Philips 2004 Annual Report Download - page 73

of stock options (EUR 50 million) and cash outflow for shares
acquired (EUR 1 million).
In 2002, net cash used for financing activities amounted to
EUR 897 million. This included the issuance of a EUR 300 million
eurobond in August, the proceeds of which were used for
repayment of short-term debt. Philips’ shareholders were paid a
distribution in cash totaling EUR 459 million. Treasury stock
transactions led to a cash outflow of EUR 19 million. Shares
acquired totaled EUR 103 million, while the exercise of stock
options resulted in a cash inflow of EUR 84 million.
Financing
Condensed balance sheet
2003 2004
Cash and cash equivalents 3,072 4,349
Receivables 8,437 8,794
Inventories 3,204 3,230
Unconsolidated companies 4,841 5,670
Other non-current financial assets 1,213 876
Property, plant and equipment 4,879 4,997
Intangible assets 3,765 2,807
Total assets 29,411 30,723
Accounts payable and other liabilities 7,672 8,169
Provisions 2,925 2,898
Debt 5,876 4,513
Minority interests 175 283
Stockholders’ equity 12,763 14,860
Total liabilities and equity 29,411 30,723
Cash and cash equivalents
In 2004, cash and cash equivalents increased by EUR 1,277 million
to EUR 4,349 million at year-end. Currency changes during 2004,
which had no effect on income, reduced cash and cash equivalents
by EUR 45 million, while the consolidation of SSMC’s cash position
of EUR 117 million at January 1, 2004, increased cash and cash
equivalents for the Group.
In 2003, cash and cash equivalents increased by EUR 1,214 million
to EUR 3,072 million at year-end. Currency impacts accounted for
a EUR 165 million decrease.
Debt position
Total debt outstanding at the end of 2004 was EUR 4,513 million,
compared with EUR 5,876 million at the end of 2003 and
EUR 7,109 million at the end of 2002.
Changes in debt are as follows:
2003 2004
GNew borrowings 360 258
GRepayments (1,304) (1,925)
GConsolidation and currency effects (289)304
(1,233) (1,363)
In 2004, total debt decreased by EUR 1,363 million to EUR 4,513
million. Philips reduced the outstanding bonds by EUR 1,527
million, due to a EUR 1,227 million repayment of maturing bonds
and a EUR 300 million early redemption of a note. The early
redemption in September 2004 of the note due on August 30,
2005, was a part of efforts to manage excess liquidity and reduce
debt where considered to be cost-effective. SSMC, since 2004 a
consolidated 48% participation of Philips, repaid EUR 351 million
outstanding loans as part of a loan restructuring program. The
remaining repayments of EUR 47 million mainly consist of
convertible personnel debentures and staff saving plans. New
borrowings include a USD 200 million (EUR 147 million)
three-year syndicated term and revolving credit facility of SSMC,
arranged in November 2004. The remaining new borrowings
mainly consist of capital lease transactions of EUR 49 million and
convertible personnel debentures and staff saving plans of EUR 42
million. Consolidation effects include two loans of SSMC, a
syndicated loan of EUR 148 million and a EUR 242 million loan
from the Economic Development Board, both almost fully repaid
with part of the proceeds from the 2004 new syndicated term loan
mentioned above. Currency effects reduced total debt by EUR 105
million, but had no effect on income.
In 2003, total debt decreased by EUR 1,233 million to EUR 5,876
million. Philips repaid EUR 1,129 million on outstanding bonds, of
which EUR 1,000 million related to an early repayment in July 2003
of a floating rate note, which was due in July 2004. New
borrowings consist of a USD 151 million seven-year floating
unsecured bullet loan from the EIB and a USD 100 million
syndicated loan in the Philippines. The remaining new borrowings
include the issuance of convertible personnel debentures
(EUR 35 million), staff saving plans (EUR 13 million), capital lease
transactions (EUR 31 million) and various other small amounts.
Philips had two ‘putable’ USD bonds outstanding at year-end 2004
for a total amount of USD 269 million. A USD 103 million bond at
7.125%, due 2025, carries an option of each holder to put the
bond to the Company on May 15, 2007 upon notice given between
March 15 and April 15, 2007; a USD 166 million bond at 7.20%,
due 2026, carries an option of each holder to put the bond to the
72 Philips Annual Report 2004
Operating and financial review and prospects