Segment Information

12 Months Ended

Dec. 31, 2015

Segment Information [Abstract]

Segment Information

24.Segment Information

The Company’s two reportable segments are Investor Services and Advisor Services. The Company structures its operating segments according to its clients and the services provided to those clients. The Investor Services segment provides retail brokerage and banking services, retirement plan services, and other corporate brokerage services. The Advisor Services segment provides custodial, trading, and support services as well as retirement business services. Revenues and expenses are allocated to the Company’s two segments based on which segment services the client.

The accounting policies of the segments are the same as those described in “Notes – 2. Summary of Significant Accounting Policies.” For the computation of its segment information, the Company utilizes an activity-based costing model to allocate traditional income statement line item expenses (e.g., compensation and benefits, depreciation and amortization, and professional services) to the business activities driving segment expenses (e.g., client service, opening new accounts, or business development) and a funds transfer pricing methodology to allocate certain revenues.

The Company evaluates the performance of its segments on a pre-tax basis, excluding significant non-recurring items and results of discontinued operations. Segment assets and liabilities are not used for evaluating segment performance or in deciding how to allocate resources to segments. However, capital expenditures are used in resource allocation and are therefore disclosed. There are no revenues from transactions between the segments. Capital expenditures are reported gross, and are not net of proceeds from the sale of fixed assets.

Financial information for the Company’s reportable segments is presented in the following table:

	Investor Services (1)						Advisor Services (1)						Unallocated						Total
Year Ended December 31,	2015		2014		2013		2015		2014		2013		2015		2014		2013		2015		2014		2013
Net Revenues:
Asset management and
administration fees	$	1,837	$	1,742	$	1,593	$	813	$	791	$	723	$	-	$	-	$	(1)	$	2,650	$	2,533	$	2,315
Net interest revenue		2,133		2,028		1,755		392		244		225		-		-		-		2,525		2,272		1,980
Trading revenue		556		606		609		310		301		304		-		-		-		866		907		913
Other (2)		234		218		176		94		74		59		-		51		1		328		343		236
Provision for loan losses		11		4		1		-		-		-		-		-		-		11		4		1
Net impairment losses
on securities		-		(1)		(9)		-		-		(1)		-		-		-		-		(1)		(10)
Total net revenues		4,771		4,597		4,125		1,609		1,410		1,310		-		51		-		6,380		6,058		5,435
Expenses Excluding Interest (3)		3,090		2,937		2,858		1,011		938		872		-		68		-		4,101		3,943		3,730
Income before taxes on income	$	1,681	$	1,660	$	1,267	$	598	$	472	$	438	$	-	$	(17)	$	-	$	2,279	$	2,115	$	1,705
Capital expenditures	$	195	$	271	$	188	$	90	$	134	$	82	$	-	$	-	$	-	$	285	$	405	$	270
Depreciation and amortization	$	171	$	154	$	157	$	53	$	45	$	45	$	-	$	-	$	-	$	224	$	199	$	202

(1)	During 2015, the Corporate Brokerage Retirement Services business was transferred from the Investor Services segment to the Advisor Services segment. All prior period amounts have been recast to conform with the current year presentation.
(2)	Unallocated amount includes a net insurance settlement of $45 million in 2014.
(3)	Unallocated amount includes a charge of $68 million for estimated future severance benefits resulting from changes in the Company’s geographic footprint in 2014.