Severance and Restructuring Related Costs

Consistent with the Company’s strategy to continuously improve its cost structure and right-size its businesses, L3 is completing employment reduction actions across several of its businesses to reduce both direct and indirect costs, including overhead and general and administrative costs. As a result of these initiatives, the Company recorded severance and restructuring related costs of $26 million with respect to approximately 800 employees during the year ended December 31, 2018, $101 million with respect to approximately 1,500 employees during the year ended December 31, 2017 and $17 million with respect to approximately 700 employees during the year ended December 31, 2016. Severance and restructuring related costs are reported within operating costs and expenses on the consolidated statements of operations. Severance and restructuring related costs incurred by reportable segment are presented in the table below.



	Year Ended December 31,
	2018		2017		2016
	(in millions)

ISRS⁽¹⁾⁽²⁾	$	7	$	38	$	5
C&NS⁽³⁾	11		52		8
Electronic Systems⁽²⁾	8		11		4
Consolidated	$	26	$	101	$	17

__________________


⁽¹⁾	The severance and restructuring related costs incurred during the year ended December 31, 2017 include a $12 million loss on the sale of a building in Garland, Texas in the fourth quarter of 2017.


⁽²⁾	The severance and restructuring related costs incurred during the year ended December 31, 2017 include $1 million and $5 million of salaried employee pension plan curtailment losses for Electronic Systems and ISRS segments, respectively. See Note 20 for additional information.


⁽³⁾	The severance and restructuring related costs incurred during the year ended December 31, 2017 exclude a pre-tax gain of $42 million on the sale of the Company's property in San Carlos, California in the second quarter of 2017.

The Company had severance and restructuring related liabilities of $14 million and $23 million included in other current liabilities on the Company’s balance sheets at December 31, 2018 and 2017, respectively. The remaining liability balance at December 31, 2018 is expected to be paid in 2019. The table below presents the change to the Company’s severance and restructuring related liability during the year ended December 31, 2018.



	December 31, 2018
	(in millions)
Balance at beginning of period	$	23
Additional provisions	26
Cash payments	(35		)
Balance at end of period	$	14