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Acquisition of Alkali Chemicals Group
 3 Months Ended
Mar. 31, 2017
Acquisition of Alkali Chemicals Group [Abstract]  
Acquisition of Alkali Chemicals Group
19.
Acquisition of Alkali Chemicals Group

On April 1, 2015, we acquired Alkali because it diversifies our end markets and revenue base, and increases our participation in faster growing emerging market economies. We believe it also provides us greater opportunity to utilize a portion of our U.S. tax attributes in future periods. See Note 3 for a discussion of the tax impact of the Alkali Transaction. We accounted for the Alkali Transaction using the acquisition method under ASC 805, Business Combinations, which requires recording assets acquired and liabilities assumed at fair value. Under the acquisition method of accounting, the assets acquired and liabilities assumed were recorded based on their estimated fair values on the Alkali Transaction Date. The results of the Alkali chemical business are included in the Alkali segment. The valuations were derived from estimated fair value assessments and assumptions used by management.
 
We funded the Alkali Transaction through existing cash and new debt. See Note 11 for further details of the Alkali Transaction financing.

Purchase Price Allocation

  
Valuation
 
Consideration:
   
Purchase price
 
$
1,650
 
     
Fair Value of Assets Acquired and Liabilities Assumed:
    
Current Assets:
    
Accounts receivable
 
$
147
 
Inventories
  
48
 
Prepaid and other assets
  
32
 
Total Current Assets
  
227
 
     
Property, plant and equipment (1)
  
767
 
Mineral leaseholds (2)
  
739
 
Other long-term assets
  
3
 
     
Total Assets
 
$
1,736
 
     
Current Liabilities:
    
Accounts payable
  
46
 
Accrued liabilities
  
28
 
Total Current Liabilities
  
74
 
     
Noncurrent Liabilities:
    
Other
  
12
 
     
Total Liabilities
  
86
 
     
Net Assets
 
$
1,650
 

(1)
The fair value of property, plant and equipment was determined using the cost approach, which estimates the replacement cost of each asset using current prices and labor costs, less estimates for physical, functional and technological obsolescence, based on the estimated useful life ranging from 5 to 38 years

(2)
The fair value of mineral rights was determined using the Discounted Cash Flow method, which was based upon the present value of the estimated future cash flows for the expected life of the asset taking into account the relative risk of achieving those cash flows and the time value of money. A discount rate of 10.4% was used taking into account the risks associated with such assets.

There were no contingent liabilities currently recorded in the fair value of net assets acquired as of the Alkali Transaction Date, and the fair value of net assets acquired includes accounts receivables with book value that approximates fair value.