DIVESTITURES / SPINOFF Footnote

6 Months Ended

Jun. 30, 2019

Discontinued Operations and Disposal Groups [Abstract]

Disposal Groups, Including Discontinued Operations, Disclosure [Note Text Block]

Discontinued Operations

On January 1, 2018, the Company completed the transfer of its North American Consumer Packaging business, which included its North American Coated Paperboard and Foodservice businesses, to Graphic Packaging International Partners, LLC (GPIP), a subsidiary of Graphic Packaging Holding Company, in exchange for a 20.5% ownership interest in GPIP. GPIP subsequently transferred the North American Consumer Packaging business to Graphic Packaging International, LLC (GPI), a wholly owned subsidiary of GPIP. International Paper is accounting for its ownership interest in the combined business under the equity method. The Company determined the fair value of its investment in the combined business and recorded a pre-tax gain of $516 million ($385 million after taxes) on the transfer in the first quarter of 2018, subject to final working capital settlement. During the second quarter of 2018, the Company recorded a pre-tax charge of $28 million ($21 million after taxes) to adjust the previously recorded gain on the transfer. 

The following summarizes the major classes of line items comprising Earnings (Loss) Before Income Taxes and Equity Earnings reconciled to Discontinued operations, net of tax, related to the transfer of the North American Consumer Packaging business for all periods presented in the consolidated statement of operations:

	Three Months Ended June 30,			Six Months Ended June 30,
In millions	2018			2018
Net Sales	$	—		$	—
Costs and Expenses
Selling and administrative expenses	2			25
(Gain) loss on transfer of business	28			(488		)
Earnings (Loss) Before Income Taxes and Equity Earnings	(30		)	463
Income tax provision (benefit)	(7		)	118
Discontinued Operations, Net of Taxes	$	(23	)	$	345

Total cash used for operations related to the North American Consumer Packaging business of $25 million for the six months ended June 30, 2018, is included in Cash Provided By (Used For) Operations in the consolidated statement of cash flows. Total cash used for investing activities related to the North American Consumer Packaging business of $40 million for the six months ended June 30, 2018, is included in Cash Provided By (Used For) Investing Activities in the consolidated statement of cash flows.

Other Divestitures

On May, 29, 2019, the Company announced that it had entered into an agreement with West Coast Paper Mills Limited (WCPM) to sell its controlling interest in International Paper APPM Limited (APPM), an India-based paper business, for ₨275 (Indian Rupees) per share. International Paper currently owns approximately 30 million shares, or 75% of the outstanding shares of APPM. The transaction is expected to be completed by the end of the year subject to satisfaction of customary closing conditions, including obtaining required governmental approvals and WCPM's launch of a tender offer. Once this transaction closes, WCPM will be responsible for the operations of APPM, and International Paper will be a passive investor until such time that IP has sold its remaining share in APPM.

In conjunction with the announced agreement, a determination was made that the current book value of the APPM disposal group exceeded its estimated fair value of $119 million which was based on the agreed upon transaction price. As a result, a preliminary pre-tax charge of $152 million ($150 million after taxes) was recorded during the second quarter of 2019. This charge included $95 million related to the cumulative foreign currency translation loss and a $57 million loss related to the write down of the long-lived assets of APPM to their estimated fair value. This charge is included in the Net (gains) losses on sales and impairments of businesses in the accompanying consolidated statement of operations and is included in the results for the Printing Papers segment. A loss of $7 million (before and after taxes) has been allocated to the noncontrolling interest related to the impairment of the long-lived assets of APPM.

At June 30, 2019, all assets and liabilities related to APPM are classified as current assets held for sale and current liabilities held for sale in the accompanying consolidated balance sheet. The following summarizes the major classes of assets and liabilities of APPM reconciled to total Assets held for sale and total Liabilities held for sale in the accompanying consolidated balance sheet:

In millions	June 30, 2019
Cash and temporary investments	$	21
Accounts and notes receivable	15
Inventories	25
Other current assets	16
Plants, properties and equipment	199
Deferred charges and other assets	10
Total Assets Held for Sale	$	286
Accounts payable and accrued liabilities	$	18
Other current liabilities	28
Deferred income taxes	50
Other liabilities	2
Net impairment reserve	152
Total Liabilities Held for Sale	$	250