Investments in equity-accounted investees

In 2006 and 2008, Philips recorded dilution gains of EUR 13 million and EUR 12 million respectively on its share in TPV Technology (TPV), a Hong Kong-based manufacturer of flat panels.

Detailed information on the other aforementioned individual line items is set out below.

At the end of February 2008, Philips' influence on LG Display's operating and financial policies including representation on the LG Display board was reduced. Consequently, the 19.9% investment in LG Display was transferred from Investments in equity-accounted investees to Other non-current financial assets effective March 1, 2008 as Philips was no longer able to exercise significant influence. Philips ceased to apply equity accounting for its LG Display shares as of that date.

2007

In 2007, Philips sold 46,400,000 shares of LG Display common stock, resulting in a gain of EUR 654 million. As a result of the sale, Philips' shareholding in LG Display was reduced from 32.9% to 19.9%.

2006

In 2006, Philips sold its remaining interest of 24.8% in FEI Company (see note (39) Acquisitions and divestments).

2008

The category 'Others' includes an impairment charge related to our 12.4% interest in TPV. Philips performed impairment reviews on the book value of the investment in TPV in 2008. We concluded that an impairment charge of EUR 59 million was required. The impairment reviews in 2008 were triggered by the deteriorating economic environment of the flat panel industry, the weakening financial performance of TPV and the stock price performance of TPV. The valuation as per December 31, 2008 was based on the stock price of TPV as of that date on the Hong Kong Stock Exchange.

2007

The voluntary support of social plans for employees impacted by the bankruptcy of certain LG.Philips Displays activities amounted to EUR 22 million.

2006

The voluntary support of social plans for employees impacted by the bankruptcy of certain LG.Philips Displays activities amounted to EUR 61 million.

Investments in equity-accounted investees

The changes during 2008 are as follows:

The EUR 1,531 million reported on Transfer to other non-current financial assets relates to the investment in LG Display.

Included in investments is EUR 25 million (2007: EUR 339 million), representing the excess of the Company’s investment over its underlying equity in the net assets of the equity-accounted investees.

The total carrying value of investments in, and loans to, equity-accounted investees is summarized as follows:

The category Other equity-accounted investees includes the investment in TPV (12.4%, carrying value EUR 60 million) and InterTrust Technologies Corporation (49.5%, carrying value EUR 64 million).

The Company owns TPV bonds which have convertible rights that potentially could result in significant influence.

The investments in equity-accounted investees are mainly included in the Group Management & Services sector.

Summarized information of investments in equity-accounted investees

Summarized financial information on the Company’s investments in equity-accounted investees, on a combined basis, is presented below: