STATE STREET CORP [STT] Filings

10-Q 1 stt-20240930.htm 10-Q stt-20240930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

Form 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File No. 001-07511

STATE STREET CORPORATION

(Exact name of Registrant as Specified in its Charter)

04-2456637

(State or other jurisdiction of incorporation)

(I.R.S. Employer Identification No.)

One Congress Street

Boston,

02114

(Address of principal executive offices)

(Zip Code)

(617)

786-3000

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $1 par value per share

STT

New York Stock Exchange

Depositary Shares, each representing a 1/4,000th ownership interest in a share of

STT.PRG

New York Stock Exchange

Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, Series G, without par value per share

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer", "accelerated filer", "smaller reporting company", and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares of the registrant’s common stock outstanding as of October 29, 2024 was 293,150,519.

STATE STREET CORPORATION

QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTERLY PERIOD ENDED

September 30, 2024

TABLE OF CONTENTS


		Page

PART I	FINANCIAL INFORMATION
	Management's Discussion and Analysis of Financial Condition and Results of Operations	4
	General	4
	Overview of Financial Results	8
	Consolidated Results of Operations	10
	Total Revenue	11
	Net Interest Income	20
	Provision for Credit Losses	23
	Expenses	23

	Repositioning Charges	24
	Income Tax Expense	25
	Line of Business Information	25
	Investment Servicing	25
	Investment Management	26
	Financial Condition	27
	Investment Securities	27
	Loans	29

	Risk Management	31
	Credit and Counterparty Risk Management	31
	Liquidity Risk Management	31
	Operational Risk Management	36
	Information Technology Risk Management	36
	Market Risk Management	36
	Model Risk Management	40
	Strategic Risk Management	40
	Capital	40
	Off-Balance Sheet Arrangements	49
	Other Matters	50
	Recent Accounting Developments	50
	Quantitative and Qualitative Disclosures About Market Risk	51
	Controls and Procedures	51
	Consolidated Financial Statements	52
	Consolidated Statement of Income (unaudited)	52
	Consolidated Statement of Comprehensive Income (unaudited)	53
	Consolidated Statement of Condition	54
	Consolidated Statement of Changes in Shareholders' Equity (unaudited)	55
	Consolidated Statement of Cash Flows (unaudited)	56
	Note 1. Summary of Significant Accounting Policies	57
	Note 2. Fair Value	58
	Note 3. Investment Securities	60
	Note 4. Loans and Allowance for Credit Losses	64
	Note 5. Goodwill and Other Intangible Assets	69
	Note 6. Other Assets	70

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	Note 7. Derivative Financial Instruments	71
	Note 8. Offsetting Arrangements	74
	Note 9. Commitments and Guarantees	77
	Note 10. Contingencies	77
	Note 11. Variable Interest Entities	79
	Note 12. Shareholders' Equity	80
	Note 13. Regulatory Capital	83
	Note 14. Net Interest Income	84
	Note 15. Expenses	84
	Note 16. Earnings Per Common Share	85
	Note 17. Line of Business Information	86
	Note 18. Revenue from Contracts with Customers	86
	Note 19. Non-U.S. Activities	88
	Note 20. Subsequent Events	89
	Review Report of Independent Registered Public Accounting Firm	90

PART II	OTHER INFORMATION
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	93
Item 5	Other Information	93
Item 6	Exhibits	94
	Signatures	95

We use acronyms and other defined terms for certain business terms and abbreviations, as defined in the acronyms list and glossary following the consolidated financial statements in this Form 10-Q.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

PART I. FINANCIAL INFORMATION

GENERAL

State Street Corporation is one of the world’s largest providers of financial services to institutional investors. Our clients - asset managers and owners, insurance companies, official institutions, and central banks - rely on us to deliver solutions that support their goals across the investment life cycle.

State Street Corporation, referred to as the Parent Company, is a financial holding company organized in 1969 under the laws of the Commonwealth of Massachusetts. The Parent Company is a source of financial and managerial strength to our subsidiaries. Through our subsidiaries, including our principal banking subsidiary, State Street Bank and Trust Company, referred to as State Street Bank, we operate in more than 100 geographic markets worldwide, including in the United States, Canada, Latin America, Europe, the Middle East and Asia. We provide a broad range of financial products and services to institutional investors worldwide, with $46.76 trillion of AUC/A and $4.73 trillion of AUM as of September 30, 2024.

As of September 30, 2024, we had consolidated total assets of $338.48 billion, consolidated total deposits of $247.43 billion, consolidated total shareholders' equity of $25.83 billion and approximately 53,000 employees.

Our operations are organized into two lines of business, Investment Servicing and Investment Management, which are defined based on products and services provided.

Additional information about our lines of business is provided in "Line of Business Information" in this Management's Discussion and Analysis and Note 17 to the consolidated financial statements in this Quarterly Report on Form 10-Q for the quarter ended September 30, 2024 (Form 10-Q).

Our executive offices are located at One Congress Street, Boston, Massachusetts 02114 (telephone (617) 786-3000). For purposes of this Form 10-Q, unless the context requires otherwise, references to "State Street," "we," "us," "our" or similar terms mean State Street Corporation and its subsidiaries on a consolidated basis.

This Management's Discussion and Analysis is part of this Form 10-Q and updates the Management's Discussion and Analysis in our 2023 Annual Report on Form 10-K for the year ended December 31, 2023 previously filed with the SEC (2023 Form 10-K). The financial information contained in this Management's Discussion and Analysis and elsewhere in this Form 10-Q should be read in conjunction with the financial and other

information contained in our 2023 Form 10-K. Certain previously reported amounts presented in this Form 10-Q have been reclassified to conform to current-period presentation.

We prepare our consolidated financial statements in conformity with U.S. GAAP. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions in its application of certain accounting policies that materially affect the reported amounts of assets, liabilities, equity, revenue and expenses.

The significant accounting policies that require us to make judgments, estimates and assumptions that are difficult, subjective or complex, about matters that are uncertain and may change in subsequent periods include:

•Recurring fair value measurements;

•Allowance for credit losses;

•Impairment of goodwill and other intangible assets; and

•Contingencies.

These significant accounting policies require the most subjective or complex judgments, and underlying estimates and assumptions could be subject to revision as new information becomes available. For additional information about these significant accounting policies refer to pages 122 to 124, “Significant Accounting Estimates” included under Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations, in our 2023 Form 10-K. We did not change these significant accounting policies in the first nine months of 2024.

Certain financial information provided in this Form 10-Q, including this Management's Discussion and Analysis, is presented using both a U.S. GAAP, or reported basis, and a non-GAAP basis, including certain non-GAAP measures used in the calculation of identified regulatory ratios. We measure and compare certain financial information on a non-GAAP basis, including information that management uses in evaluating our business and activities. Non-GAAP financial information should be considered in addition to, and not as a substitute for or as superior to, financial information prepared in conformity with U.S. GAAP. Any non-GAAP financial information presented in this Form 10-Q, including this Management’s Discussion and Analysis, is reconciled to its most directly comparable currently applicable regulatory ratio or U.S. GAAP-basis measure. As part of our non-GAAP-basis measures, we present a fully

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

taxable-equivalent NII that reports non-taxable revenue, such as interest income associated with tax-exempt investment securities, on a fully taxable-equivalent basis, which we believe facilitates an investor's understanding and analysis of our underlying financial performance and trends.

We provide additional disclosures required by applicable bank regulatory standards, including supplemental qualitative and quantitative information with respect to regulatory capital (including market risk associated with our trading activities), the LCR and NSFR, summary results of annual State Street-run stress tests which we conduct under the Dodd-Frank Act, and recovery and resolution plan disclosures. These additional disclosures are accessible on the "Filings & reports" tab of our website at investors.statestreet.com.

We have included our website address in this report as an inactive textual reference only. Information on our website is not incorporated by reference into this Form 10-Q.

We use acronyms and other defined terms for certain business terms and abbreviations, as defined in the acronyms list and glossary following the consolidated financial statements in this Form 10-Q.

Forward-Looking Statements

This Form 10-Q, as well as other reports and proxy materials submitted by us under the Securities Exchange Act of 1934, registration statements filed by us under the Securities Act of 1933, our annual report to shareholders and other public statements we may make, may contain statements (including statements in our Management's Discussion and Analysis included in such reports, as applicable) that are considered “forward-looking statements” within the meaning of U.S. securities laws, including statements about our goals and expectations regarding our business, financial and capital condition, results of operations, strategies, cost savings and transformation initiatives, investment portfolio performance, climate, dividend and stock purchase programs, acquisitions, outcomes of legal proceedings, market growth, joint ventures and divestitures, client growth, new technologies, services and opportunities, sustainability and impact, human capital, as well as industry, governmental, regulatory, economic and market trends, initiatives and developments, the business environment and other matters that do not relate strictly to historical facts.

Terminology such as “expect,” “outlook,” “will,” “goal,” “target,” “strategy,” “may,” “estimate,” “plan,” “intend,” “objective,” “forecast,” “believe,” “priority,” “anticipate,” “seek,” and “trend,” or similar statements or variations of such terms, are intended to identify forward-looking statements, although not all forward-looking statements contain such terms.

Forward-looking statements are subject to various risks and uncertainties, which change over time, are based on management's expectations and assumptions at the time the statements are made and are not guarantees of future results. Management's expectations and assumptions, and the continued validity of the forward-looking statements, are subject to change due to a broad range of factors affecting the U.S. and global economies, regulatory environment and the equity, debt, currency and other financial markets, as well as factors specific to State Street and its subsidiaries, including State Street Bank. Factors that could cause changes in the expectations or assumptions on which forward-looking statements are based cannot be foreseen with certainty. Important factors that in the future could cause actual results to differ materially from those envisaged in forward-looking statements, and that in some cases have affected us in the past, include, but are not limited to:

Strategic Risks

•We are subject to intense competition, which could negatively affect our profitability;

•We are subject to significant pricing pressure and variability in our financial results and our AUC/A and AUM;

•Our development and completion of new products and services, including State Street Alpha® and those related to digital assets and artificial intelligence, may impose costs on us, involve dependencies on third parties and may expose us to increased operational, model and other risks;

•Acquisitions, strategic alliances, joint ventures and divestitures, and the integration, retention and development of the benefits of these transactions, including the consolidation of our operations joint ventures in India, pose risks for our business; and

•Competition for qualified members of our workforce is intense, and we may not be able to attract and retain the highly skilled people we need to support our business.

Financial Market Risks

•We could be adversely affected by political, geopolitical, economic and market conditions, including, for example, as a result of liquidity or capital deficiencies (actual or perceived) by other financial institutions and related market and government actions, the ongoing wars in Ukraine and in the Middle East, major political elections globally, actions taken by central banks to address inflationary and growth pressures, monetary policy tightening, periods of significant volatility in valuations

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

and liquidity or other disruptions in the markets for equity, fixed income and other assets classes globally or within specific markets;

•We have significant global operations and clients that can be adversely impacted by disruptions in key global economies, including local, regional and geopolitical developments affecting those economies;

•Our investment securities portfolio, consolidated financial condition and consolidated results of operations could be adversely affected by changes in the financial markets, governmental action or monetary policy. For example, among other risks, increases in prevailing interest rates or market conditions have led, and were they to occur in the future could further lead, to reduced levels of client deposits and resulting decreases in our NII or to portfolio management decisions resulting in reductions in our capital or liquidity ratios;

•Our business activities expose us to interest rate risk;

•We assume significant credit risk of counterparties, who may also have substantial financial dependencies on other financial institutions, and these credit exposures and concentrations could expose us to financial loss;

•Our fee revenue represents a significant portion of our revenue and is subject to decline based on, among other factors, market and currency declines, investment activities and preferences of our clients and their business mix;

•If we are unable to effectively manage our capital and liquidity, our financial condition, capital ratios, results of operations and business prospects could be adversely affected;

•Our calculations of risk exposures, total RWA and capital ratios depend on data inputs, formulae, models, correlations and assumptions that are subject to change, which could materially impact our risk exposures, our total RWA and our capital ratios from period to period;

•We may need to raise additional capital or debt in the future, which may not be available to us or may only be available on unfavorable terms; and

•If we experience a downgrade in our credit ratings, or an actual or perceived reduction in our financial strength, our borrowing and

capital costs, liquidity and reputation could be adversely affected.

Compliance and Regulatory Risks

•Our business and capital-related activities, including common share repurchases, may be adversely affected by regulatory requirements and considerations, including capital, credit and liquidity;

•We face extensive and changing government regulation and supervision in the jurisdictions in which we operate, which may increase our costs and compliance risks and may affect our business activities and strategies;

•Our businesses may be adversely affected by government enforcement and litigation;

•Our businesses may be adversely affected by increased and conflicting political and regulatory scrutiny of asset management stewardship and corporate sustainability or Environmental, Social and Governance (ESG) practices;

•Any misappropriation of the confidential information we possess could have an adverse impact on our business and could subject us to regulatory actions, litigation and other adverse effects;

•Changes in accounting standards may adversely affect our consolidated results of operations and financial condition;

•Changes in tax laws, rules or regulations, challenges to our tax positions and changes in the composition of our pre-tax earnings may increase our effective tax rate;

•We could face liabilities for withholding and other non-income taxes, including in connection with our services to clients, as a result of tax authority examinations; and

•Our businesses may be negatively affected by adverse publicity or other reputational harm.

Operational and Technology Risks

Our internal control environment may be inadequate, fail or be circumvented, and actual results may differ from those expressed as a result of a number of factors, including the manifestation of operational risk as follows:

•Our business may be negatively affected by our failure to update and maintain our technology infrastructure, or otherwise meet the increasing resiliency expectations of our clients and regulators, or as a result of a cyber-attack or similar vulnerability in our or business partners' infrastructure;

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

•Our risk management framework, models and processes may not be effective in identifying or mitigating risk and reducing the potential for related losses, and a failure or circumvention of our controls and procedures, or errors or delays in our operational and transaction processing, or those of third parties, could have an adverse effect on our business, financial condition, operating results and reputation;

•Shifting and maintaining operational activities to non-U.S. jurisdictions, changing our operating model, including by consolidating our operations joint ventures in India, and outsourcing to, or insourcing from, third parties expose us to increased operational risk, geopolitical risk and reputational harm and may not result in expected cost savings or operational improvements;

•Attacks or unauthorized access to our or our business partners' or clients' information technology systems or facilities, such as cyber-attacks or other disruptions to our or their operations, could result in significant costs, reputational damage and impacts on our business activities;

•Long-term contracts and customizing service delivery for clients expose us to increased operational risk, pricing and performance risk;

•We may not be able to protect our intellectual property or may infringe upon the rights of third parties;

•The quantitative models we use to manage our business may contain errors that could adversely impact our business, financial condition, operating results and regulatory compliance;

•Our reputation and business prospects may be damaged if investors in the collective investment pools we sponsor or manage incur substantial losses in these investment pools or are restricted in redeeming their interests in these investment pools;

•The impacts of climate change, and regulatory responses, and disclosure requirements related to such risks, could adversely affect us; and

•We may incur losses or face negative impacts on our business as a result of unforeseen events, including terrorist attacks, natural disasters, climate change, pandemics, global conflicts, an abrupt banking crisis and other geopolitical events, which may have a negative impact on our business and operations.

Actual outcomes and results may differ materially from what is expressed in our forward-looking statements and from our historical financial results due to the factors discussed in this section and elsewhere in this Form 10-Q or disclosed in our other SEC filings. Forward-looking statements in this Form 10-Q should not be relied on as representing our expectations or assumptions as of any time subsequent to the time this Form 10-Q is filed with the SEC. We undertake no obligation to revise our forward-looking statements after the time they are made. The factors discussed herein are not intended to be a complete statement of all risks and uncertainties that may affect our businesses. We cannot anticipate all developments that may adversely affect our business or operations or our consolidated results of operations, financial condition or cash flows.

Forward-looking statements should not be viewed as predictions and should not be the primary basis on which investors evaluate State Street. Any investor in State Street should consider all risks and uncertainties disclosed in our SEC filings, including our filings under the Securities Exchange Act of 1934, in particular our annual reports on Form 10-K, our quarterly reports on Form 10-Q and our current reports on Form 8-K, and our registration statements filed under the Securities Act of 1933, all of which are accessible on the SEC's website at www.sec.gov or on the "Filings & reports" tab of our website at investors.statestreet.com.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

OVERVIEW OF FINANCIAL RESULTS


TABLE 1: OVERVIEW OF FINANCIAL RESULTS
	Three Months Ended September 30,						% Change
(Dollars in millions, except per share amounts)	2024			2023
Total fee revenue	$	2,616		$	2,361		11	%
Net interest income	723			624			16
Total other income	(80)			(294)			73
Total revenue	3,259			2,691			21

Provision for credit losses	26			—			nm
Total expenses	2,308			2,180			6
Income before income tax expense	925			511			81
Income tax expense	195			89			nm

Net income	$	730		$	422		73
Adjustments to net income:
Dividends on preferred stock(1)	$	(48)		$	(24)		(100)


Net income available to common shareholders	$	682		$	398		71
Earnings per common share:
Basic	$	2.29		$	1.27		80
Diluted	2.26			1.25			81
Average common shares outstanding (in thousands):
Basic	297,365			313,147			(5)
Diluted	301,847			317,329			(5)
Cash dividends declared per common share	$	0.76		$	0.69		10
Return on average common equity	12.0		%	7.3		%	470		bps
Pre-tax margin	28.4			19.0			940

	Nine Months Ended September 30,						% Change
(Dollars in millions, except per share amounts)	2024			2023
Total fee revenue	$	7,494		$	7,115		5	%
Net interest income	2,174			2,081			4
Total other income	(80)			(294)			73
Total revenue	9,588			8,902			8
Provision for credit losses	63			26			nm
Total expenses	7,090			6,761			5
Income before income tax expense	2,435			2,115			15
Income tax expense	531			381			39

Net income	$	1,904		$	1,734		10
Adjustments to net income:
Dividends on preferred stock(1)	$	(148)		$	(84)		(76)
Earnings allocated to participating securities(2)	(1)			(1)			—
Net income available to common shareholders	$	1,755		$	1,649		6
Earnings per common share:
Basic	$	5.85		$	5.03		16
Diluted	5.77			4.97			16
Average common shares outstanding (in thousands):
Basic	299,964			327,776			(8)
Diluted	304,176			332,011			(8)
Cash dividends declared per common share	$	2.14		$	1.95		10
Return on average common equity	10.6		%	9.9		%	70		bps
Pre-tax margin	25.4			23.8			160

(1) Additional information about our preferred stock dividends is provided in Note 12 to the consolidated financial statements in this Form 10-Q.

(2) Represents the portion of net income available to common equity allocated to participating securities, composed of unvested and fully vested SERP (supplemental executive retirement plans) shares and fully vested deferred director stock awards, which are equity-based awards that contain non-forfeitable rights to dividends, and are considered to participate with the common stock in undistributed earnings.

nm Not meaningful

The following “Financial Results and Highlights” section provides information related to significant events, as well as highlights of our consolidated financial results for the third quarter of 2024 presented in Table 1: Overview of Financial Results. More detailed information about our consolidated financial results, including the comparison of our financial results for the three and nine months ended September 30, 2024 compared to the same periods of 2023, is provided under “Consolidated Results of Operations”, "Line of Business Information" and "Capital" which follows these sections, as well as in our consolidated financial statements in this Form 10-Q.

Financial Results and Highlights

Third quarter of 2024 financial performance

•Earnings per share (EPS) of $2.26 in the third quarter of 2024 increased 81% as compared to the same period of 2023, primarily due to the impact of a notable item in the prior year period and higher total revenue, partially offset by higher total expenses. The prior year notable item represented 64% points of the increase.

•Total revenue increased 21% in the third quarter of 2024, compared to the same period of 2023, primarily driven by the impact of a notable item in the prior year period and higher fee revenue and NII. The prior year notable item represented 12% points of the increase.

•Total expenses increased 6% in the third quarter of 2024, compared to the same period of 2023, as higher business investments, as well as revenue and performance-related costs, were partially offset by productivity savings from ongoing organizational simplification, process improvements and other initiatives, including from the joint venture consolidations in India.

•Pre-tax margin of 28.4% in the third quarter of 2024 increased from 19.0% in the same period of 2023, primarily due to higher total revenue, partially offset by higher expenses and provision for credit losses. Return on equity was 12.0% in the third quarter of 2024, an increase from 7.3% in the same period of 2023, primarily due to higher net income available to common shareholders, partially offset by higher average common shareholders' equity.

•Operating leverage was 15.2% points in the third quarter of 2024, reflecting the impact of a notable item in third quarter of 2023 which represented 11.9% points of operating leverage. Operating leverage represents the

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

difference between the percentage change in total revenue and the percentage change in total expenses, in each case relative to the same period of the prior year.

•Fee operating leverage was 4.9% points in the third quarter of 2024, reflecting the impact of notable items which represented 3.4% points of fee operating leverage. Fee operating leverage represents the difference between the percentage change in total fee revenue and the percentage change in total expenses, in each case relative to the same period of the prior year.

•We returned a total of $674 million to our shareholders in the form of common share repurchases and common stock dividends.

Notable Items

•Notable items in the third quarter of 2024 include:

◦Loss on the sale of investment securities of approximately $81 million relating to an investment portfolio repositioning reflected in other income;

◦Gain on sale of an equity investment of $66 million recorded in other fee revenue; and

◦Revenue-related recovery of $15 million from settlement proceeds associated with a 2018 FX benchmark litigation resolution, which is reflected in foreign exchange trading services revenue.

•Notable items in the third quarter of 2023 included a loss on the sale of investment securities of approximately $294 million relating to an investment portfolio repositioning reflected in other income.

Revenue

•Total fee revenue increased 11% in the third quarter of 2024, compared to the same period of 2023, primarily reflecting higher other fee revenue, foreign exchange trading services revenue, management fees, and servicing fees.

•Servicing fee revenue increased 3% in the third quarter of 2024, compared to the same period of 2023, as higher average market levels and net new business, excluding a previously disclosed client transition, were partially offset by pricing headwinds, a previously disclosed client transition and lower client activity, including asset mix shift.

•Management fee revenue increased 10% in the third quarter of 2024, compared to the same period of 2023, primarily due to higher average market levels.

•Foreign exchange trading services revenue increased 19% in the third quarter of 2024, compared to the same period of 2023, primarily due to higher client volumes and a $15 million revenue-related recovery from a 2018 FX benchmark litigation resolution, partially offset by lower spreads associated with lower average FX volatility. The $15 million revenue-related recovery contributed 5% points to the increase.

•Securities finance revenue increased 13% in the third quarter of 2024, compared to the same period of 2023, mainly due to higher client lending balances, partially offset by lower spreads primarily resulting from muted industry specials activity.

•Software and processing fees revenue increased 11% in the third quarter of 2024, compared to the same period of 2023, primarily due to higher front office software and data revenue associated with CRD.

•Other fee revenue increased $81 million in the third quarter of 2024, compared to the same period of 2023, primarily reflecting a $66 million gain on sale of an equity investment.

•NII increased 16% in the third quarter of 2024, compared to the same period of 2023, primarily due to higher investment securities yields and loan growth, partially offset by deposit mix shift towards interest-bearing deposits.

•Other income was a loss of $80 million, mainly reflecting the loss on sale of investment securities related to the repositioning of the investment portfolio.

Provision for Credit Losses

•In the third quarter of 2024, we recorded a $26 million provision for credit losses, primarily reflecting an increase in loan loss reserves associated with certain commercial real estate and leveraged loans, combined with a change in macroeconomic factors. There was no provision for credit losses recorded in the third quarter of 2023.

Expenses

•Total expenses increased 6% in the third quarter of 2024, compared to the same period of 2023, as higher business investments, as well as revenue and performance-related costs, were partially

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

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offset by productivity savings from ongoing organizational simplification, process improvements and other initiatives, including from the joint venture consolidations in India.

AUC/A and AUM

•AUC/A of $46.76 trillion as of September 30, 2024, increased 17% compared to September 30, 2023, primarily due to higher quarter-end market levels, net new business and client flows. In the third quarter of 2024, newly announced asset servicing mandates totaled approximately $466 billion of AUC/A. Servicing assets remaining to be installed in future periods totaled approximately $2.35 trillion of AUC/A as of September 30, 2024.

•AUM of $4.7 trillion as of September 30, 2024, increased 29% compared to September 30, 2023, primarily due to higher quarter-end market levels and higher net inflows in the third quarter of 2024.

Capital

•In the third quarter of 2024, we returned a total of $674 million to our shareholders in the form of common share repurchases and common stock dividends.

◦We declared aggregate common stock dividends of $0.76 per share, totaling $224 million in the third quarter of 2024, compared to $0.69 per share, totaling $213 million in the same period of 2023, representing an increase of approximately 10% on a per share basis.

◦In the third quarter of 2024, we acquired an aggregate of 5.4 million shares of common stock at an average per share cost of $84.00 and an aggregate cost of $450 million. These purchases were all conducted under the share repurchase program approved by our Board of Directors in January 2024.

•Our standardized CET1 capital ratio was 11.6% as of September 30, 2024, flat compared to December 31, 2023, as capital generated from earnings and improved AOCI was offset by the expected normalization of RWA. Our Tier 1 leverage ratio was 5.5% as of September 30, 2024, flat compared to December 31, 2023, as capital generated from earnings and improved AOCI was offset by higher consolidated average assets, primarily reflecting higher client deposits and an increase in repo-style transactions. Given the current global economic environment,

and our plans for capital distributions, we expect our CET1 capital ratio and Tier 1 leverage ratio to remain within or above our target ranges of 10-11% and 5.25-5.75%, respectively.

•On July 24, 2024, we issued 850 thousand depositary shares, each representing a 1/100th ownership interest in a share of fixed rate reset, non-cumulative perpetual preferred stock, Series J, without par value per share, with a liquidation preference of $100,000 per share (equivalent to $1,000 per depositary share), in a public offering. The net proceeds from the offering were approximately $842 million.

•On September 16, 2024, we redeemed an aggregate $500 million, or all 5,000 outstanding shares, of our non-cumulative perpetual preferred stock, Series H (represented by 500,000 depository shares), for a cash redemption price of $100,000 per share (equivalent to $1,000 per depository share), plus all declared and unpaid dividends.

Debt Issuances and Redemptions

•On August 20, 2024, we issued $1 billion aggregate principal amount of 4.530% fixed-to-floating rate senior notes due 2029.

•On October 1, 2024, we notified the holders of our $1 billion aggregate principal amount of 2.354% fixed-to-floating rate senior notes due 2025, that we will redeem all the notes on November 1, 2024.

•On October 22, 2024, we issued $1.2 billion aggregate principal amount of 4.330% fixed rate senior notes due 2027, $300 million aggregate principal amount of floating rate senior notes due 2027, and $800 million aggregate principal amount of 4.675% fixed-to-floating rate senior notes due 2032.

CONSOLIDATED RESULTS OF OPERATIONS

This section discusses our consolidated results of operations for the three and nine months ended September 30, 2024 compared to the same periods of 2023 and should be read in conjunction with the consolidated financial statements and accompanying notes to the consolidated financial statements in this Form 10-Q.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

Total Revenue


TABLE 2: TOTAL REVENUE
	Three Months Ended September 30,				% Change
(Dollars in millions)	2024		2023
Fee revenue:
Back office services	$	1,167	$	1,138		3	%
Middle office services	99		96			3
Servicing fees	1,266		1,234			3
Management fees	527		479			10
Foreign exchange trading services	374		313			19
Securities finance	116		103			13
Front office software and data	146		130			12
Lending related and other fees	62		58			7
Software and processing fees	208		188			11
Other fee revenue	125		44			nm
Total fee revenue	2,616		2,361			11
Net interest income:
Interest income	3,081		2,328			32
Interest expense	2,358		1,704			38
Net interest income	723		624			16
Other income:
Gains (losses) related to investment securities, net	(80)		(294)			73

Total other income	(80)		(294)			73
Total revenue	$	3,259	$	2,691		21

	Nine Months Ended September 30,					% Change
(Dollars in millions)	2024		2023
Fee revenue:
Back office services	$	3,449	$	3,433		—	%
Middle office services	284		277			3
Servicing fees	3,733		3,710			1
Management fees	1,548		1,397			11
Foreign exchange trading services	1,041		958			9
Securities finance	320		329			(3)
Front office software and data	442		401			10
Lending related and other fees	187		173			8
Software and processing fees	629		574			10
Other fee revenue	223		147			52
Total fee revenue	7,494		7,115			5
Net interest income:
Interest income	8,968		6,587			36
Interest expense	6,794		4,506			51
Net interest income	2,174		2,081			4
Other income:
Gains (losses) related to investment securities, net	(80)		(294)			73

Total other income	(80)		(294)			73
Total revenue	$	9,588	$	8,902		8

Fee Revenue

Table 2: Total Revenue, provides the breakout of fee revenue for the three and nine months ended September 30, 2024 and 2023. Servicing and management fees collectively made up approximately 69% and 70% of the total fee revenue in the three and nine months ended September 30, 2024, respectively, and 73% and 72% of the total fee revenue in the three and nine months ended September 30, 2023, respectively.

Servicing Fee Revenue

Servicing fees, as presented in Table 2: Total Revenue, increased 3% in the three months ended September 30, 2024, compared to the same period of 2023, as higher average market levels and net new business, excluding a previously disclosed client transition, were partially offset by pricing headwinds, a previously disclosed client transition and lower client activity, including asset mix shift. Servicing fees increased 1% in the nine months ended September 30, 2024, compared to the same period of 2023.

Servicing fees generated outside the U.S. were approximately 47% of total servicing fees in both the three and nine months ended September 30, 2024, and 47% and 46% of total servicing fees in the three and nine months ended September 30, 2023, respectively.

Servicing fee revenue comprises revenue from a range of services provided to our clients, including certain Alpha servicing mandates, consisting of core custody services, accounting, reporting and administration, which we refer to collectively as back office and middle office services. The nature and mix of services provided and the asset classes for which the services are performed affect our servicing fees. The basis for fees will differ across regions and clients. Generally, our servicing fee revenues are affected by several factors, including changes in market valuations, client activity and asset flows, net new business and the manner in which we price our services. For servicing fees for which we have not yet issued an invoice to our clients as of period end, we include an estimate of the impact of changes in market valuations, client activity and flows, net new business and changes in pricing in our revenues.

Changes in Market Valuations

Our servicing fee revenue is impacted by both our levels and the geographic and product mix of our AUC/A. Increases or decreases in market valuations have a corresponding impact on the level of our AUC/A and servicing fee revenues, though the degree of impact will vary depending on asset types and classes, and geography of assets held within our clients’ portfolios. For certain asset classes where the valuation process is more complex, including alternative investments, or where our valuation is dependent on third party information, AUC/A is reported on a time lag, typically one-month. For those asset classes, the impact of market levels on our reported AUC/A does not reflect current period-end market levels.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

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Over the five years ended December 31, 2023, we estimate that worldwide equity and fixed income market valuations impacted our servicing fees revenue by approximately 2% on average with a range of (4)% to 8% annually and approximately 1% and (4)% in 2023 and 2022, respectively. See Table 3: Daily Averages, Month-End Averages and Quarter-End Equity Indices for selected indices. While the specific indices presented are indicative of general market trends, the asset types and classes relevant to individual client portfolios can and do differ, and the performance of associated relevant indices and of client portfolios can therefore differ from the performance of the indices presented. In addition, our asset classifications may differ from those industry classifications presented.

Assuming that all other factors remain constant, including client activity, asset flows and pricing, we estimate, using relevant information as of September 30, 2024 that a 10% increase or decrease in worldwide equity valuations, on a weighted average basis, over the relevant periods for which our servicing fees are calculated, would result in a corresponding change in our total servicing fee revenues, on average and over multiple quarters, of approximately 3%. We estimate, similarly assuming all other factors remain constant and using relevant information as of September 30, 2024, that changes in worldwide fixed income markets, which on a weighted average basis and over time are typically less volatile than worldwide equity markets, have a smaller corresponding impact on our servicing fee revenues on average and over time.


TABLE 3: DAILY AVERAGES, MONTH-END AVERAGES AND QUARTER-END EQUITY INDICES(1)
	Daily Averages of Indices				Month-End Averages of Indices				Quarter-End Indices
	Three Months Ended September 30,				Three Months Ended September 30,				As of September 30,
	2024	2023	% Change		2024	2023	% Change		2024	2023	% Change
S&P 500®	5,543	4,458	24	%	5,644	4,462	26	%	5,762	4,288	34	%
MSCI EAFE®	2,380	2,113	13		2,435	2,113	15		2,469	2,031	22
MSCI® Emerging Markets	1,092	992	10		1,119	993	13		1,171	953	23
MSCI ACWI®	817	683	20		833	683	22		852	657	30
	Daily Averages of Indices				Month-End Averages of Indices
	Nine Months Ended September 30,				Nine Months Ended September 30,
	2024	2023	% Change		2024	2023	% Change
S&P 500®	5,265	4,223	25	%	5,323	4,260	25	%
MSCI EAFE®	2,323	2,098	11		2,349	2,100	12
MSCI® Emerging Markets	1,055	992	6		1,064	988	8
MSCI ACWI®	783	658	19		791	662	19

(1) The index names listed in the table are service marks of their respective owners.


TABLE 4: QUARTER-END DEBT INDICES(1)
	As of September 30,
	2024	2023	% Change
Bloomberg U.S. Aggregate Bond Index®	2,258	2,024	12	%
Bloomberg Global Aggregate Bond Index®	488	436	12

(1) The index names listed in the table are service marks of their respective owners.

Client Activity and Asset Flows

Client activity and asset flows are impacted by the number of transactions we execute on behalf of our clients, including FX settlements, equity and derivative trades, and wire transfer activity, as well as actions by our clients to change the asset class in which their assets are invested. Our servicing fee revenues are impacted by a number of factors, including transaction volumes, asset levels and asset classes in which funds are invested, as well as industry trends associated with these client-related activities.

Our clients may change the asset classes in which their assets are invested, based on their market outlook, risk acceptance tolerance or other considerations. Over the five years ended December 31, 2023, we estimate that client activity and asset flows, together, impacted our servicing fees revenue by approximately (1)% on average with a range of (3)% to 1% annually and approximately (3)% and 0% in 2023 and 2022, respectively. See Table 5: Industry Asset Flows for selected asset flow information. While the asset flows presented are indicative of general market trends, the asset types and classes relevant to individual client portfolios can and do differ, and our flows may differ from those market trends. In addition, our asset classifications may differ from those industry classifications presented.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

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TABLE 5: INDUSTRY ASSET FLOWS
	Three Months Ended September 30,
(In billions)	2024		2023
North America - (U.S. Domiciled) - Morningstar Direct Market Data(1)(2)(3)
Long-Term Funds(4)	$	(121.4)	$	(111.4)
Money Market	278.3		132.4
Exchange-Traded Fund	287.5		110.2
Total Flows	$	444.4	$	131.2

EMEA - Morningstar Direct Market Data(1)(2)(5)
Long-Term Funds(4)	$	75.7	$	(40.2)
Money Market	126.6		47.4
Exchange-Traded Fund	63.4		30.5


Total Flows	$	265.7	$	37.7

(1) Industry data is provided for illustrative purposes only. It is not intended to reflect our activity or our clients' activity and is indicative of only segments of the entire industry.

(2) Source: Morningstar. The data includes long-term mutual funds, ETFs and money market funds. Mutual fund data represents estimates of net new cash flow, which is new sales minus redemptions combined with net exchanges, while ETF data represents net issuance, which is gross issuance less gross redemptions. Data for Fund of Funds, Feeder funds and Obsolete funds were excluded from the series to prevent double counting. Data is from the Morningstar Direct Asset Flows database.

(3) The third quarter of 2024 data for North America (U.S. domiciled) includes Morningstar direct actuals for July 2024 and August 2024 and Morningstar direct estimates for September 2024.

(4) The long-term fund flows reported by Morningstar direct in North America are composed of U.S. domiciled market flows mainly in Equities, Allocation and Fixed-Income asset classes. The long-term fund flows reported by Morningstar direct in EMEA are composed of the European market flows mainly in Equities, Allocation and Fixed-Income asset classes.

(5) The third quarter of 2024 data for Europe is on a rolling three month basis for June 2024 through August 2024, sourced by Morningstar.

Net New Business

Over the five years ended December 31, 2023, net new business, which includes business both won and lost, has affected our servicing fee revenues by approximately 0% on average with a range of 0% to 1% annually and approximately 1% in both 2023 and 2022.

Gross investment servicing mandates were approximately $466 billion and $1.23 trillion of AUC/A in the three and nine months ended September 30, 2024, respectively, and approximately $1.80 trillion of AUC/A per year on average over the five years ended December 31, 2023, ranging from approximately $0.79 trillion to $3.52 trillion of AUC/A annually in any given year.

Servicing fee revenue associated with new servicing mandates may vary based on the breadth of services provided, the time required to install the assets, and the types of assets installed.

Revenues associated with new mandates are not reflected in our servicing fee revenue until the assets have been installed. Our installation timeline, in general, can range from 6 to 36 months, with the average installation timeline being approximately 9 to 12 months over the past two full fiscal years. We expect that our more complex installations, including new State Street Alpha mandates, will generally be on the longer end of the 6 to 36 months range. With respect to the current asset mandates of approximately $2.35 trillion of AUC/A that are yet to be installed as of September 30, 2024, we expect the conversion will occur over the coming 24 months, with approximately 15-20% expected to be installed in the remainder of 2024 and approximately 60% in 2025, with the balance expected to be installed largely in 2026. The expected timing of these installations is subject to change due to a variety of factors, including adjusted implementation schedules agreed with clients, scope adjustments, and product and functionality changes.

Pricing

The industry in which we operate has historically faced pricing pressure, and our servicing fee revenues are also affected by such pressures today. Consequently, no assumption should be drawn as to future revenue run rate from announced servicing wins, as the amount of revenue associated with AUC/A, once installed, can vary materially. On average, over the five years ended December 31, 2023, we estimate that pricing pressure with respect to existing clients has impacted our servicing fees by approximately (3)% annually, with the impact ranging from (2)% to (4)% in any given year and approximately (2)% in both 2023 and 2022. Pricing concessions can be a part of a contract renegotiation with a client including terms that may benefit us, such as extending the term of our relationship with the client, expanding the scope of services that we provide or reducing our dependency on manual processes through the standardization of the services we provide. The timing of the impact of additional revenue generated by anticipated additional services, and the amount of revenue generated, may differ from expectations due to the impact of pricing concessions on existing services due to the necessary time required to onboard those new services or process changes, the nature of those services and client investment practices and other factors. These same market pressures also impact the fees we negotiate when we win business from new clients.

Historically, and based on an indicative sample of revenue, we estimate that approximately 60%, on average, of our servicing fee revenues have been variable due to changes in asset valuations including changes in daily average valuations of AUC/A; another approximately 15%, on average, of our servicing fees are impacted by the

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

volume of activity in the funds we serve; and the remaining approximately 25% of our servicing fees tend not to be variable in nature nor impacted by market fluctuations or values.

In addition to the effects described above (i.e., client activity and asset flows, net new business and pricing) our servicing fee revenue in any period will vary depending on the mix of products and services we provide to our clients. The full impact of changes in market valuations and the volume of activity in the funds may not be fully reflected in our servicing fee revenues in the periods in which the changes occur, particularly in periods of higher volatility.


TABLE 6: ASSETS UNDER CUSTODY AND/OR ADMINISTRATION BY PRODUCT(1)
(In billions)	September 30, 2024		December 31, 2023		September 30, 2023
Collective funds, including ETFs	$	15,253	$	14,070	$	13,145
Mutual funds	12,223		11,009		10,313
Pension products	9,339		8,352		8,255
Insurance and other products	9,944		8,379		8,304
Total	$	46,759	$	41,810	$	40,017


TABLE 7: ASSETS UNDER CUSTODY AND/OR ADMINISTRATION BY ASSET CLASS(1)
(In billions)	September 30, 2024		December 31, 2023		September 30, 2023
Equities	$	27,715	$	24,317	$	22,971
Fixed-income	12,027		11,043		10,688
Short-term and other investments	7,017		6,450		6,358
Total	$	46,759	$	41,810	$	40,017


TABLE 8: ASSETS UNDER CUSTODY AND/OR ADMINISTRATION BY GEOGRAPHY(1)(2)
(In billions)	September 30, 2024		December 31, 2023		September 30, 2023
Americas	$	33,460	$	29,951	$	28,237
Europe/Middle East/Africa	10,214		8,913		8,987
Asia/Pacific	3,085		2,946		2,793
Total	$	46,759	$	41,810	$	40,017

(1) Consistent with past practice, AUC/A values for certain asset classes are based on a lag, typically one-month.

(2) Geographic mix is generally based on the domicile of the entity servicing the funds and is not necessarily representative of the underlying asset mix.

Asset servicing mandates newly announced in the third quarter of 2024 totaled approximately $466 billion of AUC/A. Servicing assets remaining to be installed in future periods totaled approximately $2.35 trillion as of September 30, 2024, which will be reflected in AUC/A in future periods after installation and will generate servicing fee revenue in subsequent periods. The full revenue impact of such mandates will be realized as the assets are installed and additional services are added over that period.

New asset servicing mandates, including Alpha servicing mandates, may be subject to completion of definitive agreements, consents or assignments, approval of applicable boards and shareholders and customary regulatory approvals, the failure to complete any of which will prevent the relevant mandate from being installed and serviced. New asset servicing mandates and servicing assets remaining to be installed in future periods exclude certain new business which has been contracted, but for which the client has not yet provided permission to publicly disclose. These excluded assets, which from time to time may be significant, will be included in new asset servicing mandates and reflected in servicing assets remaining to be installed in the period in which the client provides its permission. Servicing mandates and servicing assets remaining to be installed in future periods may include assets associated with acquisitions or structured transactions and are presented on a gross basis based on factors present on or about the time we determine the business to be won by us and are not updated based on subsequent developments, including changes in assets, market valuations, scope and, potentially, termination. Such assets therefore do not include the impact of clients who have notified us during the period of their intent to terminate or reduce their relationship with us, which from time to time may be significant.

With respect to these new servicing mandates, once installed we may provide various services, including back office services such as custody and safekeeping, transaction processing and trade settlement, fund administration, reporting and record keeping, security servicing, fund accounting, middle office services such as investment book of records, transaction management, loans, cash derivatives and collateral services, recordkeeping, client reporting and investment analytics, markets services such as FX trading services, liquidity solutions, currency and collateral management and securities finance, and front office services such as portfolio management solutions, risk analytics, scenario analysis, performance and attribution, trade order and execution management, pre-trade compliance and ESG investment tools. Revenues associated with new servicing mandates may vary based on the breadth of services provided, the timing of installation, and the types of assets.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

As previously disclosed in early 2021, due to a decision to diversify providers, one of our large asset servicing clients is moving a significant portion of its ETF assets currently with State Street to one or more other providers. Prior to the commencement of the transition of assets, which began in 2022, we estimated that the financial impact of this transition represented approximately 1.9% of our 2021 total fee revenue. We began to see the impact of the transition on our fee revenue and income growth trends primarily towards the end of 2023, with the remainder expected to be realized through 2025 as the transition continues. On a quarterly run rate basis, we estimate that the third quarter of 2024 reflected approximately two-thirds of the revenue impact of the exiting business. We expect to continue as a significant service provider for this client after this transition and for the client to continue to be meaningful to our business.

Management Fee Revenue

Management fees increased 10% and 11% in the three and nine months ended September 30, 2024, respectively, compared to the same periods of 2023, primarily due to higher average market levels.

Management fees generated outside the U.S. were approximately 24% and 25% of total management fees in the three and nine months ended September 30, 2024, respectively, and 25% and 26% of total management fees in the three and nine months ended September 30, 2023, respectively.

Management fees generally are affected by our level of AUM, which we report based on month-end valuations. Management fees for certain components of managed assets, such as ETFs, mutual funds and Undertakings for Collective Investments in Transferable Securities, are affected by daily average valuations of AUM. Management fee revenue is more sensitive to market valuations than servicing fee revenue, as a higher proportion of the underlying services provided, and the associated management fees earned, are dependent on equity and fixed-income security valuations. Additional factors, such as the relative mix of assets managed, may have a significant effect on our management fee revenue. While certain management fees are directly determined by the values of AUM and the investment strategies employed, management fees may reflect other factors, including performance fee arrangements, as well as our relationship pricing for clients.

Asset-based management fees for passively managed products, to which our AUM is currently primarily weighted, are generally charged at a lower fee on AUM than for actively managed products. Actively managed products may also include performance fee arrangements which are recorded when the fee is earned, based on predetermined benchmarks associated with the applicable account's performance.

In light of the above, we estimate, using relevant information as of September 30, 2024, and assuming that all other factors remain constant, including the impact of business won and lost and client flows, that:

•A 10% increase or decrease in worldwide equity valuations, on a weighted average basis, over the relevant periods for which our management fees are calculated, would result in a corresponding change in our total management fee revenues, on average and over multiple quarters, of approximately 5%; and

•changes in worldwide fixed income markets, which on a weighted average basis and over time are typically less volatile than worldwide equity markets, will have a significantly smaller corresponding impact on our management fee revenues on average and over time.

Daily averages, month-end averages and quarter-end indices demonstrate worldwide changes in equity and debt markets that affect our management fee revenue. Quarter-end indices affect the values of AUM as of those dates. See Table 3: Daily Averages, Month-End Averages and Quarter-End Equity Indices for selected indices. While the specific indices presented are indicative of general market trends, the asset types and classes relevant to individual client portfolios can and do differ, and the performance of associated relevant indices and of client portfolios can therefore differ from the performance of the indices presented. In addition, our asset classifications may differ from those industry classifications presented.

State Street Corporation | 15

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS


TABLE 9: ASSETS UNDER MANAGEMENT BY ASSET CLASS AND INVESTMENT APPROACH
(In billions)	September 30, 2024		December 31, 2023		September 30, 2023
Equity:
Active	$	54	$	47	$	53
Passive	2,923		2,466		2,161
Total equity	2,977		2,513		2,214
Fixed-income:
Active	30		71		80
Passive	593		538		506
Total fixed-income(1)	623		609		586
Cash(1)	543		467		434
Multi-asset-class solutions:
Active	23		21		20
Passive	352		289		222
Total multi-asset-class solutions	375		310		242
Alternative investments(2):
Active	10		11		21
Passive(3)	204		192		175
Total alternative investments	214		203		196
Total	$	4,732	$	4,102	$	3,672

(1) Includes both floating- and constant-net-asset-value portfolios held in commingled structures or separate accounts.

(2) Includes real estate investment trusts, currency and commodities, including SPDR® Gold Shares and SPDR® Gold MiniSharesSM Trust. We are not the investment manager for the SPDR® Gold Shares and SPDR®Gold MiniSharesSM Trust, but act as the marketing agent.

(3) AUM for passive alternative investments has been revised from prior presentations.


TABLE 10: GEOGRAPHIC MIX OF ASSETS UNDER MANAGEMENT(1)
(In billions)	September 30, 2024		December 31, 2023		September 30, 2023
Americas	$	3,448	$	3,028	$	2,702
Europe/Middle East/Africa(2)	728		577		519
Asia/Pacific	556		497		451
Total	$	4,732	$	4,102	$	3,672

(1) Geographic mix is based on client location or fund management location.

(2) AUM for passive alternative investments has been revised from prior presentations.


TABLE 11: EXCHANGE-TRADED FUNDS BY ASSET CLASS(1)
(In billions)	September 30, 2024		December 31, 2023		September 30, 2023
Alternative Investments(2)	$	91	$	73	$	66

Equity	1,253		1,038		886
Multi Asset	1		1		1
Fixed-Income	171		156		142
Total Exchange-Traded Funds	$	1,516	$	1,268	$	1,095

(1) ETFs are a component of AUM presented in the preceding table.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

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TABLE 12: ACTIVITY IN ASSETS UNDER MANAGEMENT BY PRODUCT CATEGORY

(In billions)

Equity

Fixed-Income

Cash(1)

Multi-Asset-Class Solutions

Alternative Investments(2)(3)

Total

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