Philips 2007 Annual Report Download - page 145

Philips Annual Report 2007 151
FEI Company
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 76 million. The gain is included in Results relating to
equity-accounted investees.
2005
During 2005, Philips completed several divestments, acquisitions
and ventures. All business combinations have been accounted for
using the purchase method of accounting. Major business combinations
in 2005 relate to the acquisitions of Stentor and Lumileds. 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 2005, included in the Company’s consolidated statement of
income for 2005, amounted to EUR 488 million and a loss of
EUR 20 million, respectively.
The most signicant acquisitions and divestments are summarized
in the next two tables and described in the section below.
Acquisitions
cash
outow
net
assets
acquired1)
other
intangible
assets goodwill
Stentor 194 (29) 108 115
Lumileds 788 (34) 268 554
1) Excluding cash acquired
Divestments
cash inow
net assets
divested1)
recognized
gain
Connected Displays
(Monitors) − (136)2) 136
Philips Pension
Competence Center 55 13 42
LG.Philips LCD 938 606 332
TSMC 770 310 460
NAVTEQ 932 179 753
Atos Origin 554 369 185
Great Nordic 67 19 48
1) Excluding cash divested
2) Represents net balance of assets received in excess of net assets divested
Stentor
In August 2005, Philips acquired all shares of Stentor, a US-based
company. The related cash outow was EUR 194 million. Stentor was
founded in 1998 to provide a solution for enterprise-wide medical
image and information management. Since the date of aquisition,
Stentor has been consolidated within the Medical Systems sector.
Lumileds
In November 2005, Philips acquired an incremental 47.25% of
Lumileds shares from Agilent, at a cost of EUR 788 million, which
brought the Philips’ participating share to a level of 96.5%. The full
business was included in the Lighting sector. In 2006, Philips acquired
the remaining 3.5% of the shares.
The following table summarizes the fair value of the assets acquired
and liabilities assumed with respect to the acquisition of the 47.25%
additional Lumileds shares in November 2005:
November 28, 2005
Total purchase price (net of cash) 788
Allocated to:
Property, plant and equipment 62
Goodwill 554
Working capital (78)
Deferred tax assets 17
Intangible assets 262
In-process R&D 6
Long-term debt (35)
788
The amount of purchased in-process research and development assets
acquired and written off in 2005 was EUR 6 million. This amount is
included in the consolidated statement of income under Research and
development expenses.
Intangible assets, excluding in-process research and development, is
comprised of the following:
amount
amortization
period
in years
Core technology 55 8
Existing technology 91 7
Customer relationships 101 11
Luxeon trade name 14 16
Backlog 1 1
262
The following table presents the year-to-date unaudited pro-forma
results of Philips, assuming Lumileds had been consolidated as of
January 1, 2005:
Unaudited
January-December 2005
Philips Group
pro forma
adjustments1)
pro forma Philips
Group
Sales 25,445 235 25,680
Income from
operations 1,558 (20) 1,538
Net income 2,868 (20) 2,848
Basic earnings
per share - in
euros 2.29 2.28
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 reect the amortization
of intangibles (EUR 17 million after tax), share-based compensation expense
(EUR 23 million after tax), the reversal of results relating to equity-accounted
investees (EUR 18 million after tax) and remaining adjustments of
EUR 4 million.
Group nancial statements
Notes to the group nancial statements
Company nancial statements 250 Corporate governance246 Reconciliation of
non-US GAAP information 258 The Philips Group in the last ten years 260
Investor information