TomTom Reports Second Quarter 2013 Results

Notes to the consolidated interim financial statements of TomTom NV

1. General

TomTom NV (the “Company”) has its statutory seat and headquarters in Amsterdam, the Netherlands. The consolidated interim financial statements comprise the financial information of the Company and its subsidiaries (together referred to as the “group”) and have been prepared by the Management Board and authorised for issue on 25 July 2013.

The consolidated interim financial statements have neither been reviewed nor audited.

2. Summary of significant accounting policies

The principal accounting policies and method of computations applied in these consolidated interim financial statements are consistent with those applied in the annual financial statements for the year ended 31 December 2012, except as described below. These policies have been consistently applied to all the periods presented, unless otherwise stated.

Basis of preparation

The consolidated interim financial statements for the six months ended 30 June 2013 have been prepared in accordance with IAS 34 ‘Interim Financial Reporting’. As permitted by IAS 34, the consolidated interim financial statements do not include all of the information required for full annual financial statements and the notes to these consolidated interim financial statements are presented in a condensed format. Accordingly, the condensed consolidated interim financial statements should be read in conjunction with the annual financial statements for the year ended 31 December 2012, which have been prepared in accordance with International Financial Reporting Standards (IFRS) and IFRIC interpretations as adopted by the European Union.

Other new accounting standards and developments

Effective from 1 January 2013, the group adopted the following IFRS standards:

1. IFRS 10 ‘Consolidated financial statements’

2. IFRS 11 ‘Joint arrangements’

3. IFRS 12 ‘Disclosures of interests in other entities'

4. IFRS 13 ‘Fair value measurement’

All the above mentioned standards as well as all other standards and interpretations issued and effective for the reporting period starting 1 January 2013 did not have a material impact for the group. IAS 19 revised ‘Employee Benefits’ has been early adopted as from 1 January 2012. As the impact of the remeasurement of the pension provision on H1 2012 is not material, the related comparative H1 2012 numbers are not adjusted.

All IFRS standards and interpretations that were in issue but not yet effective for reporting periods beginning on 1 January 2013 have not yet been adopted and are not expected to have material impact on the group.

As we have increased our investments in technologies that we develop specifically to meet the requirements of certain customers, we have presented the amortisation of these technologies in the cost of sales as from 1 January 2013. The impact of such amortisation in the past is not material and therefore no adjustment is made to the comparative figures.

Use of estimates

The preparation of these interim financial statements requires management to make certain assumptions, estimates and judgements that affect the reported amounts of assets, liabilities and disclosure of contingent assets and liabilities as of the date of the interim financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of revision and the future periods if the revision affects both current and future periods. For areas involving higher degree of judgement or areas where assumptions and estimates are significant to the (interim) financial statements, reference is made to Note 4 of the Consolidated financial statements in the 2012 Annual Report.

3. Segment reporting

The internal management reporting is structured based primarily upon the market segments in which the four operating segments – Consumer, Automotive, Business Solutions and Licensing - operate. Consumer generates revenue mainly from the sale of PNDs, maps and related navigation services. Automotive sells in-dash navigation solutions, as well as digital map data and other content to customers in the automotive segment. Business Solutions provides fleet management services to fleet owners and Licensing generates revenue by licensing digital map- and other related contents to customers in various different segments.

Management assesses the performance of segments based on the measures of revenue and earnings before interest and taxes (EBIT), whereby the EBIT measure includes allocations of expenses from supporting functions within the group. As the four operating segments serve only external customers, there is no inter-segment revenue. The allocations of expenses have been determined based on relevant measures, which reflect the level of benefits of these functions to each of the operating segments.

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