Philips 2005 Annual Report Download - page 216

Philips Annual Report 2005216
I
Long-term debt
range of
interest rates
average rate
of interest
amount
outstanding due in 2006
due after
2006
due after
2010
average
remaining
term
(in years)
amount out-
standing 2004
Eurobonds 5.8-7.1 6.0 2,447 −2,447 750 3.3 2,701
USD bonds 7.3-8.4 7.9 429 227 202 202 12.4 374
USD putable bonds 7.1-7.2 7.2 224 −224 224 20.0 195
Convertible debentures 0.2-0.2 0.2 155 155 −−−160
Intercompanynancing 4.2-4.7 4.3 152 152 −−−933
Other long-term debt 3.2-12.1 5.1 197 48 149 4.4 185
3,604 582 3,022 1,176 5.2 4,548
Corresponding data of
previous year 4,548 1,387 3,161 1,042 5,651
Companynancialstatements
The following amounts of the long-term debt as of December 31, 2005
aredueinthenextveyears:
2006 582
2007 4
2008 1,702
2009 7
2010 133
2,428
Corresponding amount previous year 3,506
Included in convertible debentures are Philips personnel debentures, for
which the reader is referred to the related note in the consolidated
nancialstatements.
J
Stockholders’ equity
Priority shares
In the 2005 Annual General Meeting of Shareholders it was approved to
withdraw the ten priority shares, which were held by the Dr. A.F. Philips-
Stichting. They were converted into 25,000 common shares.
Preference shares
The ‘Stichting Preferente Aandelen Philips’ has been granted the right
to acquire preference shares in the Company. Such right has not been
exercised. As a means to protect the Company and its stakeholders
against an unsolicited attempt to acquire (de facto) control of the
Company, the General Meeting of Shareholders in 1989 adopted
amendments to the Company’s Articles of Association that allow the
Board of Management and the Supervisory Board to issue (rights to)
preference shares to a third party.
Option rights/restricted shares
The Company has granted stock options on its common shares and
rights to receive common shares in future (see note 35).
Treasury shares
In connection with the Company’s share repurchase programs, Royal
Philips Electronics’ shares which have been repurchased and are held
in treasury for (i) delivery upon exercise of options and convertible
personnel debentures and under, restricted share programs and
employee share purchase programs and (ii) capital reduction purposes
are accounted for as a reduction of stockholders’ equity. Treasury shares
are recorded at cost, representing the market price on the acquisition
date. When issued, shares are removed from treasury stock on a FIFO
basis. Any difference between the cost and the market value at the
time treasury shares are issued, is recorded in share premium. In order
to reduce potential dilution effects, a total of 83,822,329 shares were
acquired during 2005 at an average market price of EUR 21.87 per share,
totaling EUR 1,836 million, and a total of 3,628,775 shares were delivered
at an average exercise price of EUR 20.67 totaling EUR 75 million.
A total of 114,736,942 shares were held by Royal Philips Electronics
at December 31, 2005 (2004: 34,543,388 shares), acquired at an
aggregate cost of EUR 2,919 million.
Dividend
A dividend of EUR 0.44 per common share will be proposed to the
2006 Annual General Meeting of Shareholders.
K
Net income
Netincomein2005amountedtoaprotofEUR3,374million
(2004:aprotofEUR2,783million).Fortheremunerationofpastand
present members of both the Board of Management and the Supervisory
Board,pleaserefertonote36totheconsolidatednancialstatements.
L
Employees
The number of persons employed by the Company at year-end 2005
was 12 (2004: 14) and included the members of the Board of Management
and most members of the Group Management Committee.
M
Obligations not appearing in the balance sheet
GeneralguaranteesasdenedinBook2,Section403ofthe
Netherlands Civil Code have been given by Royal Philips Electronics on
behalf of several Group companies in the Netherlands. The liabilities of
these companies to third parties and unconsolidated companies totaled
EUR 1,397 million as of year-end 2005 (2004: EUR 1,355 million).
Guarantees totaling EUR 549 million (2004: EUR 495 million) have also
been given on behalf of other Group companies, and guarantees totaling
EUR 129 million (2004: EUR 87 million) on behalf of unconsolidated
companies and third parties.
February 13, 2006
The Supervisory Board
The Board of Management