ASSETS IMPAIRMENTS AND RESTRUCTURING

9 Months Ended

Sep. 30, 2021

Restructuring Costs and Asset Impairment Charges [Abstract]

ASSET IMPAIRMENTS AND RESTRUCTURING CHARGES, NET


(Dollars in millions)	Third Quarter				First Nine Months
Tangible Asset Impairments	2021		2020		2021		2020
Site optimizations
AFP - Tire additives (1)	$	—	$	—	$	4	$	5
AM - Advanced interlayers (2)	—		—		1		—
AM - Performance films (3)	—		—		—		4
AFP - Animal nutrition (4)	—		—		—		3
Discontinuation of growth initiatives (5)	—		—		—		8
	—		—		5		20
Gain on Sale of Previously Impaired Assets
Site optimizations
AFP - Animal nutrition (4)	—		—		(1)		—
	—		—		(1)		—
Intangible Asset Impairments
AFP - Tradenames (6)	—		—		—		123
AFP - Customer relationships (7)	—		—		—		2
	—		—		—		125
Severance Charges
Business improvement and cost reduction actions (8)	—		46		—		46
CI & AFP - Singapore (9)	—		2		—		5
Site optimizations
AM - Advanced interlayers (2)	—		3		1		3
AFP - Tire additives (1)	—		1		—		1
AM - Performance films (3)	—		—		—		3
AFP - Animal nutrition (4)	—		—		—		1
	—		52		1		59
Other Restructuring Costs
Cost reduction initiatives (8)	—		7		—		7
Discontinuation of growth initiatives contract termination fees (5)	—		1		—		4
CI & AFP - Singapore (9)	3		—		16		—
Site optimizations
AM - Advanced interlayers (2)	1		—		3		—
AFP - Tire additives (1)	1		—		3		—
AM - Performance films (3)	2		—		2		—


	7		8		24		11

Total	$	7	$	60	$	29	$	215

(1)Asset impairment charges, severance costs, and site closure costs in the AFP segment from the previously reported closure of a tire additives manufacturing facility in Asia Pacific as part of ongoing site optimization.

(2)Asset impairment charges, severance costs, and site closure costs in the Advanced Materials ("AM") segment due to the previously reported closure of an advanced interlayers manufacturing facility in North America as part of ongoing site optimization. In addition, accelerated depreciation of $4 million in first nine months 2021 and $7 million in third quarter and first nine months 2020 was recognized in "Cost of sales" in the Unaudited Consolidated Statements of Earnings, Comprehensive Income and Retained Earnings related to the closure of this facility. Management expects total charges of up to $30 million for the closure of this facility, primarily reported in "Cost of sales" and in "Asset impairments and restructuring charges, net" in the Unaudited Consolidated Statements of Earnings, Comprehensive Income and Retained Earnings, of which $13 million was recognized in 2020.

(3)Fixed asset impairment charges and severance costs in the AM segment from the previously reported closure of a performance films manufacturing facility in North America as part of ongoing site optimization.

(4)Fixed asset impairment charges, net and severance costs in the AFP segment from the previously reported closure of an animal nutrition manufacturing facility in Asia Pacific as part of ongoing site optimization.

(5)Fixed asset impairment charges and contract termination fees resulting from management's decision to discontinue growth initiatives for polyester based microfibers, including AvraTM performance fibers, the financial results of which were not allocated to an operating segment and reported in "Other".

(6)Intangible asset impairment charges in the AFP segment tire additives business to reduce the carrying values of the CrystexTM and SantoflexTM tradenames to the estimated fair values. The estimated fair values were determined using an income approach, specifically, the relief from royalty method, including some unobservable inputs. The impairments were primarily the result of weakened demand in the transportation markets impacted by COVID-19 and increased competitive pricing pressure as a result of global capacity increases.

(7)Intangible asset impairment charge in the AFP segment for customer relationships.

(8)Severance and related costs as part of business improvement and cost reduction initiatives which were reported in "Other".

(9)Site closure costs in third quarter 2021 of $2 million and $1 million in the Chemical Intermediates ("CI") and AFP segments, respectively, and site closure costs, including contract termination fees, in first nine months 2021 of $13 million and $3 million in the CI and AFP segments, respectively, and severance charges in third quarter and first nine months 2020 of $1 million and $5 million, respectively, in the CI segment, resulting from the previously reported plan to discontinue production of certain products at the Singapore manufacturing site. Excluding the fixed asset impairments in 2019, restructuring charges of up to $50 million are expected for this closure, of which $6 million was recognized in 2020.

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 nine months 2021 and full year 2020:


(Dollars in millions)	Balance at January 1, 2021		Provision/ Adjustments		Non-cash Reductions/ Additions		Cash Reductions		Balance at September 30, 2021
Non-cash charges	$	—	$	5	$	(5)	$	—	$	—
Severance costs	65		1		—		(47)		19
Other restructuring costs	14		23		—		(23)		14
Total	$	79	$	29	$	(5)	$	(70)	$	33


(Dollars in millions)	Balance at January 1, 2020		Provision/ Adjustments		Non-cash Reductions/ Additions		Cash Reductions		Balance at December 31, 2020
Non-cash charges	$	—	$	145	$	(145)	$	—	$	—
Severance costs	17		65		1		(18)		65
Other restructuring costs	11		17		—		(14)		14
Total	$	28	$	227	$	(144)	$	(32)	$	79

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