3rd Quarter Earnings Summary Appendix

EX-99.2 3 dex992.htm 3RD QUARTER EARNINGS SUMMARY APPENDIX 3rd Quarter Earnings Summary Appendix

Exhibit 99.2

MELLON FINANCIAL CORPORATION

Notes to Financial Trends

Notes:

During the third quarter of 2006, we announced an agreement to sell our insurance premium financing business to BB&T and applied discontinued operations accounting for this business. Accordingly, the income statements for all periods have been restated.

During the second quarter of 2006, we completed the formation of the previously announced 50:50 joint venture with WestLB AG, WestLB Mellon Asset Management. The financial results are included in the Mellon Asset Management sector.

During the first quarter of 2006, we moved the financial results of Mellon 1st Business Bank, National Association (N.A.), to the Private Wealth Management sector from the Other sector (previously the Treasury Services/Other Activity sector). This change reflects the similar nature of products and clients of Mellon 1st Business Bank with other reporting units in the Private Wealth Management sector, as well as our organizational structure, as the management of Mellon 1st Business Bank reports to the head of Private Wealth Management. Historical sector results for Private Wealth Management and Other have been restated.

Prior period sector data may reflect immaterial reclassifications resulting from minor changes made to be consistent with current period presentation.

Summations may not equal due to rounding. As a result of this rounding convention, there may exist immaterial differences between the sector trends data versus the sector trends data subsequently filed on Form 10-Q.

Discontinued Operations Accounting/Accounting Change(s) -

The income/(loss) and average assets from discontinued operations accounting and the cumulative effect of accounting change(s) have not been allocated to any sector.

Average Assets -

Where average deposits in a business sector are greater than average loans, average assets include an allocation of investment securities equal to the difference. Consolidated average assets include average assets of discontinued operations.

Return on Common Equity/Pretax Operating Margin -

Ratios are presented on a continuing operations basis. Quarterly return on common equity ratios are annualized.

Page 1

MELLON FINANCIAL CORPORATION

CONSOLIDATED RESULTS - 11 Quarter Trend


(dollar amounts in millions unless otherwise noted; presented on an FTE basis)	2004												2005												2006
	1st Qtr (a)			2nd Qtr (b)			3rd Qtr			4th Qtr (c)			1st Qtr (d)			2nd Qtr			3rd Qtr			4th Qtr			1st Qtr (e)			2nd Qtr			3rd Qtr
Revenue:
Investment management		366			369			368			395			402			417			438			447			466			489			518
Performance fees		39			17			11			60			27			26			41			77			58			48			56

Total investment management		405			386			379			455			429			443			479			524			524			537			574
Distribution and service		66			67			68			68			71			74			82			90			98			108			107
Institutional trust and custody		138			137			132			145			150			160			172			188			194			206			207
Securities lending revenue		18			24			16			18			24			33			25			26			30			38			26
Payment solutions & investor services		145			149			133			138			134			142			122			126			121			124			119
Other fee revenue		235			147			137			158			348			155			164			159			178			171			149

Total fee and other revenue		1,007			910			865			982			1,156			1,007			1,044			1,113			1,145			1,184			1,182
Net interest revenue		106			114			107			111			116			125			114			118			121			114			121

Total revenue		1,113			1,024			972			1,093			1,272			1,132			1,158			1,231			1,266			1,298			1,303
Credit quality expense		(7	)		(2	)		(1	)		(4	)		(2	)		3			12			5			1			(3	)		(1	)
Amortization of intangible assets		4			5			4			6			6			7			7			7			7			7			7
Other operating expenses		742			745			707			797			787			809			854			899			949			956			959

Total operating expenses		746			750			711			803			793			816			861			906			956			963			966
Income from continuing operations before income taxes (benefits)		374			276			262			294			481			313			285			320			309			338			338
Income taxes (benefits)		132			98			84			99			175			111			90			113			109			108			118

Income from continuing operations		242			178			178			195			306			202			195			207			200			230			220
Income from discontinued operations after-tax		3			(2	)		5			(3	)		(51	)		(77	)		(1	)		1			7			2			2

Net income (loss)	$	245		$	176		$	183		$	192		$	255		$	125		$	194		$	208		$	207		$	232		$	222

EPS from Continuing Operations	$	0.57		$	0.42		$	0.42		$	0.46		$	0.72		$	0.49		$	0.46		$	0.50		$	0.48		$	0.56		$	0.53
Average loans (f)	$	7,489		$	7,491		$	7,047		$	7,205		$	6,882		$	7,339		$	7,421		$	7,133		$	6,758		$	6,625		$	6,684
Average assets (g)	$	33,222		$	33,377		$	33,447		$	35,951		$	36,869		$	36,436		$	37,907		$	37,988		$	37,515		$	39,104		$	41,447
Average deposits	$	19,227		$	19,776		$	20,295		$	22,083		$	23,035		$	22,322		$	23,566		$	23,905		$	23,569		$	24,084		$	27,905
Average common equity	$	3,769		$	3,753		$	3,822		$	3,983		$	4,178		$	4,087		$	4,109		$	4,114		$	4,157		$	4,182		$	4,312
Average Tier I preferred equity	$	1,026		$	1,011		$	1,010		$	1,047		$	1,038		$	1,037		$	1,032		$	1,024		$	1,022		$	1,015		$	1,072
Market value of assets under management at period end (in billions)	$	679		$	679		$	670		$	707		$	729		$	738		$	766		$	781		$	808		$	870		$	918
Market value of assets under administration or custody at period end (in billions)	$	2,824		$	2,856		$	2,978		$	3,233		$	3,293		$	3,450		$	3,777		$	3,908		$	4,125		$	4,213		$	4,380
Return on common equity		26	%		19	%		19	%		19	%		30	%		20	%		19	%		20	%		20	%		22	%		20	%
Pretax operating margin		34	%		27	%		27	%		27	%		38	%		28	%		25	%		26	%		24	%		26	%		26	%
Pretax operating margin (excluding items in footnotes a to e)		29	%		29	%		27	%		25	%		28	%		28	%		25	%		26	%		26	%		26	%		26	%

(a)

The first quarter of 2004 includes a pre-tax gain of $93 million from the sale of approximately 35% of the Corporation’s investment in Shinsei Bank.

Also included in the first quarter of 2004 is a pre-tax charge of $19 million associated with a writedown of two small non-strategic businesses, one of which was sold in the third quarter of 2004.

(b)

The second quarter of 2004 includes a $24 million pre-tax charge relating to vacating 10 leased locations in London and moving into the new Mellon Financial Centre in London.

(c)

The fourth quarter of 2004 includes a $17 million pre-tax occupancy expense reversal relating to the reduction of a sublease loss reserve following the execution of a new lease on our Pittsburgh headquarters building.

(d)

The first quarter of 2005 includes a pre-tax gain of $197 million from the sale of our remaining investment in Shinsei Bank, a $10 million pre-tax charge (included in other expense) for the early extinguishment of debt, and $5 million of additional expense ($2 million of occupancy expense and $3 million of other expenses) related to charges recorded in 2004 for the move to the new Mellon Financial Centre in London and a writedown of the remaining small non-strategic businesses previously identified as held for sale (see footnote above).

(e)

The first quarter of 2006 includes a $19 million pre-tax charge in connection with payments, awards and benefits payable to Mellon’s former chairman and chief executive officer, pursuant to his employment agreement.

(f)

Consolidated average loans include average loans of discontinued operations of $548 million, $667 million, $505 million and $570 million for the first, second, third and fourth quarters of 2004; $397 million, $749 million, $802 million and $779 million for the first, second, third and fourth quarters of 2005; $779 million, $753 million and $832 million for the first, second and third quarters of 2006.

(g)

Consolidated average assets include average assets of discontinued operations of $1,198 million, $1,297 million, $1,140 million and $1,195 million for the first, second, third and fourth quarters of 2004; $983 million, $1,032 million, $862 million and $836 million for the first, second, third and fourth quarters of 2005; $832 million, $806 million and $885 million for the first, second and third quarters of 2006.

Page 2

MELLON FINANCIAL CORPORATION

CONTINUING OPERATIONS - 11 Quarter Trend

NONINTEREST REVENUE


(dollar amounts in millions unless otherwise noted)	2004												2005												2006
(dollar amounts in millions unless otherwise noted)	1st Qtr (a)			2nd Qtr			3rd Qtr			4th Qtr			1st Qtr (a)			2nd Qtr			3rd Qtr			4th Qtr			1st Qtr			2nd Qtr			3rd Qtr
Investment management	$	366		$	369		$	368		$	395		$	402		$	417		$	438		$	447		$	466		$	489		$	518
Performance fees		39			17			11			60			27			26			41			77			58			48			56

Total investment management		405			386			379			455			429			443			479			524			524			537			574
Distribution and service		66			67			68			68			71			74			82			90			98			108			107
Institutional trust & custody		156			161			148			163			174			193			197			214			224			244			233
Payment solutions & investor services		145			149			133			138			134			142			122			126			121			124			119
Foreign exchange trading		57			50			38			41			54			50			52			46			58			69			52
Financing-related and Equity Investment		128			36			48			61			246			46			49			46			51			46			34
Other		39			43			40			46			38			46			54			57			60			47			51

Total fee and other revenue		996			892			854			972			1,146			994			1,035			1,103			1,136			1,175			1,170
Gains on the sales of securities		—			8			—			—			—			—			1			—			—			—			3

Total noninterest revenue (non-FTE)	$	996		$	900		$	854		$	972		$	1,146		$	994		$	1,036		$	1,103		$	1,136		$	1,175		$	1,173
FTE impact		11			10			11			10			10			13			8			10			9			9			9

Total noninterest revenue (FTE)	$	1,007		$	910		$	865		$	982		$	1,156		$	1,007		$	1,044		$	1,113		$	1,145		$	1,184		$	1,182
Fee and other revenue as a percentage of fee and net interest revenue (FTE) (a)		90	%		89	%		89	%		90	%		91	%		89	%		90	%		90	%		90	%		91	%		91	%
Market value of assets under management at period end (in billions)	$	679		$	679		$	670		$	707		$	729		$	738		$	766		$	781		$	808		$	870		$	918
Market value of assets under administration or custody at period end (in billions)	$	2,824		$	2,856		$	2,978		$	3,233		$	3,293		$	3,450		$	3,777		$	3,908		$	4,125		$	4,213		$	4,380
*S&P 500 Index - period end*		1126			1141			1115			1212			1181			1191			1229			1248			1295			1270			1336
*S&P 500 Index - daily average*		1133			1123			1104			1163			1192			1182			1224			1231			1284			1281			1288

(a)

The first quarter of 2004 and 2005 includes gains from the sale of the Corporation’s investment in Shinsei Bank of $93 million and $197 million, respectively.

Excluding these gains, fee and other revenue as a percentage of fee and net interest revenue (FTE) would have totaled 89% in the first quarter of 2005 and 90% in the first quarter of 2004.

Page 3

MELLON FINANCIAL CORPORATION

CONTINUING OPERATIONS - 11 Quarter Trend

Average Balances (a)

2004

2005

2006

(dollar amounts in millions)

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

1st Qtr

2nd Qtr

3rd Qtr

Average assets:

Investment Securities:

Fixed rate

6,294

6,924

7,001

6,448

6,231

6,001

5,772

5,704

5,557

5,444

5,319

Adjustable rate

1,156

1,272

1,426

2,023

2,490

2,791

3,053

3,355

3,645

3,584

3,360

Floating rate

2,786

2,771

2,731

3,509

4,207

4,847

6,315

7,040

7,595

8,366

9,164

Obligations of states and political subdivisions

543

560

631

690

749

794

819

829

814

771

749

Other (b)

190

182

Total investment securities

10,969

11,709

11,857

12,743

13,745

14,504

16,029

16,982

17,666

18,221

18,659

Trading account securities

352

268

228

248

308

294

309

283

309

439

456

Money Market Assets

2,986

2,703

3,310

4,157

4,252

3,307

2,713

2,825

2,330

2,909

4,918

Loans, net of unearned discount

6,941

6,824

6,542

6,635

6,484

6,590

6,619

6,354

5,979

5,872

5,852

Total interest-earning assets

21,248

21,504

21,937

23,783

24,789

24,695

25,670

26,444

26,284

27,441

29,885

Total non interest-earning assets (c)

11,933

11,939

11,599

12,180

12,126

11,814

12,309

11,713

11,403

11,923

11,786

Total Assets

33,181

33,443

33,536

35,963

36,915

36,509

37,979

38,157

37,687

39,364

41,671

Average liabilities and shareholders’ equity:

Deposits in domestic offices

7,695

8,041

8,655

9,164

9,653

9,298

9,760

10,087

9,748

9,673

13,328

Deposits in foreign offices

4,865

4,760

4,664

5,598

6,256

6,004

6,395

5,926

5,547

6,049

6,589

Total interest-bearing deposits

12,560

12,801

13,319

14,762

15,909

15,302

16,155

16,013

15,295

15,722

19,917

Federal funds purchased and securities under repurchase agreements

1,476

1,478

1,155

960

978

1,627

2,135

1,763

1,765

2,394

1,376

Other funds borrowed

677

520

370

503

421

442

411

438

471

592

147

Long term debt

5,222

5,253

5,264

5,436

5,511

5,293

4,837

4,692

4,633

4,584

4,669

Funding of disc ops

(1,035

)

(1,161

)

(995

)

(1,039

)

(825

)

(1,029

)

(827

)

(801

)

(805

)

(774

)

(855

)

Total interest-bearing liabilities

18,900

18,891

19,113

20,622

21,994

21,635

22,711

22,105

21,359

22,518

25,254

Total noninterest-bearing deposits

6,636

6,943

6,949

7,294

7,094

7,012

7,411

7,892

8,274

8,362

7,988

Other liabilities (c)

3,903

3,813

3,594

4,056

3,620

3,728

3,702

3,936

3,785

4,133

3,971

Total liabilities

29,439

29,647

29,656

31,972

32,708

32,375

33,824

33,933

33,418

35,013

37,213

Shareholders’ equity

3,742

3,796

3,880

3,991

4,207

4,134

4,155

4,224

4,269

4,351

4,458

Total liabilities and shareholders’ equity

33,181

33,443

33,536

35,963

36,915

36,509

37,979

38,157

37,687

39,364

41,671

(a)

Amounts and yields exclude adjustments for fair value and the related deferred tax effect required by SFAS No. 115. Prior periods calculated on a continuing operations basis even though the balance sheet, in accordance with GAAP, is not restated for discontinued operations.

(b)

Balances include Federal Reserve Stock, Preferred Stock, Loan Securitizations and other Investment Securities.

(c)

Includes assets and liabilities of discontinued operations.

Page 4

MELLON FINANCIAL CORPORATION

CONTINUING OPERATIONS - 11 Quarter Trend

Interest Yields/Rates (a)

2004

2005

2006

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

1st Qtr

2nd Qtr

3rd Qtr

4th Qtr

1st Qtr

2nd Qtr

3rd Qtr

Average Rates:

Investment Securities:

Fixed rate

4.46

4.32

4.20

4.22

4.34

4.31

4.30

4.39

4.41

4.37

Adjustable rate

3.26

3.23

3.17

3.37

3.57

3.71

3.81

3.93

4.21

4.27

4.31

Floating rate

1.74

1.77

2.19

2.60

3.17

3.64

4.03

4.52

5.02

5.36

5.67

Obligations of states and political subdivisions

7.35

7.26

7.10

7.02

7.13

6.97

6.80

6.69

6.88

6.70

6.59

Other (b)

Total investment securities

3.88

3.81

3.78

3.83

4.03

4.12

4.25

4.48

4.78

4.94

5.10

Trading account securities

2.50

2.09

1.91

1.96

1.75

2.24

2.21

2.16

1.86

2.19

2.32

Money market assets

2.39

2.48

2.73

2.90

2.93

2.99

3.12

3.68

3.82

4.15

4.21

Loans, net of unearned discount

4.09

4.17

4.06

4.60

4.91

6.01

5.60

5.85

6.17

6.51

6.97

Total interest-earning assets

3.72

3.74

3.68

3.86

4.05

4.45

4.70

4.97

5.15

5.28

Deposits in domestic offices

0.89

1.06

1.36

1.64

1.98

2.39

2.79

3.18

3.61

4.06

Deposits in foreign offices

1.66

1.46

1.71

2.08

2.18

2.43

2.52

3.13

3.24

3.59

3.44

Total interest-bearing deposits

1.19

1.10

1.29

1.63

1.85

2.16

2.44

2.92

3.20

3.60

3.86

Federal funds purchased and securities under repurchase agreements

0.83

0.81

1.12

1.55

2.05

2.46

3.19

3.62

3.74

4.75

4.45

Other funds borrowed

3.39

3.64

4.89

4.09

1.97

3.00

3.34

3.96

4.32

4.78

5.14

Long term debt

3.63

3.60

3.72

3.94

4.28

4.53

5.01

5.47

5.90

6.21

6.53

Funding of disc ops (c)

Total interest-bearing liabilities

1.92

1.83

2.00

2.30

2.46

2.75

3.04

3.50

3.81

4.25

4.35

Rates

Yield on total interest-earning assets

3.72

3.74

3.68

3.86

4.05

4.45

4.70

4.97

5.15

5.28

Cost of funds supporting interest-earning assets

1.71

1.61

1.74

2.00

2.16

2.41

2.69

2.93

3.09

3.48

3.67

Net interest Margin:

Taxable equivalent basis

2.01

2.13

1.94

1.86

1.89

2.04

1.76

1.77

1.88

1.67

1.61

Without taxable equivalent increments

1.93

2.05

1.87

1.79

1.81

1.97

1.69

1.70

1.81

1.60

1.55

(a)

(b)

Yields are not meaningful.

(c)

Rates are not meaningful as the reduction in interest expense represents the cost of allocated funding of the assets of discontinued operations.

Page 5

MELLON FINANCIAL CORPORATION

CONTINUING OPERATIONS - 11 Quarter Trend

OPERATING EXPENSE


	2004								2005								2006
(dollar amounts in millions)	1st Qtr (b)		2nd Qtr (c)		3rd Qtr		4th Qtr (d)		1st Qtr (e)		2nd Qtr		3rd Qtr		4th Qtr		1st Qtr (f)		2nd Qtr		3rd Qtr
Staff:
Compensation	$	231	$	232	$	239	$	260	$	245	$	248	$	255	$	261	$	269	$	270	$	280
Incentive (a)		100		89		83		120		107		115		126		135		171		148		162
Employee benefits		54		53		50		51		66		61		67		65		76		71		73

Total staff		385		374		372		431		418		424		448		461		516		489		515
Professional, legal and other purchased services		87		99		91		107		99		110		113		123		115		126		131
Distribution and servicing		79		79		81		80		81		90		100		106		115		126		122
Net occupancy		56		78		57		42		58		57		60		59		59		58		51
Equipment		44		42		41		41		41		43		44		47		44		44		42
Business development		21		22		20		23		21		23		23		28		25		28		25
Communications		22		22		17		22		25		18		20		20		23		23		19
Amortization of intangible assets		4		5		4		6		6		7		7		7		7		7		7
Other		48		29		28		51		44		44		46		55		52		62		54

Total operating expense	$	746	$	750	$	711	$	803	$	793	$	816	$	861	$	906	$	956	$	963	$	966
Employees at period-end		15,600		15,500		15,400		15,500		15,800		16,000		16,700		16,600		16,600		16,700		16,700

(a)

Effective Jan. 1, 2003, Mellon began recording an expense for the estimated fair value of stock options using the prospective method under transitional guidance provided in the Statement of Financial Accounting Standards (SFAS) No. 148, “Accounting for Stock-Based Compensation—Transition and Disclosure.” Stock option expense totaled approximately $4 million for each of the quarters of 2004. It totaled $6 million, $6 million, $7 million and $6 million for each of the quarters of 2005.

It totaled $11 million for the first quarter of 2006, including $3 million to Mellon’s former chairman and chief executive officer, pursuant to his employment agreement, $9 million for the second quarter of 2006 and $8 million for the 3rd quarter of 2006.

(b)

The first quarter of 2004 includes a pre-tax charge of $19 million associated with a writedown of two small non-strategic businesses held for sale, one of which was sold in the third quarter of 2004.

(c)

The second quarter of 2004 includes a $24 million pre-tax charge ($23 million—occupancy, $1 million—other) relating to vacating 10 leased locations in London and moving into the new Mellon Financial Centre in London.

(d)

(e)

The first quarter of 2005 includes a $10 million pre-tax charge (included in other expense) for the early extinguishment of debt and $5 million of additional expense ($2 million of occupancy expense and $3 million of other expenses) related to charges recorded in 2004 for the move to the new Mellon Financial Centre in London and a writedown of the remaining small non-strategic businesses previously identified as held for sale (see footnote above).

(f)

Page 6

MELLON FINANCIAL CORPORATION

ASSETS UNDER MANAGEMENT/ ADMINISTRATION OR CUSTODY - 11 Quarter Trend


	2004												2005												2006
(dollar amounts in billions unless otherwise noted)	1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			1st Qtr			2nd Qtr			3rd Qtr
Market value of assets under management at period end
Institutional	$	421		$	421		$	419		$	443		$	463		$	469		$	490		$	501		$	527		$	585		$	607
Mutual Funds		200			199			191			200			203			205			212			216			214			219			244
Private Client		58			59			60			64			63			64			64			64			67			66			67

Total market value of assets under management		679			679			670			707			729			738			766			781			808			870			918
Composition of assets under management at period end
Equity Funds		36	%		36	%		37	%		39	%		37	%		37	%		37	%		37	%		37	%		35	%		35	%
Fixed Income Funds		20	%		21	%		20	%		20	%		20	%		19	%		18	%		18	%		19	%		21	%		20	%
Money Market Funds		24	%		22	%		21	%		21	%		19	%		20	%		20	%		20	%		19	%		20	%		21	%
Securities lending cash collateral		11	%		12	%		13	%		12	%		15	%		16	%		16	%		15	%		15	%		13	%		14	%
Overlay and alternative investments		9	%		9	%		9	%		8	%		9	%		8	%		9	%		10	%		10	%		11	%		10	%

Total		100	%		100	%		100	%		100	%		100	%		100	%		100	%		100	%		100	%		100	%		100	%
Managed mutual funds fee revenue (millions)
Equity Funds	$	72		$	78		$	77		$	87		$	85		$	87		$	93		$	93		$	93		$	96		$	94
Money Market Funds		58			58			56			51			49			54			58			58			58			59			63
Fixed Income Funds		34			32			32			31			30			31			30			31			29			29			29
Nonproprietary		12			11			13			14			15			16			19			19			14			17			18

Total managed mutual funds fee revenue		176			179			178			183			179			188			200			201			194			201			204
Average assets of proprietary mutual funds
Equity Funds	$	48		$	51		$	50		$	53		$	54		$	54		$	57		$	57		$	59		$	60		$	60
Money Market Funds		96			96			91			87			85			90			96			100			99			101			110
Fixed Income Funds		25			23			23			22			22			22			21			21			21			21			21

Total average assets of proprietary mutual funds		169			170			164			162			161			166			174			178			179			182			191
Market value of assets under administration or custody at period end (a)	$	2,824		$	2,856		$	2,978		$	3,233		$	3,293		$	3,450		$	3,777		$	3,908		$	4,125		$	4,213		$	4,380
Total Assets
Managed	$	679		$	679		$	670		$	707		$	729		$	738		$	766		$	781		$	808		$	870		$	918
Administration/Custody (a)		2,824			2,856			2,978			3,233			3,293			3,450			3,777			3,908			4,125			4,213			4,380

Total	$	3,503		$	3,535		$	3,648		$	3,940		$	4,022		$	4,188		$	4,543		$	4,689		$	4,933		$	5,083		$	5,298

(a)

Excludes assets of $310 billion at June 30, 2005, $328 billion at Sept. 30, 2005, $333 billion at Dec. 31, 2005, $359 billion at March 31, 2006, $364 billion at June 30, 2006 and $376 billion at Sept. 30, 2006 that we manage and are also under administration or custody. These assets are included in assets under management.

Page 7

MELLON FINANCIAL CORPORATION

ASSETS UNDER MANAGEMENT NET FLOWS - 11 Quarter Trend


	2004												2005											2006
(dollar amounts in billions )	1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			1st Qtr			2nd Qtr			3rd Qtr		4th Qtr			1st Qtr			2nd Qtr			3rd Qtr
Market value of assets under management at beginning of period	$	657		$	679		$	679		$	670		$	707		$	729		$	738	$	766		$	781		$	808		$	870
Net Flows
Long-term		6			—			2			8			5			(1	)		9		7			11			11			6
Money market		6			(6	)		(19	)		(3	)		6			—			4		4			(3	)		10			19
Securities lending		9			4			5			1			21			9			2		(3	)		1			(4	)		7

Total net inflows		21			(2	)		(12	)		6			32			8			15		8			9			17			32
Net Market appreciation		7			—			(3	)		30			(10	)		1			13		6			18			(2	)		16
Acquisitions/divestitures		(6	)		2			6			1			—			—			—		1			—			47			—

Market value of assets under management at end of period	$	679		$	679		$	670		$	707		$	729		$	738		$	766	$	781		$	808		$	870		$	918

Page 8

MELLON FINANCIAL CORPORATION

BUSINESS SECTORS

MELLON ASSET MANAGEMENT - 11 Quarter Trend


(dollar amounts in millions unless otherwise noted; presented on an FTE basis)	2004												2005												2006
	1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			1st Qtr			2nd Qtr			3rd Qtr
Revenue:
Investment management
Mutual funds		176			179			177			183			179			187			200			201			194			201			204
Institutional clients		99			97			98			115			122			129			133			136			158			170			196
Performance fees		39			17			11			60			27			26			41			77			58			48			56
Private clients		17			18			19			20			20			21			22			23			24			26			25

Total investment management		331			311			305			378			348			363			396			437			434			445			481
Distribution and service		66			67			68			68			71			74			82			90			98			108			107
Institutional trust and custody		13			14			14			14			13			13			14			13			13			11			12
Other fee revenue		3			(3	)		(3	)		5			3			(1	)		1			(2	)		9			(3	)		6

Total fee and other revenue		413			389			384			465			435			449			493			538			554			561			606
Net interest revenue (expense)		(5	)		(6	)		(6	)		(5	)		(4	)		(6	)		(6	)		(5	)		(4	)		(11	)		(10	)

Total revenue		408			383			378			460			431			443			487			533			550			550			596
Credit quality expense		—			—			—			—			—			—			—			—			—			—			—
Amortization of intangible assets		2			2			2			3			3			4			3			3			3			3			3
Other operating expenses		292			284			285			346			320			332			355			369			387			393			408

Total operating expenses		294			286			287			349			323			336			358			372			390			396			411
Income from continuing operations before taxes (benefits)		114			97			91			111			108			107			129			161			160			154			185
Income taxes (benefits)		40			35			29			38			39			38			41			57			52			50			60

Net income (loss)	$	74		$	62		$	62		$	73		$	69		$	69		$	88		$	104		$	108		$	104		$	125

Average loans	$	7		$	7		$	7		$	—		$	—		$	—		$	—		$	—		$	4		$	—		$	—
Average assets	$	1,979		$	1,982		$	2,032		$	2,126		$	1,964		$	1,977		$	1,986		$	1,950		$	1,981		$	2,353		$	2,507
Average deposits	$	6		$	11		$	17		$	17		$	19		$	8		$	10		$	14		$	13		$	8		$	27
Average common equity	$	778		$	780		$	806		$	857		$	966		$	966		$	966		$	966		$	997		$	997		$	997
Average Tier I preferred equity	$	441		$	447		$	456		$	469		$	476		$	476		$	476		$	476		$	399		$	399		$	399
Market value of assets under management at period end (in billions) (a),(b),(c)	$	568		$	565		$	550		$	585		$	587		$	587		$	612		$	629		$	653		$	711		$	751
Market value of assets under administration or custody at period end (in billions)	$	7		$	6		$	8		$	8		$	9		$	8		$	3		$	3		$	3		$	3		$	3
Return on common equity		38	%		33	%		31	%		34	%		29	%		29	%		37	%		43	%		44	%		42	%		50	%
Pretax operating margin (GAAP)		28	%		25	%		24	%		24	%		25	%		24	%		27	%		30	%		29	%		28	%		31	%
Adjusted pretax operating margin (d)		35	%		32	%		31	%		29	%		31	%		30	%		34	%		38	%		36	%		36	%		39	%
Employees at period-end		2,500			2,500			2,600			2,600			2,600			2,500			2,400			2,400			2,500			2,500			2,500

(a)

Includes amounts subadvised for/by other sectors.

(b)

Includes assets of $47 billion at June 30, 2006 and $46 billion at Sept. 30, 2006 managed by WestLB Mellon Asset Management (a 50:50 joint venture).

(c)

Reflects the June 30, 2006 transfer of $8 billion of securities lending cash collateral to the Asset Servicing Sector.

(d)

Pretax margin adjusted for Distribution and servicing expense netted against revenue.

Page 9

MELLON FINANCIAL CORPORATION

BUSINESS SECTORS

PRIVATE WEALTH MANAGEMENT - 11 Quarter Trend


(dollar amounts in millions unless otherwise noted; presented on an FTE basis)	2004												2005												2006
	1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			1st Qtr			2nd Qtr			3rd Qtr
Revenue:
Investment management		74			75			74			77			81			80			83			87			90			92			93
Institutional trust and custody		2			2			3			2			3			2			3			2			3			2			3
Other fee revenue		7			6			4			5			5			5			5			6			5			6			4

Total fee and other revenue		83			83			81			84			89			87			91			95			98			100			100
Net interest revenue (expense)		75			77			76			74			80			79			77			76			74			77			77

Total revenue		158			160			157			158			169			166			168			171			172			177			177
Credit quality expense		—			—			—			1			—			—			—			—			—			—			—
Amortization of intangible assets		1			1			1			2			1			1			1			1			1			1			1
Other operating expenses		85			87			87			91			90			91			95			99			102			104			105

Total operating expenses		86			88			88			93			91			92			96			100			103			105			106
Income from continuing operations before taxes (benefits)		72			72			69			64			78			74			72			71			69			72			71
Income taxes (benefits)		25			26			22			21			28			26			23			26			22			24			23

Net income (loss)	$	47		$	46		$	47		$	43		$	50		$	48		$	49		$	45		$	47		$	48		$	48

Average loans	$	4,228		$	4,333		$	4,345		$	4,449		$	4,506		$	4,623		$	4,651		$	4,563		$	4,615		$	4,688		$	4,669
Average assets	$	8,439		$	8,822		$	9,100		$	9,226		$	9,431		$	9,462		$	10,062		$	10,860		$	10,279		$	10,395		$	10,544
Average deposits	$	7,157		$	7,555		$	7,819		$	7,957		$	8,295		$	8,286		$	8,846		$	9,474		$	8,824		$	8,865		$	8,827
Average common equity	$	687		$	686		$	694		$	697		$	571		$	571		$	571		$	571		$	553		$	553		$	553
Average Tier I preferred equity	$	219		$	218		$	216		$	214		$	215		$	215		$	215		$	215		$	184		$	184		$	184
Market value of total client assets at period end (in billions) (a)	$	76		$	76		$	76		$	78		$	77		$	78		$	82		$	86		$	89		$	87		$	90
Return on common equity		27	%		27	%		27	%		24	%		35	%		34	%		34	%		32	%		34	%		35	%		34	%
Pretax operating margin		46	%		45	%		44	%		41	%		46	%		45	%		43	%		41	%		40	%		41	%		40	%
Employees at period-end		1,900			1,900			1,800			1,800			1,900			1,900			1,900			1,900			1,900			2,000			2,000

(a)

Includes assets under management, before amounts subadvised by/for other sectors, of $47 billion, $46 billion, $47 billion and $50 billion in the first, second, third and fourth quarters of 2004, $49 billion, $50 billion, $51 billion and $53 billion in the first, second, third and fourth quarters of 2005; and $55 billion, $54 billion and $55 billion in the first, second and third quarters of 2006, respectively.

Page 10

MELLON FINANCIAL CORPORATION

BUSINESS SECTORS

ASSET SERVICING - 11 Quarter Trend


(dollar amounts in millions unless otherwise noted; presented on an FTE basis)	2004												2005												2006
	1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			1st Qtr			2nd Qtr			3rd Qtr
Revenue:
Institutional trust and custody		120			118			113			127			132			141			154			171			174			187			188
Securities lending revenue		18			24			16			18			24			33			25			26			30			38			26
Other fee revenue		73			67			53			59			68			67			70			72			83			96			77

Total fee and other revenue		211			209			182			204			224			241			249			269			287			321			291
Net interest revenue (expense)		14			18			17			20			19			21			22			20			26			27			29

Total revenue		225			227			199			224			243			262			271			289			313			348			320
Credit quality expense		—			—			—			—			—			—			—			—			—			—			—
Amortization of intangible assets		1			2			1			1			2			2			2			3			3			3			2
Other operating expenses		173			168			167			183			186			198			215			235			242			258			255

Total operating expenses		174			170			168			184			188			200			217			238			245			261			257
Income from continuing operations before taxes (benefits)		51			57			31			40			55			62			54			51			68			87			63
Income taxes (benefits)		18			20			10			14			20			22			17			18			22			28			21

Net income (loss)	$	33		$	37		$	21		$	26		$	35		$	40		$	37		$	33		$	46		$	59		$	42

Average loans	$	99		$	61		$	16		$	3		$	(25	)	$	1		$	(1	)	$	(20	)	$	(1	)	$	(30	)	$	(1	)
Average assets	$	7,087		$	6,824		$	7,021		$	8,036		$	8,211		$	8,117		$	9,048		$	8,484		$	8,376		$	9,248		$	10,159
Average deposits	$	5,460		$	5,414		$	5,764		$	6,496		$	7,010		$	6,859		$	7,753		$	7,077		$	7,111		$	7,570		$	8,737
Average common equity	$	606		$	599		$	583		$	609		$	482		$	482		$	482		$	482		$	551		$	551		$	551
Average Tier I preferred equity	$	136		$	135		$	132		$	128		$	125		$	125		$	125		$	125		$	132		$	132		$	132
Market value of assets under management at period end (in billions) (a),(b)	$	64		$	68		$	73		$	74		$	95		$	104		$	106		$	103		$	104		$	108		$	115
Market value of assets under administration or custody at period end (in billions) (c)	$	2,793		$	2,826		$	2,946		$	3,199		$	3,259		$	3,416		$	3,746		$	3,874		$	4,091		$	4,180		$	4,344
Return on common equity		22	%		25	%		14	%		17	%		30	%		33	%		30	%		27	%		34	%		42	%		31	%
Pretax operating margin		23	%		25	%		15	%		18	%		23	%		24	%		20	%		18	%		22	%		25	%		20	%
MEMO:
Total joint venture revenue (d)	$	81		$	82		$	74		$	84		$	93		$	101		$	102		$	107		$	119		$	149		$	140
Securities on Loan (e)	$	100		$	95		$	100		$	115		$	150		$	160		$	165		$	161		$	178		$	187		$	206
Employees at period-end		3,600			3,600			3,600			3,500			3,700			3,800			4,500			4,500			4,500			4,500			4,600

(a)

Represents the investment of securities lending cash collateral managed by the Asset Servicing Sector.

(b)

Reflects the June 30, 2006 transfer of $8 billion securities lending cash collateral from Mellon Asset Management Sector.

(c)

Excludes assets of $310 billion at June 30, 2005, $328 billion at Sept. 30, 2005, $333 billion at Dec. 31, 2005, $359 billion at Mar. 31, 2006, $364 billion at June 30, 2006 and $376 billion at Sept. 30, 2006 that we manage and are also under administration or custody. These assets are included in the Corporation’s assets under management.

(d)

Restated to reflect the acquisition of the remaining 50% interest of Russell Mellon, previously a joint venture.

(e)

Represents the total dollar amount of securities on loan, both cash and non-cash, at period end by the Corporation.

Page 11

MELLON FINANCIAL CORPORATION

BUSINESS SECTORS

PAYMENT SOLUTIONS & INVESTOR SERVICES - 11 Quarter Trend


(dollar amounts in millions unless otherwise noted; presented on an FTE basis)	2004												2005												2006
	1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			1st Qtr			2nd Qtr			3rd Qtr
Revenue:
Payment solutions & investor services		145			149			133			138			134			142			122			126			121			124			119
Other fee revenue		3			5			5			5			8			6			5			7			5			6			5

Total fee and other revenue		148			154			138			143			142			148			127			133			126			130			124
Net interest revenue (expense)		31			30			29			33			37			33			34			38			41			44			51

Total revenue		179			184			167			176			179			181			161			171			167			174			175
Credit quality expense		—			—			—			—			—			—			—			—			—			—			—
Amortization of intangible assets		—			—			—			—			—			—			1			—			—			—			1
Other operating expenses		125			130			120			134			133			135			126			132			129			133			129

Total operating expenses		125			130			120			134			133			135			127			132			129			133			130
Income from continuing operations before taxes (benefits)		54			54			47			42			46			46			34			39			38			41			45
Income taxes (benefits)		19			19			15			14			17			16			11			14			13			13			14

Net income (loss)	$	35		$	35		$	32		$	28		$	29		$	30		$	23		$	25		$	25		$	28		$	31

Average loans	$	71		$	117		$	107		$	106		$	95		$	99		$	87		$	93		$	83		$	91		$	85
Average assets	$	6,654		$	6,893		$	6,970		$	7,730		$	7,840		$	7,169		$	6,992		$	7,195		$	7,326		$	7,129		$	9,910
Average deposits	$	5,928		$	6,171		$	6,232		$	7,014		$	7,071		$	6,437		$	6,244		$	6,576		$	6,783		$	6,541		$	9,288
Average common equity	$	308		$	287		$	288		$	292		$	315		$	315		$	315		$	315		$	266		$	266		$	266
Average Tier I preferred equity	$	64		$	64		$	64		$	63		$	75		$	75		$	75		$	75		$	64		$	64		$	64
Market value of assets under management at period end (in billions)	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—
Market value of assets under administration or custody at period end (in billions)	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—
Return on common equity		46	%		48	%		45	%		37	%		38	%		38	%		30	%		31	%		39	%		41	%		46	%
Pretax operating margin		30	%		29	%		29	%		24	%		26	%		25	%		21	%		23	%		23	%		23	%		26	%
Employees at period-end		3,700			3,700			3,600			3,800			3,800			3,800			3,700			3,600			3,500			3,500			3,400

Page 12

MELLON FINANCIAL CORPORATION

BUSINESS SECTORS

OTHER - 11 Quarter Trend


(dollar amounts in millions unless otherwise noted; presented on an FTE basis)	2004												2005												2006
	1st Qtr (a)			2nd Qtr (b)			3rd Qtr			4th Qtr (c)			1st Qtr (d)			2nd Qtr			3rd Qtr			4th Qtr			1st Qtr (e)			2nd Qtr			3rd Qtr
Revenue:
Institutional trust and custody		3			3			2			2			2			4			1			2			4			6			4
Other fee revenue		149			72			78			84			264			78			83			76			76			66			57

Total fee and other revenue		152			75			80			86			266			82			84			78			80			72			61
Net interest revenue (expense)		(9	)		(5	)		(9	)		(11	)		(16	)		(2	)		(13	)		(11	)		(16	)		(23	)		(26	)

Total revenue		143			70			71			75			250			80			71			67			64			49			35
Credit quality expense		(7	)		(2	)		(1	)		(5	)		(2	)		3			12			5			1			(3	)		(1	)
Amortization of intangible assets		—			—			—			—			—			—			—			—			—			—			—
Other operating expenses		67			76			48			43			58			53			63			64			89			68			62

Total operating expenses		67			76			48			43			58			53			63			64			89			68			62
Income from continuing operations before taxes (benefits)		83			(4	)		24			37			194			24			(4	)		(2	)		(26	)		(16	)		(26	)
Income taxes (benefits)		30			(2	)		8			12			71			9			(2	)		(2	)		—			(7	)		—

Net income (loss)	$	53		$	(2	)	$	16		$	25		$	123		$	15		$	(2	)	$	—		$	(26	)	$	(9	)	$	(26	)

Average loans	$	2,536		$	2,306		$	2,067		$	2,077		$	1,909		$	1,867		$	1,882		$	1,718		$	1,278		$	1,123		$	1,099
Average assets	$	7,865		$	7,559		$	7,184		$	7,638		$	8,440		$	8,679		$	8,957		$	8,663		$	8,721		$	9,173		$	7,442
Average deposits	$	676		$	625		$	463		$	599		$	640		$	732		$	713		$	764		$	838		$	1,100		$	1,026
Average common equity	$	1,390		$	1,401		$	1,451		$	1,528		$	1,844		$	1,753		$	1,775		$	1,780		$	1,790		$	1,815		$	1,945
Average Tier I preferred equity	$	166		$	147		$	142		$	173		$	147		$	146		$	141		$	133		$	243		$	236		$	293
Market value of assets under management at period end (in billions)	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—
Market value of assets under administration or custody at period end (in billions)	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—
Return on common equity		n/m			n/m			n/m			n/m			n/m			n/m			n/m			n/m			n/m			n/m			n/m
Pretax operating margin		n/m			n/m			n/m			n/m			n/m			n/m			n/m			n/m			n/m			n/m			n/m
Employees at period-end (f)		3,900			3,800			3,800			3,800			3,800			4,000			4,200			4,200			4,200			4,200			4,200

(a)

The first quarter of 2004 includes a pre-tax gain of $93 million from the sale of approximately 35% of the Corporation’s investment in Shinsei Bank.

Also included in the first quarter of 2004 is a pre-tax charge of $19 million associated with a writedown of two small non-strategic businesses, one of which was sold in the third quarter of 2004.

(b)

The second quarter of 2004 includes a $24 million pre-tax charge relating to vacating 10 leased locations in London and moving into the new Mellon Financial Centre in London.

(c)

(d)

The first quarter of 2005 includes a pre-tax gain of $197 million from the sale of our remaining investment in Shinsei Bank, a $10 million pre-tax charge (included in other expense) for the early extinguishment of debt and $5 million of additional expense ($2 million of occupancy expense and $3 million of other expenses) related to charges recorded in 2004 for the move to the new Mellon Financial Centre in London and a writedown of the remaining small non-strategic businesses previously identified as held for sale (see footnote above).

(e)

(f)

Primarily relates to employees in Technology, Finance and Human Resources supporting the business sectors; the cost of these employees are fully allocated to the business sectors.

n/m - not meaningful

Page 13

MELLON FINANCIAL CORPORATION

BUSINESS SECTORS


(dollar amounts in millions unless otherwise noted; presented on an FTE basis)	Mellon Asset Management									Private Wealth Management									Asset Servicing
	2005			2004			2003			2005			2004			2003			2005			2004			2003
Revenue:
Investment management		1,373			1,198			1,064			331			300			275			—			—			—
Performance fees		171			127			70			—			—			—			—			—			—

Total investment management		1,544			1,325			1,134			331			300			275			—			—			—
Distribution and service fees		317			269			240			—			—			—			—			—			—
Institutional trust and custody		53			55			58			10			9			9			598			478			422
Securities lending revenue		—			—			—			—			—			—			108			76			69
Payment solutions & investor services		—			—			—			—			—			—			—			—			—
Other fee revenue		1			2			(12	)		21			22			30			277			252			220

Total fee and other revenue		1,915			1,651			1,420			362			331			314			983			806			711
Net interest revenue (expense)		(21	)		(22	)		(22	)		312			302			326			82			69			82

Total revenue		1,894			1,629			1,398			674			633			640			1,065			875			793
Credit quality expense		—			—			—			—			1			2			—			—			—
Amortization of intangible assets		13			9			8			4			5			4			9			5			5
Other operating expenses		1,376			1,207			1,082			375			350			328			834			691			633

Total operating expenses		1,389			1,216			1,090			379			355			332			843			696			638
Income from continuing operations before taxes (benefits) and cumulative effect of accounting change		505			413			308			295			277			306			222			179			155
Income taxes (benefits)		175			142			108			103			94			107			77			62			55

Income (loss) from continuing operations before cumulative effect of accounting change		330			271			200			192			183			199			145			117			100
Cumulative effect of accounting change		—			—			—			—			—			—			—			—			—

Income from continuing operations		330			271			200			192			183			199			145			117			100
Income from discontinued operations after-tax		—			—			—			—			—			—			—			—			—

Net income (loss)	$	330		$	271		$	200		$	192		$	183		$	199		$	145		$	117		$	100

Average loans	$	—		$	5		$	7		$	4,586		$	4,339		$	3,805		$	(11	)	$	45		$	27
Average assets	$	1,969		$	2,030		$	2,035		$	9,958		$	8,898		$	9,640		$	8,467		$	7,244		$	5,861
Average deposits	$	13		$	13		$	8		$	8,729		$	7,624		$	6,624		$	7,176		$	5,785		$	4,203
Average common equity	$	966		$	805		$	708		$	571		$	691		$	628		$	482		$	599		$	570
Average Tier I preferred equity	$	476		$	453		$	421		$	215		$	217		$	227		$	125		$	133		$	144
Market value of assets under management at period end (in billions)	$	629		$	585		$	554		$	49		$	48		$	48		$	103		$	74		$	55
Market value of assets under administration or custody at period end (in billions)	$	3		$	8		$	10		$	31		$	26		$	23		$	3,874		$	3,199		$	2,688
Return on common equity		34	%		34	%		28	%		34	%		26	%		32	%		30	%		20	%		18	%
Pretax operating margin		27	%		25	%		22	%		44	%		44	%		48	%		21	%		20	%		20	%
Employees at period-end		2,400			2,600			2,500			1,900			1,800			1,900			4,500			3,500			3,700

Page 14

MELLON FINANCIAL CORPORATION

BUSINESS SECTORS


(dollar amounts in millions unless otherwise noted; presented on an FTE basis)	Payment Solutions & Investor Services									Other									Consolidated Results
	2005			2004			2003			2005			2004			2003			2005			2004			2003
Revenue:
Investment management		—			—			—			—			—			—			1,704			1,498			1,339
Performance fees		—			—			—			—			—			—			171			127			70

Total investment management		—			—			—			—			—			—			1,875			1,625			1,409
Distribution and service		—			—			—			—			—			—			317			269			240
Institutional trust and custody		—			—			—			9			10			(1	)		670			552			488
Securities lending revenue		—			—			—			—			—			—			108			76			69
Payment solutions & investor services		524			565			569			—			—			—			524			565			569
Other fee revenue		26			18			17			501			383			275			826			677			530

Total fee and other revenue (a)		550			583			586			510			393			274			4,320			3,764			3,305
Net interest revenue (expense) (b)		142			123			152			(42	)		(34	)		(6	)		473			438			532

Total revenue (c)		692			706			738			468			359			268			4,793			4,202			3,837
Credit quality expense		—			—			—			18			(15	)		3			18			(14	)		5
Amortization of intangible assets		1			—			—			—			—			—			27			19			17
Other operating expenses		526			509			525			238			234			148			3,349			2,991			2,716

Total operating expenses		527			509			525			238			234			148			3,376			3,010			2,733
Income from continuing operations before taxes (benefits) and cumulative effect of accounting change		165			197			213			212			140			117			1,399			1,206			1,099
Income taxes (benefits) (c)		58			67			75			76			48			40			489			413			385

Income (loss) from continuing operations before cumulative effect of accounting change		107			130			138			136			92			77			910			793			714
Cumulative effect of accounting change		—			—			—			—			—			(7	)		—			—			(7	)

Income from continuing operations		107			130			138			136			92			70			910			793			707
Income from discontinued operations after-tax		—			—			—			—			—			—			(128	)		3			(6	)

Net income (loss)	$	107		$	130		$	138		$	136		$	92		$	70		$	782		$	796		$	701

Average loans (d)	$	93		$	100		$	95		$	1,843		$	2,246		$	3,294		$	7,194		$	7,307		$	7,704
Average assets (e)	$	7,296		$	7,063		$	8,408		$	8,687		$	7,561		$	6,406		$	37,304		$	34,003		$	33,877
Average deposits	$	6,580		$	6,338		$	7,565		$	712		$	590		$	1,093		$	23,210		$	20,350		$	19,493
Average common equity	$	315		$	294		$	352		$	1,787		$	1,443		$	1,264		$	4,121		$	3,832		$	3,522
Average Tier I preferred equity	$	75		$	64		$	73		$	142		$	157		$	145		$	1,033		$	1,024		$	1,010
Market value of assets under management at period end (in billions)	$	—		$	—		$	—		$	—		$	—		$	—		$	781		$	707		$	657
Market value of assets under administration or custody at period end (in billions)	$	—		$	—		$	—		$	—		$	—		$	—		$	3,908		$	3,233		$	2,721
Return on common equity		34	%		44	%		39	%		n/m			n/m			n/m			22	%		21	%		20	%
Pretax operating margin		24	%		28	%		29	%		n/m			n/m			n/m			29	%		29	%		29	%
Pretax operating margin (f)																				26	%		28	%		29	%
Employees at period-end		3,600			3,800			3,800			4,200			3,800			4,000			16,600			15,500			15,900

(a)

Consolidated results include FTE impact of $41 million, $42 million and $42 million for 2005, 2004 and 2003, respectively.

(b)

Consolidated results include FTE impact of $18 million, $17 million and $16 million for 2005, 2004 and 2003, respectively.

(c)

Consolidated results include FTE impact of $59 million, $59 million and $58 million for 2005, 2004 and 2003, respectively.

(d)

Consolidated average loans include average loans from discontinued operations of $683 million, $572 million and $476 million for 2005, 2004 and 2003, respectively.

(e)

Consolidated average assets include average assets of discontinued operations of $927 million, $1,207 million and $1,527 million for 2005, 2004 and 2003, respectively.

(f)

Excludes footnote items listed on Consolidated Results - 11 Quarter Trend page.

n/m - not meaningful

Page 15

MELLON FINANCIAL CORPORATION

CONTINUING OPERATIONS - 11 Quarter Trend

NONPERFORMING ASSETS


	2004												2005												2006
(dollar amounts in millions)	1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			1st Qtr			2nd Qtr			3rd Qtr
Nonperforming loans:
Commercial and financial	$	48		$	11		$	17		$	10		$	9		$	7		$	7		$	1		$	1		$	—		$	1
Personal		2			3			3			4			4			4			3			2			2			2			2
Commercial real estate		1			—			—			—			—			—			—			—			—			—			—
Lease finance assets		—			—			—			15			15			15			27			13			10			12			1

Total nonperforming loans		51			14			20			29			28			26			37			16			13			14			4
Total acquired property		—			1			1			—			—			—			—			—			3			—			—

Total nonperforming assets	$	51		$	15		$	21		$	29		$	28		$	26		$	37		$	16		$	16		$	14		$	4

Nonperforming loans as a percentage of total loans		0.68	%		0.20	%		0.30	%		0.43	%		0.39	%		0.34	%		0.48	%		0.24	%		0.19	%		0.20	%		0.07	%
Nonperforming assets as a percentage of Tier I capital plus the reserve for loan losses		1.99	%		0.56	%		0.82	%		1.08	%		0.98	%		0.87	%		1.23	%		0.53	%		0.51	%		0.44	%		0.12	%(a)

(a)

Preliminary

Page 16

MELLON FINANCIAL CORPORATION

CONTINUING OPERATIONS - 11 Quarter Trend

PROVISION AND RESERVE FOR CREDIT EXPOSURE


	2004												2005												2006
(dollar amounts in millions)	1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			1st Qtr			2nd Qtr			3rd Qtr			4th Qtr			1st Qtr			2nd Qtr			3rd Qtr
Reserve Activity:
Loan losses		103			94			96			98			98			87			87			80			63			60			58
Unfunded commitments		75			77			73			71			67			77			81			77			78			82			81

Reserve at beginning of period	$	178		$	171		$	169		$	169		$	165		$	164		$	168		$	157		$	141		$	142		$	139
Total credit losses		—			(2	)		(1	)		(1	)		(1	)		—			(24	)		(15	)		—			(1	)		—
Total recoveries		—			2			1			2			1			1			1			1			—			1			—

Sub-total - net credit recoveries (losses)	$	—		$	—		$	—		$	1		$	—		$	1		$	(23	)	$	(14	)	$	—		$	—		$	—
Credit losses on loans transferred to held for sale		—			—			—			—			—			—			—			—			—			—			—

Total net credit recoveries (losses)	$	—		$	—		$	—		$	1		$	—		$	1		$	(23	)	$	(14	)	$	—		$	—		$	—
Impact of disposals and acquisitions		—			—			—			—			—			—			—			—			—			—			—
Securitizations		—			(2	)		—			(1	)		—			—			—			—			—			—			—
Loss on sale of commitments		—			—			—			—			—			—			—			—			—			—			—
Provision for credit losses		(7	)		(2	)		(1	)		(4	)		(2	)		3			12			5			1			(3	)		(1	)
Reclass of provision to discontinued operations		—			2			1			—			1			—			—			—			—			—			—
Reserves transferred to assets of discontinued operations		—			—			—			—			—			—			—			—			—			—			(3	)
Reserves transferred to held for sale		—			—			—			—			—			—			—			(7	)		—			—			—

Reserve at end of period	$	171		$	169		$	169		$	165		$	164		$	168		$	157		$	141		$	142		$	139		$	135
Reserve for loan losses	$	94		$	96		$	98		$	98		$	87		$	87		$	80		$	63		$	60		$	58		$	55
Reserve for unfunded commitments		77			73			71			67			77			81			77			78			82			81			80

Reserve at end of period	$	171		$	169		$	169		$	165		$	164		$	168		$	157		$	141		$	142		$	139		$	135
Reserve for loan losses as a percentage of total loans (a)		1.27	%		1.39	%		1.40	%		1.45	%		1.23	%		1.15	%		1.05	%		0.96	%		0.91	%		0.84	%		0.93	%
Reserve for unfunded commitments as a percentage of unfunded commitments (a)		0.46	%		0.47	%		0.47	%		0.47	%		0.54	%		0.58	%		0.55	%		0.58	%		0.62	%		0.61	%		0.60	%
Annualized net credit losses to average loans		—	%		—	%		—	%		–0.03	%		—	%		—	%		1.23	%		0.77	%		—	%		—	%		—	%

(a)

At period end.

Page 17