The firm believes that there are probably things on the edges that it will be able to relook at or save money on, but it’s not significant. Because if the firm does begin to grow and if it gets any help from this market, it has had nothing but negative from stylistically in some of these equity market areas. The last four to six weeks have certainly been more positive, then the firm will have things that it needs to do to help that. Whatever savings the firm will probably be trying to do things to grow that will tend to offset that.

Michael Hecht (Banc of America): Could you talk a little about the outlook for the adjusted operating margin? Should we be thinking about 35% over time and can you touch on any impact you saw this quarter from your revenue days?

First of all, as long as the company continues to have to present the distribution costs that way that it has to with the accountants it is talking more of a 30% margin. If you pull those distribution numbers out, you’re talking then a 35% margin. Just to clarify.

The fact of the matter is lots of different schemes or structures relative to fee realization, general balance, it’s all average assets. Your fixed costs have no relationship to your number of days in the quarter, but certainly your revenue does. Certainly the absence of a couple of days in the midst of it does go back on the revenue and that tends to be richer dollars to the bottom line. But you’re going to have calendar day differences in many different quarters. But yes, that certainly is a dynamic.

Michael Hecht: You have talked about in the past the opportunity to sell some of the top performing marquee funds at ClearBridge institution. Can you touch on any traction you have seen on that front?

The only thing is the firm has got three Institutional accounts for ClearBridge. It’s embryonic would be too strong but it’s in the earlier stages. Although the firm has through its various marketing areas been able to do something and it will continue its concentration there has been more on their current business than on gaining new by on the Institutional track. But the company is doing both. So far what the firm has done has not been hard, and there is more room there. But you could look for that to accelerate if the large cap growth area begins to take hold. But if you look at the way flows have tended to work, there is a pronounced relationship to tide turns. The amount of flows that have gone in the international area, which is both as performance and the fact that people are looking to increase their global exposure going forward, and the percentage of flows going there are immense, if the growth group or the area of growth stocks large cap growth took hold, both the overall scenario in the ClearBridge area and the Institutional side would probably take hold together.

Prashant Bhatia (Citigroup): You were thinking about trying to put ClearBridge on a revenue share. Where you are on that front? Is it possible that will go on a revenue share sooner than later?

Revenue share isn’t within the company’s current thinking. Maybe in two years the firm might consider that but they’re not ready to do that yet. In order to get somebody on to a revenue share, it normally requires them to have stability and profitability because they take on risk as part of a revenue share that they’ve got to be prepared to take on. It’s not likely that the company would do that with ClearBridge at this time. It remains very profitable. But to take this on as an additional burden now is highly unlikely.

Prashant Bhatia: You’ve talked about you’re paying for space in multiple places right now until you can get everyone in one place and that has some duplicative type expense associated with it. How much is that today?

You’re starting to move to a level of detail that’s probably not worth factoring into the model. In this quarter you saw the occupancy jump. The firm got a lot of locations that are moving, you’ve got acceleration of current leasehold improvements and things that stack up, and that was probably a million and a half of jump. In this quarter, we indicated that this is going to sustain at that level or maybe even increase a teeny bit moving into June, as we get into the September/December quarter. The hesitation is what additional locations you may need or what additional offices may open. But the order of magnitude that you end up talking, assuming nothing got added, just the duplicity got eliminated, you’re probably talking order of magnitude about a penny or two tops per quarter.

Christopher Spahr (Deutsche Bank): Could you comment on the flows that you might be getting from overseas sources?

The offshore funds have generally done very well for the company and the firm continues to gain assets. The offshore funds have been consistent across the Americas, Europe, and Asia, but the firm has had good success in Japan with some new products, and some genuinely consistent results across the other countries.

Christopher Spahr: To maximize Legg Mason’s alpha generation, would you integrate a platform that would make more sense across your bond complex, as there maybe at least a few of them?

Western’s integrated. The only other bond capability the firm has is at Brandywine, which does have currency capabilities, basically their product that has done so well on the global side is not a trading product in the fact that they typically buy bonds and hold them for a long period of time if they’re convinced that those bonds are good value. Then they tend to have currency trading around the bonds. Probably for three of the last four years, they have been ranked number one in that category. They do have currency trading capability, and have stepped up the things they’re going to do on that. The way they run that money, though, is probably different than the way Western runs its money. That’s the only other bond activity that the company has. Everything else is contained within Western Asset and as integrated as you’re going to get when you’re operating off eight trading desks around the world. The firm has spent probably more time recently than ever on looking at where the future may be going. Therefore, the firm has taken on some new projects, Western has looked at some new things and Brandywine has looked at some new things.

Doug Sipkin (Wachovia): While the international market has been very strong, you aren’t as well-positioned there. If you take a look at some of the economic indicators and earnings reports from some of the multi-national companies it does look that’s where the bulk of global growth is coming from. How confident are you that there’s going to be this rotation given the much stronger economic underpinnings abroad than in domestic markets?

There’s no way of knowing that answer. You tend to rely on your historical knowledge. What’s happened here on the international side is that not only is it growing because those markets are growing, and those markets have done very well, which won’t go on forever, but you can’t have these markets all exploding at one time which is the way they have been that eventually will see its end. Not only have you had a growing market but you have had an amazing shift of assets that had to come from somewhere else go into this international global whatever denomination you want to put this in. You’ve had an immense shift of assets, and that maybe permanent, but that shift of assets doesn’t go on forever. At some point you’re at 26% or whatever the number is that’s going to settle at 30. The company is close to that right now. Then it will just be normal growth. It will not be this double whammy of geo, I have to go from 15% to 30% over the next two years which has been what has been so significant in this asset drive.