MERGER-RELATED COSTS AND CHARGES

The following table presents pre-tax merger-related costs and other charges that we incurred in connection with the Starwood Combination.



	Three Months Ended
($ in millions)	March 31, 2017		March 31, 2016
Merger-related costs and charges
Transaction costs	$	7	$	7
Employee termination costs	21		—
Integration costs	23		1
	51		8
Interest expense	—		2
	$	51	$	10

Transaction costs represent costs related to the planning and execution of the Starwood Combination, primarily for financial advisory, legal, and other professional service fees. Employee termination costs represent employee severance, retention, and other termination related benefits. Integration costs primarily represent integration employee salaries and share-based compensation, change management consultants, and technology-related costs. Merger-related interest expense in the 2016 first quarter reflects costs that we incurred for a bridge term loan facility commitment related to the Starwood Combination.

In connection with the Starwood Combination, we initiated a restructuring program to achieve cost synergies from our combined operations. We did not allocate costs associated with our restructuring program to any of our business segments. The following table presents our restructuring reserve activity during the 2017 first quarter:



($ in millions)	Employee termination costs
Balance at year-end 2016	$	192
Charges	—
Cash payments	(39		)
Adjustments ⁽¹⁾	9
Balance at March 31, 2017, classified in “Accrued expenses and other”	$	162


⁽¹⁾	Adjustments primarily reflect the reversal of charges for certain employees who accepted other positions at the Company or resigned and the impact of cumulative translation adjustments.