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Restructuring Costs And Other Charges
9 Months Ended
Sep. 30, 2018
Restructuring Costs And Other Charges  
Restructuring Costs And Other Charges

(9)      Restructuring Costs and Other Charges:



Transformation Program

During the second quarter of 2018, Frontier announced a multi-year strategic plan with the objective of improving revenues, profitability, and cash flows by enhancing our operations and customer service and support processes (the “Transformation Program”). During the three months ended September 30, 2018, we incurred $12 million in costs directly associated with these activities.



We have retained a consulting firm to assist in executing on various aspects of this plan.  The consulting firm will be eligible to receive quarterly fees in the event that we achieve targeted improvements in the Company’s profitability, and bonus payments in the event that we achieve targeted improvements in the Company’s profitability or stock price. In certain circumstances, the consulting firm may become eligible to receive the bonus payments and specified fees upon a change of control or termination of the consulting arrangement. Amounts accrued in connection with the consulting agreement are recognized as operating expense under “Restructuring costs and other charges.”



Restructuring Costs

As of September 30, 2018, restructuring related liabilities of $11  million pertaining to employee separation charges were included in “Other current liabilities” in our consolidated balance sheet.



Restructuring costs and other charges, primarily consisting of severance and other employee-related costs of $8  million and $46 million in connection with workforce reductions, are included in “Restructuring costs and other charges” in our consolidated statement of operations for the nine months ended September 30, 2018 and 2017, respectfully.





The following is a summary of the changes in the liabilities established for restructuring and other programs at September 30, 2018:







 

 

 

 



 

 

 

 

($ in millions)

 

 

 

 



 

 

 

Balance, January 1, 2018

 

$

25 

 

Severance expense

 

 

 

Transformation costs

 

 

12 

 

Cash payments during the period

 

 

(34)

 

Balance, September 30, 2018

 

$

11