LEASES (Tables)

12 Months Ended

Dec. 31, 2021

Leases [Abstract]

Right-of-Use Assets and Associated Obligations for Operating and Finance Leases

The following table details right-of-use assets and associated obligations for operating and finance leases included on the Consolidated Balance Sheets for the periods presented:

		December 31,		December 31,
(Dollars in millions)	Classification	2020		2021
Assets:
Operating lease assets	Intangibles and other assets, net	$	14	$	9
Finance lease assets	Property, plant and equipment, net(1)	5		4
Total leased assets		$	19	$	13
Liabilities
Current liabilities:
Operating	Accrued and other liabilities	$	8	$	4
Finance	Current maturities of long-term debt and finance leases	1		1
Non-current liabilities:
Operating	Other long-term liabilities	6		5
Finance	Long-term debt and finance leases	4		3
Total lease liabilities		$	19	$	13

(1) Finance lease assets are recorded net of accumulated amortization.

Costs Associated with Leasing Transactions, Weighted Average Assumptions, and Cash Flow Details Associated with Leases

The following table details the costs associated with leasing transactions included on the Consolidated Statements of Operations for the periods presented:

		Year Ended		Year Ended
(Dollars in millions)	Classification	December 31, 2020		December 31, 2021
Operating lease cost	Cost of products sold (exclusive of depreciation and amortization)	$	10	$	9
Operating lease cost	Selling, general and administrative expenses	1		1
Variable lease cost	Cost of products sold (exclusive of depreciation and amortization)	7		3
Short term lease cost	Cost of products sold (exclusive of depreciation and amortization)	3		1
Finance lease cost:
Amortization of leased assets	Depreciation and amortization	1		1
Interest on lease liabilities	Interest expense	—		—
Net lease cost		$	22	$	15

The following assumptions were used to determine the right-of-use assets and obligations associated with Verso’s leases for the periods presented. Verso uses its incremental borrowing rate to value the right-of-use asset and related obligations.

	December 31,		December 31,
	2020		2021
Weighted average remaining lease term (years):
Operating leases	2.1		2.6
Finance leases	3.7		3.2
Weighted average discount rate:
Operating leases	2.7	%	2.0	%
Finance leases	3.4	%	3.0	%

The following table provides additional cash flow details associated with leases included on the Consolidated Statements of Cash Flows for the periods presented:

	Year Ended	Year Ended
(Dollars in millions)	December 31, 2020	December 31, 2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows related to operating leases	11	10
Operating cash flows related to finance leases	—	—
Financing cash flows related to finance leases	1	1

Future Operating Lease Payments Associated with Leases Commenced

The following table details the future lease payments associated with leases commenced as of December 31, 2021, including amounts for any renewal options that Verso has determined are reasonably certain to be exercised.

	Operating		Finance
(Dollars in millions)	Leases		Leases		Total
2022	$	4	$	1	$	5
2023	3		2		5
2024	2		1		3
2025	—		—		—
Thereafter	—		—		—
Total lease payments	9		4		13
Imputed interest	—		—		—
Present value of lease liabilities	$	9	$	4	$	13

Future Finance Lease Payments Associated with Leases Commenced

The following table details the future lease payments associated with leases commenced as of December 31, 2021, including amounts for any renewal options that Verso has determined are reasonably certain to be exercised.

	Operating		Finance
(Dollars in millions)	Leases		Leases		Total
2022	$	4	$	1	$	5
2023	3		2		5
2024	2		1		3
2025	—		—		—
Thereafter	—		—		—
Total lease payments	9		4		13
Imputed interest	—		—		—
Present value of lease liabilities	$	9	$	4	$	13