Annual Report 2008
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Long-term debt

Auditor report 		Notes
Previous - US GAAP financial statements: Significant accounting policies Next - IFRS financial statements: Introduction
 
 
range of interest rates
average rate of interest
amount outstanding 2008
due in 1 year
due after 1 year
due after 5 years
average remaining term (in years)
amount outstanding 2007
 
 
 
 
 
 
 
 
 
Eurobonds
6.1-6.1%
6.1%
750
−
750
−
2.4
2,442
USD bonds
3.3-7.8%
5.9%
2,522
−
2,522
1,822
14.0
357
Convertible debentures
1.7-1.7%
1.7%
81
72
9
−
2.6
103
Private financing
1.0-12.4%
4.5%
8
1
7
−
1.8
9
Bank borrowings
1.0-16.3%
5.1%
11
−
11
4
3.6
4
Finance Leases
1.0-11.3%
3.0%
135
4
131
46
3.9
88
Other long-term debt
2.0-16.4%
5.2%
65
54
11
1
1.4
58
 
 
5.7%
3,572
131
3,441
1,873
−
3,061
 
 
 
 
 
 
 
 
 
Corresponding data of previous year
 
5.9%
3,061
1,849
1,212
416
 
3,213
 

The following amounts of long-term debt, as at December 31, 2008, are due in the next five years:

 
2009
131
2010
75
2011
1,020
2012
14
2013
459
Total
1,699
Corresponding amount of previous year
2,645
 

In March 2008, Philips placed a total of USD 3,100 million of debt which consisted of a floating rate note for USD 350 million, and 3 fixed rate bonds totaling USD 2,750 million. The weighted average interest rate of the new bonds was 5.66% at December 31, 2008. Philips used the proceeds of this offering to refinance the EUR 1,691 million worth of notes that matured in the first half of 2008. As of December 31, 2008, Philips had outstanding public bonds of EUR 3,272 million previously issued mostly in USD or EUR.

The following table provides additional details regarding the outstanding bonds.

 
 
effective rate
2007
2008
 
 
 
 
Unsecured Eurobonds
 
 
 
Due 2/06/08; 7 1/8%
7.302%
130
−
Due 5/14/08; 7%
7.094%
61
−
Due 5/16/08; 5 3/4%
5.817%
1,500
−
Due 5/16/11; 6 1/8%
6.122%
750
750
Adjustments 1)
 
1
−
 
 
2,442
750
 
 
 
 
Unsecured USD Bonds
 
 
 
Due 5/15/25; 7 3/4%
8.010%
67
70
Due 6/01/26; 7 1/5%
7.426%
113
118
Due 8/15/13; 7 1/4%
7.554%
97
101
Due 5/15/25; 7 1/8%
7.361%
70
73
Due 11/03/11; 3 3/8%
3.128%
−
248
Due 11/03/13; 4 5/8%
4.949%
−
355
Due 11/03/18; 5 3/4%
6.066%
−
887
Due 11/03/38; 6 7/8%
7.210%
−
710
Adjustments 1)
 
10
(40)
 
 
357
2,522
 
1) Adjustments relate to issued bond discounts, transaction costs and fair value adjustments for interest rate derivatives.

The provisions applicable to all corporate bonds that have been issued by the Company in March 2008, contain a ‘Change of Control Triggering Event’. This means that if the Company would experience such an event it may be required to offer to purchase the bonds of that series at a purchase price equal to 101% of their principal amount, plus accrued and unpaid interest, if any.

Secured liabilities

In 2008, EUR 3.5 million of long-term and short-term debt was secured by collateral of EUR 3.4 million manufacturing assets (2007: EUR nil).

Previous - US GAAP financial statements: Significant accounting policies Next - IFRS financial statements: Introduction
This is an interactive electronic version of the Philips Annual Report 2008 and also contains certain information in summarized form. The contents of this version are qualified in their entirety by reference to the printed version of the Philips Annual Report 2008. The printed version is available as a PDF file on this website. Information about: forward-looking statements, third-party market share data, fair value information, US GAAP basis of presentation, use of non-US GAAP information, statutory financial statements and management report, revision and reclassifications and analysis of 2007 compared to 2006.
167
167
Notes to the US GAAP financial statements
Notes to the IFRS financial statements
Notes to the Company financial statements
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