Restructuring, Impairment, and Plant Closing and Transition Costs

9 Months Ended

Sep. 30, 2020

Restructuring and Related Activities [Abstract]

Restructuring, Impairment, and Plant Closing and Transition Costs

Note 6. Restructuring, Impairment, and Plant Closing and Transition Costs

Venator has initiated various restructuring programs in an effort to reduce operating costs and maximize operating efficiency.

Restructuring Activities

Company-wide Restructuring

In January 2019, we implemented a plan to reduce costs and improve efficiency of certain company-wide functions. As part of the program, we recorded restructuring expense of nil for the three and nine months ended September 30, 2020, respectively, and $1 million and $5 million for the three and nine months ended September 30, 2019, respectively, all of which related to workforce reductions. We expect that additional costs related to this plan will be immaterial.

Titanium Dioxide Segment

In July 2016, we implemented a plan to close our Umbogintwini, South Africa titanium dioxide manufacturing facility. As part of the program, we recorded restructuring expense of nil for the three and nine months ended September 30, 2020, respectively, and nil and $1 million for the three and nine months ended September 30, 2019, respectively, all of which related to plant shutdown costs. We expect further charges as part of this program to be immaterial. In connection with this plan, in August 2020 we sold the Umbogintwini facility. Accordingly, during the third quarter of 2020 we received proceeds of $6 million related to this sale and recognized a corresponding gain on disposal of assets of $6 million. This gain is recorded in the "Other operating (income) expense, net" line item of our unaudited condensed consolidated statement of operations.

In March 2017, we implemented a plan to close the white-end finishing and packaging operation of our titanium dioxide manufacturing facility at our Calais, France site. The announced plan follows the 2015 closure of the black-end manufacturing operations and would result in the closure of the entire facility. As part of the program, we recorded restructuring expense of nil and $4 million for the three and nine months ended September 30, 2020, respectively, and $3 million and $5 million for the three and nine months ended September 30, 2019, respectively, all of which related to plant shutdown costs. We expect to incur additional plant shutdown costs for our Calais, France facility of approximately $13 million through 2023.

In September 2018, we implemented a plan to close our Pori, Finland titanium dioxide manufacturing facility. As part of the program, we recorded restructuring expense of $10 million for the three months ended September 30, 2020, of which $9 million was related to accelerated depreciation and $1 million related to plant shutdown costs. This restructuring expense consists of $1 million of cash expense and a noncash expense of $9 million. We recorded restructuring expense of $18 million for the nine months ended September 30, 2020 of which $11 million was related to accelerated depreciation, $2 million related to employee benefits and $5 million related to plant shutdown costs. This restructuring expense consists of $7 million of cash expense and a noncash expense of $11 million.

We recorded a restructuring expense related to our Pori facility of $8 million for the three months ended September 30, 2019, of which $6 million was related to accelerated depreciation, $1 million related to employee benefits, and $1 million related to plant shut down costs. This restructuring expense consisted of $2 million of cash expense and a noncash expense of $6 million. We recorded restructuring expense of $11 million for the nine months ended September 30, 2019, of which $17 million was related to accelerated depreciation, $5 million related to employee benefits and $3 million related to plant shutdown costs, partially offset by a gain of $14 million related to early settlement of contractual obligation. This restructuring expense consists of $8 million of cash expense and a noncash net expense of $3 million.

We expect to incur additional charges related to our Pori facility of approximately $87 million through the end of 2024, of which $7 million relates to accelerated depreciation, $77 million relates to plant shut down costs, $1 million relates to other employee costs and $2 million relates to the write off of other assets. Future charges consist of $9 million of noncash costs and $78 million of cash costs.

Performance Additives Segment

In August 2018, we implemented a plan to close our Performance Additives manufacturing site in Beltsville, Maryland. As part of the program, we recorded restructuring expense of nil for the three and nine months ended September 30, 2020, each, and nil and $2 million for the three and nine months ended September 30, 2019, respectively, all of which related to accelerated depreciation. We do not expect to incur any additional charges as part of this program.

Accrued Restructuring and Plant Closing and Transition Costs

As of September 30, 2020 and December 31, 2019, accrued restructuring and plant closing and transition costs by type of cost and year of initiative consisted of the following:

	Workforce reductions(1)		Other restructuring costs		Total(2)
Accrued liabilities as of December 31, 2019	$	15	$	1	$	16
2020 charges for 2019 and prior initiatives	4		7		11
2020 payments for 2019 and prior initiatives	(10)		(7)		(17)
Accrued liabilities as of September 30, 2020	$	9	$	1	$	10

(1)The total workforce reduction reserves of $9 million relate to the termination of 121 positions, of which zero positions have been terminated but require future payment as of September 30, 2020.

(2)Accrued liabilities are related to 2019 initiatives and prior for all periods presented.

Details with respect to our reserves for restructuring, impairment and plant closing and transition costs are provided below by segment and initiative:

	Titanium Dioxide		Performance Additives		Total
Accrued liabilities as of December 31, 2019	$	16	$	—	$	16
2020 charges for 2019 and prior initiatives	10		1		11
2020 payments for 2019 and prior initiatives	(16)		(1)		(17)
Accrued liabilities as of September 30, 2020	$	10	$	—	$	10
Current portion of restructuring reserves	$	4	$	—	$	4
Long-term portion of restructuring reserve	$	6	$	—	$	6

Restructuring, Impairment and Plant Closing and Transition Costs

Details with respect to major cost type of restructuring charges and impairment of assets for the three and nine months ended September 30, 2020 and 2019 by initiative are provided below:

	Three months ended September 30,				Nine months ended September 30,
	2020		2019		2020		2019
Cash charges	$	1	$	5	$	11	$	19
Impairment of assets	3		—		3		—
Early settlement of contractual obligation	—		—		—		(14)
Accelerated depreciation	9		7		11		19
Total Restructuring, Impairment and Plant Closing and Transition Costs	$	13	$	12	$	25	$	24