Siemens 2008 Annual Report Download - page 272

176 Notes to Consolidated Financial Statements
(in millions of €, except where otherwise stated and per share amounts)
The target range for our capital structure ratio is 0.8 – 1.0, to be achieved by 2010. As a step toward achieving
this target range, we have announced a program to repurchase up to €10 billion in Siemens shares until 2010.
A key factor in maintaining a strong nancial prole is Siemens’ credit rating which is affected among other
factors by the capital structure, the protability, the ability to generate cash ow, geographic and product diver-
sication as well as our competitive market position. Siemens’ current corporate credit ratings from Moody’s
Investors Service and Standard & Poor’s are noted below:
On November 9, 2007, Moody’s Investors Service graded Siemens’ long-term corporate credit rating from Aa3
to A1 and set its outlook from “negative” to “stable”. The rating action followed our announcements of a share-
buyback program (as mentioned above) and a capital structure target. The rating classication A is the third
highest rating within the agency’s debt ratings category. The numerical modier 1 indicates that our long-term
debt ranks in the higher end of the A category. The Moody’s rating outlook is an opinion regarding the likely
direction of an issuer’s rating over the medium-term. Rating outlooks fall into the following six categories: posi-
tive, negative, stable, developing, ratings under review and no outlook.
Moody’s Investors Service’s rating for Siemens’ short-term corporate credit and commercial paper is P-1, the
highest available rating in the prime rating system, which assesses issuers’ ability to honor senior nancial obli-
gations and contracts. It applies to senior unsecured obligations with an original maturity of less than one year.
In addition, Moody’s Investors Service published a credit opinion. The most recent credit opinion for Siemens
as of June 12, 2008 classied the liquidity prole of the Company as “very healthy”.
September 30,
2008 2007
Short-term debt 1,819 5,637
Plus: Long-term debt 14,260 9,860
Less: Cash and cash equivalents (6,893) (4,005)
Less: Current available for sale nancial assets (152) (193)
Net debt 9,034 11,299
Less: SFS Debt excluding internally purchased receivables (9,359) (6,675)
Plus: Funded status pension plan 2,460 1,039
Plus: DBO Other post-employment benets 650 779
Plus: Credit guarantees 480 386
Less: approx. 50% nominal amount hybrid bond (901) (1,000)
Adjusted industrial net debt 2,364 5,828
Moody’s
Investors
Service
Standard
& Poor’s
Long-term debt A1 AA–
Short-term debt P-1 A–1+