Shareholders' Equity

9 Months Ended

Sep. 30, 2012

Stockholders' Equity Note [Abstract]

Shareholders' Equity

Shareholders’ Equity

On August 21, 2012, we issued and sold 20,000,000 depositary shares, each representing a 1/4,000th ownership interest in a share of State Street’s non-cumulative perpetual preferred stock, Series C, without par value, with a liquidation preference of $100,000 per share (equivalent to $25 per depositary share), in a public offering. We issued 5,000 shares of Series C preferred stock in connection with the depositary share offering. The aggregate proceeds from the offering, net of underwriting discounts, commissions and other issuance costs, were approximately $488 million.

Dividends on shares of the Series C preferred stock are not mandatory and are non-cumulative. If declared, dividends will be payable on the liquidation preference of $100,000 per share quarterly in arrears on March 15, June 15, September 15 or December 15 of each year at an annual rate of 5.25%. If we issue additional shares of Series C preferred stock after the original issue date, dividend rights with respect to such shares will commence from the original issue date of such additional shares. Dividends on the Series C preferred stock will not be declared to the extent that such declaration would cause us to fail to comply with applicable laws and regulations, including federal regulatory capital guidelines. During the third quarter of 2012, we declared a dividend of approximately $8 million on the Series C preferred stock.

On September 15, 2017, or any dividend payment date thereafter, the Series C preferred stock and corresponding depositary shares may be redeemed by us, in whole or in part, at a redemption price equal to $100,000 per share (equivalent to $25 per depositary share) plus any declared and unpaid dividends, without accumulation of any undeclared dividends. The Series C preferred stock and corresponding depositary shares may be redeemed at our option, in whole or in part, prior to September 15, 2017, upon the occurrence of a regulatory capital treatment event, as defined, at a redemption price equal to $100,000 per share (equivalent to $25 per depositary share) plus any declared and unpaid dividends, without accumulation of any undeclared dividends.

On September 4, 2012, we submitted a notice to State Street Capital Trust III for the redemption of all 5,001 outstanding shares of our non-cumulative perpetual preferred stock, Series A, liquidation preference of $100,000 per share. The Series A preferred stock, issued in March 2011, was held by State Street Capital Trust III, and constituted the principal asset of the trust. On October 4, 2012, we redeemed all of the outstanding shares of Series A preferred stock for a redemption price equal to $100,000 per share, or approximately $500 million. At the time of redemption, we also paid declared but unpaid dividends on the Series A preferred stock. Together with other Series A preferred dividends declared and paid in the third quarter of 2012, these dividends totaled $7 million. As of September 30, 2012, as a result of the redemption notice, the $500 million redemption liability was reclassified from shareholders' equity to other short-term borrowings in our consolidated statement of condition.

In March 2012, our Board of Directors approved a new program authorizing the purchase by us of up to $1.8 billion of our common stock through March 31, 2013. During the three months ended September 30, 2012, we purchased approximately 11.4 million shares of our common stock at an average and aggregate cost of approximately $42.11 and $480 million, respectively. During the nine months ended September 30, 2012, we purchased approximately 22.5 million shares of our common stock at an average and aggregate cost of approximately $42.68 and $960 million, respectively. We may employ third-party broker/dealers to acquire shares on the open market in connection with our common stock purchase programs.

The following table presents the after-tax components of accumulated other comprehensive loss as of the dates indicated:

(In millions)	September 30, 2012			December 31, 2011
Foreign currency translation	$	19
Net unrealized losses on hedges of net investments in non-U.S. subsidiaries	(14		)	$	(14	)
Net unrealized gains on available-for-sale securities portfolio	823			110
Net unrealized losses related to reclassified available-for-sale securities	(120		)	(189		)
Net unrealized gains (losses) on available-for-sale securities	703			(79		)
Net unrealized losses on available-for-sale securities designated in fair value hedges	(196		)	(210		)
Other-than-temporary impairment on available-for-sale securities related to factors other than credit	(5		)	(17		)
Other-than-temporary impairment on held-to-maturity securities related to factors other than credit	(76		)	(86		)
Net unrealized losses on cash flow hedges	(6		)	(5		)
Minimum pension liability	(239		)	(248		)
Total	$	186		$	(659	)

In the nine months ended September 30, 2012, we realized net gains of $29 million from sales of available-for-sale securities. Unrealized pre-tax gains of $22 million were included in OCI as of December 31, 2011, net of deferred taxes of $9 million, related to these sales.

In the nine months ended September 30, 2011, we realized net gains of $81 million from sales of available-for-sale securities. Unrealized pre-tax gains of $65 million were included in OCI as of December 31, 2010, net of deferred taxes of $26 million, related to these sales.