DTE Energy 2012 Annual Report Download - page 74
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Table of Contents
accordance with ASC 805, “Business Combinations.” The following is the Company's assignment as of the closing date of the consideration:
Cash $ 22
Accounts receivable 14
Other current assets 8
Property, plant and equipment 100
Intangible assets 75
Other noncurrent assets 9
Current liabilities (7)
Non-controlling interest (1)
Total purchase price $220
The Company did not record any goodwill due to the acquisition.
The intangible assets recorded as a result of the acquisition pertain to existing contracts and agreements, which were valued at approximately $ 75
million as of the closing date. The fair value of the intangible assets acquired was estimated by applying the income approach. The income approach is based
upon discounted projected future cash flows attributable to the existing contracts and agreements. The fair value measurement is based on significant
unobservable inputs, including management estimates and assumptions, and thus represents a Level 3 measurement, pursuant to the applicable accounting
guidance. Key estimates and inputs include revenue and expense projections and discount rates based on the risks associated with the projects. The intangible
assets are amortized on a straight line basis over a weighted-average amortization period of approximately eight years.
The Company's 2012 results of operations include revenue of $ 30 million and net income of $2 million associated with the acquired project companies
for the approximate three-month period following the closing date. The pro forma results of operations have not been presented for DTE Energy because the
effects of the acquisition were not material to our consolidated results of operations.
Sale of Unconventional Gas Production Business
In December 2012, the Company sold its 100% equity interest in its Unconventional Gas Production business which consisted of gas and oil production
assets in the western Barnett and Marble Falls shale areas of Texas. The properties in the sale included all of the reserves on approximately 88,000 net acres
near Dallas, Texas. The sale resulted in gross proceeds of approximately $ 255 million, which resulted in a pre-tax loss of approximately $ 83 million ($55
million after tax). The sale price is subject to customary purchase price adjustments that will be recognized in the first half of 2013.
The activity of the discontinued Unconventional Gas Production business is shown below. The amounts exclude general corporate overhead costs, and
related tax effects, and no portion of corporate interest costs were allocated to discontinued operations.
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