EQUITY METHOD INVESTMENTS (Note)

9 Months Ended

Sep. 30, 2021

Equity Method Investments and Joint Ventures [Abstract]

Equity Method Investments and Joint Ventures Disclosure [Text Block]

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

Graphic Packaging International Partners, LLC

The Company completed the transfer of its North American Consumer Packaging business in exchange for an initial 20.5% ownership interest (79,911,591 units) in Graphic Packaging International Partners, LLC (GPIP) in 2018. The Company has since fully monetized its investment in GPIP with transactions beginning in the first quarter 2020 through the second quarter 2021.

GPIP Monetization Transactions

Date	Transaction Type	Units	Proceeds		Pre-tax Gain		After-Tax Gain
In millions except units
2020 First Quarter	Units exchange	15,150,784	$	250	$	33	$	25
2020 Third Quarter	Units exchange	17,399,414	250		—		—
2021 First Quarter	Units exchange and open market sale	24,588,316	397		33		25
2021 First Quarter	TRA				41		31
2021 Second Quarter	Units exchange and open market sale	22,773,077	402		64		48
2021 Second Quarter	TRA (a)				66		50

(a) The TRA entitles the Company to 50% of the amount of any tax benefits projected to be realized by GPIP upon the Company's exchange of its units. This amount is recorded in other receivables and is expected to be received within the next 12 months.

As of June 30, 2021, the Company no longer had an ownership interest in GPIP. The Company recorded equity earnings of $11 million for the three months ended September 30, 2020 and $4 million and $29 million for the nine months ended September 30, 2021 and 2020, respectively. There were no equity earnings recorded for the three months ended September 30, 2021. The Company received cash dividends from GPIP of $5 million and $16 million during the first nine months of 2021 and 2020, respectively.

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 $95 million and $(33) million for the three months ended September 30, 2021 and 2020, respectively, and $245 million and $(5) million for the nine months ended September 30, 2021 and 2020, respectively. Foreign exchange gains (losses) included in equity earnings for the three months and nine months ended September 30, 2021, were not material and JSC Ilim Group had no U.S. dollar-denominated debt outstanding as of September 30, 2021. Equity earnings (losses) for the three months and nine months ended September 30, 2020, included after-tax foreign exchange losses of $55 million and $72 million, respectively, primarily on the remeasurement of U.S. dollar-denominated net debt. The Company received cash dividends from the joint venture of $144 million and $141 million during the first nine months of 2021 and 2020, respectively. At September 30, 2021 and December 31, 2020, the Company's investment in Ilim was $517 million and $393 million, respectively, which was $131 million and $127 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. Prior to the spin-off of the Printing Papers segment on October 1, 2021, the Company was party to a joint marketing agreement with JSC Ilim Group, a subsidiary of Ilim, under which the Company purchased, marketed and sold paper produced by JSC Ilim Group. Purchases under this agreement were $42 million and $41 million for the three months ended September 30, 2021 and 2020, respectively, and $125 million and $131 million for the nine months ended September 30, 2021 and 2020, respectively. The joint marketing agreement was conveyed to Sylvamo Corporation as part of the spin-off transaction on October 1, 2021.

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

Balance Sheet

In millions	September 30, 2021		December 31, 2020
Current assets	$	935	$	739
Noncurrent assets	3,069		2,733
Current liabilities	711		674
Noncurrent liabilities	2,487		2,249
Noncontrolling interests	34		17

Income Statement

	Three Months Ended September 30,				Nine Months Ended September 30,
In millions	2021		2020		2021		2020
Net sales	$	729	$	498	$	1,993	$	1,474
Gross profit	393		191		1,051		597
Income (loss) from continuing operations	190		(62)		498		7
Net income (loss)	182		(60)		481		7

The Company's remaining equity method investments are not material.