Siemens 2007 Annual Report Download - page 141

Management’s discussion and analysis 141
Management’s discussion and analysis
Dividend
Siemens AG, the parent company of businesses discussed in this report, recorded
net income under German accounting principles (HGB) of €2.317 billion for fi scal
2007 compared to €1.426 billion for the previous year.
At the Annual Shareholders’ Meeting scheduled for January 24, 2008, the Man-
aging Board, in agreement with the Supervisory Board, will submit the following
proposal: to pay €1.60 per share as a dividend, which aggregates to an expected
total payout of €1.463 billion. The prior-year dividend was €1.45 per share. The
amount attributable to shares of stock of Siemens AG held in treasury by the Com-
pany at the date of the Annual Shareholders’ Meeting shall be carried forward.
Liquidity and capital resources
Financial Strategy and Capital Structure
Financial Strategy
Siemens is committed to a strong fi nancial profi le, which gives us the fi nancial
fl exibility to achieve our growth and portfolio optimization goals.
Our principal source of Company fi nancing are cash infl ows from operating
activities. Our Corporate Treasury generally manages cash and cash equivalents
for the entire Company and 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 confl icting capital market controls. In these
countries, the relevant Siemens subsidiary companies obtain fi nancing primarily
from local banks. At September 30, 2007 Siemens held €4.005 billion in cash and
cash equivalents in various currencies of which approximately 68% were managed
by Corporate Treasury. Corporate Treasury carefully manages investments of
cash and cash equivalents subject to strict credit requirements and counterparty
limits. In addition, Corporate Treasury lends funds via intragroup fi nancing to
the Operations and Financing and Real Estate components. This intragroup
fi nancing, together with intragroup liabilities between the components, is shown
under intragroup liabilities in the balance sheets. Under this approach, at Septem-
ber 30, 2007, €2.886 billion of such intragroup fi nancing was directly attributable
to the Financing and Real Estate component and the remainder to the Operations
component. At September 30, 2007, the Financing and Real Estate component addi-
tionally held €180 million in short-term and €411 million in long-term debt from
external sources.
In addition to the sources of liquidity described below, we 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 fi nancial fl exibility and limiting
repayment risk.