Philips 2007 Annual Report Download - page 212

Philips Annual Report 2007218
Depreciation of property, plant and equipment includes an additional
write-off in connection with the retirement of property, plant and
equipment amounting to EUR 28 million (2006: EUR 20 million, 2005:
EUR 13 million).
Included in depreciation of property, plant and equipment is an amount
of EUR 22 million (2006: EUR 17 million, 2005: EUR 42 million) relating
to impairment charges.
Depreciation of property, plant and equipment and amortization of
software and other intangible assets are primarily included in cost of
sales. Amortization of development cost is included in research and
development expenses.
In 2007, no goodwill impairments were recorded (2006: EUR nil,
2005: EUR nil).
Total depreciation and amortization
2005 2006 2007
Medical Systems 209 232 302
DAP 128 138 135
Consumer Electronics 178 179 168
Lighting 184 255 332
Innovation & Emerging Businesses 151 107 75
Group Management & Services 69 79 71
919 990 1,083
Other business income (expense)
Other business income (expense) consists of the following:
2005 2006 2007
Result on disposal of business:
- income 206 130 35
- expense (8) (64) (65)
Result on disposal of xed assets:
-income 155 108 107
-expense (29) (18) (24)
Result on remaining business:
- income 219 90 127
- expense (125) (67) (76)
418 179 104
Results on the disposal of businesses consisted of:
2005 2006 2007
Automotive Playback Modules − − (30)
Philips Sound Solutions − 12 −
CryptoTec − 26 −
Connected Displays (Monitors) 158 23 −
Philips Pension Competence Center 43 − −
Other (3) 5 −
198 66 (30)
2007
The result on disposal of businesses in 2007 mainly related to the sale
of Automotive Playback Modules which resulted in a loss of EUR 30
million. The result on the sale of xed assets mainly related to the sale
of certain buildings in Austria and the Netherlands as well as land in
the US. The other business results are mainly attributable to certain
settlements and the nalization of several divestitures.
2006
The result on disposal of businesses in 2006 is related mainly to
the sale of the CryptoTec activities which delivered a gain of EUR 26
million, the sale of Philips Sound Solutions PSS to D&M Holding at
a gain of EUR 12 million and the sale of Connected Displays at a gain
of EUR 23 million. The result on disposal of xed assets is mainly
related to the sale of certain real estate assets in Austria with a gain
of EUR 31 million. Other business income consists of the settlement
of certain legal claims and some releases of provisions.
2005
The result on disposal of businesses in 2005 related mainly to the sale
of certain activities within Philips’ monitors and at TV business to
TPV at a gain of EUR 158 million and the sale of asset management
and pension administration activities to Merrill Lynch and Hewitt
respectively, for an amount of EUR 43 million. In 2005, the result
on disposal of xed assets related mainly to the sale of buildings in
Suresnes, France (EUR 67 million) and in the Netherlands (EUR 36
million). In 2005, other business income and expenses consists of
the settlement of some legal claims and some releases of provisions.
41
Financial income and expenses
2005 2006 2007
Interest income 87 150 236
Interest expense (289) (339) (279)
Net interest expense (202) (189) (43)
Income from non-current
nancial assets 242 334 2,952
Foreign exchange results 1 2 (1)
Other nancing income (expenses), net 67 (118) (59)
310 218 2,892
108 29 2,849
Interest income increased by EUR 86 million during 2007, this was
mainly as a result of higher average cash balances and higher average
interest rates realized during 2007, compared to 2006.
Interest expense decreased by EUR 60 million during 2007, mainly as
a result of lower average debt positions and lower interest costs on
derivatives related to hedging of Philips’ foreign currency denominated
cash balances and inter-company funding positions.
In 2007, income from non-current nancial assets totaled EUR 2,952
million, and included EUR 2,783 million from the sale of shares in
TSMC, EUR 31 million gain on sale of shares in Nuance Communications,
EUR 10 million loss on sale of shares in JDS Uniphase and a cash
dividend of EUR 128 million from TSMC. In 2006, income from
non-current nancial assets totaled EUR 334 million, and included a
cash dividend of EUR 223 million from TSMC and a gain of EUR 97
million upon designation of the TSMC shares received through a stock
dividend as trading securities. In 2005, EUR 235 million of tax-exempt
gains from the sale of the remaining shares in Atos Origin and Great
Nordic were recognized.
In 2007, other nancial charges included an impairment charge of
EUR 36 million in relation to the investment in JDS Uniphase, a further
EUR 12 million gain as a result of the fair value change in the conversion
option embedded in the convertible bond received from TPV
Technology. In 2006, other nancial charges included an impairment
charge of EUR 77 million in relation to the investment in TPO Display,
a further EUR 61 million loss as a result of the fair value change in the
conversion option embedded in the convertible bond received from
TPV Technology and a EUR 29 million gain as a result of increases in
the fair value of the trading securities held in TSMC. In 2005, other
nancial charges included a EUR 53 million fair value gain on the
conversion option TPV Technology convertible bond.
128 Group nancial statements 188 IFRS information
Notes to the IFRS nancial statements
240 Company nancial statements