NOTE 10 - SPECIAL CHARGES

For the three months ended March 31, special charges consisted of the following (in millions):


	Three Months Ended March 31,
Operating:	2018		2017
Severance and benefit costs	$	14	$	37
Impairment of assets		23		—
(Gains) losses on sale of assets and other special charges		3		14

Special charges		40		51
Income tax benefit related to special charges		(9)		(18)

Total special charges, net of tax	$	31	$	33

During the three months ended March 31, 2018 and 2017, the Company recorded severance and benefit costs related to a voluntary early-out program for its technicians and related employees represented by the International Brotherhood of Teamsters (the “IBT”) of $8 million ($7 million net of taxes) and $21 million ($14 million net of taxes) respectively. In the first quarter of 2017, approximately 1,000 technicians and related employees elected to voluntarily separate from the Company and will receive a severance payment, with a maximum value of $100,000 per participant, based on years of service, with retirement dates through early 2019. Also during the three months ended March 31, 2018 and 2017, the Company recorded severance primarily related to its management reorganization initiative of $6 million ($4 million net of taxes) and $16 million ($10 million net of taxes) respectively.

During the three months ended March 31, 2018, the Company recorded a $23 million ($17 million net of taxes) fair value adjustment for aircraft purchased off lease and impairments related to certain fleet types and certain international slots no longer in use.

Accrual Activity

The severance-related accrual as of March 31, 2018 is primarily related to severance and other compensation expense associated with voluntary employee early retirement programs and is expected to be mostly paid through early 2019. The accrual balance for future lease payments on permanently grounded aircraft as of March 31, 2018 is expected to be mostly paid through 2025. Activity related to these accruals is as follows (in millions):


	Severance and Benefits		Permanently Grounded Aircraft
Balance at December 31, 2017	$	37	$	22
Accrual		14		—
Payments		(19)		(1)

Balance at March 31, 2018	$	32	$	21


	Severance and Benefits		Permanently Grounded Aircraft
Balance at December 31, 2016	$	14	$	41
Accrual		37		—
Payments		(23)		(1)

Balance at March 31, 2017	$	28	$	40