During the quarter ended August 31, 2008, money market and liquidity funds advised by the Company’s asset management affiliates that invest primarily in corporate obligations experienced net inflows of $8.0 billion. Subsequent to quarter end, credit and liquidity conditions further deteriorated resulting in material redemptions from corporate money market and liquidity funds. In September 2008, such funds experienced net redemptions or outflows of approximately $46 billion. In September 2008, the Company purchased approximately $23 billion of securities from the funds, which are included in the Company’s condensed consolidated statement of financial condition. The securities were purchased by the Company to fund investor redemptions amidst illiquid trading markets for a wide range of money market instruments. Securities purchased included commercial paper, municipals, certificates of deposit and notes. All of the securities were short term in nature and rated A1 / P1 or better. These purchases were funded primarily through various available stabilization facilities.

Structured investment vehicles (“SIVs”) are unconsolidated entities that issue various capital notes and debt instruments to fund the purchase of assets. While the Company does not sponsor or serve as asset manager to any unconsolidated SIVs, the Company does serve as investment advisor to certain unconsolidated money market funds that have investments in securities issued by SIVs. In the second half of fiscal 2007, widespread illiquidity in the commercial paper market led to market value declines and rating agency downgrades of many securities issued by SIVs, some of which were held by the funds. As a result, the Company purchased at amortized cost approximately $900 million of such securities from the funds during fiscal 2007 and $217 million of such securities during the nine month period ended August 31, 2008. During the quarter and nine month period ended August 31, 2008, the Company recorded losses of $10 million and $283 million, respectively, on these securities.

The carrying value of the purchased securities still held by the Company as of August 31, 2008 was $490 million. Such positions are reflected at fair value, and presented in Financial instruments owned—Corporate and other debt in the condensed consolidated statements of financial condition. Subsequent to August 31, 2008, the Company has not purchased additional SIV securities from the funds. The Company has no obligation to purchase any additional SIV securities from the funds in the future. The funds continue to have investments in securities issued by SIVs, with an aggregate face value of approximately $400 million as of August 31, 2008 compared with $8.2 billion as of November 30, 2007.

The Company does not consolidate these money market and liquidity funds because the Company does not have a controlling financial interest in the funds nor is it the primary beneficiary of such funds. The Company also does not have a significant variable interest in such funds. See “Results of Operations—Asset Management” herein for Asset Management’s period-end and average customer assets under management or supervision.