Honeywell 2013 Annual Report Download - page 84

The following amounts represent the final determination of the fair value of the identifiable assets
acquired and liabilities assumed:
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 157
Accounts and other receivables. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
Other assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Intangible assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 205
Deferred revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (221)
Other current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (18)
Net assets acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 223
Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 453
Redeemable noncontrolling interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (151)
Purchase price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 525
The results from the acquisition date through December 31, 2012 are included in the Performance
Materials and Technologies segment and were not material to the consolidated financial statements.
In December 2011, the Company acquired King’s Safetywear Limited (KSW) a leading
international provider of branded safety footwear. The aggregate value, net of cash acquired, was
approximately $331 million (including the assumption of debt of $33 million) and was allocated to
tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair
values at the acquisition date. The Company has assigned approximately $167 million to identifiable
intangible assets, predominantly trademarks, technology, and customer relationships. The definite lived
intangible assets are being amortized over their estimated lives, using straight-line and accelerated
amortization methods. The value assigned to trademarks of approximately $84 million is classified as
indefinite lived intangibles. The excess of the purchase price over the estimated fair values of net
assets acquired (approximately $157 million), 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 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 Automation and Control Solutions segment. Their
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 Automation
and Control Solutions segment and were not material to the consolidated financial statements.
In August 2011, the Company acquired 100 percent of the issued and outstanding shares of EMS
Technologies, Inc. (EMS), a leading provider of connectivity solutions for mobile networking, rugged
mobile computers and satellite communications. EMS had reported 2010 revenues of approximately
$355 million.
The aggregate value, net of cash acquired, was approximately $513 million and was allocated to
tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair
values at the acquisition date. The Company has assigned approximately $119 million to identifiable
intangible assets, of which approximately $89 million and approximately $30 million were recorded
within the Aerospace and Automation and Control segments, respectively. The intangible assets are
predominantly customer relationships, existing technology and trademarks. These intangible assets are
being amortized over their estimated lives, using straight-line and accelerated amortization methods.
The excess of the purchase price over the estimated fair values of net assets acquired (approximating
$314 million), 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 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
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HONEYWELL INTERNATIONAL INC.
NOTES TO FINANCIAL STATEMENTS—(Continued)
(Dollars in millions, except per share amounts)