Philips 2006 Annual Report Download - page 131

Philips Annual Report 2006 131
11
2
Acquisitions and divestments
2006
During 2006, the Company entered into a number of acquisitions and
completed several disposals of activities. All business combinations
have been accounted for using the purchase method of accounting.
Major business combinations in 2006 relate to the acquisitions
of Lifeline Systems Inc., Witt Biomedical Corporation, Avent and
Intermagnetics. The remaining business combinations, both individually
and in the aggregate, were deemed immaterial in respect of the SFAS
No. 141 disclosure requirements.
Sales and Income from operations related to activities divested in
2006, included in the Company’s consolidated statement of income
for 2006, amounted to EUR 975 million and a loss of EUR 54 million,
respectively.
The most signifi cant acquisitions and divestments are summarized
in the next two tables and described in the section below.
Acquisitions
cash
outfl ow
net
assets
acquired
1)
other
intangible
assets goodwill
Lifeline 583 (77 ) 319 341
Witt Biomedical 110 (9 ) 29 90
Avent 689 (47 ) 392 344
Intermagnetics 993 (35 ) 255 773
1) Excluding cash acquired
Divestments
cash
infl ow
net assets
divested
recognized
gain
CryptoTec 30 (1 ) 31
Philips Enabling Technologies (ETG) 45
1) 42 3
Philips Sound Solutions (PSS) 53
1) 10 43
FEI 154 78
2) 76
1) Net of cash divested
2) Includes the release of cumulative translation differences
Lifeline
On March 22, 2006, Philips completed its acquisition of Lifeline Systems
Inc. (Lifeline), a leader in personal emergency response services. Philips
acquired a 100% interest in Lifeline by paying USD 47.75 per share in
cash. This business is included in Consumer Healthcare Solutions, part
of the Domestic Appliances and Personal Care sector.
22
The following table summarizes the fair value of the assets acquired
and liabilities assumed with respect to the acquisition of the Lifeline
shares on March 22, 2006:
March 22, 2006
Total purchase price (net of cash) 583
Allocated to:
Property, plant and equipment 20
Other non-current fi nancial assets 19
Working capital 8
Deferred tax liabilities (124 )
Intangible assets 319
Goodwill 341
583
Intangible assets comprise:
amount
amortization period
in years
Trademark and
trade names 114 indefi nite
Software 9 3-5
Customer relationships 196 5-20
319
Witt Biomedical
On April 26, 2006, Philips completed its acquisition of Witt Biomedical,
the largest independent supplier of hemodynamic monitoring and
clinical reporting systems used in cardiology catheterization
laboratories. Witt Biomedical has been consolidated within the
Medical Systems sector. Goodwill on this acquisition is tax-deductible.
The following table summarizes the fair value of the assets acquired
and liabilities assumed with respect to the acquisition of the Witt
shares on April 26, 2006:
April 26, 2006
Total purchase price (net of cash) 110
Allocated to:
Property, plant and equipment 1
Working capital 10
Deferred tax 4
Provisions (24 )
Intangible assets 25
In-process R&D 4
Goodwill 90
110
226 Corporate governance224 Reconciliation of
non-US GAAP information
234 The Philips Group
in the last ten years
236 Investor information