Acquisition and Restructuring Costs

The following table presents acquisition and restructuring costs incurred in the periods indicated:



	Three Months Ended March 31,
(In millions)	2012		2011
Acquisition costs	$	13	$	14
Restructuring charges, net	8		5
Total	$	21	$	19

Acquisition Costs

The acquisition costs incurred in the three months ended March 31, 2012 were composed of $13 million of integration costs incurred primarily in connection with our acquisition of the Intesa securities services business. The acquisition costs incurred in the three months ended March 31, 2011 were composed of $14 million of integration costs primarily associated with the Intesa securities services business and Bank of Ireland Asset Management acquisitions.

Restructuring Charges

The net restructuring charges of $8 million incurred in the three months ended March 31, 2012, more fully described below, included $15 million related to the business operations and information technology transformation program offset by a $7 million credit related to our expense control measures, specifically our withdrawal from our fixed-income trading initiative. The restructuring charges of $5 million incurred in the three months ended March 31, 2011 related to the business operations and information technology transformation program.

Business Operations and Information Technology Transformation Program

In November 2010, we announced a global multi-year business operations and information technology transformation program. The program includes operational, information technology and targeted cost initiatives, including plans related to reductions in both staff and occupancy costs. To date, we have recorded aggregate pre-tax restructuring charges of $304 million, composed of $15 million in the three months ended March 31, 2012, $133 million in 2011 and $156 million in 2010.

The charges related to the program include costs associated with severance, benefits and outplacement services, as well as costs which resulted from actions taken to reduce our occupancy costs through consolidation of real estate. In addition, the charges include costs related to information technology, including transition fees associated with the expansion of our use of service providers associated with components of our information technology infrastructure and application maintenance and support.

In 2010, in connection with the program, we initiated a reduction of 1,400 employees, or approximately 5% of our global workforce, which was substantially completed by the end of 2011. In 2011, in connection with the expansion of our use of service providers associated with our information technology infrastructure and application maintenance and support, we identified approximately 530 employees who will be provided with severance and outplacement services as their roles are eliminated. As of March 31, 2012, in connection with the planned aggregate staff reductions of 1,930 employees described above, 1,381 employees had been involuntarily terminated and left State Street, including 49 employees during the three months ended March 31, 2012.

Expense Control Measures

During the fourth quarter of 2011, in connection with expense control measures designed to calibrate our expenses to our outlook for our capital markets-facing businesses in 2012, we took two actions. First, we withdrew from our fixed-income trading initiative, under which we traded in fixed-income securities and derivatives as principal with our custody clients and other third-parties that trade in these securities and derivatives. Second, we undertook other targeted staff reductions. As a result of these actions, we recorded aggregate pre-tax restructuring charges of $120 million in 2011, and also recorded a net credit adjustment of $7 million during the three months ended March 31, 2012, in our consolidated statement of income.

The charges included costs related to severance, benefits and outplacement services related to both the withdrawal from the fixed-income initiative and the other targeted staff reductions. In addition, the charges included costs associated with fair- value adjustments to the initiative's trading portfolio resulting from our decision to withdraw from the initiative, and costs related to other asset write-downs and contract terminations. In connection with the employee-related actions, we identified 442 employees who will be provided with severance and outplacement services as their roles are eliminated. As of March 31, 2012, 230 employees had been involuntarily terminated and left State Street, including approximately 215 employees during the three months ended March 31, 2012.

The following table presents aggregate activity associated with accruals that resulted from the charges associated with the business operations and information technology transformation program and expense control measures, for the three months ended March 31, 2012:



(In millions)	Employee- Related Costs			Real Estate Consolidation			IT Transition Costs			Fixed-Income Trading Portfolio			Asset and Other Write-offs			Total
Balance at December 31, 2011	$	162		$	39		$	33		$	38		$	15		$	287
Additional accruals for business operations and information technology transformation program	—			3			12			—			—			15
Accruals for expense control measures	3			—			—			(10		)	—			(7		)
Payments and adjustments	(37		)	(1		)	(11		)	(24		)	(4		)	(77		)
Balance at March 31, 2012	$	128		$	41		$	34		$	4		$	11		$	218