Other assets

12 Months Ended

Dec. 31, 2012

Other assets

Note 7—Other assets:

	December 31,
	2011		2012
	(In millions)
Investment in affiliates:
Ti02 manufacturing joint venture	$	89.2	$	109.9
Basic Management and Landwell		16.5		16.2
Total	$	105.7	$	126.1
Other assets:
Waste disposal site operating permits, net	$	66.6	$	65.7
Restricted cash		7.6		20.9
Deferred financing costs		2.0		7.0
IBNR receivables		6.5		6.7
Capital lease deposit		6.2		6.2
Assets held for sale		7.3		2.6
Other		67.9		46.7
Total	$	164.1	$	155.8

Investment in TiO₂ manufacturing joint venture. Our Chemicals Segment and another Ti0₂ producer, Tioxide Americas, Inc. (“Tioxide”), are equal owners of a manufacturing joint venture (Louisiana Pigment Company, L.P., or “LPC”) that owns and operates a TiO₂ plant in Louisiana. Tioxide is a wholly-owned subsidiary of Huntsman Corporation.

We and Tioxide are both required to purchase one-half of the TiO₂ produced by LPC, unless we and Tioxide agree otherwise (such as in 2012, when we purchased approximately 52% of the production from the plant). LPC operates on a break-even basis and, accordingly, we report no equity in earnings of LPC. Each owner’s acquisition transfer price for its share of the TiO₂ produced is equal to its share of the joint venture’s production costs and interest expense, if any. Our share of net cost is reported as cost of sales as the related TiO₂ acquired from LPC is sold. We report distributions we receive from LPC, which generally relate to excess cash generated by LPC from its non-cash production costs, and contributions we make to LPC, which generally relate to cash required by LPC when it builds working capital, as part of our cash flows from operating activities in our Consolidated Statements of Cash Flows. The components of our net distributions (contributions) from LPC are shown in the table below.

	Years ended December 31,
	2010			2011			2012
	(In millions)
Distributions from LPC	$	26.1		$	29.7		$	79.5
Contributions to LPC		(23.7	)		(25.9	)		(100.2	)
Net distributions (contributions)	$	2.4		$	3.8		$	(20.7	)

Summary balance sheets of LPC are shown below:

	December 31,
	2011		2012
	(In millions)
ASSETS
Current assets	$	108.5	$	139.8
Property and equipment, net		140.7		126.0
Total assets	$	249.2	$	265.8
LIABILITIES AND PARTNERS’ EQUITY
Other liabilities, primarily current	$	68.0	$	43.2
Partners’ equity		181.2		222.6
Total liabilities and partners’ equity	$	249.2	$	265.8

Summary income statements of LPC are shown below:

	Years ended December 31,
	2010		2011		2012
	(In millions)
Revenues and other income:
Kronos	$	133.7	$	144.8	$	250.2
Tioxide		134.5		145.7		227.5
		268.2		290.5		477.7
Cost and expenses:
Cost of sales		267.7		290.1		477.3
General and administrative		.5		.4		.4
		268.2		290.5		477.7
Net income	$	—	$	—	$	—

Investment in Basic Management and Landwell. We also own a 32% interest in Basic Management, Inc. (“BMI”), which provides utility services in the industrial park where one of TIMET’s plants is located, among other things. We also have a 12% interest in The Landwell Company (“Landwell”), which is actively engaged in efforts to develop certain real estate. BMI owns an additional 50% interest in Landwell. For federal income tax purposes Landwell is treated as a partnership, and accordingly the combined results of operations of BMI and Landwell include a provision for income taxes on Landwell’s earnings only to the extent that such earnings accrue to BMI. We record our equity in earnings of BMI and Landwell on a one-quarter lag because their financial statements are generally not available to us on a timely basis. Certain selected combined financial information of BMI and Landwell is summarized below.

	September 30,
	2011		2012
	(In millions)
ASSETS
Current assets	$	16.1	$	25.7
Prepaid costs and other		19.9		11.6
Property and equipment, net		6.5		6.4
Investment in undeveloped land and water rights		40.4		42.0
Land and development costs		13.5		12.7
Total assets	$	96.4	$	98.4
LIABILITIES AND EQUITY
Current liabilities	$	5.7	$	14.2
Long-term debt		16.2		14.3
Deferred income taxes		5.9		6.0
Other noncurrent liabilities		6.7		3.4
Equity		61.9		60.5
Total liabilities and equity	$	96.4	$	98.4

	Twelve months ended September 30,
	2010			2011			2012
	(In millions)
Total revenues	$	6.9		$	10.0		$	10.4
Loss before income taxes		(4.6	)		(2.7	)		(1.2	)
Net loss		(3.6	)		(2.1	)		(1.4	)

Assets held for sale. At December 31, 2012 our assets held for sale consisted primarily of properties of our Component Products Segment which were formerly used in its operations, the River Grove facility (land, building and building improvements) and the Neenah land. These assets were classified as “assets held for sale” when they ceased to be used in our operations and met all of the applicable criteria under GAAP. In the third quarter of 2012 we obtained updated independent appraisals of the Byron Center and River Grove facilities. Based on these appraisals, we recognized write-downs in the third quarter of $.2 million on each of the Byron Center and River Grove facilities to reduce the carrying value of the assets to their estimated fair value less cost to sell. We sold the Byron Center facility in December 2012 for net proceeds of $3.6 million, which net proceeds were less than the carrying amount of the assets and we therefore recognized a loss on the sale of the facility of approximately $.8 million during the fourth quarter of 2012.

In the fourth quarter of 2012, we entered into an agreement to sell the River Grove facility. The transaction closed during the first quarter of 2013. The net proceeds from the sale approximate the carrying value of the assets as of December 31, 2012. The valuation of the River Grove facility as of December 31, 2012 is based on a sales contract with a third party which represents a Level 2 input as defined by ASC 820-10-35.

We also recognized asset held for sale write-downs of $.5 million in 2010 and $1.1 million in 2011 related to these properties, associated with obtaining updated appraisals on the properties. These appraisals represent a Level 2 input as defined by ASC 820-10-35.

Other. We have certain related party transactions with LPC and Basic Management, as more fully described in Note 16.

The IBNR receivables relate to certain insurance liabilities, the risk of which we have reinsured with certain third party insurance carriers. We report the insurance liabilities related to these IBNR receivables which have been reinsured as part of noncurrent accrued insurance claims and expenses. Certain of our insurance liabilities are classified as current liabilities and the related IBNR receivables are classified with prepaid expenses and other current assets. See Notes 10 and 16.

Restricted cash relates primarily relates to our Chemicals (see Notes 9 and 12) and Waste Management Segments (see Note 17).

The capital lease deposit relates to certain indebtedness of our Waste Management Segment and is discussed in Note 9.