Philips 2010 Annual Report Download - page 167

13 Group financial statements 13.11 - 13.11 5 6
Annual Report 2010 167
2008 2009 2010
Net sales 6,951 4,165 353
Income before taxes 538 142 47
Income taxes (109) (30) (16)
Other income (loss) − (6) −
Net income 429 106 31
Total share in net income of associates
recognized in the Consolidated statements
of income 81 23 14
2009 2010
Current assets 1,987 760
Non-current assets 1,400 282
3,387 1,042
Current liabilities (1,418) (631)
Non-current liabilities (817) (99)
Net asset value 1,152 312
Investments in associates included in the Consolidated
balance sheet 274 178
5Discontinued operations
2010 and 2009
During 2009 and 2010, there were no results from discontinued
operations.
2008
MedQuist
On August 6, 2008, the Company announced that it had completed the
sale of its approximately 70% ownership interest in MedQuist to CBAY
for a consideration of USD 287 million. The consideration was
composed of a cash payment of USD 98 million, a promissory note of
USD 26 million, a convertible bond of USD 91 million, and a pre-closing
cash dividend of USD 72 million. The promissory note was redeemed
during 2009. The convertible bond was redeemed in October 2010;
please refer to note 14. The financial results attributable to the
Company’s interest in MedQuist have been presented as discontinued
operations.
The following table summarizes the results of the MedQuist business
included in the Consolidated statements of income as discontinued
operations for 2008:
2008
Sales 128
Costs and expenses (131)
Gain on sale of discontinued operations 15
Impairment charge −
Income (loss) before taxes 12
Income taxes (3)
Result of investments in associates −
Non-controlling interests 1
Results from discontinued operations 10
Semiconductors
On September 29, 2006, the Company sold a majority stake in its
Semiconductors division to a private equity consortium led by Kohlberg
Kravis Robert & Co. (KKR). The transaction consisted of the sale of the
division and a simultaneous acquisition of non-controlling interests in
the recapitalized organization NXP Semiconductors (NXP). The
operations of the Semiconductors division have been presented as
discontinued operations.
The Company’s ownership interest in NXP was 19.8% on December
31, 2009. During 2010, the Company sold its entire interest in NXP,
please refer to note 11.
The following table summarizes the results of the Semiconductors
division included in the Consolidated statements of income as
discontinued operations. The 2008 results mainly related to the
settlement of income taxes, largely operational in nature.
2008
Sales −
Costs and expenses −
Gain (loss) on sale of discontinued operations (3)
Income (loss) before taxes (3)
Income taxes (4)
Results from discontinued operations (7)
6Acquisitions and divestments
2010
During 2010, Philips entered into 11 acquisitions. These acquisitions
involved an aggregated purchase price of EUR 235 million and have been
accounted for using the acquisition method. Measured on an annualized
basis, the aggregated impact of the 11 acquisitions on group Sales,
Income from operations, Net income and Net income per common
share (on a fully diluted basis) is not material in respect of IFRS 3
disclosure requirements.
On March 9, 2010, Philips divested 9.4% of the shares in TPV
Technology Ltd. (TPV). The TPV shares were sold to CEIEC Ltd., a
Hong Kong-based technology company, for a cash consideration of
EUR 98 million. The transaction resulted in a gain of EUR 5 million,
which was reported under Results relating to Investments in
Associates.
The remaining divestments in 2010 involved an aggregated
consideration of EUR 22 million and were therefore deemed immaterial
in respect of IFRS 3 disclosure requirements.
2009
During 2009, Philips entered into a number of acquisitions and
completed several divestments.
Saeco International Group S.p.A. of Italy (Saeco) was the largest
acquisition in 2009. Other acquisitions, both individually and in the
aggregate, as well as divestments were deemed immaterial with respect
to the IFRS 3 disclosure requirements.
The acquisition of Saeco is summarized in the following table and
described in the paragraph below.
Acquisitions
net cash
outflow net assets acquired1)
other intangible
assets goodwill
Saeco 171 17 74 80
1) Net assets acquired includes an adjustment of EUR 10 million for Non-
controlling interests and is net of cash acquired
Saeco
On July 24, 2009, Philips reached an agreement with Saeco’s senior
lenders. Under the terms of the agreement, Philips acquired full
ownership of Saeco through the assumption of all outstanding senior
debt and related financial instruments for an upfront payment of EUR
170 million plus a deferred consideration of EUR 30 million payable no
later than the 5th anniversary of the transaction.