Philips 2005 Annual Report Download - page 100

Philips Annual Report 2005100
Restructuring and impairment
charges
During 2005, a net charge of EUR 149 million was
recorded in EBIT for restructuring and asset impairments.
in millions of euros 2004 2005
charges
estimated
annualized
future
savings charges
estimated
annualized
future
savings
Restructuring:
Medical Systems 3 − 2 2
DAP 8 5 4 3
Consumer
Electronics 140 105 67 15
Lighting 35 20 35 30
Semiconductors 41 25 10 15
Other Activities 35 25 26 20
Release of excess
provisions (27 ) − (12 ) −
Total restructuring 235 180 132 85
Asset impairment:
Lighting 30 −
Semiconductors − 2
Other Activities 23 15
Total asset impairment 53 17
Goodwill impairment:
Medical Systems 590 −
Semiconductors 4 −
Other Activities 2 −
Total goodwill
impairment 596 −
Total restructuring and
impairment 884 149
The most signifi cant new projects in 2005 were:
within CE, the closing of the Audio/Video Innovation
Center and the restructuring of the Mobile
Infotainment business;
within Lighting, ongoing rationalization in Lamps
through downsizing of capacity and transfer to
low-wage countries;
Semiconductors’ efforts to achieve ongoing reduction
of excess capacity, overhead and research and
development costs in Europe;
within Other Activities, the restructuring and impairment
of a number of activities in preparation for their
disentanglement or divestment.
The Company’s remaining restructuring projects in 2005
covered a number of smaller projects.
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•
•
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The Company performed the annual goodwill impairment
tests, resulting in zero charge to EBIT.
Restructuring and impairment charges in 2004 amounted
to EUR 884 million, consisting of gross charges totaling
EUR 911 million, partly offset by releases of EUR 27 million.
The Company recorded EUR 590 million impairment
charges for MedQuist. New projects in 2004 were in CE,
where the research and development and production of
the Creative Display Solutions front-projection activity
were discontinued together with the engine activities of
LCoS. Furthermore, within Other Activities, the panel
activities of LCoS were stopped, while within Semiconductors,
a further reduction of excess capacity, overhead and
research and development costs in Europe was realized.
Within Lighting, further rationalization took place in Lamps
and Luminaires through the downsizing of capacity. The
remaining restructuring projects in 2004 for the Philips
Group covered a number of smaller projects, all relating
to lay-offs.
Restructuring and impairment charges in 2003 amounted
to EUR 551 million, consisting of additions totaling
EUR 486 million, which were partly offset by releases
of EUR 83 million, and goodwill impairment charges of
EUR 148 million. The most signifi cant restructuring
projects were in Semiconductors, CE, Lighting and
Other Activities.
For further details of restructuring charges, see note 4 to
the consolidated fi nancial statements in this Annual Report.
Management discussion and analysis