Acquisition and Restructuring Costs

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



	Three Months Ended March 31,
(In millions)	2013			2012
Acquisition costs	$	15		$	13
Restructuring charges, net	(1		)	8
Total acquisition and restructuring costs	$	14		$	21

Acquisition Costs

Acquisition costs incurred in the three months ended March 31, 2013 totaled $15 million, compared to $13 million in the three months ended March 31, 2012, with the costs in both periods related to previously announced acquisitions.

Restructuring Charges

In the three months ended March 31, 2013, we recorded a net restructuring credit of $1 million, composed of $8 million of restructuring charges related to the continuing implementation of our Business Operations and Information Technology Transformation program, offset by a credit of $9 million related to expense control measures initiated by us in December 2012. In the three months ended March 31, 2012, we recorded $8 million of restructuring charges, composed of $15 million related to the Business Operations and Information Technology Transformation program, partly offset by a $7 million credit related to expense control measures we initiated in December 2011, specifically our withdrawal from our fixed-income trading initiative.

Information with respect to these initiatives (the Business Operations and Information Technology Transformation program and the 2011 and 2012 expense control measures), including charges, employee reductions and aggregate activity in the related accruals, is provided in the two sections that follow.

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 restructuring charges of $364 million in our consolidated statement of income, composed of $156 million in 2010, $133 million in 2011, $67 million in 2012 and $8 million in the three months ended March 31, 2013.

The charges related to the program included costs related to severance, benefits and outplacement services, as well as costs which resulted from actions taken to reduce our occupancy costs through consolidation of real estate. The charges also included 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 the involuntary termination of 1,400 employees, or approximately 5% of our global workforce, which was substantially complete at the end of 2011. In addition, 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 to be involuntarily terminated as their roles were eliminated. In 2012 and in the three months ended March 31, 2013, an additional 164 and 148 positions, respectively, were identified for elimination. As of March 31, 2013, in connection with the planned aggregate staff reduction of 2,242 employees described above, 2,065 of such identified employees had been involuntarily terminated, composed of 550 employees in 2010, 782 employees in 2011, 697 employees in 2012 and 36 employees in the three months ended March 31, 2013.

Expense Control Measures

In December 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, in 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 a net credit of $1 million in 2012, in our consolidated statement of income. We did not record any restructuring charges in the three months ended March 31, 2013 related to these expense control measures.

The charges recorded in 2011 included costs related to severance, benefits and outplacement services with respect to both our withdrawal from our fixed-income initiative and the other targeted staff reductions. In connection with the employee-related actions, we identified 442 employees to be involuntarily terminated as their roles were eliminated. As of March 31, 2013, 384 employees had been involuntarily terminated, composed of 15 employees in 2011, 363 employees in 2012 and 6 employees in the three months ended March 31, 2013. The charges also included costs associated with fair-value adjustments to the initiative's trading portfolio resulting from our decision to withdraw from the initiative, as well as costs related to asset write-downs and contract terminations.

In December 2012, in connection with expense control measures designed to better align our expenses to our business strategy and related outlook for 2013, we identified additional targeted staff reductions. As a result of these actions, we recorded aggregate pre-tax restructuring charges of $133 million in 2012. We also recorded a net credit of $9 million in the three months ended March 31, 2013 in our consolidated statement of income. The 2012 charges included employee-related costs for severance, benefits and outplacement services, as well as costs for asset and other write-offs related to contract terminations. In connection with these 2012 expense control measures, we identified 630 employees to be involuntarily terminated as their roles are eliminated. As of March 31, 2013, 453 employees had been involuntarily terminated, composed of 40 employees in 2012 and 413 employees in the three months ended March 31, 2013. The credit recorded in the three months ended March 31, 2013 was related to adjustments to severance and benefits-related charges recorded in 2012.

Aggregate Restructuring-Related Accrual Activity

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 the 2011 and 2012 expense control measures:



(In millions)	Employee- Related Costs			Real Estate Consolidation			Information Technology Costs			Asset and Other Write-Offs			Total
Balance as of December 31, 2012	$	195		$	49		$	5		$	13		$	262
Accruals for Business Operations and Information Technology Transformation program	9			—			(1		)	—			8
Adjustments of accruals for 2012 expense control measures	(9		)	—			—			—			(9		)
Payments and adjustments	(44		)	(6		)	(4		)	(3		)	(57		)
Balance as of March 31, 2013	$	151		$	43		$	—		$	10		$	204