Philips 2012 Annual Report Download - page 152

12 13 14 15 16 17 12 Group financial statements 12.11 - 12.11
152 Annual Report 2012
12 Other non-current financial assets
The changes during 2012 are as follows:
available-
for-sale
financial
assets
loans and
receivables
held-to-
maturity
invest-
ments
financial
assets
at fair value
through
profit or loss total
Balance as of
January 1, 2012 204 72 3 67 346
Changes:
Reclassifications 13 2 − − 15
Acquisitions/
additions 19 208 − 17 244
Sales/
redemptions/
reductions (2) (1) − (35) (38)
Impairment (8) − − − (8)
Value
adjustments 7 (10) − (3) (6)
Translation and
exchange
differences (1) (4) − 1 (4)
Balance as of
December 31,
2012 232 267 3 47 549
Available-for-sale financial assets
The Company’s investments in available-for-sale financial assets mainly
consist of investments in common stock of companies in various
industries.
Loans and receivables
The increase of loans and receivables in 2012 mainly relates to loans
provided to TPV Technology Limited and the television joint venture
TP Vision Holding BV (EUR 151 million in aggregate), which was
established on April 1, 2012 in the context of the divestment of Philips’
Television business. Additionally there was an increase of EUR 53
million in Loans and receivables related to the sale of real estate
belonging to the High Tech Campus.
Financial assets at fair value through profit or loss
The reduction of financial assets at fair value through profit and loss
with EUR 35 million in 2012 mainly relates to financial assets earmarked
for the Swiss pension plan, which have been used in a buy-out
transaction.
Also included in this category are certain financial instruments that
Philips received in exchange for the transfer of its television activities.
The initial value of EUR 17 million was adjusted by EUR 11 million during
2012.
In 2010 Philips sold its entire holding of common shares in NXP
Semiconductors B.V. (NXP) to Philips Pension Trustees Limited (herein
referred to as “UK Pension Fund”). As a result of this transaction the
UK Pension Fund obtained the full legal title and ownership of the NXP
shares, including the entitlement to any future dividends and the
proceeds from any sale of shares. From the date of the transaction the
NXP shares are an integral part of the plan assets of the UK Pension
Fund. The purchase agreement with the UK Pension Fund includes an
arrangement that may entitle Philips to a cash payment from the UK
Pension Fund on or after September 7, 2014, if the value of the NXP
shares has increased by this date to a level in excess of a predetermined
threshold, which at the time of the transaction was substantially above
the transaction price, and the UK Pension Fund is in a surplus (on the
regulatory funding basis) on September 7, 2014. The arrangement
qualifies as a financial instrument and is reported under Other non-
current financial assets. The fair value of the arrangement was estimated
to be EUR 8 million as of December 31, 2011. As of December 31, 2012
management’s best estimate of the fair value of the arrangement is EUR
14 million, based on the risks, the stock price of NXP, the current
progress and the long-term nature of the recovery plan of the UK
Pension Fund. The change in fair value in 2012 is reported under Value
adjustments in the table above and also recognized in Financial income.
13 Other non-current assets
Other non-current assets in 2012 are comprised of prepaid pension
costs of EUR 7 million (2011: EUR 5 million) and prepaid expenses of
EUR 87 million (2011: EUR 66 million).
For further details see note 29, Pensions and other postretirement
benefits.
14 Inventories
Inventories are summarized as follows:
2011 2012
Raw materials and supplies 1,083 1,039
Work in process 630 540
Finished goods 1,912 1,916
3,625 3,495
The amounts recorded above are net of allowances for obsolescence.
In 2012, the write-down of inventories to net realizable value amounted
to EUR 276 million (2011: EUR 239 million). The write-down is included
in cost of sales.
15 Current financial assets
Other current financial assets were EUR nil million as at December 31,
2012 (2011: EUR nil million).
16 Other current assets
Other current assets include prepaid expenses of EUR 337 million
(2011: EUR 351 million).
17 Current receivables
The accounts receivable, net, per sector are as follows:
2011 2012
Healthcare 1,882 1,967
Consumer Lifestyle 1,339 892
Lighting 1,261 1,364
Innovation, Group & Services 102 111
4,584 4,334
The aging analysis of accounts receivable, net, is set out below:
2011 2012
current 3,966 3,624
overdue 1-30 days 290 272
overdue 31-180 days 234 298
overdue > 180 days 94 140
4,584 4,334
A large part of overdue trade accounts receivable relates to public
sector customers with slow payment approval processes. The
allowance for doubtful accounts receivable has been primarily
established for receivables that are past due.