Philips 2004 Annual Report Download - page 151
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aggregate amount of EUR 166 million. The lease back rental periods are 9 years for the 2003
arrangement and 8 and 5 years for the arrangements entered into in 2002. The Company has
the option of extending each of the lease back terms. The rental payments are fixed. The rental
payments for 2004 totaled EUR 24 million (2003: EUR 24 million, 2002: EUR 26 million).
The remaining minimum payments are as follows:
2005 22
2006 19
2007 14
2008 11
2009 11
Later 42
The Company has subleases with total expected future revenues of EUR 26 million (2003:
EUR 34 million), as follows:
2005 7
2006 7
2007 4
2008 4
2009 4
Later –
Guarantees
In the normal course of business, the Company issues certain guarantees. Guarantees issued or
modified after December 31, 2002, having characteristics defined in FIN45, are measured at fair
value and recognized on the balance sheet. At the end of 2004, the fair value of guarantees
issued was not significant.
Guarantees issued before December 31, 2002 and not modified afterward, and certain
guarantees issued after December 31, 2002, which do not have characteristics defined in FIN45,
remain off-balance sheet.
The following off-balance sheet guarantees were outstanding at December 31, 2004.
expiration per period
total amounts
committed
less than 1 year 2-5 years after 5 years
Guarantees for the benefit of unconsolidated
companies/third parties 422 189 92 141
In conjunction with a refinancing of LG.Philips Displays (LPD), the parent companies, LG
Electronics and the Company, each provided an equity contribution of USD 250 million and a
guarantee of USD 50 million as security for principal, interest and fees payable by LPD.
Simultaneously, the existing guarantees of USD 200 million of each shareholder were released.
Environmental Remediation
The Company and its subsidiaries are subject to environmental laws and regulations. Under
these laws, the Company and/or its subsidiaries may be required to remediate the effects of the
release or disposal of certain chemicals on the environment.
In the United States, subsidiaries of the Company have been named as potentially responsible
150 Philips Annual Report 2004
Financial statements of the Philips Group