Philips 2007 Annual Report Download - page 165

Philips Annual Report 2007 171
Assumed healthcare cost trend rates have a signicant effect on the
amounts reported for the healthcare plans. A one-percentage-point
change in assumed healthcare cost trend rates would have the
following effects:
one-
percentage-
point
increase
one-
percentage-
point
decrease
Effect on total of service and interest cost 5 (3)
Effect on postretirement benet obligation 47 (40)
Estimated future postretirement benet payments
The following benet payments, which reect expected future service,
as appropriate, are expected to be paid:
2008 25
2009 25
2010 26
2011 27
2012 28
Years 2013 − 2017 140
22
Other current liabilities
Other current liabilities are summarized as follows:
2006 2007
Advances received from customers on orders not
covered by work in process 133 133
Other taxes including social security premiums 339 253
Other short-term liabilities 133 123
605 509
22
23
Short-term debt
2006 2007
Short-term bank borrowings 622 464
Other short-term loans 34 32
Current portion of long-term debt 207 1,849
863 2,345
During 2007 the weighted average interest rate on the bank borrowings
was 7.9% (2006: 6.3%).
In the Netherlands, the Company issues personnel debentures with
a 5-year right of conversion into common shares of Royal Philips
Electronics. Convertible personnel debentures may not be converted
within a period of 3 years after the date of issue. These convertible
personnel debentures are available to most employees in the Netherlands
and are purchased by them with their own funds and are redeemable
on demand. The convertible personnel debentures become
non-convertible debentures at the end of the conversion period.
Although convertible debentures have the character of long-term
nancing, the total outstanding amounts are classied as current
portion of long-term debt. At December 31, 2007, an amount of
EUR 103 million (2006: EUR 136 million) of convertible personnel
debentures was outstanding, with an average conversion price of EUR
24.26. The conversion price varies between EUR 16.81 and EUR 31.59
with various conversion periods ending between January 1, 2008
and December 31, 2012.
Included within the current portion of long-term debt is EUR 1,692
million of bonds, with EUR 130 million due to mature in February
2008 and EUR 1,562 million due to mature in May 2008.
The Company has access to a USD 2.5 billion commercial paper
program which was established at the beginning of 2001. The Company
also has available a seven-year revolving credit facility for USD 2.5
billion, established in December 2004, that could act as a back-up for
the commercial paper program and can also be used for general
corporate purposes. The Company did not use the commercial paper
program or the revolving credit facility during 2007.
23
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