As of December 31, 2020, restructuring related liabilities of $2 million pertaining to employee separation charges and accrued costs related to transformation initiatives are included in “Other current liabilities” in our consolidated balance sheet.

During 2018, Frontier announced a strategic plan (Transformation Program) with the objective of improving revenues, profitability, and cash flows by enhancing our operations and customer service and support processes. We had retained a consulting firm to assist in executing on various aspects of the Transformation Program. This agreement was terminated in June 2019 and in connection therewith we made subsequent payments of approximately $35 million related to previously accrued expenses. We continue to implement programs and initiatives designed to improve and enhance our business and expect associated expenses to be recognized as incurred. Amounts accrued in connection with related consulting arrangements are recognized as operating expense under “Restructuring costs and other charges.”

During 2020, we incurred $87 million in expenses consisting of $8 million directly associated with transformation initiatives, $7 million of severance and employee costs resulting from workforce reductions, and $72 million of consulting and advisory costs related to our balance sheet restructuring activities through the Petition Date.

Effective with the Petition date, these other charges consisting of consulting and advisory costs incurred are recorded in Reorganization items, net in the consolidated statement of operations.

During 2019, we incurred $168 million in expenses related to changes in the operation of our business, consisting of $46 million directly associated with transformation initiatives, $44 million of pension/OPEB special termination benefit enhancements related to a voluntary severance program, $38 million of severance and employee costs

resulting from workforce reductions, and $40 million of consulting and advisory costs related to our balance sheet restructuring activities, which are included in “Restructuring costs and other charges” in our consolidated statement of operations for the year ended December 31, 2019.

During 2018, restructuring costs and other charges, primarily consisting of severance and other employee-related costs of $12 million and costs directly associated with the Transformation Program of $23 million, totaling $35 million in connection with workforce reductions, are included in “Restructuring costs and other charges” in our consolidated statement of operations for the year ended December 31, 2018.

The following is a summary of the changes in the liabilities established for restructuring and related programs:



	Restructuring
($ in millions)	Liability
Balance at December 31, 2018	$	18
Severance expense		38
Transformation costs		46
Other costs		40
Cash payments during the period		(127)
Balance at December 31, 2019		15
Severance expense		7
Transformation costs		8
Other costs		72
Cash payments during the period		(100)
Balance at December 31, 2020	$	2