Siemens 2005 Annual Report Download - page 114

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Contractual obligations
In the ordinary course of business, Siemens’ primary contractual obligations regarding cash
involve debt service, purchase obligations and operating lease commitments.
The following table summarizes contractual obligations for future cash outflows as of Septem-
ber 30, 2005:
Debt – At September 30, 2005, Siemens had €12.435 billion of short- and long-term debt, of
which €3.999 billion will become due within the next 12 months. Included in short-term debt is
€1.484 billion of commercial paper, reflecting all amounts outstanding under our commercial
paper programs, therefore limiting refinancing risk. The remainder is represented by bonds and
other loans from banks coming due within the next 12 months. At September 30, 2005, the
weighted average maturity of our bonds and notes due after one year was 4.15 years. At Septem-
ber 30, 2004, total debt was €11.219 billion. Further information about the components of debt is
given in “Notes to Consolidated Financial Statements.”
Debt for Siemens at September 30, 2005 consisted of the following:
Our notes and bonds contain no specific financial covenants such as rating triggers or interest
coverage, leverage or capitalization ratios that could trigger a requirement for early payment or
additional collateral support.
Our Corporate Treasury has primary responsibility for raising funds in the capital markets for
the entire Company, including the Financing and Real Estate component, except in countries with
conflicting capital market controls. In these countries, the relevant Siemens subsidiary compa-
nies obtain financing primarily from local banks. Corporate Treasury lends funds via intracom-
pany financing to the Operations and Financing and Real Estate components. This intracompany
financing, together with intracompany liabilities between the components, is shown under intra-
company liabilities in the balance sheets. Under this approach, at September 30, 2005, €8.971 bil-
lion of such intracompany financing was directly attributable to the Financing and Real Estate
component and the remainder to the Operations component. At September 30, 2005, the Financ-
ing and Real Estate component additionally held €386 million in short-term and €521 million in
long-term debt from external sources.
Management’s discussion and analysis
Liquidity and capital resources
Payments due by period
Total Less than 1–3 4 –5 After
(€ in millions) 1 year years years 5 years
Debt 12,435 3,999 2,968 2,763 2,705
Purchase obligations 10,456 8,912 1,132 324 88
Operating leases 2,681 628 924 546 583
Total contractual cash obligations 25,572 13,539 5,024 3,633 3,376
Short- Long-
(€ in millions) Term Term Total
Notes and bonds 1,625 6,826 8,451
Loans from banks 673 613 1,286
Other financial indebtedness 1,612 733 2,345
Obligations under capital leases 89 264 353
Total debt 3,999 8,436 12,435