Philips 2014 Annual Report Download - page 151

Group nancial statements 12.9
Annual Report 2014 151
Restructuring projects at Lighting centered on
Luminaires businesses and Light Sources & Electronics,
the largest of which took place in the United States,
France and Belgium.
Innovation, Group & Services restructuring projects
mainly focused on the Financial Operations Service
Unit, primarily in Italy, France and the United States.
The movements in the provisions and liabilities for
restructuring in 2013 are presented by sector as follows:
Philips Group
Restructuring-related provisions in millions of EUR
2013
Jan. 1,
2013
addi-
tions
uti-
liza-
tions
relea-
ses
other
changes1)
Dec
31,
2013
Healthcare 77 14 (50) (23) (1) 17
Consumer
Lifestyle 48 11 (27) (10) (1) 21
Lighting 198 64 (110) (19) (3) 130
Innovation,
Group and
Services 62 16 (30) (15) 2 35
Philips
Group 385 105 (217) (67) (3) 203
1) Other changes primarily relate to translation dierences and transfers
between sectors
The most signicant projects in 2012
In 2012, the most signicant restructuring projects
related to Lighting and Healthcare and were driven by
our change program Accelerate!.
In Healthcare, the largest projects were undertaken in
Imaging Systems and Patient Care & Clinical Informatics
in various locations in the United States, the
Netherlands and Germany to reduce the operating
costs and simplify the organization.
Consumer Lifestyle restructuring charges were mainly
related to Lifestyle Entertainment (primarily in Hong
Kong and the United States) and Coee (mainly Italy).
Restructuring projects at Lighting centered on
Luminaires businesses and Light Sources & Electronics,
the largest of which took place in the Netherlands,
Belgium and in various locations in the US.
Innovation, Group & Services restructuring projects
focused on the IT and Financial Operations Service
Units (primarily in the Netherlands), Group & Regional
Overheads (mainly in the Netherlands and Italy) and
Philips Innovation Services (in the Netherlands and
Belgium).
The movements in the provisions and liabilities for
restructuring in 2012 are presented by sector as follows:
Philips Group
Restructuring-related provisions in millions of EUR
2012
Jan.1,
2012
addi-
tions
uti-
liza-
tions
relea-
ses
other
changes1)
Dec.
31,
2012
Healthcare 18 100 (29) (7) (5) 77
Consumer
Lifestyle 39 58 (41) (8) – 48
Lighting 52 225 (61) (16) (2) 198
Innovation,
Group and
Services 60 67 (47) (10) (8) 62
Philips
Group 169 450 (178) (41) (15) 385
1) Other changes primarily relate to translation dierences and transfers
between sectors
Litigation provisions
The Company and certain of its group companies and
former group companies are involved as a party in legal
proceedings, including regulatory and other
governmental proceedings.
Philips Group
Litigation provisions in millions of EUR
2012 - 2014
2012 2013 2014
Balance as of January 1 101 238 236
Changes:
Additions 234 48 563
Utilizations (85) (17) (170)
Releases (7) (15) (23)
Accretion – – 6
Translation dierences (5) (18) 41
Balance as of December 31 238 236 653
The additions in 2014 include the patent infringement
lawsuit by Masimo Corporation in the Unites States
District Court for the District of Delaware against Philips
in which Masimo was awarded a compensation of USD
467 million (EUR 366 million).
The majority of the remaining 2014 additions and of the
utilization of the provisions, as well as of the remaining
ending balance as of December 31, 2014 relates to
certain parts of the Cathode Ray Tube antitrust litigation
as mentioned in note 26, Contingent assets and
liabilities for which the Company concluded it was able
to make a reliable estimate of the cash outow or was
able to reach a settlement.
The Company expects to use the provisions within the
next ve years. For more details reference is made to
note 26, Contingent assets and liabilities.
Other provisions
The main elements of other provisions are: provision for
post-employment benets and obligatory severance
payments of EUR 50 million (2013: 66 million), onerous
contract provisions for unfavorable supply contracts as
part of divestment transactions, onerous (sub)lease