You are analyzing the property, plant, and equipment of three international paper and paper products companies:

• AbitibiBowater Inc. (NYSE: ABY) is a Canadian company that manufactures newsprint, commercial printing papers, and other wood products.

• International Paper Company (NYSE: IP) is a U.S. paper and packaging company.

• UPM-Kymmene Corporation (UPM) is a Finnish company that manufactures fine and specialty papers, newsprint, magazine papers, and other related products. The company’s common stock is listed on the Helsinki and New York stock exchanges.
Exhibit 10 presents selected information from the companies’ financial statements.

* Pulp and paper mills historical cost as disclosed in a footnote total $21,819 million. Depreciation expense and accumulated depreciation is not separately reported for mills.
Sources: For ABY, Form 10-K for the year ended 31 December 2008, filed 31 March 2009. For IP, Form 10-K for the year ended 31 December 2008, filed 20 February 2009. For UPM, annual report for the year ended 31 December 2008.
1. Based on the earlier data for each company, estimate the total useful life, age, and remaining useful life of PPE.
2. Interpret the estimates. What items might affect comparisons across these companies?
3. How does each company’s 2008 depreciation expense compare to its capital expenditures for the year?
4. Calculate and compare fixed asset turnover for each company.

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EXHIBIT 10 Currency (in millions): Historical cost total PPE, end of year Accumulated depreciation, end of year Net PPE, end of year Land included in PPE Average Net PPE Net Sales Annual depreciation expense (annual impairment) Capital expenditure Accounting standards PPE measurement Depreciation method Useful life of assets, in years, except as noted ABY Canadian $ $9,013 4,553 4,460 161 5,067 6,771 726 186 Canadian GAAP Historical cost Straight-line 20-40 (buildings); 5-20 (machinery and equipment); 40 (power plants) IP U.S. $ $29,815 15,613 14,202 Not separated 12,172 24,829 1,347 1,002 U.S. GAAP Historical cost Units-of-production for pulp and paper mills;* straight-line for other Straight-line depreciation rates are 2.5% to 8.5% (buildings) and 5% to 33% (machinery and equipment) UPM Euro 16,382 10,694 5,688 347 5,934 9,461 (182) 558 IFRS Historical cost Straight-line 25-40 (buildings); 15-20 (heavy equip.); 5-15 (light equip.)