Siemens 2005 Annual Report Download - page 112

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Capital resources
Capital resources at September 30, 2005 included €8.121 billion in cash and cash equivalents held
in various currencies. Corporate Treasury generally manages cash and cash equivalents for the
entire Company, except in countries where local capital controls require otherwise. At September
30, 2005, Corporate Treasury managed approximately 81% of Siemens’ cash and cash equivalents.
Corporate Treasury carefully manages investments of cash and cash equivalents subject to strict
credit requirements and counterparty limits. In addition, €1.789 billion is held in marketable
securities, including shares in Infineon, Juniper and Epcos AG (Epcos).
Our shareholders’ equity at September 30, 2005 was €27.117 billion, an increase of €262 mil-
lion since September 30, 2004. See also the discussion of pension plan funding below, as well as
the Consolidated Statements of Changes in Shareholders’ Equity. We have authorization from our
shareholders to repurchase up to 10% of our outstanding shares at any time until July 26, 2006.
Such stock may be sold via a stock exchange; or (i) retired with the approval of the Supervisory
Board, (ii) used to satisfy the Company’s obligations under the 1999 and the 2001 Siemens Stock
Option Plans, (iii) offered for purchase by employees or former employees of the Company; and
(iv) used to service the conversion or option rights granted by the Company in connection with
the issuance of bonds. In addition, the Supervisory Board shall be authorized to transfer treasury
stock repurchased by the Company to members of the Managing Board of Siemens AG as stock-
based compensation with a waiting period of at least two years.
Our principal source of Company financing is cash flow from operating and investing activi-
ties. In fiscal 2005, net cash provided by operating activities from continuing operations totaled
€4.217 billion. In fiscal 2005, as part of our growth strategy, we incurred significant cash outflows
due to various acquisitions. As a result of these acquisitions, as well as higher capital expendi-
tures and higher supplemental cash contributions to Siemens’ pension trusts, cash flow from
operating and investing activities from continuing operations was a negative €1.489 billion in
fiscal 2005.
We have two credit facilities at our disposal, which are available in the unlikely event that we
are unable to access commercial paper or medium-term notes markets. Our credit facilities at
September 30, 2005 consisted of €4.602 billion in unused committed lines of credit. In fiscal
2005, we renewed our U.S.$3.0 billion multi-currency revolving credit facility and increased it
to a U.S.$5.0 billion syndicated multi-currency revolving credit facility expiring March 2012 pro-
vided by a syndicate of international banks. In addition, we established a revolving credit facility
for an aggregate amount of €450 million expiring in September 2012 provided by a domestic
bank. The latter replaces our €750 million revolving credit facility due in June 2008, which we
terminated in fiscal 2005. None of our credit facilities contain a material adverse change provi-
sion of the type typically found in facilities of such nature.
Management’s discussion and analysis
Liquidity and capital resources