EQUITY METHOD INVESTMENTS Footnote

9 Months Ended

Sep. 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. As of September 30, 2019, the Company's ownership interest in GPIP was 21.6%. The Company recorded equity earnings of $10 million and $19 million for the three months ended September 30, 2019 and 2018, respectively, and $37 million and $36 million for the nine months ended September 30, 2019 and 2018, respectively. The Company received cash dividends from GPIP of $20 million and $12 million during the first nine months of 2019 and 2018, respectively. The Company's investment in GPIP was $1.1 billion at both September 30, 2019 and December 31, 2018, which was $534 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 $69 million and $62 million for the three months ended September 30, 2019 and 2018, respectively, and $212 million and $180 million for the nine months ended September 30, 2019 and 2018, respectively.

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

Balance Sheet

In millions	September 30, 2019		December 31, 2018
Current assets	$	1,765	$	1,757
Noncurrent assets	5,419		5,292
Current liabilities	1,067		1,148
Noncurrent liabilities	3,325		3,156

Income Statement

	Three Months Ended September 30,				Nine Months Ended September 30,
In millions	2019		2018		2019		2018
Net sales	$	1,581	$	1,530	$	4,640	$	4,515
Gross profit	266		256		820		714
Income from continuing operations	83		135		283		278
Net income	83		135		283		278

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, net of taxes, of $18 million and $74 million for the three months ended September 30, 2019 and 2018, respectively, and $186 million and $223 million for the nine months ended September 30, 2019 and 2018, respectively. The Company received cash dividends from the joint venture of $239 million and $118 million during the first nine months of 2019 and 2018, respectively. At September 30, 2019 and December 31, 2018, the Company's investment in Ilim was $477 million and $478 million, respectively, which was $146 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 $51 million and $50 million for the three months ended September 30, 2019 and 2018, respectively, and $162 million and $159 million for the nine months ended September 30, 2019 and 2018, respectively.

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

Balance Sheet

In millions	September 30, 2019		December 31, 2018
Current assets	$	749	$	981
Noncurrent assets	2,392		1,710
Current liabilities	947		545
Noncurrent liabilities	1,509		1,470
Noncontrolling interests	22		11

Income Statement

	Three Months Ended September 30,				Nine Months Ended September 30,
In millions	2019		2018		2019		2018
Net sales	$	479	$	655	$	1,692	$	2,030
Gross profit	196		376		836		1,152
Income from continuing operations	41		149		388		454
Net income	40		143		375		438