Philips 2009 Annual Report Download - page 189

The movements in the provisions and liabilities for restructuring in 2009
are presented by sector as follows:
Dec. 31,
2008
addi-
tions utilized released
other
changes1)
Dec. 31,
2009
Healthcare 58 37 (61) (11) 1 24
Consumer
Lifestyle 137 134 (109) (23) 3 142
Lighting 135 186 (116) (41) − 164
GM&S 42 68 (37) (6) (1) 66
372 425 (323) (81) 3 396
1) Other changes primarily relate to translation differences
The most significant projects in 2008
• Healthcare’s restructuring projects were undertaken to reduce
operating costs and simplify the organization. The projects affected
many locations, most notably sites in Hamburg (Germany), Helsinki
(Finland) and Andover (US).
• Consumer Lifestyle’s main projects primarily relate to the
integration of the former DAP and CE businesses, the exit of TV in
North America, the restructuring and subsequent sale of the
Television factory in Juarez (Mexico) and the optimization of the
European supply footprint within almost all businesses.
• In Lighting, over 60 restructuring projects were active during 2008
and a total amount of EUR 156 million was added to the provision
and liability for restructuring. A significant portion of the charge
related to actions taken to address the ongoing shift from
incandescent bulbs to energy-efficient lighting solutions. Other main
projects within the Lighting sector included the closure of lamp
phosphor production in Maarheeze (the Netherlands), the
consolidation of production activities from Fairmont to Salina (US),
the reorganization of the wire & lead coiling activities in Turnhout
(Belgium) and Maarheeze (the Netherlands), the reorganization of
R&D activities within traditional lighting, mainly in Turnhout
(Belgium) and Roosendaal (the Netherlands), and the reorganization
and staff reductions of the headquarters in Eindhoven (the
Netherlands). Other smaller projects in Lighting, in various
locations, were aimed at further increasing organizational
effectiveness and reducing the fixed cost base.
• Within Group Management & Services, most of the costs relate to
the move of the US country organization headquarters from New
York to Andover, initiated in 2007, and the restructuring of
Assembleon.
The movements in the provisions and liabilities for restructuring in 2008
are presented by sector as follows:
Dec. 31,
2007
addi-
tions utilized released
other
changes1)
Dec. 31,
2008
Healthcare − 62 (2) − (2) 58
Consumer
Lifestyle 10 174 (48) − 1 137
Lighting 14 156 (34) (2) 1 135
GM&S 20 35 (12) − (1) 42
44 427 (96) (2) (1) 372
1) Other changes primarily relate to translation differences
The most significant projects in 2007
• In Lighting; restructuring of the Oss plant in the Netherlands, from
mass manufacturing to competence center, and the closure of
fluorescent lamp-based LCD backlighting activities.
• Within Group Management & Services: the US country organization
headquarters were moved from New York to Andover.
The movements in the provisions and liabilities for restructuring in 2007
are presented by sector as follows:
Dec. 31,
2006
addi-
tions utilized released
other
changes
Dec. 31,
2007
Healthcare 13 1 (14) − − −
Consumer
Lifestyle 18 8 (15) (1) − 10
Lighting 45 24 (51) (4) − 14
GM&S 16 5 − − (1) 20
92 38 (80) (5) (1) 44
Other provisions
Other provisions include provisions for employee jubilee funds totaling
EUR 77 million (2008: EUR 76 million), self-insurance liabilities of
EUR 65 million (2008: EUR 58 million), liabilities related to business
combinations totaling EUR 46 million (2008: EUR nil) and provisions for
expected losses on existing projects/orders of EUR 10 million (2008:
EUR 13 million). The Group expects to utilize the liabilities related to
business combinations and the provision for expected losses on existing
projects/orders mainly within the next two years. The provisions for
employee jubilee funds, the self-insurance liabilities and all other
provisions are expected to be mainly utilized within the next 5 years.
18 Pensions and other postretirement benefits
Defined-benefit plan pensions
Employee pension plans have been established in many countries in
accordance with the legal requirements, customs and the local situation
in the countries involved. The Company also sponsors a number of
defined-benefit pension plans. The benefits provided by these plans are
based on employees’ years of service and compensation levels. The
measurement date for all defined-benefit plans is December 31.
The Company’s contributions to the funding of defined-benefit pension
plans are determined based upon various factors, including minimum
contribution requirements, as established by local government, legal
and tax considerations as well as local customs.
Summary of pre-tax costs for pensions and other
postretirement benefits
2007 2008 2009
Defined-benefit plans (38) (21) 3
Defined-contribution plans including multi-
employer plans 84 96 107
Retiree medical plans 29 31 (100)
75 106 10
In 2009 curtailment gains totaling EUR 134 million related to changes in
retiree medical plans positively impacted the result.
The table below provides a summary of the changes in the defined-
benefit obligations for defined-benefit pension plans and the fair value of
their plan assets for 2009 and 2008. It also provides a reconciliation of
the funded status of these plans to the amounts recognized in the
Consolidated balance sheets.
11 Group financial statements 11.12 - 11.12 18
Philips Annual Report 2009 189