Good day and welcome, ladies and gentlemen, to the Moody’s Corporation’s Third Quarter 2011 Earnings Conference Call. At this time, I would like to inform you that this conference is being recorded and that all participants are in a listen-only mode. At the request of the company, we will open the conference up for questions and answers following the presentation. I will now turn the conference over to Salli Schwartz, Vice President, Investor Relations. Please go ahead ma’am.

Thank you. Good morning everyone and thanks for joining us on this teleconference to discuss Moody’s third quarter results for 2011. I am Salli Schwartz, Global Head of Investor Relations. Moody’s released its results for the third quarter of 2011 this morning. The earnings press release and a presentation to accompany this teleconference are both available on our website at ir.moodys.com. Ray McDaniel, Chairman and Chief Executive Officer of Moody’s Corporation, will lead this morning’s conference call. Also making prepared remarks on the call this morning is Linda Huber, Chief Financial Officer of Moody’s Corporation. Before we begin, I call your attention to the Safe Harbor language which can be found toward the end of our earnings release. Today’s remarks may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. In accordance with the Act, I also direct your attention to the management’s discussion and analysis section, and the risk factors discussed in our Annual Report on Form 10-K for the year ended December 31, 2010 and in other SEC filings made by the company, which are available on our website and on the Securities and Exchange Commission’s website. These together with the Safe Harbor statement set forth important factors that could cause actual results to differ materially from those contained in any such forward-looking statements. I would also like to point out that members of the media may be on the call this morning in a listen-only mode. I will now turn the call over to Ray McDaniel.

Thank you, Salli. Good morning and thank you to everyone for joining today’s call. I’ll begin our remarks by summarizing Moody’s third quarter 2011 results. Linda will follow with additional financial detail and operating highlights. I will then speak to recent regulatory developments, comment briefly on one of our litigation matters and finish with an update of our outlook for 2011. After our prepared remarks, we’ll be happy to respond to your questions. Third quarter revenue of $531 million increased 4% over the prior year, with strong performance by Moody’s Analytics offsetting a modest revenue decline at Moody’s Investors Service. Operating income for the third quarter totaled $196 million, also 4% above the prior year period. Diluted earnings per share for the quarter of $0.57 increased 2% year-over-year and included a benefit of $0.03 from the favorable resolution of a state tax matter. While volatile market condition in US and Europe may continue, we are reaffirming our 2011 EPS guidance of $2.38 to $2.48 and we expect to beat the upper end of the range. Turning to year-to-date performance, revenue for the first nine months of 2011 was $1.7 billion, a 17% increase from the first nine months of 2010. Expenses were $997 million, up 12% and operating income of $716 million increased 24% from the prior year period. Revenue at Moody’s Investor Service for the first nine months of 2011 was $1.2 billion, an increase of 18% from a year ago. Moody’s Analytics revenue was $512 million, 15% higher than the prior year period. I will now turn the call over to Linda to provide further commentary on our results and other updates.

Thanks Ray. I will begin with revenue at the company level. As Ray mentioned, Moody’s total revenue for the quarter increased 4% to $531 million. Excluding the favorable impact of foreign currency translation, revenue grew 1%. US third quarter revenue decreased 1% to $274 million while revenue outside the US grew 9% to $257 million and represented 48% of Moody’s total revenue, up from 46% in the year ago period. Recurring revenue of $314 million represented 59% of the total compared to 55% in the prior year period. Looking now at each of our businesses, Moody’s Investor Service revenue for the quarter was $351 million, a 2% decrease year-over-year. Excluding the impact of foreign currency translation, revenue was down 5%. US revenue decreased 4% over the prior year period while outside the U.S. revenue increased 1% and represented 43% of total ratings revenue. Global Corporate Finance revenue in the third quarter decreased a 11% from the year ago period to $129 million. Revenue was down 11% in the US, while outside the US revenue was lower by 10% year-over-year. The decline in global corporate finance revenue reflected weaker issuance primarily in speculative grade bonds in both the US and Europe. Global Structured Finance revenue for the third quarter was $82 million, 17% above the prior year period. In the US, revenue increased 20% year-over-year primarily due to strength in commercial real estate. Most other areas of the US structured finance market remained weak including residential mortgage backed securities. Non-US structured finance revenue rose 14%, driven part primarily by European covered bonds and residential mortgage-backed securities in Europe and Asia. Global financial institutions revenue of $72 million decreased 2% from the same quarter of 2010 with US revenue declining 1% while non-US revenue fell 3%. Global revenue for the public project…

Thanks Linda. I will continue with the update on regulatory and litigation developments. In the US, following the SEC’s August common deadline for ruler proposals relevant to NRSROs under the Dodd-Frank Act. The SEC is expected to adopt final rules by June 2012. Pursuant to the Dodd-Frank Act regulatory authorities have begun resuming their user ratings and regulations and considering alternative measures this replacements. In September, a separate SEC common period closed regarding a Dodd-Frank mandated study about, among other matters, feasibility of establishing an alternative system for allocating credit ratings, assignments for structure finance products. The study which the SEC expect to complete by December 2012, stems from what’s known as the Frankin Amendment. Also in September, the SEC released its first annual reports summarizing its examination of NRSROs as mandated by the Dodd-Frank act. It did not determine that any finding discussed in the report constituted a material regulatory deficiency. Turning to Europe, transfer of oversight of registered credit rating agencies to the European Securities and Markets Authority or ESMA became effective in July. We expect the decision on Moody’s registration application of our EU based entities to be made before year end. As many of you know, the European Commission is expected to for its new rules for credit agency industry, drafts of which have been commented on by the media and some European officials. We also understand that the commission intends to release a formal proposal by mid to late November. Once the proposal is published it will then be debated among members of the European parliament, the commission and members of the European Council of Finance Ministers. The suggested measures that have been imported on by the media address sober ratings, the use of ratings in regulation, business models, rotation of rating agencies, liability and…

(Operator Instructions). We’ll go first to William Bird with Lazard.

Looks like your guidance implies a further step-down in MIS Q4. Just wanted to understand if you're seeing this in pipeline or if it just being conservative driven the world we live in?

Well I think its mix, Bill. Where were we see good pipeline but uncertainty I would say is in the corporate finance are particularly that high yield sector. And I think that good pipeline is going to be whether its executed on in the fourth quarter is going to be subject to whether there are some additional spread contraction and may be some additional economic activity to the extent that there is greater confidence in growth both in the US and in Europe. I think its worth noting also that structured finance area where we had strength throughout year in crucial real-estate sector and we do think that that pipeline is a little lighter for the fourth quarter then what we have seen earlier in the year. So that's an area where we would expect decline as well.

I was wondering if you could talk a little bit about just the cost. What was the incentive comp accrual in Q3 and what will your cost profile look like in Q4? Is there anything anomalous in cost in Q4?

Sure, Bill, its Linda. The incentive compensation accrual for third quarter was $25 million which was down from $35 million in the second quarter of last year, and that's probably a reasonable number to use for the fourth quarter if we come in as we expect. Now, if we do of course have higher particularly operating income then we have got it to of course incentive compensation might move back up, but sequentially we are expecting relatively flat unless which applies to the upfront.

We go next to Michael Meltz with JPMorgan.

Ray, Can you speak of the more about -- I appreciate you comments on regulation and what's happening in Europe. The press accounts have been inconsistent but they are you know talking about some a lot of the changes. Can you talk about some of the things that are out there and perhaps its premature, but I am just interested here more of your views on that regard. And then also, Linda, on the tax rate, this is tax rate has been jumping around. What do you consider your run rate tax rate that specifically at this point what should we be modeling for next year?

Yeah, sure, Michael. I will start. With respect to the regulation, particularly in Europe, we are fully aware of some draft proposal that have been made. We haven’t seen any formal proposals at this point. But I would say that the issues being addressed in the proposals in Europe are very similar to what we have been dealing with over the last few years in the US and in some other jurisdictions around competition and conflicts of interest, the issue about over-reliance on credit ratings by market participants, enhanced transparency in the system, whether the liability standards for assigning credit ratings are appropriate or should be changed. So, its not a change in the topics there being debated in the regulatory area. Although from what I understand some of the proposals in Europe would for how to address those issues would be different in what we have seen for example in the US. I don’t think, I can go into a whole lot of detail on this at this point, because again we haven’t seen any formal proposals introduced and we don’t know what any formal proposals ultimately going to look like. But from what I understand are some things that we would believe are good ideas and some things that we would think are probably not such good ideas. Included in the former category would be reducing over reliance on rating agencies and improving information transparency. I think those are workable ideas. I think, they can develop some useful solutions in those areas. Some of the ideas that we probably wouldn’t be a supportive of, I think are also probably more unworkable.

Michael, let me take a shot at your tax question and we apologize for our bounty tax rate. For the third quarter, as we said our GAAP view of deducted tax rates was 28.5% and for the year were at 29.9% year-to-date and for the full year guidance we're guiding to 31%. The issue for us as is we are not always sure. Well, we don’t know when separate state audit matters will be resolved which is what causes the uncertainty. It frankly makes it very difficult to predict where the tax rate is going. I would be particularly hesitant to comment on 2012 tax rates because as you know there are some pretty significant proposal splitting around out there in terms of changing the entire corporate tax structure for the US. But I think it would be pretty draconian of us to try to look it where our tax rates are going to go for next year, before we have some grater clarity on the overall federal corporate rate. So, I think its enough to wait till February when we give guidance for the year to get more information on that, sorry about that.

May be I will ask it this way, I think your guidance implicitly to get the $31 million for the year its perhaps $35 million in the fourth quarter, is that fair?

Yeah, I think we are looking forward to take up in the fourth quarter, but again 31 is our rate for the year and it will have to be how we do in some timing (inaudible).

We will go next to Peter Appert with Piper Jaffray.

Hi this is George Tong for Peter Appert, thanks for taking my questions. Could you give us some color on NYSE market share performance versus S&P?

Yeah, this is Ray and I will make some preliminary remarks but Michel Madelain may want to offer some comment as well. We have not seen any significant changes in market coverage. We continue to provide broad comprehensive ratings coverage both in the US and internationally. So, I mean there are areas in certain asset classes on a certain geographies where that is not the case I have mentioned in previous calls. Based on our credit analysis, we have generally not been rating the junior trances of collateralized as known obligations, for example. So, there are some areas where we don’t have the broad conference of coverage that I think characterizes our global business. But I also would say that we have not seen significant changes globally in market coverage. And Michel, if there is anything we should add to that please weigh in.

No, I mean the only thing I would add is a full set of segment, the volume of transaction is very richly limited, and therefore you may see changes from quarter-to-quarter that are really not meaningful, but apart from that I can't confirm where there is no real no change like that in taking place in this quarter.

Got it. And how would you characterize the sustainability of Moody’s margins environment with little to no revenue growth?

Well, George, its Linda, let me take a shot of that. As usual, two components that we want to look at on margin for the rest of the year. The first component is revenue where frankly we have the most uncertainty and obviously we are guiding down on revenue you can get it from the math for the fourth quarter, and three out of four the business lines in Moody’s Investor Service, so we expect could come off in the fourth quarter. Moody’s Analytics however we expect to be moving upward in the fourth quarter. Now expenses, we started the year at $327 million in the first quarter and we told everyone we would ramp expenses around $40 million over the course of the year. And that looked to be about right. And actually, expenses will be down we think perhaps a little bit from where we were fourth quarter last year. Then we're watching our expenses. We did a pretty good job with expense control in the third quarter. We'll continue to work on that again, uncertainly around the incentive compensation fees. But we would expect in the fourth quarter margin if you do the math it’s probably going to be in the low 30s given what we are expecting right now. Now we do have unusual uncertainty for the fourth quarter of the year. We could see revenue come off further which would obviously be hurtful to the margin. We could see revenue move up by a similar amount. Our guidance incorporates that we could see as much of the $40 million swing to the downside and still hit the bottom end. We could see that swing to the upside, and obviously we might do better but it’s just extremely difficult to tell at this time. So, margin, we have got it $38 million to $40 million and we have got it for the year, and we have been pretty thoughtfully about that.

Got it, that’s very helpful. Going back to the Analytics business, could you provide some details on what’s driving that growth and how sustainable that growth is going forward?

Yeah, why don’t I ask Mark Almeida to comment on that, if you would, Mark?

Sure, we are seeing good strength across all of the Moody’s Analytics businesses, particularly research, data, and analytics. That business has firmed very nicely throughout the course of this year, so we are getting very good growth from RD&A, and off course that’s the largest segment within Moody’s Analytics. The software business continues to perform very well. We like what’s been happening there and we expect to see continued good growth in software, but of course that is a lumpy business. And so, we are going to see some volatility from quarter-to-quarter. You will recall that the fourth quarter of 2010 was very, very strong in software, and it’s going to be quite a challenge for us to keep up with that in the fourth quarter this year. And then finally, we are seeing a nice boost from the acquisition of CSI Global Education which we closed last November. So, I guess the long story short, we have had very solid organic growth in the business aided by the acquired revenue from CSI this year.

Got it. And then, last question on a very preliminary basis, how favorable do you think the operating environment in 2012 will be the generating revenue growth acceleration?

Well, to follow-up on Linda’s comment, we do feel that we are in a period of relatively high uncertainty, but high uncertainties does not mean that we don’t see the opportunity for revenue growth in 2012. We have got some parts of our business that are more subject to capital market activity and issuance trends. And some parts of the business, particularly over in Moody’s Analytics side which are relatively immune to issuance cycles. I'd just add that we have been in a period of low issuance for the last few months, and as you can tell from our guidance for the full-year 2011, we are not excepting a large pickup in the fourth quarter. But I also commented that the pipelines, particularly in corporate finance are pretty strong. And that is issuance activity that is looking for an opportunity which spreads narrowing to get into the market. So, there is reason to feel good about the future. It’s just predicting exactly which quarter is that going to happen that we are finding the difficulty with.

We'll go next is Craig Huber with Access 342.

First off, Linda, I'd like to a typical question. I'd like to ask, your transaction versus non-transaction breakdown for your four areas, could you go through that with us please?

Sure, the third quarter starting with the rating agency as the whole, we have 52% transaction and 48% relationship for the whole business, and let me break that down with the CFG first, 62% transaction and 38% relationship, for structured 49% transaction and 51% relationship, for FIG 30% transaction and 70% relationship, and for PPIF 58% transaction and 42% relationship, and for MA were are at 19% transaction and 81% relationship, and for the whole company 41% transaction and 59% relationship just 41% and 59%.

And then my other housekeeping question. Linda, can you just revenue breakdown in corporate finance (inaudible) high-yield bank loans etc to a financial institutions too, if you would please?

Sure. For investment period, 21% of the total $100 million and $29 million was investment, Craig. Now the place where we have, there are two places where we have challenges here which is interesting to look at Craig for. Basically, we are running at 12% of the whole CFG line in high-yield and that compares if you want to look at it sequentially in the second quarter of last year we were at 23% of that line running high-yield. The numbers in terms of the absolute number is $15 million for third quarter down from $45 million in the second quarter. So that is where we have a revenue issue. Bank loan is similarly, 16% of overall CFG issuance at $21 million, and if you look at the second quarter it was 22%. So the absolute number was $43.6 million in the second quarter. So again, we have had a considerable job in bank loan ratings. Other accounts, 51% for this quarter versus 37% and that’s looking a little bit flatter from second quarter to third quarter. So again, from $200 million second quarter to a $129 million in third quarter that’s the tricky part of what we are wrestling with here and that’s why it makes it more difficult to know where we are going for the fourth quarter. Let me give you structured, you want structured as well as FIG.

Yes, all three please.

Okay. So, $82 million for all structured finance for third quarter, 29% is asset-backed, 25% is RMBS, 23% is real estate, and 23% is derivative. And then, for FIG a total line of $72 million, 70% of that is banking, 26% is insurance, and 5% is managed investment.

And then, for PPIF if you would.

Sure. You are very thorough Craig.

Every quarter my friend.

Every quarter, well, we're always prepared. We have a total of $68.3 million and 50% is PFG and sovereign, 7% is munis, and 42% is project and infrastructure.

Okay. And then, Ray, comment little bit further if you would on structured finance. Well, this year certainly seems like its done a lot better than you can originally expect it nine months ago, say can you talk little bit about that what you are seeing out there and plus what your kind of outlook in next six months say?

Sure, you are right. It has been stronger than we anticipated and I think even after the first quarters we were fairly cautious about the remainder of the year because of the one off activity in the first quarter. We had seen strength throughout the year in both CMBS and in covered bonds. And we have seen strength in European RMBS including covered bonds. That is we do not expect either from comments for the closure real estate area to continue at the phase that it that it has earlier in the year if we have some upside surprise it might come from there. I am a bit more optimistic about the run rate for structured finance than I was, because of what we have seen in the second and third quarters. But, we do not think that it’s going to be as strong in the fourth quarter as what we’ve seen in Q2 and Q3. Nonetheless, I would point to that area for the potential of some upside.

And my last question, what was the percent change of or your revenues for your Asia operation for ratings, and also that number for Europe please?

In the third quarter?

Yes.

Well, our growth in Europe in third quarter for Moody’s overall was 5%. And for other international it was about 18%.

We'll go next Edward Atorino with Benchmark.

Hi, covered bonds, those came in a less field. Or could you talk more about whether that’s a one time event or is that the only way Europe is financing its banking system these days.

Ed, this the perfect question for me to turn over to Mitchell Madeline and I’m going to do that.

Well, it was scripted.

Thank you, Ed. I think what is happening in covered bond is the two things. One is that we see that an increased number of programs we’re rating and that’s the long term trend we’ve seen now for many months. So we’re benefiting from that. We have a very strong market position. In term of Asia, the Asians has actually been adversely impacted by the macro trends that have been impacted grossly markets in Europe. So the actual issuance has been down. But that has been largely offset by the increased number of programs we’re rating and our market position.

So the dollar amount was down but the number of programs was up?

It's about the issuance.

Yeah.

That’s quarter on quarter.

Quarter-over-quarter.

Year on year it has been up significantly. Yes because of the first part of the year actually the issuance was actually quite reversed.

Europe is frozen. Can they do covered bond issuance in this environment in the fourth quarter?

Yeah, actually I would be pretty optimistic about the future of covered bond issue and because it is considered a safer form of financing. They have backing of the financial institution and the collateral. So it’s a secured form of financing and is particularly useful for institutions that need equity. So in a stressed environment I think its going to continued to be a favored instrument class.

I understand some regulatory proposals or whatever to get covered bonds into the U.S or where is all that stuff right now.

Well you have the proposals for the immediate future. I would not anticipate that that would become a significant market. US institutions are generally in good position from a liquidity standpoint and this form of financing is probably most effective if there is a risk of worse environment or a liquidity mending environment.

And how does the rest of the structured world look these days, any light on the horizon?

Yes, there are I would say several lights on the horizon. There are also areas of darkness. I think the CLO market has both in showing signs of life and the economics that support that market in terms of spreads. I think I have an opportunity to encourage issues going forward particularly if Spreads come in. The commercial real estate market although as we said we’re not expecting a strong year end still has a great deal of real estate financing that needs to occur and the other receivable sector has been strong throughout. Some areas where issuances is more in doubt, we’re going to all be waiting for more permanent resolution of US residential mortgage backed securities. What role the project market will play in that sector and also you know areas such as credit card and student loans had been under more pressure mainly because of the performance of the asset class because of changes in regulation.

I know if I miss this, could you give an update generally on issuance saying how you yield corporate in October, we’re almost through with October, I think my calendar’s right. It’s still depressed I presume.

It's Linda; let me take a shot at that. Yes, through October it has been depressed. There is a pipeline out there and there are a couple of different things that we watch. We watch the VIX index which is Orchit Express which had been as high as 60 and is now come down to 30 when we were doing strongish ones in high-yield that was done to 15. We would like to see that come in a little bit, hopefully we’ll get there. The other thing is we need to spreads to come in probably 75 to 100 basis points, and today looks better in the markets. We are noticing 7 deals in markets this morning none of them high-yield that I can see yet but we need spread to come in. We need people to get back into more of a risk-on mode and we’ll see what happens but you know our revenue is sensitive to what happens in high yields and bank loans and you know those two can swing up in one direction or another.

Can you talk about what’s been driving Analytics at a fantastic track record in the last couple of quarters?

Thank you. Maybe we'll let Mark do that.

Yeah, Mark you want to take that?

Sure. Eddy it’s a – as we said earlier that the research business is firmed very nicely, so that's helping us software’s is been performing well and so organically that the business is firing on all cylinders to be honest. And then we've also got the additional revenue from CSI which we've acquired last November.

But you give an organic growth rate that I miss out to the quarter?

We did not.

Would you give one?

We had not disclosed that.

Well our next question from Douglas Arthur with Evercore.

Yeah, Linda, I am sorry, can you go back over the breakdown of quarter finances? It sounded for a second that you are moving dollars and percentages around.

I think what I was trying to do was to explain little bit about what the different before second quarter to third quarter which we think is instructive for everyone. So, let me run through this again let me look at the big dollar changes because I think that would be helpful. So in second quarter of 2011 obviously, issuance was very, very strong. We had a record quarter in corporate finance of $200 million of issuance. For corporate finance for this quarter, third quarter we down to $129 million so we lost about $70 million. Now investment trade didn’t suffer quite as much. We went from about $38 million to about $27 million, but again the high yield business went from $45 million to $15 million and the bank loan business went from almost 47 to $21 million. Other accounts a little bit more stable as well from sort of $74 million to $66 million. So of the $70 million difference of the change is attributable $52 million that is high yield in bank loans. So, again we like to see those too such as comeback. And again, we would see a revenues swing to the upside or we could see revenue swing to the downside depending on what happens in the fourth quarter. Particularly with the corporate business, it is the toughest one for us to forecast right now because markets are obviously choppy. We have weeks which are very strong in terms of issuance we have weeks which are almost closedown in terms of issuance. The general view in November we’ll hearing for just high grade. Expectations running $80 billion of issuance for high grade, which should be about $20 billion a week which is good. But we are also cognizant that we only got sort of six more weeks to the year to go here obviously we are moving into the holiday period so we’re trying to be thoughtful about this but it’s pretty tricky to forecast.

We’ll go next this one Sloan Bohlen with Goldman Sachs.

Hi there. Just a follow-up question with regard to issuance particularly with investment grade. How should we think about the upcoming maturity schedule specifically if it means to refis now that corporate balance sheets of yours is flushed with cash has ever been, should we think about the amount of that issuance relative to what’s maturing coming down as cash is used to delever, and how do you think about that for projecting your turn?

Sloan, I don’t have that information right in front of me. I would urge you to look at our third quarter investor deck which we’ll be putting up after we file the 10-Q which will be sort of middle of next week I think, and we’ll have that chart in there, which you might want to take a look at it. The turn would be while we saw post forward in the first week, second quarter we saw an air pocket or sort of a stalling out in the third quarter and you can tell by the numbers that I just gave to Doug and to Craig about what the magnitude of that was. We’re hoping as we said that we’ll get back to a more typical high grade issuance month of $80 billion for the month of November running about $20 billion a week but again we have to wait and see. What we’ve seen as the markets open up opportunistic strong issuers jump back in and they are continuing to finance. Given that many corporates have a lot of cash offshore we think that people are still looking to finance and we see some cases of people financing for share buybacks, also for CapEx and to a lesser extent it’s still there for M&A activity. The role of refinancing still exists but take a look at that next week when we put up the new investor deck.

Sloan, just to add a little bit of on Linda's comments. There is a very significant amount of refinancing that we can see having to occur over the next three to four years. It has been pushed out from the height of the wall is lower in 2012 than it was early this year and that’s not surprising. So what I think we would describe this as the refinancing that is going to occur is going to have an opportunistic flavor to it and if rates come in and there is an opportunity to refinance early at good spreads that’s going to be done. What we are also looking to is the degree of financing that is going to occur out of the refi market as a result of M&A activity capital raising for general corporate purposes, share repurchase and the like and that’s what we will associate with issuance activity in a reinvigorated economic environment. So, its trade-off between the very low rate that we might see in a more of a refi and environment and perhaps higher rates but more narrow spreads in a stronger overall economic environment that would drive financing for different reasons other than just refi.

Okay, that’s all very helpful, and I think that one other bit of my question will be though, as we look at the wall of financing as we look at those numbers about what’s an assuring in each of the upcoming years. Should we think about the ratio being one-to-one, so if say a $100 was maturing should a $100 be issued or you think there can be something less than that as company delever?

I think its going to depend on how companies feel about the overall economic environment and business expansion at the end of the day. I don’t think they are going to be delivering if they are in a business expansion mode and we would see more of a one-to-one. If they continue to feel that risk is bad, as they did in August and September then we may very well see them using some of their cash to delever. I think also, that a lot of finance executives that have come through this period are thinking about having more cash on hand on a permanent basis then they would have before the financial crisis. And so, I don’t think that a return to historical cash on hand level is necessarily the central case.

Okay that’s helpful. And then, just one other question on the Moody’s analytics, as one of you guys could touch on the Wall Street cost cutting potential headcount reduction, and what impact that might have in that segment?

Sure, I think I am going to let Mark add color to the remarks I have or correct them if I misspeak. But, I think there are two things that act in somewhat offsetting ways, one is if there is a good headcount at our customers fewer number seats that may limit the number of licensees that we have for those seats and reduction in users per customer. On the other hand, the reduction in work force at firms impacts what they were able to do they themselves, and they go outside and look for expertise in risk management, risk modeling, risk metrics that we provide and that provides a very good sales opportunity for us and I think we would characterize the second factor as being more powerful than the first.

Ray, it's Mark, I agree with that, I think that’s correct characterization of where we are. Thus far we haven’t see the head count reductions that it had been announced at the banks, have not affected the business. We haven’t seen any kind of a material pull back on spending at our big financial institutions customers. Certainly the stories we were reading in the press and hearing about the large numbers of staff reductions and what appears to be more emphases on expense management that doesn’t make us feel great, but it’s a practical matter, it has not yet presented itself or manifested itself in undermining any of our sales activity.

Okay. And Mark is there a time seasonally when we would expect that to through if it did?

Well, I mean I would reflect back on what we went through in late 2008 and through most of 2009. I don’t think that was seasonal, that was more event driven, you had the aggressive pull back post Lehman and so forth. Certainly as we move in to 2012, people are now putting their budgets together and making their spending commitments for next year. If we saw a short pull back, we would start seeing it now, and as I said, we have not yet seen that, but obviously it’s something we are going to look at very closely over the next couple of months.

Thank you, at this time I would like to turn the conference back over to Mr. Ray McDaniel for any additional or closing remarks.

Okay. This concludes the third quarter earnings call. As a reminder a replay of this call would be available after 3.30 p.m. Easter Time on Moody’s website. Thank you very much everybody.

Thank you ladies and gentleman for your participation, this will conclude today’s conference call.