Shareholders' Equity

9 Months Ended

Sep. 30, 2011

Shareholders' Equity

Shareholders' Equity

Note 10. Shareholders' Equity

In March 2011, we issued 5,001 shares, or $500 million, of our non-cumulative perpetual preferred stock, series A, $100,000 liquidation preference per share, in connection with the remarketing of our 6.001% junior subordinated debentures due 2042 originally issued to State Street Capital Trust III in 2008. The preferred stock was purchased by State Street Capital Trust III using the ultimate proceeds from the remarketing transaction, and now constitutes the principal asset of the trust. The preferred stock qualifies for inclusion in tier 1 regulatory capital under federal regulatory capital guidelines. Additional information about the remarketing transaction is provided in note 7 in this Form 10-Q and in note 10 to the consolidated financial statements included in our 2010 Form 10-K. Dividends on the perpetual preferred stock are non-cumulative, and are accrued when declared.

In March 2011, our Board of Directors approved a new program authorizing the purchase by us of up to $675 million of our common stock in 2011. This new program superseded the Board's prior authorization under which 13.25 million common shares were available for purchase as of December 31, 2010. During the period from April 1, 2011 through September 30, 2011, we purchased and recorded as treasury stock a total of approximately 10.7 million shares of our common stock, at an average cost per share of approximately $42.06 and an aggregate cost of approximately $450 million. As of September 30, 2011, approximately $225 million of purchase authorization remained. 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) income as of the dates indicated:

(In millions)	September 30, 2011			December 31, 2010
Foreign currency translation	$	226		$	216
Net unrealized loss on hedges of net investments in non-U.S. subsidiaries		(14	)		(14	)
Net unrealized gain (loss) on available-for-sale securities portfolio		253			(90	)
Net unrealized loss related to reclassified available-for-sale securities		(215	)		(317	)
Net unrealized gain (loss) on available-for-sale securities		38			(407	)
Net unrealized loss on available-for-sale securities designated in fair value hedges		(231	)		(135	)
Expected losses from other-than-temporary impairment on available-for-sale securities related to factors other than credit		(13	)		(17	)
Expected losses from other-than-temporary impairment on held-to-maturity securities related to factors other than credit		(98	)		(111	)
Net unrealized loss on cash flow hedges		(5	)		(11	)
Minimum pension liability		(218	)		(210	)
Total	$	(315	)	$	(689	)

For 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 other comprehensive income, or OCI, at December 31, 2010, net of deferred taxes of $26 million, related to these sales. For the nine months ended September 30, 2010, we realized net gains of $286 million from sales of available-for-sale securities. Unrealized pre-tax gains of $102 million were included in OCI at December 31, 2009, net of deferred taxes of $41 million, related to these sales.

 

      The following table presents total comprehensive income for the periods indicated:

	Three Months Ended September 30,					Nine Months Ended September 30,
(In millions)	2011			2010		2011		2010
Net income	$	555		$	546	$	1,539	$	1,473
Other comprehensive (loss) income		(475	)		925		374		1,483
Total comprehensive income	$	80		$	1,471	$	1,913	$	2,956