Philips 2008 Annual Report Download - page 157

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EUR 77 million in 2006, recognized in Financial income and expense.
The impairment review in 2008 was triggered by the deteriorating
economic environment of the connected displays industry and the
weakening financial performance of TPO. The valuation was based
on the “over-the-counter” stock price of TPO, quoted on the Gre Tai
Securities Market in Taiwan, a market with insufficient trading volumes
and infrequent transactions.The investment in TPO is classified as
level 2 in the fair value hierarchy.
Other
Included in the category “other” are two convertible bonds, one
issued by TPV Technology (TPV) and one issued by CBAY.
The convertible bond issued by TPV has a total fair value of EUR 142
million as at December 31, 2008. The bond has a maturity date of
September 5, 2010, with an option to convert the bond into shares
of TPV during the period September 5, 2008 until maturity.
The CBAY convertible bond, which may not be transferred to a third
party before August 6, 2009, has a total fair value EUR 51 million as of
December 31, 2008. The bond has a maturity date of August 6, 2015.
Philips has an option to convert the bond into shares of CBAY before
the maturity date or to sell the convertible bond to C-Bay as of
August 2012 onwards. CBAY also has the option to redeem the
convertible bonds in 2011, 2012 and 2013 at a certain percentage
of the bond’s face value.
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Non-current receivables
Non-current receivables include receivables with a remaining term
of more than one year, and the non-current portion of income taxes
receivable amounting to EUR 1 million (2007: EUR 14 million).
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Other non-current assets
Other non-current assets in 2008 are comprised of prepaid pension
costs of EUR 2,751 million (2007: EUR 2,703 million), deferred tax
assets of EUR 553 million (2007: EUR 971 million) and prepaid
expenses of EUR 46 million (2007: EUR 52 million).
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Property, plant and equipment
land and
buildings
machinery and
installations lease assets
other
equipment
prepayments
and
construction in
progress
no longer
productively
employed total
Balance as of January 1, 2008:
Cost 2,303 3,395 88 1,732 343 13 7,874
Accumulated depreciation (935) (2,321) (48) (1,381) −(9) (4,694)
Book value 1,368 1,074 40 351 343 4 3,180
Changes in book value:
Capital expenditures 101 339 37 277 9 8 771
Retirements and sales (51) (33) −(37) (7) −(128)
Depreciation (90) (331) (13) (195) −−(629)
Write-downs and impairments (1) (38) −(17) −−(56)
Translation differences 9 12932−35
Changes in consolidation 133 95 25 58 −−311
Total changes 101 44 58 89 4 8 304
Balance as of December 31, 2008:
Cost 2,353 3,434 128 1,733 347 48 8,043
Accumulated depreciation (884) (2,316) (30) (1,293) −(36) (4,559)
Book value 1,469 1,118 98 440 347 12 3,484
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Land with a book value of EUR 185 million, at December 31, 2008
(2007: EUR 148 million) is not depreciated.
The expected useful lives of property, plant and equipment are
as follows:
Buildings from 5 to 50 years
Machinery and installations from 3 to 10 years
Lease assets from 1 to 15 years
Other equipment from 1 to 10 years
Capital expenditures include capitalized interest related to
construction in progress amounting to EUR 3 million in 2008 (2007:
EUR 5 million).
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Philips Annual Report 2008 157
254
Corporate governance
250
Reconciliation of
non-US GAAP information
262
Ten-year overview
266
Investor information