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Restructuring, Asset-Related, and Other Charges
12 Months Ended
Dec. 31, 2020
Restructuring And Related Activities [Abstract]  
Restructuring, Asset-Related, and Other Charges

 

Note 7. Restructuring, Asset-related, and Other Charges

 

The following table sets forth the components of the Company’s restructuring, asset-related, and other charges for the years ended December 31, 2020, 2019, and 2018.

 

 

 

Year Ended December 31,

 

 

 

2020

 

 

2019

 

 

2018

 

Restructuring and other charges:

 

 

 

 

 

 

 

 

 

 

 

 

Employee separation charges

 

$

17

 

 

$

21

 

 

$

14

 

Decommissioning and other charges

 

 

41

 

 

 

23

 

 

 

31

 

Total restructuring and other charges

 

 

58

 

 

 

44

 

 

 

45

 

Asset-related charges (1)

 

 

22

 

 

 

43

 

 

 

4

 

Total restructuring, asset-related, and other charges

 

$

80

 

 

$

87

 

 

$

49

 

 

(1)

Asset-related charges for the years ended December 31, 2020 and 2019 are discussed in further detail below. Asset-related charges for the year ended December 31, 2018 included $4 for a pre-tax goodwill impairment charge in the Company’s Chemical Solutions segment.

 


The following table sets forth the impacts of the Company’s restructuring programs to segment earnings for the years ended December 31, 2020, 2019, and 2018.

 

 

 

Year Ended December 31,

 

 

 

2020

 

 

2019

 

 

2018

 

Restructuring charges:

 

 

 

 

 

 

 

 

 

 

 

 

Plant and product line closures:

 

 

 

 

 

 

 

 

 

 

 

 

Chemical Solutions

 

$

4

 

 

$

2

 

 

$

4

 

Corporate and Other

 

 

1

 

 

 

18

 

 

 

9

 

Total plant and product line closures

 

 

5

 

 

 

20

 

 

 

13

 

2017 Restructuring Program:

 

 

 

 

 

 

 

 

 

 

 

 

Titanium Technologies

 

 

 

 

 

1

 

 

 

1

 

Thermal & Specialized Solutions

 

 

 

 

 

1

 

 

 

4

 

Advanced Performance Materials

 

 

 

 

 

1

 

 

 

5

 

Chemical Solutions

 

 

 

 

 

 

 

 

2

 

Corporate and Other

 

 

(1

)

 

 

 

 

 

15

 

Total 2017 Restructuring Program

 

 

(1

)

 

 

3

 

 

 

27

 

2018 Restructuring Program:

 

 

 

 

 

 

 

 

 

 

 

 

Corporate and Other

 

 

 

 

 

(1

)

 

 

5

 

Total 2018 Restructuring Program

 

 

 

 

 

(1

)

 

 

5

 

2019 Restructuring Program:

 

 

 

 

 

 

 

 

 

 

 

 

Titanium Technologies

 

 

 

 

 

5

 

 

 

 

Thermal & Specialized Solutions

 

 

1

 

 

 

3

 

 

 

 

Advanced Performance Materials

 

 

2

 

 

 

4

 

 

 

 

Chemical Solutions

 

 

 

 

 

1

 

 

 

 

Corporate and Other

 

 

 

 

 

9

 

 

 

 

Total 2019 Restructuring Program

 

 

3

 

 

 

22

 

 

 

 

2020 Restructuring Program:

 

 

 

 

 

 

 

 

 

 

 

 

Titanium Technologies

 

 

3

 

 

 

 

 

 

 

Thermal & Specialized Solutions

 

 

1

 

 

 

 

 

 

 

Advanced Performance Materials

 

 

3

 

 

 

 

 

 

 

Chemical Solutions

 

 

1

 

 

 

 

 

 

 

Corporate and Other

 

 

5

 

 

 

 

 

 

 

Total 2020 Restructuring Program

 

 

13

 

 

 

 

 

 

 

Total restructuring charges

 

 

20

 

 

 

44

 

 

 

45

 

Asset-related charges:

 

 

 

 

 

 

 

 

 

 

 

 

Titanium Technologies

 

 

 

 

 

9

 

 

 

 

Advanced Performance Materials

 

 

10

 

 

 

 

 

 

 

Chemical Solutions

 

 

8

 

 

 

34

 

 

 

4

 

Corporate and Other

 

 

4

 

 

 

 

 

 

 

Total asset-related charges

 

 

22

 

 

 

43

 

 

 

4

 

Other charges:

 

 

 

 

 

 

 

 

 

 

 

 

Titanium Technologies

 

 

1

 

 

 

 

 

 

 

Chemical Solutions

 

 

37

 

 

 

 

 

 

 

Total other charges

 

 

38

 

 

 

 

 

 

 

Total restructuring, asset-related, and other charges

 

$

80

 

 

$

87

 

 

$

49

 

 


Plant and Product Line Closures and Asset-related Charges

 

Titanium Technologies

 

In December 2019, in an effort to improve the profitability of the Company’s Titanium Technologies segment, management approved the discontinuation of the titanium tetrachloride production line at the Company’s New Johnsonville, Tennessee site. For the year ended December 31, 2019, the Company recorded accelerated depreciation of $9. The Company does not expect to incur material decommissioning and dismantling-related charges related to the discontinuation of this production line.

 

Advanced Performance Materials

 

In the year ended December 31, 2020, in connection with various property, plant, and equipment and other asset impairments, the Company recorded asset-related charges of $10.

 

Chemical Solutions

 

In the fourth quarter of 2015, the Company announced its completion of the strategic review of its Reactive Metals Solutions business and the decision to stop production at its Niagara Falls, New York manufacturing plant. The Company recorded additional decommissioning and dismantling-related charges of $2, $2, and $4 for the years ended December 31, 2020, 2019, and 2018, respectively. The Company expects to incur and spend approximately $3 related to additional restructuring charges for similar activities through 2021, all of which relate to Chemical Solutions. As of December 31, 2020, the Company incurred, in the aggregate, $40 in restructuring charges related to these activities, excluding asset-related charges.

 

In the third quarter of 2019, in an effort to improve the profitability of the Company’s Chemical Solutions segment, the Company announced plans to exit its Methylamines and Methylamides business at its Belle, West Virginia manufacturing plant, which culminated in the completed exit and sale of the business in the fourth quarter of 2019. As a result, for the year ended December 31, 2019, the Company recorded accelerated depreciation of $34. The Company does not expect to incur additional charges related to the exit of the Methylamines and Methylamides business. Refer to “Note 4 – Acquisitions and Divestitures” for further details.

 

In the second quarter of 2020, the Company completed a business review of its Aniline business. It was determined that the Aniline business is not core to the Company’s future strategy, and production was ceased at the Pascagoula, Mississippi manufacturing plant in the fourth quarter of 2020. As a result, during the year ended December 31, 2020, the Company recorded asset-related charges of $10, which are primarily comprised of $6 for property, plant, and equipment and other asset impairments, as well as $4 for environmental remediation liabilities to be paid over a period of approximately 16 years. The Company also recorded employee separation-related liabilities of $2. In conjunction with this decision, approximately 75 employees will separate from the Company in 2021 and will be subject to our customary involuntary termination benefits. The associated severance payments will also be made in 2021. The Company expects to incur approximately $12 in additional restructuring charges related to decommissioning, dismantling, and other costs in connection with the exit of its Pascagoula site by the end of 2021, all of which relate to Chemical Solutions. The future net cash outflows associated with these exit costs are not expected to be material.

 

Corporate and Other

 

In the first quarter of 2018, the Company began a project to demolish and remove several dormant, unused buildings at its Chambers Works site in Deepwater, New Jersey, which were assigned to Chemours in connection with its Separation from EID and never used in Chemours’ operations. For the years ended December 31, 2020, 2019, and 2018, the Company incurred $1, $18, and $9, respectively, in decommissioning and dismantling-related charges associated with these efforts. As of December 31, 2020, the Company has incurred, in the aggregate, $28 in restructuring charges related to these activities. The Company does not currently expect to incur additional charges related to these activities at its Chambers Works site through the end of 2021, and any remaining future charges and cash outflows associated with these activities are not expected to be material.

 


2017 Restructuring Program  

 

In 2017, the Company announced certain restructuring activities designed to further the cost savings and productivity improvements outlined under management’s transformation plan. These activities include, among other efforts: (i) outsourcing and further centralizing certain business process activities; (ii) consolidating existing, outsourced third-party information technology (“IT”) providers; and, (iii) implementing various upgrades to the Company’s current IT infrastructure. In connection with these corporate function efforts, the Company recorded $3, and $18, in restructuring-related charges for years ended December 31, 2019, and 2018, respectively.

 

In 2017, the Company also announced a voluntary separation program (“VSP”) for certain eligible U.S. employees in an effort to better manage the anticipated future changes to its workforce. Employees who volunteered for and were accepted under the VSP received certain financial incentives above the Company’s customary involuntary termination benefits to end their employment with Chemours after providing a mutually agreed-upon service period. Approximately 300 employees separated from the Company through the end of 2018. An accrual representing the majority of these termination benefits, amounting to $18, was recognized in the fourth quarter of 2017. The remaining $9 of incremental, one-time financial incentives under the VSP were recognized over the period that each participating employee continued to provide service to Chemours.

 

The Company recorded charges for its 2017 Restructuring Program of $3 and $27 for the years ended December 31, 2019 and 2018, respectively. The cumulative amount incurred, in the aggregate, for the Company’s 2017 Restructuring Program amounted to $61 at December 31, 2020. The Company has substantially completed all actions related to this program.

 

2018 Restructuring Program

 

In the fourth quarter of 2018, management initiated a restructuring program of the Company’s corporate functions and recorded the related estimated severance costs of $5. The Company has substantially completed all actions related to this program.

 

2019 Restructuring Program

 

In the third quarter of 2019, management initiated a severance program of the Company’s corporate functions and businesses, and the majority of employees separated from the Company during the fourth quarter of 2019. For the years ended December 31, 2020 and 2019, the Company recorded charges for its 2019 Restructuring Program of $3 and $22, respectively. As of December 31, 2020, the cumulative amount incurred, in the aggregate, for the Company’s 2019 Restructuring Program amounted to $25. The Company believes that it has completed incurring severance costs for this program. At December 31, 2020 and 2019, $2 and $14 remained as an employee separation-related liability, respectively, and the remaining severance payments are expected to be made by the end of 2021.

 

2020 Restructuring Program

 

In the first quarter of 2020, management initiated the first phase of a severance program that was largely attributable to further aligning the cost structure of the Company’s businesses and corporate functions with its strategic and financial objectives. A second phase of this program was initiated in the third quarter of 2020. As of December 31, 2020, the cumulative amount incurred, in the aggregate, for the Company’s 2020 Restructuring Program amounted to $13. The Company believes that it has completed incurring severance costs for this program. At December 31, 2020, $3 remained as an employee separation-related liability, and the remaining severance payments are expected to be made by the end of 2021.

 

 


The following table sets forth the change in the Company’s employee separation-related liabilities associated with its restructuring programs for the years ended December 31, 2020 and 2019.

 

 

 

Chemical Solutions

Site Closures

 

 

2015 Global

Restructuring

Program

 

 

2017

Restructuring

Program

 

 

2018

Restructuring

Program

 

 

2019

Restructuring

Program

 

 

2020

Restructuring

Program

 

 

Total

 

Balance at January 1, 2019

 

$

 

 

$

1

 

 

$

10

 

 

$

5

 

 

$

 

 

$

 

 

$

16

 

(Credits) charges to income

 

 

 

 

 

(1

)

 

 

 

 

 

(1

)

 

 

22

 

 

 

 

 

 

20

 

Payments

 

 

 

 

 

 

 

 

(9

)

 

 

(4

)

 

 

(8

)

 

 

 

 

 

(21

)

Balance at December 31, 2019

 

 

 

 

 

 

 

 

1

 

 

 

 

 

 

14

 

 

 

 

 

 

15

 

Charges (credits) to income

 

 

2

 

 

 

 

 

 

(1

)

 

 

 

 

 

3

 

 

 

13

 

 

 

17

 

Payments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(15

)

 

 

(10

)

 

 

(25

)

Balance at December 31, 2020

 

$

2

 

 

$

 

 

$

 

 

$

 

 

$

2

 

 

$

3

 

 

$

7

 

 

At December 31, 2020 and 2019, there were no significant outstanding liabilities related to the Company’s decommissioning and other restructuring-related charges.

 

Other Charges

 

Chemical Solutions

 

The Company is currently in the process of constructing a new Mining Solutions facility in Gomez Palacio, Durango, Mexico. Following the commencement of the construction, several lawsuits were filed, which resulted in suspension of construction and nullification of the Company’s environmental permit at the site. These matters are further discussed in “Note 22 – Commitments and Contingent Liabilities”. In connection with the construction work at the site, the Company had previously entered into an agreement with a third-party services provider. In the fourth quarter of 2020, the Company entered into dispute resolution with the third-party services provider, resulting in a $26 charge related to contract termination fees, as well as immediate recognition of $11 of other related prepaid costs. At December 31, 2020, the Company had $146 of long-lived assets under construction at the facility. The Company ultimately believes that it will be successful in obtaining its permits and will continue with its planned development of the site. While the Company currently believes these amounts are recoverable, an unfavorable ruling by the Mexican courts on its appeals could lead to a fixed asset impairment assessment that potentially impairs all or a portion of the facility, resulting in a non-cash charge in the Company’s results of operations at that time.