Annual Report 2006 - Munters

NOTE 4 CONT.Dehumidification MCS HumiCool Eliminations, etc. Total2006 2005 2006 2005 2006 2005 2006 2005 2006 2005Operating liabilities 165 153 112 131 284 161 –8 –2 553 443Other liabilities – – – – – – 1,084 1,022 1,084 1,022Total liabilities 165 153 112 131 284 161 1,076 1,020 1,637 1,465Other dataInvestments 29 17 110 87 28 23 0 1 168 128Depreciation and impairments 21 22 82 78 33 36 –1 5 135 141Number of employees at year-end 900 853 1,845 1,706 789 668 18 18 3,552 3,245Geographic regionsThe Group’s operations are divided into three geographic regions that constitute secondary segments: Europe, the Americas and Asia. The Europe Region includesEurope, the Middle East and Africa. The Americas Region includes North America, Central America and South America. The Asia Region includes Asia, except theMiddle East, and Australia.Europe Americas Asia Eliminations, etc. Total2006 2005 2006 2005 2006 2005 2006 2005 2006 2005Net sales 3,412 3,056 1,872 1,683 529 484 –101 –93 5,712 5,130Operating assets 1,392 1,215 540 735 237 238 3 –5 2,172 2,183Operating liabilities 376 254 152 153 61 57 –36 –21 553 443Investments 80 83 78 33 10 11 0 1 168 128Number of employees at year-end 2,331 2,144 830 754 372 330 19 17 3,552 3,245NOTE 5 OTHER OPERATING INCOME ANDOPERATING EXPENSESOther operating incomeGroupParent Company2006 2005 2006 2005Divestment of operations 14 – – –Exchange-rate differences – – 0 1Royalty from subsidiaries – – 3 3Other operating expenses14 – 3 4Impairment of participations inassociated companies –2 – – –Goodwill impairment – –3 – –Exchange-rate differences –4 –6 –1 ––6 –9 –1 –The sale of the Water business area was implemented during the first quarter of2006, at a purchase price of slightly more than SEK 26 M. The business unit,which had operations in Germany and the UK, had sales totaling SEK 62 M in2005. After provisions for expenses in connection with the sale, plus impairmentof production equipment within HumiCool, the net profit from these nonrecurringeffects was marginally positive.NOTE 6 DEPRECIATION AND IMPAIRMENTSDepreciation and amortization of tangible and intangible assets are based onthe historical acquisition value and the estimated useful lifetime for various typesof assets. For assets acquired during the year, depreciation or amortization iscalculated from the acquisition date and deducted primarily straightline over thefollowing period.Patents, licenses and brandsLand leaseBuildingsMachinery and equipmentEquipment within MCS operationsImprovement measures in leased premises3–10 years50 years20–30 years3–10 years6 years3–7 yearsGoodwill impairment is reported among other operating expenses. See alsoNote 13.The useful life for acquired brands is based on the number of years that thebrand is estimated to contribute revenues to the Group in its current form.Remaining useful life for the brand is 9 years and 11 months.The year’s depreciation, amortization and impairments were charged againstthe year’s earnings as shown below.GroupParent Company2006 2005 2006 2005Cost of goods sold 108 110 – –Selling costs 7 6 – –Administrative costs 21 21 2 1Research and developmentcosts 0 1 – –Other operating expenses – 3 – –Amortization of acquisitionrelatedintangible fixed assets 0 – – –136 141 2 1Impairment of inventories totaled 5 (5) and is included in Cost of goods sold. Noreversals of previous impairments occurred.M U N T E R S A N N U A L R E P O R T 2 0 0 6 53