Philips 2008 Annual Report Download - page 217

The following table summarizes the results of the MDS business
included in the consolidated statements of income as discontinued
operations for 2006, which mainly relate to translation differences
upon completion of the transaction.
2006
Sales 194
Costs and expenses (160)
Income (loss) from operations 34
Financial income and expenses −
Income (loss) before taxes 34
Income taxes −
Results from discontinued operations 34
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Acquisitions and divestments
2008
During 2008, Philips entered into a number of acquisitions and
completed several divestments. All business combinations have
been accounted for using the purchase method of accounting.
The major acquisitions in 2008 consisted of Genlyte Group Inc. (Genlyte),
Respironics Inc. (Respironics) and VISICU Inc. (VISICU). The remaining
acquisitions, both individually and in the aggregate, were deemed
immaterial in respect of the IFRS 3 disclosure requirements.
Sales and income from operations related to activities divested in
2008, included in the Company’s consolidated statement of income
for 2008, amounted to EUR 176 million and nil, respectively.
The most significant acquisitions and divestments are summarized
in the next two tables and described in the section below.
Acquisitions
net cash
outflow
net
assets
acquired1)
other
intangible
assets goodwill
Genlyte 1,894 10 860 1,024
Respironics 3,196 (152) 1,186 2,162
VISICU 198 (10) 33 175
Excluding cash acquired
1)
Divestments
inflow of
cash and
other assets1)
net assets
divested
recognized
gain (loss)
Set-Top Boxes &
Connectivity Solutions 742) (32) 42
Philips Speech Recognition
Systems 653) (20) 45
Net of cash divested
1)
Assets received in lieu of cost (see note 66)
2)
Of which EUR 22 million cash
3)
Genlyte
On January 22, 2008, Philips completed the purchase of all outstanding
shares of Genlyte, a leading manufacturer of lighting fixtures, controls
and related products for the commercial, industrial and residential
markets. Through this acquisition Philips established a solid platform
for further growth in the area of energy-saving and green lighting
technology. The acquisition created a leading position for Philips in
the North American luminaires market. Philips paid total net cash
consideration of EUR 1,894 million. This amount includes the cost of
331,627 shares previously acquired in August 2007, the pay-off of certain
debt and the settlement of outstanding stock options. The net impact
of the Genlyte acquisition on Philips’ liquidity position in 2008, excluding
the pay-off of debt, was EUR 1,805 million. As of the acquisition date,
Genlyte has been consolidated as part of the Lighting sector.
The condensed balance sheet of Genlyte determined in accordance
with IFRS, immediately before and after the acquisition date:
before
acquisition date
after acquisition
date
Assets and liabilities
Goodwill 254 1,024
Other intangible assets 102 860
Property, plant and equipment 129 191
Working capital 134 160
Other current financial assets −3
Deferred tax liabilities (12) (300)
Provisions (18) (36)
Cash 57 57
646 1,959
Financed by
Group equity 568 1,951
Loans 78 8
646 1,959
The goodwill recognized is related to the complementary technological
expertise and talent of the Genlyte workforce and the synergies expected
to be achieved from integrating Genlyte into the Lighting sector.
Other intangible assets are comprised of the following:
amount
amortization
period in years
Core technology and designs 81 1-8
In-process R&D 11 5
Group brands 142 2-14
Product brands 5 2-5
Customer relationships and patents 614 9-17
Order backlog 6 0.25
Software 1 3
860
Genlyte contributed income from operations of EUR 34 million to
the Group for the period from January 22 to December 31, 2008.
Respironics
On March 10, 2008, Philips acquired 100% of the shares of Respironics,
a leading provider of innovative solutions for the global sleep and
respiratory markets. Respironics designs, develops, manufactures and
markets medical devices used primarily for patients suffering from
Obstructive Sleep Apnea (OSA) and respiratory disorders. The
acquisition of Respironics added new product categories in OSA and
home respiratory care to the existing Philips business. This acquisition
formed a solid foundation for the Home Healthcare Solutions business
of the Company. Philips acquired Respironics’ shares for a net cash
consideration of EUR 3,196 million. As of the acquisition date,
Respironics has been consolidated as part of the Healthcare sector.
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Philips Annual Report 2008 217
254
Corporate governance
250
Reconciliation of
non-US GAAP information
262
Ten-year overview
266
Investor information