HP » Topics » NOTE 8 ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

These excerpts taken from the HP 10-K filed Nov 26, 2008.

NOTE 8 ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The components of other comprehensive income for the years ended September 30, 2008, 2007 and 2006 were as follows (in thousands):

Years Ended September 30,

  2008

  2007

  2006

 
Unrealized appreciation (depreciation) on securities net
    of tax of $(10,558), $23,076 and $18,331
  $ (17,227 ) $ 37,654   $ 29,909  
Reclassification of realized gains in net income net of
    tax of $8,358, $24,874 and $7,548
    (13,636 )   (40,584 )   (12,318 )
Minimum pension liability adjustments net of
    tax of $5,621 and $2,765
        9,170     4,510  
Amortization of net periodic benefit costs – net of actuarial gain, net of tax of $(4,054)     (6,615 )        
   
 
 
 
    $ (37,478 ) $ 6,240   $ 22,101  
   
 
 
 

The components of accumulated other comprehensive income (loss) at September 30, 2008 and 2007, net of applicable tax effects, were as follows (in thousands):

September 30,

  2008

  2007

Unrealized appreciation on securities   $ 42,078   $ 72,941
Unrecognized actuarial gain (loss) and prior service cost     (3,671 )   2,944
   
 
    $ 38,407   $ 75,885
   
 

65


NOTE 9 ACQUISITION OF TERRAVICI DRILLING SOLUTIONS

On May 21, 2008, the Company acquired a private limited partnership, TerraVici Drilling Solutions (TerraVici) in a transaction accounted for under the purchase method of accounting. Under the purchase method of accounting, the assets acquired and liabilities assumed of TerraVici are recorded as of the acquisition date, at their respective fair values, and consolidated with those of the Company. TerraVici's results of operations are included in the Company's consolidated financial statements from the date of acquisition. TerraVici is included with all other non-reportable business segments.

The Company paid $12.2 million to acquire TerraVici and it is now a wholly-owned subsidiary of the Company. The total purchase price included acquisition-related costs of $1.2 million. The terms of the transaction provide for future contingency payments up to $11 million based on specific commerciality milestones and certain earn-out provisions based on future earnings being met.

TerraVici is developing patented rotary steerable technology to enhance horizontal and directional drilling operations. The Company acquired TerraVici to complement technology currently used with the FlexRig. By combining this new technology with the Company's existing capabilities, the Company expects to improve drilling productivity and reduce total well cost to the customer.

The acquisition was accounted for using the purchase method of accounting and the purchase price allocation resulted in the following amounts being allocated to the assets acquired and liabilities assumed at the acquisition date based upon their respective fair values.

 
  May 21, 2008

 
      Amounts in thousands  
Current assets   $ 371  
Fixed assets     4,257  
Trademark     919  
In-process research and development     11,129  
Other noncurrent assets     280  
   
 
Assets acquired     16,956  
Liabilities assumed     (5,477 )
   
 
Net assets acquired     11,479  
Goodwill     702  
   
 
Acquisition cost   $ 12,181  
   
 

The fair value of the acquired intangible assets consists primarily of indefinite-lived trademarks of $0.9 million and non-compete agreements of $0.3 million. The weighted average amortization period for the non-compete agreements is 4.0 years.

In-process research and development, or IPR&D, represents rotary steerable system (RSS) tools under development by TerraVici at the date of acquisition that had not yet achieved technological feasibility, and would have no future alternative use. Accordingly, the purchase price allocated to IPR&D was expensed

66



immediately subsequent to the acquisition. This charge will be amortized over 15 years for tax purposes. The $11.1 million estimated fair value of IPR&D was derived using the multi-period excess-earnings method.

Pro forma summary financial results for the fiscal year ended September 30, 2008 are not presented because the consolidated results of operations, assuming the acquisition of TerraVici had occurred at the beginning of the reporting period, is not materially different from the Consolidated Statement of Income as reported.

The excess of purchase price over the fair value assigned to the assets acquired and liabilities assumed represents the goodwill resulting from the acquisition. The amount allocated to goodwill is preliminary and subject to change, depending on the results of the final purchase price allocation. The Company does not expect any portion of this goodwill to be deductible for tax purposes. The goodwill attributable to the Company's acquisition of TerraVici has been recorded as a noncurrent asset in the Company's September 30, 2008 Consolidated Balance Sheet and will not be amortized.

The allocation of the purchase price is subject to finalization of the Company's management analysis of the fair value of the assets acquired and liabilities assumed of TerraVici as of the acquisition date. The final allocation of the purchase price may result in additional adjustments to the recorded amounts of asset and liabilities and may also result in adjustments to depreciation, amortization and acquired in-process research and development. The final allocation is expected to be completed as soon as practicable but no later than 12 months after the acquisition date.

NOTE 8 ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)



The components of other comprehensive income for the years ended September 30, 2008, 2007 and 2006 were as follows (in thousands):




































































































Years Ended September 30,


 2008

 2007

 2006

 
Unrealized appreciation (depreciation) on securities net

    of tax of $(10,558), $23,076 and $18,331
 $(17,227)$37,654 $29,909 
Reclassification of realized gains in net income net of

    tax of $8,358, $24,874 and $7,548
  (13,636) (40,584) (12,318)
Minimum pension liability adjustments net of

    tax of $5,621 and $2,765
    9,170  4,510 
Amortization of net periodic benefit costs – net of actuarial gain, net of tax of $(4,054)  (6,615)    
  
 
 
 
  $(37,478)$6,240 $22,101 
  
 
 
 




The components of accumulated other comprehensive income (loss) at September 30, 2008 and 2007, net of applicable tax effects, were as follows (in
thousands):





















































September 30,


 2008

 2007

Unrealized appreciation on securities $42,078 $72,941
Unrecognized actuarial gain (loss) and prior service cost  (3,671) 2,944
  
 
  $38,407 $75,885
  
 



65









NAME="page_ly10202_1_66">





NOTE 9 ACQUISITION OF TERRAVICI DRILLING SOLUTIONS



On May 21, 2008, the Company acquired a private limited partnership, TerraVici Drilling Solutions (TerraVici) in a transaction accounted for under the
purchase method of accounting. Under the purchase method of accounting, the assets acquired and liabilities assumed of TerraVici are recorded as of the acquisition date, at their respective fair
values, and consolidated with those of the Company. TerraVici's results of operations are included in the Company's consolidated financial statements from the date of acquisition. TerraVici is
included with all other non-reportable business segments.



The
Company paid $12.2 million to acquire TerraVici and it is now a wholly-owned subsidiary of the Company. The total purchase price included acquisition-related costs of $1.2 million.
The terms of the transaction provide for future contingency payments up to $11 million based on specific commerciality milestones and certain earn-out provisions based on future
earnings being met.



TerraVici
is developing patented rotary steerable technology to enhance horizontal and directional drilling operations. The Company acquired TerraVici to complement technology currently used with the
FlexRig. By combining this new technology with the Company's existing capabilities, the Company expects to improve drilling productivity and reduce total well cost to the customer.



The
acquisition was accounted for using the purchase method of accounting and the purchase price allocation resulted in the following amounts being allocated to the assets acquired and liabilities
assumed at the acquisition date based upon their respective fair values.
















































































































 
 May 21, 2008

 
   Amounts in thousands 
Current assets $371 
Fixed assets  4,257 
Trademark  919 
In-process research and development  11,129 
Other noncurrent assets  280 
  
 
Assets acquired  16,956 
Liabilities assumed  (5,477)
  
 
Net assets acquired  11,479 
Goodwill  702 
  
 
Acquisition cost $12,181 
  
 




The fair value of the acquired intangible assets consists primarily of indefinite-lived trademarks of $0.9 million and non-compete agreements
of $0.3 million. The weighted average amortization period for the non-compete agreements is 4.0 years.



In-process
research and development, or IPR&D, represents rotary steerable system (RSS) tools under development by TerraVici at the date of acquisition that had not yet achieved
technological feasibility, and would have no future alternative use. Accordingly, the purchase price allocated to IPR&D was expensed



66











immediately
subsequent to the acquisition. This charge will be amortized over 15 years for tax purposes. The $11.1 million estimated fair value of IPR&D was derived using the
multi-period excess-earnings method.



Pro
forma summary financial results for the fiscal year ended September 30, 2008 are not presented because the consolidated results of operations, assuming the acquisition of TerraVici had
occurred at the beginning of the reporting period, is not materially different from the Consolidated Statement of Income as reported.




The
excess of purchase price over the fair value assigned to the assets acquired and liabilities assumed represents the goodwill resulting from the acquisition. The amount allocated to goodwill is
preliminary and subject to change, depending on the results of the final purchase price allocation. The Company does not expect any portion of this goodwill to be deductible for tax purposes. The
goodwill attributable to the Company's acquisition of TerraVici has been recorded as a noncurrent asset in the Company's September 30, 2008 Consolidated Balance Sheet and will not be amortized.



The
allocation of the purchase price is subject to finalization of the Company's management analysis of the fair value of the assets acquired and liabilities assumed of TerraVici as of the acquisition
date. The final allocation of the purchase price may result in additional adjustments to the recorded amounts of asset and liabilities and may also result in adjustments to depreciation, amortization
and acquired in-process research and development. The final allocation is expected to be completed as soon as practicable but no later than 12 months after the acquisition date.



This excerpt taken from the HP 10-K filed Dec 13, 2006.

NOTE 9 ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The table below presents changes in the components of accumulated other comprehensive income (loss).

 
  Unrealized Appreciation
(Depreciation)
on Securities

  Interest Rate
Swap

  Minimum Pension
Liability

  Total
 
 
 
 

 

 

 

(in thousands)

 
Balance at September 30, 2003   $ 39,851   $ (72 ) $ (6,111 ) $ 33,668  
   
 
2004 Change:                          
  Pre-income tax amount     31,420         (1,951 )   29,469  
  Income tax provision     (11,940 )       742     (11,198 )
  Amortization of swap (net of $45 income tax benefit)         72         72  
  Realized gains in net income (net of $9,659 income tax)     (15,759 )             (15,759 )
   
 
      3,721     72     (1,209 )   2,584  
   
 
Balance at September 30, 2004     43,572         (7,320 )   36,252  
   
 
2005 Change:                          
  Pre-income tax amount     24,588         (5,510 )   19,078  
  Income tax provision     (9,343 )       2,094     (7,249 )
  Realized gains in net income (net of $328 income tax)     (537 )               (537 )
   
 
      14,708         (3,416 )   11,292  
   
 
Balance at September 30, 2005     58,280         (10,736 )   47,544  
   
 
2006 Change:                          
  Pre-income tax amount     48,240         7,275     55,515  
  Income tax provision     (18,331 )       (2,765 )   (21,096 )
  Realized gains in net income (net of $7,548 income tax)     (12,318 )               (12,318 )
   
 
      17,591         4,510     22,101  
   
 
Balance at September 30, 2006   $ 75,871   $   $ (6,226 ) $ 69,645  
   
 

62


"NOTE 8 ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)" elsewhere:

Bill Barrett (BBG)
Rex Energy Corp. (REXX)
Wikinvest © 2006, 2007, 2008, 2009, 2010, 2011, 2012. Use of this site is subject to express Terms of Service, Privacy Policy, and Disclaimer. By continuing past this page, you agree to abide by these terms. Any information provided by Wikinvest, including but not limited to company data, competitors, business analysis, market share, sales revenues and other operating metrics, earnings call analysis, conference call transcripts, industry information, or price targets should not be construed as research, trading tips or recommendations, or investment advice and is provided with no warrants as to its accuracy. Stock market data, including US and International equity symbols, stock quotes, share prices, earnings ratios, and other fundamental data is provided by data partners. Stock market quotes delayed at least 15 minutes for NASDAQ, 20 mins for NYSE and AMEX. Market data by Xignite. See data providers for more details. Company names, products, services and branding cited herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by Wikinvest.
Powered by MediaWiki