Gary D. Burnison – Chief Operating Officer and CEO Steve Giusto – Chief Financial Officer

Toby Summer - Suntrust Robinson Humphrey Josh Fogel – Sidoti and Company Andrew Combs – UBS Kevin McVey – Credit Suisse Mark McComb - R.W. Baird Tye Nikavados - C.L. King Michael Morrin - Merrill Lynch

Ladies and gentlemen, thank you for standing by and welcome to the Korn/Ferry International conference call. (Operator Instructions) Before I turn the call over to your host Mr. Gary D. Burnison, let me first read a cautionary statement to investors. Certain statements made in the presentation today will constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Although the company believes the expectations reflected in such statements are based on reasonable assumptions, investors are cautioned not to place undue reliance on such statements. Actual results in future periods may differ more than is expected or desired, because of the number of risks and uncertainties which are beyond the company’s control. Additional information concerning such risk and uncertainty can be found in the company’s annual report for fiscal 2007. With that, I’ll turn the call over to Mr. Burnison. Go ahead, sir. Gary D. Burnison: Thank you, Kathy, and good morning, everyone. Today, we are pleased to announce our results for the third quarter and to discuss our outlook for the business ahead. At the end of this month, I’m going to celebrate my sixth anniversary with the firm. It’s quite remarkable to look at the tremendous progress that we’ve made in growing this business in the past 24 quarters. From essentially a mono-line firm, doing less than $300 million annually, to today’s Korn/Ferry, with three growing businesses with approximately $825 million of annualized fee revenue, including our business in Mexico. Our recently completed third quarter was no exception with revenues up 22% versus a year ago. As we look to the future, Korn/Ferry will continue to evolve to reflect and address the profound changes occurring in the human capital landscape. It’s clear to me that leading companies, in light of the demographic trends and skill shortages, are increasingly concerned by the investments induced by the talent war. Indeed, talented and skilled employees are the world’s most precious commodity and this perspective has significantly changed our business. Executive search is no longer about simply finding talent. It’s about attracting it and ensuring the best fit for the company and the executive. And secondly, it’s no longer just about recruiting top people but also, the need to more effectively and efficiently deploy, develop, retain and reward these professionals. These critical factors have influenced our business model and have driven our success year over year. And, this in fact, is tomorrow’s Korn/Ferry, a diversified talent management provider. For our third quarter, and for the first time in the history of Korn/Ferry, and the industry, consolidated fee revenues tipped $200 million, a remarkable milestone. Up 22% from the prior year, fee revenue has now improved sequentially for 18 consecutive quarters. Our third quarter was fueled by sequential improvements in all of our businesses. EPS was 37 a share, an improvement of 12%. From a geographic perspective, our business in EMEA rose 22% in a quarter. Demand throughout the region has been solid with strong performance in France and the Middle East. Due to a supply of heavy confirmations, EMEA has a solid pipeline moving into the fourth quarter. Asia Pacific was up 36%, generating a little over $25 million in revenue and the business was led by improvements in India, Japan, Korea, and Singapore. Our North American business achieved almost $95 million in revenue, up 14%, driven primarily by our industrial and life science sectors. Korn/Ferry strives to be an innovator of this industry. As executive recruiting has evolved, with greater emphasis being placed on how we can help ensure that the candidate is the best fit for both the position and the organization, Korn/Ferry has responded by the development and launch of the Korn/Ferry Advantage. It’s a framework, supported by a set of proprietary tools that’s providing us with a common approach to executive recruitment. It allows our clients to define the critical leadership competencies necessary for success. It also enables us to integrate our leadership abilities into our flagship executive recruiting. It’s now operational around the globe and client reception has been very strong. Dozens of searches have been awarded in which the Advantage was noted as the deciding factor for choosing Korn/Ferry. Process has been effective in winning engagements on all levels, including several high profile CEO searches. Turning to Future Step, activity in the middle market, an outsource recruiting segment remains solid. Future Step has now achieved 17 sequential quarters of revenue growth. For the third quarter, Future Step has generated fees of $28 million, up 26%. And also during the quarter, we secured our most significant recruitment process outsourcing win to date. In Asia, we’ve signed a 5 year contract with a multi-national, helping our client with their recruitment activity, initially expected to fill over 2,000 positions. Albeit the largest, this assignment is just one of many considerable outsource recruiting engagements that Future Step is now performing and it’s indicative of how we intend to grow and scale our business. Revenues for our leadership development solutions business also continue to grow in the quarter. Through the first three quarters, the business recorded $44 million in fee revenue with a positive margin. Leading results have been particularly strong through year to day revenue of $17 million, a 27% margin. Importantly, we’re seeing an increasing level of referrals between our leadership business and our search team with a great emphasis on joint consultative solutions. Although we, too, read the newspapers, our business has yet to see any significant deterioration due to any recessionary anxiety. Irrespective of developments in the economic environment, we will continue to pursue a strategy to evolve and transform this industry and Korn/Ferry. During the quarter, we recruited additional top flight consultants to the team, made significant progress on our KF Advantage initiative, and saw further proof from our clients that there is an increasing demand for the full array of solutions that we offer. We’re going to remain focused on our operating model. We will avoid any unnecessary spending yet we are going to retain the resources necessary to pursue our long-term vision. We’re going to continue to optimize the search business, creating a differentiated platform, while focusing on quality, leverage, and scale. We’re going to grow our leadership consulting capabilities and we’re further, going to reposition Future Step in the RPO space, which, in the long term, will drive further margin improvements. Finally, we will explore additional emerging markets for expansion opportunities; enhance our culture through the promotion of our core values and increased sense of community, and the training and development of our colleagues. The company is in great financial condition and we are absolutely well positioned for long-term success and on-going value creation for our shareholders. With that, I’d like to turn it over to our Chief Financial Officer, Steve Giusto. Steve.

Thank you, Gary, and good morning, everyone. Today, we are pleased to announce another good quarter of revenue growth for Korn/Ferry International. As Gary stated, fiscal 08 third quarter fee revenue grew 22% versus the third quarter of fiscal 07 to a new all time high of $201.2 million. On a sequential basis, even though the quarter included the normally slower holiday period, revenue grew 2.7%. Korn/Ferry’s fee revenue has now grown sequentially for 18 consecutive quarters dating back to July 2003, with fee revenues growing at a compound annual growth rate of approximately 21% over this period. Our earnings have also grown. Fiscal 08 third quarter EPS grew $0.04 or just over 12% versus the third quarter of fiscal 07. Earnings per share on a sequential basis were flat. Fiscal 08 third quarter operating earnings were down 1% year over year and 17% sequentially and our operating margin for the quarter was 10.5%. Included in our operating expenses during the quarter were approximately $1.9 million of reserves and accruals aimed at reducing our cost structure. Some of the charges are for cash outlays in the form of severance and the like that have no associated future benefit and therefore have been accrued currently although they will be paid out in the future. Absent these charges, our operating margins would have been 11.5%, 100 basis points higher than reported, but still a point and a half lower than the previous quarter, due primarily to incremental bonuses as a result of our strong growth. We may have other similar charges in the future that as we work to make our operating model more profitable over the long run. While we do not consider this type of charge unusual or material, we believe disclosing steps to rationalize our cost structure and to improve our results in the future is meaningful information to our investors. Operating margin in the fiscal 08 second quarter and in the prior year third quarter were both 13%. Included in our income for the third quarter is approximately $3 million of realized gains on the investment portfolio underlying certain long term compensation programs we maintain on behalf of our employees. It is typical for investment managers to close out certain positions at the end of the calendar year and we were the beneficiary this year of positive investment returns when this activity occurred. These gains are included in our P&L below the operating margin line as they are not a part of our fundamental operations. It is difficult to predict if we will benefit at this level again next year. Now, let me review the business segments in a little bit more detail, starting with executive recruiting. Fiscal 08 fee revenue reached $173 million, an increase of $30 million, or 21% year over year and $4 million, or 2.3% sequentially. All executive recruiting operating regents grew over third quarter fiscal 07. Fiscal 08 third quarter North America fee revenue was $94.8 million, up $12.6 million or 15.4% year over year and essentially flat sequentially. In North America, we gained ground in consumer education and healthcare but lost ground sequentially in other areas. The North America financial services practice grew almost 14% year over year but was down 6.6% sequentially for the quarter, a result not unexpected given the state of the financial services industry. Underlying market conditions in Europe remain strong in fiscal third quarter. Europe fee revenue grew 22.2% or $8.4 million versus the third quarter of fiscal year 07, reaching $46.3 million. On a sequential basis, Europe grew 10%. Trends into the fourth quarter are encouraging. And year over year, 12 of 19 local country markets have improved with all major specialty markets growing, led by industrial at 42%, life sciences at 24%, technology at 14%, and financial services at 8%. The Asia Pacific market also continues its growth trend into the third quarter of fiscal 08 with fee revenue reaching $25.3 million. Asia Pac fee revenue was up $6.7 million or 36% year over year and 2.7% sequentially. Greater China up 16% year over year, India up 101% year over year, and Australia up 37% year over year, continue to be key growth markets for the Asia Pacific region. In Latin American, fiscal 08 third quarter fee revenue improved over $2.3 million or 53% year over year. In the second quarter of this year, Latin America had remarkable revenues in sequential growth of almost 50%. Thus, on a sequential basis in the third quarter, the region was down 12%. Fiscal 08 third quarter executive search operating earnings were $29 million, up over $1.7 million or 6% year over year and down $3.9 million or 12% sequentially. Consolidated executive search operating margin was 16.8% and was off 230 basis points for the third quarter of fiscal 07. Sequentially, executive search operating margin dropped 270 basis points driven primarily by incremental productivity bonus demand and our continued investment in consultants in our core search practice as well as our leadership development solutions division. Let me now discuss head count. The number of executive search consultants at the end of third quarter was 518, down 5 consultants from the second quarter of fiscal 08. Third quarter annualized revenue from consultants was $1.9 million and is up 11.5% year over year. The number of consultants in Q3 of fiscal year 07 was 485 so year over year consultant count is up 33, or approximately 7%. Now, let’s turn to Future Step. Future Step’s fiscal 08 third quarter fee revenue improved over $5.8 million or 26% versus the third quarter of fiscal year 07 and $1.3 million or 5.0% sequentially, reaching $28.1 million. As Gary said, Future Step has now grown in 17 consecutive quarters and all geographies grew on a year over year basis. Sequential fee revenue gains were achieved in Asia Pac and Europe while North America was essentially flat. Fiscal 08 sequential fee revenue in Europe and Asia Pacific was 12% and 3% respectively. Future Steps fiscal 08 third quarter operating earnings were $2 million up $½ million sequentially. Operating margin was 7.2% in the quarter. The management team on Future Step is focused on continuing to generate solid growth while making progress on operating margins which we believe can be in double digits over the medium term. Now, let’s turn to the balance sheet. At quarter end, our worldwide capital cash balance was $298 million, up approximately $56 million sequentially. We had a good quarter of cash collections and also slowed our buy-back activity during the quarter. We are committed to on-going returns of capital to our shareholders and believe that our stock is a compelling investment given the market discount across the broad services sector. However, we also believe it is prudent during this period of economic uncertainty to retain greater financial flexibility. And we also believe that evaluations companies that we might be interested in acquiring maybe be coming down and we want to be ready to move opportunistically. We returned over $6 million in cash to our shareholders in the quarter by reducing approximately 400,000 shares. And through the end of the third quarter, the firm has now repurchased approximately 2.9 million shares of common stock with total proceeds of approximately $56.5 million. There is now approximately $43.5 million remaining of the $50 million share repurchase funds authorized by the board of directors in October 2007. At quarter end, approximately $25 million, or less than 10% of our cash and marketable securities portfolio, was invested in auction rate securities. In the last two weeks, a number of originators have experienced auction failures on a portion of their securities and we, like many others, have securities subject to these market conditions. This has not affected our overall liquidity and we do not expect any liquidity issues due to this market condition. If the market does not recover, we will assess the need to any mark to market any of these securities at year end. But to be clear, these auction rate securities we own are backed by AAA municipal bonds and a pool of federally backed student loans and are paying interest as scheduled. We do not anticipate having the need to liquidate any of these securities below par. Let me now comment on our last quarter of the fiscal year. We have completed the first month of the fourth quarter and revenues and conformations have been good. If that trend continues, we estimate that fourth quarter fee revenue will likely range from $195 million to $210 million and diluted earnings per share will likely range from $0.34 to $0.38. This estimate assumes that exchange rates stay where they are and that we continue to perform better in terms of revenue than would be inferred from reading the somewhat dire economic forecast from the business media. This is a tricky market that we are addressing with optimism and focus and some degree of caution. That concludes our prepared remarks and we would be glad to answer your questions.

Our first question is from the line of Toby Summer of Suntrust Robinson Humphrey. Please go ahead, sir. Toby Summer – Suntrust Robinson Humphrey: Thank you. I had a question for you about the accruals related to streamlining. You mentioned that they weren’t unusual and I was wondering if you could give us some colors as to whether they’re larger than they were a year ago and kind of what kind of variation you’ve had on these accruals on a quarterly basis recently.

Toby, what we’re trying to do is, we’re trying to create a cost structure that is efficient enough to generate the sorts of mid-team margins that we expected over the long term and in this quarter, we didn’t achieve that. Part of that is because we established some new reserves aimed at beginning to rationalize the cost structure. Historically, the search industry has been kind of a boom and bust cycle and we’re trying to break that cycle. So what we’re trying to do is be proactive about addressing our cost structure even though our business continues to be very strong. So what we’re doing is actively managing the cost structure to make certain that as we proceed through this next year, that we are prepared for all eventualities and that we have the most efficient cost structure that we can. And the reason that we put it the way we did, is that there could be other instances across the globe where in order to reduce costs over the long-term, we have to incur costs to make that happen. And so, we just thought it was good disclosure to let you know that. Toby Summer – Suntrust Robinson Humphrey: Absolutely, thank you, that is helpful. From a geographic perspective, were those measure focused in any one particular region or were they spread across any particular geography?

Oh, no they were across the region. Toby Summer – Suntrust Robinson Humphrey: Ok, and then you mentioned the cash balance. I was wondering if you could give us a little more color as to what sort of, what’s the spendable amount of cash versus the bonus accrual, etc. and kind of, if you could elaborate a little on the types of investments you’re holding. Thank you.

We have somewhere between 110 and by the end of the year, 150 of really truly investable cash. We think that’s modestly more than we would need just to keep running the business but as we mentioned, we want to maintain some financial flexibility through this period. What was your second question, again? I’m sorry. Toby Summer – Suntrust Robinson Humphrey: The types of investments that you’re holding with the cash balance.

Well, it’s range of things and as I mentioned, a small component of it is in auction rates, then there’s other money market funds, treasuries, etc. So, we have a very conservative cash portfolio. Toby Summer – Suntrust Robinson Humphrey: Could you just mention your prepared remarks? Again, I apologize that I didn’t write it down. What proportion that you have in auction rate of the cash balance?

A little less than 10%. Toby Summer – Suntrust Robinson Humphrey: Thank you and then the last question then I’ll get back in the queue is you mentioned that financial services is up, I think, double digit year over year for the quarter but, I think, down to the mid-single digits sequentially and I was wondering if you could comment as to what your expectation would be on that particular segment for the April quarter. Thank you.

Well, the financial services business, as you would expect, sequentially, it’s down, given everything that’s happening and there’s a couple of sectors that are depressed, particularly in North America and the UK and those are investment banking and capital markets. If you look from a geographic perspective, sequentially, Europe was down, North America was down, but Asia was up, so overall, the business sequentially was down about 9% year over year but obviously it’s up about 16 to 18%. Toby Summer – Suntrust Robinson Humphrey: Thank you very much. And as a percentage of revenue, what does it represent currently? And thank for all the color.

Sure. Financial services is about 21% of our overall firm.

Is that all, Mr. Summer?

Yes, I think he got off, Kathy.

Ok, thank you then and we’ll go to Josh Fogel with Sidoti and Company. Please go ahead. Josh Fogel – Sidoti and Company: Thank you and good morning. I have a couple of headcount questions here. Of the decline of the size between Q2 and Q3, which region or regions did that take place in?

Well, we’ve never given that out and it was down 5 on a base of 560 or 520. What we’re doing and what we have been doing is to continue to look at our workforce and to make sure that we’re optimizing our operating model and that we continually cancel out non-performers and we did that in the quarter and will continue to do that. Josh Fogel – Sidoti and Company: Ok, are you still looking to add consultants in all regions then? Is that looking forward?

Absolutely. I mean the life blood of the consulting services business, as you know, is people. Our brand is our people and our colleagues around the world. We’re incredibly proud of the 2600 employees we have and absolutely, we are aggressively looking to add to our own talent mix. But at the same time, we have to make sure that we are optimizing our operating model and that we take a candid look at our consultants. And we’ve done that now for 6 years and we’ll continue to do it. Josh Fogel – Sidoti and Company: Ok and is it possible if you have a vertical or a market that’s under-performing, how easy is it to transfer a more mature consultant into a new market or vertical?

Certainly, it’s tougher, there’s no question about it. And as this business continues to evolve, clients are expecting content knowledge around an industry. The good news for us is that the portfolio is incredibly balanced. Both geographically, half our business is outside the United States. But also from an industry perspective, if you look at the overall firm today, 21-22% of the company is in financial services, 24% is in industrial, 15-17% is in technology, life sciences is 17-18%, consumer is 17-18%. So, it’s a very very balanced portfolio. But as the years progress here, clients expect content knowledge around industry verticals and sectors within industries. Josh Fogel – Sidoti and Company: Ok and of the 33 added year over year, were those promotions or new adds? Can you break those out?

It’s a combination of both and this, when we start our new fiscal year on May 1, we will announce a new set of promotions. We’re just going through that process right now. But it’s a combination of both. Josh Fogel – Sidoti and Company: Ok and two more quick ones, if I may. I know that your share buyback slowed a little last quarter and you may want to take advantage of some of the discounts out there but is something like a dividend, a one time or a quarterly dividend a possibility here? You are sitting on a ton of cash.

Look, we’re constantly looking at what the best use of our capital is. Where we’re retaining some in the business right now, because we think there are going to be opportunities over the near term that may come our way. If we don’t use the capital in that way, we will continue to look at the best way to return capital to the shareholders and the manner in which we do that may change over time. But we haven’t declared a dividend obviously and it would require substantial discussion at the board level to decide if that was what we were going to do. For the moment, if we were to return capital, it would be through a buyback. I hope that we have demonstrated our commitment to investing our excess cash and capital in a proven manner and if you look back now over the last two to two and a half years, we have repurchased probably about 100 to 150 million or so dollars and I’m probably off a little bit, in stock and return that directly back to shareholders. We’ve also deployed excess capital via 3 acquisitions and I will tell you that those acquisitions, I’m very proud to report that they have performed above expectations. We’ve integrated them into the business and are absolutely driving incremental value. And at the same time, if you look back at our performance over the last 24 quarters, I think we’ve also committed to deliver very consistent operating earnings to the shareholders. So, try to think of this as a very balanced approach and that’s how we’re going to continue to view it. Josh Fogel – Sidoti and Company: Ok, great, and just lastly, can you comment on the trends you saw in February and also with your revenue guidance, does it assume any strength or moderation in any specific regions? Thank you.

No, thank you. It basically assumes that the trends are going to continue. EMEA has been very, very strong, particularly on the continent. The Middle East performance is doing very, very well. Asia, as you would expect, has been on fire. And in North America, despite what you read in the newspapers, we continue to see good activity and so that’s what we’re kind of basing this next quarter’s guidance on. Josh Fogel – Sidoti and Company: Great, thank you.

Next question is from Andrew Combs with UBS. Proceed. Andrew Combs – UBS: Hello. I had a question about seasonality. Looking back over the last five years, I think revenue has typically increased about 10% sequentially from Q4 over Q3. In confirmation, your searches have grown about 12%. Given new comments about how February’s shape, would you say that you feel as though February’s kind of in line with what you’ve historically seen sequentially, based on that seasonality or would you say it’s just kind of holding up to what we’ve seen in Q3? Thank you.

Andrew, I would say it’s holding up. If you look at the past several years and you look at our Q4, you’re right in terms of your comments about the sequential growth. But when you actually look at that, a lot of that has been driven by financial services. And as you know, in the investment banking capital markets worlds, a lot of activity begins to happen at the end of the calendar year when people really move around at the beginning of year. And so, to some extend that uptake has been driven by financial services and quite candidly, we just don’t see that in capital markets and investment banking, at least as it relates to North America and the UK. Andrew Combs – UBS: Ok, thanks. And then, I was wondering if you could tell us approximately what proportion of your executive search revenue comes from C level and board level searches. Thank you.

Well, that really depends on how you define it. It’s all in the definition. We’ve defined that, certainly, in our annual report. I would tell you that the majority of our business, clearly more than 50%, is in some way, in the C level or board suite around the world. And you can’t just look at average fees to draw a conclusion on that, given that our business is so broad geographically and the compensation levels in Latin America and parts of Asia are just not what we experience in the United States, for example. Andrew Combs – UBS: Ok, thank, and one final one. In terms of B per search, that continues to remain very strong. Can you talk about what some of the drivers are there and what your thought are, perhaps, as you look at your guidance? Thanks.

Well, it absolutely, as you look back over the last 12 to 16 quarters, we have demonstrated that we are absolutely committed to continuing to migrate this brand to the top of the house. And clearly, part of that increase in average fees is really based on at least 3 things. One is a implicit strategy to move the brand upstream. Secondly is if you look at some of the emerging economies, there is inflationary pressure on wages and in the talent shortages, that has driven it. And in the final piece is that if you go back in time, there was a shift away from equity to cash and that’s had an impact. So, I think it’s at least those 3 factors if you look at least at our average fee growth. Andrew Combs – UBS: Thanks, sorry. And if you could just give us some thoughts about what’s simplistic in your guidance. Thanks.

What’s simplistic in our guidance is basically steady stakes in terms of what we have seen this last quarter and in anticipation that that is going to continue. Andrew Combs – UBS: Ok, thank you.

Next, we have Kevin McVey with Credit Suisse. Go ahead. Kevin McVey – Credit Suisse: Hey, Gary and Steve, how are you? How important is the month of February to your total fourth quarter in terms of contribution, February versus March, April? Do you have any analysis that looks at how much that contributes to the quarter?

Oh, that’s like saying if you score 2 points in the first quarter, is it more meaningful than 2 points in the fourth quarter, in a basketball, game. I will tell you that looking at the business over the last several years, our fourth quarter has been driven to a large extent by financial services and the activities around capital market and investment banking. And candidly, we just don’t see that level of activity. With respect to February, that’s just a tough thing for me to answer, Kevin. Obviously, if it were not good, then that would be problematic but the fact that is was ok was helpful. I mean, you don’t want to be behind in the first quarter so the fact that we’re off to a decent start in our fourth quarter is encouraging but I think that anybody that is in business services has got to be operating with, as we said in our prepared remarks, some optimism because the world doesn’t look as bad as what the papers said but also some caution because of what the newspapers are saying. So, we think our pipeline is decent, our backlog is decent, and we hope that trend continues through the quarter and into our next fiscal year. Kevin McVey – Credit Suisse: And in terms of the percentage of financial services, it was helpful that you gave overall but can you give us a geographical breakdown on how it’s weighted? The financial services sector, how much is North America, South America, Asia Pacific? Thanks.

I’d say that, and this is off the top of my head, and Steve can look at it. I would say that 30-35% of it, something like that, is in North America. Is that right? Of the total? Of the total, yes. Let us get that, we don’t have it in front of us. We would be guessing and that would not be wise. Kevin McVey – Credit Suisse: Ok.

Why don’t you ask another question or we’ll put you in the queue and we’ll come back and answer that. Kevin McVey – Credit Suisse: And my final question, on that accrual, I know that it relates to flexibility but was that related to real estate closings?

No, it’s mostly people costs.

Question is from Mark McComb from R.W. Baird. Please go ahead. Mark McComb - R.W. Baird: Good morning, everybody. I apologize. I’m on the road and got on the call a little bit later due to some communication problems but I apologize in advance if these questions were already asked. But in terms of then, I heard one, and this is a follow up to one question. Do you plan to add in North America, to your financial services practice?

Sure. Absolutely. I believe, and again, a little counter intuitive, that volatility creates opportunity. The financial services industry is absolutely a centerpiece of the world’s economy and for us it represents about 21% of our business. And so, candidly, the next 2 or 3 quarters are going to be very very challenging in the capital markets and investment banking areas. We’ve seen a pick up in Ops and risk officers and audit and insurance. But we have to, and again, the lifeblood of our firm is our people, Mark, as you know, we have to continue to be aggressive in bringing talent into this company. We also have to be very candid about the consultants that we have and continue to make sure that we cancel out people that aren’t performing. Mark McComb - R.W. Baird: When you’re talking about adding in that particular area and being opportunistic, you’re referring to areas that may be emerging or may be established areas like investment banking? Thanks.

It would be both. We certainly have a very immediate interest in alternatives and asset management, those kinds of areas, but sure, we would also want to strengthen our investment banking and capital markets business. Mark McComb - R.W. Baird: What if those businesses end up being in a two year decline? And obviously, that’s not something that we want but it’s possible. I mean, all you have to do is read some of the more thoughtful pieces on what’s occurring economically and what’s different about this downturn relative to others and you could come to a reasonable conclusion that maybe things are going to be tough for some time, not 2 or 3 quarters.

Well, Mark, I think that’s fair comment but we’re not operating the business that way. We’re operating the business more optimistically than that but as we said, we’re not, we’re trying to do that with some caution, and we’re trying to be careful with our spending and things like that just because you don’t want to get hit by the truck you didn’t see coming. But obviously with our revenues, it doesn’t seem like we’re seeing that. And in regards to particularly financial services, we just see that as a long term opportunity where despite the breadth of our business, we have some opportunities to expand. And so, we’ll see what the economy throws us in terms of a curve ball but we’re optimistic about our opportunities in that area. Mark, with you and Steve and I and Greg, we’ve all been through a number of cycles and as Steve said, he said it very eloquently, that’s not how we’re managing the business. We are building here a diversified HR services business and it’s going to be the top in mind brand in human capital. And you know, you’ve got to have a little bit of a longer outlook. I would say, Mark, if I could, that Kevin asked a question about the financial services mix and I had said it was about 30% in North America. It’s about 40% of overall. Financial services is about 40% or so North America, 30% in Europe, 20% in Asia and the balance in Latin America. Mark McComb - R.W. Baird: How much cash do you expect to have after bonuses are paid out and when does that happen?

We expect to have about $370 million in cash after the end of the year. I don’t want to tell you exactly what we think our bonuses are going to be but at the end of the year, until the end of the year, but we’ll pay out a substantial portion of that in July and that will leave us with $150 million plus of investable cash when all is said and done but when you consider all the calls on our cash. We’re a very well capitalized business, a solid balance sheet, you know, the sort of financial condition you want to be in at any juncture of the cycle with the concerns that you raised, it’s good to have a solid balance sheet. I would also, Mark, back to your original question about investment banking and capital markets, I would say that, and as you know, we have a very balanced portfolio. But even within financial services, our historical, the amount of business that we have in investment banking and capital markets. Quite candidly, we can add to our capabilities there, it’s just if you look at financial services, we’re extremely balanced even from a sector perspective. Mark McComb - R.W. Baird: What’s your expectation with regards to the margins in North America from a longer term perspective if we look out towards next year when things are quote unquote normal?

Well, if things are normal, we expect our overall operating margins across the company to be in the mid-teens. We’ve achieved those margins for some time. We see some opportunity to continue to leverage the operating model and some of the things we’re mentioned in terms of rationalizing our cost in accomplishing that but we’re going to have to wait and see. Wouldn’t want to promise margin expansion and in the face of your comments about the economy, if we believe you, Mark. And we don’t necessarily believe that point of view but we’re trying to be, as we said, proactive about managing the cost structure to achieve appropriate returns on capital and that requires constant diligence. Mark McComb - R.W. Baird: I just spent simply to North America, and that’s the most obvious area, are you thinking that it can get back into the low 20s? Or?

Sure but I don’t know when exactly that will be, Mark. I wish I could give you a quarter as to when that’s going to happen. The North American market is about half of our revenues, more or less. It’s important to our success and it is a very strong financial performers and so, we expect great things from them. Mark McComb - R.W. Baird: I just meant whether or not this last quarter was an anomaly that is going to reverse itself or whether or not this is going to be something that.

I would say this. Over the course of this year, our people across the world and in North America have been performing very well and so there is, as we mentioned, some incremental demand for bonuses that comes out of that. That is a process that is an annual process and so we see some opportunity for a little margin expansion in the fourth quarter but we also have to make certain, as Gary as eluded, that we do the right things to continue to retain our very best people. And part of what has happened is that the very very high performers in the business have been doing very well and that kind of mechanically creates incremental bonus demand that we need to accrue for. Mark McComb - R.W. Baird: Thank you.

We’ll go next to Tye Nikavados with C.L. King. Please go ahead. Tye Nikavados - C.L. King: How are you? A couple of numbers questions and then I had a question about Future Step. Bonus accruals for the quarter and cap ex for the year?

Just in Future Step? Tye Nikavados - C.L. King: No, bonus accruals corporate wide.

The total bonus accrual was $44 million. $44 during the quarter. It’s $118 for the year. Tye Nikavados - C.L. King: Ok.

And cap ex was $4.7 million in the quarter and what is it year to date? $13 million year to date. Tye Nikavados - C.L. King: Continue to run pretty much at that rate in the fourth?

Yes. Tye Nikavados - C.L. King: Ok. On Future Step, I wasn’t sure if I heard you right. You intend to reposition Future Step?

No no no no. We have been focused on the RPO space for some time and if anything, it’s more of an intense focus in that area because we believe in scale of those sorts of engagements and the margins implicit to those sorts of engagements are where we would like to be over time. So that’s our intent with regards to RPO. Tye Nikavados - C.L. King: I see. Roughly, what is the RPO business as a percentage now of Future Step?

It’s less than 50% of the business, Tye. Tye Nikavados - C.L. King: Ok, that takes care of me. Thanks. And thanks for a terrific quarter.

Thank you, thank you.

Have a question from Michael Morrin with Merrill Lynch. Go ahead, sir. Michael Morrin - Merrill Lynch: Good morning. Actually, just following up on that last question on Future Step. Gary, did you also say that your expectation on longer term is that there’s still some room for margin performance?

Yes, we sure hope so. This is as we talked about in that in our Future Step business is that we really believe that this is a multi $100 million revenue opportunity. We also believe that the market for outsource recruiting is very very new and it’s developing. And some places, we’re actually helping to make the market and as we take on bigger, more consultative solutions for our clients, we believe that implicit in that is much more profitable engagements. Michael Morrin - Merrill Lynch: And then switching gears an also following up on what Mark was asking about in North America and the margins there, if I heard you correctly, the accruals did not impact any region other than so there wasn’t anything out of the ordinary in North American that impacted the margins for the fourth quarter?

Well, we added some people there and we’ve added bonus there so, that’s not unusual, that’s what happened. Michael Morrin - Merrill Lynch: And then finally, on your leadership development practice, I think you said that it was profitable. And I want to make sure that the numbers you provided at the very beginning included Lominger and so I think you said $44 million if I’m not mistaken.

Yes that does include Lominger. Michael Morrin - Merrill Lynch: So the ex-Lominger business today is still losing money?

Not in the quarter. Michael Morrin - Merrill Lynch: Not in the quarter?

If you look over all our firm today on a run rate basis, we’re doing about $825 or $830 million of fee revenue and almost $200 million of that comes outside of our search businesses. Run rate base Future Step at $120 million and $118 million and our leadership is about $65 million or so. Is that run rate basis correct, Michelle? Which includes Lominger. Michael Morrin - Merrill Lynch: Right, thank you.

Have a follow up with Toby Summer - Suntrust Robinson Humphrey. Go ahead. Toby Summer - Suntrust Robinson Humphrey: Thank you. You mentioned couple of times that you are positioning yourself with some cash as you see potential acquisition targets or as multiples come in. I was wondering if you could comment as to whether you’re looking at more boutique executive search firms or to add and diversity as has been your strategy in recent years. Thank.

Our strategy has absolutely not changed. We’re not doing anything different today than three years ago with respect to corporate development. We’re pragmatic, practical and so we have looked over the past several years in adjacent markets to executive recruiting and we’ve also looked at other recruiting areas. So our strategy hasn’t changed. Toby Summer - Suntrust Robinson Humphrey: Gary, in terms of the composition of any deal that you would look for, given where we are with some uncertainty in at least the headlines, would the composition over the way you would structure a deal change to more on an in or out size or something like that?

It would really depend and again, we’re kind of debating something that’s very philosophical and intellectual because we don’t have anything on the table. It would really depend on the nature of the business and with any acquisition, it’s not, the financial pieces are obviously important and the strategy is important but the most important piece in any acquisition is the people and that’s the same for our clients and that’s why we believe we have a phenomenal opportunity in our leadership business in that putting companies together. Sure, it’s about the strategy and it’s about how your structure it but first and foremost, it’s how you get people to work together and that’s all about culture. That really drives a lot of our thinking when we’re looking at possibilities like that. Toby Summer - Suntrust Robinson Humphrey: Thank you very much.

Also have a follow up from Mark McComb with R.W. Baird. Go ahead. Mark McComb - R.W. Baird: Can you go ahead and talk about the types of people that you would try to bring in in terms of level of experience. Are they requiring guarantees to come on and how quickly can they potentially run?

That, we’ve been pretty consistent in that, with that as well. We’ve probably brought on in the last 42 months or so, a little over a couple hundred consultants, half have search experience, half don’t. Today, as we’re looking at it and we’re looking at the, let’s just take the search channel which is 80% of our business today, we would tend to err towards people that have search experience. Our bias is probably moved a little bit more back towards that but in some emerging markets, we don’t have that luxury and so it will vary. But generally, we don’t have a bias today for the flagship business to bring in consultants that have proven search experience. In terms of, we just don’t, we’re not going to get caught up in a guarantee, Mark, and we haven’t and we’re not going to. It’s not fair to the consultants that we have in our firm and it’s just not in line with the culture that we’re building. Mark McComb - R.W. Baird: There are no, you’re not giving them any guarantees, per se, or nothing that’s overly material?

There’s no out right guarantees, no. Certainly I’m not going to sit here and talk about everything but the overall in terms of the philosophy, we tend to shy away from out right dollar guarantees. Mark McComb - R.W. Baird: Ok, terrific. Thank you.

Mr. Burnison, we have no further questions. Please go ahead with your closing remarks. Gary D. Burnison: Well, thank you. Thank you for the questions. Thank you for taking the time to listen and have interest in our company. We have a fabulous company here and you certainly pick up the newspapers every day and it’s going to be a challenging next few quarters, I think. But we’ve got a firm here that we’re building for the long term. We’ve got a great brand and we operate in almost every geographic center around the world and it’s really overall an industry that is being driven by skill shortage, demographic trends, and globalization and we believe we’re at the epicenter over what a leading company really needs to get right. And that’s their people strategy so we’re extremely bullish on our firm and what we’re building here and we thank you for your interest. We’ll talk to you next time.