Siemens 2012 Annual Report Download - page 180

1 A. To our Shareholders
21 B. Corporate Governance 49 C. Combined Management Report
50 C. Business and economic environment
64 C. Financial performance measures
69 C. Results of operations
82 C. Financial position
93 C. Net assets position
95 C. Overall assessment of the economic position
96 C. Subsequent events
97 C. Sustainability
111 C. Report on expected developments and
associated material opportunities and risks

As mentioned earlier, Siemens announced in August  that
it would adjust its capital structure through share buybacks
amounting to up to € billion by December , . In fiscal
 we recorded cash outflows of €. billion relating to the
repurchase of ,, treasury shares at a weighted aver-
age share price of €.. After the end of the fiscal  we re-
corded additional cash outflows of €. billion relating to the
share buyback program.
Other capital requirements also include expected significant
cash outflows in coming quarters relating to charges for pro-
gram-related productivity measures in Sectors in connection
with “Siemens ,” a company-wide program supporting our
One Siemens framework for sustainable value creation.
With our ability to generate positive operating cash flows, our
total liquidity of €. billion and our €. billion in undrawn
lines of credit and given our credit ratings at year-end we be-
lieve that we have sufficient flexibility to fund our capital re-
quirements including scheduled debt service, regular capital
spending, ongoing cash requirements from operating and SFS
financing activities, dividend payments, pension plan funding
and portfolio activities. Also in our opinion, our working capi-
tal is sufficient for the Company ’s present requirements.
...  
In the ordinary course of business, Siemens’ primary contrac-
tual obligations regarding cash relate to debt, purchase obliga-
tions and operating leases.
The following table summarizes our contractual obligations as
of September ,  that will result in future cash outflows:
   
Total Less than
 year
 – 
years
 – 
years
After
 years
(in millions of €)
Debt 20,707 3,826 1,940 7,325 7,615
Purchase
obligations 20,519 14,097 3,256 1,650 1,515
Operating leases 3,167 812 1,043 543 770
Total contractual
obligations 44,392 18,735 6,239 9,519 9,899
Debt – As of September , , Siemens had €. billion
of short- and long-term debt, of which €. billion will be-
come due within the next twelve months. Short-term debt in-
cludes current maturities of long-term debt, as well as loans
from banks coming due within the next twelve months. Fur-
ther information about the components of debt is given in
   .     .
Debt for Siemens as of September ,  consisted of the
following:
(in millions of €) Short-term Long-term Total
Notes and bonds 2,018 16,194 18,212
Loans from banks 1,505 449 1,954
Other financial indebtedness 270 110 380
Obligations under finance leases 33 128 161
Total debt 3,826 16,880 20,707
Purchase obligations – Purchase obligations include agree-
ments to purchase goods or services that are enforceable and
legally binding and which specify all of the following items: ()
fixed or minimum quantities, () fixed, minimum or variable
price provisions and () approximate timing of the transaction.
As of September , , Siemens had €. billion in pur-
chase obligations. These purchase obligations primarily relat-
ed to agreements of our Sectors on the purchase of goods such
as property plant and equipment, intangible assets, raw mate-
rials and supplies or to the purchase of services such as advertis-
ing or maintenance. These purchase obligations have not been
recognized as liabilities or expenses as of September , .
In December , Siemens and AtoS signed an option agree-
ment (written call option) which granted AtoS the right to ac-
quire Siemens IT Solutions and Services. Closing of the trans-
action was on July , . Related to the transaction is a sev-
en-year outsourcing contract worth around €. billion, under
which AtoS will provide managed services and system integra-
tion to Siemens. The expected remaining cash outflows from
the outsourcing contract are included in these purchase obli-
gations. For further information on that transaction see
   .     .
Operating leases – As of September , , Siemens had
a total of €. billion in total future payment obligations
under non-cancelable operating leases, mainly relating to SRE
activities.
Other – Siemens is subject to asset retirement obligations
related to certain items of property, plant and equipment. Such
asset retirement obligations are primarily attributable to envi-
ronmental clean-up costs related to remediation and environ-
mental protection, which amounted to €. billion as of
September , , and costs primarily associated with the re-
moval of leasehold improvements at the end of the lease term
of € million as of September , . The environmental
clean-up costs related to remediation and environmental