Philips 2008 Annual Report Download - page 150

The charges are included in the following line items in the income
statement:
2006 2007 2008
Cost of sales 63 24 275
Selling expenses 8 4 154
G&A expenses 6 4 51
R&D expenses 5 5 40
82 37 520
The most significant new projects in 2008
In Lighting, over 60 restructuring projects were active during 2008 •
and a total charge of EUR 221 million was recognized. A significant
portion of the charge related to actions taken to address the
ongoing shift from incandescent bulbs to energy efficient lighting
solutions. Other main projects within the Lighting sector included
the closure of lamp phosphor production in Maarheeze (the
Netherlands), the consolidation of production activities from
Fairmont to Salina (USA), the reorganization of the wire & lean
coiling activities in Turnhout (Belgium) and Maarheeze (the
Netherlands), the reorganization of R&D activities within traditional
lighting, mainly in Turnhout (Belgium) and Roosendaal (the
Netherlands), and the reorganization and staff reductions of the
headquarters in Eindhoven (the Netherlands). Other smaller projects
in Lighting, in various locations, were aimed at further increasing
organizational effectiveness and reducing the fixed cost base
Consumer Lifestyle’s main projects primarily relate to the
•
integration of the former DAP and CE businesses, the exit of TV in
North America, the restructuring and subsequent sale of the
Television factory in Juarez (Mexico) and the optimization of the
European supply footprint within almost all businesses
Healthcare’s restructuring projects were undertaken to reduce
•
operating costs and simplify the organization. The projects affected
many locations, most notably sites in Hamburg (Germany), Helsinki
(Finland) and Andover (USA)
Within Innovation and Emerging Businesses, the restructuring
•
of Assembleon will adapt the company to ongoing weakness in
the semiconductor market
Within Group Management & Services, most of the costs relate
•
to the move of the US country organization headquarters from
New York to Andover, initiated in 2007
While all these projects have been communicated, the completion
of many of these projects will be during 2009 and early 2010, and
will affect approximately 7,000 employees.
The movements in the provisions and liabilities for restructuring
costs in 2008 are presented by sector as follows:
Dec.
31,
2007
acqui-
sitions
addi-
tions utilized
released
other
changes
1)
Dec.
31,
2008
Healthcare −−68 (2) −(2) 64
Consumer
Lifestyle 10 −171 (48) −1 134
Lighting 14 20 132 (32) (2) 1 133
I&EB 1 −18 (6) −−13
GM&S 19 −17 (6) −(1) 29
44 20 406 (94) (2) (1) 373
Other changes primarily relate to translation differences
1)
The total restructuring program charges in 2008 of EUR 520 million
are presented by sector as follows:
personnel
costs
write-
down of
assets
other
costs released total
Healthcare 68 1 −−69
Consumer
Lifestyle 156 24 15 −195
Lighting 126 91 6 (2) 221
I&EB 17 −1−18
GM&S 9 −8−17
376 116 30 (2) 520
The most significant new projects in 2007
Within Lighting: restructuring of the Oss plant in the Netherlands, •
from mass manufacturing to a competence center, and the closure
of fluorescent lamp-based LCD backlighting activities.
Within Group Management & Services: the US country organization
•
headquarters were moved from New York to Andover.
The movements in the provisions and liabilities for restructuring costs
in 2007 are presented by sector as follows:
Dec. 31,
2006
addi-
tions utilized released
other
changes1)
Dec. 31,
2007
Healthcare 13 1 (14) −−−
Consumer
Lifestyle 18 8 (15) (1) −10
Lighting 45 24 (51) (4) −14
I&EB −1−−−1
GM&S 16 4 −−(1) 19
92 38 (80) (5) (1) 44
Other changes primarily relate to translation differences
1)
The total restructuring program charges in 2007 of EUR 37 million
are presented by sector as follows:
personnel
costs
write-
down of
assets
other
costs released total
Healthcare 1 −−−1
Consumer
Lifestyle 7 −1(1)7
Lighting 22 4 2 (4) 24
I&EB 1 −−−1
GM&S 4 −−−4
3543(5)37
The most significant new projects in 2006
Within Lighting: the relocation of parts of the loss-making activities •
in Weert, Netherlands, to low-cost areas, the relocation in Mexico
of all Juarez plant activities to the Monterrey plant and the
relocation of the standard Lead in Wire business in the Netherlands
(Deurne) to Poland
Within Healthcare: the transfer of the production of SPECT
•
cameras from Milpitas to Cleveland
Within Consumer Lifestyle: the restructuring of the Klagenfurt site
•
in Austria, reduction of the fixed cost base and providing a more
diverse and flexible supply base.
Philips Annual Report 2008150
180
Sustainability performance
192
IFRS financial statements
244
Company financial statements
124
US GAAP financial statements
Notes to the US GAAP
financial statements