Financial income and expenses

Philips Group
Financial income and expenses in millions of EUR
2012 - 2014
 
2012
2013
2014
Interest income
37
54
39
Interest income from loans and receivables
20
32
22
Interest income from cash and cash equivalents
17
22
17
Dividend income from available for sale financial assets
4
5
4
Net gains from disposal of financial assets
1
60
Net change in fair value of financial liabilities at fair value through profit or loss
44
Other financial income
20
11
11
Financial income
106
70
114
Interest expense
(363)
(323)
(290)
Interest on debt and borrowings
(271)
(245)
(224)
Finance charges under finance lease contract
(7)
(7)
(7)
Interest expenses - pensions
(85)
(71)
(59)
Provision-related accretion and interest
(22)
(25)
(80)
Net foreign exchange losses
(6)
(1)
Impairment loss of financial assets
(8)
(10)
(17)
Net change in fair value of financial assets at fair value through profit or loss
(2)
(9)
(6)
Net change in fair value of financial liabilities at fair value through profit or loss
(3)
(2)
Other financial expenses
(40)
(24)
(19)
Financial expense
(435)
(400)
(415)
Financial income and expenses
(329)
(330)
(301)

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Net financial income and expense showed a EUR 301 million expenses in 2014, which was 29 million lower than in 2013. Interest expense in 2014 was EUR 33 million lower than in 2013, mainly as a result of lower average outstanding debt and lower interest related to pensions. The gain from disposal of financial assets in 2014 amounted to EUR 60 million, mainly from Neusoft, Chimei Innolux, Gilde III and Sapiens. The impairment charges in 2014 amounted to EUR 17 million, mainly from shareholdings in Chimei Innolux, Prime Technology, Timesys and loans to Open Gate Capital. Provision-related accretion and interest in 2014 primarily consisted of interest expense related to the jury verdict in the Masimo litigation, and accretion expense associated with other discounted provisions and uncertain tax positions.

Interest expense in 2013 was EUR 40 million lower than in 2012, mainly as a result of lower average outstanding debt and lower interest related to pensions in 2013. In 2013 impairment charges amounted to EUR 10 million, mainly from shareholdings in Lighting Science Group and Gilde III.

Net financial income and expense showed a EUR 329 million expense in 2012. Total financial income of EUR 106 million included a EUR 46 million gain related to a change in estimate on the valuation of long term derivative contracts.

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CO2-equivalent or carbon dioxide equivalent is a quantity that describes, for a given mixture and amount of greenhouse gas, the amount of CO2 that would have the same global warming potential (GWP), when measured over a specified timescale (generally 100 years).