Restructuring charges

3 Months Ended

Mar. 31, 2012

Note 10 – Restructuring charges

Operational excellence initiatives

In the fourth quarter of 2011, we announced our operational excellence initiatives which include an expense reduction initiative that was expected to impact approximately 1,500 positions or approximately 3% of our global workforce, as well as additional initiatives to transform operations, technology and corporate services that will increase productivity and reduce the growth rate of expenses. Severance payments related to these positions are primarily paid over the salary continuance period in accordance with the separation plan. In the fourth quarter of 2011, we recorded a pre-tax restructuring charge of $107 million related to the operational excellence initiatives. In the first quarter of 2012, we recorded a recovery of $2 million related to the operational excellence initiatives. The aggregate restructuring charge is recorded as a separate line on the income statement.

The following table presents the activity in the restructuring reserve related to the operational excellence initiatives through March 31, 2012.


Operational excellence initiatives 2011 – restructuring charge reserve activity (in millions)	Severance			Other			Total
Original restructuring charge	$	78		$	29		$	107
Utilization		(4	)		(29	)		(33	)
Balance at Dec. 31, 2011		74			-			74
Additional charges (recovery)		(2	)		-			(2	)
Utilization		(10	)		-			(10	)
Balance at March 31, 2012	$	62		$	-		$	62

This restructuring charge was recorded in the Other segment as it is a corporate initiative and not directly related to the operating performance of the businesses. The table below presents the restructuring charge if it had been allocated by business.


Operational excellence initiatives 2011 – restructuring charge (recovery) by business						Total
(in millions)	1Q12			4Q11		charges since inception
Investment Management	$	-		$	17	$	17
Investment Services		(2	)		41		39
Other segment (including Business Partners)		-			49		49
Total restructuring charge (recovery)	$	(2	)	$	107	$	105

Global location strategy

BNY Mellon continues to execute its global location strategy. This strategy includes migrating positions to our global growth centers and was expected to result in moving and/or eliminating approximately 2,400 positions. Severance payments related to these positions are primarily paid over the salary continuance period in accordance with the separation plan. In 2009, we recorded a pre-tax restructuring charge of $139 million related to this strategy. In the first quarter of 2012, we recorded a recovery of $7 million associated with the global location strategy.

The following table presents the activity in the restructuring reserve related to the global location strategy through March 31, 2012.


Global location strategy 2009 – restructuring charge reserve activity (in millions)	Severance			Asset write-offs/ other			Total
Original restructuring charge	$	102		$	37		$	139
Additional charges		14			6			20
Utilization		(89	)		(32	)		(121	)
Balance at Dec. 31, 2011	$	27		$	11		$	38
Additional charges (recovery)		(7	)		-			(7	)
Utilization		(7	)		-			(7	)
Balance at March 31, 2012	$	13		$	11		$	24


Global location strategy 2009 – restructuring charge (recovery) by business
(in millions)	1Q12			4Q11			1Q11			Total charges since inception
Investment Management	$	(1	)	$	-		$	-		$	54
Investment Services		(7	)		(1	)		(6	)		69
Other segment (including Business Partners)		1			1			-			29
Total restructuring charge (recovery)	$	(7	)	$	-		$	(6	)	$	152

- Definition

The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled.

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