 1,161 |          |        |        | (174    | ) |        |        | (309 | ) |       |       | 135  |  
|                                            |                                                   | Acquisitions                           |        |        | 624                |   |        |         | 138   |   |       |       | 486   |          |        |        | 117     |   |        |        | 91   |   |       |       | 26   |  
|                                            |                                                   | Divestments                            |        |        | (147               | ) |        |         | (75   | ) |       |       | (72   | )        |        |        | (205    | ) |        |        | (25  | ) |       |       | (180 | )
|                                            |                                                   | Benefits paid                          |        |        | (1,032             | ) |        |         | (751  | ) |       |       | (281  | )        |        |        | (991    | ) |        |        | (715 | ) |       |       | (276 | )
|                                            |                                                   |                                        |        |        |                    |   |        |         |       |   |       |       |       |          |        |        |         |  
|Projected benefit obligation at end of year |                                                   |                                        | 24,977 |        |                    |   | 15,932 |         |       |   | 9,045 |       |       |          | 20,794 |        |         |   | 13,851 |        |      |   | 6,943 |      
|                                            |                                                   |                                        |        |        |                    |   |        |         |       |   |       |       |       |          |        |        |         |  
|                                            |                                                   | Germany                                |        |        | 15,932             |   |        |         |       |   |       |       |       |          |        |        | 13,851  |   |        |        |      |   |       |       |      |  
|                                            |                                                   | U.S.                                   |        |        | 3,921              |   |        |         |       |   |       |       |       |          |        |        | 3,010   |   |        |        |      |   |       |       |      |  
|                                            |                                                   | U.K.                                   |        |        | 3,098              |   |        |         |       |   |       |       |       |          |        |        | 2,200   |   |        |        |      |   |       |       |      |  
|                                            |                                                   | Other                                  |        |        | 2,026              |   |        |         |       |   |       |       |       |          |        |        | 1,733   |   |        |        |      |   |       |       |      |  

projected benefit obligation    amendments and
other actuarial (gains)
and losses


F-42



---



##### Table of Contents



SIEMENS AG


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS(Continued)


(in millions of
, except where
otherwise stated and per share amounts)




|                                         |                                                |                                        |        |        |                    |   |        |         |       |   |       |       |      |          |        |        |         |   |        |        |      |   |       |       |      |  
|---------------------------------------- | ---------------------------------------------- | -------------------------------------- | ------ | ------ | ------------------ | - | ------ | ------- | ----- | - | ----- | ----- | ---- | -------- | ------ | ------ | ------- | - | ------ | ------ | ---- | - | ----- | ----- | ---- | -
|                                         |                                                | September 30, 2005                     |        |        | September 30, 2004 |  
|                                         |                                                |                                        |        |        |                    |  
|                                         |                                                | Total                                  |        |        | Domestic           |   |        | Foreign |       |   | Total |       |      | Domestic |        |        | Foreign |  
|                                         |                                                |                                        |        |        |                    |   |        |         |       |   |       |       |      |          |        |        |         |  
|Change in plan assets:                   |                                                |                                        |        |        |                    |   |        |         |       |   |       |       |      |          |        |        |         |   |        |        |      |   |       |      
|                                         | Fair value of plan assets at beginning of year |                                        |        | 17,708 |                    |   |        | 11,965  |       |   |       | 5,743 |      |          |        | 15,899 |         |   |        | 11,016 |      |   |       | 4,883 |     
|                                         |                                                | Foreign currency exchange rate changes |        |        | 135                |   |        |         |      |   |       |       | 135  |          |        |        | (99     | ) |        |        |     |   |       |       | (99  | )
|                                         |                                                | Actual return on plan assets           |        |        | 2,289              |   |        |         | 1,596 |   |       |       | 693  |          |        |        | 1,202   |   |        |        | 673  |   |       |       | 529  |  
|                                         |                                                | Acquisitions and other                 |        |        | 325                |   |        |         |      |   |       |       | 325  |          |        |        | 81      |   |        |        | 55   |   |       |       | 26   |  
|                                         |                                                | Divestments and other                  |        |        | (26                | ) |        |         |      |   |       |       | (26  | )        |        |        | (205    | ) |        |        |     |   |       |       | (205 | )
|                                         |                                                | Employer contributions (supplemental)  |        |        | 1,496              |   |        |         | 1,380 |   |       |       | 116  |          |        |        | 1,255   |   |        |        | 700  |   |       |       | 555  |  
|                                         |                                                | Employer contributions (regular)       |        |        | 535                |   |        |         | 159   |   |       |       | 376  |          |        |        | 518     |   |        |        | 236  |   |       |       | 282  |  
|                                         |                                                | Plan participants contributions       |        |        | 49                 |   |        |         |      |   |       |       | 49   |          |        |        | 48      |   |        |        |     |   |       |       | 48   |  
|                                         |                                                | Benefits paid                          |        |        | (1,032             | ) |        |         | (751  | ) |       |       | (281 | )        |        |        | (991    | ) |        |        | (715 | ) |       |       | (276 | )
|                                         |                                                |                                        |        |        |                    |   |        |         |       |   |       |       |      |          |        |        |         |  
|Fair value of plan assets at end of year |                                                |                                        | 21,479 |        |                    |   | 14,349 |         |       |   | 7,130 |       |      |          | 17,708 |        |         |   | 11,965 |        |      |   | 5,743 |      
|                                         |                                                |                                        |        |        |                    |   |        |         |       |   |       |       |      |          |        |        |         |  
|                                         |                                                | Germany                                |        |        | 14,349             |   |        |         |       |   |       |       |      |          |        |        | 11,965  |   |        |        |      |   |       |       |      |  
|                                         |                                                | U.S.                                   |        |        | 3,063              |   |        |         |       |   |       |       |      |          |        |        | 2,618   |   |        |        |      |   |       |       |      |  
|                                         |                                                | U.K.                                   |        |        | 2,319              |   |        |         |       |   |       |       |      |          |        |        | 1,664   |   |        |        |      |   |       |       |      |  
|                                         |                                                | Other                                  |        |        | 1,748              |   |        |         |       |   |       |       |      |          |        |        | 1,461   |   |        |        |      |   |       |       |      |  

Pension benefits: Recognition of an Additional Minimum
Liability (AML)


 


F-43



---



##### Table of Contents



SIEMENS AG


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS(Continued)


(in millions of
, except where
otherwise stated and per share amounts)




|                                               |         |                    |        |        |                    |  |        |         |  |  |        |   |  |          |        |        |         |  |        |   |  |  |       |   | 
|---------------------------------------------- | ------- | ------------------ | ------ | ------ | ------------------ |  | ------ | ------- |  |  | ------ | - |  | -------- | ------ | ------ | ------- |  | ------ | - |  |  | ----- | - | 
|                                               |         | September 30, 2005 |        |        | September 30, 2004 | 
|                                               |         |                    |        |        |                    | 
|                                               |         | Total              |        |        | Domestic           |  |        | Foreign |  |  | Total  |   |  | Domestic |        |        | Foreign | 
|                                               |         |                    |        |        |                    |  |        |         |  |  |        |   |  |          |        |        |         | 
|Projected benefit obligation                   |         |                    | 24,569 |        |                    |  | 15,932 |         |  |  | 8,637  |   |  |          | 18,446 |        |         |  | 13,851 |   |  |  | 4,595 |  
|                                               | Germany |                    |        | 15,932 |                    |  |        |         |  |  |        |   |  |          |        | 13,851 |         |  |        |   |  |  |       |   | 
|                                               | U.S.    |                    |        | 3,881  |                    |  |        |         |  |  |        |   |  |          |        | 866    |         |  |        |   |  |  |       |   | 
|                                               | U.K.    |                    |        | 3,098  |                    |  |        |         |  |  |        |   |  |          |        | 2,200  |         |  |        |   |  |  |       |   | 
|                                               | Other   |                    |        | 1,658  |                    |  |        |         |  |  |        |   |  |          |        | 1,529  |         |  |        |   |  |  |       |   | 
|Accumulated benefit obligation                 |         |                    | 23,686 |        |                    |  | 15,853 |         |  |  | 7,833  |   |  |          | 17,829 |        |         |  | 13,757 |   |  |  | 4,072 |  
|                                               | Germany |                    |        | 15,853 |                    |  |        |         |  |  |        |   |  |          |        | 13,757 |         |  |        |   |  |  |       |   | 
|                                               | U.S.    |                    |        | 3,476  |                    |  |        |         |  |  |        |   |  |          |        | 776    |         |  |        |   |  |  |       |   | 
|                                               | U.K.    |                    |        | 2,749  |                    |  |        |         |  |  |        |   |  |          |        | 1,966  |         |  |        |   |  |  |       |   | 
|                                               | Other   |                    |        | 1,608  |                    |  |        |         |  |  |        |   |  |          |        | 1,330  |         |  |        |   |  |  |       |   | 
|Fair value of plan assets                      |         |                    | 20,935 |        |                    |  | 14,349 |         |  |  | 6,586  |   |  |          | 15,467 |        |         |  | 11,965 |   |  |  | 3,502 |  
|                                               | Germany |                    |        | 14,349 |                    |  |        |         |  |  |        |   |  |          |        | 11,965 |         |  |        |   |  |  |       |   | 
|                                               | U.S.    |                    |        | 2,973  |                    |  |        |         |  |  |        |   |  |          |        | 586    |         |  |        |   |  |  |       |   | 
|                                               | U.K.    |                    |        | 2,253  |                    |  |        |         |  |  |        |   |  |          |        | 1,643  |         |  |        |   |  |  |       |   | 
|                                               | Other   |                    |        | 1,360  |                    |  |        |         |  |  |        |   |  |          |        | 1,273  |         |  |        |   |  |  |       |   | 
|                                               |         |                    |        |        |                    |  |        |         |  |  |        |   |  |          |        |        |         | 
|Underfunding of accumulated benefit obligation |         |                    | (2,751 | )      |                    |  | (1,504 | )       |  |  | (1,247 | ) |  |          | (2,362 | )      |         |  | (1,792 | ) |  |  | (570  | )
|                                               |         |                    |        |        |                    |  |        |         |  |  |        |   |  |          |        |        |         | 
|                                               | Germany |                    |        | (1,504 | )                  |  |        |         |  |  |        |   |  |          |        | (1,792 | )       |  |        |   |  |  |       |   | 
|                                               | U.S.    |                    |        | (503   | )                  |  |        |         |  |  |        |   |  |          |        | (190   | )       |  |        |   |  |  |       |   | 
|                                               | U.K.    |                    |        | (496   | )                  |  |        |         |  |  |        |   |  |          |        | (323   | )       |  |        |   |  |  |       |   | 
|                                               | Other   |                    |        | (248   | )                  |  |        |         |  |  |        |   |  |          |        | (57    | )       |  |        |   |  |  |       |   | 

   


     AOCI 


F-44



---



##### Table of Contents



SIEMENS AG


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS(Continued)


(in millions of
, except where
otherwise stated and per share amounts)


Pension benefits: Components of NPPC




|                                         |                                            |                    |        |     |                    |  |      |                    |   |  |       |    |  |          |        |     |         |  |      |       |  |  |          |     |   |         |        |     |  |  |      |     |  |  |      |    | 
|---------------------------------------- | ------------------------------------------ | ------------------ | ------ | --- | ------------------ |  | ---- | ------------------ | - |  | ----- | -- |  | -------- | ------ | --- | ------- |  | ---- | ----- |  |  | -------- | --- | - | ------- | ------ | --- |  |  | ---- | --- |  |  | ---- | -- | 
|                                         |                                            | Year ended         |        |     | Year ended         |  |      | Year ended         |  
|                                         |                                            | September 30, 2005 |        |     | September 30, 2004 |  |      | September 30, 2003 |  
|                                         |                                            |                    |        |     |                    |  |      |                    |  
|                                         |                                            | Total              |        |     | Domestic           |  |      | Foreign            |   |  | Total |    |  | Domestic |        |     | Foreign |  |      | Total |  |  | Domestic |     |   | Foreign |       
|                                         |                                            |                    |        |     |                    |  |      |                    |   |  |       |    |  |          |        |     |         |  |      |       |  |  |          |     |   |         |       
|Service cost                             |                                            |                    | 579    |     |                    |  | 307  |                    |   |  | 272   |    |  |          | 469    |     |         |  | 212  |       |  |  | 257      |     |   |         | 484    |     |  |  | 212  |     |  |  | 272  |   
|Interest cost                            |                                            |                    | 1,121  |     |                    |  | 726  |                    |   |  | 395   |    |  |          | 1,105  |     |         |  | 742  |       |  |  | 363      |     |   |         | 1,121  |     |  |  | 767  |     |  |  | 354  |   
|Expected return on plan assets           |                                            |                    | (1,291 | )   |                    |  | (905 | )                  |   |  | (386  | )  |  |          | (1,154 | )   |         |  | (813 | )     |  |  | (341     | )   |   |         | (1,107 | )   |  |  | (814 | )   |  |  | (293 | ) 
|Amortization of:                         |                                            |                    |        |     |                    |  |      |                    |   |  |       |    |  |          |        |     |         |  |      |       |  |  |          |     |   |         |        |     |  |  |      |     |  |  |      |   
|                                         | Unrecognized prior service cost (benefits) |                    |        | (9  | )                  |  |      | (19                | ) |  |       | 10 |  |          |        | 10  |         |  |      |      |  |  |          | 10  |   |         |        | 12  |  |  |      |    |  |  |      | 12 | 
|                                         | Unrecognized net losses                    |                    |        | 561 |                    |  |      | 475                |   |  |       | 86 |  |          |        | 623 |         |  |      | 520   |  |  |          | 103 |   |         |        | 451 |  |  |      | 392 |  |  |      | 59 | 
|                                         | Unrecognized net transition asset          |                    |        |    |                    |  |      |                   |   |  |       |   |  |          |        | (2  | )       |  |      |      |  |  |          | (2  | ) |         |        |    |  |  |      |    |  |  |      |   | 
|Loss due to settlements and curtailments |                                            |                    | 3      |     |                    |  |     |                    |   |  | 3     |    |  |          |       |     |         |  |     |       |  |  |         |     |   |         | 8      |     |  |  |     |     |  |  | 8    |   
|                                         |                                            |                    |        |     |                    |  |      |                    |   |  |       |    |  |          |        |     |         |  |      |       |  |  |          |     |   |         |       
|Net periodic pension cost                |                                            |                    | 964    |     |                    |  | 584  |                    |   |  | 380   |    |  |          | 1,051  |     |         |  | 661  |       |  |  | 390      |     |   |         | 969    |     |  |  | 557  |     |  |  | 412  |   
|                                         |                                            |                    |        |     |                    |  |      |                    |   |  |       |    |  |          |        |     |         |  |      |       |  |  |          |     |   |         |       
|                                         | Germany                                    |                    |        | 584 |                    |  |      |                    |   |  |       |    |  |          |        | 661 |         |  |      |       |  |  |          |     |   |         |        | 557 |  |  |      |     |  |  |      |    | 
|                                         | U.S.                                       |                    |        | 190 |                    |  |      |                    |   |  |       |    |  |          |        | 217 |         |  |      |       |  |  |          |     |   |         |        | 240 |  |  |      |     |  |  |      |    | 
|                                         | U.K.                                       |                    |        | 149 |                    |  |      |                    |   |  |       |    |  |          |        | 132 |         |  |      |       |  |  |          |     |   |         |        | 111 |  |  |      |     |  |  |      |    | 
|                                         | Other                                      |                    |        | 41  |                    |  |      |                    |   |  |       |    |  |          |        | 41  |         |  |      |       |  |  |          |     |   |         |        | 61  |  |  |      |     |  |  |      |    | 

expected return on plan assets amortization of
unrecognized net losses    




amortization of unrecognized net losses expected absolute
return on plan assets


Pension benefits: Assumptions for the calculation of the
PBO and NPPC




F-45



---



##### Table of Contents



SIEMENS AG


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS(Continued)


(in millions of
, except where
otherwise stated and per share amounts)




|                              |         |                          |     |      |          |  |      |         |  |  |       |   |  |          |     |      |         |  |      |   |  |  |     |   | 
|----------------------------- | ------- | ------------------------ | --- | ---- | -------- |  | ---- | ------- |  |  | ----- | - |  | -------- | --- | ---- | ------- |  | ---- | - |  |  | --- | - | 
|                              |         | Year ended September 30, |    
|                              |         |                          |    
|                              |         | 2005                     |     |      | 2004     | 
|                              |         |                          |     |      |          | 
|                              |         | Total                    |     |      | Domestic |  |      | Foreign |  |  | Total |   |  | Domestic |     |      | Foreign | 
|                              |         |                          |     |      |          |  |      |         |  |  |       |   |  |          |     |      |         | 
|Discount rate                 |         |                          | 4.5 | %    |          |  | 4.35 | %       |  |  | 4.9   | % |  |          | 5.5 | %    |         |  | 5.25 | % |  |  | 5.9 | %
|                              | Germany |                          |     | 4.35 | %        |  |      |         |  |  |       |   |  |          |     | 5.25 | %       |  |      |   |  |  |     |   | 
|                              | U.S.    |                          |     | 5.25 | %        |  |      |         |  |  |       |   |  |          |     | 6.5  | %       |  |      |   |  |  |     |   | 
|                              | U.K.    |                          |     | 4.9  | %        |  |      |         |  |  |       |   |  |          |     | 5.7  | %       |  |      |   |  |  |     |   | 
|Rate of compensation increase |         |                          | 2.6 | %    |          |  | 2.25 | %       |  |  | 3.2   | % |  |          | 2.6 | %    |         |  | 2.25 | % |  |  | 3.3 | %
|                              | Germany |                          |     | 2.25 | %        |  |      |         |  |  |       |   |  |          |     | 2.25 | %       |  |      |   |  |  |     |   | 
|                              | U.S.    |                          |     | 3.25 | %        |  |      |         |  |  |       |   |  |          |     | 3.25 | %       |  |      |   |  |  |     |   | 
|                              | U.K.    |                          |     | 3.7  | %        |  |      |         |  |  |       |   |  |          |     | 4.0  | %       |  |      |   |  |  |     |   | 
|Rate of pension progression   |         |                          | 1.2 | %    |          |  | 1.0  | %       |  |  | 2.0   | % |  |          | 1.3 | %    |         |  | 1.0  | % |  |  | 2.3 | %
|                              | Germany |                          |     | 1.0  | %        |  |      |         |  |  |       |   |  |          |     | 1.0  | %       |  |      |   |  |  |     |   | 
|                              | U.K.    |                          |     | 2.7  | %        |  |      |         |  |  |       |   |  |          |     | 2.8  | %       |  |      |   |  |  |     |   | 





|                               |         |                    |     |      |                    |  |      |                    |  |  |                    |   |  |          |     |      |         |  |      |       |  |  |          |   |  |         |     |      |       |  |      |          |  |  |         |   |  |  |     |      |   |  |      |   |  |  |     |   | 
|------------------------------ | ------- | ------------------ | --- | ---- | ------------------ |  | ---- | ------------------ |  |  | ------------------ | - |  | -------- | --- | ---- | ------- |  | ---- | ----- |  |  | -------- | - |  | ------- | --- | ---- | ----- |  | ---- | -------- |  |  | ------- | - |  |  | --- | ---- | - |  | ---- | - |  |  | --- | - | 
|                               |         | Year ended         |     |      | Year ended         |  |      | Year ended         |  |  | Year ended         |  
|                               |         | September 30, 2006 |     |      | September 30, 2005 |  |      | September 30, 2004 |  |  | September 30, 2003 |  
|                               |         |                    |     |      |                    |  |      |                    |  |  |                    |  
|                               |         | Total              |     |      | Domestic           |  |      | Foreign            |  |  | Total              |   |  | Domestic |     |      | Foreign |  |      | Total |  |  | Domestic |   |  | Foreign |     |      | Total |  |      | Domestic |  |  | Foreign |  
|                               |         |                    |     |      |                    |  |      |                    |  |  |                    |   |  |          |     |      |         |  |      |       |  |  |          |   |  |         |     |      |       |  |      |          |  |  |         |  
|Discount rate                  |         |                    | 4.5 | %    |                    |  | 4.35 | %                  |  |  | 4.9                | % |  |          | 5.5 | %    |         |  | 5.25 | %     |  |  | 5.9      | % |  |         | 5.4 | %    |       |  | 5.25 | %        |  |  | 5.6     | % |  |  | 6.0 | %    |   |  | 5.75 | % |  |  | 6.4 | %
|                               | Germany |                    |     | 4.35 | %                  |  |      |                    |  |  |                    |   |  |          |     | 5.25 | %       |  |      |       |  |  |          |   |  |         |     | 5.25 | %     |  |      |          |  |  |         |   |  |  |     | 5.75 | % |  |      |   |  |  |     |   | 
|                               | U.S.    |                    |     | 5.25 | %                  |  |      |                    |  |  |                    |   |  |          |     | 6.5  | %       |  |      |       |  |  |          |   |  |         |     | 6.25 | %     |  |      |          |  |  |         |   |  |  |     | 7.25 | % |  |      |   |  |  |     |   | 
|                               | U.K     |                    |     | 4.9  | %                  |  |      |                    |  |  |                    |   |  |          |     | 5.7  | %       |  |      |       |  |  |          |   |  |         |     | 5.4  | %     |  |      |          |  |  |         |   |  |  |     | 5.7  | % |  |      |   |  |  |     |   | 
|Expected return on plan assets |         |                    | 6.7 | %    |                    |  | 6.7  | %                  |  |  | 6.7                | % |  |          | 6.7 | %    |         |  | 6.75 | %     |  |  | 6.6      | % |  |         | 6.7 | %    |       |  | 6.75 | %        |  |  | 6.6     | % |  |  | 6.7 | %    |   |  | 6.75 | % |  |  | 6.7 | %
|                               | Germany |                    |     | 6.7  | %                  |  |      |                    |  |  |                    |   |  |          |     | 6.75 | %       |  |      |       |  |  |          |   |  |         |     | 6.75 | %     |  |      |          |  |  |         |   |  |  |     | 6.75 | % |  |      |   |  |  |     |   | 
|                               | U.S     |                    |     | 6.95 | %                  |  |      |                    |  |  |                    |   |  |          |     | 6.95 | %       |  |      |       |  |  |          |   |  |         |     | 6.95 | %     |  |      |          |  |  |         |   |  |  |     | 6.95 | % |  |      |   |  |  |     |   | 
|                               | U.K.    |                    |     | 6.75 | %                  |  |      |                    |  |  |                    |   |  |          |     | 6.85 | %       |  |      |       |  |  |          |   |  |         |     | 6.85 | %     |  |      |          |  |  |         |   |  |  |     | 6.85 | % |  |      |   |  |  |     |   | 
|Rate of compensation increase  |         |                    | 2.6 | %    |                    |  | 2.25 | %                  |  |  | 3.2                | % |  |          | 2.6 | %    |         |  | 2.25 | %     |  |  | 3.3      | % |  |         | 2.5 | %    |       |  | 2.25 | %        |  |  | 2.9     | % |  |  | 3.1 | %    |   |  | 2.75 | % |  |  | 3.9 | %
|                               | Germany |                    |     | 2.25 | %                  |  |      |                    |  |  |                    |   |  |          |     | 2.25 | %       |  |      |       |  |  |          |   |  |         |     | 2.25 | %     |  |      |          |  |  |         |   |  |  |     | 2.75 | % |  |      |   |  |  |     |   | 
|                               | U.S.    |                    |     | 3.25 | %                  |  |      |                    |  |  |                    |   |  |          |     | 3.25 | %       |  |      |       |  |  |          |   |  |         |     | 3.0  | %     |  |      |          |  |  |         |   |  |  |     | 4.25 | % |  |      |   |  |  |     |   | 
|                               | U.K.    |                    |     | 3.7  | %                  |  |      |                    |  |  |                    |   |  |          |     | 4.0  | %       |  |      |       |  |  |          |   |  |         |     | 3.6  | %     |  |      |          |  |  |         |   |  |  |     | 4.1  | % |  |      |   |  |  |     |   | 
|Rate of pension progression    |         |                    | 1.2 | %    |                    |  | 1.0  | %                  |  |  | 2.0                | % |  |          | 1.3 | %    |         |  | 1.0  | %     |  |  | 2.3      | % |  |         | 1.4 | %    |       |  | 1.25 | %        |  |  | 2.1     | % |  |  | 1.4 | %    |   |  | 1.25 | % |  |  | 2.3 | %
|                               | Germany |                    |     | 1.0  | %                  |  |      |                    |  |  |                    |   |  |          |     | 1.0  | %       |  |      |       |  |  |          |   |  |         |     | 1.25 | %     |  |      |          |  |  |         |   |  |  |     | 1.25 | % |  |      |   |  |  |     |   | 
|                               | U.K.    |                    |     | 2.7  | %                  |  |      |                    |  |  |                    |   |  |          |     | 2.8  | %       |  |      |       |  |  |          |   |  |         |     | 2.6  | %     |  |      |          |  |  |         |   |  |  |     | 2.5  | % |  |      |   |  |  |     |   | 

F-46



---



##### Table of Contents



SIEMENS AG


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS(Continued)


(in millions of
, except where
otherwise stated and per share amounts)




Pension benefits: Sensitivity Analysis





|                                    |  |                              |  |  |                 |  |  | 
|----------------------------------- |  | ---------------------------- |  |  | --------------- |  |  | 
|                                    |  | Effect on NPPC 2006 due to a | 
|                                    |  |                              | 
|                                    |  | one-percentage-              |  |  | one-percentage- | 
|                                    |  | point/500                   |  |  | point/500      | 
|                                    |  | increase                     |  |  | decrease        | 
|                                    |  |                              |  |  |                 | 
|Discount rate                       |  | (255)                        |  |  | 328            
|Expected return on plan assets      |  | (200)                        |  |  | 200             | 
|Rate of compensation increase       |  | 48                           |  |  | (44)            | 
|Rate of pension progression         |  | 265                          |  |  | (221)           | 
|Market-related value of plan assets |  | (68)                         |  |  | 68              | 



Pension benefits: Additional information concerning
changes of the AML and actual returns on plan assets


|                                                                                             |  |                    |       |  |                    |  |     |                    |  |  |       |  |  |          |        |   |         |  |      |       |  |  |          |   |  |         |       |  |  |  |     |  |  |  |     | 
|-------------------------------------------------------------------------------------------- |  | ------------------ | ----- |  | ------------------ |  | --- | ------------------ |  |  | ----- |  |  | -------- | ------ | - | ------- |  | ---- | ----- |  |  | -------- | - |  | ------- | ----- |  |  |  | --- |  |  |  | --- | 
|                                                                                             |  | Year ended         |       |  | Year ended         |  |     | Year ended         | 
|                                                                                             |  | September 30, 2005 |       |  | September 30, 2004 |  |     | September 30, 2003 | 
|                                                                                             |  |                    |       |  |                    |  |     |                    | 
|                                                                                             |  | Total              |       |  | Domestic           |  |     | Foreign            |  |  | Total |  |  | Domestic |        |   | Foreign |  |      | Total |  |  | Domestic |   |  | Foreign |      
|                                                                                             |  |                    |       |  |                    |  |     |                    |  |  |       |  |  |          |        |   |         |  |      |       |  |  |          |   |  |         |      
|Change in the minimum liability adjustment within Accumulated
    other comprehensive income |  |                    | 1,813 |  |                    |  | 896 |                    |  |  | 917   |  |  |          | (1,432 | ) |         |  | (922 | )     |  |  | (510     | ) |  |         | 1,363 |  |  |  | 498 |  |  |  | 865 | 




|                             |  |                    |       |  |                    |  |       |                    |  |  |       |  |  |          |       |  |         |  |     |       |  |  |          |  |  |         |     |  |  |  |     |  |  |  |   | 
|---------------------------- |  | ------------------ | ----- |  | ------------------ |  | ----- | ------------------ |  |  | ----- |  |  | -------- | ----- |  | ------- |  | --- | ----- |  |  | -------- |  |  | ------- | --- |  |  |  | --- |  |  |  | - | 
|                             |  | Year ended         |       |  | Year ended         |  |       | Year ended         | 
|                             |  | September 30, 2005 |       |  | September 30, 2004 |  |       | September 30, 2003 | 
|                             |  |                    |       |  |                    |  |       |                    | 
|                             |  | Total              |       |  | Domestic           |  |       | Foreign            |  |  | Total |  |  | Domestic |       |  | Foreign |  |     | Total |  |  | Domestic |  |  | Foreign |    
|                             |  |                    |       |  |                    |  |       |                    |  |  |       |  |  |          |       |  |         |  |     |       |  |  |          |  |  |         |    
|Actual return on plan assets |  |                    | 2,289 |  |                    |  | 1,596 |                    |  |  | 693   |  |  |          | 1,202 |  |         |  | 673 |       |  |  | 529      |  |  |         | 648 |  |  |  | 641 |  |  |  | 7 | 

F-47



---



##### Table of Contents



SIEMENS AG


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS(Continued)


(in millions of
, except where
otherwise stated and per share amounts)


     


Pension benefits: Plan Assets




|             |  |                    |       |                                             |                    |  |     |                    |  |  |         |   |  |       |     |   |          |  |     |         |  |  |     |   |  |  |     |  
|------------ |  | ------------------ | ----- | ------------------------------------------- | ------------------ |  | --- | ------------------ |  |  | ------- | - |  | ----- | --- | - | -------- |  | --- | ------- |  |  | --- | - |  |  | --- | -
|             |  |                    |       | Asset allocation as of the measurement date |                   
|             |  |                    |       |                                             |                   
|             |  | Target asset       |       |                                             | September 30, 2005 |  |     | September 30, 2004 | 
|             |  | allocation         |       |                                             |                    |  |     |                    | 
|Asset class  |  | September 30, 2006 |       |                                             | Total              |  |     | Domestic           |  |  | Foreign |   |  | Total |     |   | Domestic |  |     | Foreign | 
|             |  |                    |       |                                             |                    |  |     |                    |  |  |         |   |  |       |     |   |          |  |     |         | 
|Equity       |  |                    | 20-50 | %                                           |                    |  | 31  | %                  |  |  | 25      | % |  |       | 43  | % |          |  | 26  | %       |  |  | 18  | % |  |  | 44  | %
|Fixed income |  |                    | 40-70 | %                                           |                    |  | 56  | %                  |  |  | 63      | % |  |       | 40  | % |          |  | 56  | %       |  |  | 64  | % |  |  | 39  | %
|Real estate  |  |                    | 5-15  | %                                           |                    |  | 8   | %                  |  |  | 7       | % |  |       | 9   | % |          |  | 9   | %       |  |  | 8   | % |  |  | 10  | %
|Cash         |  |                    | 5-15  | %                                           |                    |  | 5   | %                  |  |  | 5       | % |  |       | 8   | % |          |  | 9   | %       |  |  | 10  | % |  |  | 7   | %
|             |  |                    |       |                                             |                    |  |     |                    |  |  |         |   |  |       |     |   |          |  |     |         | 
|             |  |                    |       |                                             |                    |  | 100 | %                  |  |  | 100     | % |  |       | 100 | % |          |  | 100 | %       |  |  | 100 | % |  |  | 100 | %
|             |  |                    |       |                                             |                    |  |     |                    |  |  |         |   |  |       |     |   |          |  |     |         | 





Pension benefits: Pension Plan Funding




|                                |  |                    |     |  |                    |  |     |                    |  |  |       |  |  |          |       |  |         |  |       |       |  |  |          |  |  |         |       |  |  |  |     |  |  |  |     | 
|------------------------------- |  | ------------------ | --- |  | ------------------ |  | --- | ------------------ |  |  | ----- |  |  | -------- | ----- |  | ------- |  | ----- | ----- |  |  | -------- |  |  | ------- | ----- |  |  |  | --- |  |  |  | --- | 
|                                |  | (Unaudited)        |     |  |                    |  |     |                    |  |  |       |  |  |          |      
|                                |  | Year ended         |     |  |                    |  |    
|                                |  | September 30, 2006 |     |  | Year ended         |  |     | Year ended         | 
|                                |  | (expected)         |     |  | September 30, 2005 |  |     | September 30, 2004 | 
|                                |  |                    |     |  |                    |  |     |                    | 
|                                |  | Total              |     |  | Domestic           |  |     | Foreign            |  |  | Total |  |  | Domestic |       |  | Foreign |  |       | Total |  |  | Domestic |  |  | Foreign |      
|                                |  |                    |     |  |                    |  |     |                    |  |  |       |  |  |          |       |  |         |  |       |       |  |  |          |  |  |         |      
|Regular funding                 |  |                    | 611 |  |                    |  | 321 |                    |  |  | 290   |  |  |          | 535   |  |         |  | 159   |       |  |  | 376      |  |  |         | 518   |  |  |  | 236 |  |  |  | 282 | 
|Supplemental cash Contributions |  |                    |    |  |                    |  |    |                    |  |  |      |  |  |          | 1,496 |  |         |  | 1,380 |       |  |  | 116      |  |  |         | 1,255 |  |  |  | 700 |  |  |  | 555 | 
|                                |  |                    |     |  |                    |  |     |                    |  |  |       |  |  |          |       |  |         |  |       |       |  |  |          |  |  |         |      
|Total                           |  |                    | 611 |  |                    |  | 321 |                    |  |  | 290   |  |  |          | 2,031 |  |         |  | 1,539 |       |  |  | 492      |  |  |         | 1,773 |  |  |  | 936 |  |  |  | 837 | 
|                                |  |                    |     |  |                    |  |     |                    |  |  |       |  |  |          |       |  |         |  |       |       |  |  |          |  |  |         |      

     




F-48



---



##### Table of Contents



SIEMENS AG


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS(Continued)


(in millions of
, except where
otherwise stated and per share amounts)




Pension benefits: Pension benefit payments




|                          |  |       |       |  |          |  |       |         |  |  |       | 
|------------------------- |  | ----- | ----- |  | -------- |  | ----- | ------- |  |  | ----- | 
|                          |  | Total |       |  | Domestic |  |       | Foreign | 
|                          |  |       |       |  |          |  |       |         | 
|Pension benefits paid     |  |       |       |  |          |  |       |         |  |  |       | 
|2004                      |  |       | 991   |  |          |  | 715   |         |  |  | 276   | 
|2005                      |  |       | 1,032 |  |          |  | 751   |         |  |  | 281   | 
|Expected pension payments |  |       |       |  |          |  |       |         |  |  |       | 
|2006                      |  |       | 1,134 |  |          |  | 789   |         |  |  | 345   | 
|2007                      |  |       | 1,151 |  |          |  | 796   |         |  |  | 355   | 
|2008                      |  |       | 1,207 |  |          |  | 832   |         |  |  | 375   | 
|2009                      |  |       | 1,236 |  |          |  | 854   |         |  |  | 382   | 
|2010                      |  |       | 1,261 |  |          |  | 872   |         |  |  | 389   | 
|2011-2015                 |  |       | 7,178 |  |          |  | 4,829 |         |  |  | 2,349 | 



Other postretirement benefits








| |   |                                                                                                                             
| | - | ----------------------------------------------------------------------------------------------------------------------------
| |  | Obligations and funded status,                                                                                              
|
| |  | Plan assets,                                                                                                                
|
| |  | Components of net periodic benefit cost for other postretirement
    benefits,                                              
|
| |  | Assumptions used in the calculation of the APBO and the net
    periodic benefit cost for other postretirement benefits, and
|
| |  | Benefit payments.                                                                                                           

F-49



---



##### Table of Contents



SIEMENS AG


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS(Continued)


(in millions of
, except where
otherwise stated and per share amounts)


Other postretirement benefits: Obligations and funded
status




|                                              |  |                    |        |   |                    |  |      |         |  |  |       |   |  |          |        |   |         |  |      |   |  |  |      |  
|--------------------------------------------- |  | ------------------ | ------ | - | ------------------ |  | ---- | ------- |  |  | ----- | - |  | -------- | ------ | - | ------- |  | ---- | - |  |  | ---- | -
|                                              |  | September 30, 2005 |        |   | September 30, 2004 | 
|                                              |  |                    |        |   |                    | 
|                                              |  | Total              |        |   | Domestic           |  |      | Foreign |  |  | Total |   |  | Domestic |        |   | Foreign | 
|                                              |  |                    |        |   |                    |  |      |         |  |  |       |   |  |          |        |   |         | 
|Fair value of plan assets                     |  |                    | 3      |   |                    |  |     |         |  |  | 3     |   |  |          | 5      |   |         |  |     |   |  |  | 5    |  
|Accumulated postretirement benefit obligation |  |                    | 919    |   |                    |  | 394  |         |  |  | 525   |   |  |          | 939    |   |         |  | 443  |   |  |  | 496  |  
|                                              |  |                    |        |   |                    |  |      |         |  |  |       |   |  |          |        |   |         | 
|Funded status                                 |  |                    | (916   | ) |                    |  | (394 | )       |  |  | (522  | ) |  |          | (934   | ) |         |  | (443 | ) |  |  | (491 | )
|Unrecognized net gain                         |  |                    | (357   | ) |                    |  | (318 | )       |  |  | (39   | ) |  |          | (373   | ) |         |  | (274 | ) |  |  | (99  | )
|Unrecognized prior service benefits           |  |                    | (44    | ) |                    |  |     |         |  |  | (44   | ) |  |          | (11    | ) |         |  |     |   |  |  | (11  | )
|Unrecognized net transition obligation        |  |                    |       |   |                    |  |     |         |  |  |      |   |  |          | 1      |   |         |  |     |   |  |  | 1    |  
|                                              |  |                    |        |   |                    |  |      |         |  |  |       |   |  |          |        |   |         | 
|Net amount recognized                         |  |                    | (1,317 | ) |                    |  | (712 | )       |  |  | (605  | ) |  |          | (1,317 | ) |         |  | (717 | ) |  |  | (600 | )
|                                              |  |                    |        |   |                    |  |      |         |  |  |       |   |  |          |        |   |         | 



|                                                             |                                                                        |                                        |     |     |                    |   |     |         |     |   |       |     |     |          |     |       |         |   |     |     |     |   |     |     |      |  
|------------------------------------------------------------ | ---------------------------------------------------------------------- | -------------------------------------- | --- | --- | ------------------ | - | --- | ------- | --- | - | ----- | --- | --- | -------- | --- | ----- | ------- | - | --- | --- | --- | - | --- | --- | ---- | -
|                                                             |                                                                        | September 30, 2005                     |     |     | September 30, 2004 |  
|                                                             |                                                                        |                                        |     |     |                    |  
|                                                             |                                                                        | Total                                  |     |     | Domestic           |   |     | Foreign |     |   | Total |     |     | Domestic |     |       | Foreign |  
|                                                             |                                                                        |                                        |     |     |                    |   |     |         |     |   |       |     |     |          |     |       |         |  
|Change in benefit obligations:                               |                                                                        |                                        |     |     |                    |   |     |         |     |   |       |     |     |          |     |       |         |   |     |     |     |   |     |    
|                                                             | Accumulated postretirement benefit obligation at beginning of
    year |                                        |     | 939 |                    |   |     | 443     |     |   |       | 496 |     |          |     | 1,088 |         |   |     | 482 |     |   |     | 606 |     
|                                                             |                                                                        | Foreign currency exchange rate changes |     |     | 13                 |   |     |         |    |   |       |     | 13  |          |     |       | (31     | ) |     |     |    |   |     |     | (31  | )
|                                                             |                                                                        | Service cost                           |     |     | 26                 |   |     |         | 14  |   |       |     | 12  |          |     |       | 44      |   |     |     | 17  |   |     |     | 27   |  
|                                                             |                                                                        | Interest cost                          |     |     | 52                 |   |     |         | 23  |   |       |     | 29  |          |     |       | 60      |   |     |     | 26  |   |     |     | 34   |  
|                                                             |                                                                        | Settlements and curtailments           |     |     | (4                 | ) |     |         |    |   |       |     | (4  | )        |     |       | (3      | ) |     |     |    |   |     |     | (3   | )
|                                                             |                                                                        | Plan participants contributions       |     |     | 2                  |   |     |         |    |   |       |     | 2   |          |     |       | 2       |   |     |     |    |   |     |     | 2    |  
|                                                             |                                                                        | Plan amendments and other              |     |     | (41                | ) |     |         |    |   |       |     | (41 | )        |     |       | (4      | ) |     |     | 7   |   |     |     | (11  | )
|                                                             |                                                                        | Actuarial (gains) losses, net          |     |     | (6                 | ) |     |         | (59 | ) |       |     | 53  |          |     |       | (170    | ) |     |     | (65 | ) |     |     | (105 | )
|                                                             |                                                                        | Acquisitions                           |     |     |                   |   |     |         |    |   |       |     |    |          |     |       | 10      |   |     |     | 1   |   |     |     | 9    |  
|                                                             |                                                                        | Divestments                            |     |     | (7                 | ) |     |         | (7  | ) |       |     |    |          |     |       | (2      | ) |     |     | (2  | ) |     |     |     |  
|                                                             |                                                                        | Benefits paid                          |     |     | (55                | ) |     |         | (20 | ) |       |     | (35 | )        |     |       | (55     | ) |     |     | (23 | ) |     |     | (32  | )
|                                                             |                                                                        |                                        |     |     |                    |   |     |         |     |   |       |     |     |          |     |       |         |  
|Accumulated postretirement benefit obligation at end of year |                                                                        |                                        | 919 |     |                    |   | 394 |         |     |   | 525   |     |     |          | 939 |       |         |   | 443 |     |     |   | 496 |    
|                                                             |                                                                        |                                        |     |     |                    |   |     |         |     |   |       |     |     |          |     |       |         |  

F-50



---



##### Table of Contents



SIEMENS AG


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS(Continued)


(in millions of
, except where
otherwise stated and per share amounts)


Other postretirement benefits: Plan assets




|                                      |                                                |                                  |   |   |                    |   |   |         |   |  |       |   |     |          |   |   |         |   |   |   |   |  |   |   |     |  
|------------------------------------- | ---------------------------------------------- | -------------------------------- | - | - | ------------------ | - | - | ------- | - |  | ----- | - | --- | -------- | - | - | ------- | - | - | - | - |  | - | - | --- | -
|                                      |                                                | September 30, 2005               |   |   | September 30, 2004 |  
|                                      |                                                |                                  |   |   |                    |  
|                                      |                                                | Total                            |   |   | Domestic           |   |   | Foreign |   |  | Total |   |     | Domestic |   |   | Foreign |  
|                                      |                                                |                                  |   |   |                    |   |   |         |   |  |       |   |     |          |   |   |         |  
|Change in plan assets                 |                                                |                                  |   |   |                    |   |   |         |   |  |       |   |     |          |   |   |         |   |   |   |   |  |   |  
|                                      | Fair value of plan assets at beginning of year |                                  |   | 5 |                    |   |   |        |   |  |       | 5 |     |          |   | 3 |         |   |   |  |   |  |   | 3 |    
|                                      |                                                | Employer contributions           |   |   | 31                 |   |   |         |  |  |       |   | 31  |          |   |   | 32      |   |   |   |  |  |   |   | 32  |  
|                                      |                                                | Plan participants contributions |   |   | 2                  |   |   |         |  |  |       |   | 2   |          |   |   | 2       |   |   |   |  |  |   |   | 2   |  
|                                      |                                                | Benefits paid                    |   |   | (35                | ) |   |         |  |  |       |   | (35 | )        |   |   | (32     | ) |   |   |  |  |   |   | (32 | )
|                                      |                                                |                                  |   |   |                    |   |   |         |   |  |       |   |     |          |   |   |         |  
|Fair value of plan assets at year end |                                                |                                  | 3 |   |                    |   |  |         |   |  | 3     |   |     |          | 5 |   |         |   |  |   |   |  | 5 |  
|                                      |                                                |                                  |   |   |                    |   |   |         |   |  |       |   |     |          |   |   |         |  

Other postretirement benefits: Components of net periodic
benefit cost




|                                             |                                     |                    |    |     |                    |  |    |                    |   |  |       |     |   |          |    |     |         |  |    |       |   |  |          |    |   |         |     |     |   |  |    |    |   |  |     |    |  
|-------------------------------------------- | ----------------------------------- | ------------------ | -- | --- | ------------------ |  | -- | ------------------ | - |  | ----- | --- | - | -------- | -- | --- | ------- |  | -- | ----- | - |  | -------- | -- | - | ------- | --- | --- | - |  | -- | -- | - |  | --- | -- | -
|                                             |                                     | Year ended         |    |     | Year ended         |  |    | Year ended         |  
|                                             |                                     | September 30, 2005 |    |     | September 30, 2004 |  |    | September 30, 2003 |  
|                                             |                                     |                    |    |     |                    |  |    |                    |  
|                                             |                                     | Total              |    |     | Domestic           |  |    | Foreign            |   |  | Total |     |   | Domestic |    |     | Foreign |  |    | Total |   |  | Domestic |    |   | Foreign |    
|                                             |                                     |                    |    |     |                    |  |    |                    |   |  |       |     |   |          |    |     |         |  |    |       |   |  |          |    |   |         |    
|Service cost                                 |                                     |                    | 26 |     |                    |  | 14 |                    |   |  | 12    |     |   |          | 44 |     |         |  | 17 |       |   |  | 27       |    |   |         | 42  |     |   |  | 19 |    |   |  | 23  |   
|Interest cost                                |                                     |                    | 52 |     |                    |  | 23 |                    |   |  | 29    |     |   |          | 60 |     |         |  | 26 |       |   |  | 34       |    |   |         | 66  |     |   |  | 30 |    |   |  | 36  |   
|Amortization of:                             |                                     |                    |    |     |                    |  |    |                    |   |  |       |     |   |          |    |     |         |  |    |       |   |  |          |    |   |         |     |     |   |  |    |    |   |  |     |   
|                                             | Unrecognized prior service benefits |                    |    | (10 | )                  |  |    |                   |   |  |       | (10 | ) |          |    | (7  | )       |  |    |      |   |  |          | (7 | ) |         |     | (5  | ) |  |    |   |   |  |     | (5 | )
|                                             | Unrecognized net (gains)/losses     |                    |    | (19 | )                  |  |    | (15                | ) |  |       | (4  | ) |          |    | (10 | )       |  |    | (12   | ) |  |          | 2  |   |         |     | (13 | ) |  |    | (7 | ) |  |     | (6 | )
|Net gain due to settlements and curtailments |                                     |                    | (4 | )   |                    |  |   |                    |   |  | (4    | )   |   |          | (3 | )   |         |  |   |       |   |  | (3       | )  |   |         | (27 | )   |   |  |   |    |   |  | (27 | ) 
|                                             |                                     |                    |    |     |                    |  |    |                    |   |  |       |     |   |          |    |     |         |  |    |       |   |  |          |    |   |         |    
|Net periodic benefit cost                    |                                     |                    | 45 |     |                    |  | 22 |                    |   |  | 23    |     |   |          | 84 |     |         |  | 31 |       |   |  | 53       |    |   |         | 63  |     |   |  | 42 |    |   |  | 21  |   
|                                             |                                     |                    |    |     |                    |  |    |                    |   |  |       |     |   |          |    |     |         |  |    |       |   |  |          |    |   |         |    

Other postretirement benefits: Assumptions used in the
calculation of the APBO and net periodic benefit cost






|                                               |                            |                    |            |                    |  |                    |             |  |  |            |               |  | 
|---------------------------------------------- | -------------------------- | ------------------ | ---------- | ------------------ |  | ------------------ | ----------- |  |  | ---------- | ------------- |  | 
|                                               |                            | Year ended         |            | Year ended         |  | Year ended         |            
|                                               |                            | September 30, 2005 |            | September 30, 2004 |  | September 30, 2003 |            
|                                               |                            |                    |            |                    |  |                    |            
|Discount rate                                  |                            | 5.25%              |            |                    |  | 6.5%               |             |  |  | 6.25%      |               | 
|Medical trend rates (initial/ ultimate /year): |                            |                    |            |                    |  |                    |             |  |  |            |               | 
|                                               | Medicare ineligible pre-65 |                    | 9%/5%/2010 |                    |  |                    | 10%/5%/2010 |  |  |            | 8.33%/5%/2007 |  | 
|                                               | Medicare eligible post-65  |                    | 9%/5%/2010 |                    |  |                    | 10%/5%/2010 |  |  |            | 8.33%/5%/2007 |  | 
|Fixed dollar benefit                           |                            | 4.5%               |            |                    |  | 4.5%               |             |  |  | 6%         |               | 
|Dental trend rates (initial/ultimate/year)     |                            | 6%/5%/2021         |            |                    |  | 6%/5%/2021         |             |  |  | 6%/5%/2021 |               | 



F-51



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##### Table of Contents



SIEMENS AG


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS(Continued)


(in millions of
, except where
otherwise stated and per share amounts)




|                                                        |  |                      |    |          |  |  |     |  
|------------------------------------------------------- |  | -------------------- | -- | -------- |  |  | --- | -
|                                                        |  | September 30, 2005   |   
|                                                        |  | One-percentage-point |   
|                                                        |  |                      |   
|                                                        |  | increase             |    | decrease
|                                                        |  |                      |    |         
|Effect on accumulated postretirement benefit obligation |  |                      | 59 |          |  |  | (49 | )
|Effect on total of service and interest cost components |  |                      | 6  |          |  |  | (4  | )

Other postretirement benefits: Benefit payments




|                                                    |  |       |     |  |          |  |     |         |  |  |     | 
|--------------------------------------------------- |  | ----- | --- |  | -------- |  | --- | ------- |  |  | --- | 
|                                                    |  | Total |     |  | Domestic |  |     | Foreign | 
|                                                    |  |       |     |  |          |  |     |         | 
|Payments for other postretirement benefits          |  |       |     |  |          |  |     |         |  |  |     | 
|2004                                                |  |       | 55  |  |          |  | 23  |         |  |  | 32  | 
|2005                                                |  |       | 55  |  |          |  | 20  |         |  |  | 35  | 
|Expected payments for other postretirement benefits |  |       |     |  |          |  |     |         |  |  |     | 
|2006                                                |  |       | 52  |  |          |  | 23  |         |  |  | 29  | 
|2007                                                |  |       | 57  |  |          |  | 28  |         |  |  | 29  | 
|2008                                                |  |       | 63  |  |          |  | 34  |         |  |  | 29  | 
|2009                                                |  |       | 56  |  |          |  | 27  |         |  |  | 29  | 
|2010                                                |  |       | 59  |  |          |  | 29  |         |  |  | 30  | 
|2011-2015                                           |  |       | 388 |  |          |  | 238 |         |  |  | 150 | 



22. Other accruals and provisions


|                             |  |               |       |  |      |  |       | 
|---------------------------- |  | ------------- | ----- |  | ---- |  | ----- | 
|                             |  | September 30, |      
|                             |  |               |      
|                             |  | 2005          |       |  | 2004 | 
|                             |  |               |       |  |      | 
|Product warranties           |  |               | 796   |  |      |  | 728   | 
|Asset retirement obligations |  |               | 499   |  |      |  | 478   | 
|Deferred income              |  |               | 324   |  |      |  | 356   | 
|Other long-term accruals     |  |               | 3,200 |  |      |  | 2,454 | 
|                             |  |               |       |  |      | 
|                             |  |               | 4,819 |  |      |  | 4,016 | 
|                             |  |               |       |  |      | 

       




F-52



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##### Table of Contents



SIEMENS AG


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS(Continued)


(in millions of
, except where
otherwise stated and per share amounts)


          


   Other operating income
(expense), net







|                                                                                                                  |  |               |     |               |  |  |     |  
|----------------------------------------------------------------------------------------------------------------- |  | ------------- | --- | ------------- |  |  | --- | -
|                                                                                                                  |  | Year ended    |     | Year ended   
|                                                                                                                  |  | September 30, |     | September 30,
|                                                                                                                  |  | 2005          |     | 2004         
|                                                                                                                  |  |               |     |              
|Aggregate carrying amount as of the beginning of fiscal year
    (thereof current portion of
    74 and
    97) |  |               | 552 |               |  |  | 592 |  
|Liabilities incurred in the current period                                                                        |  |               | 12  |               |  |  | 4   |  
|Liabilities settled in the current period                                                                         |  |               | (62 | )             |  |  | (87 | )
|Accretion expense                                                                                                 |  |               | 28  |               |  |  | 28  |  
|Revision in estimated cash flows                                                                                  |  |               | 12  |               |  |  | 15  |  
|                                                                                                                  |  |               |     |               |  | 
|Aggregate carrying amount as of fiscal year-end (thereof current
    portion of 43
    and 74)                  |  |               | 542 |               |  |  | 552 |  
|                                                                                                                  |  |               |     |               |  | 

F-53



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##### Table of Contents



SIEMENS AG


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS(Continued)


(in millions of
, except where
otherwise stated and per share amounts)


23. Shareholders equity


Common stock and Additional paid-in capital


 


 




|                         |                                       |                         |           |       |                    |  |         |                     |  |  |          |          |   |           |         |          |          |  |         |          |   |  |         |         |  
|------------------------ | ------------------------------------- | ----------------------- | --------- | ----- | ------------------ |  | ------- | ------------------- |  |  | -------- | -------- | - | --------- | ------- | -------- | -------- |  | ------- | -------- | - |  | ------- | ------- | -
|                         |                                       | Common stock            |           |       | Authorized capital |  |         | Conditional capital | 
|                         |                                       | (authorized and issued) |           |       | (not issued)       |  |         | (not issued)        | 
|                         |                                       |                         |           |       |                    |  |         |                     | 
|                         |                                       | in                      |           |       | in                 |  |         | in                  |  |  | in       |          |   | in        |         |          | in       | 
|                         |                                       | thousands               |           |       | thousand           |  |         | thousands           |  |  | thousand |          |   | thousands |         |          | thousand | 
|                         |                                       | of                     |           |       | shares             |  |         | of                 |  |  | shares   |          |   | of       |         |          | shares   | 
|                         |                                       |                         |           |       |                    |  |         |                     |  |  |          |          |   |           |         |          |          | 
|As of October 1, 2002    |                                       |                         | 2,671,122 |       |                    |  | 890,374 |                     |  |  | 766,630  |          |   |           | 255,543 |          |          |  | 194,093 |          |   |  | 64,698  |        
|                         | Settlement to former SNI shareholders |                         |           | 1,477 |                    |  |         | 492                 |  |  |          |         |   |           |         |         |          |  |         | (1,477   | ) |  |         | (492    | )
|                         | New approved capital                  |                         |           |      |                    |  |         |                    |  |  |          | 250,000  |   |           |         | 83,334   |          |  |         | 267,000  |   |  |         | 89,000  |  
|                         | Expired capital                       |                         |           |      |                    |  |         |                    |  |  |          | (300,000 | ) |           |         | (100,000 | )        |  |         |         |   |  |         |        |  
|                         |                                       |                         |           |       |                    |  |         |                     |  |  |          |          |   |           |         |          |          | 
|As of September 30, 2003 |                                       |                         | 2,672,599 |       |                    |  | 890,866 |                     |  |  | 716,630  |          |   |           | 238,877 |          |          |  | 459,616 |          |   |  | 153,206 |        
|                         | Stock options                         |                         |           | 195   |                    |  |         | 65                  |  |  |          |         |   |           |         |         |          |  |         | (195     | ) |  |         | (65     | )
|                         | Settlement to former SNI shareholders |                         |           | 433   |                    |  |         | 145                 |  |  |          |         |   |           |         |         |          |  |         | (433     | ) |  |         | (145    | )
|                         | New approved capital                  |                         |           |      |                    |  |         |                    |  |  |          | 600,000  |   |           |         | 200,000  |          |  |         | 733,528  |   |  |         | 244,509 |  
|                         | Expired capital                       |                         |           |      |                    |  |         |                    |  |  |          | (650,000 | ) |           |         | (216,667 | )        |  |         | (267,000 | ) |  |         | (89,000 | )
|                         |                                       |                         |           |       |                    |  |         |                     |  |  |          |          |   |           |         |          |          | 
|As of September 30, 2004 |                                       |                         | 2,673,227 |       |                    |  | 891,076 |                     |  |  | 666,630  |          |   |           | 222,210 |          |          |  | 925,516 |          |   |  | 308,505 |        
|                         | Settlement to former SNI shareholders |                         |           | 29    |                    |  |         | 9                   |  |  |          |         |   |           |         |         |          |  |         | (29      | ) |  |         | (9      | )
|                         |                                       |                         |           |       |                    |  |         |                     |  |  |          |          |   |           |         |          |          | 
|As of September 30, 2005 |                                       |                         | 2,673,256 |       |                    |  | 891,085 |                     |  |  | 666,630  |          |   |           | 222,210 |          |          |  | 925,487 |          |   |  | 308,496 |        
|                         |                                       |                         |           |       |                    |  |         |                     |  |  |          |          |   |           |         |          |          | 

Capital increases





  


Authorized, unissued capital


  


F-54



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##### Table of Contents



SIEMENS AG


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS(Continued)


(in millions of
, except where
otherwise stated and per share amounts)


  





  





Conditional capital (unissued)


  


  


   





F-55



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##### Table of Contents



SIEMENS AG


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS(Continued)


(in millions of
, except where
otherwise stated and per share amounts)





  


 


Treasury stock





 


  


  


F-56



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##### Table of Contents



SIEMENS AG


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS(Continued)


(in millions of
, except where
otherwise stated and per share amounts)


Accumulated other comprehensive income (loss)




|                                                                              |  |                          |        |     |        |  |      |      |  |  |        |   |  |        |       |   |     |     |      |        |  |  |        |   |  |     |        |   |  |  |     |   |  |  |        |  
|----------------------------------------------------------------------------- |  | ------------------------ | ------ | --- | ------ |  | ---- | ---- |  |  | ------ | - |  | ------ | ----- | - | --- | --- | ---- | ------ |  |  | ------ | - |  | --- | ------ | - |  |  | --- | - |  |  | ------ | -
|                                                                              |  | Year ended September 30, |       
|                                                                              |  |                          |       
|                                                                              |  | 2005                     |        |     | 2004   |  |      | 2003 | 
|                                                                              |  |                          |        |     |        |  |      |      | 
|                                                                              |  |                          |        | Tax |        |  |      |      |  |  | Tax    |   |  |        |       |   |     | Tax |      |        | 
|                                                                              |  | Pretax                   |        |     | effect |  |      | Net  |  |  | Pretax |   |  | effect |       |   | Net |     |      | Pretax |  |  | effect |   |  | Net |       
|                                                                              |  |                          |        |     |        |  |      |      |  |  |        |   |  |        |       |   |     |     |      |        |  |  |        |   |  |     |       
|Changes in unrealized gains (losses) on securities:                           |  |                          |        |     |        |  |      |      |  |  |        |   |  |        |       |   |     |     |      |        |  |  |        |   |  |     |        |   |  |  |     |   |  |  |        |  
|Unrealized holding gains (losses) for the period                              |  |                          | 271    |     |        |  | (108 | )    |  |  | 163    |   |  |        | 218   |   |     |     | (79  | )      |  |  | 139    |   |  |     | 334    |   |  |  | (87 | ) |  |  | 247    |  
|Reclassification adjustments for (gains) losses included in net
    income    |  |                          | (265   | )   |        |  | 89   |      |  |  | (176   | ) |  |        | (75   | ) |     |     | 13   |        |  |  | (62    | ) |  |     | 25     |   |  |  | (4  | ) |  |  | 21     |  
|                                                                              |  |                          |        |     |        |  |      |      |  |  |        |   |  |        |       |   |     |     |      |        |  |  |        |   |  |     |       
|Net unrealized gains (losses) on available-for-sale securities                |  |                          | 6      |     |        |  | (19  | )    |  |  | (13    | ) |  |        | 143   |   |     |     | (66  | )      |  |  | 77     |   |  |     | 359    |   |  |  | (91 | ) |  |  | 268    |  
|Changes in unrealized gains (losses) on derivative financial
    instruments: |  |                          |        |     |        |  |      |      |  |  |        |   |  |        |       |   |     |     |      |        |  |  |        |   |  |     |        |   |  |  |     |   |  |  |        |  
|Unrealized gains (losses) on derivative financial instruments                 |  |                          | (165   | )   |        |  | 64   |      |  |  | (101   | ) |  |        | 73    |   |     |     | (33  | )      |  |  | 40     |   |  |     | 179    |   |  |  | (68 | ) |  |  | 111    |  
|Reclassification adjustments for (gains) losses included in net
    income    |  |                          | (71    | )   |        |  | 28   |      |  |  | (43    | ) |  |        | (111  | ) |     |     | 43   |        |  |  | (68    | ) |  |     | (141   | ) |  |  | 54  |   |  |  | (87    | )
|                                                                              |  |                          |        |     |        |  |      |      |  |  |        |   |  |        |       |   |     |     |      |        |  |  |        |   |  |     |       
|Net unrealized gains (losses) on derivative financial instruments             |  |                          | (236   | )   |        |  | 92   |      |  |  | (144   | ) |  |        | (38   | ) |     |     | 10   |        |  |  | (28    | ) |  |     | 38     |   |  |  | (14 | ) |  |  | 24     |  
|Minimum pension liability                                                     |  |                          | (1,935 | )   |        |  | 690  |      |  |  | (1,245 | ) |  |        | 1,397 |   |     |     | (532 | )      |  |  | 865    |   |  |     | (1,477 | ) |  |  | 499 |   |  |  | (978   | )
|Foreign-currency translation adjustment                                       |  |                          | 483    |     |        |  |     |      |  |  | 483    |   |  |        | (249  | ) |     |     |     |        |  |  | (249   | ) |  |     | (695   | ) |  |  |    |   |  |  | (695   | )
|                                                                              |  |                          |        |     |        |  |      |      |  |  |        |   |  |        |       |   |     |     |      |        |  |  |        |   |  |     |       
|                                                                              |  |                          | (1,682 | )   |        |  | 763  |      |  |  | (919   | ) |  |        | 1,253 |   |     |     | (588 | )      |  |  | 665    |   |  |     | (1,775 | ) |  |  | 394 |   |  |  | (1,381 | )
|                                                                              |  |                          |        |     |        |  |      |      |  |  |        |   |  |        |       |   |     |     |      |        |  |  |        |   |  |     |       

Miscellaneous


(Handelsgesetzbuch)      


24. Commitments and contingencies


Guarantees and other commitments




|           |                                       |               |       |     |      |  |       |     | 
|---------- | ------------------------------------- | ------------- | ----- | --- | ---- |  | ----- | --- | 
|           |                                       | September 30, |      
|           |                                       |               |      
|           |                                       | 2005          |       |     | 2004 | 
|           |                                       |               |       |     |      | 
|Guarantees |                                       |               |       |     |      |  |       |    
|           | Credit guarantees                     |               |       | 362 |      |  |       | 341 | 
|           | Guarantees of third-party performance |               |       | 829 |      |  |       | 370 | 
|           | Other guarantees                      |               |       | 602 |      |  |       | 525 | 
|           |                                       |               |       |     |      | 
|           |                                       |               | 1,793 |     |      |  | 1,236 |    
|           |                                       |               |       |     |      | 

F-57



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##### Table of Contents



SIEMENS AG


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS(Continued)


(in millions of
, except where
otherwise stated and per share amounts)


Credit guarantees  


Guarantees of third-party
performance,


Other guarantees Other guarantees  




|           |  |  |     | 
|---------- |  |  | --- | 
|2006       |  |  | 628 | 
|2007       |  |  | 515 | 
|2008       |  |  | 409 | 
|2009       |  |  | 299 | 
|2010       |  |  | 247 | 
|Thereafter |  |  | 583 | 

  


 






F-58



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##### Table of Contents



SIEMENS AG


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS(Continued)


(in millions of
, except where
otherwise stated and per share amounts)






|    |                                              
|--- | ---------------------------------------------
|25. | Derivative instruments and hedging activities



Foreign currency exchange risk management




Derivative
financial instruments not designated as hedges


Other current asset Other current liability


Cost of
sales


Hedging
activities




Cash flow hedges AOCI    AOCI


 AOCI




F-59



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##### Table of Contents



SIEMENS AG


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS(Continued)


(in millions of
, except where
otherwise stated and per share amounts)


Fair value hedges Other current asset   Other current liability   


Interest rate risk management






Derivative
financial instruments not designated as hedges


Other current asset Other current
liability


Fair
value hedges of fixed-rate debt obligations


Income (expense) from financial assets and


F-60



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##### Table of Contents



SIEMENS AG


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS(Continued)


(in millions of
, except where
otherwise stated and per share amounts)


marketable securities, net


   


Cash
flow hedges of revolving term deposits


AOCI  AOCI


Credit risk management




26. Fair value of financial instruments




Derivative financial instruments




Derivative interest rate contracts


Derivative currency contracts


F-61



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##### Table of Contents



SIEMENS AG


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS(Continued)


(in millions of
, except where
otherwise stated and per share amounts)


Credit default swaps


  Other current assets   Other current liabilities  


Non-derivative financial instruments




Financial assets and securities




|                |  |               |       |  |      |  |       | 
|--------------- |  | ------------- | ----- |  | ---- |  | ----- | 
|                |  | September 30, |      
|                |  |               |      
|                |  | 2005          |       |  | 2004 | 
|                |  |               |       |  |      | 
|Fair value      |  |               | 3,935 |  |      |  | 4,293 | 
|Carrying amount |  |               | 3,768 |  |      |  | 4,122 | 

Financing receivables




Debt




|                |  |               |        |  |      |  |        | 
|--------------- |  | ------------- | ------ |  | ---- |  | ------ | 
|                |  | September 30, |       
|                |  |               |       
|                |  | 2005          |        |  | 2004 | 
|                |  |               |        |  |      | 
|Fair value      |  |               | 12,994 |  |      |  | 11,663 | 
|Carrying amount |  |               | 12,435 |  |      |  | 11,219 | 

F-62



---



##### Table of Contents



SIEMENS AG


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS(Continued)


(in millions of
, except where
otherwise stated and per share amounts)


27. Stock-based compensation




Accounting for
Stock-Based Compensation Accounting for Stock-Based
CompensationTransition and Disclosure Accounting for Stock Issued to Employees


Stock Option Plans


Description
of plans1999 Siemens Stock Option Plan








Description
of plans2001 Siemens Stock Option Plan




F-63



---



##### Table of Contents



SIEMENS AG


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS(Continued)


(in millions of
, except where
otherwise stated and per share amounts)






Accounting for Stock-Based
Compensation


  


|                                 |  |                          |            |                  |                |  |        |         |                  |  |                |   |  |                  |        |  |                |  |            |   |  |  |        | 
|-------------------------------- |  | ------------------------ | ---------- | ---------------- | -------------- |  | ------ | ------- | ---------------- |  | -------------- | - |  | ---------------- | ------ |  | -------------- |  | ---------- | - |  |  | ------ | 
|                                 |  | Year ended September 30, |           
|                                 |  |                          |           
|                                 |  | 2005                     |            |                  | 2004           |  |        | 2003    |                 
|                                 |  |                          |            |                  |                |  |        |         |                 
|                                 |  |                          |            | Weighted average |                |  |        |         | Weighted average |  |                |   |  | Weighted average |       
|                                 |  | Options                  |            |                  | exercise price |  |        | Options |                  |  | exercise price |   |  | Options          |        |  | exercise price | 
|                                 |  |                          |            |                  |                |  |        |         |                  |  |                |   |  |                  |        |  |                | 
|Outstanding, beginning of period |  |                          | 28,054,326 |                  |                |  | 70.86 |         |                  |  | 20,410,876     |   |  |                  | 69.82 |  |                |  | 11,648,767 |   |  |  | 82.85 | 
|Granted                          |  |                          | 2,945,035  |                  |                |  | 72.54 |         |                  |  | 8,678,752      |   |  |                  | 73.25 |  |                |  | 9,397,005  |   |  |  | 53.70 | 
|Options exercised                |  |                          | (1,696,362 | )                |                |  | 54.31 |         |                  |  | (65,063        | ) |  |                  | 57.73 |  |                |  |           |   |  |  |       | 
|Options forfeited                |  |                          | (691,443   | )                |                |  | 74.41 |         |                  |  | (970,239       | ) |  |                  | 71.18 |  |                |  | (634,896   | ) |  |  | 70.28 | 
|                                 |  |                          |            |                  |                |  |        |         |                  |  |                |   |  |                  |        |  |                | 
|Outstanding, end of period       |  |                          | 28,611,556 |                  |                |  | 71.93 |         |                  |  | 28,054,326     |   |  |                  | 70.86 |  |                |  | 20,410,876 |   |  |  | 69.82 | 
|                                 |  |                          |            |                  |                |  |        |         |                  |  |                |   |  |                  |        |  |                | 
|Exercisable, end of period       |  |                          | 17,486,809 |                  |                |  | 71.21 |         |                  |  | 10,804,159     |   |  |                  | 82.91 |  |                |  | 4,573,058  |   |  |  | 76.36 | 

F-64



---



##### Table of Contents



SIEMENS AG


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS(Continued)


(in millions of
, except where
otherwise stated and per share amounts)




|                    |        |                  |                     |  |                |         |  |         |                |  |        |             |        |                  |                |  |           |  |  |  |        | 
|------------------- | ------ | ---------------- | ------------------- |  | -------------- | ------- |  | ------- | -------------- |  | ------ | ----------- | ------ | ---------------- | -------------- |  | --------- |  |  |  | ------ | 
|Options outstanding |        |                  | Options exercisable | 
|                    |        |                  |                     | 
|                    |        | Weighted average |                     |  | Weighted       |         |  |        
|                    |        | Options          |                     |  | remaining life |         |  | average |                |  | Number |             |        | Weighted average |               
|Exercise prices     |        |                  | outstanding         |  |                | (years) |  |         | exercise price |  |        | exercisable |        |                  | exercise price | 
|                    |        |                  |                     |  |                |         |  |         |                |  |        |             |        |                  |                | 
|                    | 53.70 |                  |                     |  | 7,185,600      |         |  |         | 2              |  |        |             | 53.70 |                  |                |  | 7,185,600 |  |  |  | 53.70 | 
|                    | 57.73 |                  |                     |  | 1,227,245      |         |  |         | 1              |  |        |             | 57.73 |                  |                |  | 1,227,245 |  |  |  | 57.73 | 
|                    | 72.54 |                  |                     |  | 2,907,680      |         |  |         | 4              |  |        |             | 72.54 |                  |                |  |          |  |  |  |       | 
|                    | 73.25 |                  |                     |  | 8,217,067      |         |  |         | 3              |  |        |             | 73.25 |                  |                |  |          |  |  |  |       | 
|                    | 86.23 |                  |                     |  | 2,809,396      |         |  |         | 2              |  |        |             | 86.23 |                  |                |  | 2,809,396 |  |  |  | 86.23 | 
|                    | 87.19 |                  |                     |  | 6,264,568      |         |  |         | 1              |  |        |             | 87.19 |                  |                |  | 6,264,568 |  |  |  | 87.19 | 

Fair
value information




|                                                       |  |                           |        |   |      |  |        |      |  |  |        |  
|------------------------------------------------------ |  | ------------------------- | ------ | - | ---- |  | ------ | ---- |  |  | ------ | -
|                                                       |  | Assumptions at grant date |       
|                                                       |  |                           |       
|                                                       |  | 2005                      |        |   | 2004 |  |        | 2003 | 
|                                                       |  |                           |        |   |      |  |        |      | 
|Risk-free interest rate                                |  |                           | 2.72   | % |      |  | 3.22   | %    |  |  | 3.31   | %
|Expected dividend yield                                |  |                           | 2.07   | % |      |  | 1.80   | %    |  |  | 2.23   | %
|Expected volatility                                    |  |                           | 20.38  | % |      |  | 31.85  | %    |  |  | 53.49  | %
|Expected option life                                   |  |                           | 3 yrs. |   |      |  | 3 yrs. |      |  |  | 3 yrs. |  
|Estimated weighted average fair value per option       |  |                           | 4.54  |   |      |  | 9.62  |      |  |  | 9.80  |  
|Fair value of total options granted during fiscal year |  |                           | 12    |   |      |  | 81    |      |  |  | 92    |  



Stock appreciation rights (SARs)




|                                 |  |                          |         |                  |                |  |        |       |                  |  |                |   |  |  |        | 
|-------------------------------- |  | ------------------------ | ------- | ---------------- | -------------- |  | ------ | ----- | ---------------- |  | -------------- | - |  |  | ------ | 
|                                 |  | Year ended September 30, |        
|                                 |  |                          |        
|                                 |  | 2005                     |         |                  | 2004           | 
|                                 |  |                          |         |                  |                | 
|                                 |  |                          |         | Weighted average |                |  |        |       | Weighted average | 
|                                 |  | SARs                    |         |                  | exercise price |  |        | SARs |                  |  | exercise price |  
|                                 |  |                          |         |                  |                |  |        |       |                  |  |                |  
|Outstanding, beginning of period |  |                          | 198,850 |                  |                |  | 73.25 |       |                  |  |               |   |  |  |       | 
|Granted                          |  |                          | 76,670  |                  |                |  | 72.54 |       |                  |  | 206,050        |   |  |  | 73.25 | 
|Options forfeited                |  |                          | (7,800  | )                |                |  | 73.25 |       |                  |  | (7,200         | ) |  |  | 73.25 | 
|                                 |  |                          |         |                  |                |  |        |       |                  |  |                |  
|Outstanding, end of period       |  |                          | 267,720 | *                |                |  | 73.05 |       |                  |  | 198,850        |   |  |  | 73.25 | 
|                                 |  |                          |         |                  |                |  |        |       |                  |  |                |  
|Exercisable, end of period       |  |                          |        |                  |                |  |       |       |                  |  |               |   |  |  |       | 










|  |                                                                                                                                                                                                                        
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|* | Thereof 76,670 SARs with a
    72.54 exercise
    price and a weighted average remaining life of 4 years and
    191,050 SARs with a
    73.25 exercise
    price and a weighted average remaining life of 3 years.

F-65



---



##### Table of Contents



SIEMENS AG


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS(Continued)


(in millions of
, except where
otherwise stated and per share amounts)


Stock awards








.  


Phantom stock




Employee share purchase plan


.   


F-66



---



##### Table of Contents



SIEMENS AG


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS(Continued)


(in millions of
, except where
otherwise stated and per share amounts)


28. Personnel costs


|                                                                                      |  |                          |        |  |      |  |        |      |  |  |        | 
|------------------------------------------------------------------------------------- |  | ------------------------ | ------ |  | ---- |  | ------ | ---- |  |  | ------ | 
|                                                                                      |  | Year ended September 30, |       
|                                                                                      |  |                          |       
|                                                                                      |  | 2005                     |        |  | 2004 |  |        | 2003 | 
|                                                                                      |  |                          |        |  |      |  |        |      | 
|Wages and salaries                                                                    |  |                          | 21,680 |  |      |  | 20,261 |      |  |  | 20,468 | 
|Statutory social welfare contributions and expenses for optional
    support payments |  |                          | 3,576  |  |      |  | 3,419  |      |  |  | 3,529  | 
|Expenses relating to pension plans and employee benefits                              |  |                          | 1,390  |  |      |  | 1,416  |      |  |  | 1,437  | 
|                                                                                      |  |                          |        |  |      |  |        |      | 
|                                                                                      |  |                          | 26,646 |  |      |  | 25,096 |      |  |  | 25,434 | 
|                                                                                      |  |                          |        |  |      |  |        |      | 



|                                    |  |               |         |  |      |  |         | 
|----------------------------------- |  | ------------- | ------- |  | ---- |  | ------- | 
|                                    |  | Year ended    |        
|                                    |  | September 30, |        
|                                    |  |               |        
|                                    |  | 2005          |         |  | 2004 | 
|                                    |  |               |         |  |      | 
|Manufacturing and services          |  |               | 243,100 |  |      |  | 226,200 | 
|Sales and marketing                 |  |               | 110,300 |  |      |  | 104,600 | 
|Research and development            |  |               | 45,700  |  |      |  | 43,500  | 
|Administration and general services |  |               | 40,300  |  |      |  | 38,100  | 
|                                    |  |               |         |  |      | 
|                                    |  |               | 439,400 |  |      |  | 412,400 | 
|                                    |  |               |         |  |      | 

29. Earnings per share


|                                                                                                                      |  |                          |         |  |      |  |         |      |  |  |         | 
|--------------------------------------------------------------------------------------------------------------------- |  | ------------------------ | ------- |  | ---- |  | ------- | ---- |  |  | ------- | 
|                                                                                                                      |  | Year ended September 30, |        
|                                                                                                                      |  |                          |        
|                                                                                                                      |  | 2005                     |         |  | 2004 |  |         | 2003 | 
|                                                                                                                      |  |                          |         |  |      |  |         |      | 
|                                                                                                                      |  | (shares in thousands)    |        
|Income from continuing operations before cumulative effect of
    accounting change                                   |  |                          | 3,058   |  |      |  | 3,450   |      |  |  | 2,355   | 
|Plus: interest on dilutive convertible debt securities                                                                |  |                          | 21      |  |      |  | 21      |      |  |  | 7       | 
|                                                                                                                      |  |                          |         |  |      |  |         |      | 
|Income from continuing operations before cumulative effect of
    accounting change plus effect of assumed conversion |  |                          | 3,079   |  |      |  | 3,471   |      |  |  | 2,362   | 
|Weighted average shares outstandingbasic                                                                             |  |                          | 890,732 |  |      |  | 890,705 |      |  |  | 889,988 | 
|Effect of dilutive convertible debt securities and stock options                                                      |  |                          | 45,798  |  |      |  | 45,510  |      |  |  | 14,836  | 
|                                                                                                                      |  |                          |         |  |      |  |         |      | 
|Weighted average shares outstandingdiluted                                                                           |  |                          | 936,530 |  |      |  | 936,215 |      |  |  | 904,824 | 
|Basic earnings per share (from continuing operations before
    cumulative effect of accounting change)               |  |                          | 3.43    |  |      |  | 3.87    |      |  |  | 2.65    | 
|Diluted earnings per share (from continuing operations before
    cumulative effect of accounting change)             |  |                          | 3.29    |  |      |  | 3.71    |      |  |  | 2.61    | 




30. Segment information




F-67



---



##### Table of Contents



SIEMENS AG


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS(Continued)


(in millions of
, except where
otherwise stated and per share amounts)


Operations Operations Other Operations Reconciliation to
financial statements






Financing and Real Estate Eliminations, reclassifications and
Corporate Treasury Operations Financing and Real Estate


Siemens Summary of
significant accounting policies




Operations


Operations Operations




Corporate items, pensions and
eliminations Operations Financing and Real
Estate Corporate items,


F-68



---



##### Table of Contents



SIEMENS AG


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS(Continued)


(in millions of
, except where
otherwise stated and per share amounts)


pensions and eliminations     Operations Financing and Real Estate Corporate items, pensions and eliminations    


Operations


Operations


Other Operations


Reconciliation
to financial statements


Reconciliation to financial statements


Corporate items Pensions Eliminations Operations


Corporate items, pensions and eliminations Group profit


|                |  |                          |        |   |      |  |        |      |  |  |        |  
|--------------- |  | ------------------------ | ------ | - | ---- |  | ------ | ---- |  |  | ------ | -
|                |  | Year ended September 30, |       
|                |  |                          |       
|                |  | 2005                     |        |   | 2004 |  |        | 2003 | 
|                |  |                          |        |   |      |  |        |      | 
|Corporate items |  |                          | (537   | ) |      |  | (450   | )    |  |  | (747   | )
|Pensions        |  |                          | (519   | ) |      |  | (729   | )    |  |  | (827   | )
|Eliminations    |  |                          | (16    | ) |      |  | (27    | )    |  |  | (1     | )
|                |  |                          |        |   |      |  |        |      | 
|                |  |                          | (1,072 | ) |      |  | (1,206 | )    |  |  | (1,575 | )
|                |  |                          |        |   |      |  |        |      | 

Corporate items    Corporate items 


F-69



---



##### Table of Contents



SIEMENS AG


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS(Continued)


(in millions of
, except where
otherwise stated and per share amounts)




Pensions Corporate items Pensions Pensions


Other interest expense


Operations Operations Segment
Information


|                                                                                                              |  |               |         |   |      |  |         |  
|------------------------------------------------------------------------------------------------------------- |  | ------------- | ------- | - | ---- |  | ------- | -
|                                                                                                              |  | September 30, |        
|                                                                                                              |  |               |        
|                                                                                                              |  | 2005          |         |   | 2004 | 
|                                                                                                              |  |               |         |   |      | 
|Total assets of Operations                                                                                    |  |               | 81,454  |   |      |  | 67,927  |  
|Asset-based adjustments:                                                                                      |  |               |         |   |      |  |         |  
|Intracompany financing receivables and investments                                                            |  |               | (16,987 | ) |      |  | (13,534 | )
|Tax related assets                                                                                            |  |               | (6,779  | ) |      |  | (4,889  | )
|Liability-based adjustments:                                                                                  |  |               |         |   |      |  |         |  
|Pension plans and similar commitments                                                                         |  |               | (4,917  | ) |      |  | (4,392  | )
|Accruals                                                                                                      |  |               | (7,055  | ) |      |  | (6,125  | )
|Liabilities to third parties                                                                                  |  |               | (24,093 | ) |      |  | (20,881 | )
|Assets and Liabilities held for sale                                                                          |  |               | 44      |   |      |  |        |  
|                                                                                                              |  |               |         |   |      | 
|Total adjustments (line item Other assets related
    reconciling items within the Segment Information table) |  |               | (59,787 | ) |      |  | (49,821 | )
|Net capital employed of Corporate items, pensions and
    eliminations                                        |  |               | 3,690   |   |      |  | 3,116   |  
|                                                                                                              |  |               |         |   |      | 
|Net capital employed of Operations Groups                                                                     |  |               | 25,357  |   |      |  | 21,222  |  
|                                                                                                              |  |               |         |   |      | 

F-70



---



##### Table of Contents



SIEMENS AG


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS(Continued)


(in millions of
, except where
otherwise stated and per share amounts)


Operations Segment Information


|                                                       |  |                             |        |   |                          |  |                            |                          |  |  |       |   |  |      |       |  |      |  |       |      |  |  |       |  |  |      |       |  |  |  |       |  |  |  |       | 
|------------------------------------------------------ |  | --------------------------- | ------ | - | ------------------------ |  | -------------------------- | ------------------------ |  |  | ----- | - |  | ---- | ----- |  | ---- |  | ----- | ---- |  |  | ----- |  |  | ---- | ----- |  |  |  | ----- |  |  |  | ----- | 
|                                                       |  | Net cash from operating and |        |   |                          |  | Amortization, depreciation |                         
|                                                       |  | investing activities        |        |   | Capital spending         |  |                            | and impairments          | 
|                                                       |  | Year ended September 30,    |        |   | Year ended September 30, |  |                            | Year ended September 30, | 
|                                                       |  |                             |        |   |                          |  |                            |                          | 
|                                                       |  | 2005                        |        |   | 2004                     |  |                            | 2003                     |  |  | 2005  |   |  | 2004 |       |  | 2003 |  |       | 2005 |  |  | 2004  |  |  | 2003 |      
|                                                       |  |                             |        |   |                          |  |                            |                          |  |  |       |   |  |      |       |  |      |  |       |      |  |  |       |  |  |      |      
|Total Operations continuing                           |  |                             | (1,222 | ) |                          |  | 2,241                      |                          |  |  | 270   |   |  |      | 5,736 |  |      |  | 4,033 |      |  |  | 4,138 |  |  |      | 2,892 |  |  |  | 2,857 |  |  |  | 2,792 | 
|Total Operations discontinued                         |  |                             | (1,219 | ) |                          |  | 244                        |                          |  |  | 198   |   |  |      | 135   |  |      |  | 134   |      |  |  | 99    |  |  |      | 109   |  |  |  | 94    |  |  |  | 102   | 
|                                                       |  |                             |        |   |                          |  |                            |                          |  |  |       |   |  |      |       |  |      |  |       |      |  |  |       |  |  |      |      
|Total Operations                                       |  |                             | (2,441 | ) |                          |  | 2,485                      |                          |  |  | 468   |   |  |      | 5,871 |  |      |  | 4,167 |      |  |  | 4,237 |  |  |      | 3,001 |  |  |  | 2,951 |  |  |  | 2,894 | 
|Total Financing and Real
    Estate continuing        |  |                             | (259   | ) |                          |  | 213                        |                          |  |  | (50   | ) |  |      | 775   |  |      |  | 448   |      |  |  | 406   |  |  |      | 424   |  |  |  | 391   |  |  |  | 438   | 
|Total Financing and Real
    Estate discontinued      |  |                             | 5      |   |                          |  | 3                          |                          |  |  | 4     |   |  |      |      |  |      |  |      |      |  |  |      |  |  |      | 1     |  |  |  | 2     |  |  |  | 2     | 
|                                                       |  |                             |        |   |                          |  |                            |                          |  |  |       |   |  |      |       |  |      |  |       |      |  |  |       |  |  |      |      
|Total Financing and Real Estate                        |  |                             | (254   | ) |                          |  | 216                        |                          |  |  | (46   | ) |  |      | 775   |  |      |  | 448   |      |  |  | 406   |  |  |      | 425   |  |  |  | 393   |  |  |  | 440   | 
|Eliminations, reclassifications and Corporate Treasury |  |                             | (8     | ) |                          |  | 561                        |                          |  |  | 1,351 |   |  |      |      |  |      |  |      |      |  |  |      |  |  |      |      |  |  |  |      |  |  |  |      | 
|                                                       |  |                             |        |   |                          |  |                            |                          |  |  |       |   |  |      |       |  |      |  |       |      |  |  |       |  |  |      |      
|Siemens Consolidated Statements of Cash Flow           |  |                             | (2,703 | ) |                          |  | 3,262                      |                          |  |  | 1,773 |   |  |      | 6,646 |  |      |  | 4,615 |      |  |  | 4,643 |  |  |      | 3,426 |  |  |  | 3,344 |  |  |  | 3,334 | 
|                                                       |  |                             |        |   |                          |  |                            |                          |  |  |       |   |  |      |       |  |      |  |       |      |  |  |       |  |  |      |      

Financing and Real Estate


Financing
and Real Estate Income before income taxes Operations Financing and
Real Estate


Income before income taxes       Income before income taxes   


Income before income taxes      


Eliminations, reclassifications and Corporate Treasury


Income before income taxes Income before
income taxes  


Description of business segments


Operations


Communications (Com) .


F-71



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##### Table of Contents



SIEMENS AG


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS(Continued)


(in millions of
, except where
otherwise stated and per share amounts)


Siemens Business Services (SBS)


Automation and Drives (A&D)


Industrial Solutions and Services (I&S)


Logistics and Assembly Systems (L&A)


Siemens Building Technologies (SBT)


Power Generation (PG)


Power Transmission and Distribution (PTD)


Transportation Systems (TS)


Siemens VDO Automotive (SV)


Medical Solutions (Med)


Osram


F-72



---



##### Table of Contents



SIEMENS AG


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS(Continued)


(in millions of
, except where
otherwise stated and per share amounts)


Financing and Real Estate


Siemens Financial Services (SFS)


Siemens Real Estate (SRE)


31. Geographic information




|                            |  |                               |        |  |                                |  |        |      |  |  |        |  |  |      |        |  |      |  |        |  |  |  |        | 
|--------------------------- |  | ----------------------------- | ------ |  | ------------------------------ |  | ------ | ---- |  |  | ------ |  |  | ---- | ------ |  | ---- |  | ------ |  |  |  | ------ | 
|                            |  | Sales by location of customer |        |  | Sales by location of companies | 
|                            |  |                               |        |  |                                | 
|                            |  | 2005                          |        |  | 2004                           |  |        | 2003 |  |  | 2005   |  |  | 2004 |        |  | 2003 | 
|                            |  |                               |        |  |                                |  |        |      |  |  |        |  |  |      |        |  |      | 
|Germany                     |  |                               | 15,685 |  |                                |  | 16,223 |      |  |  | 16,277 |  |  |      | 24,798 |  |      |  | 25,872 |  |  |  | 25,248 | 
|Europe (other than Germany) |  |                               | 24,429 |  |                                |  | 22,787 |      |  |  | 22,982 |  |  |      | 23,684 |  |      |  | 20,869 |  |  |  | 20,372 | 
|U.S                         |  |                               | 14,686 |  |                                |  | 13,378 |      |  |  | 15,120 |  |  |      | 14,806 |  |      |  | 13,377 |  |  |  | 15,066 | 
|Americas other than U.S     |  |                               | 4,414  |  |                                |  | 3,522  |      |  |  | 2,973  |  |  |      | 3,651  |  |      |  | 2,899  |  |  |  | 2,484  | 
|Asia-Pacific                |  |                               | 10,057 |  |                                |  | 8,990  |      |  |  | 8,322  |  |  |      | 6,612  |  |      |  | 5,586  |  |  |  | 5,308  | 
|Africa, Middle East, C.I.S  |  |                               | 6,174  |  |                                |  | 5,337  |      |  |  | 4,101  |  |  |      | 1,894  |  |      |  | 1,634  |  |  |  | 1,297  | 
|                            |  |                               |        |  |                                |  |        |      |  |  |        |  |  |      |        |  |      | 
|Siemens                     |  |                               | 75,445 |  |                                |  | 70,237 |      |  |  | 69,775 |  |  |      | 75,445 |  |      |  | 70,237 |  |  |  | 69,775 | 
|                            |  |                               |        |  |                                |  |        |      |  |  |        |  |  |      |        |  |      | 

|                            |  |                   |        |  |      |  |        |      |  |  |        | 
|--------------------------- |  | ----------------- | ------ |  | ---- |  | ------ | ---- |  |  | ------ | 
|                            |  | Long-lived assets |       
|                            |  |                   |       
|                            |  | 2005              |        |  | 2004 |  |        | 2003 | 
|                            |  |                   |        |  |      |  |        |      | 
|Germany                     |  |                   | 4,272  |  |      |  | 4,190  |      |  |  | 4,340  | 
|Europe (other than Germany) |  |                   | 3,530  |  |      |  | 2,886  |      |  |  | 3,036  | 
|U.S                         |  |                   | 2,551  |  |      |  | 2,295  |      |  |  | 2,174  | 
|Americas other than U.S     |  |                   | 592    |  |      |  | 455    |      |  |  | 447    | 
|Asia-Pacific                |  |                   | 965    |  |      |  | 778    |      |  |  | 718    | 
|Africa, Middle East, C.I.S  |  |                   | 102    |  |      |  | 79     |      |  |  | 41     | 
|                            |  |                   |        |  |      |  |        |      | 
|Siemens                     |  |                   | 12,012 |  |      |  | 10,683 |      |  |  | 10,756 | 
|                            |  |                   |        |  |      |  |        |      | 



32. Subsequent events




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F-73



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##### Table of Contents



PART III, CONTINUED





ITEM 19:      EXHIBITS


|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|Number  |  | Description of Exhibit                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|1.1     |  | English translation of Articles of Association of Siemens
    Aktiengesellschaft updated as of October 2005                                                                                                                                                                                                                                                                                                                                                                 
|2.1     |  | The total amount of long-term debt securities authorized under
    any instrument does not exceed 10% of the total assets of the
    Company on a consolidated basis. We hereby agree to furnish to
    the Commission, upon its request, a copy of any instrument
    defining the rights of holders of long-term debt of Siemens
    Aktiengesellschaft or of its subsidiaries for which consolidated
    or unconsolidated financial statements are required to be filed.
|8.1     |  | List of Significant Subsidiaries                                                                                                                                                                                                                                                                                                                                                                                                                                            
|12.1    |  | Certification of Chief Executive Officer pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                                                                                                                      
|12.2    |  | Certification of Chief Financial Officer pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                                                                                                                      
|13.1    |  | Certification of Chief Executive Officer pursuant to 18. U.S.C.
    Section 1350, as adopted pursuant to Section 906 of
    the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                                                                  
|13.2    |  | Certification of Chief Financial Officer pursuant to 18. U.S.C.
    Section 1350, as adopted pursuant to Section 906 of
    the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                                                                  
|14.1    |  | Consent of KPMG Deutsche Treuhand-Gesellschaft AG                                                                                                                                                                                                                                                                                                                                                                                                                           

III-1



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##### Table of Contents



SIGNATURES








| |                                        
| | ---------------------------------------
| | Siemens Aktiengesellschaft             
|
| | /s/ Heinz-Joachim
    Neubürger        
| |                                        
| | Heinz-Joachim Neubürger                
| | Chief Financial Officer                
|
| | /s/ Dr. Ralf P. Thomas                 
| |                                        
| | Dr. Ralf P. Thomas                     
| | Corporate Vice President and Controller

III-2



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INDEX


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H




I








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