Philips 2012 Annual Report Download - page 185

13 Company financial statements 13.4 - 13.4 E F G H I J K
Annual Report 2012 185
ELong-term debt and short-term debt
Long-term debt
(range of)
interest rates
average
interest rate
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 − − 2 2 − − 1.0 −
Intercompany financing 0.0 - 1.4% 0.7% 442 442 − − 0.2 996
Bank borrowings 2.3 - 2.8% 2.5% 450 − 450 200 4.6 450
Other long-term debt 2.5 - 19.0% 5.0% 49 49 − − 1.0 56
4,153 614 3,539 3,289 4,030
Corresponding data previous year 4,030 1,075 2,955 2,207 3,990
The following amounts of the long-term debt as of December 31, 2012,
are due in the next five years:
2013 614
2014 250
2015 −
2016 −
2017 −
864
Corresponding amount previous year 1,823
Convertible debentures include Philips personnel debentures. For
more information, please refer to note 19, Long-term debt and short-
term debt.
Short-term debt
Short-term debt includes the current portion of outstanding external
and intercompany long-term debt of EUR 614 million (2011: EUR 1,075
million), other debt to group companies totaling EUR 11,015 million
(2011: EUR 6,214 million) and short-term bank borrowings of EUR 113
million (2011: EUR 62 million).
Debt to other group companies is significantly higher compared to
previous years as a result of the adoption of a new practice to clear
cash transactions with US-based subsidiaries (see note C, Receivables
for further explanation).
FOther current liabilities
2011 2012
Income tax payable − 78
Other short-term liabilities 64 538
Accrued expenses 171 253
Derivative instruments - liabilities 1,034 592
1,269 1,461
Other short-term liabilities include a payable amount of EUR 509
million related to a fine from the European Commission following an
investigation into alleged violation of competition rules in the Cathode-
Ray Tubes (CRT) industry. The payable amount represents the
aggregate of the amount of EUR 313 million to be paid by the Company
and EUR 196 million, being 50% of the fine related to LPD (see note A,
Investments in affiliated companies for further explanation).
GNet income
Net income in 2012 amounted to a profit of EUR 226 million (2011: a
loss of EUR 1,295 million). The increase of net results in 2012 compared
to 2011 is especially due to the financial performance of affiliated
companies.
HEmployees
The number of persons employed by the Company at year-end 2012
was 10 (2011: 9) and included the members of the Board of
Management and certain leaders from functions, businesses and
markets, together referred to as the Executive Committee.
For the remuneration of past and present members of both the Board
of Management and the Supervisory Board, please refer to note 32,
Information on remuneration, which is deemed incorporated and
repeated herein by reference.
IContractual obligations and contingent liabilities
not appearing in the balance sheet
Philips entered into contracts with several venture capitalists where it
committed itself to make, under certain conditions, capital
contributions to investment funds to an aggregated amount of EUR 48
million until June 30, 2021. These investments will qualify as non-
controlling interests once the capital contributions have been paid.
Furthermore, Philips made commitments to third parties of EUR 25
million with respect to sponsoring activities. The amounts are due
before 2016.
General guarantees as referred to in Section 403, Book 2, of the Dutch
Civil Code, have been given by the Company on behalf of several group
companies in the Netherlands. The liabilities of these companies to
third parties and investments in associates totaled EUR 1,416 million as
of year-end 2012 (2011: EUR 1,450 million).
Guarantees totaling EUR 284 million (2011: EUR 279 million) have also
been given on behalf of other group companies and credit guarantees
totaling EUR 4 million (2011: EUR 14 million) on behalf of
unconsolidated companies and third parties. The Company is the head
of a fiscal unity that contains the most significant Dutch wholly-
owned group companies. The Company is therefore jointly and
severally liable for the tax liabilities of the tax entity as a whole. For
additional information, please refer to note 25, Contingent liabilities.
JAudit fees
For a summary of the audit fees, please refer to the Group Financial
statements, note 1, Income from operations.
KSubsequent events
Transfer of Audio, Video, Multimedia and Accessories
businesses to Funai
On 29 January 2013, Philips signed an agreement regarding the transfer
of its Lifestyle Entertainment business (Audio, Video, Multimedia and
Accessories to Funai Electric Co., Ltd. (Funai). Under the terms of this
agreement, Funai will pay a cash consideration of EUR 150 million and a
brand license fee, relating to a license agreement for an initial period of
five and a half years, with an optional renewal of five years. Currently
these businesses belong to the operating sector Consumer Lifestyle.