
6.	RESTRUCTURING COSTS

Restructuring charges were $30 million and $5 million for the three months ended March 31, 2018 and 2017, respectively. The components of the restructuring charges for the three months ended March 31, 2018 and 2017 were as follows:



	Three Months Ended March 31,
	2018		2017
Personnel-related costs (1)	$	14	$	5
Facility-related costs (2)	9		—
Internal use software impairment (3)	7		—
Total restructuring charges	$	30	$	5

_______________


(1)	Personnel-related costs consist of severance costs provided to employees who have been terminated and duplicate payroll costs during transition.


(2)	Facility-related costs consist of costs associated with planned facility closures such as contract termination costs, lease payments, net of applicable sublease income, that will continue to be incurred under the contract for its remaining term without economic benefit to the Company, accelerated depreciation on asset disposals and other facility and employee relocation related costs.


(3)	Internal use software impairment relates to development costs capitalized for a project that was determined to not meet the Company's strategic goals when analyzed by the Company's new leadership team.

Leadership Realignment and Other Restructuring Activities

Beginning in the first quarter of 2018, the Company commenced the implementation of a plan to drive its business forward and enhance stockholder value. The key aspects of this plan include senior leadership realignment, an enhanced focus on technology and talent, as well as further attention on office footprint and other operational efficiencies, including the consolidation of certain support services provided to the Company Owned Real Estate Brokerage Services and Real Estate Franchise Services segments.

The following is a reconciliation of the beginning and ending reserve balances for the restructuring program related to Leadership Realignment and Other Restructuring Activities:



	Personnel-related costs			Facility-related costs			Internal use software impairment			Total
Balance at December 31, 2017	$	—		$	—		$	—		$	—
Restructuring charges	14			8			7			29
Costs paid or otherwise settled	(8		)	(1		)	(7		)	(16		)
Balance at March 31, 2018	$	6		$	7		$	—		$	13

The following table shows the total costs currently expected to be incurred by type of cost the restructuring program related to Leadership Realignment and Other Restructuring Activities:



	Total amount expected to be incurred		Amount incurred to date		Total amount remaining to be incurred
Personnel-related costs	$	17	$	14	$	3
Facility-related costs	17		8		9
Internal use software impairment	7		7		—
Total	$	41	$	29	$	12

The following table shows the total costs currently expected to be incurred by reportable segment for the restructuring program related to Leadership Realignment and Other Restructuring Activities:



	Total amount expected to be incurred		Amount incurred to date		Total amount remaining to be incurred
Real Estate Franchise Services	$	2	$	2	$	—
Company Owned Real Estate Brokerage Services	27		16		11
Relocation Services	9		8		1
Title and Settlement Services	1		1		—
Corporate and Other	2		2		—
Total	$	41	$	29	$	12

Business Optimization Initiative

During the fourth quarter of 2015, the Company began a business optimization initiative that focused on maximizing the efficiency and effectiveness of the cost structure of each of the Company's business units. The action was designed to improve client service levels across each of the business units while enhancing the Company's profitability and incremental margins. The plan focused on several key areas of opportunity which include process improvement efficiencies, office footprint optimization, leveraging technology and media spend, centralized procurement, outsourcing administrative services and organizational design. The expected costs of activities undertaken in connection with the restructuring plan are largely complete. At December 31, 2017, the remaining liability was $7 million. During the three months ended March 31, 2018, the Company incurred facility-related costs of $1 million and paid or settled costs of $3 million, resulting in a remaining accrual of $5 million.