Philips 2015 Annual Report Download - page 176

Company nancial statements 13.4
176 Annual Report 2015
earnings. When treasury shares are reissued under the
Company’s share plans, the dierence between the
market price of the shares issued and the cost is
recorded in retained earnings, the market price is
recorded in capital in excess of par value.
Dividend withholding tax in connection with the
Company’s purchase of treasury shares for capital
reduction purposes is recorded in retained earnings.
The following transactions took place resulting from
employee option and share plans:
Koninklijke Philips N.V.
Employee option and share plan transactions
2014 - 2015
2014 2015
Shares acquired 7,254,606
Average market price EUR 24.53
Amount paid EUR 178 million
Shares delivered 10,777,489 5,338,743
Average market price EUR 30.26 EUR 30.35
Cost of delivered shares EUR 326 million EUR 162 million
Total shares in treasury
at year-end 17,127,544 11,788,801
Total cost EUR 470 million EUR 308 million
In 2015, there was no need to acquire additional shares
to cover our commitments under share-based
compensation plans.
In order to reduce share capital, the following
transactions took place:
Koninklijke Philips N.V.
Share capital transactions
2014 - 2015
2014 2015
Shares acquired 21,283,315 20,296,016
Average market price EUR 23.95 EUR 24.39
Amount paid EUR 510 million EUR 495 million
Reduction of capital
stock (shares) 21,837,910 21,361,016
Reduction of capital
stock (EUR) EUR 533 million EUR 517 million
Total shares in treasury
at year-end 3,303,000 2,238,000
Total cost EUR 77 million EUR 55 million
Share purchase transactions related to employee
option and share plans, as well as transactions related
to the reduction of share capital involved a cash outow
of EUR 506 million, which includes the impact of taxes.
Settlements of share-based compensation plans
involved a cash inow of EUR 81 million.
Dividend distribution
A proposal will be submitted to the 2016 Annual
General Meeting of Shareholders to pay a dividend of
EUR 0.80 per common share, in cash or shares at the
option of the shareholder, from the 2015 net income
and retained earnings of the Company.
Legal reserves
As of December 31, 2015, legal reserves relate to the
revaluation of assets and liabilities of acquired
companies in the context of multi-stage acquisitions of
EUR 4 million (2014: EUR 13 million), unrealized gains on
available-for-sale nancial assets of EUR 56 million
(2014: EUR 27 million), unrealized gains on cash ow
hedges of EUR 12 million (2014: EUR 13 million
unrealized losses), ‘aliated companies’ of EUR 958
million (2014: EUR 1,059 million) and unrealized
currency translation gains of EUR 1,058 million (2014:
EUR 229 million unrealized losses).
The item ‘aliated companies’ relates to the ‘wettelijke
reserve deelnemingen’, which is required by Dutch law.
This reserve relates to any legal or economic restrictions
on the ability of aliated companies to transfer funds
to the parent company in the form of dividends.
Limitations in the distribution of shareholders’
equity
Pursuant to Dutch law, limitations exist relating to the
distribution of shareholders’ equity of EUR 2,274 million
as at December 31, 2015. Such limitations relate to
common shares of EUR 186 million, as well as to legal
reserves included under ‘revaluation’ of EUR 4 million,
available-for-sale nancial assets of EUR 56 million,
unrealized gains related to cash ow hedges of EUR 12
million, unrealized currency translation gains of EUR
1,058 million and ‘aliated companies’ of EUR 958
million.
As at December 31, 2014 the limitations on distributable
amounts were EUR 1,515 million and related common
shares of EUR 187 million, as well as to legal reserves
included under ‘revaluation’ of EUR 13 million,
available-for-sale nancial assets of EUR 27 million,
unrealized currency gains of EUR 229 million and
‘aliated companies’ of EUR 1,059 million. The
unrealized losses related to cash ow hedges of EUR 13
million, although qualifying as a legal reserve, reduce
the distributable amount by their nature.