UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
DC 20549
______________
FORM 8-K
CURRENT
REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE
SECURITIES EXCHANGE ACT OF 1934
Date
of Report (Date of earliest event reported): July
24, 2015
MOODY’S
CORPORATION
(Exact
Name of Registrant as Specified in Charter)
Delaware
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1-14037
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13-3998945
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(State or Other Jurisdiction of Incorporation)
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(Commission File Number)
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(IRS Employer Identification No.)
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7 World Trade Center at 250 Greenwich Street New York, New
York 10007
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(Address
of Principal Executive Offices) (Zip Code)
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Registrant’s
telephone number, including area code:
(212) 553-0300
Check the
appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the Registrant under any
of the following provisions:
⃞
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
⃞
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
⃞
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
⃞
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item 2.02, "Results of Operations and Financial Condition"
On July 24, 2015, Moody's Corporation (the "Registrant") announced its
financial results for the quarter ended June 30, 2015. A copy of the
press release containing the announcement is included as Exhibit 99.1.
In addition to financial results determined in accordance with generally
accepted accounting principles (GAAP) that are included in the press
release, the press release also includes non-GAAP financial measures (as
defined under Regulation G of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”)) and a reconciliation of those numbers to
GAAP.
As stated in the press release, GAAP Earnings Per Share of
$1.28 for the second quarter of 2015 increased 14% from the non-GAAP EPS
of $1.12 for the second quarter of 2014. The non-GAAP EPS figure
excluded the $0.36 gain on ICRA Ltd. The GAAP Earnings Per Share of
$1.28 for the second quarter of 2015 decreased by 14% as compared to the
GAAP EPS of $1.48 for the second quarter of 2014. The foregoing
non-GAAP financial measure should be considered in addition to, not as a
substitute for or superior to, EPS prepared in accordance with GAAP as
more fully discussed in the Registrant’s financial statements and
filings with the Securities and Exchange Commission.
The information contained in this Current Report, including the exhibit
hereto, is being furnished and shall not be deemed "filed" for the
purpose of Section 18 of the Exchange Act or otherwise subject to the
liabilities of that Section. The information in this Current Report
shall not be incorporated by reference into future filings under the
Securities Act of 1933, as amended, or the Exchange Act, unless it is
specifically incorporated by reference therein.
Item 7.01, "Regulation FD Disclosure"
The information set forth under Item 2.02, "Results of Operations and
Financial Condition" is incorporated herein by reference.
Item 9.01, "Financial Statements and Exhibits"
(d) Exhibits
99.1 Press release
of Moody's Corporation dated July 24, 2015, announcing results for the
quarter ended June 30, 2015.
SIGNATURE
Pursuant to
the requirements of the Securities Exchange Act of 1934, the Registrant
has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
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MOODY'S
CORPORATION
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By:
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/s/ John J. Goggins
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John J. Goggins
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Executive Vice President and General Counsel
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Date:
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July 24, 2015
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INDEX TO EXHIBITS
Exhibit No.
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Description
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99.1
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Press release of Moody's Corporation dated July 24, 2015,
announcing results for the quarter ended June 30, 2015.
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Exhibit 99.1
Moody's
Corporation Reports Results for Second-Quarter 2015
-
2Q15
revenue up 5% from 2Q14 to $918.1 million; up 10% on a constant
currency basis
-
2Q15
operating income up 2% from 2Q14 to $419.3 million; up 7% on a
constant currency basis
-
2Q15
EPS of $1.28 up 14% from 2Q14 non-GAAP EPS of $1.12, which excluded
the $0.36 ICRA Gain
-
Reaffirming
FY 2015 GAAP EPS guidance of $4.55 to $4.65
NEW YORK--(BUSINESS WIRE)--July 24, 2015--Moody’s Corporation (NYSE:MCO)
today announced results for the second-quarter 2015.
SECOND-QUARTER 2015 HIGHLIGHTS
Moody’s Corporation reported revenue of $918.1 million for the three
months ended June 30, 2015, up 5% from $873.5 million for the same
period of 2014.
Operating expenses totaled $498.8 million, up 8% from $461.8 million,
and operating income was $419.3 million, up 2% from $411.7 million.
Adjusted operating income (operating income before depreciation and
amortization) was $447.2 million, up 3% from $434.0 million. Operating
margin for the second-quarter 2015 was 45.7% and adjusted operating
margin was 48.7%.
EPS of $1.28 was up 14% from second-quarter 2014 non-GAAP EPS of $1.12,
which excluded a $103 million non-cash, pre-tax gain, or $0.36 per
share, resulting from Moody’s acquisition of a controlling interest in
ICRA Ltd. in the second-quarter of 2014 (the “ICRA Gain”).
“Moody’s achieved 5% revenue growth in the second quarter due to strong
US performance, partially offset by challenging European conditions,”
said Raymond McDaniel, President and Chief Executive Officer of Moody’s.
“We are reaffirming our 2015 earnings per share guidance of $4.55 to
$4.65 despite uneven global growth and foreign currency volatility.”
MCO SECOND-QUARTER 2015 REVENUE UP 5%
Moody’s Corporation reported global revenue of $918.1 million for the
second-quarter 2015, up 5% from the second-quarter 2014. Foreign
currency translation unfavorably impacted revenue by 5%. US revenue was
$545.9 million, up 18% from $461.1 million, while non-US revenue was
$372.2 million, down 10% from $412.4 million. Revenue generated outside
the US constituted 41% of total revenue, versus 47% in the year-ago
period.
MIS Second-Quarter Revenue Up 2%
Global revenue for Moody’s Investors Service (MIS) for the
second-quarter 2015 was $639.2 million, up 2% from the prior-year
period. Foreign currency translation unfavorably impacted MIS revenue by
5%. US revenue was $412.0 million, up 17%, while non-US revenue was
$227.2 million, down 17%.
Global corporate finance revenue was $319.6 million, essentially flat to
the prior-year period. This result reflected strong US investment-grade
issuance primarily from increased M&A activity, largely offset by lower
levels of non-US speculative grade issuance as well as a challenging
prior-year comparable in Europe. US corporate finance revenue increased
18%, while non-US revenue decreased 25%.
Global structured finance revenue totaled $121.2 million, up 10% from a
year earlier, primarily the result of strength in US structured credit,
RMBS and commercial real estate finance. Structured finance US revenue
was up 20%, while non-US revenue was down 10%.
Global financial institutions revenue was $90.4 million, down 2%
compared to the prior-year period. US financial institutions revenue was
up 10%, while non-US revenue was down 9%.
Global public, project and infrastructure finance revenue was $99.9
million, up 2% over the prior-year period. Increased US public finance
issuance was partially offset by a decline in global project and
infrastructure revenue against a strong prior-year comparable. US
public, project and infrastructure finance revenue was up 10%, while
non-US revenue was down 11%.
MA Second-Quarter Revenue Up 12%
Global revenue for Moody’s Analytics (MA) for second-quarter 2015 was
$278.9 million, up 12% from second-quarter 2014. Foreign currency
translation unfavorably impacted MA revenue by 6%. MA’s US revenue was
$133.9 million, up 23%, and its non-US revenue was $145.0 million, up 4%.
Global revenue from research, data and analytics (RD&A) was $157.5
million, up 11% from the prior-year period. Growth was mainly due to the
October 2014 acquisition of Lewtan Technologies as well as strong
performance in the credit research and content licensing businesses. US
RD&A revenue was up 19%, while non-US revenue was up 2%.
Global enterprise risk solutions (ERS) revenue of $83.2 million was up
24%, resulting from strong project delivery across all product offerings
as well as the July 2014 acquisition of WebEquity Solutions. US ERS
revenue was up 44%, while non-US revenue was up 14%.
Global revenue from professional services of $38.2 million was down 4%
from the prior-year period, primarily due to the year-over-year decline
of the Canadian dollar as well as the effect of exiting certain Copal
Amba product lines in late 2014. US professional services revenue was up
10%, while non-US revenue was down 10%.
SECOND-QUARTER 2015 EXPENSE UP 8%
Second-quarter 2015 expense for Moody’s Corporation was $498.8 million,
up 8% from the prior-year period, primarily due to expenses from our
2014 acquisitions as well as compensation costs associated with new
hires and merit increases. Foreign currency translation favorably
impacted expense by 5%.
Operating income was $419.3 million, up 2% from $411.7 million. Foreign
currency translation unfavorably impacted operating income by 5%.
Adjusted operating income of $447.2 million increased 3% from the
prior-year period. The operating margin was 45.7%, down from 47.1%. The
adjusted operating margin was 48.7%, down from 49.7%. These margin
declines resulted from the added expense of our 2014 acquisitions as
well as the unfavorable impact of foreign currency translation.
Moody’s effective tax rate was 30.4% for second-quarter 2015, compared
with 33.1% for the prior-year period. The year-over-year reduction was
due to a favorable tax ruling from New York State and a change in the
New York City tax law regarding income apportionment.
MCO FIRST HALF 2015 REVENUE UP 9%
For Moody’s Corporation overall, global revenue was $1.8 billion for the
first half of 2015, up 9% from the first half of 2014. Foreign currency
translation unfavorably impacted revenue by 5%. US revenue was $1.1
billion, up 18%, while non-US revenue was $0.7 billion, down 2%.
MIS First Half Revenue Up 8%
Revenue at MIS totaled $1.2 billion for the first half of 2015, up 8%
from the prior-year period. Foreign currency translation unfavorably
impacted MIS revenue by 5%. US revenue was $783.5 million, up 17%.
Non-US revenue was $458.0 million, down 6%, and represented 37% of MIS
revenue, down from 42% in the first half of 2014.
MA First Half Revenue Up 11%
MA revenue totaled $542.2 million for the first half of 2015, up 11%
from the prior-year period. Foreign currency translation unfavorably
impacted MA revenue by 6%. US revenue of $262.2 million increased 20%.
Non-US revenue was $280.0 million, up 4%, and constituted 52% of MA
revenue, down from 55% in the first half of 2014.
FIRST HALF 2015 EXPENSE UP 11%
Expense for Moody’s Corporation for the first half of 2015 was $993.1
million, up 11% from the prior year. Foreign currency translation
favorably impacted expense by 4%.
Operating income was $790.6 million, up 6% from the first half of 2014.
Foreign currency translation unfavorably impacted operating income by
6%. Adjusted operating income of $847.1 million increased 7% from the
prior-year period. Moody’s operating margin was 44.3%, down from 45.4%,
and its adjusted operating margin was 47.5%, down from 48.2%.
The effective tax rate for the first half of 2015 was 31.5%, consistent
with the first half of 2014.
2015 CAPITAL ALLOCATION AND LIQUIDITY
2.2 Million Shares Repurchased in Second-Quarter
During second-quarter 2015, Moody’s repurchased 2.2 million shares at a
total cost of $234.9 million, or an average cost of $107.35 per share,
and issued 0.4 million shares as part of its employee stock-based
compensation plans. Over the first half of 2015, Moody’s repurchased 6.0
million shares at a total cost of $600.7 million, or an average cost of
$99.61 per share.
Outstanding shares as of June 30, 2015, totaled 200.3 million, down 5%
from the prior year. As of June 30, 2015, Moody’s had $1.0 billion of
share repurchase authority remaining.
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, up $88.2 million. Free cash flow in the
first six months of 2015 was $553.7 million, up 32% from the first six
months of 2014, primarily due to 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. Our guidance assumes foreign
currency translation at end-of-quarter exchange rates. Specifically, our
forecast reflects exchange rates for the British pound (£) and the euro
(€) of $1.57 to £1 and $1.11 to €1, respectively.
Certain components of Moody’s 2015 guidance have been modified to
reflect the Company’s current view of business conditions, as follows:
Global MIS revenue for full-year 2015 is still expected to increase in
the mid-single-digit percent range. However, US revenue is now expected
to increase in the low-double-digit percent range, while non-US revenue
is now expected to be approximately flat. Within MIS, structured finance
revenue is now expected to grow in the mid-single-digit percent range
and public, project and infrastructure finance revenue is now expected
to increase in the low-double-digit percent range.
Global MA revenue for full-year 2015 is still expected to increase in
the mid-single-digit percent range. Within MA, professional services
revenue is now expected to decrease in the high-single-digit percent
range.
The effective tax rate is now expected to be approximately 31% to 32%
and capital expenditures are now expected to be approximately $100 -
$110 million.
A full summary of Moody’s guidance as of July 24, 2015 is included in
Table 12 - 2015 Outlook at the end of this press release.
CONFERENCE CALL
Moody’s will hold a conference call to discuss second-quarter 2015
results as well as its 2015 outlook on July 24, 2015, at 11:30 a.m. EDT.
Individuals within the US 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. EDT. 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. EDT, August 22, 2015.
A replay of the teleconference will be available from 3:30 p.m. EDT on
July 24, 2015 until 3:30 p.m. EDT on August 22, 2015. The replay can be
accessed from within the US and Canada by dialing +1-888-203-1112. Other
callers can access the replay at +1-719-457-0820. The replay
confirmation code is 2759861.
*****
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 10,200 people worldwide and
maintains a presence in 35 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 July 24, 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 US and abroad; the uncertain
effectiveness and possible collateral consequences of US 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 US, 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.
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Table 1 - Consolidated Statements of Operations (Unaudited)
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Three Months Ended
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Six Months End
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June 30,
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June 30,
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2015
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2014
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2015
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2014
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Amounts in millions, except per share amounts
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Revenue
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$
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918.1
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$
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873.5
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$
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1,783.7
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$
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1,640.7
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Expenses:
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Operating
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243.9
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222.1
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488.3
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438.1
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Selling, general and administrative
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227.0
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217.4
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448.3
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412.5
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Depreciation and amortization
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27.9
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22.3
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56.5
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45.4
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Total expenses
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498.8
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461.8
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993.1
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896.0
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Operating income
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419.3
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411.7
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790.6
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744.7
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Non-operating (expense) income, net
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Interest (expense) income, net
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(31.9
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)
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(26.0
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(61.2
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)
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(49.8
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)
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Other non-operating (expense) income, net
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(8.2
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)
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(3.3
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)
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(5.7
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)
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(0.9
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ICRA Gain
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-
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102.8
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-
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102.8
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Total non-operating (expense) income, net
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(40.1
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)
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73.5
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(66.9
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)
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52.1
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Income before provision for income taxes
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379.2
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485.2
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723.7
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796.8
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Provision for income taxes
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115.1
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160.8
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228.3
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250.7
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Net income
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264.1
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324.4
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495.4
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546.1
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Less: net income attributable to noncontrolling interests
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2.4
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5.2
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3.6
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8.9
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Net income attributable to Moody's Corporation
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$
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261.7
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$
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319.2
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$
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491.8
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$
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537.2
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Earnings per share attributable to Moody's common shareholders
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Basic
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$
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1.30
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$
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1.51
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$
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2.43
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$
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2.52
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Diluted
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$
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1.28
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$
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1.48
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$
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2.39
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$
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2.47
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Weighted average number of shares outstanding
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Basic
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201.3
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212.0
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202.0
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213.0
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Diluted
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204.4
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215.7
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205.4
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217.1
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|
|
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Table 2 - Supplemental Revenue Information (Unaudited)
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Three Months Ended
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Six Months Ended
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June 30,
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June 30,
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Amounts in millions
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2015
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2014
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2015
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2014
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Moody's Investors Service
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|
|
|
|
|
|
|
|
|
|
|
Corporate Finance
|
|
|
$
|
319.6
|
|
|
$
|
320.9
|
|
|
|
$
|
618.3
|
|
|
$
|
585.3
|
|
|
Structured Finance
|
|
|
|
121.2
|
|
|
|
110.6
|
|
|
|
|
222.5
|
|
|
|
205.9
|
|
|
Financial Institutions
|
|
|
|
90.4
|
|
|
|
92.2
|
|
|
|
|
184.2
|
|
|
|
177.6
|
|
|
Public, Project and Infrastructure Finance
|
|
|
|
99.9
|
|
|
|
98.0
|
|
|
|
|
200.6
|
|
|
|
178.7
|
|
|
MIS Other*
|
|
|
|
8.1
|
|
|
|
3.3
|
|
|
|
|
15.9
|
|
|
|
6.6
|
|
|
Intersegment royalty
|
|
|
|
23.7
|
|
|
|
21.9
|
|
|
|
|
46.0
|
|
|
|
43.4
|
|
|
Sub-total MIS
|
|
|
|
662.9
|
|
|
|
646.9
|
|
|
|
|
1,287.5
|
|
|
|
1,197.5
|
|
|
Eliminations
|
|
|
|
(23.7
|
)
|
|
|
(21.9
|
)
|
|
|
|
(46.0
|
)
|
|
|
(43.4
|
)
|
|
Total MIS revenue
|
|
|
|
639.2
|
|
|
|
625.0
|
|
|
|
|
1,241.5
|
|
|
|
1,154.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Moody's Analytics
|
|
|
|
|
|
|
|
|
|
|
|
Research, Data and Analytics
|
|
|
|
157.5
|
|
|
|
141.4
|
|
|
|
|
307.1
|
|
|
|
279.0
|
|
|
Enterprise Risk Solutions
|
|
|
|
83.2
|
|
|
|
67.2
|
|
|
|
|
160.3
|
|
|
|
127.0
|
|
|
Professional Services
|
|
|
|
38.2
|
|
|
|
39.9
|
|
|
|
|
74.8
|
|
|
|
80.6
|
|
|
Intersegment revenue
|
|
|
|
3.1
|
|
|
|
3.3
|
|
|
|
|
6.4
|
|
|
|
6.6
|
|
|
Sub-total MA
|
|
|
|
282.0
|
|
|
|
251.8
|
|
|
|
|
548.6
|
|
|
|
493.2
|
|
|
Eliminations
|
|
|
|
(3.1
|
)
|
|
|
(3.3
|
)
|
|
|
|
(6.4
|
)
|
|
|
(6.6
|
)
|
|
Total MA revenue
|
|
|
|
278.9
|
|
|
|
248.5
|
|
|
|
|
542.2
|
|
|
|
486.6
|
|
|
Total Moody's Corporation revenue
|
|
|
$
|
918.1
|
|
|
$
|
873.5
|
|
|
|
$
|
1,783.7
|
|
|
$
|
1,640.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Moody's Corporation revenue by geographic area
|
|
|
|
|
|
|
|
|
|
United States
|
|
|
$
|
545.9
|
|
|
$
|
461.1
|
|
|
|
$
|
1,045.7
|
|
|
$
|
886.7
|
|
|
International
|
|
|
|
372.2
|
|
|
|
412.4
|
|
|
|
|
738.0
|
|
|
|
754.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
918.1
|
|
|
$
|
873.5
|
|
|
|
$
|
1,783.7
|
|
|
$
|
1,640.7
|
|
|
|
|
|
|
|
|
|
*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
|
|
|
Six Months Ended
|
|
|
|
|
June 30, 2014
|
|
|
June 30, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts in millions
|
|
|
As Reported
|
|
Reclassification
|
|
As Reclassified
|
|
|
As Reported
|
|
Reclassification
|
|
As Reclassified
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Moody's Investors Service
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate Finance
|
|
|
$
|
320.9
|
|
$
|
-
|
|
|
$
|
320.9
|
|
|
$
|
585.3
|
|
$
|
-
|
|
|
$
|
585.3
|
|
Structured Finance
|
|
|
|
110.6
|
|
|
-
|
|
|
|
110.6
|
|
|
|
205.9
|
|
|
-
|
|
|
|
205.9
|
|
Financial Institutions
|
|
|
|
92.2
|
|
|
-
|
|
|
|
92.2
|
|
|
|
177.6
|
|
|
-
|
|
|
|
177.6
|
|
Public, Project and Infrastructure Finance
|
|
|
|
98.0
|
|
|
-
|
|
|
|
98.0
|
|
|
|
178.7
|
|
|
-
|
|
|
|
178.7
|
|
MIS Other
|
|
|
|
-
|
|
|
3.3
|
|
|
|
3.3
|
|
|
|
-
|
|
|
6.6
|
|
|
|
6.6
|
|
Total MIS revenue
|
|
|
|
621.7
|
|
|
3.3
|
|
|
|
625.0
|
|
|
|
1,147.5
|
|
|
6.6
|
|
|
|
1,154.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Moody's Analytics
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research, Data and Analytics
|
|
|
|
144.7
|
|
|
(3.3
|
)
|
|
|
141.4
|
|
|
|
285.6
|
|
|
(6.6
|
)
|
|
|
279.0
|
|
Enterprise Risk Solutions
|
|
|
|
67.2
|
|
|
-
|
|
|
|
67.2
|
|
|
|
127.0
|
|
|
-
|
|
|
|
127.0
|
|
Professional Services
|
|
|
|
39.9
|
|
|
-
|
|
|
|
39.9
|
|
|
|
80.6
|
|
|
-
|
|
|
|
80.6
|
|
Total MA revenue
|
|
|
|
251.8
|
|
|
(3.3
|
)
|
|
|
248.5
|
|
|
|
493.2
|
|
|
(6.6
|
)
|
|
|
486.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Moody's Corporation revenue
|
|
|
$
|
873.5
|
|
$
|
-
|
|
|
$
|
873.5
|
|
|
$
|
1,640.7
|
|
$
|
-
|
|
|
$
|
1,640.7
|
|
|
|
|
|
|
|
|
|
|
|
Table 4 - Selected Consolidated Balance Sheet Data (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
December 31,
|
|
|
|
|
|
|
2015
|
|
2014
|
|
|
|
Amounts in millions
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
$
|
|
|
|
|
1,538.6
|
|
|
$
|
1,219.5
|
|
|
|
Short-term investments
|
|
|
|
|
|
|
|
508.9
|
|
|
|
458.1
|
|
|
|
Total current assets
|
|
|
|
|
|
|
|
3,064.0
|
|
|
|
2,686.4
|
|
|
|
Non-current assets
|
|
|
|
|
|
|
|
1,935.5
|
|
|
|
1,982.6
|
|
|
|
Total assets
|
|
|
|
|
|
|
|
4,999.5
|
|
|
|
4,669.0
|
|
|
|
Total current liabilities
|
|
|
|
|
|
|
|
1,124.8
|
|
|
|
1,199.7
|
|
|
|
Total debt (1)
|
|
|
|
|
|
|
|
3,106.1
|
|
|
|
2,547.3
|
|
|
|
Other long-term liabilities
|
|
|
|
|
|
|
|
872.0
|
|
|
|
879.1
|
|
|
|
Total shareholders' (deficit) equity*
|
|
|
|
|
|
|
|
(103.4
|
)
|
|
|
42.9
|
|
|
|
Total liabilities and shareholders' equity
|
|
|
|
|
|
|
|
4,999.5
|
|
|
|
4,669.0
|
|
|
|
|
|
|
|
|
|
|
|
|
Actual number of shares outstanding
|
|
|
|
|
|
|
|
200.3
|
|
|
|
204.4
|
|
|
|
|
|
|
|
|
|
|
|
|
* The decrease primarily reflects share repurchases and FX
translation losses partially offset by net income in the first
six months of 2015.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
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)
|
|
|
|
|
|
|
|
504.7
|
|
|
|
503.8
|
|
|
|
2012 Senior Notes due 2022 (b)
|
|
|
|
|
|
|
|
497.0
|
|
|
|
496.9
|
|
|
|
2013 Senior Notes due 2024 (c)
|
|
|
|
|
|
|
|
497.6
|
|
|
|
497.5
|
|
|
|
2014 Senior Notes due 2019 (d)
|
|
|
|
|
|
|
|
451.3
|
|
|
|
450.7
|
|
|
|
2014 Senior Notes due 2044 (e)
|
|
|
|
|
|
|
|
298.4
|
|
|
|
298.4
|
|
|
|
2015 Senior Notes due 2027 (f)
|
|
|
|
|
|
|
|
557.1
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total debt
|
|
|
$
|
|
|
|
|
3,106.1
|
|
|
$
|
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
$6.5 million and a $5.8 million adjustment relating to the fair
value of an interest rate hedge at June 30, 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 $1.9
million and a $1.4 million adjustment relating to the fair value of
an interest rate hedge at June 30, 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 5 - Non-operating (expense) income, net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2015
|
|
2014
|
|
|
2015
|
|
2014
|
|
Amounts in millions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net:
|
|
|
|
|
|
|
|
|
|
|
|
Expense on borrowings
|
|
|
$
|
(30.7
|
)
|
|
$
|
(25.6
|
)
|
|
|
$
|
(59.0
|
)
|
|
$
|
(51.7
|
)
|
|
Income
|
|
|
|
2.3
|
|
|
|
1.7
|
|
|
|
|
4.2
|
|
|
|
3.3
|
|
|
UTPs and other tax related liabilities
|
|
|
|
(3.5
|
)
|
|
|
(2.1
|
)
|
|
|
|
(6.7
|
)
|
|
|
(1.5
|
)
|
|
Interest Capitalized
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
0.3
|
|
|
|
0.1
|
|
|
Total interest expense, net
|
|
|
$
|
(31.9
|
)
|
|
$
|
(26.0
|
)
|
|
|
$
|
(61.2
|
)
|
|
$
|
(49.8
|
)
|
|
Other non-operating (expense) income, net:
|
|
|
|
|
|
|
|
|
|
|
|
FX gain/(loss)
|
|
|
$
|
(12.2
|
)
|
|
$
|
(7.1
|
)
|
|
|
$
|
(12.2
|
)
|
|
$
|
(6.1
|
)
|
|
Joint venture income (loss)
|
|
|
|
3.4
|
|
|
|
3.5
|
|
|
|
|
5.3
|
|
|
|
5.3
|
|
|
Other
|
|
|
|
0.6
|
|
|
|
0.3
|
|
|
|
|
1.2
|
|
|
|
(0.1
|
)
|
|
Other non-operating income (expense), net
|
|
|
|
(8.2
|
)
|
|
|
(3.3
|
)
|
|
|
|
(5.7
|
)
|
|
|
(0.9
|
)
|
|
ICRA Gain
|
|
|
|
-
|
|
|
|
102.8
|
|
|
|
|
-
|
|
|
|
102.8
|
|
|
Total non-operating (expense) income, net
|
|
|
$
|
(40.1
|
)
|
|
$
|
73.5
|
|
|
|
$
|
(66.9
|
)
|
|
$
|
52.1
|
|
|
|
|
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 June 30,
|
|
|
2015
|
|
2014
|
|
|
MIS
|
|
MA
|
|
Eliminations
|
|
Consolidated
|
|
MIS
|
|
MA
|
|
Eliminations
|
|
Consolidated
|
Revenue
|
|
$
|
662.9
|
|
$
|
282.0
|
|
|
$
|
(26.8
|
)
|
|
$
|
918.1
|
|
|
$
|
646.9
|
|
|
|
251.8
|
|
|
|
(25.2
|
)
|
|
$
|
873.5
|
|
Operating, selling, general and administrative expense
|
|
|
287.0
|
|
|
210.7
|
|
|
|
(26.8
|
)
|
|
|
470.9
|
|
|
|
271.7
|
|
|
|
193.0
|
|
|
|
(25.2
|
)
|
|
|
439.5
|
|
Adjusted operating income
|
|
|
375.9
|
|
|
71.3
|
|
|
|
-
|
|
|
|
447.2
|
|
|
|
375.2
|
|
|
|
58.8
|
|
|
|
-
|
|
|
|
434.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
15.8
|
|
|
12.1
|
|
|
|
-
|
|
|
|
27.9
|
|
|
|
11.4
|
|
|
|
10.9
|
|
|
|
-
|
|
|
|
22.3
|
|
Operating income
|
|
$
|
360.1
|
|
$
|
59.2
|
|
|
$
|
-
|
|
|
$
|
419.3
|
|
|
$
|
363.8
|
|
|
$
|
47.9
|
|
|
$
|
-
|
|
|
$
|
411.7
|
|
Adjusted operating margin
|
|
|
56.7%
|
|
|
25.3
|
%
|
|
|
|
|
48.7
|
%
|
|
|
58.0
|
%
|
|
|
23.4
|
%
|
|
|
|
|
49.7
|
%
|
Operating margin
|
|
|
54.3%
|
|
|
21.0
|
%
|
|
|
|
|
45.7
|
%
|
|
|
56.2
|
%
|
|
|
19.0
|
%
|
|
|
|
|
47.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30,
|
|
|
2015
|
|
2014
|
|
|
MIS
|
|
MA
|
|
Eliminations
|
|
Consolidated
|
|
MIS
|
|
MA
|
|
Eliminations
|
|
Consolidated
|
Revenue
|
|
$
|
1,287.5
|
|
$
|
548.6
|
|
|
$
|
(52.4
|
)
|
|
$
|
1,783.7
|
|
|
$
|
1,197.5
|
|
|
|
493.2
|
|
|
$
|
(50.0
|
)
|
|
$
|
1,640.7
|
|
Operating, selling, general and administrative expense
|
|
|
568.3
|
|
|
420.7
|
|
|
|
(52.4
|
)
|
|
|
936.6
|
|
|
|
520.3
|
|
|
|
380.3
|
|
|
|
(50.0
|
)
|
|
|
850.6
|
|
Adjusted operating income
|
|
|
719.2
|
|
|
127.9
|
|
|
|
-
|
|
|
|
847.1
|
|
|
|
677.2
|
|
|
|
112.9
|
|
|
|
-
|
|
|
|
790.1
|
|
Depreciation and amortization
|
|
|
31.8
|
|
|
24.7
|
|
|
|
-
|
|
|
|
56.5
|
|
|
|
22.8
|
|
|
|
22.6
|
|
|
|
-
|
|
|
|
45.4
|
|
Operating income
|
|
$
|
687.4
|
|
$
|
103.2
|
|
|
$
|
-
|
|
|
$
|
790.6
|
|
|
$
|
654.4
|
|
|
$
|
90.3
|
|
|
$
|
-
|
|
|
$
|
744.7
|
|
Adjusted operating margin
|
|
|
55.9%
|
|
|
23.3
|
%
|
|
|
|
|
47.5
|
%
|
|
|
56.6
|
%
|
|
|
22.9
|
%
|
|
|
|
|
48.2
|
%
|
Operating margin
|
|
|
53.4%
|
|
|
18.8
|
%
|
|
|
|
|
44.3
|
%
|
|
|
54.6
|
%
|
|
|
18.3
|
%
|
|
|
|
|
45.4
|
%
|
|
|
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 June 30,
|
|
|
|
|
|
2015
|
|
|
2014
|
|
|
|
|
|
Transaction
|
|
Relationship
|
|
Total
|
|
|
Transaction
|
|
Relationship
|
|
Total
|
|
Corporate Finance
|
|
|
|
$232.8
|
|
$86.8
|
|
$319.6
|
|
|
$238.5
|
|
$82.4
|
|
$320.9
|
|
|
|
|
|
73%
|
|
27%
|
|
100%
|
|
|
74%
|
|
26%
|
|
100%
|
|
Structured Finance
|
|
|
|
$80.3
|
|
$40.9
|
|
$121.2
|
|
|
$70.0
|
|
$40.6
|
|
$110.6
|
|
|
|
|
|
66%
|
|
34%
|
|
100%
|
|
|
63%
|
|
37%
|
|
100%
|
|
Financial Institutions
|
|
|
|
$32.8
|
|
$57.6
|
|
$90.4
|
|
|
$32.5
|
|
$59.7
|
|
$92.2
|
|
|
|
|
|
36%
|
|
64%
|
|
100%
|
|
|
35%
|
|
65%
|
|
100%
|
|
Public, Project and Infrastructure Finance
|
|
|
|
$62.2
|
|
$37.7
|
|
$99.9
|
|
|
$61.8
|
|
$36.2
|
|
$98.0
|
|
|
|
|
|
62%
|
|
38%
|
|
100%
|
|
|
63%
|
|
37%
|
|
100%
|
|
MIS Other
|
|
|
|
$4.1
|
|
$4.0
|
|
$8.1
|
|
|
-
|
|
$3.3
|
|
$3.3
|
|
|
|
|
|
51%
|
|
49%
|
|
100%
|
|
|
-
|
|
100%
|
|
100%
|
|
Total MIS
|
|
|
|
$412.2
|
|
$227.0
|
|
$639.2
|
|
|
$402.8
|
|
$222.2
|
|
$625.0
|
|
|
|
|
|
64%
|
|
36%
|
|
100%
|
|
|
64%
|
|
36%
|
|
100%
|
|
Moody's Analytics
|
|
|
|
$67.1
|
|
$211.8
|
|
$278.9
|
|
|
$58.8
|
|
$189.7
|
|
$248.5
|
|
|
|
|
|
24%
|
|
76%
|
|
100%
|
|
|
24%
|
|
76%
|
|
100%
|
|
Total Moody's Corporation
|
|
|
|
$479.3
|
|
$438.8
|
|
$918.1
|
|
|
$461.6
|
|
$411.9
|
|
$873.5
|
|
|
|
|
|
52%
|
|
48%
|
|
100%
|
|
|
53%
|
|
47%
|
|
100%
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30,
|
|
|
|
|
|
2015
|
|
|
2014
|
|
|
|
|
|
Transaction
|
|
Relationship
|
|
Total
|
|
|
Transaction
|
|
Relationship
|
|
Total
|
|
Corporate Finance
|
|
|
|
$446.3
|
|
$172.0
|
|
$618.3
|
|
|
$426.3
|
|
$159.0
|
|
$585.3
|
|
|
|
|
|
72%
|
|
28%
|
|
100%
|
|
|
73%
|
|
27%
|
|
100%
|
|
Structured Finance
|
|
|
|
$142.1
|
|
$80.4
|
|
$222.5
|
|
|
$125.8
|
|
$80.1
|
|
$205.9
|
|
|
|
|
|
64%
|
|
36%
|
|
100%
|
|
|
61%
|
|
39%
|
|
100%
|
|
Financial Institutions
|
|
|
|
$70.6
|
|
$113.6
|
|
$184.2
|
|
|
$61.5
|
|
$116.1
|
|
$177.6
|
|
|
|
|
|
38%
|
|
62%
|
|
100%
|
|
|
35%
|
|
65%
|
|
100%
|
|
Public, Project and Infrastructure Finance
|
|
|
|
$126.7
|
|
$73.9
|
|
$200.6
|
|
|
$104.8
|
|
$73.9
|
|
$178.7
|
|
|
|
|
|
63%
|
|
37%
|
|
100%
|
|
|
59%
|
|
41%
|
|
100%
|
|
MIS Other
|
|
|
|
$7.4
|
|
$8.5
|
|
$15.9
|
|
|
-
|
|
$6.6
|
|
$6.6
|
|
|
|
|
|
47%
|
|
53%
|
|
100%
|
|
|
-
|
|
100%
|
|
100%
|
|
Total MIS
|
|
|
|
$793.1
|
|
$448.4
|
|
$1,241.5
|
|
|
$718.4
|
|
$435.7
|
|
$1,154.1
|
|
|
|
|
|
64%
|
|
36%
|
|
100%
|
|
|
62%
|
|
38%
|
|
100%
|
|
Moody's Analytics
|
|
|
|
$127.7
|
|
$414.5
|
|
$542.2
|
|
|
$113.3
|
|
$373.3
|
|
$486.6
|
|
|
|
|
|
24%
|
|
76%
|
|
100%
|
|
|
23%
|
|
77%
|
|
100%
|
|
Total Moody's Corporation
|
|
|
|
$920.8
|
|
$862.9
|
|
$1,783.7
|
|
|
$831.7
|
|
$809.0
|
|
$1,640.7
|
|
|
|
|
|
52%
|
|
48%
|
|
100%
|
|
|
51%
|
|
49%
|
|
100%
|
|
|
|
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 to
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 8 - Non-GAAP diluted earnings per share attributable to
Moody's common shareholders:
|
|
The Company presents this non-GAAP measure to exclude the impact
of the ICRA Gain in the second quarter of 2014 to allow for a more
meaningful comparison of Moody’s diluted earnings per share from
period to period. Below is a reconciliation of this measure to its
most directly comparable U.S. GAAP amount:
|
|
(amounts in millions)
|
|
|
Three Months Ended June 30,
|
|
|
Six Months Ended June 30,
|
|
|
|
2015
|
|
2014
|
|
|
2015
|
|
2014
|
Diluted EPS - GAAP
|
|
|
$
|
1.28
|
|
$
|
1.48
|
|
|
$
|
2.39
|
|
$
|
2.47
|
ICRA Gain
|
|
|
|
-
|
|
|
(0.36)
|
|
|
|
-
|
|
|
(0.36)
|
Diluted EPS - Non-GAAP
|
|
|
$
|
1.28
|
|
$
|
1.12
|
|
|
$
|
2.39
|
|
$
|
2.11
|
|
|
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.
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
|
Six Months Ended
June 30,
|
(amounts in millions)
|
|
2015
|
|
2014
|
|
|
2015
|
|
2014
|
Operating income
|
|
$
|
419.3
|
|
$
|
411.7
|
|
|
$
|
|
|
|
790.6
|
|
$
|
|
|
|
744.7
|
Depreciation & amortization
|
|
|
27.9
|
|
|
22.3
|
|
|
|
|
|
|
56.5
|
|
|
|
|
|
45.4
|
Adjusted operating income
|
|
$
|
447.2
|
|
$
|
434.0
|
|
|
$
|
|
|
|
847.1
|
|
$
|
|
|
|
790.1
|
Operating margin
|
|
|
45.7%
|
|
|
47.1%
|
|
|
|
|
|
|
44.3%
|
|
|
|
|
|
45.4%
|
Adjusted operating margin
|
|
|
48.7%
|
|
|
49.7%
|
|
|
|
|
|
|
47.5%
|
|
|
|
|
|
48.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
June 30,
|
(amounts in millions)
|
|
|
|
|
|
2015
|
|
|
2014
|
Net cash flows from operating activities
|
|
|
|
|
|
$
|
|
594.4
|
|
|
$
|
|
458.0
|
Capital additions
|
|
|
|
|
|
|
|
(40.7)
|
|
|
|
|
(38.8)
|
Free cash flow
|
|
|
|
|
|
$
|
|
553.7
|
|
|
$
|
|
419.2
|
Net cash used in investing activities
|
|
|
|
|
|
$
|
|
(91.8)
|
|
|
$
|
|
(113.4)
|
Net cash used in financing activities
|
|
|
|
|
|
$
|
|
(157.6)
|
|
|
$
|
|
(501.2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Full-Year Ended December 31,
2015
|
Net cash flows from operating activities guidance
|
|
|
|
|
|
Approximately $1.1 billion
|
Capital additions guidance
|
|
|
|
|
|
Approximately $100 - $110 million
|
Free cash flow guidance
|
|
|
|
|
|
Approximately $1.0 billion
|
|
|
Table 11 - Constant Currency Measures:
|
|
The Company presents revenue and expense growth on a constant
currency basis because management deems this metric to be a useful
measure of assessing the operations of the Company in times of
foreign exchange rate volatility. Constant currency measures
exclude the impact of changes in foreign exchange rates on
operating results. The Company calculates the dollar impact of
foreign exchange as the difference between the translation of its
current period non-US dollar functional currency results using
prior comparative period weighted average foreign exchange
translation rates and current year as reported results. Growth
rates on a constant currency basis are determined based on the
difference between current period revenue and expenses translated
using prior period comparative weighted average exchange rates and
prior period as reported results divided by prior as reported
results. Below is a reconciliation of the Company’s reported
revenue and expense changes to the changes on a constant currency
basis:
|
|
|
|
|
Three Months Ended June 30, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MCO
|
|
|
|
|
MCO
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
Operating Income
|
|
|
|
|
|
|
|
$
|
|
|
|
%
|
|
|
|
|
$
|
|
|
|
%
|
|
|
Reported change
|
|
|
|
|
44.6
|
|
|
|
5%
|
|
|
|
|
7.6
|
|
|
|
2%
|
|
|
FX impact
|
|
|
|
|
42.8
|
|
|
|
5%
|
|
|
|
|
22.1
|
|
|
|
5%
|
|
|
Constant currency change
|
|
|
|
|
87.4
|
|
|
|
10%
|
|
|
|
|
29.7
|
|
|
|
7%
|
|
|
|
Table 12 - 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 July 24, 2015
|
|
|
Last publicly disclosed guidance on May 1, 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 31% - 32%
|
|
|
Approximately 32% - 33%
|
|
GAAP EPS
|
|
|
$4.55 to $4.65
|
|
|
NC
|
|
Capital expenditures
|
|
|
Approximately $100 - $110 million
|
|
|
Approximately $110 - $115 million
|
|
Free cash flow
|
|
|
Approximately $1 billion
|
|
|
NC
|
|
Share repurchases
|
|
|
Approximately $1 billion (subject to available cash, market conditions
and other ongoing capital allocation decisions)
|
|
|
NC
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Full-year 2015 revenue guidance
|
|
MIS
|
|
|
Current guidance as of July 24, 2015
|
|
|
Last publicly disclosed guidance on May 1, 2015
|
|
MIS global
|
|
|
growth in the mid-single-digit percent range
|
|
|
NC
|
|
MIS U.S.
|
|
|
growth in the low-double-digit percent range
|
|
|
growth in the high-single-digit percent range
|
|
MIS Non-U.S.
|
|
|
Approximately flat
|
|
|
growth in the low-single-digit percent range
|
|
Corporate finance
|
|
|
growth in the mid-single-digit percent range
|
|
|
NC
|
|
Structured finance
|
|
|
growth in the mid-single-digit percent range
|
|
|
growth in the low-single-digit percent range
|
|
Financial institutions
|
|
|
growth in the low-single-digit percent range
|
|
|
NC
|
|
Public, project and infrastructure finance
|
|
|
growth in the low-double-digit percent range
|
|
|
growth in the high-single-digit percent range
|
|
MA
|
|
|
|
|
|
|
|
MA global
|
|
|
growth in the mid-single-digit percent range
|
|
|
NC
|
|
MA U.S.
|
|
|
growth in the low-double-digit percent range
|
|
|
NC
|
|
MA Non-U.S.
|
|
|
growth in the low-single-digit percent range
|
|
|
NC
|
|
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 high-single-digit percent range
|
|
|
decrease in the low-single-digit percent range
|
|
NC- There is no difference between the Company's current
guidance and the last publicly disclosed guidance for this item.
|
|
|
|
CONTACT:
Michael Adler
Senior Vice President
Corporate
Communications
212.553.4667
michael.adler@moodys.com
or
Salli
Schwartz
Global Head of Investor Relations
212.553.4862
sallilyn.schwartz@moodys.com
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