Line of Business Information

9 Months Ended

Sep. 30, 2014

Segment Reporting [Abstract]

Line of Business Information

Line of Business Information

We have two lines of business: Investment Servicing and Investment Management. Given our services and management organization, the results of operations for these lines of business are not necessarily comparable with those of other companies, including companies in the financial services industry. Information about our two lines of business, as well as revenues, expenses and capital allocation methodologies associated with them, is provided in note 25 to the consolidated financial statements included in our 2013 Form 10-K.

The following is a summary of our line-of-business results for the periods indicated. The “Other” column for the three and nine months ended September 30, 2014 included net costs of $14 million and $157 million, respectively, composed of the following -

Three months ended September 30, 2014 -

• Severance cost credits of $2 million associated with prior accruals for staff reductions;

• Net acquisition and restructuring costs of $20 million; and

• Credits to provisions for litigation exposure and other costs of $4 million.

Nine months ended September 30, 2014 -

• Net severance costs associated with staff reductions of $74 million;

• Net acquisition and restructuring costs of $81 million; and

• Provisions for litigation exposure and other costs of $2 million.

The “Other” column for the three and nine months ended September 30, 2013 included costs of $35 million and $94 million, respectively, composed of the following -

Three months ended September 30, 2013 -

• Net acquisition and restructuring costs of $30 million; and

• Net provisions for litigation exposure and other costs of $5 million.

Nine months ended September 30, 2013 -

• Net acquisition and restructuring costs of $74 million; and

• Net provisions for litigation exposure and other costs of $20 million.

The amounts in the “Other” columns were not allocated to State Street's business lines. Results for the 2013 periods reflect reclassifications, for comparative purposes, related to management changes in methodologies associated with allocations of revenue and expenses reflected in line-of-business results for 2014.

	Three Months Ended September 30,
	Investment Servicing						Investment Management						Other						Total
	2014			2013			2014			2013			2014			2013			2014			2013
(Dollars in millions, except where otherwise noted)
Fee revenue:
Servicing fees	$	1,302		$	1,211		$	—		$	—		$	—		$	—		$	1,302		$	1,211
Management fees	—			—			316			276			—			—			316			276
Trading services	266			251			12			14			—			—			278			265
Securities finance	99			74			—			—			—			—			99			74
Processing fees and other	25			52			(8		)	5			—			—			17			57
Total fee revenue	1,692			1,588			320			295			—			—			2,012			1,883
Net interest revenue	551			527			19			19			—			—			570			546
Gains (losses) related to investment securities, net	—			(4		)	—			—			—			—			—			(4		)
Total revenue	2,243			2,111			339			314			—			—			2,582			2,425
Provision for loan losses	2			—			—			—			—			—			2			—
Total expenses	1,639			1,500			239			187			14			35			1,892			1,722
Income before income tax expense	$	602		$	611		$	100		$	127		$	(14	)	$	(35	)	$	688		$	703
Pre-tax margin	27		%	29		%	29		%	40		%							27		%	29		%
Average assets (in billions)	$	243.2		$	197.7		$	4.1		$	3.6								$	247.3		$	201.3

	Nine Months Ended September 30,
	Investment Servicing						Investment Management						Other						Total
	2014			2013			2014			2013			2014			2013			2014			2013
(Dollars in millions, except where otherwise noted)
Fee revenue:
Servicing fees	$	3,828		$	3,587		$	—		$	—		$	—		$	—		$	3,828		$	3,587
Management fees	—			—			908			816			—			—			908			816
Trading services	756			803			35			55			—			—			791			858
Securities finance	331			283			—			—			—			—			331			283
Processing fees and other	122			157			(5		)	10			—			—			117			167
Total fee revenue	5,037			4,830			938			881			—			—			5,975			5,711
Net interest revenue	1,634			1,655			52			63			—			—			1,686			1,718
Gains (losses) related to investment securities, net	4			(9		)	—			—			—			—			4			(9		)
Total revenue	6,675			6,476			990			944			—			—			7,665			7,420
Provision for loan losses	6			—			—			—			—			—			6			—
Total expenses	4,905			4,639			708			613			157			94			5,770			5,346
Income before income tax expense	$	1,764		$	1,837		$	282		$	331		$	(157	)	$	(94	)	$	1,889		$	2,074
Pre-tax margin	26		%	28		%	28		%	35		%							25		%	28		%
Average assets (in billions)	$	229.0		$	201.9		$	3.6		$	3.8								$	232.6		$	205.7