EQUITY METHOD INVESTMENTS Footnote

6 Months Ended

Jun. 30, 2019

Equity Method Investments and Joint Ventures [Abstract]

Equity Method Investments and Joint Ventures Disclosure [Text Block]

The Company accounts for the following investments in affiliated companies under the equity method of accounting.

Graphic Packaging International Partners, LLC

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 a subsidiary of 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 that holds the assets of the combined business. The Company recorded equity earnings of $14 million and $15 million for the three months ended June 30, 2019 and 2018, respectively, and $27 million and $17 million for the six months ended June 30, 2019 and 2018, respectively. The Company received cash dividends from GPIP of $12 million and $6 million during the first six months of 2019 and 2018, respectively. The Company's investment in GPIP was $1.1 billion at both June 30, 2019 and December 31, 2018, which was $565 million and $562 million, respectively, more than the Company's proportionate share of the entity's underlying net assets. The difference primarily relates to the basis difference between the fair value of our investment and the underlying net assets, and is generally amortized in equity earnings over a period consistent with the underlying long-lived assets. The Company is party to various agreements with GPI under which it sells fiber and other products to GPI. Sales under these agreements were $74 million and $58 million for the three months ended June 30, 2019 and 2018, respectively, and $143 million and $118 million for the six months ended June 30, 2019 and 2018, respectively.

Summarized financial information for GPIP is presented in the following tables:

Balance Sheet

In millions	June 30, 2019		December 31, 2018
Current assets	$	1,855	$	1,757
Noncurrent assets	5,420		5,292
Current liabilities	1,070		1,148
Noncurrent liabilities	3,403		3,156

Income Statement

	Three Months Ended June 30,				Six Months Ended June 30,
In millions	2019		2018		2019		2018
Net sales	$	1,553	$	1,509	$	3,059	$	2,985
Gross profit	288		235		554		458
Income from continuing operations	105		81		200		143
Net income	105		81		200		143

Ilim S.A.

The Company has a 50% equity interest in Ilim S.A. (Ilim), which has subsidiaries whose primary operations are in Russia. The Company recorded equity earnings (losses), net of taxes, of $67 million and $57 million for the three months ended June 30, 2019 and 2018, respectively, and $168 million and $149 million for the six months ended June 30, 2019 and 2018, respectively. The Company received cash dividends from the joint venture of $239 million and $116 million during the first six months of 2019 and 2018, respectively. At June 30, 2019 and December 31, 2018, the Company's investment in Ilim was $466 million and $478 million, respectively, which was $149 million and $145 million, respectively, more than the Company's proportionate share of the joint venture's underlying net assets. The differences primarily relate to currency translation adjustments and the basis difference between the fair value of our investment at acquisition and the underlying net assets. The Company is party to a joint marketing agreement with JSC Ilim Group, a subsidiary of Ilim, under which the Company purchases, markets and sells paper produced by JSC Ilim Group. Purchases under this agreement were $59 million and $56 million for the three months

ended June 30, 2019 and 2018, respectively, and $112 million and $109 million for the six months ended June 30, 2019 and 2018, respectively.

Summarized financial information for Ilim is presented in the following tables:

Balance Sheet

In millions	June 30, 2019		December 31, 2018
Current assets	$	705	$	981
Noncurrent assets	2,234		1,710
Current liabilities	866		545
Noncurrent liabilities	1,417		1,470
Noncontrolling interests	21		11

Income Statement

	Three Months Ended June 30,				Six Months Ended June 30,
In millions	2019		2018		2019		2018
Net sales	$	594	$	698	$	1,213	$	1,375
Gross profit	304		402		640		776
Income from continuing operations	142		116		347		305
Net income	137		112		336		295