Philips 2007 Annual Report Download - page 35

Philips Annual Report 2007 41
The Company’s participation in the net income of
equity-accounted investees increased from a loss of
EUR 180 million in 2006 to a prot of EUR 271 million
in 2007, mainly due to higher earnings at LG.Philips LCD.
Philips’ share in LG.Philips LCD’s operational result in
2007 improved by EUR 456 million compared to 2006,
resulting in a prot of EUR 260 million, compared to
a loss of EUR 196 million in 2006.
Earnings from the sale of shares mainly consisted of
the EUR 508 million non-taxable gain on the sale of
a 13% stake in LG.Philips LCD, reducing Philips’
shareholding from 32.9% to 19.9%. In 2006, a EUR 76
million non-taxable gain was recognized on the sale of
the remaining 8.4 million shares of common stock in FEI,
which reduced Philips’ shareholding from 24.8% to zero.
In 2006, gains and losses arising from dilution effects
were mainly due to a EUR 14 million dilution gain
recorded for TPV.
In 2006, investment impairment and guarantee charges
primarily related to a EUR 61 million loss which was
recognized as a result of agreements made with
LG.Philips Displays for voluntary payments (social
contributions and environmental clean-up), mainly in
France, Germany, the Netherlands and the UK.
Minority interests
The share of minority interests in the income of Group
companies reduced income by EUR 5 million, compared
to EUR 4 million in 2006.
Discontinued operations
In this Annual Report, Philips reports the results of
Mobile Display Systems, Semiconductors and MedQuist
separately as discontinued operations. Consequently,
the related results, including transaction gains and losses,
are shown separately in the nancial statements under
discontinued operations.
The loss from discontinued operations of EUR 433 million
in 2007 was primarily attributable to a EUR 360 million
impairment charge for MedQuist, taking into account
EUR 325 million cumulative foreign currency translation
differences, which had previously been accumulated under
equity since the date of the acquisition in 2000. In addition,
a EUR 43 million loss related to the 2006 sale of a majority
stake in the Semiconductors division was recognized,
mainly due to pension settlements.
In 2006, the Company sold a majority stake in its
Semiconductors division to a private equity consortium.
The transaction consisted of the sale of the division for
a total consideration of EUR 7,913 million and the
simultaneous acquisition of a minority interest in the
recapitalized organization at a cost of EUR 854 million.
A net gain of EUR 4,283 million was recorded on the sale.
The 2006 results of discontinued operations also
included a EUR 29 million gain on the sale of Mobile
Display Systems to TPO.
In 2007, Philips and the German Heart Institute in Berlin (DHZB)
opened the rst fully integrated Philips Electrophysiology Lab.
By creating a more intuitive working environment and integrating
data management, workow efciency is greatly improved.
Being able to determine the ambient environment of the lab
puts patients at ease. The result – better clinical focus and a
friendlier environment for patients.
98 Risk management 112 Our leadership 116 Report of the Supervisory Board 126 Financial Statements