UNITED STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date
of Report (Date of earliest event reported):
January
13, 2012
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State
Street Corporation
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(Exact
name of registrant as specified in its charter)
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Massachusetts
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001-07511
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04-2456637
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(State of Incorporation)
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(Commission File Number)
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(IRS Employer
Identification Number)
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One Lincoln Street, Boston, Massachusetts
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02111
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(Address
of principal executive offices)
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(Zip
code)
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Registrant's telephone number, including area code:
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(617) 786-3000
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Check the
appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any
of the following provisions:
⃞
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
⃞
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
⃞
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
⃞
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item 2.02.
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Results of Operations and Financial Condition.
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On January 18, 2012, State Street Corporation (“State Street” or the
“Company”) issued a news release announcing its results of operations
and related financial information for full-year 2011 and the fourth
quarter of 2011. A copy of that news release is furnished herewith as
Exhibit 99.1, and is incorporated herein by reference.
In addition, a copy of a slide presentation pertaining to State Street’s
investment portfolio as of December 31, 2011, which will be referenced
in connection with the investor conference call to be held by the
Company on January 18, 2012, is furnished with this Form 8-K as Exhibit
99.2.
Item 2.05.
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Costs Associated with Exit or Disposal Activities.
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On January 18, 2012, State Street announced additional expense control
measures designed to better calibrate the Company’s expenses to its
outlook for its capital markets-facing businesses in 2012, which
resulted in fourth-quarter 2011 pre-tax charges of $120 million ($0.15
per share). These charges included $83 million ($0.11 per share)
resulting from the Company’s withdrawal from its fixed-income trading
initiative and $37 million ($0.04 per share) of severance and benefits
costs associated with other targeted staff reductions. The $83 million
charge associated with the fixed-income trading initiative included $38
million ($0.05 per share) related to changes in the fair value of the
initiative’s trading portfolio, $25 million ($0.03 per share) of
severance and benefits costs and $20 million ($0.03 per share) of costs
associated with asset write-downs and contract terminations.
During the fourth quarter of 2011, the Company commenced a series of
actions that concluded on January 13, 2012 with its commitment to fully
withdraw from its fixed-income trading initiative and to undertake other
targeted staff reductions. It anticipates that all staff reductions
will be substantially completed by the end of 2012. In addition, as a
result of the withdrawal from its fixed-income trading initiative, the
Company intends to wind down the initiative’s remaining trading
portfolio. At December 31, 2011, this trading portfolio consisted
primarily of derivative assets with an aggregate fair value of
approximately $1.89 billion and derivative liabilities with an aggregate
fair value of approximately $1.78 billion. The Company’s consolidated
results of operations for future periods, during which the trading
portfolio is wound down, may be affected, potentially materially, by the
impact of economic and market conditions, including changes in credit
profiles and currency and yield spreads, on the valuation of, or trade
execution for, the initiative’s remaining trading portfolio.
Item 5.02.
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Departure of Directors or Certain Officers; Election of
Directors; Appointment of Certain Officers; Compensatory
Arrangements of Certain Officers.
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On January 17, 2012, State Street amended its Management Supplemental
Retirement Plan to reduce from 6% to 5% the Company’s matching
contributions under the plan. As amended, the Company will annually
provide each participant in the plan with a contribution equal in amount
to that participant’s annual contribution; however, the Company’s
contribution will be limited to a maximum of 5% of the participant’s
eligible compensation. Prior to the amendment, the Company’s
contribution was limited to a maximum of 6% of the participant’s
eligible compensation. Each of the Company’s current named executive
officers identified in the proxy statement for its 2011 annual meeting
of shareholders is eligible to participate in the plan. The amendment
is effective as of January 1, 2012.
Forward-Looking Statements
This Current Report on Form 8-K contains forward-looking statements as
defined by United States securities laws, including statements relating
to State Street’s expectations concerning the wind-down of the remaining
trading portfolio of its former fixed-income trading initiative and the
completion of the staff reductions announced today. Forward-looking
statements are often, but not always, identified by such forward-looking
terminology as “anticipate,” “intend,” "plan," "expect," "look,"
"believe," "estimate," "seek," "may," "will," "trend," "target,” and
"goal," or similar statements or variations of such terms. These
statements are not guarantees of future performance, are inherently
uncertain, are based on current assumptions that are difficult to
predict and involve a number of risks and uncertainties. Therefore,
actual outcomes and results may differ materially from what is expressed
in those statements, and those statements should not be relied upon as
representing the Company’s expectations or beliefs as of any date
subsequent to January 18, 2012.
Important factors that may affect future results and outcomes include,
but are not limited to:
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the manner in which the Federal Reserve and other regulators implement
the Dodd-Frank Act, Basel III and other regulatory initiatives in the
U.S. and internationally, including any increases in the minimum
regulatory capital ratios applicable to the Company and regulatory
developments that result in changes to the Company’s operating model
or other changes to the provision of its services in order to comply
with or respond to such regulations;
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required regulatory capital ratios under Basel II and Basel III, in
each case as fully implemented by State Street and State Street Bank
(and in the case of Basel III, when finally adopted by the Federal
Reserve), which may result in the need for substantial additional
capital or increased levels of liquidity in the future;
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approvals required by the Federal Reserve or other regulators for the
use, allocation or distribution of its capital or other specific
capital actions or programs, including equity repurchases, which
approvals may restrict or limit the Company’s growth plans,
distributions to shareholders, equity repurchase programs or other
capital initiatives;
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changes in law or regulation that may adversely affect the Company,
its clients’ or its counterparties’ business activities and the
products or services that it sells, including additional or increased
taxes or assessments thereon, capital adequacy requirements and
changes that expose it to risks related to compliance;
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financial market disruptions and the economic recession, whether in
the U.S., Europe or other regions, internationally;
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the liquidity of the U.S. and international securities markets,
particularly the markets for fixed-income securities, and the
liquidity requirements of the Company’s clients;
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increases in the volatility of, or declines in the levels of, the
Company’s net interest revenue, changes in the composition of the
assets on the Company’s consolidated balance sheet and the possibility
that the Company may be required to change the manner in which it
funds those assets;
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the financial strength and continuing viability of the counterparties
with which the Company or its clients do business and to which the
Company has investment, credit or financial exposure including, for
example, the direct and indirect effects on counterparties of the
pending sovereign debt risks in Europe;
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the credit quality, credit agency ratings, and fair values of the
securities in the Company’s investment securities portfolio, a
deterioration or downgrade of which could lead to other-than-temporary
impairment of the respective securities and the recognition of an
impairment loss in its consolidated statement of income;
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delays or difficulties in the execution of the Company’s previously
announced business operations and information technology
transformation program, which could lead to changes in its estimates
of the charges, expenses or savings associated with the planned
program, resulting in increased volatility of the Company’s earnings;
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the maintenance of credit agency ratings for the Company’s debt and
depository obligations as well as the level of credibility of credit
agency ratings;
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the results of, and costs associated with, government investigations,
litigation, and similar claims, disputes, or proceedings;
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the risks that acquired businesses and joint ventures will not be
integrated successfully, or that the integration will take longer than
anticipated, that expected synergies will not be achieved or
unexpected disynergies will be experienced, that client and deposit
retention goals will not be met, that other regulatory or operational
challenges will be experienced and that disruptions from the
transaction will harm relationships with clients, employees or
regulators;
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the ability to complete acquisitions, divestitures and joint ventures,
including the ability to obtain regulatory approvals, the ability to
arrange financing as required and the ability to satisfy closing
conditions;
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the performance of and demand for the products and services the
Company offers, including the level and timing of redemptions and
withdrawals from its collateral pools and other collective investment
products;
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the possibility that the Company’s clients will incur substantial
losses in investment pools where it acts as agent, and the possibility
of significant reductions in the valuation of assets;
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the Company’s ability to attract deposits and other low-cost,
short-term funding;
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potential changes to the competitive environment, including changes
due to the effects of consolidation, and perceptions of State Street
as a suitable service provider or counterparty;
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the level and volatility of interest rates and the performance and
volatility of securities, credit, currency and other markets in the
U.S. and internationally;
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the Company’s ability to measure the fair value of the investment
securities on its consolidated balance sheet;
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the Company’s ability to control operating risks, data security breach
risks, information technology systems risks and outsourcing risks, and
the Company’s ability to protect its intellectual property rights, the
possibility of errors in the quantitative models the Company uses to
manage its business and the possibility that its controls will prove
insufficient, fail or be circumvented;
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adverse publicity or other reputational harm;
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the Company’s ability to grow revenue, attract and/or retain and
compensate highly skilled people, control expenses and attract the
capital necessary to achieve its business goals and comply with
regulatory requirements;
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the potential for new products and services to impose additional costs
on the Company and expose it to increased operational risk;
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changes in accounting standards and practices; and
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changes in tax legislation and in the interpretation of existing tax
laws by U.S. and non-U.S. tax authorities that affect the amount of
taxes due.
Other important factors that could cause actual results to differ
materially from those indicated by any forward-looking statements are
set forth in the Company’s 2010 Annual Report on Form 10-K and the
Company’s subsequent SEC filings. The Company encourages investors to
read these filings, particularly the sections on risk factors, for
additional information with respect to any forward-looking statements
and prior to making any investment decision. The forward-looking
statements contained in this Current Report on Form 8-K speak only as of
the date hereof, January 18, 2012, and the Company does not undertake
efforts to revise those forward-looking statements to reflect events
after that date.
Item 9.01.
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Financial Statements and Exhibits.
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(d) Exhibits.
State Street Corporation’s news release dated January 18, 2012,
announcing its full-year 2011 and fourth-quarter 2011 results of
operations and related financial information, is furnished herewith as
Exhibit 99.1, and a slide presentation pertaining to State Street’s
investment portfolio, which will be made available in connection with
the investor conference call referenced in the January 18, 2012 news
release, is furnished herewith as Exhibit 99.2.
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
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STATE STREET CORPORATION
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By:
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/s/ James J. Malerba
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Name:
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James J. Malerba
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Title:
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Executive Vice President,
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Corporate Controller and
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Chief Accounting Officer
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Date:
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January 18, 2012
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EXHIBIT INDEX
Exhibit No.
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Description
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99.1
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State Street’s news release dated January 18, 2012, announcing its
full-year 2011 and fourth-quarter 2011 results of operations and
related financial information.
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99.2
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Slide presentation pertaining to State Street’s investment
portfolio as of December 31, 2011.
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