Good day everyone, and welcome ladies and gentlemen to the Moody's Corporation Fourth Quarter and Year-End 2007 Earnings Conference Call. At this time, I'd 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 Lisa Westlake, Vise President, Investor Relations. Please go ahead.

Thanks, Audra. Good morning everyone, and thanks for joining us on today's teleconference to discuss Moody's results for the fourth quarter and full year of 2007. This is Lisa Westlake, Vice President of Investor Relations. Moody's released its results for the fourth quarter of 2007 and the full year this morning and the earnings release is available on our website at ir.moodys.com. In addition we have prepared a presentation to accompany this teleconference. The presentation is also available on our website. Ray McDaniel, Chairman and Chief Executive Officer of Moody's Corporation, will lead this morning's conference call. Also on the call this morning is Linda Huber, Chief Financial Officer of Moody's Corporation. Before we get started I call your attention to the cautionary language set out at the end of our earnings release. Certain statements my colleagues and I make today may be forward-looking within the spirit of the Private Securities Litigation Reform Act of 1995. This act provides the Safe Harbor for such forward-looking statements. I direct your attention to the management's discussion and analysis section and the risk factors discussed on our annual report on Form 10-K for the year ended December 31, 2005, and in other filings made by the company from time to time with the SEC. I'd also like to point out the Safe Harbor statements under the Private Securities Litigation Reform Act of 1995 contained in our press release issued this morning. These set forth important factors that could cause actual results to differ materially from those contained in any such forward-looking statements. I should point out that members of the media might be on the call this morning in a listen-only mode. I'll now pleased to turn the call over to Ray McDaniel.

Thank you, Lisa and thank you all for joining us on today's call. I'll begin our prepared remark this morning with a brief summary of Moody's fourth quarter and full year results. Linda will then take you through the fourth quarter and full year operating highlights, provide some commentary on revenue and expenses, update you on our share repurchase program, and discuss several investments we have made since our last earnings call including real estate. I will then review developments in the regulatory areas and finish with Moody's outlook for 2008. After that we will be happy to respond to your questions. Moody's reported solid financial performance for full year 2007 based on very strong first half results partially offset by the unprecedented challenges affecting the ratings business in the second half. Looking first at the fourth quarter, revenue of $505 million was down 14% from the same period of 2006. Revenue declines in the ratings business resulting from unfavorable market conditions were partially offset by growth in our research at Moody's KMV businesses. Operating income for the fourth quarter was $212 million and included a restructuring charge of $48 million. Foreign currency translation had a positive impact on operating results increasing revenue in operating income growth by approximately 210 and 150 basis points respectively. Reported earnings per share for the quarter were $0.49, excluding our fourth quarter restructuring charge and 2006 gain on building sale. Non-GAAP diluted earnings per share of $0.60 for the quarter declined 6% versus $0.64 for 2006. Turning briefly to full year 2007 results. Revenues approximately $2.3 billion was 11% higher than the full year of 2006. Operating income for 2007 was $1.1 billion including restructuring charges of $50 million. Reported earnings per share of $2.58 included $0.19 per benefit in the resolution of certain legacy tax matters, and $0.11 per share charge related restructuring actions. Excluding adjustments and the impact of the legacy tax matters in both years, full year 2007 earnings per share of $2.50 were 11% higher than the $2.25 in 2006. At this point I'll turn the call over to Linda, who'll provide further detail on revenue and expenses for the fourth quarter and full year 2007.

Thanks Ray. I'll begin by providing details for the fourth quarter starting with our U.S. businesses. Moody's U.S. revenues was $277 million in the fourth quarter down 23% year-over-year. And Moody's Investors Service U.S. revenue was $258 million down 25% from a year ago. U.S. ratings revenues decline 31% year-over-year largely caused by 53% reduction in structured finance revenue driven by a significant declines in issuance across most structured finance asset category. Revenue from residential mortgage-backed securities was down 81%, a revenue from rating credit derivatives and commercial mortgage-backed securities declined 54% and 52% respectively. Asset-backed securities revenue decreased 18% from a year ago. U.S. corporate finance revenue increased 2% from the prior year period with gross in revenue from investment rate bond rating largely offset by double-digit percent revenue decline from rating high yield bonds and bank loan. U.S. financial institutions ratings revenue grew 5% driven mainly by favorable results in the insurance sector. U.S. public finance revenue declines 6% from the robust fourth quarter of 2006. Finally U.S. research revenue showed a strong increase of 23% from the prior year period. Turning now to our international operations Moody's revenue growth was essentially flat outside the U.S. total international revenue of $228 million in the fourth quarter was comparable to $229 million in the prior year period. The foreign currency translation contributing approximately 530 basis point of growth. International revenue accounted for 45% of Moody's total in the quarter compared with 39% in a year ago period. From Moody's Investor Service international revenue declined 2% year-over-year to $203 million. The revenue from international ratings was down 9% to $161 million. International structured finance ratings revenue was 17% lower than in the prior year period due to declines in ratings revenue across most asset classes. International corporate finance revenue was…

Thanks, Linda. I will now briefly summarize developments in the regulatory area. We continue to have active communications with regulatory authorities in the U.S. and International. As discussed last quarter the issues related to subprime residential mortgage and securitization have prompted significant focus by policy makers and regulators on the financial services sector including specific attention to the role and performance of rating agencies. A broad agenda was set by the G7 finance ministers and central banking authorities in their October 2007 meeting with the G7 asked the Financial Stability Forum or FSF to provide updates and recommendations by April 2008 on four topics. Including one about the role of credit rating agencies and evaluating structured finance products. This agenda has acted as a catalyst and encouraged global regulatory authorities in central banks to coordinate activities in time lines in order to provide their views to the FSF. These authorities include the BIS Committee on the Global Financial System and the International Organization of Securities Commissions or IOSCO. The FSF in turn is expected to provide the G7 with an update and recommendations that have been informed by the views of the various international authorities. Many of you may have seen IOSCO's press release yesterday regarding its progress and addressing the subprime prices. Moody's supports the efforts being undertaken by global and EU regulatory organizations and policy makers. We look forward to sharing our views and participating in IOSCO's request for comment process as it continue its study of the structured finance rating process. In addition Moody's has been responding to questions and participating in various reviews as appropriate including providing our views on Moody's role in structured finance market, ways to raise market awareness about the meaning of our ratings steps that we're taking to demonstrate sound independent rating…

Thank you. [Operator Instructions] We'll go first to Michael Meltz at Bear Stearns.

I am still digesting there, but I had, I think I've two questions. On your, Ray give us a little bit more clarity please as to your expectations what baked in your guidance for the full year in terms of expectations for the first half. You just mentioned the expense guidance for the quarter. How weak are you anticipating the revenue line to look in the first half? And then secondly that comment about the lease expense, are the new lease there? Does any of the expense of your existing facility go away once you move in and so what is the actual incremental burden I guess want to get into 2010?

Okay, Michael it's Ray. I'll take the first question, and ask Linda to take the second. We are not giving quarterly revenue guidance for the business, but we do expect that in addition to the weak market conditions, we will continue to see the seasonal patterns that we've seen in the past, so that the Q1 should have the lowest revenue generation for the year. I would not expect we are going to see the same peaks and valleys in revenue by quarter in 2008 simply because of the decline in the structured business, which has always had strong seasonal variation by quarter. So that's about as much as I can give you on the early year outlook.

And Michael on your question on the lease for the London lease we are going to be putting on an 8-K on that next week. So we'd urge you to look at further details on that. It doesn't have much impact on 2008 as we have noted it's primarily coming on line in 2009. Regarding your question about the double rent expense here at Seven World Trade Center you are correct. In the fourth quarter of 2007 we no longer have the double rent expense so through the first three quarters of 2007 we carried a total of $9 million of double rent expense a 3 million a quarter, so that $3 million went away in the fourth quarter of 2007 and we'll not be present in 2008.

Actually Linda that wasn't my question, your moving facilities in Canary Wharf, what is the incremental hit that would to be exist?

Not until the end of 2009 though the 2008 impact since we are not going anywhere and 2008 will be minimal, but we'll have more information on this the total financial commitment when we put out 8-K.

I get, okay so you can't quantify I think you're saying $25 million to $30 million a year, but you are not quantifying what that is incrementally?

I think we would rather not go there until we put out the details in the 8-K and 10-K.

Okay. Last question from me not to get into weeds in terms of exposures, but your... can you remind us of your transaction and relationship exposures and just perhaps for the full year and where you actually ended the year?

Sure. The silver lining on the structured finance business particularly in U.S. coming off a bit is that we have better balance between our transactional and relationship revenue Michael. So for the total ratings business we are looking at 66% transactional revenue and 34% relationship revenue for the fourth quarter of 2007. And as I noted that, that is coming into better balance and we would see that balance continuing to be more even as we move forward into 2008.

Do you have a number for '07?

Yes.

Yes.For the full year 07 transactional 73% of ratings revenue and relationship was 27% of relationship revenue. So you saw those numbers coming into better balance in the fourth quarter.

Got it. Thank you.

Next we'll move to John H. Neff at William Blair. John H. Neff - William Blair & Co.: Hi, thank you. I was just wondering if you could actually quantify for or give us an estimate, what are the actual credit losses that are you're seeing so far in the market for our RMBS, SIBs, CDOs into that nature?

Yes. This is Brian Clarkson and with respect to RMBS transactions the losses that are flowed through on the 06 is less than 100 basis points and CDOs it's a light number. John H. Neff - William Blair & Co.: Okay, great. And then is there baked on your 2008 EPS guidance is there an expectation of how should we think about the share buyback contribution to that performance, do you expect I know it's hard to say but you expect to exhaust the current buyback in 2008?

I think John, we were pleased with the results of what we did in 2007, as we said we reduced the share count by 10% in 2007 that was accretive to EPS by $0.07. I think we sort of like that sort of range of reduction in the share count. We're looking to of course buyback more shares in the price was lower we would see... that would be likely in the first half of the year and we'll continue to fund the share repurchase is primarily with free cash flow, but as we said we do have capacity to borrow if the price looks attractive. John H. Neff - William Blair & Co.: Okay. That will be a good transition. And my next question could you remind us of the cost of your debt and review on the debt outstanding over the course of the way given the plan to fund the buyback for free cash flow?

Are you looking for the interest expense... John H. Neff - William Blair & Co.: Yes, yes.

Amount of debt outstanding. John H. Neff - William Blair & Co.: Yes.

The interest expense amount has of course moved up because we've taken on more debt and for 2007 the interest expense on borrowings were $15.7 million and again we'd expect that to move up for 2008, we haven't quantified that in our guidance for the full year effect of the money that was borrowed.

You mentioned the balance between transaction and relationship based you cited that the growth in relationship base revenue in the fourth quarter is that by default as issuance volumes dropped or are you actively transitioning certain relationships into that relationship category?

No, that is more by default. The structured finance business and the decline in issuance in that area caused a reweighting between the transaction base revenue and recurring revenue from relationships.

Okay. And last question if I can. Can you just remind us of the breakdown between U.S. structured finance ratings revenue as a percentage of global structured finance? Thank you.

Okay. For the full year of 2007 global structured finance revenue was about 38%, 39% of total Moody's corporation revenue, and that's going to decline fairly significantly in 2008 because of the expected decline in terms of issuance activities. So that is going to be a reducing number reached a high point of about 45% in the first half of 2007 down to 39% for the full year and it will be below that in 2008 obviously.

Next we'll move to Karl Choi of Merrill Lynch.

Hi, I have few questions here, the first one is I wonder if you can talk a little bit about in Europe for your guidance you said you expect some return of market liquidity within a back half of the year and your assumption do you actually expect ratings revenue growth by let's say fourth quarter? And second is if you can give us a breakdown of your total costs in terms of compensation how much that was incentive compensation that will be great?

Yes, I think in terms of the fourth quarter we would expect some modest increase over the fourth quarter of 2007, well we do expect conditions to improve in the second half of the year. We are not expecting those condition to represent exclusive improvement coming off of the week first half. So I would expect to be more protected and more modest, but with increases in year-on-year performance by the end of the year.

Karl, it's Linda your question on comp expense for the full year of 2007 total incentive comp of $86.6 million was 12% of total comp. Total stock comp was 12% of the total number, and all other compensation was 76%. All of that comes up to comp to total expensive ratio of 67%. Interestingly the comparison in the fourth quarter of 2007 that number was down to 61%. Obviously, we had accrued fuller compensation in the first half of the year when the results we're looking strong. So total incentive comp was actually a negative number for the fourth quarter. Total stock comp was 13% of total comp in the fourth quarter and all other was about 90%, so again as they said the total comp percentage was down to 61% in the fourth quarter.

And is that why you expect compensation cost go up in the first quarter because incentive comp was actually negative in the fourth quarter?

Yes, and we would expect that, that would balance out as we get back to the first quarter appropriate approval for compensation for compensation based on how we do in the first quarter.

And could you also give us the breakdown of your corporate revenues into investment grade high yield and the others?

Sure. For total global corporate finance which is what I had in front of me I've got high yield and this is the percentage of total global corporate finance I'll ask somebody to look at the corporate finance as a percentage of total revenues, but high yield as a percentage of global corporate finance of 12% in 2007, investment grade was 24%, bank credit facility is 18%, and other which includes MTNs and shelves and commercial paper and so on was 47% all that totaled $104.5 million for the full year 2007, and just a moment here let me see if Ray's got the full amount for--

Yes, the total corporate ratings revenues is a percent of total MCO revenue was about 20%.

And lastly in terms of option expense what do you expect option expense to be in 2008?

Hang on just a second here, I think we would expect option expense and again option expense would move a bit based on how well we performed next year, but approximately $80 million for 2008.

Great. Thank you.

Next we'll go to Fred Searby of J.P. Morgan.

Hi, I wondered if you could give us a little more color on the regulatory what's going on in the regulatory front in Europe. Are there any governmental entities other than IOSCO that are actively investigating you and is there any sort of unilateral action by different countries, what your thoughts on there? Thank you.

Well Fred, couple of things first of all there are several processes underway for reviewing either rating agencies, processes, and performance for reviewing the structured finance markets specifically. The work that is being done by IOSCO includes representatives from both the SEC in the U.S. and from the Committee of European Securities Regulators, as well as some other regulatory authorities outside of the U.S. and Europe. And that process while it makes independent recommendations for behavioral processes and conduct at rating agencies, which IOSCO would expect us to implement, is also feeding into the broader process of review the rating agencies by the financial stability forum by the presents working group here in the U.S. and so there are independent efforts going on, which are funneling into an integrated review at the international level or pan national level. We also do... we also are subject to reviews or inspections in some individual countries that's not new that has been in existence for several years that includes the U.S. and includes some countries in Europe.

Okay. Thank you.

Next we move to Ed Atorino at Benchmark.

Hi. Could you repeat you've gave a cost for the first quarter as compared to the fourth quarter I just didn't write fast enough, was 20, 29 [ph]?

Ed, what costs are you looking for?

Do you mean fourth quarter expense Ed?

Yes, you said the first quarter expense versus the fourth, was that up $20 million, $30 million?

$20 million.

Plus $20 million.

In first quarter expense over fourth quarter expense I believe that excluding the restructuring charge.

Yes, thanks. Secondly other expense item was rather notably large $19.8 million what was in there besides interest expense and what would that amount sort of the going forward?

Ed, it's Linda, we'd ask you that take a look at this when we file our 10-K. We've got some more detail, but the various components are our FX, which is very small, interest income which is $5.5 million, interest expense which is $15.7 million and then we carry some of our FIN 48 we carry our FIN 48 item as partially interest expense which is 5.3 million negative number. We have a few additions to that, but it all sum to the $19.8 that you've noted and the main change in that would be as we mentioned the increased interest expense on the borrowings.

So, going forward wouldn't be $20 million a quarter, right?

I don't think we have broken that out. But, directionally the interest expense is growing as we have increased borrowings.

Thanks.

And next we'll move to Lucas Binder at UBS.

Hi, guys. Couple of quick questions. Can you.... Ray you gave an update on IOSCO, but can you talk a little bit about where things are domestically with the SEC and the state's attorney general? And then also are you within Moody's analytics is their plan still break out that can be in research revenue breakdowns?

Sure. With respect to the SEC and the various state's attorney general, we... the SEC is continuing with what is now is normal inspection and review process that is new pursuant to the reform act and the propagating rules, but they have been in contact with us and we've been responding to inquiries and request for information from the SEC pursuant to that. And they have had particular interest I think not surprisingly in processes around structured financing and making sure that they understand those and are comfortable with the information that we are giving them there. And it's a similar story with the state's attorney general in that we are responding to information request making all the information that is being requested available on its timely basis as we can and those inquiries continue.

Lucas just follow-up on your second question on how we are reporting Moody's analytics, as I think Ray said we are going to have three categories within Moody's analytics going forward, which would include subscription, consulting, and software and we will no longer be individually reporting KMV.

Okay. And then just a follow-up with looking at the rest of the world, mean I think you are pretty fair about the outlook for the U.S. I guess why do you still feel confident that rest of the world, as far as insurance are going to be able and ratings we probably be able hold out relative to what's it going on you about?

well for the full year 2008, we expect that it is going to be a challenging year both inside and outside the U.S. clearly. And we do expect that the contagion effect from credit conditions in the U.S. will probably have a greater effect in Europe. Then they will in Asia that being said we have seen that market activity while it has not been robust has been healthier in the fourth quarter of 2007 then it was outside the U.S. then it was inside the U.S. There is somewhat different mix in the business. There is much less of anything that would look like a subprime mortgage market once when gets outside the U.S. in structured finance. There is also a smaller contribution to corporate finance activity from high yield then in the U.S. So the down turn in high yield activity has a more material impact on our business here in the U.S. then outside. And finally because this intermediation is not as far along outside the U.S., we have more new more new rating request, ratings mandate internationally then we do here, and a lot of that is unrelated to issuance its institutions that might be looking for ratings for domestic market purposes or counter party purposes in terms of engaging counter party activity cross border. So all of that I think indicates why we expect things to be a bit better outside then inside this country.

And if I could ask one last question with regard to the discussion of the change in rating system, changing you know, adding extra disclosures, extra risk factors between yourselves and S&P and Fitch there is some sort of a plan out there for all three, can you talk a little bit about what the timeframe is, and what the process would be for implementing something like that?

Well we have as you obviously know for your question we have issued a request for comment with respect to waiting system management in the structured finance area. In terms of seeking market response to whether different kinds of metrics than are measured by the traditional rating system or different kinds of alerts as to ratings that are heavily based on modeled credit analysis versus more fundamental credit analysis would be helpful to the market. We are doing that for a couple of reasons; one, a number of public sector authorities have indicated an interest in that, and I think would like to understand what the private sector would think about that idea. Secondly, because there are different behavioral characteristics to structured ratings, even if the expected loss in structured finance is comparable to expected loss in corporate and governmental sectors. The distribution of losses, the influence of pulling together or pooling assets that are relatively homogenous and originate at same point in time, creates more variability in the performance both up and down of those ratings. So we are looking at whether we can provide additional clarity, and in providing additional clarity what would the marketplace find most helpful, so that's all its background. The request for comment... we've asked for comments backed by the end of February. And the reason we have asked for that timing is because we would seek to take both narrative comments and the choices that the marketplace prefers and summarize those and make the information available to the general public to over site authorities. So they have that available in their thinking as they go through the process with the financial stability forum and the G7.

Great. Thank you.

[Operator Instructions] We'll go next to Catriona Fallon at Citi.

Hi, good morning and thanks for taking the question. Quick question for Linda, what are you expecting for depreciation and amortization expense for 08?

Catriona I don't think we've got any that granular with where we're going on depreciation for 2008. I don't have that in front of me.

Okay. And I'm wondering if there is any change to the thought of kind of a longer term 50% operating margin goal?

I think we've spoken pretty clearly that side it's probably not going to be there in 2008. We are obviously very concerned about the front half of the year where we think that the margin will be closer to 40% and then improving in the back half for the year. For the longer term we would like to be able to return to the 50% margin and that is our goal. I think you can see under very difficult circumstances in the fourth quarter we've kept a very tight leash on cost. We've gone through with our restructuring and we feel we've done very well in terms of dealing appropriately with headcount and the other expenses that we have to handle here. So I think that we would like to encourage shareholders that 50% margin is achievable probably not likely in 2008 and the first half of 2008. It can be a bit tougher than the full year.

Okay. And I'll just add two comments somewhat offsetting comments, but as far as maintaining an aspirational 50% margin. I think one reason why people might believe that is going to be difficult to return to even over the medium to longer term. Is because of misunderstanding and an expectation that we have a materially higher margins in structured finance and in the more complex areas of structured finance like credit derivatives, which have been hard hit by this down turn. And that's not the case. So the margins in that business are similar to the margins in the other parts of our ratings business. Now one thing that may cause us to have some difficulty in returning to margins that we've had in the past is that we do expect to have continued strong growth coming out of the Moody's analytics business and that business is not as high margin business as the ratings business. We expect that we are going to have improving profitability along with an improving top line in that business. But to the extent that it grows more quickly than the ratings business over the next few years. That is going to have downward pressure on the margin.

Okay. And then just a follow-up, Ray, what are some of the things that you are looking at in the market that might make you change your outlook for 08. So for instance you know what your thoughts on the situation with the bond guarantors? And then maybe some comments on the economy and whether we could see stagflation this year? And then thirdly, when do you expect to see new products entering the structured finance market?

Well with respect to stagflation I have long said that is probably the least favored scenario for our business just as it is for many businesses. And in our business to the extent that interest rates are required or being directed to address inflation even in a weak economy that reduces the outlook for both new money issuance by institutions and reduces the refinancing opportunities, so that's why that's a bad scenario for our business. As far as what I would look for elsewhere in terms of the pace of recovery in credit market, a large part of that I think still had to go back to a when there is stabilization in the delinquency and then ultimately the foreclosure rates in the U.S. housing market. That stabilization is going to improve confidence in the marketplace and although they are important social policy reasons to hope for stabilization at lower delinquency in default levels rather than higher stabilization itself will improve market confidence because it will improve the clarity around the value of these assets. That affects many other segments of the capital markets including you know, other financial services firms, insurance companies, and in insurance companies including the financial guarantors, then I certainly think that certainty around the outlook for the financial guarantee industry again is going to help reestablish clarity and hopefully confidence in the markets, and I know we have an important role to play there, and as I think you are well aware we are continuing our analysis of those companies right now. And it's been a fairly in terms of analysis, we'll make information available on our conclusion as quickly as we can.

Catriona, one other point in terms of the revenue impact on Moody's as a corporation the amount of revenue we garner from ratings the bond guarantors is less than 1% of Moody's total revenue. And in terms of the transaction that they wrap we would rate those transactions whether or not they are wrapped. So the direct revenue impact on Moody's is not particularly consequential.

Great. Thank you.

We'll move next to Craig Huber at Lehman Brothers.

Yes there are few questions please. Can you just quantify if you would on the reversal that accrued I think incentive comp in the fourth quarter?

Craig, I think we don't want to get into the magnitude of that exactly, but it was a few million dollars and --

That's not more than 10 million?

It was modest, but I think the unusual point was that it was down rather than up.

Yes.

And that's unfortunate, but that's the way it went.

All right. Can you just give me more color then why you think costs in the upcoming first quarterly roughly $20 million higher? That number is not dramatic enough?

Sure. We are hoping with the way the numbers are laying out in the first quarter that we will be able to accrue bonuses in a more wholesome way than what happened in the fourth quarter where we in fact had this reversal because we had accrued at a more healthy paced in the first and second quarters. So I guess it would be considered a return to normalcy and of course we are starting a new year.

And we did have a work force reduction, which is going to have some impact in the first quarter. It's not going to be a complete offset to annualization of compensation expense, but it is an offset.

Then also for the fourth quarter could you break out for us a percent of revenues are based on transactions, for structured, for corporate, for financial institutions, and public finance. I know it varied within those four categories, could you just break down?

I think Linda has that.

Okay. You want the fourth quarter, Craig?

Yes, I do wish fourth quarter and the full year I think that would be helpful?

Okay. Hope everybody has time and not interested in lunch. Okay fourth quarter for; corporate finance, transactions 64%, relationships 36%; financial institutions, transaction 42%, relationship 58%; public finance, transactions 93%, and relationship 7%; and structured finance, transactions 73%, relationship 27%; the total for ratings fourth quarter transactions 66%, and relationship 34%. Going onto full year for our corporate finance, transactions 69%, and relationship 31%; financial institutions, transactions 48%, relationship 52%; public finance transaction is 93%, relationship 7%; and structured finance, transaction 81%, and relationship 19%; for full year 2007 total transaction revenue percentage 73% and relationship 27%; so a pronounced shift to relationship revenues in the fourth quarter of 2004.

And then also --

Fourth quarter of 2007 I apologize, going back in time.

Thank you. One last question just get a little more detail you talked about this in the past just for clarity here can you just explain to us you talk about the margins being very similar across your various products that you rate, how much extra time your analyst will actually spend in CDO of structured finance product. And allocate those costs for us just to more claim in that greater high yield bond I mean that's end of the days why you are saying the margins are very similar?

Yes, it is they are more complex securities in most cases as the more complex securities acquire more analyst time and often more analyst to look at those transactions and though the much longer time to market from when transaction is first brought in and assets to review to what it goes to market.

Okay. Can you quantify that if you let me how many days you typically would?

No it varies so much that I don't think first of all. I don't have the quantification, but if I did I don't think it would be very helpful.

I will be if you take it nets are obviously about the same margins?

Yes, I mean the fact that we can see there are differences in the fees and we can see what the overall expenses are for our different areas. We can say and that's out.

Maybe if you could just speak in one more Asia as a percent of your revenues for the fourth quarter what was that please?

Let's see Asia as a percent of the fourth quarter give me just a minute here.

Craig, I am not sure we have a full we have a quarter on Asia specifically for the full year 2007. I think it was about 11% comes to mind.

Yes, it was a little higher in the fourth quarter Moody's Asia was probably 12% or 13%.

Great. Thank you very much.

We'll move next to Michael Meltz at Bear Stearns.

Hey, there just one follow-up on this and sorry to carry on here, but just on Craig's question about relationship and transaction. So are you saying you ended the year if I back in the numbers they are basically of total company revenues 50% are transactions and 50% roughly or I think you would think actually 49% transaction and the balance everything else is that right?

I haven't done the math, but we are saying 66% of approximately 80% was transaction meaning the rating agency and then the non-ratings business is essentially a recurring or relationship based revenue business there is a little bit that's one-off but not much of it.

Got it. Okay. And I know I think you mentioned in the beginning can you just actually you know what I'll follow-up off line sorry about that.

Okay.

You're welcome.

And next we move to Ed Atorino at Benchmark.

Hi, sorry to prolong this. Fourth quarter if you said this I apologize, and then we can all go to lunch, International versus U.S. in the fourth quarter revenues, structured finance revenues.

Structured finance International versus U.S. in Q4.

Yes.

Okay, it was...

About$84.5 million of U.S. structured finance revenue in the fourth quarter, Ed.

Okay. For the year with a breakdown, can I have a look at that?

The fourth quarter was just over 50% we came out of the U.S.

Total ratings.

No just over 50% of structured finance ratings in Q4 came out of the U.S.

Right, and how about total company?

Total company revenues I have that one and this is interesting Ed for the U.S. we are at 55% down and 45% international. So that's rebalancing, which we expect to get even more even handed going forward it's very helpful to us and is one of the things that are driving the tax rate down and you see we got the tax rate to 38.5% to 39.5%, and that is a permanent change and people should consider that difference in the way the financial for the company lay out.

Thanks very much.

And our last question comes from Catriona Fallon.

Yes, hi just a quick follow-up. Thanks for the breakdown on each of the different revenue lines on transactional versus relationship. So am I to assume than for public finance and structured finance. The majority of the relationship revenue is surveillance fees, but for corporate finance and financial information institutions is both surveillance fees and non-traditional type of contracts?

Yes, I would not call the non traditional contract, but relationship based where we receive annual fees from corporations or financial institutions as part of the rating relationship outside of monitoring. But, aside from the terminology, yes I would agree with your comment.

Okay. And then can you give us some directional you now if you have to actual numbers that's fantastic, but directional ideas on the margins for this different types of relationships?

No I don't think we are going to be able to make margins available on relationship versus transactional business, so I just don't have that available.

Okay. Thanks so much.

Okay

And Mr. McDaniel I'll turn the conference back to you for any closing remarks.

Okay, well thank you everybody for joining and for your detailed and enthusiastic questions. We look forward to speaking with you after the first quarter. Thanks.

That does conclude today's conference. Again thank you for your participation.