| | One time non-cash impairment charges amount to approximately EUR 418 million and cash charge to EUR 42 million |
| Amsterdam, the Netherlands - The success of flat displays has increased the pressure on demand and prices for Cathode Ray Tubes (CRT). As a consequence, LG.Philips Displays (LPD), the CRT business-joint venture between Royal Philips Electronics (NYSE: PHG, AEX: PHI) and LG Electronics, announced today impairment charges, which it will book in the fourth quarter of 2005. Philips has reviewed the consequences of the announced impairment for the valuation of its interests in LPD and will write off the remaining book value of approximately EUR 128 million of the investment. Philips will also pass through its income statement an accumulated negative difference in currency translation of approximately EUR 290 million related to its investment in LPD, which will have no impact on Philips equity. Both impairment charges together amount to EUR 418 million and are of a non-cash nature. In addition Philips will take a cash charge of approximately EUR 42 million associated with the existing guarantee provided to LPDs banks. All amounts above will be reported under "results related to unconsolidated companies". Future results in LPDs financial statements will not negatively impact Philips equity, as Philips will not inject further capital in LPD. Philips will continue to be a key customer of LPD for its CRT requirements. |
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