Siemens 2013 Annual Report Download - page 174

92 A. To our Shareholders
117 B. Corporate Governance 155 C. Combined Management Report
156 C. Business and economic environment
173 C. Financial performance system
179 C. Results of operations
192 C. Financial position
204 C. Net assets position
207 C. Overall assessment of the economic position
209 C. Subsequent events
210 C. Sustainability
227 C. Report on expected developments and
associated material opportunities and risks

We intend to achieve a target for ROCE (adjusted) for continu-
ing operations of % to %. ROCE (adjusted) for continuing
operations amounted to .% in fiscal , compared to
.% a year earlier. The decrease was due to a combination of
lower income from continuing operations and higher average
capital employed. ROCE (adjusted) for continuing and discon-
tinued operations amounted to .% in fiscal , compared
to .% a year earlier. For information on the calculation of
ROCE (adjusted) and its components see C.. ADDITIONAL
INFORMATION FOR FINANCIAL PERFORMANCE MEASURES. Siemens’
weighted average cost of capital (WACC) at the end of fiscal
 was approximately .%.
Our financial indicator for measuring capital efficiency at
Financial Services (SFS) is return on equity after tax, or ROE
(after tax), in line with common practice in the financial ser-
vices industry. We define ROE (after tax) as SFS’ profit after tax,
divided by SFS’ average allocated equity. For purposes of calcu-
lating ROE (after tax), the relevant income tax is calculated on
a simplified basis, by applying an assumed % flat tax rate to
SFS’ profit, excluding income (loss) from investments account-
ed for using the equity method, net, which is basically net
of income tax already, and tax-free income components and
others such as components which have already been taxed or
are generally tax-free. We intend to achieve a target for ROE
(after tax) of % to % at SFS.
C.. Capital structure
A key consideration within the framework of One Siemens is to
maintain ready access to the capital markets through various
debt products and preserve our ability to repay and service our
debt obligations over time. Therefore, we use the ratio of ad-
justed industrial net debt to adjusted EBITDA for managing
and controlling our capital structure and as an indicator for the
required period in years to repay the adjusted industrial net
debt. Interest, taxes, depreciation and amortization are not
taken into consideration for purposes of this financial mea-
sure. Our goal is to achieve a ratio in the range of . – .. The
capital structure ratio as of September ,  increased to
., compared to . a year earlier. This difference was due
to an increase of adjusted industrial net debt and a decrease of
adjusted EBITDA (continuing operations). For more informa-
tion, see C.. RECONCILIATION TO ADJUSTED EBITDA (CONTINUING
OPERATIONS) and C.. CAPITAL STRUCTURE.
Return on capital employed (ROCE (adjusted))
(continuing operations)
FY  13.8%
FY  15.5%
Target range:  – %
Income from continuing operations before interest after tax
× 100%
Average capital employed
Capital structure (continuing operations)
FY  0.34
FY  0.24
Target range: . – .
Adjusted industrial net debt
Adjusted EBITDA
Return on Equity (ROE) (after tax)
FY  17.1%
FY  21.9%
Target range:  – %
SFS’ profit after tax
× 100 %
SFS’ average allocated equity