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Provisions | 12 Months Ended
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Dec. 31, 2020
Provisions [Abstract] |
Provisions [Text Block] | ### 20Provisions Philips Group Provisions in millions of EUR
| 2019 | 2020
--- | --- | ---
| long-term | short-term | total | long-term | short-term | total
Post-employment benefit1) | 824 |  | 824 | 751 |  | 751
Product warranty | 38 | 172 | 210 | 28 | 139 | 167
Environmental provisions | 145 | 25 | 170 | 162 | 21 | 183
Restructuring-related provisions | 31 | 125 | 156 | 17 | 100 | 117
Legal provisions | 14 | 40 | 55 | 19 | 53 | 72
Contingent consideration provisions | 245 | 108 | 354 | 203 | 114 | 318
Other provisions | 305 | 86 | 392 | 279 | 93 | 372
Provisions | 1,603 | 556 | 2,159 | 1,458 | 522 | 1,980
1)For more details refer to Post-employment benefits. #### Assurance-type product warranty The provisions for assurance-type product warranty reflect the estimated costs of replacement and free-of-charge services that will be incurred by the company with respect to products sold. The company expects the provisions to be utilized mainly within the next year. Philips Group Provisions for assurance-type product warranty in millions of EUR
| 2018 | 2019 | 2020
--- | --- | --- | ---
Balance as of January 1 | 201 | 190 | 210
Changes: |  |  |
Additions | 248 | 291 | 239
Utilizations | (261) | (274) | (270)
Translation differences and other | 2 | 3 | (12)
Balance as of December 31 | 190 | 210 | 167
#### Environmental provisions The environmental provisions include accrued costs recorded with respect to environmental remediation in various countries. In the United States, subsidiaries of the company have been named as potentially responsible parties in state and federal proceedings for the clean-up of certain sites. Provisions for environmental remediation can change significantly due to the emergence of additional information regarding the extent or nature of the contamination, the need to utilize alternative technologies, actions by regulatory authorities as well as changes in judgments and discount rates. Approximately EUR 91 million of the long-term provision is expected to be utilized after one to five years, with the remainder after five years. For more details on the environmental remediation reference is made to Contingent assets and liabilities. Philips Group Environmental provisions in millions of EUR
| 2018 | 2019 | 2020
--- | --- | --- | ---
Balance as of January 1 | 160 | 144 | 170
Changes: |  |  |
Additions | 23 | 20 | 9
Utilizations | (15) | (18) | (16)
Releases | (4) | (1) | -
Changes in discount rate | (28) | 9 | 37
Accretion | 5 | 5 | 3
Translation differences and other | 4 | 12 | (19)
Balance as of December 31 | 144 | 170 | 183
The additions and the releases of the provisions originate from additional insights in relation to factors like the estimated cost of remediation, changes in regulatory requirements and efficiencies in completion of various site work phases. #### Restructuring-related provisions Philips Group Restructuring-related provisions in millions of EUR
| Jan. 1, 2020 | additions | utilizations | releases | other changes | Dec. 31, 2020
--- | --- | --- | --- | --- | --- | ---
Diagnosis & Treatment | 61 | 36 | (47) | (16) | (1) | 33
Connected Care | 28 | 17 | (21) | (5) | (2) | 17
Personal Health | 25 | 30 | (22) | (3) | (1) | 28
Other | 42 | 35 | (31) | (7) | - | 38
Philips Group | 156 | 118 | (122) | (32) | (4) | 117
In 2020, the most significant restructuring projects impacted Diagnostic & Treatment and Other businesses and mainly took place in the Netherlands, US and Germany. The restructuring comprised mainly product portfolio rationalization and the reorganization of global support functions. The company expects the provisions to be utilized mainly within the next year. ##### 2019 In 2019, the most significant restructuring projects impacted Diagnostic & Treatment and Other businesses and mainly took place in the Netherlands, US and Germany. The movements in the provisions for restructuring in 2019 are presented by segment as follows: Philips Group Restructuring-related provision in millions of EUR
| Jan. 1, 2019 | additions | utilizations | releases | other changes | Dec. 31, 2019
--- | --- | --- | --- | --- | --- | ---
Diagnosis & Treatment | 57 | 51 | (37) | (10) | - | 61
Connected Care | 22 | 33 | (16) | (9) | (2) | 28
Personal Health | 9 | 33 | (12) | (4) | - | 25
Other | 26 | 57 | (31) | (11) | - | 42
Philips Group | 114 | 175 | (97) | (34) | (1) | 156
##### 2018 In 2018, the most significant restructuring projects impacted Diagnosis & Treatment, Connected Care & Health Informatics and Other businesses and mainly took place in the US, Germany and Netherlands. The movements in the provisions for restructuring in 2018 are presented by segment as follows: Philips Group Restructuring-related provisions in millions of EUR
| Jan. 1, 2018 | additions | utilizations | releases | Dec. 31, 2018
--- | --- | --- | --- | --- | ---
Diagnosis & Treatment | 45 | 62 | (38) | (12) | 57
Connected Care | 15 | 24 | (10) | (8) | 22
Personal Health | 6 | 8 | (5) | (1) | 9
Other | 45 | 42 | (45) | (16) | 26
Philips Group | 112 | 136 | (98) | (37) | 114
#### Legal provisions The company and certain of its group companies and former group companies are involved as a party in legal proceedings, including regulatory and other governmental proceedings. Philips Group Legal provisions in millions of EUR
| 2018 | 2019 | 2020
--- | --- | --- | ---
Balance as of January 1 | 50 | 26 | 55
Changes: |  |  |
Additions | 17 | 69 | 72
Utilizations | (29) | (36) | (45)
Releases | (11) | (6) | (6)
Accretion | 2 | 2 | 1
Translation differences and other | (3) | - | (5)
Balance as of December 31 | 26 | 55 | 72
##### The most significant proceedings The majority of the movements in the above schedule are related to the Cathode Ray Tube (CRT) antitrust litigation and investigation with the Italian Competition Authority (ICA). ##### Italian Competition Authority (ICA) investigation In 2020, the company recorded a legal provision in relation to an investigation initiated by the Italian Competition authority in February 2018. The investigation focusses on whether the company and certain other healthcare companies violated antitrust laws in the maintenance services aftermarket for medical diagnostic imaging devices. ##### Cathode Ray Tube (CRT) antitrust litigation In 2020 and 2018, the majority of the movements in relation to the CRT antitrust litigation were utilizations due to the transfer to other liabilities for which the company was able to reach a settlement. These settlements were subsequently paid out during the year or in the respective following year. For more details, refer to Contingent assets and liabilities. The company expects the provisions to be utilized mainly within the next three years. #### Contingent consideration provisions Philips Group Contingent consideration provisions in millions of EUR
| 2018 | 2019 | 2020
--- | --- | --- | ---
Balance as of January 1 | 66 | 409 | 354
Acquisitions | 366 | 6 | 70
Utilizations | (48) | (44) | (14)
FV changes | 26 | (17) | (93)
Balance as of December 31 | 409 | 354 | 318
The provision for contingent consideration reflects the fair value of the expected payment to former shareholders of an acquiree for the exchange of control if specified future events occur or conditions are met, such as the achievement of certain regulatory milestones or the achievement of certain commercial milestones. The provision for contingent consideration can change significantly due to changes in the estimated achievement of milestones and changes in discount rates. In 2020, the acquisitions through business combinations consists of a provision for contingent consideration of EUR 70 million relating to the acquisition of Intact Vascular. ##### EPD In 2020, revisions to EPD’s forecast due to delays in commercialization caused by the need to do more work on the maturity of the technology, resulted in a EUR 101 million decrease in the fair value of the respective contingent consideration liability and is reflected in Other business income. For more details of the EPD contingent consideration refer to Fair value of financial assets and liabilities. In 2018, the acquisitions through business combinations mainly consisted of a provision for contingent consideration of EUR 239 million relating to the acquisition of EPD. The company expects the provisions to be utilized mainly within the next three years. #### Other provisions Philips Group Other provisions in millions of EUR
| 2018 | 2019 | 2020
--- | --- | --- | ---
Closing balance as of December 31 | 499 | 432 | 392
IFRS 16 adjustment |  | (6) |
Opening balance as of January 1 | 499 | 426 | 392
Changes: |  |  |
Additions | 169 | 143 | 161
Utilizations | (178) | (127) | (109)
Releases | (57) | (61) | (49)
Accretion | 2 | 1 | (1)
Translation differences and other | (3) | 10 | (21)
Balance as of December 31 | 432 | 392 | 372
The main elements of other provisions are: provisions for possible taxes/social security of EUR 39 million (2019: EUR 46 million); provisions for onerous contracts of EUR 24 million (2019: EUR 0 million), reflecting non-cancellable commitments on supplies for which no future demand or alternative usage has been identified, primarily caused by volatility in demand due to COVID-19. For more details reference is made to COVID-19. provisions for employee jubilee funds EUR 92 million (2019: EUR 82 million); self-insurance provisions of EUR 45 million (2019: EUR 47 million); provisions for decommissioning costs of EUR 30 million (2019: EUR 33 million); provisions for rights of return of EUR 36 million (2019: EUR 40 million); the releases in 2018, 2019 and 2020 are due to the reassessment of the positions in other provisions throughout the year; the remaining provisions relate to a variety of positions, for example provision for disability of employees and provision for royalty obligations. The company expects the provisions to be utilized mainly within the next five years, except for: provisions for employee jubilee funds of which half is expected to be utilized after five years; provisions for decommissioning costs of which half is expected to be utilized after five years; provisions for rights of return to be utilized mainly within the next year.

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