Definitions and abbreviations
Cash ﬂow before ﬁnancing activities:
the sum of net cash ﬂow from operating activities and net cash ﬂow from investing activities.
excludes the effect of currency movements and acquisitions and divestments (changes in consolidation). Philips believes that comparable sales information enhances understanding of sales performance.
Continuing net income:
recurring net income from continuing operations, or net income excluding discontinued operations and excluding material non-recurring items.
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 2009 uses the market capitalization as of December 31, 2008).
earnings before interest, tax and amortization (EBITA) represents income from continuing operations excluding results attributable to minority interest holders, results relating to equity-accounted investees, 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 intangible assets, which arises when acquisitions are consolidated.
EBITA per common share:
EBITA divided by the weighted average number of shares outstanding (basic). The same principle is used for the deﬁnition of net income or stockholders’ equity per common share, replacing EBITA.
Employee Engagement Index (EEI):
measures the level of employee loyalty and satisfaction; expressed as the % of employees giving a favorable score.
Free cash ﬂow:
net cash ﬂow from operating activities minus net capital expenditures.
abbreviation for full-time equivalent employee.
Income as a % of stockholders’ equity (ROE):
measures income from continuing operations as a percentage of average stockholders’ equity. ROE rates Philips’ overall proﬁtability by evaluating how much proﬁt the company generates with the money shareholders have invested.
Income from continuing operations:
net income from continuing operations, or net income excluding discontinued operations
Net promoter score (NPS):
the Net Promoter Score is a tool to measure Philips’ customers’ loyalty to its products. It is measured through one question: “Based on your experience with this product, how likely are you to recommend your Philips product to a friend, relative or colleague?” Philips categorizes the answers as ‘Promoters’, ‘Passives’ or ‘Detractors’. The NPS is measured by deducting the percentage of Detractors (score 0 to 6) from the percentage of customers who are Promoters (score 9 to 10).
Philips uses Productivity internally and as mentioned in this annual report as a non-ﬁnancial indicator of efﬁciency that relates the added value, being income from operations adjusted for certain items such as restructuring and acquisition-related charges etc. plus salaries and wages (including pension costs and other social security and similar charges), depreciation of property, plant and equipment, and amortization of intangibles, to the average number of employees over the past 12 months.
by ‘health’ we mean not only medical-related aspects of health, but also keeping ﬁt, eating a healthy diet and generally living a healthy lifestyle.
by ‘well-being’ we mean a general sense of fulﬁllment, feeling good and at ease. ‘Well-being’ also refers to a sense of comfort, safety and security people feel in their environment – at home, at work, or out and about.
Brominated Flame Retardants
Electronic Industry Citizenship Coalition
Energy Performance of Buildings
Energy using Products
Global Reporting Initiative
International Standardization Organization
Millennium Development Goals
Organic Light-Emitting Diode
Per ﬂuorinated compounds
Registration, Evaluation, Authorization and Restriction of Chemical substances
Regulation on Hazardous Substances
Waste Electrical and Electronic Equipment