Restructuring

2016 Restructuring

In 2016, the Company began implementing a series of initiatives designed to make it a simpler, more agile company able to deliver an enhanced customer experience ("2016 Restructuring"). These initiatives include an increasing emphasis on less capital-intensive products and the achievement of operational synergies.

On July 31, 2017, the Company executed a variable 5-year information technology services agreement with a third-party service provider at an expected annualized cost of $70 - $90 per year, with a total cumulative 5-year cost of approximately $400, subject to potential reduction as a result of the Organizational Restructuring program discussed below. Included in these costs are approximately $35 of transition costs, which are included in the restructuring amounts below. This initiative, which is a component of the Company’s 2016 Restructuring program, improves expense efficiency and upgrades the Company's technology capabilities. Entry into this agreement resulted in severance, asset write-off, transition and other implementation costs. From inception through completion of these initiatives, the Company expects to incur total restructuring expenses for asset-write off of $16 and transition costs of approximately $35. All anticipated asset write-off costs were incurred in 2017.

In addition to the restructuring expenses incurred above, the reduction in employees from the execution of the contract described above caused the aggregate reduction in employees under the Company's 2016 Restructuring program to trigger an immaterial curtailment and related remeasurement of the Company's qualified defined benefit pension plan and active non-qualified defined benefit plan.

The expected completion date for all 2016 Restructuring initiatives is the end of 2018. As the Company further develops these initiatives, it will incur additional restructuring expenses in one or more periods through the end of 2018. These costs, which include severance and other costs, cannot currently be estimated but could be material.

The summary below presents restructuring expense, pre-tax, by type of costs incurred, for the periods indicated:



	Year Ended December 31,		Cumulative Amounts Incurred to Date
	2017		Cumulative Amounts Incurred to Date
Severance benefits	$	34	$	60
Asset write-off costs	16		16
Transition costs	17		17
Other costs	15		23
Total restructuring expense	$	82	$	116

Total 2016 Restructuring expense is reflected in Operating expenses in the Consolidated Statements of Operations, but are excluded from Adjusted operating earnings before income taxes. These expenses are classified as a component of Other adjustments to Income (loss) from continuing operations before income taxes and consequently are not included in the adjusted operating results of the Company's segments.

The following table presents the accrued liability associated with restructuring expenses as of December 31, 2017:



	Severance Benefits			Transition Costs		Other Costs				Total
Accrued liability as of January 1, 2017	$	21		$	—	$	2			$	23
Provision	39			17		15				71
Payments	(25		)	—		(14		)		(39		)
Other adjustments⁽¹⁾	(5		)	—		—				(5		)
Accrued liability as of December 31, 2017	$	30		$	17	$	3		⁽²⁾	$	50

⁽¹⁾Represents net write-downs of accruals, not associated with payments.

⁽²⁾Represents services performed but not yet paid.

Organizational Restructuring

As a result of the Company's entry into the Transaction, it is undertaking further restructuring efforts to reduce expenses associated with its CBVA and fixed and fixed indexed annuities businesses, as well as its corporate and shared services functions.

The Transaction resulted in recognition of severance and other restructuring expenses. For the year ended December 31, 2017, the Company incurred restructuring expenses of $4, primarily related to severance, which are reflected in Income (loss) from discontinued operations, net of tax, in the Consolidated Statements of Operations. There were no payments made in 2017. Through the closing of the Transaction, the Company anticipates incurring additional restructuring expenses, directly related to the disposition. These costs, which include severance, transition and other costs, cannot currently be estimated but could be material. Refer to the Business Held for Sale and Discontinued Operations Note to these Consolidated Financial Statements for further information.

In addition to restructuring expenses associated with discontinued operations, the Company will develop and approve additional Organizational Restructuring initiatives to simplify the organization as a result of the Transaction, and expects to incur restructuring expenses in one or more periods through the end of 2019. These costs, which include severance, transition and other costs, cannot currently be estimated but could be material. These costs will be reported in Operating expenses in the Consolidated Statement of Operations, but excluded from Adjusted operating earnings before income taxes and consequently are not included in the adjusted operating results of the Company's segments.