RESTRUCTURING AND ASSET RELATED CHARGES - NET

12 Months Ended

Dec. 31, 2020

Restructuring and Related Activities [Abstract]

Restructuring and Asset Related Charges - Net

RESTRUCTURING AND ASSET RELATED CHARGES - NET

2020 Restructuring Program

On September 30, 2020, the Corporation's Board of Directors (the "Board") approved restructuring actions that were aligned to the structural cost improvement initiatives announced by Dow Inc. in response to the continued economic impact from the pandemic caused by coronavirus disease 2019 ("COVID-19"). The restructuring program is designed to reduce structural costs and enable the Corporation to further enhance competitiveness while the COVID-19 economic recovery gains traction. This program includes workforce cost reductions and actions to rationalize the Corporation's manufacturing assets. These actions are expected to be substantially complete by the end of 2021.

As a result of these actions, in the third quarter of 2020, the Corporation recorded pretax restructuring charges of $13 million, consisting of severance and related benefit costs of $9 million and asset write-downs and write-offs of $4 million. The impact of these charges was included in "Restructuring and asset related charges - net" in the consolidated statements of income.

At December 31, 2020, $8 million was included in "Accrued and other current liabilities" and $1 million was included in "Other noncurrent obligations" in the consolidated balance sheets.

DowDuPont Cost Synergy Program

In September and November 2017, the Corporation approved restructuring actions that were aligned with DowDuPont's synergy targets. In connection with this program, the Corporation recorded restructuring charges for severance and related benefit costs of $2 million in 2020, $4 million in 2019 and $3 million in 2018. These charges were shown as "Restructuring and asset related charges ‑ net” in the consolidated statements of income. The program was completed in 2020 with cumulative severance payments of $19 million. At December 31, 2019, severance of $16 million had been paid, leaving a liability of $1 million recorded in "Accrued and other current liabilities" in the consolidated balance sheets.

The Corporation expects to incur additional costs in the future related to its restructuring activities. Future costs are expected to include demolition costs related to closed facilities and restructuring plan implementation costs; these costs will be recognized as incurred. The Corporation also expects to incur additional employee-related costs, including involuntary termination benefits, related to its other optimization activities. These costs cannot be reasonably estimated at this time.

2019 Asset Related Charges

On August 13, 2019, the Corporation entered into a definitive agreement to sell its acetone derivatives product line to ALTIVIA Ketones & Additives, LLC. As a result of this planned transaction, the Corporation recognized a pretax impairment charge of $75 million in the third quarter of 2019. The impairment charge was included in "Restructuring and asset related charges - net" in the consolidated statements of income. See Notes 5 and 18 for additional information.