Philips 2007 Annual Report Download - page 216

Philips Annual Report 2007222
2007
The company had a share in income, mainly related to LG.Philips
LCD. Philips is represented on the board of directors and continued
to exercise inuence by participating in the policy-making processes
of LPL. Accordingly, Philips continued to apply equity accounting for
LPL in 2007.
2006
The Company had a share in losses, mainly related to LG.Philips LCD.
2005
The Company had a share in income, mainly TSMC and LG.Philips
LCD, and losses, mainly LG.Philips Displays. The operational loss of
LG.Philips Displays included restructuring costs of EUR 30 million.
Results on sales of shares
2005 2006 2007
FEI Company − 103 −
NAVTEQ 768 − −
TSMC 551 − −
LG.Philips LCD 435 − 654
Others _ 3 6
1,754 106 660
2007
In 2007, Philips sold 46,400,000 shares of LG.Philips LCD common
stock, resulting in a gain of EUR 654 million. As a result of the sale,
Philips’ shareholding in LG.Philips LCD was reduced from 32.9%
to 19.9%.
2006
In 2006, Philips sold its remaining interest of 24.8% in FEI Company
(see note 39).
2005
In 2005, Philips sold its remaining 33.1 million shares in NAVTEQ,
resulting in a non-taxable gain of EUR 768 million. As a result of this
transaction, Philips’ shareholding in NAVTEQ was reduced to zero.
Results on the sale of shares includes a gain of EUR 551 million resulting
from the sale of 567,605,000 common shares in the form of American
Depository Shares in TSMC. Following the aforementioned sale of
TSMC shares, Philips’ shareholding in TSMC was reduced to 16.4%.
During 2005, the Company was represented on the board of directors
and continued to exercise inuence by participating in the policy-
making processes of TSMC. Accordingly, the Company continued to
apply equity accounting for TSMC. After giving up signicant inuence
in 2006, the Company designated the investment as available for sale.
In 2005, Philips sold 27,375,000 shares of LG.Philips LCD common stock,
resulting in a gain of EUR 435 million. As a result of the sale, Philips’
shareholding in LG.Philips LCD was reduced from 40.5% to 32.9.%.
Gains and losses arising from dilution effects
2005 2006 2007
TPV − 13 −
LG.Philips LCD 214 − −
TSMC (24) − −
190 13 −
2005
The secondary offering of LG.Philips LCD of 65,000,000 American
Depository Shares in July 2005, has resulted in a dilution gain of
EUR 214 million reducing our share from 44.6% to 40.5%. Furthermore,
a loss of EUR 24 million related to the issuance of shares to employees
of TSMC was included. According to TSMC’s Articles of Incorporation,
annual bonuses to employees have been granted, partially in shares.
Philips’ shareholding in TSMC was diluted as a result of the shares
issued to employees.
Investment impairment/other charges
2005 2006 2007
LG.Philips Displays (168) (61) (22)
Others (11) (9) −
(179) (70) (22)
2007
The voluntary support of social plans for employees impacted by
the bankruptcy of certain LG.Philips Displays activities amounted
to EUR 22 million.
2006
The voluntary support of social plans for employees impacted by
the bankruptcy of certain LG.Philips Displays activities amounted
to EUR 61 million.
2005
Investment impairment charges in 2005 related to LG.Philips Displays
and a few smaller investments. In December 2005, as a result of various
factors including lower demand and increased pricing pressures for
CRT, the Company concluded that its investment in LG.Philips Displays
was impaired. Accordingly, the Company wrote off the remaining book
value of the investment and recorded an impairment charge of
EUR 131 million. Additionally, the Company recognized the accumulated
foreign translation gain related to this investment of EUR 5 million.
The Company also fully provided for the existing guarantee of EUR 42
million provided to LPD’s banks. Philips will not inject further capital
into LPD.
Investments in, and loans to, equity-accounted investees
The changes during 2007 are as follows:
loans investments total
Investments in equity-
accounted investees as of
January 1, 2007 5 2,864 2,869
Changes:
Acquisitions/additions 10 10
Sales/repayments (4) (980) (984)
Share in income/value
adjustments − 246 246
Dividends received − (48) (48)
Translation and exchange
rate differences (1) (275) (276)
Investments in equity-
accounted investees as of
December 31, 2007 − 1,817 1,817
Included in investments is EUR 339 million (2006: EUR 622 million),
representing the excess of the Company’s investment over its underlying
equity in the net assets of the equity-accounted investees. The
principal amount is EUR 329 million (2006: EUR 612 million)
for LG.Philips LCD.
Sales/repayments mainly relate to the sale of LG.Philips LCD
(see note 39).
128 Group nancial statements 188 IFRS information
Notes to the IFRS nancial statements
240 Company nancial statements