Siemens 2006 Annual Report Download - page 172

Notes to Consolidated Financial Statements
(in millions of €, except where otherwise stated and per share amounts)
168
In July 2005, the Company completed the acquisition of all shares of Flender Holding
GmbH, Germany (Flender), a supplier of mechanical and electrical drive equipment, focusing
on gear technology. The primary reason for the acquisition was to enable the Company to offer
a full drive train (motor, inverter, gear) to customers. The business is being integrated into
A&D and was consolidated as of July 2005. The acquisition costs amount to €702. Based on the
final purchase price allocation, €409 was allocated to intangible assets subject to amortization
and €433 was recorded as goodwill. Of the €409 intangible assets, €264 was allocated to cus-
tomer relationships and €101 to technology. Customer relationships and technology are amor-
tized over weighted-average amortization periods of 12 years and 10 years, respectively.
In fiscal 2005, the Company acquired Bonus Energy A/S, Denmark, a supplier of wind ener-
gy systems and substantially all of the assets of Robicon Corporation, USA, a manufacturer of
medium voltage drives and power controls. The combined purchase price of the two acquisi-
tions amounts to €476.
The Company made certain other acquisitions during the years ended September 30, 2006
and 2005, which did not have a significant effect on the Consolidated Financial Statements.
b) Dispositions (including assets and liabilities held for disposal)
ba) Dispositions in fiscal 2006 (including assets and liabilities held for disposal)
At the beginning of April 2006, SBS closed the sale of its Product Related Services (PRS) busi-
ness to Fujitsu Siemens Computers (Holding) BV.
In June 2006, Siemens and Nokia Corporation (Nokia), Finland announced an agreement to
contribute the carrier-related operations of Siemens, which are part of Com, and the Networks
Business Group of Nokia into a new company, to be called Nokia Siemens Networks (NSN), in
exchange for shares in NSN. Siemens and Nokia will each own an economic share of approxi-
mately 50% of NSN. Siemens expects to account for its investment in NSN using the equity
method. The assets and liabilities of the carrier-related operations of Siemens are classified
on the balance sheet as held for disposal and measured at the lower of their carrying amount
or fair value less costs to sell. The transaction is expected to close in the first half of fiscal 2007
and is subject to customary regulatory approvals (European Union approval having been
received on November 13, 2006), the completion of standard closing conditions, and agree-
ment on a number of detailed implementation steps. Siemens expects to realize a gain on this
transaction.
The carrying amounts of the major classes of assets and liabilities held for disposal as of
September 30, 2006, for carrier-related operations were as follows:
September 30,
2006
Accounts receivable, net 2,391
Inventories, net 1,803
Goodwill 216
Property, plant and equipment, net 411
Other assets 849
Assets held for disposal 5,670
Accounts payable 1,788
Accrued liabilities 896
Pension plans and similar commitments 198
Other accruals and provisions 233
Payroll and social security taxes 318
Other liabilities 796
Liabilities held for disposal 4,229