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Operating ExpensesThe table below presents the percentage change in each expense category and the percentage of totaloperating expenses represented by each category.Percentage of TotalPercentage Change Operating Expensesfor the fiscal years ended September 30, 2009 vs. 2008 2008 vs. 2007 2009 2008 2007Underwriting and distribution .......................... (30)% (10)% 45% 49% 52%Compensation and benefits ............................ (14)% 4% 32% 28% 26%Information systems, technology and occupancy ........... (15)% 1% 9% 8% 8%Advertising and promotion ............................ (37)% (3)% 4% 5% 5%Amortization of deferred sales commissions ............... (20)% 13% 5% 5% 4%Other ............................................. (23)% (17)% 5% 5% 5%Total Operating Expenses ........................ (24)% (5)% 100% 100% 100%Underwriting and DistributionUnderwriting and distribution expenses include payments to financial advisers and other third partiesfor providing sales, marketing and distribution services to investors in our sponsored investment products.The decreases in underwriting and distribution expenses in fiscal years 2009 and 2008 were consistent withthe 30% and 12% decreases in underwriting and distribution revenues during both periods.Compensation and BenefitsCompensation and benefit expenses decreased in fiscal year 2009 primarily due to declines in salaries,wages and benefits and variable compensation. Salaries, wages and benefits decreased $123.4 million,mainly resulting from lower staffing levels and a favorable currency impact. The decrease was partiallyoffset by severance costs of $38.4 million related to reductions to our global workforce of approximately10% announced during the first half of fiscal year 2009. Variable compensation decreased $77.1 million.The decreased expenses during fiscal year 2009 reflect in part some of the actions we have taken tocontain costs, including reducing variable compensation and not providing annual merit salary increases. Asof September 30, 2009, we had approximately 7,700 employees, a decrease from approximately 8,800 atSeptember 30, 2008.Compensation and benefit expenses increased in fiscal year 2008 primarily due to annual merit salaryadjustments that were effective December 1, 2007 and higher staffing levels. Another contributing factorwas an increase in variable compensation, primarily resulting from the impact of adopting a new accountingpronouncement in October 2006 requiring us to recognize an additional compensation expense. Theseincreases were partially offset by a one-time pre-tax charge of $16.4 million recorded in fiscal year 2007and a decrease in costs related to matching contributions under our amended and restated 1998 EmployeeStock Investment Plan.We continue to place a high emphasis on our pay for performance philosophy. As such, any changes inthe underlying performance of our sponsored investment products or changes in the composition of ourincentive compensation offerings could have an impact on compensation and benefits going forward.However, in order to attract and retain talented individuals, our level of compensation and benefits mayincrease more quickly or decrease more slowly than our revenue.45