- 1Q15 revenue up 13% from 1Q14 to $865.6
million; up 18% on a constant currency basis
- 1Q15 operating income up 12% from 1Q14
to $371.3 million; up 18% on a constant currency basis
- 1Q15 GAAP EPS up 11% from 1Q14 to
$1.11
- Reaffirming FY 2015 guidance of GAAP
EPS in the range of $4.55 to $4.65
Moody’s Corporation (NYSE:MCO) today announced results for the
first-quarter 2015.
FIRST-QUARTER 2015 HIGHLIGHTS
Moody’s Corporation reported revenue of $865.6 million for the
three months ended March 31, 2015, up 13% from $767.2 million for
same period of 2014.
Operating expense in first-quarter 2015 totaled $494.3 million,
a 14% increase from $434.2 million. Operating income was $371.3
million, up 12% from $333.0 million. Adjusted operating income
(operating income before depreciation and amortization) was $399.9
million, up 12% from $356.1 million. Operating margin for
first-quarter 2015 was 42.9%, and adjusted operating margin was
46.2%. GAAP EPS of $1.11 was up 11% from first-quarter 2014 GAAP
EPS of $1.00.
"Moody’s first-quarter 2015 revenue increased 13% year over
year, reflecting double-digit growth from both Moody’s Investors
Service and Moody’s Analytics,” said Raymond McDaniel, President
and Chief Executive Officer of Moody’s. “We are reaffirming our
full-year 2015 earnings per share guidance of $4.55 to $4.65
despite our expectations for uneven global growth as well as the
strength of the U.S. dollar at current exchange rates.”
MCO FIRST-QUARTER 2015 REVENUE UP
13%
Moody’s Corporation reported global revenue of $865.6 million
for first-quarter 2015, up 13% from first-quarter 2014. Foreign
currency translation unfavorably impacted revenue by 5%. U.S.
revenue was $499.8 million, up 17% from $425.6 million, while
non-U.S. revenue was $365.8 million, up 7% from $341.6 million.
Revenue generated outside the U.S. constituted 42% of total
revenue, versus 45% in the year-ago period.
MIS First-Quarter Revenue Up
14%
Global revenue for Moody’s Investors Service (MIS) for
first-quarter 2015 was $602.3 million, up 14% from the prior-year
period. Foreign currency translation unfavorably impacted MIS
revenue by 5%. U.S. revenue was $371.5 million, up 18%, while
non-U.S. revenue was $230.8 million, up 8%. Excluding the 2014
consolidation of ICRA Ltd., MIS revenue grew 12%
year-over-year.
Global corporate finance revenue was $298.7 million in
first-quarter 2015, up 13% from the prior-year period, reflecting
increased investment-grade issuance from heightened M&A
activity, as well as strong investor demand for high-yield bonds.
Partially offsetting these gains was a contraction in bank loan
issuance. Corporate finance U.S. revenue increased 13%, while
non-U.S. revenue increased 14%.
Global structured finance revenue totaled $101.3 million for
first-quarter 2015, up 6% from a year earlier, primarily the result
of strong U.S. commercial real estate issuance. Structured finance
U.S. revenue was up 13%, while non-U.S. revenue was down 6%.
Global financial institutions revenue was $93.8 million, up 10%
compared to the prior-year period, primarily due to increased
revenue from U.S. finance companies and insurers. Partially
offsetting the increase was a decrease in revenue from global
managed investment issuers, which experienced elevated activity in
the prior year. Financial institutions U.S. and non-U.S. revenue
was up 19% and 4%, respectively.
Global public, project and infrastructure finance revenue was
$100.7 million, up 25% resulting from increases in U.S. municipal
financing activity and global municipal infrastructure issuance.
Public, project and infrastructure finance U.S. revenue was up 37%,
while non-U.S. revenue was up 7%.
MA First-Quarter Revenue Up
11%
Global revenue for Moody’s Analytics (MA) for first-quarter 2015
was $263.3 million, up 11% from first-quarter 2014. Foreign
currency translation unfavorably impacted MA revenue by 5%. MA’s
U.S. revenue was $128.3 million, up 17%, and its non-U.S. revenue
was $135.0 million, up 5%. Excluding the 2014 acquisitions of
Lewtan Technologies and WebEquity Solutions, MA revenue grew 7%
year-over-year.
Global revenue from research, data and analytics (RD&A) was
$149.6 million, up 9% from the prior-year period. Growth was driven
by strong sales of credit research and licensing of ratings data,
higher customer retention rates, and the acquisition of Lewtan
Technologies in October 2014. RD&A U.S. revenue was up 13%,
while non-U.S. revenue was up 3%.
Global enterprise risk solutions (ERS) revenue of $77.1 million
was up 29% from first-quarter 2014, resulting from strong project
delivery across all product offerings, as well as the acquisition
of WebEquity in July 2014. ERS U.S. revenue was up 41%, while
non-U.S. revenue was up 22%.
Global revenue from professional services of $36.6 million was
down 10% from the prior-year period, primarily due to the
year-over-year effect of exiting certain Copal Amba product lines
in late 2014. Professional services U.S. revenue was down 4%, while
non-U.S. revenue was down 13%.
FIRST-QUARTER 2015 EXPENSE UP
14%
First-quarter 2015 expense for Moody’s Corporation was $494.3
million, up 14% from the prior-year period, primarily due to
increased headcount and added operating expense from 2014
acquisitions. Foreign currency translation favorably impacted
expense by 4%.
Operating income was $371.3 million, up 12% from $333.0 million.
Adjusted operating income of $399.9 million also increased 12% from
the prior-year period. Foreign currency translation unfavorably
impacted operating income by 7%. The operating margin was 42.9%,
down from 43.4%. The adjusted operating margin was 46.2%, down from
46.4%.
Moody’s effective tax rate was 32.9% for first-quarter 2015,
compared with 28.9% for the prior-year period, which included a
benefit from the resolution of a foreign tax audit.
2015 CAPITAL ALLOCATION AND
LIQUIDITY
3.8 Million Shares Repurchased in First
Quarter
During first-quarter 2015, Moody’s repurchased 3.8 million
shares at a total cost of $365.8 million, or an average cost of
$95.20 per share, and issued 2.3 million shares as part of its
annual employee stock-based compensation plans. Outstanding shares
as of March 31, 2015 totaled 202.2 million, down 5% from the prior
year. As of March 31, 2015, Moody’s had $1.2 billion of share
repurchase authority remaining.
€500 Million Issued on March 9,
2015
On March 9, 2015, Moody’s issued €500 million of 12-year senior
unsecured notes at 1.75%, hedging the Company’s euro net assets. At
quarter-end, Moody’s had $3.1 billion of outstanding debt and $1.0
billion of additional debt capacity available under its revolving
credit facility. Total cash, cash equivalents and short-term
investments at quarter-end were $2.0 billion, down $49.5 million
from a year earlier. Free cash flow in first-quarter 2015 was
$242.8 million, up 54% from first-quarter 2014 due to the increase
in net income and changes in working capital.
ASSUMPTIONS AND OUTLOOK FOR FULL-YEAR
2015
Moody’s outlook for 2015 is based on assumptions about many
macroeconomic and capital market factors, including interest rates,
foreign currency exchange rates, corporate profitability and
business investment spending, mergers and acquisitions, consumer
borrowing and securitization, and the amount of debt issued. These
assumptions are subject to some degree of uncertainty, and results
for the year could differ materially from our current outlook.
Guidance assumes foreign currency translation at end-of-quarter
exchange rates.
Moody’s full-year 2015 GAAP EPS guidance remains in the range of
$4.55 to $4.65, although certain components of Moody’s 2015 revenue
guidance have been modified to reflect the Company’s current view
of business conditions.
Global MIS revenue for full-year 2015 is still expected to
increase in the mid-single-digit percent range. However, U.S.
revenue is now expected to increase in the high-single-digit
percent range and non-U.S. revenue is now expected to increase in
the low-single-digit percent range. Within MIS, structured finance
revenue and financial institutions revenue are now each expected to
increase in the low-single-digit percent range.
Global MA revenue for full-year 2015 is still expected to
increase in the mid-single-digit percent range. However, U.S.
revenue is now expected to increase in the low-double-digit percent
range and non-U.S. revenue is now expected to increase in the
low-single-digit percent range. Within MA, professional services
revenue is now expected to decrease in the low-single-digit percent
range.
A full summary of Moody’s guidance as of May 1, 2015 is included
in the 2015 Outlook table at the end of this press release.
CONFERENCE CALL
Moody’s will hold a conference call to discuss its first-quarter
2015 results, as well as its 2015 outlook, on May 1, 2015, at 11:30
a.m. EST. Individuals within the U.S. and Canada can access the
call by dialing 1-877-400-0505. Other callers should dial
+1-719-234-7477. Please dial into the call by 11:20 a.m. EST. The
passcode for the call is “Moody’s Corporation.”
The teleconference will be webcast with a slide presentation and
can be accessed on Moody's Investor Relations website,
http://ir.moodys.com, until 3:30 p.m. EST, May 30, 2015.
A replay of the teleconference will be available from 3:30 p.m.
EST on May 1, 2015 until 3:30 p.m. EST on May 30, 2015. The replay
can be accessed from within the U.S. and Canada by dialing
888-203-1112. Other callers can access the replay at
+1-719-457-0820. The replay confirmation code is 6383368.
ABOUT MOODY'S CORPORATION
Moody's is an essential component of the global capital markets,
providing credit ratings, research, tools and analysis that
contribute to transparent and integrated financial markets. Moody’s
Corporation (NYSE: MCO) is the parent company of Moody's Investors
Service, which provides credit ratings and research covering debt
instruments and securities, and Moody's Analytics, which offers
leading-edge software, advisory services and research for credit
and economic analysis and financial risk management. The
corporation, which reported revenue of $3.3 billion in 2014,
employs approximately 10,000 people worldwide and maintains a
presence in 33 countries. Further information is available at
www.moodys.com.
“Safe Harbor” Statement under the Private
Securities Litigation Reform Act of 1995
Certain statements contained in this release are forward-looking
statements and are based on future expectations, plans and
prospects for Moody’s business and operations that involve a number
of risks and uncertainties. Moody’s outlook for 2015 and other
forward-looking statements in this release are made as of May 1,
2015, and the Company disclaims any duty to supplement, update or
revise such statements on a going-forward basis, whether as a
result of subsequent developments, changed expectations or
otherwise. In connection with the “safe harbor” provisions of the
Private Securities Litigation Reform Act of 1995, the Company is
identifying certain factors that could cause actual results to
differ, perhaps materially, from those indicated by these
forward-looking statements. Those factors, risks and uncertainties
include, but are not limited to, the current world-wide credit
market disruptions and economic slowdown, which is affecting and
could continue to affect the volume of debt and other securities
issued in domestic and/or global capital markets; other matters
that could affect the volume of debt and other securities issued in
domestic and/or global capital markets, including credit quality
concerns, changes in interest rates and other volatility in the
financial markets; the level of merger and acquisition activity in
the U.S. and abroad; the uncertain effectiveness and possible
collateral consequences of U.S. and foreign government initiatives
to respond to the current world-wide credit market disruptions and
economic slowdown; concerns in the marketplace affecting Moody’s
credibility or otherwise affecting market perceptions of the
integrity or utility of independent credit agency ratings; the
introduction of competing products or technologies by other
companies; pricing pressure from competitors and/or customers; the
level of success of new product development and global expansion;
the impact of regulation as an NRSRO, the potential for new U.S.,
state and local legislation and regulations, including provisions
in the Financial Reform Act and regulations resulting from that
Act; the potential for increased competition and regulation in the
EU and other foreign jurisdictions; exposure to litigation related
to Moody’s rating opinions, as well as any other litigation,
government and regulatory proceedings, investigations and inquiries
to which the Company may be subject from time to time; provisions
in the Financial Reform Act legislation modifying the pleading
standards, and EU regulations modifying the liability standards,
applicable to credit rating agencies in a manner adverse to credit
rating agencies; provisions of EU regulations imposing additional
procedural and substantive requirements on the pricing of services;
the possible loss of key employees; failures or malfunctions of
Moody’s operations and infrastructure; any vulnerabilities to cyber
threats or other cybersecurity concerns; the outcome of any review
by controlling tax authorities of the Company’s global tax planning
initiatives; the outcome of those Legacy Tax Matters and legal
contingencies that relate to the Company, its predecessors and
their affiliated companies for which Moody’s has assumed portions
of the financial responsibility; exposure to potential criminal
sanctions or civil remedies if the Company fails to comply with
foreign and US laws and regulations that are applicable in the
jurisdictions in which the Company operates, including sanctions
laws, anti-corruption laws and local laws prohibiting corrupt
payments to government officials; the impact of mergers,
acquisitions or other business combinations and the ability of the
Company to successfully integrate acquired businesses; currency and
foreign exchange volatility; the level of future cash flows; the
levels of capital investments; and a decline in the demand for
credit risk management tools by financial institutions; and other
risk factors as discussed in the Company’s annual report on Form
10-K for the year ended December 31, 2014 and in other filings made
by the Company from time to time with the Securities and Exchange
Commission.
Table 1 - Consolidated Statements of Operations
(Unaudited)
Three Months Ended March 31,
2015
2014 Amounts in millions, except per share amounts
Revenue $
865.6 $ 767.2 Expenses:
Operating 244.4 216.0 Selling, general and administrative
221.3 195.1 Depreciation and amortization 28.6 23.1
Total
expenses 494.3 434.2
Operating income 371.3
333.0 Non-operating (expense) income, net
Interest (expense) income, net (29.3) (23.8) Other non-operating
(expense) income, net 2.5 2.4 Total non-operating (expense)
income, net (26.8) (21.4)
Income before provision for
income taxes 344.5 311.6 Provision for income
taxes 113.2 89.9 Net income 231.3 221.7 Less: net income
attributable to non-controlling interests 1.2 3.7
Net income attributable to Moody's Corporation $
230.1 $ 218.0
Earnings per share
attributable to Moody's common shareholders Basic $ 1.14 $ 1.02
Diluted $ 1.11 $ 1.00
Weighted average number of shares
outstanding Basic 202.7 214.0 Diluted 206.5
218.5
Table 2 - Supplemental Revenue
Information (Unaudited) Three Months Ended
March 31, Amounts in millions
2015
2014 Moody's Investors Service
Corporate Finance $ 298.7 $ 264.4 Structured Finance 101.3
95.3 Financial Institutions 93.8 85.4 Public, Project and
Infrastructure Finance 100.7 80.7 MIS Other* 7.8 3.3 Intersegment
royalty 22.3 21.5 Sub-total MIS 624.6 550.6
Eliminations (22.3) (21.5) Total MIS revenue
602.3 529.1
Moody's Analytics Research, Data
and Analytics 149.6 137.6 Enterprise Risk Solutions 77.1 59.8
Professional Services 36.6 40.7 Intersegment revenue 3.3
3.3 Sub-total MA 266.6 241.4 Eliminations (3.3)
(3.3) Total MA revenue 263.3 238.1
Total
Moody's Corporation revenue $ 865.6 $
767.2
Moody's Corporation revenue by geographic area United States
$ 499.8 $ 425.6 International 365.8 341.6
$
865.6 $ 767.2
*Pursuant to the acquisition of ICRA Ltd. (ICRA) in 2014, the
Company realigned certain components of its presentation of revenue
by LOB. Beginning in the fourth quarter of 2014, ICRA’s non-ratings
revenue was combined with non-ratings revenue associated with
Moody’s majority ownership of Korea Investors Service (KIS) to form
the “MIS Other” LOB. Non-ratings revenue from KIS was previously
reported in MA’s RD&A LOB. Expenses relating to ICRA’s and
KIS’s non-ratings revenue are now reported in the MIS segment. The
prior year comparative results have been reclassified to reflect
this realignment.
Table 3 - Supplemental Revenue
Reclassification (Unaudited)
The following table summarizes the 2014 impact of the
reclassification of non-ratings revenue associated with Moody's
majority ownership of KIS, which was formerly reported in MA's
RD&A LOB, to the MIS Other LOB.
Three
Months Ended
March 31, 2014
Amounts in millions
As Reported
Reclassification As Reclassified
Moody's Investors Service Corporate Finance $ 264.4 $
- $ 264.4 Structured Finance 95.3 - 95.3 Financial Institutions
85.4 - 85.4 Public, Project and Infrastructure Finance 80.7 - 80.7
MIS Other - 3.3 3.3 Total MIS revenue
525.8 3.3 529.1
Moody's Analytics Research, Data and Analytics 140.9 (3.3)
137.6 Enterprise Risk Solutions 59.8 - 59.8 Professional Services
40.7 - 40.7 Total MA revenue
241.4 (3.3) 238.1
Total
Moody's Corporation revenue $ 767.2
$ - $ 767.2
Table 4 - Non-operating (expense)
income, net
Three Months Ended March 31,
2015
2014
Amounts in millions
Interest expense, net: Expense on borrowings $ (28.3) $
(26.1) Income 1.9 1.6 UTPs and other tax related liabilities (3.2)
0.6 Interest Capitalized 0.3 0.1
Total interest
expense, net $ (29.3) $ (23.8)
Other non-operating (expense) income, net: FX gain/(loss) $
- $ 1.0 Joint venture income (loss) 1.9 1.8 Other 0.6
(0.4)
Other non-operating income (expense), net 2.5
2.4
Total non-operating (expense) income, net
$ (26.8) $ (21.4)
Table 5 - Selected Consolidated Balance Sheet Data
(Unaudited) March 31, December 31,
2015 2014 Amounts in millions
Cash and cash equivalents $ 1,509.9 $ 1,219.5
Short-term investments 485.5 458.1 Total current assets 3,039.3
2,686.4 Non-current assets 1,936.7 1,982.6 Total assets 4,976.0
4,669.0 Total current liabilities 1,138.2 1,199.7 Total debt (1)
3,095.1 2,547.3 Other long-term liabilities 888.9 879.1 Total
shareholders' equity(deficit)* (146.2) 42.9 Total liabilities and
shareholders' equity 4,976.0 4,669.0 Actual number of shares
outstanding 202.2 204.4
* The decrease primarily reflects share
repurchases and FX translation losses partially offset by netincome
in the first three months of 2015.
March 31, December 31, (1) Total debt consists of the
following:
2015 2014 Series 2007-1 Notes due 2017 $
300.0 $ 300.0 2010 Senior Notes due 2020 (a) 511.1 503.8 2012
Senior Notes due 2022 (b) 497.0 496.9 2013 Senior Notes due 2024
(c) 497.5 497.5 2014 Senior Notes due 2019 (d) 454.1 450.7 2014
Senior Notes due 2044 (e) 298.4 298.4 2015 Senior Notes due 2027
(f) 537.0 -
Total debt $ 3,095.1
$ 2,547.3
(a) Represents $500 million of 5.5%
publicly traded Senior Notes which mature on September 1, 2020; the
notes were offered to the public at 99.374% of the face amount and
include a $13.0 million and a $5.8 million adjustment relating to
the fair value of an interest rate hedge at March 31,2015 and
December 31, 2014, respectively
(b) Represents $500 million of 4.5%
publicly traded Senior Notes which mature on September 1, 2022; the
notes were offered to the public at 99.218% of the face amount
(c) Represents $500 million of 4.9%
publicly traded Senior Notes which mature on February 15, 2024; the
notes were offered to the public at 99.431% of the face amount
(d) Represents $450 million of 2.75%
publicly traded Senior Notes which mature on July 15, 2019; the
notes were offered to the public at 99.838% of the face amount and
include a $4.7 million and a $1.4 million adjustment relating to
the fair value of an interest rate hedge at March 31, 2015 and
December 31, 2014, respectively
(e) Represents $300 million of 5.25%
publicly traded Senior Notes which mature on July 15, 2044; the
notes were offered to the public at 99.462% of the face amount
(f) Represents €500 million of 1.75%
publicly traded Senior Notes which mature on March 9, 2027
Table 6 - Financial Information by
Segment:
The table below presents revenue, adjusted operating income
and operating income by reportable segment. The Company defines
adjusted operating income as operating income excluding
depreciation and amortization.
Three Months
Ended March 31, 2015 2014 MIS
MA Eliminations
Consolidated MIS MA
Eliminations Consolidated Revenue $ 624.6 $
266.6 $ (25.6) $ 865.6 $ 550.6 $ 241.4 $ (24.8) $ 767.2
Operating, selling, generaland
administrativeexpense
281.3 210.0 (25.6) 465.7 248.6
187.3 (24.8) 411.1
Adjusted operating
income 343.3 56.6 -
399.9 302.0 54.1
- 356.1
Depreciationandamortization
16.0 12.6 - 28.6 11.4
11.7 - 23.1
Operatingincome
$ 327.3 $ 44.0 $ -
$ 371.3 $ 290.6 $ 42.4
$ - $ 333.0
Adjusted operating margin
55.0% 21.2% 46.2% 54.8% 22.4%
46.4%
Operating margin
52.4% 16.5% 42.9% 52.8% 17.6%
43.4%
Table 7 - Transaction and Relationship
Revenue:
The tables below summarize the split between transaction and
relationship revenue. In the MIS segment, excluding MIS Other,
transaction revenue represents the initial rating of a new debt
issuance as well as other one-time fees while relationship revenue
represents the recurring monitoring of a rated debt obligation
and/or entities that issue such obligations, as well as revenue
from programs such as commercial paper, medium-term notes, shelf
registrations and other non-rating subscription based revenue. In
MIS Other, transaction revenue represents revenue from professional
services and outsourcing engagements and relationship revenue
represents subscription based revenues. In the MA segment,
relationship revenue represents subscription-based revenues and
software maintenance revenue. Transaction revenue in MA represents
software license fees and revenue from risk management advisory
projects, training and certification services, and outsourced
research and analytical engagements.
Three Months Ended March 31, 2015
2014 Transaction Relationship Total Transaction
Relationship
Total Corporate Finance
$213.6
$85.1
$298.7
$187.9
$76.5
$264.4
72% 28% 100% 71% 29% 100% Structured Finance
$61.8
$39.5
$101.3
$55.7
$39.6
$95.3
61% 39% 100% 58% 42% 100% Financial Institutions
$37.8
$56.0
$93.8
$29.0
$56.4
$85.4
40% 60% 100% 34% 66% 100%
Public, Project andInfrastructure
Finance
$64.4
$36.3
$100.7
$43.0
$37.7
$80.7
64% 36% 100% 53% 47% 100% MIS Other
$3.3
$4.5
$7.8
-
$3.3
$3.3
42% 58% 100% - 100% 100%
Total MIS
$380.9
$221.4
$602.3
$315.6
$213.5
$529.1
63% 37% 100% 60% 40% 100%
Moody's Analytics
$60.6
$202.7
$263.3
$54.6
$183.5
$238.1
23% 77% 100% 23% 77% 100%
Total Moody'sCorporation
$441.5
$424.1
$865.6
$370.2
$397.0
$767.2
51% 49% 100% 48% 52% 100%
Table 8 - 2015 Outlook:
Moody’s outlook for 2015 is based on assumptions about many
macroeconomic and capital market factors, including interest rates,
foreign currency exchange rates, corporate profitability and
business investment spending, merger and acquisition activity,
consumer borrowing and securitization, and the amount of debt
issued. These assumptions are subject to some degree of
uncertainty, and results for the year could differ materially from
our current outlook. Moody’s guidance, which is presented in the
table below, assumes foreign currency translation at end-of-quarter
exchange rates.
Full-year 2015 Moody's Corporation
guidance MOODY'S CORPORATION Current guidance as of
May 1, 2015
Last publicly disclosed guidance
onFebruary 25, 2015
Revenue growth in the mid-single-digit percent range NC Operating
Expenses growth in the mid-single-digit percent range NC
Depreciation & amortization Approximately $120 million NC
Operating Margin Approximately 43% NC Adjusted Operating Margin
Approximately 46% NC Effective tax rate Approximately 32% - 33% NC
GAAP EPS $4.55 to $4.65 NC Capital expenditures Approximately $110
- $115 million NC Free cash flow Approximately $1 billion NC Share
repurchases
Approximately $1 billion (subject to
available cash, market conditions andother ongoing capital
allocation decisions)
NC
Full-year 2015 revenue
guidance MIS Current guidance as of May 1, 2015
Last publicly disclosed guidance
onFebruary 25, 2015
MIS global growth in the mid-single-digit percent range NC MIS U.S.
growth in the high-single-digit percent range growth in the
mid-single-digit percent range MIS Non-U.S. growth in the
low-single-digit percent range growth in the mid-single-digit
percent range Corporate finance growth in the mid-single-digit
percent range NC Structured finance growth in the low-single-digit
percent range growth in the mid-single-digit percent range
Financial institutions growth in the low-single-digit percent range
growth in the mid-single-digit percent range Public, project and
infrastructure finance growth in the high-single-digit percent
range NC
MA MA global growth in the
mid-single-digit percent range NC MA U.S. growth in the
low-double-digit percent range growth of approximately 10% MA
Non-U.S. growth in the low-single-digit percent range growth in the
mid-single-digit percent range Research, data and analytics growth
in the high-single-digit percent range NC Enterprise risk solutions
growth in the mid-single-digit percent range NC Professional
services decrease in the low-single-digit percent range
approximately flat
NC- There is no difference between the
Company's current guidance and the last publicly disclosed guidance
for this item.
Non-GAAP Financial Measures:
The tables below reflect certain adjusted results that the
SEC defines as "non-GAAP financial measures" as well as a
reconciliation of each non-GAAP measure to its most directly
comparable GAAP measure. Management believes that such non-GAAP
financial measures, when read in conjunction with the Company's
reported results, can provide useful supplemental information for
investors analyzing period-to-period comparisons of the Company's
performance, facilitate comparisons to competitors' operating
results and provide greater transparency to investors of
supplemental information used by management in its financial and
operational decision-making. These non-GAAP measures, as defined by
the Company, are not necessarily comparable to similarly defined
measures of other companies. Furthermore, these non-GAAP measures
should not be viewed in isolation or used as a substitute for other
GAAP measures in assessing the operating performance or cash flows
of the Company.
Table 9 - Adjusted Operating
Income and Adjusted Operating Margin: The table below
reflects a reconciliation of the Company’s operating income and
operating margin to adjusted operating income and adjusted
operating margin. The Company defines adjusted operating income as
operating income excluding depreciation and amortization. The
Company presents adjusted operating income because management deems
this metric to be a useful measure of assessing the operating
performance of Moody’s, measuring the Company's ability to service
debt, fund capital expenditures, and expand its business. Adjusted
operating income excludes depreciation and amortization because
companies utilize productive assets of different ages and use
different methods of both acquiring and depreciating productive
assets. Management believes that the exclusion of this item,
detailed in the reconciliation below, allows for a more meaningful
comparison of the Company’s results from period to period and
across companies. The Company defines adjusted operating margin as
adjusted operating income divided by revenue.
(amounts in millions)
Three Months Ended
March 31,
2015 2014 Operating income $
371.3 $ 333.0 Depreciation & amortization
28.6 23.1
Adjusted operating income $
399.9 $ 356.1 Operating margin
42.9% 43.4% Adjusted operating margin
46.2% 46.4%
Full-Year Ended December 31,
2015
Operating margin guidance Approximately 43% Depreciation and
amortization Approximately 3%
Adjusted operating
margin guidance
Approximately 46%
Table 10 - Free Cash Flow:
The table below reflects a reconciliation of the Company’s
net cash flows from operating activities to free cash flow. The
Company defines free cash flow as net cash provided by operating
activities minus payments for capital additions. Management
believes that free cash flow is a useful metric in assessing the
Company’s cash flows to service debt, pay dividends and to fund
acquisitions and share repurchases. Management deems capital
expenditures essential to the Company’s product and service
innovations and maintenance of Moody’s operational capabilities.
Accordingly, capital expenditures are deemed to be a recurring use
of Moody’s cash flow.
Three Months
Ended
March 31,
(amounts in millions)
2015
2014
Net cash flows from
operating activities
$ 261.8 $ 177.2 Capital
additions (19.0) (19.1)
Free cash flow
$ 242.8 $ 158.1 Net cash used in
investing activities $ (49.3) $
(82.2)
Net cash provided by (used
in) financing activities
$ 123.9 $ (222.1)
Table 11 - Revenue and Operating Income
Growth Excluding Foreign Exchange Impact:
The table below reflects reconciliations of the Company's
reported revenue and operating income growth rates to their growth
rates assuming 2015 results were translated using the same foreign
currency rate as used in 2014. The Company presents the revenue and
operating income growth rates using this approach because
management deems this metric to be a useful measure when evaluating
the Company's revenue and operating income growth from the prior
year. Management believes that the exclusion of the impact of
changes in foreign exchange rates on revenue and operating income
growth, detailed in the reconciliation below, allows for a more
meaningful comparison of the Company's results from
period-to-period.
Three Months
Ended March 31, 2015
MCO Revenue
MCO OperatingIncome
MCO reported growth rate 12.8% 11.5% Add: Foreign
currency impact 5.3% 6.5%
MCO growth rate
excluding foreign exchange
18.1% 18.0%
Table 12 - Revenue Growth Excluding
2014 Acquisitions:
The table below reflects a reconciliation of the reported
revenue growth rate to the growth rate excluding the impact of
revenue from acquisitions which were completed in 2014. The Company
presents the revenue growth rate excluding acquisitions because
management deems this metric to be a useful measure when evaluating
the Company's revenue growth from the prior year. Management
believes that the exclusion of the impact of acquisitions on
revenue growth, detailed in the reconciliation below, allows for a
more meaningful comparison of the Company's results from
period-to-period and across companies.
Three Months EndedMarch 31,
2015
MIS MA Reported revenue growth rate 14% 11% Less:
Impact of 2014 acquisitions 2% 4%
Revenue growth rate
excluding acquisitions
12% 7%
Michael Adler, 212-553-4667Senior Vice PresidentCorporate
Communicationsmichael.adler@moodys.comorSalli Schwartz,
212-553-4862Global Head of Investor
Relationssallilyn.schwartz@moodys.com
Moodys (NYSE:MCO)
Historical Stock Chart
From Mar 2024 to Apr 2024
Moodys (NYSE:MCO)
Historical Stock Chart
From Apr 2023 to Apr 2024