EX-99.1 2 dex991.htm SLIDES FOR THE PRESENTATION BY MR. LOGUE AND MR. RESCH Slides for the presentation by Mr. Logue and Mr. Resch
Exhibit 99.1

2
Reminder
This
presentation
contains
forward-looking
statements
as
defined
by
United
States
securities
laws,
including
statements
about
State
Street's
goals
and
expectations
regarding
its
business,
financial
condition,
results
of
operations
and
strategies,
the
financial
and
market
outlook,
governmental
and
regulatory
initiatives
and
developments
and
the
business
environment.
These
statements
are
not
guarantees
of
future
performance,
are
inherently
uncertain,
are
based
on
current
assumptions
that
are
difficult
to
predict
and
involve
a
number
of
risks
and
uncertainties.
Therefore,
actual
outcomes
and
results
may
differ
materially
from
what
is
expressed
in
those
statements,
and
those
statements
should
not
be
relied
upon
as
representing
State
Street’s
expectations
or
beliefs
as
of
any
date
subsequent
to
the
date
of
this
presentation.
Important
factors
that
may
affect
future
results
and
outcomes
include:
the
financial
strength
of
the
counterparties
with
which
State
Street
or
its
clients
does
business
and
with
whom
State
Street
has
investment
or
financial
exposure;
the
liquidity
of
the
U.S.
and
International
securities
markets,
particularly
the
markets
for
fixed-income
securities,
and
the
liquidity
requirements
of
State
Street's
customers;
potential
changes
to
the
competitive
environment
due
to
the
effects
of
consolidation,
regulation
and
perceptions
of
State
Street
as
a
suitable
service
provider
or
counterparty;
the
level
and
volatility
of
interest
rates,
particularly
in
the
U.S.,
Europe
and
the
Asia/Pacific
region;
the
performance
and
volatility
of
securities,
credit,
currency
and
other
markets
in
the
U.S.
and
internationally;
economic
conditions
and
monetary
and
other
governmental
actions
designed
to
address
the
level
and
volatility
of
interest
rates
and
the
volatility
of
securities,
currency
and
other
markets
in
the
U.S.
and
internationally;
State
Street's
ability
to
measure
the
fair
value
of
securities
in
its
investment
securities
portfolio
and
in
the
asset-backed
commercial
paper
conduits
it
sponsors,
particularly
given
current
market
conditions
for
many
of
those
securities;
the
credit
quality
and
credit
agency
ratings
of
the
securities
in
State
Street's
investment
securities
portfolio,
a
deterioration
or
downgrade
of
which
could
lead
to
other-than-temporary
impairment
of
the
respective
securities
and
the
recognition
of
an
impairment
loss,
the
maintenance
of
the
credit
agency
ratings
for
State
Street's
own
debt
obligations
as
well
as
the
level
of
credibility
of
credit
agency
ratings;
State
Street's
ability
to
attract
non-interest
bearing
deposits
and
other
low-cost
funds;
the
possibility
that
changes
to
accounting
rules
or
in
market
conditions
or
asset
performance
may
require
any
off-balance
sheet
activities,
including
State
Street's
asset-backed
commercial
paper
conduits,
to
be
consolidated
into
State
Street's
financial
statements,
requiring
recognition
of
associated
losses,
if
any;
the
results
of
litigation
and
similar
disputes
and,
in
particular,
the
effect
that
current
or
potential
litigation
may
have
on
its
reputation
and
that
of
State
Street
Global
Advisors
("SSgA")
and
State
Street's
ability
to
attract
and
retain
customers;
the
possibility
that
the
ultimate
costs
of
the
legal
exposure
associated
with
certain
of
SSgA's
actively
managed
fixed-income
strategies
may
exceed
or
be
below
the
level
of
the
related
reserve,
in
view
of
the
uncertainties
of
the
timing
and
outcome
of
litigation,
and
the
amounts
involved;
the
possibility
of
further
developments
of
the
nature
that
previously
gave
rise
to
the
legal
exposure
associated
with
certain
of
SSgA's
actively
managed
fixed-income
and
other
investment
strategies;
State
Street's
ability
to
integrate
acquisitions
into
its
business,
including
the
acquisition
of
Investors
Financial;
the
performance
and
demand
for
the
products
and
services
State
Street
offers,
including
the
level
and
timing
of
withdrawals
from
our
collective
investment
products;
the
enactment
of
legislation
and
changes
in
regulation
and
enforcement
that
impact
State
Street
and
its
customers,
as
well
as
the
effects
of
legal
and
regulatory
proceedings,
including
litigation;
State
Street's
ability
to
continue
to
grow
revenue,
control
expenses
and
attract
the
capital
necessary
to
achieve
its
business
goals
and
comply
with
regulatory
requirements;
State
Street's
ability
to
navigate
systemic
risks
and
control
operating
risks;
State
Street's
ability
to
obtain
quality
and
timely
services
from
third
parties
with
which
it
contracts;
trends
in
the
globalization
of
investment
activity
and
the
growth
on
a
worldwide
basis
in
financial
assets
and
the
resulting
sovereign
and
monetary
policy
risks;
trends
in
governmental
and
corporate
pension
plans
and
savings
rates;
changes
in
accounting
standards
and
practices,
including
changes
in
the
interpretation
of
existing
standards,
that
impact
State
Street's
consolidated
financial
statements;
and
changes
in
tax
legislation
and
in
the
interpretation
of
existing
tax
laws
by
U.S.
and
non-
U.S.
tax
authorities
that
impact
the
amount
of
taxes
due. 
Other
important
factors
that
could
cause
actual
results
to
differ
materially
from
those
indicated
by
any
forward-looking
statements
are
set
forth
in
State
Street’s
Annual
Report
on
Form
10-K
and
its
subsequent
SEC
filings,
including,
in
particular,
its
Current
Report
on
Form
8-K
dated
October
15,
2008.
State
Street
encourages
investors
to
read
these
filings,
particularly
the
sections
on
Risk
Factors,
and
its
subsequent
SEC
filings,
for
additional
information
with
respect
to
any
forward-looking
statements
and
prior
to
making
any
investment
decision.
The
forward-looking
statements
contained
in
this
presentation
speak
only
as
of
the
date
hereof,
November
11,
2008,
and
State
Street
does
not
undertake
efforts
to
revise
those
forward-looking
statements
to
reflect
events
after
this
date.

3
Agenda
Navigating the New Financial Landscape
Core Business is Strong
Managing through the Turmoil
Building on the Core Business

4

5
Navigating the New Financial Landscape
Core Business is Strong*
$2,417
$1.30
Consensus
**
650 BPS
$2,700
$1.40
Actual
Q2 08
$2,605
$1.36
Consensus
**
290 BPS
$2,536
$1.24
Actual
Q3 08
$2,514
$2,600
Operating Revenue
Q1 08
810 BPS
Operating Leverage
$1.19
$1.39
Operating Earnings per Share
Consensus
**
Actual
$ in millions                           
except per share data
*Results
presented
on
an
operating
basis,
including
fully
taxable-equivalent
revenue;
see
reconciling
tables
in
Appendix
**Consensus
reports’
average
of
First
Call
estimates
Indy Mac
Fannie Mae &
Freddie Mac
Significant bank
write-downs
Bear Stearns
Insurance
downgrades
Bond insurers
under scrutiny
Lehman
AMLF
CPFF
MMIFF
TARP
State Street has performed well during turbulent times
Feb
Mar
Apr
May
Jun
Jan 08
Jul
Aug
Sep
Oct
Nov
AIG

6
Core
Business
is
Strong*
—
2008
Performance
Year-to-Date
Navigating
the
New
Financial
Landscape
*Results
presented
on
an
operating
basis,
including
fully
taxable-equivalent
revenue;
see
reconciling
tables
in
Appendix
+24.7%
+21.4%
+25.4%
% Change ex IFIN
17.3%
17.8%
Operating ROE
$ in millions,
except per share data
9/30/08
9/30/07
% Change
Operating revenue
$7,836
$5,898
+32.9%
Operating expenses
$5,252
$4,119
+27.5%
Operating EPS
$4.03
$3.15
+27.9%
PERFORMANCE FOR NINE MONTHS ENDED
Operating revenue, operating EPS and operating ROE continue to be strong
Operating leverage
540 bps
400 bps

7
Navigating
the
New
Financial
Landscape
Approaching the high end of the range
Approaching the high end of the range
Exceeding the high end of the range
Expectations for 2008
14%–17%
Operating ROE
10%–15%
Growth in Operating EPS
14%–17%
Growth in Operating Revenue
Range
(Includes Investors Financial)
Goal
*Presented
on
an
operating
basis
Consistent
performance
approaching
or
above
high
end
of
ranges
Core
Business
is
Strong
—
Expectations
for
2008*

8
Navigating
the
New
Financial
Landscape
Continued
momentum
in
core
business
Core
Business
is
Strong
—
New
Business
Wins
Business
2009
Q4 08
$2 billion
$23 billion
$102 billion
$127 billion
Asset Management
$852 billion
Installed thru Q3
$130 billion
To be installed
$298 billion
$1,280 billion
Asset Servicing
YTD New Wins¹
1
Assets
as
of
9/30/08

9
-15.9
-18.6
3.1
-20
-15
-10
-5
0
5
Navigating
the
New
Financial
Landscape
-8.7
-14.3
-1.1
-15
-10
-5
0
5
Servicing
fees
are
based
on
more
factors
than
AUC
valuations
Core
Business
is
Strong
—
Servicing
Fee
Revenue
vs.
Daily
Average
Values
%
S&P
500
average
daily
valuations
EAFE
average
daily
valuations
State
Street
servicing
fee
revenue
%
Q3 2008 vs. Q3 2007
Q3 2008  vs. Q2 2008

10
Navigating the New Financial Landscape
Core Business is Strong —
Management
Fee
Revenue
vs.
Average
of
Three
Months’
End
Q3 2008  vs. Q2 2008
-8.6
-15.6
-6.8
-20
-15
-10
-5
0
5
%
%
-16.6
-21.4
-12.7
-25
-20
-15
-10
-5
0
5
S&P 500 average of 3 months’
end
EAFE average 3 months’
end
State Street management fee revenue
New business and diverse products contribute to management fee revenue
Q3 2008 vs. Q3 2007

11

12
Market conditions improving, aided by the Federal Reserve and U.S. Treasury programs
Navigating the New Financial Landscape
>
Program created to address customer requests; Assets sourced from the market
>
Committed to reducing size of program
–
$29.2 billion of assets at 9/30/07
–
$25.5 billion of assets at 9/30/08
>
As of 9/30/08, 80% of the conduit assets were rated A or higher with no sub-prime
or SIV assets
>
Excluding impact of AMLF, amount held on balance sheet was $6.2 billion as of
9/30/08
>
$22
billion
(89%)
of
commercial
paper
of
$25.5
billion
in
total
assets
within
conduits
(as
of
9/30/08)
is
eligible
to
be
sold
to
the
Federal
Reserve
Bank’s
Commercial
Paper
Funding
Facility
(CPFF),
although
we
are
not
participating
at
this time
>
Unrealized mark-to-market after-tax loss was $2.1 billion as of 9/30/08
Managing through the Turmoil
ABCP Conduits

13
Navigating the New Financial Landscape
1
The
estimated
pro
forma
impact
to
State
Street
Corporation’s
capital
ratios
assumes:
-
All
four
State
Street-sponsored
conduits,
with
combined
assets
of
approximately
$25.5
billion
at
September
30,
2008
are
consolidated
onto
the
balance
sheet
of
State
Street
Bank
and
Trust
on
September
30,
2008;
Assets
of
the
conduits
are
recorded
at
fair
value
2
Requirement
for
Tier
1
leverage
applies
to
Bank
only
3
Common
equity
plus
TARP
less
goodwill
and
intangibles
/
adjusted
tangible
assets
4
Moody’s
definition
of
TCE
gives
some
equity
credit
for
hybrid
securities
and
for
TARP
preferred
of
which
25%
is
credited
to
equity
4.26%
6.14%
4.80%
Total Tangible Equity³
15.76%
18.62%
15.95%
6%
Tier 1 Risk-Based Capital
5%
Well Capitalized
Minimum²
8.31%
8.25%
Pro-forma
ex Central Banks w/ $2B TARP
& conduit consolidation
11.16%
10.35%
Moody’s TCE/RWA
4
9.76%
8.36%
Tier 1 Leverage
Pro forma
ex Central Banks       
w/ $2B TARP
Actual
Ex Central Bank
deposits
STT’s
Ratios
9/30/2008
Had State Street consolidated its conduits on 9/30/08, it would have remained               
well-capitalized with ample sources of liquidity¹
Managing through the Turmoil
ABCP CONDUITS —
IMPACT¹
TO FINANCIAL RATIOS

14
Navigating
the
New
Financial
Landscape
>
Conservatively structured and well seasoned
>
At 9/30/08, 84% of portfolio assets were rated AAA and 97% were rated
A or better
>
Portfolio performing within expectations at 9/30/08
>
Portfolio
constructed
to
perform
well
even
with
stresses
in
market
environment²
>
As of 9/30/08, downgrades have been minimal and no assets were in
default²
>
All assets are current for principal and interest
>
Unrealized mark-to-market after-tax loss was $3.3 billion as of 9/30/08
Investment Portfolio remains of high quality and well diversified
Managing through the Turmoil
Investment
Portfolio¹
1
All
information
as
of
9/30/08
unless
otherwise
noted
2
See
Appendix

15
Navigating the New Financial Landscape
Stable Value
Wrap Accounts
>
$10BN
(as
of
9/30/08)
in
SSgA-managed
stable
value
accounts
that
have
contractual
arrangements
with
wrap
providers
>
A
Stable
Value
investment
option
is
an
important
choice
to
tens
of
thousands
of
retirement
plan
participants
>
Continued
disruption
in
markets
has
led
to
wider
spreads
between
market
and
book
value;
as
of
9/30/08
market
value
of
non-cash
assets
was
91%
of
book value
>
Added
$450
million
cash
to
these
accounts
to
bring
market
value
of
non-
cash
assets
to
95%
of
book
value
as
of
October
30,
2008
>
Purchased
$2.5
billion
in
assets
from
program
onto
State
Street’s
balance
sheet
(AFS)
to
enhance
position
of
customers
and
wrap
providers
>
State
Street’s
actions
support
plan
participants,
our
customers,
and
the
industry
Contribution
helps
to
protect
the
retirement
interests
of
plan
participants
Managing through the Turmoil

16
Navigating
the
New
Financial
Landscape
>
State
Street
acts
as
agent,
not
principal,
in
managing
program
>
Collateral
pools
performing
as
expected
and
are
conservatively
invested
–
23
day
duration
book
as
of
9/30/08
–
Customer
participation/redemption
in
collateral
pools
managed
with
available liquidity
>
Customers
have
not
experienced
losses
due
to
default
and
collateral
pools
have
not
required
our
support
in
current
market
turmoil
>
As
of
September
30,
2008,
excluding
market
declines,
program
assets
have
declined
10%
from
June
30.
2008
–
About
44
of
450
customers
have
suspended
participation
in
the
program
–
No
restrictions
on
customers’
normal
program
activities;
certain
restrictions
on
customers
whose
withdrawal
requests
are
a
change
from
normal activity
–
Gained
several
new
customers
during
period
of
turmoil
>
Spreads
and
scarcity
value
of
assets
on
loan
are
expected
to
partially
offset
the
impact
of
lower
volumes
Program
remains
liquid
in
challenging
market
Managing through the Turmoil
Securities
Lending¹
1
All
information
as
of
9/30/08
unless
otherwise
noted

17
Navigating
the
New
Financial
Landscape
State
Street
is
an
integral
part
of
the
financial
services
infrastructure
Managing
through
the
Turmoil
—
Government
Actions
TARP
CPFF
AMLF
MBS
Fed / Treasury Programs
>
One
of
nine
financial
institutions
selected
to
lead
participation
in
Capital
Purchase
Program
>
Asset-purchase
component
of
TARP
still
evolving
>
Appointed
as
custodian
and
administrator
for
Commercial
Paper
Funding
Facility
>
One
of
the
first
banks
to
be
fully
operational
with
Asset-Backed
Commercial
Paper
Money
Market
Liquidity
Facility
(AMLF)
program
>
No
credit
or
capital
assessment
to
State
Street
>
$152
billion
of
eligible
ABCP
purchased
from
2a7
funds
in
total
program;
State
Street
purchased
$77
billion
as
of
9/30/08
>
Appointed
to
manage
a
portion
of
Mortgage-Backed
Securities Program
State Street Eligible
Custody / Manage

18

19
Navigating the New Financial Landscape
Building on the Core Business —
Rating Agency View of Capital
“…State
Street’s
current
capital
levels
provide
a
substantial
cushion
against
the
primary
direct
risks
to
its
capital
adequacy…
if
conduit
assets
were
consolidated
and
the
security
portfolio
unrealized
losses
at
9/30/08
were
deducted
from
capital
[low
likelihood
on
a
HTM
basis]
then
Moody’s
estimates
that
State
Street’s
Tier1/RWA
would
fall
to
a
still
solid
approximately
11.5%
from
a
very
high
19%...”
—
Moody’s
press
release
affirming
State
Street
Credit
rating
at
Aa3,
10/15/08
“We
have
tended
to
look
at
tangible
common
equity
relative
to
risk
weighted
assets
rather
than
to
total
assets.
Because
we
still
feel
risk
weighted
gives
you
a
clearer
—
a
better
picture
of
the
risks
than
total
assets
would...So
generally
we
actually
look
at
both
tier
one
ratio
and
our
own
tangible
common
equity
to
risk
weighted
assets
ratio,
and
we
generally
give
those
two
equal
weights
in
our
analysis.
”
—
David
Fanger,
Senior
Analyst
at
Moody’s,
10/20/08
Describing
Moody’s
approach
to
capital
adequacy
when
determining
credit
ratings
as
reported
on
a
Deutsche-Bank
sponsored
conference
call
Moody’s

20
Navigating
the
New
Financial
Landscape
>
Raised
$2.8
billion
in
equity
capital
in
June
2008
>
TARP
added
$2
billion
in
preferred
shares
in
October
2008
>
Generated
approximately
$1.8
billion
of
organic
capital
in
9
months
of
2008
>
TOTAL:
Added
$6.6
billion
in
additional
capital
in
the
first
9
months
of
2008
Building
on
the
Core
Business
—
Regulatory
Ratios
Well-capitalized
with
ample
sources
of
liquidity;
Goal
is
to
maintain
flexibility
in
the
challenging
market
environment
8.3%
15.8%
STT
pro forma
with TARP
and conduit
consolidation²
8.7%
12.1%
NTRS
pro forma
with TARP³
8.2%
11.8%
BK
pro forma
with TARP³
9.8%
18.6%
STT
pro forma
with TARP²
6.6%
6.5%
8.4%
5%
Leverage
Ratio
NTRS²
BK²
STT²
Well Capitalized
Minimum¹
9.2%
9.3%
16.0%
6%
Tier 1
Risk-based
Capital
As of September 30, 2008
1
Requirement
for
Tier
1
leverage
applies
to
Bank
only
2
Based
on
reported
results
3
Based
on
State
Street’s
calculation
adding
reported
TARP
issuance
to
information
disclosed
in
reports
from
BK
and
NTRS

21
Navigating
the
New
Financial
Landscape
Building
on
the
Core
Business
—
Opportunities
>
$225
billion
*
of
AUM
at
SSgA
and
$270
billion
in
AUC
from
Sovereign
Wealth
Funds
>
Leverage
strong
existing
relationships
to
further
penetrate
this
growing
segment
>
Integrated
firm-wide
approach
presents
new
cross-sell
opportunities
Sovereign
Wealth Funds
>
State
Street
ETFs
of
$180
billion
(9/30/08)
—
up
$30
billion
from
6/30/08
>
Leverage
strong
brand
awareness
and
multi-channel
distribution
strategy
>
Opportunities
exist
for
continued
product
innovation
Exchange
Traded Funds
>
Cost
pressures
tend
to
increase
willingness
of
investment
managers
to
outsource
back
and
middle
office
functions
>
Expect
increased
business
opportunities
in
2H
2009
and
2010
Outsourcing
>
Recent
government
actions
have
created
political
environment
for
regulatory reform
>
More
regulation
generally
increases
customer
demand
for
administration
and reporting
Regulatory Reform
*As of September 30, 2008

22
Navigating
the
New
Financial
Landscape
Building
on
the
Core
Business
—
Expense
Management
Since
2004,
inculcating
expense
management
into
corporate
DNA
Key Levers
>
State
Street
remains
committed
to
achieving
positive
operating
leverage
on
an
annual
basis
>
Given
the
uncertainty
in
the
current
economic
environment,
we
must
remain
vigilant
>
Aggressive
policies
in
place
to
manage
headcount
and
related
expense
–
IT
expenses
(20%–25%
of
operating
expenses)
can
be
modulated
–
Use
of
contractors
provides
flexibility
in
expense
>
Redoubling
strategic
sourcing
efforts

23
Navigating
the
New
Financial
Landscape
Summary
>
Core
business
remains
strong,
building
momentum
>
Flight
to
quality
continues
>
During
turmoil,
significantly
strengthened
capital
levels
and
ratios
>
Environment
continues
to
be
challenging
>
Focus
on
expenses
>
Concentrate
on
key
revenue
streams,
such
as
additional
outsourcing
>
Developing
new
products
to
meet
emerging
regulatory
requirements
>
Objectives
continue
to
be
preservation
of
capital
,
operating
EPS
growth,
and
positive
operating
leverage
on
an
annual
basis
>
Intend
to
retain
long-term
financial
goals;
Working
toward
delivering
operating
EPS
in
2009
approaching
low
end
of
long-term
goal
Focused
on
delivering
consistent
results

24