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The Company has a lock-up period associated with the sale of shares in Pace Micro Technology that expires on April 21, 2009.
The sale of TSMC shares contributed the majority of the decrease in available-for-sale securities.
Philips’ shareholdings in its main listed equity-accounted investees had a fair value of EUR 60 million based on quoted market
prices at December 31, 2008, and consisted primarily of the Company’s holdings in TPV Technology. The Company transferred
LG Display from equity-accounted investees to available-for-sale securities effective March 1, 2008 as Philips was no longer
able to exercise significant influence. The decline in the value of LG Display holding was due to the sale of 24 million shares,
as well as the sharp decline in the stock price in 2008.
Philips has a USD 2.5 billion commercial paper program, under which it can issue commercial paper up to 364 days in tenor,
both in the US and in Europe, in any major freely convertible currency. There is a panel of banks, in Europe and in the US,
which service the program. When Philips wants to fund through the commercial paper program, it contacts the panel of banks.
The interest is at market rates prevailing at the time of issuance of the commercial paper. There is no collateral requirement
in the commercial paper program. Also, there are no limitations on Philips’ use of the program, save for market considerations,
such as that the commercial paper market itself is not open.
If this were to be the case, Philips’ USD 2.5 billion committed revolving credit facilities could act as back-up for short-term
financing requirements that normally would be satisfied through the commercial paper program. The USD 2.5 billion revolving
credit facility does not have a material adverse change clause, has no financial covenants and does not have credit-rating-related
acceleration possibilities. The revolving credit facility is allocated among 26 banks headquartered in Organization for Economic
Co-operation and Development (OECD) countries. As of December 31, 2008, Philips did not have any commercial paper outstanding.
In addition to the USD 2.5 billion revolving credit facility, Philips has a EUR 500 million standby roll-over loan agreement
in place. The availability of EUR 450 million out of this EUR 500 million is committed until April 29, 2010. As of December
31, 2008, Philips did not have any loans outstanding under these facilities.
As of December 31, 2008 Philips had an undrawn committed bilateral loan of EUR 250 million in place which was fully drawn
in January 2009.
Outstanding long-term bonds, including the ones issued in March 2008, do not have a material adverse change clause, financial
covenants nor credit-rating-related acceleration possibilities.
As at December 31, 2008, Philips had total cash and cash equivalents of EUR 3,620 million; Philips pools cash from subsidiaries
to the extent legally and economically feasible. Cash in subsidiaries is not necessarily freely available for alternative
uses due to possible legal or economic restrictions. The amount of cash not immediately available is not considered material
for Philips to meet its cash obligations. Philips had a total debt position of EUR 4,158 million at year-end 2008.
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