Philips 2008 Annual Report Download - page 60

If this were to be the case, Philips’ USD 2.5 billion
committed revolving credit facilities could act as
back-up for short-term financing requirements that
normally would be satisfied through the commercial
paper program. The USD 2.5 billion revolving credit
facility does not have a material adverse change clause,
has no financial covenants and does not have credit-
rating-related acceleration possibilities. The revolving
credit facility is allocated among 26 banks headquartered
in Organization for Economic Co-operation and
Development (OECD) countries. As of December 31,
2008, Philips did not have any commercial paper
outstanding.
In addition to the USD 2.5 billion revolving credit
facility, Philips has a EUR 500 million standby roll-over
loan agreement in place. The availability of EUR 450
million out of this EUR 500 million is committed until
April 29, 2010. As of December 31, 2008, Philips did
not have any loans outstanding under these facilities.
As of December 31, 2008 Philips had an undrawn
committed bilateral loan of EUR 250 million in place
which was fully drawn in January 2009.
Outstanding long-term bonds, including the ones
issued in March 2008, do not have a material adverse
change clause, financial covenants nor credit-rating-
related acceleration possibilities.
As at December 31, 2008, Philips had total cash and
cash equivalents of EUR 3,620 million; Philips pools
cash from subsidiaries to the extent legally and
economically feasible. Cash in subsidiaries is not
necessarily freely available for alternative uses due
to possible legal or economic restrictions. The amount
of cash not immediately available is not considered
material for Philips to meet its cash obligations.
Philips had a total debt position of EUR 4,158 million
at year-end 2008.
Contractual cash obligations,
other cash commitments
and guarantees
Contractual cash obligations
Presented opposite is a summary of the Group’s
contractual cash obligations and commitments at
December 31, 2008
Philips has no material commitments for capital
expenditures.
Philips
has a number of commercial agreements, such
as supply agreements, which provide that certain
penalties may be charged to the company if the company
does not fulfill its commitments.
The Company has a lock-up period associated with
the sale of shares in Pace Micro Technology that
expires on April 21, 2009. The sale of TSMC shares
contributed the majority of the decrease in available-
for-sale securities.
Philips’ shareholdings in its main listed equity-accounted
investees had a fair value of EUR 60 million based on
quoted market prices at December 31, 2008, and
consisted primarily of the Company’s holdings in TPV
Technology. The Company transferred LG Display from
equity-accounted investees to available-for-sale securities
effective March 1, 2008 as Philips was no longer able
to exercise significant influence. The decline in the value
of LG Display holding was due to the sale of 24 million
shares, as well as the sharp decline in the stock price
in 2008.
Philips has a USD 2.5 billion commercial paper program,
under which it can issue commercial paper up to 364
days in tenor, both in the US and in Europe, in any major
freely convertible currency. There is a panel of banks,
in Europe and in the US, which service the program.
When Philips wants to fund through the commercial
paper program, it contacts the panel of banks. The
interest is at market rates prevailing at the time of
issuance of the commercial paper. There is no collateral
requirement in the commercial paper program. Also,
there are no limitations on Philips’ use of the program,
save for market considerations, such as that the
commercial paper market itself is not open.
Lighting the road ahead in Asia
Philips officially opened its Automotive Lighting Ap-
plication Center at the Philips Innovation Campus
in Shanghai, China. This center studies local needs in
automotive lighting to provide customized support
and speed up the introduction of the latest lighting
technologies into the fast-growing local markets.
Philips Annual Report 200860
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Our group performance
Liquidity and
capital resources
18
We care about...
8
Message from
the President
6
Performance highlights
14
Who we are