Philips 2004 Annual Report Download - page 2

A new approach to annual reporting
Philips is striving to combine timely reporting of its annual financial
results with full disclosure and transparency.
This year, Philips has again accelerated the reporting of its annual
financial results. The performance in 2004 has been summarized in
a separate booklet entitled ‘Annual Review 2004’ of Koninklijke
Philips Electronics N.V. (‘Royal Philips Electronics’, or the
‘Company’), which was published on January 27, 2005.
Full financial information and further statutory and other
information, including the Operating and financial review and
prospects, is contained in this Annual Report.
Forward-looking statements
This document contains certain forward-looking statements with respect to the financial
condition, results of operations and business of Philips and certain of the plans and
objectives of Philips with respect to these items (including, but not limited to, cost
savings), in particular the outlook paragraph of the Operating and financial review and
prospects in this Annual Report booklet.
By their nature, forward-looking statements involve risk and uncertainty because they
relate to events and depend on circumstances that will occur in the future. There are a
number of factors that could cause actual results and developments to differ materially
from those expressed or implied by these forward-looking statements. These factors
include, but are not limited to, levels of consumer and business spending in major
economies, changes in consumer tastes and preferences, changes in law, the
performance of the financial markets, pension costs, the levels of marketing and
promotional expenditures by Philips and its competitors, raw materials and employee
costs, changes in exchange and interest rates (in particular changes in the euro and the
US dollar can materially affect results), changes in tax rates and future business
combinations, acquisitions or dispositions and the rate of technological changes, political
and military developments in countries where Philips operates, the risk of a downturn in
the semiconductor market, Philips’ ability to secure short-term profitability and invest in
long-term growth in Lighting and product R&D in Medical Systems, and industry
consolidation.
Statements regarding market share, including as to Philips’ competitive position,
contained in this document are based on outside sources such as specialized research
institutes, industry and dealer panels in combination with management estimates. Where
full-year information regarding 2004 is not yet available to Philips, those statements may
also be based on estimates and projections prepared by outside sources or
management. Rankings are based on sales unless otherwise stated.
Use of non-GAAP information
In presenting and discussing the Philips Group’s financial position, operating results and
cash flows, management uses certain non-GAAP financial measures. These non-GAAP
financial measures should not be viewed in isolation as alternatives to the equivalent
GAAP measure(s) and should be used in conjunction with the most directly comparable
US GAAP measure(s). A discussion of the non-GAAP measures included in this
document and a reconciliation of such measures to the most directly comparable US
GAAP measure(s) are contained on pages 210 and 211 in this document.
1Philips Annual Report 2004