Philips 2004 Annual Report Download - page 150
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The EUR 558 million increase in total collateral was mainly due to the consolidation of SSMC.
SSMC currently has a USD 400 million (EUR 294 million) syndicated credit facility, comprising
of a USD 200 million term loan and a USD 200 million revolving credit facility, of which USD 90
million (EUR 66 million) was drawn as of year-end 2004. For this facility, of which EUR 213
million was outstanding at the end of 2004, property, plant and equipment (EUR 500 million)
and other assets (EUR 58 million) have been given as security.
O
25 Other non-current liabilities
Other non-current liabilities are summarized as follows:
2003 2004
Accrued pension costs 389 451
Sale-and-leaseback deferred income 85 79
Income tax payable 78 74
Asset retirement obligations 26 28
Other liabilities 75 104
653 736
O
26 Commitments and contingent liabilities
The Company has a product supply agreement with Jabil Circuit Inc. Under the agreement, Jabil
will provide design and engineering services, new product introduction, prototype and test
services, procurement, printed circuit board assembly, and final assembly and integration.
Under the agreement, the Company is required to make minimum product purchases in
accordance with the following schedule:
2005 EUR 900 million
2006 EUR 900 million
The agreement provides that certain penalties may be charged to the Company if the Company
fails to satisfy the volume commitments.
Operating lease obligations
Long-term operating lease commitments totaled EUR 754 million in 2004 (2003: EUR 739
million). These leases expire at various dates during the next 20 years. The future payments that
fall due in connection with these obligations are as follows:
2005 186
2006 124
2007 115
2008 71
2009 63
Later 195
The long-term operating leases are mainly related to the rental of buildings. A number of these
leases originate from sale-and-lease back arrangements. In 2004, no new
sale-and-operational-lease back arrangements were concluded. In 2003 there was one
sale-and-operational-lease back arrangement in Belgium in which a building was sold for an
amount of EUR 14 million. In 2002 the Company entered into two sale-and-operational-lease
back arrangements in the Netherlands for office buildings. These buildings were sold for an
149Philips Annual Report 2004