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): February
5, 2016
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 February 5, 2016, Moody's Corporation (the "Registrant") announced
its financial results for the fourth quarter and full year ended
December 31, 2015, as well as its outlook for 2016. A copy of the press
release containing the announcement is included as Exhibit 99.1.
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 Securities Exchange Act of 1934, as amended
(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
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99.1
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Press release of Moody's Corporation dated February 5, 2016,
announcing results for the fourth quarter and full year ended
December 31, 2015.
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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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February 5, 2016
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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 February 5, 2016,
announcing results for the fourth quarter and full year ended
December 31, 2015.
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Exhibit 99.1
Moody's
Corporation Reports Results for Fourth Quarter and Full Year 2015; Sets
Outlook for Full Year 2016
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4Q15
revenue of $865.9 million down 1% from 4Q14; up 2% on a constant
currency basis
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4Q15
EPS of $1.09 down 3% from 4Q14
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FY 2015
revenue of $3.5 billion up 5% from FY 2014; up 9% on a constant
currency basis
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FY 2015
GAAP EPS of $4.63 versus $4.61 in FY 2014; FY 2015 non-GAAP EPS of
$4.60 up 9% from FY 2014
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Projected
FY 2016 EPS of $4.75 to $4.85
NEW YORK--(BUSINESS WIRE)--February 5, 2016--Moody’s Corporation
(NYSE:MCO) today announced results for the fourth quarter and full year
2015, as well as set its outlook for full year 2016.
“Despite difficult market conditions in 2015, Moody’s achieved revenue
and EPS growth for the sixth consecutive year,” said Raymond McDaniel,
President and Chief Executive Officer of Moody’s. “Although we expect
continued market volatility, we are projecting mid-single-digit percent
revenue growth in 2016 as well as EPS of $4.75 to $4.85.”
FOURTH QUARTER AND FULL YEAR 2015 HIGHLIGHTS
Moody’s Corporation reported revenue of $865.9 million for the three
months ended December 31, 2015, down 1% from $877.5 million for same
period of 2014, but up 2% on a constant currency basis.
Operating expense totaled $532.8 million, flat to the prior year period,
and operating income was $333.1 million, down 3% from $344.7 million.
Adjusted operating income (operating income before depreciation and
amortization) was $361.8 million, also down 3% from the prior year
period. The operating margin for the fourth quarter of 2015 was 38.5%
and the adjusted operating margin was 41.8%.
EPS of $1.09 was down 3% from the fourth quarter of 2014.
For full year 2015, Moody’s Corporation reported revenue of $3.5
billion, up 5% from $3.3 billion in 2014, or up 9% on a constant
currency basis.
Operating expense was $2.0 billion, up 6% and operating income was $1.5
billion, up 2%. Adjusted operating income was $1.6 billion, up 3%. The
operating margin for full year 2015 was 42.3% and the adjusted operating
margin was 45.5%.
Full year 2015 GAAP EPS of $4.63 was up from $4.61 in 2014. Non-GAAP EPS
of $4.60 was up 9% from $4.21 in 2014. In both years, non-GAAP EPS
excluded a $0.03 benefit from legacy tax matters. Full year 2014
non-GAAP EPS also excluded a $0.37 gain resulting from Moody’s
acquisition of a controlling interest in ICRA Ltd. in the second quarter
of 2014.
MCO FOURTH QUARTER 2015 REVENUE DOWN 1%
Moody’s Corporation reported global revenue of $865.9 million for the
fourth quarter of 2015, down 1% from the fourth quarter of 2014, but up
2% on a constant currency basis.
US revenue was $481.2 million, up 1% from the prior year period. Non-US
revenue was $384.7 million, down 4% from $398.8 million, but up 4% on a
constant currency basis. Revenue generated outside the US constituted
44% of total revenue, versus 45% in the year-ago period.
MIS Fourth Quarter Revenue Down 4%
Global revenue for Moody’s Investors Service (MIS) for the fourth
quarter of 2015 was $544.6 million, down 4% from the prior year period,
but flat on a constant currency basis. US revenue was $338.3 million,
down 2%. Non-US revenue was $206.3 million, down 7% but up 2% on a
constant currency basis.
Global corporate finance revenue was $246.1 million, down 7% from the
prior year period, or down 4% on a constant currency basis. This result
reflected lower levels of non-US investment grade and global speculative
grade bond issuance, partially offset by improved levels of US and
European bank loan issuance. US corporate finance revenue increased 1%,
while non-US revenue decreased 20%.
Global structured finance revenue totaled $114.1 million, down 4% from
the prior year period, but flat on a constant currency basis. Increased
activity across most areas of structured finance partially offset lower
collateralized loan obligation (CLO) issuance. US structured finance
revenue was down 3% and non-US revenue was down 5%.
Global financial institutions revenue was $91.9 million, up 8% from the
prior year period, or up 13% on a constant currency basis. This result
was driven primarily by the US insurance and European banking sectors.
US financial institutions revenue was up 7% and non-US revenue was up 8%.
Global public, project and infrastructure finance revenue was $85.2
million, down 5% versus the prior year period, or down 2% on a constant
currency basis, primarily as a result of decreased US public finance
activity. US public, project and infrastructure finance revenue was down
10%, while non-US revenue was up 4%.
MA Fourth Quarter Revenue Up 3%
Global revenue for Moody’s Analytics (MA) for the fourth quarter of 2015
was $321.3 million, up 3% from the fourth quarter of 2014, or up 6% on a
constant currency basis. MA’s US revenue was $142.9 million, up 6%.
Non-US revenue was $178.4 million, up 1% or up 6% on a constant currency
basis.
Global revenue from research, data and analytics (RD&A) was $161.4
million, up 8% from the prior year period, or up 11% on a constant
currency basis. Growth was mainly due to strong new sales and product
upgrades, coupled with record customer retention. US RD&A revenue was up
10%, while non-US revenue was up 5%.
Global enterprise risk solutions (ERS) generated record revenue of
$121.5 million, up 1% from the prior year period, or up 4% on a constant
currency basis. Growth was driven by strength in the credit assessment
and originations and stress testing businesses. US and non-US ERS
revenue were each up 1%.
Global revenue from professional services of $38.4 million was down 10%
from the prior year period, or down 6% on a constant currency basis.
This result was primarily due to lower net new business at Copal Amba as
well as the unfavorable impact of foreign exchange on the credentials
and licensing business. US professional services revenue was down 7%,
while non-US revenue was down 11%.
FOURTH QUARTER 2015 OPERATING EXPENSE FLAT
Fourth quarter 2015 operating expense for Moody’s Corporation was $532.8
million, flat to the prior year period. Foreign currency translation
favorably impacted operating expense by 3%.
Operating income was $333.1 million, down 3% from the fourth quarter of
2014, but up 1% on a constant currency basis. Adjusted operating income
of $361.8 million was also down 3% from the prior year period. Moody’s
operating margin was 38.5%, down from 39.3%, and its adjusted operating
margin was 41.8%, down from 42.4%.
Moody’s effective tax rate was 29.4% for the fourth quarter of 2015,
compared with 28.1% for the prior year period. This increase was
primarily due to a reduced percentage of income in the quarter from
lower tax rate jurisdictions, partially offset by the favorable
resolution of tax audits.
MCO FULL YEAR 2015 REVENUE UP 5%
For Moody’s Corporation overall, global revenue was $3.5 billion for
full year 2015, up 5% from 2014, or up 9% on a constant currency basis.
US revenue was $2.0 billion, up 11%. Non-US revenue amounted to $1.5
billion, down 3% but up 7% on a constant currency basis.
MIS Full Year Revenue Up 3%
Revenue at MIS totaled $2.3 billion for full year 2015, up 3% from the
prior year period, or up 8% on a constant currency basis. US revenue was
$1.5 billion, up 10%. Non-US revenue was $859.9 million, down 7% but up
4% on a constant currency basis. Non-US revenue represented 37% of MIS
revenue, down from 41% in 2014.
MA Full Year Revenue Up 8%
MA revenue totaled $1.2 billion for full year 2015, up 8% from full year
2014, or up 12% on a constant currency basis. US revenue of $534.7
million increased 13%. Non-US revenue was $615.6 million, up 3% or up
11% on a constant currency basis. Non-US revenue constituted 54% of MA
revenue, down from 56% in 2014.
FULL YEAR 2015 OPERATING EXPENSE UP 6%; NON-GAAP EPS UP 9%
Full year 2015 operating expense for Moody’s Corporation was $2.0
billion, up 6% from the prior year. Foreign currency translation
favorably impacted operating expense by 4%.
Operating income was $1.5 billion, up 2% from 2014, or up 8% on a
constant currency basis. Adjusted operating income of $1.6 billion
increased 3% from the prior year. Moody’s operating margin was 42.3%,
down from 43.2%, and its adjusted operating margin was 45.5%, down from
46.0%.
The effective tax rate for full year 2015 was 31.2% versus 31.1% in 2014.
Full year 2015 GAAP EPS of $4.63 was up from $4.61 in 2014. Non-GAAP EPS
of $4.60 was up 9% from $4.21 in 2014. In both years, non-GAAP EPS
excluded a $0.03 benefit from legacy tax matters. Full year 2014
non-GAAP EPS also excluded a $0.37 gain resulting from Moody’s
acquisition of a controlling interest in ICRA Ltd. in the second quarter
of 2014.
2015 CAPITAL ALLOCATION AND LIQUIDITY
Quarterly Dividend Up 9%
On December 15, 2015, Moody’s increased its quarterly dividend by 9%
from $0.34 to $0.37 per share of common stock. During 2015, Moody’s
returned $272.1 million to its shareholders via dividend payments.
2.0 Million Shares Repurchased in the Fourth Quarter
During the fourth quarter of 2015, Moody’s repurchased 2.0 million
shares at a total cost of $192.6 million, or an average cost of $100.09
per share, and issued 0.3 million shares as part of its employee
stock-based compensation plans.
For full year 2015, Moody’s repurchased 10.9 million shares at a total
cost of $1.1 billion, or an average cost of $101.14 per share, and
issued 3.2 million shares as part of its employee stock-based
compensation plans. Outstanding shares as of December 31, 2015, totaled
196.1 million, down 4% from the prior year.
In the fourth quarter of 2015, the Board of Directors authorized a $1
billion share repurchase program which will commence following
completion of the existing program. Including this incremental program,
Moody’s had $1.5 billion of share repurchase authority remaining as of
December 31, 2015.
Full Year 2015 Free Cash Flow Up 13%
On November 13, 2015, Moody’s issued $300 million of 5.25% senior
unsecured notes due 2044. At year-end, Moody’s had $3.4 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 $2.2 billion, up $554.6
million from December 31, 2014. Free cash flow for full year 2015 was
$1.1 billion, up 13% from full year 2014, primarily due to changes in
working capital.
ASSUMPTIONS AND OUTLOOK FOR FULL YEAR 2016
Moody’s outlook for 2016 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. Moody’s guidance assumes
foreign currency translation for the British pound (£) of $1.42 to £1
and for the euro (€) of $1.09 to €1. For all other currencies, Moody’s
assumes end-of-2015 exchange rates.
MCO Full Year 2016 Outlook
Moody’s expects full year 2016 revenue and operating expense to each
grow in the mid-single-digit percent range. Moody’s projects an
operating margin of approximately 42% and an adjusted operating margin
of approximately 45%. The effective tax rate is expected to be 32% to
32.5%.
The Company expects 2016 EPS of $4.75 to $4.85.
Free cash flow is expected to be approximately $1.1 billion. Moody’s
expects share repurchases to be approximately $1 billion, subject to
available cash, market conditions and other capital allocation
decisions. Capital expenditures are expected to be $125 million to $135
million. These investments are expected to continue over the next
several years. Depreciation and amortization expense is expected to be
approximately $130 million.
MIS Full Year 2016 Outlook
For MIS, Moody’s expects 2016 revenue to grow in the mid-single-digit
percent range. Both US and non-US MIS revenue are also expected to
increase in the mid-single-digit percent range.
Corporate finance revenue is expected to be flat. Structured finance
revenue and public, project and infrastructure finance revenue are each
expected to grow in the high-single-digit percent range. Financial
institutions revenue is expected to grow in the mid-single-digit percent
range.
MA Full Year 2016 Outlook
For MA, 2016 revenue is expected to increase in the mid-single-digit
percent range. US revenue is expected to grow in the high-single-digit
percent range and non-US revenue is expected to be flat.
Research, data and analytics revenue is projected to grow in the
mid-single-digit percent range.
Enterprise risk solutions revenue is expected to grow in the
low-single-digit percent range, following earlier than anticipated
recognition of revenue in the fourth quarter of 2015.
Professional services revenue is expected to decline in the
low-single-digit percent range. Lower net new business at Copal Amba in
2015 as well as ongoing foreign exchange headwinds in the credentials
and licensing business are expected to continue to impact revenue in
2016.
CONFERENCE CALL
Moody’s will hold a conference call to discuss fourth quarter and full
year 2015 results as well as its 2016 outlook on February 5, 2016, at
11:30 a.m. EST. 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. EST. The passcode for the call
is “Moody’s Corporation.”
The teleconference will also be webcast with an accompanying slide
presentation which can be accessed through Moody's Investor Relations
website, http://ir.moodys.com under “Events and Presentations.”
The webcast will be available until 3:30 p.m. Eastern Time on March 5,
2016.
A replay of the teleconference will be available from 3:30 p.m. EST,
February 5, 2016 until 3:30 p.m. Eastern Time, March 5, 2016. 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 6337202.
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
$3.5 billion in 2015, employs approximately 10,400 people worldwide and
maintains a presence in 36 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 2016 and other forward-looking
statements in this release are made as of February 5, 2016, 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.
Table 1 - Consolidated Statements of Operations (Unaudited)
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Three Months Ended
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Year Ended
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December 31,
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December 31,
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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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865.9
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$
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877.5
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$
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3,484.5
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$
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3,334.3
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Expenses:
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Operating
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251.9
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255.5
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976.3
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930.3
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Selling, general and administrative
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252.2
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250.3
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921.3
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869.3
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Depreciation and amortization
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28.7
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27.0
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113.5
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95.6
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Total expenses
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532.8
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532.8
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2,011.1
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1,895.2
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Operating income
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333.1
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344.7
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1,473.4
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1,439.1
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Non-operating (expense) income, net
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Interest (expense) income, net
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(28.1)
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(29.3)
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(115.1)
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(116.8)
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Other non-operating (expense) income, net
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7.3
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20.4
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21.3
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35.9
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ICRA Gain
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-
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-
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-
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102.8
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Total non-operating (expense) income, net
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(20.8)
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(8.9)
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(93.8)
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21.9
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Income before provision for income taxes
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312.3
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335.8
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1,379.6
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1,461.0
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Provision for income taxes
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91.9
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94.4
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430.0
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455.0
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Net income
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220.4
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241.4
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949.6
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1,006.0
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Less: net income attributable to noncontrolling interests
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2.5
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5.1
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8.3
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17.3
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Net income attributable to Moody's Corporation
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$
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217.9
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$
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236.3
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$
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941.3
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$
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988.7
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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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1.11
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$
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1.14
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$
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4.70
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$
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4.69
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Diluted
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$
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1.09
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$
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1.12
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$
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4.63
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$
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4.61
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Weighted average number of shares outstanding
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Basic
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197.0
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206.5
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200.1
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210.7
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Diluted
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200.2
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210.5
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203.4
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214.7
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Table 2- Supplemental Revenue Information (Unaudited)
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|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Year Ended
|
|
|
December 31,
|
|
December 31,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts in millions
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Moody's Investors Service
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate Finance
|
$
|
246.1
|
|
$
|
263.3
|
|
$
|
1,112.7
|
|
$
|
1,109.3
|
|
Structured Finance
|
|
114.1
|
|
|
118.5
|
|
|
449.1
|
|
|
426.5
|
|
Financial Institutions
|
|
91.9
|
|
|
85.3
|
|
|
365.6
|
|
|
354.7
|
|
Public, Project and Infrastructure Finance
|
|
85.2
|
|
|
90.1
|
|
|
376.4
|
|
|
357.3
|
|
MIS Other
|
|
7.3
|
|
|
7.9
|
|
|
30.4
|
|
|
18.0
|
|
Intersegment royalty
|
|
24.0
|
|
|
21.9
|
|
|
93.5
|
|
|
87.6
|
|
Sub-total MIS
|
|
568.6
|
|
|
587.0
|
|
|
2,427.7
|
|
|
2,353.4
|
|
Eliminations
|
|
(24.0)
|
|
|
(21.9)
|
|
|
(93.5)
|
|
|
(87.6)
|
|
Total MIS revenue
|
|
544.6
|
|
|
565.1
|
|
|
2,334.2
|
|
|
2,265.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Moody's Analytics
|
|
|
|
|
|
|
|
|
|
|
|
|
Research, Data and Analytics
|
|
161.4
|
|
|
149.5
|
|
|
626.4
|
|
|
571.8
|
|
Enterprise Risk Solutions
|
|
121.5
|
|
|
120.4
|
|
|
374.0
|
|
|
328.5
|
|
Professional Services
|
|
38.4
|
|
|
42.5
|
|
|
149.9
|
|
|
168.2
|
|
Intersegment revenue
|
|
3.4
|
|
|
3.2
|
|
|
13.1
|
|
|
13.3
|
|
Sub-total MA
|
|
324.7
|
|
|
315.6
|
|
|
1,163.4
|
|
|
1,081.8
|
|
Eliminations
|
|
(3.4)
|
|
|
(3.2)
|
|
|
(13.1)
|
|
|
(13.3)
|
|
Total MA revenue
|
|
321.3
|
|
|
312.4
|
|
|
1,150.3
|
|
|
1,068.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Moody's Corporation revenue
|
$
|
865.9
|
|
$
|
877.5
|
|
$
|
3,484.5
|
|
$
|
3,334.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Moody's Corporation revenue by geographic area
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United States
|
$
|
481.2
|
|
$
|
478.7
|
|
$
|
2,009.0
|
|
$
|
1,814.5
|
|
International
|
|
384.7
|
|
|
398.8
|
|
|
1,475.5
|
|
|
1,519.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
865.9
|
|
$
|
877.5
|
|
$
|
3,484.5
|
|
$
|
3,334.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 3 - Non-operating (Expense) Income, Net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Year Ended
|
|
December 31,
|
|
|
December 31,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
|
Amounts in millions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest (expense) / income, net:
|
|
|
|
|
|
|
|
|
|
|
|
Expense on borrowings (a)
|
$
|
(31.8
|
)
|
|
$
|
(28.3
|
)
|
|
$
|
(120.6
|
)
|
|
$
|
(118.4
|
)
|
Income
|
|
2.7
|
|
|
|
1.6
|
|
|
|
9.7
|
|
|
|
6.7
|
|
Legacy Tax (b)
|
|
-
|
|
|
|
-
|
|
|
|
0.7
|
|
|
|
0.7
|
|
UTPs and other tax related liabilities(c)
|
|
1.0
|
|
|
|
(2.6
|
)
|
|
|
(5.3
|
)
|
|
|
(5.8
|
)
|
Interest capitalized
|
|
-
|
|
|
|
-
|
|
|
|
0.4
|
|
|
|
-
|
|
Total interest (expense) income, net
|
$
|
(28.1
|
)
|
|
$
|
(29.3
|
)
|
|
$
|
(115.1
|
)
|
|
$
|
(116.8
|
)
|
Other non-operating (expense) income, net:
|
|
|
|
|
|
|
|
|
|
|
|
FX gain/(loss)
|
$
|
3.6
|
|
|
$
|
18.8
|
|
|
$
|
1.1
|
|
|
$
|
20.3
|
|
Legacy Tax (b)
|
|
-
|
|
|
|
-
|
|
|
|
6.4
|
|
|
|
6.4
|
|
Joint venture income (loss)
|
|
3.0
|
|
|
|
1.7
|
|
|
|
11.8
|
|
|
|
9.6
|
|
Other
|
|
0.7
|
|
|
|
(0.1
|
)
|
|
|
2.0
|
|
|
|
(0.4
|
)
|
Other non-operating (expense) income, net
|
|
7.3
|
|
|
|
20.4
|
|
|
|
21.3
|
|
|
|
35.9
|
|
ICRA Gain
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
102.8
|
|
Total non-operating (expense) income, net
|
$
|
(20.8
|
)
|
|
$
|
(8.9
|
)
|
|
$
|
(93.8
|
)
|
|
$
|
21.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) The full-year 2014 amount includes approximately $11M
in net costs related to the prepayment of the Series 2005-1 Notes.
|
(b) Reflects the favorable resolution of legacy tax
matters.
|
(c) The 2015 amounts include benefits from the resolution
of certain domestic and international tax matters.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 4 - Selected Consolidated Balance Sheet Data (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
December 31,
|
|
|
2015
|
|
2014
|
Amounts in millions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
1,757.4
|
|
$
|
1,219.5
|
Short-term investments
|
|
|
474.8
|
|
|
458.1
|
Total current assets
|
|
|
3,243.1
|
|
|
2,686.4
|
Non-current assets
|
|
|
1,880.3
|
|
|
1,982.6
|
Total assets
|
|
|
5,123.4
|
|
|
4,669.0
|
Total current liabilities
|
|
|
1,218.5
|
|
|
1,199.7
|
Total debt (1)
|
|
|
3,401.0
|
|
|
2,547.3
|
Other long-term liabilities
|
|
|
836.9
|
|
|
879.1
|
Total shareholders' (deficit) equity *
|
|
|
(333.0)
|
|
|
42.9
|
Total liabilities and shareholders' equity
|
5,123.4
|
|
|
4,669.0
|
|
|
|
|
|
|
|
Actual number of shares outstanding
|
|
|
196.1
|
|
|
204.4
|
|
|
|
|
|
|
|
* The decrease primarily reflects share repurchases and FX
translation losses partially offset by net income in 2015.
|
|
|
|
|
|
|
|
|
|
December 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)
|
|
|
507.8
|
|
|
503.8
|
2012 Senior Notes due 2022 (b)
|
|
|
497.2
|
|
|
496.9
|
2013 Senior Notes due 2024 (c)
|
|
|
497.7
|
|
|
497.5
|
2014 Senior Notes due 2019 (d)
|
|
|
451.8
|
|
|
450.7
|
2014 Senior Notes due 2044 (e)
|
|
|
603.4
|
|
|
298.4
|
2015 Senior Notes due 2027 (f)
|
|
|
543.1
|
|
|
-
|
Total debt
|
|
$
|
3,401.0
|
|
$
|
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 $9.4 million and a $5.8 million adjustment relating to the fair
value of an interest rate hedge at December 31, 2015 and 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 $2.3
million and a $1.4 million adjustment relating to the fair value
of an interest rate hedge at December 31, 2015 and 2014,
respectively.
(e) Represents $600 million of 5.25% publicly traded
Senior Notes which mature on July 15, 2044; the initial $300
million issuance of the notes in 2014 were offered to the
public at 99.462% of the face amount; the additional $300 million issuance
in 2015 were offered to the public at 101.663% of the face amount.
(f) Represents €500 million of 1.75% publicly traded
Senior Notes which mature on March 9, 2027.
|
|
|
|
|
|
|
Table 5 - 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 December 31,
|
|
|
|
|
2015
|
|
2014
|
|
|
|
|
MIS
|
|
MA
|
|
Eliminations
|
|
Consolidated
|
|
MIS
|
|
MA
|
|
Eliminations
|
|
Consolidated
|
Revenue
|
|
$
|
568.6
|
|
$
|
324.7
|
|
$
|
(27.4)
|
|
$
|
865.9
|
|
$
|
587.0
|
|
$
|
315.6
|
|
$
|
(25.1)
|
|
$
|
877.5
|
Operating, selling, general and administrative
|
|
|
283.9
|
|
|
247.6
|
|
|
(27.4)
|
|
|
504.1
|
|
|
292.6
|
|
|
238.3
|
|
|
(25.1)
|
|
|
505.8
|
Adjusted operating income
|
|
|
284.7
|
|
|
77.1
|
|
|
-
|
|
|
361.8
|
|
|
294.4
|
|
|
77.3
|
|
|
-
|
|
|
371.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
17.3
|
|
|
11.4
|
|
|
-
|
|
|
28.7
|
|
|
15.0
|
|
|
12.0
|
|
|
-
|
|
|
27.0
|
Operating income
|
|
$
|
267.4
|
|
$
|
65.7
|
|
$
|
-
|
|
$
|
333.1
|
|
$
|
279.4
|
|
$
|
65.3
|
|
$
|
-
|
|
$
|
344.7
|
Adjusted operating margin
|
|
|
50.1%
|
|
|
23.7%
|
|
|
|
|
|
41.8%
|
|
|
50.2%
|
|
|
24.5%
|
|
|
|
|
|
42.4%
|
Operating margin
|
|
|
47.0%
|
|
|
20.2%
|
|
|
|
|
|
38.5%
|
|
|
47.6%
|
|
|
20.7%
|
|
|
|
|
|
39.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
|
|
|
|
2015
|
|
2014
|
|
|
|
|
MIS
|
|
MA
|
|
Eliminations
|
|
Consolidated
|
|
MIS
|
|
MA
|
|
Eliminations
|
|
Consolidated
|
Revenue
|
|
$
|
2,427.7
|
|
$
|
1,163.4
|
|
$
|
(106.6)
|
|
$
|
3,484.5
|
|
$
|
2,353.4
|
|
$
|
1,081.8
|
|
$
|
(100.9)
|
|
$
|
3,334.3
|
Operating, selling, general and administrative
|
|
|
1,120.3
|
|
|
883.9
|
|
|
(106.6)
|
|
|
1,897.6
|
|
|
1,076.2
|
|
|
824.3
|
|
|
(100.9)
|
|
|
1,799.6
|
Adjusted operating income
|
|
|
1,307.4
|
|
|
279.5
|
|
|
-
|
|
|
1,586.9
|
|
|
1,277.2
|
|
|
257.5
|
|
|
-
|
|
|
1,534.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
66.0
|
|
|
47.5
|
|
|
-
|
|
|
113.5
|
|
|
49.4
|
|
|
46.2
|
|
|
-
|
|
|
95.6
|
Operating income
|
|
$
|
1,241.4
|
|
$
|
232.0
|
|
$
|
-
|
|
$
|
1,473.4
|
|
$
|
1,227.8
|
|
$
|
211.3
|
|
$
|
-
|
|
$
|
1,439.1
|
Adjusted operating margin
|
|
|
53.9%
|
|
|
24.0%
|
|
|
|
|
|
45.5%
|
|
|
54.3%
|
|
|
23.8%
|
|
|
|
|
|
46.0%
|
Operating margin
|
|
|
51.1%
|
|
|
19.9%
|
|
|
|
|
|
42.3%
|
|
|
52.2%
|
|
|
19.5%
|
|
|
|
|
|
43.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 6 - 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.
|
|
|
Transaction and Relationship Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
|
|
2015
|
|
2014
|
|
|
Transaction
|
|
Relationship
|
|
Total
|
|
Transaction
|
|
Relationship
|
|
Total
|
Corporate Finance
|
|
$
|
160.8
|
|
$
|
85.3
|
|
$
|
246.1
|
|
$
|
175.7
|
|
$
|
87.6
|
|
$
|
263.3
|
|
|
|
65%
|
|
|
35%
|
|
|
100%
|
|
|
67%
|
|
|
33%
|
|
|
100%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Structured Finance
|
|
$
|
76.0
|
|
$
|
38.1
|
|
$
|
114.1
|
|
$
|
78.5
|
|
$
|
40.0
|
|
$
|
118.5
|
|
|
|
67%
|
|
|
33%
|
|
|
100%
|
|
|
66%
|
|
|
34%
|
|
|
100%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Institutions
|
|
$
|
35.2
|
|
$
|
56.7
|
|
$
|
91.9
|
|
$
|
27.6
|
|
$
|
57.7
|
|
$
|
85.3
|
|
|
|
38%
|
|
|
62%
|
|
|
100%
|
|
|
32%
|
|
|
68%
|
|
|
100%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Public, Project and Infrastructure Finance
|
|
$
|
47.8
|
|
$
|
37.4
|
|
$
|
85.2
|
|
$
|
52.8
|
|
$
|
37.3
|
|
$
|
90.1
|
|
|
|
56%
|
|
|
44%
|
|
|
100%
|
|
|
59%
|
|
|
41%
|
|
|
100%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MIS Other
|
|
$
|
2.8
|
|
$
|
4.5
|
|
$
|
7.3
|
|
$
|
3.8
|
|
$
|
4.1
|
|
$
|
7.9
|
|
|
|
38%
|
|
|
62%
|
|
|
100%
|
|
|
48%
|
|
|
52%
|
|
|
100%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total MIS
|
|
$
|
322.6
|
|
$
|
222.0
|
|
$
|
544.6
|
|
$
|
338.4
|
|
$
|
226.7
|
|
$
|
565.1
|
|
|
|
59%
|
|
|
41%
|
|
|
100%
|
|
|
60%
|
|
|
40%
|
|
|
100%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Moody's Analytics
|
|
$
|
97.7
|
|
$
|
223.6
|
|
$
|
321.3
|
|
$
|
95.6
|
|
$
|
216.8
|
|
$
|
312.4
|
|
|
|
30%
|
|
|
70%
|
|
|
100%
|
|
|
31%
|
|
|
69%
|
|
|
100%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Moody's Corporation
|
|
$
|
420.3
|
|
$
|
445.6
|
|
$
|
865.9
|
|
$
|
434.0
|
|
$
|
443.5
|
|
$
|
877.5
|
|
|
|
49%
|
|
|
51%
|
|
|
100%
|
|
|
49%
|
|
|
51%
|
|
|
100%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
|
|
2015
|
|
2014
|
|
|
Transaction
|
|
Relationship
|
|
Total
|
|
Transaction
|
|
Relationship
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate Finance
|
|
$
|
768.8
|
|
$
|
343.9
|
|
$
|
1,112.7
|
|
$
|
782.0
|
|
$
|
327.3
|
|
$
|
1,109.3
|
|
|
|
69%
|
|
|
31%
|
|
|
100%
|
|
|
70%
|
|
|
30%
|
|
|
100%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Structured Finance
|
|
$
|
287.9
|
|
$
|
161.2
|
|
$
|
449.1
|
|
$
|
264.8
|
|
$
|
161.7
|
|
$
|
426.5
|
|
|
|
64%
|
|
|
36%
|
|
|
100%
|
|
|
62%
|
|
|
38%
|
|
|
100%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Institutions
|
|
$
|
136.6
|
|
$
|
229.0
|
|
$
|
365.6
|
|
$
|
123.8
|
|
$
|
230.9
|
|
$
|
354.7
|
|
|
|
37%
|
|
|
63%
|
|
|
100%
|
|
|
35%
|
|
|
65%
|
|
|
100%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Public, Project and Infrastructure Finance
|
|
$
|
225.9
|
|
$
|
150.5
|
|
$
|
376.4
|
|
$
|
208.9
|
|
$
|
148.4
|
|
$
|
357.3
|
|
|
|
60%
|
|
|
40%
|
|
|
100%
|
|
|
58%
|
|
|
42%
|
|
|
100%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MIS Other
|
|
$
|
13.2
|
|
$
|
17.2
|
|
$
|
30.4
|
|
$
|
3.8
|
|
$
|
14.2
|
|
$
|
18.0
|
|
|
|
43%
|
|
|
57%
|
|
|
100%
|
|
|
21%
|
|
|
79%
|
|
|
100%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total MIS
|
|
$
|
1,432.4
|
|
$
|
901.8
|
|
$
|
2,334.2
|
|
$
|
1,383.3
|
|
$
|
882.5
|
|
$
|
2,265.8
|
|
|
|
61%
|
|
|
39%
|
|
|
100%
|
|
|
61%
|
|
|
39%
|
|
|
100%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Moody's Analytics
|
|
$
|
296.9
|
|
$
|
853.4
|
|
$
|
1,150.3
|
|
$
|
283.2
|
|
$
|
785.3
|
|
$
|
1,068.5
|
|
|
|
26%
|
|
|
74%
|
|
|
100%
|
|
|
27%
|
|
|
73%
|
|
|
100%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Moody's Corporation
|
|
$
|
1,729.3
|
|
$
|
1,755.2
|
|
$
|
3,484.5
|
|
$
|
1,666.5
|
|
$
|
1,667.8
|
|
$
|
3,334.3
|
|
|
|
50%
|
|
|
50%
|
|
|
100%
|
|
|
50%
|
|
|
50%
|
|
|
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 7 - 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 as well as benefits from the resolution of Legacy
Tax Matters 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 US
GAAP amount:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
|
|
|
|
2015
|
|
|
2014
|
Diluted EPS - GAAP
|
|
$
|
4.63
|
|
$
|
4.61
|
ICRA Gain
|
|
|
-
|
|
|
(0.37)
|
Legacy Tax
|
|
|
(0.03)
|
|
|
(0.03)
|
Diluted EPS - Non-GAAP
|
|
$
|
4.60
|
|
$
|
4.21
|
|
|
|
|
|
|
|
|
Table 8 - 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
December 31,
|
|
|
Year Ended
December 31,
|
|
|
|
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
Operating income
|
|
$
|
333.1
|
|
$
|
344.7
|
|
$
|
1,473.4
|
|
$
|
1,439.1
|
|
Depreciation & amortization
|
|
|
28.7
|
|
|
27.0
|
|
|
113.5
|
|
|
95.6
|
Adjusted operating income
|
|
$
|
361.8
|
|
$
|
371.7
|
|
$
|
1,586.9
|
|
$
|
1,534.7
|
Operating margin
|
|
|
38.5%
|
|
|
39.3%
|
|
|
42.3%
|
|
|
43.2%
|
Adjusted operating margin
|
|
|
41.8%
|
|
|
42.4%
|
|
|
45.5%
|
|
|
46.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
December 31,
|
|
|
|
|
|
|
|
|
|
|
2016
|
|
|
|
|
|
|
Operating Margin Guidance
|
|
|
Approximately 42%
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
Approximately 3%
|
|
|
|
|
|
|
Adjusted Operating Margin Guidance
|
|
|
Approximately 45%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 9 – 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.
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
December 31,
|
|
|
|
|
|
|
|
|
|
|
2015
|
|
|
2014
|
Net cash flows from operating activities
|
|
|
|
$
|
1,154.0
|
|
$
|
1,018.6
|
|
Capital additions
|
|
|
|
|
|
|
|
|
(89.0)
|
|
|
(74.6)
|
Free cash flow
|
|
|
|
|
|
|
|
$
|
1,065.0
|
|
$
|
944.0
|
Net cash used in investing activities
|
|
$
|
(92.4)
|
|
$
|
(564.9)
|
Net cash provided by (used in) financing activities
|
|
$
|
(461.0)
|
|
$
|
(1,064.5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
December 31,
|
|
|
|
|
|
|
|
|
|
|
2016
|
|
|
Net cash flow from operating activities guidance
|
|
|
Approximately $1.2 Billion
|
|
|
|
|
|
|
Capital additions
|
|
|
$125 - $135 million
|
|
|
|
|
|
|
Free cash flow guidance
|
|
|
Approximately $1.1 Billion
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 10 - Constant Currency Measures:
|
|
The Company presents revenue and operating income 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-USD 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 operating income 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 as reported revenue and operating
income changes to the changes on a constant currency basis:
|
|
Three Months Ended December 31, 2015
|
|
CFG
|
|
SFG
|
|
FIG
|
|
PPIF
|
|
|
Total MIS
|
|
MIS Non-US
|
|
Revenue
|
|
Revenue
|
|
Revenue
|
|
Revenue
|
|
|
Revenue
|
|
Revenue
|
|
$
|
%
|
|
$
|
%
|
|
$
|
%
|
|
$
|
%
|
|
|
$
|
%
|
|
$
|
%
|
Reported change
|
(17.2)
|
(7%)
|
|
(4.4)
|
(4%)
|
|
6.6
|
8%
|
|
(4.9)
|
(5%)
|
|
|
(20.5)
|
(4%)
|
|
(15.1)
|
(7%)
|
FX impact
|
7.0
|
3%
|
|
4.8
|
4%
|
|
4.3
|
5%
|
|
3.0
|
3%
|
|
|
19.4
|
4%
|
|
19.7
|
9%
|
Constant currency change
|
(10.2)
|
(4%)
|
|
0.4
|
-
|
|
10.9
|
13%
|
|
(1.9)
|
(2%)
|
|
|
(1.1)
|
-
|
|
4.6
|
2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RD&A
|
|
ERS
|
|
PS
|
|
Total MA
|
|
|
MA Non-US
|
|
|
|
Revenue
|
|
Revenue
|
|
Revenue
|
|
Revenue
|
|
|
Revenue
|
|
|
|
$
|
%
|
|
$
|
%
|
|
$
|
%
|
|
$
|
%
|
|
|
$
|
%
|
|
|
|
Reported change
|
11.9
|
8%
|
|
1.1
|
1%
|
|
(4.1)
|
(10%)
|
|
8.9
|
3%
|
|
|
1.0
|
1%
|
|
|
|
FX impact
|
4.2
|
3%
|
|
4.3
|
3%
|
|
1.5
|
4%
|
|
10.0
|
3%
|
|
|
10.0
|
5%
|
|
|
|
Constant currency change
|
16.1
|
11%
|
|
5.4
|
4%
|
|
(2.6)
|
(6%)
|
|
18.9
|
6%
|
|
|
11.0
|
6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MCO
|
|
MCO Non-US
|
|
MCO
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
Revenue
|
|
Operating Income
|
|
|
|
|
|
|
|
|
|
|
$
|
%
|
|
$
|
%
|
|
$
|
%
|
|
|
|
|
|
|
|
|
|
|
Reported change
|
(11.6)
|
(1%)
|
|
(14.1)
|
(4%)
|
|
(11.6)
|
(3%)
|
|
|
|
|
|
|
|
|
|
|
FX impact
|
29.4
|
3%
|
|
29.7
|
8%
|
|
15.7
|
4%
|
|
|
|
|
|
|
|
|
|
|
Constant currency change
|
17.8
|
2%
|
|
15.6
|
4%
|
|
4.1
|
1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
MCO
|
|
MCO
|
|
MCO Non-US
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
Operating Income
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
$
|
%
|
|
$
|
%
|
|
$
|
%
|
|
|
|
|
|
|
|
|
|
|
Reported change
|
150.2
|
5%
|
|
34.3
|
2%
|
|
(44.3)
|
(3%)
|
|
|
|
|
|
|
|
|
|
|
FX impact
|
149.5
|
4%
|
|
75.9
|
6%
|
|
145.8
|
10%
|
|
|
|
|
|
|
|
|
|
|
Constant currency change
|
299.7
|
9%
|
|
110.2
|
8%
|
|
101.5
|
7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total MIS
|
|
MIS Non-US
|
|
Total MA
|
|
MA Non-US
|
|
|
|
|
|
|
|
|
Revenue
|
|
Revenue
|
|
Revenue
|
|
Revenue
|
|
|
|
|
|
|
|
|
$
|
%
|
|
$
|
%
|
|
$
|
%
|
|
$
|
%
|
|
|
|
|
|
|
|
Reported change
|
68.4
|
3%
|
|
(64.9)
|
(7%)
|
|
81.8
|
8%
|
|
20.6
|
3%
|
|
|
|
|
|
|
|
FX impact
|
102.2
|
5%
|
|
99.1
|
11%
|
|
47.3
|
4%
|
|
46.7
|
8%
|
|
|
|
|
|
|
|
Constant currency change
|
170.6
|
8%
|
|
34.2
|
4%
|
|
129.1
|
12%
|
|
67.3
|
11%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 11 - 2016 Outlook
|
|
Moody’s outlook for 2016 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 with the exception of the British pound (£) and the euro (€)
which assume foreign currency translation of $1.42 to £1 and $1.09
to €1, respectively.
|
|
Full Year 2016 Moody's Corporation Guidance as of February 5,
2016
|
MOODY'S CORPORATION
|
|
Revenue
|
growth in the mid-single-digit percent range
|
Operating expense
|
growth in the mid-single-digit percent range
|
Depreciation & amortization
|
Approximately $130 million
|
Operating margin
|
Approximately 42%
|
Adjusted Operating margin
|
Approximately 45%
|
Effective tax rate
|
32% - 32.5%
|
EPS
|
$4.75 to $4.85
|
Capital expenditures
|
$125 - $135 million
|
Free cash flow
|
Approximately $1.1 billion
|
Share repurchases
|
Approximately $1 billion (subject to available cash, market conditions
and other ongoing capital allocation decisions)
|
Full Year 2016 Revenue Guidance as of February 5, 2016
|
MIS
|
|
MIS global
|
growth in the mid-single-digit percent range
|
MIS US
|
growth in the mid-single-digit percent range
|
MIS non-US
|
growth in the mid-single-digit percent range
|
CFG
|
flat
|
SFG
|
growth in the high-single-digit percent range
|
FIG
|
growth in the mid-single-digit percent range
|
PPIF
|
growth in the high-single-digit percent range
|
MA
|
|
MA global
|
growth in the mid-single-digit percent range
|
MA US
|
growth in the high-single-digit percent range
|
MA non-US
|
flat
|
RD&A
|
growth in the mid-single-digit percent range
|
ERS
|
growth in the low-single-digit percent range
|
PS
|
decline in low single-digit percent range
|
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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