Siemens 2005 Annual Report Download - page 113

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We also have two commercial paper programs, under which we typically issue commercial
paper with a maturity of less than 90 days, for an aggregate of U.S.$3.0 billion in the U.S. domestic
market and an aggregate of €3.0 billion in the euro market. The amount outstanding under these
commercial paper programs was €1.484 billion at September 30, 2005.
In addition, the Company has a medium-term note program of €5.0 billion. The amount out-
standing under this program was €966 million at September 30, 2005. The Company is in the
process of updating the listing particulars of its medium-term note program on the basis of a
new European Union Directive in fiscal 2006.
None of our commercial paper and medium-term note programs or our credit facilities
contains specific financial covenants such as rating triggers or interest coverage, leverage or
capitalization ratios that could trigger remedies, such as acceleration of repayment or additional
collateral.
In addition to the above-described sources of liquidity, we constantly monitor funding options
available in the capital markets, as well as trends in the availability and cost of such funding, with
a view to maintaining financial flexibility and limiting repayment risks.
Capital requirements
Capital requirements include scheduled debt service and regular capital spending and cash
requirements. €3.999 billion of debt, including €1.484 billion of commercial paper, is scheduled
to become due in fiscal 2006. We plan capital expenditures for property, plant and equipment for
fiscal 2006 to be above current depreciation expense of €2.328 billion for fiscal 2005.
In June 2003, the Company issued €2.5 billion of convertible notes through its wholly owned
Dutch subsidiary, Siemens Finance B.V., which are fully and unconditionally guaranteed by
Siemens AG. The convertible notes have a 1.375% coupon and are convertible into approximately
44.5 million shares of Siemens AG at a conversion price of €56.1681 per share, which is subject to
change under certain circumstances. The conversion right is contingently exercisable by the
holders upon the occurrence of one of several conditions, including, upon the Company’s share
price having exceeded 110% of the conversion price on at least 20 trading days in a period of 30
consecutive trading days ending on the last trading day of any calendar quarter. The Company
may, at any time from June 18, 2007, redeem the notes outstanding at their principal amount
together with interest accrued thereon, if Siemens’ share price exceeds 130% of the conversion
price on any 15 of 30 consecutive trading days before notice of early redemption. Unless previous-
ly redeemed, converted or repurchased and cancelled, the notes mature on June 4, 2010. The con-
version condition described above was met at the end of the first quarter of fiscal 2004.
Management’s discussion and analysis
Consolidated Financial Statements Notes to Consolidated Financial Statements