Philips 2004 Annual Report Download - page 193

Option rights/restricted shares
The Company has granted stock options on its common shares and rights to receive common
shares in future (see note 32).
Treasury shares
Royal Philips Electronics’ shares which have been repurchased and are held in treasury for
delivery upon exercise of options and convertible personnel debentures and under restricted
share programs and employee stock purchase plans are accounted for as a reduction of
stockholders’ equity. Treasury shares are recorded at cost, representing the market price on
the acquisition date. When issued, shares are removed from treasury stock on a FIFO basis.
Any difference between the cost and the market value at the time treasury shares are issued, is
recorded in share premium.
In order to reduce potential dilution effects, a total of 4,102,020 shares were acquired during
2004 at an average market price of EUR 23.35 per share, totaling EUR 96 million, and a total of
4,942,894 shares were delivered at an average exercise price of EUR 22.83, totaling EUR 113
million. A total of 34,543,388 shares were held by Royal Philips Electronics at December 31,
2004 (2003: 35,384,262 shares), acquired at an aggregate cost of EUR 1,239 million.
Other reserves
A dividend of EUR 0.40 per common share will be proposed to the 2005 Annual General
Meeting of Shareholders.
O
KNet income
Net income in 2004 amounted to a profit of EUR 2,336 million (2003: a profit of EUR 705 million).
For the remuneration of past and present members of both the Board of Management and the
Supervisory Board, please refer to note 33 of the consolidated financial statements.
O
LEmployees
The number of persons employed by Philips at year-end 2004 was 14 (2003: 17) and included
the members of the Board of Management and most members of the Group Management
Committee.
O
MObligations not appearing in the balance sheet
General guarantees as defined in Book 2, Section 403 of the Netherlands Civil Code have been
given by Royal Philips Electronics on behalf of several Group companies in the Netherlands. The
liabilities of these companies to third parties and unconsolidated companies totaled EUR 1,355
million as of year-end 2004 (2003: EUR 1,130 million). Guarantees totaling EUR 495 million
(2003: EUR 788 million) have also been given on behalf of other Group companies, and
guarantees totaling EUR 87 million (2003: EUR 495 million) on behalf of unconsolidated
companies and third parties.
February 22, 2005
The Supervisory Board
The Board of Management
192 Philips Annual Report 2004
Dutch GAAP information