Philips 2005 Annual Report Download - page 50

Philips Annual Report 200550
Information on the Philips Group
Our cooperations
Philips engages from time to time in cooperative activities
with other companies. Philips’ principal cooperative business
activities and participating interests are set out below.
Philips Medical Capital – USA
Philips Medical Systems and Rabobank Group’s subsidiary
De Lage Landen International set up a venture to provide
nancingtoPhilipscustomersthroughouttheUnited
States for the purchase of the full range of diagnostic
imaging equipment produced by Philips Medical Systems.
The venture is called Philips Medical Capital and is based
in Wayne, Pennsylvania. De Lage Landen owns a majority
stake (60%) in the venture and has operational control.
The venture became operational in 2002.
Philips Medical Capital – Europe
Philips Medical Systems and Société Générale Equipment
Finance set up a venture to providenancingtoPhilips
customers in six major European countries for the
purchase of the full range of diagnostic imaging equipment
produced by Philips Medical Systems. The venture is called
Philips Medical Capital – Europe and is based in Wuppertal,
Germany. Société Générale owns a majority stake (60%)
in the venture and has operational control. The venture
became operational in 2005.
Lumileds
In 2005, Philips acquired Agilent Technologies’
shareholding in Lumileds. Through the acquisition, Philips
has controlling ownership of Lumileds and holds 96.5% of
Lumileds’ issued and outstanding capital. The remaining
3.5% is owned by an employee trust company. Lumileds
has been consolidated since the end of November 2005.
Crolles2
Crolles2 is an R&D and manufacturing cooperation. Philips
has a 31% stake in Crolles2, which is operated together
with STMicroelectronics and Freescale Semiconductor in
Crolles, France. Advanced CMOS technologies for 90 nm
and 65 nm geometries have been developed, and early
development on the 45 nm CMOS process takes place.
Products in 90 nm are in production for all partners, and
65 nm production will be piloted in 2006. The products
are mostly system-on-silicon solutions for mobile phones
and home applications (TV, set-top box, etc.) that can
benetfromthesmallerdimensionstoofferbetter
performance at lower prices. There is a strong emphasis
on low power consumption and on embedded memories.
LG.Philips LCD
LG.Philips LCD (LPL), a manufacturing venture between
Philips and LG Electronics of South Korea, is a leading
manufacturerandsupplierofthin-lmtransistorliquid-
crystal display (TFT-LCD) panels. New shares were issued
in 2004 to the public through an initial public offering (IPO).
As a result, Philips and LG Electronics of South Korea each
held a 44.6% stake. The company manufactures TFT-LCD
panelsinawiderangeofsizesandspecications,primarily
for use in notebook computers, desktop monitors
and televisions.
In July and December 2005, Philips sold common stock
of LG.Philips LCD, further reducing its stake in LG.Philips
LCD to 32.9%.
LG.Philips Displays
LG.Philips Displays (LPD) is a 50/50 joint venture with
LG Electronics of South Korea and is a leading supplier
of cathode-ray tubes (CRTs) for televisions and desktop
monitors. In December 2005, as a result of increased
pressure on demand and prices for CRTs, Philips wrote
off the remaining book value of EUR 126 million of the
investment. Philips also passed through the income
statement an accumulated negative difference in currency
translation of EUR 290 million related to the investment in
LPD, which had no impact on Philips’ equity. Philips also
fully provided for the existing guarantee of EUR 42 million
provided to LPD’s banks. Philips will not inject further
capital into LPD.
On January 27, 2006, several companies belonging to the
LPDgroupledforinsolvencyprotection,followedby
bankruptcy proceedings for various of such entities.
For further information, please refer to page 119.
InterTrust Technologies
InterTrust Technologies is a leading developer of Digital
Rights Management (DRM) technologies and holds a key
DRM patent portfolio, which covers a wide variety of
secure digital distribution technologies, including digital
media platforms, web services and enterprise infrastructure.
One of the reasons for Philips’ 49.5% shareholding is to
ensure wider access to InterTrust’s key DRM intellectual
property rights, so as to enable broad DRM-protected
distributionofdigitalcontentforthebenetofcontent
owners, service providers and device makers, as well as
consumers and enterprises.