Kate Pilcher - Head of Investor Relations Ken Moelis - Chairman & Chief Executive Officer Joe Simon - Chief Financial Officer.

Ken Worthington - J.P. Morgan Alex Blostein - Goldman Sachs Brennan Hawken - UBS Douglas Sipkin - Susquehanna Devin Ryan - JMP Securities Vincent Hung – Autonomous Betsy Graseck - Morgan Stanley Joel Jeffrey – KBW.

Good afternoon and welcome to the Moelis & Company Third Quarter 2014 Earnings Conference Call and webcast. All participants will be in listen-only mode (Operator Instructions). Please note this event is being recorded. I would now like to turn the conference over to Kate Pilcher, Head of Investor Relations. Please go ahead..

Thank you and good afternoon. With me today are Ken Moelis, Chairman and Chief Executive Officer and Joe Simon, Chief Financial Officer. Earlier today we issued a press release announcing our firm’s third quarter results, which can be found on our Investor Relations website at investors.moelis.com.

This conference call is being webcast live on the Investor Relations section of our website and an archive recording will be available approximately one hour after the conclusion of this call.

Before we begin, I would like to note that the remarks made on this call may contain certain forward-looking statements, which are subject to various risks and uncertainties, including those identified from time to time in the Risk Factors section of Moelis & Company’s filings with the Securities and Exchange Commission.

Actual results could differ materially from those currently anticipated. Our comments today include references to certain adjusted or non-GAAP financial measures.

We believe these measures when presented together with comparable GAAP measures are useful to investors to compare our results across several periods and better understand our operating results.

The reconciliation of these adjusted financial measures with the relevant GAAP financial information and other information required by Regulation G is provided in the firm’s earnings release, which as I mentioned is posted on our Investor Relations website at investors.moelis.com.

Following today’s prepared remarks, we will open up the call for questions. I will now turn the call over to Ken..

Thanks Kate, and welcome everyone to our third quarter 2014 earnings call. We continue to be pleased with our performance this quarter as we delivered record third quarter and record first nine months revenues.

These results were primarily driven by the continued improvement in the M&A environment which has been driven by strong market and transaction fundamentals that have enabled us to leverage our integrated offering to advise our clients on not just M&A, but on a wide range of strategic alternatives.

We also benefitted from the continued [maturation] franchise and our expanded brand recognition around the globe. Our solid topline results combined with our strong financial discipline contributed to another strong quarter of earnings and operating cash flows.

As many of you heard me say during our IPO road show, we are committed to our capital light model and to returning access capital to shareholders. We demonstrated this commitment today with a special dividend of $1 per share in addition to our regular quarterly dividend of $0.20 per share and we’ll touch more on that later.

As we review the quarter, we continue to believe four key investments themes drive value of Moelis & Company and it’s just a quick reminder these four are first, we are well know globally for singular focus on clients and relationships. Second, a strong market trends continue to create enormous opportunities for us.

Third, as a firm we had the benefit of identifying these trends and built our firm with a differentiated one firm model to specifically address the size and scope of this opportunity and fourth approximately two thirds of the firm is owned by employees and we operate the firm as owners with an extraordinary financial discipline.

So let‘s briefly review the quarter. We earned $128.7 million of revenues in the quarter which was up 30% from the third quarter of 2013 and first nine month revenues of $374.9 million, which were up 46% year-over-year.

Additionally on a trailing 12 month basis we earned $529.1 million of revenues, which represents the strongest 12 month period since our inception seven years ago.

We offer our benchmark, our revenue growth against the broader M&A market and our growth year-to-date compares to an 11% increase in the number of global transactions completions for M&A deals greater than $100 million in value and a 9% increase in dollar volume of completed transactions.

These numbers are an improvement from the first half when the number of completed transactions was up only 2% and we believe there’s a lot of runway left. Taking a step back, we think there are a few factors that drove our strong performance this quarter.

First, solid market and transaction fundamentals are leaving a continued improvement in M&A and we are participating in this improvement. Our [bid] is benefiting not only from an increase in M&A transaction but also as our clients explore other types of strategic alternatives along side or in place of M&A.

As a result, this year we have experienced increased transaction volume as well as growth in our average fees. Second, I think another contributor to our performance is the continued maturation of our franchise and our brand.

For example, our team in Europe is having a very strong year and as we mentioned during our IPO road show again, we have invested in a first class team in Europe where we expected to see results as our brand matured and the market improved.

We are seeing those results and we believe we are well positioned to continue to capture share when the European market rebounds. In addition to revenues, we generated strong earnings with adjusted net income per share of $0.42 for the quarter and $1.19 for the first nine months of 2014.

Our adjusted pre-tax income margin was 30% for both the quarter and the year-to-date. Now, I’ll turn to the M&A market. As I mentioned, transaction completions are growing but fairly slowly.

However, transaction announcements have meaningfully increased with 57% growth in the dollar volume of announced M&A transactions over $100 million year-to-date and a 22% increase in the number of transactions. This is the highest level of announcements since before the financial crisis both in terms of dollar value and number of deals.

I think this is showing us continued momentum for a strong M&A environment. And as I have previously mentioned this is a result of a typical ingredients, cash on corporate balance sheets, low interest rates, high stock prices and confidence in board rooms.

What I’ve started to realize and focus on more, you might have heard me say it more recently is then I think we have been focusing on the reasons for the M&A boom from the wrong side of the transaction. We tend to always talk about the confidence on the buy side, but never the confidence on the sellers side.

And I think the reason we are now entering a very good M&A cycle is because stock prices have been high and that’s probably because interest rates are low, but what that really leads to is more confidence sellers. I think there were always buyers when the crisis ended.

As soon as the crisis calmed down, but it was very hard to find sellers and you need two sides to a transaction. At that moment when values of the companies were half of what they used to be it was very difficult to go to market.

Today, CEOs, boards, financial sponsors are more willing to sell their companies and the market is liquid enough to ensure completion of that transaction. So now we have two sides of the transaction and I think this is leading to the uptick in the deal environment.

While the M&A market uptick and increased activity levels with clients evaluating and executing a wide range of strategic alternatives, it’s the perfect environment to provide the holistic advice through our differentiated one-firm approach.

And this integrated model is also allowing us to attract top talent as we grow our business around the needs of our clients, which brings me to hiring. As many of you know last month we brought on Eric Cantor, former U.S. House Majority Leader as our Vice Chairman and Managing Director.

During his time in Washington, Eric was in the middle of the most complex and interesting issues that cut across finance, international affairs, geopolitics and we think this experience will be very valuable to our clients.

Last month we also announced the appointment of Jan Caspar Hoffmann, Managing Director and Head of Mergers and acquisition for German speaking Europe. We expect to see increased international and domestic M&A activity in Germany and look forward to Caspar joining us in February following his going on [leave].

So where does this leave us in terms of the headcount? As we mentioned, in a typical year you can expect us to add between four to six MDs on a net basis through a combination of internal promotions and hires. This is not been a typical year however, due to recruiting tailwind following our IPO and a more attractive hiring environment in general.

We ended the quarter with 96 managing directors which is an increase of 10 MDs from the end of the 2013 and eight of these MDs were added in the third quarter. In terms of total bankers we ended the quarter with 376 bankers up from 317 at year-end 2013.

So this year we have exceeded what we would consider a typical recruiting year, but we believe we are making investments to drive long term value for our clients and our shareholders. I think it is also important to point out that the majority of our new bankers started in the third quarter.

For example the four MDs in our private funds advisory group only joined in the past few months. We think there is tremendous upside to this business, but as you know there’s an inherent ramp period before bankers begin generating revenues.

So the cost of our new hires is running through our P&L but we do not expect them to contribute meaningfully to revenues in the current year. As the environment continues to improve and our new bankers more fully integrate into our advisory model, we expect them to begin to add incrementally to our revenues.

With that, let me turn the call over now to Joe to discuss the financial results in more detail.

Thank Ken. I’ll take a few minutes to highlight some key points and metrics contained in the press release. We present our results on a GAAP and adjusted basis. The adjusted financials reflect two types of adjustments. The first type of adjustment removes the impact of charges associated with the firms IPO.

The second type of adjustment is more timing in nature and reflects the allocation of our earning between non-controlling interests and the public shareholders, as if the firm had been operating in its new corporate structure since the beginning of the year, instead of from the date of our IPO which closed on April 22.

You can find a detailed account of these adjustments reconciled to our GAAP financial results in the press release. Compensation and benefits expenses on an adjusted basis were $66.7 million for the third quarter of 2014, resulting in a compensation expense ratio of 52% consistent with the ratio for the first nine of the year.

As a remainder, we report a lower than targeted total comp run rate expense due to the equity vested acceleration which we discussed last forum.

The lower level of ongoing equity amortization expense will increase as annual as annual equity compensation is granted in the future, accordingly our compensation expense ratio will also steady increased towards our target long term compensation ratio of between 57% and 58% of revenues.

Third quarter 2014 non-comp expenses were $24.7 million as compared with third quarter 2013 of $19.2 million.

The increase in non-comp expenses primarily reflects a more active new business development environment with specific increases coming from recruiting costs and travel and entertainment, as well as expenses incurred in connection with operating as a public company. Recruiting cost were incurred in connection with some of our new MD hires.

G&A grew with banker headcount increases as well as in connection with the annual client conference we hosted September this year of which occurred in October last year so this created some incremental expense in our third quarter as compared with last year.

Despite these factors our non-comp expense ratio for the quarter remained consistent with the prior year at 19% of revenues. For the year-to-date period, our non-comp ratio decreased from 21% of revenues on a GAAP basis to 18% of revenues on an adjusted basis consistent with our long term target of 15% to 18%.

As we previously discussed, as a result of completing our IPO in April, we have a new corporate structure with 28% of our operating partnership being owned by the public corporation, and subject to U.S. Federal Corporate Income Tax. There was no material change to our effective tax rate which remains at approximately 40%.

The resulting adjusted net income was $0.42 and $1.19 per share for the third quarter and first nine months of 2014 respectively. We ended the quarter with a strong financial position. We have $216 million of cash and short term investments and no debt on our balance sheet.

Finally, as Ken mentioned earlier, in addition to our regular quarterly dividend of $0.20 per share our board declared a special dividend of $1 per share. The total of $1.20 will be paid on November 24th to stockholders of record as of November 10.

These actions are consistent with our commitment to our capital light model and to return access capital to shareholders. The special dividend results from our strong operating cash flows as well as a onetime cash tax benefit that arose from our IPO.

Given our limited public flow, we believe dividends are a more efficient way to return capital to shareholders in the current circumstances. As we have articulated during our IPO, our intention is to keep our fully exchangeable share count flat with the IPO level at 54.3 million shares which excludes the impact of unvested shares.

As a function of the treasury method of accounting around unvested shares, we will from time to time be share -- in our diluted share count which will affect our fully diluted EPS calculation.

In the third quarter we had an increase of approximately 1 million shares primarily due to the impact of the quarter’s average share price of $33.71 had on the treasury method calculation. As you know, the treasury method calculation revolves around unvested equity and is highly sensitive to share price.

We experience strong start performance in the third quarter which yielded a significant addition to our share count for purposes of the diluted EPS calculation, although these incremental shares did not become legally vested. The best thing of these shares will not occur until between 2017 and 2019 with a heavy wait until 2019.

We believe that between now and then the public load of our stock will increase sufficiently such that we will pursue stock repurchases as a means of neutralizing share count growth. We’d now be happy to take any questions..

(Operator Instructions). And our first question will come from Ken Worthington of JPMorgan.

Hi, good afternoon, can you talk a little bit more about the nature of your pipeline and then particular any seems that you are seeing in advisory? I think one that was mentioned by Ken in the prepared remarks was more non-M&A advisory, so I was hoping you could flush that out.

And then sort of an ancillary questions, what sectors kind of show the most promise in ’15, are there any concerns of your clients about the credit or interest rate environment and any comments on cross border deals given treasury language on U.S. tax policy? Thank you..

Hi, Ken. So I didn’t mean to signal out that there was a huge difference in the mix, first of all we feel very good about the level of business and what we’re working on. It’s a heavy percentage of M&A. I just believe that what we are seeing in this market and as I said, I think it’s very important to remember its two sides of driving it.

There’s always a desire, there’s always a desire to purchase and move ahead in life, but there’s a lot of companies and boards asking questions what should we do? And I think you have seen it recently even in the amount of let’s say split ups that are going on.

Companies are looking to what all of their options are, and we’re helping them on those types of issues.

But I still think I didn’t want to let anybody believe the vast, the majority the substantial majority whatever percent, term you want to use is M&A but we are actively advising companies on all sorts of strategic alternatives that they are thinking about. If I had to characterize by industry, I think we are seeing it really broad based.

I think we are seeing activity across the board will be very hard for me to signal out any single sector that’s leading the charge.

I think it’s pretty broad and the last part of your question, I’m not sure maybe I’m not getting, so all of it is probably referring to inversions, which I continue to believe people are looking at maximizing the effectiveness of the tax rate and their territorial ability to move cash around the world from jurisdictions to jurisdictions.

There is some concern about the proposals put out and what that might affect and how that might affect very specific transactions and may cause the marginal transactions, the marginal transactions to fall off, but people continue to try to optimize all aspects of the business including tax rate..

Great, thank you. And then just maybe a technical question, you reported the Class A share count in the release and I think you guys kind of danced around the total share count with the dilution. What was the total share count; it was you know – sort of, yeah thank you..

The total of our basic share count vested is $15.3 million and then that diluted is about $16.2 million..

Okay, 60.2..

Now with that total exchangeable share count, so that’s for the Pubco for the fully exchangeable its $54.3 million and then you would add basically that same $900,000 to a $1 million to that number or fully diluted..

Okay, great. Thank you..

And the next question will come from Alex Blostein of Goldman Sachs.

Hey good afternoon everyone. So Ken question for you around the hiring environment, so sounded like you guys are clearly quite busy in the third quarter.

And I was wondering if you could talk a little bit more whether you think it’s more of a Moelis specific dynamic given the fact that you guys did just become public and that may have raised you know awareness of the firm a little bit more, or do you think this is a broader industry wide dynamic that we can continue to see more of the flow out of the bigger banks into the independent models which I thought would slow down at some point..

Let me make sure that you back up transaction by three months. Usually when we hire somebody they go on leave for three months. So when they show up at us, it means we have concluded the negotiations that are higher than three months, by the way in some jurisdictions six months, but its unusually three months earlier.

So we were right busy in right around the time of the IPO. So I think you are right. It was when we filed, when we started to go public, I think we did attract a part of the talent that was interested in the fact that we were going to have a liquid security.

I think by publicizing our financials, we probably clarified for people, remember nobody have an idea of what the firm was doing, so we try to clarify for people whether or not it was a good model and it was successful. So I think we had a very good hiring season and it really was right around the IPO.

And those people showed up in the third quarter we didn’t hire them in the third. To the industry I continue to believe that there will be a continued movement of high quality talent to the boutiques.

I think that it is a friendlier environment for creative people to do their work in a less regulated environment with smaller, more personal feel to the firms too. I think that all goes to it. That doesn’t mean its for everyone, but I do think you are going to continue to see talent overtime come this way..

Understood. And then my second question was around Europe, it sounds like you guys made a little bit of an extra investment there and clearly even during the roadshow you highlighted that as an area [property] guys, given some of the recent slowdown on the macro front and concerns over deflation and lower for ever interest rates type of thing.

How do you think about the backdrop for European M&A today versus a couple of months ago?.

No it’s interesting; I agree but the European economy certainly hasn’t had much good news in the last few weeks, months in terms of growth. But I still think it leads to decision making. Sooner or later companies still have to decide their strategic goals and what they are going to do it’s still a big economy with significant firms there.

I do think some of the larger firms have cut back significantly so there is a good environment if you are focused on your client, if you are calling and showing up you are differentiating yourself because of that.

And as you said we put a – you can’t show up, look you can’t show up with a team the day the market turns and say, hi we are here to serve you. You have to put time and our brand image in Europe was not the same as it was here. I’m an American and we had a large contingent of people start with us on day one here in the United States.

We invested in Europe, it’s slightly younger than the United States, but its been fantastic to see and somebody mentioned this, the IPO has helped it. I think hiring somebody like Eric Cantor has helped us over there.

But I used to have to explain in France you know we were called Moelis, in London we were [Morales] and I think it’s been much more consistent now that people know who you are, they know what we can do and we’re getting the benefits of a consistent long term calling effort by really high quality people..

Got it. That all makes sense. Thanks for taking the questions..

The next question will come from Brennan Hawken of UBS..

Good afternoon. So just a follow up on Alex’s question there.

At this point how many MPs do you have in Europe?.

.

:.

Okay. Perfect. And then quick one, it sounded like there was some unusual or sort of you know one time like maybe noise type items in the non comp line you know such as recruiting or conference timing.

Is it possible to give us a sense of what kind of an impact that had on the quarter just for modeling purposes so that we can think about what’s the right jumping offer?.

Yeah, so I mean I think the two principle areas were professional fees which were affectively there were two pieces, one was the recruiting cost and that’s typically something that happens in the second and third quarters, so I don’t know that and obviously we had an unusually robust, hiring in the second and third quarters.

I can’t really give you too much direction on how to model that. We also had a particular banker consultant who were involved in a successful transaction and ultimately there was a fee there, so that was episodic and that’s something that we ultimately consider a draw against comp. So I’m not sure that you need to deal with that.

T&E was probably the principal area and two things, one is certainly we had an annual client of that, that is episodic, I mean happens once a year, it happened to be this year in the third quarter instead of last year in the fourth, so you see some delta there, that was a couple of million dollars.

And then T&E also brought more broadly fluctuate materially quarter-to-quarter depending on overall travel activity, level of new business spend, timing of client reimbursements, so it’s hard to provide you know anything that’s directional with respect to a quarters worth of activity..

Sure. Okay, thanks for that.

And then I know in the past Ken you’ve hit on some of the more unconventional forms of revenue and certainly you clarified on the point of revenues beyond traditional M&A growing, but were some of these performance fees that you guys have been able to capture in the past relevant in the current quarter and were announcement fees a material driver just hoping to try and get a sense if you can maybe give us some color on that as well trying to get used to modeling your revenue versus the public data that’s out there?.

Look I would say in general it was pretty – it was a very normal quarter. I believe, our performance fees if you mean the sort of participation and getting better outcomes was probably lower than the first half of the year in the third quarter.

So I think it was more transaction execution very basic, I think it was a lot of M&A, I don’t have any exact percentage, but I think it was lot of conclusions on M&A. So yeah, I think this was probably a more traditional, success fee based quarter than the first half of the year..

Terrific, thanks for the color..

Okay..

Next we have a question from Douglas Sipkin of Susquehanna..

Yeah, thank you good afternoon..

Hi..

Just a couple of questions, first a little bit on the modeling side.

So on a stand sort of the progression of compensation in the ratio can you maybe provide a little bit of color as to when we may start to see that lift off that sort of 52% range, I mean in terms of like intervals you know in 15, 16, 17 or is that too difficult to sort of provide that type of guidance..

Basically the comp ratio should lift on an annual basis and it will be a function of each year incentive comp cycle is typically the first quarter of the following year, there was a combination of cash which is already being accounted for and equity which would be more of prospective and it stores new equity grants that will begin to add to the comp ratio and over the course of the next couple of years we believe we’ll be approaching that target..

Got you, okay but there is no sort of baseline way to think about it per annum getting to the target and then it really just depends..

Joe Simon:.

Okay, perfect. And then just a question on the special dividend obviously very nice to see.

Just trying to figure any, obviously it sounds like it’s a combination of benefits from the IPO as well as the strong cash flow, can you maybe tell us which way does it tilt thinking about maybe you know something like this on a more consistent basis or is it really more to do with fact that are the IPO credit some tailwinds?.

Well I’ll give you the quantitative and I’ll let Ken talk to the qualitative.

But from a quantitative standpoint it was probably as you know when we went to the IPO we said that we were going to distribute 50% of our normalized earnings, so we’ve been retaining that other 50% that is part of the distribution that probably represents about 60% and then this cash tax benefit was is a function of basically some of the small percentage of the equity that was in the hand of the pre IPO partners was in the form of options which ultimately gave rise to a deduction that again based on a strong operating results gave rise to a cash benefit and that was probably about 40% of the special dividend..

And I think going forward, look this was we talk about being the most efficient way to return capital. First of all, I want to say we are committing to returning our access capital, we like the capital live model and we like staying the businesses and we are committed to that.

There’s really no way if you follow our trading volume, I don’t think we could repurchase shares in the market. So, we came in the third quarter with $216 million of cash, you know our fourth quarter has been our best quarter historically. So what we felt like was we’re sitting with excess capital.

I would hope going forward that we continue to adjust our dividend correctly in line with our earnings and hope that’s stronger. We hope overtime that’s stronger and then you know that we as chairs start to trade in the market that we do stock repurchases.

But till the time we have in our stock that we could actually do stock repurchases this was just efficient, it was the efficient way to get the capital back to people..

Got you. And then just last question on obviously on the sort of competitive framework.

I mean, it’s obviously a good environment you know we’re seeing both private companies hire and public companies sort of try to do things to unlock value, particularly as it relates to sort of maybe leveraging or trying to disconnect the perceive conflict with private equity in the [indiscernible] just curious for your thoughts on that.

I mean do you get the sense that it’s getting a little bit more competitive to the extent that it’s impacting the business at all but certainly it doesn’t seem that way, but I’m just curious for your perspective, ion of boutiques. And just remember we are still a very small part of the market.

I think there’s a you take a few of the boutiques and put them together and there were more bankers inside of Lehman Brothers which is no longer here. So, again, we are it’s a big market out there.

We compete with advisors and banks around the globe and so when there is the creation or you know an indication and by the way again Blackstone was not a creation of the new firm.

But just remember, it is a big market out there and if you are asking all the boutiques how much they compete directly against each other I think you’ll be surprised that we rarely see each other just because we are small. So we are usually competing with the bigger firms just because they have more bankers..

Okay. Perfect thank you. That’s very helpful, thanks for taking all the questions..

Our next question will come from Devin Ryan of JMP Securities.

Thank you, good afternoon.

So I guess question on the velocity of M&A announcements and really the just of the question is you know when M&A markets that tend to keep going and it often seems that the time that it takes from the start of an engagement on a deal to the announcement and them ultimately its completion that that, time period gets compressed and so the velocity is picking up.

So I’m curious are you guys seeing that in your backlog right now where maybe its filling up quicker and turning over faster today than in the recent past and just expectations for velocity moving forward..

You know it’s interesting. I’m going to try to bring out my calculus which I did horribly and so will see if I can get what the second derivative here it.

But I think we are – we thought that velocity is high, but its staying the same, so the only thing that would actually cause transactions to flow in is if the velocity were accelerating, that’s why I’m getting into my calculus. So in the second quarter during our call, I think that’s where we saw the change.

And I think at the beginning of the second quarter we said we had thought we saw some things accelerate that we thought would be in the third and to the second, but then I think we’ve reached just standard higher velocity, and so I think now this is the way its going, there’s not acceleration, it didn’t feel like we had acceleration, we just had a standard velocity which is picked up speed so we have higher velocity, but I don’t believe that we think there was an acceleration if that’s what you’re looking for closings..

Right.

But I guess maybe than going back then it sounds like it has accelerate and now we just have any higher or faster pace?.

Yeah. That’s what I mean. So you know in the second quarter we kind of felt like we had an acceleration and we sort of try to say, we thought we might had a dealer to accelerate.

And, today we just think the velocity in general is at a higher level, I think it goes to higher stock prices, just the whole thing just feels like its moving faster and with more certainty, but again not accelerating just moving faster..

Great..

I’m trying to get something out of the courses, when I took in calculate, you know I’m not sure it working, but I’m trying to amortize some of that cost here..

Very helpful.

With respect to Brazil is there any traction there to speak up at this point, I know its early days in the initiative is young, but just be curious kind of how that progressing relative to the expectation and then maybe from a staffing perspective should we expect from the outside that you continue to build there before the revenues comp or does it feel like now you have a good kind of core group even rather small and so let’s see if we get some early success and then move from there?.

We’ve got – we’ve had some early successes and we kept it small, and I think we’ll keep it small for a while. Look we haven’t even opened our office yet officially opened the office. So we like the team. We have seen – it’s been phenomenon. I talk to them as funny, when I talk to them right after the election on Monday.

And just check it Brazil was still there. They said yes, is much more comp than the markets seem to project. But they are there, they are doing business, and I think you’re going to see us grow somewhat slowly. We like the team we have, but continue to grow and carefully.

I mean we understand that the markets did get hit on the election this week and we’ll be carefully..

Got it. Thanks. And then just lastly small item here, but looks like the Australia JV had a little bigger contribution this quarter from little bit softer than past couple of quarters.

So was that driven equities or banking more broadly and just any update on trajectory of that relationship or business over there?.

Okay. So small that I wouldn’t look to any percentage plus or minus. I will tell you that the Australian market has had a tough economy. They are very linked to the mining economy. I think again, I think we have a tremendous group of people; I apologize by the way for the sirens going by.

But the – we have lot of faith from the team down there, the Australian economies had a very tough – I think nine months, they’re not having their best year. I wouldn’t look too much to the percentage contribution. Its small and it can move by large percentages on small numbers..

Okay. Great. Thanks for taking the time. Operator The next question comes from Vincent Hung of Autonomous..

Hi, good afternoon..

Good afternoon, Vincent..

Are there any chunky outside fees in the number of quarter?.

No. I again, I’d say it was one of the more boring stable normal quarters. I don’t think there’s anything else we called chunky..

Okay. Just on seasoning, I’ll probably asked this before, but in the presentation previously you’ve said, 40% of MD, MDs are more or less than three years.

So how much of the revenue growth contribution this quarter has confirmed so called seasoning?.

There’s just no way to tell you that. There’s no way to know that. The only thing I can tell you is, in fact I talked to Brazil on Monday I told you and they were, yes, how they’re doing.

And they were sided because they planning a trip down for Eric Cantor and they one of our restructuring guy visit and the pitch the deal with the sector team or restructuring team, a Brazilian team and now they’re going to have client meetings with Eric Cantor and so when you say, how much, I’m just giving you that as example because its Brazil.

And they were talking about how much they’re getting out of this one firm approach, because we don’t segment people off and try to structure into kind of commission payments.

So, you ask that question and I can say there been five or six different people contributing to some transactions there, because I have no way to separate that into – I have no way to separate that, that’s a problem..

Okay. And then the last question is just around the pipeline.

So when you look at the composition of the pipeline as it stands, is it very much just business that will close in 2014 or is that some healthy business for 2015 as well?.

And we’re starting to -- I’d say, of the business that we look at that we’re working on, a substantial majority of it is for post 2014. I think that what we call business in the system; we’re starting to build significantly into 2015..

Okay. Thank you very much..

And the next question comes from Betsy Graseck of Morgan Stanley..

Hi, good afternoon..

Good afternoon, Betsy..

Okay. Just two questions one with on the especially I just wanted to make sure I understood how you are thinking about that, because less than 60% was from operating cash flow essentially, right, and it’s a $60 million in cash you know if that was enough.

How do we think about how that’s special recruits from here because is this cash that they built up over a year that either you’re disbursing out now today or is this something that build up for shorter period of time, I just want to understand what kind of payout ratio we should not be [indiscernible]?.

This is build up over the whole year. I mean this is – the operating cash flow build up over the whole year. Again, we don’t have an outlet for using excess cash to retire stock, it’s just not enough stock flowed out there for us to do that.

And I know some of the comps did add in the future we would probably be in the market buying shares rather than doing a special dividend. So yeah, this generates kind of evenly over the revenues, because we don’t have any – there’s no major capital expenditures we had.

So you can do our net income plus our non-cash expenses and you can get to our cash flow pretty easily, but we just had no outlet of share repurchase to return excess capital and we wanted to be aggressive in returning excess capital.

We feel like it’s – that’s the business model we told everybody we would be in and we felt like this was the best way to getting back..

I totally get that. And just you mentioned earlier in the call that you wanted to at some point you said – along lines of adjusted dividend in line with our earnings.

So I’m wondering is what you’re saying is looking on quarterly basis, we’ve got another $0.15 or so in excess cash generations that is going to come to inform of [JV] over time and so you have to focus better?.

I think that the takeaway was that the way we thought about sizing the dividend in the first place was half would be used to fund our ordinary dividend, and the other half of excess capital would be use to buy back stock.

But given the fact that we have such a small flow that and we believe that – and we have a substantial amount of excess capital, we wanted to return that rather than retain it waiting for the day when we could actually buyback stock..

But to you question do we have – I think your question is do we have room in regular dividend? The answer is that will be determined. Look, we are – we’ve had a pretty good year.

The first nine months were up 46% on revenues and look that’s been a good performance from the time we look forward and try to determine what would be a safe dividend and something we could justify.

As we get comfortable with the model and what we could do, we’ll address that, but I don’t have any answer to your question, but we have had probably a performance that exceeded what we thought when we started the year..

Okay. That’s clear, thank you. And then separately on restructuring, we obviously track what you put out there on your website and now that everything you’re doing does look the website tracking for a nice increase in restructuring here transactions $9 billion in 3Q up from 2 billion in 2Q using the perimeters that [indiscernible] was structuring on.

So I just wanted to get a sense as to what’s driving that because as you have indicated you know there’s really not a restructuring market per se, but yet you know you’ve been generating business in that type of activity. So maybe give a little bit of color there and just a sense of what the pipeline on that specific, actually your businesses like..

So one of the problems is we can’t put all our transactions up. So the website is a very sporadic way to follow us, because some deals we just can’t put on, some clients won’t let us, it’s what we can put up, when we can put up and are allowed to.

Just to give you a flavor, I think that the restructuring market is okay right now, it’s nothing great because you have such low interest rates and ability to refinance. We think we are doing fine in restructuring, but I do think that the huge issuance over the last three or four years is a great backlog for the future.

We’re committed to holding our team together and because we do think there will be a day. By the way, I don’t suspect it, I don’t, I wouldn’t call it a boom in restructuring. I think we’re doing well, we are very happy with the way we are performing but it’s not a market of big defaults and distressed credits right now. But that cycle always turns..

Okay. Thanks..

The next question comes from Joel Jeffrey of KBW..

Hey good afternoon guys..

Hi, Joe.

Ken, most of my questions have been asked, but just for some clarification and when you talked about the strength of your European business, is that predominantly coming from M&A or is there any business that you are seeing strength in there?.

You know I think it’s broad across the board. I think it probably reflects the broad nature of our business as well. I don’t have it by percentage because its once again. You know we have a very client centric firm. I just want to repeat to everybody, we look at it as a client centric affair.

And so we don’t label somebody or restructuring client or an M&A client or a Brazilian client. They are clients of the firm.

And it was a little bit like Joel talked about, we have this big client event and people ask this, why do you have a client event? And it’s a wonderful place to introduce a client who sees himself attached to a banker to the rest of what we have, and create an institutional link with the client which is extremely more valuable than a specialist or sector or length, one off length.

And I just want to say that we really don’t track it the way I think you’d want us to because we track it as do we have the mind sure of the client, are they looking to us and are we performing to that client. And then whatever they do we want to be part of.

But I mean that may not be the answer you want but it is the way we run our business, very client centric versus you know MD Centric or sector centric or activity centric..

Okay and then just lastly from me and maybe there it’s a follow up a little bit on Betsy’s question, what’s the minimum cash or capital levels you feel comfortable riding the business at?.

So you know as part of the whole access capital regime, we have basically a series of regulated operating companies. We look at the requirements in each domain, or domicile and ultimately that number in aggregate is only about $50 million..

Okay, thanks for taking my questions..

And this concludes our questions and answer session. I would like to turn the conference back over to Ken Moelis for any closing remarks..

Well thank you all for spending the time with us this afternoon. We look forward to speaking with you and if you have any questions call us but again thanks for your support and your time..

The conference is now concluded. Thank you for attending today’s presentation. You may now disconnect..