1. How do you add value? + State Street 2005 1 value defined 8 shareholder letter 14 customer value 36 financial summary 48 corporate information 49 board of directors 50 executive leadership 52 worldwide locations State Street Corporation How do you add value? State Street is the worlds leading provider of financial services to institutional investors. Our broad and integrated range of State Street Financial Center services spans the entire investment spectrum including research, investment management, trading services and investment One Lincoln Street servicing. Our competitive advantage lies in our focus and the commitment of more than 20,000 employees operating in 26 State Street 2005 Boston, Massachusetts 02111-2900 countries around the world. Because of this focus, we can continually invest in our business and build dynamic, long-term +1 617 786 3000 relationships with our customers. In doing so, we deliver a value and service that customers cannot get anywhere else. www.statestreet.com For more information, visit www.statestreet.com. Design and content by State Street Global Marketing 05-STT0423 Photography by Andy Ryan, Tom Kates and Getty Images 2006 STATE STREET CORPORATION

2. 2005 Financial Highlights $ millions, except per share data 2005(1) 2004(2) $ Change % Change Total revenue(3) $ 4,951 $ 522 11% $ 5,473 Total operating expenses 3,759 282 8 4,041 Income from continuing operations 798 147 18 945 Net income 798 40 5 838 Earnings per share from continuing operations: Basic $ 2.38 $ .48 20 $ 2.86 Diluted 2.35 .47 20 2.82 Earnings per share: Basic $ 2.38 $ .15 6 $ 2.53 Diluted 2.35 .15 6 2.50 Cash dividends declared per share .64 .08 13 .72 Return on shareholders equity from continuing operations 13.3% 15.3% Return on shareholders equity 13.3 13.6 Diluted Earnings Per Share Total Revenue 2005 was a year of goals set and met. From Continuing Operations (1) In 2005, we recorded a loss from discontinued operations of $107 million (2) In 2004, operating expenses included $62 million, or $.12 per share, of (1) 2002 earnings per share included the gain on the sale of the divested (3) 2004 earnings per share included GSS acquisition merger and integration (charge of $165 million reduced by related tax benefit of $58 million), merger and integration costs related to the acquisition of a substantial Corporate Trust business of $.90 per share. costs of $.12 per share. or $.32 per share, related to a plan to divest our ownership interest in Bel portion of the Global Securities Services, or GSS, business of Deutsche (2) 2003 earnings per share included the combined gains on sales of the (4) 2002 total revenue included the gain on the sale of the divested Corporate Air Investment Advisors LLC. Bank AG. Excluding these costs, diluted earnings per share from continuing divested Corporate Trust and Private Asset Management businesses of Trust business of $495 million. operations for 2004 were $2.47. $.68 per share, and combined charges for divestiture costs, GSS acquisition (5) 2003 total revenue included the combined gains on sales of the divested (3) On a taxable-equivalent basis, total revenue for 2005 of $5.52 billion merger and integration costs, restructuring expenses, settlement of a state Corporate Trust and Private Asset Management businesses of $345 million increased $519 million, or 10%, from $5.00 billion in 2004. tax matter and a loss on certain real estate sold equal to $.86 per share. and a loss on certain real estate sold of $13 million.

3. Value is more than just numbers.

4. More than late nights at the office. STT 2

5. Bigger than ideas. STT 3

6. It transcends geographies. STT 4

7. And lines of communication. STT 5

8. 28 consecutive years of operating earnings per share growth + operations in U.K. authority wins + 2.4 million trade settlements averaged per month + 9 new + 6,000 employees involved in volunteer projects + more than 10 years in hedge on FX Connect + serving 37% of the U.S. pension and tax-exempt market + years in business + No. 1 manager of institutional assets worldwide + more 19 percent of retail and institutional fund assets in Germany + more than 3,200 operating expenses invested in technology + new regional data within State + $382 billion in transition management assets + double-digit growth in fee and Exchange Trading Platform + servicing $2.8 trillion in assets for investment quantitative investment management approach + more than 20,000 employees of exchange-traded funds worldwide + $1.4 million donated to global disaster under management + enhanced my.statestreet.com + 27 consecutive years management + up to 23,000 foreign exchange trades per week matched by GTSS than $640 billion assets under administration in Asia-Pacific + top rated in + 34,000 hours of community service invested by employees + 13 independent products + No. 1 investment manager in Europe + custody services for more 35 countries + 414,000 Fed wire transfers averaged per month + Global Alpha + Worlds Best Bank in Asset Management + 4 new offices opened in 2005 of trust assets in Japan held by non-domestic banks + 31% of U.S. mutual portfolios measured by WM Performance Services + $130 billion in hedge STT 6

9. 26 countries + more than $10 trillion in assets under custody + 4 new local exchange-traded funds launched + 80% of new revenue from existing customers fund servicing + exceeded $45 billion in daily foreign exchange trading volume trust and valuation services for more than 4,500 daily priced portfolios + 213 than $500 billion offshore assets serviced + Depotbank services for more than information technology professionals worldwide + 20-25 percent of annual Street Investor Confidence Index + 37% of workforce outside the United States total revenue + 40% of U.S. mutual funds serviced + Best Multibank Foreign manager operations outsourcing + 51 active stock selection strategies with worldwide + 19% of U.K. pension fund assets serviced + Second largest manager relief efforts + 834 investment servicing wins + more than $1.4 in trillion assets of biannual dividend increases + 27% growth in global equity assets under + 4.1 million automated clearinghouse transactions averaged per month + more hedge fund administration + 57 billion in quantitative active equity strategies directors + top 100 customers average a 14-year relationship and use 12.8 than 20% of fund assets in Canada + securities finance customers in more than Plus investment strategy launched + 39% of revenue generated outside the U.S. + Best Custodian + 837 portfolio transitions completed + more than 36% fund net assets values published daily to the NASDAQ + 5,000 investment fund assets under administration + 1,252 new investment management wins Its more. STT 7

10. 2005 Headlines 01.06.05 Named Investment Service Provider to Mexicos Profuturo GNP + 01.10.05 State Street Global Advisors To Our Shareholders + Joseph C. Antonellis + Ronald E. Logue + William W. Hunt + Joseph L. Hooley Executive Vice President and Chairman and Executive Vice President, Executive Vice President, Chief Information Officer, Chief Executive Officer, State Street Corporation; Global Head of Investor Services, State Street Corporation State Street Corporation President and Chief Executive Officer, State Street Corporation State Street Global Advisors STT 8

11. Launched Pooled Asset Liability Matching Solution + 01.11.05 Ranked First by International Securities Finance Magazine in its 2004 Combined Beneficial State Street delivered value in 2005. We delivered value to our shareholders, our customers, our employees and the communities in which we operate. We achieved this value by focusing on delivering for our customers, executing our plan against our goals, performing consistently for our shareholders, providing more opportunities for our employees, and continuing to give back to the communities where we do business. Our goals for 2005 included growth in operating earnings per share of between 10 and 15 percent, growth in operating revenue of between 8 and 12 percent, and operating return on shareholders equity of between 14 and 17 percent. We achieved these goals, increasing operating earnings per share from continuing operations by 14 percent and operating revenue by 10 percent and recording return on shareholders equity from continuing operations of 15.3 percent. Assets under custody hit an all-time high of $10.1 trillion and assets under management rose to a record $1.4 trillion. 2005 was our 28th consecutive year of operating earnings per share growth and our 27th consec- utive year of dividend increases, which rose 12 percent. We also repurchased 13 million shares of our stock, putting our share count at 334 million shares outstanding, just as it was at the end of 2004. I measure the years achievements in four ways. Financial We remained focused on the bottom line in 2005, carefully balancing revenue growth with contin- ued expense management. This focus allowed us to generate positive operating leverage for the year, an objective I set out to accomplish when I took over as chairman and chief executive officer in July 2004, and one that I continue to target. I view our 2005 results as a start, and an indication that we are heading in the right direction. Business growth across the company helped fuel our revenue increase in 2005. We added more than 2,000 new investment servicing and investment management wins in 2005, a result of our strong sales culture and our ability to execute. State Street Global Advisors (SSgA), our investment management arm and the largest institutional asset manager in the world, also posted significant growth in 2005 and improved its contribution to State Street overall. SSgA now represents 21 percent of State Streets total pretax income, up from 17 percent a year ago. We continued to deepen existing customer relationships and expand new product capabilities. These factors, combined with new business growth, enabled us to deliver what I consider to be better top-line performance than our peers. STT 9

12. Owner and Borrower Rankings Assessment + 01.14.05 Received $2 Billion Pension Plan Business from ChevronTexaco Corp. + 01.31.05 Celebrated 10 Years We continue to see significant opportunities for growth outside of the United States, which accounted for 39 percent of State Streets revenue in 2005, up from 37 percent at the end of 2004. I have set a goal of increasing this number to 50 percent over time, fueled in part by the growth of savings and retirement assets in Europe and the Asia-Pacific region and the globalization of investing. In addition to revenue growth, positive operating leverage was achieved through expense control. By monitoring our headcount, adding mainly to support new business wins and by better aligning our real estate portfolio with our needs, we slowed our rate of expense growth. Our strengthened and more cost-effective global servicing model, shaped in part by new regulatory requirements, helped us to better serve our customers in the locations where they do business. We now have processing hubs in multiple locations around the world including Canada and India. The centralized treasury group that we formed early in 2005 has improved management of our balance sheet, which is driven by customer liabilities. To better position State Street for rising interest rates, in 2005 we expanded the investment portfolio and adjusted the mix of investments to include higher yielding floating-rate securities, ending the year with a conservatively invested portfolio, 95 percent of which was AA rated or better. Customer State Streets singular focus on providing large, global institutional investors with unparalleled service and value remained a differentiator for our company in 2005. Our ability to handle complex transactions, create innovative solutions and improve efficiencies helped us to attract new customers and add significant value to our existing customer relationships around the world. 2,086 14% growth in operating earnings per share new investment servicing and from continuing operations investment management wins STT 10

13. in Kansas City + 02.22.05 Appointed by Brandywine Asset Management to Provide Managed Account Outsourcing Services + 02.25.05 Named Best Custodian Major wins that fell into the expanded business category in 2005 included a landmark investment manager operations outsourcing renewal from Scottish Widows Investment Partnership in Edinburgh, extending our relationship with this customer well into a second decade. The years biggest investment servicing win, from Columbia Management Advisors, LLC, the asset management arm of Bank of America, gave State Street a key role in one of the largest fund integrations in the history of the mutual fund industry. This piece of business expands upon our existing relationship with a fund family that was acquired by Bank of America and illustrates our ability to earn the trust and confidence of our customers, as does another investment servicing appointment from Charles Schwab Investment Management for $149 billion in assets. Two wins from Volkswagen Group one in the United Kingdom and the other in Germany are further proof of our ability to expand many of the custody and accounting relationships we established years ago. We also established many new customer relationships in 2005 in all major geographies and across all our capabilities. These relationships include conducting one of the largest-ever portfolio transitions for a customer in Japan and providing servicing and management for a wide range of pension and investment schemes in Europe and Asia-Pacific. State Streets ability to develop new products and services for both new and existing customers continues to set us apart. State Street Global Advisors played an important role during the year in helping to enhance Asias bond markets as manager of the ABF Pan Asia Bond Index Fund, a key component of the Asian Bond Fund 2, an initiative developed by a group of 11 central banks and monetary authorities designed to provide governments with an additional source of credit. The fund invests in the local currency debt of eight countries in Asia, increasing investors access to this vital region of the world. 28 10% consecutive years of growth in increase in operating revenue operating earnings per share STT 11

14. by The Asset magazine + 02.28.05 Named European Mutual Fund Administrator of The Year by ICFA magazine + 03.01.05 State Street Global Advisors Product innovation continues to be a focus for us. State Street Global Advisors developed several new strategies including Global Alpha Plus, an innovative investment strategy designed to achieve consistent excess returns. It also launched a number of liability-driven investment strategies aimed at better matching assets to liabilities for pension funds. SSgAs growing active product array contributed to more than half of its net new revenue in 2005. With a renewed focus on exchange-traded funds, SSgA also launched nine new ETFs during the year, including the SPDR Dividend, and saw strong growth in some of its innovative approaches such as the streetTRACKS Gold Shares. Our research and trading capabilities, including foreign exchange, equity execution, transition management and securities finance activities, also posted record results in 2005. Daily trading volume on FX Connect, our multibank electronic trading system, surpassed $45 billion and State Street remained the unmatched leader in transition management, managing more than $380 billion in portfolio transitions during the year. Continued demand for our quantitative investment research led us to expand our successful State Street Investor Confidence Index, which now includes regional views for Europe, North America and the Asia-Pacific region. As we advance our effort to serve customers in all the markets where they do business, we strengthened our presence in 2005 in Switzerland, the Netherlands and Hong Kong, and opened a representative office in Beijing, China. These markets will play an important role in our goal to increase revenue outside the United States. Governance State Street has made several recent changes to its corporate governance policies. First, we created a new chief compliance officer position charged with centralizing and overseeing State Streets compliance program. Our board of directors 13 out of 14 of whom qualify as independent under the New York Stock Exchange listing standards are now elected annually, eliminating three-year terms of the past. Shareholders also now annually ratify the appointment of our auditors, Ernst & Young LLP. In 2005, the board adopted a majority voting standard requiring a director or nominee who receives a withhold vote from the majority of outstanding shares in an uncontested election of directors to submit his or her resignation, to be considered by the Nominating and Corporate Governance Committee. STT 12

15. Named Best of the Best by Asia Asset Management Magazine + 03.03.05 Received Top Honors for the Third Consecutive Year in International Fund Talent Great companies are built around extraordinary individual execution. We must continue to invest in State Streets future by developing and leveraging our deep pool of talented professionals. Today, we are investing in our employees at a higher level than ever before. In 2005, we added more training, enhanced our salary and promotions process, and undertook several initiatives to move executives within State Street globally to provide a deeper bench of talent that supports our succession planning. One such example is the appointment in 2005 of Bill Hunt, an 11-year company veteran, to lead State Street Global Advisors. State Street employees continue to give their time and money to improve the communities where we live and work. In a year of unprecedented natural disasters around the world, State Street colleagues offered their help and support to a variety of relief efforts, while continuing to support local charitable endeavors. More than a quarter of our workforce invested approximately 30,000 hours of volunteer time around the globe last year. Giving back is an inherent part of the State Street culture and a source of great corporate pride. In 2005, I believe State Street became a stronger, more efficient and more focused company. As we move into 2006, Im encouraged that our business pipeline remains strong, and that were executing well against our strategic objectives. For 2006, we have once again set financial goals of achieving revenue growth between 8 and 12 percent, earnings per share growth between 10 and 15 percent and return on shareholders equity between 14 and 17 percent. We are currently targeting the middle of those ranges. In my 18 months as State Streets chairman and CEO, conversations with our customers have assured me of one thing: When customers come to State Street, they get a value they cannot find anywhere else. We delivered that value in 2005, and I will keep working to build on that value for all of our stakeholders in the future. Sincerely, Ronald E. Logue Chairman and Chief Executive Officer STT 13

16. Investment Weeklys European ETF Awards + 03.08.05 Won Investment Servicing Business from Bank of Americas Asset Management Arm, Columbia FOCUSEFFICIEN SERVICEEXPERI COMMITMENTC INTEGRATIONAC INNOVATIONEXP At State Street, delivering value is the bottom line. It lies at the heart of For one customer, it may represent streamlined operations or an innovative returns and creates growth. We measure value in our customers success STT 14

17. Management + 03.30.05 Achieved Top Rankings in Global Investors 2005 Foreign Exchange Survey + 04.21.05 Opened State Street Financial Center CYLEADERSHIP NCESOLUTIONS USTOMIZATION CURACYDEPTH ERTISERETURN everything we do. Its definition is as unique as each customers objectives. trading solution. For another, its a complex investment strategy that boosts and deliver value to our shareholders because of it. Our value starts here. STT 15

18. in Zurich, Switzerland + 05.02.05 Retained by Oregon State Treasury to Service $60 Billion in Assets + 05.11.05 Celebrated 15 Years in Canada Scottish Widows Investment Partnership STT 16

19. + 05.12.05 Named to Manage $1 Billion ABF Pan Asia Bond Index Fund + 05.26.05 Expanded Reporting and Analysis Capabilities for Securities Finance 27,000 holdings 4,000 asset lines 500 unitized prices generated daily 5 year partnership + 8 year contract renewal The value we deliver lies in our unwavering commitment. In 2000, Scottish Widows Investment Partnership (SWIP), one of Europes largest investment managers, sought to integrate its investment manager operations following a large consolidation at parent company Lloyds TSB. State Streets relationship with Lloyds TSB as primary custodian was transformed into a landmark outsourcing arrangement with SWIP to provide global custody, fund accounting, trustee/depository and investment manager operations services on its entire range of life, pension and investment products. The arrangement was renewed in 2005, a testament to our commitment to SWIP and our collective success in the growing investment manager operations outsourcing market. STT 17

20. Customers + 05.26.05 Opened Beijing Office + 06.06.05 Won Seven Best in Class Honors in PlanSponsor Magazines 2005 Transition Management + Janette Allen Outsource Relationship Manager, Scottish Widows Investment Partnership + Charlie Hogg Senior Manager, Process Improvement Team, Scottish Widows Investment Partnership + Derek Crooks Business Systems Manager, Scottish Widows Investment Partnership + Alan Robertson Head of Outsource Relationship Management, Scottish Widows Investment Partnership Following its acquisition by Lloyds TSB, Edinburgh-based SWIP wanted to integrate the investment administration functions of its four component businesses. At the time, SWIP employed seven third-party providers, five processing centers and operated eight different systems platforms. Outsourcing its investment manager operations to a third party gave SWIP the ability to better focus on its core capability investment management and accurately forecast its operational costs. State Street consolidated SWIPs operations and shifted assets to a single platform in 11 months six months ahead of schedule. Support was also provided for the launch of 220 new funds and various fund conversions. Today more than 500 unitized prices are being generated daily for SWIP funds. Administration costs have been reduced and are now more predictable. STT 18

21. Survey + 06.08.05 Named Worlds Largest Institutional Fund Manager by Pensions & Investments Magazine + 06.16.05 Announced $.01 Increase in + Alison McDonald Vice President, + John Lyons Institutional Fund Services, Head of Investment Support & Control, State Street Scottish Widows Investment Partnership + David Calderwood Vice President, Collective Fund Services, State Street + Ian Kennedy Head of Investment Accounting, Scottish Widows Investment Partnership The partnership weve had with State Street has helped us to be very flexible about new products that we would like to bring to market and changes we want to make to respond to our clients changing needs. Chris Phillips, Chief Executive of Scottish Widows Investment Partnership + Alan Findlay Vice President and Department Head, Collective Fund Services, State Street When the outsourcing contract came up for renewal, SWIP did a comprehensive market search, but chose to remain with State Street. Together, State Street and SWIP are shaping a new aspect of the outsourcing industry and finding more efficient ways to deliver information and services to fund investors and institutional clients. Common goals, vision and commitment have allowed that to happen. STT 19

22. Quarterly Dividend, to $.18 per share + 06.23.05 Appointed to Service New United Kingdom Pension Protection Fund + 06.27.05 Named Among Best + Daniel Kern, CFA Vice President, Charles Schwab Investment Management + David Rosenberg Vice President, Charles Schwab Investment Management + Mei-Luh Lee Director, Charles Schwab Investment Management Charles Schwab Investment Management STT 20

23. Places to Work in Information Technology by Computerworld + 07.11.05 Received Top Rankings in Global Custodian Hedge Fund Administration Survey $149B in assets serviced 67 funds managed 105 share classes + 1 leading provider Our customers find value in increased efficiency. When Charles Schwab Investment Management (CSIM) sought to streamline its complex back-office accounting and administration functions, it turned to State Street. Our integrated fund accounting and custody services, along with our experience across all asset types, enabled one of the largest U.S. mutual fund firms to run a more efficient operation that included improved reporting for its shareholders. STT 21

24. + 07.15.05 Named Best at Investor Services in North America by Euromoney Magazine + 07.21.05 FX Connect Named Best Multibank Foreign Exchange + John D. Fitch Vice President, U.S. Mutual Fund Accounting, State Street + Kyle F. Moran Vice President, U.S. Mutual Fund Administration, State Street Years of excellent service helped turn an existing relationship into one of State Streets largest wins last year. In the late 1980s, State Street began providing custody services to a California investment firm that later became AXA Rosenberg Group. In 2004, when CSIM became the funds new investment advisor and launched a new fund family called the Laudus Funds, State Street continued as one of CSIMs seven service providers. STT 22

25. Trading Platform for Institutional Investors by FXWeek Magazine + 08.02.05 Won Staffordshire County Council $600 Million Investment Servicing + Thresa B. Dewar Vice President, U.S. Mutual Fund Administration, State Street + John J. Cronin Assistant Vice President, U.S. Mutual Fund Custody, State Street We needed to consolidate a very complex model with a variety of service providers I cant think of anything we are doing or will do that State Street hasnt seen. Dan Kern, Vice President, Charles Schwab Investment Management When multiple service relationships proved inefficient for CSIM, it decided to create a new and simplified servicing structure. State Streets breadth of integrated product offerings, our expertise in servicing complex mutual funds and strong technology infrastructure helped CSIM create the efficiency it wanted. Today, CSIM has a provider servicing $149 billion of assets, a simpler and scalable operating structure, a more efficient shareholder reporting process and a long-lasting partnership that is delivering value. STT 23

26. Business + 08.22.05 Awarded a 75 Million Investment Management Contract from RAC Pension Scheme + 08.24.05 Appointed Service Provider to Volkswagen Group STT 24

27. Four Local UK Pension Fund Authorities + 08.30.05 Selected to Manage $330 Million for Assuranceforeningen Skuld of Norway + 09.06.05 Reappointed 1.4B portfolio transition 80 transition management professionals 70M asset management win + 8 year partnership Value can be defined by experience. Institutional investors operating in todays evolving regulatory environment need a partner who knows the territory. As a global investment manager and investment service provider, State Street helped Europes largest carmaker execute two pension fund strategies designed to improve investment returns. In each case, a combination of extensive industry knowledge and experience with global pension funds led Volkswagen to choose State Street. STT 25

28. Global Custodian by Liontrust Asset Management PLC + 09.08.05 Named to Service $3.3 Billion for Banco de Guatemala + 09.13.05 Named + Louisa Vincent Vice President, Client Service, State Street Global Advisors State Street has provided depotbank services in Germany to Volkswagens corporate treasury funds since 1997. During this time, the relationship has expanded to include additional services such as commission recapture, which has helped the carmaker increase operational efficiency and save on brokerage fees. In 2001, Volkswagen became the first German company to launch a defined contribution pension plan. Over the next four years, State Street administered the plan while the company continually looked for ways to improve returns. When Volkswagen decided to change its asset allocation and investment management strategy, State Streets transition management team provided the solutions and resources needed to restructure the portfolio. State Street is the leading provider of transition management services to institutional investors, with teams throughout Europe, North America and Asia-Pacific. STT 26

29. Worlds Best Bank in Asset Management by Global Finance Magazine + 09.19.05 Completed 1.4 Billion Portfolio Transition for Volkswagen Pension + Kevin Anderson Vice President, Global Fixed Income, State Street Global Advisors + Simon Roe Vice President, Enhanced Equity, State Street Global Advisors State Street Global Advisors had the strength, resources and experience to provide us with the solutions aligned with our investment goals. Roy Platten, Staff Benefits & Policy Manager for Volkswagen Group United Kingdom Ltd. To effectively transition its portfolio, Volkswagen needed access to advanced trading strategies and high-quality liquidity. State Street Global Markets, State Streets research and trading arm, provided those resources and seamlessly executed the 1.4 billion transition, helping Volkswagen gain access to a new, more appropriate investment strategy. A separate piece of business last year in London enabled us to further expand our relationship with this key customer. State Street Global Advisors, our investment management arm, was appointed manager of 70 million of assets in Volkswagens pension scheme for workers in the United Kingdom. The win consisted of an enhanced U.K. equity strategy and a passive U.K. fixed income strategy. State Street Global Advisors experience with a range of passive and active, including enhanced, investment strategies will help Volkswagen add value while controlling investment risk. STT 27

30. Fund + 09.27.05 Renewed Landmark Investment Manager Operations Outsourcing Contract with Scottish Widows Investment Partnership + 09.27.05 + Kate Thompson + Mike Clarke + Kevin Connaughton Assistant Treasurer, Columbia Funds Chief Accounting Officer, Columbia Funds CFO and Treasurer, Columbia Funds + Jeff Coleman + Mary Beth Pilat + Regina Mak Deputy Treasurer, Columbia Funds Assistant Treasurer, Columbia Funds Technology Manager, Columbia Funds Columbia Management Advisors, LLC STT 28

31. Named to Service $21 Billion for State of Connecticut + 10.05.05 Launched Global Alpha Plus Investment Strategy + 10.06.05 Appointed by Sanofi 290 accounting conversions 227 custody conversions 89 fund mergers 5 year relationship + $250B asset servicing contract Value is delivered through integrated solutions. In 2005, State Street began servicing $250 billion in assets for Columbia Management, the asset management arm of Bank of America. This important win followed a series of mergers involving the Liberty Funds Group, and later Columbia Management, which had been a State Street customer for four years. When Bank of America decided to consolidate operations for three of its fund families into Columbia Management, it chose State Street to help complete one of the largest integrations in mutual fund history. STT 29

32. Aventis to Manage an 800 Million Currency Overlay Strategy + 10.06.05 Renewed Investment Servicing Contract with Halliburton + 10.03.05 + Edward J. McKenzie Vice President and Department Head, U.S. Mutual Fund Servicing, State Street + Shawn M. Alarie Vice President, U.S. Mutual Fund Accounting, State Street Our four-year relationship with Boston-based Liberty Funds, and later Columbia Management, provided plenty of time to prove that State Street has the solutions to help any large asset manager integrate and convert disparate systems into a single operations platform. In 2000, Liberty Funds chose State Street to run the fund accounting and financial reporting operations for $40 billion in assets. A successful, year-long conversion led to more business, and State Street also consolidated custody servicing for the funds. When the former FleetBoston Financial Corporations asset management arm, which included its Galaxy and Columbia funds, acquired Liberty Funds in 2002, State Street retained the Liberty business and added the servicing of Galaxy. By 2004, State Street supported 59 fund mergers, 190 accounting conversions and 127 custody conversions. STT 30

33. International Fund Services Named Best Fund Administrator in ALPHA Magazines Hedge Fund Service Provider Awards + 10.17.05 Selected by + Janine M. Donovan Vice President, U.S. Mutual Fund Custody, State Street State Street is uniquely positioned to provide what we need. Reducing the number of vendors allowed us to capitalize on efficiencies, build consistent internal controls, and pass along savings to our shareholders. Christopher L. Wilson, President, Columbia Management That year, another merger brought the fund groups under Bank of America, which began to consolidate the fund operations under the Columbia name. The company reduced the number of funds it offered and cut fund expenses by switching to a single service provider. State Street had the relationship, the track record and the integrated service solutions to make that happen. STT 31

34. Gallaher Pensions Limited to Run a 50 Million Active U.K. Equity Mandate + 10.27.05 Named to Provide Investment Servicing for Charles Schwab Reserve Bank of Australia Peoples Bank of China Hong Kong Monetary Authority Bank Indonesia Bank of Japan Bank of Korea Bank Negara Malaysia Reserve Bank of New Zealand Bangko Sentral ng Pilipinas Monetary Authority of Singapore Bank of Thailand ABF Pan Asia Bond Index Fund STT 32

35. Investment Management funds + 10.31.05 Reappointed by Lloyds TSB Group Pension Schemes to Provide Investment Services for the Schemes Assets 11 central banks and monetary authorities 20 years experience in the Asia-Pacific market $550B under management in global fixed income products 6 exchange-traded funds launched in Asia + $1B ABF Pan Asia Bond Index Fund We deliver value through our expertise. In the wake of the 1997 Asian financial crisis, central bankers across the region recognized the need to provide Asian companies with better access to capital. The Executives Meeting of East Asia and Pacific Central Banks (EMEAP) Group, which comprises 11 central banks and monetary authorities in the region, developed the Asian Bond Fund Initiative to improve the bond markets and offer investors more innovative, cost-efficient and diversified products. In 2005, during the second stage of the initiative, the $2 billion Asian Bond Fund 2 (ABF2) was launched by the EMEAP Group. The Group chose State Street to play an important role in bringing the ABF Pan Asia Bond Index Fund (PAIF), a $1 billion component fund of ABF2, to market. STT 33

36. + 11.15.05 SSgA Launched Nine New ETFs + 11.16.05 Awarded $4 Billion Investment Servicing Business from California State Automobile Association + Yan-Yan Li Principal, Head of Legal and Compliance, State Street Global Advisors Asia Ltd. State Street has been a pioneer in the Asia-Pacific marketplace for two decades, and in 1999 was named to manage the regions first exchange-traded fund (ETF) Tracker Fund of Hong Kong. We have also collaborated with local fund managers and stock exchanges and successfully launched ETFs in China, Korea, Singapore and Taiwan. Our relationships and experience were some of the reasons why we were chosen to play a key advisory role in PAIF, which enabled investors to diversify risk across eight Asian bond and currency markets in a single transaction. STT 34

37. + 12.05.05 Named to Manage $100 Million Socially Responsible Investing Portfolio for Arkitekternas Pensionskassa + 12.15.05 Announced $.01 Increase + Cecilia Chin Principal, Director of Marketing, State Street Global Advisors Asia Ltd. From an investors perspective, the passively managed ABF2 funds represent low-cost and efficient vehicles for investing in local currency- denominated bonds in Asia. In the context of bond market development... it will help contribute to the broadening and deepening of bond markets in the region over time. Executives Meeting of East Asia and Pacific Central Banks + Hon Cheung Principal, Managing Director, State Street Global Advisors Singapore Ltd. State Street Global Advisors was named to manage PAIF, an open-ended listed bond fund investing across the region. Modeled on the cost-effective and efficient structure of ETFs, PAIF invests in domestic currency-denominated sovereign and quasi-sovereign bonds issued in eight Asian markets. PAIF was listed on the Hong Kong Stock Exchange in July 2005 and had $1.1 billion in assets at year end. The fund is registered in Japan and Singapore. It is also available to eligible institutional investors in Thailand. State Streets global experience and broad knowledge base helped ensure the success of this important economic milestone. STT 35

38. in Quarterly Dividend, to $.19 Per Share + 12.21.05 Awarded C$870 Million Currency Hedging Mandate from Workers Compensation Board-Alberta $5.5B total revenue 4.6B total fee revenue 945M income from continuing operations 2.82 diluted earnings per share from continuing operations + 15.3% return on shareholders equity from continuing operations STT 36

39. + 01.18.06 Announced 10% Increase in Operating Revenue and 14% Increase in Earnings Per Share from Continuing Operations in 2005 38 selected financial data 39 summary of operations 45 report of independent registered public accounting firm 46 condensed consolidated financial statements 2005 Financial Summary STT 37

40. Selected Financial Data $ millions, except per share data or where otherwise indicated 2005 2004 2003 2002 2001 Years ended December 31, Total fee revenue $ 4,048 $ 3,556 $ 2,850 $ 2,769 $ 4,551 Net interest revenue 859 810 979 1,025 907 Provision for loan losses (18) - 4 10 - (Losses) gains on sales of available-for-sale investment securities, net 26 23 76 43 (1) Gain on sale of Private Asset Management business, net of exit and other associated costs - 285 - - 16 Gain on sale of Corporate Trust business, net of exit and other associated costs - - 60 495 - Total revenue 4,951 4,734 4,396 3,827 5,473 Total operating expenses 3,759 3,622 2,841 2,897 4,041 Income from continuing operations before income tax expense 1,192 1,112 1,555 930 1,432 Income tax expense from continuing operations 394 390 540 302 487 Income from continuing operations 798 722 1,015 628 945 Net loss from discontinued operations - - - - (107) Net income 838 $ 798 $ 722 $ 1,015 $ 628 $ Per common share Basic earnings: Continuing operations $ 2.38 $ 2.18 $ 3.14 $ 1.94 $ 2.86 Net income 2.38 2.18 3.14 1.94 2.53 Diluted earnings: Continuing operations $ 2.35 $ 2.15 $ 3.10 $ 1.90 $ 2.82 Net income 2.35 2.15 3.10 1.90 2.50 Cash dividends declared .64 .56 .48 .41 .72 Closing price of common stock 49.12 52.08 39.00 52.25 55.44 As of December 31, Investment securities $ 37,571 $ 38,215 $ 28,071 $ 20,781 $ 59,870 Total assets 94,040 87,534 85,794 69,850 97,968 Deposits 55,129 47,516 45,468 38,559 59,646 Long-term debt 2,458 2,222 1,270 1,217 2,659 Shareholders equity 6,159 5,747 4,787 3,845 6,367 Assets under custody (in billions) $ 9,497 $ 9,370 $ 6,171 $ 6,203 $ 10,121 Assets under management (in billions) 1,354 1,106 763 775 1,441 Number of employees 19,668 19,850 19,501 19,753 20,965 Ratios Continuing operations: Return on shareholders equity 13.3% 13.9% 24.1% 17.3% 15.3% Return on average assets .84 .87 1.28 .88 .95 Dividend payout 26.9 25.9 15.4 21.0 25.3 Net income: Return on shareholders equity 13.3 13.9 24.1 17.3 13.6 Return on average assets .84 .87 1.28 .88 .84 Dividend payout 26.9 25.9 15.4 21.0 28.5 Average shareholders equity to average assets 6.3 6.3 5.3 5.1 6.2 Tier 1 risk-based capital 13.3 14.0 17.1 13.6 11.7 Total risk-based capital 14.7 15.8 18.0 14.5 14.0 Tier 1 leverage ratio 5.5 5.6 5.6 5.4 5.6 Tangible common equity to adjusted total assets 4.5 4.5 4.9 4.7 4.8 STT 38

41. Summary of Operations Overview State Street Corporation and its subsidiaries report two lines of business. Investment Servicing provides services for mutual funds and collective investment funds, corporate and public retirement plans, insurance companies, foundations, endowments, and other investment pools worldwide. Products include custody, product- and participant-level accounting, daily pricing and administration; master trust and master custody; recordkeeping; foreign exchange, brokerage and other trading services; securities nance; deposit and short-term investment facilities; loans and lease nancing; investment manager and hedge fund manager operations outsourcing; and performance, risk and compliance analytics to support institutional investors. Investment Management offers a broad array of services for managing nancial assets, including investment management and investment research services, primarily for institutional investors worldwide. These services include passive and active U.S. and non-U.S. equity and xed income strategies, and other related services, such as securities nance. For nancial information about these business lines, see the Line of Business Information section of Managements Discussion and Analysis of Financial Condition and Results of Operations included in our 2005 Form 10-K. This Summary of Operations should be read in conjunction with the Consolidated Financial Statements, which are prepared in accordance with accounting principles generally accepted in the United States, or GAAP, and the related Notes to Consolidated Financial Statements, included in our 2005 Form 10-K. Certain previously reported amounts presented in this Summary of Operations have been reclassied to conform to current period classications. The preparation of nancial statements requires management to make estimates and assumptions in the application of certain accounting policies that materially affect the reported amounts of assets, liabilities, revenue and expenses. Actual results could differ from those estimates. Unless otherwise indicated or unless the context requires otherwise, all references in this Summary of Operations to State Street, we, us, our or similar terms mean State Street Corporation and its subsidiaries on a consolidated basis. STT 39

42. From time to time, in executing our strategic plan, we may enter into business acquisitions and strategic alliances, and may divest non-strategic operations. We continuously review and assess various business opportunities related to this strategy. For more nancial information about our acquisition and divestiture activities, see Note 2 of the Notes to Consolidated Financial Statements included in our 2005 Form 10-K under Item 8. This Summary of Operations contains statements that are considered forward-looking statements within the meaning of U.S. federal securities laws. Forward-looking statements include statements about our condence and strategies and our expectations about revenue and market growth, acquisitions and divestitures, new technologies, services and opportunities, and earnings. These forward-looking statements involve certain risks and 2002 uncertainties which could cause actual results to differ 3.10(1) 2005 materially. Additional information about forward-looking 2.82 statements and related risks and uncertainties is included in our 2005 Form 10-K under Item 1A. 2004 2.35(3) 2003 Financial Highlights 2.15(2) 2001 For 2005, we recorded net income from continuing 1.90 operations of $945 million, up $147 million, or 18%, from net income of $798 million in 2004. Fully-diluted earnings per share from continuing operations were $2.82 in 2005, up 20% from $2.35 in 2004. Earnings per share for 2004 included $62 million, or $.12 per share, of merger and integration costs associated with the 2003 acquisition of a substantial portion of the Global Securities Services, or GSS, business of Deutsche Bank AG. Dollars Diluted Earnings Per Share From Continuing Operations (1) 2002 earnings per share included the gain on the sale of divestiture costs, GSS acquisition merger and integration the divested Corporate Trust business of $.90 per share. costs, restructuring expenses, settlement of a state tax matter (2) 2003 earnings per share included the combined gains on sales and a loss on certain real estate sold equal to $.86 per share. of the divested Corporate Trust and Private Asset Management (3) 2004 earnings per share included GSS acquisition merger businesses of $.68 per share, and combined charges for and integration costs of $.12 per share. STT 40

43. We remained focused on achieving our previously disclosed nancial goals in 2005, carefully balancing revenue growth with continued expense management. This focus allowed us to generate positive operating leverage for the year, which we dene as a rate of total revenue growth that exceeds the rate of growth of total operating expenses. Total revenue for 2005 grew 11% while total operating expenses increased only 8%. We continued to deepen existing customer relationships and expand new product capabilities. These factors, combined with new business growth, enabled us to achieve our nancial goals in moderately improving nancial markets. We continue to see the most signicant opportunities for growth outside of the U.S. For 2005, 39% of our total revenue was from non-U.S. activities, up from 37% for 2004, and approximately 7,800 employees worked outside the U.S. We expect that eventually, we will derive 50% of total revenue from outside the United States, as a result of the growth of savings and retirement assets in Europe and the Asia-Pacic region. We managed our balance sheet to better position State Street for rising interest rates during 2005. We expanded our investment securities portfolio and adjusted the mix of investments to include higher yielding, oating-rate securities. As a result, net interest revenue in 2005 increased by 6% from 2004. Including taxable-equivalent adjustments for 2005 and 2004 of $42 million and $45 million, respectively, net interest revenue increased by 5% from 2004. Positive operating leverage was also generated through expense control. Managing our expenses involved careful allocation of headcount, realignment of our real estate portfolio and the establishment of other cost-efciency measures. STT 41

44. Revenue Total revenue for 2005 was $5.47 billion, an increase of $522 million from $4.95 billion in 2004. Revenue growth from 2004 reected growth in servicing, management, trading and securities nance fees, as well as higher net interest revenue. Collectively, servicing and management fees for 2005 were up $339 million, or 12%, from 2004. The increases were attributable to new business from existing and new customers and higher equity market valuations. Assets under custody increased to a record level of $10.12 trillion, up $624 billion from $9.50 trillion a year ago. Assets under management also increased to a record level of $1.44 trillion, up $87 billion from $1.35 trillion a year ago. Trading services revenue was $694 million, up $99 million 2005 compared to $595 million a year ago, reecting a higher dollar- 5.47 volume of foreign exchange trades for customers and a higher 2004 2003 4.95 volume of transition management business. Securities nance 4.73(2) 2002 fees were $330 million for 2005, an improvement of $71 million 4.40(1) from $259 million in 2004, beneting from improved spreads 2001 and an increase in average loan volume. Processing fees 3.83 and other revenue was $302 million in 2005, compared with $308 million in 2004. Net interest revenue for 2005 was $907 million, an increase of $48 million from $859 million in 2004, due to an increase in average balance sheet size and changes in U.S. Non-U.S. balance sheet mix, somewhat offset by increased funding costs and a atter yield curve. $ Billions Total Revenue (1) 2002 total revenue included the gain on the sale of the (2) 2003 total revenue included the combined gains on sales of divested Corporate Trust business of $495 million. the divested Corporate Trust and Private Asset Management businesses of $345 million and a loss on certain real estate sold of $13 million. STT 42

45. Operating Expenses Operating expenses were $4.04 billion for 2005, up $282 million from 2004. Expense growth in 2005 was driven in part by higher salaries and employee benets expense, primarily from increased stafng levels to accommodate new business and higher incentive compensation expense due to improved earnings. Additionally, expense growth reected an increase in transaction processing expense related to higher transaction volumes and higher subcustodian fees resulting from higher net asset values. Higher occupancy expense in 2005 reected a $26 million charge related to a long-term sub-lease agreement, somewhat offset by a $16 million charge in 2004, and higher occupancy costs in Europe associated with new business. Higher ot