Table of Contents

		Earnings Release
		Munich, July 27, 2006

Siemens in the third quarter (April 1 to June 30) of fiscal 2006

“The third quarter continued our overall momentum, with higher income, sales and orders compared to a year earlier,” said Siemens CEO Klaus Kleinfeld. “It was a particularly successful quarter in terms of reshaping our business portfolio. In addition to announcing a new joint venture for our carrier communications business with an outstanding partner in Nokia, we also initiated strategic acquisitions that will make Siemens an important player in clinical diagnostics, one of the most dynamic sectors of medicine.”

“For the full year, we expect to deliver income from continuing operations at least level with the prior year, despite significantly higher charges at our Information & Communications Groups and substantial changes in our business portfolio. All our efforts remain focused on meeting our stated 2007 targets.”

1

For the third quarter of fiscal 2006, ended June 30, 2006, Siemens reported net income of €792 million, up 104% compared to €389 million in the same period a year earlier. Basic and diluted earnings per share rose to €0.89 and €0.85, respectively, from €0.44 and €0.42 in the third quarter a year earlier. Income from continuing operations in the third quarter was €804 million, a 30% increase from €618 million a year earlier. Basic and diluted earnings per share from continuing operations were €0.90 and €0.86, respectively. A year earlier, basic and diluted earnings per share from continuing operations in the third quarter were €0.69 and €0.67, respectively.

Group profit from Operations in the third quarter was €1.278 billion, up 32% from €971 million in the prior-year period, as a majority of the Groups in Operations posted higher earnings year-over-year. Major earnings contributions came from Automation and Drives (A&D), Medical Solutions (Med), Power Generation (PG), Siemens VDO Automotive (SV), Power Transmission and Distribution (PTD), and Osram. Severance charges at Communications (Com) and Siemens Business Services (SBS) totaled €69 million, somewhat more than in the prior-year period but less than the level expected for the fourth quarter of fiscal 2006.

Income before income taxes from the other two components of Siemens worldwide, Financing and Real Estate and Corporate Treasury, rose to €185 million from €162 million in the third quarter a year earlier. Net income also benefited from the sale of Infineon shares mentioned above, which resulted in a €33 million gain taken within corporate items.

Third-quarter orders of €22.442 billion were up 14% compared to the third quarter a year earlier, led by strong order growth at Transportation Systems (TS), A&D and PTD. Sales increased 14% as well, to €21.173 billion. International markets were the primary source of top-line growth, as sales in Germany edged up 1% and orders in Germany declined 2% compared to the prior-year level. Currency translation effects in the quarter were negligible. Organic growth in the third quarter included a 9% rise in orders and a 7% increase in sales for Siemens overall, despite declines in Germany of 4% in orders and 1% in sales. Portfolio effects included divestment of the Product Related Services (PRS) business at SBS at the beginning of the current quarter, and a number of major acquisitions in the fourth quarter of the prior year including VA Technologie AG (VA Tech). Beginning with the fourth quarter, these acquisitions will contribute to sales and orders on an organic basis rather than as new volume, with a corresponding effect on reported growth rates.

On a continuing basis, net cash provided from operating and investing activities within Operations in the third quarter was €1.510 billion compared to €101 million provided in the prior-year period.

2

The current period included €1.127 billion in proceeds from the Infineon share sale, while the prior-year period included €731 million used to acquire CTI Molecular Imaging, Inc. (CTI). Cash payments for severance at Com and SBS were higher in the current period, totaling €81 million compared to €24 million in the prior-year period. Both periods included significant cash used for inventories and capital expenditures associated with business growth. Within Financing and Real Estate and Corporate Treasury activities, net cash from operating and investing activities in the third quarter was €258 million compared to a negative €385 million a year earlier. For Siemens on a continuing basis, net cash from operating and investing activities in the third quarter was €1.768 billion compared to a negative €284 million a year earlier.

Operations in the third quarter of fiscal 2006

Information and Communications

Communications (Com)

In the third quarter, Siemens took further significant steps toward completing the strategic reorientation of Com. The Group’s carrier networks business and its enterprise networks business are held for disposal as of June 30, 2006, and Siemens announced an agreement to merge the carrier activities into a joint venture with Nokia Corporation. This transaction is expected to close by the second quarter of fiscal 2007 at the latest. Also in the third quarter, Com’s home and office communication products unit was carved out as a separate business; it is now included in Other Operations on a retroactive basis, and its results are no longer included at Com. Finally, the Wireless Modules division is scheduled to become part of A&D at the beginning of fiscal 2007.

Third-quarter sales for Com edged up 1% year-over-year, to €2.972 billion, and orders rose 5%, to €3.258 billion. Group profit at Com was positive compared to a loss in the third quarter a year earlier. Severance charges of €34 million were nearly unchanged compared to the prior-year quarter.

3

The carrier business posted higher sales and also increased its earnings contribution year- over-year. Sales at the enterprise networks business declined year-over-year, and its loss widened. Com expects higher severance charges in the fourth quarter.

Siemens Business Services (SBS)

SBS closed the previously announced sale of its PRS business at the beginning of the third quarter. On an adjusted basis, excluding portfolio effects, sales of €1.081 billion came within 1% of the prior-year level and orders of €1.054 billion were up 2% year-over-year. Group profit was again negative. The current period included higher severance charges compared to the prior year, at €35 million, as well as adverse effects related to the divestiture of PRS.

Automation and Control

Automation and Drives (A&D)

A&D posted a record quarterly profit of €396 million, up 19% year-over-year. A&D’s Group profit margin remained high, despite a changing sales mix and increased selling costs associated with strategic expansion of the Group’s business base. Both sales and orders included a combination of double-digit organic growth and new volume from acquisitions between the periods under review. As a result, sales climbed to €3.214 billion, up 28% year-over-year, and orders rose to €3.541 billion, 32% higher than the prior-year period. A&D’s continued expansion in Asia-Pacific included particularly rapid growth in China.

4

Industrial Solutions and Services (I&S)

Third-quarter Group profit at I&S was €78 million, including a substantial positive contribution from the VA Tech acquisition. For comparison, Group profit in the prior-year period included project-related charges. Sales of €2.232 billion in the third quarter were 59% higher than in the prior-year period, and included increases in all lines of business. Orders for the quarter rose 26% year-over-year, to €1.744 billion. The growth in both sales and orders benefited strongly from the VA Tech acquisition.

Siemens Building Technologies (SBT)

SBT posted Group profit of €45 million, up from €26 million a year earlier. The increase resulted in part from increased capacity utilization combined with higher sales, which rose 4% to €1.122 billion. Profitability at SBT also benefited from greater emphasis on higher-margin activities based on products and services. Third-quarter orders were level with the prior-year period, at €1.142 billion.

5

Power

Power Generation (PG)

PG’s Group profit of €213 million in the third quarter included charges related to a major project and a changed sales mix compared to the prior year. In particular, while the Wind Power division doubled its third-quarter sales and earnings compared to a year earlier, its earnings margin is rising from a lower level compared to PG’s fossil power generation business. Third-quarter sales for PG overall climbed 25% year-over-year, to €2.635 billion, as the Group converted strong order growth in recent quarters to current business. Orders were €2.475 billion compared to €2.646 billion in the third quarter a year earlier, which included a higher level of large orders in the fossil power generation business. After the close of the quarter, PG announced an agreement to acquire AG Kühnle, Kopp & Kausch of Germany, a maker of steam turbines, turbocompressors and fans for industrial applications with fiscal 2005 revenues of approximately €270 million. This transaction, which is pending regulatory review, is expected to close in the fourth quarter.

Power Transmission and Distribution (PTD)

A very strong third quarter for PTD included substantial increases in Group profit, sales and orders. The rise in Group profit, to €113 million, was driven by higher sales at every division, led by the High Voltage division. For comparison, Group profit at PTD a year earlier included severance charges in the Transformers division.

6

New volume from the VA Tech acquisition added to the Group’s exceptionally strong organic growth in the third quarter, particularly including large orders in the Middle East. As a result, third-quarter sales jumped 82%, to €1.718 billion, and orders for the quarter climbed 57% year-over-year, to €2.075 billion.

Transportation

Transportation Systems (TS)

Group profit at TS was €18 million in the third quarter, up from €6 million in the same period a year earlier. Orders more than doubled compared to the prior-year period, to €1.550 billion, led by a major new contract for trains and maintenance in Russia. Third-quarter sales of €987 million were below the level a year earlier.

Siemens VDO Automotive (SV)

Group profit at SV was €158 million, including €17 million in charges for capacity adjustments and higher research and development (R&D) investments. Sales and orders were €2.604 billion and €2.600 billion, respectively, in the seasonally strong quarter. Orders in the prior-year period included a large contract won jointly with SBS.

7

Medical

Medical Solutions (Med)

Med was one of Siemens’ top earnings contributors, with €233 million in Group profit in the third quarter. The difference compared to the prior year is primarily volume-related, as Med increased its quarterly Group profit margin year-over-year. While sales of €1.837 billion came in lower compared to the strong third quarter a year earlier, orders of €2.088 billion were up slightly on an adjusted basis.

During the quarter Med announced two major acquisitions that would strengthen its competitive position in the strategically important medical diagnostics market. The first involves Diagnostic Products Corporation (DPC) in the U.S., with world-leading capabilities in in-vitro clinical diagnostics that strongly complement Med’s established strengths in in-vivo diagnostic imaging. The preliminary purchase price for DPC is approximately €1.5 billion and the transaction is expected to close in the fourth quarter. Med also announced an agreement to acquire the Diagnostics division of Bayer AG of Germany, which would greatly expand Med’s position in the fast-growing field of molecular diagnostics. The Bayer Diagnostics acquisition, which requires regulatory approval, had a preliminary purchase price of approximately €4.2 billion. The transaction is expected to close early in fiscal 2007.

8

Lighting

Osram

Group profit at Osram was €111 million, level with the prior year despite higher costs associated with the market launch of innovative new products. The Group grew in all regions, posting sales of €1.089 billion for the quarter compared to €1.038 billion in the same period a year earlier.

Other Operations

Other Operations consist of centrally held operating businesses not related to a Group. These businesses include joint ventures, equity investments, a portion of the VA Tech acquisition, and the distribution and industry logistics (Dematic) businesses carved out of the former Logistics and Assembly Systems Group. Other Operations also include Siemens’ home and office communications products unit (SHC), which was carved out of Com as a stand-alone business. Beginning in the third quarter, results for SHC are included within Other Operations on a retroactive basis to maintain a meaningful comparison with prior periods.

     In the third quarter, Group profit from Other Operations was €9 million compared to €2 million a year earlier. Earnings from joint ventures were higher compared to the prior-year period. Dematic posted similar losses in both periods, while SHC posted a loss following a positive result in the prior-year period. Sales from Other Operations rose to €1.176 billion from €998 million a year earlier, including new volume from VA Tech. In June of 2006, Siemens agreed to divest Dematic pending regulatory approval. The transaction is expected to close in the fourth quarter, and result in a loss.

9

Corporate items, pensions and eliminations

Corporate items, pensions and eliminations were a negative €252 million compared to a negative €248 million in the third quarter a year earlier. Corporate items improved year-over-year, due primarily to a €33 million gain from the sale of Siemens’ remaining Infineon shares, while centrally carried pension expense increased primarily due to a reduction in the discount rate assumption at September 30, 2005.

Financing and Real Estate

Siemens Financial Services (SFS)

Income before income taxes at SFS was €64 million in the third quarter. The higher income in the prior-year period resulted from a substantial gain on the sale of a 51% stake in the real estate funds management business of Siemens Kapitalanlagegesellschaft mbH (SKAG).

Siemens Real Estate (SRE)

In the third quarter, SRE recorded income before income taxes of €6 million compared to €44 million in the same period a year earlier. While the current period was affected by higher vacancy costs and lower rental income, in part due to weaker demand in Germany, the prior-year period benefited from higher income from real estate disposals.

10

Eliminations, reclassifications and Corporate Treasury
Income before income taxes from Eliminations, reclassifications and Corporate Treasury was €115 million compared to €38 million in the third quarter a year earlier. The difference was due to increased interest income from intra-company financing and from positive effects at Corporate Treasury from derivative activities not qualifying for hedge accounting.

Income statement highlights in the third quarter
Net income for Siemens in the third quarter was €792 million, more than double compared to €389 million in the third quarter a year earlier. Income from continuing operations was €804 million compared to €618 million in the prior-year period. In both periods under review, discontinued operations relate to the sale of the mobile devices business. Group profit from Operations was 32% higher than a year earlier, primarily due to higher gross profit driven by higher sales. Gross profit margin for the third quarter came in lower, however, at 28.0% compared to 28.5% a year earlier. Third-quarter R&D expenses increased to €1.408 billion from €1.251 billion a year earlier, including higher outlays at SV. Due to the significant increase in sales year-over-year, R&D declined to 6.6% of sales from 6.7% in the prior-year quarter, and marketing, selling and general administrative expenses fell to 17.1% of sales from 18.2% in the third quarter a year earlier.

Income and earnings per share in the first nine months
Net income for Siemens in the first nine months of fiscal 2006 was €2.492 billion, up from €2.171 billion in the first nine months a year earlier. Basic and diluted earnings per share for the first nine months were €2.80 and €2.67 respectively. In the prior-year period, basic and diluted earnings per share were €2.44 and €2.34, respectively. Income from continuing operations in the first nine months was €2.520 billion compared to €2.561 billion in the same period a year earlier. The current period includes a higher effective tax rate compared to the prior-year period. On a continuing basis, basic and diluted earnings per share were €2.83 and €2.70, respectively, compared to €2.88 and €2.75 in the same period a year earlier. Group profit from Operations for the first nine months rose to €4.005 billion from €3.761 billion in the prior-year period, despite a substantial increase in severance charges at Com and SBS only partially offset by higher gains from sales of Juniper shares at Com. The severance charges at SBS and Com totaled €596 million compared to €165 million in the prior-year period. Juniper gains at Com were €356 million compared to €208 million in the first nine months a year earlier.

11

Order and sales trends for the first nine months
Orders in the first nine months were €73.643 billion, a 22% increase from €60.195 billion in the prior-year period. Sales of €63.402 billion were up 19% from €53.339 billion in the first nine months a year earlier. On an organic basis, excluding currency translation effects and the net effect of acquisitions and dispositions, orders climbed 10% and sales rose 8%.

Growth was driven by international markets, where major orders were both numerous and well-distributed. International orders for the first nine months were up 27% year-over-year, to €61.076 billion, while sales for the first nine months climbed 23%, to €51.569 billion. In Germany, orders and sales each rose 3%, to €12.567 billion and €11.833 billion, respectively, primarily due to acquisitions between the periods under review. Within international growth, Asia-Pacific orders climbed to €11.668 billion and sales reached €9.233 billion, both up 35% year-over-year. Within Asia-Pacific, orders in China for the first nine months increased 34%, to €4.109 billion, and sales in China surged 56% year-over-year, to €3.201 billion. Growth in the Americas was robust as well, particularly due to strong portfolio and currency translation effects. The region generated 22% order growth and 24% sales growth resulting in nine-month totals of €18.165 billion and €16.578 billion, respectively. Within this trend, the U.S. posted orders of €13.634 billion and sales of €12.726 billion, both 22% higher than in the first nine months a year earlier. In Europe outside Germany, orders for the first nine months were up 19% year-over-year, at €22.614 billion, and sales increased 14%, to €19.881 billion, both benefiting strongly from portfolio effects.

12

Liquidity for the first nine months
In the first nine months, on a continuing basis, operating and investing activities provided net cash of €1.349 billion compared to net cash used of €2.148 billion in the prior-year period. Discontinued operations used net cash of €316 million in the first nine months this year, compared to net cash used of €789 million in the same period a year earlier.

Within Operations, operating activities provided net cash of €1.286 billion in the first nine months of fiscal 2006, even as cash outflows for severance payouts at Com and SBS rose to €503 million from €90 million in the same period a year earlier. In the prior-year period, operating activities provided net cash of €687 million, including €1.496 billion in supplemental contributions to Siemens pension plans. Both periods included significant build-ups of net working capital associated with business growth, particularly for inventories. Investing activities also showed the effects of overall business growth in both periods. While cash outflows for capital expenditures were higher in the current period, payments for acquisitions were higher in the first nine months of the prior year, which included €731 million for CTI at Med. Proceeds from sales of investments were higher in the current period and net cash from the sale of marketable securities increased substantially due to €1.127 billion proceeds from the sale of Infineon shares in the third quarter of fiscal 2006. This results in net cash used in investing activities of €533 million in the first nine months of the current year, compared to €2.737 billion a year earlier.

The other two components of Siemens, which include Financing and Real Estate and Corporate Treasury activities, provided net cash from operating and investing activities of €596 million in the first nine months of fiscal 2006. In the same period a year earlier, these components used net cash of €98 million from operating and investing activities.

13

Funding status of pension plans
The estimated underfunding of Siemens’ principal pension plans as of June 30, 2006 amounted to €3.5 billion, which is approximately the same amount as at the end of fiscal 2005. Pension service and interest costs were offset by regular employer contributions and an actual return on plan assets in the first nine months of €531 million. This total represents a 3.4% return on an annualized basis, below the expected annual return of 6.7%.

Economic Value Added
Economic Value Added (EVA) in the first nine months of fiscal 2006 was positive and improved due to higher earnings compared to the same period a year earlier.

Note: Beginning at 10:00 a.m. CEST on July 27, 2006, the telephone conference at which CEO Dr. Klaus Kleinfeld and CFO Joe Kaeser discuss the quarterly figures will be broadcast live on the Internet at www.siemens.com/conferencecall. The accompanying slide presentation can also be viewed here, and a recording of the conference will subsequently be made available as well. Starting at 12:00 CEST, Dr. Klaus Kleinfeld and Joe Kaeser will hold a telephone conference in English for analysts and investors, which can be followed live at www.siemens.com/analystcall.

This document contains forward-looking statements and information — that is, statements related to future, not past, events. These statements may be identified by words as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “will” or words of similar meaning. Such statements are based on our current expectations and certain assumptions, and are, therefore, subject to certain risks and uncertainties. A variety of factors, many of which are beyond Siemens’ control, affect its operations, performance, business strategy and results and could cause the actual results, performance or achievements of Siemens worldwide to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements. For us, particular uncertainties arise, among others, from changes in general economic and business conditions, changes in currency exchange rates and interest rates, introduction of competing products or technologies by other companies, lack of acceptance of new products or services by customers targeted by Siemens worldwide, changes in business strategy, regulatory action and various other factors. More detailed information about certain of these factors is contained in Siemens’ filings with the SEC, which are available on the Siemens website, www.siemens.com and on the SEC’s website, www.sec.gov. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in the relevant forward-looking statement as expected, anticipated, intended, planned, believed, sought, estimated or projected. Siemens does not intend or assume any obligation to update or revise these forward-looking statements in light of developments which differ from those anticipated.

14

SIEMENS AG
SEGMENT INFORMATION (continuing operations — unaudited)
As of and for the three months ended June 30, 2006 and 2005 and as of September 30, 2005
(in millions of €)

SIEMENS AG
SEGMENT INFORMATION (continuing operations — unaudited)
As of and for the nine months ended June 30, 2006 and 2005 and as of September 30, 2005
(in millions of €)