LG 2001 Annual Report Download - page 88

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ยป88
LG Electronics Inc. The
43
rd Annual Report
Notes to Financial Statements
for the years ended December 31, 2001 and 2000
24. Supplemental Cash Flow Information
The Company considers cash on hand, bank deposits and highly liquid marketable securities with
original maturities of three months or less to be cash and cash equivalents.
Significant transactions not affecting cash flows for the years ended December 31, 2001 and 2000 are
as follows :
Millions of Won
2001 2000
Transfer to property, plant and equipment from construction in progress 245,626 75,196
Transfer to machinery and equipment from machinery in transit 164,865 86,596
Reclassify current maturities of debenture 1,283,892 1,275,736
Reclassify current maturities of long-term debt 199,948 223,923
Changes in retained earnings and capital adjustments by equity method of accounting on investments 218,778 304,103
Increase in investments by contribution of CRT division in kind 913,431 -
Increase in assets by merger of LGIC - 3,060,233
Increase in liabilities by merger of LGIC - 2,534,043
25. Merger
Effective September 1, 2000, the Company merged with LG Information & Communications, Ltd., (LGIC),
an affiliate, in accordance with a merger agreement with LGIC on June 8, 2000 and subsequent approval
by shareholders on July 22, 2000.
LGIC was incorporated to manufacture and sell electronic switching systems, transmission equipment,
network equipment, mobile telecommunication systems, and mobile phones.
The Company owned 8,374,357 shares of LGIC (27.10%) at the time of merger but the Company
cancelled those shares without issuing common stock.
In connection with the merger, the Company issued 47,790,404 shares of common stock ( 1,347,645
million) exchanging 2.1216 shares of its common stock for each share of LGIC. The Company acquired the
assets and assumed the liabilities of LGIC at their fair value as of September 1, 2000. As a result of the
merger, the Company recognized goodwill of 393,820 million.
Changes in goodwill are as follows :
Millions of Won
Goodwill at the merger 393,820
Amortization
2001 (39,382)
2000 (21,275) (60,657)
Goodwill as of December 31, 2001 333,163