Note 4. Restructuring Charges

The Company incurred restructuring charges of $1 million (less than $1 million, net of tax) and $14 million ($10 million, net of tax) in the three months ended September 30, 2018 and 2017, respectively, and $13 million ($10 million, net of tax) and $17 million ($12 million, net of tax) in the nine months ended September 30, 2018 and 2017, respectively. Restructuring charges were comprised of the following:



	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(In millions)	2018		2017		2018		2017
Terminix(1)	$	—	$	—	$	2	$	1
Franchise Services Group(2)		—		—		1		—
Corporate(3)		—		1		3		2
Leadership transition(4)		—		10		—		10
Global Service Center relocation(5)		—		3		8		4
Total restructuring charges	$	1	$	14	$	13	$	17

___________________________________

(1)

For the nine months ended September 30, 2018, these charges included $2 million of severance and other costs. For the nine months ended September 30, 2017, these charges included $1 million of severance and other costs. Severance and other costs of $1 million were unpaid and accrued as of September 30, 2018, which includes amounts previously accrued as of December 31, 2017.

(2)

For the nine months ended September 30, 2018, these charges included $1 million of severance and other costs.

(3)

The Company has historically made changes on an ongoing basis to enhance capabilities and reduce costs in its corporate functions that provide company-wide administrative services to support operations. In 2017, the Company began taking actions to enhance capabilities and align corporate functions with those required to support the strategic needs as two stand-alone companies in anticipation of the American Home Shield spin-off. For the nine months ended September 30, 2018 these charges included $3 million of severance and other costs. For the three and nine months ended September 30, 2017, these charges include $1 million and $2 million, respectively, of severance and other costs. Severance and other costs of $1 million were unpaid and accrued as of September 30, 2018, which includes amounts previously accrued as of December 31, 2017.

(4)

For the three and nine months ended September 30, 2017, these charges included $4 million of severance costs and $5 million of stock-based compensation expense due to the modification of non-vested stock options as part of the severance agreement with the former Chief Executive Officer of the Company. Severance and other costs of $2 million were unpaid and accrued as of September 30, 2018, which includes amounts previously accrued as of December 31, 2017

(5)

For the nine months ended September 30, 2018, these charges included lease termination and other charges of $8 million related to the relocation of the Company’s headquarters, which is referred to as the Company’s Global Service Center. For the three and nine months ended September 30, 2017, these charges included redundant rent expense, accelerated depreciation and other charges of $3 million and $4 million, respectively, related to the relocation of the Company’s headquarters. Of this amount, $4 million was unpaid and accrued as of September 30, 2018.

The pretax charges discussed above are reported in Restructuring charges in the unaudited condensed consolidated statements of operations and comprehensive income. Certain restructuring comparative figures in the condensed consolidated statements of operations and comprehensive income and statements of cash flows have been reclassified to conform to the current year presentation.

A reconciliation of the beginning and ending balances of accrued restructuring charges, which are included in Accrued liabilities—Other on the unaudited condensed consolidated statements of financial position, is presented as follows:



	Accrued
	Restructuring
(In millions)	Charges
Balance as of December 31, 2017	$	6
Costs incurred		13
Costs paid or otherwise settled		(12)
Balance as of September 30, 2018	$	8

Balance as of December 31, 2016	$	3
Costs incurred		17
Costs paid or otherwise settled		(14)
Balance as of September 30, 2017	$	6

The company expects substantially all of its accrued restructuring charges to be paid by December 31, 2019.