Honeywell 2011 Annual Report Download - page 68

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associated risks that would be encountered) to enhance our product offerings to key target markets and serve as entry into new and profitable segments, and
the expected cost synergies that will be realized through the consolidation of the acquired business into our Aerospace and Automation and Control Solutions
segments. These cost synergies are expected to be realized principally in the areas of selling, general and administrative expenses, material sourcing and
manufacturing. This goodwill is non-deductible for tax purposes.
The results from the acquisition date through December 31, 2011 are included in the Aerospace and Automation and Control Solutions segments and
were not material to the consolidated financial statements. As of December 31, 2011, the purchase accounting for EMS is subject to final adjustment primarily
for the valuation of inventory and property, plant and equipment, useful lives of intangible assets, amounts allocated to intangible assets and goodwill, and for
certain pre-acquisition contingencies.
In October 2010, we completed the acquisition of the issued and outstanding shares of Sperian Protection (Sperian), a French company that operates
globally in the personal protection equipment design and manufacturing industry. Sperian had reported 2009 revenues of approximately $900 million.
The aggregate value, net of cash acquired, was approximately $1,475 million (including the assumption of approximately $326 million of outstanding
debt) and was allocated to tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values at the acquisition
date.
The following amounts represent the final determination of the fair value of the identifiable assets acquired and liabilities assumed.
Accounts and other receivables $ 117
Inventories 166
Other current assets 8
Property, plant and equipment 108
Intangible assets 539
Other assets and deferred charges 4
Accounts payable (63)
Accrued liabilities (114)
Deferred income taxes (156)
Long-term debt (326)
Other long-term liabilities (64)
Net assets acquired 219
Goodwill 930
Purchase price $ 1,149
We have assigned $539 million to intangible assets, predominantly customer relationships, trade names, and technology. These intangible assets are
being amortized over their estimated lives which range from 3 to 20 years using straight line and accelerated amortization methods. Included in this amount, a
value of approximately $246 million has been assigned to trade names intangibles determined to have indefinite lives. The excess of the purchase price over
the estimated fair values of net assets acquired is approximately $930 million and was recorded as goodwill. This goodwill arises primarily from the
avoidance of the time and costs which would be required (and the associated risks that would be encountered) to develop a business with a product offering
and customer base comparable to Sperian and the expected cost synergies that will be realized through the consolidation of the acquired business into our
Automations and Controls Solutions segment. These cost synergies are expected to be realized principally in the areas of selling, general and administrative
expenses, material sourcing and manufacturing. This goodwill is non-deductible for tax purposes. The results from the acquisition date through December 31,
2010 are included in the Automation and Control Solutions segment and were not material to the consolidated financial statements.
In August 2009, the Company completed the acquisition of the RMG Group (RMG Regel + Messtechnik GmbH), a natural gas measuring and control
products, services and integrated solutions company, for a purchase price of approximately $416 million, net of cash acquired. The purchase price for the
acquisition was allocated to the tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values at the
acquisition date. The Company has assigned $174 million to identifiable intangible assets, predominantly customer relationships, existing technology and
trademarks. These intangible assets are being
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