Siemens 2009 Annual Report Download - page 264

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 Reports Supervisory Board /
Managing Board  Corporate Governance  Management’s discussion and analysis  Consolidated Financial Statements
 Consolidated Statements of Income  Consolidated Statements of Income
and Expense Recognized in Equity
 Consolidated Balance Sheets  Consolidated Statements of Cash Flow
est taxes, depreciation and amortization (EBITDA) as adjusted.
The calculation of Adjusted industrial net debt is set forth in
the table below. Adjusted EBITDA is calculated as earnings be-
fore income taxes (EBIT) (adjusted) before amortization (de-
fined as amortization and impairments of intangible assets
other than goodwill) and depreciation and impairments of
property, plant and equipment and goodwill. Adjusted EBIT is
income from continuing operations before income taxes less
financial income (expense), net and income (loss) from invest-
ments accounted for using the equity method, net.
The target range for our capital structure ratio is 0.8 – 1.0. As a
step toward achieving this target range, we implemented our
share buyback plan for up to €10 billion in share repurchases
through 2010 – see Note 27. In fiscal 2009, no shares were re-
purchased under this program.
A key factor in maintaining a strong financial profile is our
credit rating which is affected by capital structure, profitability,
ability to generate cash flow, geographic and product diversifi-
cation as well as our competitive market position, among other
factors. Our current corporate credit ratings from Moody ’s In-
vestors Service and Standard & Poor’s are noted below:
 ADDITIONAL CAPITAL DISCLOSURES
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 percent compared to fiscal 2008.
Total debt increased by 22 percent during the last fiscal year
primarily due to the issuance of Euro medium-term notes with
a carrying amount of €3.98 billion as of September 30, 2009
partly offset by repaying the €0.5 billion floating rate extend-
ible note and U.S.$750 million floating rate notes with a carry-
ing amount of €524. This resulted in a decrease in total equity
as a percentage of total capital to 58 percent compared to 62
percent in fiscal 2008. This also resulted in an increase in Total
debt as a percentage of Total capital of 42 percent in fiscal
2009 from 38 percent in the prior year.
Commitments exist to sell or otherwise issue common shares
in connection with established share-based compensation plans.
In fiscal 2009, commitments for share-based compensation
were fulfilled through treasury shares, which is intended to
continue in fiscal 2010. For additional information with respect
to share-based compensation and treasury shares, see Note 34.
As part of our Fit42010 program, we decided to improve our
capital structure. A key consideration is to maintain ready ac-
cess to capital markets through various debt products and to
preserve our ability to repay and service our debt obligations
over time. We therefore set a capital structure goal defined as
Adjusted industrial net debt, divided by Earnings before inter-
September , % Change
 
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, as
stated above, and total equity) 46,284 42,853 8%
B27T076_E
B27T077_E
September ,
 
Short term debt 698 1,819
Plus: Long term debt 18,940 14,260
Less: Cash and cash equivalents (10,159) (6,893)
Less: Current available for sale
financial assets (170) (152)
Net debt 9,309 9,034
Less: SFS Debt excl. internally
purchased receivables (9,521) (9,359)
Plus: Funded status pension plan 4,015 2,460
Plus: Funded status other post
employment benefits 646 650
Plus: Credit guarantees 313 480
Less: approx. 50% nominal amount
hybrid bond (862) (901)
Less: Fair value hedge accounting
adjustment 1(1,027) (180)
Adjusted industrial net debt 2,873 2,184
 Fair value hedge accounting adjustments have been included since fiscal ;
prior year amounts were adjusted accordingly.