International Paper 2012 Annual Report Download - page 86

of $58 million. Additionally, the Company purchased
a 21.5% stake of APPM in a public tender offer com-
pleted on October 8, 2011 for $105 million in cash.
International Paper recognized an unfavorable cur-
rency transaction loss of $9 million due to
strengthening of the dollar against the Indian Rupee
prior to the closing date, resulting from cash balan-
ces deposited in Indian Rupee denominated escrow
accounts.
In November 2011, International Paper appealed a
directive from the Securities and Exchange Board of
India (SEBI) that would require us to pay to the ten-
dering shareholders the equivalent per share value
of the non-compete payment that was paid to the
previous controlling shareholders. The Company has
deposited approximately $25 million into an escrow
account to fund the additional non-compete pay-
ments in the event SEBI’s direction is upheld. By an
order dated September 12, 2012, the Indian Secu-
rities Appellate Tribunal (SAT) upheld the SEBI
directive. As a result of this initial unfavorable ruling,
International Paper included the $25 million
escrowed cash amount in the final purchase price
consideration of APPM. On October 8, 2012, Interna-
tional Paper appealed the SAT’s decision to the
Indian Supreme Court.
APPM’s results of operations are included in the
consolidated financial statements from the date of
acquisition on October 14, 2011.
The following table summarizes the final allocation
of the purchase price to the fair value of assets and
liabilities acquired as of October 14, 2011.
In millions
Cash and temporary investments $3
Accounts and notes receivable 7
Inventory 43
Other current assets 13
Plants, properties and equipment 352
Goodwill 138
Deferred income tax asset 4
Other intangible assets 91
Other long-term assets 1
Total assets acquired 652
Accounts payable and accrued liabilities 67
Long-term debt 47
Other liabilities 11
Deferred income tax liability 90
Total liabilities assumed 215
Noncontrolling interest 37
Net assets acquired $400
The identifiable intangible assets acquired in con-
nection with the APPM acquisition included the fol-
lowing:
In millions
Estimated
Fair Value
Average
Remaining
Useful Life
Asset Class:
(at acquisition
date)
Non-compete agreement $58 6 years
Tradenames 20 Indefinite
Fuel supply agreements 5 2 years
Power purchase arrangements 5 5 years
Wholesale distribution network 3 18 years
Total $91
Pro forma information related to the acquisition of
APPM has not been included as it does not have a
material effect on the Company’s consolidated
results of operations.
2010: On June 30, 2010, International Paper com-
pleted the acquisition of SCA Packaging Asia (SCA)
for a purchase price of $202 million, including $168
million in cash plus assumed debt of $34 million. The
SCA packaging business in Asia consists of 13
corrugated box plants and two specialty packaging
facilities, which are primarily in China, along with
locations in Singapore, Malaysia and Indonesia.
SCA’s results of operations are included in the con-
solidated financial statements from the date of
acquisition on June 30, 2010.
The following table summarizes the final allocation
of the purchase price to the fair value of assets and
liabilities acquired as of June 30, 2010.
In millions
Cash and temporary investments $19
Accounts and notes receivable 70
Inventory 24
Other current assets 2
Plants, properties and equipment 103
Goodwill 30
Other intangible assets 38
Total assets acquired 286
Accounts payable and accrued liabilities 66
Deferred income tax liability 7
Other liabilities 3
Total liabilities assumed 76
Noncontrolling interest 8
Net assets acquired $202
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