Welcome to the Korn/Ferry International conference call. Before I turn thecall over to your host, Mr. Gary D. Burinson, let me first read a cautionarystatement to investors. Certain statements made in the presentation today will constituteforward-looking statements within the meaning of the Private SecuritiesLitigation Reform Act of 1995. Although the Company believes the expectationsreflected in such forward-looking statements are based on reasonable assumptions,investors are cautioned not to place undue reliance on such statements. Actualresults in future periods may differ materially from those currently expectedor desired because of a number of risks and uncertainties which are beyond theCompany’s control. Additional information concerning such risks anduncertainties can be found in the Company’s annual report for fiscal 2007. With that I’ll turn the call over to Mr. Burnison, please go ahead Mr.Burnison

Good morning everyone. Today I’m going to divide my remarks into threesections. First, our second quarter performance, next our strategy and finallyour outlook for the business in the coming months. Overall our business has performed very well during the second quarter andfirst half of the fiscal year. I’m pleased to report that fee revenue for thesecond quarter has set a new record totaling $196 million, an improvement of26%, over $800 million on an annualized basis with our operations in Mexico. EPS for the quarter came in at $0.37, an improvement of 19% over last year.Our operating margin for the period was 13%. Performance in the quarter wasdriven by all business lines and regions, with the exception of Emea, whichencountered modest and normal seasonality on a sequential basis, but was up 28%year-on-year. North America was up 24% over the prioryear. Asia Pacific also generated strong growth up 35% from last year. And Latin America turned in an impressive 75% improvement in the top line at$7.5 million. From a market’s perspective, our industrial market had a great quarter on aglobal basis up 13% sequentially, led by Aerospace in defense and energy. Healthcarewas also strong, up 20% sequentially. Its interesting, despite the setbacks inthe U.S.financial services industry, our global financial market was up 13%sequentially driven by consumer banking services and real estate. The activitywas fueled by improvements in Asia Pacific and Latin America. Our combined leadership development solutions business, which includes Lomingerand Leadersource, posted an impressive 52% year-over-year growth and is onalmost a $60 million run rate. Lominger continues to out perform ourexpectations. During the quarter, the business achieved $6 million in feerevenue which is up almost 75% year-on-year with an operating margin of almost30%. In the middle market, Futurestep, our outsource recruiting subsidiary,posted revenues of $27 million which is up about 30%…

Thank you Gary, and good morning.Today we are pleased to announce another quarter of positive results forKorn/Ferry International. As Gary stated, fiscal ’08 second quarter consolidatefee revenue grew over $40 million or 26% versus the second quarter of fiscal’07 and $10.5 million or 5.7% sequentially reaching $195.9 million, our highestrevenue quarter ever. Korn/Ferry consolidated fee revenue has now grown sequentially for 17 consecutivequarters dating back to July of 2003 with fee revenues growing at a compoundannual growth rate of approximately 23% over this period. Our earnings have also grown. Fiscal ’08 second quarter EPS grew $0.06 orover 19% versus the second quarter of fiscal ’07 and a $0.01 sequentiallyreaching a record high of $0.37. Additionally consolidated fiscal ’08 secondquarter operating earnings grew over $4.2 million or 20% versus the secondquarter of fiscal ’07 and $300,000 or 1.1% sequentially to $25.4 million. This profitability was achieved while we continued to invest in people and processesdesigned to drive long-term growth and fulfillment of our strategic objectives.Operating margin in fiscal ’08 second quarter was 13%. In the prior year’ssecond quarter operating margin was 13.6% and it was 13.5% in the first quarterof this year. The number of executive search consultants at the end of the second quartergrew to 523, up seven consultants from the first quarter of fiscal ’08. Secondquarter annualized revenue for consultant was over $1.26 million and is up12.5% year-over-year. The overall growth and headcount across the globereflects our optimism about the opportunities we see for continuing to expandour core executive recruiting business while broadening our reach in non searchbusinesses. That said we must carefully balance headcount growth with profitability tomake certain that we are achieving acceptable returns on our investments inpeople. While we are pleased with the overall operating results for this pastquarter, we believe there is room for improved…

Our first question is from the line of Josh Vogel with Sidoti & Co., pleasego ahead. Josh Vogel – Sidoti & Co.: Hey good morning. With your fee revenue guidance of $190 to $200 million,can you give us any color as to what kind of strength or growth you’reexpecting in North America that’s built into thatguidance?

Well I mean in terms of the outlook, we’re basically assuming that themarket conditions are going to stay essentially as they are today. We do have,as Steve mentioned, this year, the way the holiday’s fall you’ve got Christmasand New Year’s falling on a Tuesday so we do believe that there’s going to besome seasonal cyclicality this year.

Our whole thought process is that while the revenue guidance is relativelyflat, the beginning of the quarter was quite good and we’re hopeful that we canwork through the seasonality that comes with Christmas and New Year’s and thenwith the Chinese New Year in Asia, and move aggressively into the generallystronger fourth quarter of the year. Josh Vogel – Sidoti & Co.: Okay and can you just discuss the trends across all your regions that yousaw in November?

I would say that it was fairly broad based. Asia andEmea continued to be robust. I’ll tell you that the new business in Emea inNovember was as strong as we’ve seen it this fiscal year. And in North America the level of new business confirmations was right in linewith our expectations. Josh Vogel – Sidoti & Co.: Okay, and what about in the financial services vertical, can you just giveus a little bit of color how that performed last quarter in North America andglobally?

You know, despite what you read in the papers, we were a little surprisedthat the business was up sequentially, which it was, but when you think aboutthe diversification of our financial services business, I guess that’sactually, you know, it makes sense. We have seen – there’s obviously been aslowdown at the [bold] bracket in terms capital markets and investment banking,however, as you know this time of year is generally not a robust time for hiringin those segments of financial services. We have seen activity from the second tier, third tier firms that are beingvery opportunistic with respect to talent and in the volatility that’s beenhappening over the last several weeks. Europe and Asiain financial services, performed very well. Asia was upsequentially and you know North America was up actuallyon a sequential basis. So what we’ve seen is, although there’s been a declinein [bolds] bracket investment banking, at the MD level as well as the capitalmarkets, that there’s been a little bit of a shift and we’ve seen a pick-up ininsurance, infrastructure, risk as you can imagine, risk positions as well asreal estate. So you know that’s what we’re seeing today in the financial serviceslandscape.

And just to add one thing is, we have less exposure to financial servicesthan some of our competitors which cuts both ways. We actually like thatexposure to be higher because we think that long-term financial services is anextraordinarily good market. But while you have chaos going on and thosemarkets to have less exposure, it is – it works in it from the short run but inthe long run we’re very bullish on the opportunities to grow that practice. Josh Vogel – Sidoti & Co.: Okay, and the European business, I know there’s some seasonality there butthe margins were a little bit lighter than what I was looking for, is thatbecause of the bulk of your investments were coming in the European region?

I wouldn’t say the bulk but certainly we continue to make investments acrossthe globe and you know, as I mentioned in our remarks, we are pleased with ourresults but we think that there are opportunities for margin improvement in allour businesses and part of our goal through the remainder of this year is to bevery focused on generating strong revenue growth while continuing to improvethe margins. So you know that’s something that we’re going to have to work onand we’ll see how well we do it, at accomplishing that goal. Josh Vogel – Sidoti & Co.: Okay and just lastly, if you strip out that write-down in Futurestep, whatwould the seconds operating margin have been?

Less than 10%, just about 8% and we think that the opportunity in thatbusiness to get to double digit margins is right there. Having said that, weneed to focus in order to make that happen. Josh Vogel – Sidoti & Co.: Okay great, thank you very much.

Our next question is from Toby Sommer from Suntrust Robinson Humphrey,please go ahead. Toby Sommer – Suntrust RobinsonHumphrey: Thank you very much, start out with a question on pricing if I could, whichwas very strong in the quarter both in Futurestep and in the core executivesearch business, the word you had characterized what the growth was comprisedof, because I know it could move a couple different ways, whether it’s a mixshift within industries in terms of some of the demand you saw, or movingupscale which has been a process you’ve been undergoing now for the lastseveral years. Maybe if you could comment about what apples to apples pricingwas like for the same kind of positions in the same industries.

Well you know generally – it’s hard to generalize Toby, but clearly part ofour strategy in terms of growing our flagship business, the executive searchbusiness, is to move the brand up stream. As we’ve demonstrated to ourshareholders and to our colleagues over the last 16 quarters we have done justthat. So sequentially I wouldn’t characterize the pricing as any stronger per se.Our average fee globally this quarter was $87,000 or so, which when you lookagainst some of our, some of the other competitors, whether they’re private orpublic is a little bit lower. But our breadth, I mean we’re much, much broader,we’re in 40 countries around the world. Our Latin American business is adominant business. Our Asian business is a dominant business. So you reallyhave to factor that in when looking at comparables. But its, at least sequentially, we haven’t seen any dramatic shifts in termsof pricing but overall clearly, coming out of the technology dot com area yousaw movement away from equity based compensation into more cash and we havecontinued to see the war for talent and with that, we have seen wages risegenerally. In some parts of the world it’s absolutely red hot. In Chinafor example, there is significant wage growth and the same in India.We’ve got a fabulous opportunity in both of those markets to grow our businessover the next three to five years. Toby Sommer – Suntrust RobinsonHumphrey: Thank you. Shifting gears a little bit, in terms of financial services bothglobally and in North America, when are typically thestrongest quarters from a seasonal perspective for confirmations in that area?

Well it depends on a segment. Within financial services we have six or sevensectors but with, as you would expect, with the investment banking and capitalmarkets those tend to be more robust at the beginning of a calendar year. Thatgenerally coincides with those firms’ fiscal years. Then with insurance andreal estate, consumer banking, those are pretty consistent throughout the year,but clearly in at least those two areas, we’ll see activity at the beginning ofa firm’s fiscal year, which is typically the beginning of a calendar year. Toby Sommer – Suntrust RobinsonHumphrey: Okay thanks, and then just wanted to ask a question on your capitalallocation, you’re still, despite the fact you bought back a lot of stock inthe quarter, still growing your cash balance, any thoughts on changes in theacquisition environment given perhaps some of the turbulence in the stockmarket and declining multiples, have you seen any changes among theexpectations of potential acquisition candidates?

Yeah, we’re pretty active looking at potential acquisitions and we thinkthat there are a number of opportunities to further transform this businessinto a broader professional services platform. Having said that, our experienceis that some of the private companies that are for sale actually kind of haveunreasonable expectations around multiples and so we continue to be financiallydisciplined about how we look at these transactions, looking for good strategicfit and good cultural fit. But at the same time we don’t know that it makessense for a private company to have a multiple higher than a public company.This doesn’t seem to make that much sense to us so it makes completingtransactions challenging but in a business like ours, its all people, youshould think very carefully about those acquisitions that you actually pull thetrigger on because they have to fit very well culturally. But your question was about capital allocation, we certainly want tomaintain enough balance sheet strength so that as these opportunities come upwe have plenty of fire power to bring to bear on the marketplace and whilewe’ve been aggressive in the quarter in terms of buying back our stock, we alsofeel as if we do have plenty of dry powder. Toby Sommer – Suntrust RobinsonHumphrey: Thank you very much.

Our next question is from the line of Andrew Fones with UBS, please goahead. Andrew Fones – UBS: Hi, I’d like to better understand the impact of pricing on your revenuegrowth also and so I was wondering if you can share with us the growth in thenumber of searches by geography and then also perhaps the financial servicesand other industries. Thanks.

Well we typically, we haven’t given out the number of assignments byindustry on this call. Andrew I would just say what I’ve said earlier is thatoverall on a global basis our industrial sector had a fabulous quarter. As youcan imagine, when you see the demand for natural resources and the like. So ourbusinesses very much follow that trend and we’ve seized upon it. We’ve got afabulous industrial business. We’ve also seen, sequentially, increased activityin the healthcare area. That’s been across the board as well. So those twotrends definitely stick out on a sequential basis. Then even, you know, despitewhat you read in the newspapers, our financial services business did wellsequentially and I think that’s because it’s a balanced portfolio. And overallwe have a very balanced portfolio and within financial services we saw more ofa shift into risk kinds of positions, infrastructure ops, real estate and apause in capital markets and investment banking at the [bolds] bracket. But again, this time of year, people are obsessed with bonuses as you know,and there’s not a lot of hiring going on in Wall Street at the [bolds] bracketfirms and so I think that’s from a market’s perspective Andrew, kind of asynopsis of the quarter.

Andrew, the total number of assignments during the quarter was 1,878, up13.5% so you can probably do the math to figure out the volume and pricingimpact on our revenues. Andrew Fones – UBS: And the up 13.5% was that sequentially, year-over-year…?

Versus a year ago, same quarter a year ago. Andrew Fones – UBS: Okay, I thought in the press release you had mentioned that you saw a 21% increasein fee per search versus your 25% growth in revenue.

I think in the press release its referring to fees or assignments billed inthe quarter. What Steve just gave you was the newly opened assignments withinthe quarter and of course that comparison versus the same quarter a year ago. Andrew Fones – UBS: Okay great thanks. And then I guess just finally, touching back on some ofyour comments there, is there any difference in the level of search forindustrial and healthcare. You know, two of your kind of strongest segmentsthis period versus some of the other segments that were perhaps grown a littlemore slowly?

No, obviously in the capital markets and investment banking area some ofthose fees can be quite high given the compensation levels and certainly youdon’t see as much of that in the industrial and healthcare areas, that’s justnot the market. They’re really two completely different worlds. But then withinfinancial services, when you get into ops and risk and insurance and realestate, it becomes much more consistent with what you’d see in other verticals. Andrew Fones – UBS: Okay, thanks.

And our next question from the line of Michel Morin of Merrill Lynch, pleasego ahead. Michel Morin – Merrill Lynch: Good morning guys, I just wanted to check, you’ve mentioned kind of theareas of strength in the quarter, specifically relative to your ownexpectations three months ago, are these the same areas where you werepositively surprised or were there other segments where you saw much betterthan expected results?

Well you know you pick up the newspaper every day Michel and you certainlyhave to question what’s happening in the world around you. In August Ipersonally had those questions and you know, more recently with the charge off activityat the big universal banks, there’s certainly room for pause. I – a littlesurprised at financial services compared to when we last spoke to shareholdersin early September, just for no other reason than just reading the newspaperback then. But then again, we do have a balanced portfolio within financialservices overall. If you look at the various sectors within financial servicesand a good percentage of the business is in Emea and Asia Pacific and Latin America. So if you really kind of look at our business I guess itwouldn’t surprise you per se but on balance, yeah I would say that’s probablythe thing that sticks out in my head. Michel Morin – Merrill Lynch: Okay and just I know its relatively small, but if we look at yourperformance in Mexico, just the equity gain seems to be its been a bit lowerthan what we were looking for, has there been a change there at all or …

No, no there hasn’t and in fact, the business has performed exceedingly welland that combined with our South American is really a dominant business in theregion. So there could be something that was lumpy but the business continuesto perform. Michel Morin – Merrill Lynch: Okay great and then just finally, the write-down at Futurestep, I know thatif we go back a year or two there had been a much bigger issue there, it soundslike this is just a one-off event or it seems like you’re downplaying it. Couldyou elaborate a bit more on kind of what happened here?

Well I mean, every client situation is different and this particular case,we had a result that was unfortunate but we’re not happy about it but Iwouldn’t consider it systemic or anything that I would point out other than askind of a blip in the quarter. The Futurestep people are growing the businessvery nicely. They have some momentum that they’re continuing to capitalize onand as I mentioned, I expect that over time the margins in that business willcontinue to inch up while the revenues grow. So nothing in that particular casecan be extrapolated to the rest of the business. Michel Morin – Merrill Lynch: Okay great, thanks very much guys.

Our next question from the line of Mark Marcon with Robert W. Baird, pleasego ahead. Mark Marcon – Robert W. Baird: Good morning everybody and congratulations on a terrific quarter in whatseems to be an increasingly tough environment. You know, Gary we’ve talkedabout this quite a bit, how are you going to think about things for the comingyear in terms of making investments behind the business given, you know, theheadlines that are out there and the fact that employment does lag a little bitrelative to general business economic activity. Can you also talk a little bitabout some of, a little bit more about some of the recent hires that you’vemade, because you’ve made some significant ones and is this just a start or arethings going to get tempered a little bit? Or are you going to kind of wait andsee how things play out? And then I’ve got a couple of follow-ups.

Well Mark, there’s many facets to your question there. We are absolutelyobsessed with transforming this firm and we are going to create absolutely thetop of mind brand in human capital. We are going to create a diversified HR servicesbusiness. To do that we have to invest and we are going to do that. You have tobe mindful of the cycle, there’s no question about that, which we are. Nobodyhas a crystal ball, we certainly don’t. Our intention isn’t in any kind ofdownturn to run this business with operating margins in the mid to high singledigit, I mean that’s our goal, that’s in all of our operating plans that wehave. The life blood of any services business is its people and like yourbusiness, we have to continually go out and recruit colleagues into this firmand we have to retain the colleagues that we have and so we’re committed tothat. But overall our goal is to round out a set of solutions that help ourclients, not only identify talent, but help – you know, we want to help ourclients more effectively and efficiently deploy, develop, retain and rewardtheir work force. In terms of your question about recent hires that havereceived some press, they have been absolutely what we expected and more. So ifyou look around the world and some of these hires that we’ve made, they haveexceeded our expectations Mark. Mark Marcon – Robert W. Baird: That’s great to hear. So it sounds like even though you’ve – you justarticulated a personal observation about how things may play out from acyclical perspective and maybe things slow down a little bit, it doesn’t soundlike you’re going to pull back too dramatically in terms of making investmentsbut at the same time you are committed to, under any – even if we go into adramatic downturn, still maintaining even in a dramatic downturn, a mid to highsingle digit margin, did I hear that correctly?

That’s the goal, but again Mark, we don’t have a crystal ball. I’ll tell youthat this firm, we’re in our 39th year. We’ve experienced I believefour recessions, in three of those four the business was down between 8 and10%, something like that I think Greg’s got the exact numbers. The last one wasobviously was quite unusual. We certainly wouldn’t see a situation like that.But like any business, businesses operate in a cyclical climate and whether ourbusiness lags the economy or not, you’re in a much better position to say thanwe are, but we are absolutely mindful of the world around us and that’s, youknow, we are committed Mark to running this business to mid high single digitmargins and I kind of believe personally that volatility creates opportunityand so when you talk about making investments in maybe a down part of the cycle,you have to be opportunistic and you have to have a view towards the long-term.I think the thing we’ve demonstrated to shareholders is that we’ve doneeverything we said we were going to do. We hope to be able to deliver on thatcommitment in the future. Mark Marcon – Robert W. Baird: And then just to be clear, the mid to high single digit margin is if we’rein a down turn. Obviously the margins would be a lot higher in a normaleconomic environment?

Yes. Mark Marcon – Robert W. Baird: Okay, just so there wasn’t any confusion there. And then can you talk alittle bit about the specifics on Futurestep or is that something you cannotreally talk about?

You mean like, who the client was? Probably not. Mark Marcon – Robert W. Baird: No but what the exact issue was?

No, we’re not going to talk about the specific issue, but when you’redelivering on mandates and some of the Futurestep mandates are literallyhundreds of positions, you are going to have hiccups along the way and many,many times its human nature and in a services business, is that you tend to tryto always please the client. Sometimes you over commit yourself and sometimesyou under deliver. That’s something that as a human being in any type of businesssometimes happens and in a services business it happens more often. Mark Marcon – Robert W. Baird: Do you think that we should expect situations like this to arise in thefuture or do you think this issue, even though it’s part of human nature, it’snot going to, we’re probably not going to see things like this again.

I mean, I think it’s obvious that there will be things like this in thefuture and there will also be times when we hit the cover the ball, its justpart of growing a business and just to be clear, this was a combined Korn/Ferrystep engagement so its not as if there’s a particular issue that is specific toany one component of the business. This was a combined effort that in thisparticular case, did not quite meet our client’s expectations. As Garyjust stated, the likelihood of that happening in a services business every oncein a while is pretty high. The likelihood that it happens very often is verylow. I mean our overall level of satisfaction from our clients in all of ourbusinesses is very high and we always are focused on improving in that area. Sowe take these issues very seriously when they occur because 100% satisfactionis the goal. You don’t ever get there, but that’s the goal. So certainly on ouroverall basis, this is a completely immaterial event to Korn/Ferry. It ismodestly significant to Futurestep’s margins in this particular quarter but onan overall basis, this is really kind of a blip. We’re constantly trying toimprove all of our businesses. Our people are always trying to do the best theycan for clients, every once in awhile we don’t meet their expectations butthat’s not the norm, that’s the exception. Mark Marcon – Robert W. Baird: Great, I was trying to get a feel for the frequency. Last question, withyour stock trading where it is, I’m glad to see that you’re buying back stockand you’ve got an extremely thoughtful Board – of all the things you could doit seems given your long-term trajectory how would not continuing to buy backstock aggressively at these levels, not increase shareholder value to thegreatest extent possible of anything you could do with your capital at thispoint?

Well, we look at investments in terms of where our cost of capital is and wetry to make investments that return in excess of that cost of capital. One of thosechoices obviously is we think an investment in Korn/Ferry is a greatinvestment. And we think that, you know, we’re not experts on where the stockshould be but we do think that we are building extraordinary value over thelong-term in this business and so we will continue as I mentioned in theprepared comments to look judiciously at how we can return capital toshareholders, achieve extraordinarily good returns for our shareholders and atthe same time, leave ourselves well armed to address any other strategicopportunities that also wouldn’t hit returns in excess of our cost in capital.It’s not a single source choice. We have many opportunities both in terms ofgrowing our existing businesses looking at other expansions of our businessinto the HR space, and as you mentioned buying back stock. The management teamwill continue to look at that actively. Mark Marcon – Robert W. Baird: Great. Thank you.

And the next question from the line of Kevin [McVey] with Credit Suisse,please go ahead. Kevin [McVey] – Credit Suisse: Hi, it’s Kevin McVey, I wonder if you could just give us a sense of whattype of contribution you would need by region, across the $190 to $200 millionin revenue for the third quarter guidance.

Say it again Kevin, I’m not sure… Kevin [McVey] – Credit Suisse: Steve, what type of contribution you would need from North America, South America, Europeto achieve that low to high end of the range on the revenue?

Well we’re assuming overall that the mix of business stays rather consistentto this quarter in terms of percentage mix.

Mid range of guidance would sort of imply flat outlook by region division.We do expect a slight uptick; let’s say midrange in the Futurestep business. Kevin [McVey] – Credit Suisse: And Gary would you [inaudible]the environment overall similar to what it was last quarter? I mean it feltlike August things were very tight and then September loosened up and obviouslywe’ve had a step down here, is the operating environment similar to what it wasback then when you reported the first quarter or just I guess from a macroperspective overall.

It’s a great question. You’re right in terms of how you characterize it. Ithink that’s the psychology of it, that’s how you pick up the newspaper, it wascertainly a lot of concern in August. Things kind of died down and then overthe last several weeks you’ve seen, as you pick up the newspaper every day, youcontinue to see questions, particularly as it relates to the U.S.economy. Again, we’re not economists. What I can just report to you is whatwe’re seeing and that is in Asia Pacific, continued robust demand, in Emeastrong demand and in North America we’ve seen flattishactivity over the last several months. But again in line with our expectations,the North American market is obviously a mature market. That’s really the bestthat I can report to you. Kevin [McVey] – Credit Suisse: That’s helpful. And then not to belabor financial services, but could youremind us what percentage is North America at your total financial servicesbusiness, how much is North America, kind of by region?

I think off the top of my head and Greg can correct me, but I want to saythat 35, 40% of our financial services is North America.Is that right Greg? Yeah, 35% or so of the financial services business is North America. Then it’s broken between Asia Pacific and Emea and hangon one second, we’ll give you those numbers. Kevin [McVey] – Credit Suisse: Great.

I want to elaborate just a little bit on your first question, is as Garysaid, we’re not trying to predict what will happen in the economy because Godknows, even the economists can’t quite seem to do that. But we are preparingthe business for a variety of economic scenarios including an uptick, but atthe same time we have to be prudent about how we get returns on the investmentsthat we make. So during the quarter we continued to invest in people, wecontinued to invest in our new businesses or our newer businesses and we’retrying to do that in a balanced way so that we can generate solid returnsacross all segments. Kevin [McVey] – Credit Suisse: That’s helpful. And Steve, while they’re looking that up, I wonder if youcould in terms of, what are the first kinds of areas of focus you’ll focus onnow that you’re on board and as you look out over the next couple of quarters?

I would say that the key difference between our strategy and others is thatwe have expanded our business outside of search into other non search relatedbusinesses and that key to our strategy is continuing to make excellent progressin those areas and I hope to be able to help both the Futurestep and the LDSfolks in terms of building out the scale and the profitability of theiroffering. Kevin [McVey] – Credit Suisse: Could you remind us how big LDS is right now?

I don’t know -- have we ever disclosed it?

Yeah, we’re on a run rate right now of almost $60 million and I will tellyou that its, you know, that’s up from – believe it or not that’s up from $8million probably three and a half, four years ago. That we continue to seedemand from our clients for those solutions and we’re very very encouraged bythat business. And I’d say that if you look around the world, consistently it’sthe business that receives the highest client satisfaction marks.

Yeah Kevin to answer your question on financial services, of the total 39%as Gary said is in the North America region, 32% in Europe, 20% in AsiaPacific and about 8% or so in Latin America. Kevin [McVey] – Credit Suisse: Thank you very much.

And our next question from the line of Clint Fendley with Davenport,please go ahead. Clint Fendley – Davenport & Co.: Thank you good morning gentlemen and welcome aboard Steve.

Well thank you, it’s good to be here. Clint Fendley – Davenport & Co.: Gary, when we look at your international revenue today whether it be Europeor in Asia, would you say that your searches are still driven by the needs ofU.S. based firms and how might that have changed during the past year or so?

No I would not say that and, but you’re talking about 38 countries, so Idon’t want to generalize but I’ll pick some countries. Chinafor example, I mean our strategy there, we’ve been there 13 years. We justopened our third office on the mainland. We have four in greater Chinanow. Our strategy there is to move more and more of the business to local companiesas you could imagine given the activity that’s happening. So we don’t have kindof a rep office mentality when it comes to how we expand geographically. It’s aglobal business that is executed locally. The Middle East,for example is a phenomenal opportunity for us that we started several yearsago. So generally speaking, when we look at geography we do very much have aglobal view, institutionalize how we go to market, connect it globally, but itis a local office. Our philosophy is not to have rep offices. If we’re going togo into a market, we want to be number one in that market. To do that, you haveto have a focus on building a local business. Clint Fendley – Davenport & Co.: And within Europe, how far away do you think you arefrom really moving upstream to where you’re one of the very top tier firmswithin Europe.

Well we consider ourselves to be one of the top tier firms and I will justtell you that overall even though we’ve taken this business from $260 millionof fee revenue four and a half years ago, to today $800 million, we stillbelieve that there is just phenomenal opportunity across the board to furtherdifferentiate this business and scale it. Obviously that’s subject to any kindof economic cycles but you have to look through that. And Emea is no different.We’re doing the highest level of business we’ve ever done there. We have tocontinue to make sure that as we do that we grow the margins and we growprofitably like we do in any business that we’re in. But we have a greatopportunity and what we’re seeing for example in the Middle East,what we’re seeing in Russia,what we’re seeing in – it’s exciting, it’s really exciting. The world hasflattened, there’s no question about it and we’re blessed to have a companythat has since it’s very very inception of focus on international business andthat’s what we have today. Clint Fendley – Davenport & Co.: Thank you that’s helpful.

And our next question from the line of Ross Berner with Weintraub Capital,please go ahead. Ross Berner – Weintraub Capital Management: Hey guys thanks for taking my call and nice job in a tough environment. Imissed some of the call but just wanted to see if we get a sense of what youguys are thinking about as it relates to Futurestep and do you still sort ofview it as a potential for as an independent company at some point in thefuture and as it continues to grow fairly quickly, just maybe tell us whatyou’re thinking about that?

Well we’re growing our businesses. I mean we run our leadership developmentbusiness, we run our flagship search business and we run our Futurestepbusiness. There are CEOs of those businesses, Presidents of those businesses andwe expect those businesses to scale independently. Having said that the overallstrategy of this firm is to create a series of solutions that help our clientsnot just identify talent, but help them more effectively and efficientlydeploy, develop, retain and reward their workforce. So the whole strategy ofthis firm is not to diversify for the sake of diversification but rather todevelop solutions and services that enable us to talk to clients throughout thewhole year. And so whether it’s our leadership business or our Futurestepbusiness, we believe that those businesses are adjacent to the flagshipbusiness and that they will reinforce that flagship business and drive deeperrelationships. Ross Berner – Weintraub CapitalManagement: So there’s no price – I was under the impression that at some point thatonce it got to a critical mass, that you’d maybe would be of the mindset thatit should be a separate, maybe entity, public entity or otherwise. Is that notthe think at this point or is that – I appreciate that it’s all part of thesame strategy but at one point there was a view that because it is growing so quicklyand the business that it’s in, that it’s probably a higher valuation type ofenterprise.

Once fiduciaries to all of our shareholders and obviously we need to look athow we can create the most value for shareholders through all the offerings weprovide, so if someone were to suggest some sort of structure that would allowthe value that Futurestep is creating in a business to more effectively bereturned to shareholders, I suppose we would consider that. For the moment andfor the foreseeable future, we see this as a consolidated component of ourlong-term growth strategy and more importantly a way, as Garysaid, to more effectively serve our clients across the [pamphion] of talentissues that they face. So currently we think that the best solution forFuturestep is to continue to grow and grow profitably within the context of aconsolidated Korn/Ferry. Obviously we would have to consider other alternativesif they were brought to us, but we are not considering those sorts ofalternatives at this point.

Yeah, absolutely not. I mean, today 21% of the business comes from outsideof executive search. We hope that we can articulate to shareholders the valueof those businesses inside the overall umbrella of Korn/Ferry today. Ross Berner – Weintraub CapitalManagement: Understood, thanks very much for taking the call.

It appears that there are no further questions Mr. Burnison.

Well thank you, I will say that it is challenging environment particularlywhen you read the newspaper. We don’t have a crystal ball. We are absolutelycommitted to delivering to our shareholders like we’ve done consistently overthe last 25 quarters. We have a fabulous opportunity. We’ve got a householdbrand and we’re in almost every geographic market around the world. So with that I wish everybody Season’s Greetings, Happy Holidays and thankyou for participating in this call.