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Note 4. Goodwill
73
(
€
millions)
Dec. 31, 2003 Dec. 31, 2002
Amortization Year of Cost Amortization Net Net
period acquisition
Square D Company 40 years 1991 1,585.7 496.0 1,089.7 1,358.0
Groupe Lexel 40 years 1999 990.8 130.6 860.2 906.1
Telemecanique 40 years 1988 802.0 339.4 462.6 482.6
Federal Pioneer Ldt 40 years 1990 80.6 29.9 50.7 51.8
Merlin Gerin 30 years 1992 160.7 73.5 87.2 92.6
Crouzet Automatismes 20 years 2000 205.8 43.4 162.4 184.7
Mita Holding Ldt 20 years 1999 51.4 10.5 40.9 47.1
Positec 20 years 2000 168.7 62.7 106.0 123.0
PDL 20 years 2001 38.2 4.9 33.3 34.6
TAC 20 years 2003 402.7 6.7 396.0 -
Digital Electronics 10 years 2002 95.1 9.5 85.6 -
Infra + 10 years 2000 21.2 7.0 14.2 14.8
Schneider Automation 10 years 1994 35.4 28.3 7.1 10.6
JV VAS (1) 5 years 2001 21.2 12.9 8.3 12.5
Other (2) 5-20 years 332.6 224.0 108.6 53.5
Total 4,992.1 1,479.3 3,512.8 3,371.9
(1) VA Tech Schneider High Voltage GmbH (2) Approximately 25 companies
The change in net values between December 31,
2002 and December 31, 2003 primarily reflects:
■The € 190.7 million standard amortization for the
year (compared with € 192.6 million in 2002).
In 2003, the Group wrote down the goodwill on
Positec by € 10 million, corresponding to the differ-
ence between the recoverable amount –determined
by the discounted free cash flow method applying a
discount rate of 8.5% (Group weighted average cost
of capital)– and net book value.
■The € 241.1 million negative effect of exchange
rate fluctuations.
■The € 524.1 million impact of changes in the scope
of consolidation, primarily related to the acquisitions
of TAC (€ 402.7 million) and Digital Electronics
Corporation (€ 103.3 million).
■Reclassification under goodwill of differences aris-
ing on acquisition of autonomous business units, for
a net amount of € 59.1 million (see note 5).
■€ 10.5 million reduction in Crouzet Group goodwill
to take into account the cancellation of a tax reserve
booked when the business was acquired and which
is no longer required