Siemens 2009 Annual Report Download - page 310

222
 Reports Supervisory Board /
Managing Board  Corporate Governance  Management’s discussion and analysis  Consolidated Financial Statements
218 Statement of the Managing Board 218 Responsibility statement 219 Independent auditors’ report 220 Five-year summary
Glossary
AAmerican depository shares (ADSs)/
American depository receipts
Negotiable share certificates issued by major U.S. banks, related to non-American shares deposited
with them. ADSs are generally issued in a ratio of 1:1.
Asset management The process of managing corporate assets in order to enhance operational efficiency while
minimizing costs and associated risks.
Associated companies An associate is an entity, including an unincorporated entity such as a partnership, over which the
investor has significant influence and that is neither a subsidiary nor an interest in a joint venture.
BBenchmarking A technique used to compare the products, services, processes and financials within an organiza-
tion with the best practices at other, similar organizations.
Business portfolio The aggregate total of business areas in which Siemens is active.
CCaptive finance entity A financial services unit organized as a business within an industrial enterprise that offers financial
solutions primarily to customers of the operating units of that enterprise.
Cash conversion rate Measures the proportion of profit that is converted into free cash flow (see free cash flow).
Cash flow Reflects the amounts of cash and cash equivalents being received and used by a company during
a defined period of time. The cash flow is presented in the statements of cash flow.
Cash management The management of cash and cash equivalents within an organization to optimize financial
activities.
Commercial paper Short-term loan issued in the open market by companies with strong credit ratings. Maturities
typically range from 2 to 270 days.
Consolidated financial statements Financial statements that bring together all the assets, liabilities, net worth, results of operations
and cash flows
of two or more affiliated companies, as though the business were in fact a single economic entity.
Corporate Treasury A corporate function responsible for ensuring the availability of company-wide financing and cash
management, including consulting services involving issues of corporate finance, interest rates
and currencies, liquidity management and all other questions related to the financial management
of operations.
Cost of capital The cost of capital represents the minimum return expected by the providers of capital. For equity
providers this includes the expected increase in the value of a company’s share.
DDebt-to-equity ratio Total long-term debt divided by total shareholders’ equity.
Deferred taxes Assets and liabilities arising from the different treatment of transactions for financial and tax
reporting purposes.
Defined benefit obligation (DBO) Defined benefit obligation (DBO) is the present value, without deducting any plan assets, of expec-
ted future payments (including compensation increase) required to settle the obligation resulting
from employee service in the current and prior periods.
Derivative A financial instrument whose value varies with the value of an underlying asset (such as a stock,
bond, currency or commodity) or index (such as interest rates).
Dilution Dilution is a reduction in earnings per share or an increase in loss per share resulting from the
assumption that convertible instruments are converted, that options or warrants are exercised,
or that ordinary shares are issued upon the satisfaction of specified conditions.
Discontinued operations A component of an entity that either has been disposed of or is classified as held for sale and
represents a separate major line of business or geographical area of operations, is part of a single
coordinated plan to dispose of a separate major line of business or geographical area of operations
or is a subsidiary acquired exclusively with a view to resale.