Philips 2006 Annual Report Download - page 132

Philips Annual Report 2006132
Intangible assets comprise:
amount
amortization period
in years
Back-log 7 1
Developed and
core technology 11 4
Customer relationships
and patents 6 10
Other 1 3
25
Avent
As of August 31, 2006, Philips completed its acquisition of Avent,
a leading provider of baby and infant feeding products in the United
Kingdom and the United States. Philips acquired Avent for EUR 689
million, which was paid in cash upon completion of the transaction.
As of the date of acquisition Avent has been consolidated within the
Domestic Appliances and Personal Care sector.
The following table summarizes the initial fair value of the assets
acquired and liabilities assumed with respect to the acquisition of
the Avent shares on August 31, 2006:
August 31, 2006
Total purchase price (net of cash) 689
Allocated to:
Property, plant and equipment 35
Working capital 40
Deferred tax liabilities (122 )
Intangible assets 392
Goodwill 344
689
The allocation of the purchase price to the net assets acquired had
not yet been fi nalized as of December 31, 2006, as further information
related to intangible asset valuations remained outstanding.
Intangible assets comprise:
amount
amortization
period in years
Trademarks and trade names 242 indefi nite
Customer relationships and patents 150 5-18
392
Intermagnetics
On November 9, 2006, the Company acquired Intermagnetics General
Corporation (Intermagnetics) for USD 27.50 per share, which was paid
in cash upon completion. Additionally, in connection with the closing,
Philips provided a loan to Intermagnetics of approximately USD 120
million to pay off debt and certain other obligations, including amounts
related to the acceleration of stock-based compensation and expenses
incurred
as a result of the transaction. Since the date of acquisition,
Intermagnetics has been consolidated within the Medical Systems sector.
The following table summarizes the initial fair value of the assets
acquired and liabilities assumed with respect to the acquisition of
the Intermagnetics shares on November 9, 2006:
November 9, 2006
Total purchase price (net of cash) 993
Allocated to:
Property, plant and equipment 45
Working capital 65
Deferred tax liabilities (78 )
Provisions (9 )
Long-term debt (1 )
Short-term debt (57 )
In-process R&D 29
Other intangible assets 226
Goodwill 773
993
The amount of purchased in-process research and development
acquired and written off in 2006 was EUR 29 million. This amount
is included in the consolidated statement of income under Research
and development expenses.
The allocation of the purchase price to the net assets acquired had
not been fi nalized as of December 31, 2006, as further information
related to intangible asset valuations remained outstanding.
Other intangible assets, excluding in-process research and
development, is comprised of the following:
amount
amortization
period in years
Core and existing technology 120 6
Trademarks and trade names 17 10
Customer relationships 86 9
Miscellaneous 3 2
226
Intermagnetics has developed, designed, manufactured and supplied
superconducting magnet systems and certain other components used
in magnetic resonance imaging systems to Philips for use in medical
systems. This pre-existing relationship involved EUR 120 million of
Intermagnetics’ revenues in 2006.
112 Group fi nancial statements
Notes to the group fi nancial statements
172 IFRS information 218 Company fi nancial statements