Siemens 2009 Annual Report Download - page 173

85
 Managing Board statements, Independent auditors’ report, Additional information
95 Net assets position 97 Report on post-balance sheet date events
98 Risk report
108 Information required pursuant to
§315 (4) HGB of the German Commercial
Code and explanatory report
114 Compensation report
114 Report on expected developments
As part of our Fit42010 program, we decided to improve our
capital structure. A key consideration in this regard is to main-
tain ready access to capital markets through various debt prod-
ucts and to preserve our ability to repay and service our debt
obligations over time. We therefore set ourselves a capital
structure goal defined as Adjusted industrial net debt divided
by Earnings before interest, taxes, depreciation and amortiza-
tion (EBITDA) as adjusted. The calculation of Adjusted indus-
trial net debt is set forth in the table below. Adjusted EBITDA is
calculated as earnings before income taxes (EBIT) (adjusted)
before amortization (defined as amortization and impairments
of intangible assets other than goodwill) and depreciation and
impairments of property, plant and equipment and goodwill.
Adjusted EBIT is calculated as income from continuing opera-
tions before income taxes less financial income (expense), net
and income (loss) from investments accounted for using the
equity method, net.
The target range for our capital structure ratio is 0.8 – 1.0. We
set this target based on normal business cycles, unlike the cur-
rent global recessionary conditions and the adverse effects of
the financial crisis. As a step toward achieving this target
range, we implemented our share buyback plan for up to €10
billion in share repurchases through 2010. Since the start of
the share buyback program on January 28, 2008, we acquired
a total of 52,771,205 Siemens shares with a market value at
purchase of approximately €4.0 billion in two tranches under
this plan amongst others for the purpose of cancellation and
reduction of capital stock, and to fulfill obligations arising out
of share-based compensation programs.
CAPITAL STRUCTURE
As of September 30, 2009 and 2008, our capital structure was
as follows:
In fiscal 2009, total equity attributable to shareholders of
Siemens AG decreased by 0.5% compared to fiscal 2008. Total
debt increased by 22% during fiscal 2009 primarily due to the
issuance of €4.0 billion in medium-term notes and the effect
of fair value hedges, partly offset by the repayments of the
€0.5 billion floating rate extendible note and US$750 million
floating rate notes. This resulted in a decrease in total equity as
a percentage of total capital to 58% compared to 62% in fiscal
2008. Accordingly, total debt as a percentage of total capital
increased to 42% from 38% in the prior year. For more detailed
information related to the fair value hedges, to the change in
total equity and to the issuance and repayment of debt, see
“Notes to Consolidated Financial Statements”, “Net assets posi-
tion” and “ – Capital resources and requirements”.
We have commitments to sell or otherwise issue common
shares in connection with established share-based compensa-
tion plans. In fiscal 2009, commitments for share-based com-
pensation were fulfilled through treasury shares. In fiscal
2010, we also plan to fulfill commitments for share-based com-
pensation through treasury shares. For additional information
with respect to share-based compensation and treasury
shares, see “Notes to Consolidated Financial Statements.”
(in millions of €)
September 30, % Change
2009 2008
Total equity attributable to
shareholders of Siemens AG 26,646 26,774 (0.5)%
As percentage of total capital 58% 62%
Short-term debt 698 1,819
Long-term debt 18,940 14,260
Total debt 19,638 16,079 22%
As percentage of total capital 42% 38%
Total capital
(total debt and total equity) 46,284 42,853 8%
B25T023_E