Philips 2008 Annual Report Download - page 148

The following table summarizes the fair value of Intermagnetics’
assets and liabilities:
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
The amount of 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 comprise:
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 1,198 (7) 1,191
Net income 5,381 (2) 5,379
Basic earnings per share –
in euros 4.58 4.58
Pro forma adjustments include sales, income from operations and net income
1)
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
finances its acquisitions with own funds, the pro forma adjustments exclude
the cost of external funding incurred prior to acquisition. The pro forma
adjustments reflect 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).
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. A EUR 31 million gain on this transaction
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 Holdings for EUR 53 million. A EUR 43 million
gain on the transaction has been reported under Other business income.
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. A EUR 76 million gain
on this transaction is included in Results relating to equity-
accounted investees.
3
Income from operations
For information related to sales and income from operations on
a geographical and sector basis, see Information by sector and
main country that begins on page 133 of this Annual Report.
Sales composition
2006 2007 2008
Goods 24,107 24,270 23,568
Services 2,073 1,973 2,325
Licenses 502 550 492
26,682 26,793 26,385
Salaries and wages
2006 2007 2008
Salaries and wages 4,613 4,607 5,098
Pension costs 155 111 106
Other social security and similar
charges:
- Required by law 635 634 750
- Voluntary 104 101 80
5,507 5,453 6,034
Salaries and wages include an amount of EUR 376 million (2007: EUR 35
million, 2006: EUR 78 million) relating to restructuring charges.
See note 20 for further information on pension costs.
Share-based compensation expense amounted to EUR 78 million
(EUR 58 million, net of tax), EUR 111 million (EUR 84 million, net of
tax) and EUR 107 million (EUR 78 million, net of tax) in 2008, 2007,
and 2006, respectively. See note 33 for further information on
Share-based compensation.
For the remuneration of the Board of Management and Supervisory
Board, please refer to note 34.
Philips Annual Report 2008148
180
Sustainability performance
192
IFRS financial statements
244
Company financial statements
124
US GAAP financial statements
Notes to the US GAAP
financial statements