Shareholders’ Equity

Preferred Stock:

Preferred Stock, Series E

In November 2014, we issued 30 million depositary shares, each representing a 1/4,000th ownership interest in a share of State Street’s non-cumulative perpetual preferred stock, Series E, without par value per share, with a liquidation preference of $100,000 per share (equivalent to $25 per depositary share), which we refer to as our Series E preferred stock, in a public offering. The aggregate proceeds from the offering, net of underwriting discounts, commissions and other issuance costs, were approximately $728 million.

On December 15, 2019, or any dividend payment date thereafter, the Series E 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 E preferred stock and corresponding depositary shares may be redeemed at our option in whole, but not in part, prior to December 15, 2019, upon the occurrence of a regulatory capital treatment event, as defined in the certificate of designation with respect to the Series E 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 January 2015, we declared dividends on our Series E preferred stock of $1,833 per share, or approximately $0.46 per depositary share, totaling approximately $14 million, which will be paid in March 2015.

Preferred Stock, Series D

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 per share, with a liquidation preference of $100,000 per share (equivalent to $25 per depositary share), which we refer to as our Series D preferred stock, 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 2014, we declared aggregate dividends on our Series D preferred stock of $4,605 per share, or approximately $1.15 per depositary share, totaling approximately $35 million. In January 2015, we declared dividends on our Series D preferred stock of $1,475 per share, or approximately $0.37 per depositary share, totaling approximately $11 million, which will be paid in March 2015.

Preferred Stock, Series C

In 2014, we declared aggregate dividends on our Series C preferred stock of $5,252 per share, or approximately $1.32 per depositary share, totaling approximately $26 million. In 2013, we declared aggregate dividends on our Series C preferred stock of $5,250 per share, or approximately $1.31 per depositary share, totaling approximately $26 million. In January 2015, we declared dividends on our Series C preferred stock of $1,313 per share, or approximately $0.33 per depositary share, totaling approximately $7 million, which will be paid in March 2015.

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 but not 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.

Dividends on shares of our Series C, Series D and Series E 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 annual rates of 5.25%, 5.90% and 6.00%, respectively. If we issue additional shares of our Series C, Series D or Series E 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, Series D and Series E 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 applicable federal regulatory capital guidelines.

Common Stock:

In March 2014, our Board of Directors approved a common stock purchase program authorizing the purchase of up to $1.70 billion of our common stock through March 31, 2015. In 2014, we purchased approximately 17.7 million shares of our common stock at an average per-share cost of $69.59 and an aggregate cost of approximately $1.23 billion under the program. As of December 31, 2014, approximately $470 million remained available for purchases of our common stock under the program. Shares acquired under the program which remained unissued as of December 31, 2014 were recorded as treasury stock in our consolidated statement of condition as of December 31, 2014.

In 2014, we completed a previous Board-authorized common stock purchase program with the purchase of 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.

In 2014, in the aggregate under both programs, we purchased approximately 23.8 million shares of our common stock at an average per-share cost of $69.48 and an aggregate cost of approximately $1.65 billion.

In 2014, we declared aggregate common stock dividends of $1.16 per share, totaling approximately $490 million, compared to aggregate common stock dividends of $1.04 per share, totaling approximately $463 million, declared in 2013.

Accumulated Other Comprehensive Income (Loss):

The following table presents the after-tax components of AOCI as of December 31:



(In millions)	2014			2013			2012
Net unrealized gains on cash flow hedges	$	276		$	161		$	69
Net unrealized gains (losses) on available-for-sale securities portfolio	273			(56		)	815
Net unrealized gains (losses) related to reclassified available-for-sale securities	39			(72		)	(110		)
Net unrealized gains (losses) on available-for-sale securities	312			(128		)	705
Net unrealized losses on available-for-sale securities designated in fair value hedges	(121		)	(97		)	(183		)
Other-than-temporary impairment on available-for-sale securities related to factors other than credit	1			4			(3		)
Net unrealized losses on hedges of net investments in non-U.S. subsidiaries	(14		)	(14		)	(14		)
Other-than-temporary impairment on held-to-maturity securities related to factors other than credit	(29		)	(47		)	(65		)
Net unrealized losses on retirement plans	(272		)	(203		)	(283		)
Foreign currency translation	(660		)	229			134
Total	$	(507	)	$	(95	)	$	360

In the year ended December 31, 2014, we realized net gains of $15 million, or $9 million net of related taxes from sales of available-for-sale securities. Unrealized pre-tax losses of $43 million were included in AOCI as of December 31, 2013, net of deferred tax benefits of $17 million, related to these sales. In the year ended December 31, 2013, we realized net gains of $14 million, or $9 million net of related taxes, from sales of available-for-sale securities. Unrealized pre-tax gains of $25 million were included in AOCI as of December 31, 2012, net of deferred taxes of $10 million, related to these sales.

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



	Year Ended December 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
Balance as of December 31, 2012	$	69	$	519		$	(14	)	$	(65	)	$	(283	)	$	134		$	360
Other comprehensive income (loss) before reclassifications	89		(735		)	—			15			60			96			(475		)
Amounts reclassified into earnings	3		(5		)	—			3			20			(1		)	20
Other comprehensive income (loss)	92		(740		)	—			18			80			95			(455		)
Balance as of December 31, 2013	161		(221		)	(14		)	(47		)	(203		)	229			(95		)
Other comprehensive income (loss) before reclassifications	112		422			—			17			—			(889		)	(338		)
Amounts reclassified into earnings	3		(9		)	—			1			(69		)	—			(74		)
Other comprehensive income (loss)	115		413			—			18			(69		)	(889		)	(412		)
Balance as of December 31, 2014	$	276	$	192		$	(14	)	$	(29	)	$	(272	)	$	(660	)	$	(507	)

The following tables present after-tax reclassifications into earnings for the periods indicated:



	Years Ended December 31,
	2014			2013
(In millions)	Amounts Reclassified into Earnings						Affected Line Item in Consolidated Statement of Income
Cash flow hedges:
Interest-rate contracts, net of related tax benefit of $2 and $2, respectively	$	3		$	3		Net interest revenue
Available-for-sale securities:
Net realized gains from sales of available-for-sale securities, net of related taxes of ($6) and ($5), respectively	(9		)	(9		)	Net gains (losses) from sales of available-for-sale securities
Other-than-temporary impairment on available-for-sale securities related to factors other than credit, net of related tax benefit of $2	—			4			Losses reclassified (from) to other comprehensive income
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 $3 for 2013	1			3			Losses reclassified (from) to other comprehensive income
Retirement plans:
Amortization of actuarial losses, net of related taxes of ($50) and tax benefits of $13, respectively	(69		)	20			Compensation and employee benefits expenses
Foreign currency translation:
Sales of non-U.S. entities, net of related taxes of ($1)	—			(1		)	Processing fees and other revenue
Total reclassifications out of AOCI	$	(74	)	$	20