Philips 2005 Annual Report Download - page 192

Philips Annual Report 2005192
Notes to the IFRS consolidated nancial
statements of the Philips Group
all amounts in millions of euros unless otherwise stated
Thereaderisalsoreferredtothenotestotheconsolidatednancial
statements based on US GAAP.
Reclassications
Certainbalancesheetitemspreviouslyreportedunderspecic
nancialstatementcaptionshavebeenreclassiedtoconformwith
the 2005 presentation.
40
Discontinued operations
Philips Mobile Display Systems
On November 10, 2005, Royal Philips Electronics and Toppoly
Optoelectronics Corporation of Taiwan announced that they have signed
a binding letter of intent to merge Philips’ Mobile Display Systems
(MDS) business unit with Toppoly to create a leader in mobile display
technology. 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:
2004 2005
Sales 973 653
Costs and expenses (937) (827)
Earnings before interest and tax 36 (174)
Financial income and expenses − −
Income before taxes 36 (174)
Income taxes − −
Net income 36 (174)
The 2005 results include an impairment charge of EUR 163 million.
2004 2005
Net cash provided by operating activities 96 15
Net cash used for investing activities (37) (30)
Netcashprovidedbynancingactivities − −
Dec. 31,
2004
Dec. 31,
2005
Receivables 116 135
Inventories 90 37
Property, plant and equipment 126 9
Other assets 38 9
Total assets 370 190
Accounts and notes payable 153 114
Other liabilities 35 29
Total liabilities 188 143
41
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 IFRS 3 disclosure requirements.
Sales and EBIT related to activities divested in 2005 for the period
included in the consolidation amounted to EUR 488 million and a loss
of EUR 25 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) 109 114
Lumileds 788 (3) 268 523
1) Excluding cash acquired
Divestments
cashinow
net assets
divested1)
recognized
gain (loss)
Connected Displays (Monitors) −(158)2) 158
Philips Pension Competence
Center 55 12 43
LG.Philips LCD 938 503 435
TSMC 770 219 551
NAVTEQ 932 164 768
Atos Origin 554 332 222
Great Nordic 67 54 13
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.
IFRS information