Philips 2008 Annual Report Download - page 49

For 2009, the effective tax rate excluding non-taxable
items is expected to be around 30%.
For further information, please refer to note 6 of
the US GAAP financial statements.
Results of equity-accounted investees
The results relating to equity-accounted investees
declined by EUR 744 million in 2008 to EUR 19 million.
Philips’ participation in the net income of equity-
accounted investees declined from EUR 271 million in
2007 to EUR 81 million in 2008, which included EUR
66 million from earnings at LG Display. These earnings
were partly offset by a EUR 59 million non-cash value
adjustment on the equity stake in TPV Technology.
During 2008, as a result of the reduction in both
Philips’ shareholding and the number of Philips board
members, Philips lost significant influence, and LG
Display was accounted for as an available-for-sale
security instead of an equity investment.
In 2007, the EUR 514 million proceeds from the sale
of shares were mainly due to the EUR 508 million
non-taxable gain on the sale of a 13% stake in LG
Display. The proceeds from the sale of stakes in 2008
were recorded under Financial income and expenses.
Minority interests
The share of minority interests in companies within
the income of the Group reduced income by EUR 3
million in 2008, compared to EUR 5 million in 2007.
Discontinued operations
Philips reports the results of Semiconductors and the
MedQuist business separately as discontinued operations.
Consequently, the related results, including transaction
gains and losses, are shown separately in the financial
statements under Discontinued operations.
The loss from discontinued operations of EUR 8 million
in 2008 was mainly due to final results related to
MedQuist, which was sold in 2008 to CBAY Inc.
In 2007, discontinued operations recorded a loss of
EUR 433 million, primarily attributable to a EUR 360
million impairment charge for MedQuist, taking
into account EUR 325 million in 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.
Net income
Income from continuing operations declined from
EUR 4,593 million in 2007 to a loss of EUR 178 million
in 2008. The decline was attributable to lower EBIT
in
2008 and lower results in financial income and expenses.
Net income for the Group including discontinued
operations amounted to a loss of EUR 186 million,
or EUR 0.19 per common share, in 2008, compared
to a profit of EUR 4,160 million, or EUR 3.83 per
common share, in 2007.
The power to do more
Every day, radiologists and cardiologists are asked to
do more in less time, meeting heightened expecta-
tions across a wider range of patients and condi-
tions. Philips brings much-needed simplicity to this
complex process. The latest innovation in computed
tomography, Philips Brilliance iCT offers an impres-
sive combination of speed, power and coverage to
improve image quality while incorporating the latest
dose-reduction technology.
Philips Annual Report 2008 49
122
Performance statements
114
Supervisory Board report
110
Our leadership
94
Risk management
70
Our sector performance