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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) |
|
2008(2)
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2007(3)(4) |
% Change |
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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 |
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Total fee revenue |
|
7,747 |
|
6,633 |
|
17 |
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Net interest revenue after
provision for loan losses, operating-basis(1)
|
|
2,784 |
|
1,788 |
|
56 |
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Gains on sales of available-for-sale investment securities, net |
|
(54) |
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(27) |
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Total revenue, operating basis |
|
10,477 |
|
8,394 |
|
25 |
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Total expenses, operating-basis |
|
6,780 |
|
5,768 |
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18 |
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Income from continuing operations before income tax expense, operating-basis |
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3,697 |
|
2,626 |
|
41 |
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Income tax expense |
|
1,236 |
|
899 |
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Taxable equivalent adjustment(1)
|
|
104 |
|
58 |
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Income from continuing operations, operating basis |
$ |
2,357 |
$ |
1,669 |
|
41 |
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Income from continuing operations available to common shareholders, operating basis |
$ |
2,335 |
$ |
1,669 |
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40 |
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Earnings per share, operating-basis(5): |
Basic |
$ |
5.65 |
$ |
4.63 |
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22 |
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Diluted |
|
5.61 |
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4.57 |
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23 |
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Cash dividends declared per share |
|
.95 |
|
.88 |
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Return on equity, operating-basis |
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19.3 |
% |
17.7 |
% |
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As of December 31, |
Investment securities |
$ |
76,017 |
$ |
74,559 |
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Total assets |
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173,631 |
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142,543 |
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Deposits |
|
112,225 |
|
95,789 |
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Long-term debt |
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4,419 |
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3,636 |
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Shareholders' equity |
|
12,774 |
|
11,299 |
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Closing price per share of common stock |
$ |
39.33 |
$ |
81.20 |
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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 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. |
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