Huntsman Corporation Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Note 13 - Restructuring, Impairment and Plant Closing Costs (Credits)

Note 13 - Restructuring, Impairment and Plant Closing Costs (Credits)

12 Months Ended

Dec. 31, 2020

Restructuring and Related Activities Disclosure [Text Block]

13. RESTRUCTURING, IMPAIRMENT AND PLANT CLOSING COSTS (CREDITS)

As of December 31, 2020, 2019 and 2018, accrued restructuring costs by type of cost and initiative consisted of the following (dollars in millions):

							*Non-cancelable*			*Other*
	*Workforce*			*Demolition and*			*lease and contract*			*restructuring*
	*reductions*			*decommissioning*			*termination costs*			*costs*			*Total*
Accrued liabilities as of January 1, 2018	$	5		$	2		$	41		$	5		$	53
2018 charges for 2017 and prior initiatives		—			—			2			—			2
2018 charges for 2018 initiatives		5			—			—			10			15
2018 payments for 2017 and prior initiatives		(2	)		(1	)		(2	)		—			(5	)
2018 payments for 2018 initiatives		(1	)		—			—			(5	)		(6	)
Reversal of reserves no longer required		(2	)		—			(29	)		—			(31	)
Accrued liabilities as of December 31, 2018		5			1			12			10			28
2019 (credits) charges for 2018 and prior initiatives		2			(1	)		2			3			6
2019 charges for 2019 initiatives		7			—			—			1			8
2019 payments for 2018 and prior initiatives		(4	)		—			(7	)		(9	)		(20	)
2019 payments for 2019 initiatives		—			—			—			(1	)		(1	)
Reversal of reserves no longer required		(2	)		—			—			(2	)		(4	)
Accrued liabilities as of December 31, 2019		8			—			7			2			17
2020 charges for 2019 and prior initiatives		—			—			2			3			5
2020 charges for 2020 initiatives		35			—			—			3			38
2020 payments for 2019 and prior initiatives		(5	)		—			(7	)		(4	)		(16	)
2020 payments for 2020 initiatives		(10	)		—			—			(3	)		(13	)
Reversal of reserves no longer required		—			—			—			(1	)		(1	)
Foreign currency effect on liability balance		1			—			—			—			1
Accrued liabilities as of December 31, 2020	$	29		$	—		$	2		$	—		$	31

Details with respect to our reserves for restructuring, impairment and plant closing costs are provided below by segment and initiative (dollars in millions):

				*Performance*			*Advanced*			*Textile*			*Corporate*
	*Polyurethanes*			*Products*			*Materials*			*Effects*			*and other*			*Total*
Accrued liabilities as of January 1, 2018	$	1		$	1		$	3		$	47		$	1		$	53
2018 charges (credits) for 2017 and prior initiatives		—			1			—			(4	)		5			2
2018 charges for 2018 initiatives		—			2			3			—			10			15
2018 payments for 2017 and prior initiatives		(1	)		(1	)		—			—			(3	)		(5	)
2018 payments for 2018 initiatives		—			(1	)		—			—			(5	)		(6	)
Reversal of reserves no longer required		—			(1	)		—			(29	)		(1	)		(31	)
Accrued liabilities as of December 31, 2018		—			1			6			14			7			28
2019 charges for 2018 and prior initiatives		—			—			—			2			4			6
2019 charges for 2019 initiatives		—			—			7			—			1			8
2019 payments for 2018 and prior initiatives		—			(1	)		(2	)		(9	)		(8	)		(20	)
2019 payments for 2019 initiatives		—			—			(1	)		—			—			(1	)
Reversal of reserves no longer required		—			—			—			(4	)		—			(4	)
Accrued liabilities as of December 31, 2019		—			—			10			3			4			17
2020 charges (credits) for 2019 and prior initiatives		—			1			(1	)		1			4			5
2020 charges for 2020 initiatives		16			4			9			7			2			38
2020 payments for 2019 and prior initiatives		(1	)		—			(5	)		(2	)		(8	)		(16	)
2020 payments for 2020 initiatives		(3	)		(3	)		(3	)		(2	)		(2	)		(13	)
Reversal of reserves no longer required		—			—			(1	)		—			—			(1	)
Foreign currency effect on liability balance		—			—			—			1			—			1
Accrued liabilities as of December 31, 2020	$	12		$	2		$	9		$	8		$	—		$	31

Current portion of restructuring reserves	$	12		$	2		$	6		$	6		$	—		$	26
Long-term portion of restructuring reserves		—			—			3			2			—			5

Details with respect to cash and noncash restructuring charges for the years ended December 31, 2020, 2019 and 2018 by initiative are provided below (dollars in millions):

Cash charges:
2020 charges for 2019 and prior initiatives	$	5
2020 charges for 2020 initiatives		38
Reversal of reserves no longer required		(1	)
Noncash charges:
Accelerated depreciation		7
Total 2020 restructuring, impairment and plant closing costs	$	49

Cash charges:
2019 charges for 2018 and prior initiatives	$	6
2019 charges for 2019 initiatives		8
Reversal of reserves no longer required		(4	)
Noncash charges:
Gain on sale of assets		(49	)
Other noncash credits		(2	)
Total 2019 restructuring, impairment and plant closing costs	$	(41	)

Cash charges:
2018 charges for 2017 and prior initiatives	$	2
2018 charges for 2018 initiatives		15
Noncash charges:
Reversal of reserves no longer required		(31	)
Other noncash charges		7
Total 2018 restructuring, impairment and plant closing costs	$	(7	)

2020 Restructuring Activities

Beginning in the second quarter of 2020, our Polyurethanes segment implemented a restructuring program to reorganize its spray polyurethane foam business to better position this business for efficiencies and growth in coming years. In connection with this restructuring program, we recorded restructuring expense of approximately $9 million for the year ended December 31, 2020, primarily related to workforce reductions and accelerated depreciation recorded as restructuring, impairment and plant closing costs. We expect to record additional restructuring expenses of approximately $4 million through 2021.

Beginning in the third quarter of 2020, our Polyurethanes segment implemented a restructuring program to optimize its downstream footprint. In connection with this restructuring program, we recorded restructuring expense of approximately $12 million for the year ended December 31, 2020, and we expect to record further restructuring expenses of between approximately $15 million and $20 million through 2021.

Beginning in the second quarter of 2020, our Performance Products segment implemented a restructuring program, primarily related to workforce reductions, in response to the sale of our Chemical Intermediates Businesses to Indorama. In connection with this restructuring program, we recorded restructuring expense of approximately $4 million for the year ended December 21, 2020.

Beginning in the second quarter of 2020, our Advanced Materials segment implemented restructuring programs, primarily related to workforce reductions and accelerated depreciation in connection with the CVC Thermoset Specialties Acquisition, the alignment of the segment’s commercial organization and optimization of the segment’s manufacturing processes. In connection with these restructuring programs, we recorded restructuring expense of approximately $10 million for the year ended December 31, 2020.

During 2020, our Textile Effects segment implemented restructuring programs to rationalize and realign structurally across various functions and certain locations within the segment. In connection with these restructuring programs, we recorded restructuring expense of approximately $7 million for the year ended December 31, 2020 related primarily to workforce reductions.

2019 Restructuring Activities

In September 2011, we initiated a restructuring program in our Textile Effects segment to close its production facilities and business support offices in Basel, Switzerland. In July 2019, we sold the production and business support offices in Basel. Accordingly, during the third quarter of 2019, we received proceeds of $49 million related to this sale and recognized a corresponding gain on disposal of assets of $49 million. This gain was recorded as a credit to restructuring, impairment and plant closing costs during the third quarter of 2019.

2018 Restructuring Activities

In 2011, we implemented a significant restructuring of our Textile Effects segment (the “Textile Effects Restructuring Plan”), including the closure of our production facilities and business support offices in Basel, Switzerland. In connection with this plan, we recorded restructuring reserves covering, among other things, a non-cancelable long-term service agreement. In the fourth quarter of 2018, we settled this agreement in exchange for the payment of $10 million, $8 million of which was paid in 2019 and $2 million will be paid in 2023. In connection with this settlement, we reversed the related restructuring reserve and recorded a net credit of $29 million in the fourth quarter of 2018. In addition, during 2018, we recorded a credit of $4 million primarily related to a gain on the sale of land at the Basel, Switzerland site.

Our Corporate and other segment recorded restructuring expense of $15 million in 2018 related to corporate initiatives.