Shareholders' Equity

3 Months Ended

Mar. 31, 2014

Stockholders' Equity Note [Abstract]

Shareholders' Equity

Shareholders’ Equity

Preferred Stock:

In February 2014, we issued 30 million depositary shares, each representing a 1/4,000th ownership interest in a share of State Street’s fixed-to-floating-rate non-cumulative perpetual preferred stock, Series D, without par value, with a liquidation preference of $100,000 per share (equivalent to $25 per depositary share), in a public offering. The aggregate proceeds from the offering, net of underwriting discounts, commissions and other issuance costs, were approximately $742 million.

On March 15, 2024, or any dividend payment date thereafter, the Series D 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 D preferred stock and corresponding depositary shares may be redeemed at our option in whole, but not in part, prior to March 15, 2024, upon the occurrence of a regulatory capital treatment event, as defined in the certificate of designation with respect to the Series D preferred stock, 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.

In the three months ended March 31, 2014, we declared aggregate dividends on our non-cumulative perpetual preferred stock, Series C (represented by depositary shares, each representing a 1/4,000th ownership interest in a share of State Street's non-cumulative perpetual preferred stock, Series C) of $1,313 per share, or approximately $0.33 per depositary share, totaling approximately $6 million.

Dividends on shares of both our Series C and Series D preferred stock are not mandatory and are not 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% and 5.90%, respectively. If we issue additional shares of our Series C or Series D 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 our Series C and Series D 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.

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 in the certificate of designation with respect to the Series C preferred stock, 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.

Common Stock:

In March 2014, our Board of Directors approved a new common stock purchase program authorizing the purchase of up to $1.70 billion of our common stock through March 31, 2015. No shares were purchased by us under this program in the three months ended March 31, 2014.

In the three months ended March 31, 2014, we purchased approximately 6.1 million shares of our common stock at an average cost of $69.14 per share and an aggregate cost of approximately $420 million, under a previous program approved by the Board in March 2013. As of March 31, 2014, no shares remained available for purchase under the March 2013 program. Shares acquired in connection with our common stock purchase programs which remained unissued as of March 31, 2014 were recorded as treasury stock in our consolidated statement of condition as of March 31, 2014.

In both the three months ended March 31, 2014 and 2013, we declared aggregate common stock dividends of $0.26 per share, totaling approximately $112 million and $118 million, respectively.

Accumulated Other Comprehensive Income (Loss):

The following table presents the after-tax components of AOCI as of the dates indicated:

(In millions)	March 31, 2014			December 31, 2013
Net unrealized gains on cash flow hedges	$	154		$	161
Net unrealized gains (losses) on available-for-sale securities portfolio	194			(56		)
Net unrealized losses related to reclassified available-for-sale securities	(61		)	(72		)
Net unrealized gains (losses) on available-for-sale securities	133			(128		)
Net unrealized losses on available-for-sale securities designated in fair value hedges	(107		)	(97		)
Other-than-temporary impairment on available-for-sale securities related to factors other than credit	2			4
Net unrealized losses on hedges of net investments in non-U.S. subsidiaries	(14		)	(14		)
Other-than-temporary impairment on held-to-maturity securities related to factors other than credit	(39		)	(47		)
Net unrealized losses on retirement plans	(197		)	(203		)
Foreign currency translation	256			229
Total	$	188		$	(95	)

In the three months ended March 31, 2014, we realized net gains of $15 million, or $9 million net of related taxes as presented in the tables that follow, from sales of available-for-sale securities. Unrealized pre-tax gains of $5 million were included in AOCI as of December 31, 2013, net of deferred taxes of $3 million, related to these sales. In the

three months endedMarch 31, 2013, we realized net gains of $5 million, or $3 million net of related taxes as presented in the tables that follow, from sales of available-for-sale securities. Unrealized pre-tax losses of $49 million were included in AOCI as of December 31, 2012, net of deferred taxes of $20 million, related to these sales.

The following tables presents changes in AOCI by component, net of related taxes, for the periods indicated:

	Three Months Ended March 31, 2014
(In millions)	Net Unrealized Gains (Losses) on Cash Flow Hedges			Net Unrealized Gains (Losses) on Available-for-Sale Securities			Net Unrealized Losses on Hedges of Net Investments in Non-U.S. Subsidiaries			Other-Than-Temporary Impairment on Held-to-Maturity Securities			Net Unrealized Losses on Retirement Plans			Foreign Currency Translation		Total
Beginning balance	$	161		$	(221	)	$	(14	)	$	(47	)	$	(203	)	$	229	$	(95	)
Other comprehensive income (loss) before reclassifications	(8		)	258			—			8			1			27		286
Amounts reclassified out of AOCI	1			(9		)	—			—			5			—		(3		)
Other comprehensive income (loss)	(7		)	249			—			8			6			27		283
Ending balance	$	154		$	28		$	(14	)	$	(39	)	$	(197	)	$	256	$	188

	Three Months Ended March 31, 2013
(In millions)	Net Unrealized Gains (Losses) on Cash Flow Hedges		Net Unrealized Gains (Losses) on Available-for-Sale Securities			Net Unrealized Losses on Hedges of Net Investments in Non-U.S. Subsidiaries			Other-Than-Temporary Impairment on Held-to-Maturity Securities			Net Unrealized Losses on Retirement Plans			Foreign Currency Translation			Total
Beginning balance	$	69	$	519		$	(14	)	$	(65	)	$	(283	)	$	134		$	360
Other comprehensive income (loss) before reclassifications	63		69			—			4			(2		)	(248		)	(114		)
Amounts reclassified out of AOCI	1		(3		)	—			2			5			—			5
Other comprehensive income (loss)	64		66			—			6			3			(248		)	(109		)
Ending balance	$	133	$	585		$	(14	)	$	(59	)	$	(280	)	$	(114	)	$	251

The following table presents after-tax reclassifications out of AOCI for the periods indicated:

	Three Months Ended March 31,
	2014			2013
(In millions)	Amounts Reclassified out of AOCI						Affected Line Item in Consolidated Statement of Income
Cash flow hedges:
Interest-rate contracts	$	1		$	1		Net interest revenue
Available-for-sale securities:
Net realized gains from sales of available-for-sale securities, net of related taxes of ($6) and ($2), respectively	(9		)	(3		)	Net gains (losses) from sales of available-for-sale securities
Held-to-maturity securities:
Other-than-temporary impairment on held-to-maturity securities related to factors other than credit, net of related tax benefit of $1	—			2			Losses reclassified (from) to other comprehensive income
Retirement plans:
Amortization of actuarial losses, net of related tax benefits of $3 and $3, respectively	5			5			Compensation and employee benefits expenses
Total reclassifications out of AOCI	$	(3	)	$	5