Key financials and dividend policy

Prior years results and cash flows have been restated to reflect the effect of classifying the Television business as discontinued operations in 2011.

Net income and EPS

Net income of the Philips Group showed a loss of EUR 1,291 million, or EUR 1.36 per common share, compared to a profit of EUR 1,452 million, or EUR 1.54 per common share, in 2010.

Dividend policy

We are committed to a stable dividend policy with a 40% to 50% pay-out of continuing net income.

Continuing net income, or net income excluding material non-recurring items and discontinued operations, is the base figure used to calculate the dividend payout for the year. For 2011, the key exclusions used to arrive at continuing net income are the results related to the Television business of Consumer Lifestyle where we signed a joint venture agreement with TPV and consequently show these results as discontinued operations. The impairment charges taken on goodwill and other intangibles impairment charges in Q2 and Q4, the curtailment in the UK Pension Fund, and restructuring and post-acquisition charges are also excluded.

Proposed distribution

A proposal will be submitted to the 2012 Annual General Meeting of Shareholders to declare a dividend of EUR 0.75 per common share, in cash or in shares at the option of the shareholder, against the reserve retained earnings. Such dividend is expected to result in a distribution with a total value of EUR 695 million.

Shareholders will be given the opportunity to make their choice between cash and shares between May 7, 2012, and May 25, 2012 (US ends on May 24). If no choice is made during this election period, the dividend will be paid in shares. On May 25, 2012, after close of trading, the number of share dividend rights entitled to one new common share will be determined based on the volume-weighted average price of all traded common shares of Koninklijke Philips Electronics N.V. at Euronext Amsterdam on 23, 24 and 25 May, 2012. The Company will calculate the number of share dividend rights entitled to one new common share, such that the gross dividend in shares will be approximately 3% higher than the gross dividend in cash. Payment of the dividend and delivery of new common shares, with settlement of fractions in cash, if required, will take place from May 30, 2012. The distribution of dividend in cash to holders of New York registry shares will be made in USD at the USD/EUR rate fixed by the European Central Bank on May 28, 2012.

Dividend in cash is in principle subject to 15% Dutch dividend withholding tax, which will be deducted from the dividend in cash paid to the shareholders. Dividend in shares paid out of earnings and retained earnings is subject to 15% dividend withholding tax, but only in respect of the par value of the shares (EUR 0.20 per share). This withholding tax in the case of dividend in shares will be borne by Philips.

In 2011, a dividend of EUR 0.75 per common share was paid in cash or shares, at the option of the shareholder. Approximately 63% elected for a share dividend resulting in the issuance of 22,896,661 new common shares, leading to a 2.4% dilution. The remainder of the dividend was paid in cash (EUR 259 million) against the net income of the Company.

 
 
ex-dividend date
record date
payment date
 
 
 
 
Amsterdam shares
May 2, 2012
May 4, 2012
May 30, 2012
New York shares
May 2, 2012
May 4, 2012
May 30, 2012

  • graph
    Dividend and dividend yield per common share

Information for US investors

Dividends and distributions per Common Share

The following table sets forth in euros the gross dividends on the Common Shares in the fiscal years indicated (from prior-year profit distribution) and such amounts as converted into US dollars and paid to holders of Shares of the New York registry:

 
 
2007
2008
2009
2010
2011
 
 
 
 
 
 
in EUR
0.60
0.70
0.70
0.70
0.75
in USD
0.80
1.09
0.94
0.93
1.11

Exchange rates USD : EUR

The following two tables set forth, for the periods and dates indicated, certain information concerning the exchange rate for US dollars into euros based on the Noon Buying Rate in New York City for cable transfers in foreign currencies as certified for customs purposes by the Federal Reserve Bank of New York (the “Noon Buying Rate”). The Noon Buying Rate on February 17, 2012 was EUR 0.7605 per USD 1.

 
calendar period
EUR per USD
 
period end
average
high
low
 
 
 
 
 
2006
0.7577
0.7906
0.8432
0.7504
2007
0.6848
0.7259
0.7750
0.6729
2008
0.7184
0.6844
0.8035
0.6246
2009
0.6977
0.7187
0.7970
0.6623
2010
0.7536
0.7579
0.8362
0.6879
2011
0.7708
0.7186
0.7736
0.6723

 
 
highest rate
lowest rate
 
 
 
August, 2011
0.7063
0.6892
September, 2011
0.7437
0.7001
October, 2011
0.7530
0.7056
November, 2011
0.7551
0.7245
December, 2011
0.7736
0.7415
January, 2012
0.7885
0.7580

Philips publishes its financial statements in euros while a substantial portion of its net assets, earnings and sales are denominated in other currencies. Philips conducts its business in more than 50 different currencies.

Unless otherwise stated, for the convenience of the reader the translations of euros into US dollars appearing in this report have been made based on the closing rate on December 31, 2011 (USD 1 = EUR 0.7728). This rate is not materially different from the Noon Buying Rate on such date (USD 1 = EUR 0.7708).

The following table sets out the exchange rate for US dollars into euros applicable for translation of Philips’ financial statements for the periods specified.

 
 
EUR per USD
 
period end
average
high
low
 
 
 
 
 
2006
0.7591
0.7935
0.8375
0.7579
2007
0.6790
0.7272
0.7694
0.6756
2008
0.7096
0.6832
0.7740
0.6355
2009
0.6945
0.7170
0.7853
0.6634
2010
0.7485
0.7540
0.8188
0.7036
2011
0.7728
0.7192
0.7728
0.6721

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This is an interactive electronic version of the Philips Annual Report 2011 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 full Philips Annual Report 2011. This printed version is available as a PDF file on this website. Information about: forward-looking statements, third-party market share data, fair value information, IFRS basis of presentation, use of non-GAAP information, statutory financial statements and management report, reclassifications and analysis of 2010 compared to 2009.
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Earnings before interest, tax and amortization (EBITA) represents income from continuing operations excluding results attributable to non-controlling interest holders, results relating to investments in associates, income taxes, financial income and expenses, amortization and impairment on intangible assets (excluding software and capitalized development expenses). Philips believes that EBITA information makes the underlying performance of its businesses more transparent by factoring out the amortization of these intangible assets, which arises when acquisitions are consolidated.

This equals recurring net income from continuing operations, or net income excluding discontinued operations and excluding material non-recurring items.

The dividend yield is the annual dividend payment divided by Philips’ market capitalization. All references to dividend yield are as of December 31 of the previous year (the yield on the dividend paid in 2010 uses the market capitalization as of December 31, 2009).