BT 2006 Annual Report Download - page 88

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12. ACQUISITIONS continued
Intangible assets, comprising a brand, customer lists and customer relationships, were recognised at their respective fair values.
The residual excess over the net assets acquired is recognised as goodwill. Goodwill comprises principally the assembled work
force, expected cost savings and synergies.
c
Other
During the year ended 31 March 2006 the group acquired a number of other smaller subsidiary undertakings and businesses
including principally SkyNet Systems Limited, the CARA Group and Total Network Solutions Limited. The combined net assets and
goodwill arising in respect of these acquisitions were as follows:
Book and
fair value
£m
Property, plant and equipment 5
Inventories 4
Receivables 26
Cash and cash equivalents 11
Payables (29)
Group’s share of original book value and fair value of net assets 17
Goodwill 52
Total consideration 69
If these acquisitions had occurred on 1 April 2005, the group’s revenue and profit after tax would have been higher by £15 million
and £nil, respectively.
Year ended 31 March 2005
d
Infonet
On 25 February 2005 the group acquired 100% of the issued share capital of Infonet Services Corporation (Infonet) for total
consideration of £520 million including acquisition costs of £10 million (£315 million, net of cash in the business). At 31 March
2005, the fair value adjustments relating to the acquisition of Infonet were provisional, however no further changes to these
adjustments were necessary when the fair values were finalised in the 2006 financial year. The net assets acquired in the
transaction, and the goodwill arising, were as follows:
Book
value
Fair value
adjustments Fair value
£m £m £m
Intangible assets – 78 78
Property, plant and equipment 200 (100) 100
Receivables 93 (19) 74
Cash and cash equivalents 205 – 205
Payables (94) 4 (90)
Provisions and non current liabilities (14) (18) (32)
Minority interest (1) – (1)
Group’s share of original book value and fair value of net assets 389 (55) 334
Goodwill 186
Total consideration 520
Intangible assets, comprising a brand and customer relationships, were recognised at their respective fair values. The residual
excess over the net assets acquired is recognised as goodwill. Goodwill comprises principally the assembled work force, expected
cost savings and synergies.
BT Group plc Annual Report and Form 20-F 2006 Notes to the consolidated financial statements86