Siemens 2010 Annual Report Download - page 202

6 To our shareholders 21 Corporate Governance 49 Combined management’s discussion and analysis
50 Business and operating environment
78 Fiscal  – Financial summary
81 Results of operations
98 Financial position
110 Net assets position
113 Overall assessment of the economic position

Return on capital employed (ROCE)
ROCE
Fit
ROCE (adjusted)
One Siemens
September 30, September 30,
(in millions of €)    
Capital employed
Total equity 29,096 27,287 29,096 27,287
Plus: Long-term debt 17,497 18,940 17,497 18,940
Plus: Short-term debt and current maturities of long-term debt 2,416 698 2,416 698
Less: Cash and cash equivalents (14,108) (10,159) (14,108) (10,159)
Plus: Pension plans and similar commitments 8,464 5,938
Less: Siemens Financial Services (SFS) Debt (10,028) (9,521)
Less: Fair value hedge accounting adjustments 1 (1,518) (1,027)
Capital employed (continuing operations) 34,901 36,766 31,819 32,156
Average capital employed (continuing operations) 2, 3 37,360 39,100 33,513 34,676
ROCE
Fit
ROCE (adjusted)
One Siemens
Year ended September 30, Year ended September 30,
   
Income from continuing operations before interest after tax
Net income 4,068 2,497 4,068 2,497
Plus: Other interest (income) expense, net (317) (111) (317) (111)
Less: SFS Other interest income (expense) 4339 265
Plus: Interest cost on Pension plans and similar commitments 5315 270
Less: Taxes on interest adjustments 692 41 (98) (157)
Income before interest after tax 3,843 2,427 4,307 2,764
Plus: (Income) loss from discontinued operations, net of income taxes 44 (40) 44 (40)
Income from continuing operations before interest after tax 3,887 2,387 4,351 2,724
Return on capital employed (ROCE) (continuing operations)
(I) Income from continuing operations before interest after tax 3,887 2,387 4,351 2,724
(II) Average capital employed (continuing operations) 2, 3 37,360 39,100 33,513 34,676
(I) / (II) ROCE (continuing operations) 10.4% 6.1% 13.0% 7.9%
1 Debt is generally reported with a value representing approximately the amount to be repaid. However for debt designated in a hedging relationship (fair value hedges), this amount is
adjusted by changes in market value mainly due to changes in interest rates. Accordingly we deduct these changes in market value in order to end up with an amount of debt that
approximately will be repaid, which we believe is a more meaningful figure for the calculation presented above. For further information on fair value hedges see, “Notes to Consolidated
Financial Statements.”
2 In fiscal , Capital employed (continuing operations) includes adjustments relating to minor assets and liabilities associated with Assets classified as held for disposal presented as
discontinued operations.
3 Average capital employed for a fiscal year is determined as a five-point average in capital employed of the respective quarters starting with the capital employed as of September  of
the previous fiscal year.
4 SFS Other income (expense) is included in Other interest income (expense), net. Adding back SFS Other income (expense) in the nominator corresponds to the adjustment for SFS Debt
in the denominator.
5 For fiscal 2010 and 2009, interest cost on Pension plans and similar commitments is calculated using the weighted average discount rate of our principal pension benefit plans at
period-end for the fiscal year ended September ,  (.%) and for the fiscal year ended September ,  (.%) (both as reported in “Notes to Consolidated Financial State-
ments”) applied to Pension plans and similar commitments as reported in the “Consolidated Statements of Financial Position” as of September ,  and , respectively.
6 Effective tax rate for the determination of taxes on interest adjustments is calculated by dividing Income from continuing operations before income taxes through Income taxes, both as
reported in the “Consolidated Statements of Income.”
Due to rounding, numbers presented may not add up precisely to the totals provided and percentages may not precisely reflect the absolute figures.