8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report:    January 10, 2003

State Street Corporation _______________________________ (Exact name of registrant as specified in its charter)
Massachusetts ______________	0-5108 __________________	04-2456637 __________________________
(State of Incorporation)	(Commission File Number)	(IRS Employer Identifica tion Number)

225 Franklin Street, Boston, Massachusetts ______________________________________	02110 ____________
(Address of principal executive offices)	(Zip code)

Registrant’s telephone number, including area code:

(617) 786-3000

Item 5.    Other Events.

On January 10, 2003, Registrant issued a press release announcing 2002 fourth quarter and 2002 full year financial results.

The press release issued by Registrant in connection with the announcement is filed herewith as Exhibit 99.1 and is incorporated herein by reference.

Item 7.    Financial Statements and Exhibits.

(c)    Exhibits.

99.1    Form of press release dated January 10, 2003 and addendum.

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

STATE STREET CORPORATION

/s/    Frederick P. Baughman

Name:     Frederick P. Baughman

Title:    Senior Vice President,

Controller and Chief Accounting

Officer

Date: January 10, 2003

EXHIBIT INDEX

Exhibit
99.1	Form of press release dated January 10, 2003 and addendum

EX-99.1

225 Franklin Street

Boston, MA 02110-2804

United States of America

          News Release

For Release:	IMMEDIATELY
Contact:	Edward J. Resch	Investors:     Kelley MacDonald	Media:     Hannah Grove
	+1 617/664-1110	+1 617/664-3477	+1 617/664-3377

STATE STREET CORPORATION ANNOUNCES

EARNINGS PER SHARE GROWTH,

REFLECTING CONTINUED BUSINESS SUCCESS

2002 Earnings Per Share of $3.10 Include a Gain of $0.90

Boston, MA January 10, 2003

State Street Corporation announced today fourth-quarter diluted earnings per share of $1.46 and net income of $477 million on revenue of $1.5 billion. For the full-year 2002, earnings per share were $3.10 and net income was $1.0 billion, on revenue of $4.4 billion. Results for the fourth quarter and full-year include a net gain on the sale of State Street’s Corporate Trust business of $495 million, equal to $296 million after taxes, or $0.90 in diluted earnings per share. Excluding the gain, return on stockholders’ equity was 16.1% for the quarter, and 17.1% for the year.

For the fourth quarter of 2001, State Street reported diluted earnings per share of $0.52 and net income of $171 million on revenue of $1.0 billion. For the full-year 2001, reported earnings per share were $1.90 and net income was $628 million, on revenue of $3.8 billion. Results for 2001 included both goodwill amortization expenses of $38 million, equal to $26 million after tax, or $0.08 per diluted share, and the write-off of State Street’s total investment in Bridge Information Systems, Inc. of $50 million, equal to $33 million after tax, or $0.10 per share, which was recorded in the first quarter. The

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State Street Corporation

Fourth Quarter Earnings Release

January 10, 2003

Resch, +1 617/664-1110

Page 2

fourth-quarter 2001 impact from the goodwill adjustment was $10 million, or $7 million after-tax, equal to $0.02 per share.

State Street prepares supplemental information adjusting reported results for significant transactions, and defines the information as operating results. Operating results provide financial information on a comparable basis from period to period to assist stockholders and others in analyzing State Street’s financial results for ongoing businesses and operations. On an operating-results basis, consistent with prior presentations, fourth-quarter taxable-equivalent revenue was down 4%, or $42 million; and net income was up 2%, or $3 million, from the fourth quarter of 2001. For the full year, taxable-equivalent revenue was up $19 million, and net income was up 5%, or $32 million, from the prior year.

These operating results for 2002 exclude the fourth-quarter net gain. Operating results for 2001 exclude both the goodwill amortization expenses and the write-off of State Street’s total investment in Bridge. Operating results for both years also include fully-taxable equivalent adjustments. Detailed information on the adjustments is available in the Addendum Selected Financial Information table III included with this press release.

David A. Spina, chairman and chief executive officer of State Street, said, “This was a year of outstanding accomplishment for State Street, achieved in a very challenging environment. We won important new business mandates, continued to strengthen our client relationships, and expanded our product range. These achievements contributed to continued growth in State Street’s earnings per share, making this our 25^th consecutive year of EPS growth. Our success in winning new clients and streamlining operations to control expense growth helped us overcome the challenges posed by weak financial markets worldwide and a difficult interest-rate environment.

“Our agreement to acquire significant portions of Deutsche Bank’s Global Securities Services business was a defining moment for our company. We’re on track to close the agreement soon, and our integration team is working energetically to ensure a successful transition.

“In 2003, we remain focused on providing sophisticated investors with the investment solutions they need, and better service than they can find anywhere else. Our primary financial goal, sustainable real growth in earnings per share, is a foundation of our business strategy. I am confident that State Street’s continued evolution as a global company will drive our ability to create value for stockholders.”

FOURTH-QUARTER RESULTS

As reported, fourth-quarter diluted earnings per share were $1.46, net income was $477 million, and total revenue was $1.5 billion, including the net gain on the sale of State Street’s Corporate Trust business of $495 million, equal to $296 million after taxes, or $0.90 in diluted earnings per share.

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State Street Corporation

Fourth Quarter Earnings Release

January 10, 2003

Resch, +1 617/664-1110

Page 3

State Street generates revenue by providing sophisticated global investors with integrated products, services and strategies that support their investment and business goals.

Servicing fees were up 1% in the fourth quarter, to $427 million. Servicing fees are derived from accounting, administration, custody, daily pricing, securities lending, performance and analytics, compliance monitoring, and operations outsourcing for investment managers. New business from existing and new clients, including business gained through an acquisition, drove growth in servicing fees, more than offsetting the constraint imposed by the decline in comparable average equity market valuations and lower securities lending revenue. Daily average values for the S&P 500 Index were down 21% from the fourth quarter of 2001; daily average values for the MSCI^® EAFE Index^SM were down 17%. Total assets under custody were $6.2 trillion, level with the prior year.

Management fees from investment management services, delivered through State Street Global Advisors, were $126 million, compared to $129 million a year ago. Management fees reflected continued new business success, which largely offset the effects of significantly lower average equity market valuations from a year ago. Total assets under management were $763 billion, compared to $775 billion a year previously.

Foreign exchange trading revenue was $62 million for the quarter, compared to $83 million a year ago, reflecting low currency volatility in the quarter. Brokerage fees were $38 million, compared to $23 million a year ago, driven by significantly higher equity trading volumes. Securities gains of $31 million, compared to $7 million last year, reflected opportunities created by the low-interest rate environment.

Reported net interest revenue for the fourth quarter was $225 million. On a taxable-equivalent basis, net interest revenue was $240 million, a decline of $65 million from a year ago. State Street provides repurchase agreements and deposit services for clients’ investment activities, which generate net interest revenue. Lower yields on assets, reflecting the continuing decline in interest rates, offset growth in the balance sheet and lower liability costs.

Operating expenses were $704 million, compared to $746 million a year ago. On a comparable basis, expenses were down $32 million, or 4%, from $736 million a year ago. Comparable expenses for the fourth quarter of 2001 exclude $10 million of goodwill amortization expenses. Lower salaries and benefits expenses, reflecting reduced staffing and contract services costs, drove the decline in expenses. State Street continues to invest in the key initiatives that offer greatest opportunity for future growth while remaining focused on controlling the growth rate of expenses.

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State Street Corporation

Fourth Quarter Earnings Release

January 10, 2003

Resch, +1 617/664-1110

Page 4

FULL-YEAR RESULTS

As reported, 2002 earnings per share were $3.10 and net income was $1.0 billion, on revenue of $4.4 billion, including the net gain on the sale of State Street’s Corporate Trust business of $495 million, equal to $296 million after taxes, or $0.90 in diluted earnings per share.

Revenue for the full-year, on an operating-results basis as defined above, was $4.0 billion, up $19 million from 2001. New business success drove the growth, substantially offset by the impact of lower equity market valuations, low currency volatility and a less-favorable interest-rate environment.

Servicing fees were up 4% for the year, to $1.7 billion. Management fees were up 2%, to $526 million. Strong new business success drove growth in both servicing fees and management fees, offsetting the impact of lower equity market valuations and lower securities lending revenue.

Foreign exchange trading revenue declined $68 million, to $300 million, reflecting low currency volatility. Brokerage fees rose $35 million, to $124 million, from a year ago, driven by significantly higher equity trading volumes. Securities gains of $76 million, up $33 million, reflected opportunities created by the low-interest rate environment.

Reported net interest revenue for 2002 was $979 million. On a taxable-equivalent operating-results basis, net interest revenue was $1.0 billion, a decline of $52 million from 2001. Lower yields on assets offset growth in the balance sheet and lower liability costs.

Operating expenses were $2.8 billion for the year. On a comparable basis, expenses were down $17 million, or 1%. Comparable expenses for 2001 exclude $38 million of goodwill amortization expenses. Lower other expenses, reflecting reduced professional services and advertising expenses, contributed to the decline in total expenses.

INVESTOR CONFERENCE CALL

State Street will webcast an investor conference call today, Friday, January 10, 2003, at 9:30 a.m. EST, available at www.statestreet.com/stockholder. The conference call will also be available via telephone, at +1 719/457-2621. Recorded replays of the conference call will be available on the web site, and by telephone at +1 402/220-4230, beginning at noon Friday. Additional financial detail is available on State Street’s website, at www.statestreet.com/stockholder, under “Financial Reports.”

State Street Corporation (NYSE: STT) is the world’s leading specialist in providing sophisticated global investors with investment servicing and investment management. With $6.2 trillion in assets under custody and $763 billion in assets under management,

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State Street Corporation

Fourth Quarter Earnings Release

January 10, 2003

Resch, +1 617/664-1110

Page 5

State Street is headquartered in Boston, Massachusetts and operates in 22 countries and over 100 markets worldwide. For more information, visit State Street’s web site at www.statestreet.com or call 877/639-7788 [NEWS STT] toll-free in the United States and Canada, or +1 202/266-3340 outside those countries.

This news announcement contains forward-looking statements as defined by United States securities laws, including statements about the financial outlook and business environment. Those statements are based on current expectations and involve a number of risks and uncertainties, including those related to the pace at which State Street adds new clients or at which existing clients use additional services, the value of global and regional financial markets, the pace of cross-border investment activity, changes in interest rates, the pace of worldwide economic growth and rates of inflation, the extent of volatility in currency markets, consolidations among clients and competitors, State Street’s business mix, the dynamics of markets State Street serves, and State Street’s success at integrating and converting acquisitions into its business. 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 2001 annual report and subsequent SEC filings. State Street encourages investors to read the corporation’s annual report, particularly the section on factors that may affect financial results, 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 press release speak only as of the date hereof, January 10, 2003, and the company will not undertake efforts to revise those forward-looking statements to reflect events after this date.

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STATE STREET CORPORATION

Addendum Earnings Digest⁽¹⁾

(Dollars in millions, except per share data)

	Quarter ended December 31,
	2002		2001		% Change
Revenue	$	1,456	$	998	46
Earnings		477		171	179
Diluted earnings per share		1.46		.52	180

	Year ended December 31,
	2002		2001		% Change
Revenue	$	4,396	$	3,827	15
Earnings		1,015		628	62
Diluted earnings per share		3.10		1.90	63

(1) Information presented in accordance with accounting principles generally accepted in the United States.

Addendum page 1

STATE STREET CORPORATION

Addendum Selected Financial Information

I. CONSOLIDATED STATEMENT OF INCOME PREPARED IN ACCORDANCE WITH ACCOUNTING PRINCIPLES GENERALLY ACCEPTED IN THE UNITED STATES

Prior year information has been restated in accordance with FASB accounting guidance effective January 1, 2002, presenting client-reimbursed expenses on a gross basis as revenue and expense.

	Quarter ended December 31,				Year ended December 31,
(Dollars in millions, except per share data)	2002		2001		2002		2001
Fee Revenue
Servicing fees	$	427	$	421	$	1,716	$	1,648
Management fees		126		129		526		516
Foreign exchange trading		62		83		300		368
Brokerage fees		38		23		124		89
Processing fees and other		53		53		184		148
Total fee revenue		706		709		2,850		2,769
Net Interest Revenue
Interest revenue		465		563		1,974		2,855
Interest expense		240		278		995		1,830
Net interest revenue		225		285		979		1,025
Provision for loan losses		1		3		4		10
Net interest revenue after provision for loan losses		224		282		975		1,015
Gains on the sales of available-for-sale investment securities		31		7		76		43
Gain on the sale of corporate trust business, net of exit and other associated costs		495				495
Total Revenue		1,456		998		4,396		3,827
Operating Expenses
Salaries and employee benefits		411		435		1,670		1,663
Information systems and communications		94		95		373		365
Transaction processing services		65		62		246		247
Occupancy		64		63		246		229
Other		70		91		306		393
Total operating expenses		704		746		2,841		2,897
Income before income taxes		752		252		1,555		930
Income taxes		275		81		540		302
Net Income	$	477	$	171	$	1,015	$	628
Earnings Per Share
Basic	$	1.47	$	.53	$	3.14	$	1.94
Diluted		1.46		.52		3.10		1.90
Average Shares Outstanding (in thousands)
Basic		323,520		323,489		323,520		325,030
Diluted		326,469		329,268		327,477		330,492

The three and twelve month periods ended December 31, 2001, have been restated in accordance with the FASB accounting guidance effective January 1, 2002 to present client-reimbursed expenses on a gross basis as revenue and expense.

II. OTHER FINANCIAL INFORMATION

	Quarter ended December 31,						Year ended December 31,
(Dollars in millions, except per share data or where otherwise indicated)	2002			2001			2002			2001
Assets under custody (in billions)	$	6,171		$	6,203
Assets under management (in billions)		763			775
Assets under trusteeship (in billions)		—			668
Total assets	$	85,794		$	69,850
Long-term debt		1,270			1,217
Stockholders’ equity		4,787			3,845
Return on equity		42.4	%		17.8	%		24.1	%		17.3	%
Closing price per share of common stock	$	39.00		$	52.25
Cash dividends declared per share		.13			.11		$	.48		$	.405

Addendum Page 2

STATE STREET CORPORATION

Addendum Selected Financial Information

III. INCOME STATEMENT INFORMATION ON AN OPERATING RESULTS BASIS

State Street prepares its Consolidated Statement of Income as presented on addendum page 2 in accordance with accounting principles generally accepted in the United States (GAAP). That financial information includes significant, non-recurring, non-operating special items and reports goodwill amortization expense in accordance with accounting practice applicable for those periods presented.

In order to provide information on a comparable basis from period to period and assist stockholders, analysts, other external parties and management in analyzing State Street’s financial results and trends for ongoing businesses and operations, State Street also presents a financial measure defined as Operating Results. State Street believes that such non-GAAP financial information assists investors and others by providing them financial information in a format that provides comparable financial trends of recurring business activities. State Street’s Operating Results are based on GAAP results, adjusted for three types of financial activity:

(1) Operating Results exclude the results of certain significant transactions not representative of ongoing operations.

(2) Operating Results include fully taxable equivalent adjustments that increase net interest revenue to reflect investment yield on tax-free investments on an equivalent basis with taxable investments.

(3) Operating Results exclude goodwill amortization expense from operating expenses in 2001 to be consistent with GAAP accounting required beginning in 2002.

The table set forth below contains State Street’s selected consolidated Operating Results for the periods presented:

	(Dollars in millions)
	Quarters Ended December 31,								Years Ended December 31,
	2002			2001			% Change		2002			2001			% Change
Fee Revenue
Servicing fees	$	427		$	421		1		$	1,716		$	1,648		4
Management fees		126			129		(3	)		526			516		2
Foreign exchange trading		62			83		(25	)		300			368		(18	)
Brokerage fees		38			23		62			124			89		39
Loss on investment in Bridge
Information Systems, Inc.
Processing fees and other		53			53		1			184			198	(2)	(8	)
Total fee revenue		706			709					2,850			2,819		1
Net Interest Revenue
Interest revenue		465			563					1,974			2,855
Interest expense		240			278					995			1,830
		225			285					979			1,025
Taxable-equivalent adjustment		15	(1)		20	(1)				61	(1)		67	(1)
Net interest revenue		240			305					1,040			1,092
Provision for loan losses		1			3					4			10
Net interest revenue after provision for loan losses (taxable-equivalent basis)		239			302		(21	)		1,036			1,082		(4	)
Gains on the sales of available-for-sale investment securities, net		31			7					76			43		77
Gain on the sale of corporate trust business, net of exit and other associated costs		—	(3)		—					—	(3)		—
Total Revenue		976			1,018		(4	)		3,962			3,944
Operating Expenses
Salaries and employee benefits		411			435		(5	)		1,670			1,663
Information systems and communications		94			95		(1	)		373			365		2
Transaction processing services		65			62		4			246			247
Occupancy		64			63		1			246			229		7
Goodwill amortization expense		—			—	(4)				—			—	(4)
Other		70			81		(13	)		306			355		(14	)
Total operating expenses		704			736		(4	)		2,841			2,859		(1	)
Income before income taxes		272			282		(4	)		1,121			1,085		3
Income taxes		76			84					341			331
Taxable-equivalent adjustment		15			20					61			67
Net Income	$	181		$	178		2		$	719		$	687		5
Return on equity		16.1	%		18.6	%				17.1	%		18.9	%
Average Shares Outstanding (in thousands):
Basic		323,520			323,489					323,520			325,030
Diluted		326,469			329,268					327,477			330,492

The following non-GAAP adjustments applicable to the periods presented are necessary to reconcile the consolidated statement of income prepared in accordance with GAAP to the selected consolidated Operating Results presented in the table above:

(1) Operating Results include a fully taxable-equivalent adjustment. This is a method of presentation in which interest income on tax-exempt securities is adjusted to present the earnings performance on a basis equivalent to interest earned on fully-taxable securities with a corresponding charge to income tax expense. The adjustment is computed using a federal income tax rate of 35%, adjusted for applicable state income taxes, net of the related federal tax benefit.

(2) Operating Results exclude the write-off of State Street’s total investment in Bridge Information Systems, Inc. of $50 million. The after-tax loss was $33 million, or $.10 in diluted earnings per share. This write-off was recorded in March 2001.

(3) Operating Results exclude the gain on the sale of the corporate trust business. This gain was $495 million after deductions for exit and other associated costs of $155 million. The after-tax gain was $296 million, or $.90 in diluted earnings per share. This was recorded in December 2002.

(4) Operating Results for the three months ended December 31, 2001, exclude $10 million of goodwill amortization expense, equal to $7 million, or $.02 in diluted earnings per share after tax. Results for the year ended December 31, 2001, exclude $38 million of goodwill amortization expense, equal to $26 million, or $.08 in diluted earnings per share after tax.

Addendum Page 3

STATE STREET CORPORATION

Addendum Consolidated Statement of Condition

(Dollars in millions)	December 31, 2002			December 31, 2001
Assets
Cash and due from banks	$	1,361		$	1,651
Interest-bearing deposits with banks		28,143			20,317
Securities purchased under resale agreements and securities borrowed		17,215			16,680
Trading account assets		984			994
Investment securities		28,071			20,781
Loans (less allowance of $61 and $58)		4,113			5,283
Premises and equipment		887			829
Accrued income receivable		823			880
Goodwill		462			470
Other intangible assets		127			142
Other assets		3,608			1,823
Total Assets	$	85,794		$	69,850
Liabilities
Deposits:
Interest-bearing—U.S.	$	7,279		$	2,753
Noninterest-bearing		9,005			9,390
Interest-bearing—Non-U.S.		29,184			26,416
Total Deposits		45,468			38,559
Securities sold under repurchase agreements		21,963			19,006
Federal funds purchased		3,895			3,315
Other short-term borrowings		3,440			1,012
Accrued taxes and other expenses		1,967			1,582
Other liabilities		3,004			1,314
Long-term debt		1,270			1,217
Total Liabilities		81,007			66,005
Stockholders’ Equity
Preferred stock, no par: authorized 3,500,000; issued none
Common stock, $1 par: authorized 500,000,000; issued 329,992,000 and 329,999,000		330			330
Surplus		104			110
Retained earnings		4,472			3,612
Other unrealized comprehensive gain		106			70
Treasury stock at cost (5,065,000 and 6,329,000 shares)		(225	)		(277	)
Total Stockholders’ Equity		4,787			3,845
Total Liabilities and Stockholders’ Equity	$	85,794		$	69,850

Addendum Page 4