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| State Street Corporation is the world's leading provider of financial services to institutional investors. Our broad and integrated range of services spans the entire investment spectrum, including research, investment management, trading services and investment servicing. |
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| State Street provides specialized investment research and trading in foreign exchange, equities, fixed income, derivatives and money market products. Our goal is to enhance and preserve portfolio values for asset managers and asset owners with original, flow-based research, innovative portfolio strategies, trade process optimization, and global connectivity across multiple asset classes and markets. |
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| State Street Global Advisors, the world's leading manager of institutional assets, provides disciplined, systematic investment strategies for customers of every size and investment objective. Our passive and active – including enhanced – strategies capitalize on technological and intellectual innovation. We also offer integrated solutions and trading services to customers who wish to outsource aspects of their investment management programs. |
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| As the world's leading investment service provider, State Street delivers an array of customized investment solutions to asset managers, pension funds, hedge funds, insurance companies, collective funds, mutual funds and nonprofit organizations. We offer fund accounting, fund administration, custody, securities lending, investment manager operations outsourcing, recordkeeping, performance and analytics, and transfer agency services that are highly scalable and truly global. With our expertise and local market knowledge, we help our customers control costs, develop and launch competitive new investment products, and expand globally. |
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(Dollars in millions, except
per
share data) |
|
2007(2)(3) |
2006(4) |
% Change |
|
|
| |
 |
| |
| For the years ended
December 31, |
| Fee revenue: |
| Servicing fees |
$ |
3,388 |
$ |
2,723 |
|
24 |
|
| Management fees |
|
1,141 |
|
943 |
|
21 |
|
| Trading services |
|
1,152 |
|
862 |
|
34 |
|
| Securities finance |
|
681 |
|
386 |
|
76 |
|
| Processing fees and other |
|
237 |
|
272 |
|
(13) |
|
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|
|
|
|
|
|
|
| |
 |
|
| Total fee revenue |
|
6,599 |
|
5,186 |
|
27 |
|
| Net interest revenue after
provision for loan losses, operating-basis (1) |
|
1,788 |
|
1,155 |
|
55 |
|
| Gains on sales of available-for-sale
investment securities, net |
|
7 |
|
15 |
|
|
|
| |
|
|
|
|
|
|
|
 |
| |
|
|
|
|
|
|
|
| Total revenue, operating
basis |
|
8,394 |
|
6,356 |
|
32 |
|
| Total expenses,
operating-basis |
|
5,768 |
|
4,540 |
|
27 |
|
| |
 |
| |
| Income from continuing
operations before income tax expense, operating-basis |
|
2,626 |
|
1,816 |
|
45 |
|
| Income tax expense |
|
899 |
|
610 |
|
|
|
| Taxable equivalent adjustment(1) |
|
58 |
|
45 |
|
|
|
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 |
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| Income from continuing
operations, operating basis |
$ |
1,669 |
$ |
1,161 |
|
44 |
|
| |
 |
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| Earnings per share,
operating-basis (5): |
| Basic |
$ |
4.63 |
$ |
3.51 |
|
32 |
|
| Diluted |
|
4.57 |
|
3.46 |
|
32 |
|
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|
|
|
|
|
|
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| Cash dividends declared per
share |
|
.88 |
|
.80 |
|
|
|
| Return on equity,
operating-basis |
|
17.7 |
% |
17.1 |
% |
|
|
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| As of December 31, |
| Investment securities |
$ |
74,559 |
$ |
64,992 |
|
|
|
| Total assets |
|
142,543 |
|
107,353 |
|
|
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| Deposits |
|
95,789 |
|
65,646 |
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| Long-term debt |
|
3,636 |
|
2,616 |
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| Shareholders' equity |
|
11,299 |
|
7,252 |
|
|
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|
|
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| Closing price per share of common stock |
$ |
81.20 |
$ |
67.44 |
|
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(1) Operating-basis results for each of the years presented include a fully
taxable-equivalent adjustment. Fully taxable-equivalent
revenue is a method of presentation in which the tax
savings achieved by investing in tax-exempt securities are
included in interest income with a corresponding charge to
income tax expense. This method facilitates comparison of
the performance of tax-exempt and taxable securities. The
adjustment is computed using a federal income tax rate of
35%, adjusted for applicable state income taxes, net of
the related federal tax benefit.
(2) Operating-basis results for 2007 exclude merger and
integration costs of $198 million, or $129 million
after-tax, recorded in connection with the acquisition of
Investor’s Financial, and a net charge of $467 million, or
$279 million after-tax, associated with certain active
fixed-income strategies at State Street Global Advisors.
(3) Financial information for 2007 includes results of
Investors Financial, acquired on July 2, 2007, for the
third and fourth quarters of 2007.
(4) Operating-basis results for 2006 exclude $65 million
of tax adjustments primarily related to The Tax Increase
Prevention and Reconciliation Act, or “TIPRA”, and certain
leveraged lease transactions.
(5) Operating-basis earnings per share for 2007 reflect
the issuance of 60.8 million shares on July 2, 2007 in
connection with the acquisition of Investors Financial.
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