International Paper 2015 Annual Report Download - page 75

58
PLANTS, PROPERTIES AND EQUIPMENT
In millions at December 31 2015 2014
Pulp, paper and packaging facilities $ 31,466 $31,805
Other properties and equipment 1,242 1,263
Gross cost 32,708 33,068
Less: Accumulated depreciation 20,728 20,340
Plants, properties and equipment, net $ 11,980 $12,728
In millions 2015 2014 2013
Depreciation expense $ 1,213 $1,308 $1,415
INTEREST
Cash payments related to interest were as follows:
In millions 2015 2014 2013
Interest payments $ 680 $ 718 $ 751
Amounts related to interest were as follows:
In millions 2015 2014 2013
Interest expense (a) $ 644 $ 677 $ 669
Interest income (a) 89 70 57
Capitalized interest costs 25 23 17
(a) Interest expense and interest income exclude approximately
$25 million, $38 million and $45 million in 2015, 2014 and 2013,
respectively, related to investments in and borrowings from
variable interest entities for which the Company has a legal
right of offset (see Note 12).
NOTE 9 GOODWILL AND OTHER INTANGIBLES
GOODWILL
The following tables present changes in the goodwill
balances as allocated to each business segment for the
years ended December 31, 2015 and 2014:
In millions
Industrial
Packaging
Printing
Papers
Consumer
Packaging Total
Balance as of January 1, 2015
Goodwill $3,396 $2,234 $1,784 $7,414
Accumulated impairment losses (a) (100) (1,877) (1,664) (3,641)
3,296 357 120 3,773
Reclassifications and other (b) (70) (95) (3) (168)
Additions/reductions (1) (15) (c) (117) (d) (133)
Impairment loss (137) (e) — —(137)
Balance as of December 31, 2015
Goodwill 3,325 2,124 1,664 7,113
Accumulated impairment losses (a) (237) (1,877) (1,664) (3,778)
Total $3,088 $247 $— $3,335
(a) Represents accumulated goodwill impairment charges since the
adoption of ASC 350, “Intangibles – Goodwill and Other” in 2002.
(b) Represents the effects of foreign currency translations and
reclassifications.
(c) Reflects a reduction from tax benefits generated by the deduction
of goodwill amortization for tax purposes in Brazil.
(d) Reduction due to the sale and de-consolidation of Shandong Sun
joint venture in Asia.
(e) Reflects a charge for goodwill impairment related to our Brazil
Industrial Packaging business.
In millions
Industrial
Packaging
Printing
Papers
Consumer
Packaging Distribution Total
Balance as of
January 1, 2014
Goodwill $3,430 $2,311 $1,787 $400 $7,928
Accumulated
impairment losses
(a) — (1,877) (1,664) (400) (3,941)
3,430 434 123 — 3,987
Reclassifications and
other (b) (34) (57) (3) — (94)
Additions/reductions — (20) (c) — — (20)
Impairment loss (100) (d) — —— (100)
Write off of goodwill —— —(400) (400)
Write off of
accumulated
impairment loss —— — 400 400
Balance as of
December 31, 2014
Goodwill 3,396 2,234 1,784 — 7,414
Accumulated
impairment losses
(a) (100) (1,877) (1,664) — (3,641)
Total $3,296 $357 $120 $— $3,773
(a) Represents accumulated goodwill impairment charges since the
adoption of ASC 350, “Intangibles – Goodwill and Other” in 2002.
(b) Represents the effects of foreign currency translations and
reclassifications.
(c) Reflects a reduction from tax benefits generated by the deduction
of goodwill amortization for tax purposes in Brazil.
(d) Reflects a charge of $100 million for goodwill impairment related
to our Asia Industrial Packaging business.
In the fourth quarter of 2015, in conjunction with the annual
testing of its reporting units for possible goodwill
impairments, the Company calculated the estimated fair
value of its Brazil Packaging business using its discounted
future cash flows and determined that all of the goodwill in
the business, totaling $137 million, should be written off.
The decline in the fair value of the Brazil Packaging
business and resulting impairment charge was due to the
negative impacts on the cash flows of the business caused
by the continued decline of the overall Brazilian economy.
In the fourth quarter of 2014, in conjunction with the annual
testing of its reporting units for possible goodwill
impairments, the Company calculated the estimated fair
value of its Asia Industrial Packaging business using the
discounted future cash flows and determined that all of the
goodwill in this business, totaling $100 million, should be
written off. The decline in the fair value of the Asia Industrial
Packaging business and resulting impairment charge was
due to a change in the strategic outlook for the business.
In the fourth quarter of 2013, in conjunction with the annual
testing of its reporting units for possible goodwill
impairments, the Company calculated the estimated fair
value of its India Papers business using the discounted
future cash flows and determined that all of the goodwill of
this business, totaling $112 million, should be written off.
The decline in the fair value of the India Papers reporting
unit and resulting impairment charge was due to a change
in the strategic outlook for the India Papers operations.
At December 31, 2013, there was $400 million of goodwill
and $400 million of accumulated impairment losses
included in the consolidated balance sheet associated with