Philips 2005 Annual Report Download - page 195

Philips Annual Report 2005 195
Salaries and wages
2004 2005
Salaries and wages 5,789 5,833
Pension costs 431 505
Other social security and similar charges:
−Requiredbylaw 763 755
−Voluntary 207 (148)
7,190 6,945
Seenote55tothenancialstatementsforfurtherinformationon
pension costs.
For remuneration details of the members of the Board of Management
and the Supervisory Board see note 36.
Depreciation and amortization
Depreciation of property, plant and equipment and amortization of
intangibles are as follows:
2004 2005
Depreciation of property, plant and equipment 1,369 1,271
Amortization of internal use software 145 113
Amortization of goodwill and other intangibles:
−Amortizationofotherintangibleassets 150 133
−Amortizationofdevelopmentcosts 412 467
−Impairmentofgoodwill 591 −
2,667 1,984
Depreciation of property, plant and equipment includes an additional
write-off in connection with the retirement of property, plant and
equipment amounting to EUR 19 million in 2005 (2004: EUR 28 million).
Included in depreciation of property, plant and equipment is an amount
of EUR 42 million (2004: EUR 125 million) relating to restructuring and
impairment charges.
Depreciation of property, plant and equipment and amortization of
software and other intangible assets are primarily included in cost of
sales. Amortization of development cost is included in research and
development expenses.
No goodwill impairments were recorded in 2005 (2004: EUR 591
million, of which EUR 588 million related to MedQuist).
Total depreciation and amortization
2004 2005
Medical Systems 813 236
DAP 123 128
Consumer Electronics 209 178
Lighting 213 184
Semiconductors 1,050 1,038
Other Activities 251 214
Unallocated 8 6
2,667 1,984
Other business income (expense)
Other business income (expense) consists of the following:
2004 2005
Result on disposal of businesses
- income 664 206
- expense (6) (8)
Resultondisposalofxedassets
- income 66 149
- expense (13) (9)
Remaining business
- income 261 243
- expense (246) (130)
726 451
Results on the disposal of businesses consisted of:
2004 2005
Connected Displays (Monitors) −158
Philips Pension Competence Center −43
Initial public offering NAVTEQ 654 −
Other 4 (3)
658 198
The result on disposal of businesses in 2005 related mainly to the sale
ofcertainactivitieswithintheCompany’smonitorsandatTVbusiness
to TPV at a gain of EUR 158 million and the sale of asset management
and pension administration activities to Merrill Lynch and Hewitt
respectively for an amount of EUR 43 million. In 2005, the result on
disposalofxedassetsrelatedmainlytothesaleofbuildingsinSuresnes,
France (EUR 67 million) and in the Netherlands (EUR 36 million). In 2005,
remaining business income and expenses consists of the settlement of
some legal claims and some releases of provisions.
The result on disposal of businesses in 2004 primarily consists of a non-
taxable gain of EUR 654 million on the initial public offering of NAVTEQ
whichincludedcumulativetranslationprotofEUR8million.In2004,
remaining business income (expense) consists of a variety of items, the
mostsignicantbeinginsurancerecoveriesofEUR 58 million, releasesE
of provisions related to the disentanglement of some former businesses,
and the payment of EUR 133 million for the settlement of litigation in
the US with Volumetrics, net of insurance.
43
Financial income and expenses
2004 2005
Interest income 48 92
Interest expense (306) (289)
Total interest expense, net (258) (197)
Reversal of prior-year impairments on
available-for-sale securities 19 −
Incomefromnon-currentnancialassets 240 242
Foreign exchange results (1) 1
Miscellaneousnancingcosts/income,net 34 67
Totalothernancialincomeandexpense 292 310
34 113
4343
methodofaccounting,becauseitcontinuedtohavesignicantinuence.
GreatNordic.ThisresultedinacashinowofEUR67millionanda
protofEUR13million,whichhasbeenreportedunderFinancial
ThisresultedinacashinowofEUR554millionandprotofEUR222
inNAVTEQ.ThisresultedinacashinowofEUR932millionanda
protofEUR768million,whichhasbeenreportedasResultsrelating
includedintheconsolidationamountedtoEUR190millionandaprot
Themostsignicantacquisitionsanddivestmentsaresummarizedinthe
outow
− −
cashinow
−
forusingthecostmethod.Thetransactionresultedinacashoutow
EUR654milliongainonthesaleofsharesandacashinowofEUR672
transactionresultedinacashoutowofEUR24million.Jabilwill
nosignicantinuenceinAtosOrigincouldbeexercised.
inAustria.ThetransactioninvolvedacashoutowofEUR12million.
4242