Note 20.

Acquisition and Restructuring Costs

The following table presents acquisition and restructuring costs incurred during the years ended December 31:


(In millions)	2011		2010		2009
Acquisition costs	$	16	$	89	$	49
Restructuring charges		253		156		—

Total	$	269	$	245	$	49

Acquisition Costs:

The acquisition costs incurred in 2011 were composed of $71 million of integration costs incurred primarily in connection with our acquisitions of BIAM, the Intesa securities services business and MIFA. These costs were offset by a $55 million tax indemnification benefit for an income tax claim related to the 2010 acquisition of the Intesa securities services business. Refer to note 2 for additional information with respect to this tax indemnification. The 2010 costs were composed of integration costs primarily associated with the acquisitions of the Intesa securities services business and MIFA.

Restructuring Charges:

The restructuring charges of $253 million incurred in 2011, more fully described below, included $133 million related to the business operations and information technology transformation program and $120 million related to expense control measures.

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 $289 million, composed of $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 at the end of 2011. In addition, in the third quarter of 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 530 employees who will be provided with severance and outplacement services as their roles are eliminated. As of December 31, 2011, in connection with the planned aggregate staff reductions of 1,930 employees described above, 1,332 employees had been involuntarily terminated and left State Street, including 782 employees in 2011.

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 restructuring charges of $120 million in our 2011 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 December 31, 2011, 15 employees had been involuntarily terminated and left State Street, and an additional 184 employees were involuntarily terminated and left State Street in January 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 years indicated:


(In millions)	Employee- Related Costs			Real Estate Consolidation			Information Technology Costs			Fixed-Income Trading Portfolio		Asset and Other Write- offs			Total
Initial restructuring-related accrual	$	105		$	51										$	156

Payments		(15	)		(4	)										(19	)

Balance at December 31, 2010		90			47											137

Additional accruals for business operations and information technology transformation program		85			7		$	41								133

Accruals for expense control measures		62			—			—		$	38	$	20			120
Payments and adjustments		(75	)		(15	)		(8	)		—		(5	)		(103	)

Balance at December 31, 2011	$	162		$	39		$	33		$	38	$	15		$	287