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➔ Note 14 - Goodwill
a) Manufacturing and sales companies
1. Breakdown by company
2002
(in millions of euros) Cost Amortization Net
Faurecia
- Bertrand Faure acquisition 839 (213) 626
- Sommer Allibert acquisition 166 (12) 154
Sommer Allibert group (*) 1,211 (110) 1,101
Faurecia Exhaust Systems 206 (31) 175
Other Faurecia subsidiaries 39 (16) 23
Peugeot Citroën do Brasil Automoveis 34 (34) -
Gefco KN GmbH & Co 36 (7) 29
Automotiv Pazarlama AS (Popas) 12 - 12
Total 2,543 (423) 2,120
* In 2002, additional fair adjustments of €99 million were made to identifiable assets
and liabilities. These adjustments increase the gross amount of goodwill arising on
the acquisition by the Group of the shares in Sommer Allibert and its subsidiaries
to €1,211 million.
2001
(in millions of euros) Cost Amortization Net
Faurecia
- Bertrand Faure acquisition 839 (172) 667
- Sommer Allibert acquisition 166 (4) 162
Sommer Allibert group 1,112 (48) 1,064
Faurecia Exhaust Systems 245 (24) 221
Other Faurecia subsidiaries 38 (15) 23
Peugeot Citroën Argentina 303 (303) -
Peugeot Citroën do Brasil Automoveis 57 - 57
Gefco KN GmbH & Co 36 (5) 31
Total 2,796 (571) 2,225
2000
(in millions of euros) Cost Amortization Net
Faurecia (Bertrand Faure acquisition) 839 (129) 710
Faurecia Exhaust Systems 232 (12) 220
Other Faurecia subsidiaries 30 (13) 17
Peugeot Citroën Argentina 287 (214) 73
Gefco KN GmbH & Co 36 (2) 34
Total 1,424 (370) 1,054
2. Movements
(in millions of euros) 2002 2001 2000
Opening balance, net 2,225 1,054 1,215
Sommer Allibert acquisition 100 1,112 N/A
Transfer of SIT (Sommer Allibert)
shares to Faurecia - 166 N/A
Goodwill on acquisitions for the year
and translation adjustment (45) 86 97
Amortization for the year (128) (118) (70)
Exceptional amortization (32) (75) (188)
Closing balance, net 2,120 2,225 1,054
Faurecia
In 2002, the book value of the assets of each of Faurecia’s businesses,
including goodwill, was compared to the sum of the discounted future
cash flows expected to be generated by the assets, based on the latest
projections. The calculation was performed by extrapolating to perpetuity
projected cash flows for the last year of the current business plan (2006)
based on a growth rate of 2%. A discount rate of 7.5% was applied.
Based on the comparison between the book values of the assets and the
sum of the corresponding discounted future cash flows, no impairment
loss was recorded in respect of goodwill.
Goodwill recognized on acquisition of the Sommer Allibert group in
2001 amounted to €1,278 million. Details of this amount are provided
in note 3-c 1. This goodwill is being amortized over 20 years, from the
date of acquisition of the various blocks of shares. The amortization
charge for 2001 was €52 million.
Peugeot Citroën Argentina
Exceptional amortization of goodwill recorded in 2001 and 2000
concerned Peugeot Citroën Argentina and included:
In 2001:
- Amortization of €56 million offset by the reversal of an equivalent
amount from contingency reserves, following the favorable outcome
of a risk that was recorded in the balance sheet of Peugeot Citroën
Argentina when the company was first consolidated.
- Additional amortization of €19 million to write off the balance of the
goodwill in accordance with the principle described in note 1-l.
In 2000:
- Amortization of €61 million offset by the reversal of an equivalent
amount from contingency reserves, following the favorable outcome
of a risk that was recorded in the balance sheet of Peugeot Citroën
Argentina when the company was first consolidated;
- Additional amortization of €127 million recorded in accordance with
the policy described in note 1-l.
Peugeot Citroën do Brasil Automoveis
In 2002, the balance of goodwill arising on acquisition of Peugeot
Citroën do Brasil Automoveis was written off in accordance with the
policy described in note 1-l.
b) Finance companies
Goodwill concerns Crédipar.
The gross amount is €100 million, amortized over 20 years. Accumulated
amortization at December 31, 2002 amounted to €20 million and
the net book value of goodwill at that date was €80 million.
The carrying value of goodwill, under assets, is covered by future
cash flows and it is not necessary to record any impairment.
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