3M 2004 Annual Report Download - page 76

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The purchase price allocations and the resulting impact on the Consolidated Balance Sheet relating to all 2004
acquisitions follow:
2004 ACTIVITY
Asset (Liability)
(Millions)
HighJump
Software, Inc.
Hornell
Holding AB
and
Subsidiaries Info-X Inc.
Precision
Optics, Inc.
(2004
activity)
Total
Activity
Accounts receivable $ 6 $ 7 $ 2 $ – $ 15
Inventories – 9 – – 9
Other current assets 1 1 – – 2
Property, plant and equipment – net 1 6 – – 7
Purchased intangible assets 18 21 5 (17) 27
Purchased goodwill 52 72 17 (13) 128
Deferred tax asset 3 – – – 3
Accounts payable and other
current liabilities (4) (8) (2) – (14)
Interest bearing debt – (38) – – (38)
Deferred revenue (6) – (3) – (9)
Other long-term liabilities (5) (7) (2) – (14)
Net assets acquired $ 66 $ 63 $ 17 $ (30) $116
Supplemental information:
Cash paid/(received) $ 24 $ 66 $ 20 $ (30) $ 80
Less: Cash acquired 1 3 3 – 7
Cash paid, net of cash acquired $ 23 $ 63 $ 17 $ (30) $ 73
Non-cash (3M shares at fair value) 43 – – – 43
Net assets acquired $ 66 $ 63 $ 17 $ (30) $116
Year 2003 acquisitions:
In January 2003, 3M purchased an additional 25% interest in Sumitomo 3M Limited from NEC Corporation for
$377 million in cash. Prior to this purchase, 3M controlled and owned 50% of Sumitomo 3M Limited and fully
consolidated both Sumitomo 3M Limited’s balance sheet and results of operations, with a provision for the minority
interest that did not have participating rights. As a result of this acquisition, 3M now owns 75% of Sumitomo 3M
Limited. Sumitomo Electric Industries, Ltd., a Japanese corporation, owns the remaining 25% of Sumitomo 3M
Limited. Because all business segments benefit from this combination, goodwill acquired in this acquisition was
allocated to 3M’s seven business segments.
During the first quarter of 2003, 3M (Display and Graphics Business) finalized the purchase of Corning Precision
Lens, Inc. (Precision Optics, Inc.), which was acquired in December 2002, exclusive of the settlement described
previously under “Year 2004 acquisitions”. The impacts of finalizing the purchase price allocation, including a
working capital adjustment and payment of direct acquisition expenses, are shown in the business combination
activity table that follows.
During the year ended December 31, 2003, 3M entered into six additional business combinations for a total
purchase price of $49 million, net of cash acquired.
1) 3M (Industrial Business) purchased 100% of the outstanding shares of Solvay Fluoropolymers, Inc. (SFI),
previously a wholly owned subsidiary of Solvay America, Inc. SFI is a manufacturer of fluoroplastic products.
2) 3M (Display and Graphics Business) purchased Corning Shanghai Logistics Company Limited, previously a
wholly owned subsidiary of Corning Incorporated. This business is involved in the distribution of lens systems for
projection televisions.
3) 3M (Safety, Security and Protection Services Business) purchased 100% of the outstanding shares of
GuardiaNet Systems, Inc., a software company.
4) 3M (Electro and Communications Business) purchased the outstanding minority interest of Pouyet
Communications, Inc. (PCI), an Indian company. PCI is a telecommunications supplier.
5) 3M (Health Care Business) purchased 100% of the outstanding shares of Vantage Health Limited, a British
company. Vantage Health Limited develops health information systems software.
6) 3M (Health Care Business) purchased certain tangible and intangible assets from AstraZeneca S.p.A., an
Italian company. AstraZeneca S.p.A. is a research-based pharmaceuticals company.