Siemens 2011 Annual Report Download - page 202

6 A. To our shareholders
23 B. Corporate Governance 51 C. Combined management’s discussion and analysis
52 C. Business and operating environment
80 C. Fiscal  – Financial summary
83 C. Results of operations
101 C. Financial position
114 C. Net assets position
117 C. Overall assessment of the economic position
118 C. Report on post-balance sheet date events
119 C. Report on expected developments and
associated material opportunities and risks
135 C. Information required pursuant to Section  ()
and Section  () of the German Commercial
Code (HGB) and explanatory report

and product diversification as well as our competitive market
position. Our current corporate credit ratings from Moody ’s In-
vestors Service and Standard & Poor’s are noted as follows:
Moody ’s Investors
Service
Standard &
Poor’s
Long-term debt A1 A +
Short-term debt P-1 A -1+
On November 9,  Moody ’s applied a long-term credit rat-
ing of “A.” The rating classification “A” is the third highest rat-
ing within the agency ’s debt ratings category. The numerical
modifier “” indicates that our long-term debt ranks in the
higher end of the A category. On September ,  Moody ’s
revised its outlook for Siemens’ credit rating from “stable” to
“positive.” The outlook change recognizes that over the past
years, Siemens’ large business portfolio has become more bal-
anced and resilient to cyclicality as a result of disposals. Fur-
thermore it reflects Siemens’ strengthened profitability. The
Moody ’s rating outlook is an opinion regarding the likely di-
rection of an issuer’s rating over the medium-term. Rating
outlooks of Moody ’s fall into the following six categories:
“positive,” “negative,” “stable,” “developing,” “ratings under re-
view” and “no outlook.”
Moody ’s Investors Service’s rating for our short-term corpo-
rate credit and commercial paper is “P-,” the highest available
rating in the prime rating system, which assesses issuers’
ability to honor senior financial obligations and contracts. It
applies to senior unsecured obligations with an original matu-
rity of less than one year. On September ,  Moody ’s af-
firmed our “P-” short-term rating.
On June ,  Standard & Poor’s applied a long-term credit
rating of “A+.” Within Standard & Poor’s ratings definitions an
obligation rated “A” has the third highest long-term rating cat-
egory. The modifier “+” indicates that our long-term debt
ranks in the upper end of the A category. On April , ,
Standard & Poor’s revised its outlook for Siemens’ credit rating
from “stable” to “positive.” The outlook revision reflects Siemens’
solid operating and financial performance throughout the
 to  global financial and economic downturn. A rat-
ing outlook indicates the potential direction of a long-term
credit rating over the medium-term. Rating outlooks of Stan-
dard & Poor’s fall into the following four categories: “positive,”
“negative,” “stable” and “developing.”
Furthermore, Standard & Poor’s raised our short-term corpo-
rate credit rating from “A-” to “A-+” on April , . This is
the highest short-term rating within the Standard & Poor’s
short-term rating scale. The upgrade of the short-term rating
is based on Standard & Poor’s assessment of our liquidity.
The U.S. Securities and Exchange Commission granted the reg-
istration of Moody’s Investors Services and Standard & Poor’s
Ratings Services the status of nationally recognized statistical
rating organizations (NRSROs). Siemens does not have any
agreements with other nationally recognized statistical rating
organizations to provide long-term and short-term credit
ratings.
We believe that our high credit rating for our long-term debt
applied by Moody ’s and Standard & Poor’s allows us to raise
funds in the capital markets at attractive conditions or to ob-
tain financing from banks with financial flexibility. A high
credit rating generally leads to lower credit spreads and there-
fore our rating also positively affects our funding costs. Secu-
rity ratings are not a recommendation to buy, sell or hold se-
curities. Credit ratings may be subject to revision or withdraw-
al by the rating agencies at any time and each rating should
be evaluated independently of any other rating.
C.. Capital structure
As of September ,  and , our capital structure was
as follows:
(in millions of €)
September , % Change
 
Total equity attributable to
shareholders of Siemens AG 31,530 28,346 11%
As percentage of total capital 64% 59%
Short-term debt and current
maturities of long-term debt 3,660 2,416
Long-term debt 14,280 17,497
Total debt 17,940 19,913 (10)%
As percentage of total capital 36% 41%
Total capital
(total debt and total equity) 49,470 48,259 3%
In fiscal , total equity attributable to shareholders of
Siemens AG increased by % compared to fiscal . Total
debt decreased by % during fiscal . This resulted in an