Philips 2007 Annual Report Download - page 47

Philips Annual Report 2007 53
Philips’ policy is to provide only guarantees and other
letters of support, in writing. Philips does not stand
by other forms of support. The following table outlines
the total outstanding off-balance sheet credit-related
guarantees and business-related guarantees provided
by Philips for the benet of unconsolidated companies
and third parties as at December 31, 2007.
Expiration per period 2007
in millions of euros
total
amounts
committed
less
than 1
year 1-5 years
after 5
years
Business-related
guarantees 432 142 95 195
Credit-related
guarantees 45 5 16 24
477 147 111 219
Expiration per period 2006
in millions of euros
total
amounts
committed
less
than 1
year 1-5 years
after 5
years
Business-related
guarantees 466 151 80 235
Credit-related
guarantees 42 14 2 26
508 165 82 261
Contractual cash obligations
Presented below is a summary of the Group’s
contractual cash obligations, contingent obligations
resulting from guarantees provided, and the capital
resources available to fund the cash requirements.
Cash obligations at December 31, 2007 2)
in millions of euros
payments due by period
total
less
than 1
year
1-3
years
3-5
years
after 5
years
Long-term debt1) 2,973 1,841 19 754 359
Capital lease
obligations1) 88 8 15 8 57
Short-term debt1) 496 496 − − −
Operating leases1) 730 147 232 134 217
Bond interest 655 171 143 97 244
4,942 2,663 409 993 877
1) Short-term debt, long-term debt and capital lease obligations are included in
the Company’s consolidated balance sheet; please refer to note 23, note 24
and note 26 of the notes to the group nancial statements
2) For further details about uncertain tax positions, amounting to EUR 627 million,
see note 6 of the notes to the Group nancial statements
The Company has a number of commercial agreements
such as supply agreements, that provide that certain
penalties may be charged to the Company if the
Company does not fulll its commitments.
Based on past operating performance and current
prospects, supported by the Company’s balance sheet
and unused borrowing capacity, Philips believes that
working capital is sufcient for the Company’s present
requirements. Furthermore, the Company has no
material commitments for capital expenditures.
The Company had total amounts payable in relation
to accrued interest on debt of EUR 110 million as
at December 31, 2007.
The Company sponsors pension plans in many countries
in accordance with legal requirements, customs and the
local situation in the countries involved. The majority
of employees in Europe and North America are covered
by dened-benet plans.
Contributions to funded pension plans are made by
the Company, as necessary, to provide sufcient assets
to meet future benets payable to plan participants.
These contributions are determined by various factors,
including funded status, legal and tax considerations
and local customs.
The Company currently expects cash outows
in relation to employee benets which are estimated
to amount to EUR 314 million in 2008 (2007: EUR
433 million), consisting of EUR 160 million employer
contributions to dened-benet pension plans,
EUR 89 million employer contributions to dened-
contribution pension plans, and EUR 65 million expected
cash outows in relation to unfunded pension plans.
The expected cash outows in 2008 and subsequent
years are uncertain and may change substantially as a
consequence of statutory funding requirements as well
as changes in actual versus currently assumed discount
rates, estimations of compensation increases and returns
on pension plan assets.
For further details about cash obligations related to pension
plans, see note 20 of the group nancial statements.
98 Risk management 112 Our leadership 116 Report of the Supervisory Board 126 Financial Statements