Philips 2006 Annual Report Download - page 196

Philips Annual Report 2006196
The following tables present the year-to-date unaudited results of
Lumileds and the effect on Philips’ results assuming Lumileds had been
consolidated as of January 1, 2004.
Unaudited
January-December 2005
Philips
Group
pro forma
adjustments
1)
pro forma
Philips Group
Sales 25,775 235 26,010
Income from operations 1,419 (55 ) 1,364
Net income 3,374 (46 ) 3,328
Earnings per share - in
euros 2.70 2.66
1) The pro forma adjustments relate to sales, Income from operations and
net results of Lumileds attributable to the period preceding the acquisition
(EUR 42 million positive impact after tax) and also refl ect the amortization
of intangibles (EUR 37 million after tax), share-based compensation expense
(EUR 29 million after tax), and the reversal of results relating to equity-
accounted investees (EUR 20 million after tax and remaining adjustments
of EUR 2 million after tax).
Unaudited
January-December 2004
Philips
Group
pro forma
adjustments
1)
pro forma
Philips Group
Sales 24,855 234 25,089
Income from operations 1,105 (34 ) 1,071
Net income 2,783 (30 ) 2,753
Earnings per share - in
euros 2.17 2.15
1) The pro forma adjustments relate to sales, Income from operations and net
results of Lumileds of 2004 (EUR 52 million positive impact after tax) and also
refl ect the amortization of intangibles (EUR 40 million after tax), share-based
compensation expense (EUR 13 million after tax), shared-based expense
(EUR 23 million after tax), the reversal of results relating to equity-accounted
investees (EUR 23 million after tax) and remaining adjustments of EUR 6 million
after tax.
Connected Displays (Monitors)
In September 2005, Philips sold certain activities within its monitors
and fl at TV business to TPV Technologies, a Hong Kong listed
company for a 15% ownership interest in TPV and a convertible bond
of EUR 220 million. A gain of EUR 158 million was recognized in
Other business income (expense). TPV will continue to produce for
Philips the monitors that will be sold under the Philips brand. The
Company accounts for the investment in TPV using the equity method
since the Company can exercise signifi cant infl uence. The Company
also has representation on TPV’s board.
Philips Pension Competence Center
In September 2005, the Company sold the legal entities which perform
the asset management function and the pension administration of the
Philips Pension Fund to Merrill Lynch and Hewitt, respectively. The
transactions resulted in a cash infl ow of EUR 55 million and a gain of
EUR 43 million, which has been reported under Other business income.
LG.Philips LCD
In July 2005, LG.Philips LCD issued 65,000,000 American Depository
Shares or an equivalent of 32,500,000 shares, resulting in a dilution gain
of EUR 214 million. Contemporaneously, the Company sold 9,375,000
common shares. In December 2005 the Company sold 18 million
common shares. As a result of these two transactions, the Company
had a cash infl ow of EUR 938 million and a gain on the sales of shares
of EUR 435 million, which has been reported as Results relating to
equity-accounted investees. As a result of these transactions, the
Company’s participating share in LG.Philips LCD was reduced to 32.9%.
TSMC
In July and September 2005, Philips sold 567,605,000 common shares
in the form of American Depository Shares of TSMC. This resulted in
a cash infl ow of EUR 770 million and a gain of EUR 551 million, which
has been reported as Results relating to equity-accounted investees.
Philips’ shareholding after these transactions was reduced from 19.0%
to 16.4%. In 2005, Philips accounted for this investment using the
equity method of accounting. After giving up signifi cant infl uence in
2006, the Company designated the investment as available for sale.
Great Nordic
In September 2005, the Company sold its remaining share of 3.1% in
Great Nordic. This resulted in a cash infl ow of EUR 67 million and a gain
of EUR 13 million, which has been reported under Financial income.
Atos Origin
In July 2005, Philips sold its remaining share of 15.4% in Atos Origin.
This resulted in a cash infl ow of EUR 554 million and a gain of
EUR 222 million, which has been reported under Financial income.
NAVTEQ
In April and May 2005, the Company sold its remaining share of 37.1%
in NAVTEQ. This resulted in a cash infl ow of EUR 932 million and a
gain of EUR 768 million, which has been reported as Results relating
to equity-accounted investees.
2004
During 2004, 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 these business combinations were deemed immaterial in
respect of the IFRS 3 disclosure requirements.
Sales and Income from operations related to activities divested in 2004
for the period included in the consolidation amounted to EUR 190
million and a profi t of EUR 60 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
Philips-Neusoft Medical
Systems 49 1 5 43
Gemini Industries 48 32 8 8
Industriegrundstuecks-
Verwaltungs GmbH 12 12 − −
1) Excluding cash acquired
112 Group fi nancial statements 172 IFRS information
Notes to the IFRS fi nancial statements
218 Company fi nancial statements