Philips 2006 Annual Report Download - page 195

Philips Annual Report 2006 195
Philips Sound Solutions
On December 31, 2006, Philips sold its Philips Sound Solutions (PSS)
business to D&M Holding for EUR 53 million. The transaction resulted
in EUR 12 million gain, reported under Other business income.
FEI
On December 20, 2006, Philips sold its 24.8% interest in FEI Company,
a NASDAQ listed company, in a public offering. The sale provided
Philips with net proceeds of EUR 154 million and a non-taxable gain
of EUR 103 million. The gain is included in Results relating to equity-
accounted investees.
2005
During 2005, the Company completed several divestments, acquisitions
and ventures. 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 IFRS 3 disclosure
requirements.
Sales and Income from operations 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 25 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
Stentor 194 (29 ) 109 114
Lumileds 788 (3 ) 268 523
1) Excluding cash acquired
Divestments
cash infl ow
net assets
divested
1)
recognized
gain
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 outfl ow was EUR 194 million.
Stentor was founded in 1998 to provide a solution for enterprise-wide
medical image and information management. The business is included
in the Medical Systems sector.
Lumileds
On November 28, 2005, the Company acquired an incremental 47.25%
Lumileds shares from Agilent, at a cost of EUR 788 million, which
brought the Company’s participating share to a level of 96.5%. The
business was included to the Lighting sector. In 2006, the Company
acquired the remaining 3.5% of the shares.
The condensed balance sheet of Lumileds determined in accordance
with IFRS, immediately before and after acquisition date:
before
acquisition date
after acquisition
date
Assets
Goodwill − 523
Other intangible assets 4 569
1)
Property, plant and equipment 110 132
Working capital 23 (45 )
Deferred tax assets − 100
Cash 21 21
158 1,300
Financed by
Group equity 83 1,130
Loans 75 170
158 1,300
1) Comprises of existing (EUR 4 million), acquired (EUR 268 million), revalued
existing Philips share (EUR 262 million; net of tax EUR 167 million) and
revalued minority share (EUR 35 million) of other intangible assets.
The equity included an amount of EUR 167 million caused by the
revaluation of Philips’ participating interest of 49.25% upon acquiring
the 47.25% from Agilent.
Employees of Lumileds have vested options on Lumileds shares which
must be offered to Lumileds when executed and Lumileds is obliged
to acquire these shares. The liability at December 31, 2005 related to
these vested options was EUR 86 million. There were 3,187,545 and
3,018,442 unvested options outstanding at November 28, 2005 and
December 31, 2005 respectively.
Other Intangibles, excluding in-process research and development, is
comprised of the following:
amount
amortization
period in years
Core technology 118 8
Existing technology 193 7
In-process research
and development 11 8
Customer relationships 216 11
Luxeon trade name 29 16
Backlog 2 1
569
226 Corporate governance224 Reconciliation of
non-US GAAP information
234 The Philips Group
in the last ten years
236 Investor information