Andy Clark - Investor Relations Bob Kelly - Chairman & Chief Executive Officer Todd Gibbons - Chief Financial Officer Rich Brueckner - Chief Executive Officer, Pershing Jim Palermo - Co-Chief Executive Officer Brian Gerard Rogan - Chief Risk Officer Ron O’Hanley - Vice Chairman Arthur Certosimo – Senior Executive Vice President, Broker Dealer Services Karen Peetz - Chief Executive Officer of Financial Markets & Treasury Services

Mike Mayo - CLSA Howard Chen - Credit Suisse Betsy Graseck - Morgan Stanley Ken Houston – Bank of America/Merrill Lynch Glenn Schorr - UBS Brian Bedell - ISI Group Tom McCrohan - Janney Montgomery Scott Nancy Bush - NAB Research John Stilmar - SunTrust

Welcome to the fourth quarter 2009 earnings conference call hosted by BNY Mellon. (Operator Instructions) I will now turn the call over to Mr. Andy Clark. Mr. Clark, you may begin.

Thank you and welcome everyone to the review of the fourth quarter 2009 financial results for BNY Mellon. This conference call webcast to be recorded and will consist of copyright material. You may not record reproduce, retransmit or rebroadcast these materials or any portion thereof without BNY Mellon’s express written consent. Before we begin, let me remind you that our remarks may include statements about future expectations, plans, and prospects, which are considered forward-looking statements. The actual results may differ materially from those indicated or implied by the forward-looking statements as a result of various factors. These factors include those identified in the cautionary statement on page 15 of our press release and those identified in our documents filed with the SEC that are available on our website www.bnymellon.com. Forward-looking statements in this call speak only as of today, January 20, 2010. We will not update forward-looking statements. This morning’s press release provides the highlights of our results. We also have the quarterly earnings review document available on our website and we will be using the quarterly earnings review to discuss our results. This morning’s call will include comments from Bob Kelly, our Chairman and CEO and Todd Gibbons, our Chief Financial Officer. In addition, several of our Executive Management Team members are available to address questions about the performance of our businesses. Now, I would like to turn the call over to Bob.

Thanks, Andy and good morning everyone and thank you for joining us. Our earnings per share were $0.59 or $712 million. On an operating basis they were $0.55 or $657 million. In Q4 the balance sheet remained strong as evidenced by the fact that we had much lower provision and we actually had a small security gain. This is the first time we have had a security gain in a quarterly result since the second quarter of 2007 so it is welcome to finally see that bit of a turnaround and a pretty solid indication of how differently we should view the securities markets versus a year ago or two years ago. Several of our core businesses are showing some improvement with a particular strong quarter in asset management. However, the persistently low interest rate environment around the world continues to challenge our net interest revenue and also impacts fee revenue due to fee waivers that are pretty substantial in our company. Todd can talk a little bit about that later on. Fee revenue was actually up 2% versus the prior quarter excluding the net impact of third quarter asset sales. We had excellent growth in assets in wealth management fees. They were up 13%. We had net long-term asset flows of $14 billion which was the biggest increase since 2006 and performance fees were up $58 million. Our security servicing fees excluding tech lending revenue was actually up 1% led by core fees in asset servicing as well as in issuer services. Securities lending spread and FX volatility remains soft. NII was up slightly mostly due to the small increase in our balance sheet size. Expenses were a little higher than recent levels on an operating basis. They were down 1% year-over-year but up 6% sequentially. The sequential increase was largely driven by a seasonal increase in business development, the Insight acquisition, employee benefit adjustments, higher legal and FDIC expenses. In other words you shouldn’t view it as a run rate and they were unusually high. We do want to point out on a full year basis incentive expense is actually down 20% versus 2008. We took a restructuring charge of $139 million to allow us to continue to drive efficiencies in future quarters and it was more than offset by a one-time tax gain in our financials. During the quarter we also completed the previously announced restructuring of our investment portfolio to reduce risk. That has helped to put our biggest securities issued behind us and going forward they should be modest in size if at all. We also declared victory on our merger integration outperforming our original goals handily. We are continuing to win new business and the pipelines are actually good. In addition to strong new flows in asset management, in asset servicing we won $400 billion in new assets under custody. In wealth management we had our 16th consecutive quarter of net positive client asset growth. In DRs and corporate trust we have continued to win business away from our competitors. In fact two more DR issuers moved their established programs from our competitors to us during the quarter. In broker dealer services we continue to gain market share both internationally and domestically and in Pershing we have had great success in converting business opportunities and 2010 should be another good year. We continue to deliver our business model. We are well positioned for improving stock and debt markets, increase and growth in capital flows and for issuance levels. Of course any increase in short-term interest rates will greatly increase our fees and net interest income. Finally, we expect a better year in 2010 versus 2009. At this point let’s hand it off to Todd to go deeper into the numbers and then we will come back for questions. Todd?

Thanks Bob. Good morning everyone. As Bob indicated our core businesses are showing signs of improvement and our asset management results were particularly strong. As I get into the numbers my comments will follow the quarterly earnings review beginning on page 3. You can see our continuing EPS was $0.59 on a reported basis and that includes the benefit of $0.04 related to a discrete tax item and the securities gain Bob just mentioned. It was partially offset by a charge related to our re-engineering initiatives and M&I expenses. That gets us to an operating EPS of $0.55 for the quarter. Operating earnings benefited approximately $0.05 to $0.06 from a lower effective tax rate which was driven by a higher proportion of foreign earnings. Operating earnings were negatively impacted $0.02 to $0.03 by adjustments to benefit expenses and a seasonal increase in certain expense items. Thus I view our core operating earnings in the $0.51 to $0.53 range. Net interest revenue was up 1%. Fee revenue decreased 1% but if you exclude asset sales that we made in the third quarter fee revenue increased 2% sequentially. Provision for credit losses declined $82 million. If you turn to page 5 of the review, you can see the assets under management and assets under custody rose for the quarter and securities on loan declined. The decline of securities lending assets is probably a year-end event. We expect the decline to be temporary. Assets under management was up 15% largely driven by the Insight acquisition. However, we are pleased to see a $14 billion increase in long-term flows. Turning to page 6 of the earnings review it shows fee growth. Securities servicing fees if you exclude securities lending revenue were up 1% quarter-over-quarter and essentially flat from last year. Asset servicing core fees were up 4% sequentially reflecting higher market values and net new business as assets under custody were up 1%. Securities lending fees were up $14 million sequentially and $138 million compared with the fourth quarter of 2008. Both declines reflect lower spreads and lower volumes. Spreads were off 33% sequentially and 80% year-over-year. Average volumes were [up] 4% sequentially. Spreads are now at historically low levels and we expect them to improve as interest rates move. During the quarter we won an incremental $400 billion in new business in asset servicing and the pipeline remains strong. Issuer servicer fees were up 3% sequentially primarily reflecting higher DR revenue and that was offset somewhat by lower money market related distribution fees in corporate trusts. Clearing fees declined 6% over the prior quarter and 20% over the prior year once again relating from lower money market distribution fees as well as lower trading volumes. One of the key drivers of our total performance was a strong quarter in asset management. Asset and wealth management fees were up 13% sequentially and 5% over the last year. Both increases reflect the impact of the acquisition of Insight in the fourth quarter, stronger investment performance and improved market values which was partially offset by a reduction in money market related fees due to outflows in money market products and higher fee waivers due to the impact of lower interest rates. Assets under management increased 15% over the prior quarter, well outpacing the rate of growth in the equity markets. If we look at the asset management business AUM reached $1.04 trillion on the quarter. Assets under management benefited from the Insight acquisition as mentioned and the net long term benefits of $14 billion in the quarter primarily reflecting the benefit from the strength in global equity and fixed income products. Assets under management were negatively impacted by short-term outflows. Note that the Insight acquisition closed on November 2nd so we are not yet seeing a full quarter impact on our earnings. Finally, as mentioned above the near zero rate environment continues to impact money market distribution fees in several of our businesses. Fee waivers are currently costing us about $0.04 per quarter and are unlikely to change until the central banks increase rates. FX and other trading revenue was flat sequentially and down 52% compared to the record fourth quarter of 2008. The sequential results reflect higher FX revenue and lower fixed income trading revenue. The decrease year-over-year reflects lower FX revenue driven by reduced volatility as well as the lower valuation of credit derivatives to hedge the loan portfolio. Turning to net interest revenue which is detailed on page 7 of the earnings review, NIR and the related margin continue to be impacted by persistently low short-term interest rates globally and our strategy to invest in high quality, relatively short duration assets. NIR increased 1% sequentially primarily reflecting a higher level of interest earning assets. Net interest margin was 1.77% compared with 1.85% in the prior quarter. The decrease in the margin reflects an increase interest earning assets driven by deposit growth. In the current rate environment we cannot invest new deposits at historical spreads. Thus the net interest margin will vary slightly with the overall size of the balance sheet. In the quarter there was modest accretion of the restructured assets which was largely offset by lower hedging gains. In 2010 we expect the portfolio restructuring to contribute approximately $200 million of net interest income and that is slightly better than the high end of our original estimates. Turning to noninterest expense on page 8 you can see that operating expenses were up 6% sequentially and this was primarily reflecting seasonally higher business development expenses including branding costs, the impact of the Insight acquisition, employee benefit adjustments and higher legal and FDIC expenses. On page 9 of the earnings review we provide detail on our securities portfolio. The first table details activity in the fourth quarter of 2009 and the second is our traditional table showing amortized cost, fair value and ratings. During the fourth quarter we successfully completed the investment portfolio restructuring. The net impact of that was a $15 million pre-tax securities gain. First of all, what we did was we moved $5 billion in fair value of our investment security portfolio into a Grantor Trust. As you can see from the schedule, the Grantor Trust contains Alt-A, prime and subprime RMBS which had been previously written down to fair value as part of the third quarter efforts. As a result of this transaction we received $771 million in cash for a Class A senior tranche that was sold to third parties and we retained the Class B certificates with a fair value of $4.2 billion, as you can see in the table. The securities held in the Grantor Trust have been marked down to approximately $0.60 on the dollar so the likelihood of future impairments is low. In fact, we expect to recover a significant amount of the write down over time. The Grantor Trust resulted in a $39 million net loss in the fourth quarter. In addition to completing the Grantor Trust, we sold an additional $2.9 billion fair value of securities and most of that was from the watch list and that was for a gain of $54 million. The following table represents the fourth quarter 2009 activity related to restructuring as well as the investments we made in the quarter. As you can see from the table the watch list declined 38% in the quarter and is now down over 50% from the peak. Although it has been painful, we are pleased with the restructuring’s execution and comfortable with the level of risk in the portfolio. In December we reported a pre-tax restructuring charge of $139 million. The charge was comprised of $102 million for severance costs along with $37 million of asset write offs. The severance costs are related to the execution of our global location strategy which will involve migrating positions to global growth centers and eliminating certain positions. Since there will be additional costs as well as some benefit related to these initiatives in 2010 we will not actually start to see the net benefit until the beginning of 2011. Our regulatory capital ratios remain strong. Tier 1 increased 60 basis points to 12% and Tier 1 common increased 60 basis points to 10.5%. TCE remained stable at 5.2 as the acquisition of Insight was worth approximately 15 basis points and our tangible assets were higher due to the lower levels of cash with central banks and an increase in deposits. In terms of our loan portfolio on page 11 the provision for credit losses declined from $147 million to $65 million in the fourth quarter reflecting improved credit migration over the period. Going forward we expect the quarterly provision to be roughly in the same range we have seen in this quarter. During the quarter the total reserve for credit increased $32 million and net charge offs totaled $33 million. Our results for the quarter include a net income tax benefit of $41 million which consists primarily of a $51 million benefit from proportionately higher foreign earnings and a $133 million benefit from a discrete tax item which is related to a tax loss on mortgages. The effective tax rate in the fourth quarter on an operating basis was 22% and that included the $51 million benefit noted earlier. We would expect our effective tax rate to be approximately 30-32% in 2010. Turning to page 19, during December we declared victory on our merger. Year-to-date we achieved $251 million in annualized revenue synergies, well above our full year target, and we also realized $206 million in expense synergies during the quarter, an incremental increase of $10 million from the third quarter. Looking ahead to 2010 we are pleased to see revenue momentum in our core asset management and security servicing businesses though our revenue continues to be impacted by a persistently low interest rate environment. In fact, we estimate that a 100 basis point increase in overnight ratings should add about $500 million in pre-tax earnings to our annual run rate. That assumes no change in client deposit and money market activities. So once interest rates start to rise we will benefit greatly. In the meantime we are focused on improving our performance by increasing revenues, controlling costs and reducing earnings volatility. Let me provide a little color on each. I will start on the revenue front. Here we are actively identifying opportunities to consolidate market share and enhance our global capabilities to create more growth. There are also natural ties that exist between many of our product capabilities. We are working to more effectively package various services for certain client segments which will enable us to offer more comprehensive solutions that our competitors simply cannot match. Our second initiative is to grow margins by improving our operating models. Across the company we are looking at which jobs really need to be performed in major metropolitan areas and which can be done equally well in one of our growth centers. The expense benefit from our 2010 moves will begin to show up in 2011. Parallel to this we are continuing our ongoing re-engineering and process automation efforts looking across the company as a whole. Third is to continue to limit the risk on our balance sheet, something that you saw with the previously announced portfolio restructuring that we completed in the fourth quarter. We have also nearly completed right sizing our largest credit exposures which will also reduce earnings volatility and on Friday we closed on the sale of our Florida bank. Together these three initiatives will improve our performance and the consistency of our earnings going forward. With that I will turn it back to Bob.

Thanks Todd. Let’s open it up for questions now.

(Operator Instructions) The first question comes from the line of Mike Mayo – CLSA. Mike Mayo - CLSA: Can you give a little more color on the pipeline? You mentioned a lot of different areas where you see business momentum but it is hard for us to put that in context. Maybe as a percentage of revenues or at least compared to last quarter or last year kind of a percentage increase. Just some sort of context to that would be helpful.

Why don’t I start with Ron O'Hanley and that is where we obviously are seeing the most momentum. Ron? Ron O'Hanley: The overall pipeline is up significantly early 2010 from early 2009 as you might expect. Activity levels were just simply down last year. The rough estimate for the industry is down in the institutional areas by about two-thirds. So we are seeing a dramatic increase in our pipeline and even more of an increase outside of the US than in as much reflecting that our non-US revenues are growing. But it is a very robust pipeline. I would liken it back to the midpoint of the last decade levels.

Hopefully it is a bit of a new run rate for us and it is great to see the performance in the funds as well. Karen anything you would say about your various businesses?

Very similar and actually Todd referenced some large deals in [inaudible] broker dealer business, treasury and corporate trust our pipelines are strong. So we are quite positive.

Jim how about the custody?

The pipelines are basically flat versus a year ago. About ¼ of our pipeline is in the large outsourcing deals from investment management firms. As a matter of fact we just recently won a very large mandate in Europe that we will be able to announce publicly shortly and we look forward to doing that.

I would say we have the strongest pipeline going into the year that we have had in a good long time. We have got verbals and letters of intent on $50 million in new revenue and about $100 billion in assets in Pershing. So we feel good about that. We are very close to getting a few more marquee names across the goal line. So the strongest time going into the year we have seen in awhile.

I guess the way we would summarize it if that was helpful is obviously very strong in asset management and wealth management. Generally strong in Karen’s various businesses. Obviously we would like to see a lot more issuance of corporate paper and have the securitization markets come back at some point. What we see in Pershing is great pipelines and activity and in Jim’s world and the custody business it is going to have to take the economy to continue to turn around for eventually interest rates to pick up. We are highly levered, as you know, to an improving capital market and eventually higher interest rates. Mike Mayo - CLSA: One more slice at it, non-US relative to US growth this quarter? Is it growing a little faster? Twice as fast? Any metrics for that?

I would say actually we were pleased with the growth we saw outside of the US. Off the top of my head I don’t have a precise number on that. I would have to look to the various businesses.

Our business from last quarter more than half of it came from outside the US. To give you some perspective, in the asset services side our revenues have moved from a year ago at 37% outside the US to now 41%.

I think asset management was particularly…

The last couple of years about 2/3 of the growth has been non-US versus 1/3 in the US. It was even more for the last quarter simply because of the acquisition of Insight. I think you will see non-US business continuing to grow and in fact asset management now is 50% of revenues are from non-US clients.

We are pretty optimistic we can continue to gain share outside the US.

The next question comes from the line of Howard Chen - Credit Suisse. Howard Chen - Credit Suisse: The core balance sheet seemed to grow nicely this quarter. I am curious on your thoughts about whether we have hit an inflection point here or if there is still some lumpiness and frictional issues we need to work through?

The driver of the balance sheet was really the positive driven [power] and there are some lumpy deposits in there but I would say you are seeing reasonably good trends and I would expect the balance sheet to grow with our businesses probably not quite as fast as revenue growth but certainly correlating to revenue growth. It seems to be a lot more normalized I would say. A couple of lumpy deposits but it is starting to get back to normal. Howard Chen - Credit Suisse: In your prepared remarks you mentioned this $500 million benefit from 100 basis point rise in rates. Can you flesh that out a little bit because I know there are a bunch of moving parts between NII, money market fee waivers, lending spreads and a bunch of other impacts. I am curious if you could help bucket that and kind of walk through what timeframe it takes to get the full benefit of all that?

Sure. It is probably about equally split between fee waivers and net interest income. So if we look at fee waivers we start to recover probably in the vicinity of 60% of the fee waivers from a mere 25 basis point move. So of that 500 figure that is 250 or so to be generated there. So when I indicated 100 basis points that’s if rates move instantaneously and that would be the next regular run rate. So 100 basis points we recover just about all the fee waivers that we are currently waiving. In terms of net interest income the real benefit there is from the lack of compression on some of the low rates. So we will pay for deposits, for example, Fed funds minus 50 basis points which as you can see is impossible to do so they are interest sensitive deposits and we will recover that as soon as we do see a move in rates. So that $500 million was the run rate given an immediate 100 basis point move in the overnight central bank rates.

The way I would also say it is that most of the benefit is from the first 100 basis point rise of which the first 25 basis points is the most important. If we had a rise above 100 basis points the benefit would probably be half of what it would have been for the first 100 basis points. Howard Chen - Credit Suisse: A follow-up on that, the lending spreads is that given how much you generate in that? Is that somewhat diminimous? Obviously it is smaller than the money market fee waivers and the NII benefit. How would you think about that? Is that in that $500 million as well?

It is not. We didn’t include the [sec] lending. It was very simple we included in that $500 million. That is net interest income and the fee waivers that we mentioned. The sec lending spreads are really being hit. A little bit of an interest rate move would help but they are really being hit by very light tech spread, or the difference between the demand for Treasuries and the risk free rate and the overnight rate. There is really no spread there. This is as narrow as we have ever seen it historically. That would probably change if we just saw an overall movement in rates. It would also change if there was a move back to risk premiums. So you have kind of got the worst combination. No core interest rate and no risk premium in the market right now. Howard Chen - Credit Suisse: Capital ratios remain very strong. Could you give us an update on the M&A landscape which you have been pretty open about and any evolution between doing strategic acquisitions versus dividends and other forms of capital deployment?

What I would say is we are seeing a little bit of activity on the M&A front. As you know we look at a lot of things and we don’t necessarily do them. Because we have pretty tough financial hurdles. As you know, we are a very specialized model. Asset management and security servicing. So we will tend to focus on those bases and we will do it globally. Again our hurdles are tough but we will be disciplined. We will also be very careful of our capital ratios. We don’t want to run them down far either. What I think about our relative priorities, I am getting the sense from yourself, analysts and shareholders that you want us to invest in our businesses so we can grow them over time. Particularly right now given where we are hopefully more of a secular low in the securities markets or close to it. I don’t get the impression there is going to be a lot of dividend increases in the short-term in the US. That might be something we will look at in the second half and frankly that would be a higher priority for us versus buying back stock. We would expect given the quality of our balance sheet now and our core earnings capabilities that we will be generating a lot of capital in due course but those will be issues we will be thinking about more in the second half of the year.

The next question comes from the line of Betsy Graseck - Morgan Stanley. Betsy Graseck - Morgan Stanley: On the reinvestment you announced today, I am sorry if I missed it, but could you just go through what the total reinvestment dollars are expected to be in this program and the size and pace of the benefits and when that comes? The timing?

That is a bit of a restructuring charge that we took. It was a total of $139 million. $102 million of that was related to severance and $37 million of it was related to asset write offs. We will commence, it is probably a little more heavily weighted towards the second half of 2010 and there will be operating expenses associated with that. The operating expenses will basically eat up the initial benefits and we will really see it in our 2011 run rate. We expect when we take these actions about an 18 month period to recover the charge off. So this is really investing in our 2011 making us more efficient and continuing to grow in our growth centers. Betsy Graseck - Morgan Stanley: But the investment you are making today what kind of dollar return do you see coming from that once it is all baked into your run rate?

If you think about it, it is 1.5 times that number. We will recover in 1.5 years so it is about…the IRR will be extremely high. You are recovering it in 1.5 years. Your run rate is going down by about 75% per annum.

We see a huge number of opportunities to drive efficiencies in our various processing businesses over the next 3-5 years. It is part of the theme for our company is a core competency of each one of our businesses and each one of our executives will be their ability to continually re-engineer their operations so they are not only more efficient but actually increase the quality of service to our clients. Betsy Graseck - Morgan Stanley: So if I am thinking about the operating leverage in the business obviously the first lever is going to be rising rates which depending on when you think that occurs will start to flow in potentially at the end of 2010. Do you see this as a second wave of operating leverage benefit as we move into 2011 and 2012?

Yes. If you are assuming that the restructuring is going to reduce your expense base in 2011 and 2012 by about $100 million that is going to give you another point or two. Betsy Graseck - Morgan Stanley: A kind of nitpicky question on the tax that suggested by the President I think last week. I realize it is early stages and you have to go through Congress and all of that but I just wanted to make sure I understood what the potential impact would be on you and your business model given that it is a tax on essentially uninsured deposits.

Obviously we have a perspective on that tax. I will let Bob talk to that. In terms of the impact to us, basically the tax is a percentage of assets and you take out Tier 1 and take out your insurable FDIC deposits. So assuming that we do nothing with the rest of our balance sheet it is probably in the $175-200 million range. It appears that it will be tax deductible although that is not absolutely certain.

We have thought about this a lot and we just have to conclude it is bad policy for the country. I always worry about the unintended consequences of material actions and things that may result from that. Of course we always worry about how it will impact jobs if we can’t pass on costs. I know shareholders are going to want the industry to reduce costs and the most obvious place to do that is against the workforce. I also think it impairs the ability for less healthy banks to be able to lend which of course has been one of the key stories that bank clients have had to deal with over the last two years. It also because it is essentially a tax on balance sheet size it is also going to really encourage the banks to reduce the size of their balance sheets and ultimately it is going to encourage people to reduce liquidity, to reduce the fee. That is not a very good thing to do in the early phases of an overall economic recovery. There are other things too. I worry a lot about creating an unlevel playing field with non-US banks because it essentially makes US banks competitive in raising foreign deposits. We are in a global industry and if our competitors in Europe don’t have to pay a fee and we are trying to raise deposits in Europe it is very expensive and we are uncompetitive. Level playing field is extremely important in our industry. Lastly, it actually discourages acquisitions because I don’t know if you really thought it through but you would end up paying a fee on goodwill and intangibles. So there are a lot of things that really need to be thought through here that I don’t think are good for our industry or for the country. Betsy Graseck - Morgan Stanley: Is it something that if it were to go through you think that you would manage to try to offset through either other expense cuts or through {inaudible].

Well we are all trying to…it is very early days on this. Obviously we want to mitigate whatever the cost would be and I am sure everyone is thinking about that now including our foreign competitors.

The next question comes from the line of Ken Houston – Bank of America/Merrill Lynch. Ken Houston – Bank of America/Merrill Lynch: The accretion benefit of about $200 million for this year can you talk about it in two ways? First of all, are they coming in fairly ratably over the course of the year? Then just give us an outlook did that start to tail off as you get into 2011 and beyond?

It will stay with us for awhile. The way we look at this is we look at the performance of the underlying assets so we may adjust it based on performance. We think we have taken a pretty conservative view on it. I look at it as probably kind of a three year before it starts to tail out completely. Ken Houston – Bank of America/Merrill Lynch: So pretty ratable over three years or so?

We would expect it to be pretty ratable over the three year period. Ken Houston – Bank of America/Merrill Lynch: My second question is can you give us a sense, Bob made the point earlier that you actually had net securities gains this quarter. With the watch list down, the market’s underlying improving that helps the unrealized but can you give us a broad sense or some type of magnitude of loss content you might see coming through over time on the OTTI side?

We have done a lot of work and actually we are very pleased with what we were able to do as well. For example, we sold out our complete portfolio of fee lots and did that above where we had it marked at the end of Q3. We are very pleased with the execution. I would say the market is stronger than what we had anticipated so we have been able to sell stuff that we thought had a higher probability of impairments. I think impairments should be relatively small. That is not to say we might see an issue here or there that deteriorates further than we had expected it but it should be manageable to our earnings. Ken Houston – Bank of America/Merrill Lynch: Keeping on the credit theme, obviously we saw some stability in the NPAs. You mentioned downgrades were less and the provision did reset back to that kind of first half level. Any thoughts going forward as far as provision expectations and the movement through the credit cycle on credit?

Todd actually covered it in his prepared remarks. We are seeing the run rate in 2010 similar to the fourth quarter. We see some potential for improvement in 2010 from that run rate but as always we are subject to a single event risk on a particular credit.

The next question comes from the line of Glenn Schorr – UBS. Glenn Schorr - UBS: A follow-up on Ken’s question. Just making sure, nothing sold this quarter on the watch list, correct?

No we did sell stuff out of the watch list in the quarter. Glenn Schorr - UBS: I am just looking and as Ken mentioned obviously the marks have gone up with the improvement in the markets. I don’t think there has been much migration on the credit front but I am curious where the sales came from and if that is right on the credit migration front.

We put a table together on page 9 of the earnings review. So you can see the sales that we made. Some of these we had announced and we made it pretty close to the third quarter but there are some additional that we made in the fourth quarter. So you can see we sold, if you go to the third column from the right, the proceeds from sales we sold a fair amount of the floating rate notes. We sold commercial MBS. We sold Alt-A. We sold sub-prime. We sold 100% of our home equity fee lot. So there was $2.6 billion right out of the watch list that we sold. Glenn Schorr - UBS: But that is inclusive of what was previously announced, correct?

It is. There were several hundred million additional to that in this quarter and we have actually sold a little bit more in 2010.

I would say it is a theme that over time here we are going to look depending upon prices and opportunities we are going to look at selling more of the watch list securities.

This will be a dynamic process. If there is something we don’t like and we think there is a pretty good bid for it we will hit it. Glenn Schorr - UBS: So bottom line then reading into this is that the $1.2 billion of unrealized loss there might be a little bleed in but you still think there is a decent liquidity component to the marks.

Definitely. We have actually seen just since year-end are pretty significant further recovery here. I would say over $400 million in market value. Some of that is interest rate benefit but a lot of that coming from the credit product as well. Glenn Schorr - UBS: Switching gears with an asset management question. The money market outflows and the long-term inflows I am just curious if there is any capture in there meaning money market trends staying within family and switching into some of the longer…or are those reasonably mutually exclusive? Ron O'Hanley: For the most part it is mutually exclusive because a lot of what you are seeing in the money market funds is really big institutional flows or where we are sub-advising for somebody else. What we are seeing though interestingly is the stabilization of the outflows. Most of the quarterly outflows actually occurred in October and early November. We saw remarkably little at year-end. That is probably because interest rates are [audio fade] but for the most part these are independent to get to your core question. Glenn Schorr - UBS: If you could remind us on are the bulk of the assets in the fourth quarter payable on performance fees or do you have a certain percentage that is in the first quarter as well?

The bulk are fourth quarter payables. So there are some as far as watermarks where we achieved and will start to see some in 2010 and 2011 outside of the fourth quarter. But even so it is 80% plus, our fourth quarter payable.

The next question comes from the line of Brian Bedell - ISI Group. Brian Bedell - ISI Group: A question on the [TARP] tax, it does seem to unfairly penalize both custodian related deposits and other processing related deposits. What do you think the chances are of you effectively fighting that? Supposedly the Treasury is open to consulting with the financial companies. Do you have any read of your success of being able to exclude those types of deposits from the tax?

I don’t really have a sense for it yet. It is all so new that we are trying to work through it. Obviously we would like to have some influence on that just because of our business model that is so different from traditional banks. It is just too early to say. Brian Bedell - ISI Group: On the seasonality in the fourth quarter can you talk about to what degree seasonality influenced the balance sheet size and also revenues in issuer services?

I will let Todd take the balance sheet side. I wouldn’t say there was a whole lot of seasonality. That was kind of unusual. There wasn’t a lot of window dressing or anything that took place. Maybe we saw a little bit of that in the sec lending but that is not a balance sheet item. It looked to have limited seasonality to it if any of all. In terms of issuer services, Karen?

The only thing we have seen is less seasonality than historically in corporate trust. So we wouldn’t expect too much fluctuation quarter-over-quarter in corporate trust but depositary receipts first quarter tend to be not as strong as fourth quarter. Brian Bedell - ISI Group: So the reverse in 1Q there but not too much in corporate trusts?

Right. Brian Bedell - ISI Group: On the fee waiver, we have read about a $0.04 run rate. I think we were at $0.03 last quarter. In which areas did you see the incremental impact this quarter versus last?

It is consistent. It is across the board. What has ended up happening is basically the overnight fund rate continued to creep down closer and closer to zero. We kind of thought the target was close to 25 basis points and that was when we were at the $0.03. But it is not. It is inside of that so that is effectively what has driven it down. Brian Bedell - ISI Group: Do you think you are at a full run rate there now?

I don’t think we are going to go negative at this point. Brian Bedell - ISI Group: Lastly on acquisitions obviously international is a focus. Also asset management. What about more asset servicing type businesses in the mutual fund area and within the US? Are those areas of interest?

You aren’t implying anything are you? Brian Bedell - ISI Group: I have an idea.

We have stated in the past that we love both spaces. Both managing our asset servicing. We completed two transactions last year in Ron and John Little’s world. We are looking at asset servicing but it has been a number of things pop up over the last year and I would expect to see more. Clearly that is a space where we can continue to grow, not just organically but if you hit the right financials we would be interested in acquisitions there. In the US, it is a slightly different dynamic in that it would have to be space where we have a strategic product disadvantage. So that is really all I can say at this point. Brian Bedell - ISI Group: You would prefer to do acquisitions over share buybacks?

Depending upon the financials. I know buybacks is an instantaneous return of wherever you want to view the return on cost of capital at 11-12%. If we can find acquisitions that make sense financially in terms of accretion and provide an internal rate of return using conservative assumptions that are materially higher than that, and if it is in our space we would probably look seriously at it.

The next question comes from the line of Tom McCrohan - Janney Montgomery Scott. Tom McCrohan - Janney Montgomery Scott: I was wondering if you could comment on the hedge fund administration business and where you guys stand from a market share perspective and assets under administration.

Over the last year we have been very successful at grabbing market share and moving up from say a year ago at eight in the charts to now fourth. So we expect to continue that both in the US and in Europe. Most of our market share has come from the United States and we feel that over the next 18 months we will focus both on the US and in Europe. Tom McCrohan - Janney Montgomery Scott: Does that include some type of prime brokerage capability that you are also marketing to win share?

No it doesn’t actually. It is really just the pure administration services related to the accounting evaluation. We do partner up with Pershing and their prime brokerage services for some joint solutions to the hedge funds but the numbers that I mentioned were specifically our hedge fund administration. Tom McCrohan - Janney Montgomery Scott: Are you starting to see any kind of hedge fund creation right now that things are starting to recover and there is more of a focus on distressed debt?

I think we saw that actually in early 2008 when it seemed that the hedge funds pretty much at the same time, around April or so, started opening up distressed debt funds and we saw big influx of that type of security. Then around the end of the summer we started seeing long equities really materialize as the hedge funds brought that US global valuations were starting to recover.

I would like to add this is a space that we have had tremendous growth in. We are very optimistic about the future of that business.

The next question comes from the line of Nancy Bush - NAB Research. Nancy Bush - NAB Research: A quick question on a business that you haven’t talked a lot about in a long time and I heard you mention it this morning which is the DR business. I think there is a fair amount of confusion and I admit to being confused about the ongoing prospects for that business. Could you just talk about it and talk about volumes and pricing and that sort of thing?

DR did experience a pretty big deflation if you will with kind of the issuance and cancellations. We actually make a fair amount of money on cancellations but of course that is not a good long-term position to be in. We are quite thrilled to see that for the last nine months we have seen net issuance every month for the last nine months and we are back up to about $1.2 billion DRs outstanding with very good indications in large markets like China, India and Taiwan and DR programs really accelerating. We are much more positive about the DR coming through a tough year.

What is interesting is it is an emerging market product and Cecil [inaudible] talked about the eventual demise of it. But the fact is that is not going to happen. We have been saying this for decades now and we still have good prospects in that business and clearly we have a huge market share around the world.

And it is highly profitable.

The next question comes from the line of John Stilmar – SunTrust. John Stilmar - SunTrust: I believe last quarter we talked about in asset management the net flows you were seeing clearly the movement away from lower risk product but you particularly highlighted that flows were still coming out of your alternative asset management functions. Can you please update us on where those flows are in the alternative space? Ron O'Hanley: The outflows from alternative have stabilized. So we certainly saw a lot of that as clients really rethought their alternative programs but we have seen for the most part pretty good performance in our alternatives in 2009. I would say that has stabilized. That really does reflect into the numbers that we saw for the fourth quarter because as we have been reporting for most of 2009 we were seeing long-term inflows on the retail side and outflows on the institutional side. The institutional part reversed in the fourth quarter. We saw positive long-term flows in both institutional and retail. What we are seeing I think is the return to the market of institutions us getting at least, if not more, than our share and some pretty sophisticated clients looking at their programs in a holistic way which means that the inflows ought to be coming to us in pretty sizeable chunks as we go through 2010 and 2011. John Stilmar - SunTrust: Shifting gears to a more tactical question on clearing services, as we take a step back and it seems like you are talking about a pretty robust pipeline. Is it fair for us to start to call a bottom in terms of where the servicing fees might be given that there is probably some fee waivers that are pressuring that and it seems like with alternative asset management starting to show a little bit more robustness and your presence in the hedge fund community it seems that clearing services might be an area of potential growth from at least where we are today. Can you give me your sense of where we sit today as of the fourth quarter and what we should be starting to expect for servicing fees including services outside of just the normal fee waiver?

The big lumpy item of course is the waivers on the money market funds. So that won’t turn around until we get an interest rate increase. Otherwise though I think we have turned the corner and I think the new business pipeline is an indication of that.

One of the things we are seeing for our largest financial institutions around the world are increasingly looking at ways in which they can add shareholder value and one of those ways is to outsource the middle office and back office processes including in the clearing business. We are seeing more banks and financial institutions coming to us on that. As you know there is this ongoing migration to more and more financial advisors and market share investment advisors starting their own shops. That is a space where obviously we can compete very, very effectively to help them be more successful. That was the last question we had. Thank you very much for joining the call. We very much appreciate the questions. Have a good day.

If there are any additional questions or comments you may contact Mr. Andy Clark at 212-635-1803. Thank you ladies and gentlemen. This concludes today’s conference call. Thank you for participating.