Philips 2007 Annual Report Download - page 225

Philips Annual Report 2007 231
Movements in the net liability for other dened-benet obligations:
2006 2007
Projected benet obligation at the beginning of year 447 373
Service cost 4 3
Interest cost 26 26
Actuarial gains (12) 47
Curtailments − −
Plan amendments − (5)
Settlements − (6)
Changes in consolidation (2) 27
Benets paid (65) (32)
Exchange rate differences (26) (19)
Miscellaneous 1 (1)
Projected benet obligation at end of year 373 413
Present value of funded obligations at end of year − −
Present value of unfunded obligations at end of year 373 413
2006 2007
Funded status (373) (413)
Unrecognized actuarial losses (35) 31
Unrecognized psc − (5)
Net balances (408) (387)
Classication of the net balance is as follows:
Provision for other postretirement benets - (408) (387)
Other postretirement benet expense recognized in the
income statement:
2005 2006 2007
Service cost 19 4 3
Interest cost on accumulated
postretirement benets 40 26 26
Net actuarial loss recognized 4 (4) (4)
Curtailment (308) − −
(245) 26 25
of which discontinued operations (23) − −
The expense for other postretirement benets is recognized
in the following line items in the income statement:
2005 2006 2007
Cost of sales (50) 3 2
Selling expenses (11) 3 2
General and administrative expenses (156) 20 20
Research and development expenses (28) − 1
(245) 26 25
The weighted average assumptions used to calculate the postretirement
benet obligations other than pensions as of December 31 were
as follows:
2006 2007
Discount rate 7.2% 8.5%
Compensation increase (where applicable) 5.6% −
The weighted average assumptions used to calculate the net cost
for years ended December 31:
2006 2007
Discount rate 6.9% 7.2%
Compensation increase (where applicable) 5.6% −
Assumed healthcare cost trend rates at December 31:
2006 2007
Healthcare cost trend rate assumed for next year 8.0% 9.0%
Rate that the cost trend rate will gradually reach 5.0% 7.0%
Year of reaching the rate at which it is assumed
to remain 2,014 2,015
Sensitivity analysis
Assumed healthcare 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
as at December 31, 2007:
increase
with 1%
decrease
by 1%
Effect on total of service and interest cost 5 (3)
Effect on postretirement benet obligation 47 (40)
Historical data
2006 2007
Present value of dene-benet obligation 373 413
Fair value of plan assets − −
(Decit) surplus (373) 413
Experience adjustments in % on
- dened-benet obligations (gain) loss (1.6%) (0.2%)
57
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
57
Group nancial statements
Notes to the IFRS 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