Philips 2015 Annual Report Download - page 146

Group nancial statements 12.9
146 Annual Report 2015
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 2013
In 2013, In Healthcare, the largest projects were
undertaken in Customer Services, Home Healthcare
Solutions and Imaging Systems in the United States,
Italy and the Netherlands to reduce the operating costs
and simplify the organization.
Consumer Lifestyle restructuring charges were mainly
related to Personal Care (primarily in the Netherlands
and Austria) and Coee (mainly Italy).
The most signicant restructuring projects related to
Lighting and were driven by the industrial footprint
rationalization.
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.
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
2013 - 2015
2013 2014 2015
Balance as of January 1 238 236 653
Changes:
Additions 48 563 66
Utilizations (17) (32) (25)
Transfer to other current liabilities - (138) (161)
Changes in discount rate - - 8
Releases (15) (23) (25)
Accretion - 6 12
Translation dierences (18) 41 50
Balance as of December 31 236 653 578
2015
The majority of the ending balance as of December 31,
2015 relates to the patent infringement lawsuit by
Masimo Corporation as mentioned in the 2014
paragraph.
The majority of the transfers to other current liabilities
relates to certain parts of the Cathode Ray Tube (CRT)
antitrust litigation as mentioned in note 26, Contingent
assets and liabilities for which the Company was able
to reach a settlement. These settlements were
subsequently paid out in 2015.
The movement of EUR 50 million in translation
dierences is mainly explained by the increase of the
USD/EUR rate which impacted the litigation provisions
nominated in USD.
The Company expects to use the provisions within the
next three years. For more details reference is made to
note 26, Contingent assets and liabilities.
2014
The additions and ending balance in 2014 include the
patent infringement lawsuit by Masimo Corporation in
the United States District Court for the District of
Delaware against Philips in which Masimo was
awarded a compensation of USD 467 million (EUR 366
million) in 2014.
The majority of the remaining additions and remaining
ending balance as of December 31, 2014 relates to
certain parts of the CRT antitrust litigation for which the
company concluded it was able to make a reliable
estimate of the cash outow or was able to reach
settlement.
The transfer to other current liabilities in the schedule
above relates to certain parts of the CRT antitrust
litigation where the Company was able to reach
settlement. Settlements in excess of provisions
recognized previously were recognized as an increase
of other current liabilities as disclosed in note 22, Other
liabilities. These settlements were subsequently paid
out in 2015.
As a result of the aforementioned changes in estimates
for the CRT antitrust litigation, the results of other
business expenses of EUR 271 million in 2014 as
included in note 6, Income from operations mainly
relate to certain parts of the CRT antitrust litigation for
which the company concluded it was able to make a
reliable estimate of the cash outow or where the
Company was able to reach settlement.
For more details reference is made to note 26,
Contingent assets and liabilities.