On July 1, 2007, The Bank of New York Company, Inc. (“The Bank of New York”) and Mellon Financial Corporation (“Mellon Financial”) merged into The Bank of New York Mellon Corporation (“The Bank of New York Mellon”). The following Unaudited Pro Forma Combined Consolidated Balance Sheet combines the respective historical Consolidated Balance Sheets of The Bank of New York and Mellon Financial giving effect to the merger as if it had been completed on June 30, 2007. The pro forma balance sheet reflects that the merger was accounted for as a purchase of Mellon Financial by The Bank of New York and, accordingly, includes adjustments to record assets and liabilities of Mellon Financial at their estimated fair values, which are subject to further adjustment as additional information becomes available and additional analyses are performed. The related pro forma adjustments are described in the accompanying Notes to the Unaudited Pro Forma Combined Consolidated Financial Information.

The following Unaudited Pro Forma Combined Consolidated Statements of Income for the six months ended June 30, 2007 and year ended Dec. 31, 2006 combine the respective historical Consolidated Statements of Income of The Bank of New York and Mellon Financial giving effect to the merger as if it had become effective at Jan. 1, 2006 as an acquisition by The Bank of New York of Mellon Financial using the purchase method of accounting and giving effect to the related pro forma adjustments described in the accompanying notes to the Unaudited Pro Forma Combined Consolidated Financial Information.

We anticipate that the merger will provide The Bank of New York Mellon with financial benefits that include reduced operating expenses. The pro forma information does not reflect the benefits of expected cost savings, opportunities to earn additional revenue, the impact of restructuring and transaction-related costs and, accordingly, does not attempt to predict or suggest future results. It also does not necessarily reflect what the historical results of The

Bank of New York Mellon would have been had the merger been completed during these periods.

The unaudited pro forma combined consolidated financial information and notes are presented for illustrative purposes only. They include various estimates, which are subject to material change, and may not necessarily be indicative of the financial position or results of operations that would have occurred if the transaction had been consummated as of the applicable date or which may be attained in the future.

Note 1 — Purchase business combination

The transaction was accounted for as an acquisition of Mellon Financial by The Bank of New York using the purchase method of accounting and, accordingly, the assets and liabilities of Mellon Financial were recorded at their respective fair values on the date the transaction was completed. The transaction was effected by the issuance of The Bank of New York Mellon’s common stock, $0.01 par value per share, to The Bank of New York shareholders and Mellon Financial shareholders. Each share of The Bank of New York common stock was exchanged for 0.9434 shares of The Bank of New York Mellon common stock, and each share of Mellon Financial common stock was exchanged for one share of The Bank of New York Mellon common stock. The shares of The Bank of New York Mellon common stock issued to effect the transaction were recorded at $39.86 per share. This amount was determined by averaging the closing price of The Bank of New York common stock for the two trading days before the Dec. 4, 2006 announcement of the transaction and the two trading days after the announcement of the transaction (which includes the day of the announcement), and dividing by The Bank of New York exchange ratio.

If a shareholder of The Bank of New York was otherwise entitled to a fractional share of The Bank of New York Mellon common stock, cash was issued instead of such fraction share of The Bank of New York Mellon common stock. The pro forma financial statements do not present an estimate of such cash, which was not material and was funded by cash on hand.

The allocation of the transaction’s purchase price included in the unaudited pro forma combined financial information is expected to be completed in the third quarter of 2007 after thorough analyses to determine the fair values of Mellon Financial’s tangible and identifiable intangible assets and liabilities as of July 1, 2007. The pro forma financial information presented includes adjustments to record certain tangible and identifiable intangible assets and liabilities of Mellon Financial at their respective estimated fair values. The pro forma adjustments included in this pro forma financial information are subject to updates as additional information becomes available and as additional

analyses are performed and may be recorded for up to one year from the merger date. Any change in the estimated fair value of the net assets of Mellon Financial may change the amount of the purchase price allocable to goodwill. Material intercompany transactions have been eliminated from the unaudited pro forma combined consolidated financial information.

The goodwill recorded in connection with the merger is not subject to amortization and none is deductible for tax purposes. The customer relationships, customer contract-based, core deposit and noncompete intangibles will be amortized over their estimated economic lives based on the pattern of usage or consumption, if determinable. Mutual fund advisory contract and trade name intangibles with indefinite lives will not be subject to amortization in accordance with the provisions of SFAS No. 142.

The Bank of New York Mellon is in the process of finalizing the allocation method of the goodwill and intangibles to reportable segments and expects to complete the allocation in the third quarter of 2007.

Note 2 — Pro forma financial information

Pro forma financial information for the transaction is included as of June 30, 2007 and for the six months ended June 30, 2007 and for the year ended Dec. 31, 2006. The pro forma adjustments in the pro forma financial statements reflect the right of each Mellon Financial shareholder to receive one share of The Bank of New York Mellon common stock for each share of Mellon Financial held by such holder of record, based on the number of shares of Mellon Financial that were outstanding on June 30, 2007. The unaudited pro forma financial information presented in the pro forma financial statements is not necessarily indicative of the results of operations in future periods or the future financial position of The Bank of New York Mellon.

The pro forma balance sheet adjustments reflect the issuance of 1.135 billion shares of The Bank of New York Mellon common stock with an aggregate par value of $11 million and an increase in paid-in capital of $15.2 billion as shown in Note 4; goodwill of $10.8 billion as shown in Note 3; and amortizing and indefinite-lived intangibles of $2.7 billion and

$2.4 billion, respectively, as shown in Note 5. Also included in the pro forma balance sheet adjustments is an increase in other liabilities, which includes estimated exit and transaction costs of $138 million, other asset and liability fair value adjustments, and an increase of $1.7 billion in deferred income taxes.

Upon completion of the merger, The Bank of New York stock options were exchanged for stock options in The Bank of New York Mellon and the exercise price per share was adjusted for the 0.9434 exchange ratio.

Mellon Financial stock options were exchanged for stock options in The Bank of New York Mellon and the option price per share was not adjusted as the exchange ratio is one Mellon Financial share for one The Bank of New York Mellon share. All unvested Mellon Financial options granted prior to Dec. 4, 2006 were accelerated upon approval of the transaction by Mellon Financial’s shareholders on May 24, 2007, except for those for which waivers to acceleration were obtained. Vested stock options issued by The Bank of New York Mellon in exchange for options held by employees and directors of Mellon Financial were considered part of the purchase price. Accordingly, the purchase price includes an estimated fair value of stock options of $302 million.

The fair value of The Bank of New York Mellon stock options that were issued in exchange for Mellon Financial stock options was estimated by using the Black-Scholes option pricing model with market assumptions. Option pricing models require the use of highly subjective market assumptions, including expected stock price volatility, which if changed can materially affect fair value estimates. The more significant assumptions used in estimating the fair value included volatility of 25 percent, a dividend yield of 2.20 percent, an expected life of 50-75 percent of the remaining contractual terms and a risk-free interest rate for U.S. government bonds having a remaining life equal to the respective options’ expected lives.

The estimated exit cost liabilities incurred in the transaction consisted principally of personnel-related costs, which included involuntary termination benefits for Mellon Financial employees to be severed in connection with the transaction, relocation costs for continuing Mellon Financial

employees and costs to cancel contracts of Mellon Financial that will provide no future benefit to The Bank of New York Mellon. The estimated $76 million of exit cost liabilities include only those costs associated with Mellon Financial. The estimated transaction costs of $62 million are included in goodwill.

During the six months ended June 30, 2007 and year ended Dec. 31, 2006, The Bank of New York and Mellon Financial acquired businesses or portions of businesses which are included herein only from the date of completion.

Note 3 — Purchase price and goodwill

The computation of the purchase price, the allocation of the purchase price to the net assets of Mellon Financial based on fair values estimated at June 30, 2007, the estimated intangibles and the resulting amount of goodwill follows:

 

(dollar amounts in millions, except per share amounts)		June 30, 2007
Purchase price of Mellon Financial:
Mellon Financial net common shares outstanding			418,330,448
Exchange ratio			1.00
The Bank of New York Mellon shares			418,330,448
Average price per share (Note 1)		$	39.86
Purchase price of Mellon
Financial shares						$	16,675
Estimated fair value of outstanding Mellon Financial stock options							302(	N)
Total purchase price						$	16,977
Net Mellon Financial assets acquired:
Mellon Financial shareholders’ equity						$	5,194
Mellon Financial goodwill and intangibles							(2,925)(	A)
Unrecognized compensation on unvested stock options and restricted stock							126(	O)
Estimated adjustments to reflect assets at fair value:							(201)(	C)
Loans and leases, net
Premises and equipment							11(	D)
Identified intangibles							5,102(	E)
Other assets							742(F)(	G)(K)
							(	V)(W)
Estimated adjustments to reflect liabilities at fair value:
Deposits							(4)(	H)
Long-term debt							(18)(	I)
Other liabilities							(72)(	G)(J)
Deferred taxes
Related to increased intangibles carrying value			(1,728	)
Related to stock options			(39	)
Related to all other adjustments			101
Total deferred tax adjustments							(1,666)(	L)
Estimated exit and transactions costs							(138)(	M)
Total net assets acquired and adjustment to fair value							6,151
Goodwill						$	10,826

See Note 5 for footnote explanations.