Non-U.S. Activities

9 Months Ended

Sep. 30, 2011

Note 18. Non-U.S. Activities

We define non-U.S. activities as those revenue-producing assets and business activities that arise from clients domiciled outside the U.S. Due to the nature of our business, precise segregation of U.S. and non-U.S. activities is not possible. Subjective judgments have been applied to determine results of operations related to our non-U.S. activities, including our application of funds transfer pricing and our asset and liability management policies. Interest expense allocations are based on the average cost of short-term borrowings.

The following table presents our non-U.S. operating results for the periods indicated. Effective January 1, 2011, management revised its methodology with respect to funds transfer pricing, which is used in the measurement of net interest revenue related to non-U.S. activities. Prior-year net interest revenue amounts were not restated to reflect the revised methodology.


	Three Months Ended September 30,						Nine Months Ended September 30,
(In millions)	2011			2010			2011			2010
Total fee revenue	$	758		$	676		$	2,293		$	1,998
Net interest revenue		300			184			877			519
Gains (Losses) related to investment securities, net		(4	)		(2	)		(13	)		48

Total revenue		1,054			858			3,157			2,565
Expenses		809			688			2,485			2,113

Income before income taxes		245			170			672			452
Income tax expense		63			64			173			170

Net income	$	182		$	106		$	499		$	282

Non-U.S. revenue for the three and nine months ended September 30, 2011 included $516 million and $1.01 billion, respectively, in the U.K., primarily from our London operations.

The following table presents the significant components of our non-U.S. assets as of the dates indicated, based on the domicile of the underlying counterparties:


(In millions)	September 30, 2011		December 31, 2010
Interest-bearing deposits with banks	$	13,289	$	9,443
Non-U.S. investment securities		23,439		19,329
Other assets		24,717		13,994

Total assets	$	61,445	$	42,766