Income from operations

For information related to Sales and Income from operations on a geographical and sector basis, see Information by sector and main country.

Salaries and wages include an amount of EUR 318 million (2008: EUR 372 million, 2007: EUR 35 million) relating to restructuring charges. The voluntary charges include an amount of EUR 131 million related to a curtailment gain for retiree medical benefit plan.

See note (18) Pensions and other postretirement benefits for further information on pension costs.

Share-based compensation expense amounted to EUR 94 million, EUR 78 million and EUR 111 million in 2009, 2008, and 2007, respectively. See note (30) Share-based compensation for further information on share-based compensation.

For remuneration details of the members of the Board of Management and the Supervisory Board, see note (31) Information on remuneration.

Employees

The average number of employees by category is summarized as follows (in FTEs):

Depreciation and amortization

Depreciation of property, plant and equipment and amortization of intangibles are as follows:

Included in depreciation of property, plant and equipment is an amount of EUR 121 million (2008: EUR 97 million, 2007: EUR 50 million) relating to impairment charges.

Depreciation of property, plant and equipment and amortization (including impairment) of software and other intangible assets are primarily included in Cost of sales. Amortization (including impairment) of development cost is included in Research and development expenses.

Rent

Rent expenses amounted to EUR 352 million (2008: EUR 322 million, 2007: EUR 334 million).

Selling expenses

Advertising and sales promotion costs totaled EUR 804 million (2008: EUR 949 million, 2007: EUR 994 million) and are included in selling expenses. Shipping and handling costs of EUR 505 million are also included (2008: EUR 595 million, 2007: EUR 533 million).

General and administrative expenses

General and administrative expenses include the costs related to management and staff departments in the corporate center, sectors and country/regional organizations, amounting to EUR 842 million (2008: EUR 983 million, 2007: EUR 869 million). Additionally, the pension costs and costs of other post-retirement benefit plans relating to employees, not allocated to current sector activities, amounted to a net loss of EUR 23 million (2008: EUR 12 million gain, 2007: EUR 36 million gain). Besides in 2009, General and administrative expenses also include a curtailment gain for retiree medical benefit plan amounting EUR 131 million.

Research and development expenses

Expenses for research and development activities amounted to EUR 1,631 million, representing 7.0% of Group sales (2008: EUR 1,777 million, 6.7% of Group sales 2007: EUR 1,601 million, 6.0% of Group sales).

For information related to Research and development expenses on a sector basis, see Information by sector and main country.

Impairment of goodwill

In 2009, no goodwill impairment charges were recorded (2008: EUR 301 million, 2007: EUR nil).

Other business income (expenses)

Other business income (expenses) consists of the following:

Results on the disposal of businesses consisted of:

The results on the disposal of businesses in 2008 are mainly related to the sale of the Set-Top Boxes and Connectivity Solutions activities to Pace Micro Technology which resulted in a gain of EUR 42 million, and the sale of Philips Speech Recognition activities to Nuance Communications which resulted in a gain of EUR 45 million. The result on the disposal of fixed assets is mainly related to the sale of fixed assets in Taiwan with a gain of EUR 39 million.

The result on the disposal of businesses in 2007 mainly related to the sale of Automotive Playback Modules which resulted in a loss of EUR 30 million. The result on the sale of fixed assets mainly related to the sale of certain buildings in Austria and the Netherlands as well as land in the US. The other business results are mainly attributable to certain settlements and the finalization of several divestitures.