Vodafone 2009 Annual Report Download - page 113

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Financials
Vodafone Group Plc Annual Report 2009 111
29. Acquisitions
The aggregate cash consideration in respect of purchases of interests in subsidiary undertakings and joint ventures, net of cash acquired, is as follows:
£m
Cash consideration paid:
Arcor (26.4%)(1) 366
Ghana Telecommunications (70.0%) 486
Other acquisitions completed during the year 457
Other minority interest acquisitions 38
Acquisitions completed in previous years 24
1,371
Net overdrafts acquired 18
1,389
Note:
(1) This acquisition has been accounted for as a transaction between shareholders. Accordingly, the difference between the cash consideration paid and the carrying value of net assets attributable to
minority interests has been accounted for as a charge to retained losses.
Total goodwill acquired was £663 million and included £344 million in relation to Ghana Telecommunications and £319 million in relation to other acquisitions
completed during the year. In addition, amendments to provisional purchase price allocations on acquisitions completed in previous years resulted in a reduction in goodwill
of £50 million.
Ghana Telecommunications Company Limited (‘Ghana Telecommunications’)
On 17 August 2008, the Group completed the acquisition of 70.0% of Ghana Telecommunications for cash consideration of £486 million, all of which was paid during the
year. The initial purchase price allocation has been determined provisionally pending the completion of the final valuation of the fair value of net assets acquired.
Fair value
Book value adjustments Fair value
£m £m £m
Net assets acquired:
Identifiable intangible assets(1) − 136 136
Property, plant and equipment 171 − 171
Inventory 10 − 10
Trade and other receivables 25 − 25
Deferred tax liabilities (8) (34) (42)
Trade and other payables (100) − (100)
Other (33) − (33)
Net identifiable assets acquired 65 102 167
Goodwill(2) 344
Total asset acquired 511
Minority interests (25)
Total consideration (including £3 million of directly attributable costs) 486
Notes:
(1) Id ent if iable inta ngible asset s of £136 mi llion consist of lice nces and spectr um fees of £112 mi llion and other intangible assets of £24 mi llion. The weighted aver age li ves of licences and spe ctrum fees ,
other intangible assets and total intangible assets are 11 years, one year and ten years respectively.
(2) The goodwill is attributable to the expected profitability of the acquired business and the synergies expected to arise after the Group’s acquisition of Ghana Telecommunications.
The results of the acquired entity have been consolidated in the income statement from the date of acquisition. From the date of acquisition, the acquired entity reduced
the profit attributable to equity shareholders of the Group by £389 million.
Pro forma full year information
The following unaudited pro forma summary presents the Group as if Ghana Telecommunications had been acquired on 1 April 2008. The impact of other acquisitions on
the pro forma amounts disclosed below is not significant. The pro forma amounts include the results of Ghana Telecommunications, amor tisation of the acquired intangible
assets recognised on acquisition and the interest expense on the increase in net debt as a result of the acquisitions. The pro forma amounts do not include any possible
synergies from the acquisition of Ghana Telecommunications. The pro forma information is provided for comparative purposes only and does not necessarily reflect the
actual results that would have occurred, nor is it necessarily indicative of future results of operations of the combined companies.
2009
£m
Revenue 41,069
Profit for the financial year 3,052
Profit attributable to equity shareholders 3,050
Pence
Basic earnings per share 5.78
Diluted earnings per share 5.76
Other
During the 2009 financial year, the Group completed a number of smaller acquisitions for aggregate cash consideration of £475 million, including £18 million net overdrafts
acquired, with £457 million of the net cash consideration paid during the year. The aggregate fair values of goodwill, identifiable assets, and liabilities of the acquired
operations were £319 million, £378 million and £240 million, respectively.