Philips 2006 Annual Report Download - page 47

Philips Annual Report 2006 47
Assuming investors require repayment at the relevant
put dates, the average remaining tenor of the total
outstanding long-term debt was 3.7 years at year-end
2006, compared to 3.8 years in 2005. However, assuming
the ‘putable’ bonds will be repaid at maturity, the average
remaining tenor at the end of 2006 was 4.1 years
compared to 5.0 years at the end of 2005.
Long-term debt as a proportion of the total debt
stood at 78% at the end of 2006, compared to 74%
at the end of 2005.
Net debt
Net debt to group equity1)
in billions of euros group equity2)
net debt
25
20
15
10
5
0
(5)
14.1
5.3
27 : 73
20023)
12.9
2.8
18 : 82
20033)
15.0
0.2
1 : 99
20043)
16.8
(0.8)
(5) : 105
20053)
23.1
(2.2)
(10) : 110
2006
ratio:
1) For a reconciliation to the most directly comparable US GAAP measures,
see the chapter Reconciliation of non-US GAAP information.
2) Stockholders’ equity and minority interests
3) Restated to present the Semiconductors division as a discontinued operation
The Company had a net cash position (cash and cash
equivalents, net of debt) of EUR 2,154 million at the end
of 2006, compared to a net cash position at the end of
2005 of EUR 806 million.
Stockholders’ equity
Stockholders’ equity increased by EUR 6,331 million to
EUR 22,997 million at December 31, 2006. Net income
contributed EUR 5,383 million, while unrealized gains
on available-for-sale securities
had an upward effect
of EUR 4,291 million, mainly related to the changed
accounting treatment of TSMC. The unrealized gain
on the value of TSMC was partly offset by EUR 2,899
million due to the share repurchase programs for both
capital reduction purposes and the hedging of long-term
incentive and employee stock purchase programs, and
by EUR 523 million due to the dividend payment to
shareholders in 2006. There was a net decrease of
EUR 263 million related to pension liabilities including
the effect of adoption of SFAS No. 158.
In 2005, stockholders’ equity increased by EUR 1,806
million to EUR 16,666 million. The increase was primarily
driven by net income of EUR 2,868 million and an increase
in other comprehensive income of EUR 1,137 million,
mainly related to the positive change of currency
translation differences (EUR 1,521 million), partly offset
by the effect of the sale of available-for-sale securities
(EUR 184 million).
The number of outstanding common shares of Royal Philips
Electronics at December 31, 2006 was 1,107 million
(2005: 1,201 million). During 2006 a total of 173 million
shares were cancelled.
At the end of 2006, the Company held 35.9 million
shares in treasury to cover the future delivery of shares
in connection with the 65.5 million rights outstanding at
year-end 2006 under the Company’s long-term incentive
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54 The Philips sectors 86 Risk management 100 Report of the Supervisory Board 110 Financial Statements