Strategic Initiatives

6 Months Ended

Jun. 30, 2011


3.	*Strategic Initiatives*

As discussed in prior filings, we have historically performed several comprehensive evaluations of the strategies and opportunities of our operations. As a result of these various evaluations, we discontinued all new customer account originations except in our credit card business. Although a strategic review of our credit card business is in process, there were no significant strategic actions taken during the three or six months ended June 30, 2011 or the year ended December 31, 2010 related to our continuing operations. Summarized below are the strategic actions undertaken in 2009 for our continuing operations as well as information regarding the remaining restructuring liability related to these actions.

2009 Strategic Initiatives During 2009, we undertook a number of actions including the following:


	>	Throughout 2009, we decided to exit certain lease arrangements and consolidate a variety of locations across the United States. The process of closing and consolidating these facilities, which began during the second quarter of 2009, was completed during the fourth quarter of 2010. As a result, we have exited certain facilities and/or significantly reduced our occupancy space in the following locations: Bridgewater, New Jersey; Minnetonka, Minnesota; Wood Dale, Illinois; Elmhurst, Illinois; Sioux Falls, South Dakota and Tampa, Florida. Additionally, we have consolidated our operations in Virginia Beach, Virginia into our Chesapeake, Virginia facility and consolidated certain servicing functions previously performed in Brandon, Florida to facilities in Buffalo, New York and Elmhurst, Illinois.


	>	In late February 2009, we decided to discontinue new customer account originations for all products by our Consumer Lending business and close all branch offices.

The following summarizes the changes in the restructure liability during the three and six months ended June 30, 2011 and 2010, respectively, relating to actions implemented during 2009:


	One-Time
	Termination and			Lease Termination
	Other Employee			and Associated
	Benefits⁽¹⁾			Costs⁽²⁾			Other⁽³⁾			Total

	(in millions)

Three Months Ended June 30, 2011:
Restructuring liability at beginning of period	$	4		$	4		$	-		$	8
Restructuring costs paid during the period		-			(1	)		-			(1	)

Restructure liability at end of period	$	4		$	3		$	-		$	7

Three Months Ended June 30, 2010:
Restructuring liability at beginning of period	$	8		$	8		$	2		$	18
Restructuring costs recorded during the period		-			4			-			4
Restructuring costs paid during the period		(3	)		(2	)		-			(5	)
Adjustments to the restructure liability during the period		-			(2	)		(2	)		(4	)

Restructure liability at end of period	$	5		$	8		$	-		$	13

Six Months Ended June 30, 2011:
Restructuring liability at beginning of period	$	4		$	6		$	-		$	10
Restructuring costs paid during the period		-			(3	)		-			(3	)

Restructure liability at end of period	$	4		$	3		$	-		$	7

Six Months Ended June 30, 2010:
Restructuring liability at beginning of period	$	10		$	12		$	2		$	24
Restructuring costs recorded during the period		1			4			-			5
Restructuring costs paid during the period		(6	)		(7	)		-			(13	)
Adjustments to the restructure liability during the period		-			(1	)		(2	)		(3	)

Restructure liability at end of period	$	5		$	8		$	-		$	13


⁽¹⁾		One-time termination and other employee benefits are included as a component of salaries and employee benefits in the consolidated statement of income (loss).

⁽²⁾		Lease termination and associated costs are included as a component of occupancy and equipment expenses in the consolidated statement of income (loss).

⁽³⁾		The other expenses are included as a component of Other servicing and administrative expenses in the consolidated statement of income (loss).