Siemens 2010 Annual Report Download - page 203

113 Report on post-balance sheet date events
114 Report on expected developments and associated
material opportunities and risks
128 Information required pursuant to § () and
§ () HGB and explanatory report
133 Information required pursuant to § () and
§ () no.  HGB and explanatory report
135 Compensation and declaration pursuant to §a HGB
135 Additional information for supplemental
financial measures
138 Siemens AG (Discussion on basis of HGB)
147 Consolidated Financial Statements
261 Additional information

Adjusted industrial net debt
Fit One Siemens
September 30, September 30,
(in millions of €)    
Short-term debt 2,416 698 2,416 698
Plus: Long-term debt 117,497 18,940 17,497 18,940
Less: Cash and cash equivalents (14,108) (10,159) (14,108) (10,159)
Less: Current available for sale financial assets (246) (170) (246) (170)
Net debt 5,560 9,309 5,560 9,309
Less: SFS Debt (10,028) (9,521) (10,028) (9,521)
Plus: Funded status principal pension benefit plans 6,357 4,015
Plus: Funded status principal other post-employment benefit plans 738 646
Plus: Pension plans and similar commitments 8,464 5,938
Plus: Credit guarantees 597 313 597 313
Less: % nominal amount hybrid bond
2 (886) (862) (886) (862)
Less: Fair value hedge accounting adjustment 3(1,518) (1,027) (1,518) (1,027)
(I) Adjusted industrial net debt 819 2,873 2,189 4,150
(II) Adjusted EBITDA (continuing operations) 10,034 9,219 10,034 9,219
(I) / (II) Adjusted industrial net debt / adjusted EBITDA (continuing operations) 0.08 0.31 0.22 0.45
1 Long-term debt including fair value hedge accounting adjustment of €, million and €, million for the fiscal year ended September ,  and , respectively.
2 The adjustment for our hybrid bond considers the calculation of this financial ratio applied by rating agencies to classify  percent of our hybrid bond as equity and  percent
as debt. This assignment follows the characteristics of our hybrid bond such as a long maturity date and subordination to all senior and debt obligations.
3 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.”
Due to rounding, numbers presented may not add up precisely to the totals provided and percentages may not precisely reflect the absolute figures.
DEFINITIONS OF OTHER FINANCIAL
PERFORMANCE MEASURES
We also use other financial performance measures in addition
to the measures described above, such as new orders and or-
der backlog for the assessment of our future revenue potential.
We define and calculate new orders and order backlog as fol-
lows:
Under our policy for the recognition of new orders, we gener-
ally recognize a new order when we enter into a contract that
we consider “legally effective and binding” based on a number
of different criteria. In general, if a contract is considered le-
gally effective and binding, we recognize the total contract
value. The contract value is the agreed price or fee for that
portion of the contract for which the delivery of goods and / or
the provision of services is irrevocably agreed. Future revenues
from service, maintenance and outsourcing contracts are rec-
ognized as new orders in the amount of the total contract
value only if there is adequate assurance that the contract will
remain in effect for its entire duration (e.g., due to high exit
barriers for the customer). New orders are generally recog-
nized immediately when the relevant contract becomes legally
effective and binding. The only exceptions are orders with
short overall contract terms. In this case, a separate reporting
of new orders would provide no significant additional informa-
tion regarding our performance. For orders of this type the
recognition of new orders thus occurs when the underlying
revenue is recognized.
Order backlog represents the future revenues of our Company
resulting from already recognized new orders. Order backlog is
calculated by adding the new orders of the current fiscal year
to the balance of the order backlog from the prior fiscal year
and subtracting the revenue recognized in the current fiscal
year. If an order from the current fiscal year is cancelled or its
amount is modified, we adjust our new order totals for the cur-
rent quarter accordingly, but do not retroactively adjust previ-
ously published new order totals. However, if an order from a
previous fiscal year is cancelled, new orders of the current
quarter and accordingly the current fiscal year are generally
not adjusted. Instead, if the adjustment exceeds a certain
threshold, the existing order backlog is revised. Aside from