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Debt | 12 Months Ended
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Dec. 31, 2020
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Debt [Text Block] | ### 19Debt Philips has a USD 2.5 billion Commercial Paper Program and a EUR 1 billion committed standby revolving credit facility that can be used for general group purposes, such as a backstop of its Commercial Paper Program. As of December 31, 2020, Philips did not have any loans outstanding under either facility. The facility does not have a material adverse change clause, has no financial covenants and no credit-rating-related acceleration possibilities. As per 9 March 2020, Philips has established a Euro Medium-Term Note (EMTN) program, a framework that facilitates the issuance of notes for a total amount up to EUR 10 billion. The provisions applicable to all USD-denominated corporate bonds issued by the company in March 2008 and March 2012 (due 2038 and 2042) contain a ‘Change of Control Triggering Event’. If the company would experience such an event with respect to a series of corporate bonds the company might be required to offer to purchase the bonds that are still outstanding at a purchase price equal to 101% of their principal amount, plus accrued and unpaid interest, if any. Furthermore, the conditions applicable to the EUR-denominated corporate bonds issued in 2017, 2018 and 2019 (due 2023, 2024, 2026 and 2028) and the new bonds issued in 2020 (due 2025 and 2030) contain a similar provision (‘Change of Control Put Event’). Upon the occurrence of such an event, the company might be required to redeem or purchase any of such bonds at their principal amount together with interest accrued. Philips’ outstanding long-term debt do not contain financial covenants. In March 2020, Philips issued a EUR 500 million fixed-rate sustainability innovation bond due in 2025 with a coupon rate of 1.375%, and a EUR 500 million fixed-rate bond due in 2030 with a coupon rate of 2.000% under the EMTN program. In 2020, Philips entered into a total amount of EUR 745 million of forward contracts to complete the remainder of the EUR 1.5 billion share buyback program announced on January 29, 2019, with maturity dates in 2021. In addition, Philips entered into a total amount of EUR 174 million of forward contracts in 2020 related to the long-term incentive and employee stock purchase plans announced on January 29,2020, and a total amount of EUR 126 million of forward contracts matured relating to the company's long-term incentive and employee stock purchase plans announced on October 22, 2018. As of January 1, 2019 lease liabilities of EUR 803 million were recognized upon the adoption of IFRS 16 and additional lease liabilities of EUR 256 million were recognized through December 31, 2019. In May 2019, Philips issued a fixed-rate Green Innovation Bond with an aggregate principal amount of EUR 750 million (0.500%, due 2026). In September 2019, EUR bonds of EUR 500 million were repaid upon their scheduled maturity. In 2019, a total nominal amount of EUR 576 million of forward contracts matured relating to the EUR 1.5 billion share buyback program announced on June 28, 2017. In addition, a total nominal amount of EUR 130 million of forward contracts matured relating to the company's long-term incentive and employee stock purchase plans. #### Long-term debt The below tables present information about the long-term debt outstanding, its maturity and average interest rates in 2020 and 2019. Philips Group Long-term debt in millions of EUR unless otherwise stated
| amount outstanding in 2020 | Current portion | Non-current portion | Between 1 and 5 years | amount due after 5 years | average remaining term (in years) | average rate of interest
--- | --- | --- | --- | --- | --- | --- | ---
USD bonds | 1,210 |  | 1,210 | 122 | 1,088 | 16.1 | 6.3%
EUR bonds | 3,229 |  | 3,229 | 1,494 | 1,735 | 5.4 | 1.0%
Forward contracts | 982 | 869 | 113 | 113 |  | 0.9 |
Lease liability | 1,216 | 267 | 948 | 596 | 352 | 3.9 | 2.1%
Bank borrowings | 205 | 1 | 203 | 3 | 200 | 4.1 | 0.2%
Other long-term debt | 16 | 15 | 1 | 1 | - | 1.0 | 0.0%
Long-term debt | 6,857 | 1,153 | 5,705 | 2,329 | 3,376 | 6.3 | 2.0%
Philips Group Long-term debt in millions of EUR unless otherwise stated
| amount outstanding in 2019 | Current portion | Non-current portion | Between 1 and 5 years | amount due after 5 years | average remaining term (in years) | average rate of interest
--- | --- | --- | --- | --- | --- | --- | ---
USD bonds | 1,328 |  | 1,328 |  | 1,328 | 17.1 | 6.3%
EUR bonds | 2,234 |  | 2,234 | 995 | 1,239 | 5.8 | 0.8%
Forward contracts | 188 | 126 | 62 | 62 |  | 1.2 |
Lease liability | 1,381 | 272 | 1,109 | 618 | 491 | 4.3 | 2.4%
Bank borrowings | 206 | 1 | 205 | 5 | 200 | 5.1 | 0.3%
Other long-term debt | 17 | 17 |  |  |  | 1.0 | 1.8%
Long-term debt | 5,355 | 416 | 4,939 | 1,681 | 3,258 | 8.0 | 2.5%
##### Bonds The below table discloses the amount outstanding and effective rate of bonds. Philips Group Unsecured Bonds in millions of EUR unless otherwise stated
| effective rate | 2019 | 2020
--- | --- | --- | ---
Unsecured EUR Bonds |  |  |
Due 9/06/2023; 1/2% | 0.634% | 500 | 500
Due 5/02/2024; 3/4% | 0.861% | 500 | 500
Due 22/05/2026; 1/2% | 0.608% | 750 | 750
Due 5/02/2028; 1 3/8% | 1.523% | 500 | 500
Due 30/03/2025; 1 3/8% | 1.509% |  | 500
Due 30/03/2030; 2% | 2.128% |  | 500
Unsecured USD Bonds |  |  |
Due 5/15/2025; 7 3/4% | 7.429% | 56 | 51
Due 6/01/2026; 7 1/5% | 6.885% | 122 | 111
Due 5/15/2025; 7 1/8% | 6.794% | 75 | 68
Due 11/03/2038; 6 7/8% | 7.210% | 648 | 591
Due 3/15/2042; 5% | 5.273% | 446 | 407
Adjustments1) |  | (35) | (39)
Unsecured Bonds |  | 3,562 | 4,439
1)Adjustments related to both EUR and USD bonds and concern bond discounts, premium and transaction costs. ##### Leases The following table presents a reconciliation between the total of future minimum lease payments and their present value. Philips Group Lease liabilities in millions of EUR
| 2019 | 2020
--- | --- | ---
| future minimum lease payments | interest | present value of minimum lease payments | future minimum lease payments | interest | present value of minimum lease payments
Less than one year | 292 | 20 | 272 | 290 | 23 | 267
Between one and five years | 698 | 80 | 618 | 651 | 55 | 596
More than five years | 543 | 52 | 491 | 384 | 31 | 352
Lease liability | 1,533 | 152 | 1,381 | 1,325 | 109 | 1,216
#### Short-term debt Philips Group Short-term debt in millions of EUR
| 2019 | 2020
--- | --- | ---
Short-term bank borrowings | 92 | 76
Current portion of long-term debt | 416 | 1,153
Short-term debt | 508 | 1,229
During 2020, the weighted average interest rate on the bank borrowings was 5.9% (2019: 14.2%). This decrease was driven by both lower interest rates overall and a lower relative amount of borrowings in high interest rate countries compared with the prior year.

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