Siemens 2006 Annual Report Download - page 128

Management’s discussion and analysis
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In August 2006, Siemens Financieringsmaatschappij N.V., issued U.S.$5.0 billion of notes,
which are unconditionally and irrevocably guaranteed as to payment of principal and interest
by Siemens AG. These notes were issued in four tranches of
■U.S.$ 750 million Floating Rate Notes due August 14, 2009,
■U.S.$ 750 million 5.5% Notes due February 16, 2012,
■U.S.$ 1.750 billion 5.75% Notes due October 17, 2016, and
■U.S.$ 1.750 billion 6.125% Notes due August 17, 2026.
For the floating rate note, the issuer may, on or after February 14, 2008, redeem all or some
of the notes at the early redemption amount (call) according to the conditions of the bond.
For the fixed rate notes, the issuer may redeem, at any time, all or some of the notes at the
early redemption amount (call) according to the conditions of the bond.
In September 2006, Siemens Financieringsmaatschappij N.V. issued a Hybrid Capital Bond,
which is guaranteed on a subordinated basis by Siemens AG. The subordinated bond was
issued in a euro tranche of €900 million and a British pound tranche of £750 million, both due
September 14, 2066, with a call option for Siemens after 10 years or thereafter. The Bonds bear
interest at a fixed rate until September 14, 2016, and thereafter, floating rate interest according
to their conditions.
In fiscal 2006, Siemens redeemed the outstanding amount of €1.6 billion of its 5% euro-
denominated bonds, which were due on July 4, 2006.
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
September 30, 2006:
Debt – At September 30, 2006, Siemens had €15.574 billion of short- and long-term debt,
of which €2.175 billion will become due within the next 12 months. Short-term debt includes
current maturities of long-term debt, as well as loans from banks coming due within the next
12 months. At September 30, 2006, the weighted average maturity of our bonds and notes due
after one year was 7.65 years. At September 30, 2005, total debt was €12.435 billion. Further
information about the components of debt is given in “Notes to Consolidated Financial State-
ments.”
Payments due by period
Less than 1–3 4–5 After
(€ in millions) Total 1 year years years 5 years
Debt 15,574 2,175 1,808 4,852 6,739
Purchase obligations 12,652 11,161 1,202 239 50
Operating leases 2,589 647 926 521 495
Total contractual cash obligations 30,815 13,983 3,936 5,612 7,284