Philips progresses with wind down of Corporate Investments portfolio

* Completes sale of Philips Sound Solutions to D&M resulting in a one-time gain of EUR 41.7 million
* Takes approximately EUR 70 million non-cash impairment charge on investment in TPO Display Corp.


Wednesday, January 03, 2007 - Amsterdam, The Netherlands – Royal Philips Electronics (NYSE:PHG, AEX:PHI) today announced that the closing of the sale of its Philips Sound Solutions (PSS) business unit to D&M Holdings Inc. of Japan will lead to a one-time earnings gain of EUR 41.7 million for the fourth quarter of 2006. The sale of PSS to D&M was settled in cash and was completed on December 31, 2006. PSS had 2005 revenues of approximately EUR 120 million.

Philips also announced that it will take a EUR 70 million non-cash impairment charge in its financial results for the fourth quarter of 2006 relating to the adjustment of the investment value of Philips’ holding in TPO Display Corp. TPO is a leader in mobile display technology, in which Philips owns a 17.5% stake.



In line with US GAAP accounting principles, the impairment of the investment value of Philips’ holding is triggered by a prolonged reduction in TPO’s share price. The charge will be recorded against the financial income & expense line of the Philips income statement.

About Royal Philips Electronics

Royal Philips Electronics of the Netherlands (NYSE: PHG, AEX: PHI) is a global leader in healthcare, lifestyle and technology, delivering products, services and solutions through the brand promise of “sense and simplicity”. Headquartered in the Netherlands, Philips employs approximately 126,000 employees in more than 60 countries worldwide. With sales of EUR 30.4 billion in 2005, the company is a market leader in medical diagnostic imaging and patient monitoring systems, energy efficient lighting solutions, personal care and home appliances, as well as consumer electronics. News from Philips is located at www.philips.com/newscenter.

Forward-looking statements

This release may contain certain forward-looking statements with respect to the financial condition, results of operations and business of Philips and certain of the plans and objectives of Philips with respect to these items. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future and there are many factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements.

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Jayson Otke

Philips Corporate Communications

Royal Philips Electronics

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