Philips 2012 Annual Report Download - page 155

12 Group financial statements 12.11 - 12.11 19
Annual Report 2012 155
19 Long-term debt and short-term debt
Long-term debt
(range of)
interest rates
average rate of
interest
amount
outstanding due in 1 year due after 1 year due after 5 years
average
remaining term
(in years)
amount
outstanding
2011
USD bonds 3.8 - 7.8% 5.6% 3,198 109 3,089 3,089 14.2 2,505
Convertible
debentures − − 12 12 − − − 23
Private financing 0 - 1.6% 1.6% 2 2 − − 0.9 1
Bank borrowings 2.3 - 7.8% 2.7% 469 13 456 203 4.6 627
Other long-term
debt 1.3 - 19.0% 5.0% 52 50 2 − 4.0 57
3,733 186 3,546 3,292 3,213
Finance leases 0.6 - 15.1% 3.6% 243 65 178 65 7.3 204
5.2% 3,976 251 3,725 3,357 3,417
Corresponding
data of previous
year 5.8% 3,417 139 3,278 2,240 3,972
The following amounts of long-term debt as of December 31, 2012, are
due in the next five years:
2013 251
2014 305
2015 33
2016 19
2017 11
Total 619
Corresponding amount of previous year 1,177
effective
rate 2011 2012
Unsecured USD Bonds
Due 5/15/25; 7 3/4% 7.429% 77 75
Due 6/01/26; 7 1/5% 6.885% 128 126
Due 8/15/13; 7 1/4% 6.382% 110 108
Due 5/15/25; 7 1/8% 6.794% 79 78
Due 3/11/13; 4 5/8%1) 4.949% 386 −
Due 3/11/18; 5 3/4%1) 6.066% 966 948
Due 3/11/38; 6 7/8%1) 7.210% 773 758
Due 3/15/22; 3.750%1) 3.906% − 758
Due 3/15/42; 5.000%1) 5.273% − 379
Adjustments2) (14) (32)
2,505 3,198
1) The provisions applicable to these bonds, issued in March 2008 and in March
2012, contain a ‘Change of Control Triggering Event’. If the Company would
experience such an event with respect to a series of corporate bonds, the
Company may be required to offer to purchase the bonds of the series at a
purchase price equal to 101% of the principal amount, plus accrued and
unpaid interest, if any.
2) Adjustments relate to issued bond discounts, transaction costs and fair value
adjustments for interest rate derivatives
Secured liabilities
In 2012, none of the long-term and short-term debt was secured by
collateral (2011: EUR nil million).
Short-term debt
2011 2012
Short-term bank borrowings 422 533
Other short-term loans 21 25
Current portion of long-term debt 139 251
582 809
During 2012, the weighted average interest rate on the bank
borrowings was 7.8% (2011: 10.5%).
In the Netherlands, the Company issued personnel debentures with a
5-year right of conversion into common shares of Royal Philips
Electronics. Convertible personnel debentures may not be converted
within a period of 3 years after the date of issue. These convertible
personnel debentures were available to most employees in the
Netherlands and were purchased by them with their own funds and
were redeemable on demand. The convertible personnel debentures
become non-convertible debentures at the end of the conversion
period.
Although convertible debentures have the character of long-term
financing, the total outstanding amounts are classified as current
portion of long-term debt. At December 31, 2012, an amount of EUR
12 million (2011: EUR 23 million) of convertible personnel debentures
was outstanding, with an average conversion price of EUR 19.73. The
conversion price varies between EUR 14.19 and EUR 29.5 with various
conversion periods ending between January 1, 2013 and December 31,
2013. As of January 1, 2009, Philips no longer issues these debentures.
Furthermore, Philips has a USD 2.5 billion Commercial Paper Program
and a EUR 1.8 billion revolving credit facility that can be used for general
corporate purposes and as a backstop of its commercial paper program.
In January 2013, the EUR 1.8 billion facility was extended by 2 years
until February 18, 2018. As of December 31, 2012 Philips did not have
any loans outstanding under either facility.