Siemens 2007 Annual Report Download - page 149

Management’s discussion and analysis 149
Management’s discussion and analysis
Commercial paper program – In fi scal 2007, we combined our U.S.$5 billion
commercial paper program and €3 billion European commercial paper into a
U.S.$9 billion Global multi-currency commercial paper program (€6.347 billion),
including extendable notes capabilities. As of September 30, 2007, the nominal
amount outstanding under this program was U.S.$6.182 billion (€4.360 billion).
Our issues of commercial paper have a maturity of typically less than 90 days.
Medium-term note program – We have a medium-term note program of €5.0
billion. During fi scal 2007, the Company decided not to update the listing of the
program. Accordingly, we can issue debt as private placements but not as listed
debt. The nominal amount outstanding under this program was €1.389 billion at
September 30, 2007.
None of our credit facilities contain a material adverse change provision of the
type often found in facilities of such nature and none of our global commercial
paper and medium-term note programs nor our credit facilities contain specifi c
fi nancial covenants such as rating triggers or interest coverage, leverage or capi-
talization ratios that could trigger remedies, such as acceleration of repayment or
additional collateral.
Other fi nancing instruments – In fi scal 2006, Siemens Financierings-
maatschappij N.V., a wholly owned Dutch subsidiary of Siemens AG issued two
series of notes of U.S.$750 million maturing 2009 and 2012, as well as two series
of notes of U.S.$1.750 billion maturing 2016 and 2026. In addition, Siemens Finan-
cieringsmaatschappij N.V. issued a Hybrid Capital bond in a euro tranche of €900
million and a British pound tranche of £750 million. The total nominal amount of
our Hybrid bonds is approximately €2 billion. The reason for these issuances was
to better match fund capital and currency requirements, to diversify our investor
base and to strengthen the overall balance sheet.
Further information about our bonds and the other components of debt is given
below and in “Notes to Consolidated Financial Statements.”
Capital expenditures for Operating Groups – The capital expenditure rate
(expressed as a percentage of depreciation and amortization) for property, plant
and equipment (PPE) and intangible assets for fi scal 2007 was 109%. We have set a
mid-term target to keep additions to PPE and intangible assets as a percentage of
depreciation and amortization to 95% – 115%.
Cash fl ows related to portfolio activities – After the close of fi scal 2007, we
occurred in November 2007 substantial debt fi nanced cash outfl ows in connection
with the Dade Behring acquisition. The preliminary purchase price for Dade Beh-
ring amounts to approximately €5 billion. In contrast, we will receive substantial
cash infl ows from the sale of SV (preliminary purchase price of approximately
€11.4 billion). For further information, see “Strategic Overview,” as well as “Notes
to Consolidated Financial Statements.”
Share buyback program – Subsequent to the close of the fi scal year end 2007,
we announced our planned share-buyback program, which we will conduct over
the next three years up to a total cash outfl ow of approximately €10 billion. For
additional see “Subsequent Events.”
Dividends – At the Annual Shareholders’ Meeting scheduled for January 24,
2008, the Managing 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.