Philips 2007 Annual Report Download - page 144

Philips Annual Report 2007150
The following table summarizes the fair value of Intermagnetics’ assets
and liabilities acquired on November 9, 2006:
November 9, 2006
Total purchase price (net of cash) 993
Allocated to:
Property, plant and equipment 45
Working capital 66
Deferred tax liabilities (96)
Provisions (9)
Long-term debt (1)
Short-term debt (58)
In-process R&D 39
Other intangible assets 274
Goodwill 733
993
Adjusted for the effects of the nal purchase price allocation completed in 2007.
The amount of purchased in-process research and development
acquired and written off was EUR 39 million. This amount is included
in the consolidated statement of income under Research and
development expenses.
Other intangible assets, excluding in-process research and
development, is comprised of the following:
amount
amortization
period
in years
Core and existing technology 181 6
Trademarks and trade names 8 10
Customer relationships 81 9
Miscellaneous 4 2
274
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.
Pro forma disclosures on acquisitions
The following table presents the year-to-date unaudited pro-forma
results of Philips, assuming Lifeline, Witt Biomedical, Avent and
Intermagnetics had been consolidated as of January 1, 2006:
Unaudited
January-December 2006
Philips Group
pro forma
adjustments1)
pro forma
Philips Group
Sales 26,682 236 26,918
Income from operations 1,201 (7) 1,194
Net income 5,383 (2) 5,381
Basic earnings per share –
in euros 4.58 4.58
1) Pro forma adjustments include sales, income from operations and net income
from continuing operations of the acquired companies from January 1, 2006
to the date of acquisition. For that purpose, sales related to the pre-existing
relationship between Philips and Intermagnetics have been excluded. As Philips
nances its acquisitions with own funds, the pro forma adjustments exclude
the cost of external funding incurred prior to the acquisition. The pro forma
adjustments reect the impact of the purchase-price accounting effects from
January 1, 2006 to the date of acquisition. Purchase-price accounting effects
primarily relate to the amortization of intangible assets (EUR 72 million,
excluding the write-off of research and development assets) and inventory
step-ups (EUR 24 million).
The following table presents the year-to-date unaudited pro forma
results of Philips, assuming Lifeline, Witt Biomedical, Avent and
Intermagnetics had been consolidated as of January 1, 2005:
Unaudited
January-December 2005
Philips Group
pro forma
adjustments1)
pro forma
Philips Group
Sales 25,445 415 25,860
Income from operations 1,558 (22) 1,536
Net income 2,868 (10) 2,858
Basic earnings per share –
in euros 2.29 2.29
1) Pro forma adjustments include sales, income from operations and net income
from continuing operations of the acquired companies of 2005. For that
purpose, sales related to the pre-existing relationship between Philips and
Intermagnetics have been excluded. As Philips nances its acquisitions with
own funds, the pro forma adjustments exclude the cost of external funding
incurred in 2005. The pro forma adjustments also reect the impact of the
purchase-price accounting effects of 2005. These effects primarily relate to
the amortization of intangible assets (EUR 78 million, excluding the write-off
of research and development assets) and inventory step-ups (EUR 24 million).
CryptoTec
On March 31, 2006, Philips transferred its CryptoTec activities to
Irdeto, a provider of content security, and a subsidiary of multimedia
group Naspers. Irdeto purchased the CryptoTec net assets for an
amount of EUR 30 million. The gain on this transaction of EUR 31
million has been reported under Other business income.
Philips Enabling Technologies
On November 6, 2006, Philips sold Philips Enabling Technologies
Group (ETG) to VDL for EUR 45 million. The gain on this transaction
(EUR 3 million) has been reported under Other business income.
Philips Sound Solutions
On December 31, 2006, Philips transferred its Philips Sound
Solutions (PSS) business to D&M Holding for EUR 53 million.
The transaction resulted in a EUR 43 million gain, reported under
Other business income.
128 Group nancial statements
Notes to the group nancial statements
188 IFRS information 240 Company nancial statements