Welcome to Franklin Resources Earnings Conference Call for the quarter ended March 31, 2008. Please note that the financial results to be discussed in this conference call are preliminary. Statements made in this conference call regarding Franklin Resources Inc., which are not historical facts, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve a number of unknown and known risks, uncertainties, and other important factors that could cause actual results to differ materially from any future results expressed or implied as such forward-looking statements. These and other risk uncertainties and other important factors are described in more detail in Franklin’s recent filings with the Securities and Exchange Commission included in the risk factors and MD&A sections of Franklin’s most recent Form 10-K and 10-Q filings. (Operator Instruction) Mr. Johnson, you may begin your conference.

This is Greg Johnson, CEO of Franklin Resources. Joining me today is Ken Lewis our CFO. I think everybody recognizes it was a difficult quarter for most asset management firms and it was no exception at Franklin Templeton. Looking at the overall asset levels, the declined by about 8%, from $643 billion to $591 billion. Our average assets declined 6% from $651 billion to $610 billion. As you would expect with this kind of volatility, with outflows and market depreciation, our overall shift shifted from equity to fixed income and equity assets at the end of the quarter represented 55.5% of our assets versus 59.3% in the prior quarter and fixed income increased 24.6% versus 21.4%. The assets [inaudible] various investment groups Franklin was relatively flat, down 1.5% to $240.5 billion and Templeton was down 15% to just under $210 billion. Before I talk about the overall flow, I just want to mention one change in our presentation of flows. In an effort to improve our A1 presentation, net exchanges are now included with our sales number. Previously net exchanges were included in market appreciation. We’ve also reclassified two Indian money market funds to the taxable fixed-income category and after further review this classification was determined to be more appropriate given the attributes of the fund. These funds are still used in short-term cash management so you may see an increased redemption and sales levels overall. So, in sum, net new flows equals new sales minus redemptions plus net exchanges. Moving on to the flows, it was a negative quarter. We had outflows of $6.1 billion versus inflows of $4.6 billion. Sales were down about 13%, redemptions up 9%. I think it’s important to note that looking at the flows, most of the outflows did occur in January. There were…

As Greg mentioned, this quarter’s market volatility definitely created a challenging operating environment for us. Our results show that we were able to effectively manage costs and maintain a healthy operating margin of 34%, which was above the fiscal year 2007 margin of 33%. Our successful cost management was tempered by reduction in non-operating income this quarter caused by some unrealized mark-to-market losses, less realized gains in our investments and our products and lower earnings on invested cash. All of which I will discuss in more detail. Net income for the quarter decreased 29.4% to $366.1 million, or $1.54 per diluted shares. A couple of highlights on the line items—major line items. Investment management fees declined approximately 10% due to the decline in average assets under management. A change in mix, towards fixed income that Greg mentioned, one day less in the quarter and approximately $10 million less of performance fees. Our underwriting and distribution fee revenue decreased just under 13%. That was consistent with the decline in sales and assets under management. [inaudible] margin was just under 3%. The decrease was due to some non-recurring items in those line items and if you exclude those the margins would have approximated the prior quarter. Other net revenue declined $4.4 million primarily due to a mark-to-market on an interest rate swap related to our auto loan operations. On the expense side we were able to hold expenses in check without jeopardizing some our strategic initiatives. Most of the line items increased less than 2% quarter-over-quarter. Compensation and benefits was virtually flat from last quarter as the increase in payroll taxes and a full quarter of merit increases were offset by a decrease in variable compensation. Technology and occupancy expenses were also flat quarter-over-quarter and we will continue to invest in the…

Just some of the business highlights. In the United States we were pleased to see that we are ranked third among the fund families in the U.S. with 12 Lipper awards for the three-, five-, and ten-year periods. We are pleased to see that—we talked about our fixed income campaign and how the results there have increased market shares in many different categories, but even more importantly we’ve seen 14,500 new financial advisors that hadn’t written a ticket with us in fixed income do that through this campaign period. On the international side, we announced during the quarter a 49% stake in Viet Cong bank in Viet Nam, the Vietnamese investment management company. In Malaysia we recently were approved to establish a foreign fund management company there. We’re currently one of five companies that has been approved in that market. On the institution side, along with strong demand for the excellent fixed income results that we had in this organization, we also see continued demand for global equities as well as non-U.S. equity strategies and private equity real estate with several opportunities today in the pipe line. With that, we would like to now open it up for your questions.

(Operator Instructions) Your first question comes from Michael Kim - Sandler O’Neill. Michael Kim – Sandler O’Neill & Partners: The $1.4 billion institutional account that funded on April 1, what type of mandate was that?

It was a Global 6 and Global Equity. Michael Kim – Sandler O’Neill & Partners: In terms of the slow down in retail volumes, looking across geographies, it seems like redemptions have accelerated quicker overseas versus perhaps here in the U.S. Do you think this is just kind of a function of international markets underperforming or do you think that overseas retail flows are just generally more volatile on a quarter-over-quarter basis?

I think it’s true and I think the hard part in really answering that question, you have many larger accounts—platform-type sales, fund-to-fund sales—that use C Cab, so in periods you will have, whether it’s a consultant or whoever that’s running those accounts, move large moneys around. So that can skew what we would view normally as a retail number. But I think in general, when comparing to the U.S., it really comes back to the mix of assets and C Cab—our C Cab—tends to have more in global equities, more in regional funds like the Asian Growth Fund, so with the kind of market you’ve had last quarter, you would expect to see more redemptions. And you’re in a lot of newer markets that this may be the first time you’ve had a sell off with the investors. So I think we’re kind of testing that a well. But when I really looked at the numbers, you know, I think what the first thing you expect in that kind of market is sales really slow down. And that’s really what happened. And then redemptions pick up. I think if you look at the overall numbers it really wasn’t a huge pick up in redemptions. I think some of those funds had a decrease in sales. When looking at the equity side. Michael Kim – Sandler O’Neill & Partners: I know it’s still kind of early days as it relates to the integration of the retail and institutional businesses at Templeton, but have you started to see any narrowing in terms of the performance distribution across—or the performance dispersion, I should say—across the two platforms and do you think the improvements kind of in the foreign fund are linked to that process?

Well, I would certainly like to say they are. And I think, again, it’s hard to answer that directly because some of those holdings were done before the changes. But I think more importantly the group is working extremely well together and the result will be a--much more consistent results between the institutional and the retail side. But, remember, the retail side—the portfolio manager will always have a bit more discretion that institutional mandates, which run with more common portfolios. And that’s something that we encourage but we also don’t want to have—you know, it has to be within a reasonable band and I think that’s what we’ve certainly moved towards. The Nassau group seems to be working very effectively with the overall global equity group.

Your next question comes from Mike Carrier - UBS.

Just one question on the investment and other income lines, given that it was volatile this quarter. Can you give us any color on like the break down within that bucket, in terms of what flows through there? And then you were talking about some of your investments and some of your funds that are consolidated and marked to market there. Any balances for that component of the line?

I’ll start with the line that we call Sponsor and Investment Products Gains. So that’s the market and you can get a pretty good feel for that if you look at our balance sheet and what we call Investments Securities Trading. So those will be the products where we consolidate due to controls. One way to look at that is whatever you think the market assumption is for the period, you apply that against the average balance of those investments and you can get a little bit of a feel for what to expect there. On Investment and Other Income we have realized gains and we have—essentially realized gains and earnings on cash. The biggest delta was the fact that we really didn’t sell too much of our investments. We didn’t have too much in realized gains in this quarter versus the prior quarters. And in addition, certainly interest rates are lower than they were last quarter and our cash balances were a bit lower as well. And the other thing that was in there, and it wasn’t very significant—maybe in the neighborhood of about $10 million—were some asset impairments or evaluation allowances that were made.

And then just on performance, if you go through some of the different equity buckets, the one year it’s been under some pressure but then when you go to the three-year, five-year and in some of the buckets you’re seeing some pressure there, too. Just wondering, is there anything more strategically that you guys are thinking about in terms of changes, or it just going through this process and just different things happening, you know, in some of the international markets?

I think the emphasis with the organization is always on investment performance and everything we can do to make sure that we have the right people and resources to support the system performance. I think if you go back to my earlier remarks about the three- and five-year, yes, some of the numbers are creeping in, but if you take, for example, Mutual series or [inaudible] shares, they’re probably in the 51-53 percentile, which puts a big bucket of assets in below-average that in a one day’s, two day’s, a week’s performance can move back up into the second one. So I don’t think there’s really—you know, that number doesn’t really tell the whole story and the performance there, when you look at the mix that they’ve had and how they’ve had that European exposure and things, they’ve done relatively well with that exposure against the current benchmark. So I think you will always be concerned about underperforming and that’s what we do as a company and that’s why we exist. So whether it’s three, five, ten, or one, you know, again, we’re going to do what we can to make sure we do the best job possible.

Your next question comes William Katz - Buckingham Research. William Katz – Buckingham Research: Just sort of curious, given all the issues going on with the credit-sensitive part of the financial system—banks and brokers and others—can you revisit the strategy of having the bank? The second question I have is given what seems to be a bias toward [inaudible] just give me an update on where you stand in terms of potential leveraging a more decision rotation away from value.

I’ll take the one on the bank. Really there’s not change in our strategy there. We think it is a strategic component of our network business and I don’t think it’s been terribly affected by the credit markets. You know, our business is pretty vanilla there. And word, I guess on the auto loan operations as well, what we’ve done there, you’re probably aware that the [inaudible] markets all but dried up for special financing, but fortunately we can ride out that storm. And what we’ve done is we’ve increased pricing so that business is kind of at the current sustainable level.

And on the growth side, it is something that we continue to be very focused on and I mentioned some of the performance numbers and the recent strength around some of the Franklin numbers have been certainly a highlight for the quarter. But in addition to that we are—fiduciary has a very strong large cap growth U.S. fund that we’re positioning for the market to sell through our wholesaler force. And we’re also, in addition to that, registering a global growth fund to be run by that group, as well as a global growth fund to be run by our local asset managers. And all of that is a priority and something that we—that you’ll hear more from in the next quarter or so. William Katz – Buckingham Research: I’m looking at your margin year-on-year and it’s down a tad. Just sort of curious, I was just thinking about the delta and all the line items. Are you getting to a point now where if the revenue environment were to continue to be problematic that you’re running out of flexibility on expenses? Or is there still some variability left from here?

Well I think there still is some variability left on it. And so if I could just make a couple of general points. We are taking the cost management discussion very seriously. We are in constant dialogue with the business units. Having said that, you know, I think it’s a little short sighted for us to make some deep cuts to the bone expense reductions. In fact, cutting to the muscle might be a little bit short-sighted. But there is still room. Obviously the component of compensation that’s variable, if revenues go down, that will go down. And I think some of the decisions we make today, from a cost management perspective, will take a few quarters before they’re reflected in the P&L.

Your next question comes from Ken Worthington - JP Morgan.

You mentioned the campaign in fixed income. Can you just give us some more flavor in what you’ve been doing there? How much you’ve been spending and a little more on the impact the campaign has had in terms of—beyond just the broker account selling, but any more information you can give us?

I don’t have the numbers on what we’re spending on it and it has been going on for probably nine months and it’s something we recently extended. And it really started—we felt that—you now, Franklin had a long history in fixed income, we have tremendous records there and we were actually loosing market share in fixed income and part of that is because we’re out there talking about other areas, like equities, and Templeton, and Mutual series, and other products in the company. I think we just lost sight of some of the strengths on the fixed income side. So we wanted to make sure it was a priority to get that message out there and we put in very specific kind of quantitative measures for our sales force to cross sell and really measure it by various groups to—not just on the dollar sale but to see that we have new advisors selling. And if you look at what’s happened, when the timing really couldn’t have been better and that’s not because we made a market call of any kind, just the market moved our way there and also the muni side, our muni share had a tremendous pick up here in the last quarter and much of that was due to many of the credit problems that some of the leveraged muni bond funds have had. And we’ve always stuck with pure vanilla and relatively simple on the muni side, and that was out of favor for a while and we were loosing share with that story of low-cost, pure vanilla. Well, today that’s very much back in vogue so we want to make sure we’re still telling that story. But we also had a lot of mortgage funds—strategic mortgage—a lot of funds that—strategic income fund that had great Morning Star ratings and very small assets. It was really just a question of getting shelf space. So that’s what we have focused on. And we’re not just out there talking about that; we’ve still very much talking about the other ones but we just felt it was getting lost with all the other products and we needed to focus on it.

And then I don’t know if I’m front-running the Q, but what was the cash position at the end of the quarter. It had fallen from 3.8 to 2.5 or so for the last two quarters. And then, if I look at the cash, what’s actually at the parent company and able to be returned to shareholders, obviously at your discretion? Because I assume it’s not the full 2.5.

We probably we started this about a year ago, disclosing the percentage of cash, U.S.-non-U.S. The Q is coming out--I don’t have that number handy. Also, I would refer to the Q which will come out in a couple of weeks.

And for the cash at the U.S., is all that eligible to be used for returning to shareholders?

More or less, of course, there’s some regulatory capital requirements, so give it an appropriate hair cut. But most of it is available.

Your next question comes from Prashant Bhatia - Citi.

In the prior quarters you were spending a lot more on repurchases and the stock was 20%, 30% higher. I guess why the relative slow down this quarter?

I think there are probably a couple of reasons. Market volatility might be one of them. You know, also, we really haven’t changed our strategy of being opportunistic. You know, it’s tough to see what was going on in January. But the other factor to consider is that we had a debt repayment in April so we were kind of being a little bit cautious there.

In terms of the equity outflow, the $9.2 billion in global and international equity. Can you just give a little more detail of where the clients were that pulled the money out? Was it predominantly U.S.-based or was it more overseas domiciled clients?

Well, it was more overseas and I mentioned just some of the lumpy January redemptions that took place for various reasons. One performance related, and most of them not. More they just reallocated in the case or Europe and some of the funds-to-funds where they just reallocated to lower risk portions in those portfolios. And we lost out on those. So, most of it was outside of the U.S. And the U.S., if you look at the quarter-to-quarter numbers, for our big funds, they’re relatively stable as far as the net outflow numbers. And actually, as I mentioned, improved on the foreign bump.

And also on the performance, I know you had kind of bounced around amongst the categories but it does seem like every equity—all your equities now are in the bottom two quartiles. Is there—have you looked across the managers and is there some kind of consistent theme that’s driving that underperformance?

I think obviously you’ll get an answer from any of the managers and I think what—for us, are we really consistent with what we would expect from that style in this type of market, and the answer is yes. And I will say with Mutual, you know, they’ve historically had a waiting outside of the U.S. and historically in Europe, historically in financials. Those have been two areas that over the last year are going to put you—put some pressure on relative performance. Templeton, you know, is going to have a hard time buying materials, commodities, oil-related stocks, and they’ve been a very important part of relative performance for that segment. So I think that’s what we try to look at and see if we’re sticking to our knitting and we’ve been through plenty of periods like this over time and we feel very confident with the team and process that’s there today.

And then on the portfolio, you talked a little bit about the income coming out of there but can you talk about what the underlying assets are? You mentioned you had some permanent impairments there.

Let me clarify that. So on the Sponsored Investment Product line, that’s what I was specifically referring to, which was investment trading securities that are marked to market. The securities there, a couple of the big ones were UK and European equities and most of them are—I would characterize them as plain vanilla, long, equity funds.

And in the investment and other income, anything?

We had a couple of impairments. One was an investment that was part of the Darby operations, that’s a private equity bid. But in total, the impairments were less than $10 million.

Is that based on what that portfolio looks like? Should we expect that to be closer to a run rate going forward or is that too early to say?

No, the reason I’m pointing that $10 million out is that should be non-recurring.

You had mentioned 14,500 advisors were new to selling the fixed income product. Do you have an equivalent number for your equity products?

No. I don’t have any measurement. We’ve done campaigns in various time periods with the same kind of goals in place but I wouldn’t know what those numbers would be offhand.

Your next question comes from Craig Siegenthaler - Credit Suisse. Craig Siegenthaler – Credit Suisse: I’m just following up on the last question on the investment income line item. It looks like you reported a little bit over $30 million. You said $10 million was more unusual due to realized investment losses and I guess in the Darby P portfolio. You add that back and you get right around $40 million. I mean, is that a good run rate for your interest on the bond part of that cash portfolio? And then any thing above that would be realized gains?

I can’t find too many faults with that analysis. Craig Siegenthaler – Credit Suisse: Second question really on the acquisition funds. Where are you guys looking, kind of globally, to expand. I know Templeton is very rich in global offices. But are there any areas you’re underweight, internationally, that you’d like to move a little bit deeper into?

I think it’s consistent with what we’ve talked about in the past. We try to look at anything where we think we can add value with our distribution. And the UK is a market for us that, as far as market share, we are underrepresented in on a relatively mature market. And that’s probably the only obvious one for us. But we’re still looking, whether it’s a place like Malaysia or a market like a Brazil where you could come in and where these local managers are emerging, we like to be first in those markets, too. And you know those are longer term debts and that’s really the Viet Name type investment that we made. And the one in the Middle East as well, that we like to be first in these newer markets as they’re coming out. And I would expect to see more deals like that done.

Your next question comes from Jeff Hopson - Stifel. Jeffrey Hopson – Stifel Nicolaus & Company, Inc.: Compensation expense did not adjust relative to revenues. So what are your thoughts there and how that might be affected going forward?

I think that it actually did adjust. And it was offset by increases that were due to the full quarter of merit increase as well as seasonal up tick in [inaudible] taxes. That’s why it shows as flat quarter-over-quarter. Jeffrey Hopson – Stifel Nicolaus & Company, Inc.: So there’s some seasonal. And then otherwise going forward it will naturally adjust to both profits and revenue?

I think so. All things being equal, if we replicated the quarter, I think the comp to net ratios will probably resemble going forward.

Your next question comes from Mark Irizarry - Goldman Sachs. Mark Irizarry – Goldman Sachs : Are you saying that the second quarter run rate comp ratio is reasonable or that it’s just sort of get back to the previous quarter, sort of range, in the mid-20s?

It’s absolutely dependent upon the revenue and the profits to the company. That’s clearly a component of the variable. In addition to the performance--relative performance--the variable compensation is a function of the overall profitability of the company. Mark Irizarry – Goldman Sachs : All right, but just to be clear—so that second quarter is or is not a good run rate?

Well, I think the compensation to net revenue ratio is reasonable. Mark Irizarry – Goldman Sachs : Greg, can you talk about the monthly progression of sales? I know you alluded to $5 billion in outflows in January alone. But can you talk about what happened in February, March, particularly in global and international? And then, what are you seeing so far in April?

Well, I think I have to be careful about what I’m seeing in April, but as far as the quarter, I mean, obviously you can see it was a big improvement in February and March if we had that kind out outflows in January. So you had slight outflows and I think it probably tracked to what the market was doing. February was a good rebound, and a little bit better, March relatively flat. So, you know, better picture and I think that is important to note the lumpiness and the trend. And we really haven’t broken that out in the past but I think it is irrelevant, because we really haven’t seen that kind of move within a quarter like we did first quarter. But, as you would expect, I mean the markets are performing better. There’s a feeling that things may have bottomed and with that investor sentiment is better than what it was. So overall for the industry flow should be better than what we’ve seen in the last quarter. Mark Irizarry – Goldman Sachs : And just in terms of the way you’re growing the business though potential acquisitions, it seems like you’re [inaudible] local level talent, probably on a broader, geographic basis, but obviously it seems like what happened this quarter was more about depth of product. What sort of are you feeling on any kind of deal to broaden your overseas product versus you know, putting new flags on the map, if you will?

I think you want to do both. And we are open to both and I’m not sure it was depth of product, I think the equity side—if you had heavy equity assets it was a pretty tough quarter. There’s exceptions, of course to that, but as a rule. You know, most firms had outflows. Value actually did better than growth, year-to-date. So that shift really is not affecting much as far as the product mix goes. And I think for us it’s some near-term performance issues that are putting some pressure on the flows and then just this is the first big hit for the emerging and developing markets an their first really sell off and they kind of held in there very well and then had a bit of a hit and I think that probably shocked some investors and created some redemptions during the quarter. Mark Irizarry – Goldman Sachs : And then just in terms of the buy back. How is your thinking about that going forward?

I think really no change. Who knows what’s going to happen in a given quarter. We’re going to continue to be opportunistic. You know, we like the business outlook, we like the company. And then I remind you in January we got [inaudible] authorization.

Your next question comes from Cynthia Mayer - Merrill Lynch. Cynthia Mayer – Merrill Lynch: I guess just a follow up on your previous comment on the developing market sell off. I’m wondering can you describe kind of the equity/fixed asset mixed for U.S. versus non-U.S. and versus developing markets? Because I kind of remember a slide from an old presentation in which you guys said that one of the interesting trends is that as markets develop, investors tend to move from fixed income to equities. And I’m wondering, among your developing markets investors, what is their weight of equities versus fixed and for overseas investors in general, are they more weighted to equities than fixed, than in the U.S.?

I, unfortunately, do not have all that information and I can speak in general terms and say it really does vary, not so much by whether it’s an emerging or developing market but more by the region and the country. Latin America has been more fixed income. U.S. sales Global Bond does very well there for us as investors move out of the traditional high-yielding bank instruments. But in Asia where there’s been local appetites for local equities—take a market like Korea, where they have a history of investing in Korean equities and fixed income—and their first diversification was into China and India funds. And they feel like that’s diversifying. So it really does vary by marketplace. And just in general terms your new investor will be much more comfortable moving into what I would consider to be riskier sector country—regional funds, than they would be in places like Latin America. So overall you do have a heavier weighting in—and for us, just look at the last quarter. I said the Asian growth fund had had a swing of probably $2.5 billion of flows between one quarter and the next, so you can see how dramatic that one fund was on our overall net gross. Cynthia Mayer – Merrill Lynch: If the dollar starts to strengthen here, would Templeton be flexible in terms of hedging, or is that sort of a bedrock part of their philosophy?

It has been a bedrock part of its philosophy but we have registered funds in other currencies—local currencies—to deal with some of those issues.

And I would just add--I presume you’re talking about Templeton equity—but Templeton Global Bond proved they are in fact looking to be strategic about future Euro dollar to other currencies and take advantage of that. Cynthia Mayer – Merrill Lynch: And I guess just one more use of cash question. It’s been a few years since you did a special dividend and I’m just wondering if you look out ahead to potential shift in tax rates whether you find that an attractive option at some point?

As you can imagine, we talk about things like that all the time. At the current—where we stand today—there’s really no plans to change anything. But of course, that’s a decision the Board will make.

Your next question comes from Robert Lee - KBW. Robert Lee – Keefe, Bruyette & Woods: Do you anticipate any potential fall out from the potential Supreme Court ruling in the muni business, in that Kentucky case?

I think it’s certainly a risk but at the end of the day investors are still going to want munis whether they have the state exemption or not. And it’s still very uncertain which way it goes on what the states will do, whether they can decide to allow double exemption or not to protect that. So I think at the end of the day you will have somewhat of an pricing adjustment in the marketplace. You’ll probably have a lot of funds combined, but the demand for munis would still be very consistent. And I don’t really have the sense for what the odds are of where that Supreme Court decision is going to go. Robert Lee – Keefe, Bruyette & Woods: And another balance sheet question, I think you mentioned you had debt that matured—I assume I’ll see this in the Q but I’ll ask anyway—I assume you use—do you refund that or do you use cash and I guess related to that, if you just kind of paid it off, what’s your feeling about having at least a little slice of debt on the balance sheet?

It’s a combination of cash and CP. We issues about $300 million of commercial paper. You know, we did that in advance of the debt maturing. But I think you’re right. I think it is good to have a little bit of debt on the balance sheet. Certainly at the rates today. You know, I think it’s something that we will consider. Robert Lee – Keefe, Bruyette & Woods: Recently you had active ETF, gotten some approvals—I mean, how do you think of the ETF business or the active ETF business as kind of a competitive threat for the traditional fund business?

I think it’s something we need to be looking at closely. And just like you could argue the same risk, whether it’s gate index funds or quant funds, too, you know, fall into that same category and those are things we spend a lot of time making sure we know exactly what’s going on there. I think there’s still a little bit of confusion on what is an actively managed ETF, and to me it’s still more of a quant-tilt type of an indexed product. But, you know, we are looking at them and if we feel that a quant-type approach makes sense within our group, I’m sure, you know, an actively managed ETF is a natural extension of that. But I don’t think it’s a direct threat to your traditional, daily actively managed fund. Because it’s really impossible to replicate that.

Your next question comes from Christopher Spahr - Deutsche Bank. Christopher Spahr – Deutsche Bank Securities: Can you give me the amount of [inaudible] held by non-U.S. clients this quarter and what it was last quarter?

Well, I can tell you what it was last quarter. It was 28%. And 26% this quarter. Did you get that? Christopher Spahr – Deutsche Bank Securities: Yes, thank you. I mean it looks like both just the net outflows as well as the market depreciation? And regarding the expenses that was earlier—do you expect that the expenses might actually go up if somehow you have to service these clients a little bit harder overseas? Educating them more, kind of sticking with it? Maybe reaching out to the sales force overseas and so forth?

I think that it’s something that we’ve been doing for a really long time so I don’t really see any net new incremental spend in that area.

Your next question comes from Michael Hecht - Banc of America. Michael Hecht – Banc of America Securities: On the cash and cash equivalents question, it was $3.7 billion at the end of the quarter, up from $2.9 billion last quarter?

Right. Michael Hecht – Banc of America Securities: So a decent amount of build there. And I’m just wondering if you can help us—because I didn’t get a good sense of kind of appetite for repurchase--but, how you are you kind or prioritizing, you know, use of free cash flow at this point between CapEx or you know, spending on new seed investments or new product launches versus, you know, capital—share repurchases and, you know, whatever.

There’s a lot in there. So, it was $3.7 billion in March versus $3.6 billion in September.

I have $2.9 in December.

Well, there’s really no change. I mean, the way we look, for example on the CapEx. You know, everything’s kind—we look at the benefits of investing now versus the returns of the future. There’s no change there. Really, there’s no change to our strategy right now in terms of stock repurchases. And we did talk a little bit about the debt. Michael Hecht – Banc of America Securities: What’s [inaudible] still authorized on the repurchase?

$[inaudible].6 million this quarter end.

The authorization was for $10 million, or a little bit under that. Probably like $9.5 million or something like that. $9.4 million. Michael Hecht – Banc of America Securities: And then just last question on consolidation. What areas would kind of be most attractive and is the pricing environment becoming any more conducive to doing deals? And then what about larger diversified players that might be looking to monetize certain businesses, like asset management the current environment where a lot of funds like those are kind of raising capital? I mean, is there more of an opportunity to look at deals like those in this environment?

I think that’s probably an accurate statement, that there is a capital shortage for many a large financial institution, so the easy way to shore up your balance sheet is to sell independent asset managers that they may have acquired through the last cycle. So clearly I do think you will see a few more deals done and I think the good news for us is that you have less competitors right now because of the situation with the debt markets and private equity as well as the financial institutions being under pressure put it more on a more normal situation to go out and acquire one of those firms.

And there are no further questions.

Well, thank you everyone for joining us today for the call and we look forward to speaking next quarter. Thank you.