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State Street Reports 2008 Earnings Per Share of $3.89, up 13% on a Revenue Gain of 28% Compared to 2007

Full-Year Operating Earnings Per Share Increased 14% to a Record $5.21 Per Share on a 25% Gain in Operating Revenue

BOSTON--(BUSINESS WIRE)--Jan. 20, 2009--State Street Corporation today announced full-year 2008 earnings of $3.89 per share on net income of $1.620 billion compared with $3.45 per share on net income of $1.261 billion in 2007. Revenue in 2008 is $10.693 billion, up 28% from $8.336 billion in 2007. Return on common shareholders' equity in 2008 is 13.4% equal to 13.4% in 2007. In the fourth quarter of 2008, State Street reported earnings of $0.15 per share on net income of $65 million, compared to net income of $223 million, or $0.57 per share in the fourth quarter of 2007. Revenue in the fourth quarter of 2008 is $2.673 billion, up 8% from $2.479 billion in the fourth quarter of 2007. Return on common shareholders' equity is 2.3% in the fourth quarter of 2008 compared to 7.7% in the fourth quarter of 2007.

Management also presents results on an operating basis in order to provide financial information that is comparable from period to period and to present comparable financial trends with respect to our ongoing business operations. A full reconciliation of operating-basis results to U.S. generally accepted accounting principals (GAAP) is included in the addendum at the end of this press release.

"Operating-basis" results for the full-year 2008 exclude previously reported net effects of $(28) million, or $(0.25) per share, as well as fourth-quarter net effects of $(723) million, or $(1.03) per share, including $(450) million related to the previously disclosed transaction with certain stable value funds managed by State Street Global Advisors; restructuring charges of $(306) million, primarily associated with our previously announced reduction in force; merger and integration costs of $(27) million associated with the 2007 acquisition of Investors Financial Services Corp. ("Investors Financial"); partially offset by net interest revenue of $60 million from acting as an intermediary under the Federal Reserve Bank's Asset-Backed Commercial Paper Money Market Liquidity Facility ("AMLF"). "Operating- basis" results for the full-year 2007 exclude $(665) million in pre-tax charges associated with active fixed-income strategies at State Street Global Advisors and merger and integration costs associated with Investors Financial. "Operating-basis" results for the fourth-quarter of 2007 exclude $(524) million in pre-tax charges associated with active fixed-income strategies at State Street Global Advisors and merger and acquisition costs associated with Investors Financial. Operating-basis revenue for all periods is presented on a fully taxable-equivalent basis.

The following financial results are presented on an operating basis, as discussed below.

Operating-basis earnings for the full-year 2008 are $5.21 per share, up 14% from $4.57 per share in 2007. Operating-basis revenue in 2008 is up 24.8% to a State Street record of $10.477 billion from $8.394 billion in 2007. Operating-basis expenses in 2008 of $7.058 billion increased 22.4% from $5.768 billion in 2007. On an operating basis, we achieved 240 basis points in positive operating leverage in the year-over-year comparison. Operating-basis return on common shareholders' equity in 2008 is 17.9%, up from 17.7% in 2007.

Operating-basis earnings per share in the fourth quarter are $1.18 per share down 14 % from $1.38 per share in the fourth quarter of 2007. Operating revenue of $2.641 billion in the fourth quarter of 2008 is up 5.8% from $2.496 billion in the fourth quarter a year ago. Operating-basis expenses of $1.806 billion in the fourth quarter of 2008 are up 9.5% from $1.649 billion in the year-ago quarter. For the fourth quarter of 2008, operating return on common shareholders' equity is 18.3%, down from 18.7% for the fourth quarter of 2007.

The balance sheet declined from $286 billion at September 30, 2008, to $174 billion at year end. Excluding $52 billion in excess deposits held at central banks at December 31, 2008, compared with $54 billion at September 30, 2008, and $6 billion of investment securities related to the AMLF, compared to $77 billion at September 30, 2008, the normalized balance sheet was $116 billion at December 31, 2008. At December 31, 2007 the balance sheet was $143 billion. Our regulatory ratios continue to be strong as of December 31, 2008. The tier-1 capital ratio stood at 20.49% and our tier-1 leverage ratio was 7.74%.

Reflecting the ongoing illiquidity in the markets at December 31, 2008, the after-tax, unrealized mark-to-market losses in the investment portfolio increased to $6.3 billion ($5.45 billion recorded in OCI and $.87 billion in HTM, not recorded in OCI), up $3.0 billion from September 30, 2008, and in the State Street-administered asset-backed commercial paper conduits increased to $3.6 billion up $1.4 billion from September 30, 2008. Since year end the unrealized after-tax losses in the investment portfolio have improved $400 million to $5.9 billion as of Friday, January 16, 2009.

Commenting on the performance, Ronald E. Logue, State Street's chairman and chief executive officer, said, "I am pleased that we either met or exceeded our financial goals in 2008. Fiscal year 2008 represents our fourth consecutive year of double-digit growth both in revenue and operating earnings per share. New business wins in 2008 totaled $1.66 trillion in asset servicing with $317 billion to be installed in 2009 and $198 billion in asset management with $24 billion to be installed this year. Servicing fees, trading services, securities finance and net interest revenue each recorded significant double-digit revenue growth in 2008."

Logue commented on the quality of State Street's assets, "We continue to believe that the asset quality of both our investment portfolio and the conduit program remains strong. None of the securities is in default and all are current for principal and interest. In 2008, more than $8 billion in structured securities in our investment portfolio paid down at par, yet had a fair market value, which on average was at a 7.8% discount to book value. We expect the vast majority of our securities to behave similarly as they mature. The current trend in the market is encouraging, but we recognize it only measures two-weeks' progress."

Logue added, "While we expect 2009 to present industry-wide challenges, we believe that the revenue drivers we have identified and the expense controls we have in place, will allow us to meet the following 2009 financial goals, all stated on an operating basis. We expect our revenue in 2009 to be approximately flat with our record revenue in 2008, down from our long term goal of 8% to 12% growth. We expect our operating earnings per share to also be approximately flat with 2008, below our long-term goal of 10% - 15% growth, and we expect operating return on equity to be slightly below the long-term goal of 14% to 17%. We continue to target positive operating leverage on an annual basis."

Citing specific revenue drivers for 2009, Logue said, "Our business pipeline is strong. In addition to those 2008 wins that are scheduled for installation in 2009, we are meeting with potential customers from very large fund complexes that are considering outsourcing their back and/or middle office to us in order to create some variable expense for their organizations. Also large hedge funds, that have historically self-administered their holdings are looking for an outsource partner to create more transparency for their funds and their shareholders. Further, we are expecting new government mandates for increased regulations and transparency to create opportunities for us to develop products for our customers."

Logue concluded, "Regarding net interest income, we expect 2009 net interest income and net interest margin to be approximately flat with 2008. We have $15 billion of low-yielding securities maturing, which we will re-invest in AAA-rated asset-backed and mortgage-backed securities at higher yields if government programs begin to normalize markets."

State Street evaluates the market from time to time. Following recent discussions with investors, State Street has determined not to raise equity capital in this turbulent market.

Following are three tables that display specified reported-basis and operating-basis results for legacy State Street as well as for the acquired Investors Financial business. The first two tables present results for the full year 2008 and 2007 and the fourth quarter for 2008 and 2007, reported in accordance with GAAP and the effects of the non-operating items excluded from operating-basis results. The third table describes the results in four categories: "Baseline," "Investors Financial," "Operating," and "Reported." Management believes such presentation facilitates an investor's understanding and analysis of our underlying performance and trends in addition to financial information prepared in accordance with GAAP. In addition, management believes that providing separate Investors Financial results and baseline financial information further assists investors and analysts in understanding the effect of that acquisition.


$ in millions except per share      For the year ended     For the year ended
data

                                    December 31, 2008      December 31, 2007

                                    Operatinga  Reportedb  Operatingc  Reportedb

Fee revenue                         $7,747      7,747      $6,633      $6,633

Net interest revenue from           2,680       2,680      1,730       1,730
operations

Taxable-equivalent adjustment       104         0          58          0

Net interest revenue from AMLF      0           68         0           0

SILO-related reduction in net       0           (98)       0           0
interest revenue

Total net interest revenue          2,784       2,650      1,788       1,730

Gains (losses) related to           (54)        (54)       (27)        (27)
investment securities, net

Gain on sale of CitiStreet          0           350        0           0
interest

Total revenue                       10,477      10,693     8,394       8,336

Expenses from operations            7,058       7,058      5,768       5,768

Non-operating expenses:

Merger and integration costs        0           115        0           198

Non-operating provisions, netd      0           956        0           467

Total expenses                      7,058       8,129      5,768       6,433

Income before income tax expense    3,419       2,564      2,626       1,903

Income tax expense from operations  1,127       1,127      899         899

Taxable-equivalent adjustment       104         0          58          0

Income tax expense (benefit) on     0           (205)      0           (257)
non-operating items

Total income tax expense            1,231       922        957         642

Preferred dividends and related     (22)        (22)       0           0
adjustments

Net income available to common      $2,166      $1,620     $1,669      $1,261
shareholders

Diluted earnings per common share   $5.21       $3.89      $4.57       $3.45



a "Operating" results for 2008 are reported results, excluding the impact of the CitiStreet gain, AMLF revenue, the charge associated with SILO leasing transactions, the reserve associated with the estimated net exposure to an affiliate of Lehman Brothers Holdings, Inc.; the merger and integration costs associated with the acquisition of Investors Financial the charge associated with certain of State Street Global Advisors' managed accounts with exposure to third-party guarantors, and the restructuring charges primarily associated with the reduction in force, and are presented on a fully taxable-equivalent basis.

b "Reported" results are in accordance with U.S. generally accepted accounting principles (GAAP).

c "Operating" results for 2007 are reported results, excluding the impact of the merger and integration costs associated with the acquisition of Investors Financial and a net charge associated with certain fixed-income strategies at State Street Global Advisors and are presented on a fully taxable-equivalent basis.

dNon-operating provisions include, for 2008, the charge associated with certain of State Street Global Advisors' managed accounts with exposure to third-party guarantors, the restructuring charges primarily associated with the reduction in force, and the reserve associated with the estimated net exposure to an affiliate of Lehman Brothers Holdings, Inc.; for 2007, includes the net charge associated with certain active fixed-income strategies at State Street Global Advisors.


$ in millions except per share      For the quarter ended  For the quarter ended
data

                                    December 31, 2008      December 31, 2007

                                    Operatinga  Reportedb  Operatingc  Reportedb

Fee revenue                         $1,881      $1,881     $1,927      $1,927

Net interest revenue from           783         783        556         556
operations

Taxable-equivalent adjustment       28          0          17          0

Net interest revenue from AMLF      0           60         0           0

Total net interest revenue          811         843        573         556

Gains (losses) related to           (51)        (51)       (4)         (4)
investment securities, net

Total revenue                       2,641       2,673      2,496       2,479

Expenses from operations            1,806       1,806      1,649       1,649

Non-operating expenses:

Merger and integration costs        0           27         0           57

Non-operating provisions, netd      0           756        0           467

Total expenses                      1,806       2,589      1,649       2,173

Income before income tax expense    835         84         847         306

Income tax expense from operations  274         274        290         290

Taxable-equivalent adjustment       28          0          17          0

Income tax expense (benefit) on     0           (277)      0           (207)
non-operating items

Total income tax expense (benefit)  302         (3)        307         83

Preferred dividends and related     (22)        (22)       0           0
adjustments

Net income available to common      $511        $65        $540        $223
shareholders

Diluted earnings per common share   $1.18       $0.15      $1.38       $0.57



a "Operating" results in the fourth quarter of 2008 are reported results, excluding the impact of AMLF revenue, the charge associated with certain of State Street Global Advisors' managed accounts with exposure to third-party guarantors, the restructuring charges primarily associated with the reduction in force, and merger and integration costs associated with the acquisition of Investors Financial; and are presented on a fully taxable-equivalent basis.

b "Reported" results are in accordance with U.S. generally accepted accounting principles (GAAP).

c "Operating" results in the fourth quarter of 2007 are reported results, excluding the impact of the merger and integration costs associated with the acquisition of Investors Financial and a net charge associated with certain fixed-income strategies at State Street Global Advisors and are presented on a fully taxable-equivalent basis.

dNon-operating provisions include, for 2008, the charge associated with certain of State Street Global Advisors' managed accounts with exposure to third-party guarantors and the restructuring charges primarily associated with the reduction in force; and for 2007, includes the net charge associated with certain active fixed-income strategies at State Street Global Advisors.


$ in millions except per share data

For the quarter ended

              December 31,                                        December 31,
              2008                                                2007

              Baseline   Investors      Operating   Reported (d)  Reported (d)
              (a)        Financial (b)  (c)

Fee revenue   $1,730     $151           $1,881      $1,881        $1,927

All other     675        85             760         792           552
revenue

Total         2,405      236            2,641       2,673         2,479
revenue

Total         1,659      147            1,806       2,589         2,173
expenses

Income tax
expense       262        40             302         (3)           83
(benefit)

Preferred
dividends     (22)       0              (22)        (22)          0
and related
adjustments

Net income
available to  $462       $49            $511        $65           $223
common
shareholders

Diluted EPS   $1.16      $0.02          $1.18       $0.15         $0.57



(a) "Baseline" results represent results of legacy State Street on an operating basis excluding AMLF revenue, the impact of the charge associated with the State Street Global Advisors' managed accounts with exposure to third-party guarantors, the restructuring charges primarily associated with the reduction in force, and merger and integration costs associated with the acquisition of Investors Financial; and are presented on a fully taxable-equivalent basis.

(b) "Investors Financial" results represent revenue and expenses, including financing costs and amortization of intangibles, attributable to the Investors Financial business acquired on July 2, 2007, but excluding merger and integration costs. Presented on a fully taxable-equivalent basis. Per-share amounts reflect the impact on outstanding shares from the issuance of approximately 61 million shares for the acquisition.

(c) "Operating" results are reported results, excluding AMLF revenue, the impact of the charge associated with the State Street Global Advisors' managed accounts with exposure to third-party guarantors, the restructuring charges primarily associated with the reduction in force, and merger and integration costs associated with the acquisition of Investors Financial; and are presented on a fully taxable-equivalent basis.

(d) "Reported" results are in accordance with GAAP.

FULL YEAR 2008 VS. 2007

On an operating basis, total revenue increased 24.8% from $8.394 billion to $10.477 billion. Servicing fees increased 11%, from $3.388 billion to $3.745 billion. Management fees decreased 10%, from $1.141 billion to $1.028 billion. Trading services revenue increased 27%, from $1.152 billion to $1.467 billion and securities finance revenue increased 81%, from $681 billion to $1.230 billion. Processing fees and other revenue increased 2%, to $277 million from $271 million. Fully taxable-equivalent net interest revenue increased 56%, from $1.788 billion to $2.784 billion.

On an operating basis, expenses increased 22.4%, from $5.768 billion to $7.058 billion. On an annual, operating basis, the Company achieved approximately 240 basis points of positive operating leverage. Operating expenses included an increase of 21% to $4.120 billion in salaries and employee benefits expense. Transaction processing expense increased 4% to $644 million and information systems and communications increased 16% to $633 million. Occupancy expense increased 14% to $465 million. Other expenses increased 50% to $1.196 billion.

RESULTS OF THE FOURTH-QUARTER OF 2008 VS. YEAR-AGO QUARTER

On an operating basis, total revenue is $2.641 billion in the fourth quarter of 2008, up from $2.496 billion, or 5.8%, from the fourth quarter of 2007. Expenses on an operating basis are $1.806 billion, up 9.5% compared with $1.649 billion in the fourth quarter of 2007.

Servicing fees are $842 million, down 13%, from $967 million in the year-ago quarter. The decrease is primarily attributable to lower equity valuations. Total assets under custody at quarter end are $12.04 trillion, down 21%, compared with $15.30 trillion at the end of the year-ago quarter.

Daily average values for the S&P 500 Index are down 39%, for the MSCI(R) EAFE IndexSM are down 47%, and for the NASDAQ are down 41% during the fourth quarter of 2008 from the year-ago quarter.

Management fees, generated by State Street Global Advisors, are $209 million, down 30%, compared to $297 million in the year-ago quarter. The decrease in management fees reflects lower average month-end equity valuations and lower performance fees. Total assets under management at quarter end are $1.44 trillion, down 27%, compared to $1.98 trillion at the end of the year-ago quarter.

Average month-end values compared to the fourth quarter of 2007, are down 38% for the S&P 500 Index and down 41% for the NASDAQ; average month-end values for the MSCI(R) EAFE IndexSM are down 48%. The total return of the Lehman US Aggregate bond index for the fourth quarter is 4.58%.

Trading services revenue, which includes foreign exchange trading revenue and brokerage and other fee revenue, is up 19%, from $352 million to $418 million. The increase is driven by higher volatility in foreign exchange, offset partially by a decline in foreign exchange volumes and in brokerage and other revenue.

Securities finance revenue is $329 million in the quarter, compared to $256 million in the year-ago quarter, an increase of 29%. The increase reflects improved spreads, offset partially by a lower level of demand for securities on loan reflecting the overall deleveraging of securities that occurred during the third and fourth quarters of 2008.

Processing and other revenue is up 51%, to $83 million primarily due to increases in product-related revenue.

Fully taxable-equivalent net interest revenue is $811 million, up 42% from $573 million in last year's fourth quarter. The increase in net interest revenue is due to wider spreads on assets due to lower funding costs as a result of the reductions in the Fed Funds rate near the end of the third quarter and in fourth quarter. Net interest margin during the fourth quarter of 2008 increased to 2.28% from 1.95% in the year-ago period. During the quarter the Company recorded $78 million in other-than-temporary impairment charges on eleven investment securities, offset partially by $27 million in gains from the sales of securities and gains on security dispositions.

The 9.5% increase in expenses on an operating basis from $1.649 billion in the fourth quarter of 2007 to $1.806 billion in the fourth quarter of 2008 is primarily due to an increase in other expenses as well as in salaries and benefits costs. Salaries and employee benefits expense on an operating basis increased $42 million to $976 million, attributable to a higher headcount and benefits costs, offset partially by lower incentive compensation. Transaction processing expense decreased 21% to $145 million principally due to lower subcustodian and brokerage fees. Information systems and communications expense increased 10% to $163 million, and occupancy expenses of $124 million in 2008 quarter compare to $107 million in the 2007 quarter. On an operating basis, other expenses increased 44%, or $122 million, to $398 million, primarily due to increased securities processing costs and regulatory fees and assessments.

On an operating basis, the effective tax rate was 34.0% in the fourth quarter of 2008 compared with 34.9% in the fourth quarter of 2007. We expect the rate for 2009 to be approximately 34.0%.

RESULTS OF THE FOURTH-QUARTER OF 2008 VS. THIRD QUARTER OF 2008

On an operating basis, fourth-quarter earnings are $1.18 per share as compared to third-quarter earnings of $1.24 per share. Total revenue on a fully tax-equivalent basis in the 2008 fourth quarter of $2.641 billion is up 4.1%, or $105 million compared to $2.536 billion in the third quarter. On an operating basis, expenses in the fourth quarter of 2008 are $1.806 billion up 6.5%, or $111 million, from third-quarter expenses of $1.695 billion.

Servicing fee revenue is down 13% due to significantly lower average equity valuations. Management fee revenue is down 20% due to significantly lower average month-end equity valuations and lower performance fees. Trading services revenue is up 15% to $418 million primarily due to higher volatility, partially offset by lower volumes in foreign exchange. Securities finance revenue improved 34% to $329 million due to improved spreads, partially offset by a lower level of loaned securities. Processing fees and other revenue increased 32% to $83 million due to increases in product-related revenue.

Fully taxable-equivalent net interest revenue increased 27% to $811 million due to the wider spreads on assets following a significant cut in the Fed Funds rate in the fourth quarter and an increase in lower-cost funding.

Salaries and employee benefits expense is down 5% on an operating basis primarily due to lower incentive compensation. Transaction processing expense is down 12% due to lower brokerage and subcustodian fees. Information systems and communication is up 8% to and occupancy expense is up 7%. On an operating basis, other expense increased 65%, or $157 million, to $398 million. Other expenses included increased securities processing costs, additional regulatory fees and assessments, as well as legal and compliance costs.

ADDITIONAL INFORMATION

All per share amounts represent diluted earnings per common share based on average common shares outstanding for the respective period reported. Positive operating leverage is defined as the excess rate of growth of total revenue over the rate of growth of total operating expenses, each determined on an operating basis.

INVESTOR CONFERENCE CALL

State Street will webcast an investor conference call today, Tuesday, January 20, 2009, at 9:30 a.m. EST, available at www.statestreet.com/stockholder. The conference call will also be available via telephone, at +1 706/679-5594 (conference ID 77064958). Recorded replays of the conference call will be available on the web site, and by telephone at +1 706/645-9291 (conference ID 77064958), beginning approximately two hours after the call's completion. The telephone replay will be available for approximately two weeks following the conference call. This press release, presentation materials to be referred to on the conference call and additional financial information are available on State Street's website, at www.statestreet.com/stockholder, under "Investor Information--Latest News," -Annual Reports and Financial Trends--Financial Trends" and "--Investor Events and Presentations."

State Street Corporation (NYSE: STT) is the world's leading specialist in providing institutional investors with investment servicing, investment management and investment research and trading services. With $12.04 trillion in assets under custody and $1.44 trillion in assets under management at December 31, 2008, State Street operates in 27 countries and more than 100 geographic markets worldwide and employs 28,475 worldwide.

FORWARD-LOOKING STATEMENTS

This news announcement contains forward-looking statements as defined by United States securities laws, including statements about our goals and expectations regarding our business, financial condition, results of operations and strategies, the financial and market outlook, governmental and regulatory initiatives and developments and the business environment. 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 our expectations or beliefs as of any date subsequent to the date of this release.

Important factors that may affect future results and outcomes include:

    --  global financial market disruptions and the current, worldwide economic
        recession, and monetary and other governmental actions designed to
        address such disruptions and recession in the United States and
        internationally;
    --  the financial strength of the counterparties with which we or our
        clients do business and with which we have investment or financial
        exposure;
    --  the liquidity of the U.S. and international securities markets,
        particularly the markets for fixed-income securities, and the liquidity
        requirements of our customers;
    --  the credit quality and credit agency ratings of the securities in our
        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;
    --  the maintenance of credit agency ratings for our debt obligations as
        well as the level of credibility of credit agency ratings;
    --  the possibility that changes to accounting rules or in market conditions
        or asset performance may require any off-balance sheet activities,
        including the unconsolidated asset-backed commercial paper conduits we
        administer, to be consolidated into our financial statements, requiring
        the recognition of associated losses;
    --  the possibility of our customers incurring substantial losses in
        investment pools where we act as agent, and the possibility of further
        general reductions in the valuation of assets;
    --  our ability to attract deposits and other low-cost short-term funding;
    --  potential changes to the competitive environment, including changes due
        to the effects of consolidation, extensive and changing government
        regulation and perceptions of State Street as a suitable service
        provider or counterparty;
    --  the level and volatility of interest rates and the performance and
        volatility of securities, credit, currency and other markets in the
        United States and internationally;
    --  our ability to measure the fair value of securities in our investment
        securities portfolio and in the asset-backed commercial paper conduits
        we sponsor;
    --  the results of litigation and similar disputes and, in particular, the
        effect of current or potential litigation concerning SSgA's active
        fixed-income strategies, and the enactment of legislation and changes in
        regulation and enforcement that impact us and our customers, as well as
        the effects of legal and regulatory proceedings;
    --  adverse publicity or other reputational harm;
    --  our ability to pursue acquisitions, strategic alliances and divestures,
        finance future business acquisitions and obtain regulatory approvals and
        consents for acquisitions;
    --  the performance and demand for the products and services we offer,
        including the level and timing of withdrawals from our collective
        investment products;
    --  our ability to continue to grow revenue, attract highly skilled people,
        control expenses and attract the capital necessary to achieve our
        business goals and comply with regulatory requirements;
    --  our ability to control operating risks, information technology systems
        risks and outsourcing risks, the possibility of errors in the
        quantitative models we use to manage our business and the possibility
        that our controls will fail or be circumvented;
    --  the potential for new products and services to impose additional costs
        on us and expose us to increased operational risk, and our ability to
        protect our intellectual property rights;
    --  our ability to obtain quality and timely services from third parties
        with which we contract;
    --  changes in accounting standards and practices, including changes in the
        interpretation of existing standards, that impact our consolidated
        financial statements; and
    --  changes in tax legislation and in the interpretation of existing tax
        laws by U.S. and non-U.S. tax authorities that impact 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 our 2007 Annual Report on Form 10-K and our subsequent SEC filings, including, in particular, our Current Report on Form 8-K dated January 20, 2009. We encourage investors to read these filings, particularly the sections on Risk Factors, and our subsequent SEC filings for additional information with respect to any forward-looking statements and prior to making any investment decision. The forward-looking statements contained in this press release speak only as of the date hereof, January 20, 2009, and we do not undertake efforts to revise those forward-looking statements to reflect events after this date.


STATE STREET CORPORATION

Earnings Press Release Addendum

Consolidated Financial Highlights

December 31, 2008

                 Quarters Ended                              % Change

                                                             Q4 2008   Q4 2008

                   December 31,   September   December 31,   vs.       vs.
                                  30,

(Dollars in
millions,
except per
share amounts      2008           2008        2007           Q3 2008   Q4 2007
or where
otherwise
noted)

Total Revenue    $ 2,673        $ 2,771     $ 2,479          (4  )   % 8       %
(1)

Total Expenses:

Non-operating      450            -           467
provisions, net

Restructuring      306            -           -
charges

Provision for
indemnification    -              200         -
exposure

Merger and
integration        27             30          57
costs

Expenses from      1,806          1,695       1,649          7         10
operations

Income Tax
Expense            (3      )      369         83
(Benefit)

Net Income         87             477         223            (82 )     (61 )

Net Income
Available to       65             477         223
Common
Shareholders

Diluted
Earnings Per     $ .15          $ 1.09      $ .57            (86 )     (74 )
Common Share

Average Diluted
Common Shares      431,902        435,030     392,200
Outstanding (in
thousands):

Cash Dividends
Declared Per     $ .24          $ .24       $ .23
Common Share

Closing Price
Per Share of
Common Stock       39.33          56.88       81.20
(at quarter
end)

Return on          2.3          % 13.6      % 7.7          %
Common Equity

At Quarter End:

Assets Under
Custody (AUC)    $ 12.04        $ 14.05     $ 15.30
(in trillions)

Assets Under
Management         1.44           1.69        1.98
(AUM) (in
trillions)

                 Years Ended                  % Change

                                              2008

                   December 31,   December    vs.
                                  31,

(Dollars in
millions,          2008           2007        2007
except per
share amounts)

Total Revenue    $ 10,693       $ 8,336       28           %
(2)

Total Expenses:

Non-operating      450            467
provisions, net

Restructuring      306            -
charges

Provision for
indemnification    200            -
exposure

Merger and
integration        115            198
costs

Expenses from      7,058          5,768       22
operations

Income Tax         922            642         44
Expense

Net Income         1,642          1,261       30

Net Income
Available to       1,620          1,261       28
Common
Shareholders

Diluted
Earnings Per     $ 3.89         $ 3.45        13
Common Share

Average Diluted
Common Shares      416,100        365,488
Outstanding (in
thousands):

Cash Dividends
Declared Per     $ .95          $ .88         8
Common Share

Return on          13.4         % 13.4      %
Common Equity

(1) Quarter ended September 30, 2008 includes $350 million gain from sale of
CitiStreet interest, net of exit and other associated costs.

(2) Year ended December 31, 2008 includes $350 million gain from sale of
CitiStreet interest, net of exit and other associated costs.





STATE STREET CORPORATION

Earnings Press Release Addendum

SELECTED CONSOLIDATED FINANCIAL INFORMATION

Quarters and Years Ended December 31, 2008 and December 31, 2007

                Quarters Ended                       Years Ended

                December 31,  December               December 31,  December 31,
                              31,

(Dollars in
millions,       2008          2007         % Change  2008          2007(1)      %
except per                                                                      Change
share amounts)

Fee Revenue:

Servicing fees  $ 842         $ 967        (13  ) %  $ 3,745       $ 3,388      11     %

Management        209           297        (30  )      1,028         1,141      (10  )
fees

Trading           418           352        19          1,467         1,152      27
services

Securities        329           256        29          1,230         681        81
finance

Processing        83            55         51          277           271        2
fees and other

Total fee         1,881         1,927      (2   )      7,747         6,633      17
revenue

Net Interest
Revenue:

Interest          1,427         1,454      (2   )      4,879         5,212      (6   )
revenue

Interest          584           898        (35  )      2,229         3,482      (36  )
expense

Net interest      843           556        52          2,650         1,730      53
revenue (2)

Provision for     -             -                      -             -
loan losses

Net interest
revenue after     843           556        52          2,650         1,730      53
provision for
loan losses

Gains (Losses)
related to
investment        (51     )     (4      )              (54     )     (27     )
securities,
net

Gain on sale
of CitiStreet
interest, net
of exit and       -             -                      350           -
other
associated
costs

Total revenue     2,673         2,479      7.8         10,693        8,336      28.3

Expenses:

Salaries and
employee          976           793        23          4,120         3,256      27
benefits

Information
systems and       163           148        10          633           546        16
communications

Transaction
processing        145           184        (21  )      644           619        4
services

Occupancy         124           107        16          465           408        14

Provision for     -             600                    -             600
legal exposure

Provision for
investment        450           -                      450           -
account
infusion

Restructuring     306           -                      306           -
charges

Merger and
integration       27            57         (53  )      115           198        (42  )
costs

Other             398           284        40          1,396         806        73

Total expenses    2,589         2,173      19.1        8,129         6,433      26.4

Income before
income tax        84            306        (73  )      2,564         1,903      35
expense

Income tax
expense           (3      )     83                     922           642
(benefit)

Net income      $ 87          $ 223        (61  )    $ 1,642       $ 1,261      30

Net income
available to    $ 65          $ 223        (71  )    $ 1,620       $ 1,261      28
common
shareholders

Earnings Per
Common Share:

Basic           $ .15         $ .58        (74  )    $ 3.92        $ 3.50       12

Diluted           .15           .57        (74  )      3.89          3.45       13

Average Common
Shares
Outstanding
(in
thousands):

Basic             431,042       385,200                413,182       360,675

Diluted           431,902       392,200                416,100       365,488

Consolidated Selected Financial Information presented above was prepared in accordance
with accounting principles generally accepted in the United States.

(1)Year ended December 31, 2007 includes financial results of Investors Financial
business for the quarters ended September 30 and December 31, 2007.

(2) Net interest revenue on a fully taxable-equivalent basis was $811 million and $573
million for the quarters ended December 31, 2008 and 2007, respectively, and $2.78
billion and $1.79 billion for the years ended December 31, 2008 and 2007,
respectively. These amounts include taxable-equivalent adjustments of $28 million and
$17 million for the quarters ended December 31, 2008 and 2007, respectively, and $104
million and $58 million for the years ended December 31, 2008 and 2007, respectively.




STATE STREET CORPORATION

Earnings Press Release Addendum

SELECTED CONSOLIDATED FINANCIAL INFORMATION

Quarters Ended December 31, 2008 and September 30, 2008

                                       Quarters Ended

                                         December 31,    September 30,

(Dollars in millions, except per         2008            2008           % Change
share amounts)

Fee Revenue:

Servicing fees                         $ 842           $ 966            (13  ) %

Management fees                          209             261            (20  )

Trading services                         418             363            15

Securities finance                       329             246            34

Processing fees and other                83              63             32

Total fee revenue                        1,881           1,899          (1   )

Net Interest Revenue:

Interest revenue                         1,427           1,027          39

Interest expense                         584             502            16

Net interest revenue (1)                 843             525            61

Provision for loan losses                -               -

Net interest revenue after provision     843             525            61
for loan losses

Gains (Losses) related to investment     (51     )       (3      )
securities, net

Gain on sale of CitiStreet interest,
net of exit and other associated         -               350
costs

Total revenue                            2,673           2,771          (3.5 )

Expenses:

Salaries and employee benefits           976             1,022          (5   )

Information systems and                  163             151            8
communications

Transaction processing services          145             165            (12  )

Occupancy                                124             116            7

Provision for investment account         450             -
infusion

Restructuring charges                    306             -

Merger and integration costs             27              30             (10  )

Other                                    398             441            (10  )

Total expenses                           2,589           1,925          34.5

Income before income tax expense         84              846            (90  )

Income tax expense (benefit)             (3      )       369

Net income                             $ 87            $ 477            (82  )

Net income available to common         $ 65            $ 477            (86  )
shareholders

Earnings Per Common Share:

Basic                                  $ .15           $ 1.11           (86  )

Diluted                                  .15             1.09           (86  )

Average Common Shares Outstanding (in
thousands):

Basic                                    431,042         430,872

Diluted                                  431,902         435,030

Consolidated Selected Financial Information presented above was prepared in
accordance with accounting principles generally accepted in the United States.

(1) Net interest revenue on a fully taxable-equivalent basis was $811 million
and $640 million for the quarters ended December 31, 2008 and September 30,
2008, respectively. These amounts include taxable-equivalent adjustments of $28
million and $25 million.





STATE STREET CORPORATION

Earnings Press Release Addendum

SELECTED CONSOLIDATED OPERATING-BASIS FINANCIAL INFORMATION

Quarters and Years Ended December 31, 2008 and December 31, 2007

                    Quarters Ended(1)                      Years Ended (1)

                    December 31,   December                December 31,   December 31,
                                   31,

(Dollars in                                       %
millions, except    2008           2007           Change   2008           2007           % Change
per share amounts)

Fee Revenue:

Servicing fees      $ 842          $ 967          (13 ) %  $ 3,745        $ 3,388        11     %

Management fees       209            297          (30 )      1,028          1,141        (10  )

Trading services      418            352          19         1,467          1,152        27

Securities finance    329            256          29         1,230          681          81

Processing fees       83             55           51         277            271          2
and other

Total fee revenue     1,881          1,927        (2  )      7,747          6,633        17

Net Interest
Revenue:

Interest revenue,     1,133          1,471        (23 )      4,714          5,270        (11  )
operating basis

Interest expense      322            898          (64 )      1,930          3,482        (45  )

Net interest
revenue, operating    811            573          42         2,784          1,788        56
basis

Provision for loan    -              -                       -              -
losses

Net interest
revenue after
provision for loan    811            573          42         2,784          1,788        56
losses, operating
basis

Gains (Losses)
related to            (51     )      (4      )               (54     )      (27     )
investment
securities, net

Total revenue,
operating basis(2)    2,641          2,496        5.8        10,477         8,394        24.8
(3)

Expenses:

Salaries and          976            934          4          4,120          3,397        21
employee benefits

Information
systems and           163            148          10         633            546          16
communications

Transaction
processing            145            184          (21 )      644            619          4
services

Occupancy             124            107          16         465            408          14

Other                 398            276          44         1,196          798          50

Total expenses,
operating basis       1,806          1,649        9.5        7,058          5,768        22.4
(2)(3)

Income before
income tax            835            847          (1  )      3,419          2,626        30
expense, operating
basis

Income tax
expense, operating    274            290                     1,127          899
basis

Taxable-equivalent    28             17                      104            58
adjustment

Net income,         $ 533          $ 540          (1  )    $ 2,188        $ 1,669        31
operating basis

Net income
available to
common              $ 511          $ 540          (5  )    $ 2,166        $ 1,669        30
shareholders,
operating basis

Diluted earnings
per common share,   $ 1.18         $ 1.38         (14 )    $ 5.21         $ 4.57         14
operating basis

Average diluted
common shares         431,902        392,200                 416,100        365,488
outstanding (in
thousands)

Return on common
equity, operating     18.3      %    18.7      %             17.9      %    17.7      %
basis

(1) Refer to the accompanying reconciliation of reported results to operating-basis results.

(2) For the quarter ended December 31, 2008, negative operating leverage in the year-over-year
comparison was 370 basis points, based on growth in total operating-basis revenue of 5.8% and
growth in total operating-basis expenses of 9.5%.

(3) For the year ended December 31, 2008, positive operating leverage in the year-over-year
comparison was 240 basis points, based on growth in total operating-basis revenue of 24.8% and
growth in total operating-basis expenses of 22.4%.




STATE STREET CORPORATION

Earnings Press Release Addendum

SELECTED CONSOLIDATED OPERATING-BASIS FINANCIAL INFORMATION

Quarters Ended December 31, 2008 and September 30, 2008

                                         Quarters Ended (1)

                                         December 31,   September 30,

(Dollars in millions, except per share   2008           2008            % Change
amounts)

Fee Revenue:

Servicing fees                           $ 842          $ 966           (13  ) %

Management fees                            209            261           (20  )

Trading services                           418            363           15

Securities finance                         329            246           34

Processing fees and other                  83             63            32

Total fee revenue                          1,881          1,899         (1   )

Net Interest Revenue:

Interest revenue, operating basis          1,133          1,105         3

Interest expense                           322            465           (31  )

Net interest revenue, operating basis      811            640           27

Provision for loan losses                  -              -

Net interest revenue after provision for   811            640           27
loan losses, operating basis

Gains (Losses) related to investment       (51     )      (3      )
securities, net

Total revenue, operating basis(2)          2,641          2,536         4.1

Expenses:

Salaries and employee benefits             976            1,022         (5   )

Information systems and communications     163            151           8

Transaction processing services            145            165           (12  )

Occupancy                                  124            116           7

Other                                      398            241           65

Total expenses, operating basis (2)        1,806          1,695         6.5

Income before income tax expense,          835            841           (1   )
operating basis

Income tax expense                         274            278

Taxable-equivalent adjustment              28             25

Net income, operating basis              $ 533          $ 538           (1   )

 Net income available to common          $ 511          $ 538           (5   )
 shareholders, operating basis

Diluted earnings per common share,       $ 1.18         $ 1.24          (4.8 )
operating basis

Average diluted common shares              431,902        435,030
outstanding (in thousands)

Return on common equity, operating basis   18.3       %   15.4        %

(1) Refer to the accompanying reconciliation of reported results to
operating-basis results.

(2)For the quarter ended December 31, 2008, negative operating leverage in the
quarter-over-quarter comparison was 240 basis points, based on growth in total
operating-basis revenue of 4.1% and growth in total operating-basis expenses of
6.5%.





STATE STREET CORPORATION

Earnings Press Release Addendum

RECONCILIATION OF REPORTED RESULTS TO OPERATING-BASIS RESULTS

Quarter and Year Ended December 31, 2008

(Dollars in
millions, except    Quarter Ended December 31, 2008               Year Ended December 31, 2008
per share amounts)

                      Reported                       Operating      Reported                       Operating

                      Results     Adjustments        Results        Results      Adjustments       Results

Fee Revenue:

Servicing fees      $ 842                          $ 842          $ 3,745                          $ 3,745

Management fees       209                            209            1,028                            1,028

Trading services      418                            418            1,467                            1,467

Securities finance    329                            329            1,230                            1,230

Processing fees       83                             83             277                              277
and other

Total fee revenue     1,881                          1,881          7,747                            7,747

Net Interest
Revenue:

Interest revenue      1,427       $ (294    ) (1)    1,133          4,879        $ (165    ) (8)     4,714

Interest expense      584           (262    ) (2)    322            2,229          (299    ) (2)     1,930

Net interest          843           (32     )        811            2,650          134               2,784
revenue

Provision for loan    -             -                -              -              -                 -
losses

Net interest
revenue after         843           (32     )        811            2,650          134               2,784
provision for loan
losses

Gains (Losses)
related to            (51     )     -                (51     )      (54     )      -                 (54     )
investment
securities, net

Gain on sale of
CitiStreet
interest, net of      -             -                -              350            (350    ) (9)     -
exit and other
associated costs

Total revenue         2,673         (32     )        2,641          10,693         (216    )         10,477

Expenses:

Salaries and          976           -                976            4,120          -                 4,120
employee benefits

Information
systems and           163           -                163            633            -                 633
communications

Transaction
processing            145           -                145            644            -                 644
services

Occupancy             124           -                124            465            -                 465

Provision for
investment account    450           (450    ) (3)    -              450            (450    ) (3)     -
infusion

Restructuring         306           (306    ) (4)    -              306            (306    ) (4)     -
charges

Merger and            27            (27     ) (5)    -              115            (115    ) (5)     -
integration costs

Other                 398           -                398            1,396          (200    ) (10)    1,196

Total expenses        2,589         (783    )        1,806          8,129          (1,071  )         7,058

Income before         84            751              835            2,564          855               3,419
income taxes

Income tax expense    (3      )     277       (6)    274            922            205       (11)    1,127
(benefit)

Taxable-equivalent    -             28        (7)    28             -              104       (7)     104
adjustment

Net income          $ 87          $ 446            $ 533          $ 1,642        $ 546             $ 2,188

Net income
available to        $ 65          $ 446            $ 511          $ 1,620        $ 546             $ 2,166
common
shareholders

Diluted earnings    $ .15         $ 1.03           $ 1.18         $ 3.89         $ 1.32            $ 5.21
per common share

Average diluted
common shares         431,902       431,902          431,902        416,100        416,100           416,100
outstanding (in
thousands)

Return on common      2.3       %   16.0      %      18.3      %    13.4      %    4.5       %       17.9      %
equity

Reported results reflect State Street's Consolidated Statement of Income prepared in accordance with accounting
principles generally accepted in the United States.

(1)Represents taxable-equivalent adjustment of $28 million, which is not included in reported results and $322
million of revenue related to the Boston Federal Reserve Bank's Asset-Backed Commercial Paper Money Market
Liquidity Facility (AMLF).

(2)Represents interest expense related to the Boston Federal Reserve Bank's AMLF.

(3) Represents a charge associated with SSgA Stable Value Funds.

(4)Represents restructuring costs associated with reduction in workforce and other cost initiatives.

(5) Represents merger and integration costs recorded in connection with the acquisition of Investors Financial,
which are direct and incremental costs associated with the acquisition and do not include ongoing expenses of
the combined organization.

(6)Represents $24 million of income tax expense related to the Boston Federal Reserve Bank's AMLF, $180 million
of income tax benefit related to SSgA Stable Value Funds, $112 million of income tax benefit related to
restructuring costs, and $9 million of income tax benefit related to merger and integration costs for the
acquisition of Investors Financial.

(7)Represents taxable-equivalent adjustment, which is not included in reported results.

(8)Represents taxable-equivalent adjustment of $104 million for the year ended December 31, 2008, which is not
included in reported results, plus a $98 million charge associated with SILO leveraged lease transactions, net
of $367 million of revenue related to the Boston Federal Reserve Bank's AMLF.

(9)Represents gain on the sale of CitiStreet interest, net of exit and other associated costs, which State
Street divested on July 1, 2008.

(10)Represents a charge to provide for estimated net exposure on an indemnification obligation associated with
collateralized repurchase agreements.

(11)Represents $27 million of income tax expense related to the Boston Federal Reserve Bank's AMLF, $39 million
of income tax expense related to the reserve for SILO's, $140 million of income tax expense related to the gain
from sale of CitiStreet interest, $180 million of income tax benefit related to SSgA Stable Value Funds, $112
million of income tax benefit related to restructuring costs, $39 million of income tax benefit related to
merger and integration costs for the acquisition of Investor's Financial and $80 million of income tax benefit
related to the provision for estimated net exposure on an indemnification obligation associated with
collateralized repurchase agreements.





STATE STREET CORPORATION

Earnings Press Release Addendum

RECONCILIATION OF REPORTED RESULTS TO OPERATING-BASIS RESULTS

Quarter and Year Ended December 31, 2007

(Dollars in
millions, except    Quarter Ended December 31, 2007                Year Ended December 31, 2007
per share amounts)

                       Reported                       Operating      Reported                     Operating

                       Results     Adjustments        Results        Results     Adjustments      Results

Fee Revenue:

Servicing fees       $ 967                          $ 967          $ 3,388                        $ 3,388

Management fees        297                            297            1,141                          1,141

Trading services       352                            352            1,152                          1,152

Securities finance     256                            256            681                            681

Processing fees        55                             55             271                            271
and other

Total fee revenue      1,927                          1,927          6,633                          6,633

Net Interest
Revenue:

Interest revenue       1,454       $ 17        (1)    1,471          5,212       $ 58        (1)    5,270

Interest expense       898           -                898            3,482         -                3,482

Net interest           556           17               573            1,730         58               1,788
revenue

Provision for loan     -             -                -              -             -                -
losses

Net interest
revenue after          556           17               573            1,730         58               1,788
provision for loan
losses

Gains (Losses)
related to             (4      )     -                (4      )      (27     )     -                (27     )
investment
securities, net

Total revenue          2,479         17               2,496          8,336         58               8,394

Expenses:

Salaries and           793           141       (2)    934            3,256         141       (2)    3,397
employee benefits

Information
systems and            148           -                148            546           -                546
communications

Transaction
processing             184           -                184            619           -                619
services

Occupancy              107           -                107            408           -                408

Provision for          600           (600    ) (2)    -              600           (600    ) (2)    -
legal exposure

Merger and             57            (57     ) (3)    -              198           (198    ) (3)    -
Integration costs

Other                  284           (8      ) (2)    276            806           (8      ) (2)    798

Total expenses         2,173         (524    )        1,649          6,433         (665    )        5,768

Income before          306           541              847            1,903         723              2,626
income taxes

Income tax expense     83            207              290            642           257              899

Taxable-equivalent     -             17        (1)    17             -             58        (1)    58
adjustment

Net income           $ 223         $ 317            $ 540          $ 1,261       $ 408            $ 1,669

Net income
available to         $ 223         $ 317            $ 540          $ 1,261       $ 408            $ 1,669
common
shareholders

Diluted earnings     $ .57         $ .81            $ 1.38         $ 3.45        $ 1.12           $ 4.57
per common share

Average diluted
common shares          392,200       392,200          392,200        365,488       365,488          365,488
outstanding (in
thousands)

Return on common       7.7       %   11.0      %      18.7      %    13.4      %   4.3       %      17.7      %
equity

Reported results reflect State Street's Consolidated Statement of Income prepared in accordance with accounting
principles generally accepted in the United States.

(1)Represents taxable-equivalent adjustment, which is not included in reported results.

(2) Represents a net charge associated with certain active fixed-income strategies at State Street Global
Advisors.

(3) Represents merger and integration costs recorded in connection with the acquisition of Investors Financial,
which are direct and incremental costs associated with the acquisition and do not include ongoing expenses of
the combined organization.




STATE STREET CORPORATION

Earnings Press Release Addendum

RECONCILIATION OF REPORTED RESULTS TO OPERATING-BASIS RESULTS

Quarter Ended September 30, 2008

(Dollars in millions, except per   Quarter Ended September 30, 2008
share amounts)

                                   Reported                        Operating

                                   Results        Adjustments      Results

Fee Revenue:

Servicing fees                     $ 966                           $ 966

Management fees                      261                             261

Trading services                     363                             363

Securities finance                   246                             246

Processing fees and other            63                              63

Total fee revenue                    1,899                           1,899

Net Interest Revenue:

Interest revenue                     1,027        $ 78        (1)    1,105

Interest expense                     502            (37     ) (2)    465

Net interest revenue                 525            115              640

Provision for loan losses            -              -                -

Net interest revenue after           525            115              640
provision for loan losses

Gains (Losses) related to            (3      )      -                (3      )
investment securities, net

Gain on sale of CitiStreet
interest, net of exit and other      350            (350    ) (3)    -
associated costs

Total revenue                        2,771          (235    )        2,536

Expenses:

Salaries and employee benefits       1,022          -                1,022

Information systems and              151            -                151
communications

Transaction processing services      165            -                165

Occupancy                            116            -                116

Merger and integration costs         30             (30     ) (4)    -

Other                                441            (200    ) (5)    241

Total expenses                       1,925          (230    )        1,695

Income before income taxes           846            (5      )        841

Income tax expense                   369            (91     ) (6)    278

Taxable-equivalent adjustment        -              25        (7)    25

Net income                         $ 477          $ 61             $ 538

Net income available to common     $ 477          $ 61             $ 538
shareholders

Diluted earnings per common share  $ 1.09         $ .15            $ 1.24

Average diluted common shares        435,030        435,030          435,030
outstanding (in thousands)

Return on common equity              13.6      %    1.8       %      15.4      %

Reported results reflect State Street's Consolidated Statement of Income
prepared in accordance with accounting principles generally accepted in the
United States.

(1)Represents taxable-equivalent adjustment of $25 million for the quarter
ended September 30, 2008, which is not included in reported results, plus a
$98 million charge associated with SILO leasing transactions, net of $45
million of revenue related to the Boston Federal Reserve Bank's Asset-Backed
Commercial Paper Money Market Liquidity Facility (AMLF).

(2)Represents $37 million of interest expense related to the Boston Federal
Reserve Bank's AMLF.

(3)Represents gain on the sale of CitiStreet interest, net of exit and other
associated costs, which State Street divested on July 1, 2008.

(4) Represents merger and integration costs recorded in connection with the
acquisition of Investors Financial, which are direct and incremental costs
associated with the acquisition and do not include ongoing expenses of the
combined organization.

(5)Represents a charge to provide for estimated net exposure to customers on
an indemnification obligation associated with collateralized repurchase
agreements.

(6)Represents $3 million of income tax expense related to the Boston Federal
Reserve Bank's AMLF, $39 million of income tax expense related to the reserve
for SILO's, $140 million of income tax expense related to the gain from sale
of CitiStreet interest, $11 million of income tax benefit related to merger
and integration costs for the acquisition of Investors Financial, and $80
million of income tax benefit related to the provision for potential secured
exposure associated with a collateralized repurchase agreement.

(7)Represents taxable-equivalent adjustment, which is not included in reported
results.




STATE STREET CORPORATION

Press Release Addendum

CONSOLIDATED STATEMENT OF CONDITION

                                       December 31,  September 30,  December 31,

(Dollars in millions, except per       2008          2008           2007
share amounts)

Assets

Cash and due from banks                $ 3,181       $ 56,145       $ 4,041

Interest-bearing deposits with banks     55,733        20,548         6,271

Securities purchased under resale        1,635         9,598          19,133
agreements

Federal funds sold                       -             1,500          4,540

Trading account assets                   815           6,332          589

Investment securities available for      54,163        68,881         70,326
sale

Investment securities held to
maturity purchased under money market    6,087         76,660         -
liquidity facility

Investment securities held to            15,767        3,945          4,233
maturity

Loans and leases (net of allowance of    9,113         17,430         15,784
$18)

Premises and equipment                   2,011         1,987          1,894

Accrued income receivable                1,738         1,915          2,096

Goodwill                                 4,527         4,516          4,567

Other intangible assets                  1,851         1,890          1,990

Other assets                             17,010        14,217         7,079

Total assets                           $ 173,631     $ 285,564      $ 142,543

Liabilities

Deposits:

Noninterest-bearing                    $ 32,785      $ 70,033       $ 15,039

Interest-bearing -- U.S.                 4,558         9,988          14,790

Interest-bearing -- Non-U.S.             74,882        70,848         65,960

Total deposits                           112,225       150,869        95,789

Securities sold under repurchase         11,154        17,274         14,646
agreements

Federal funds purchased                  1,082         1,984          425

Short-term borrowings under money        6,042         76,627         -
market liquidity facility

Other short-term borrowings              11,555        4,289          5,557

Accrued taxes and other expenses         578           2,443          4,392

Other liabilities                        13,972        14,908         6,799

Long-term debt                           4,419         4,106          3,636

Total liabilities                        161,027       272,500        131,244

Shareholders' Equity

Preferred stock, no par: authorized      1,883         -              -
3,500,000; issued 20,000 shares

Common stock, $1 par: authorized
750,000,000 shares; issued               432           432            398
431,976,032, 431,950,903 and
398,366,326 shares

Surplus                                  6,992         6,793          4,630

Retained earnings                        8,965         9,002          7,745

Accumulated other comprehensive loss     (5,650  )     (3,146  )      (575    )

Treasury stock (at cost 418,354,         (18     )     (17     )      (899    )
404,943 and 12,081,863 shares)

Total shareholders' equity               12,604        13,064         11,299

Total liabilities and shareholders'    $ 173,631     $ 285,564      $ 142,543
equity




    CONTACT: State Street Corporation
             Edward J. Resch, +1 617-664-1110
             or
             Investors:
             Kelley MacDonald, +1 617-664-3477
             or
             Media:
             Hannah Grove, +1 617-664-3377

    Source: State Street Corporation
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release regarding State Street Corporation's business which are not historical facts are "forward-looking statements" that involve risks and uncertainties. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see "Risk Factors" in the Company's Annual Report or Form 10-K for the most recently ended fiscal year.