Restructuring Charges

9 Months Ended

Sep. 30, 2014

Restructuring charges

Aggregate restructuring charges are included in M&I, litigation and restructuring charges on the income statement. Restructuring charges recorded in the second and third quarters of 2014 relate to corporate-level initiatives and were therefore recorded in the Other segment. In the fourth quarter of 2013, restructuring charges were recorded in the businesses. Prior to the fourth quarter of 2013, restructuring charges were reported in the Other segment. Severance payments are primarily paid over the salary continuance period in accordance with the separation plan.

Streamlining actions

In the second quarter of 2014, we disclosed streamlining actions which included rationalizing our staff and simplifying and automating global processes primarily related to actions taken across investment services, technology, and operations. This charge was comprised of $125 million of severance costs. In the third quarter of 2014, we recorded a restructuring charge of $53 million primarily related to severance. The following table presents the activity in the reserve through Sept. 30, 2014.



Streamlining actions – restructuring reserve activity
(in millions)	Total
Original restructuring charge	$	125
Utilization	(16		)
Balance at June 30, 2014	109
Net additional charges	53
Utilization	(55		)
Balance at Sept. 30, 2014	$	107

The table below presents the restructuring charge if it had been allocated by business.



Streamlining actions – restructuring charge by business (in millions)	3Q14		2Q14		Total charges since inception
Investment Management	$	7	$	15	$	22
Investment Services	23		76		99
Other segment (including Business Partners)	23		34		57
Total restructuring charge (recovery)	$	53	$	125	$	178

Operational Excellence Initiatives

In 2011, we announced our Operational Excellence Initiatives which include an expense reduction initiative impacting approximately 1,500 positions, as well as additional initiatives to transform operations, technology and corporate services that will increase productivity and reduce the growth rate of expenses. We recorded a pre-tax restructuring charge of $107 million related to the Operational Excellence Initiatives in 2011. This charge was comprised of $78 million of severance costs and $29 million primarily for operating lease-related items and consulting costs. In the third quarter of 2014, we recorded a charge of $4 million. The following table presents the activity in the restructuring reserve related to the Operational Excellence Initiatives through Sept. 30, 2014.



Operational Excellence Initiatives 2011 – restructuring reserve activity
(in millions)	Severance			Other			Total
Original restructuring charge	$	78		$	29		$	107
Net additional charges (net recovery/gain)	95			(57		)	38
Utilization	(129		)	28			(101		)
Balance at June 30, 2014	44			—			44
Net additional charge	4			—			4
Utilization	(12		)	—			(12		)
Balance at Sept. 30, 2014	$	36		$	—		$	36

The table below presents the restructuring charge if it had been allocated by business.



Operational Excellence Initiatives 2011 – restructuring charge (recovery) by business							Total charges since inception
(in millions)	3Q14			2Q14			Total charges since inception
Investment Management	$	(2	)	$	—		$	50
Investment Services	4			(3		)	86
Other segment (including Business Partners)	2			(2		)	13
Total restructuring charge (recovery)	$	4		$	(5	)	$	149

- 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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