Siemens 2008 Annual Report Download - page 183

Management’s discussion and analysis 87
In addition, in September 2006 we issued a subordinated Hybrid Capital Bond in two tranches, a euro tranche of
€900 million and a British pound tranche of £750 million, both tranches with a nal legal maturity in 2066 and
with a call option for the Company after 10 years or thereafter. The total nominal amount of our Hybrid bond is
approximately €1.8 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 in “Notes to Consolidated
Financial Statements.”
Capital expenditures – Our total capital expenditures for additions to intangible assets and property, plant and
equipment (PPE) amounted to €3.721 billion in scal 2008, compared to €3.751 billion in the prior year. The
capital expenditure rate for our Sectors, dened as additions to intangible assets and PPE as a percentage of
amortization and depreciation, was 116% for scal 2008. We have set a mid-term target to keep this percentage
in the range of 95%-115%.
Cash ows related to portfolio activities – During scal 2008, we incurred signicant cash outows in connec-
tion with the acquisition of Dade Behring at Healthcare. The aggregate consideration, including the assumption
of debt, amounted to approximately €4.9 billion (including €69 million cash acquired). Further, we incurred
cash outows of approximately €1.1 billion related primarily to nancing of SEN in connection with its divest-
ment. In contrast, we received approximately €11.4 billion in cash inows from the sale of SV. For further infor-
mation, see “Notes to Consolidated Financial Statements.”
Share buyback plan – In November 2007, we announced a share buyback plan for up to €10 billion in share
repurchases through 2010 for the purpose of cancellation and reduction of capital stock and, to a lesser extent,
to fulll obligations arising out of share-based compensation programs. During scal 2008, we repurchased
shares in two tranches in a total volume of approximately €4.0 billion with the primary purpose of cancellation
and reduction of capital stock under this plan.
Dividends – At the Annual Shareholders’ Meeting scheduled for January 27, 2009, the Managing Board, in agree-
ment 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 €1.378 billion. The prior-year dividend was also €1.60 per share. The
amount attributable to shares of stock of Siemens AG held in treasury by the Company as of the date, as well as
attributable to treasury stock retired by the date, of the Annual Shareholders’ Meeting shall be carried forward.
Other capital requirements – Other expected signicant capital requirements include cash outows in connec-
tion with our SG&A reduction program and other restructuring measures, as well as capital requirements for
legal and regulatory matters, including the payment of potential nes in connection with investigations con-
ducted by public prosecutors and other government authorities regarding allegations of public corruption,
including ongoing settlement negotiations with authorities in Germany and the U.S. In addition, in October
2008, Siemens received a drawdown request by NSN for two tranches of €250 million each in relation to
a Shareholder Loan Agreement between Siemens and NSN closed at arm’s length, thereby utilizing the maxi-
mum amount under this agreement. In accordance with the agreement, both tranches of this shareholder loan
mature in scal 2011.