Legg Mason is a global asset management firm. The company provides active asset management in many major investment centers throughout the world. Legg Mason is headquartered in Baltimore, Maryland, and its common stock is listed on the New York Stock Exchange (symbol: LM).

Legg Mason

SOURCE: Legg Mason

Mary Athridge of Legg Mason, +1-212-805-6035 Web Site: http://www.leggmason.com

For the full fiscal year 2008, the Company achieved record revenues of $4.63 billion, up 7% from $4.34 billion in fiscal 2007. Net income for fiscal 2008 was $267.6 million, or $1.86 per diluted share, representing a decrease of 59% and 58%, respectively, from fiscal 2007 results. Cash income, as adjusted, for the year was $877.0 million, or $6.09 per diluted share, both representing an increase of 4% from fiscal 2007.

Assets Under Management ("AUM") at the end of fiscal 2008 were $950.1 billion, down 5% from $998.5 billion at December 31, 2007, and down 2% from $968.5 billion at the end of fiscal 2007.

Comments on the Fourth Fiscal Quarter and Fiscal Year 2008 Results

Mark R. Fetting, President and Chief Executive Officer, said, "This past quarter was among the most difficult we have ever faced and we are disappointed with our results. We remain a fundamentally strong firm today, but we know we have work to do. We are fully focused on restoring our historically strong investment performance across the board, despite the challenges of continued market volatility and investor uncertainty.

"In the quarter just ended, we continued to provide, on a proactive basis, financial support to several of our money market funds. The non-cash charges from this support led to a net loss for the quarter. We also incurred a non-cash charge for a write-down of certain acquired management contracts. Our actions on behalf of the money market funds have been dilutive to our earnings for two consecutive quarters, but we are resolute in our view that these have been prudent and proper actions to take. We will stay vigilant going forward.

"Excluding these two non-cash charges, cash income, as adjusted, was $178.5 million for the fourth quarter. Our overall earnings power remains strong and our annual revenues of $4.63 billion in fiscal 2008 represented a record for Legg Mason. The diversification and global scale of our managers are key elements of our competitive advantage as a firm. We have major managers who are performing very well in a tough investment climate, and we are seeing growth outside the U.S., but we know that we need our U.S. equity managers to return to form, and this is a top priority."

Assets Under Management Decreased to $950 Billion

AUM decreased to $950.1 billion as of March 31, 2008, down $48.4 billion, or 5%, from $998.5 billion at December 31, 2007, primarily as a result of market depreciation of $28.5 billion in the fourth quarter and net client cash outflows of $19.2 billion. Equity outflows were $17 billion and fixed income outflows were $7 billion for the quarter, while liquidity inflows totaled $5 billion.

Average AUM during the quarter were $975 billion, compared to $1,014 billion in the third quarter of fiscal 2008 and $959 billion in the fourth quarter of fiscal 2007. At March 31, 2008, equity products represented 29% of AUM, fixed income represented 53% and liquidity represented 18%. By business division, 54% of total AUM were in Institutional, 40% in Managed Investments and 6% in Wealth Management. Assets managed for non-U.S. domiciled clients represented 34% of total AUM at March 31, 2008.

For the fiscal year 2008, total AUM declined by $18.4 billion, or 2%, from $968.5 billion at March 31, 2007. Despite the challenging markets, Western Asset, Permal and Brandywine each grew their AUM in fiscal 2008.

Comparison to the Fourth Quarter of Fiscal Year 2007

Revenues decreased 6% from the prior year quarter, reflecting lower investment advisory fees as a result of the decline in performance fees and year-over-year changes in the mix of equity and fixed income assets. Operating expenses increased by 7% from the prior year quarter, primarily due to the $151 million write-down of certain acquired management contracts. Other non-operating expenses were $530.5 million, driven by approximately $517.2 million of losses and other costs related to the Company's money market fund support. For the quarter, the Company incurred a net loss of $255.5 million, or $1.81 per diluted share, down from net income of $172.5 million, or $1.19 per diluted share, in the fourth quarter of fiscal 2007. The diluted loss per share included a net charge of $2.06 for the support of the money market funds and a net charge of $0.66 for the write-down of certain acquired management contracts. Cash income (please refer below) was a loss of $207.3 million, or $1.47 per diluted share, compared to cash income of $222.4 million, or $1.54 per diluted share, in the fourth quarter of fiscal 2007. Cash income, as adjusted, was $178.5 million, or $1.25 per diluted share, compared to $222.4 million, or $1.54 per diluted share, in the comparable period last fiscal year.

The pre-tax profit margin decreased to (36.7%) from 24.0% in the fourth quarter of fiscal 2007. The pre-tax profit margin, as adjusted, was 30.1%, down from 33.3% in the prior fiscal year quarter.

Results for Fiscal Year 2008

Total revenues for fiscal 2008 were $4.63 billion, up 7% from the prior fiscal year, primarily driven by an increase in fund advisory fees of 15%. Performance fees decreased for the year by 7%, to $132.7 million. Net income was $267.6 million, down 59% from $646.8 million in fiscal 2007. Earnings were $1.86 per diluted share, a decrease of 58% from $4.48 in fiscal 2007. Cash income for the year was $468.5 million, or $3.25 per diluted share, compared to cash income of $846.0 million, or $5.86 per diluted share, in fiscal 2007. Cash income, as adjusted, was $877.0 million, or $6.09 per diluted share, both up 4% from $846.0 million, or $5.86 per diluted share, for the corresponding previous fiscal year.

The pre-tax profit margin for fiscal 2008 was 9.6%, compared to 24.0% for fiscal 2007. The pre-tax profit margin, as adjusted, was 32.8%, down slightly from 33.2% in fiscal 2007.

Comparison to the Third Quarter of Fiscal Year 2008

Revenues of $1.07 billion decreased 10% from $1.19 billion in the prior quarter ended December 31, 2007. There was a loss of $255.5 million in the quarter, compared to net income of $154.6 million in the prior quarter. The decline in net income was largely the result of the non-cash charges to support money market funds and the write-down of certain acquired management contracts. Cash income was a loss of $207.3 million, or $1.47 per diluted share, compared to cash income of $205.1 million, or $1.42 per diluted share, in the third quarter of fiscal 2008. Cash income, as adjusted, of $178.5 million, or $1.25 per diluted share, represented a decrease of 22% and 21%, respectively, compared to the third quarter of fiscal 2008.

The pre-tax profit margin was (36.7%) compared to 20.8% in the prior quarter. The pre-tax profit margin, as adjusted, was 30.1%, down from 33.0% in the prior quarter.

Business Developments

The adverse market conditions in the quarter were challenging for all divisions, though the Company's investment managers continued to expand their distribution into key opportunity markets and to launch select new products. Several managers received significant industry recognition for their products and performance.

    Highlights for the quarter include:

    -- The Municipal Bond team at Western Asset won the 2007 year-end Lipper
       award for Outstanding Fixed Income performance on a 1-year, 3-year and
       5-year basis.

    -- Five portfolios managed by The Royce Funds were awarded the 2007 Lipper
       Performance Achievement Award: the Royce Opportunity Fund (for 10-year
       performance), the Royce Value Plus Fund (for 5-year performance), the
       Royce Focus Trust (for 1-year, 5-year and 10-year performance), the
       Royce Micro-Cap Trust (for 5-year performance) and the Royce Capital
       Fund, Micro-Cap Portfolio (for 10-year performance).

    -- In the 2008 Investment Performance Awards from AsianInvestor:
       -- Brandywine Global won awards in the Global Fixed Income category for
          its 3-year and 10-year risk-adjusted performance
       -- Batterymarch won top honors in the Asia Equities (excluding Japan)
          category for its 5-year performance
       -- Legg Mason International Equities won in the Hong Kong Equities
          category for its 10-year performance.

    -- Batterymarch portfolio managers Curtis Butler and Ray Prasad were named
       Citywire Top Managers of the Year for their performance with the Legg
       Mason Asia Pacific Fund.

    -- Permal extended its successful global launch of a fund-of-hedge funds
       offering generally designed to invest in the Silk Road region and in
       other global emerging regions. The firm also launched several
       structured products and added new share classes to its existing product
       lines to facilitate continued strong growth in Asian markets including
       China, Singapore, Malaysia and Korea. Permal also funded several new
       mandates that increased its penetration of the U.S. institutional
       market.

    -- Brandywine Global launched new currency classes for a global bond fund
       and extended one of its core equity products into the separate account
       space, in response to increased demand.

Balance Sheet

At March 31, 2008, Legg Mason's cash position, including cash equivalents, repurchase agreements and cash restricted for collateral purposes, was $2.9 billion, total debt was $2.8 billion and stockholders' equity was $6.6 billion. The ratio of total debt to total capital (total equity plus total debt) was 29%.

Use of Supplemental Data as Non-GAAP Performance Measures

Cash Income and Cash Income, as Adjusted

As supplemental information, we are providing performance measures that are based on methodologies other than generally accepted accounting principles ("non-GAAP") for "cash income" and "cash income, as adjusted" that management uses as benchmarks in evaluating and comparing the period-to-period operating performance of Legg Mason, Inc. and its subsidiaries.

We define "cash income" as net income plus amortization and deferred taxes related to intangible assets. We define "cash income, as adjusted" as cash income plus net money market fund support losses and impairment charges.

We believe that cash income and cash income, as adjusted, provide a good representation of our operating performance adjusted for non-cash acquisition related and other items that facilitate comparison of our results to prior period results and to the results of other asset management firms that have not engaged in significant acquisitions or money market fund support transactions.

We also believe that cash income and cash income, as adjusted, are important metrics in estimating the value of an asset management business. These measures are provided in addition to net income, but are not a substitute for net income and may not be comparable to non-GAAP performance measures, including measures of cash earnings or cash income, of other companies. Further, cash income and cash income, as adjusted, are not liquidity measures and should not be used in place of cash flow measures determined under GAAP. Legg Mason considers cash income and cash income, as adjusted, to be useful to investors because they are important metrics in measuring the economic performance of asset management companies, as indicators of value, and because they facilitate comparisons of Legg Mason's operating results with prior period results and the results of other asset management firms that have not engaged in significant acquisitions or money market fund support transactions.

In calculating cash income, we add the impact of the amortization of intangible assets from acquisitions, such as management contracts, to net income to reflect the fact that these non-cash expenses distort comparisons of Legg Mason's operating results with the results of other asset management firms that have not engaged in significant acquisitions. Deferred taxes on indefinite-life intangible assets and goodwill represent actual tax benefits that are not realized under GAAP absent an impairment charge or the disposition of the related business. Because we actually receive these tax benefits on indefinite-life intangibles and goodwill, we add them to net income in the calculation of cash income. In calculating cash income, as adjusted, we add net money market fund support losses and net impairment charges to cash income to reflect that these charges distort comparisons of Legg Mason's operating results to prior period results and the results of other asset management firms.

Should a disposition or impairment charge for indefinite-life intangibles or goodwill occur, its impact on cash income and cash income, as adjusted, may distort actual changes in the operating performance or value of our firm. Accordingly, we monitor changes in indefinite-life intangible assets and goodwill and the related impact on cash income and cash income, as adjusted, to ensure appropriate explanations accompany such disclosures. The impairment charge on amortizable management contracts recognized in the March 31, 2008 quarter impacts both cash income and cash income, as adjusted, because any decrease in value is already reflected in reduced revenues. Further, like other amortizable intangibles, no adjustment for deferred taxes has been previously reflected in cash income.

Although depreciation and amortization on fixed assets are non-cash expenses, we do not add these charges in calculating cash income or cash income, as adjusted, because these charges are related to assets that will ultimately require replacement.

Reconciliations of net income to non-GAAP cash income and cash income, as adjusted, are presented below.

Pre-Tax Profit Margin from Continuing Operations, As Adjusted for Distribution and Servicing Expense, Money Market Fund Support Losses and Impairment Charges

Legg Mason believes that pre-tax profit margin from continuing operations adjusted for distribution and servicing expense, money market fund support losses (net of related compensation adjustments) and impairment charges is a useful measure of our performance because it indicates what our margins would have been without the distribution revenues that are passed through to third parties as a direct cost of selling our products, money market fund support losses and impairment charges that we do not consider part of our core business metrics, and thus it shows the effect of these items on our margins. Further, money market fund support losses and impairment charges distort comparisons of Legg Mason's pre-tax profit margin to prior period profit margins and the profit margins of other asset management firms that have not engaged in significant acquisitions or money market fund support transactions. This measure is provided in addition to the Company's pre-tax profit margin from continuing operations calculated under GAAP, but is not a substitute for calculations of margin under GAAP and may not be comparable to non-GAAP performance measures, including measures of adjusted margins, of other companies. Reconciliations of consolidated pre-tax profit margin from continuing operations, as adjusted, to pre-tax profit margin under GAAP, are presented below.

Conference Call to Discuss Results

A conference call to discuss the Company's results, hosted by Mr. Fetting, will be held at 10 a.m. E.D.T. today. The call will be open to the general public. Interested participants should access the call by dialing 1-866-793- 1306 (or for international calls 1-703-639-1308) at least 10 minutes prior to the scheduled start to ensure connection.

A replay or transcript of the live broadcast will be available on the Legg Mason website, in the investor relations section, or by dialing 1-888-266-2081 (or for international calls 1-703-925-2533), access Pin Number 1234949, after completion of the call. Please note that the replay will be available beginning at 1:00 p.m., E.D.T. on Tuesday, May 6, 2008 and ending on May 20, 2008.

About Legg Mason

Legg Mason is a global asset management firm, with $950 billion in assets under management as of March 31, 2008. The Company provides active asset management in many major investment centers throughout the world. Legg Mason is headquartered in Baltimore, Maryland, and its common stock is listed on the New York Stock Exchange (symbol: LM).

    This release contains forward-looking statements subject to risks,
uncertainties and other factors that may cause actual results to differ
materially. For a discussion of these risks and uncertainties, see "Risk
Factors" and "Management's Discussion and Analysis of Financial Condition and
Results of Operations" in Legg Mason's Annual Report on Form 10-K for the
fiscal year ended March 31, 2007 and its subsequent quarterly reports on Form
10-Q.



                      LEGG MASON, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF INCOME
               (Amounts in thousands, except per share amounts)
                                 (Unaudited)

                                    Quarters Ended              % Change
                                                             March     March
                                                              2008      2008
                                                           Compared   Compared
                                                               to        to
                               March    December    March   December   March
                                2008       2007      2007     2007      2007

    Operating Revenues:
      Investment advisory fees:
        Separate accounts     $341,797   $365,735   $376,311    (6.5)%  (9.2)%
        Funds                  558,382    593,375    542,696    (5.9)    2.9
        Performance fees         3,258     50,848     37,514   (93.6)  (91.3)

      Distribution and service
       fees                    158,721    172,637    181,533    (8.1)  (12.6)
      Other                      6,965      4,049      3,743    72.0    86.1
         Total operating
          revenues           1,069,123  1,186,644  1,141,797    (9.9)   (6.4)

    Operating Expenses:
      Compensation and
       benefits                326,899    366,377    404,906   (10.8)  (19.3)
      Distribution and
       servicing               304,674    326,698    317,863    (6.7)   (4.1)
      Communications and
       technology               52,326     45,400     46,125    15.3    13.4
      Occupancy                 32,896     34,303     28,856    (4.1)   14.0
      Amortization of
       intangible assets        13,686     14,155     16,714    (3.3)  (18.1)
      Impairment of management
       contracts               151,000        -          -       n/m     n/m
      Other                     50,038     57,720     54,879   (13.3)   (8.8)
         Total operating
          expenses             931,519    844,653    869,343    10.3     7.2

    Operating Income           137,604    341,991    272,454   (59.8)  (49.5)

    Other Income (Expense)
      Interest income           22,922     19,356     15,707    18.4    45.9
      Interest expense         (28,073)   (20,837)   (18,107)   34.7    55.0
      Other                   (525,341)   (93,518)     4,241   461.8     n/m
         Total other income
          (expense)           (530,492)   (94,999)     1,841   458.4     n/m

    Income (Loss) from
     Operations before Income
     Tax Provision (Benefit)
     and Minority Interests   (392,888)   246,992    274,295  (259.1) (243.2)

      Income tax provision
       (benefit)              (137,488)    92,319    102,046  (248.9) (234.7)

    Income (Loss) from
     Operations before
     Minority Interests       (255,400)   154,673    172,249  (265.1) (248.3)

      Minority interests,
       net of tax                  (51)       (91)       225   (44.0)    n/m

    Net Income (Loss)        $(255,451)   $154,582  $172,474  (265.3) (248.1)


    n/m - not meaningful



                      LEGG MASON, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF INCOME
               (Amounts in thousands, except per share amounts)
                                 (Unaudited)
                                 (continued)

                                    Quarters Ended              % Change
                                                             March     March
                                                              2008      2008
                                                           Compared   Compared
                                                               to        to
                               March    December    March  December    March
                                2008       2007      2007     2007      2007
Net income (loss)
 per share:
  Basic                    $(1.81)     $1.09     $1.22      (266.1)% (248.4)%

  Diluted                  $(1.81)     $1.07     $1.19      (269.2)  (252.1)

 Weighted average number
  of shares outstanding:
    Basic                 141,132    142,297   141,590
    Diluted(1)            141,132    144,018   144,549


    (1) Basic shares outstanding used for diluted earnings per share
    calculation due to loss for period

    n/m - not meaningful



                      LEGG MASON, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF INCOME
               (Amounts in thousands, except per share amounts)
                                 (Unaudited)

                                        For the Twelve Months Ended
                                           March 2008   March 2007   % Change
    Operating Revenues:
      Investment advisory fees:
        Separate accounts                  $1,464,512   $1,445,796      1.3%
        Funds                               2,319,788    2,023,140     14.7
        Performance fees                      132,740      142,245     (6.7)
      Distribution and service fees           692,277      716,402     (3.4)
      Other                                    24,769       16,092     53.9
          Total operating revenues          4,634,086    4,343,675      6.7

    Operating Expenses:
      Compensation and benefits             1,569,517    1,568,568      0.1
      Distribution and servicing            1,273,986    1,196,019      6.5
      Communications and technology           192,821      174,160     10.7
      Occupancy                               129,425      100,180     29.2
      Amortization of intangible assets        57,271       68,410    (16.3)
      Impairment of management contracts      151,000          -        n/m
      Other                                   209,890      208,040      0.9
          Total operating expenses          3,583,910    3,315,377      8.1

    Operating Income                        1,050,176    1,028,298      2.1

    Other Income (Expense)
      Interest income                          76,923       58,916     30.6
      Interest expense                        (82,681)     (71,474)    15.7
      Other                                  (600,547)      28,114      n/m
          Total other income (expense)       (606,305)      15,556      n/m

    Income from Continuing Operations
     before Income Tax Provision and
     Minority Interests                       443,871    1,043,854    (57.5)

      Income tax provision                    175,995      397,612    (55.7)

    Income from Continuing Operations
      before Minority Interests               267,876      646,242    (58.5)

      Minority interests, net of tax             (266)           4      n/m

    Income from Continuing Operations         267,610      646,246    (58.6)

      Gain on sale of discontinued
       operations, net of tax                     -            572      n/m

    Net Income                               $267,610     $646,818    (58.6)


    n/m - not meaningful



                      LEGG MASON, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF INCOME
               (Amounts in thousands, except per share amounts)
                                 (Unaudited)
                                 (continued)


                                      For the Twelve Months Ended
                                          March 2008  March 2007   % Change
    Net income per share:
      Basic
        Income from continuing operations     $1.88       $4.58     (59.0)%
        Gain on sale of discontinued
         operations                             -           -         n/m
                                              $1.88       $4.58     (59.0)

      Diluted
        Income from continuing operations     $1.86       $4.48     (58.5)
        Gain on sale of discontinued
         operations                             -           -         n/m
                                              $1.86       $4.48     (58.5)

    Weighted average number of shares
      outstanding:
        Basic                               142,018     141,112
        Diluted                             143,976     144,386


    n/m - not meaningful



                      LEGG MASON, INC. AND SUBSIDIARIES
                              SUPPLEMENTAL DATA

             RECONCILIATION OF NET INCOME (LOSS) TO CASH INCOME,
                         AND CASH INCOME, AS ADJUSTED
               (Amounts in thousands, except per share amounts)
                                 (Unaudited)

                                    Quarters Ended              % Change
                                                             March     March
                                                              2008      2008
                                                           Compared   Compared
                                                               to        to
                               March    December    March   December   March
                                2008      2007       2007     2007      2007

    Net Income (Loss)       $(255,451)  $154,582  $172,474   (265.3)% (248.1)%

      Plus:
          Amortization of
           intangible assets   13,686     14,155    16,714     (3.3)   (18.1)
          Deferred income
           taxes on intangible
           assets              34,475     36,385    33,261     (5.2)     3.6

    Cash Income (Loss)       (207,290)   205,122   222,449   (201.1)  (193.2)

      Plus:
          Net money market
           fund support(1)    290,954     22,771       -        n/m      n/m
          Impairment of
           management
           contracts(2)        94,813        -         -        n/m      n/m

    Cash Income, as adjusted $178,477   $227,893  $222,449    (21.7)   (19.8)

    Net Income (Loss) per
     Diluted Share             $(1.81)     $1.07     $1.19   (269.2)  (252.1)

      Plus:
          Amortization of
           intangible assets     0.10       0.10      0.12        -    (16.7)
          Deferred income taxes
           on intangible assets  0.24       0.25      0.23     (4.0)     4.3

    Cash Income (Loss) per
     Diluted Share              (1.47)      1.42      1.54   (203.5)  (195.5)

      Plus:
          Net money market
           fund support(1)       2.06       0.16        -       n/m      n/m
          Impairment of
           management
           contracts(2)          0.66         -         -       n/m      n/m

    Cash Income per Diluted Share,
     as adjusted                $1.25      $1.58      $1.54   (20.9)   (18.8)


    (1) Includes related adjustments to compensation and income tax benefits
    (2) Net of income tax benefit

    n/m - not meaningful



                      LEGG MASON, INC. AND SUBSIDIARIES
                              SUPPLEMENTAL DATA

                 RECONCILIATION OF NET INCOME TO CASH INCOME,
                         AND CASH INCOME, AS ADJUSTED
               (Amounts in thousands, except per share amounts)
                                 (Unaudited)


                                       For the Twelve Months Ended
                                          March 2008  March 2007    % Change

    Net Income                              $267,610    $646,818     (58.6)%

      Plus:
         Amortization of intangible assets    57,271      68,410     (16.3)
         Deferred income taxes on
          intangible assets                  143,600     130,758       9.8

    Cash Income                              468,481     845,986     (44.6)

      Plus:
         Net money market fund support(1)    313,726         -         n/m
         Impairment of management
          contracts(2)                        94,813         -         n/m

    Cash Income, as adjusted                $877,020    $845,986       3.7

    Net Income per Diluted Share               $1.86       $4.48     (58.5)

      Plus:
         Amortization of intangible assets      0.40        0.47     (14.9)
         Deferred income taxes on intangible
          assets                                0.99        0.91       8.8

    Cash Income per Diluted Share               3.25        5.86     (44.5)

      Plus:
         Net money market fund support(1)       2.18         -         n/m
         Impairment of management contracts(2)  0.66         -         n/m

    Cash Income per Diluted Share, as
     adjusted                                  $6.09       $5.86       3.9


    (1) Includes related adjustments to compensation and income tax benefits
    (2) Net of income tax benefit

    n/m - not meaningful



                      LEGG MASON, INC. AND SUBSIDIARIES
                              SUPPLEMENTAL DATA

          PRE-TAX PROFIT MARGIN FROM CONTINUING OPERATIONS ADJUSTED
    FOR DISTRIBUTION AND SERVICING EXPENSE, MONEY MARKET FUND SUPPORT AND
                                  IMPAIRMENT
                            (Amounts in thousands)
                                 (Unaudited)

                                    Quarters Ended              % Change
                                                             March     March
                                                              2008      2008
                                                           Compared   Compared
                                                               to        to
                               March    December    March   December   March
                                2008       2007      2007     2007      2007

    Operating Revenues, GAAP
     basis                  $1,069,123 $1,186,644 $1,141,797   (9.9)%   (6.4)%

       Less:
         Distribution and
          servicing expense    304,674    326,698    317,863   (6.7)    (4.1)

    Operating Revenues, as
     adjusted                 $764,449   $859,946   $823,934  (11.1)    (7.2)

    Income (Loss) from
     Continuing Operations
     before Income Tax
     Provision (Benefit)
     and Minority Interests,
     GAAP Basis              $(392,888)  $246,992   $274,295 (259.1)  (243.2)

       Plus:
           Net money market
            fund support(1)    471,871     36,433        -      n/m      n/m
           Impairment of
            management
            contracts          151,000        -          -      n/m      n/m

    Income from Continuing
     Operations before Income
     Tax Provision and Minority
     Interests, as adjusted   $229,983   $283,425   $274,295  (18.9)   (16.2)


    Pre-tax profit margin,
     GAAP basis                  (36.7)%     20.8%      24.0%
    Pre-tax profit margin, as
     adjusted                     30.1       33.0       33.3


    (1) Includes related adjustments to compensation

    n/m - not meaningful



                      LEGG MASON, INC. AND SUBSIDIARIES
                              SUPPLEMENTAL DATA

          PRE-TAX PROFIT MARGIN FROM CONTINUING OPERATIONS ADJUSTED
    FOR DISTRIBUTION AND SERVICING EXPENSE, MONEY MARKET FUND SUPPORT AND
                                  IMPAIRMENT
                            (Amounts in thousands)
                                 (Unaudited)


                                          For the Twelve Months Ended
                                            March 2008    March 2007  % Change

    Operating Revenues, GAAP basis          $4,634,086    $4,343,675     6.7%

      Less:
        Distribution and servicing expense   1,273,986     1,196,019     6.5

    Operating Revenues, as adjusted         $3,360,100    $3,147,656     6.7

    Income from Continuing Operations
     before Income Tax Provision and
     Minority Interests, GAAP Basis           $443,871    $1,043,854   (57.5)

      Plus:
        Net money market fund support(1)       508,304           -       n/m
        Impairment of management contracts     151,000           -       n/m

    Income from Continuing Operations
     before Income Tax Provision and Minority
     Interests, as adjusted                  $1,103,175    $1,043,854    5.7


    Pre-tax profit margin, GAAP basis               9.6%         24.0%
    Pre-tax profit margin, as adjusted             32.8          33.2


    (1) Includes related adjustments to compensation

    n/m - not meaningful



                      LEGG MASON, INC. AND SUBSIDIARIES
                           ASSETS UNDER MANAGEMENT
                            (Amounts in billions)
                                 (Unaudited)

                                               Quarters Ended
                               March    December   September   June     March
                                2008      2007       2007      2007      2007
    By asset class:
     Equity                   $271.6     $320.8     $343.9    $352.3    $338.0
     Fixed Income              508.2      514.5      506.0     479.2     470.9
     Liquidity                 170.3      163.2      161.7     160.9     159.6
       Total                  $950.1     $998.5   $1,011.6    $992.4    $968.5

    By asset class (average):
     Equity                   $292.5     $335.6     $341.6    $349.3    $338.5
     Fixed Income              514.4      512.9      492.2     475.9     465.0
     Liquidity                 168.4      165.2      160.9     159.7     155.4
       Total                  $975.3   $1,013.7     $994.7    $984.9    $958.9

    By client domicile:
     US                       $622.7     $661.0     $675.7    $659.9    $644.5
     Non-US                    327.4      337.5      335.9     332.5     324.0
      Total                   $950.1     $998.5   $1,011.6    $992.4    $968.5

    By division:
     Managed Investments      $376.6     $398.8     $411.4    $414.2    $403.2
     Institutional             511.4      532.4      530.3     506.8     496.3
     Wealth Management          62.1       67.3       69.9      71.4      69.0
       Total                  $950.1     $998.5   $1,011.6    $992.4    $968.5



                      LEGG MASON, INC. AND SUBSIDIARIES
                 COMPONENT CHANGES IN ASSETS UNDER MANAGEMENT
                            (Amounts in billions)
                                 (Unaudited)

                                               Quarters Ended
                                    March   December  September  June    March
                                     2008     2007      2007     2007     2007

     Beginning of period            $998.5  $1,011.6   $992.4  $968.5  $944.8
     Net client cash flows           (19.2)     (9.1)     0.3     1.7    13.6
     Market performance and other    (28.5)     (4.0)    18.9    23.5    10.4
     Acquisitions (Dispositions),
      net                             (0.7)        -        -    (1.3)   (0.3)
     End of period                  $950.1    $998.5 $1,011.6  $992.4  $968.5

     BY DIVISION

                                                Quarters Ended
                                   March   December  September  June    March
    Managed Investments             2008     2007     2007      2007     2007
      Beginning of period           $398.8   $411.4   $414.2   $403.2  $384.8
      Net client cash flows           (5.1)    (6.1)    (8.8)    (3.3)   10.2
      Market performance and other   (16.4)    (6.5)     6.0     14.3     8.2
      Acquisitions (Dispositions),
       net                            (0.7)       -        -        -       -
      End of period                 $376.6   $398.8   $411.4   $414.2  $403.2

    Institutional
      Beginning of period           $532.4   $530.3   $506.8   $496.3  $492.1
      Net client cash flows          (11.7)    (0.2)     9.9      4.6     2.7
      Market performance and other    (9.3)     2.3     13.6      5.9     1.5
      Acquisitions (Dispositions),
       net                               -        -        -        -       -
      End of period                 $511.4   $532.4   $530.3   $506.8  $496.3

    Wealth Management
      Beginning of period            $67.3    $69.9    $71.4    $69.0   $67.9
      Net client cash flows           (2.4)    (2.8)    (0.8)     0.4     0.7
      Market performance and other    (2.8)     0.2     (0.7)     3.3     0.7
      Acquisitions (Dispositions),
       net                               -        -        -     (1.3)   (0.3)
      End of period                  $62.1    $67.3    $69.9    $71.4   $69.0

    Note:  Immaterial differences may result from the rounding of quarterly
           amounts.



                      LEGG MASON, INC. AND SUBSIDIARIES
                 COMPONENT CHANGES IN ASSETS UNDER MANAGEMENT
                            (Amounts in billions)
                                 (Unaudited)

                                                      Fiscal Year Ended
                                                  March 2008      March 2007
    Beginning of period                            $968.5           $867.6
    Net client cash flows                           (26.3)            44.2
    Market performance and other                      9.9             57.5
    Acquisitions (Dispositions), net                 (2.0)            (0.8)
    End of period                                  $950.1           $968.5

    BY DIVISION
                                                     Fiscal Year Ended
    Managed Investments                          March 2008       March 2007
      Beginning of period                          $403.2           $356.5
      Net client cash flows                         (23.2)            23.5
      Market performance and other                   (2.7)            23.3
      Acquisitions (Dispositions), net               (0.7)            (0.1)
      End of period                                $376.6           $403.2

    Institutional
      Beginning of period                          $496.3           $444.8
      Net client cash flows                           2.5             21.7
      Market performance and other                   12.6             30.2
      Acquisitions (Dispositions), net                  -             (0.4)
      End of period                                $511.4           $496.3

     Wealth Management
      Beginning of period                           $69.0            $66.3
      Net client cash flows                          (5.6)            (1.0)
      Market performance and other                      -              4.0
      Acquisitions (Dispositions), net               (1.3)            (0.3)
      End of period                                 $62.1            $69.0


    Note:  Immaterial differences may result from the rounding of quarterly
           amounts.

SOURCE Legg Mason

http://www.leggmason.com