Philips 2008 Annual Report Download - page 57

Acquisitions
In 2008, a total of EUR 5,316 million cash was used for
acquisitions, mainly for Respironics (EUR 3,196 million),
Genlyte (EUR 1,805 million) and VISICU (EUR 198 million).
In 2007, cash disbursements amounting to EUR 1,502
million were used for acquisitions, notably for PLI
(EUR 561 million) and Color Kinetics (EUR 515 million),
as well as for DLO, Health Watch, TIR Systems, Raytel
Cardiac Services and Emergin.
Divestments and derivatives
Cash proceeds of EUR 1,831 million and EUR 37 million
were received from the final sale of stakes in TSMC
and D&M Holdings respectively. Additionally, the sale
of shares in LG Display generated EUR 670 million
cash. The maturing of derivatives led to a net cash
inflow of EUR 337 million.
In 2007, EUR 4,105 million in cash was received
from the sale of other non-current financial assets,
primarily related to TSMC, while EUR 1,640 million
cash was generated by the sale of interests in
businesses, including the sale of 46.4 million shares
in LG Display. The maturing of currency hedges led
to a net cash inflow of EUR 385 million.
Cash flows from financing activities
Net cash used for financing activities in 2008 was
EUR 3,575 million. The impact of changes in debt was
an increase of EUR 380 million, including the issuance
of EUR 2,053 million of bonds, offset by bond repayments
amounting to EUR 1,691 million. Also, Philips’ shareholders
were paid EUR 720 million in the form of a dividend
payment. Additionally, net cash outflows for share
repurchases totaled EUR 3,257 million. This included
a total of EUR 3,298 million related to the repurchases
of shares for cancellation. The cash outflows were
partially offset by a net cash inflow of EUR 41 million
due to the exercise of stock options.
In 2007, net cash used for financing activities totaled
EUR 2,368 million. The impact of changes in debt was
a reduction of EUR 281 million, including a EUR 113
million repayment of long-term bank borrowings.
Furthermore, Philips’ shareholders were paid EUR 659
million as a dividend payment. Net cash outflows for
share repurchases totaled EUR 1,448 million. This
included EUR 810 million related to hedging of obligations
under the long-term employee incentive and employee
stock purchase programs and a total of EUR 823 million
related to the repurchases of the shares for cancellation.
These cash outflows were partially offset by a net
cash inflow of EUR 161 million due to the exercise
of stock options.
Cash flows from discontinued operations
In 2008, EUR 37 million cash was used by discontinued
operations, the majority of which related to tax payments
in connection with the 2006 sale of Philips’ majority
stake in the Semiconductors business.
In 2007, EUR 115 million cash was used by discontinued
operations, the majority of which was due to tax payments
related to the Semiconductors business and operating
cash flows of MedQuist in 2007.
Financing
Consolidated balance sheet information for the
years 2008, 2007 and 2006 is presented above.
Condensed consolidated balance sheet information
in millions of euros
2006 2007 2008
Intangible assets 5,536 6,289 11,676
Property, plant and equipment 3,084 3,180 3,484
Inventories 2,834 3,146 3,371
Receivables 9,651 9,500 9,275
Accounts payable and other
liabilities (8,129) (7,799) (8,625)
Provisions (3,281) (3,089) (3,969)
Other non-current financial
assets 8,055 3,183 1,331
Equity-accounted investees 2,974 1,886 284
Assets of discontinued
operations 431 333 −
Liabilities of discontinued
operations (169) (157) −
20,986 16,472 16,827
Cash and cash equivalents 5,886 8,769 3,620
Debt (3,869) (3,557) (4,158)
Net cash (debt) 2,017 5,212 (538)
Minority interests (40) (42) (46)
Stockholders’ equity (22,963) (21,642) (16,243)
(20,986) (16,472) (16,827)
Please refer to the consolidated balance sheets for 2007 and 2008 which are
part of the chapter US GAAP financial statements.
Changes in debt
in millions of euros
2006 2007 2008
New borrowings (106) (29) (2,088)
Repayments 543 310 1,708
Consolidation and currency effects 181 31 (221)
Total changes in debt 618 312 (601)
Philips Annual Report 2008 57
122
Performance statements
114
Supervisory Board report
110
Our leadership
94
Risk management
70
Our sector performance