Deutsche Post DHL - Annual Report 2011

Consolidated Financial Statements

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Consolidated Financial Statements

Notes to the Consolidated Financial Statements of Deutsche Post AG

Basis of preparation

2 Consolidated group

ACQUISITION OF TAG EQUITY

In mid-July 2011, Deutsche Post DHL acquired the company Tag EquityCo Limited, Cayman Islands, together with its subsidiaries. Tag Equity is an international provider of marketing execution and production services. The company has been assigned to the Williams Lea business unit within the SUPPLY CHAIN segment. Final purchase price allocation is presented in the following tables.

Final purchase price allocation for Tag Equity
€m
	Carrying amount	Adjustments	Fair value
ASSETS
Non-current assets	13	–	13
Customer relationships	–	47	47
Brand name	–	4	4
Software	–	11	11
Current assets	54	–	54
Cash and cash equivalents	5	–	5
	72	62	134
EQUITY AND LIABILITIES
Non-current liabilities and provisions	–	–	–
Deferred tax liabilities	–	16	16
Current liabilities and provisions	102	–	102
	102	16	118
Net assets			16

The customer relationships will be amortised over 20 years using the straight-line method, whilst the software will be amortised over five years. The brand name has an indefinite useful life.

Goodwill for Tag Equity
€m
		Fair value
Cost		91
Less net assets		16
Goodwill		75

The transaction costs for this acquisition amounted to €6 million. In addition, shareholder loans of €33 million were repaid.

The companies contributed €76 million to consolidated revenue and €11 million to consolidated EBIT since the date of initial consolidation. Inclusion of the companies as at 1 January 2011 would have affected consolidated revenue by adding €67 million and consolidated EBIT by adding €8 million.

Insignificant acquisitions in 2011

In the period up to 31 December 2011, Deutsche Post DHL acquired further subsidiaries that did not materially affect the Group’s net assets, financial position and results of operations, either individually or in the aggregate. These insignificant acquisitions are presented in the following:

Adcloud is a specialised provider of internet advertising space marketing and placement services. Eurodifarm is a specialist in the temperature-controlled distribution of pharmaceutical and diagnostic products. Standard Forwarding, a US company in the forwarding business, was acquired in order to expand capacity in the Freight business unit. Deutsche Post DHL acquired all of the shares of its LifeConEx LLC, USA, joint venture, previously held by LCAG USA Inc., USA. This company provides end-to-end cold chain logistics services for the life sciences industry. The change in the method of consolidation resulted in a gain of €1.3 million, which is reported in other operating income. Under the terms of an asset deal, DHL Supply Chain Pty. Limited, Australia, has acquired from Post Logistics Australasia assets and liabilities relating to its road freight transport and warehousing and storage services.

Insignificant acquisitions, 2011
€m
1 January to 31 December	Carrying amount	Adjustments	Fair value
ASSETS
Non-current assets	17	–	17
Current assets	25	–	25
Cash and cash equivalents	8	–	8
	50	–	50
EQUITY AND LIABILITIES
Non-current liabilities and provisions	6	–	6
Current liabilities and provisions	40	–	40
	46	–	46
Net assets			4