Siemens 2013 Annual Report Download - page 321

253 D. Consolidated Financial Statements 357 E. Additional Information
254 D.1 Consolidated Statements of Income
255 D.2 Consolidated Statements of Comprehensive Income
256 D.3 Consolidated Statements of Financial Position
257 D. Consolidated Statements of Cash Flows
258 D.5 Consolidated Statements of Changes in Equity
260 D.6 Notes to Consolidated Financial Statements
348 D.7 Supervisory Board and Managing Board
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tive upcoming fiscal years, based on the earliest date on which
Siemens could be required to pay. Cash outflows for financial
liabilities (including interest) without fixed amount or timing
are based on the conditions existing at September , .
Year ended September 30,
2014 2015
2016 to
2018
2019 and
thereafter
(in millions of €)
Non-derivative
financial liabilities
Notes and bonds 2,077 622 9,937 9,368
Loans from banks 478 393 859 11
Other financial
indebtedness 87 10 38 –
Obligations under
finance leases 30 17 62 89
Trade payables 7,710 19 10 1
Other financial liabilities 1,188 42 422 4
Derivative
financial liabilities 377 147 224 39
Irrevocable loan
commitments 2,354 224 303 69
The risk implied from the values shown in the table above re-
flects the one-sided scenario of cash outflows only. Obliga-
tions under finance leases, trade payables and other financial
liabilities mainly originate from the financing of assets used in
Siemens’ ongoing operations such as property, plant, equip-
ment and investments in working capital – e.g. inventories
and trade receivables. These assets are considered in the Com-
pany ’s overall liquidity risk management. A considerable por-
tion of the irrevocable loan commitments result from as-
set-based lending transactions meaning that the respective
loans can only be drawn after sufficient collateral has been
provided by the borrower. To monitor existing financial assets
and liabilities as well as to enable an effective controlling of
future risks, Siemens has established a comprehensive risk
reporting covering its worldwide business units.
The balanced view of liquidity and financial indebtedness is
stated in the calculation of the Net debt. Net debt results from
total debt less total liquidity. Total debt comprises line item
Short-term debt and current maturities of long-term debt as
well as line item Long-term debt, as stated on the Consolidated
Statements of Financial Position. Total debt comprises items
Notes and bonds, Loans from banks, Obligations under finance
leases and Other financial indebtedness such as commercial
paper. Total liquidity refers to the liquid financial assets, which
Siemens had available at the respective period-end dates to
fund its business operations and to pay for near-term obliga-
tions. Total liquidity comprises line items Cash and cash
equivalents as well as line item Available-for-sale financial
assets, as stated on the Consolidated Statements of Financial
Position. Management uses the Net debt measure for internal
finance management, as well as for external communication
with investors, analysts and rating agencies.
September 30,
(in millions of €) 2013 2012
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
Cash and cash equivalents (9,190) (10,891)
Available-for-sale financial assets (current) (601) (524)
Total liquidity (9,790) (11,415)
Net debt (Total debt less Total liquidity) 10,663 9,292
Siemens’ capital resources consist of a variety of short- and
long-term financial instruments including, but not limited to,
loans from financial institutions, commercial paper, notes and
bonds as well as credit facilities. In addition to cash and cash
equivalents and to available-for-sale financial assets, liquid re-
sources consist of future cash flows from operating activities.
Siemens’ capital requirements include, among others, sched-
uled debt service, regular capital spending, ongoing cash re-
quirements from operating and SFS financing activities, in-
cluding cash outflows related to the announced growth strate-
gy of SFS, dividend payments, pension plan funding, portfolio
activities, and cash outflows in connection with “Siemens
,” a Company-wide program aimed at improving profitabil-
ity in the Sectors.
CREDIT RISK
Credit risk is defined as an unexpected loss in cash and earn-
ings if the customer is unable to pay its obligations in due time
or if the value of collateral declines.
Siemens provides its customers with various forms of direct
and indirect financing particularly in connection with large
projects. Siemens finances a large number of smaller customer
orders, for example the leasing of medical equipment, in part
through SFS. SFS is also exposed to credit risk by financing
third-party equipment or by taking direct or indirect participa-