Philips 2008 Annual Report Download - page 269

Share repurchase programs for capital
reduction purposes
In each of the last four years Philips has started share
repurchase programs, which, in aggregate, reduced
the shares outstanding by 28% from 1,282 million to
923 million at December 31, 2008. All shares have
been purchased for capital reduction purposes. In the
first half of 2005, Philips repurchased EUR 500 million
worth of its own shares and then an additional
EUR 1.5 billion by February 2006.
On July 17, 2006, Philips announced a further EUR 1.5
billion share repurchase program which was expanded
to EUR 4.0 billion on August 3, 2006. Philips completed
EUR 2.4 billion in 2006 of this program.
Philips planned to execute the remaining EUR 1.6
billion via a program using a second trading line on
Euronext Amsterdam, which started on January 22,
2007. Through this second trading line EUR 0.8 billion
worth of shares were purchased in 2007.
In December 2007, the Dutch parliament adopted an
amendment to Dutch tax legislation, effective January
1, 2008, that increased the amount that companies
may spend on repurchasing shares free of withholding
tax. Subsequently, Philips announced that it planned
to repurchase EUR 5 billion worth of common Philips
shares. As a consequence of this new share repurchase
program, which includes the portion of the second
trading line program that had yet to be completed,
Philips terminated its second trading line.
At the end of 2008 share repurchases totaling EUR 3.3
billion, or two-thirds of the planned EUR 5.0 billion,
had been completed. Given the economic conditions in
2008, we announced on January 26, 2009 that, in line with
our prudent financial management, we would suspend
the share repurchase program until further notice.
Further details on the current and previous share
repurchase programs can be found on the Investor
Relations website. For more information see the
section Corporate governance of the Philips Group
that begins on page 254 of this Annual Report.
In 2008 the Company started the procedure for the
cancellation of Philips shares acquired pursuant to
the EUR 5.0 billion share repurchase program. The
cancellation has been effected in several tranches. The
number of shares cancelled in 2008 was 170,414,994.
Based on a survey at the end of 2008 and information
provided by several large custodians, the shareholder
portfolio information is included in the graphs
Shareholder by region and Shareholders by style.
Shareholders by region (estimated)1)
Other
2% North
America
34%
Western
Europe
64%
in %
Growth
32%
Value
21%
GARP 2)
11%
Retail
15%
Index
11%
Other
10%
Shareholders by style (estimated)
1)
in %
Impact of share repurchases on share count
in millions of shares
2004 2005 2006 2007 2008
Shares issued 1,316 1,316 1,143 1,143 972
Shares in treasury 35 115 36 78 49
Shares outstanding 1,282 1,201 1,107 1,065 923
Shares repurchased –72 102 26 146
Shares cancelled ––173 –170
Split based on identified shares in shareholder identification
1)
GARP: growth at reasonable price
2)
Philips Annual Report 2008 269
254
Corporate governance
250
Reconciliation of
non-US GAAP information
262
Ten-year overview
266
Investor information