Merger and Restructuring Charges

6 Months Ended

Jun. 30, 2012

Restructuring and Related Activities [Abstract]

MERGER AND RESTRUCTURING CHARGES

The Corporation committed to a restructuring plan in connection with the completion of the acquisition of Sterling on July 28, 2011. The restructuring plan, which is expected to be substantially completed by December 31, 2012, is intended to streamline operations across the combined organization. The restructuring plan is expected to result in cumulative costs of approximately $115 million ($73 million, after-tax) through the end of the plan, primarily encompassing facilities and contract termination charges, systems integration and related charges, severance and other employee-related charges, and transaction-related costs. The Corporation recognized acquisition-related expenses of $83 million ($52 million after-tax) from July 28, 2011 (the acquisition date) through June 30, 2012, recorded in “merger and restructuring charges” in the consolidated statements of comprehensive income. Merger and restructuring charges include the incremental costs to integrate the operations of Sterling and do not reflect the costs of the fully integrated combined organization. Merger and restructuring charges comprised the following from the acquisition date to June 30, 2012 and for the three- and six-month periods ended June 30, 2012 and 2011.



			Total Incurred
	Total Expected		Inception to		Three Months Ended June 30,				Six Months Ended June 30,
(in millions)	Per Plan		June 30, 2012		2012		2011		2012		2011
Facilities and contract termination charges	$	51	$	21	$	7	$	—	$	5	$	—
Systems integration and related charges	30		28		1		4		2		4
Severance and other employee-related charges	26		26		—		—		1		—
Transaction costs	8		8		—		1		—		1
Total merger and restructuring charges	$	115	$	83	$	8	$	5	$	8	$	5

The following table presents the changes in restructuring reserves for the three- and six-month periods ended June 30, 2012.



(in millions)	Three Months Ended June 30, 2012			Six Months Ended June 30, 2012
Balance at beginning of period	$	15		$	26
Merger and restructuring charges	8			14
Payments	(6		)	(17		)
Other adjustments (a)	—			(6		)
Balance at end of period	$	17		$	17


(a)	Other adjustments include revisions to the timing or amount of estimated net costs related to the exit of lease facilities included in facilities and contract termination charges.

- 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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