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 and six months ended June 30, 2019, we incurred $16 million and $29 million, respectively, in costs directly associated with these activities.

We had retained a consulting firm to assist in executing on various aspects of this plan. This agreement was terminated in June 2019 and in connection therewith we will make a payment in the third quarter of approximately $30 million of previously accrued expenses. We continue to pursue a reduced transformation program and expect associated expenses to be recognized as incurred. Amounts accrued in connection with the consulting arrangement are recognized as operating expense under “Restructuring costs and other charges.”

Restructuring costs and other charges, consisting primarily of severance and other employee-related costs of $26 million and costs directly associated with the Transformation Program of $29 million are included in “Restructuring costs and other charges” in our consolidated statement of operations for the six months ended June 30, 2019.

For the six months ended June 30, 2018, restructuring costs and other charges, consisted primarily of severance and other employee-related costs of $6 million.

The following is a summary of the changes in the liabilities established for restructuring and other programs for the six months ended June 30, 2019 which are all classified in other current liabilities:



($ in millions)

Balance at January 1, 2019	$	18
Severance expense		26
Transformation costs		29
Other restructuring costs		4
Cash payments during the period		(40)
Balance at June 30, 2019	$	37	⁽¹⁾