Investments in and Advances to Affiliates

12 Months Ended

Dec. 31, 2021

Related Party Transactions [Abstract]

Transactions with Affiliates

INVESTMENTS IN AND ADVANCES TO AFFILIATES

At December 31, 2021, and 2020, we had an investment in a joint venture with Resolute Forest Products, Inc. to operate jointly owned I-Joist facilities in Quebec, Canada (Resolute-LP). Each partner owns 50% of the venture. We sell OSB web stock and LVL flanges to the Resolute-LP joint venture, both of which are used as raw materials for I-Joist manufacture. We purchase I-Joists manufactured by Resolute-LP for subsequent resale and distribution. We eliminate profits on these sales and purchases, to the extent the inventory has not been sold through to third parties, based on its 50% interest. For the years ended December 31, 2021, 2020, and 2019, we sold $58 million, $21 million, and $12 million, respectively, of OSB and LVL to Resolute-LP and purchased $170 million, $73 million, and $70 million, respectively, of I-Joists from Resolute-LP.

Included in our Consolidated Balance Sheets at December 31, 2021 and 2020, are $5 million and $7 million, respectively, in accounts receivable associated with Resolute-LP. For the years ended December 31, 2021, and 2020, we received $5 million and $4 million, respectively, in dividends from Resolute-LP. We classified the receipt of these cash dividends as cash flows from operations. Our cumulative equity in earnings from Resolute-LP exceeds the cumulative distributions received; therefore, the dividends were deemed to be a return on our investment and not a return of our investment.

We are the exclusive distributor of the I-Joists produced and sold by the joint venture, and it is considered an integral part of our operations. We classify the income from the joint venture as a reduction in cost of sales. LP recorded income from affiliates of $11 million in 2021, $4 million in 2020, and $11 million in 2019.

On February 14, 2022, we entered an agreement to sell our 50% equity interest in two joint ventures that produce I-joists to Resolute Forest Products Inc. for $50 million, subject to customary adjustments. The completion of the sale, subject to regulatory approvals and certain closing conditions, is expected to close in the first half of 2022.