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tate Street
State Street Corporation
December 31, 2001

WORKING TOGETHER, THINKING AHEAD

State Street is a world leader in serving the unique needs of sophisticated global
investors. Powered by our technological savvy, deep understanding of global markets
and ability to integrate services throughout the investment process, we provide our
clients with business solutions that help them succeed in complex times.

State Street has four core competencies: investment servicing, investment management,
research and trading services. We draw on these capabilities to create integrated
service solutions that increase our clients’ productivity and performance. Our clients
think of us as a trusted partner because we are committed to developing solutions
that meet their investment goals today and help them prepare for future challenges.

With 19,800 employees working in offices in 22 countries, State Street serves clients
in 100 markets around the world. At the close of 2001, State Street had total assets
under custody of $6.2 trillion and assets under management of $775 billion.

1 Highlights

2 Letter to Our Stockholders

8 Ready for the Future

14 Financial Summary

20 Board of Directors

22 Senior Executive Group

23 Corporate Information

24 Worldwide Locations

State Street ist ein weltweit führendes Unternehmen, das den speziellen Bedürfnissen anspruchsvoller globaler
Investoren dient. Weil wir über starkes technisches Know-how verfügen, wie auch über solides Verständnis
globaler Märkte und über die Fähigkeit, Dienstleistungen durch den Investitionsprozess zu integrieren, bieten wir
unseren Kunden Geschäftslösungen an, die ihnen in anspruchsvollen Zeiten zum Erfolg verhelfen.

State Street verfügt über vier Grundkompetenzen: Investment Servicing, Asset Management, Research
sowie Trading. Aus diesen Fähigkeiten schöpfen wir, um integrierte Service-Lösungen zu erstellen, die
sowohl die Produktivität wie auch die Leistung unserer Kunden erhöht. Weil wir uns verpflichten, Lösungen
zu entwickeln, die ihren aktuellen Investitionszielen entsprechen und sie auf künftige Herausforderungen
vorbereiten, betrachten uns unsere Kunden als vertrauenswürdige Partner.

Unsere 19.800 Mitarbeiter in 22 Ländern betreuen Kunden auf der ganzen Welt in über 100 Märkten. Zum
Jahresende 2001 verwahrte State Street US-$ 6,2 Billionen an Wertpapieranlagen und verwaltete
Vermögensanlagen in Höhe von US-$ 775 Milliarden.

4

22 1 9,800 100
2001 6 2,000 7,750

State Street, est le leader mondial au service des besoins spécifiques des investisseurs haut de gamme de
renommée internationale. Forts d’un savoir-faire technologique, d’une profonde compréhension des marchés
internationaux et d’une répartition efficace de nos services tout au long du processus d’investissement, nous
sommes à même de fournir à nos clients des solutions grâce auxquelles ils seront au rendez-vous de la
compétitivité en ces temps de forte instabilité.

State Street organise son activité autour de quatre axes fondamentaux : le suivi, la recherche, la gestion
d’investissements et les transactions boursières. Grâce à l’ensemble de nos compétences, nous sommes en
mesure d’imaginer des solutions complètes visant à améliorer la productivité et les performances de nos
clients. Ces derniers nous considèrent comme un partenaire d’une extrême fiabilité parce que nous nous
engageons à développer des solutions en matière de placements adaptées à leurs objectifs actuels, et parce
que nous les aidons à se préparer pour les défis à venir.

Grâce à ses 19 800 salariés, répartis dans 22 pays différents, State Street assiste des clients partout dans le
monde, c’est-à-dire sur plus de 100 marchés. Au terme de l’année 2001, State Street totalisait 6,2 billions de
dollars américains en nombre d’actifs sous dépôt et 775 milliards de dollars américains d’actifs sous gestion.

State Street es una empresa líder mundial que sirve las intrincadas y únicas necesidades de sofisticados
inversionistas globales. Nuestra empresa deriva su fuerza de una combinación de conocimiento tecnológico,
un profundo entendimiento de los mercados globales y la capacidad de integrar servicios que abarcan todos
los aspectos del proceso de inversión. Proveemos a nuestros clientes con soluciones para la inversión de
recursos y los ayudamos a que dichas inversiones se realicen exitosamente en tiempos muy complejos.

State Street ofrece cuatro pilares fundamentales: servicios de inversión, administración de inversiones,
investigación y transacciones. Basándonos en estos cimientos, creamos soluciones integradas de servicio que
permiten incrementar la productividad y el desempeño de nuestros clientes. Nuestros clientes nos consideran
un socio confiable porque estamos comprometidos a desarrollar soluciones que se ajusten a sus metas de
inversión actual, ayudándolos al mismo tiempo a prepararse para afrontar retos venideros.

Con 19.800 empleados esparcidos por 22 países en nuestras oficinas, State Street presta sus servicios a
clientes de todo el mundo en más de 100 mercados. A la clausura de operaciones del 2001, la totalidad
de activos bajo custodia en State Street sumaron 6,2 billones de dólares estadounidenses, mientras que los
activos administrados por State Street alcanzaron los 775 miles de millones de dólares estadounidenses.

19,800
62,000 7,750

OF OUR 209TH YEAR

HIGHLIGHTS
(Dollars in millions, except per share data; taxable equivalent) 2001(1) 2000 Change

Total Operating Revenue $ 3,914 $ 3,615 8%
Operating Earnings 661 595 11

Operating Earnings Per Share:(3)
Basic 2.03 1.85 10
Diluted 2.00 1.81 10

Cash Dividends Declared Per Share(3) .405 .345 17
Operating return on Equity 18.2% 20.3%

'01(1)
'00
3,914
'99(2) 3,615
3,119

'92
1,052

R E V E N U E (Dollars in millions)
TOTAL

'01(1)
'00 2.00
1.81
'99(2)
1.49

'92
.51

D I L U T E D E A R N I N G S P E R S H A R E (3)

(1) Excluded from operating results for the year ended December 31, 2001, is the write-off of State Street’s total investment in Bridge Information Systems, Inc.
of $50 million, equal to $33 million after tax, or $.10 per diluted share, recorded in March 2001.

(2) Excluded from operating results for the year ended December 31, 1999, is the gain on the sale of the commercial banking business of $282 million, net
of exit and other associated costs, and a one-time charge of $57 million on sales of securities related to the repositioning of the investment portfolio.
Combined, these items increased reported net income by $130 million after tax, or $.40 per diluted share.

(3) Per share amounts have been restated to reflect the 2-for-1 stock split in the form of a 100% stock dividend distributed on May 30, 2001, to stockholders
of record as of April 30, 2001.

TO OUR STOCKHOLDERS

The year 2001 was marked by unique challenges and opportunities. The environment in which we operated
was difficult in many ways. Economic growth slowed significantly in all regions of the world. Stock market
performance was weak for the second consecutive year – the first such downturn in the United States since
1973, and the first in global markets since 1982. The terrorist attacks and unprecedented market disruption
in September filled the world with political uncertainty and a sense of anxiety.

Despite these considerable challenges, State Street turned in strong performance in many areas in 2001.
We achieved our 24th consecutive year of double-digit growth in operating earnings per share. We brought
in an impressive amount of new business in all products in all parts of the world. We launched transfer
agency systems in Luxembourg and the United Kingdom. We were recognized as a great place for women to
work. We devoted 1.5% of our pre-tax profits to support community needs throughout the world as we have
for more than 20 years. And we continued to develop as a team. All in all, 2001 was a year of considerable
achievement for State Street.

Financial Results Our primary financial goal is to achieve sustainable real growth in earnings per share.
In 2001, operating earnings per share increased 10%, to $2.00 on a diluted basis. Our ten-year growth rate
for operating earnings per share is 16% compounded annually.

Operating revenue, driven by new business from existing and new clients, increased 8%, to $3.9 billion, in 2001.
In the fourth quarter, we achieved $1 billion in revenue – a record result. Facing a challenging environment,
we tempered our year-over-year expense growth to 8%, in step with revenue growth, while continuing to
invest in the technology and infrastructure needed to drive our future growth.

2 State Street Corporation

We continue to differentiate ourselves by stating a goal for
revenue growth. We have reaffirmed our goal of achieving
12.5% real compound annual growth from 2000 through 2010,
although, as has been true in the past, we do not expect to
achieve that rate every year in the ten-year period.

Our supporting goal for return on stockholders’ equity is to
achieve 18% annually. In 2001, we exceeded that goal by
delivering operating ROE of 18.2%.

We distributed a two-for-one stock split in the form
of a 100% stock dividend on May 30, 2001, and we
increased our quarterly cash dividend declared
twice during the year for the 23rd consecutive year.
Cash dividends declared in 2001 increased 17%
from the prior year.

ex
lobalizatio
Seizing Opportunity For me personally, our ability to perform so well in such a difficult year served to
crystallize some important conclusions. First, I believe that our fundamental strategy – focusing on serving
the needs of sophisticated investors around the world – is sound. Second, I believe that we have enormous
opportunities to leverage our leadership in financial services and grow around the world.

State Street clearly distinguished itself in the marketplace in 2001. Most notably, we did an excellent job
of serving our clients. State Street people are passionately committed to making our clients successful. We
use our insight and technology to integrate our products and services into solutions that work effectively
for them. We have the vision and fortitude to deliver excellence consistently, day in and day out – as is
evidenced by the experience of clients such as Federated Investors, who has been growing with us for more
than 40 years.

Of equal importance is the fact that we have positioned ourselves to benefit from some very powerful
global trends. These trends are (1) ongoing convergence in the financial services industry, (2) a worldwide
sense of urgency about the need for retirement security, and (3) a growing trend by investment managers
to outsource activities that aren’t part of their core competencies.

It is not enough simply to be “in the right place at the right time.” To benefit fully from the effects of these
trends, State Street is thinking ahead in dynamic and creative ways. Then we implement – and State Street
is an expert at getting things done.


pe
n
Convergence in the financial services industry provides State Street with an opportunity to assume a
leadership role. The new global players who are emerging are looking for a partner who can offer a full
range of integrated service solutions and is highly experienced in dealing with financial operations
worldwide – including different regulations and technologies. These requirements coincide perfectly with
State Street’s core strengths – strengths we have proven in serving clients such as Chuo Mitsui, Merrill
Lynch and UBSWarburg.

Another global trend that benefits State Street is a growing sense of urgency about retirement security,
driven by increasing life expectancy in most parts of the world. This trend is putting pressure on retirement
systems, leading governments and employers to devise new strategies to help workers invest for their futures.
These efforts are creating growing pools of retirement assets, which must be managed and serviced. State
Street’s deep expertise in global financial markets, as well as our position as a world leader in pension fund
servicing – is a strong advantage for us. We participate by providing services to investment managers and
by managing assets ourselves through innovative solutions such as exchange-traded funds (ETFs) and
enhanced indexing.

The move toward operations outsourcing is another area in which State Street has a clear advantage. We
are creating a scaleable solution for investment managers who need complete servicing of their back and
middle office operations. Our success with Pacific Investment Management Company (PIMCO) and Scottish
Widows has made us the leading candidate in current searches.

5

rien Strategic Focus We are deepening our position as the trusted partner of sophisticated investors by
building on our strengths. Among these strengths are:

A strategic client orientation Partnering with clients to deliver State Street’s best capabilities in responsive,
trust-based relationships that meet true client needs.

A global focus Integrating service delivery and providing for local differences on behalf of clients everywhere.

A technological advantage Using innovative technology to deliver efficient, client-friendly solutions.

One of State Street’s greatest assets is the quality of our people. Our achievement of solid results this year
in the face of such difficult economic and market conditions is a testament to our team’s focus, commitment
to client service and integrity.

In December 2001, our Board of Directors elected Ron Logue as President and Chief Operating Officer of
State Street. Ron and I have worked together closely for more than a decade, and I look forward to continuing
our partnership. Ron’s strong client focus, his understanding of the potential offered by technology and his
proven ability to deliver both innovation and reliability contribute significantly to our success in maintaining
our competitive advantage and advancing our global leadership.


ce
I am very pleased with our performance in the past year and am both confident and enthusiastic about
our prospects for the future. I want to thank our 19,800 employees in 22 countries for their hard work.
I also want to thank our stockholders for their continued support. In 2002 and beyond, we will seize more
and more opportunities to grow, to deliver value to our clients and stockholders and to continue to build
on State Street’s reputation as a world leader in financial services.

Sincerely,

David A. Spina
Chairman and Chief Executive Officer

from left to right:

Ronald E. Logue
President and Chief Operating Officer

John R. Towers
Vice Chairman and Chief Administrative Officer

David A. Spina
Chairman and Chief Executive Officer

READY FOR THE FUTURE

State Street is 210 years old in 2002. Over two centuries of experience in
international financial markets is a great strength for us. As a leader in the evolution of
these markets, we have a rich perspective and a depth of practical expertise that are
invaluable to our clients.

Experience alone, however, is no guarantee of success. State Street has continued to grow
and win because we have consistently planned for the future – designing innovative solutions

persp
so our clients can succeed in rapidly changing business and technological environments.


Today, State Street offers sophisticated investors the solutions they need to achieve their
goals in a quickly changing and uncertain global environment. Our broad capabilities enable
us to provide seamless management of investment information, highly reliable investment
servicing solutions, performance-oriented investment management and cutting-edge research
and trading services to investors around the world.

Our other offering – perhaps less tangible but immeasurably powerful – is our ability to

ective
share our strengths with clients through collaborative working partnerships.

9

We Are Global
Being a truly global firm requires a lot more than simply having offices in multiple countries. Our clients
need a global infrastructure that is so complete and so interconnected that they can view the world as one
seamless marketplace.

State Street is an expert in supplying global applications and adapting for differences in local markets and
cultures. As a result, more and more investment managers worldwide are choosing to outsource non-core
activities to State Street. Partnering with us in this way enables them to focus more productively and confidently
on their core businesses.

Clients around the world also rely on us for the expertise that helps them address the challenges created
by quickly expanding businesses and changing industry regulations. In China, for example, we’re working with
our partner, the Industrial Commercial Bank of China, and the Chinese government to shape the country’s
emerging mutual fund business. In Brazil, we are collaborating with Banco Itau to expand the bank’s services
for pension funds and multinational companies, and to help design new services.

We Are Experts in Applying Technology
State Street clients count on us to use innovative technology to deliver efficient, client-friendly solutions.
We are committed to investing in technology and technology professionals and have been for decades. As a
result, State Street’s technology today is open, reliable, scaleable and global – enabling us to support a wide
range of investment strategies.

One reason for our technological edge is our industry-leading, multi-currency accounting system – among
the most robust in the world. Our unique capability has proven particularly important to investment clients
such as AMVESCAP, Barclays Capital and GE Asset Management (GEAM), whose strategies lead them to offer


multiple investment products across many markets and time zones. As the largest net asset value calculator
in the United States, we supply over 7,000 multi-currency daily pricing valuations to U.S.-registered mutual
funds. We also calculate net asset values for nearly 3,500 retirement funds every day.

Our clients count on our people to help them apply technology to their businesses in new ways. In addition
to consulting to individual clients about technology-related issues, State Street has established a reputation
as a thought leader in the use of new technologies in world financial markets. In China, for example, we recently
signed a memorandum of understanding with Zhejiang University, located in Hangzhou, Zhejiang Province
to participate in the creation of a technology center jointly operated by State Street and the University.

State Street’s commitment to technology is evidenced by our recent inclusion in Computerworld Magazine’s
annual ranking of “the top 100 places to work for information technology professionals.” We are honored
to be considered one of the great global technology companies.

11

Our Range of Services is Fully Integrated
True integration is a key advantage to the success of sophisticated investors in today’s complex financial
markets. State Street works with clients as a collaborative partner to assemble complete solutions that
cross all aspects of the investment process. We deliver these solutions in responsive, trust-based relationships
that meet our clients’ precise needs.

The need for this level of integration and capability is increasing most dramatically in Europe. From our
Luxembourg office, the world’s second-largest mutual fund market and Europe’s largest cross-border
investment center, we have been instrumental in meeting the unique requirements of investment managers
who wish to distribute and manage funds in Europe, Latin America and Japan.

In 2001, State Street worked side-by-side with many new clients to develop integrated investment
servicing solutions. These clients included Lord Abbett, the New York State Teachers’ Retirement System
(NYSTRS) and Philips Pensioenfonds (Philips Electronics N.V.). We are providing an expanded spectrum of
integrated services to clients of long standing as well — companies such as ABP Investments (Alegemen
Burgerlijk Pensioenfonds), California Public Employees’ Retirement Systems (CalPERS), the Government Pension
Investment Fund (formerly Nenpuku), Merrill Lynch and UBSWarburg.


We Manage with a Long-Term View
Our clients tell us they value our clear point of view about the way financial markets will evolve, and our
plans for seizing opportunities that will come with changes in investment climates, vehicles, technologies
and regulations.

Our insight into global markets gives us a competitive edge in developing investment servicing solutions
that are reliable and accurate, flexible and scaleable. We are continually enhancing our acknowledged
industry-leading electronic trading platforms and investment research services. In our investment management
business, we offer a broad range of investment styles and capabilities.

State Street’s ability to think ahead is demonstrated by our development and adoption of new investment
products. For example, we were one of the architects of exchange-traded funds (ETFs) and remain the
investment manager and trustee for the first and still the largest ETF - the S&P 500 SPDR (“Spider”) trust,
launched in partnership with the American Stock Exchange.

No other company can offer the type of market intelligence that State Street provides to our clients through
State Street Global Link.® Global Link is a powerful online worldwide network that combines proprietary
market research, portfolio analytics and electronic trading technology to support clients’ decision making
processes, maximize their efficiency, facilitate trading, reduce risk and optimize returns. Today, 54 of the
world’s 100 largest money managers use Global Link.

We are well positioned for continued growth. We remain committed to delivering the highest-quality
solutions to our clients. We remain committed to delivering value to our stockholders. With a heritage of
leadership and innovation, State Street is ready for the future.

13

FINANCIAL SUMMARY

SELECTED FINANCIAL DATA
(Dollars in millions, except per share data; per share data 96-01
restated for 2-for-1 stock split in 2001; taxable equivalent) 2001 2000 1999 1998 1997 CAGR

F o r t h e y e a r s e n d e d D e c e m b e r 31 ,
Operating Results:
Fee revenue:
Servicing fees $ 1,624 $ 1,425 $ 1,170 $ 1,024 $ 861
Management fees 511 581 600 480 391
Foreign exchange trading 368 387 306 289 245
Processing fees and other 329 272 236 204 176

Total fee revenue 2,832 2,665 2,312 1,997 1,673 17%

Net interest revenue after provision for loan losses 1,082 950 807 768 669 13

Total operating revenue 3,914 3,615 3,119 2,765 2,342 16
Operating expenses 2,867 2,644 2,336 2,068 1,734 15

Income before income taxes 1,047 971 783 697 608 17
Income taxes 319 311 254 221 184
Taxable equivalent adjustment 67 65 40 40 44

Operating earnings $ 661 $ 595 $ 489 $ 436 $ 380 18

Operating earnings per share:
Basic $ 2.03 $ 1.85 $ 1.52 $ 1.35 $ 1.18 17
Diluted 2.00 1.81 1.49 1.33 1.16 18

Cash dividends declared per share .405 .345 .300 .260 .220 16

Operating return on equity 18.2% 20.3% 19.7% 20.2% 20.6%

Reported Results:
Total revenue $ 3,864 $ 3,615 $ 3,344 $ 2,765 $ 2,342 15
Net Income 628 595 619 436 380 17

Earnings per share:
Basic $ 1.94 $ 1.85 $ 1.93 $ 1.35 $ 1.18 16
Diluted 1.90 1.81 1.89 1.33 1.16 16

Return on equity 17.3% 20.3% 25.0% 20.2% 20.6%

A s o f D e c e m b e r 31 ,
Total assets $ 69,896 $ 69,298 $ 60,896 $ 47,082 $ 37,975
Long-term debt 1,217 1,219 921 922 774
Stockholders’ equity 3,845 3,262 2,652 2,311 1,995
Closing price per share of common stock 52.25 62.11 36.53 35.06 29.09

Number of employees 19,753 17,604 17,213 16,816 14,199

Operating results exclude significant, non-recurring special items to present the results and trends of the Corporation’s ongoing business activities. For the
year ended December 31, 2001, operating results exclude the write-off of State Street’s total investment in Bridge Information Systems, Inc. of $50 million,
equal to $33 million after tax, or $.10 per diluted share, recorded in March 2001. For the year ended December 31, 1999, operating results exclude the
gain on the sale of the commercial banking business of $282 million, net of exit and other associated costs, and a one-time charge of $57 million on sales
of securities related to the repositioning of the investment portfolio. Combined, these items increased reported net income by $130 million after tax,
or $.40 per diluted share.
Results above include State Street’s retirement investment and benefits outsourcing services through March 31, 2000. On April 1, 2000, those services were
contributed to CitiStreet, a 50/50 joint venture accounted for using the equity method, thereby reducing revenue and expenses subsequent to
CitiStreet’s formation.


Summary of Operations
State Street recorded its 24th consecutive year of double-digit operating earnings-per-share growth in 2001.
State Street’s operating earnings per share were $2.00 in 2001, an increase of 10% over 2000 earnings per share
of $1.81. Total taxable-equivalent operating revenue was $3.9 billion, an increase of 8% from 2000. Operating
earnings were $661 million, up 11% from 2000 net income of $595 million. Operating return on stockholder’s
equity was 18.2%.
State Street’s 2001 reported earnings per share were $1.90, its reported net income was $628 million, and its
reported total taxable-equivalent revenue was $3.9 billion. Reported results for 2001 differ from operating results,
which exclude the write-off of State Street’s total investment in Bridge Information Systems, Inc. (“Bridge”) of $50
million, equal to $33 million after tax, or $.10 per diluted share. In March 2001, following a bankruptcy filing by
Bridge, State Street determined that the value of this investment was permanently impaired.

'01
'00 2.00
1.81
'99
'98
1.49
'97
1.33
1.16

DILUTED OPERATING
E A R N I N G S P E R S H A R E (Dollars)

State Street’s primary financial goal is to achieve sustainable, real (inflation-adjusted) growth in earnings per share.
Over the last five years, diluted operating earnings per share increased at an 18% compound annual growth rate.
In 2001, the Corporation’s total operating revenue was $3.9 billion, an increase of $299 million, or 8%, over 2000.
On April 1, 2000, State Street contributed its retirement investment and benefits outsourcing services to a 50/50
joint venture, CitiStreet, accounted for using the equity method, thereby reducing revenue and expenses of State
Street subsequent to CitiStreet’s formation. Adjusted to exclude the revenue and expenses of services contributed
to CitiStreet from the first quarter of 2000 (“adjusted for the formation of CitiStreet”), the growth in total operating
revenue was 10%.

'01
'00
3,914
'99 3,615
'98 3,119
'97 1
2,765
2,342
2
3
4
R E V E N U E (Dollars in millions)
TOTAL OPERATING

1 Servicing fees 2 Management fees
3 Foreign exchange trading and processing fees and other revenue
4 Net interest revenue after provision for loan losses

15

Summary (cont’d)
In 2001, servicing fees and net interest revenue drove revenue growth. Growth in servicing fees primarily reflects
several large client wins installed starting in the latter half of 2000 and continuing throughout 2001, and a
significant increase in securities lending revenue fees. Strength in securities lending revenue resulted primarily from
wider interest rate spreads in a favorable 2001 U.S. interest rate environment. Declines in equity market values
worldwide offset some of the growth in servicing fees. Both securities lending and net interest revenue benefited
from the unusual occurrence of eleven reductions in the U.S. federal funds target rate during 2001. Additionally,
growth in State Street’s balance sheet, primarily from clients’ investment activities, was a significant factor in the
growth of net interest revenue. Management fees were down 12%, reflecting declining equity values worldwide.
Foreign exchange trading revenue was down 5%, reflecting decreased currency volatility. Lower management fees
and foreign exchange trading revenue partially offset the growth in servicing fees and net interest revenue.
Reducing the rate of expense growth was a key factor in State Street’s 2001 performance. State Street continues to
invest for the future by carefully pacing spending on strategic initiatives and technology projects that are critical to
long-term growth. Operating expenses were $2.9 billion, an increase of 8% over 2000. Adjusted for the formation
of CitiStreet, operating expenses grew 10%, significantly lower than the comparable 20% expense growth in 2000.
The 10% year-over-year growth in expenses reflects higher salaries and employee benefits expense, partially offset
by lower incentive-based compensation, and higher information systems and communications expense.
State Street has two supporting financial goals, one for total revenue and one for return on stockholders’ equity.
State Street’s total revenue goal is 12.5% real compound annual growth from 2000 through 2010; although, as
has been true in the past, State Street does not expect to achieve that growth rate every year in the ten-year
period. State Street still expects to meet its goal over the stated period. Operating return on stockholders’ equity
for 2001 was 18.2%, exceeding State Street’s long-term goal of 18%.
State Street’s strategy of focusing on providing sophisticated global investors with a complete, integrated range
of products and services has proven successful for over two decades under varying economic and financial
conditions. State Street focuses on total client relationships. This focus results in a high rate of client retention,
cross-selling opportunities and recurring revenue. Services are integrated and priced based on each client’s total
business relationship. While most of State Street’s client services result in management or servicing fees, clients
use a wide variety of additional services that are recorded in their respective revenue categories, such as foreign
exchange trading revenue or net interest revenue. Management focuses on increasing total revenue.
State Street’s ability to serve clients’ expanding needs is critical to its success. Long-term, global trends driving
demand for State Street’s services remain robust and support continuing growth: ongoing convergence in the
financial services industry, a worldwide sense of urgency about the need for retirement security and a growing
trend by investment managers to outsource activities that are not part of their core competencies. By continuing
to invest in technology, integrated products and services that span the entire investment process, and expansion
into new markets, State Street is positioned to benefit from these trends.
State Street’s solid performance in 2001 was the result of strong new business with existing and new clients, a
diverse service offering, and market expertise that enabled State Street to take advantage of an unprecedented
interest rate environment, as well as the commitment and abilities of State Street’s global employee team.


Report of Independent Auditors
The Stockholders and Board of Directors
We have audited, in accordance with auditing standards generally accepted in the United States, the consolidated
statement of condition of State Street Corporation at December 31, 2001 and 2000 and the related consolidated
statements of income, changes in stockholders’ equity, and cash flows for each of the three years in the period
ended December 31, 2001 (not presented separately herein) and in our report dated January 16, 2002, we
expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set
forth in the accompanying condensed consolidated financial statements is fairly stated in all material respects in
relation to the consolidated financial statements from which it has been derived.

Boston, Massachusetts
January 16, 2002

17

Condensed Consolidated Financial Statements
CONSOLIDATED STATEMENT OF INCOME
(Dollars in millions, except per share data) Years ended December 31, 2001 2000 1999

Fee Revenue
Servicing fees $ 1,624 $ 1,425 $ 1,170
Management fees 511 581 600
Foreign exchange trading 368 387 306
Processing fees and other 279 272 179

Total Fee Revenue 2,782 2,665 2,255

Net Interest Revenue
Interest revenue 2,855 3,256 2,437
Interest expense 1,830 2,362 1,656

Net interest revenue 1,025 894 781
Provision for loan losses 10 9 14

Net interest revenue after provision for loan losses 1,015 885 767

Gain on sale of commercial banking business, net of exit and
other associated costs 282

Total Revenue 3,797 3,550 3,304

Operating Expenses
Salaries and employee benefits 1,663 1,524 1,313
Information systems and communications 365 305 287
Transaction processing services 247 268 237
Occupancy 229 201 188
Other 363 346 311

Total operating expenses 2,867 2,644 2,336

Income before income taxes 930 906 968
Income taxes 302 311 349

Net Income $ 628 $ 595 $ 619

E a r n i n g s Pe r S h a r e
Basic $ 1.94 $ 1.85 $ 1.93
Diluted 1.90 1.81 1.89

Average Shares Outstanding (in thousands)
Basic 325,030 321,678 321,320
Diluted 330,492 328,088 327,503

Refer to State Street Corporation’s 2001 Financial Review for a complete set of consolidated financial statements.


CONSOLIDATED STATEMENT OF CONDITION
(Dollars in millions) As of December 31, 2001 2000

Assets
Cash and due from banks $ 1,651 $ 1,618
Interest-bearing deposits with banks 20,317 21,295
Securities purchased under resale agreements and securities borrowed 16,680 21,134
Federal funds sold 650
Trading account assets 994 1,004
Investment securities (including securities pledged of $9,006 and $7,152) 20,781 13,740
Loans (less allowance of $58 and $57) 5,283 5,216
Premises and equipment 829 726
Accrued income receivable 880 845
Other assets 2,481 3,070

Total Assets $ 69,896 $ 69,298

Liabilities
Deposits:
Interest-bearing — U.S. $ 2,753 $ 2,241
Noninterest-bearing 9,390 10,009
Interest-bearing — Non-U.S. 26,416 25,687

Total deposits 38,559 37,937
Securities sold under repurchase agreements 19,006 21,351
Federal funds purchased 3,315 955
Other short-term borrowings 1,012 632
Accrued taxes and other expenses 1,582 1,431
Other liabilities 1,360 2,511
Long-term debt 1,217 1,219

Total Liabilities 66,051 66,036

Stockholders’ Equity
Preferred stock, no par: authorized 3,500,000; issued none
Common stock, $1 par: authorized 500,000,000; issued 329,999,000 and 167,219,000 330 167
Surplus 110 69
Retained earnings 3,612 3,278
Other unrealized comprehensive income (loss) 70 (1)
Treasury stock, at cost (6,329,000 and 5,508,000 shares) (277) (251)

Total Stockholders’ Equity 3,845 3,262

Total Liabilities and Stockholders’ Equity $ 69,896 $ 69,298

Refer to State Street Corporation’s 2001 Financial Review for a complete set of consolidated financial statements.

19

DIRECTORS

1 2 3 4 5

10 11 12 13 14

1 David A. Spina 5 Nader F. Darehshori 8 Linda A. Hill
Chairman and Chief Executive Officer Chairman, President and Chief Executive Officer, Wallace Brett Donham Professor of Business Administration,
Houghton Mifflin Company Harvard Business School

2 Tenley E. Albright, M.D.
6 Arthur L. Goldstein 9 John M. Kucharski
Chairman, Western Resources, Inc.
Chairman and Chief Executive Officer, Retired Chairman and Chief Executive Officer, EG&G, Inc.
Ionics, Incorporated
3 I. MacAllister Booth
10 Charles R. LaMantia
Retired Chairman, President and Chief Executive Officer,
7 David P. Gruber
Polaroid Corporation Retired Chairman and Chief Executive Officer,
Retired Chairman and Chief Executive Officer, Arthur D. Little, Inc.
Wyman-Gordon Company
4 Truman S. Casner
Of Counsel, Ropes & Gray


9
6 7 8

16
15 17 18

11 Ronald E. Logue 14 Bernard W. Reznicek 17 Diana Chapman Walsh
President and Chief Operating Officer President, Premier Group; National Director — Utility President, Wellesley College
Marketing, Central States Indemnity Company of Omaha

12 Dennis J. Picard 18 Robert E. Weissman
15 Richard P. Sergel
Chairman Emeritus, Raytheon Company Chairman, Shelburne Investments
President and Chief Executive Officer,
National Grid USA
13 Alfred Poe
Personal Investor
16 Gregory L. Summe
Chairman, President, and Chief Executive Officer,
PerkinElmer, Inc.

21

SENIOR EXECUTIVE GROUP

David A. Spina* Maureen Scannell Bateman*
Chairman and Chief Executive Officer Executive Vice President and
General Counsel
Ronald E. Logue*
Joseph W. Chow
President and
Chief Operating Officer Executive Vice President

John R. Towers* Luis J. de Ocejo
Vice Chairman and Executive Vice President
Chief Administrative Officer
John A. Fiore
Executive Vice President and
Chief Information Officer

Joseph L. Hooley
Timothy B. Harbert*
Executive Vice President
Executive Vice President,
Chairman and Chief Executive Officer, Ronald L. O’Kelley*
State Street Global Advisors
Executive Vice President,
Chief Financial Officer and Treasurer

Stanley W. Shelton
Executive Vice President

Chairman Emeritus

William S. Edgerly
Chairman, State Street Corporation
1976-1992

* Designated as executive officers for SEC and IRS purposes


INFORMATION

Corporate Headquarters Stockholder Information
State Street Corporation For timely information about corporate
225 Franklin Street financial results and other matters of
Boston, Massachusetts 02110-2804 interest to stockholders, and to request
copies of our news releases and financial
Website: www.statestreet.com
reports by fax or mail, please visit our
General inquiries: +1 617 786 3000
website at:
Annual Meeting
www.statestreet.com/stockholder
Wednesday, April 17, 2002, 10:00 a.m. at
or call 877 639 7788 toll-free in the United
Corporate Headquarters
States and Canada, or +1 402 573 3644
Transfer Agent
from other countries. These services are
Registered stockholders wishing to
available 24 hours a day, seven days a week.
change name or address information on
For copies of State Street’s Form 10-K,
their shares, transfer ownership of stock,
Form 10-Q, quarterly financial releases, or
deposit certificates, report lost certificates,
additional copies of this annual report,
consolidate accounts, authorize direct
please visit State Street’s website, call State
deposit of dividends, or receive information
Street’s stockholder services telephone
on State Street’s dividend reinvestment
line described above, or write to:
plan should contact:
Shareholder.com
EquiServe Trust Company, N.A.
ref: State Street Corporation
P.O. Box 43011
12 Clocktower Place
Providence, Rhode Island 02940-3011
Maynard, Massachusetts 01754-2597
800 426 5523
Website: www.equiserve.com Investors and analysts interested in
additional financial information may
Stock Listing
contact State Street’s Investor Relations
State Street’s common stock is listed
department at Corporate Headquarters,
on the New York Stock Exchange, ticker
telephone +1 617 664 3477.
symbol: STT, and on the Boston and Pacific
Stock Exchanges.

23

LOCATIONS

State Street's clients are among the most sophisticated investors in the world — and their growth strategies are
among the most complex. Through our offices in 22 countries and a global network covering 100 mature and emerging
geographic markets, we can help them capitalize on investment opportunities wherever they arise.

Australia Netherlands United States
Melbourne, Southbank, Sydney Amsterdam California
Alameda, Los Angeles, Newport Beach,
Belgium Netherlands Antilles Sacramento, San Francisco, San Marino

Brussels Willemstad—Curaçao Connecticut
Hartford, Greenwich
Canada New Zealand
Florida
Montreal, Toronto, Vancouver Wellington
Boca Raton, Naples

Cayman Islands People’s Republic of China Georgia
George Town Hong Kong Atlanta

Illinois
Chile Singapore Chicago
Santiago Singapore
Iowa
Des Moines
Czech Republic South Korea
Massachusetts
Prague Seoul
Boston, Milton, Norwood, Osterville, Quincy,
Westborough, Westwood
France Switzerland
Michigan
Montpellier, Paris Zurich
Lansing

Germany Taiwan Missouri
Frankfurt, Munich Taipei Kansas City, St. Louis

New Hampshire
Ireland United Arab Emirates Manchester, North Hampton
Dublin Dubai
New Jersey
Japan United Kingdom Princeton

Tokyo Andover, Edinburgh, Guernsey, Jersey, New York
London, Windsor New York, White Plains
Luxembourg
North Carolina
Luxembourg Charlotte, Winston-Salem


S
For more information
225 Franklin Street
Boston, Massachusetts 02110
+1 617 786 3000

www.statestreet.com

© 2002 State Street Corporation

SSBCM-AR-01

2001 FINANCIAL REVIEW

1 Selected Financial Data

2 Management's Discussion and Analysis of
Results of Operations and Financial Condition
2 Results of Operations
16 Financial Condition
23 Critical Accounting Policies

25 Report of Independent Auditors

26 Consolidated Financial Statements
26 Consolidated Statement of Income
27 Consolidated Statement of Condition
28 Consolidated Statement of Changes in
Stockholders’ Equity
29 Consolidated Statement of Cash Flows
30 Notes to the Consolidated Financial Statements

Selected Financial Data
(Dollars in millions, except per share
data; per share data restated for 2-for-1 96-01
2001
stock split in 2001; taxable equivalent) 2000 1999 1998 1997 CAGR
F o r t h e y e a r s e n d e d D e c e m b e r 31 ,
Operating Results:
Fee revenue:
$ 1,624
Servicing fees $ 1,425 $ 1,170 $ 1,024 $ 861
511
Management fees 581 600 480 391
368
Foreign exchange trading 387 306 289 245
329
Processing fees and other 272 236 204 176
2,832
Total fee revenue 2,665 2,312 1,997 1,673 17%
1,082
Net interest revenue after provision for loan losses 950 807 768 669 13
3,914
Total operating revenue 3,615 3,119 2,765 2,342 16
2,867
Operating expenses 2,644 2,336 2,068 1,734 15
1,047
Income before income taxes 971 783 697 608 17
319
Income taxes 311 254 221 184
67
Taxable equivalent adjustment 65 40 40 44

$ 661
Operating Earnings $ 595 $ 489 $ 436 $ 380 18

Operating earnings per share:
$ 2.03
Basic $ 1.85 $ 1.52 $ 1.35 $ 1.18 17
2.00
Diluted 1.81 1.49 1.33 1.16 18

.405
Cash dividends declared per share .345 .300 .260 .220 16

18.2%
Operating return on equity 20.3% 19.7% 20.2% 20.6%

Reported Results:
$ 3,864
Total revenue $ 3,615 $ 3,344 $ 2,765 $ 2,342 15
628
Net Income 595 619 436 380 17

Earnings per share:
$ 1.94
Basic $ 1.85 $ 1.93 $ 1.35 $ 1.18 16
1.90
Diluted 1.81 1.89 1.33 1.16 16

17.3%
Return on equity 20.3% 25.0% 20.2% 20.6%

A s o f D e c e m b e r 31 ,
$69,896
Total assets $69,298 $60,896 $47,082 $37,975
1,217
Long-term debt 1,219 921 922 774
3,845
Stockholders’ equity 3,262 2,652 2,311 1,995
52.25
Closing price per share of common stock 62.11 36.53 35.06 29.09

19,753
Number of employees 17,604 17,213 16,816 14,199

Operating results exclude significant, non-recurring special items to present the results and trends of the Corporation’s
ongoing business activities. For the year ended December 31, 2001, operating results exclude the write-off of State Street’s
total investment in Bridge Information Systems, Inc. of $50 million, equal to $33 million after tax, or $.10 per diluted share,
recorded in March 2001. For the year ended December 31, 1999, operating results exclude the gain on the sale of the com-
mercial banking business of $282 million, net of exit and other associated costs, and a one-time charge of $57 million
on sales of securities related to the repositioning of the investment portfolio. Combined, these items increased reported
net income by $130 million after tax, or $.40 per diluted share.
Results above include State Street’s retirement investment and benefits outsourcing services through March 31, 2000. On
April 1, 2000, those services were contributed to CitiStreet, a 50/50 joint venture accounted for using the equity method,
thereby reducing revenue and expenses subsequent to CitiStreet’s formation.

1

Management’s Discussion and Analysis of
Results of Operations and Financial Condition
Results of Operations
Summary
State Street recorded its 24th consecutive year of double-digit operating earnings-per-share growth in 2001.
State Street’s operating earnings per share were $2.00 in 2001, an increase of 10% over 2000 earnings per share of
$1.81. Total taxable-equivalent operating revenue was $3.9 billion, an increase of 8% from 2000. Operating earnings
were $661 million, up 11% from 2000 net income of $595 million. Operating return on stockholder’s equity
was 18.2%.
State Street’s 2001 reported earnings per share were $1.90, its reported net income was $628 million, and its
reported total taxable-equivalent revenue was $3.9 billion. Reported results for 2001 differ from operating
results, which exclude the write-off of State Street’s total investment in Bridge Information Systems, Inc.
(“Bridge”) of $50 million, equal to $33 million after tax, or $.10 per diluted share. In March 2001, following a
bankruptcy filing by Bridge, State Street determined that the value of this investment was permanently impaired.

'01
'00 2.00
1.81
'99
'98
1.49
'97
1.33
1.16

DILUTED OPERATING
(Dollars)
EARNINGS PER SHARE

State Street’s primary financial goal is to achieve sustainable, real (inflation-adjusted) growth in earnings per
share. Over the last five years, diluted operating earnings per share increased at an 18% compound annual
growth rate.
In 2001, the Corporation’s total operating revenue was $3.9 billion, an increase of $299 million, or 8%, over 2000.
On April 1, 2000, State Street contributed its retirement investment and benefits outsourcing services to a 50/50
joint venture, CitiStreet, accounted for using the equity method, thereby reducing revenue and expenses of
State Street subsequent to CitiStreet’s formation. Adjusted to exclude the revenue and expenses of services
contributed to CitiStreet from the first quarter of 2000 (“adjusted for the formation of CitiStreet”), the growth
in total operating revenue was 10%.

'01
'00
3,914
'99 3,615
'98 3,119
'97 1
2,765
2,342
2
3
4
(Dollars in millions)
TOTAL OPERATING REVENUE

1 Servicing fees 2 Management fees 3 Foreign exchange trading and processing fees and other revenue
4 Net interest revenue after provision for loan losses

In 2001, servicing fees and net interest revenue drove revenue growth. Growth in servicing fees primarily reflects
several large client wins installed starting in the latter half of 2000 and continuing throughout 2001, and a
significant increase in securities lending fees. Strength in securities lending revenue resulted primarily from


wider interest rate spreads in a favorable 2001 U.S. interest rate environment. Declines in equity market values
worldwide offset some of the growth in servicing fees. Both securities lending and net interest revenue benefited
from the unusual occurrence of eleven reductions in the U.S. federal funds target rate during 2001. Additionally,
growth in State Street’s balance sheet, primarily from clients’ investment activities, was a significant factor in
the growth of net interest revenue. Management fees were down 12%, reflecting declining equity values
worldwide. Foreign exchange trading revenue was down 5%, reflecting decreased currency volatility. Lower
management fees and foreign exchange trading revenue partially offset the growth in servicing fees and net
interest revenue.
Reducing the rate of expense growth was a key factor in State Street’s 2001 performance. State Street continues
to invest for the future by carefully pacing spending on strategic initiatives and technology projects that are
critical to long-term growth. Operating expenses were $2.9 billion, an increase of 8% over 2000. Adjusted for
the formation of CitiStreet, operating expenses grew 10%, significantly lower than the comparable 20% expense
growth in 2000. The 10% year-over-year growth in expenses reflects higher salaries and employee benefits
expense, partially offset by lower incentive-based compensation, and higher information systems and
communications expense.
State Street has two supporting financial goals, one for total revenue and one for return on stockholders’ equity.
State Street’s total revenue goal is 12.5% real compound annual growth from 2000 through 2010; although, as
has been true in the past, State Street does not expect to achieve that growth rate every year in the ten-year
period. State Street still expects to meet its goal over the stated period. Operating return on stockholders’ equity
for 2001 was 18.2%, exceeding State Street’s long-term goal of 18%.
State Street’s strategy of focusing on providing sophisticated global investors with a complete, integrated range
of products and services has proven successful for over two decades under varying economic and financial
conditions. State Street focuses on total client relationships. This focus results in a high rate of client retention,
cross-selling opportunities and recurring revenue. Services are integrated and priced based on each client’s total
business relationship. While most of State Street’s client services result in management or servicing fees, clients
use a wide variety of additional services that are recorded in their respective revenue categories, such as foreign
exchange trading revenue or net interest revenue. Management focuses on increasing total revenue.
State Street’s ability to serve clients’ expanding needs is critical to its success. Long-term, global trends driving
demand for State Street’s services remain robust and support continuing growth: ongoing convergence in the
financial services industry, a worldwide sense of urgency about the need for retirement security and a growing
trend by investment managers to outsource activities that are not part of their core competencies. By continuing
to invest in technology, integrated products and services that span the entire investment process, and expansion
into new markets, State Street is positioned to benefit from these trends.
State Street’s solid performance in 2001 was the result of strong new business with existing and new clients, a
diverse service offering, and market expertise that enabled State Street to take advantage of an unprecedented
interest rate environment, as well as the commitment and abilities of State Street’s global employee team.

Revenue
State Street is one of the world’s leading specialists in serving mutual funds, collective funds and pension plans.
The Corporation provides investment management and industry-leading technology and information services
to support financial strategies and transactions for sophisticated global investors. State Street has integrated
its products and services to meet client needs throughout every phase of the investment cycle. This integration
positions State Street to grow with its clients by providing additional products and services globally as client
requirements expand. State Street’s focus on total client relationships results in high client retention, cross-
selling opportunities and recurring revenue. During 2001, clients continued to increase the number of State
Street products they use. The Corporation’s 1,000 largest clients used an average of 7.3 products in 2001, up from

3

an average of 7.1 in 2000. The top 100 largest clients used an average of 11.3 products in 2001, up from an average
of 11.2 in 2000.
State Street benefits significantly from its ability to derive revenue from the transaction flows of clients. This
occurs through the management of cash positions, including deposit balances and other short-term investment
activities, using State Street’s balance sheet capacity. Significant foreign currency transaction volumes provide
potential for foreign exchange trading revenue as well.

Fee Revenue
Total operating fee revenue was $2.8 billion in 2001, compared to $2.7 billion in 2000, an increase of 6%. Adjusted
for the formation of CitiStreet, the growth in fee revenue was 8%.
Growth in servicing fees of $199 million, or 14%, was the primary contributor to the increase in fee revenue. This
growth primarily reflects several large client wins installed starting in the latter half of 2000 and continuing
throughout 2001, and strength in fee revenue from securities lending. Declines in equity market values
worldwide offset some of the growth in servicing fees. Management fees were down 5%, adjusted for the
formation of CitiStreet, reflecting the decline in the worldwide equity markets. Foreign exchange trading revenue
was down 5%, reflecting lower currency volatility, and processing fees and other revenue was up 21%, primarily
due to gains on the sales of investment securities.
Servicing and management fees are a function of several factors, including the mix and volume of assets under
custody and assets under management, securities positions held, and portfolio transactions, as well as types of
products and services used by clients. State Street estimates, based on a study conducted in 2000, that a 10%
increase or decrease in worldwide equity values would cause a corresponding change in State Street’s total
revenue of approximately 2%. If bond values were to increase or decrease by 10%, State Street would anticipate
a corresponding change of approximately 1% in its total revenue.
Securities lending revenue in 2001 increased approximately 40% over 2000. Securities lending revenue is
reflected in both servicing fees and management fees. Securities lending revenue is a function of the volume of
securities lent and interest rate spreads. While volumes increased in 2001, the year-over-year increase is
primarily due to wider interest rate spreads resulting from the unusual occurrence of eleven reductions in the
U.S. federal funds target rate during 2001.

FEE REVENUE

Adjusted
Change Change
2001(1) 1999(2) 00-01(3)
(Dollars in millions) 2000 00-01
$1,624
Servicing fees $1,425 $1,170 14% 14%
511
Management fees 581 600 (12) (5)
368
Foreign exchange trading 387 306 (5) (5)
329
Processing fees and other 272 236 21 21

$2,832
Total fee revenue $2,665 $2,312 6 8

(1) 2001 results exclude the write-off of State Street’s total investment in Bridge of $50 million
(2) 1999 results exclude the one-time charge of $57 million related to the repositioning of the investment portfolio
(3) 2000 results adjusted for the formation of CitiStreet


Servicing Fees

In 2001, servicing fees were $1.6 billion, up 14% from 2000. Growth in servicing fees primarily reflects several
large client wins installed starting in the latter half of 2000 and continuing throughout 2001, and strength in
securities lending revenue. Declines in equity market values worldwide offset some of the growth in servicing
fees. State Street provides solutions to meet the needs of managers of mutual funds, collective funds, pension
and retirement plans and other institutional investors worldwide through offices and a global custodian network
that spans 100 geographic markets.
M u t u a l F u n d s a n d C o l l e c t i v e F u n d s Servicing fees include fee revenue from U.S. mutual funds,
collective funds worldwide, non-U.S. retirement plans and other non-U.S. investment pools. Products and
services provided include custody, accounting, daily pricing and administration; trustee and recordkeeping;
investment manager operations outsourcing; and securities lending. In 2001, revenue growth from servicing U.S.
mutual funds and collective funds was primarily due to new business from new and existing clients.
State Street is the largest mutual fund custodian and accounting agent in the United States. State Street provides
custody services for 44% of registered U.S. mutual funds and is distinct from other mutual fund service providers
because clients make extensive use of a number of related services, including accounting, daily pricing and fund
administration. The Corporation provides fund accounting and valuation services for more than four times the
assets serviced by the next largest accounting service provider. State Street calculates approximately 30% of the
U.S. mutual fund prices that appear daily in The Wall Street Journal.
A long-term revenue driver is the number of mutual funds the Corporation services. In 2001, the total number
of funds State Street serviced increased by 341, or 8%, to 4,680. There were 689 new funds serviced, 524 from
existing clients and 165 from new clients, partially offset by 348 funds no longer serviced due primarily to fund
liquidations and consolidations.
State Street is committed to expanding globally by serving the worldwide needs of both its U.S. and non-U.S.
clients. Growth in servicing revenue in Europe was primarily attributable to previously announced acquisitions,
alliances and new business in the United Kingdom. Growth in servicing fees in Asia/Pacific included fees from
new business, primarily in Japan.
In 2000, State Street announced plans to expand its services to investment managers to include operations outsourcing
services. Through these services, State Street provides global asset managers with a comprehensive suite of services,
from trade order management through settlement. Services include securities trade order processing, custodian
communications for settlements, accounting systems, and networks and information technology development.
U . S . P e n s i o n , I n s u r a n c e a n d O t h e r I n v e s t m e n t P o o l s State Street provides master trust, master
custody, securities lending, and performance, risk and compliance analytics to corporate and public pension
funds, other institutional retirement funds, insurance companies, foundations, endowments and corporate and
public treasurers. These clients make extensive use of many other products and services, including securities
lending, investment management, and foreign exchange and equity trade execution. In 2001, revenue growth
was driven primarily by increased securities lending revenue.
At 26% market share, State Street has a leading position in the market for servicing U.S. tax-exempt assets for
corporate and public pension funds. Additionally, State Street provides trust and valuation services for over 3,900
daily-priced, unitized defined contribution accounts, making State Street a leader in this market.

5

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