Total income for the three months ended March 31, 2008, was $8.2 million, representing a decrease of $85.5 million from the corresponding period in 2007. The decrease in the three month period was primarily a result of decreased interest on time deposits due to a lower time deposit balance. The trading losses and fees for the three months ended March 31, 2008, increased $16 thousand from the corresponding period in 2007, to a loss of $105 thousand. The increased trading losses were due primarily to the lower present value caused by the decrease in the aggregate net asset value of outstanding shares subject to the financial warranty agreements.

Total expenses (excluding income taxes) for the three months ended March 31, 2008, was $89 thousand, compared to $53 thousand for the same periods in 2007.

Total net income for the three months ended March 31, 2008, was $5.0 million, representing a decrease of $52.7 million from the corresponding period in 2007. As discussed above, the decrease in the three months period was primarily a result of decreased interest on time deposits due to the lower time deposit balance. Income tax expense for the three months ended March 31, 2008, was $3.1 million, representing a decrease of $32.8 million from the corresponding period in 2007.

Liquidity & Capital Resources

Main Place's primary source of liquidity is its cash and cash equivalents on hand and interest income thereon. At March 31, 2008, Main Place had approximately $1.2 billion in cash and cash equivalents, which were mostly held as time deposits with the Parent. At March 31, 2008, Main Place's maximum obligation under the financial warranties was $782.0 million and the estimated pay out on the warranty contracts was $2.9 million. The overall potential liability was lower than the present value of the future cash in-flow, and Main Place has never made a payment to fund any shortfall amount under these products.

Critical Accounting Estimates and Principles

Main Place's significant accounting principles are described in Note 2 of Main Place's audited financial statements included in its Form 10-K for the year ended December 31, 2007, and are essential to understanding Management's Discussion and Analysis of Financial Condition and Results of Operations. Some of Main Place's accounting principles require significant judgment to estimate values of either assets or liabilities. In addition, certain accounting principles require significant judgment in applying the accounting principles to individual transactions to determine the most appropriate treatment. We have established procedures and processes to facilitate making the judgments necessary to prepare financial statements.

The following is a summary of the more judgmental and critical accounting estimates and principles. In each area, we have identified the variables most important in the estimation process. Management has used the best information available to make the estimations necessary to value the related assets and liabilities. Actual performance that differs from our estimates and future changes in the key variables could change future valuations and impact net income.

Derivative Assets and Liabilities

Main Place engages in derivative trading-related activities. The management process related to the derivative positions is discussed in detail in "Item 7A - Quantitative and Qualitative Disclosures About Market Risk" in Main Place's 2007 Annual Report on Form 10-K. Trading positions recorded on the balance sheet are at estimated fair value. The potential future payout to the funds and to be received from the Parent, was netted against the present value of the fees to be received from the funds and paid to the parents.

Income Taxes

Main Place estimates tax expense based on the amount it expects to owe as part of a tax allocation agreement with the Corporation, inclusive of current state taxes payable to the Parent. Accrued income taxes represent the net estimated amount due or to be received from taxing authorities. In estimating accrued income taxes, Main Place assesses the relative merits and risks of the appropriate tax treatment of transactions taking into account statutory, judicial and regulatory guidance in the context of its tax position.

Contractual Obligation

Main Place has entered into financial warranty agreements with the Parent. Under the terms of these agreements, the Parent provides financial warranties in favor of Main Place and Main Place have fees to the Parent. The below table is the best estimate of contractual obligation that Main Place due to the Parent based on the net asset value of the aforementioned funds as of March 31, 2008.

                          Contractual Liability Table



            (Dollars in thousands)               Payment due by period
                                                   Less than     1-3       3-5
            Contractual Obligation       Total      1 Year      Years     Years
            Fee to Parent (ML Value)    $ 1,228           781      447        -
            Fee to Parent (ML Growth)   $   734           467      267        -
            Fee to Parent (Pioneer)     $   385           227      158        -

            Total                       $ 2,347   $     1,475   $  872   $    -