Philips 2007 Annual Report Download - page 3

We are
inspired
by people
World of wonder
Philips has redened home entertainment
with Aurea. The Aurea experience is like
stepping into a different world, as scenes
radiate an aura of light and color beyond
the frame. The result is a totally
immersive, ambient viewing experience.
Better images, lower impact
The 256-slice Philips Brilliance iCT
scanner can capture an image of the
entire heart in just two beats, while
reducing radiation doses by up to 80%.
Energy-saving potential
Designed for ofces and schools, for
instance, Philips MASTER TL-D Eco
uorescent lamps save 15% energy
compared to traditional T8 uorescent
lamps, of which the EU alone has an
installed base of more than 1 billion.
Forward-looking statements
This document contains certain forward-looking statements with
respect to the nancial condition, results of operations and business
of Philips and certain of the plans and objectives of Philips with respect
to these items, in particular the Outlook section of the chapter The
Philips Group in this Annual Report. Examples of forward-looking
statements include statements made about our strategy, estimates
of sales growth, future EBITA and future developments in our organic
business. By their nature, forward-looking statements involve risk and
uncertainty because they relate to future events and circumstances
and there are many factors that could cause actual results and
developments to differ materially from those expressed or implied
by these forward-looking statements.
These factors include but are not limited to domestic and global
economic and business conditions, the successful implementation of
our strategy and our ability to realize the benets of this strategy, our
ability to develop and market new products, changes in legislation, legal
claims, changes in exchange and interest rates, changes in tax rates,
pension costs, raw materials and employee costs, our ability to identify
and complete successful acquisitions and to integrate those acquisitions
into our business, our ability to successfully exit certain businesses or
restructure our operations, the rate of technological changes, political,
economic and other developments in countries where Philips operates,
industry consolidation and competition. As a result, Philips’ actual
future results may differ materially from the plans, goals, and expectations
set forth in such forward-looking statements. For a discussion of
factors that could cause future results to differ from such forward-
looking statements, see also the chapter Risk management.
Third-party market share data
Statements regarding market share, including those regarding Philips’
competitive position, contained in this document are based on outside
sources such as specialized research institutes, industry and dealer
panels in combination with management estimates. Where full-year
information regarding 2007 is not yet available to Philips, those
statements may also be based on estimates and projections prepared
by outside sources or management. Rankings are based on sales unless
otherwise stated.
Fair value information
In presenting the Philips Group’s nancial position, fair values are
used for the measurement of various items in accordance with the
applicable accounting standards. These fair values are based on market
prices, where available, and are obtained from sources that are deemed
to be reliable. Readers are cautioned that these values are subject to
changes over time and are only valid at the balance sheet date. When
a readily determinable market value does not exist, fair values are
estimated using valuation
models, which we believe are appropriate
for their purpose. They require
management to make signicant
assumptions with respect to future developments which are inherently
uncertain and may therefore deviate from actual developments. Critical
assumptions used are disclosed in the nancial statements. In certain
cases, independent valuations are obtained to support management’s
determination of fair values.
US GAAP basis of presentation
The nancial information included in this document is based on
US GAAP, unless otherwise indicated. As used in this document, the
term EBIT has the same meaning as Income from operations (IFO).
Use of non-US GAAP information
In presenting and discussing the Philips Group’s nancial position,
operating results and cash ows, management uses certain non-
US GAAP nancial measures like: comparable growth; EBITA; NOC;
net debt (cash); and cash ow before nancing activities. These
non-US GAAP nancial measures should not be viewed in isolation
as alternatives to the equivalent US GAAP measures.
Further information on non-US GAAP information and a
reconciliation of such measures to the most directly comparable
US GAAP measures can be found in the chapter Reconciliation
of non-US GAAP information.
Statutory nancial statements and management report
The chapters IFRS nancial statements and Company nancial
statements contain the statutory nancial statements. The introduction
to the chapter IFRS nancial statements sets out which parts of this
Annual Report form the management report within the meaning of
Section 2:391 of the Dutch Civil Code (and related Decrees).
Reclassications
On November 2, 2007, Philips announced that it has decided to
proceed with the sale of its approximately 70% ownership interest in
MedQuist.
Amongst others, in order to ensure comparison between
different nancial
years and to achieve optimal transparency for users
of the Annual Report, all consolidated nancial statements of prior
years have been restated to present the MedQuist business as a
discontinued operation. The original consolidated nancial statements
of prior years are available on the Company’s website.
As of January 2007, the following key portfolio changes have been
applied to the Philips Group structure: Other Activities was renamed
Innovation & Emerging Businesses; Unallocated was renamed Group
Management & Services; GSU activities and Miscellaneous were
transferred from Innovation & Emerging Businesses to Group
Management & Services; Consumer Healthcare Solutions was moved
from DAP to Innovation & Emerging Businesses. Also, as of January 2007,
certain Corporate/Regional/Country overhead and Corporate
Intellectual Property costs were allocated to the operating divisions
to further improve transparency of the total cost structure. As a
consequence of the aforementioned, prior-year nancials have
been restated.
This Annual Report is available online – in dynamic,
interactive form – at the address below. Key nancial
data are available as Excel downloads. The Report can
also be downloaded in full or per chapter in PDF.
www.philips.com/annualreport2007
In parallel and complementary to this Annual Report 2007, we have
published our Sustainability Report 2007 (www.philips.com/sustainability).
Philips Annual Report 20076