Cost Reduction Plans

6 Months Ended

Jun. 30, 2017

Restructuring and Related Activities [Abstract]

Cost Reduction Plans

Cost Reduction Plans

During fiscal 2015, the Company initiated the first phase ("Phase I") of the competitive improvement program (the "CIP”) comprised of activities and initiatives aimed at reducing costs in order for the Company to continue to compete successfully. Phase I is composed of three major components: (i) facilities optimization and footprint reduction; (ii) product affordability; and (iii) reduced administrative and overhead costs. On April 6, 2017, the Board of Directors approved Phase II (“Phase II”) of the Company’s previously announced CIP. Pursuant to Phase II, the Company plans to expand its CIP and further consolidate its Sacramento, California, and Gainesville, Virginia sites while centralizing and expanding its existing presence in Huntsville, Alabama. The Company currently estimates that it will incur restructuring and related costs of the Phase I and II programs of approximately $235.1 million (including approximately $60.5 million of capital expenditures). The Company has incurred $63.2 million through June 30, 2017 including $29.5 million in capital expenditures. A summary of the Company's Phase I and II reserve activity is shown below:

	Severance			Retention			Total
	(In millions)
December 31, 2016	$	6.8		$	2.1		$	8.9
Accrual	33.3			0.6			33.9
Payments	(1.2		)	(0.2		)	(1.4		)
June 30, 2017	$	38.9		$	2.5		$	41.4

The costs associated with Phase I and II will be a component of the Company’s U.S. government forward pricing rates, and therefore, will be recovered through the pricing of the Company’s products and services to the U.S. government. In addition to the employee-related Phase I and II obligations, the Company incurred non-cash accelerated depreciation expense of $2.2 millionand $0.4 million in the first half of fiscal 2017 and 2016, respectively, associated with changes in the estimated useful lives of long-lived assets.