Philips 2006 Annual Report Download - page 51

Philips Annual Report 2006 51
Share repurchase programs
In February 2006, the Company completed the EUR
1.5 billion share repurchase program which had been
initiated in August 2005. Under this share repurchase
program a total of 62,457,613 shares were acquired
during 2005 and 2006 at an average market price of
EUR 24.01 per share, totaling EUR 1.5 billion.
On July 17, 2006, the Company started another EUR 1.5
billion share repurchase program, which was expanded
to a maximum of EUR 2.5 billion in October and completed
in December 2006. Under this share repurchase program
a total of 86,472,494 shares were acquired at an average
market price of EUR 27.37 per share, eventually totaling
EUR 2,367 million.
On January 22, 2007, the Company started a EUR 1,633
million share repurchase program through a second trading
line on Euronext Amsterdam. Under this program shares
are repurchased from shareholders who are tax-exempt
or are able to achieve tax compensation. The Company
expects to complete this share repurchase program by
the end of 2007. The mechanics of the second trading
line are published on the Company’s website.
The programs started on July 17, 2006 and January 22,
2007 will together complete the return of EUR 4 billion
to the Company’s shareholders, as announced on August 3
and October 16, 2006.
In accordance with Dutch law, the Company has informed
the Netherlands Authority for the Financial Markets of
its holdings of Philips shares. All transactions in Philips
shares under these share repurchase programs have
been and will be reported on the Company’s website.
Capital reduction
In 2006, the Company’s issued share capital was reduced
by a total of 173,268,629 shares, which were acquired
pursuant to the share repurchase programs initiated in
2005 and 2006. The capital reduction was executed by
way of two share cancellations.
The fi rst share cancellation was approved by the 2006
Annual General Meeting of Shareholders and completed
in July 2006. A total of 86,796,135 shares were cancelled,
resulting in a reduction of Philips’ issued share capital
by 6.6%.
The second share cancellation was approved by the
2006 Extraordinary General Meeting of Shareholders
and completed in December 2006. A total of 86,472,494
shares were cancelled, resulting in a further reduction
of Philips’ issued share capital by 7.0%.
Litigation
The Company is involved as plaintiff or defendant
in litigation relating to such matters as competition
issues, commercial transactions, product liability
and environmental pollution. Although the ultimate
disposition of asserted claims and proceedings cannot
be predicted with certainty, it is the opinion of the
Company’s management that the outcome of any such
claims, either individually or on a combined basis, will
not have a material adverse effect on the Company’s
consolidated fi nancial position, but could be material
to the consolidated results of operations of the
Company for a particular period.
For a description of certain legal proceedings please refer
to note 27 to the consolidated fi nancial statements in this
Annual Report.
Other information
54 The Philips sectors 86 Risk management 100 Report of the Supervisory Board 110 Financial Statements