Incentive income recorded in the second quarter of 2012 totaled $47 million, compared to $20 million recorded in the second quarter of 2011. This year-over-year increase was primarily driven by higher incentive income generated by the Liquid Hedge Funds, Credit Hedge Funds and Private Equity Funds, partially offset by lower incentive income recognized from the Credit Private Equity Funds. Additionally, Fortress had $507 million in undistributed, unrealized incentive income embedded across the funds based on investment valuations at June 30, 2012. Of that $507 million, $62 million has already been included in DE during the first six months of 2012.The Company’s segment revenues and distributable earnings will fluctuate materially depending upon the performance of its funds and the realization events within its private equity businesses, as well as other factors. Accordingly, the revenues and profits in any particular period should not be expected to be indicative of future results. ASSETS UNDER MANAGEMENT As of June 30, 2012, assets under management (“AUM”) totaled $47.8 billion, up 3% from $46.4 billion as of March 31, 2012 and up 9% from $43.8 billion as of June 30, 2011. During the second quarter of 2012, Fortress recorded $1.7 billion of net client inflows for Logan Circle, had a $0.9 billion increase in its fund valuations, invested $0.4 billion of capital and raised $0.5 billion of capital and equity that was directly added to AUM. These increases to AUM were partially offset by (i) $0.8 billion of capital distributions to investors, (ii) $0.6 billion of Hedge Fund redemptions and (iii) $0.3 billion of RCA payments to Credit Hedge Fund investors. As of June 30, 2012 Fortress had $7.4 billion of dry powder, primarily in Credit Private Equity funds, which will generally be added to AUM and generate management fees when invested. BUSINESS SEGMENT RESULTS Below is a discussion of second quarter 2012 segment results and business highlights.