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Basis of Presentation
12 Months Ended
Dec. 31, 2020
Organization Consolidation And Presentation Of Financial Statements [Abstract]  
Basis of Presentation

Note 2. Basis of Presentation

 

The accompanying consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles (“GAAP”). In the opinion of management, all adjustments (consisting of normal, recurring adjustments) considered necessary for a fair presentation of the Company’s financial position and results of operations have been included for the periods presented herein. The notes that follow are an integral part of the Company’s consolidated financial statements.

 

Certain prior period amounts have been reclassified to conform to the current period presentation, the effect of which was not material to the Company’s consolidated financial statements. Specific to the Company’s acquisition of Southern Ionics Minerals, LLC (“SIM”) in the third quarter of 2019, a previously deferred acquisition-related installment payment of $10 was made in the third quarter of 2020 and classified as cash used for investing activities on the Company’s consolidated statements of cash flows for the nine months ended September 30, 2020. The Company’s classification of this payment was adjusted in the consolidated statements of cash flows for the year ended December 31, 2020 to be reflected as cash used for financing activities, the effect of which was not material to the Company’s previously filed Quarterly Report on Form 10-Q for the period ended September 30, 2020.

 

Change in Segment Reporting

 

During the fourth quarter of 2020, the Company changed the level of detail at which its Chief Executive Officer (“CEO”) and Chief Operating Officer (“COO”) (together, the Chief Operating Decision Maker, or “CODM”) regularly review and manage certain of its businesses, resulting in the bifurcation of its former Fluoroproducts segment into two standalone reportable segments: Thermal & Specialized Solutions (formerly Fluorochemicals) and Advanced Performance Materials (formerly Fluoropolymers). The Company now manages and reports its operating results through four reportable segments: Titanium Technologies, Thermal & Specialized Solutions, Advanced Performance Materials, and Chemical Solutions. This change allows Chemours to enhance its customer focus and better align its business models, resources, and cost structure to the specific current and future secular growth drivers of each business, while providing increased transparency to the Company’s shareholders. The historical segment information has been recast to conform to the current segment structure.

 

Considerations related to the current novel coronavirus disease (“COVID-19”)

 

In December 2019, an outbreak of illness caused by COVID-19 was identified in Wuhan, China, and the virus has since continued to spread globally. In March 2020, the World Health Organization declared COVID-19 a global pandemic, and the President of the United States declared the COVID-19 outbreak a national emergency. Since the initial stages of the pandemic, certain economies in regions throughout the world have started to reopen; however, certain of these regions have also seen further spread and even resurgences in the number of positively identified infections. Particularly in the Americas and Europe, infections have continued to spread, leading to health-related concerns in regions where the Company has several key manufacturing facilities. In an attempt to minimize the transmission of COVID-19, significant social and economic restrictions have been imposed throughout the U.S. and abroad, including travel bans, quarantines, restrictions on public gatherings, shelter-in-place orders, and/or safer-at-home orders. These restrictions, while necessary and important for public health, have negative business-related implications for the Company and the U.S. and global economies. In consideration of the Company’s global customer base, the rates at which economies across the globe recover or worsen may drive varying levels of end-market demand for the various performance chemicals provided by the Company’s four segments. In turn, the magnitude and duration of the COVID-19 pandemic create significant uncertainties for the Company’s customer demand and financial results and, during the year ended December 31, 2020, have caused adverse impacts on the Company’s results of operations.

 

In response to the macroeconomic uncertainties driven by COVID-19, management decided to take certain precautionary measures. On April 8, 2020, the Company drew $300 from its revolving credit facility, which was subsequently repaid during the third quarter of 2020 based on the Company’s liquidity position. Management also elected to accept tax relief provided by various taxing jurisdictions, resulting in the deferral of approximately $80 in tax payments, of which approximately $35 was paid in the fourth quarter of 2020. From a cost savings perspective, management implemented a range of actions aimed at reducing costs, inclusive of reducing all discretionary spend, freezing non-critical hiring, delaying external spend wherever possible, reducing structural plant fixed costs, and temporarily reducing base salaries where legally permissible. The temporary base salary reductions were discontinued in September 2020. Management continues to expect that cash generated from operations, available cash, receivables securitization, and existing debt financing arrangements will provide the Company with sufficient liquidity through at least February 2022.

 

In the preparation of these financial statements and related disclosures, management has assessed the impact of COVID-19 on its results, estimates, assumptions, forecasts, and accounting policies and made additional disclosures, as necessary. As the COVID-19 situation is unprecedented and ever evolving, future events and effects related to the illness cannot be determined with precision, and actual results could significantly differ from estimates or forecasts.