Equity Method Investments (Note)

12 Months Ended

Dec. 31, 2019

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

On January 1, 2018, the Company completed the transfer of its North American Consumer Packaging business, which includes 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 that holds the assets of the combined business. As of December 31, 2019, the Company's ownership percentage in GPIP was 21.6%. The Company recorded equity earnings, net of taxes, of $46 million for each of the years ended December 31, 2019 and 2018. The Company received cash dividends from GPIP of $27 million and $25 million in 2019 and 2018, respectively. At both December 31, 2019 and 2018, the Company's investment in GPIP was $1.1 billion, which was $529 million and $562 million more than the Company's proportionate share of the entity's underlying net assets at December 31, 2019 and 2018, respectively. 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.

Management engaged a third party to assist with determining the fair value of the intangible assets and the fixed assets. The fair value of the intangible assets were calculated using income and market approaches and the fair value of the fixed assets was calculated using a cost approach. The fair values were determined using inputs classified as Level 2 and Level 3 within the fair value hierarchy, which is further defined in Note 17. The Company is party to various agreements with GPI under which it sells fiber and other products to GPI. Sales under these agreements were $274 million and $240 million for the years ended December 31, 2019 and 2018, respectively.

On January 29, 2020, the Company exchanged approximately 19.0% of the aggregate units owned by the Company for an aggregated price of $250 million. After this transaction, the Company's ownership percentage in GPIP is approximately 18.3%. The Company expects to record a gain on the exchange in the first quarter of 2020.

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

Balance Sheet

In millions	2019		2018
Current assets	$	1,796	$	1,757
Noncurrent assets	5,482		5,292
Current liabilities	1,178		1,148
Noncurrent liabilities	3,244		3,156

Income Statement

In millions	2019		2018
Net sales	$	6,160	$	6,023
Gross profit	1,093		946
Income from continuing operations	333		336
Net income	334		337

ILIM S.A. (Ilim)

The Company also holds a 50% equity interest in Ilim, which has subsidiaries whose primary operations are in Russia. The Company recorded equity earnings, net of taxes, of $207 million, $290 million, and $183 million

in 2019, 2018, and 2017, respectively, for Ilim. Equity earnings (losses) includes an after-tax foreign exchange (loss) gain of $32 million, $(82) million, and

$15 million in 2019, 2018 and 2017, respectively, primarily on the remeasurement of U.S. dollar-denominated net debt. The Company received cash

dividends from the joint venture of $246 million and $128 million in 2019 and 2018, respectively. At December 31, 2019 and 2018, the Company's investment in Ilim, which is recorded in Investments in the consolidated balance sheet, was $508 million and $478 million, respectively, which was $136 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 $215 million, $214 million and $205 million for the years ended December 31, 2019, 2018 and 2017, respectively.

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

Balance Sheet

In millions	2019		2018
Current assets	$	804	$	981
Noncurrent assets	2,813		1,710
Current liabilities	1,015		545
Noncurrent liabilities	1,844		1,470
Noncontrolling interests	16		11

Income Statement

In millions	2019		2018		2017
Net sales	$	2,189	$	2,713	$	2,150
Gross profit	1,025		1,549		1,047
Income from continuing operations	438		592		379
Net income	424		571		362

The audited U.S. GAAP financial statements for Ilim are included in Exhibit 99.1 to this Form 10-K.