Philips 2005 Annual Report Download - page 140

Philips Annual Report 2005140
Notes to the group nancial statements
all amounts in millions of euros unless otherwise stated
1
Discontinued operations
Philips Mobile Display Systems
On November 10, 2005, Royal Philips Electronics and Toppoly
Optoelectronics Corporation of Taiwan announced that they had signed
a binding letter of intent to merge Philips’ Mobile Display Systems
(MDS) business unit with Toppoly. The company will be named TPO.
Upon completion of the transaction, Philips is expected to hold a stake
of approximately 17.5% of the shares of TPO.
Philips separately reports the results of the MDS business as a
discontinued operation. In accordance with the applicable accounting
principles, previous years have been restated.
The transaction, pending regulatory approvals, is expected to be
completedinthersthalfof2006.
SummarizednancialinformationforMDSactivitiesisasfollows:
2003 2004 2005
Sales 1,100 973 653
Costs and expenses (1,114) (952) (736)
Earnings before interest and tax (14) 21 (83)
Financial income and expenses − − −
Income before taxes (14) 21 (83)
Income taxes −− −
Net income (14) 21 (83)
The 2005 results include an impairment loss of EUR 69 million.
2003 2004 2005
Net cash (used for) provided by
operating activities (20) 74 −
Net cash used for investing activities (24) (15) (15)
Netcashprovidedbynancingactivities − − −
Dec. 31,
2004
Dec. 31,
2005
Receivables 116 135
Inventories 90 37
Property, plant and equipment 126 64
Other assets 5 5
Total assets 337 241
Accounts and notes payable 153 114
Other liabilities 35 29
Total liabilities 188 143
2
Acquisitions and divestments
2005
During 2005, the Company completed several disposals of activities.
Also, a number of acquisitions and ventures were completed. All
business combinations have been accounted for using the purchase
method of accounting. However, both individually and in the aggregate
– with the exception of Lumileds – these business combinations were–
deemed immaterial in respect of the SFAS No. 141 disclosure
requirements.
Sales and EBIT related to activities divested in 2005, included in the
Company’s consolidated statement of income for 2005, amounted to
EUR 488 million and a loss of EUR 20 million, respectively.
Themostsignicantacquisitionsanddivestmentsaresummarizedinthe
next two tables and described in the section below.
Acquisitions
cash
outow
net assets
acquired1)
other
intangible
assets goodwill
Stentor 194 (29) 108 115
Lumileds 788 (34) 268 554
1) Excluding cash acquired
Divestments
cashinow
net assets
divested1)
recognized
gain
Connected Displays (Monitors) −(136)2) 136
Philips Pension Competence
Center 55 13 42
LG.Philips LCD 938 606 332
TSMC 770 310 460
NAVTEQ 932 179 753
Atos Origin 554 369 185
Great Nordic 67 19 48
1) Excluding cash divested
2) Represents net balance of assets received in excess of net assets divested
Stentor
In August 2005, the Company acquired all shares of Stentor,
aUS-basedcompany.TherelatedcashoutowwasEUR194million.
Stentor was founded in 1998 to provide a solution for enterprise-wide
medical image and information management. The full business is
included in the Medical Systems sector.
Groupnancialstatements