Philips 2008 Annual Report Download - page 61

The table on the right excludes any potential uncertain
income tax liabilities that may become payable upon
examination of the Group’s income tax returns by
taxing authorities. Such amounts and periods of payment
cannot be reliably estimated. Refer to note 6
of the
notes to the Group financial statements for further
explanation of the Group’s uncertain tax positions.
Other cash commitments
Under the terms of a proposed Plan of Reorganization
filed by a US subsidiary of the Company – which is
subject to Court approval – an amount of USD 900
million (EUR 639 million) would be required to be
contributed to an Asbestos Personal Injury Trust.
EUR 121 million is currently held in a restricted trust
account and will be used in the settlement of this
contingent obligation. For further information with
respect to this and other contingent liabilities, refer
to note 27 of the US GAAP financial statements.
The Company and its subsidiaries sponsor pension
plans in many countries in accordance with legal
requirements, customs and the local situation in the
countries involved. Additionally, certain postretirement
benefits are provided in certain countries. Refer to
notes 20 and 21 of the notes to the Group financial
statements for a discussion of the plans and expected
cash outflows.
The Company announced the acceleration of restructuring
and change programs across all sectors in 2008, which
is expected to lead to a cash payment amounting to
EUR 235 million in 2009. For further information, refer to
note 4 of the notes to the Group financial statements.
A distribution for 2009 of EUR 0.70 per common share
will
be proposed to the 2009 Annual General Meeting
of Shareholders. Assuming the distribution is approved, it
is expected to amount to approximately EUR 646 million.
In light of current economic environment, in January
2009, Philips has stopped the EUR 5 billion share
buy-back program until futher notice.
Guarantees
Guarantees issued or modified after December 31, 2003,
having characteristics defined in FASB Interpretation
No. 45 ‘Guarantor’s Accounting and Disclosure
Requirements for Guarantees, including Indirect
Guarantees of Indebtedness of Others’ (FIN 45),
are measured at fair value and recognized on the
balance sheet. At the end of 2008, the total fair
value of guarantees recognized by the company
was EUR 10 million.
Contractual cash obligations at December 31, 20083)
in millions of euros
payments due by period
total
less
than 1
year
1-3
years
3-5
years
after 5
years
Long-term debt1) 3,437 127 1,027 456 1,827
Finance lease
obligations1) 135 4681746
Short-term debt1) 586 586 −−−
Operating leases1) 715 171 229 137 178
Interest on debt2) 2,533 209 391 278 1,655
7,406 1,097 1,715 888 3,706
Short-term debt, long-term debt and capital lease obligations are
1)
included in the Company’s consolidated balance sheet; please refer
to note 23, note 24 and note 26 of the US GAAP financial statements
Approximately 24% of the debt bears interest at a variable rate.
2)
Interest on debt has been estimated based upon average rates in 2008.
For further details about uncertain tax positions, amounting to
3)
EUR 559 million, see note 6 of the US GAAP financial statements.
Expiration per period 2008
in millions of euros
total
amounts
committed
less
than 1
year
1-5
years
after 5
years
Business-related
guarantees 443 205 78 160
Credit-related
guarantees 42 18 7 17
485 223 85 177
Expiration per period 2007
in millions of euros
total
amounts
committed
less
than 1
year
1-5
years
after 5
years
Business-related
guarantees 432 142 95 195
Credit-related
guarantees 45 51624
477 147 111 219
Guarantees issued before December 31, 2003, and
not modified afterwards, and guarantees issued after
December 31, 2003, which do not have characteristics
defined in FIN 45, remain off-balance sheet.
Philips’ policy is to provide only guarantees and other
letters of support, in writing. Philips does not stand by
other forms of support. The above table outlines the
total outstanding off-balance sheet credit-related
guarantees and business-related guarantees provided
by Philips for the benefit of unconsolidated companies
and third parties as at December 31, 2008.
Philips Annual Report 2008 61
122
Performance statements
114
Supervisory Board report
110
Our leadership
94
Risk management
70
Our sector performance