Siemens 2013 Annual Report Download - page 201

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

None of our credit facilities contains a material adverse change
provision of the type often found in facilities of such nature,
and none of our global commercial paper and debt issuance
programs nor our credit facilities contain specific financial cov-
enants such as rating triggers or interest coverage, leverage or
capitalization ratios that could trigger remedies, such as accel-
eration of repayment or additional collateral.
We mitigate the risk resulting from changes in the fair value of
future changes relating to our loans, notes and bonds by using
derivative financial instruments which allow us to hedge fair
value changes by swapping fixed rates of interest rates to vari-
able rates. As of September , , % of our underlying
loans, notes and bonds were changed from fixed interest rates
into variable interest rates. In addition, in order to optimize our
position with regard to interest income and interest expense
and to manage the overall financial interest rate risk with re-
spect to valuation risk affecting profit and loss and economic
risk of changing interest rates, our Corporate Treasury per-
forms a comprehensive corporate interest rate management,
under which the interest rate risk relating to the SFS business
and to the remaining group are managed separately. Further
information about our bonds and the other components of our
debt as well as about the use of financial instruments for hedg-
ing purposes is provided in NOTES ,  AND  in D.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
C... CONTRACTUAL OBLIGATIONS
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:
Payments due by period
Total Less than
 year
- years - years After
 years
(in millions of €)
Debt 20,453 1,944 2,928 7,580 8,001
Purchase
obligations 19,977 14,441 3,037 1,148 1,350
Operating leases 3,120 807 1,020 536 757
Total contractual
obligations 43,550 17,192 6,985 9,264 10,108
Debt – As of September , , Siemens had €. billion
of short- and long-term debt, of which €. billion will
become due within the next twelve months. Short-term debt
includes 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
NOTE  in D. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
Debt for Siemens as of September ,  consisted of the
following:
(in millions of €) Short-term Long-term Total
Notes and bonds 1,431 17,060 18,491
Loans from banks 412 1,233 1,645
Other financial indebtedness 82 106 188
Obligations under finance leases 20 110 130
Total debt 1,944 18,509 20,453
Purchase obligations – Purchase obligations include agree-
ments to purchase goods or services, which 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 purchase obligations. These purchase obligations pri-
marily related to agreements of our Sectors on the purchase of
goods such as property, plant and equipment, intangible as-
sets, raw materials and supplies or to the purchase of services
such as advertising or maintenance. These purchase obliga-
tions 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. The closing of the
transaction was on July , . Related to the transaction is a
seven-year outsourcing contract worth around €. billion, un-
der which AtoS provides managed services and system inte-
gration to Siemens. The expected remaining cash outflows
from the outsourcing contract are included in these purchase
obligations. For further information on that transaction, see
NOTE  in D. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.