Cost Reduction Plans

6 Months Ended

Jun. 30, 2018

Restructuring and Related Activities [Abstract]

During 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 comprised 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 the second phase (“Phase II”) of the Company’s previously announced CIP. Pursuant to Phase II, the Company is expanding its CIP and further consolidating 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 $97.9 million of such costs through June 30, 2018, including $36.6 million in capital expenditures. A summary of the Company's severance and retention liabilities related to Phase I and II activity is shown below:



	Severance			Retention			Total
	(In millions)
December 31, 2017	$	30.0		$	3.4		$	33.4
Accrual	—			2.7			2.7
Payments	(5.4		)	(2.4		)	(7.8		)
June 30, 2018	$	24.6		$	3.7		$	28.3

The costs associated with Phase I and II are included as a component of the Company’s U.S. government forward-pricing rates, and therefore, are recovered through the pricing of the Company’s products and services to the U.S. government. In addition to the employee-related CIP obligations, the Company incurred non-cash accelerated depreciation expense of $0.7 million and $2.2 million in the six months ended June 30, 2018 and 2017, respectively, associated with changes in the estimated useful lives of long-lived assets.