DIVESTITURES Footnote

9 Months Ended

Sep. 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 September 30,		Nine Months Ended September 30,
In millions	2018		2018
Net Sales	$	—	$	—
Costs and Expenses
Selling and administrative expenses	—		25
(Gain) loss on transfer of business	—		(488		)
Earnings (Loss) Before Income Taxes and Equity Earnings	—		463
Income tax provision (benefit)	—		118
Discontinued Operations, Net of Taxes	$	—	$	345

Total cash used for operations related to the North American Consumer Packaging business of $25 million for the nine months ended September 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 nine months ended September 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 then owned approximately 30 million shares, or 75% of the outstanding shares of APPM.

In conjunction with the announced agreement in the second quarter of 2019, 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. During the third quarter of 2019, the Company recorded an additional charge of $8 million (before and after taxes), which included $2 million related to the change in cumulative foreign currency translation loss and a $6 million loss related to the change in the book value of the long-lived assets of APPM compared to the estimated fair value of the disposal group. These charges are included in the Net (gains) losses on sales and impairments of businesses line item in the accompanying consolidated statement of operations and is included in the results for the Printing Papers segment. A year-to-

date loss of $9 million (before and after taxes) has been allocated to the noncontrolling interest related to the impairment of the long-lived assets of APPM.

The transaction closed on October 30, 2019 and the Company retained a passive investment of 20% in APPM. During the fourth quarter of 2019, a final immaterial adjustment to the impairment charge to reflect the difference between the proceeds received from the transaction and the closing book value of the long-lived assets will be recorded. In addition, the Company will record our retained investment at fair value.

At September 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	September 30, 2019
Cash and temporary investments	$	19
Accounts and notes receivable	16
Inventories	23
Other current assets	19
Plants, properties and equipment	195
Deferred charges and other assets	6
Total Assets Held for Sale	$	278
Accounts payable and accrued liabilities	$	18
Other current liabilities	22
Deferred income taxes	47
Other liabilities	1
Net impairment reserve	160
Total Liabilities Held for Sale	$	248