Siemens 2009 Annual Report Download - page 284

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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
The risk implied from the values shown in the table above, re-
flects the one-sided scenario of cash outflows only. Obliga-
tions under finance leases, trade payables and other financial
liabilities mainly originate from the financing of assets used in
our ongoing operations such as property, plant, equipment
and investments in working capital – e.g. inventories and
trade receivables. These assets are considered in the Com-
pany ’s overall liquidity risk management. To monitor existing
financial assets and liabilities as well as to enable an effective
controlling of future risks, Siemens has established a compre-
hensive risk reporting covering its worldwide business units.
The balanced view of liquidity and financial indebtedness is
stated in the calculation of the net debt amount and is used for
internal corporate finance management as well as external
communication with investors, analysts and rating agencies.
It results from the total amount of commercial paper, medium-
term notes, bonds, loans from banks and obligations under fi-
nance leases, less cash and cash equivalents as well as current
available-for-sale financial assets traded in an active market, as
stated on the consolidated balance sheet.
The Company ’s capital resources comprise Cash and cash
equivalents, Available-for-sale financial assets, short- and
long-term debt and cash flow from operating activities. In con-
trast, capital requirements include scheduled debt service,
regular capital spending and ongoing cash requirements from
operating activities.
Liquidity risk
Liquidity risk results from the Company ’s potential inability to
meet its financial liabilities, e.g. settlement of its financial
debt, paying its suppliers and settling finance lease obliga-
tions. Beyond effective working capital and cash management,
Siemens mitigates liquidity risk by arranged borrowing facili-
ties with highly rated financial institutions, via a medium-term
notes program and via an established global commercial paper
program. For further information on short- and long-term debt
see Note 23.
In addition to the above mentioned sources of liquidity,
Siemens constantly monitors funding options available in the
capital markets, as well as trends in the availability and costs of
such funding, with a view to maintaining financial flexibility
and limiting repayment risks.
The following table reflects all contractually fixed pay-offs for
settlement, repayments and interest resulting from recognized
financial liabilities, including derivative financial instruments
with a negative market value as of September 30, 2009. The
following table presents undiscounted cash flows for the re-
spective upcoming fiscal years. Cash outflows for financial lia-
bilities (including interest) without fixed amount or timing are
based on the conditions existing at September 30, 2009.
B27T087_E
2010 2011 2012 to
2014
2015 and
thereafter
Non-derivative
financial liabilities
Notes and bonds 815 2,820 7,187 10,008
Loans from banks 308 65 1,403 657
Other financial
indebtedness 445 40 90 76
Obligations under
finance leases 54 47 42 77
Trade payables 7,590 8 6 2
Other financial liabilities 576 45 44 97
Derivative financial liabilities 569 228 161 61
B27T088_E
September 30,
2009 2008
Short-term debt and current
maturities of long-term debt 698 1,819
Long-term debt 18,940 14,260
Total debt 19,638 16,079
Cash and cash equivalents 10,159 6,893
Available-for-sale financial assets 170 152
Total liquidity 10,329 7,045
Net debt (Total debt less Total liquidity) 9,309 9,034