Philips 2005 Annual Report Download - page 197

Philips Annual Report 2005 197
At December 31, 2005, operating loss carryforwards expire as follows:
Total 2006 2007 2008 2009 2010
2011/
2015 later unlimited
5,090 230 140 40 90 80 120 770 3,620
The Company also has tax credit carryforwards of EUR 361 million,
which are available to offset future tax, if any, and which expire as follows:
Total 2006 2007 2008 2009 2010
2011/
2015 later un limited
361 2 1 1 12 −230 30 85
Classicationoftheincometaxpayableandreceivableisasfollows:
2004 2005
Income tax receivable grouped under current
receivables 46 71
Income tax receivable grouped under non-current
receivables 23 10
Income tax payable grouped under current liabilities (277) (524)
Income tax payable grouped under non-current
liabilities (74) (59)
The amount of the unrecognized deferred income tax liability for
temporary differences of EUR 118 million (2004: EUR 141 million)
relates to unremitted earnings in foreign Group companies, which are
considered to be permanently re-invested. Under current Dutch tax
law, no additional taxes are payable. However, in certain jurisdictions,
withholding taxes would be payable.
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Investments in unconsolidated companies
Results relating to unconsolidated companies
2004 2005
Company’s participation in income and loss 912 440
Results on sales of shares 238 1,754
Gains and losses arising from dilution effects 314 190
Investment impairment charges (8) (179)
1,456 2,205
Detailed information of the aforementioned individual line items is set
out below.
Company’s participation in income and loss
2004 2005
LG.Philips LCD 563 148
LG.Philips Displays (55) (42)
Others 404 334
912 440
2005
The Company has a share in income, mainly TSMC and LG.Philips LCD,
and losses, mainly Crolles2 (due to ongoing research and development
expenditures) and LG.Philips Displays. The operational loss of LG.PhilipsL
Displays included restructuring costs of EUR 30 million.
2004
LG.Philips Displays’ loss included impairment charges of EUR 70 million,
which were recorded in conjunction with the write-down of its assets
in Dreux (France), Ann Arbor (USA) and Barcelona (Spain).
InterTrust Technologies contributed a net gain of EUR 100 million
related to its license agreement with Microsoft. Various other
unconsolidated companies (primarily TSMC and Atos Origin) contributed
anetprotofEUR304million.AsofAugust2004,NAVTEQwas
recorded under investments in unconsolidated companies.
Results on sales of shares
2004 2005
NAVTEQ −768
TSMC −551
LG.Philips LCD −435
Atos Origin 196 −
Others 42 −
238 1,754
2005
In 2005, Philips sold its remaining 33.1 million shares in NAVTEQ,33.1 EQ,E
resulting in a non-taxable gain of EUR 768 million. As a result of this
transaction, Philips’ shareholding in NAVTEQ was reduced to zero.
Results on the sale of shares includes a gain of EUR 551 million resulting
from the sale of 567,605,000 common shares in the form of American
Depository Shares in TSMC. Following the aforementioned sale of
TSMC shares, Philips’ shareholding in TSMC was reduced to 16.4%.
During 2005, the Company was represented on the board of directors
andcontinuedtoexerciseinuencebyparticipatinginthepolicy-making
processes of TSMC. Accordingly, the Company continued to apply equity
accountingforTSMC.In2006,Philips’inuenceonTSMC,including
representation on the TSMC Board, will be reduced. Effective January
2006, the investment will be transferred to available-for-sale securities
sincePhilipswillnolongerbeabletoexercisesignicantinuenceand
will cease to apply equity accounting as of that date.
In 2005, Philips sold 27,375,000 shares of LG.Philips LCD common stock,
resulting in a gain of EUR 435 million. As a result of the sale, Philips’
shareholding in LG.Philips LCD was reduced from 40.5% to 32.9%.
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Incomefromnon-currentnancialassetsin2005includedEUR235
reversed,leadingtoanancialincomeofEUR19million.
Miscellaneousnancingcosts/incomein2005includedafairvaluegain
Company’smonitorandatTVbusinesstoTPV.Refertonote41.
Miscellaneousnancingcostsin2004includedincomeofEUR46million,
scalaudits.
efciencyoffuturedisposals.This resulted in a withholding tax expense
Incometax(expense)benetfromcontinuingoperations
−
andcertainactivitieswithintheCompany’smonitorandatTVbusiness,
−
−
−−
− −
− −
−
Terminationbenets
Otherpostretirementbenets −−
−−
ofthebenetsofthesedeductibledifferences.
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