ML20035B160

Siemens Annual Rept 92

ML20035B160
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Site:	Framatome ANP Richland
Issue date:	12/31/1992
From:	SIEMENS POWER CORP. (FORMERLY SIEMENS NUCLEAR POWER
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Siemens at a glance Siemens* 1991 1992 channe New orders 82.166 SS.409 + 4% Sales 73,008 78.509 4 8% Employees 402.000 '413,000 + 3% Capita: expend tures and inves3ments 5.595 8.574 4 53 % Research 1d development 7.832 8.385 + 6% Net income 1.792 -1.955 4 9% 2.5 as a peicent of saies 75 1 as a percent of shareholders' ettwty 99 10 0 Tota! dtvidend of Siemens AG 686 - 727 + 6% Dividend per share in DM 13 00 = 13 00 ' Amounts in m@cos of Ge' man rnrts IDMi .untens stated otherwn.e l l l

• Siemens includes Siemens AG and companies in Germany and other countnes in wNch Siemens AG dvecity or indirect!y has a maiorcy of the voting nghts and which a'e incluoed in the conschdate:1 financ.al Slal(!PDIS

'The Annuitl Repart cor tatns the consaldated financial statements of Siemens AG, the Managmg Baard's combined general rewew of Siemens AG and Semens wondwde conschaated for the 1992 fiscal year, as weh as aditionalinia'mation nat required by law 1he annual financia! statements of Siemens AG have recewed an unquaWed audit opinon from tJUG Deutsche TreJhand GesellschMt AG We:schetsprUtunr.gesehet#1. and wait be pubished in the Gent.an Tedera!! Graette and f'ied with the Commercial Registrais of the Berin Chadottenhug and Munich Distnet Courts. Thei.e financia! statements can be obtained in Gemian i+e ofChage from Senens AG. Infoserwce Zh7DX PO Box 23 48 D-8510 Furth 2 Ge:many.

Contents Report on the f 2 scal year ended September 30.1992 O

n. e e n m.1. A.

We aim to be one of vJ A C LG ine most competitive Report of the Supemsory Board 2 Supe ~sor, Board 3 companies in the = = President's letter 4 e kg world electncal and Report of tne Manag:ng Board 6 fc4 i i d electronics market. Employees 9 and a pacesetter for the advancement of technology. Corporee structure 11 11 is our endeavor to provide customers throughout the world Groups with products and services that offer maximum benefits. 'j; "o Dstreon Industnal and Build.ng Systems 14 Dnves and Standard Products 15 Our employees' creativity and dedication to excellence are Automation 16 nS ems [, "Cf Comn,un the foundation of our corporate success. g Defense E!ectrorncs 19 Automotr.e Systems 19 We wish to generate sustained high earnings as a condition 1ransportation Systems 20 for assuring the future of the Company and increasing the Med' cal Engineenng 21 Semiconductors 22 value of our shareholders' investment-Passive Components /Eiectron Tubes 22 Ele ctromechanical Components 23 Audio and Video Systems 23 With our partners the world over, we aspire to maintain Compantes 24 constructive, long4erm relationships based on mutual trust. Siemens woridmoe 26 We see ourselves as an integral part of the national Research and development 29 economies we serve and feel a strong sense of responsibikty Prodactvny and environmental protection 30 to society and the environment. Conschdated financiat statements 32 Share perf ormance 48 Managing Board 50 Managemert structure 51 Fwe-year summary 52

e .d. 1-i y conschdated. have been ( 3 ()

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Q, i audited and approved h j without Quabfication by KPMG Deutsche Treuhand-Gesellschaft AG Wirtschafts-i pr0fungsgesellschaft, I pQP OP T

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Bethn and Frankf urt on Main. . A i We concur in the resuits of Vh b I' h V a the aud41. We a!so exam,ned the records, and our findings yr evm~ ~ 77 Siemens Nadorf revealed no grounds for q informatonssysteme AG objection, in view of our j (SND, Paderborn, was f uNy approval, the financial J mtegrated mio S,emens AG statements are definittve!y d dunng the fiscal year Just confirmed T h-y ended, as of October 1,1992. e" SNI operates Lke a Group We endorsed the Manag;ng /. 4' m whde retaining its status as Board's proposal that the net 44[s,%. - 6@ J s n a separate legal unit. SNI rs income available for d:stnbu-gy;MW: 'A making every effort to speed tion be used to pay a gfptp, : I l^~ fl6 necessary cost reductons d:vidend of DM13 per share (, J h $j and simu! aneously restruc-based on cap;tal stock of g 'g >$ ^ i ture its business to adapt to DM2.8 baon. The proposa! y' worldMde changes in the that the amount attobJtable aaMAmiG;2-3 computer industry. to treasury stock be carried forward was also endorsed, Our U S. compan;es had to Dunng the past f scal year. agreement was signed on take short-term measures in Effective September 30 the Manag ng Board provioed the joint development of response to the ongoing 1992. Rudolf Moosnammer us regulady with ora! and 0.25-micron techno!ogy wth recession in the U.S w,thout stepped conn from his wrcien reports on the Iraemat,ona! Business rieglectng the;r goal of dut.es as a member of the Company's pos: tion. We Machines Corporaton dBML improving results and their Employee Commatee and superv: sed the manegement Armonk, New Yo4,, and long-term objectve of in:1 at-Chairman of the Joint of the Company on the basis Toshca Corporaton, Tokyo. ing and expand;ng actvites. Employees' Council As of of these reports. Over the next few years, the The rema:ning interest in the conclusion of our Group wal a'so imp;emer.t ROLM Company, Norwalk, meeting on November 11, in our fou egu!ar!y sched-a restructunng prog'am to Connectcut, was assumed 1992, he also res;gned as r u!ed meet:ngs, we we'e kept prune its product offenng. from IBM, thus enabbng us member and Deputy informed of developments, steamhne locations and to merge ou' pnvate commu-Chairman of the Superv sory such as took piace in the revamp resource prov:sion nication systems business in Board We thanked h:m for semiconductor sector. The management These cost-the U S. fnto one unit h:s nearly twenty years of Semiconductors Group ts cutting measures are an service to the Board. pursuing two goals' secunng essent al prerequisde for We are satsbed that the Kari-Heinz Nolden essumed basic microelectronic reducing losses. Company's accounting proce-the vacant positon on the techno! ogres and reducing dures, the annual financia! Board, and Alfons Gref was losses On Ju!y 13.1992,an staternents of S.emens AG, elected new Deputy and the consohdated financial Cha:rman. statements as of September 30.1992, as we!! es the Manag:ng Board's combined generai review of S>emens AG and S'emens worldwide L________

Supervisory Board At our meeting on July 1, Heribald Narger. Dr.jur. Detlef Kreyenberg 1992. Dr Heinnch v. Pieter Man:ch Mumch D0H'8 was appointed President and Chief Executive Officer, Reimar Lust, Prof Dr.rer.nat. effective October 1.1992. Alfons Graf Bonn Dr. Karlheinz Kaske stepped Muruch Present of the Awxawer von Deputy Charman Humboldt Foundat: ort down from these positions-(as of Novemrer 11.199a Bonn Bad Godesberg which he had held for near!y Master Toolmaker twe!ve years, and retired on Werner Neugebauer September 30,1992. Hans Rudolf Mooshammer Maracn Mumen Regi nat Manager for Munen, Hirschmann. Dr. Wolfgang Deputy Criaeman IG Metall Kelier and Dr. Anton Peist tuntii November it med also retired on the same day. Mechan c Karl-Heinz Noiden We expressed our apprecia-Mutheim Wolfgang Schieren. Dr.lur. ins of November 11,193a tion to all these gentiemen Munch Machine Tool Fitter for their notable service on Deputy Chaaman the Managing Board, and Chairman of the Sopervisorv Boa'1 Franz Rehm especially honored ^"'an Auengesenschas uunch - g,ngn Dr Kaske's achievements Preccon Mechanc in difficult economic times. A! fred Bock Helmut Reithmeier Erlangen y,un en - l** **8" At the same meetrng on Eiectreal Technic.an July 1.1992. GUnter Wilhelm a n, Dr.jur. Alexander von Seidel was appointed to the DUSSeld Managing Board and. Member of twe Baard o' together with Dr. Volker Jung, uanagement Dutsene Bank AG. N:kolaus Senn. Dr.jur. was also elected to the F'araturt on Marn Zurch Corporate Executive Chaaman of the Committee. both assumed Rolf Diet Boa d of Admnstration, men Bank of sucenana zurch their new duties on October 1 Dusseido<f 1992' Chaaman of the Supemsory Bea d Dresdner Bas AG. Dussetoorf Dieter Speinmann. Prof.Dr jur. During its meeting on Herbert GrUnewaid. Dassetsorf November 11,1992, the Prof.Dr.rer nat. Anny at Law Superv:sory Board appointed Leve4 usen chaaman of he supervisory Board Horst Wagner t Prof Dr Watter Kunerth to Bayer AG funu AprQ9. 89a Be9n the Managing Board, etfec-sono,3.y Ctanman et the negonai Manager f or tive immed4ately. Supervisory Boara serim-Brandenbu g. tG Metan Bayer AG. Levetusen Berkn and Munich. Maximilian Hackl, Dr jur. January 13.1993 Munich Chairman of the Surerviso v Boa a For the Supervisory Board Bayensche Veremsbank AG. Munch Heinz Hawreliuk F-rantNn on Mam Hea1 of the Shop 5:ewa os = ,7 Depanment on the e /) / Ewcutve Commmee. IG Meta T. Ralf Heckmann Dr. Henbald N6rger Munen Chairman Te:ecr;mmuncatons instacer As of Janua y11993 3

e 7 - On the other hand. our je* F i industnal standard products i i V vi V i 6 V,, w V business is burdened by the troubled economic environ-ment At present, we see no signs of a lasting change for the better. - Over the past few years, we have made a number of strateg c decisions which, while entaihng major efforts pvmy"*"

• "7 Thts success wW enabie us and costs, were absolutely 1

to recommend an unchanged imperat!ve for safeguard;ng p %" ~w A d<vidend of DM13 per share our future I am refernng, for at the Annual Shareholders' exampie to our endeavors to r' s 1 g Ii C' Meeting desp:te an increase keep pace witn technoiogical T y in the number of sha'es advances in the field of semi-i (/ 4 conductors. or to our acquisi-q -- 1..- [MMel In evaluating future opporta-tion of fLxdort We have M nities and risks for the in:tated extenswe programs d N ~ .! enuf' N. Company. I would Ise to in both these businesses to ..M [hNh emphasde five factors f educe the substantra! WQp ' 7N7 burdens on camings and WR kn 4 -We see further major ta: lor business structures to gp Q $ & j jg opportunrties in the infra-changing economic ^d structure systems business, cond.tions and technological uu.dW awn where Siemens has estab-developments Dear sna eholder. hshed a strong position among the leaders not only in - In add: tion to undertaking On October 1.1992, Germany, but a!so in virtuauy these programs. we a!so I succeeded Dr. Karlhe:nz every regiona! market must institute further Kask e as President and Chief Communication networks measures throughout the Executive Officer of 5,emens and systems. power plant Company to secure and AG. The Company is m sound technology, energy transmis-mamtain our compettiveness cond tion and f ul!y prepared s<on and d:stnbution in globa! madets. Structura! to meet the challenges of the systems. as well as transpor-changes in our business global mark etp! ace. Dr. Kaske taton systems compnse the fields, and shifts in the deserves our deepest core of this business. We are re!at:ve cost postt;ons of grettuce for her over competitve advantage ture. introduced in 1989, the past few months: Bnght p*ovides a sohd foundation spots are closely intermin-for these efforts. gled with shadows. Unoer these cecumstances, we regard a f:fth consecutive year of growth in net income as a sigmficant ach:evement L#

4 - We intend to continue Sales Net income strengtherung our presence On tahns of DMi en mhns of DM) in strategical!y important reg;onal markets in order to BD 2 03_0 1 f M*"'"' exp!O:t emerging opportu-70 _ ~ 1 y,0

• f

.[,,gg g nmes. In doing so, we will -~g3 -i LM.Y O '..Y 5 -.I 9 3 focus on oar home mad et of w " - m'. U I Europe, which is beino -7 - -+ dg 1 000_ !..1 J _h j -4 transformed by the cication '2_i 2; 750 f _[ f .ji.,j of the sing le mark et in the ?O .4 - L West and epochal poht: cal 20 L, e i c,og '. j. i p- ~' {g-l ] 7-Q h Changes in the East. Equa!!y in [ i important is the funher con. 1 m s m r ;t - sohdation and strengthening U ~ ~ I I I B33 1m 1E 1991 1992 1988 1989 1990 1991 1932 of our presence in the North American market. Fina!!y. We are now pnmed to ex.pand the sohd posit ons New orders O' D'He f DW we have atta'ned in 90 ind:vidual business sectors in Southeast Asea. 99

.

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F F 70 All in all we can look to the 60 , -, I ~ future wrth confidence. 50 Our emp!ovees and their 40 [ ~ 'r. ~[ ]. representaDves are perior-33 i ~[ ~i' mance-onented, high!V ho~~ - ~^ v motivated and intense!y loyal 50 L -[ Together, we wil! master the 0 chauenges ahead 44 1988 1989 1990 1991 1992 Caoital spending bn tWhons of DMj 9 e \\- h + Dr. Heinnch v. Pieter

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3.e President and Chief Executive Off<cer 4 Siemens AG

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i: i m_- ---.a.s-ame l-p ._i - 1 u y 19 % 1989 1930 1991 1997 5

Report of the Managing Board p A 'r e / Weakened t mternational business L i) V t i ii ) Unnte previous years, our growth was stf ongest in Germany. where sales rose ten percent to DM3E5 buon. A substannalshare of this gain was attnbutable Slower growth Fullintegration of SM sales of DM4 0 0991. DMt 87 to the neMy conschdated Fouowng the Company's After Siemens AG had buon G owth in the year companies exceptonaliy strong expan-increased its stat e in unoer review is pnmanly sion in fiscal 1991. our Siemens f 6dorf attnbutats e to the consohda-A!though sales growth t growin siack ened measur-Informatronssysteme AG tion of companies in eastern outside Germany cropped acly in the year unoer review. (SND_ Paderbom, to more Germany, nonconsohjated to haif the prior year's level, coma *dy ose to the sof t than 95%, it was decided companies accounted for a it still reached su percent. Eurther-at tne Annua! Sharehoiders' business volume of DM300 International sa;es amounted gions: economy more, our accurs tion of new Meetings of both companies m uon. to DM42 0 bAon, account ng compames accounted for in March 1992 to funy inte-for approomately 54% of mach less g owth than in the grate SNIinto siemens AG. Vve have now ! aid the total sales. The weakness pnot yea-The most impor-Puisuant to h320 of the foundaLon f or our business of the dohar and other tant consobdabons invo!ved German Stock Corporaton rn eastem Germany. At cunencies, partcularly in the companies in the new Act. Siemens AG compen-p*esent, our most active last months of the fiscal year. German Mates. the automa-sred holders of the Groups in the new states are adverse!y affected our inter-tion acwties purchaseo from remaining SNi shares oy Pubhc Communication nadonal sales figures upon Texas ins"uments and the exchanging one share of Networks, Power Generaton. trans ston to German mai s. remmning interest in ROLM S.emens AG for sm shares Power Transmission and Mo eover, we must f ace the Company, Norwatk of SNi, hold <ngs of less D.stnbubon, and Medical tact that these currency Comecscat assumed f:om than s:x sha'es were settled Eng!neenng Our developments impair our !EM The ROLM transaction. with a cash perment. Transportation Systems intemational competsve-howeven cd not have an Group has rece:ved its tirst ness. effect on the overan busmess Siemens AG rs now obhgated orcers to mocemize radicad f<ga es untJ the last cua ter to assume losses incuned Ones in the region. SN1 and As anticipated new orders of the f.sca! year. by SN: and is jointly and the Pnvate Communcaton grew at a slower pace than severaHy 1 abie for the Systems Group have a:so sa:es, which benef: led f rom Worloude sa!es g'ew eight company's obhgations. managed to pos; tion them-a sold bac6 log of orde's The l oercent to DM78 5 oson SM has been conouctng as seNes successfuPy in the weal er growth in orders was The slowdown in growth was one atng actwtres for the new states Busness in large part a!!nbJiab!e to more c: eat f ehected in new account of Siemens AG s,nce actwt.es in east Germany the further sof tening of imer-o oers. which rose on y four the beg:nning of the currer.1 that cepend on a modem national ma4 ets. After being i po' cent to DMB5 4 buon. f1 scal year SNI operates as industna! base e e expected spuned for two years by an operat:ng group whue to gmn momentum in a the e+fects of unif cation, retanng its status as a second phase of expansion. Germany's economy also sepa' ate lega! und began to feel the impact of Most of our castem German the globa! economic cechne Foundation laid for companies wdl be merged in the last iew months of the business in east Germany into Siemens AG at the year under review New 7he estabhshment and beginn:ng of the new f: scal ordters m Germany neverthe-expansion of acteties in the year. Ess rose nine percent to new German states agair DM4D 2 boon. Here, too, the co"!nbu*ed to the Company's consohoadon of the new g owth :n the fiscal year pst east German companies had ended Th:s reg;on accoun'ed a posidve effect. Intemational for new croers of DM5 6 orders stagnated at DM45.2 0991: DM3 3) boon and b@on 6

Siemens Power Corporation, Milwaukee, Wisconsin, has begun assembling gas turbines for power plants and is increasing its production of components. Our U.S. subsidiary also exports to other 60-hertz markets. 7 1 ~U f l yC..Wm% % x y '( n y v: ~~-, h,t ,y ;. .a ~/ n :-, ., -- ~ .m

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M ( n ;., Y ,, - -a j w _. ' Growth was especia9y The bacUog of orders totated companies added 25,000 R&D expenditures unsaufactory in ine incus-DM63 0991: DM59) bi! hon at employees to the work at high level inat standard products the close of f sca! 1992. fo'ce, whereas the number S;emens spent DMS 4 busmess. which is highly Again, growth was au:te of pos:tions was cut back 0991: DM7.9) bdhon on sens tve to economic uneven across the operapng RODO. haf of them in resea'ch and development fuctuarons, as weh as m un:ts Whereas the Germany in particular, SNI as in f.sta! 1992 A!though th:s the cornponents and cata T'ansportat:oq Systerns and well as the Semiconductors, amount is a record total :t sys' ems sectors. In corrast Power Gene' acon NYU) Passive Components and represents rough'y 11% of the Pubhc Communicatron Groups recorded a suong Electron Tubes and Pnvate sales. well w: thin the everage Netwo9 s and ?ansportaSon g'owth in orce's, SNi and Communicaton Systems range of the past few years Systems Groups succeeded Med+cd Eng neenng m Groups. were affected by Compared w:th ris mie'na-m stengthening the'r pos partico:ar showed dechnes eilens:ve staff reductons in tional compettors, the 1;ons as systems suppte's The average capacity uthza-Germany and abroad Company rema ns an fo' numerous m'rast'ucture ton of au manufactanng industry leader in R&D pro;ects throughout the f acettes d'opped shghtN to More capital spending spend;ng in the f:sca! vear wid, sustammg thert 82 % 0991; 83 %) Total captal spend;ng r6 ached pst ended, some 48,000 g*owth of p evious years DM8 6 0991 DM5 6) bdhon 0991 47.000) employees OJr Automat ve Sysvns Work force expansion , the fiscal year just ended were involved in R&D Grcup a so atta:ned a rugher through integration of new Whde expend tu'es on actvmes man usua; volume of croers companies property, plant and eautp-At tte close of fiscal 1992, ment edged up only shghtY 3,emer:s employed 413,000 to app'oumate!y DMS 6 peopie wonomde 0931-n991: DV5 0) boon, 402.000) Stat st.cany. the spend ng on acousNns mtegrat.or of newy acased rose sharply to DM3 0 M991 DMD 6) bAon.

I General review As in the past virtuaN aH Assets continue to grow The growth in tota! assets contnue to benef;t f rom our R&D expend:tures were Assets increased DM2.3 was finanred without strong pos: tron in the major funded interna!!y; only about bnhon as a resu;t of the increasing our debt position. projects and systems two pe cent was government cxpansion of business and The cash proceeds itom the bus: ness taonsored susta:ned hign level cf 8% U.S do!!ar bonds of expeno:tures on property, 1992/2002 w<tn warrants in a further step to expand ns Moderate increase plant and eouipment. attached was used to replace U S. lamp business Osram in net income intangues, fmed assets and some of the higher-interest intends to acquire Sylvania h f.sca! 1992, net income investments grew by DM15 borrowings The equity ratio North American 1.ighting, the after taxes rose nine percent bdhon. On the ceer hand. imrroved to 28% due tc an U S and Canad:an bghting to DM1.955 0991: DM1.792) funds t ed up in :nventones increase of DM1.7 buhon in d:v:sion of GTE Corporaton, buon. Eam:ngs were again cropped DM2 0 bdhon oue shareholders' eauity. Stamford, Connecticut. This reduced pnmanly by losses to a high levei of advances acQuis: tion, wh,ch is planned incurred by SNI and the received f rom customers Outlook for the currert fiscal year, is Sem:condactors Group %.ewables rose DM17 Weh no immed, ate and subject to approval by the Both units faced structural by pnmanly as a substant a! improvement in U S. anttrust authontes problems and a d:fficu!t

1. <- :m of mereased the world's economy in sight, economic environment.

• me. Invest-we anicpate a less dynamic The reductica of losses Costs associated with the

- ir wetab.e growth in new orders and at SNI and in tne budd-up of operations in tre atiet .d emer hqu:d sales dunng the current fiscal Semiconductors Group new German states a so e:/ w oy DM11 bHhon year. particularly in the remains our highest pnonty. l affected earn.ngs. The Pubhc industnal standard products Wa have intens6ed the CornmunicaLon Netwo4 s sector. However, we should comprehensive restructunng and Pnvate Commumcabon measures already introduced Systems Groups aga.n to bong about the recovery accounted for most of the of both these units. Comparys losses in the U S, a4heugh bcth Groups To sa'eguard our long-term showed an overal; profit competitiveness, we are implementng extensive woridmde Corporat. - ^ productivay throughout the ~- programs to increase Finance again mede an impressive coninoudon "J*'A 4 to eamings Company Necessary stream-kning measures wd! lead to J. A. ..V further reduchons in the A' ~ p work f orce dunng the current .p.. l ( fiscal year. .;a f g. % DM13 dividend i e iI Mg ~' i 37 We wdl propese at the l

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. i. ". t[G Annual Shareholders'

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l l{v- [J Meetng on March 11,1993 {'F 6 t.f@ that a c:vidend of DM13 be ,y- 't ( - ~, .S paid on each share w:th a par buitt at our plant in e* - 'I,! f." vaM d UEA M De M

e This high-voltage income of DM727 mMhon, test generator, bdseo on the capdal stock O

M de bdM4 Nd research and nst c-that the amount attnbutable taon at the local tech-nical university. pro-to treasury stock De Camed duces lightning botts ~j r forward wrth a length of 1s eters. Nine meters g, ' and weighing g ~~ ~ 9 5 Jenerates up to < g* y six tons,the aiHipn volts. a l 8

l h pA p p This shif t is refiected in the ranks, we must identify L structure and quahicatons promising candidates at an d b V of our work force; three-early stage and develop their quarters of all employees at ta'ents Th:s process is based Siemens AG have completed on a multLphase manage-vocational tra:ning or higher ment development system education. Salaned which includes personne! employees, hatf of whom are structure studies, staff At the close of fiscal 1992, apphcation of microelectro-engineers and technicians. d.alogs, and Assessment Siemens AG and as subsd-nics and the growing sign:fi-account for more than 50% Center evaluations of anes employed 413.000 cance of projects and of the tota! work force. cand! dates' entrepreneunal peop e wor!dwide.11.000 systems business are potential more than a year earbei The changing the value-added Entrepreneurial Company's intematonai work structure in our industry. The opportunities we also intend to increase iorce g'ew to 1G0 000 0991. share denved from eng;neer. As employees' quahfications our efforts to nurture our 159.000t wahin Germany, ing and services. or soitware. r,tove and their work's employees' entrepreneunal emp:oyment rose four per-is increasing steadly. whde compiecty increases. man-capab:htees The Company's cent to 253.000 n991 hardware, or actual produc-agement and coordination new structure provides 243.000) T his increase ton va!ue-added continues oecome increasingly exceUent opportun; ties and resuned i om the inclusion tocechne Development. chaaeng!ng and diverse a suitably flexibie f ramework of newi / ', quired companies p;anning. sales and serae In keeping with our pohcy for fostenng such in easte a Germaay and now account for more than of recru: ting ertua!!y a!I man-development. To encourage abroad pamcuWtly in the half our industry's activities. agers kom the Company's in:Danve, we entrust U S Wahout this factor, the number of employees world- { j.i.i.n.,4 , 4g A,4&#,,; wide wou!d have dechned {.6 s q,_, 14 000 w1th Germany accounting for ha:f th!s decrease en.S. m Subs:anta! Statt reductions I i were necessary in the PNate /d % - l Communcaton Systems. M Y V ~ r :Is ar d ectron Tubes. and Defense ~ Electoncs Groups, and y+r above all at SN! and in the Semconductors Group. g?p These cuts were precip tated by Mructural f actors and k a '~ _ /. the f!agg;na wotid economy bg Redepios ent of staff to "l 8 ;. 5=- .. d

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other ope %t:ng unres. plan-p.* y egn -R ned attr: ton, end shonened Ti ~*~'f_. DA$AtS, kid,b.due Working shdts enabied the $f r f . uw 4 Compar. n make most of the riecey,a y adjustments w:thout reso' ting D perma-Every affort is made to find the widest nent d:sm:ssals. variety of applications for existing software Growing importance packages. Here a team d**io"* P'09'*m5 8"' of engineering and services ougher competton. the " Creasing in*ernativna! s dm sion of fabor. the b?o? der b

Employees ft y emp!ovees w:th personal 20.000 e,nptcyees from g,, responsibday for organaing countnes around the world 3 their work Cur suggestion work successfu!!y wth over scheme and cuahty circles 230.000 coMeagues at our g/ .k; are also impo tant locations in Germany. + q instruments for promottng Conversely, around 1,500 an entrepreneuna! spint. Germans are current'y act've Around 100.000 subm: ted in 150 countnes, as part of ,m f, suggestions each year, and our intemational work force g I some 900 ouanty circ les at of 160,000 employees. . M Siemens AG alone, attest to Prejudice and d:scomination F \\ g e-A' our employees' inaattve and have no place in our %s i,s comnument intematona! orgamzaton ig N f ~ 4 w;FY ' Globalthinking Investments in training [K h, a N

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't J Vdth producion iacit es or and continuing education d marketng actnes in more To susta;n the high level of A _j y inan 150 countoes cur pual:ficaban of its employees. T* _ _ _3 - J%g',, he b gioba:!y oriented Company S.emens AG spent a tota! of depenas on employees who DM12 boon on vocat.ona! Local value added: Can wo'k sJCCessfJ3y VMh tra'n:ng and Continu6ng i Chinese partners pygingg3 p;artners a!ound the eddCation programs dunng $d ns a world We therefore o"er ine f: scal year under reece og Shanghai. People's lancuage courses, interna-of this amount. e ound Repubhc of China ~ t onal Uainee p ogtems and DM:50 mson was auotted spec 61ed semina s to our to vocatona! t arning aione techncat and commerciai Nearly 16,000 young peop e junor staff. Intematona! a e presenry being p epared j eroenence, whether ga,ned by the Company for an as a student. trainee or industnal, commercial employee. p' eda es ine or techn: cal ca eer Of th:s indvduai for Company tota!. approximately 1.200 assignments throughout are apprentces in the new j the world German states, and 2,000 ) are being trarned outside Srnce its found;ng, the Germany. We have recendy l Company has onced cse:f on estabhshed Company I cs c!cse t~es vd the global voratona! tratning programs commumy Today more than in the U S Personnel costs i Employees by regon Appiitaton of,aiue added Wonduide personnel costs in tre 1992 f:sta! year rose _._. _ __ N DMfjfr sa percent to DM33,9 0991: 19% tv oneennaers /- /1 m e wes l K A ASL~~~ DM318) blion. At 5,emens 2n im av cedes AG,16% of the personnel I ~~x /[ costs rep esenteo volunta y R G ~~h W - { m 6 tw Cna'w socd benef as. such as our I Compary penson p:an i 9 $ (w ; e J e a im :ne paenme~ kehich present'y covers p tr- .m l } 8 2% 6 av e%ees about 98.000 retcees and I surviving cependents). l t afntrig and contnuing edu-ceton p oorams, and preven-tive headcare programs % 3 u e2 1932 10 i

i 9 9 Corporate structure i i i I i t 1 I e c-3 m ,-r--- Manag,inD Board : y.,y ~,. - u :. s-- y m ryn. m' - <.3.m,y.m" -- -._? r' l i m ...t. 2.- x ~ ICbrporat'e EsecuEAC$mrnittee -l-1 ,m + 4 Corporate Groups departments. Corporate offices ,,.n _. ' Power Generetion - t c. - -. power : ,a,s :. '.

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?, F' 2 - N Centralized rp~ervi m services E d [an. n Plannmg ad Deveopme..ntd: fbomee_tboional } Separate legal units-g F-Admmstraton W nsiemens haart. 1 _ .~.- 3 1 mio metont.- -' Osram GmbH t n systeme AG J t; per w:n 7 I t,_ -i ? Berlin E r f*'r +-re@p,%T m. .~ nn.,,.,.,, m.,. g - C %d, j " ? h .g i =~ ~ ' y: c -.,g y _, rag,onal organ,ization ; _. L,. " NT*"i ihgionai offices. imemanonal siemers companiet sa:es companes; '. fi i MU"IE j I representatwe othces. agences.' s 4 ~ g i y h I Saies in fiscan992* m baans of Du l 1} 2! 31 4j Sj Sj 7 'B j 9j 10l 11i 12 13 14 15! mV>- m-m l j r Power Genwoon wa scr ~~ - "A g Power Transmsson and DstqNbon 5 0 !C. ' ?"? j i i f L i 4 1 i i Mdamr.a! and Budding Systems B 7 l;' * ~

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I a j i [- i l Pcwe componems anc Eterron Tubes L5p.52 g.1 i! 1 l 1 1 j semcon heta,3 19 9 + u 1 1 } l } l e Drcomeenanis comrmems c e t.;;;;, I l l' j J ? f l i l a z j j l. j j Audo and enestems out .i 3 L i ) Gemens N xdon afarmnDonssysteme 13 0 b g*H * * ~ ~ ' + ~ 1^ ) l + Osam 3,1 f-j i 1 l j j j l l i 'f

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I l Power 1 Generation (KWU) j I Sacs Dtn 6 te.33% Nen ome s Dtn 6 b1m - 2% Carnalspereg DM523 rreo +32% b { r; n SWes rose briskly, to combined <ycle un ts. In as well as inoiedual contracts r L" h - pnman!y due to the the hydroelectric sectc*, the to enhance the safety of [ l Q Q fossil-f ueled power order for the Bhira pumped-Russian-designed nuclear l pl ant business, and storage power station in Ind:a reactors operating in Eastem new orcers nearly attained was particular!y noteworthy, Europe and the CIS.We are i the prior year's high level. as was the contract f ar the harmonizing the nuclear fuel act vities of Siemens AG and complete overhaul of three i ) In the U.S. and As,a, we generators in the U.S state our U S. subsid,ary SPC in an continued to improve out of Washington. effort to stimulate innovation pos: tion in the market for and competit:veness, and to fossil-fueled power plants. Our four U.S. companies ensure rehabihty of supply. In i particularly unfired combined-involved in power plant bush mutua! agreement with our cycie (GUD) units, as well as ness were combined to form customers, we have decided equipment for hydroelectoc Siemens Power Corporation to continue operations at our power p! ants Major orders (SPC), Bellevue, Washington, Hanau fuel fabncation facihty included the Nan Pu GUD and Mdwaukee, Wisconsin. in sp:te of pohtical difficulties p;am in Taiwan, and the Our new facil:ty in conversion of a number of Mdwaukee has begun the One of our pnonties is the plants in India and the U.S. production of gas turbines construction of new nuclear i as well in add: tion, we are power piants which offer pg, qmmveyly=y gw1"N*"""] expand 1ng the range of even more advanced safety i ']Z.jk N power plant equ;pment man-features and greater econo-1 4 Q:f i * ~ g s 7g3-y y,M' g ufactured at our Cdegon and my in operation. As a j Q y' " ' + 3 Pulo Mas plants in Indonesia. partner in Nuclear Power [

m,

t <l h y~ q Intemational S.N C., Pans, py z-- p "- ' 4 in the new German states, a joint venture with O,~ - y I hiNi }Il [ b( lj hf. ~ j we are playing a significar. Framatome, we have devel-n /P role in the ref urbishment of oped the conceptual oesion 3. h h[. D. i ' i -l [ [ [ power p! ants and the con-for a " common product" k( N a struction of new units We reactor. We are current!y J e-y s: are making rapid progress in discussing the technical w-gj 7 g; -{ transforming the manufactur-features of this reactor with s 4 b L ing plants acquired in Eriurt French and German electric h and Gorktz into facihties util:t,es to pave the way for A, capable of competing in the approvat in both ctuntries. global market q f S,emens Solar, which we J We are mcking every effort own joint!y w:th Bayemwerk g to meet society s standards AG, is the worldwide market for f uel conservation, pollu-leader in photovo!! arcs and tion control and environmen-provides us with a solid basis tal protection by imptoving for developing further apph-the technology of fossil-cations in this field. fueled power generation. The first of two Our new Teleperm XP power-In view of the strong global N' *,8[y'r[d plant instrumentation and demand for fossd-fueled combined-cycle control system improves power plants, we expect a power plant in plant rehabdtty and efficiency-f urther increase in sales and eIt y new orders in the current i ain began operation on The nuclear sector accounted f:stal year. Imer nat:onal busi- "Ch'i" , "g*' for approx:mately 30% of our ness w:1! continue to account ,n turnkey project are sa;es Our nuclear services ior more than 60% of the being supplied by business received major totat We atso foresee a P,ritish cornpanies. orders to retrof:t power long-term stabie power plant plants in Westem Europe mark et. L 12 L

Power Transmission and Distribution smes DV5e w ,E+ ten tvws DM61 von 43% Cama sweg DV '9 %m - 1% in spde of the worldwice introducing the world's first slump by concentrating on economic slowdown and maintenance-free vacuum inose core businesses in intens:f:ed miematonal circu;t breaker which we offer leading-edge compet tion, sales and new technology, and focusing our orders again mereased in the The elecinc:ty meter market actvmes on high-growth year under review. We main-was characterced by stagnat-regions such as Southeast tained our global mark et ing demand and increased Asia. We are watching the posmon and even gained cost pressure. We developed emergAg markets in Eastem market share in some a ful!y electronic gas meter Europe with particular regions. based on an ultrasonic interest and are intensifying measunng pnncip;e as an our act vmes in the U S. in in the high-voltage sectos attematve to mechanical ^g we prodJced and instaled types. New orders in the ~ 7 the world's f rst stepiess-protecton and substaton j + contro!!ed. three-phase senes control sector rose sharply, compensator for the Westem highhghted by a contract for Area Power Administraton the national load drspatch in the U S. By cont o!hng the center in Kuwa:t. In the f:etd load flow in power d:stribu-of network and substaton 1,on gnds, the compensator control technology, our open, ensures optima! and environ-d:sinbuted system arch:tec- $4 mentasy more acceptable tures have begun to supplant y gnd operaton. In Meoco, centrahzed computer 4 we constructed a 420-kV gas-systems, ensunng us a insulated swaching staton leaoing market posmon $^, - ~, ~ "2 that d:stnbutes electocity from the Petacaico power We maintained our posmon p! ant to the region around the in the highty compet,tve g new port of Lamo Cardenas transformer market. and V" We commissioned a high-insatuted extenslve restruc-vottage, d: rect-current turing measures to cut costs. back-to back knk buitt ior Bayemwerk AG near The acou:s: tion of the Kabio Etzenncht, on the German-Bratslava spo!. s r o cabie Czech border This facilay plant in Brats!ava, Slovakia. wiu ahow energy to be wa strengthen our Eastern [ ka transferred between the European actv:t,es in the { ilji two countnes power cable sector We hase p f jk .j. t rounded out our hne of F{ j We sohd.fied our market instrumentaton and contro! posmon in the medium-systems by developing and vo!tage sector by designing producing plastic fiber-optc s iI ~ ,,.. w. a nea gas-insulated circutt hnks j G jdM [ l d M,f. M M breaker and load-break sw.tchgear for small-and We are countenng the antcipation of the pending we built the 23HV medium-sized industries. slack ened cemand caused North Amencan Free Trade L,',$"/,''j"" This technology has proven by the worldmoe economic Agreement. We will simuar to f acilities especiahy successfu, in the persevere in implementng in Sabanatarga, Southeast Asian mariet We cost-cuttng measures. h","j,"*_j,",'u"fp have maintaned our leader pnmaQy 1o belp cope w!!h power to cobmbia. ship in medium-vottage growing compettve orcutt-break er technology by pressure in the single European market 13

4 i 4 ) ~ Groups Industrial and Building Systems 5ses DMS 7 ram - 1% l % o ce's DV9 3 cNn - 1% l Ca; mar spe M; DM272 r%on 427% + l l-i I New oroers and sales in main dnves for rolling We are pursuing the same l vaned greatly by region and mills, and our many years of goa!s f or urban traffic with l industry. In Germany, there expenence in process and our Euro-Scout area naviga-was stronger cemand foi Dasic automation. tion system the electronics electncal equ:pment f or large instaned in a vehicle allows j industnal and pubhc butid-Orders from the new coordinated traffic control l ings, whee orders declined German states accounted for and real-time route guidance. l for industnal systems Our an increasingly larger share We are about to introduce i business outside Germany of our bustness in Germany. Euro-Scout in severallerge l softened due to the stow-For example, the d:stoct of cmes. l down in industnal markets Schonebeck near Magdeburg i l world Moe ordered a tumkey vocational Besides instal lation and i training center. This center commissioning. servic!ng has { We rece:ved a number of will serve as a pilot project become more important in major orders from Asia. for estabhsh:ng the dual our technical service 7ctor. includ:ng contracts for vocat:0nal training system now that a growing number severa! deesel power p; ants throughout eastern Germany of industnal companics find i in the People's Repubhc of As part of the restructuring in it more cost-effective to use i China and Indonesia and for the sugar industry, we are outsourced ma:ntenance the aJtomation of a f;tting six faciones w:th state-services. W;th a d! verse hot 40!bng mi!!in Sou'h Korea of-the-art elecincal equ:p-range of services backed by ment We are also suppiyrng a network. of expert serv.ce A'u No i GmbH. Neuss, the dnve contro! and process centers, we offer our }",,',(',"j,$,2gc Germany. placed an order for automation equ:pment for a customers a comp!ete and e management system project planning and manu-new paper factory of Ha:nd! comprehensive service for j on the A9 autobahr facture of electric dnves. con-Pap,er GmbH in senweet an ineustnar and bus, ness '8V tro!S and process automat:on der Oder, Germany. Here for systems. i cont o li g t affic l flows, this system for a new aluminum hot-st'ip the first 1:me we combined ) improves highwer rnill DE?Cisive factors in programmable Controlief s Because of the wor!dwide l 'fp',V M*,I*I"8 winning this order were out with a processor developed economic slump, we do not gi noise. pos: tion as the world leader especialy for the paper anticcate any substantial l inoustry. improvement in new orders dunng the current f:sta! year. Build:ng systems business However, because of our for cap:tal projects once large bacMog of orders we again g'ew f aster than the expect an appreciable nse in market We a'e reorganeng sa!es in Germany ana ab cad our activrbes in th:s sector to improve our competit:ve position. We can now pian, supply and maintatn com-plete electrical building instal-lations from a sing le source, including power supp4 bghting, air conditioning. automation, seconty and j alarm systems. j I The traff c control systems bus: ness consohdated its lead:ng positson w:th newly developed products. Tra*f:c gJtdance systems improve traffic flow and also help i to protect the envaonment j I 14

g. .is* 3 1 s. s Drives and i i i Standard b ~ 2' r.. s c 5, i s, ~ Products e &n m wM,i ",, Ip~. e\\ y Y. 1 j sus UE7-4 n y 9 Q ,. n 'r+ - w n.s we r m ' u 'd g DfG r.or 2% ha.i.1 l c ap 4 ~~~. .,3 g. . gam t j iu - i -h a .V~~ Apart f rom our acomsmon I l cf a U S ccmpany. growth i m sales anc new orders is l pomar ;v attnbu*ab.e to the PO'... ~ - R. " _7 { r i buovant bus ness in the pstt - ' " ": # f r(~N- ~ ea e ~ j Ge* man construction sector pa r Oar mternat ona! business ~kN so"ered f*om cetenoranno I industna! cemend and conta-Sustained bnsk demand n courses for bunding-We provide hands-on ung weakness c' construt the construction sector kept Building Management System systems engineers { Fon att:v:!y in Westem German oroers p! aced wah ElB instabas at the Regensburg i Eu ope and fJorin Amenca the insta"atron Equ:pmen+ training center. [YP and Systems Dvson at a A; " 5en e I""'P'*"*** up and simulate an I Dove Systems om ia* gest h.gh levet hiematonal buse [h " ' ^ integrated system d ness Dy contrast. showed a f. te(amThermostat l and acquire expertise r,'es on. was pardcu!ady oma Luminaires with De instabus, a ected as es bus. ness maded dechne h the U S, (, l decined bcth n Germapp the acau:smon of CroJse j ' j t. single bus network i for controHing 'cic instana. ~.. ' tions w? hin a j and !" ena50n#v ne H ncs D:v.s!cn from Cooper i s ' idawo. J rt supp'y the g:oba! madet wah

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!m i BlinOS 1 buit:fing. The bus j o':Ve5 irom just a #ew watts IeKas. Dy Siemens Ener9V { h Nejm Command i dewce. saves hnen and i i anows individuar l to 830 megaaetts and oe & Automato-Inc.. At:anta t, e I L controls. 4 kao the rnar6 et m a number Georo a. we stengthen our 4 i He81mg,N i 't I } e e o g 4 of a eas. sxh as sanab:e-msta"stion business The fSventaanny 8 4 I AM speed d' ves and h:gn high madet acceptance of (m -et an~ y n p m; indator. ' con:hhWng,] 7, t t voitage motors ne a:m to our E B instabus. ceveloped g further SPentrhen out according to the European l l compe* tve ocs ton by s*anda'd for buddag ms Ma-a taator : pm :es BN#8"*SS' j conc emanng rnan;faciunng Lons. represen's a major _j ) SenW one at.ons and prunmo ou' stepiorward More than E i ! O' 5 j p odJct Lnes awe a the 70 Eu.opea, compan,es nave y j same rme inroduc.ng a rew afreadv jomed the EiBA eneraton ci c:merters tEu opean instraton Bus f j e j AssocatcN Th.s system has "l-Centers." the Group's i Sales by LowWc aage been tested m pdot pro lects mstaMaton wholesa!e organ-t Cormo! Prod; cts and and has proven to be caton. substantaHy contots l Systems a dvso, whe e"ectxe uted to our safes g owth h I rs ofte responsNe to the part th:s growth stemmed can'tal goocs industry, were The Lighting Systems irom Germany's fiounshag j afie:ted t'y s!ad ened Desron has Sohd.fjed,ts constructon sector, but even f j demand n Ge-nary, on mad et share t'y offe'.ng mte-mo e irnportant was our j the other hand. etDorts grated high-caalav pac 6 ages extenciad prodrt range as j recove'ed shghtiv desp *e and comprehensive light'ng well es new technologtes and [ l weak mie naw.a! rnaa etc solutions for bund ngs sevces At p esent we have j Th:s recovery was p!ompted Energy saving and e,wron-more thar.1001-Centers in l oy car focused maietng memany inend% efectromc Ge many and Austna We t { act v11es m Le'ected conPo' gear is gan'ng m p:an to set up a s,mdar organ-Europe?m cosmnes. 005 new impoqance We ant:c cate cadon m Eastern Europe. i snap:ng center m Amoe g. an addiona! stm lus for a l Germa% w t en<be us to growth m t%e sa:es of tnese We are counter:ng the Supply ou' Eur' pean p'odJCts and oJr new DegaDve ef'ects ci the j custome s more cao v SaOVA i195tng system ongo'ng economtc courcarn and e%c e ry by concenretng producton. j sPengthemng odt fegenbl presence anc imroduc:ng nea produc s 15 i

i i i Groups Automation 1 i i bi3 M. [NhNT + [k Nu. ws DMcs w,9 ca, o vw;; DW T mw - D e 1 Demand from our industnal 30 pa-Lage f'em cev'ters Our business in catomatic customers cechned in fo' ine Destai en~ce SMD p!acement macNnes. F Germant the downtum in used pnmanly b/1he new o cers and sa!es was N sumes Vy n g'ateo eiectronics indust'y showec mainN due to a recession n e spvm aco M from a year-on-year dechne. l the rnechanica; engineenng T -v m tr rre N However, cychcal fluctuatov i i seclot Cautous capaa: Da< M as m n U S are tipical of this market spend;ng in western ind; - sis @ y, 5 emens Inkshai With the introducton of ne.v AtG G machines capable of higher l ahZed Couranes hampe'.o As ' W on

• oJr internatona; bus; ness Ger.J1 A>!

mon an LQtu n placement rates and general-r A9N6n PD OON d'd iy :mproved performance. To raise productivrty, h0 Wever, a ma,oi order frU' 4 ["['g*"j",9 the German posta: ser cc. x s nahe ue b 5 nust-we are wen prepared for Deutsche Bundespost - neverm a id W recovsry in the re.artet tion f acilities in j Amt. erg, Germany. Posid'enst, aPowed Us ? N TaPons increase new orde's in Derrand for commun: cation m ariant p oduc-j tion is made possible Germany by one-ihn. ~ v MEie' m6b ' test and ana!ysis equ:pment j by the flexible As pnme ConPactor, We M n a"iM m^d a % & e: proved sat:sf actory, but our process automaton business j dual-manufacturing Tece?ved an order for about T WP3 h4 G era concept in this new l facility DM1 b&on to eau <p cf adatae eu anwon suffered f rom increasingty l sgms. " e is new apphc} cautous investment actvces "'0"*i G l g y;,9N-t,ons end new custome:s. by tne process inoustnes. , ')4 qw % ; and the enhancement of the On a more postve note, .W Simatc product hne Our we recewed our first orders O r~ggg; ,w.m~

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c from t e German chemicat cevelopment eng:neers have h op+:mized the utety indusFy for plants in the east w g of Simatic w.tn f aster German states. .4 l processors, new conf.gur,ng too!s and state-of-thest Our business in producton y '3 l control solutons. To improve automaton and log stcs

• ?

our mark et compettiveness, systems increased substan-we expanded and f urther te!!y over the previous year. ' " ~ ? A automated our S:matc in addmon to the ma;or production f acihty in Amberg, pro;ect for Deutsche Germany. Bundespost mentoned A@..ye gf ME above, tNs improvement was Crumbhng cemand in the oue to orders for the autona-e d rr.ach2ne tool sector resu!!ed tion of production facihtes in d N in love orde's for numen-the automot've industry. m , s ). rA. %c evstems and f, :x - f, -Wow wnge itom the strength to bring new ove N Nsury faces an We era using our innovatve I -( ( ff ife $ w -nne, Wuns of products to mark et faster 'i g 1 [\\ - %;g%. " jh / JaN ise ranufactfers to and to f urther improve ' #g a ( ,, w t. 4

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cbta,n a ia'ger share of the productivity The outlook for 'N

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.d European madet in coaabo-our German and miemational yg .:.-g j radon with machine-too! business should graouah ? N*.1 t - manufacturers we have improve toward the end of ( S I \\. intersfied our development the current frscal yeat I and prodJCton ciforts n 66 order to secure and expand k our compettve posmon m,. 16

i Private i Communication O Atert 300 popie d O are employect at ftOLMu nm cora sv-nication termWs plant in Austin. 5m NM 4 tar +R Teams. High-tech W &.Fr DM 2 tA or +M er < v q DWC - m 4M. degital telephtsnes Intended mainly for the U S. market are developed and produced here. Busness was generaly 1 " ~ " ^[ Il ^ th Yatte mth Cons @able j 'O h Vahaton in f eg:onai pf rf Dr-mange Strong gioWIh in 7 cui d0 ret sLC business Was I s i ly i ~; t-eico pomardy by brsk L oemand for our large H,com l f g [_) 300 commun,caton systems g ky ; 7. f_ - pyg 4 --, 7: g p y/ 'y 5 Howe.fr. b.isness cn the Q j . I& l Nff k dg,lMA ngv

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'f i ;; R;,. yhk 4 W.F; [? .eM y 'e ongong ecor'oT'C Sio " {}. f i p nVn bnd the weab ness oi ,m y wo w.a m r4 x W; v L q_L'( p E 1

).

m }\\, WQ.; W. u f 3M EE37fAbmMd%gp$t edm i ~ ,1 ' % desin:%,d b M r. A si < Z J M Company. WNch, i U DN WJzSh alD#Syhe' me'e F ng company P. .d AJstn.Te @. We Open?Q a r:ew commun. cat on teim:nats p: ant Au the ach res of our Group n the U S. Saies of communicaton N ke, Dew Chenmcal,3M and Siemens N;xdorf have now been conschdated systems and te'minais by Reader's Digest confirm the informationssysteme AG undet the 1 t'e "ROLM. our maietng partners are val;e of this global sing!e-trans' erred its 8818 tele-a Sremens company ' becom ng increas:ng'y source solution. phone system business io us important for our bus, ness, on June 1.1992. Market:ng l in Eastem Europe we a e they currerry account for For the cord:ess telephone e+ the 8818 system wW l market:ng our communica-one-f.fth of our tota! saies. market, our f astest g'owing contnue and wW comple-ton systems in Hungary. One of o;r new partners is bus: ness segment. we are rr ent our existing product Poiand. Romania, the C.i S, Deutsche Bunoespost current!y developing a new range, particularly in special and the Czech and Slovak Te:ekom, which a :!s both as product irne of telephones sectors such as hotels and RepuDhts. We ate a'so a resener v '>u. products and and te'ephone systems hosp:ta!s. stepping up our actvtes in couaboy:% wth us in fornt based on the new European Southeast As.a. Our H:com bias The trst joint orders for radio teiephone standard The current f:staf year will systems re beng budt under Kcom systems were for the for d:gital cordiess communs see a nse in new orders and bcense and d:stnbuted by G-7 Summrt in Mur ch and caton. seies as a resutt of the inst two CNnese factones n for the Fra%f urt airpo1 fuSyear incLsion cf ROLM Berg and Snangha The We are among the top three Company, and the transfer of People's Repubkc of Cnna is Technical adaptaton of our supphers of telephones in the Siemens Nixdorf's telephone already the second largE?st Hicom communicaton world. a pas; Don ach:eved in systems business. meiet or H1com systems system and the ROLM 9750 sp:te of deregu!ation and st;ff International compeutve f after Germany.

s progressing we4 Our competit on from the f ar pressure wW requee special Cornet r,etwos protoco!

East Cu success is based efforts to oppmse our use permits the two systems to on high-coady eng:r eenng of resources and fucy mie operate in pnvate net-and ott'actwe desgns exploi a!! opoortuntes f or works. ahow:ng compantes to rat onababon. set up worldwide netwod s important orde's from trans-n? tonal compan:es such as 17

EA N r' rgw Groups Public Communication Networks sees DMi3 2 bihon 417% New om DW4 4 wm + 104. CaMispenaq DM4?? mv + 9 A As expected the previous Dt m' W w Gar - i kve;y for Weele > of it >: kading year's strong growth in o"ders N EL SC Ilephone uphers of mo ; ma.o led to a sharp rise in saies w ichrg vis % ^.inolot / P e i networ'-

cyea, oDerators in 12 countnes cunng the year under review Co't w ;e v-

+ There was also a rnarkad nse me numaci

orde ed heve already chosen our u

in new orders Orders from rese 4 mue tha' rethird DO 'O dgtal system. The !! a Asian region aheady To date, over M0 :eisphone firs; r.ouile raco networrs p mort for 30% cf our inter-admnistat ons to smty usog S;emens' tec sology rem "usiness. er 4 our cotrtnes have on r1ior based on tne un, form te ept one swaching systems E'/ SD exchanges ame 53 Eurot ean standard are now virtuany an of the major countrin in are now being manufac Jed mson hne un:ts ha a been in operat:on. Southeast Ama are In the Peopie's Repubhc of instabd or oroe<ec ance the Nn"NN5, Ch,na in conabotat;on ath system introduct:on We Our r1rucipaton e Deu +che s to expand and !ccal panners TFe majonty have now entered Ine lodian Buntmpost Teiekum's uber-

• • d',"j,2'[,C'j

of our nine joint ventures in marf et, a d have w 1 major optic ;aict project in the new Eastern Europe have styted tWSD cc ntracts from the east German states demon-example. in Theaand we are instaning a produmtion. Nea' East and Soubst strates our prowess in this Asa Edensve busness in fie!d of technok gy. In ^993, %.r.a. fl,"*,y,[j", Eastem Europe is contob-we will connect 70.000 east uting to the creabon of a Cerman ho. w s to local f ber- ,ry p y e y / w w/ " " " mode n tele commt.n catons opte networks M Q(' f4 mfras ructure throughout k the agion. Together w:th GPT Ltd.. .i k - ba: - - ( oventry. Engiar 1 we have k h Toecommun: cation operators F 't up a plot proect for zn tre U S Russia and Jaoan madband transmission over {'" n

{

have awarced con ' acts for ivat networks in Dusseldo'f. , b' "4 EWSP pac 6 et swr.cning Germany. Custori ers from n g" i Foutment to modemize their sanous European countnes t,yL dsta networks Deutsche end. for the first time. Meuco, " h [ '.- P Pe;chsbahn, the east German nave erdered kne eau:pment ral networ k, has a!so ordered for optical transmission hnss ~ - = "F N~" this system to integrate its t text and data con municatiorm As a pnme contractor we have prov:ded telephone gWgg/mdi1Hd I in tne U.S, our sub9d:ary service to opprommate? y Siemens Stromberg Cer! son. 300.000 homes in east m-w N T. Boca Raton, Fionda. won '2srmany, thus contributing several orders for our EWSM to the raps expansion of the M i. system for hig4 speed region's telephone network. hnkmg at metropohtai area Our U S. Joint ventue. Siecor networks. As a resu!t. we Corporaton, Mckory. North are sJpp!Ving brcadband tech-Ca'ohna. dehvered fiber-optic SIEMENS nology for commer cial use or cables to the Japanese for field inals to five of the ma4 et for 'he first time. s g, en 9 ,g,' seven regional Be4 operating ' ' " W companies, as wet as to Despne fluctuations in ",.;m 3 MCI Telecommunication regonal sales our current y a Corpo'atton, a long distance f:stal year is charactenzed network operator by continued strong growth We antopate increased orde cow and f =

ough pnce compet ton au w,

'b B"ec!ed our bustness l Ho Ae cer we mintamed our ,.)

j i

,. ~ poscon in the g!obal market .a ~ w, - e c y m-w in new techno!ogies ano 5, M i-y techmques. -v ~- b "n-g;;y.n.[A C ' *... T; ' Bus; ness in compu:ed d tomog aphy (CT) systems [> %, QF-c[ was very ssccessfl win ,,,,,- g.,. - %M j more than 500 um:s so!d in 4 ; ~' 4 J% j the year unoer revrew. The y,Q f A A, new sp ra! C7 tecnno;ogy x-4{ . ' % % -~ W^< j mroduced by us :s now weli i - c. $} estab! shed on the wond market Beg nn:ng in 1993 a 4 - t-y-P,< l

omt venture ;n the Peop#s h.

- Y a.l mA Repub9c cf Cnna w We are resea'ching the Our pacemaker business wd produce at ieast 60 un:ts ei our Somatom CT sene:, a impact of utasonic shock benef I as a resu!: of the out-h ah e quahty s ear waves (currendy a proven of-court se:t:ement of a and eff.ciency ext'acorporea! therapy to patent d spute in the U S. Accc 3ng y :se or cp 3,3 Wan 300 unas so;d e tne d:sintegrate iudney stones Also, we have comm:ssioned tne ZVEl (German Elecincat and 1992 f sta: s ear. tne and caEstones) for the treat-a new piant w>th an annua! E!ect onics Mandacteers' AssanatonL only 12% of neath Magnetom Impcct aas the ment of slow-heabng bone produCiton Capacity of 60 000 care spening in 2ndastna: worifs best-Seino maonetc frac ures end tumors in un;ts in Syimat, Cahfomia cortnes paes to eientca! 4 resonance imag:ng sysiem vascutar d,agnostcs, furthe, (a ost a e .a j !!S scope of appfcaSon s prog'ess n more Oe:aded Fouow;ng the eaier increase are mciudea c'esca eaatamem e>.pand;ng cont.nuousfy n d:aonos:s and user fnend'y sn new centa! offces in accoants far pst 0% et tota! """";** * * '*

• S-f<e;oS SJch as ang;og'6phy eQ pment is opemna up a eas:em Ge many, our centa:

a eau'pment busmess in Cost-beneht analyses in vanous i and mammog'aphy wrder tance Of therapeut c coun!nes nave shown tnat the j optons Germany has retamed to appropnate use of advanced i We a<e the rna9 et 4 ader rn normal leve!s r,eScat eaurpment can resu!t in i x-ray technoiogy. In Menna. in order to evp;nd our ({S((,a sa r gg the Donau-Sp3 :s the me<tet share m uirasound in view of increas;ng levets Wnen tne me6 cal beneht world's fJs hosprial to d.eanosLC SyS: ems. we nave pressure to reduce hea:h to the pane-t is a'so ts en mta benett from a1a imeg a:e3 co4cen:ra:ea an ac:.v<t4es,n ca.e costs in many coun:nes.

%1Tgf,3c'#,L v

System for digia' C'OCPS5ing, th:S kev area in 1ssaQuan. Ae ant c pate f:atter market ogy leads to teth hghermahty roMh in both Germany and 8'd " ore cost #eme "a" j trdnsmission and archmng of Washmg:On g'ntematonat mariets in the we br the 90eral populaton l patents. rad 60gica! images i i Ogta! radiog aphy can yea's ahead We wd counter ) f:equert'v red;ce radia: on tougher competmon by l esposu'e by mo'e than ha f steamhng our o:gara$on. compa eo we comem ona! prun:ng of product "'0:noos spectrum and implementng i cec s~e cost-cong measJres 3 i a 4 21

l I Groups Semiconductors Passive Components and Electron Tubes Sm D w 9 to e -n sais Dtm s bme - cx IWW yy' U/2 0 ' W -!t % Uws Ufflb b: -ic% i cn;r o * -wg DWD % m 4 3C L cwM b >ra rg DVl4 m Won -U% The sem< conductor bus: ness posson in the mawet for Continuing strong pressure suffered f rom the worldwide RF dev,tes w:th power tran-on pnces and wen demand econom!c downturn as weh sistors for use in tne giga-from consumer and industnal es a sha's detenoration in hertz range: and for space-electronics and tne IT sector pnces in add tion, our dvest-sarng SMDs we developed led to a oechne in s6es and i ment of Heimann GmbH. structures less than 1 mm new orcers Progress was W:esbaden. Germany. w:de and 1.7 mm long. A made as we f urther devel-reduced business votume by new transm@eceivc modu;e oped our components and more than DM100 muon. for subsenber termnats using complemented our product foer-optics wd be used to spectrum The restructunng of an Group fu'fd a map order rece?ved units, which we began in the by Pubhc Communicaton The economic slowdown Net uo4s to expand eastern affected our ceram;c compo~ Germany's local telepnone ne:nts busmess less strongly ,.,.. - p y.,' ww rw . g[.; r ! Ti.g. }. nctwor6 s. than it d;d the capac: tor [ 'l 1 business of our jomt venture '1 ' 4,, d ,va.m m j (g {..... l - apphcaoons are tra 6 ey to Matsushna Components Innovat:ve semiconductor company. Siemens l ' c...-. s enhanced productyty :n GmbH & Co KG, Munch. j ] i y electronic systems As struc-By start:ng up an add.t:ona! j ~ f' h tures become finer, increas-p'oduction kne for tanta!um ~ m- ~ '~ ingfy comp!ex systems can th:p capacitors, we have now 2 h. . ' I ' amade h j .-.; N. 4. '..L .L.'.. - be placed on chips Our coi-become a fuMne European ' ~ labo'aove p'olEct wdh IBM 2 and Toshca to deveiop the 4'-

{

NM98M 9Na# d i The GSM one-chip previous year as a cost- ~ .( l Logic Device (GOLD) cNps us:ng 0 25-meron g .gsg7g g $r a'chYset t st g'estng accord:ng to p.an tecnnology wm ss'egua'd [ l om techno' gta' apMse in l smaller mobile tele-the long term TNs proWdes 7 - [j o we developed for However. Our extra cap:tal p T phones. It integrates e .qg g g 9g, y. six complex func-ceneratens of tecnnaiogw in Con lunctCO WIh unfavorabIe YO 2 SY bU e tions on a single silicon chip for opth components %5lCs), which mal miniatur 7ation. i, PN O U E yeverted us from be'ng able be Co ductor busness Cf to report an improveme** n %' G "p s re~s the ktJT , N = ~' u gg ,A Dunng the gear under rev ew. V.e 0o not expect any ~ We launched nume'ous neA Pg cam upM n Oemand O DrodJCis on the ina'f et. We 1 an tne European ma6 er the'e'o'e emP 8528 Cost-h c g measTes and focus leader n chip CSTds for tEJe_ DhonE5. and our hoh sDeed on 5p*28* m N $b t microControhers M M g aicoop W M Ventur es High-performance ahowed us to acou:re sign:f,. capacitors from can? new customer g oups siemens matsush,ia l sJcn as the automoDve Components, der are finding we noJstry Our soace-saen9 apptication in trans-ch D se! 'or noDee tete-portation systems. phones OFers ou'stanorng such as in Germany's high-speed ICE pe'iormance spec-ficDitons locomotive. be eYp?Inded our strono t 22

l I Electromechanical Audio and Components Video Systems l I I Smes DMSEE Wle + 3% seer. DM2c1 maon + 5% New omers DMM3 mMn c% New omes DM3DB Won 413% CaMaispemag DMS7 mam

• 2E%

Caxa' spen:rng DM16 milhon +14% i l l suppber for th:s sector. We Once again we recorded We expanded our manufac-Bithng of major contracts, l also expanded our production shght growth in sales despce tunng capacit*es to meet in particular for Bayerischer l of microwave devices for the the soft global economy, g*owing demand from Rundfunk. Germany, and i thoving mobne radio market. w:th pnces fathng 7% on customers. In response to Radio Repubhc Indonesia, average. Our strong growth cost pressure on the world off set lower U.S. sa!es. In ] There was a general dechne in cap.tal spendrng was market, we are streamhning January 1992, we received in the electron tube business. due to investment in new our organization and are insti-a follow-up order from However, we improved our producton hnes. tuting (!xtens've programs to Indonesia for an add: tonal market share for arresters increase productivey. 16 rad:o stations. g The d;fficuit market environ-l The business volume of our ment in the U.S. also affect-Our technological leadership subsic.ary Vacuumschme!2e ed our subsid;ary, Potter in audio and studio equip-GmbH, Hanau, Germany. & Bramf,e:d, Inc., Ponceton, I remained virtuaPy unchanced Indiana. However, the from last year. The d fficu:t company contnued to lead g'; g i economic environment in the U.S ma*ket for relays. Bra:d negat:vely :mpacted and substanta!!y improved s j new orders and sa:es at our !!S pos: lion as a mak er of YM# E I subs diary. Icotton S A, DJtomotve relays. In Europe. l Gravatat the re:ay business vaned in view of the current mari<et demand from Eastem Europe .. 6j'{# ['[f { from region to regeon Whle '"Y 4 + 4 s:tuaton, we do not yet antc-virtuany couacsed. We saw ipate any improvement en our an upsurge in orders for bus; ness Consequently, we automotve rebys from a e intens:fying efforts to Western Europe. In spce of streamhne our prodJC Tange Intense pnCe pressure. sa:es and o*gancetton, ra:se quaLiv of fiber-optic components for y_ j and product!voy. and tnm high-performance data knks C~ Np l

costs, advanced strongly New products he! ped to increase

) N l our market sha'e, and we l continued 10 develop our i actv:t,es in the U.S and At the Herkuiessant merit was reinforced by I u"n c$,th fYrst digi-development of our digital tal recording studio studio sw:tching system and Business in automotive for severischer the Variodyn 3000 amphfica-connectors and va!ve soie. Rundfunk (BR) tion system In Apnl 1992 nords for ABS systems was ,'r[nsm is our subsideary Neve intro ns most satstcctory and we one major adv8"- duced Capricom, the third l hope to budd on tNs success t ge of g ov' generaton of fully dig tai n og, eh psy in the futu'e Sales of hybnd is its ability to audio contro! consoles. } Circuits remained unchanged reproduce precisely I all stored sound j settings. The anticipated replacement ] of equipment through new technology in European pubhc radio and te:evision organizations, and the future emergence of add.t onal pnvate stat ons, lead us to expect a positive trend in new orders during the current f: scal year. 23

Companies' Siemens Nixdorf Informationssysteme s-m w.a re C'jr5 CV.12 s l'!lT l 'h. Cama'sra g DrF ? man + n The second 1:sta! year of intemat:onai customers, ineetable in the f. scal year Siemens Nndorf pnmaNy in Westem Europe. just ended On September informatonss-lsteme AG 30,1992, SNI had a work (SNO. Paderbom. was At the close of the f: scal force of apprcumately affected by the weaken:ng year, SNI recorded a loss of 4BA00 people worldwide, g!obal economy as we!I DM513 0991: DM781) 35,300 of whom were as pers:stng structural prob-muhon emp;oyed in Germany Tn:s iems in the in'ormaton tota l :s 3,200 below the first technology indust"y As a In the year under review, full year's figure, desp:te staff consequence, SNI recorded a DM712 m@on was invested increases in the new German shght dechne in new orders, in property, plant and eau!D-states and in the company's which shpped one percent to ment 0nciud ng equrpment service sector. In view of the DM12.9 b%on. leased to customers), connnuing d fficult srtuation DM148 mnon went into in the IT industry, add:tronal in contrast, we were ab:e to acqutsmons We spent personnel adjustments w;ll ta se sa!es seven percent to DM1.7 b4cn on ine oevelop-be requ: red DM13 0 bhon, due to the ment of hardaare as weh large increase in orders as system and apphcation To help us better exploit receved in the previous year. sof tware. spec:fic mart ets, we created Aporox: mate!y 65% of our inree new business un:ts business volume was gener-For structu*al and business-as of October 1.1992: ated in Germany, while the related reasons, further Persona! Computers, High. remander came from personne! adjustments were Performance Pnnters and Systems hiegradon. These units have full entrecreneurial m*.. gy mma'* l .' ~ 1-yy respons:bity for their t business and all related g p-- 1 ,. - _ ;{ @ l ment, procurement. p'oduc-j }d** functions iplann ng. develop- [ j 3 maintenance). tion. marketing, sales and D i i F Further measures to sa'e- /- guard our compet:t:veness [ ([-." in a strained market s uation and improve our eamings y include st'ea niin:ng bus: ness ( -- ) segments by focusing on %iw ~ h core act:vtbes. reducing the { h Q Q:pS. Mf number of product variants j The new series Cso and inmming production, mainfrarnes under. SE%ng and acm qtst'ative going functional C, testing at SNfs expenses. We a!so ptan to 9 systems Piant in improve the effcency of V,' A95N'8' organcatonal unts and 3 .[ reduce the cegree of verticat hai .hddh 'ntegradon in oroducson by j ncreas:ng the outsourc:ng of 1 parts and componems. ' ooer sot ures ana suxed C.Dmpines & e hsled On Oitge: .$ and 47 24

Osram Bosch-Siemens HausgerEte" i smes Dua1tw .p saws DMc 9 tem 4 rs I B New oice s DM6 9 tAon

• 7%

i New eme s DV21 tWnon + CaNalspews DM31c Mon -5% Capw spends DMr2 mAon 4 2n l Desp:te the soft economic U S, where Osram had p' eve Continuing strong demand in bus: ness in white goods cond: lions, the dechne of the ous'y marketed only specia! the new German states aga:n products in Germany. Due to ooliar and strong pressure on product knes. made a substantia; contribu-economic cond:tions in selhng pnces. Osram GmbH. tion to business growth at Westem and Eastem Europe, Serbn and Munich, increased Productron f acities were Bosch-Siemens Hausgerate the company was unable to saies frve percent to DM31 expanded to meet strong GmbH (BSHG). Munich. In achieve its sales targets in its bdhon in fiscal 1992. TNs demand for energy-ef%ent the fisca! year ended intemational business. growth was pnma9y attnbut-lamps, fiuorescent tubes and December 31,1991, world-Eamings in the 1992 fiscal able to the company's world-metal vapor lamps. In the wide sa'es rose seven per-year were burdened by nsing wide leadership in innovative growing market for halogen cent to DM6.9 bilhon. costs the gradual phasing products. lamps. Osram gained a Desp!!e d.fficult bus; ness out of government support of greater snare of the matket cond,tions, the company the Berlin economy and Saies in Germany exceeded despite competition from the again improved ris eamings. intensified intemational pnce 1 the high figure recorded in Far East. After t'ansfernng DM76.8 pressure. I fisca! 1991, largely oue to the 0990 DM64 4) mdhon to company's strengthened On Septernber 30.1992 the BSHG's conschdated retained l pos t:on in the new German company had 16.100 eamings, a profit of DM86 4 states. Intemational bus: ness employees worldwide, one 0990: DM56.2) mdkon was showed an even stronger hundred fewer than in the d stnbuted Caprtal expendi-surge. accounting ior 71% of previous year. Overall capac-tures in property. p: ant and total sales. High g owth rates rty ut:hzation was at a high equipment rose to DM322 were atta:ned above ai! in the level Osram invested 0990: DM269) milhon; DM310 mitiion in property, expend:tures for research p! ant and equipment. mainty and development totaled to expand producton capac-DM136 0990: DM119) 4 3^

• - ~

a q.. ; + &. ity for new products A rrihon /t the close of 1991, 2 +, y ( "p t.g notable event was the open-SSHG had a work force of m-9X y.. ing of a p! ant in Japan, where 24.000 0990 23.000L Osram has begun manufac- ^ \\ ~ [ i tunng gas-discharge lamps in f: scal 1992. BSHG contin-g ,y< with Mitsubishi Electnc ut.1 to pursue its poncy of [~"'% m/% Corporaton. Osram GmbH creating innovative products M .\\. ~I 1 1l 1 '* h recorded net income of meetog environmental f , T DM87 0991: DMB3) mdkon teamrements. In addition. the iy t t Y((], in the year under review. compny fu-ther expanded 3 / i T~ / its sales and customer-l 2 Osram has concluoed an service networks in Germany p. ? . s 6. s ,f.. j. 8 agreement w:th GTE and abroad in September p - .g Corporation. Stamford. 1992. BSHG and Maytag mm l c s l Connecticut, to acquite its Corporation, Newton. Iowa. I Following its imme-bgbitng business in the U.S concluced an agreement to This fuity automatic I diete success in the

• • • M"8'"** "*

and Canada. Providing that cooperate in selected from the 10 line uses mdustrial sector, our Dulux line of energy. the ant l trust authorrties business sectors state-of-the-art [ l efficient lamps has approve this acquisitron, rotors and control Osram wd: take over Notwithstanding the persis-f ,],"I"* ',* ' ,n bso e ce ante private I households. Here Sylvania, which has a sales tent weakness of the giobal minimum. o_ volume of some DM2 bdhon economy. BSHG anticipates [ lamps a e e plant in Augsburg. anc is the second-largest sales of DM7.0 beon in j lamp manu'acturer in North f:sca11992, the growth America This move wih achieved is largely due to assure Osram a substant;a! ma4 et position in North { Amenca and make the com- [ pany one of the world's three

• • tct mc!uaed ee s+mem

[ leading lamp producers. ecmce ces* red fwea: nmements 25

ho @ym 3 *;%pwnsa M %w Siemens worldw.de i m _1? K j i.- q,., $k Qp.Sg.($ s va.g..e v*- L, fji' 5 ~~,r w ,q .y The slugg:Sh economy and We received major orders in Ponugal, our Medical i .g ~ + the weak U S donar ; eft their from the teiecommunica-Engineenng Group was espe-h ;.m_ toll on our woridwide tions, energy and transporta-c;a!!v successf u! in expand:ng D% business Internat'onal orders t;on sectors, in partacular

ts market pos: ton. An order h D ~^>

rema.ned flat, at DM45.2 from the Un:ted Kingdom, was received to supply three h-[ bdhon, accountng for 53% the Netherlands, Switzerland rad.aton therapy centers in 4 of Siemens' totat business. and Greece. Usbon, Porto and Coimbra. Sales outside Germany rose ( s;x percent to DM42 0 b:liion. S emens a!so made sohd Eastern Europe 6 progress in the Ibenan We are making concerted /2 Europe market We suophed the efforts to lay a solid founda-r Desp:te the recess #cnary system for Expo '92 in the East European markets. y/L r" Europe is our home market.

SDN d,gita! commun;caton t.on for future business in g [T environment. pamcularly in Sevd;e. In addlion, we S1emens is atready playing gg

fygg/*p Scandinavia. the Unced served as head of a consor-a significant role in ,7 O Kingdom and France, we trum for Spain's first modemiz:ng the region's contnued to sohd fy our high-speed radroad hne

nfrastructure.

/ European manet pos:t!on. between Maand and Sevme Europe accoums for 53% of inaugurated for tne opening in the Commonwea!th of Stemens' intemationa: sa!es. of Expo '92 in Apni Our indepenaent States, our or DM22 5 0991: DM218) Transportaton Systems Pubhc Communicaton .S bLon: the reg:on inc:uoes G'oup began detvery of Networks. Power Generaton, eignt of our ten largest 75 high-SDeed locomotves Medica! Eng:neenng and i nationai markeis outstde ordered for the Spanish ran-Automation Groups are 'E Germany road nenvork. A consort um part:cipatng in a number of of S.emens and Framatome local joint ventures We have 7 y t S A rece ved a contract for made our commitment to the tweNe steam generato's to reg:on, fu9y aware that be instaned in four biccts more extensive business

/

at the Asco and Almaraz opportun:tes wdl take some o. ( noc: ear power piants. tme to oevelop y y Sales by region DrJ 78 s b'inon 4% Omer regions 3% Lahn Ameca / 5-.x -- 8% A9a The newly formed -v 10% No1h Ame ca / b Siemens industrial i Automation, Inc. { 7s% E umpe 145% Germany) strengthens our g, presence in the U.S. e' in Johnson City. l Tennessee, we {, I produce program-A mable controllers for x 3997 North American and global markets. 26

e,, w - --. y (O p Q:a 3 4: Y~.R A - u..+. w m. w s. .9 ,7 J. % ' J, 3,. ,......s j,. v. 4' f:,-t -., c at V..if '.c-5 " + % " M]\\ eT -x-Jg;;,gn: c Our systems are ,s 7,* .9y ys.; +. ,.' W%% designed to with- ? yy Uy(%%N o. C. . + ~ g stand the most d J kD O 1 adverse climatic .kMbX k,< 7 ,d. ',k,,. S " conditions. For example, our radio .g < ~. 4. -.4., eelay equipment. 1 d-s ^j 6-proven in over sixty 3' [W,- / e ,./ -h, ', .f countries, operates x V f ault-free in ' -J /.. - / ~ dh. Greenlands glacial terrain. s a o -..-g .T

o-JJ f.

Y,,.

1. y^

nz Power Generation (KWU)

ncreased its sales even more sharpfy. The acauts: tion

/ of A-C Equ pment Sereces. Inc., MJwaukee. Wisconsin.

a. _

paved the way for inaugu- ~ retng our assemb!y of gas turb:nes in the U S. Our four U.S. compan'es involved in ~ m.g power plant business were 4'i-combined to form Slemens Power Corporation on October 1,1932. 4 Pend;ng a,, proval by the U S. antitrust authontes, our subsid ary Osram wiii acquire v Sylvania. tne North Amencan lamp manufactyer, from GTE Corporaton. Th s move wiu U North America inte est in ROLM has Acqu;s: !on of the program-substantiany strec.gtnen .. '. 'New orders et our U.S stenginened our pos. ton mabie cont'ocer ousiness our long-term compettve F ~- compames rose SS to 55 2 by giving us an integrated from Texas instruments. posit +on in tre regton. g 'y \\ beon, and sa'es accancea concept for attract.ng new Da"as. Texas, combned with nine percent to S4 7 bAon bus; ness in the hig% the mteg aton of our erstng Looi:ng ahead. we are Abhougn pa-t of inese compet tive sector c' pubitc eutomat:on technology bus:- p epanng for the North Q increases is aT.bJib6e to s/ 'hng teChnD oge we ness mio $+ mens Industnal Amentan Free Trade cut acou soon of rew acbeved a s.gm5 cant step Automaton have effecive'y Ag'eement NAFTAL ^ compan:es, our groen rate forwaro by w:nnog Be boosted our bus; ness in this now aws tng rat,ficat:on by i$ in the U S nou.d have been South as a customer segment We a e atso not;ng Canada, the U S and Mecco l we" above ave

• age ecen ina:a: benef,ts f rom ite y

wahout in.s f acto-Our U S busmess ts pomaNv merge of our : ansportation supoorted by tuo !vge systems acta des mio Despae ims gromh eammgs compames. S'emens Meice' 5:emens Tra-sportaten remacea unsatsf acory Co porat,on and Semens Systems. Inc. mmmgion. A'inaugn :ne Pnvate Energy & Automaton. N De'awa e. Ths company Commumcat.on Systems neaW doub;ed 4ts ordets in N G oup reported a deCne m fsca:1992 bushess due to ine f aggmg U S economy. of assump-t:on of !3M'S temBF mg 0

Siemens worldwide Asia E!ectronics Groups wdl equto Latin America Continuing reinforcement We a'e mahng sign:ficant Macao's rsew international Latin Amenca, wch the of international business progress in Asa The Pubhc airport with airfield bghting, exception of Brazil, appears Despite instabikty and poht-Con.munication Networks automatea building, and air to be poised for econom!c ital uncertainties affecting Grcup was recently awa ded traffic control systems. recovery as measures to the global economy tocay, a number of major orders, strengthen market forces we will continue to pursue and our EWSD d;gtta; in a move to expand our beg:n to take effect. The our g'owth-oriented Strategy switching system has been general business in Asia we Pubhc Communication in international maiets. With setected by seven Southeast are explonng possibikties of Networks Group secured 160.000 employees in more Asian countries to date. We renforcing our local develop-major orders from povate than 150 countnes. and 240 plan to doub!e our current ment and prodJctron base operating Comp 30tes in production facilities outside 15% regiona! maiet sha'e in The volume cf new orders in Argent:na; the Transportation Germany, Siemens will pubLc sWttching systems in the region, currently at DM7 Systems Group is build;ng further secure and expand the next few years bdhon, represents more than hght-ral systems in its worldwide presence. eight percent of our world Guada:agra. Mexico, and Power Generation iAWU) total We anticipate rapid Medelkn. Colombia; and rece ved a contract from growth in this mark et. KWU is partic cating in the Taiwan Power Company, construction of hydroelecinc Ta:pei. for a tumiey dekvery power plants in Chile and of an unfired combined-cycte Meuco Our cautious opti-(GUD) power p: ant The mrsm regarding the reg,on's hdustna! a*id Bulding f uture seems justif.ed by the Systems and the Defense increased povatization of punhc compantes and by the creation of cross-border economic areas. ...._-w. Siemens worldwide . J " (. d.,3 g.rf t,. e ~ w........:.,. 8

9... p.s.

._./ ., ~. w ~ m a. - x,. z,..., - ,~ ~ .:. w. .J, ,. 7,. .../ _ 3'y ./, l

~r

.. w .. 'e p 1 . Smes . Prettan

Research and development Key components for new accounted for onlytwo {7, {g systems and products a'e a percent down from three oecwve f actor n determ:n:ng Dercent last year iong-te'm business success VWn this n mind i:s our Some of the results of our goal as a company at the R&D work in the year under lead.ng eoge of tecnnology, revfew a'e described below to ensure eady access to nnovaSe nardaare and Making key components 3 software more competitive Thanks to our basic research i Our comprehens se espert:se into p'ocesses that take ~ has made us a va:ueo partner p: ace in the electr<c a'c when i in coope'atve ventu'es !arge currents are swached inroughout the world. One o+f. w e hase substantaHy partcu:any nctabie Ulusvaton reduced the s.ze of our of tNs e our developn ent vacuum circu:t breakers. work on technoiocy for As a resu't our Power futa e generations of Transmission and D.str.bution r r tremory chts The ag'ee-Group leeched a como'etely ~ D ments w th iEM to jomt'y new type of mactenance-cevelop a 64-megab:t ch p f'ee vacuum switchgear at wou:d not have been

ne Hanover Fa:t '92 We pass b=e vethout the valuable expect tNs proouct to be a esperience gamed f rom oJr major Success on the mad et

' Vega Prorect" for one-and fou'megab.t chcs. We nave Precise regulation despite recent'y intens.f red our imprecise instructions cooperiton by expand ng it M :s imposs:b e for conven-Telephoning worldwide By processing m'9"'6"'5'"""C' to a tr part.te effort w th tiona' heatng controis to in your native language tomography images, IBM and Tesh.ca to ceteiop imo'ement the instruct.on In a jomt development our researchers in the new genereton of "Fd Be it a htt'e bit warmer. pro;ect w:th the Carneg e Princeton. New 256-megab i chts utir:ng However, the methods Menon Universcy in ,i',',5'f;**," 9,i,"n']te 0 2b-m:cron structures provideo by furry log,c can P;ttsburgh, the Unwers:ty of moving images of ventricles in the Our access to the base cany out imp'ec>se instruc-Kadstuhe, and the Advanced (,"c",h',*",'n use technoiogy reou reo for key t.ons of ms kind Tooay. Tetecommuncatons nc iog:C cevices s thereby sDecial microprocessors for Research Insttute this method to examine the heart gua' anteed ac!i beyond f uzzy logc apphcatons and internationa! rn Kyoto, we the year 2000 the associated so'tware are workng on a mu:::p!e $etect pathoIog c"a$ packages a'e eValabte f or our language interpretation changes without h8ving i oPen the Approomatety 43,000 S matc S5 and Te!eperm M prog'am for Enohsh, German thorax. employees woi in research automaton systems. Typ;ca, and Japanese, prowding and deveiopment (R&Di. apphcatons are in nontnear simunaneous online interpre-inc:udtng 13200 outstde processes, which are vmaN 1;ng for each language combr-Ge' maw R&D spend ng ,mposs<b;e to oesenbe in naton. On tNs pro;ect came to DMS 4 0991 DM7 9) ngorous mainematca! temis. Siemens :s responsib:e for behon or 11% of sa es Of yet occur when controlhng develop ng the speecn th s amount appreumate'v pWstc qect.on moid.ng recognition and syrthc s:s. l 00% was invested by machmes or chemcai kngsstc ana ysis and the the Pubbc Commgqcabon p'ocesSes nie'D'etaton of Gerrnan NP!Norts. Automaton Semconductors. and Med;ca4 Engmeenng G'oups and by SNL Govemment suopoq 29

Research Productivity and and development environmental protection '"vNT Research and oevelopment actvites are one means {j of ensunng the future compet'tive strength of our Company But a competmve edge cannot be achieved so!e!y through supenor tech-no'ogy and high product quahty. Just as important rs %,N ' jg i e ". the need to d: rect contened ettort towara improving our ~s f / eam:ngs pos: tion Moreover, s 1 the need to protect the enn ronment a!so plays a vitat role k-in determining business s T4 success This is why we are mak ing every effort to ensure the enaonmenta! compatr bMy of our products and manuf actunng processes nrw and for the future. Quality and productivity via shorter learning cycles To imp"ove our overa!! performance, we study the entire value-added cha'n from product conception to product recychng The most Important cr4enon is the durabon of E:ach indedual process step. If any one step Future data networks I. earning with used to develop a neural-15 opt:m?ed to accelerate [;,*["S*",*[9",*[' neural networks based financ,al system wh4ch the overaH process, ccsis p; at onceptionally high Adap* Ve systems are V: ai can for example, fofecast a'e FedJCed Shorter leammg speeds. A few years for apphtator s such as voice changes in interest and cyc es can a:so lead to

• 8,$,*d that the and image process:ng, or for exchange rates This sys+em f urther improvements in required switching use in d ag,ostc systems

,s a9eady bemg maueted auamy speeds could b* The 6 ey componen's n inE se by SN! attained only with relatively expensive 8%s a'e neu'B' net /vois we took in:s approach in semiconductors such capab!e cf p#ocessing our rely factory in Berkn-es made of gallium and ComDC ng incomp!Ete Mahendorf. for example, arsenide. However, working in con bnd conpao:ctory data at Ve'v where we reargan2ed junction with Ruhr hign e, peed We are working producbon accord ng to on these adaptive systeTs CLsiomer 9'oups and formed engineers have in numerous a>eas of apphCa-three autonomous un:Is f or developed sibcon t on @u'a methods have au*,omcDve, telecommunica-been successMy tMo tions and heavy-duty re:ays. tcurate ns it over 1D gigabits in f eids such as signa! and We t'ans'ened respons:bity per second inege n'oceSsng fo' medca: for deceiopment, manU ac-4 svstenis These metnoos tunng. log sbc5 and CcSt have p' oven to be eQJaby acCounUng I'om Cent,8' succP4i %* rnZng the depa#!ments to smaU tsams con"o. of mjti aw:si Tobo* cor:s sDng oi physicists, amM Ihey hav& a so been eng. nee's and commercial 30

sta" who rate d 'ect contact CFC substitute wch CU5!ome's U.! ma'eiy A sDeC!al proteoute Oevei-G k

he prodJct oeveioDmen' oped m a pdc 1 CStalation and 4ad Un'es e : t,e cu4 a: of evend Circa :s P:a,t by about '04 en Knich uses orange-peei stract estead of cn!cro-integrated fiaoroca' bons (CFCs) for environmental protection deansing elect ome assem-

._i_ 5:emens /-G curre cly DLes TNs nea soYent 3g scenas atouna DM250 c:eanses more eff c.ent'y. J moon annua 9v on e'vro" can be recyDed and uses merta! pro;ecton Our 55; ess nnsing water subs a anes and assoc:a:ea Despie the h gh cap tai rput, s' compames m Germany Ws new tec%que wa ano :nrougnou: the wond show a pos t4e re:fn m a'so maie aporopr ate irvest-ine;ongrun ments in tms fie:d Mo'e inan 300 $ emens emp;ovees a'e From single steps to

nw o!ved m sod and water comprehensive solutions protec' on. ampoMon, and Enwonmen:a p'orect on waste reanagement pQects measu'eS are esDecia"y j!

Novei solu'Jons a'e C':en ethc ent when ciOse'y I \\; reQu red 'f procaction r"eshed Votn a Compter e,- 'i processes and p'odJC:s are sTe ConCeot One e, amp <e to mE5 e bes: ase Of r atu'ai !s n2.ste A ate! PJ'i ; Cation at easy upg'ading. The ongmat The environmentally f resoftes wNe taeng our pram :n Speyer, Germany housag keyboard and power ',$,d*D,5',# m'nima: cvonm cal By t'estng mdv duai eff!uen: un't can be reiamed and used demands precise

mcact. Longs rm proa'ams f

cas sepa'a:e'y. vastes ior many mo'e years monitoring of the purincation process.

r&nge i#om cevtiopng sa,er can be eMracted dur.ng The photo shows c!eawng moce sses m manufacarmg Fohowng Telemetry guards waste water t>eing e ec 'omcs manf actunna spec-at t ea: ment 'hese the environment inspected st our plant m Karlsruhe, to C! eat:ng ewo,r en:a'n' y me:ena s are rerveted in:o To orotect tne environment ce, .ny. acceptao;e p,asScs and

te production process one must De able to ident + v packagog, to apptymg mo'e Tnts p ocec/e co^ serves pctent:a! hazards in advance ecciogca?v sens : ve tesources. red;ces cater Siemens sapphes complete me nods of a sman ng corSJmpDon by h3:f and Cuts systems f or Ints pu! Pose, c:3 eampment Co porate waste by at ieast one-thad indac'ng some portab:e c

enconmerta' votecton is systerrs that a'e 2nua ed mreef oic proc; cts, mana-Product longevity in coma ners Ldeo to auto-f actanng p'ocesses and Ow:ng to rapid advances mate teteme:'y netwo+s techno og'ca' sobbons m microeiectronics. many for remote monconng. they must be ecciogt Py scand. p'odaMs a'e outdatea w thin record a:r and water QJabty a fEu YEs's of being and pok.fant ! eve!s. Ibese laJnched However,1echnica' sistems gve government obsolescence is usuaDy agent.E's, Cont'o! Cen e's resinCled to 4 ey Compo-and p'Nate Compa,,es ean,d nents. if We ces'gn f uif e acct ss to v:ta' e.neonmer.ta! 'epistemeri Cf i ey oa'a W tn a wide geog'achac Co 1ponents m'o prodJcts, ioc!P'mt

heteEJ: Is a much longer seroCe te Tt s advantage a

rS etemDZed Dy ou' personal compJ e% in W NCh sC.' E%Dandabl* p f acd tates 31

Commentary and analysis r-n, q -( q cs r c. a n e p r. n d b. u OLA D i i O(v cfg m 3 p % W~ v O Fourteen companies in the tne growth in sales resutting Net income new German federal states from a smaiier increase in were inc'uded in the consoh-inventones compared to 'l dated financial statements f scal 1991. for tne first timeinf:sca!1992. ROLM Company, Norwa% The cost structure rema:ned 8 Connecticut. whrch had virtually unchanged As in i hharehteers' samty previously been accounted f: scal 1991, the two largest 6 for unoer the eautty method. cost categones, matenais l has been f u!!y included in the and personnel, accounted for 4 consolidated financial state-84% of totai operating perfor-2 ments as of Ju!y 1,1992. after mance. Depreciation and ' 58**

t became wholly-owned by amortization totaied DM4 6 g

Sternens Moreover.the (1991: DM4 4) bdhon. In 1988 1989 1990 1991 1992 rema ning outstand;ng shares contrast to the prior year, a of Siemens Nacorf net income from investment lniormationssysteme AG in other compan,es was Shareholders' equity and debt (SN!). Paderbom. were recorded f or f! scal 1992. M teons of DM: accuired dunng f;sca! 1992, in f tsca: 1991, net income 24 this company had aveady ' rom investment in other been included in last year's companies had been 'g consoldated f;nancial state-adversely affected by higher 26 ments Goode.dl in the aggre-losses absorbed from east Shareholders' eaury gate amount of DM19 bdhon. German companses. 12 which resulted trom the g in:tia! conschdation of equ,ty Interest income continued to interests in subsid anes and be considerab'y higher than .1_ associated companies, was interest expense Totakng

U"A offset aga:nst retained DM19 bdhort net interest g

e mngs mco e te a at last 9001988 1989 1990 1991 m2 year s level. Overai!. interest The changes in the number income dechned due to the of conschdated companies signif4 cant reduction in long-Cap <tal spending and cash flow drd not have a matena! effect term interest-beanna b bmens of DM) on Siemens' overal! position. customer receivabie's, in 10 _ sp:te of higher income from increase in net income the larger secunties portfoho. 8 total capita!!ipend'n2_... Net sates increased DM5 5 At the same time, replace- . b._ Ddhon. or cight percer;t to ment of higheNnterest debt 6 N / DM78 5 b;Ihon in f:sta! 1992. reduced interest expense ]((# ! C*S" '** Total operating perf ormance. i e, the sum of net sa:es. Mcome before income taxes

• • peno u es.

incre se in invent nes, and amounted to DM3.2 (1991-2 add 4tions to se!f-produced DM3 4i bilhon hcome tax plant and equipment rose expense decl ned as a result g 1988 1989 1933 1991 1992 bdhon, lagpng shghdy behind Germany and at suosid: anes

abroad The lower income tax 1992/2002 wdh warrants Cao.ta's'oci and aod. dona' by the 8% U.S. co"at bond rate was a:so brought about in June 1932 p"ocuced a cash pa dyn caoda! rose by DM2 5 esue was used to replace by reduced losses of several surpbs at the close of the buon due to the exeretse some of the higher-nterest subsdanes. notab!v SN! f: scal yeat baurd assets of optons nghts under the borrowings Just under one-After income taxes of DM12 increased by DM1.1 buon. warrants attached to the ha f of tota! debt mest of buon net income to ated 1986'2001 cero coupon wh,ch is incuNed outside DV1,955 meon n:ne Well-balanced assets bonds, the issuance of new Germany as a hedge against percent more than a year and capital structure shares of stock as a reso:t foreign exchange nsks, is earher Wnde the return on The Company's tota: assets of the settlement offered to denominated in U S. dollars. sales rema:ned uncnanged grew to DM718 b%cn, a former shareho!cers of SNI. Twcethrros of total debt are ( at 2 5%. retum on sha e-DM2.3 boon increase over and the inclusion of the value due a'ter one yeat At l holders' eaucy improved the pnor year. Th:s growth of the warrants attached to September 30.1992. debt moderatety to 10 DE was essendaPy produced by the 1992/2002 bond issue represented only 22% 0991: the expanded volume of Goodwdi in the amount of 25%) of shareholders' eau:ty. Cash flow remains high business. DM19 buon, which resu!ted Cash fbw, i e, the sum of f rom ine inmal consohdeton Tnis low nebt level and net ncome o!us deprec;ation, Total m'ang.bies. f aed assets of eaudy inte'ests in other the high proporbon of hquid amortcaton, wnte-downs and rvestments rose to compames was offset assets demonstrate the and the increase in medium-DM20 9 buon and now agamst rete:ned eamngs. financ:a! strength of the and long-term accrued account for 29% (1991: 28 0 habdtes, reached DM6 9 of the balance sheet tota!, (1991: DMG 6; buon, repre-97% of these assets is Balance sheet structure 6n tes of Da senDng 8 8% (1991 9 30 covered by sha eholders' 71 8 71 8 of net sa!es equity The increase in en e yes inventones to DM26 3 buon n6 e6 Due to the sharp nse !n the relates predominantly to the sapess.g acau:ston of investments. systems busmess At 76% M W Nes. M9 'M3 WT cap ta! spend:ng. at DM8 6 (1991: 670, a considerably jyQ ' 63 'i 16 0 bdhon, was considerably h:gher pe centage of 'W inyymmes 33 higher than in f; scal 1991. At inventones was itnanced by DM5 6 (1991 DM5 0) bAon. advances received from expend;tures for property. customers OM20 0 b$on) RecewaNes p; ant and eautpment sign:fr -s b result, net rnventones %7 cant'y exceeded depreciaton after deduction of advances s"24 9 Accrued %0 habees fuPy funded by cash fion. Reflectng the expanded se:urmes. -[' 4.s, L and amort 2adon. They were dechned by DM2 0 b&on t e, by internaify generated volume of business. receiv. ed O gg g g $g fJnds ables 10Creesed to DM24 9 M 31 m m2 m m2 buon. Investments in Togetner wch cash fion. ma4 etable secundes and the strong DM3 4 buon cash other bauid assets rose to Shareholders' eaudy was Comoany. In spde of the infiows provided by opera-DM19 7 buon increased by DM17 boon to sign 6 cant grow h in consoir tions, which re: ate a;most a totai of DM20 3 bAon and dated assets in recent years, excbs!vely to advances bouid assets a e mvested now finances 28% (1991. Our ba:ance sheet has a sohd receved from customers, pnman!y in f aed-tncome 27M of conschaated assets structure, by both German financed a!! capita) spend ng, secuntes and notes of top-and intematiora! standsds. as weH as most of the grade issuers, most of them As in f: scal 1991, accrued current asset reasements lover 60%) are cenommated habilmes, at DM35 0 b4on m German marts Of the again accounted for 49% of The proceeds from the totat port obo. DM1.9 buon tota! sha'ehobers' ecucy f exerece of stock warrants wm mature danng f:sca: 1993 andhabdmes attached to the 1986/2001 and DM18 boon n the zero coupon bancs and foHowing yeat Deven Debt ternamed at the pnar the issJance of the new percent of the investments year's level of DM4 5 boon 8% U S. dohar bonds of in mad etable secant:es because the cash prooded Consists of stock cftrLfcates. 33

Consolidated financial statements eyeslo Siemens woddwide consolidated balance sheet Assets Now 1992 1991 Intangibles, fixed assets and investments 'ntangue as. sets. (Si 435 275 Propew p: art and ea.npment (5) At cost 46.762 43,66D L ess accumu:ated cep ectaiton (23 960) (27.206r 17.802 16.454 investments !6) 2,657 2.660 20.894 19.389 Current assets hveMones (7) 26.275 24.774 Le:,s advantes recewed from customers. 0 9.9931 0 6.535) 6.282 8.239 Recevables and mtstei aneous assets (Si Accounts recewab e -trade 14A59 14.387 0:Per recevab'es ana m:scel:aneous assets 10.445 8.818 24.934 23.205 Masetabie secur:::es and notes (9) 16.600 15.088 Ot'eriqud assets 3 077 3.478 50.863 50.010 Prepaid expenses 43 69 l Total assets 71,800' 69A68 t Shareholders' equity and liabilities Note 1992 1991 Shareholders' equity Cep: tai stoct of Stemens AG 00) Common stxi notal number of votes 55 025162; 2.752 2.593 P:ctened stoca acts number of votes 923.C34! 46 46 2.798 2.639 Acit:ana: pardan cap;ta: 00) 5 593 6.244 Retained eamm;s 0 11 6.99i 7,735 U' appropnated consS'cated net ncome 727 686 Mmnty mterests (1 21 1.235 1.345 20.341 18.649 Accrued liabilities 03) Person pians and s:mEar comm:t vients 14.761 13.957 Other accrued Labetes 20.220 20.137 34.981 34.094 Debt 04) 4.531 4.575 Other liabilities 04) Accor.ts payab:e - t'aoe 4.854 4.912 Add.bonal Wd: tees 6.675 6 B51 11,529 11.763 Deferred income. 418 387 f Total shareholders' equity and liabilities ' 71.800 ' 69,4GB

4 Consolidated financialstatements MOOgr*"*"'"" Siemens worldwide consolidated Statement of income Note 1992 1991 Net sales (15) 78,509 73.008 Change in inventones ana addmons to self-pmduced plant and ecurpment (16) 3.204 3.300 Total operating performance. 81.713 76.308 Other ope *at,ng income (17) 5.326 5.089 Cost of matena:s (18) i35.450) (32.360) Personne1 costs n 9) (33.873) (31.817) Deprec:at.on and amortsat,on (4.613) (4 400: Other operating e,penses (20) (11.826) (11.107) Net income f rom investment in other compan,es (21) 56 (153) Net interest income (22) 1.864 1.859 income before income taxes. 3.197 3.419 income taxes (23) (1.242) 11.627) Net income - 1,955 -

1,792.

Appropriation of net income 1992 1931 Net income 1.955 1.792 tananty interests in net sncome of consolidated subsdanes (203) (155) tAno cy mterests n net loss of consohoated sutsdanes 43 211 Baiance brought forwa a from pnor year 6 Trans*ers to retarned eem:ngs (1.074) (1.162) v. .. n t- ~ 727 686 ] t Unappropriated consoudated netincome idividend of Siemens AG) 35

5 Consolidated financial statements

= " A " r

• S* = " 33 Siemens worldwide consolidated statement of changes in financial position t

1992 1991 Cash flow Net income 1.955 1.792 Depreciabon, amor 2ation and wnte-couns 4.735 4.440 herease in med:um-and long-term accrued I abmties 189 565 6.679 6.797 Funds invested in operating assets Capta! er.pendaxes for property piant and eautpmem (5.5601 (5.003) Expenocu es for accu:sition of investments (3.014) (592) r Increase in inventones (910) (2.042) Increase in recevabies (2.121) (2.648) Chance in rnrsce :aneous ba:ance sheet stems. 134 816 (11.471s (9.469) Financing from operations inerease in advances retewed from customers 3.247 1.808 increase in other habiktres 109 325 3.356 2.133 Other financing activities increase in paidsn cap ta! 2,505 351 Peduction cf debt. (158) (593) 2.347 (242) ! Change in liquid assets ' 1,111 (78 inc!uded therein Maietable secumies and notes, 1,512 (598) Other havid assets. (401) (183) e m

. Liquid assets at September 30 -

19,677 18,566 36

Consolidated financial statements Notes (1) Principles of consolidation Accrua:s are estabkshed to cover emoend.ng !csses from The wonamde conschdatedimancia! statemens inc!uae heog>ng ope'atons. wrtuaPy aM ine domestic (German and foreign suhsdanes in addmon to Siemens AG, 67(1991 57! subsdanes in Germany In the consc dated f,nanc,a! statements, intang:bie assets, and 224 M991: 231) subsdanes in forergn countnes have been property, pbnt and equ!Prnent, and investment in subsid. anes conschdated 320 t;931' 306) compames that are e ther inactwe and other Companies of ou' foreign subsdanes are translated at or have a low businet s volume a'e not included in the consoh-histonca exchange rates The;r other assets and Labihties are dated financ:a! statemev. because they have Lit!e or no sigmf-translated at the year-end current rate the average of the buying icance for the presentcon of Siemens' overa4 posmon ineer and selhng ratest sales accourt for less than three percent of consohdated sales. in add ton. we have omted ret rement benet:t corporat:ons. Revenues and expenses included in the statement of income whose assets are ass gned for a specAc purpose, as wen as are translated at average rates f or the year. except f or deprec:a-those compames whose shares we*e acqueed exclus:vely for tron, amortcaton and wnte-cowns on intang bies, faed assets and investments, which a'e translated at histoncal rates. investment purposes investments in 36 M 991. 50) associated compan>es and a two When our subsdenes' hnancial statements s'e translated into subsdanes which we had a! ready reco'ded at our proport.onate German marks. tne resutting balance is recoroea in one of two interest in the;r net worth in f. stat 1991, have been accounted ways in accordance with it e convention of conservatism. A net ior using the eau:ty metnoa An aad tiona! 137 0 991.131) other trans:aton loss,s charoed against earnings, whde a net transia-assoc att d compantes were not accounted for in this manner tion gain is off set by an accrual f or exchange nsks, which is used beCaJse of inOJ reta!we immatenalty to Cover Uanslation ICsses in subsequent years. The pnnctat subsdanes and assoc:ated companies are hsted (3) Principles of accounting an d valuation n pages 46 and 47, includ:n;; thee sa:es. snareho:ders' enty The financ:a! statements of S<emer s AG and its comeste and s and eamint;s A complete hst of our ho!d:ngs :s being f aed W.th f oreign subsdanes are preparea according to undorm pnncip'es the Commercia! Reg stnes of the Berkn-Chancitenburg and of accountng and valuaton To ensure un,formity of va'uation Munich Drstnct Courts wdhin the woridade Siemens conschdated f:nancia! state-ments, the tadceductbie valuation aa;ustments and spet.at in consondatng ou* investment in subsdanes, we off set the reserves int'uded m the ind,vidua! financia! statements of the purchase once against the value cf Stemens' interests in the comestc companies have been reversed in the conschdated shareho'ders' equcy of the conschdated subsdanes at the trme f;nancial statements in accordance with h17 of the German of tnea acquismon or in tal conschdation Any resu!tng goodwa DM Opening Balonce Sheet Act (DMBdG), the special reserves is offset agatnst retamed camings The same pnncipies are in the ind vidua! financial statements of the companies in the apphed n conschdatng comoames under the eaucy method. new German federa! states have been offset aga:nst the special Our share in the net income of the compan.es accounted for los3 acCoJnts and BhoCated to the retained Eamings of the under i+rs method is shown in the statement of income undei Woriowide consohdated f!nancial statements. Wuations in the net income from mestment in other companies. statements of companies accounted for under the eautty method that deviate from these un+f arm pnnctpies have not in the consohdated financial statements, we ehm:nate intercom-been adjusted on the basis of immatenahty. pany p<of ts as we!! as sales. expenses and income w. thin the S,emens or gancaton and au receivabies and hab%es between insof ar as intang b e assets have been acquired ior consider-conschaated compantes S:nte the intercompany protis of the aton, they are camed at acquisition cost and are amortaed up to compan,es accountea for under the eaucy me;hoa are insign a maximum of f ve years. Any goodwdl resuttng trom conschda-cant they are not eliminated lmenm statements are used for ton is offset against retawned eamings. conschdmed subsdanes whose fiscal year d:ffers from that of $+emens AG. Propeny, plant and ecutpment is recorded at acqu;smon or producton cost, less schedulea depreciation Depreciaton is (2) Foreign currency translation taien or resident a! office and f actory buhdtngs for a maximum !n the mdedua! hnancial statements. we t'ansiate receivab;es of 50 years. on technical equipnnent and machmery for a and Labihties in f oreign curreTy at the rate existing at the trans-maximum of 10 yea's. and on other eauipment and piant and accon cate or the rate at the balance sheet date, whichever 's office equ:pment, in generai, over fme yea's Eouipment leased

owe' When f ore

99 Cunency recevables and habihbes of out to customers :s depreC: Bled accord,ng to the usef ut i ves of tne subsdanes outs.de Ge'many have been nedged by forward proauct groups in the Federa Rerubhc of Germany, we use the exchange transochons, they are valued at the Corresponding deChn!ng balance method for the depreClaton of pioperty. piant

~ hedging rate and equipment to the extent possib!e under the tax laws, at the 37

i I L Consolidated financial statements 1 L Notes i l l 1 l l maximum ahowable rates, switching to the straight-line method histoncal exchange rates. Other assets and liabikties are stated as soon as the latter results in higher depreciation. Additional at their current value or replacement cost and translated at the I depreciation is taken where a wnte-down in book value is year-end current rate fthe average of the buying and selbng i deemed necessay Minor fixed assets are fully expensed in the ratesk The difference between this amount and the lower year of acquisition. acquisition or production cost is, as a rule, large!y neutralized by translation at the prevaihng year-end current rate. j Sign:ficant investments in associated corr;panies are accounted for using the equity method, thereby reflecting our propor-For improved clanty of the consolidated financial statements, tionate interest in tneir net wortk interests in nonconschdated the inflationary components contained within interest income - { subsidianes and other associated and related companies are texpense) and withinioreign exchange gains (losses) have been j vaived at the lower of cost or market. Loans made as invest-ehmintied from the financial statements of our subsidianes in j ments and bearing nominal or no interest are stated at their countries with highly inflationary economies and reclassrhed to discounted cash value. Other operating expenses. Materials, supphes, merchand:se ior Tesde. and advances to Certain items on the consolidated balance sheet and in the supphers are carried in inventories at the lower of cost or conschdated statement of income have been combined to 4 market. Work in process and finished products are stated at provide greater clanty. These rtems are shown separately in production cost. Production cost includes matenals, direct labor the Notes to consokdated financia! statements (Notest and production overnead which must be capitahzed in accord-ance with the provisions of the German tax laws The cost of The consolidated financial statements are denominated in unbW!ed contracts b valued according to the same principles. milhons of German marks (DMh l We use the LIFO method for certain meta!s. Purchases from i consohdated companies are stated in inventory according to the (4) Acquisition of subsidiaries j uniform capitahzahon pohcy required by the German Commer-and associated companies j cial Code. A reasonable and sufficient allowance is made for During the 1992 fiscal year, Siemens AG increased its interest in i cechnes in va!ue due to slow-moving items, techn!ca: obsoles-the shareholders' equity of Siemens Nixdori informations-j eence and reouctions in f air value. systeme AG (SNil Paderbom, to 100% l Rece!vables and miscehaneous assets are camed at the lower By September 30,1991. Siemens AG had acquired 78% of the of cost or market Accounts receivable due after one year which shareholders' equity of SNL Following the purchase of add:tional bear nominal or no interest have been discounted shares of SNI under a tender offer for pubhcly held outstanding shares and on the basis of previously made agreements with the Marketable secunties and notes are stated at the lower of cost Nixdorf f amily and f amily< elated trusts Siemens AG held more or market in Germany, lower valuations are retained to tne than 95% of the cap:tal stock of SNI at the beginning of 1992. extent permissible under the tax laws. The Annual Shareholders' Meeting of SNI on March 5,1992 resolved that the Company be integrated into Siemens AG Accrued liabihties include reasonable and sufficient allowance under 5320, par.1 of the German Stock Corporation Act Ths for all perceivable risks. In Germany, the accruals for pension resolution was approved by the Annua! Shareholders' Meeting plans are set uo according to actuanal pnnciples, using the of Siemens AG on March 12,1992. The integration was method of computation provided for in the German income Tax recoroed in the Commercial Registry of the Paderbom District Act. Foreign subsid; anes estabhsh accruais for pension phns, as Court on April 15.1992 and. therecy, became legally effective. reautred, accordsng to comparabie pnociples. Poi suant to 5320, par. 4 of the German Stock Corporation Act. all Defened taxes are recorded following the habihty method. shares net yet held by Siemens AG passed to Siemens AG with These taxes are provioed for the temporary differences the recording in the register. Pursuant to 5320, par. 5 of the' between the financia! reporting basis and the tax basis of tne German Stock Corporation Act, Siemens AG has undertaken to j conschdated assets and I.abihties. Deferred assets and habihties offer SNI shareholders who did not tender their shares a settle-a'e netted, with any resulting cred,1 balance being recorded as ment of one share of common stock of Siemens AG with a par an accrual for deferred taxes. A net deferred tax receivable value of DM50 in exchange for six shares of icommon or balance will be recorded only si 11 is denved from conschdation preferred) stock of SNI, each witn a par value of DM50, holdings entnes. of less than six shares will receive cash in the amount of DM156.50 per share ci SNL The exchange ratio is based on an intangibles; fixed assets and investments of our sut7 diaries appraisal by cert!f:ed pubhc accountants dated March 5,1992. in the highly infiationary economies of Argentina and Brazil are i l ~ recorded at acqu:sition or production cost and translated at l l l l 32

? v ?' t i 1p -l i e + t l l .t in fiscal 1992, ROLM Companv, Norwa!k, Connecticut, which A total of 15 subsidiaries in Germany and 10 subsidianes in f had been held on a 50/50 basis by Siemens and intemational other countnes were conschdated for the first time. whde five - Business Machines Corporation, Armonk, New York, became German companies and 23 companies outside Germany are no whoHy-owned by us. The company, which had been accounted longer included in the consohdated financi61 statements. j for on the basis of our proportonate interest r, s net worth in j pnor years, has been f ully included as a subsidiary in :he consoh-Goodwillin the amount of DM1,934 mniion, which resulted f rom j dated hnancial statements as of July 1,199~ the snitial consohdation of equity interests in subsidiaries and _ -i associated companies, was offset against retained camings. Fourteen compan es that we'e newly 1on ned or acquired in the new German federaf states in fiscal 1991 were included in the The changes in the number of conschdated companies did not conschdated itnancial statements for the first time in fisca! have a matenal eff ect on Siemens' overall position _. 1992. t i N Intangible assets and property, plant and equipment l A ' AccuJ Deprecia-mulated bor /amoi-deprecia-Net value Net valuo ' tzation ? Reclassi - Retire-tion /am<.+ as of as of during the On milhons of DM) 9/30/91 Aditions fications m ents 9/30/92 tration 9/30/92. 9/30/91 fiscal year intangible assets 971 411 450 932 497 435 275 248 -f !r Property, plant and equipment . Land. equivalent nghis to feal property, and butidngs, including buddings on land not owned. 12.442 955 380. 174 13.003 5,083 8.520 7,837 521 . Technical equipment and y machinery. 11,985 1,081 421 802 12.085 9,436 3.249 2,961 1,083 l' Other causpment. plant and office eauipment 14 830 2,357 259 1.570 15.882 12.382 3,500 3 325 2,248 L Ecuipment leased to customers 2.9G1 649 (6) 047 2,957 2,047-910 896 501 i Advances to supnbers and construction in progress. 1A3G 1,270 (1,054) 23 1,635 12 1,023 1,4'15 12 { 43660 6.318 3.216 46,762 28.960 17,602 10.454 4.365 w:w;yr w w w w w w q y.m w q% rem mmmmm~m emmwnnym-wynnw n wyrm 129,457E T10.2371 ::16;7298 W4,613 b 144 ham.., d,. -M b e h a,631; 6.7294 M MA666< M 694 u .wwwacA whmsmu. wausu~msaun s.k.as uaw+4h I l Additions to iritangible assets and property, plant and equipment. [ . dunng the fiscal year amounted to DM6,729 (1991: D M 8,051) milkon, whch include the opening balance amounts of DM1,072 l milhon attributable to companies sociuded in the consohdated [ financial statements for the first tme. f 9 t 39 ~

4 Consolidated financialstatements Notes i (6) Investments Accumulat-Accumulat-Net value ' Net value Reclassi-Betire- . ed write-ed equity-as of ' as of (in millions of DM) 9/30/91 Additions fications ments 9/30/92 downs adjustment 9/30/92 9/30/91 4 interests in subsid. anes 718 337 29 250 834 158 (95) 581 640 Interests in assocrated companies. 2.876 81 (18) 201 2,738 (1,349) 1.389 ' 1,494 Misce!!aneous envestments 805 315 (11) 78 1.031 344 687 526 m 5297 :k603 _L 502 :

(1,444) ; 2.657s c 2.660.. ~

m r ~~7.,

., q z.y y

4,399 c733[ n s c.m s _s c,, n m a w, a ca _s;w : The additions to interests in subsidianes and associated (8) Receivables and miscellaneous assets companies relate p'edominantly to the acquisition of equity interests. Due after Due after (in milhons of DM) 9130/92 one year 9/30/91 one year Retnements in interests in subsidianes resulted pnmanly from fece a e-trade their initial consohdation Retirements in interests in associated 14.459 981 14'3B7 1,657 companies main!y include the sale of the equity interest in Fides Industrie-Beteitgungsgesellschaft mbH, Munich Other recewabies and miscellaneous Our share in the net income of subsidianes and associated I companies accounted ior under the equity method amounted to Recewables from nonconsolidated DM36 (1991: DM92) milhon during the fiscal year, subsidiaries 2,249 32 1.259 46 Miscellaneous investments include interests in other Recewables from companies, as well as loans, pomarily residential construction associated and loans. rel ted companies 2,753 1,499 2,202 992 M:scellaneous Wnte<lowns of DM89 million on interests in subsidianes and of assets 5,443 713 5.357 947 DM33 million on miscellaneous investments were made dunng the fiscal year. 10.445 2.244 8.818 1,985 I (7)lnventories ~ .i 23,205 (3hb 24,90 L3,22 s_ww:w.a (in milhons of DM) 9/30/92 9/30/91 M:scellaneous assets include our interests in subsidiaries in the Materiais and supphes 2.448 2,512 amount of DM1,308 (1991: DM1,473) milhon, which were Work in process _ 4,489 4.798 acquired excluswely as f:nancial investments. This item a!so c sa a ea un accW ine home. Finished products and merchandise. 5.140 5.478 Cost of unbilied contracts 12.598 11.055 Advances to supphers - 1.600 931 yyy. _.,.- r 26.275-F24.774 a w_ s a 4 40

e [ ? [ (9) Marketable securities and notes The premium of DM1,707 milhon paid on the option rights that were exercised, and of DM120 mdhon paid for the;ettlement f 6n milBons of DM) 9/30/92 ' 9/30/91 offered to SNI shareholders was recorded as additional paid-in capital ? Treasury stock. 57 13 The authorized capital of Siemens AG remained unchanged at Stock certificates 1,850 1,733 DM800 milhon. On March 28,1991, the Annual Shareholders' F#xed-income secunties. 13,264 11.580 Meeting authonzed the Managing Board to issue DM500 million Notes. 1,429 1,762 in new shares with subsenption nghis for shareholders as well as for holders of stock warrants (authonzed capital l) and DM300 my mvmvwemmmmmeme milhon in new shares for which the subscription right of share-bhmIdadhase, holders is excluded (authonzed capital 11). These authorizations will expire on March 1,1996. A law su:t contesting these resol-In fiscal 1992, Siemens AG purchased 608.369 shares of vtsons was brought by a shareholder in its verdict rendered on common stock, with a total par value of DM30 million. or 1.2% April 2,1992, the Munich Regional Court dismissed the of the cap:tal stock, at an average pnce of DM639.80 per share, complaint witn respect to the authonzed capital I and uphe'd the in order to offer them to employees for purchase. Including the complaint with respect to the authonzed cap tal 11. The verdict, 32,505 shares of treasury stock held at the beginning of the however, is not final, since both parties have appealed. fiscal year. 476,364 shares, with a utal par value of DM24 million, or 0 9% of the capital stock, were sold to employees at a The other authonzed capital amounts to DM164 (1991:DM300) preferential price of DM391 per share. At the close of the fiscal milhon. Of this amount, DM150 mdlion is reserved to secure the year,164,510 shares of common stock, having a total par value rights to purchase common shares of Siemens AG under the of DM8 million, or 0.3% of the capital stock, remained in warrants attached to the 8% U.S. dol lar bonds of 1992/2002 treasury. They are valued at DM347 per share. !ssued by Siemens Capital Corporation. The stock warrants grant option rights ior a total of 3,000,000 common shares, Tne fmed-income secunties include shares of investment funds which may be exercised until June 2,1998. The option penod is in the amount of DM3,965 (1991: DM3,604) mdhon. automatically extended for penods of one year terms - but not more than two years-if the market price of the Siemens share Our secunty holdings include debentures and bonds :ssued by falls below the option price within one reference penod. The Siemens companies. option pnce is DM693. The premium of DM519 milhon paid on the stock warrants was recorded as additional paid-in capital. - For tax reasons, wnte-downs of DM108 miliion made in pnor years were not reversed in fiscal 1992, although the market The other authonzed capital of DM5 million provides for the price of such secunties increased dunng the year. This reduced settlement ottered to SNI shareholders who have not tendered net income in fiscal 1992 by DM45 milhon. their shares by September 30,1992. (10) Capital stock and additional paid-in capital The remaining other authonzed capital of DM9 mahon secures. The caprtal stock of Siemens AG amounts to DM2,798 milhon the nghts to purchase common shares of Siemens AG that were and is divided into 55,025.662 common shares and 923.634 granted to the holders of the 6%% 1987/94 DM bonds with preferred shares, each with a par value of DM50. Each share is warrants issued by Siemens N xdorf intemational Finance BV entitled to one vote. Under cond tions set forth in $23 of the and to the holders of the Nixdorf 1989/97 convertible loans Articles of Association, preferred stock is entded to six votes following the integration of SNI AG into Siemens AG per share in a second vote that may be demanded by the holders of preferred stock. Option rights under the 1986/2001 U.S. dollar zero coupon bond issue for 2.993,583 shares were exercised during the fiscal year. During the fiscal year, capital stock increased by a total of at a share pace of DM620 Warrants for only 6,405 shares were DM159 milhon through the issuance of 2,993,583 common not exercised when the option penod expired in June 1992. shares from the other authonzed capital as a result of the exercise of option rights under the warrants attached to the (11) Retained earnings 1986/2001 U S dollar zero coupon bonds issued by Siemens Retained earnings include a reserve for treasury stock in the Western Finance NV as vsell as through the issuance of amount of DM57 (1991: DM13) muhon. The reserve was 188,410 common shares from the other authorized capital as a increased by DM44 mdhon through transfers from other resuit of the settlement offered to former shareholders of SNI, retained eamings 41

1 b r Consolidated financial statements i Notes I l l I 9 After deducting the treasury stock reserve, other retained (14) Debt and other liabilities I eamings amounted to DM6.934 (1991: DM7,722) milhon. We transferred DM1.074 (1991: DM1.162) milhon to other retained Due within Due within eamings from the conschdated net income of DM1.955 (1991: (in miikons of DM) 9/30/92 one year 9/30/91 one year DM1.792) milhon. Goodw !! of DM1.934 milhon resulting from the initial consolidation of interests in subsidianes and asso-Debt ciated companies was offset against other retained eamings Bonds and debentures 2,225 3 1.213 3 Due to the conschdation of our companies in the new German Loans from banks 1.920 1.498 2,344 1.775 federal states, other retained eamings include a small amount of Notes and other loans 386 99 1.018 761 special reserves pursuant to the German DM Opening Balance ' ~ ~' ' 1-i J7^ P-. k Sheet Act (DMBoG) which remained after offsetting such , y 0{ 3 57{/ 9 9 9 j <630 f2 g reserves aga:nst specialloss accounts. (12) Minority interests Other liabilities M nonty interests represent the minonty shareholders' propor-Accounts tionate share of the equity of consolidated subsidiaries, pnmanly payable - trade. 4.854 0 40 4.912' 4.652 l our compantes in Austna and Switzerland, as well as Siemens Aoditiona! habihties Stromberg-Carlson. Boca Raton. Florida, and, in fiscal 1991 the a minonty interests in SNI. on o dated subsidiaries 239 165 524 479 (13) Accruedliabilities Liabilities to The accruals f or pension ptans at Siemens AG and its domestic ass d" subsidianes provide for the contractual retirement benefits of ga ompa ies 310 272 444 302 employees and reinees not subject to coHective bargaining i agreements. In addition, the accruals provide for 80% of the M;sce!!aneous i habihties. 6,126 5.4 94 5,E83 5.205 retnement benefits of employees covered by such co4ective bargaining agreements as well as their claims for transitional payments. Retirement benef!t corporations in Germany provide 6.675 5.931 6.851 5.986 ior the remainder of Siemens AG's pension obhgations to y 1h6bhh.a employees subject to collective bargaining agreements and to K529 -i10,571 " "k " " du ? their surviving dependents in addition, accruals are estabhshed -nw. --+ f or the retnement benefits of the employees and retirees of our Debt increased as a result of the 8% U.S. dollar bonds with foreign subsid: anes, unless the obhgations are covered by warrants issued by Siemens Capita! Corporation. I pension funds. Moreovet the obhgations of our U.S. subsid-Ta x habihties totakng DM961 (1931: DM989) milhon are included ianes to provide postretrrement benefits other than pension for active and retaed employees are shown here. in miscellaneous habihties. Tnis item also contains habihties amounting to DM995 (1991: DM988) million mandated by the The pension commitments of Siemens AG and its subsid anes social secunty program, which consist of outstanding statutory are fully covered by accruals for pension ptans and the iunds oi socia! welfare contnbutions and statutory retirement benef;t the retirement benefit corporations obkgations in foreign countries. { l Other accrued liab* ties include DM2.131 (1991: DM2.106) S;emens AG has made commitments to lenders of pubhc funds mi bon in prov:sions for taxes. in addition, this item consists l that it wdl not encumber its rea' estate. pnmardy of accruais for personnel costs. warranty obhgations, anticipated losses on contracts, penalties for contract perfor-We have fumished secunty for debt and other habihties totahng mance delays. and expenses f or contracts already bded-DM351 (1991: DV1691) milhon. Debt in the amount of DM181 (1991: DM167) mi ion is secured by mortgages. In Germany, ) debt in the amount af DM23 mdhon is secured by ciarms under a Hermes export cred:t guaranty in addmon, we assigned receiv-abies f rom export orders in accordance with the guidehnes of AKA Ausfuhrkredit-Gesellschaf t mbH. rocciving loans f rom AKA r in the amount of DM16 tmlhon m the fo*m of notes payable. In - 42 - I

e i t some countnes,we have executed promissory notes and pledged (19) Personnel costs securmes, in conformity with local practice, to secure our debt. Personnel costs consist of wages and salanes totahng DM27,043 (1991: DM25.373) mdhon, statutory social welfare Debt and other liabsties with a remaining term of more than five contributions and expenses related to employee benefats of years totaled DM2.269 (1991: DM1,327) mdhon. DM4,396 (1991: DM4,103) million, and expense for pension j plans cf DM2,434 (1991: DM2,341) million. - Bonds and debentures Foreign 60 mi!hons) currency DM. The average number of employees dunng the fiscal year was 417,800 (1991: 406.000); they were engaged in the iollowing ac-Semens Beteihgungen AG. Zunch tivities: i 4%% 1933/93 Swiss franc dettentures Sfr 100 114 l 1992 1991 Siemens Cap.tal Corporation. Wemington. Delaware 8% 1992/2002 U S dohar bonds Manufactunng. 172,000 172,700 7 with warrants. U.S,S 1,000 1.410 Sales 145.000 135,500 Siemens Ltd.. Bombay Research and development 48,000 46,000 15% 1971/92 Indaan rupee bonds irs 20 1 Administration and general serv ces 52,800 51,000 15% 1981/92 Ind:an rupee bonds irs 50 2 ~ ~ 417.8$0ff40b00 S emens lhdori Intemational m .a 4 m 22.- ,m Finance B V, Vianen, Netherlands l 6%% 1987/94 DM bonds w:th warrants 500 (20) Other operating expenses Siemens Western Finance N y, Other operating expenses include the expenses for write-s Wil:emstad, Cura;&o downs on investments, marketable secuotes and notes totakng 1986/2001 U S doDar DM465 (1991: DM110) milhon and misce!!aneous taxes in the zero coupon bonds w th warrants. U.S $ 144 198 amount of DM477 (1991: DM553) mill;on. 2,225 The translation of financial statements into German matks - iesultedinalossof DM138(1991:DM255) million in fiscal 1992. (15) Net Sales Net sales include our income from leasing and beente agree-Funbermore, other operating expenses consist mainly of admin-ments A breakdown of net sales by business segment and istrative, marketing and selkng expenses such as rentals, travel region is geven on page 45 expenses, sales commissions. insurance and other overhead; add;tions to accruals; secunties and foreign exchange losses; r (16) Change in inventories and and bad debt expenses. additions to self-produced plant and equipment Change in inventones and additions to self-produced plant and (21) Net income from investment in other companies equipment totaled DM3204 (1991: DM3,300) milhon, of which DM1,124 (1991: DM1,700) milhon relates to the increase in On milhons of DM) 1992 1991 i inventories of f4nished products and work in process and in the ~l cost of unbilled contracts. DM2,080 (1991: DM1,600) milkon in income from investment in other i additions to self-produced plant and equiprnent was caprtahzed. compames. 77 48 income under prof +and-loss (17) Other operating income transfer agreements. 24 25 Other coerating income includes. in particular. f oreign exchange Share in eamings resutting from and secunt es gains, income from vanous services, subsidies for equity conschaat:on 36 92 research and development, Berkn sales tax benefits and capital losses absorbed under investment grants, income f rom the reversal of accruals, and profit-and-loss transfer agreements (81) (318) gains on the sale ci investments. i 56? 1153)f (18) Cost of materials m'sa +- The cost of matenais amounted to DM35,450 (1991: DM32,360) m>Ihon This included DM26,775 (1991: DM24.110) milhon for matenats, supphes, and merchandise purchased for resale, and DMB,675 (1991: DMB.250) milhon for purchased l services from third parties. 43

Consolidated financialstatements . Notes i i i i Net income from investment in other companies includes (25) Guarantees and other commitments DM48 (1991: DM22) milhon in income from subsidiaries. On milhons of DM) 9130/92 -9/30/91 The income from subsidianes and associated companies { consohdated under the equity method consists pnman!y of our Cont:ngent liabihtes on notes. 340 440 share in the eamings of Bosch-Siemens Hausgerste GmbH, Guaramees 57 - 127 l Munich, GPT Holdings Ltd., London; and companies in the Wanamies. 1.672 1,480 United States. Collateral for third party liabilities 2 5 Losses absorbed under profit-and-loss transfer agreements + relate pumardy to our coreanies in the new German federal (26) Other financial obligations f states' At Septerrber 30,1992, we had leased from leasing companies 74 properties,14 of which were located outside Germany. In (22) Net interest income f: scal 1992, the rental expense under these leases was DM127 interest and similar income of DM2.706 (1991: DM2,885) (1991: DM129) million. The discounted value of our payment mdhon exceeded interest and simdar expenses of DM842 (1991: obligations under these leasing agreements amounts to DM879 DM1,026) million by DM1,864 (1991:DM1.8591 milhon. Interest (1991: DM928) milhon. Under the terms of the leases, the and similar income includes DM216 (1991: DM135) mdhon ag eements do not convey the ownership rights to the leased attributable to subsidianes.The interest expense attnbutable to properties; theref ore, they are not capitah2ed in the consolidated subsid: anes is not signifrant. financial statements. (23) income taxes We also have payment obhgations with a discounted value of Income taxes include German corporate income and local DM1.088 (1991: DM1,008) mill.on under long-term lease agree-income taxes, as well as the comparable foreign taxes relating ments for movable assets and real property. The renta; expense to income. Such taxes are determined in accordance with the in fiscal 1992 amounted to DM176 (1991: DM160) million. tax iaws apphcable to the indtvidual companies. In addition, income taxes include the deferred taxes resulting fro We are committed to making capital contributions of DM34 temporary d:fferences. Income tax expense was reduced by (1991: DM45) milhon to other companies, including DM10 DM40 (1991: DM98) mdhon in tax credits that relate to income (1991: DM37) million to subsid: aries. We have made commit-from investments in domestic companies. Taxes not based on ments in the amount of DM579 (1991: DM439) mdkon, income, at DM477 (1991: DM553) mdhon, are included in other including DM577 (1991: DM437) milkon to nonconsoisdated operating expenses. Subsidiaries, as hmited partners pursuant to E171 of the German Commercial Code. In addition, commitments exist in the (24) Remuneration of the Supervisory Board amount of DM16(1991: DM26) milhon, including DM10 million and the Managing Board, and loans granted in fiscal 1991 to nonconsolidated subsid, aries, pursuant to 524 Provided that shareholde s approve the proposed diadend at of the German Limited Liabikty Companies Act (GmbH ActL their Annual Shareholders' Meeting on March 11,1993, the { amount authonzed to be paid f or the fiscal year will be DM1.1 We are jointly and severally hable and have capital contnbution (1991:DM1.1) million for the Supervisory Board, DM21.0 (1991: obligations as a partner in companies formed under the German DM22 9) milhon 1or the Managing Board, and DM16.0 (1991: Civil Cooe, through which we have concluded profit-and-loss DM17.2) m0 hon for former members of the Managing Board transfer agreements with other companies, as a partner in a ~ and their surviving dependents. Pension commaments to general partnership, and as a participant in various joint - former members of the Managing Board and their survivmg activities. i dependents are covered by an accrua! of DM136.7 (1991: DM126.7) milbon-(27) Segment information Siemens is a suppher of electronic and electrical products, Loans to members of the Managing Board totaied DMO.9 (1991: systems and equipment. Activities in other lines of business are DM18) mdhon (repaid in 1992: DMO.9 milhon). These loans bear not significant. interest of up to six percent and have contractual terms of up to I 10 years.- Sales and capital expenditures of the domestic and foreign subsidiaries are assigned to the Group that has the worldwide The members of the Supervisory and Managing Boards of responsibihty for that business activity. Net sales in the table Siemens AG are Ested on pages 3 and 50, respective'V-below include intersegment shipments. I r i 4A

4 e s By business segment Net sales Capital By region Net sales Capital expenditures expenditures 6 sn milhons of DM) 1992 1991 1992 1991 (in milhons of DM) 1992 1991 1992 1991 Power Generation Germany. 56.333 51.245 3.568 3,105 (KWU) 6.570 4.955 523 394 Atinbutable to exports. [19.6641 117.982) Pcwer Transmission and Drstnbution. 5.568 5.307 219 221 Eurooe excluding Germany. 23 ABS 23,338 1.160 1.061 industna; and loctoded therein-Building Systems 8.717 8.774 272 214 E urope an Doves and Standard Commun:ty 115.1831 114.761) 1782) 16801 Products 6.686 6.522 316 420 North Amenca 8 716 8,517 515 502 Automat:en. 5.811 5.680 210 237 Latin Ament'a 1.417 1.563 92 115 Pnvate Lommunicason Systems 5.383 5.105 516 431 Asia. 2.582 2.715 184 183 Other regions 1.178 1,100 41 37 Pubhc Communicason Networks 13.165 11,260 472 434 Less intersegment Defense Eiectronics 1.460 1.679 52 76 sh pments (15 209) (15.470) Automotwe Systems. 2.540 2.127 241 219 78.509 '73,008 5.560 5,003 Transportation Systems 2.718 2.141 132 79 Med: cal Engineenng 7.887 7.429 347 375 Berhn and Munich, December 14.1992 Semiconductors 1,881 2.029 470 345 Passwe Components Siemens Akt'engesellscha 1 8 and Elect *on Tubes 1.488 1,591 116 139 Electromechanical The Managing Board Components. 555 832 87 68 Audio and Mdeo S3 stems 261 249 16 14 SM 13.010 12.125 712 708 The conschdated financial statements, which we have auited Osram. 3.119 2.971 310 328 'n accordance w:th professiona' standards comp!y with the German legal provisions With due regard to the generally Other 1,251 1.446 543 30'l accepted accounting pnnerples. :he consohdated financial state-Le% intersegment ments present a true and f air view of the Siemens g'oup's stupments. 19,861) (9.214) assem Labises, tnancia! pos: tion and earnings. The general review of the Managing Board is consistent with the consoh-76.509 73.008 5,560 5.003 dated financial statements Siemens does an extensive intemationai business. Fif ty-iour KPMG Deutsche Treuhand-Gese!!schaft percent of total sales are made to customers outside Germany At tiengeselischaft The geographic breakdown of sE. es by customer location is Wirtschaftsprufungsgese!!schaft shown on page 26 Berkn and Frankfurt on Main Our 202 operating compan es outside Germany eamed net Munich. January 5,1993 income of DM562 muon in fiscal 1992, compared w:th DM652 meon in 1991. A regiona! breakdown of the net sales and capital Schnic6 e Dr. Schulz expend tures of Siemens AG and its domestic and f oreign subsL Wirtschaftsprufer WirtschaftsorUier

d. anes is shown in the IE.bie below.

(independent aud, tors) 45

f J Principal subsidiaries and associated companies r t' t Sales

• Shareholders' eausty
• Eamings' Siemens-(DM milkon)

(DM milhon) (DM million) share (%) '

l. Subsidiaries

1. Germany Siemens N:xdorf Informatonssysteme AG. Paderbom 10.233 8 1.509 6 G15 Bi 100 Osram GmbH. Berhn and Munich 1,910 4 647.6 87.0 '

100 Siemens Anlagentechnik und Energevertenung Leipng GmbH. Leipag 497 3 158 9 (18 7) 100 Vacuumschmelze GmbH. Hanau 382.0 9B.8 08 100 Siemens Ptwate Kommunikationssysteme Vertnebs-GmbH, Berhn. 423 7 70 1 0.5 100 Siemens Audiologische Technik GmbH. Erlangen 97.9 55 0 1.6 100. Semens Kabe%erk Schwenn GmbH, Schwenn. 169 4 51.6 (24 7) 100 Siemens Ubertragungssysteme GmbH. Gre:fswald 132 4 43 4 26 100 WSSB Verkehrstechna GmbH Berlin. 182 8 38.5 (0 6) 100 Rofin-Sinar Laser GmbH Hamburg... 79 0 32 7 (12.5) 100 i NRG Nukleanohr-Gesenschaft mbH. Duisburg. 63 0 31 5 17 100 Semens Finanaerungsgesehscha't iur informationstechnik moH. Munich 104 6 1.921.1 1497 100 Sremens Miet-und Portfoi,o-GmbH & Co OHG, Berkn.. 328.2 561.7 109 6 100 Semensstadt-Grundstuc6 sverwattung GmbH & Co OHG. Berkn. 236 6 189 8 1082 100 S etec Systemtechn* GmtH & Co. OHG. Berkn. 323 4 169 2 165 9 100 Duewag AG, Krefela-Ueraingen. 506.5 12 0 00.1) 96 Siemens So'ar GmbH. tAun,ch 34 4 60 0 (93 9) 51 Semens Matsushite Components GmbH & Co KG. Munich 594.2 66 6 (34 71 50 * " l

2. International A. Europe Semens Betesgungen AG. Zunch 1,554 8 130 5 100' i

Siemens S A.. SaintGies (Brussels). 1.433 3 410 3 64.3 100 ATEA N V, Herentais/ Belgium 399 0 53 7 17.8 100 Siemens A/S, Ba4erup (Copenhagen). 487 8 77 6 23.5 - 100-Semens Osa6 eyhti$. Espoo (Helsinka 296 8 44.3 (19 7) 100 Semens S A., Saint.Denis (Pans)" 773 3 70.5 (18.0) 100 Siemens Automotive S A,Toulouse 361.5 89 5 16 7 100 Siemens A.E., Elektrotechnische Projekte und Erzeugnisse. Athens" 183 6 43 6 64 100 Siemens pic, Sunbury-on-Thames (Lonoon)" 1.256 7 423 7 32 8 100 S emens Plessey Electronic Systems Ltd. Chessington. Suncy" 022.1 48 5 (32.0) 100 Semens Ltd,. Dubbn 113 5 82 36 100 Semens Telecomunicanoni S p A.. Cologno Mon 7ese (Mdan) 1.008 6 234 3 2B 7 100 j Siemens S p A, Mdan 1.676.6 175 6 (15 4) 100 i Semens Nederland N V, The Hague. 902.3 239 7 22.5 100 j Semens A/S. Oslo" 727A 135 6 13.5 100 ] Semens AG Osterreich. Vienna" 3,184 9 406 2 53 6 74 i Semens S A., Lc. bon" 578.9 150.3 6.9 100 Semenstema AB. Solna (Stockholm). 624 7 165.9 34.3 100 Semens AB. Stockholm 293 2 14 3 4.5 100 Semens-Albis AG Zunch 1,209 0 303 3 30 7 78 { Semens S A.. Madrid 1.043 2 200 9 (8.2) 100 SimtoTicaret we Sancy: A 5 1stanbut. 393 3 30.1 54 51

1 Tod Siemens Kablo ve Ele 6 ink Saneyii A S. Mudanya.

214.3 48 4 21.2 55 Ostam S A. MolsheinVFrance 262 9 52.7 27 100 Osram Ltd. Wembley (London). 186.7 52 6 04 100 Osram Societs Riunite Osram Edison-Cienci S p A., Mdan 424 0 78.3 68 100 Osram S. A, Madnd 91 4 20.5 (16) 90 Semens N:xdod inf ormaton Systems S A /N V. Brussels 433 8 159.3 14.7 100 Semens Nmdorf informat on Systems S. A., Cergy (Pans). 488.1 17.2 (77 1) 100 Semens hdorf Information Systems Ltd, Brac6 nell (London). 357.9 31.1 (5.5) 100 S emens Data 5 p A. Mdan 662,4 78 5 3.7 51' Semens Nrxdad informatiesystemen B V. V6anen' Netherlands. 224.1 49 6 84 100 Semens %dori informationssysteme Ges.m b H. Vienna. 3B4 6 87.9 10.3 100 $ e rens Wood lotormationssysteme AG. Kloten (ZuncN.. 307 5 57.5 0.3 100 Semens hdori Ststemas de informaci6n S. A, Tres Cantos (Matid) 395 7 05 1120 8) 100 46

. ~. .- ~ + r 6 at Septemter 30,1992 ' , i I t } I Sates * ' Sharehoiders' f - equity

• _. Esmings*

Semens' . DM milhon) ' (DM milhon) share (%)- (DM milhon) ( B. North America Semens Corporation, New ' fork, NY teonsolidated financ.al statements). 7.561,1 1,324 9 (427,6) 100 including ROLM Company. Norwalk, CT i ROLM Systems. Santa Clara, CA Semens Automotive L.P., Aubum Hills. Mi Semens Commuracation Systems. Inc.. Boca Raton. FL Semens Components. loc.. Isehn, NJ Semens Energy & Automation, Inc. At:anta, GA l Semens KWU, Inc., New York. NY Semens Medical Corporation, Iselin. NJ Siemens Prwate Communication Systems, Inc., Boca Raton, f L Semens Nmdort Informaton Systems. Inc4 Burlington, MA 160.0 15 2 (98 8) 100 t Siemens Automotrve Ltd, Chatham. Ontano 457.2 94 0 18 8 '100 - Semens Electne Ltd.. Pointe Clane (Montreal) 370 0 55 0 ' (141) - 100 l l C. Latin America - Semens S. A., Bucros Aires 39G2 19 1 (56 3) 100 f Semens S A.. Sho Paulo 3GO 7 181 7 (3 41 87 Semens S A. Bogote. ".. 228.1 116.9 15 1 100 66 5 38.2 81 94 Siemens S A de C,V, Meoto City" t 78 5 35 09 100 Semens S A, Caracas.. 65 6 35 7 (4.6) 60 Osram Argentina S A C.I., Buenos Anes. 113.8 24 8 (14.5) ~100 Osram do Brasil-Companhm de Lempadas Eletocas S A. Osasco Osram S. A de C V. Naucalpan (Menco). 53.7 24 2 0.3 100 .Siemens Westem Finance N V Willemstad. Cura ao 49 7 (1.3) -100 .i ii . D Asia Siemens Ltd. Bombay 227 5 53 0 82 51 j Siemens K. K, Tokyo. 179 3 35 2 4.3 83 ' - Semens Components 1 Advanced Technology) Sdn Bhd., Malacca (Malaysia). 167 6 30 4 64 -100 - Semens Paustan Engtneenng Co Ltd, Karachi. 104.9 14.1 4.7 64 Semens Components (Pte) Ltd. Singapore L10 6 BB 2 33 6 100 1 Taicom Systems Ltd, Taipei 415.1 159 6 54 8 55 i Osram-Meico Ltd., votohama 171.3 72 7 0.5 51 E, Africa Siemens Ltd, Johannesburg" 888.0 122 2 20.3 52 .i T E Australia r Siemens Ltd. Rchmond (Melboume) 251 8 56 7 7.3 .100 i .t it Associated companies

1. Germany i

Bosch Semens Hausgerate GmbH, Munich 5,817 7 691.0 172.4 50 Linotype-Hel! AG, Esettom. 756.7 409.4 12 2 '33 Mannesmann Taity GmbH. Dctungen. 435 6 46 0 (71 2) '. 49 ? Tela Versicherung Aktiengeselischaft Berhn and Munsch 285 7 285 4 6.1 50 ?

2. Internet;onal i

GPT Hoidings Ltd., London".. 3,150 9 1.201 3 233 1' 40 Secor Corporanon, Hd cry, NC *

• 539 9 177.1 33 '

50

• hese tes wmsy we the fmana stawnewepe'ee m wwwee we tne

-- saw. shechws eww ann sarw9s accocg to um 6:e4 cenergy acceted accotr,tmo tvtaarnes m re::h c:.ortry mo <$o not 'effect consonored trenc.a' stateer,ts the MtINMt$ fob (' led m the CDOSDhd8!ed bruyC$i $14te~eIS hhafehWief$' PQJ?y

• ' $118@Hf y (htfLJbN110 MlO. l'8r 2n} Of the (sew 86 CDmmtm@ cD3e 8Dd &#m'"g5 E0 l*Dn$Mied St th0 yea'imd Cuf'tW1 sett Ftd seleys are trEtrJated at Sve'By mieS 905 VW yle5*.

k 47 i

l q P SMA p F A P eO r"'g ]- Earnings / dividend l For the fifth year in a row, l i V V VV Siemens posted increased eamings. Net income for the year was DM1.955 billion, up from DM1.792 billion in fiscal 1991. At the Annual Shareholders' Meeting, the Share price trend Supervisory and Managing Changes in Siemens dividend Around the turn of the year, Boards of Siemens AG positive growth expectations will again recommend we tax crea:t

without ta cred<t for the western economies a drvidend of DM13 00 19 53 20.31 20 31-20 31 sparked a significant advance per share. Due to the higher of the German equity market.

number of shares out-17.20 Dunng the spring of 1992, standing, the total dividend the Siemens share pnce payout for 1992 willincrease 6 n00 rallied to a high of DM703.90 to DM727 million, compared ior the year on May 25,1992. with DM686 milhon for 1991. in early June, though. Warrants expired economic expectations, The warrants attached to the some of them overly enthu-U.S. do!!ar zero coupon bonds 1988 1989 1990 1991 1992 ' slastic, were reappraised. Issued in 1986 entitled the This reevaluation was a!so holders of these warrants to prompted by the weakening purchase shares of Siemens Per-share data U.S. dollar, which has common stock at a price of nDM adverse effects on exports DM620 untit June 19,1992. for German industry. Atotalof 99.79% of these r o ut 35.00 32.10 Consequent!y, analysts warrants were exercised, 9 revis(d their corporate increasing the number of Dmdend G00, 13.00 eamings expectations shares of Siemens common downward. The Siemens stock by 2,993,583. These SNNuedit share price was a!so affected shares are entitled to the cash flow 1305' 120.10 8 9*"* #' close of fiscal 1992, it was f: scal year. quoted at DM570.70, down Sureholders'eautty 32s.10

341.50 isept 30, from DM637.10 a year earlier.

In addition to the onginal w rr nt premium of DM601 WLet p,ce ' E37.10 570 70 (Sept. 30) million, which was collected Nes swed 52.7 55 9 at the time of issue in 1986, (Sept.30. in nwlons) exercise of the option rights dunng f: scal 1992 increased t 1991 1992 shareholders' equity by an l add:tional DM1.86 bilhon. ? New debt with equity warrants On June 2,1992, Siemens Capital Corporation, a U.Se based subsidiary, issued U.S.51 billion in bonds with warrants attached These r b 48

'4 I Stock market trerd (fiscal 1988-1992) Fiscal 1992 highs and lows (Index of adjusted quarterly closing pnces: year-end 1958=100) of the Fiemens share On DW - / M [- f b [I ' 'j[ \\ - 1.000 " ~ .' k ' 680 Siemens AG 933 - ~ 5 660 4

p q[

B00 _ - 'k. 640 2' f T t 700 Q Q-l j{ y s00 Ni ~ T 'I / !{4,i-j 400 _ Listed German corporations (F A Z. share price :ndex) - 590 F 'I .300 580 200 i }. L 100 ; f40 5 i 1988 1989 1993 1991 1992 Month O N D J F M A M J J A 5 warrants entitle the holders former majonty shareholder, Employee stock to purchase Siemens enabled Siemens AG to Under our annual employee common stock at a price of increase its holdings in SNI stock offenng, approximately DM693 at any time between from approximately 78% 69% of all eligible employees August 4,1992, and June 2, to 95.2E in March 1992, purchased around 553.000 1998. Th:s exercise period the annual shateholders' shares of common stock of will be extended for a meetings of both companies Siemens AG in the spong maximum of two years, passed resolutions of 1992. Since the purchase should the price of Siernens integrating SNI into Siemens pace was significantly higher common stock be lower than AG pursuant to 5320 et. seq. this time than in the pnor I the exercise pnce within ten of the German Stock year, the acceptance rate working days prior to May 2, Corporation Act. The integra-was slightly lower than 1998, or May 2.1999. tion became effective on the long-standing average April 15.1992 upon being of roughly 70E The shares The total of U.S.$1.32 billion recorded in the commercial required for this offenng raised by this issue was register. Under the applicable were purchased on the open employed for partial provisions of the German market. repayment of higher-cost Stock Corporation Act, the bonowings and for financing remaining shares of SNI our growing business in the devolved on Siemens AG. Quarterly figures U S. on a hedged bas:s. As indemnification, the SNI shareholders have been ' 1 0/1/91- . 7/1/92 i s 1/1/92 4/1/92,. SNIintegration offered one common share Jn b%ons o!DW - 12/31/91 - 3/31/92 9 0/92 - 9/30/92; A voluntary tender offer of Siemens AG in exchange New orders 20.1 22.5 20.5 22 3 made in the autumn of 1991, for six shares of SNf stock; as well as the acquisition of holdings of less than six-Sales 16.2 19.6 19.2 23 5 the remaining shares of SNI shares will receive cash in Caprial spending 2.2 25 15 24 stillin the hands of its the amount of DM156 50 per Net income atter taxes 04 0.5 0.5 06 I share of SNI. By September 30,1992,188,410 new Siemens shares ent:tted to the fiscal 1992 dividend were issued for this purpose. 49

Managing Board j i President and Karl-Hermann Baumann, Hans GUnter Danielmeyer, Retired as of September 30 Chief Executrve Officer Dr. ret oec. Prof. Dt ret nat. 1992: Heinnch v. Pieter, Dtjut Finance Research and Development bi*' '"? "* *"*S nanning and Development $8'$[g$at Bja t he' land Erwin N. Hardt, Dtoec publ. Karlheinz Kaske, Dr.-Ing. l Specs responscM+s a ng Resemch and Development. Pubhc Communication Networks Prtsident and Inic'n saton. E conomics. Chief Executwe Officer l Adverusing and Design. Hans Baur, Dr-Ing Adolf HUtti SP"C'aaesp nsutes Austo. and Japan Speaal responsMies Rnear6 and belopent Pubhc Communicaton Networks. Power Generaton WWu Corporate Relatons. Prvste Communicaton Systems. Berkn Execurve Offices, Defense Electroncs Eberhard Kill Semiconductors: Semrtonductors industnat and Building Systems Austna and Japan Hermann Franz JUrgen Knorr Hans Hirschmann Spma' responsbbties Semiconductors Power Generation (KWU) t Dnves and Standaid hodacts Medcal Engineemg. Walter Kunerth, Prof Dr.-Ing. Wolfgang Kei!er. Dr.-Ing. Automotve Systems. r SNI. Osram. Automotwe S,ystems Power Generation tKWU) Denmark. Fan:and tee:and. Norway Sweden and Tuney Werner Mary Anton Peisl, Dr oec pubt Medcat Engmeenng Corporate Relations Voler Jung. Dr Eng h c. Intematona! Regions Peter von Siemens Special respons@htes Centrabzed Se'vces Munich Beigwrt Greece. Itaty. Lusembourg. Poqugal. the Repubhc of South CarlHeiner Thomas t Afnca. Scan and Switreriand Dwes and Stroard Products Claus Kessler Dt-Ing. Procunion and togmes Spenahesponst* des Passive Components and Electron lubes. E tec tromechamcal components. Atoo and video Syste ns Gerhard KUhne. Dr jur l Human Resources I SpecW respuntb kties Central zed Services. mcheng j Domestic Regena Admnisvation; Austraha irda ar'd Paostan i Horst Langer, Dt-Ing. Speca+ restranshimer inausmal and Budding Syste os. Transpo*tation Systems; ~j Canada. Meeco and me U.S GUnter Wilhelm Spevai responub%es Power Gene"ation Knu. Power Fansmoon and Distobabort Automadon; A>ganima Braz:L Coiomtua anc Venezuela I 1 i 1 L As of Janury 1,1993 50

'o 9 Management structure-Groups and corporate functions Groups

• Corporate departments' Corporate offices -

Power Generation (KWU) Defense Electronics Finance international Regions i I Adolf H0tt) Helmuth Wiesner Kari-Hermann Baumann, Volker Jung, Dr Eng h.c. Hans Bohm Benno Franzreb Drretoec U*IS"" # Anoreas Kley Gerhard Kluth Dr.rer pol. i Automotive Systems Joachim Putzmann Jochen Mackenrod*w Dr jur Power Transmission Waher Kunerth, Prof Dr-ing. AIDrecht Schafer, Dt jur. 1"'"""86*" and Distribution J0rgen Mache Thomas Seeberg. Dt ter pol. Horst Brase Eberhard Posner Dr. ret oec. Bruno M011er, Prof.DrAng T'ansportati n systems g g Herbert H. Steffen Wo!fram D Martinsen Hans G0nter Danielmeyer, Siegfried Franke Bernd Stecher, Dt se. pol. industrial and Building Systems Gerhard Wahl Reinhard Ernst Advertising and Design Eberhard Kit! Heinz Georg Sa!ge Medical Engineering Heinz SchwBrtzel, Jochan Detig, Dr.rer corn Pmi Dt techn. Hans-Wolfgang Scne!er Wemer Ma'y Peter Grassmann Dr-ing. Claus Weyrich. Prof. Dt phil Drives and Standard Products J0rgen Radomski gom,, g,,,,,,,, CathHeiner Thomas Centralized services semiconductors Gerhard K0hne, Dr j.ut Konrad Samberger. Dr-Ing Anton Mtchl Domestic Regional Administration Hans M. Sireh!e JUrgen Knorr Horst Fischer Dnrer nat. Waher Schusser. Dr.rer. pol. Dieter Briese Autmation Volkhart P Matth5us Production and Logistics seriin Manf red v. Raven G0nther Entsch Passive Components CladSE8SSCI DrAng Hubertus v Witzleben I and Electron Tubes Bruno Freund KarbHeinz Samann, Dr-Ing. Klaus Ziegler Emst Wilhelm M0l!er Munich Peter von Siemens Private Communication Systems Electromechanical Components" Planning and Development 4 Peter PnbMa Personnel Manfred Kasserra, Dtrer pol Heinrich v. Pieter. Dt jur. Jost Hammerschmidt' Helmut Brauners Michael M: row, Dr ret pol Karl Meister, DC ret pol. Dt ret pol Roy H. Slavin Peter Niehaus Wemer Schmuchng Hansjorg Franzius, DrAng D!etrich Botsch. Dt-Ing. Audio and wdeo systems" Uinch Z,emann, Dr rer pot .i chann Haider Public Communicetion Networks Otto Fruhmann, Dt oec. Erwin N.Hardt, Dr oec publ. WoMgang Buchholz Siemens Nixdorf Hubert Suckini; informationssysteme*" Gerhard Wiest Hans-Dieter Wiedig. Dr retoec. i G0nter Goth Otto-Hermann Gr0neberg Horst Nasko DrAng Alfred Nowosad Hartwig Rogge, DrAng E.h. Heinz-Dieter Wendorff Osram"* Wo!f-Dieter Bopst, Dr.oec. publ. Heinz-Peter Mohr g%g 3, g3 J6tg Schaefer, Dr-Ing. The first named is G%,r, Presormt O? rJU'plFBle dffpptment head " $1$ Cal d:visOns

• " Serante legal unes 51

o 6 L o. Five-year summary r f i Assets / funds employed Sept. 30. - 1988 1989 1990 1991 19924 i Sremens worldwide Property. plant and eau:pment 13.623 14.379 14.870 16.729 18.237 Investments 2,341 2,646 3.698 2.660 2.657 finta'nMielsTsetified AEeisjnd.7 ^ [ ~ $. [ C ' ~ [._..[ T " [ [I! [ investments g. y 15,964i G17,025f 218.568i Q19,389,3 220,894; as a percent of balance sheet total 27 % 26 % 29 % 28 % 29 % inventories 3.917 6.888 7.314 8.239 ' 6.282 ReceWables and miscelianeous assets 15.768 19,244 19.221 23.2.74 24.947 l Secure es and other hauid assets 23.968 21.239 19.347 18.566 19.677 g gp + . 'e~ 593.1.7 E I64. M961. 7. 63350l "I6936BT. u w 178001 r ~. v ~ n-U7 a Capital stock and additional padin can:ta! 7.263 7.690 8.532 8.883 11,388 Retained earnings and mincoty interests 10.371 10.864 9.025 9.766 8,953 .) [$kkhbNS$hk. .N743k. i8;654!;(~ 17[557[]8.64)]'Q0$3s[ t.4 es a percent of ba ance sheet tota! 30 % 29 % 27 % 27 % . 2B% Accruats for pensson plans 10.665 11.990 12.735 13.957 14.761 Omer accrued ieb4 ties 17.854 18.820 19.101 20.137 20.220 Totalaccrued abiktes 28.519 30.810 31.836 34.094 34.981 as a percut of balance sheet total 48 % 48 % 49% 49 % 49% Debt 3.904 4.227 4.058 4.575 4.531 as a percent of sharehoiders' eautty 22 % - 23% 23 % 25% 22 % Other habilzt.es 9.560 10.805 10.999 12.150 11,947 i Totadunds?emhfoyed1 ,, " [5$3j7 j[64,396((64,450f][fG36(]('Bbd} Earnings / dividend 1988 1989 1990L l1991 1992 Siemens wordwioe income before taxes 2.475 2.788 2.823 3.419 3.197 Income taxes 1.084 1.211 1.155 1.627 1.242 NEOhcome [ ][. j [1l3s1[; ],577[$%6681 ]D92(39'55) as a percent of sa;es 2.3% 2.6 % 2.6% 2.5% 25% as a percent o' shareholders' ec.rty 8.2% 87% 92% 9.9% 10 0 % Total d+vidend of Siemens AG 538 622 678 686 727 Div:dend per share On DM) 11 12.50 13 13 13 Employees

• 1988 1989 1990 1991 1992 hn thousands)

Sept. 30, German operations 223 227 230 243 253 intematonal operations 130 138 143 159 160 .:... ~ r ,+ w. 7 n., m y 3 m m, m s m o.. .c ,-.m Personnel costs 1988 1989 1990 1991 1992 .,.. ~.. (.pemens,.s,, , c23'847( [25@D4] 226.988[;31.817y y33.Bp,'. Research and development ~ 1988' 1989 '1990' '1991 1992' iSiemenP j[;., [ ~ [M80,} 6.B k [6l980( [7892f ' #8.385j as a percent of sales 10 9 % 11.2 % 11.0 % 10 8 % 107%

• #t%t 1etwry EtMent wade's and t'amees 52 i

i - - -4, -t on t,ir.ouna m moons di ou j <w i i i ' New orders - 19885 -1989 1990f 1991 ,1992-German business 24,294 27.531 28.432 3G.746 40.174 I intemational bus! ness 30 447 35,338 39,312 45.420 45.235 i <-~ -, m. - g g ' m..,. - - m,yi., ~ ~ ~. ~~c.;. .~.: q -..a

r. -- '. ~-; a..

w-na u...... e,-w

.... -. ---~. m ...-u ..a p ~,... p Change over poor year 49% + 15 % 48% 421 % 44 % -l l Sales ! ~ 1988 l 1989 " ' 199' '.. i1991 ' 1992 0 -f German business 30.756 28.449 28.357 33.203 36.475 e International business 28.619 32.679 34,833 39.745 42.034 l .+ -- ~ - ~- m _9,37.m.:m.7_6.1.128,",; 63.18S.?.-~ 373;D08_2m! 78,5.09; u,. - -. - 4, t Sieme.n.sa _ f v' J : ,a -. ~ .n e ..-n y5 - ~~ ~ Change over onor year +15% +3% +3% +16% +8% i Capital spending L1908 1989 1990 1931 .1992l 7 - in Germany 2.84G 2.097 3.882 3,332 S.801 i \\. Intere;tional 2.364 - 5,175 3,184 2.263 2.713 t -~.c ,1, , e 5.95~-. ~n.,' E5. 74i i, - 5 210_.a,~ - - ~. 9,872.2 ,.. ~., = .~ m',- !,_Ssmens4.,.. + ~n _...2006 z._5., 1 3 m c m.: w-u- Acquisition of investments 1.121 3.746 2,675 592 3.014 j Capital expenditures 4.089 4.126 4.391 5.003 5.500 j Depreciation of property. plant and enurpment 3.715 4.057 3.975 4.400 4.613 t as a percent of capnel expend <turer 91% 98 % 91 % 88 % B3% ,t L t ' Cash flow .1988, T1989' 19901 O991 19921 a r.* -o. 3 .,.:.n.. .. r-w g c-- . w -. ,, 3 v. 1 w ). f w a.'b u L -:. ^ . -X% .W + :Ol , n'w i I~ as a percent of sales 11.5 % 11 6 % 10.7 % 93% 88% [ i i-I r Siemens AG Balance sheet (as ci September 30f I1991'- -1992; f and statement of income Property. plant and equipment 58 63 f in bdhons of DM (condensed version) investments 15 8 18 2 ) fixed a, sets and y - m. m....- ._m t _ ~ -...., g s mvegmentsgj.6fi24.5j l~ inventones 1.8 1.8 Receivables 17.1 20.1 t/arketabte securities, (ior meiscai years enoed 1 Srstember 30, .1991 1992-. .ser bouid eszeis 9.7 90 , halessets,; J,' ' ~.m.,'50h,,..l,f -65 4 e i Net saws 39 3 43.3 + - - -^ - w ; " " ' " - ' ' " r 4 " Total opersting periormance 40 9 44 8 -Sha chOldM5' eQurty 16.6 19 6 Cost of matenals 091) (210;. i Accreed liabatss and ) p-Personnel costs (16 5; -(17 4) specid ieserves 257 26.5 i I Other expenseshncome (3.31 (3 7) Debt .05 06 v 7~ nnu. .m . n - mn~ b. N:E. Other haMmes 7.5 . B.7 [ Income taxes (07; (9 9) [ggi6a7sSdeff equit(;. '. V I-. i ~ -i w ., n. ew. m.mn n s, . y. m...~ m.m v. w w: e ' '- N., !b s 4' ,. i s ( It b V '^- n%. ?N',b IhY..' ? -? 53 i r e.m-me y-

i b

1 t

t' l - I j .a - ? i 'l ., A... J g - ;l Cover photo: Research ongineers [ at Siemens have developed silicon ] circuits capable of / processing up to 40 billion units of inf armation per second, a record number. The circuits will be used in I transmitting tens of thousands of telephone calls and hundreds of di itized D television programs via a single fiber-optic cable. .- j -. j . ) i Am cal Shareholders' Meeting. Mwch 11,1993,10 a m , Olympiahalie, Munich ] l-Address: ] Siemens AG j Wittelsbacherplatz 2 D-8000 Munich 2 I Federal Republic of Germany l 1 Telepnone (089) 234-0 j Telefax (089) 234-4242 i" - Telex 52100-0 sie d 1 Teletex 89870=siemcw . j Videotex Germany Btx *32000 W j . This edmon of our annual report, prepared for the convenience of Enghsh-speaking readers, is a - translation of the German original French and 4 Span:sh versions are also avadable, as well as an abbreviated version in ) Japanese. Ponted on paper treated l Order No. A191006A390-X 7600 wdh chlonne-free bleach ] -I - t ,----..-en,..w-,w,-em-ww -,.nw,n,~ r-n}}