Honeywell 2012 Annual Report Download - page 79

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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 connection with all acquisitions in 2012, 2011 and 2010, the amounts recorded for transaction
costs and the costs of integrating the acquired businesses into Honeywell were not material.
The pro forma results for 2012, 2011 and 2010, assuming these acquisitions had been made at
the beginning of the comparable prior year, would not be materially different from consolidated reported
results.
Divestitures—In July 2011, the Company sold its Consumer Products Group business (CPG) to
Rank Group Limited. The sale was completed for approximately $955 million in cash proceeds,
resulting in a pre-tax gain of approximately $301 million and approximately $178 million, net of tax. The
gain was recorded in net income from discontinued operations after taxes in the Company’s
Consolidated Statement of Operations for the year ended December 31, 2011. The net income
attributable to the noncontrolling interest for the discontinued operations is insignificant. The sale of
CPG, which had been part of the Transportation Systems segment, is consistent with the Company’s
strategic focus on its portfolio of differentiated global technologies.
70
HONEYWELL INTERNATIONAL INC.
NOTES TO FINANCIAL STATEMENTS—(Continued)
(Dollars in millions, except per share amounts)