RELATED PARTY TRANSACTIONS

12 Months Ended

Dec. 31, 2021

The following discussion summarizes activity between the Company and International Paper.

ALLOCATION OF GENERAL CORPORATE EXPENSES

The consolidated and combined statements of operations include expenses for certain centralized functions and other programs provided and administered by International Paper that were charged directly to the Company. In addition, for purposes of preparing these consolidated and combined financial statements for periods prior to the spin-off on a carve-out basis, we have been allocated a portion of International Paper’s total corporate expense. See Note 1 Background and Summary of Bu siness for a discussion of the methodology used to allocate corporate-related costs for purposes of preparing these financial statements on a carve-out basis.

RELATED PARTY SALES AND PURCHASES

The Company purchases certain of its products from International Paper which are produced in facilities that remained with International Paper. The Company continues to purchase uncoated freesheet and bristols pursuant to an offtake agreement between the Company and International Paper. The Company purchased inventory associated with the offtake agreements of $133 million during the period subsequent to the spin-off through December 31, 2021.

The Company purchases fiber pursuant to a fiber purchase agreement between the Company and International Paper. The Company purchased inventory associated with the fiber supply agreements of $52 million during the period subsequent to the spin-off through December 31, 2021.

RELATED PARTY RECEIVABLE

Related party receivable consists of the following:


In millions as of December 31	2021		2020
Due from Parent cash pool	$	—	$	202
Professional services provided to Parent / other	3		19
Total	$	3	$	221

Related party receivables are included in “Accounts and notes receivable” in the accompanying consolidated and combined balance sheets.

RELATED PARTY PAYABLE

Related party payable consists of the following:


In millions as of December 31	2021		2020
Inventory purchases	$	110	$	16
Other	—		9
Total	$	110	$	25

Related party payables are included in “Accounts payable” and “Other current liabilities” in the accompanying consolidated and combined balance sheets.

Included in our December 31, 2021 inventory purchases payable is a $77 million related party payable, pursuant to the terms of the supply and offtake agreements between the Company and International Paper, which will be paid for throughout the first six months of 2022.

Net transfers (to) from Parent are included within Parent company investment on the consolidated and combined balance sheets and statements of equity. The components of the net transfers (to) from International Paper are as follows:


In millions	2021		2020		2019
General financing activities	$	(661)	(494)		(565)
Corporate allocations	112		154		196
Stock-based compensation	10		15		19
Final spin-off adjustments (a)	(28)		—		—
Total net transfers (to) from Parent	$	(567)	$	(325)	$	(350)

(a) This amount includes a net out of period correction of $(85) million to the final Parent company investment as of the date of the Distribution. The amount is comprised of an understatement of Inventories of $32 million, an understatement of Deferred tax liabilities of $(8) million, an overstatement of Deferred Charges and Other Assets of $(196) million, and an understatement of accumulated cumulative translation losses of $87 million (see further discussion in Note 5). These amounts were determined to be immaterial to the current and prior periods.