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  Pearson Annual Report 2001    

Notes to the Accounts

   
 

26. Acquisitions

All acquisitions and combinations have been consolidated applying acquisition accounting principles.


a. Acquisition of subsidiary undertakings



all figures in millions 2001 2000



Tangible fixed assets 5 147
Joint ventures 2
Associates (3) 305
Fixed asset investments 38
Stocks 8 81
Debtors (78) 175
Creditors (19) (255)
Provisions (9) (33)
Deferred taxation (1) 8
Net borrowing acquired 83 (13)



  (14) 455
Equity minority interests (2) (101)



Net (liabilities)/assets acquired at fair value (16) 354



Fair value of consideration:    
Cash (52) (2,260)
Television assets contributed (284)
Deferred cash consideration (10) (39)
Costs accrued (1) (23)
Net prior year adjustments (8) 4
Replacement options granted (5)



  (71) (2,607)
Goodwill previously written off on businesses combined (585)



Total consideration (71) (3,192)



Goodwill arising 87 2,838



Analysed as:    
Goodwill written off to reserves (1)
Goodwill attributable to associates 633
Goodwill attributable to subsidiaries 87 2,206



  87 2,838



note Goodwill written off to reserves relates to acquisitions made before 1 January 1998.



all figures in millions 2001


Acquisition fair values  
Book value of net liabilities acquired (8)
Fair value adjustments (8)


Fair value to the Group (16)


note Of the fair value adjustments above, (10)m relates to the finalisation of the Dorling Kindersley and NCS fair values. Other fair value adjustments are provisional and will be finalised in the 2002 financial statements. The adjustments comprise the revaluation of net assets.


b. Dorling Kindersley



all figures in millions provisional
fair value
31 dec 2000
revaluations final
fair value
31 dec 2001


Tangible fixed assets 10 10
Joint ventures 2 2
Stocks 38 2 40
Debtors 40 (2) 38
Creditors (106) 1 (105)
Provisions (2) (5) (7)
Net borrowing (49) (49)


Net liabilities acquired (67) (4) (71)


note Dorling Kindersley was acquired in May 2000 and provisional fair value adjustments were made in the 2000 accounts. Final fair value adjustments have been made in 2001. The most significant adjustment was to provisions, in respect of the fair value of pension liabilities acquired.


c. National Computer Systems



all figures in millions provisional
fair value
31 dec 2000
revaluations final
fair value
31 dec 2001


Tangible fixed assets 115 (1) 114
Fixed asset investments 29 29
Stocks 32 (2) 30
Debtors 102 (1) 101
Creditors (71) (2) (73)
Provisions (20) (20)
Net cash 9 9


Net assets acquired 196 (6) 190


note NCS was acquired in September 2000 and provisional fair value adjustments were made in the 2000 accounts. Final fair value adjustments have been made in 2001.


d. Cash flow from acquisitions



all figures in millions 2001 2000



Cash current year acquisitions 52 2,260
Deferred payments for prior year acquisitions and other items 76 16



Net cash outflow 128 2,276



 
 

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