Philips 2008 Annual Report Download - page 220

The condensed balance sheet of Color Kinetics determined in
accordance with IFRS, immediately before and after acquisition date:
before
acquisition date
after
acquisition date
Assets and liabilities
Goodwill −357
Other intangible assets −187
Property, plant and equipment 7 7
Working capital 10 16
Deferred tax −(52)
Cash 71 71
88 586
Financed by
Group equity 88 586
88 586
The goodwill recognized is related mainly to the complementary
expertise of the Color Kinetics workforce and the synergies
expected to be achieved from integrating Color Kinetics into the
Lighting sector.
Other intangible assets comprise:
amount
amortization
period in years
Trade marks and trade names 1 1
Developed and core technology 113 10-20
In-process research and patents 1 0.5
Customer relationships 68 7-18
Other 4 2-10
187
Color Kinetics reported a loss from operations of EUR 8 million to
the Group for the period from August 24 to December 31, 2007.
Pro forma disclosures on acquisitions
The following table presents the year-to-date unaudited pro-forma
results of Philips, assuming PLI and Color Kinetics had been
consolidated as of January 1, 2007:
Unaudited
January-December 2007
Philips
Group
pro forma
adjustments1)
pro forma
Philips
Group
Sales 26,793 75 26,868
Income from operations 1,867 −1,867
Net income 4,873 (2) 4,871
Earnings per share - in
euros 4.49 4.48
Pro forma adjustments include sales, income from operations and net income
3)
from continuing operations of the acquired companies from January 1, 2007
to the date of acquisition. As Philips finances its acquisitions with own funds,
the pro forma adjustments exclude the cost of external funding incurred prior
to the acquisition. The pro forma adjustments also reflect the impact of the
purchase-price accounting effects from January 1, 2007 to the date of acquisition
and the elimination of non-recurring post-merger integration costs incurred
by the Company. Purchase-price accounting effects primarily relate to the
amortization of intangible assets (EUR 10 million).
The following table presents the year-to-date unaudited pro-forma
results of Philips, assuming PLI and Color Kinetics had been
consolidated as of January 1, 2006:
Unaudited
Philips
Group
pro forma
adjustments1)
pro forma
Philips
Group
Sales 26,682 454 27,136
Income from operations 1,336 14 1,350
Net income 5,153 26 5,179
Earnings per share - in
euros 4.39 4.41
Pro forma adjustments include sales, income from operations and net income
1)
from continuing operations of the acquired companies of 2006. As Philips
finances its acquisitions with own funds, the pro forma adjustments exclude
the cost of external funding incurred in 2006. The pro forma adjustments
also reflect the impact of the purchase-price accounting effects of 2006. These
effects primarily relate to the amortization of intangible assets (EUR 26 million)
and inventory step-ups (EUR 26 million).
LG Display
On October 10, 2007, Philips sold 46,400,000 shares of common
stock in LG Display to financial institutions in a capital markets
transaction. This transaction represented 13% of LG Display’s issued
share capital and reduced Philips’ holding to 19.9%. The transaction
resulted in a gain of EUR 654 million, reported under Results relating
to equity-accounted investees.
2006
During 2006, Philips entered into a number of acquisitions and
completed several divestments. All acquisitions have been accounted
for using the purchase method of accounting.
Major acquisitions in 2006 were Lifeline, Witt Biomedical, Avent and
Intermagnetics. 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
2006, included in the Company’s consolidated statement of income
for 2006, amounted to EUR 975 million and a loss of EUR 21 million
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
Lifeline 583 (77) 319 341
Witt Biomedical 110 (2) 29 83
Avent 689 (47) 392 344
Intermagnetics 993 (50) 313 730
Excluding cash acquired
1)
Divestments
cash inflow1)
net assets
divested2)
recognized
gain
CryptoTec 30 4 26
Philips Enabling
Technologies (ETG) 45 38 7
Philips Sound
Solutions (PSS) 53 41 12
FEI Company 154 51 103
Net of cash divested
1)
Includes the release of cumulative translation differences
2)
Philips Annual Report 2008220
180
Sustainability performance
244
Company financial statements
124
US GAAP financial statements
192
IFRS financial statements
Notes to the IFRS financial
statements