14. Variable Interest Entity

In February 2013, we executed definitive agreements providing for a 50/50 joint venture with Formosa Petrochemical Corporation (“FPCC”) to build, own and operate a 30 kiloton HSBC plant at FPCC’s petrochemical site in Mailiao, Taiwan. The joint venture company, Kraton Formosa Polymers Corporation (“KFPC”), is a Taiwan entity with each of Kraton and FPCC having equal representation on the board. Both Kraton and FPCC made an initial investment of approximately $15.2 million at inception, with an additional Kraton contribution of $15.0 million in August 2013. We have exclusive rights to purchase all production from KFPC. Additionally, we will be obligated to purchase a minimum volume each year, with the minimum obligation increasing over the first three years the plant is operational. As such, we have determined that we are the primary beneficiary of this variable interest entity and, therefore, have consolidated KFPC in our financial statements as of and for the nine months ended September 30, 2013 and have reflected FPCC’s ownership as a noncontrolling interest.

The following table summarizes the fair value of KFPC assets and liabilities as of February 27, 2013 recorded upon initial consolidation in our condensed consolidated balance sheet and the carrying amounts of such assets and liabilities as of September 30, 2013, before intercompany eliminations.

	September 30, 2013		February 27, 2013
	(In thousands)
Cash and cash equivalents	$	48,900	$	30,348
Other current assets		455		0
Property, plant and equipment		10,742		0
Intangible assets		10,257		0
Other long-term assets		320		0
Total assets	$	70,674	$	30,348
Current liabilities		2,882		0
Other long-term liabilities		7,138		0
Total liabilities	$	10,020	$	0