State Street Corporation · NYSE:STT
State Street — Deutsche Bank Global Financial Services Investor Conference 2014
27 slides from State Street's conference presentation, May 28, 2014
Slide 1: The Way Ahead: Creating Long-Term Shareholder Value
The Way Ahead: Creating Long-Term Shareholder Value Joseph L. Hooley Chairman, President and Chief Executive Officer Deutsche Bank Global Financial Services Investor Conference May 28, 2014
Slide 2: Forward-looking Statements
2 Forward-looking Statements This presentation contains forward-looking statements as defined by United States securities laws, including statements relating to our goals and expectations regarding our business, financial and capital condition, results of operations, investment portfolio performance
Slide 3: Agenda
3 Agenda Our Company Focused Strategy Financial Performance Summary The Way Ahead
Slide 4: Our Company
Our Company Ef) STATE STREET.
Slide 5: State Street Corporation – Global Financial Services Specialist
5 State Street Corporation – Global Financial Services Specialist OUR BUSINESS • Leading provider of financial services and products to institutional investors – $27.5 trillion of assets under custody and administration1 – $2.4 trillion of assets under management1 – Operate globally in more than 100
Slide 6: Focused Strategy
Focused Strategy Es) STATE STREET.
Slide 7: Focused Strategy: Long-Term Shareholder Value
7 1Goals presented on an operating basis, a non-GAAP presentation. See Appendix for explanations of our non-GAAP financial measures and for reconciliations of our operating-basis financial information. The Appendix is available on State Street’s website (www.statestreet.com/stockholder) and in State
Slide 8: Focused Strategy – Building on our Strong Core
8 Data as of, or for the quarter ended March 31, 2014, as appropriate. Focused Strategy – Building on our Strong Core Transitioning to a more integrated sales approach by sector Capturing full value of client relationships Developing innovative new products and services Leveraging technology leaders
Slide 9: Focused Strategy – Building on Our Strong Core: Industry Leadership
9 US MUTUAL FUNDS1 MIDDLE OFFICE2 US PENSION FUNDS3 Sources: 1 Mutual Funds - State Street Global Business Reporting, Investment Company Institute; 2 Middle Office - State Street December 2013, Scrip Issue Global Report; 3 Pension Funds - State Street Global Business Reporting, Money Market Director
Slide 10: An Early Mover in Alternatives
10 Sources: 1 Hedge Fund Market - Hedge Fund Research, January 2014; Private Equity Market - Preqin, Jan 2014; Real Estate Market – Towers Watson, July 2013; PI Online (2005-2008). As of period end; 2 Acquisitions: 2007: Palmeri $35B, Investors Financial $170B, 2010: Mourant $170B, 2012: GSAS $200B;
Slide 11: Focused Strategy – Building on Our Strong Core
11 All data as of December 31, 2013, unless otherwise noted. 1This AUM includes the assets of SPDR® Gold ETF (approx. $31B as of December 31, 2013), for which State Street Global Markets, LLC, an affiliate of SSgA, serves as the distribution agent; 2 Includes real estate investment trusts, currency
Slide 12: We are a Leading Sponsor of Exchange-Traded Funds
12 $1.1T $1.4T $1.5T $1.9T $2.4T $0.5 $0.7 $0.9 $1.1 $1.3 $1.5 $1.7 $1.9 $2.1 $2.3 $2.5 2009 2010 2011 2012 2013 1 Source: BlackRock ETP Landscape, January 2014. Focused Strategy – Building on Our Strong Core We are a Leading Sponsor of Exchange-Traded Funds SSgA Has Been Successful in Expanding ETF
Slide 13: Business Operations and IT Transformation Program – Achieving a Digital Enterprise
13 Focused Strategy – Business Operations and Information Technology Transformation Program – Achieving a Digital Enterprise Process Automation and Standardization Workforce Optimization: Centers of Excellence Leveraging Lower-Cost Locations Integrating Private Cloud Infrastructure Digital Enterpris
Slide 14: Focused Strategy – Investing In Opportunities For Growth
14 1 McKinsey, (Sep. 2012); 2 Towers Watson, Global Pension Assets Study 2012, (Jan 2012). Focused Strategy – Investing In Opportunities For Growth TREND DRIVEN BY AREAS OF INVESTMENT Globalization ● 40% of the growth in financial assets will come from emerging markets over the next decade1 - Chines
Slide 15: Focused Strategy – Optimizing Capital
15 Focused Strategy – Optimizing Capital INVESTING IN GROWTH RETURNING CAPITAL TO SHAREHOLDERS ● Focus on strategic initiatives – Expanding geographies – New product creation – Advanced technologies ● Optimize capital structure in light of new and emerging rules ● Prioritize return to shareholders t
Slide 16: Financial Performance
Financial Performance Et) STATE STREET.
Slide 17: Comparisons are to full-year 2012. Results presented on an operating basis, a non-GAAP presentation.
17 1 Comparisons are to full-year 2012. 2 Results presented on an operating basis, a non-GAAP presentation. See Appendix for explanations of our non-GAAP financial measures and for reconciliations of our operating- basis financial information. The Appendix is available on State Street’s website (www
Slide 18: (i) Data for each of State Street Corporation (STT), The Bank of New York
18 1 (i) Data for each of State Street Corporation (STT), The Bank of New York Mellon Corporation (BK) and Northern Trust Corporation (NTRS) is derived from the relevant company’s public filings, earnings announcements or related materials (individually or collectively, “publicly disclosed informati
Slide 19: Compared to the First Quarter of 2013
19 1 Results presented on an operating basis, a non-GAAP presentation. See Appendix for explanations of our non-GAAP financial measures and for reconciliations of our operating-basis financial information. The Appendix is available on State Street’s website (www.statestreet.com/stockholder) and in S
Slide 20: 2014 Outlook
20 ● Despite continued headwinds, our outlook for 2014 is positive: – 3-5% operating-basis1 revenue growth compared to 2013 – Targeting positive operating leverage2 – Expect to continue return of capital through quarterly common stock dividends and common stock repurchases ● We are committed to cont
Slide 21: Summary
Summary Ef) STATE STREET.
Slide 22: Focused Strategy: Long-Term Shareholder Value
22 1 Goals presented on an operating basis, a non-GAAP presentation. See Appendix for explanations of our non-GAAP financial measures and for reconciliations of our operating-basis financial information. The Appendix is available on State Street’s website (www.statestreet.com/stockholder) and in Sta
Slide 23: Appendix
23 Appendix The foregoing presentation includes financial information presented on a GAAP basis as well as on a non-GAAP, or “operating basis.” Management measures and compares certain financial information on an operating basis, as it believes that this presentation supports meaningful comparisons
Slide 24: 2013 vs. (Dollars in millions, except per share amounts) 2012 Total Revenue: Total revenue,
24 2013 vs. (Dollars in millions, except per share amounts) 2012 Total Revenue: Total revenue, GAAP basis $ 1,297 $ 1,214 Adjustment to GAAP-basis revenue - none - - Total revenue, operating basis (1) $ 1,297 $ 1,214 6.84 % Expenses: Total expenses, GAAP basis $ 836 $ 864 Credits related to gains an
Slide 25: 2013 vs. (Dollars in millions) 2012 Total Revenue: Total revenue, GAAP basis $ 9,884
25 2013 vs. (Dollars in millions) 2012 Total Revenue: Total revenue, GAAP basis $ 9,884 $ 9,649 2.4 % Tax-equivalent adjustment associated with tax-exempt investment securities 142 124 Tax-equivalent adjustment associated with tax-advantaged investments 158 126 Loss on sale of Greek investment secur
Slide 26: (Dollars in millions, except per share amounts) Income Before Income Tax Expense: Income before
26 (Dollars in millions, except per share amounts) Income Before Income Tax Expense: Income before income tax expense, GAAP basis $ 2,686 $ 2,766 $ 2,536 Net pre-tax effect of non-operating adjustments to revenue and expenses 343 62 239 Income before income tax expense, operating basis $ 3,029 $ 2,8
Slide 27: Q1 2014 vs. (Dollars in millions) Q1 2013 Total Revenue: Total revenue, GAAP basis
27 Q1 2014 vs. (Dollars in millions) Q1 2013 Total Revenue: Total revenue, GAAP basis $ 2,485 $ 2,435 2.1 % Tax-equivalent adjustment associated with tax-advantaged investments 57 34 Tax-equivalent adjustment associated with tax-exempt investment securities 44 32 Discount accretion associated with f
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