Siemens 2011 Annual Report Download - page 243

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Beginning with fiscal , One Siemens is our framework for
capital efficient growth and sustainable value creation. For fur-
ther information, see C.. Financial performance measures.
As part of One Siemens, we monitor our capital effi
ciency us-
ing the indicator return on capital employed ROCE (adjusted).
The following tables report this financial indicator as defined
under One Siemens.
C.. Return on capital employed (ROCE) (adjusted)
Return on capital employed (ROCE) (adjusted)
September ,
(in millions of €)  
Capital employed
Total equity 32,156 29,096
Plus: Long-term debt 14,280 17,497
Plus: Short-term debt and current maturities of long-term debt 3,660 2,416
Less: Cash and cash equivalents (12,468) (14,108)
Plus: Pension plans and similar commitments 7,307 8,464
Less: Financial Services (SFS) Debt (12,075) (10,028)
Less: Fair value hedge accounting adjustments 1 (1,470) (1,518)
Capital employed (continuing and discontinued operations) 31,391 31,819
Less: Assets classified as held for disposal presented as discontinued operations (4,667) –
Plus: Liabilities classified as held for disposal presented as discontinued operations 1,756 –
Capital employed (continuing operations) 28,479 31,819
Average capital employed (continuing operations)  30,258 33,513
Year ended September ,
(in millions of €)  
Income from continuing operations before interest after tax
Net income 6,321 4,068
Plus / Less: Other interest expense / income, net (376) (317)
Less / Plus: SFS Other interest expense / income 3 371 339
Plus: Interest cost on Pension plans and similar commitments 4 356 315
Less: Taxes on interest adjustments 5 (85) (98)
Income before interest after tax 6,587 4,308
Less / Plus: Income / loss from discontinued operations, net of income taxes 690 194
Income from continuing operations before interest after tax 7,277 4,502
Calculation of tax rate
(I) Income from continuing operations before income taxes 9,242 5,974
(II) Income taxes (2,231) (1,712)
(II) / (I) Tax rate 24% 29%
Return on capital employed (ROCE) (adjusted) (continuing operations)
(I) Income from continuing operations before interest after tax 7,277 4,502
(II) Average capital employed (continuing operations) 2 30,258 33,513
(I) / (II) ROCE (adjusted) (continuing operations) 24.0% 13.4%
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 D. Notes to
Consolidated Financial Statements.
2 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.
3 SFS Other interest income / expense is included in Other interest income / expense, net. Adding back SFS Other interest income / expense in the numerator corresponds to the
adjustment for SFS Debt in the denominator.
4 For fiscal  and , 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
Statements) applied to Pension plans and similar commitments as reported in the Consolidated Statements of Financial Position as of September ,  and , respectively.
5 Effective tax rate for the determination of taxes on interest adjustments is calculated by dividing Income taxes through Income from continuing operations before 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.
C. Additional information
for supplemental financial measures