Line of Business Information

12 Months Ended

Dec. 31, 2015

Segment Reporting [Abstract]

Line of Business Information

Line of Business Information

We have two lines of business: Investment Servicing and Investment Management. 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.

Investment Servicing provides services for U.S. mutual funds, collective investment funds and other investment pools, corporate and public retirement plans, insurance companies, foundations and endowments worldwide. Products include custody; product- and participant-level accounting; daily pricing and administration; master trust and master custody; record-keeping; cash management; foreign exchange, brokerage and other trading services; securities finance; deposit and short-term investment facilities; loans and lease financing; investment manager and alternative investment manager operations outsourcing; and performance, risk and compliance analytics to support institutional investors. We provide shareholder services, which include mutual fund and collective investment fund shareholder accounting, through 50%-owned affiliates, Boston Financial Data Services, Inc. and the International Financial Data Services group of companies.

Investment Management, through SSGA, provides a broad array of investment management, investment research and investment advisory services to corporations, public funds and other sophisticated investors. SSGA offers active and passive asset management strategies across equity, fixed-income and cash asset classes. Products are distributed directly and through intermediaries using a variety of investment vehicles, including ETFs such as the SPDR^® ETF brand.

Our investment servicing strategy is to focus on total client relationships and the full integration of our products and services across our client base through cross-selling opportunities. In general, our clients will use a combination of services, depending on their needs, rather than one product or service. For instance, a custody client may purchase securities finance and cash management services from different business units. Products and services that we provide to our clients are parts of an integrated offering to these clients. We price our products and services on the basis of overall client relationships and other factors; as a result, revenue may not necessarily reflect the stand-alone market price of these products and services within the business lines in the same way it would for separate business entities.

Generally, approximately 75% of our consolidated total revenue (fee revenue from investment servicing and investment management, as well as trading services and securities finance activities) is generated by these two business lines. The remaining 25% is composed of processing fees and other revenue, net interest revenue, which is largely generated by our investment of client deposits, short-term borrowings and long-term debt in a variety of assets, and net gains (losses) related to investment securities. These other revenue types are generally fully allocated to, or reside in, Investment Servicing and Investment Management.

Revenue and expenses are directly charged or allocated to our lines of business through management information systems. Assets and liabilities are allocated according to policies that support management’s strategic and tactical goals. Capital is allocated based on the relative risks and capital requirements inherent in each business line, along with management judgment. Capital allocations may not be representative of the capital that might be required if these lines of business were separate business entities.

The following is a summary of our line-of-business results for the periods indicated.

The “Other” column for the year ended December 31, 2015 included net costs $98 million composed of the following -

• Net acquisition and restructuring costs of $25 million; and

• Net severance costs associated with staffing realignment of $73 million.

The “Other” column for the year ended December 31, 2014 included net costs $219 million composed of the following -

• Net acquisition and restructuring costs of $133 million;

• Net severance costs associated with staffing realignment of $84 million; and

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

The “Other” column for the year ended December 31, 2013 included net costs of $180 million composed of the following -

• Net acquisition and restructuring costs of $104 million;

• Net provisions for litigation exposure and other costs of $65 million; and

• Net severance costs associated with staffing realignment of $11 million.

The amounts in the “Other” columns were not allocated to State Street's business lines. Prior reported results reflect reclassifications, for comparative purposes, related to management changes in methodologies associated with allocations of revenue and expenses to lines-of-business in 2015.

	Years Ended December 31,
	Investment Servicing									Investment Management									Other									Total
	2015			2014			2013			2015			2014			2013			2015			2014			2013			2015			2014			2013
(Dollars in millions, except where otherwise noted)
Servicing fees	$	5,153		$	5,108		$	4,799		$	—		$	—		$	—		$	—		$	—		$	—		$	5,153		$	5,108		$	4,799
Management fees	—			—			—			1,174			1,207			1,106			—			—			—			1,174			1,207			1,106
Trading services	1,108			1,039			1,027			38			45			67			—			—			—			1,146			1,084			1,094
Securities finance	496			437			359			—			—			—			—			—			—			496			437			359
Processing fees and other	325			179			206			(16		)	(5		)	6			—			—			—			309			174			212
Total fee revenue	7,082			6,763			6,391			1,196			1,247			1,179			—			—			—			8,278			8,010			7,570
Net interest revenue	2,086			2,245			2,278			2			15			25			—			—			—			2,088			2,260			2,303
Gains (losses) related to investment securities, net	(6		)	4			(9		)	—			—			—			—			—			—			(6		)	4			(9		)
Total revenue	9,162			9,012			8,660			1,198			1,262			1,204			—			—			—			10,360			10,274			9,864
Provision for loan losses	12			10			6			—			—			—			—			—			—			12			10			6
Total expenses	6,990			6,648			6,190			962			960			822			98			219			180			8,050			7,827			7,192
Income before income tax expense	$	2,160		$	2,354		$	2,464		$	236		$	302		$	382		$	(98	)	$	(219	)	$	(180	)	$	2,298		$	2,437		$	2,666
Pre-tax margin	24		%	26		%	28		%	20		%	24		%	32		%										22		%	24		%	27		%
Average assets (in billions)	$	246.6		$	234.2		$	203.2		$	3.9		$	3.9		$	3.8											$	250.5		$	238.1		$	207.0