Good morning, ladies and gentlemen and welcome to the Second Quarter 2007 Earnings Conference Call, posted by the Bank of New York Mellon Corporation. At this time, all participants are in a listen-only mode. Later we will conduct the question-and-answer session. Please note that this conference is being recorded. I would now turn the call over to Mr. Steve Lackey. Mr. Lackey, you may begin.

Thanks, Melissa. Good morning everyone and thanks for joining us to reveiew the second quarter financial results for the Bank of New York and Mellon Financial. Before we begin, let me remind you that our remarks may include statements about our future expectations, plans, and prospects, which are forward-looking statements. The actual results may differ materially from those indicated or implied by the forward-looking statements as a result of various important factors including those identified in our 2006 10-K, our most recent 10-Q and other documents filed with the SEC that are available on our website at www.bnymellon.com Forward-looking statements in this call speak only as of today July 19, 2007. We will not update forward-looking statements to reflect fact, assumptions, circumstances, or events, which have changed after they were made. This morning’s press release focuses on the separate results for the Bank of New York and Mellon. We also have the supplement document quarterly earnings summary available on our home pate, which provides the combine view, excluding the impact of purchase price adjustments our merger. This morning’s call will include comments from Tom Renyi, Bob Kelly, Bruce Van Saun, and Mike Bryson. In additional, there are several members of our executive management team to address your questions about the performance of our business during the quarter. Now, I would like to turn the call over to Tom Renyi, Executive Chairman of The Bank of New York Mellon Corporation.

Thank you, Steve. Good morning you all. Bob and I very please to with you this morning to describe the significant momentum our Company is bringing to our merger and to address the numerous opportunities we see ahead for our new Company. First, let me offer today’s agenda. Each legacy company is reporting separate financial statements for the period, leading up to our July 1 merger. And first, I will speak to the Bank of New York results, Bob will do the same for Mellon, then Mike and Bruce will provide additional detail and then Bruce will also provide some thoughts at to the near-term outlook for the new company. What we declared to all is that each company had very strong results in the quarter, with each maintaining significant momentum heading into the merger closing. Let me start with the Bank of New York financial results. In the second quarter, we earned $0.59 per share from the continuing operations, and adding back merger and integration expenses of approximately $0.04. Result in EPS up $0.63 or an increase of 21% compared to the second quarter of ’06. We are quite pleased with our results as the growth is of superior quality across the full breath of our products. Fee revenue and asset management in security servicing was up 21%, reflecting both strong underlined growth as well as the acquired corporate trust business, which by the way, has met or exceeded our expectations during its own transition period. Net interest revenue increased 24% compared to the prior year. Again, reflecting the enormous liquidity that we derive from our core servicing businesses. These strong growth rates helped us to achieve an improvement of our pretax operating margin to 36% after adjusting for the merger integration expenses. During the second quarter, we completed…

Thanks Tom and good morning everyone and thanks very much for joining the call. It’s great that we are all here together, and presenting our financials separately for the last time. Legacy Mellon enjoyed a… an impressive second quarter, 18% revenue growth, 28% EPS growth over the last… over the prior year. In fact, this is the sixth consecutive quarter in which we achieved double digit revenue and double digit earnings per share growth. Momentum and pipeline at the Bank of New York Mellon are excellent. And it’s clear that in the globalization of the world’s financial markets, it clearly favors leading providers of asset management and security servicing. In other words, this is exactly the sort of quarter we are hoping to have heading into the merger. In the second quarter, excluding the impact of merger and integration charges And other charges associated with improving our efficiency in Legacy Mellon, we generated 600 basis points of positive operating leverage resulted in a 4% improvement in the pretax margin through we delighted with. The Company’s delivery and all the financial goals, we shared with you last fall, even with the merger activity underway. And similar to the Legacy Bank and New York results, we are seeing a higher level of revenue from outside the U.S. It was 26% in the second quarter of ’07 compared to 21% a year ago. And right after quarter-end, I think most of you know that we announced an agreement to purchase the remaining 50% stake in ABN AMRO Mellon global security services. This JV has enjoined tremendous growth in revenue and earnings outside of North America, providing custody and related services and our 100% ownership really should increase… will increase our exposure to fastest growing regions of the world. The deal should close in the third quarter and show up in our results and either third or fourth quarter. So, you can watch for that, and of course, that will also increase our percentage outside of the U.S. I do want to note that Legacy Mellon received the number of reorganizations for product and service quality in the areas of asset management, asset servicing and stock transfer. And what I would say as going forward, it is critically important to us that we continue to deliver an excellent client experience, in fact, superior to that of our competitors that will help us regaining, grow our client base. So, that is a key goal going forward. At this point, I would like Mike Bryson to provide further details on the quarter, and Bruce, as Tom mentioned, is going to provide a few more highlights around Legacy Bank of New York second quarter results. And then most importantly, we are going to share with you a pretty detailed first snapshot of how our new Company looks on a combine basis in total and by business line including a few merger metrics, which I hope you find useful. Mike?

Thank you, Bob. My commentary will focus on page four of the quarterly earning summary if you might turn to that page. As Bob noted in his opening comments, we are extremely pleased with Legacy Mellon second quarter results as strong fee and net interest revenue growth combined with positive operating leverage resulted in excellent earnings per share growth. On a GAAP basis, earnings per share from continuing operations for the second quarter of 2007 was $0.67, an increase of 24% over the prior period. Adjusting for the impact of merger and integration expense as well as several other items detailed in our release, earnings per share from continuing operations was $0.69, up a strong 28% over the second quarter of 2006. During the second quarter, our assets under management grew to $929 billion, representing a 23% increase versus the second quarter of 2007 with $16 billion of net asset flows in quarter. Our assets under custody and administration increased 20% and were nearly $5.5 trillion. Revenue momentum was strong across our key business lines as total fee and other revenue and net interest revenue each increased 18% compared to the second quarter of 2006. Record quarterly levels for assets and wealth management and asset servicing fees were driven by organic growth, a strong market environment, the impact of acquisitions, and continued strong investment performance. The increase in net interest revenue reflected strong deposit growth across our business, the net benefit from the early redemption of junior subordinated debentures and reset adjustable rate securities. Consistent with our global focus, the percentage of revenue from outside the U.S. increased to 26% compared to 21% in the second quarter of 2006. Double digit top line growth combined with strong expense management resulted in approximately 600 basis points of positive operating leverage, improving…

Thanks Mike. I will walk you through the highlights of the Legacy Bank of New York results for the quarter, provide a brief overview of the combined company’s performance and offer a few thoughts about our second half outlook. What makes this quarter so pleasing is that we have continued to execute our business model with lots of new business, good revenue and earnings growth, while at the same time hitting all of our integration planning milestones. In short, we are getting it done without missing a beat. Focusing on the Legacy Bank of New York results for the moment, revenue momentum was strong across our key business lines. Asset and wealth management fees grew 25% over the year ago quarter. Performance fees of $21 million were triple that of the comparable year ago quarter. Both increases were principally due to the organic growth and performance of our alternative investment products. Asset servicing also performed well with fees increasing 17% relative to the second quarter of 2006, the consolidation of the AIB joint venture to a wholly owned subsidiary at year-end drove some of the growth. Excluding that impact fee revenues were still up a healthy 12%. The growth reflects volume increases and new business across all product areas. Another standout was issuer services where fees jumped 77% from a year ago, excluding the impact of the corporate trust business acquired from JPM, organic growth in issuer services with 9% relative to a gang buster performance in the year ago quarter. Corporate trust was the big driver of year-over-year growth as the corporate and mini markets were very active and we benefited given the breadth of our product mix. Sequential growth was also strong up 15% on annualized. This performance reflected many seasonal factors including a higher level of corporate…

Thanks, Chris. When we opened for business on July 2, it was our goal to really hit the ground running and we did that. Momentum is great, merger integrations proceeding well, and we feel increasingly comfortable with our $700 million expense synergy goal. Revenue synergy planning is now fully underway too, since we now have access to our combined client management systems. Most of the executive committee is in the room as Bruce mentioned [inaudible] clients in Australia and Asia this week, and he is on the phone from Beijing to participate in Q&A for any direct questions. Tim Keaney is in London over there, of course, running the businesses. Going forward, our focus is clear and simple. Delivering best client service in the world, retaining and growing our client base, executing a thoughtful and disciplined integration, achieving all of our expense and revenue synergies, and ultimately, delivering superior EPS growth for our shareholders. Now, let’s open up the call for questions please. Melissa?

Thank you. We will now begin the question-and-answer session. [Operator Instructions]. Our first question comes from Ken Usdin with Banc of America Securities. Please go ahead.

Thanks. Good morning.

Hi, Ken.

Hey, the question is on capital. Bruce, to your point that you made that the balance sheet is larger it looked like the BKTC ratio was definitely lower than expected and your comments about not buying back stock from next year which is in line with what you had originally said with the merger. Just wondering can you give us an update relative to the… the 42 kind of September 30 TCE goal that you had initially set out, where do you expect that to be kind of once the companies come together?

Yes. I think in general, Ken, we talked about moving to an adjusted TCE concept, because of the deferred tax liabilities and gross up of goodwill and intangibles that results from this being a non-taxable transaction. I think our targets are going to be 5% plus around that dimension. I actually don't see us getting there probably until, maybe mid-first half of next year at this point given we have to fund the ABN buyout. I think the balance sheet is going to stay a little elevated. Those would be the principal factors.

And any updates on the deferred tax liabilities as far as getting credit from the rating agencies, and any differential increment that could add to your previous thoughts on the TCE?

No, I think we have made good progress. We have seen all the rating agencies. And I think there is buy in to the way we are looking at capital. It obviously also… we are looking at tier 1 as a major objective. We are looking at our economic capital model as well. So, I think our approach to capital is certainly receiving the buy in that we expected. What that was going to do with us was probably allow us to accelerate buyback from when we originally said, which is in the third quarter of ’08. But again, now we have got a little bigger balance sheet to contend with. So, we might now have quite as much upside as maybe we had implied a quarter ago.

Okay. And then my second question is related to the of the revenue synergy that you mentioned. If I understood you correctly you said that you think they would be coming in a little better than the original model as far as the offset of positive synergies versus attrition. Could you just elaborate on both sides of that equation? Can you just give us a little more color on which part of it you feel better about, and if you can comment on both sides, that would be great.

Well, let me, Ken, it’s Bob. Let me just start with revenue synergies. We couldn’t get into really detailed planning until two and a half weeks ago now. We could talk about it at a high level, but we couldn’t share client information. We have created a revenue synergy czar and so we are calling Tony Burns [ph] who runs the client management group, and he is responsible for overall, for making sure that we identify them, build them into people’s plans and we actually realized them all. And that’s going to be tracked to the merger integration process just like expense synergies will be as well. It will probably take as always, it will probably take a little bit longer to achieve and they are a little greyer in terms of certainty than in our expenses of course. But we are seeing lots of good news. There is a lot of great meeting going on around the Company. Firstly, inside each business lines to make sure we have the best of both products and services and make sure to get pricing right on all our products. That the really big opportunity is across the business lines. And the one that I would point out that there is a huge opportunities between asset management and asset servicing, not surprisingly. Those are huge client bases with tremendous opportunities. We are also going to be moving to one overall client management systems. So, we can track this a lot better. Our thought at this point, Ken, is we are going to tell you more about this on the third quarter conference call both in terms of details… more details and timing on expense synergies as well as the revenue synergies. And frankly, I am feeling more excited about the revenue synergies today than I was even two or three weeks ago. So, you are going to have to hold on for a little bit and we will have a lot more detail for you on the third quarter call.

And Ken just I think what you were referring to in my prepared remarks was the fact I indicated that we have intangible amortization and some purchase accounting adjustments. Those are actually coming in a little lighter as we work through all of the detailed analysis that supports that. So, when you look at previously, those were going to be a little higher than the amount of second half synergies, we think that’s probably going to be a push at this point. So, we gain a little relative to the transaction model, but however, the tax rate will probably move a little bit in the other direction. So, net-net, it’s not a big issue to contend with particularly given the strong business momentum we have going into the second half of the year.

And Ken, one question that will undoubtedly come up and I am just going to say is when one thinks of a client attrition, we are not expecting much client attrition and if you look at the overlapping businesses in our Company, it’s really in the asset servicing space, which is about 25% of our earnings. This is not an acquisition related party, this is a merger of equals. Normal attrition rate in our industry for the best players, like ourselves, is probably 2% to 3% and maybe over the integration period it will be slightly higher than that on an annual basis. So, I think it’s a great story. And everything that we have seen since December 4 is reinforcing that.

Okay. Thanks a lot.

Thank you.

Our next question comes from Glenn Schorr with UBS. Please go ahead.

Just [inaudible] the 2% to 3% not bad. Questions on the ABN JV and the buy in. I know you haven’t disclosed financials, but can you talk towards what actually happened. In other words, you guys were operating for the last five years as a combined entity forget what ABN is going through with all the other stuff. What happens to all the employees, I mean will you just have a different business card and it is business as usual, maybe you could give a little color around that.

Sure. And then I am going to ask Jim Palermo to talk to that because he was the guy that was appointed in to just check on that negotiation and he has been intimately involved with it for years of course?

Glenn, I will take that. First up, the performance of the joint venture itself was… was quite extraordinary. Since January 2003, when we formed it to a 50-50 joint venture, the pretax income growth exceeded 40% compounded basis. So we really enjoyed that… just tremendous result, very grateful to the team. Otherwise what is going forward is, first we still have more to do to close the transaction which has Bruce alluded to, would be sometime late third quarter or potentially very early I think in the fourth quarter. What will happen at that point of time is the ABN AMRO Mellon employees will become the official Bank of New York Mellon employees, carrying business cards and waving the flag in that regard. The practical matter because of the long-term nature and sales update that we have and conversion process the… the opportunities that we are… that we're dealing with right now… those will in fact actually convert, most likely to convert post close. So in effect the results that the team is working on will really be reflected in the Bank of New York Mellon results as I said in the fourth quarter and into 2008.

I guess my question is, what needs to take place to even to close… in other words, this has been an ongoing operating… is it certain people that were Legacy ABN people that were Relationship Managers transition in, is it just the system's thing. I guess I am getting caught up on this has been an ongoing entity for 5 years, what needs to takes place?

No, Glenn, it is pretty straightforward. When you think about it, when you step back on it, it was one stand alone operating entity and you don't lose sales people or operating people. It was existing Legacy Mellon systems. Basically all that changes as you go from a 50% ownership to a 100% ownership and nothing else changes. So, it’s very transparent and straightforward that way. We just have to buy out the remaining percentage. The other thing to think about though is the reason why we wanted to get this done very quickly and at around a closing date is we want to have one integrated offering for Europe and outside Europe. It was really key that we didn't have competing offerings because that could be confusing to the consultants and clients, and by getting this done we provide absolute clarity to our clients in Europe in particular.

Yes, the client just… Bob made an important point there and I think this is what you are driving at is the technology platform that issues exclusively is the common Legacy Mellon technology platform that we have provided to all of client bases based on a global scale. In fact there is strictly no change in that regard.

Great and the sales forces embedded in the entity and--?

That will become part of the overall company.

Great that's what I was trying to get at. Okay. Only other question I had was on asset management. 6ish billion I think was the long term phone number. That is a like a 3%ish organic growth rate. It is okay, but not amazing. Maybe you could talk towards what's going on in performance in the different buckets and maybe what new products use you might be introducing.

Yes, Glen this is Don, talking on a combined basis is about $5 billion in long-term and $17 million in short-term, on the short-term obviously reflecting a reasonably favorable money market environment. As I talked about before we have been engaged in a fairly systematic shift from kind of playing the Mellon commodity products to some more higher value added products. Maybe the number I point to you that might help on this as our shift towards alternatives were up 69% on the same quarter last year. So, I don't think that the… that the asset… that the size of the assets reflecting the revenue growth of which is behind all this year. In terms of performance really point to the C capital gains. It’s a leading indicator of that performance is quite strong... in fact quite strong across the board. If there is any area where we would like to see a little bit stronger performance would be in an emerging market and there the performance is absolutely very high but on a relative basis, not where you would want it, but across the board we are seeing very strong performance.

And received capital gains is that actual gains and are those receded and then it starts to progress and then you actually would thrill the mind, that's not a mark-to-market thing. This is actually realized gains.

Yes. Okay.

All right. I am good. Thanks.

Thanks, Glenn.

Thank you. Our next question comes from the Betsy Graseck with Morgan Stanley. Please go ahead.

Thanks. Good morning.

Good morning, Betsy.

Just on the integration and asset servicing which as you highlighted was… will be the area where you have the most integration. I don't know challenges is the right word or not but integration opportunity I suppose. The question I get the most from folks is about customer attrition. I realize that your expectation is that you are really not going to have that much worry of customer attrition. Maybe you could talk a little bit about what you see in your businesses as to the reasons why just to give a little bit more color around the degree of confidence you have there and if you could speak it all to… the percentages of clients that will be impacted by system changes, when those system changes happen over time? Or if you could speak to your high level conversation with folks that give you that kind of confidence, that would be helpful.

Sure, Betsy. Why don't you start with Tim Keaney in London and then we will ask Jim to add to that color for you. Tim?

Hi, Betsy. Tim Keaney here. Let's take the systems question first. We have to put that off to the side, our integration team… we have a 65 person integration team within asset services working on the overall integration plan. The mandate Bob has given to Jim and I are somewhat unique in the experience I have had in past. We are emerging two strong companies. One of the things that has gone over very well in the market and indeed since the announcement, we’ve added well over $400 billion in new mandates, is the fact both Legacy Bank of New York and Legacy Mellon have both brought different strengths to the table… in particular for the pension market, Mellon's offerings is superior to the legacy bank in New York. So their accounting systems and Mellon's online systems are going to be very well received by the Legacy Bank in New York clients. And indeed this has been an area where Jim has been spending a lot of his technology investment. Conversely on the Legacy Bank in New York environment we have been spending a lot of money as you and I talked about in the past, on our custody back bone and custody infrastructure and the complement of services that we provide to the mutual funds market. And between just those two segments… that is probably well over 80% of our revenue on a combined basis. So… little bit more work to do over the next few months on the broad integration plan, we will be able to answer much more clearly, what that means in terms of clients that are affected. But the feedback I have gotten from clients has been extremely positive, the fact that we are winning 40% of the new business that we bid on and continue to since the announcement I think generally bodes very, very well. Jim, anything you want to add to that.

Yes, I agree with everything that Tim said. I think couple of things I would point to that we see as being different in this particular merger is in comparing contrasting with previous ones is, typically what we have seen, Betsy, is a stronger company acquiring a weaker company or we’ve seen a very large company acquiring a small company. In this case you have two companies come together with a momentum that Tim just described which is quite formidable. Another couple of things that I would say is both just Tim and I have met with our respective client advisory boards, we have met with many consultants, we have met with many clients. And with AC going forward there is nothing but positive prospects because they see two very strong great companies coming together with a broader ray of capabilities that we bring to the table, totally committed to the business, and now enable to invest more heavily in the business than each Legacy company would have been able to utilize. So, I think the… these two buyers in the market place. They recognize and understand that, and I think that they have responded quite nicely with the numbers that Tim talked about with the new sales results that we’ve seen.

At this stage, are you kind of trading more consultants were expanding your product set on the consumers you are working with?

I would say Betsy, Tim Keaney here. I will mention a couple of things that usually pop to my mind and I am sure Jim will add to this. Lets take a couple of areas that I would characterize as low hanging fruit cash management… the management of vital cash balances. Forgive me for referencing Legacy Banc of New York, but through our custody business bill was approximately $165 billion in idle opportunal cash balances that needed to be reinvested on clients behalf. For a number of Legacy reasons I won’t get into on this call, we were cashing a very small percentage of that indeed less than 10%. And when you look at the powerhouse of Dreyfus when you look at Standish, you look at a number of the other cash management capabilities that the merged organization brings to the table. These are cash management alternatives that the Legacy Bank of New York clients would never have had access to and these are wonderfully performing products. So, those are immediately going to be introduced to the Bank and your clients. And then I think of an area like securities lending, you would see by virtue of the clients that Bank of New York has been a large portion of our clients invested in fixed income and particularly U.S. government securities. That’s an inherent strength of Legacy Bank of New York, you’d see the exact opposite at Mellon with equities in international equities. And Jim I would also say Mellon analytical services and a couple of other things you might want to mention.

Yes. I was going to pick up on the performance in analytics, where Legacy Mellon analytical solutions is the larger provider of performance in analytics in the world. We bring up very broad rating capabilities to the Legacy BNY client base and also the broad array of asset management capabilities that we bring to the table. And then kind of coming the other way the strength that Tim, and the Legacy BNY team had on the fund accounting… fund administration side particularly outside the United States, that’s a terrific capability that we get to add into our financial institution client base. So there are a lot of synergies that we are really looking forward to and getting excited about, and as Bob said, we have just been able to really peek into each others client base over the course of the last few weeks and we see a lot of opportunity there.

Jim, just one other point I might make and this is an important one that Bob referenced earlier. When you look at this combined franchise that Jim and I are co-managing, it’s 4600 clients worldwide. And together we’ve generally speaking the buyer that buys selects the custodian or fund administrator depending on the client population is largely the same buyer that picks the asset manager and makes the asset allocation decisions. And that’s the other synapse here that’s very exciting to think about and both companies the combined company Bank of New York Mellon is now actively engaged in putting all of our client basing staff to a training program, so that Jim and my relationship managers get fully up to speed on the range of new asset management products. But that is a massive, massive opportunity we plan to exploit. Those 4600 clients around the world that generally want to do more business with fewer companies and asset management will be a feature in that dynamic.

Okay. Thanks. And you’d be able to talk about revenue synergies more specifically on next quarters of company [ph]?

Next quarter, Betsy, we want to provide you with more flavor on revenue synergies as well as some metrics on merger. I think you can pretty clearly tell our guys are not too enthusiastic here. So we will talk more on the third quarter call. but we want to be… as the guys mentioned we didn’t have access to each others client bases in detail. We had some very high level stuff like one interesting metric we were aware of early on because we had a clean room approach for a few high level metrics is that our client overlap is only about 15%. Which is kind of amazing which really talks to this huge revenue synergy opportunity, but what we need is a little bit more time for our people to come back with more definitive plans, so we can tell you stuff with more confidence pretty soon.

And that client overlap numbers in terms of number of clients or revenues?

I think it was clients. Do you remember, Steve or Don on the number? It was number of clients.

Super. Thank you.

Thanks Betsy.

Thank you. Our next question comes from Mike Mayo with Deutsche Bank. Please go ahead.

Good morning.

Good morning, Michael.

You mentioned that the synergy is what’s better at least related to the amortization on the other hand you have a higher tax rate. Can you give an update on the dilution and accretion from the merger?

I would say Mike that as you are aware, there was very little GAAP dilution in the first 12 months and in fact come from the Bank of New York holders, in fact the deal is very strong from a cash accretion right out of the shoot and it turns very positive from a GAAP accretion basis. I think we are still expecting that to be the case. But based just on the purchase accounting tax synergy numbers that’ll be close to a push maybe slightly diluted in the first… in the second half here of ’07, but not appreciably different from what we had put into the model.

And as I think you know Mike, GAAP earnings are interesting but intangible amortization is a meaningless accounting concept. So, I certainly focus on cash earnings.

And you said you feel better about expense synergies but no change to that?

Yes. I said we were increasingly comfortable with the expense synergies.

Okay. And you mentioned maybe loosing 2% to 3% of the customers which would be pretty decent but before you said lose no customers. So--?

Well, that’s true Mike. That’s the rallying cry we use with our troops and internally everyday in every business we are in, and ultimately in any business you always lose customers. It’s just the natural cycle of things. But I want everyone to feel real bad about it if we do. So, it is, what we are saying everyday in every meeting and we are going to hate losing any customer.

But the two, Mike, just to be clear what Bob said about the 2% to 3% that’s an ongoing level of attrition that we… each Legacy company had on its own. And so we are still anticipating that on… at the margin because of the merger that we would expect to see very little attrition.

What have you seen so far?

None to speak of.

Good. And 2% to 3% remember is normal for those largest players in our industry. We are probably doing a little better than most of course because we are growing so quickly and we are gaining share.

And some of your competitors saying you are offering price concessions, doing some stuff. Can you comment on the competitive environment and what you are doing?

Yes. Mike it’s Jim, clearly it’s been competitive. I think when we spoke it was during six months ago, it was a competitive environment then and it continues today. But I would say that in response to that we are most concerned in… Tim and I and the team about servicing our clients excellently, and if we do that well things have a tendency to take care of themselves have gone quite nicely. As relates to some of the commentary that we have heard of late around us zero bidding or very little bidding, I would characterize those statements as categorically false. As a matter of fact, I can tell you a very encouraging discussion that I had this week with a prospective client and their consultant when they called me to tell us, that we were being awarded a multi billion dollar mandate. And they said because of your quality, because of the value add that you bring to the table even though you are actually more than two times the price you have been awarded the business. So, I think there is still some recognition in the marketplace of quality and added value that we bring to the table.

Thank you.

Okay.

Thank you. Our next question comes from Brian Bedell with Merill Lynch. Please go ahead.

Hi, good morning folks. Just on the… kind of follow-up to the question that Tim and Jim were talking about on the servicing business. In your page 6, on the merger integration of the technology you’ve selected the core systems architecture and infrastructure. So, I assume that means for the asset servicing business you have decided sort of which platforms are going to exist for the different client segments in that business. Is that correct?

I think, it primarily meant for the Company overall maybe we could start with Don on that and maybe we will come back to Tim and Jim.

Yes. And if you could give us color [ph] on the asset servicing side, it’s like--?

Okay. Why don’t we just start with Jim?

Hi Brian, it’s Jim and please don’t bet on this but we have made some preliminary decisions on some of the technology platforms. And Brian, as I think as we mentioned in the last quarter to you was that if you take a look at Legacy Mellon where the primary client base was on more the tech exempt clients of public and corporate pension funds, and bond [ph] foundations et cetera. Those are the platforms that will continue on in that regard utilizing our performance in analytics along with our work bench product. Tim, you want to talk about the Legacy Mellon platforms?

Yes. I think if we look at the biggest platforms that the custody and cash movement piece back end, back of New York. Brian the accounting and performance and risk systems will be 90% Mellon with a little bit of added functionality in terms of the end state across the entire asset services, clientele no matter what type of client. Mellon’s online system is really terrific, very easy to use. The area with some of the work we are doing now is stress testing volumes and just making sure that we are at these end states systems will handle the volumes overtime. And Jim mentioned the fact, we kind of stress test this blueprint to get client reaction. And we’ve talked to both our client advisory boards from a feature and function point of view we’ve gotten two big thumps up from our respective clients. And little things like bringing together the securities lending platforms and the foreign exchange platforms is work that’s still ongoing. So, largely speaking we have the building blocks in place and now we’ve got to work through in effective time line to get us there.

Okay. And then… are there significant client migrations involved. It sounds like you are keeping the Mellon pension platforms are the U.S. pension clients are not migrating, is that correct?

Yes. I think that’s largely corrected. And I think again the thing that makes this different is I have done a couple of these things in the past, where the focus is getting expense synergies out the door. Clearly expenses are important but what we are going to do is take out time and get this right and bring forward a very thoughtful process. It’s probably four, five years but we want to increase the clients experience with us, improve the client’s experience with us and grow our franchise during and through integration. I think this is a very, very important point and we are going to take our time and get this right. And I think by the time, we get together to review the third quarter numbers we’ll be in a position to talk a little bit more specifically on this topic.

Okay. Great. And then just Ben just real quick are you getting the company getting $290 million across states, within the securities services business that you outline?

Yes.

Yes. Okay. And then you just, Tim mentioned $165 million of cash management balances that speaks through Bank of New York, does that exclude the number that you have on the Bank of New York’s balance sheet or is there a--?

No. That’s… that excludes what’s on the balance sheet.

Okay. You used up 90% of that to money market vendors outside of U.K.?

Yes. Exactly right, Brian.

Okay. And are you guys still confident in getting… you had mentioned the target of getting about $50 billion of money market fund assets subject to dry sales, I guess?

Yes, yes. I don’t see any reason to think that number is not achievable.

Okay. As most of that in that… in that $50 billion, in that cash management area that you are talking about?

Yes. I think of that relative to the $165 million exactly.

Right. And then to… in within the purging system that $50 billion money market for a number is not from the purging system largely or is that part of it?

No, no.

Okay. From the cash balance. Okay. And then just… I guess real quick on excess capital, Bruce, you mentioned a 5% adjusted tangible ratio by mid ’08. What would it be… when do you think you get to say 4% on a non-adjusted basis?

It depends on the size of the balance sheet a little bit. I think clearly we would be there by the end of the year.

By the end of the, okay. And just to remind you of your preferences for uses of excess capital, you guys have dead lined $1 billion in ’08 and $2 billion in ’09 and the deal model and use sort of share repurchases as a proxy. But just, if you can sort of just reiterate what your preferences for the use of excess capital would be?

Just let me talk a little bit Brian, it’s Bob, we already talked about our pay out ratio and strictly mean well 40% probably little bit lower on a cash basis, maybe 35 to 40 and that’s what we are targeting. We will keep growing the dividend as our earnings grow. Stock buybacks are great but the return on them is certain but it’s not as high as I would like. So let’s say it’s 10% or 11% return on stock buybacks. We are going to be extraordinarily busy over the next couple of years getting our merger done. Undoubtedly the business heads will be coming to us with new product ideas and some… maybe some geographic expansion ideas if they are interested, and if we can make a much higher return then 10% or 11%. I would like to support them in growing their business. As a reply to acquisitions, we are probably, I can’t imagine us doing anything material over the next… over the next while because we are going to be so busy with the merger integration. There is a scenario I guess on the asset management side that runs and runs businesses, so it’ll be integrated a lot faster than the others. And we are growing pretty rapidly internationally. There are opportunities as difficult to pick them right now but if we saw our opportunities to grow geographically with better distribution and better product capabilities, and if the returns are well in excess of our cost to capital then we might look at it in due course. So, I see us in essence then the payback is fine and I like where we are at and we are going to continue investing in our businesses.

Question.

Thank you. Our next question comes from Tom Mccrohan with Janney Montgomery Scott. Please go ahead.

Hi, and congratulations.

Thank you.

A quick question. Most of my questions have been answered. On the revenue synergies side, are there more or less opportunities across selling the revenue synergies outside the United States or do you find a kind of balance both domestically and outside of US?

I would say it’s pretty balanced and we are pulling that into our mix as well in terms of thinking about international as well as domestic.

Great, that’s all I had. Thanks very much.

Thank you.

Thank you. Our final question comes from Gerard Cassidy with RBC Capital Markets. Please go ahead.

Good morning, Bob.

Gerard.

Regarding the overseas business versus the domestic business, do you guys have any target and where would you… where would you like to see the non-U.S. revenues as a percentage of the total fixture at some point in future and when would you be able to get there?

I don’t really know that at this point, Gerard, we obviously we are seeing a pretty steep curve here in terms of growth of international versus U.S. You are going to see more growth in the third and fourth quarter just because of the addition of ABN. It seems like the business opportunities in Europe and Asia are even… are higher than here and maybe there will be acquisition opportunities over the medium-term there as well. And at this point in the asset servicing business, which a lot of it… a lot of the questions have been asked about. We’re 60% U.S. and 40% non-U.S. So I suspect that’s going to get closer to 50-50 before we know it.

As kind of a time to that, Bruce or Tom if you could make a comment on the status of that Russian situation with the law-suit that was filed. Is that being dismissed, what can you say anything about?

Well Gerard, this is Tom speaking. There is not much I can add to really what’s actually been said in the press, which I think quite honestly has been quite accurate interestingly enough. I think the… we asked them for a continuation because the process by which they serve very often their allegations are not quite correct and the court in Moscow agreed with us and has postponed any kind of hearings until November. So we are moving forward, we continue to treat this quite seriously of course and we have our councils working on it. We see this sometime in the future and ultimate resolution, but we are quite confident that we will prevail of course. And while we are treating it seriously, we don’t… can not see the basis for their allegations whatsoever.

Thank you.

Thanks, Gerard.

Well, at this point that concludes the second quarter call. I look forward to updating you on our progress on our new company, and how we are executing in coming months. Hope to see few of you in person over the course of rest of the summer and early this call. Thank you very much for coming on the call and we will keep working hard for you. Thank you.

Thank you, sir. Any additional questions or comments, you may contact Mr. Steve Lackey, or Mr. Kim Braus [ph] at 212-635-1578. Thank you ladies and gentlemen that conclude’s today’s conference call. Thank you for participating.