Siemens 2007 Annual Report Download - page 275

Notes to Consolidated Financial Statements 275
(in millions of €, except where otherwise stated and per share amounts)
Notes to Consolidated Financial Statements
27 Additional capital disclosures
Siemens is committed to a strong fi nancial profi le, which gives the Company
fi nancial fl exibility to achieve its growth and portfolio optimization goals.
As of September 30, 2007 and 2006, the capital structure of the Company was
as follows:
In fi scal 2007, total equity increased by 15% compared to fi scal 2006 primarily
due to an increase in retained earnings. Total debt increased during fi scal 2007 by
1%. This resulted in an increase in equity as a percentage of total capital to 65% in
fi scal 2007 (62% in fi scal 2006) and a decreased percentage of total debt in relation
to total capital of 35% (38% in fi scal 2006).
The Company is not subject to any statutory capital requirements. Commit-
ments exist to sell or otherwise issue common shares in connection with estab-
lished share-based payment plans. In fi scal 2007, commitments for share-based
payment plans have been satisfi ed through capital increases (see Notes 26 and 33
for additional information). Beginning with fi scal 2008, it is planned to satisfy
commitments arising from share-based payment through repurchases of the
Company’s shares.
A key factor in maintaining a strong fi nancial profi le is Siemens’ credit rating
which is affected among other factors by the capital structure, the profi tability,
the ability to generate cash fl ow, geographic and product diversifi cation as well as
a competitive market position. Siemens’ current corporate credit ratings from
Moody’s Investors Service and Standard & Poor’s are noted below:
September 30,
2007 2006 % Change
Total equity 28,996 25,193 15%
As a % of total capital (see below) 65% 62%
Short-term debt 5,637 2,175
Long-term debt 9,860 13,122
Total debt 15,497 15,297 1%
As a % of total capital 35% 38%
Total capital (total equity and total debt) 44,493 40,490 10%
Moody’s
Investors
Service
Standard
& Poor’s
Long-term debt A1 AA –
Short-term debt P-1 A–1+