Philips 2007 Annual Report Download - page 159

Philips Annual Report 2007 165
North America are covered by dened-benet pension plans. The
benets provided by these plans are based on employees’ years of
dened-benet pension plans is December 31.
to provide assets sufcient to meet the benets payable to dened-
benet pension plan participants. These contributions are determined
based upon various factors, including funded status, legal and tax
Dened - benet plans
Dened - contribution plans incl.
20
2006 2007
Netherlands other total Netherlands other total
Amounts recognized in the consolidated balance sheet
Prepaid pension costs under other non-current assets 2,143 119 2,262 2,526 177 2,703
Accrued pension costs under other non-current liabilities − (442) (442) − (369) (369)
Provisions for pensions under provisions including
discontinued operations (18) (860) (878) (15) (798) (813)
Net pension asset/(liability) at year - end 2,125 (1,183) 942 2,511 (990) 1,521
Amounts recognized in accumulated other
comprehensive income (before tax)
Net actuarial loss 273 1,301 1,574 105 1,083 1,188
Prior-service cost (credit) (464) 52 (412) (421) 36 (385)
Accumulated other comprehensive income (191) 1,353 1,162 (316) 1,119 803
The weighted average assumptions used to calculate the projected benet obligations as of December 31
were as follows:
2006 2007
Netherlands other Netherlands other
Discount rate 4.3% 5.2% 4.8% 5.6%
Rate of compensation increase * 3.5% * 3.9%
The weighted-average assumptions used to calculate the net periodic pension cost for the years ended
December 31 were as follows:
2006 2007
Netherlands other Netherlands other
Discount rate 4.2% 5.1% 4.3% 5.2%
Expected returns on plans assets 5.7% 6.1% 5.7% 6.1%
Rate of compensation increase * 3.4% * 3.5%
* The rate of compensation increase for the Netherlands consists of a general compensation increase and an individual salary increase
based on merit, seniority and promotion. The average individual salary increase for all active participants for the remaining working
lifetime is estimated at 0.75% annually. The assumed rate of general compensation increase for the Netherlands for calculating the
projected benet obligations amounts to 2.3% (2006: 2.0%). The indexation assumption used to calculate the projected benet
obligations for the Netherlands is 2.3% (2006: 2.0%) until 2008 and 1.15% (2006: 1.0%) from 2008 onwards.The difference reects a
change in indexation policy.
Group nancial statements
Notes to the group nancial statements
Company nancial statements 250 Corporate governance246 Reconciliation of
non-US GAAP information 258 The Philips Group in the last ten years 260
Investor information