SAPPI LTD (SAP) 6-K

G. Financial information for Sappi was extracted from the published consolidated results of Sappi for the year ended September 2007 prepared in
accordance with IFRS as issued by the IASB and from the published condensed reviewed results for the nine months ended June 2008 prepared in
accordance with International Accounting Standard 34, Interim Financial Reporting .
H. The allocation of the Transaction Consideration reflected in the pro forma financial effects is preliminary based on estimated fair values and the
estimated Transaction Consideration. It will eventually be adjusted based on a complete assessment of the fair value of the net Assets Acquired and the
final Transaction Consideration. The final Transaction Consideration allocation is dependent on, among other things, the finalisation of asset and liability
valuations. Any final adjustment will change the allocation of the Transaction Consideration, which will affect the fair value assigned to the assets and
liabilities and could result in a material change to the pro forma financial effects, including a change to goodwill.
I. Pro forma adjustments include an adjustment to depreciation relating to the preliminary fair value assigned to property, plant and equipment to eliminate
estimated historical expense and interest expense to take into account the financing of the Transaction. These adjustments have been tax effected at an
estimated statutory tax rate for the combined group of 28.3%.
J. The pro forma financial effects are presented for information purposes only, and do not purport to represent what Sappi’s actual results of operations or
financial condition would have been had the Transaction and the financing thereof occurred on the dates indicated, nor are they necessarily indicative of
future results of operations or financial condition.
K. The pro forma headline earnings per share for the nine months ended June 2008 and the twelve months ended September 2007 exclude a net asset
impairment reversal of EUR 111 million recorded by the Acquired Business. The impact thereof for the nine months ended June 2008 and the twelve
months ended September 2007 is 51 US cents and 54 US cents respectively.
12.1. Goodwill
The difference between the preliminary cost of the Transaction and the preliminary estimated fair value of assets and liabilities acquired of €80 million (US
$126 million) has provisionally been attributed to goodwill and not amortised. Post completion of the Transaction, Sappi will complete its analysis of the
measurement of the cost of the Transaction and the allocation of the purchase price to the Acquired Business’s identifiable assets, liabilities and contingent
liabilities as required by IFRS 3: Business Combinations. As a consequence the goodwill amount may change. The goodwill on the Transaction relates to
future cash flows that will be realised due to the acquisition and synergies of the combined Sappi and the Acquired Business.
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