ASSETS IMPAIRMENTS AND RESTRUCTURING

6 Months Ended

Jun. 30, 2020

Restructuring Costs and Asset Impairment Charges [Abstract]

ASSET IMPAIRMENTS AND RESTRUCTURING CHARGES, NET


	Second Quarter						First Six Months
(Dollars in millions)	2020		2019		2020		2019
Fixed asset impairments	$	13	$	—	$	20	$	—

Intangible asset impairments	123		—		125		—
Severance charges	2		16		7		44
Other restructuring costs	3		2		3		6
Total	$	141	$	18	$	155	$	50

In second quarter and first six months 2020 the Company recognized intangible asset impairments of $123 million in the Additives & Functional Products ("AFP") segment tire additives business to reduce the carrying value of the Crystex^™ and Santoflex^™ tradenames to the estimated fair value. The estimated fair value was determined using an income approach, specifically, the relief from royalty method, including some unobservable inputs. The impairments are primarily the result of weakened demand in transportation markets impacted by COVID-19 and increased competitive pricing pressure as a result of global capacity increases. The Company also recognized a fixed asset impairment of $5 million in the AFP segment due to the closure of a tire additives manufacturing facility in Asia Pacific as part of ongoing site optimization. Additionally, the Company recognized $8 million of asset impairments and $3 million in contract termination fees resulting from management's decision to discontinue growth initiatives for polyester based microfibers, including Avra^™ performance fibers, the financial results of

which were not allocated to an operating segment and reported in "Other".

In second quarter and first six months 2020, in the Chemical Intermediates segment, the Company recognized severance charges of $2 million and $3 million, respectively, related to the previously disclosed plan to discontinue production of certain products at the Singapore manufacturing site by the end of 2020.

Additionally, first six months 2020 asset impairments and restructuring charges included fixed asset impairment charges of $4 million and severance charges of $3 million in the Advanced Materials segment resulting from the closure of a performance films manufacturing facility in North America and fixed asset impairment charges of $3 million and severance charges of $1 million in the AFP segment for a manufacturing facility in Asia Pacific, each part of ongoing site optimization actions. The Company also recognized an intangible asset impairment charge of $2 million in the AFP segment for customer relationships.

Second quarter and first six months 2019 restructuring charges included $18 million and $46 million, respectively, for severance and related costs as part of business improvement and cost reduction initiatives. First six months 2019 also included an additional $4 million restructuring charge related to a capital project in the AFP segment that was discontinued in 2016.

Changes in Reserves

The following table summarizes the changes in asset impairments and restructuring charges, the non-cash reductions attributable to asset impairments, and the cash reductions in restructuring reserves for severance costs and site closure costs paid in first six months 2020 and full year 2019:


(Dollars in millions)	Balance at January 1, 2020		Provision/ Adjustments		Non-cash Reductions/ Additions		Cash Reductions		Balance at June 30, 2020
Non-cash charges	$	—	$	145	$	(145)	$	—	$	—
Severance costs	17		7		—		(9)		15
Other restructuring costs	11		3		—		(1)		13
Total	$	28	$	155	$	(145)	$	(10)	$	28


(Dollars in millions)	Balance at January 1, 2019		Provision/ Adjustments		Non-cash Reductions/ Additions		Cash Reductions		Balance at December 31, 2019
Non-cash charges	$	—	$	72	$	(72)	$	—	$	—
Severance costs	6		45		—		(34)		17
Other restructuring costs	8		9		1		(7)		11
Total	$	14	$	126	$	(71)	$	(41)	$	28

Substantially all severance costs remaining are expected to be applied to the reserves within one year.