Siemens 2008 Annual Report Download - page 292

196 Notes to Consolidated Financial Statements
(in millions of €, except where otherwise stated and per share amounts)
The tables below show the net foreign exchange transaction exposure by major currencies as of September 30,
2008 and 2007. In some currencies Siemens has both substantial sales and costs, which have been off-set in the
table:
Effects of currency translation
Many Siemens subsidiaries are located outside the Euro zone. Since the nancial reporting currency of Siemens
is the Euro, the nancial statements of these subsidiaries are translated into euros so that their nancial results
can be included in the Consolidated Financial Statements of Siemens. To consider the effects of foreign exchange
translation risk in the risk management, the assumption is that investments in foreign-based operations are
permanent and that reinvestment is continuous. Whenever a divestment of a particular asset or entity is made,
the value of this transaction risk is included in the sensitivity analysis. Effects from currency uctuations on the
translation of net asset amounts into Euro are reected in the Company’s consolidated equity position.
Interest rate risk
Siemens’ interest rate risk exposure is mainly related to debt obligations like bonds, loans, commercial paper
programs and interest-bearing deposits and investments. Siemens seeks to limit this risk through the use of
derivative instruments which allow it to hedge fair value changes by swapping xed rates of interest into vari-
able rates of interest. For additional information see Note 32.
September 30, 2008
USD GBP Other Total
Gross balance sheet exposure 7,851 181 (97) 7,934
Thereof: Financial assets 15,912 2,844 6,390 25,146
Thereof: Financial liabilities (8,061) (2,663) (6,487) (17,212)
Gross exposure from rm commitments
and anticipated transactions 4,068 586 694 5,348
Foreign exchange transaction exposure 11,919 767 597 13,282
Economically hedged exposure (12,348) (878) (835) (14,061)
Change in future cash ows after hedging activities
resulting from a 10% depreciation of the Euro (43) (11) (24) (78)
September 30, 2007*
USD GBP Other Total
Gross balance sheet exposure 223 321 208 752
Thereof: Financial assets 7,858 3,642 4,769 16,269
Thereof: Financial liabilities (7,635) (3,321) (4,561) (15,517)
Gross exposure from rm commitments
and anticipated transactions 3,730 392 1,193 5,315
Foreign exchange transaction exposure 3,952 713 1,398 6,063
Economically hedged exposure (3,893) (567) (1,132) (5,592)
Change in future cash ows after hedging activities
resulting from a 10% depreciation of the Euro (6) (15) (27) (47)
* including SV.