SELECTED FINANCIAL INFORMATION

(Dollars in millions, except per
share data)

2008⁽²⁾

2007⁽³⁾⁽⁴⁾

% Change

For the years ended December 31,

Fee revenue:

Servicing fees

$

3,745

$

3,388

11

Management fees

1,028

1,141

(10)

Trading services

1,467

1,152

27

Securities finance

1,230

681

81

Processing fees and other

277

271

2

Total fee revenue

7,747

6,633

17

Net interest revenue after provision for loan losses, operating-basis⁽¹⁾

2,784

1,788

56

Gains on sales of available-for-sale investment securities, net

(54)

(27)

Total revenue, operating basis

10,477

8,394

25

Total expenses, operating-basis

6,780

5,768

18

Income from continuing operations before income tax expense, operating-basis

3,697

2,626

41

Income tax expense

1,236

899

Taxable equivalent adjustment⁽¹⁾

104

58

Income from continuing operations, operating basis

$

2,357

$

1,669

41

Income from continuing operations available to common shareholders, operating basis

$

2,335

$

1,669

40

Earnings per share, operating-basis⁽⁵⁾:

Basic

$

5.65

$

4.63

22

Diluted

5.61

4.57

23

Cash dividends declared per share

.95

.88

Return on equity, operating-basis

19.3

%

17.7

%

As of December 31,

Investment securities

$

76,017

$

74,559

Total assets

173,631

142,543

Deposits

112,225

95,789

Long-term debt

4,419

3,636

Shareholders' equity

12,774

11,299

Closing price per share of common stock

$ 

39.33

$ 

81.20

⁽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 revenue excludes a charge against net interest revenue related to SILO leveraged lease transactions of $98 million, $367 million of revenue related to the Boston Federal Reserve Bank’s AMLF and a $350 million gain on the sale of Citistreet interest, net of exit and other associated costs, which State Street divested on July 1, 2008.

Operating-basis expenses for 2008 exclude $299 million in interest expense related to the Boston Federal Reserve Bank’s AMLF, a charge of $450 million associated with SSgA Stable Value Funds, $306 million in restructuring costs associated with reduction in workforce and other cost initiatives, merger and integration costs of $115 million recorded in connection with the acquisition of Investor’s Financial, and a $200 million charge to provide for estimated net exposure on an indemnification obligation associated with collateralized repurchase agreements. 

⁽³⁾ Operating-basis results for 2007 exclude merger and integration costs of $198 million recorded in connection with the acquisition of Investor’s Financial, and a net charge of $467 million associated with certain active fixed-income strategies at State Street Global Advisors.

⁽⁴⁾ Financial information for 2007 includes results of Investors Financial, acquired on July 2, 2007, for the third and fourth quarters of 2007.

⁽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.