Cash obligations

Contractual cash obligations

Presented below is a summary of the Group’s contractual cash obligations and commitments at December 31, 2013.

Contractual cash obligations at December 31, 2013
in millions of euros 1)
 
payments due by period
 
total
less than 1 year
1-3 years
3-5 years
after 5 years
 
 
 
 
 
 
Long-term debt2)
3,472
308
2
900
2,262
Finance lease obligations
241
61
78
34
68
Short-term debt
230
230
Operating leases
1,017
237
316
182
282
Derivative liabilities
337
112
93
92
40
Interest on debt3)
2,421
185
346
315
1,575
Purchase obligations4)
184
81
76
26
1
Trade and other payables
2,462
2,462
 
10,364
3,676
911
1,549
4,228
1)
Data in this table are undiscounted
2)
Long-term debt includes short-term portion of long-term debt and excludes finance lease obligations
3)
Approximately 20% of the debt bears interest at a floating rate. The majority of the interest payments on variable interest rate loans in the table above reflect market forward interest rates at the period end and these amounts may change as the market interest rate changes
4)
Philips has commitments related to the ordinary course of business which in general relate to contracts and purchase order commitments for less than 12 months. In the table, only the commitments for multiple years are presented, including their short-term portion

Philips has no material commitments for capital expenditures.

Additionally, Philips has a number of commercial agreements, such as supply agreements, which provide that certain penalties may be charged to the Company if it does not fulfill its commitments.

Certain Philips suppliers factor their trade receivables from Philips with third parties through supplier finance arrangements. At December 31, 2013 approximately EUR 343 million of the Philips accounts payables were known to have been sold onward under such arrangements whereby Philips confirms invoices. Philips continues to recognize these liabilities as trade payables and will settle the liabilities in line with the original payment terms of the related invoices.

Other cash commitments

The Company and its subsidiaries sponsor post-employment benefit plans in many countries in accordance with legal requirements, customs and the local situation in the countries involved. For a discussion of the plans and expected cash outflows, please refer to note (30) Post-employment benefits.

The Company had EUR 203 million restructuring-related provisions by the end of 2013, of which EUR 128 million is expected to result in cash outflows in 2014. Refer to note (21) Provisions for details of restructuring provisions and potential cash flow impact for 2014 and further.

A proposal will be submitted to the General Meeting of Shareholders to declare a distribution of EUR 0.80 per common share (up to EUR 740 million), in cash or shares at the option of the shareholder, against the net income for 2013. Further details will be given in the agenda for the General Meeting of Shareholders, to be held on May 1, 2014.

Guarantees

Philips’ policy is to provide guarantees and other letters of support only in writing. Philips does not provide other forms of support. At the end of 2013, the total fair value of guarantees recognized by Philips in other non-current liabilities amounted to less than EUR 1 million. The following table outlines the total outstanding off-balance sheet credit-related guarantees and business-related guarantees provided by Philips for the benefit of unconsolidated companies and third parties as at December 31, 2012 and 2013.

Expiration per period
in millions of euros
 
total amounts committed
less than 1 year
1-5 years
after 5 years
 
 
 
 
 
2013
 
 
 
 
Business-related guarantees
292
107
117
68
Credit-related guarantees
41
19
7
15
 
333
126
124
83
 
 
 
 
 
2012
 
 
 
 
Business-related guarantees
295
113
114
68
Credit-related guarantees
27
11
16
 
322
124
114
84

(0)
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This is an interactive electronic version of the Philips Annual Report 2013 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 2013. 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 2013 compared to 2012.