International Paper 2012 Annual Report Download - page 88

be due to International Paper in 2012. On January 3,
2011, International Paper signed an agreement with
KapStone to allow KapStone to pay the Company on
January 4, 2011, the discounted amount of $50 mil-
lion before taxes ( $30 million after taxes) that
otherwise would have been owed in full under the
agreement in 2012. This amount has been included
in Discontinued operations, net of taxes in the
accompanying consolidated statement of operations.
In the third quarter of 2006, the Company completed
the sale of its Brazilian Coated Papers business and
restated its financial statements to reflect this busi-
ness as a discontinued operation. Included in the
results for this business in 2005 and 2006 were local
country tax contingency reserves for which the
related statute of limitations has now expired. A $15
million tax benefit for the reversal of these reserves
plus associated interest income of $6 million before
taxes ($4 million after taxes) was recorded in March
2011, and is included in Discontinued operations, net
of taxes in the accompanying consolidated state-
ment of operations.
OTHER DIVESTITURES AND IMPAIRMENTS
2012: As referenced in Note 5, on July 2, 2012,
International Paper finalized the sales of its Ontario
and Oxnard (Hueneme), California containerboard
mills to New-Indy Containerboard LLC, and its New
Johnsonville, Tennessee containerboard mill to
Hood Container Corporation. During 2012, the
Company recorded pre-tax charges of $29 million
($55 million after taxes) for costs associated with the
divestitures of these mills. Also during 2012, in
anticipation of the divestiture of the Hueneme mill, a
pre-tax charge of $62 million ($38 million after taxes)
was recorded to adjust the long-lived assets of the
mill to their fair value.
The net 2012 loss totaling $86 million related to other
divestitures and impairments is included in Net
(gains) losses on sales and impairments of busi-
nesses in the accompanying consolidated statement
of operations.
2011: On August 22, 2011, International Paper
announced that it had signed an agreement to sell its
Shorewood business to Atlas Holdings. As a result,
during 2011, net pre-tax charges of $207 million
(after a $246 million tax benefit and a gain of $8 mil-
lion related to a noncontrolling interest, a net gain of
$47 million) were recorded to reduce the carrying
value of the Shorewood business to fair market
value. As part of the transaction, International Paper
retained a minority interest of approximately 40% in
the newly combined AGI-Shorewood business out-
side the U.S. Since the interest retained represents
significant continuing involvement in the operations
of the business, the operating results of the Shore-
wood business were included in continuing oper-
ations in the accompanying consolidated statement
of operations instead of Discontinued operations.
The sale of the U.S. portion of the Shorewood busi-
ness to Atlas Holdings closed on December 31, 2011.
The sale of the remainder of the Shorewood busi-
ness occurred during January 2012. The assets of the
remainder of the Shorewood business, totaling $196
million at December 31, 2011, are included in Assets
of businesses held for sale in current assets in the
accompanying consolidated balance sheet. The
liabilities of the remainder of the Shorewood busi-
ness totaling $43 million at December 31, 2011 are
included in Liabilities of businesses held for sale in
current liabilities in the accompanying consolidated
balance sheet. Additionally, approximately $33 mil-
lion of currency translation adjustment was reflected
in OCI related to the remainder of the Shorewood
business at December 31, 2011.
Also during 2011, the Company recorded charges
totaling $11 million (before and after taxes) to further
write down the long-lived assets of its Inverurie,
Scotland mill to their estimated fair value.
The net 2011 loss totaling $218 million related to
other divestitures and impairments is included in Net
(gains) losses on sales and impairments of busi-
nesses in the accompanying consolidated statement
of operations.
2010: During 2010, the Company recorded a pre-tax
gain of $25 million ($15 million after taxes) as a
result of the partial redemption of the 10% interest
the Company retained in its Arizona Chemical busi-
ness after the sale of the business in 2006. The
Company received $37 million in cash from the
redemption of this interest.
The net 2010 gain totaling $23 million related to
other divestitures and impairments is included in Net
(gains) losses on sales and impairments of busi-
nesses in the accompanying consolidated statement
of operations.
NOTE 7 SUPPLEMENTARY FINANCIAL
STATEMENT INFORMATION
TEMPORARY INVESTMENTS
In millions at December 31 2012 2011
Temporary Investments $934 $2,904
ACCOUNTS AND NOTES RECEIVABLE
Accounts and notes receivable, net of allowances, by
classification were:
In millions at December 31 2012 2011
Accounts and notes receivable:
Trade $3,316 $3,039
Other 246 447
Total $3,562 $3,486
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