Philips 2008 Annual Report Download - page 231

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Intangible assets excluding goodwill
The changes during 2008 were as follows:
other
intangible
assets
product
development software total
Balance as of
January 1,
2008:
Cost 2,848 1,146 615 4,609
Accumulated
amortization (743) (627) (404) (1,774)
Book value 2,105 519 211 2,835
Changes in
book value:
Additions 3 154 118 275
Acquisitions 2,093 15 −2,108
Amortization/
deductions (389) (234) (92) (715)
Impairment
losses −(84) −(84)
Translation
differences 64 9 5 78
Other 8 (22) (6) (20)
Total changes 1,779 (162) 25 1,642
Balance as of
December 31,
2008:
Cost 5,021 805 702 6,528
Accumulated
amortization (1,137) (448) (466) (2,051)
Book Value 3,884 357 236 4,477
Other intangible assets in 2008 consist of:
January 1 December 31
gross
accumulated
amortization gross
accumulated
amortization
Marketing-
related 179 (31) 81 (26)
Customer-
related 1,124 (195) 2,619 (380)
Contract-
based 33 (10) 36 (17)
Technology-
based 861 (417) 1,489 (575)
Patents and
trademarks 651 (90) 796 (139)
2,848 (743) 5,021 (1,137)
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The estimated amortization expense for these other intangible assets
for each of the five succeeding years are:
2009 417
2010 399
2011 361
2012 335
2013 306
The expected weighted average remaining life of other intangible
assets is 11.1 years as of December 31, 2008.
The additions acquired through business combinations in 2008 consist
of the acquired intangible assets of Respironics of EUR 1,186 million,
Genlyte of EUR 860 million, and VISICU of EUR 33 million. The acquired
intangible assets mainly consist of customer relationships and patents
of Respironics of EUR 732 million and Genlyte EUR 614 million, and
core technology of Respironics of EUR 355 million and VISICU
of EUR 20 million.
The unamortized costs of computer software to be sold, leased or
otherwise marketed amounted to EUR 95 million (2007: EUR 63
million). The amounts charged to the income statement for
amortization or impairment of these capitalized computer software
costs amounted to EUR 33 million (2007: EUR 20 million)
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Goodwill
The changes in 2007 and 2008 were as follows:
2007 2008
Balance as of January 1:
Cost 3,822 4,173
Amortization / Impairments (416) (373)
Book value 3,406 3,800
Changes in book value:
Acquisitions 760 3,450
Impairments −(301)
Translation differences (366) 331
Balance as of December 31:
Cost 4,173 7,952
Amortization / Impairments (373) (672)
Book value 3,800 7,280
Acquisitions in 2008 include goodwill related to the acquisitions of
Respironics for EUR 2,162 million, Genlyte for EUR 1,024 million, VISICU
for EUR 175 million, and several smaller acquisitions. Acquisitions in 2007
include goodwill related to the acquisitions of Partners in Lighting for
EUR 297 million and Color Kinetics for EUR 358 million and several
smaller acquisitions. In addition, goodwill changed due to the finalization
of purchase price accounting related to acquisitions in prior years.
A significant part of goodwill is allocated to the following businesses:
2007 2008
Home Healthcare Solutions 385 2,804
Professional Luminaires 348 1,427
Imaging Systems 1,141 1,197
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Philips Annual Report 2008 231
254
Corporate governance
250
Reconciliation of
non-US GAAP information
262
Ten-year overview
266
Investor information