Siemens 2013 Annual Report Download - page 193

253 D. Consolidated Financial Statements
357 E. Additional Information
245 C. Compensation Report, Corporate Governance
statement pursuant to Section a of the
German Commercial Code, Takeover-relevant
information and explanatory report
246 C. Siemens AG ( Discussion on basis of
German Commercial Code)
250 C. Notes and forward-looking statements

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 28,111 30,855 (9)%
As percentage of total capital 58% 60%
Short-term debt and current
maturities of long-term debt 1,944 3,826
Long-term debt 18,509 16,880
Total debt 20,453 20,707 (1)%
As percentage of total capital 42% 40%
Total capital
(total equity and total debt) 48,564 51,561 (6)%
For information on changes in equity and debt, see C. NET
ASSETS POSITION.
We believe that sustainable revenue and profit development
can be achieved only on the basis of a healthy capital struc-
ture. A key consideration of our capital structure management
is to maintain ready access to the capital markets through
various debt products and to preserve our ability to repay and
service our debt obligations over time. Siemens set a capital
structure target range of . – .. The ratio is defined as the
item Adjusted industrial net debt divided by the item Adjusted
EBITDA (continuing operations). This financial performance
measure indicates the approximate amount of time in years
that would be needed to pay off Adjusted industrial net debt
through continuing income, without taking into account inter-
est, taxes, depreciation and amortization.
We calculate the item Adjusted industrial net debt as set forth
in the table below. For further information on the calculation
of Adjusted EBITDA (continuing operations), see C.. RECON-
CILIATION TO ADJUSTED EBITDA (CONTINUING OPERATIONS).
(in millions of €)
September ,
 
Short-term debt and current maturities
of long-term debt 1,944 3,826
Plus: Long-term debt  18,509 16,880
Less: Cash and cash equivalents (9,190) (10,891)
Less: Current available-for-sale financial assets (601) (524)
Net debt 10,663 9,292
Less: SFS Debt (15,600) (14,558)
Plus: Post-employment benefits 9,265 9,801
Plus: Credit guarantees 622 326
Less: % nominal amount hybrid bond (899) (920)
Less: Fair value hedge accounting adjustment  (1,247) (1,670)
Adjusted industrial net debt 2,805 2,271
Adjusted EBITDA (continuing operations) 8,215 9,613
Adjusted industrial net debt /adjusted EBITDA
(continuing operations) 0.34 0.24
1 The item Short-term debt and current maturities of long-term debt as well as the
item Long-term debt included in total fair value hedge accounting adjustments of
€, million and €, million for the fiscal year ended September ,  and
, respectively.
2 The adjustment considers that both Moody’s and S&P view SFS as a captive finance
company. These rating agencies generally recognize and accept higher levels
of debt attributable to captive finance subsidiaries in determining credit ratings.
Following this concept, we exclude SFS Debt in order to derive an adjusted industrial
net debt which is not affected by SFS’s financing activities.
3 To reflect Siemens’ total pension liability, adjusted industrial net debt includes line
item Post-employment benefits as presented in D. CONSOLIDATED STATEMENTS
OF FINANCIAL POSITION.
4 The adjustment for our hybrid bond considers the calculation of this financial
ratio applied by rating agencies to classify % of our hybrid bond as equity and
% as debt. This assignment reflects the characteristics of our hybrid bond such
as a long maturity date and subordination to all senior and debt obligations.
5 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. We believe this
is a more meaningful figure for the calculation presented above. For further in for-
mation on fair value hedges see NOTE  in D. NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS.