Document and Entity Information
Document and Entity Information shares in Millions | 9 Months Ended |
Sep. 30, 2015shares | |
Document Information [Line Items] | |
Document Type | 10-Q |
Amendment Flag | false |
Document Period End Date | Sep. 30, 2015 |
Document Fiscal Year Focus | 2,015 |
Document Fiscal Period Focus | Q3 |
Trading Symbol | MCO |
Entity Registrant Name | MOODYS CORP /DE/ |
Entity Central Index Key | 1,059,556 |
Current Fiscal Year End Date | --12-31 |
Entity Filer Category | Large Accelerated Filer |
Entity Common Stock, Shares Outstanding | 197.7 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Revenues | $ 834.9 | $ 816.1 | $ 2,618.6 | $ 2,456.8 |
Expenses | ||||
Operating | 236.1 | 236.7 | 724.4 | 674.8 |
Selling, general and administrative | 220.8 | 206.5 | 669.1 | 619 |
Depreciation and amortization | 28.3 | 23.2 | 84.8 | 68.6 |
Total expenses | 485.2 | 466.4 | 1,478.3 | 1,362.4 |
Operating Income | 349.7 | 349.7 | 1,140.3 | 1,094.4 |
Non-operating (expense) income, net | ||||
Interest income (expense), net | (25.8) | (37.7) | (87) | (87.5) |
Other non-operating income (expense), net | $ 19.7 | $ 16.4 | $ 14 | 15.5 |
ICRA Gain | 102.8 | |||
Total non-operating (expense) income, net | $ (6.1) | $ (21.3) | $ (73) | 30.8 |
Income before provisions for income taxes | 343.6 | 328.4 | 1,067.3 | 1,125.2 |
Provision for income taxes | 109.8 | 109.9 | 338.1 | 360.6 |
Net income | 233.8 | 218.5 | 729.2 | 764.6 |
Less: Net income attributable to noncontrolling interests | 2.2 | 3.3 | 5.8 | 12.2 |
Net income attributable to Moody's | $ 231.6 | $ 215.2 | $ 723.4 | $ 752.4 |
Earnings per share attributable to Moody's common shareholders | ||||
Basic | $ 1.16 | $ 1.02 | $ 3.6 | $ 3.55 |
Diluted | $ 1.14 | $ 1 | $ 3.54 | $ 3.48 |
Weighted average number of shares outstanding | ||||
Basic | 199.4 | 210.4 | 201.1 | 212.1 |
Diluted | 202.5 | 214.2 | 204.5 | 216.1 |
Dividends declared per share attributable to Moody's common shareholders | $ 0.34 | $ 0.28 | $ 0.68 | $ 0.56 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Net income | $ 233.8 | $ 218.5 | $ 729.2 | $ 764.6 |
Foreign currency translation: | ||||
Foreign currency translation adjustments - Pre Tax | (43.2) | (79.2) | (94.3) | (76.2) |
Foreign currency translation adjustment - Tax Amount | 1.5 | (8.2) | (5.8) | (5.6) |
Foreign currency translation adjustments - Net of Tax | $ (41.7) | $ (87.4) | (100.1) | (81.8) |
Foreign currency translation adjustments - reclassification of losses included in net income - Pre Tax | $ (0.1) | $ 4.4 | ||
Foreign currency translation adjustments - reclassification of losses included in net income - Tax Effect | ||||
Foreign currency translation adjustments - reclassification of losses included in net income - Net of Tax | $ (0.1) | $ 4.4 | ||
Available for sale securities: | ||||
Net unrealized gains on available for sale securities - Pre Tax | $ 0.7 | $ 2.8 | ||
Net unrealized gains on available for sale securities - Tax | ||||
Net unrealized gains on available for sale securities - Net of Tax | $ 0.7 | $ 2.8 | ||
Reclassification of gains included in net income - Pre Tax | $ (0.6) | $ (0.8) | ||
Reclassification of gains included in net income - Tax | ||||
Reclassification of gains included in net income - Net of Tax | $ (0.6) | $ (0.8) | ||
Pension and Other Retirement Benefits: | ||||
Amortization of actuarial losses and prior service costs included in net income - Pre Tax | 3.4 | $ 1.8 | 10.3 | $ 5.5 |
Amortization of actuarial losses and prior service costs included in net income - Tax | (1.3) | (0.7) | (3.9) | (3) |
Amortization of actuarial losses and prior service costs included in net income - Net of Tax | $ 2.1 | $ 1.1 | 6.4 | 2.5 |
Net actuarial losses and prior service costs - Pre Tax | 10.9 | (6.9) | ||
Net actuarial losses and prior service costs - Tax | (4.2) | 2.8 | ||
Net actuarial losses and prior service costs - Net of Tax | 6.7 | (4.1) | ||
Total other comprehensive income (loss) - Pre Tax | $ (39.7) | $ (77.4) | (71.2) | (73.2) |
Total other comprehensive income (loss) - Tax | 0.2 | (8.9) | (13.9) | (5.8) |
Total other comprehensive income (loss) - Net of Tax | (39.5) | (86.3) | (85.1) | (79) |
Comprehensive income | 194.3 | 132.2 | 644.1 | 685.6 |
Less: Comprehensive income attributable to noncontrolling interests and redeemable noncontrolling interest | 2.2 | 3.3 | 5.8 | 12.2 |
Comprehensive income attributable to Moody's | $ 192.1 | $ 128.9 | $ 638.3 | $ 673.4 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 1,471.1 | $ 1,219.5 |
Short-term investments | 470.2 | 458.1 |
Accounts receivable, net of allowances of net of allowances of $27.1 in 2015 and $29.4 in 2014 | 720.5 | 792.4 |
Deferred tax assets, net | 36.6 | 43.9 |
Other current assets | 163.7 | 172.5 |
Total current assets | 2,862.1 | 2,686.4 |
Property and equipment, net of accumulated depreciation of $501.4 in 2015 and $451.5 in 2014 | 306.1 | 302.3 |
Goodwill | 990 | 1,021.1 |
Intangible assets, net | 308.8 | 345.5 |
Deferred tax assets, net | 132.7 | 167.8 |
Other assets | 173.2 | 145.9 |
Total assets | 4,772.9 | 4,669 |
Current liabilities: | ||
Accounts payable and accrued liabilities | 409.2 | 557.6 |
Deferred tax liabilities, net | 15.5 | 17.5 |
Deferred revenue | 625.5 | 624.6 |
Total current liabilities | 1,050.2 | 1,199.7 |
Non-current portion of deferred revenue | 128.4 | 132.2 |
Long-term debt | 3,124.5 | 2,547.3 |
Deferred tax liabilities, net | 84.3 | 95.7 |
Unrecognized tax benefits | 208.4 | 220.3 |
Other liabilities | 417.3 | 430.9 |
Total liabilities | $ 5,013.1 | $ 4,626.1 |
Contingencies (Note 14) | ||
Redeemable noncontrolling interest | ||
Shareholders' equity | ||
Preferred stock, par value $.01 per share; 10,000,000 shares authorized; no shares issued and outstanding | ||
Capital surplus | $ 424.8 | $ 383.9 |
Retained earnings | 6,631.7 | 6,044.3 |
Treasury stock, at cost; 145,161,779 and 138,539,128 shares of common stock at September 30, 2014 and December 31, 2014, respectively | (7,209.5) | (6,384.2) |
Accumulated other comprehensive loss | (320.3) | (235.2) |
Total Moody's shareholders' equity | (469.9) | (187.8) |
Noncontrolling interests | 229.7 | 230.7 |
Total shareholders' (deficit) equity | (240.2) | 42.9 |
Total liabilities, redeemable noncontrolling interest and shareholders' equity | $ 4,772.9 | $ 4,669 |
Series common stock | ||
Shareholders' equity | ||
Common stock | ||
Common Stock | ||
Shareholders' equity | ||
Common stock | $ 3.4 | $ 3.4 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 |
Accounts receivable, allowances | $ 27.1 | $ 29.4 |
Property and equipment, accumulated depreciation | $ 501.4 | $ 451.5 |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, shares authorized | 1,000,000,000 | 1,000,000,000 |
Treasury stock, shares | 145,161,779 | 138,539,128 |
Series common stock | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 10,000,000 | 10,000,000 |
Common stock, shares issued | 0 | 0 |
Common stock, shares outstanding | 0 | 0 |
Common Stock | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued | 342,902,272 | 342,902,272 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Cash flows from operating activities | ||
Net income | $ 729.2 | $ 764.6 |
Reconciliation of net income to net cash provided by operating activities: | ||
Depreciation and amortization | 84.8 | 68.6 |
Stock-based compensation expense | 66.5 | 59.9 |
Deferred income taxes | 19.7 | 43.7 |
Excess tax benefits from stock-based compensation plans | $ (44.5) | (54.5) |
ICRA Gain | (102.8) | |
Legacy Tax Matters | $ (6.4) | (6.4) |
Changes in assets and liabilities: | ||
Accounts receivable | 61 | (11.9) |
Other current assets | 4.9 | (63.3) |
Other assets | (6.6) | (4.8) |
Accounts payable and accrued liabilities | (35.7) | (16.3) |
Deferred revenue | 10.6 | 25.8 |
Unrecognized tax benefits and other non-current tax liabilities | (9.9) | 18.5 |
Other liabilities | 19.9 | (11.3) |
Net cash provided by operating activities | 893.5 | 709.8 |
Cash flows from investing activities | ||
Capital additions | (65.9) | (56.8) |
Purchases of short-term investments | (480.4) | (68) |
Sales and maturities of short-term investments | 448.6 | 90.7 |
Cash paid for acquisitions, net of cash required | (4.6) | $ (210.5) |
Settlement of net investment hedges | 20.8 | |
Net cash used in investing activities | (81.5) | $ (244.6) |
Cash flows from financing activities | ||
Issuance of notes | $ 552.8 | 747.7 |
Repayments of notes | (300) | |
Proceeds from stock-based compensation plans | $ 72.1 | 134.6 |
Repurchase of shares for payroll tax withholdings related to stock-based compensation | (59.3) | (51.3) |
Cost of treasury shares repurchased | (905.6) | (780.2) |
Excess tax benefits from settlement of stock-based compensation plans | 44.5 | 54.5 |
Payment of dividends | (205) | (178.2) |
Payment of dividends to noncontrolling interests | (4.6) | (9.7) |
Contingent consideration paid | (1.5) | (4.3) |
Debt issuance costs and related fees | (5.9) | (6.5) |
Net cash provided by (used in) financing activities | (512.5) | (393.4) |
Effect of exchange rate changes on cash and cash equivalents | (47.9) | (50.5) |
Net increase/(decrease) in cash and cash equivalents | 251.6 | 21.3 |
Cash and cash equivalents, beginning of the period | 1,219.5 | 1,919.5 |
Cash and cash equivalents, end of the period | $ 1,471.1 | $ 1,940.8 |
GLOSSARY OF TERMS AND ABBREVIAT
GLOSSARY OF TERMS AND ABBREVIATIONS | 9 Months Ended |
Sep. 30, 2015 | |
GLOSSARY OF TERMS AND ABBREVIATIONS | GLOSSARY OF TERMS AND ABBREVIATIONS The following terms, abbreviations and acronyms are used to identify frequently used terms in this report: TERM DEFINITION Adjusted Operating Income Operating income excluding depreciation and amortization Adjusted Operating Margin Operating margin excluding depreciation and amortization Amba Amba Investment Services; a provider of outsourced investment research and quantitative analytics for global financial institutions; a majorit y owned subsidiary of the Company acquired 100% of Amba in December 2013 Americas Represents countries within North and South America, excluding the U.S. AOCI Accumulated other comprehensive income (loss); a separate component o f shareholders’ equity ASC The FASB Accounting Standards Codification; the sole source of authoritative GAAP as of July 1, 2009 except for rules and interpretive releases of the SEC, which are also sources of authoritative GAAP for SEC registrants Asia-Pacific Represents countries in Asia including but not limited to: Australia, China, India, Indonesia, Japan, Korea, Malaysia, Singapore, Sri Lanka and Thailand ASU The FASB Accounting Standards Update to the ASC. It also provides background information for accounting guidance and the bases for conclusions on the changes in the ASC. ASUs are not considered authoritative until codified into the ASC Board The board of directors of the Company B PS Basis points Canary Wharf Lease Operating lease agreement entered into on February 6, 2008 f or office space in London, England, occupied by the Company in the second half of 2009 CDO Collateralized debt obligation CFG Corporate finance group; an LOB of MIS CLO Collateralized loan obligation CMBS Commercial mortgage-backed securities; part of the CREF asset class within SFG Company Moody’s Corporation and its subsidiaries; MCO; Moody’s Copal Copal Partners; an acquisition completed in November 2011; part of the MA segment; leading provider of outsourced research and analytical services to instituti onal investors Copal Amba Operating segment created in January 2014 that consists of all operations from Copal as well as the operations of Amba . The Copal Amba operating segment provides outsourced research and analytical services to the global financial and corporate sectors Council Council of the European Union CRAs Credit rating agencies CRA3 Regulation (EU) No 462/2013 of the European Parliament and of the Council, which updated the regulatory regimes imposing additional procedural requireme nts on CRAs CREF Commercial real estate finance which includes REITs, commercial real estate CDOs and mortgage-backed securities; part of SFG CSI CSI Global Education, Inc.; an acquisition completed in November 2010; part of the MA segment; a provider of financial learning, credentials, and certification services primarily in Canada D&A Depreciation and amortization D&B Business Old D&B’s Dun & Bradstreet operating company DBPP Defined benefit pension plans Debt/EBITDA Ratio of Total Debt to EBITDA EBITDA Earnings before interest, taxes, depreciation and amortization EMEA Represents countries within Europe, the Middle East and Africa EPS Earnings per share Equilibrium A leading provider of credit rating and research services in Peru and Panama; acquired b y Moody’s in May 2015 ERS The enterprise risk solutions LOB within MA, which offers risk management software products as well as software implementation services and related risk management advisory engagements ESMA European Securities and Market s Authorit y ETR Effective tax rate EU European Union EUR Euros European Ratings Platform Central credit ratings website administered by ESMA Excess Tax Benefits The difference between the tax benefit realized at exercise of an option or delivery of a restricted shar e and the tax benefit recorded at the time the option or restricted share is expensed under GAAP Exchange Act The Securities Exchange Act of 1934, as amended FASB Financial Accounting Standards Board FIG Financial institutions group; an LOB of MIS Financial Reform Act Dodd-Frank Wall Street Reform and Consumer Protection Act Free Cash Flow Net cash provided by operating activities less cash paid for capital additions FSTC Financial Services Training and Certifications; a reporting unit within the MA segment that includes on-line and classroom-based training services and CSI FX Foreign exchange GAAP U.S. Generally Accepted Accounting Principles GBP British pounds ICRA ICRA Limited. is a leading provider of credit ratings and research in India. The Company previously held 28.5 1 % equity ownership and in June 2014, incre ased that ownership stake to 50.06% through the acquisition of additional shares ICRA Acquisition The June 2014 purchase of an additional 21.55% ownership interest in ICRA resulting in majority ownership and consolidation of ICRAs financial statements; ICRAs results are consolidated into Moody’s financial statements on a three-month lag and accordingly the Company began including the results of operations for ICRA in its consolidated fin ancial statements beginning in the fourth quarter of 2014 ICRA Gain Gain relating to the step-acquisition of ICRA; U.S. GAAP requires the remeasurement to fair value of the previously held non-controlling shares held upon obtaining a controlling interest in a step-acquisition. This remeasurement of the Company’s equity investment in ICRA to fair value resulted in a pre-tax gain of $102.8 million ($78.5 million after tax) in the second quarter of 2014. IRS Internal Revenue Service IT Information technolog y KIS Korea Investors Service, Inc ; a leading Korean rating agency and consolidated subsidiary of the Company KIS Pricing Korea Investors Service Pricing, Inc ; a leading Korean provider of fixed income securities pricing and consolidated subsidiary of the Company Legacy Tax Matter(s) Exposures to certain potential tax liabilities assumed in connection with the 2000 Distribution Lewtan Lewtan Technologies; a leading provider of analytical tools and data for the global structured finance market; part of the RD&A LOB within MA; an acquisition completed in October 2014 LIBOR London Interbank Offered Rate LOB Line of business MA Moody’s Analytics – a reportable segment of MCO formed in January 2008 which provides a wide range of products and services that suppor t financial analysis and risk management activities of institutional participants in global financial markets; consists of three LOBs – RD&A, ERS and PS M&A Mergers and acquisitions Make Whole Amount The prepayment penalty amount relating to the Series 2007-1 Notes, 2010 Senior Notes , 2012 Senior Notes, 2013 Senior Notes, 2014 Senior Notes (5-year), 2014 Senior Notes (30-year) and 2015 Senior Notes which is a premium based on the excess, if any, of the discounted value of the remaining scheduled payments over the prepaid principal MCO Moody’s Corporation and its subsidiaries; the Company; Moody’s MD&A Management’s Discussion and Analysis of Financial Condition and Results of Operations MIS Moody’s Investors Service – a reportable segment of MCO; consists of five LOBs – SFG, CFG, FIG, PPIF and MIS Other MIS Other Consists of non-ratings revenue from ICRA, KIS Pricing and KIS Research. These businesses are components of MIS; MIS Other is an LOB of MIS Moody’s Moody’s Corporation and its subsidiaries ; MCO; the Company Net Income Net income attributable to Moody’s Corporation, which excludes net income from consolidated noncontrolling interests belonging to the minority interest holder New D&B The New D&B Corpora tion – which is comprised of the D&B B us iness NM Percentage change is not meaningful NRSRO Nationally Recognized Statistical Rating Organization OCI Other comprehensive income (loss); includes gains and losses on cash flow and net investment hedges, certain gains and losses relating to pension a nd other retirement benefit obligations and foreign currency translation adjustments Old D&B The former Dun and Bradstreet Company which distributed New D&B shares on September 30, 2000, and was renamed Moody’s Corporation PPIF Public, project and infrastr ucture finance; an LOB of MIS Profit Participation Plan Defined contribution profit participation plan that covers substantially all U.S. employees of the Company PS Professional Services, an LOB within MA that provides outsourced research and analytical services as well as financial training and certification programs RD&A Research, Data and Analytics; an LOB within MA that produces, sells and distributes research, data and related content. Includes products generated by MIS, such as analyses on major deb t issuers, industry studies, and commentary on topical credit events, as well as economic research, data, quantitative risk scores, and other analytical tools that are produced within MA Redeemable Noncontrolling Represents minority shareholders’ interest in entiti es that are controlled but not Interest wholly-owned by Moody’s and for which Moody’s obligation to redeem the minority shareholders’ interest is in the control of the minority shareholders Reform Act Credit Rating Agency Reform Act of 2006 REIT Real Estate Investment Trust Relationship Revenue Represents MIS 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 and shelf registrations. For MIS Other represents subscription-based revenue. For MA, represents subscription-based and maintenance revenue Retirement Plans Moody’s funded and unfund ed pension plans, the healthcare plans and life insurance plans SEC U.S. Securities and Exchange Commission Securities Act Securities Act of 1933 Series 200 5 -1 Notes Principal amount of $300 million, 4.98 % senior unsecured notes ; notes were paid in 2014 Series 2007-1 Notes Principal amount of $300 million, 6.06% senior unsecured notes due in September 2017 pursuant to the 2007 Agreement SFG Structured finance group; an LOB of MIS SG&A Selling, general and administrative expenses Total Debt All indebtedness of the Company as reflected on the consolidated balance sheets Transaction Revenue For MIS, represents the initial rating of a new debt issuance as well as other one-time fees. For MIS Other, represents revenue from professional services and outsourcing engagements. For MA, represents software license fees and revenue from risk management a dvisory projects, training and certification services, and outsourced research and analytical engagements U.K. United Kingdom U.S. United States U.S. Shared National Credit I nteragency program designed to evaluate large and complex syndicated cred its. Program The program is administered by the three federal banking regulatory agencies which include the Federal Reserve System, Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation (FDIC). USD U.S. dollar UTBs Unrecognized tax benefits UTPs Uncertain tax positions VSOE Vendor specif ic objective evidence; as defined in the ASC, evidence of selling price limited to either of the following: the price charged for a deliverable when it is sold separately, or for a deliverable not yet being sold separately, the price established by management having the relevant authority WebEquity WebEquity Solutions LLC ; a leading provider of cloud-based loan origination solutions for financial institutions ; part of the E RS LOB within MA; an acquisition completed in July 2014 2000 Distribution The distribution by Old D&B to its shareholders of all the outstanding shares of New D&B common stock on September 30, 2000 2000 Distribution Agreement Agreement governing certa in ongoing relationships between the Company and New D&B after the 2000 Distribution including the sharing of any liabilities for the payment of taxes, penalties and interest resulting from unfavorable IRS rulings on certain tax matters and certain other p otential tax liabilities 2007 Agreement Note purchase agreement dated September 7, 2007, relating to the Series 2007-1 Notes 2010 Indenture Supplemental indenture and related agreements dated August 1 9 , 201 0 , relating to the 201 0 Senior Notes 2010 Senior N otes Principal amount of $500 million, 5.50% senior unsecured notes due in September 2020 pursuant to the 2010 Indenture 2012 Facility Revolving credit facility of $1 billion entered into on April 18,2012; was replaced with the 2015 Facility 2012 Indenture Supplemental indenture and related agreements dated August 18, 2012, relating to the 2012 Senior Notes 2012 Senior Notes Principal amount of $500 million, 4.50% senior unsecured notes due in September 2022 pursuant to the 2012 Indenture 2013 Indenture Sup plemental indenture and related agreements dated August 12, 2013, relating to the 2013 Senior Notes 2013 Senior Notes Principal amount of the $500 million, 4.875% senior unsecured notes due in February 2024 pursuant to the 2013 Indenture 2014 Indenture Su pplemental indenture and related agreements dated July 16 , 201 4 , relating to the 201 4 Senior Notes 2014 Senior Notes (5-Year) Principal amount of $450 million, 2.75 % senior unsecured notes due in July 2019 2014 Senior Notes (30-Year) Princip al amount of $300 million, 5.25 % senior unsecured notes due in July 2044 2015 Facility Five-year unsecured revolving credit facility, with capacity to borrow up to $1 billion; replaces the 2012 Facility 2015 Indenture Supplemental indenture and related agreements date d March 9 , 201 5 , relating to the 201 5 Senior Notes 2015 Senior Notes Principal amount €500 million, 1.75% senior unsecured notes issued March 9, 2015 and due in March 2027 7WTC The Company’s corporate headq uarters located at 7 World Trade Center in New York, NY 7WTC Lease Operating lease agreement entered into on October 20, 2006 |
DESCRIPTION OF BUSINESS AND BAS
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION | 9 Months Ended |
Sep. 30, 2015 | |
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION | Moody’s is a provider of (i) credit ratings, (ii) credit, capital markets and economic research, data and analytical tools, (iii) software solutions and related risk management services, (iv) quantitative credit risk measures, financial services training and certification services and (v) ou tsourced research and analytical services. Moody’s has two reportable segments: MIS and MA. MIS, the credit rating agency, publishes credit ratings on a wide range of debt obligations and the entities that issue such obligations in markets worldwide. Reven ue is primarily derived from the originators and issuers of such transactions who use MIS ratings in the distribution of their debt issues to investors. Additionally, MIS earns revenue from certain non-ratings-related operations , which consist primarily of the distribution of research and fixed income pricing services in the Asia-Pacific region and outsourced services. The revenue from these operations is included in the MIS Other LOB and is not material to the results of the MIS segment. The MA segmen t develops a wide range of products and services that support financial analysis and risk management activities of institutional participants in global financial markets. Within its Research, Data and Analytics business, MA distributes research and data de veloped by MIS as part of its ratings process, including in-depth research on major debt issuers, industry studies and commentary on topical credit-related events. The RD&A business also produces economic research as well as data and analytical tools such as quantitative credit risk scores. Within its Enterprise Risk Solutions business, MA provides software solutions as well as related risk management services. The Professional Services business provides outsourced research and analytical services along wit h financial training and certification programs. These interim financial statements have been prepared in accordance with the instructions to Form 10-Q and should be read in conjunction with the Company’s consolidated financial statements and related notes in the Company’s 2014 annual report on Form 10-K filed with the SEC on February 25, 2015 . The results of interim periods are not necessarily indicative of results for the full year or any subsequent period. In the opinion of management, all adjust ments (including normal recurring accruals) considered necessary for a fair presentation of financial position, results of operations and cash flows at the dates and for the periods presented have been included. The year-end consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America. Certain reclassifications have been made to prior period amounts to conform to the c urrent presentation. |
Description of Business and Ba9
Description of Business and Basis of Presentation - Additional Information (Detail) | 9 Months Ended |
Sep. 30, 2015 | |
Segment Reporting Information [Line Items] | |
Number of reportable segments | 2 |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 9 Months Ended |
Sep. 30, 2015 | |
STOCK-BASED COMPENSATION | NOTE 2. STOCK-BASED COMPENSATION Presented below is a summary of the stock-based compensation cost and associated ta x benefit included in the accomp anying consolidated statements of operations: Three Months Ended Nine Months Ended September 30, September 30, 2015 2014 2015 2014 Stock-based compensation cost $ 22.1 $ 19.3 $ 66.5 $ 59.9 Tax benefit $ 7.2 $ 6.2 $ 21.8 $ 19.0 During the first nine months of 2015 , th e Company granted 0.3 million employee stock options, which had a weighted average grant date fair value of $36.08 per share based on the Black-Scholes option-pricing model. The Company also granted 0.9 million shares of restricted stock in the first nine months of 2015 , which had a weighted average grant da te fair value of $98.06 per share and generally vest ratably over a four-year period. Additionally, the Company gran t ed approximately 0.2 million shares of performance-based awards whereby the number of shares that ultimately vest are based on the achievement of certain non-market based performance metrics of the Company over a three-year period. The weighted average grant date fair value of th ese awards was $94.08 per share. The following weighted average assumptions were used in determining the fair value for options granted in 2015 : Expected dividend yield 1.39% Expected stock volatility 39.4% Risk-free interest rate 1.88% Expected holding period 6.9 years Grant date fair value $36.08 Unrecognized compensation expense at September 30, 2015 was $ 9.8 million and $ 113.5 m illion for stock options and un vested restricted stock, respectively, which is expected to be recognized over a weighted average period of 1.3 years and 1.7 years, respectively. Additionally, there was $ 17.8 million of unrecognized compensation expense relating to the aforementioned non-market based performance -based awards , which is expected to be recognized over a weighted average period of 1.0 years. T he following tables summarize information relati ng to stock option exercises and restricted stock vesting: Nine Months Ended September 30, Exercise of stock options: 2015 2014 Proceeds from stock option exercises $ 68.0 $ 131.5 Aggregate intrinsic value $ 64.7 $ 107.7 Tax benefit realized upon exercise $ 23.0 $ 38.7 Number of shares exercised 1.3 2.8 Nine Months Ended September 30, Vesting of restricted stock: 2015 2014 Fair value of shares vested $ 111.3 $ 92.3 Tax benefit realized upon vesting $ 35.7 $ 31.6 Number of shares vested 1.1 1.2 Nine Months Ended September 30, Vesting of performance-based restricted stock: 2015 2014 Fair value of shares vested $ 43.1 $ 38.0 Tax benefit realized upon vesting $ 15.6 $ 14.6 Number of shares vested 0.5 0.5 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Stock-Based Compensation Cost and Associated Tax Benefit | Three Months Ended Nine Months Ended September 30, September 30, 2015 2014 2015 2014 Stock-based compensation cost $ 22.1 $ 19.3 $ 66.5 $ 59.9 Tax benefit $ 7.2 $ 6.2 $ 21.8 $ 19.0 |
Weighted Average Assumptions used in Determining Fair Value for Options Granted | Expected dividend yield 1.39% Expected stock volatility 39.4% Risk-free interest rate 1.88% Expected holding period 6.9 years Grant date fair value $36.08 |
Stock Option Exercises and Restricted Stock Vesting | Nine Months Ended September 30, Exercise of stock options: 2015 2014 Proceeds from stock option exercises $ 68.0 $ 131.5 Aggregate intrinsic value $ 64.7 $ 107.7 Tax benefit realized upon exercise $ 23.0 $ 38.7 Number of shares exercised 1.3 2.8 Nine Months Ended September 30, Vesting of restricted stock: 2015 2014 Fair value of shares vested $ 111.3 $ 92.3 Tax benefit realized upon vesting $ 35.7 $ 31.6 Number of shares vested 1.1 1.2 Nine Months Ended September 30, Vesting of performance-based restricted stock: 2015 2014 Fair value of shares vested $ 43.1 $ 38.0 Tax benefit realized upon vesting $ 15.6 $ 14.6 Number of shares vested 0.5 0.5 |
Stock-Based Compensation Cost a
Stock-Based Compensation Cost and Associated Tax Benefit (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Compensation Related Costs Share Based Payments Disclosure [Line Items] | ||||
Stock compensation cost | $ 22.1 | $ 19.3 | $ 66.5 | $ 59.9 |
Tax benefit | $ 7.2 | $ 6.2 | $ 21.8 | $ 19 |
Weighted Average Assumptions us
Weighted Average Assumptions used in Determining Fair Value for Options Granted (Detail) | 9 Months Ended |
Sep. 30, 2015$ / shares | |
Schedule Of Weighted Average Assumptions For Fair Values Of Stock Options [Line Items] | |
Expected dividend yield | 1.39% |
Expected stock volatility | 39.40% |
Risk-free interest rate | 1.88% |
Expected holding period | 6 years 10 months 20 days |
Grant date fair value | $ 36.08 |
Stock Option Exercises and Rest
Stock Option Exercises and Restricted Stock Vesting (Detail) - USD ($) shares in Millions, $ in Millions | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Employee Stock Options [Member] | ||
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items] | ||
Proceeds from stock option exercises | $ 68 | $ 131.5 |
Aggregate intrinsic value | 64.7 | 107.7 |
Tax benefit realized upon exercise/vesting | $ 23 | $ 38.7 |
Number of shares exercised | 1.3 | 2.8 |
Restricted Stock [Member] | ||
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items] | ||
Fair value of shares vested | $ 111.3 | $ 92.3 |
Tax benefit realized upon exercise/vesting | $ 35.7 | $ 31.6 |
Number of shares vested | 1.1 | 1.2 |
Vesting of Performance Based Restricted Stock [Member] | ||
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items] | ||
Fair value of shares vested | $ 43.1 | $ 38 |
Tax benefit realized upon exercise/vesting | $ 15.6 | $ 14.6 |
Number of shares vested | 0.5 | 0.5 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) $ / shares in Units, shares in Millions, $ in Millions | 9 Months Ended |
Sep. 30, 2015USD ($)$ / sharesshares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Employee stock options, weighted average grant date fair value | $ 36.08 |
Employee Stock Options [Member] | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Employee stock options, granted | shares | 0.3 |
Employee stock options, weighted average grant date fair value | $ 36.08 |
Unrecognized compensation expense | $ | $ 9.8 |
Weighted average period to recognize expense | 1 year 3 months 18 days |
Restricted Stock [Member] | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Restricted stock, granted | shares | 0.9 |
Restricted stock, weighted average grant date fair value | $ 98.06 |
Unrecognized compensation expense | $ | $ 113.5 |
Weighted average period to recognize expense | 1 year 8 months 12 days |
Non Market Performance Based Vesting Condition [Member] | Restricted Stock [Member] | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Restricted stock, granted | shares | 0.2 |
Restricted stock, weighted average grant date fair value | $ 94.08 |
Unrecognized compensation expense | $ | $ 17.8 |
Weighted average period to recognize expense | 1 year |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2015 | |
INCOME TAXES | M oody’s effective tax rate was 32.0 % and 33.5 % for the three months ended September 30, 2015 and 2014, respectively and 31.7 % and 32.0 % for the nine month periods ended September 30, 2015 and 2014, respectively. The decrease in the ETR compared to the third quarter of 2014 was primarily due to changes in New York State and New York City tax law s relating to income apportionment . The Company classifies interest related to UTPs in interest expense, net in its consolidated statement s of operations. Penalties, if incurred, would be recognized in other non-operating (expense) income, net. The Company had a n increase in its UTPs of $ 0.1 million during the third quarter of 2015 and an overall decrease in its UTPs during the first nine mo nths of 2015 of $ 11.9 million ($7.6 million net of federal tax benefits). Moody’s Corporation and subsidiaries are subject to U.S. federal income tax as well as income tax in various state, local and foreign jurisdictions. The Company’s U.S. federal income tax returns for the years 2008 through 2012 are under examination and its returns for 2013 through 2014 remain open to examination. The Company’s New York State tax returns for 2011 through 2013 are currently under examination and the Company’s New York C ity tax return for 2013 is currently under examination. The Company’s U.K. tax return for 2012 is currently under examination and its return for 2013 remains open to examination. For ongoing audits, it is possible the balance of UTBs could decrease in the next twelve months as a result of the settlement of these audits, which might involve the payment of additional taxes, the adjustment of certain deferred taxes and/or the recognition of tax benefits. It is also possible that new issues might be raised by t ax authorities that could necessitate increases to the balance of UTBs. As the Company is unable to predict the timing or outcome of these audits, it is therefore unable to estimate the amount of changes to the balance of UTBs at this time. However, the Co mpany believes that it has adequately provided for its financial exposure relating to all open tax years by tax jurisdiction in accordance with the applicable provisions of Topic 740 of the ASC regarding UTBs. Nine Months Ended September 30, 2015 2014 Income taxes paid $ 299.9 $ 334.6 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Income Taxes Paid | Nine Months Ended September 30, 2015 2014 Income taxes paid $ 299.9 $ 334.6 |
Income Taxes Paid (Detail)
Income Taxes Paid (Detail) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Income Taxes [Line Items] | ||
Income Taxes Paid | $ 299.9 | $ 334.6 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Income Tax Contingency [Line Items] | ||||
Effective tax rate | 32.00% | 33.50% | 31.70% | 32.00% |
Overall increase (decrease) in unrecognized tax benefits (UTPs) | $ 9.9 | $ (18.5) | ||
Gross [Member] | ||||
Income Tax Contingency [Line Items] | ||||
Overall increase (decrease) in unrecognized tax benefits (UTPs) | $ 0.1 | (11.9) | ||
Net [Member] | ||||
Income Tax Contingency [Line Items] | ||||
Overall increase (decrease) in unrecognized tax benefits (UTPs) | $ (7.6) |
WEIGHTED AVERAGE SHARES OUTSTAN
WEIGHTED AVERAGE SHARES OUTSTANDING | 9 Months Ended |
Sep. 30, 2015 | |
WEIGHTED AVERAGE SHARES OUTSTANDING | NOTE 4. WEIGHTED AVERAGE SHARES OUTSTANDING Below is a reconciliation of basic to diluted shares outstanding: Three Months Ended Nine Months Ended September 30, September 30, 2015 2014 2015 2014 Basic 199.4 210.4 201.1 212.1 Dilutive effect of shares issuable under stock-based compensation plans 3.1 3.8 3.4 4.0 Diluted 202.5 214.2 204.5 216.1 Anti-dilutive options to purchase common shares and restricted stock as well as contingently issuable restricted stock which are excluded from the table above 0.6 0.5 0.8 0.7 The calculation of diluted EPS requires certain assumptions regarding the use of both cash proceeds and assumed proceeds that would be received upon the exercise of stock options and vesting of restricted stock outstanding as of September 30, 2015 and 2014 . These assumed proceeds include Excess Tax Benefits and any unrecognized compensation of the awards. The decrease in the diluted shares outstanding primarily reflects treasury share repurchases |
WEIGHTED AVERAGE SHARES OUTST21
WEIGHTED AVERAGE SHARES OUTSTANDING (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Reconciliation of Basic to Diluted Shares Outstanding | Three Months Ended Nine Months Ended September 30, September 30, 2015 2014 2015 2014 Basic 199.4 210.4 201.1 212.1 Dilutive effect of shares issuable under stock-based compensation plans 3.1 3.8 3.4 4.0 Diluted 202.5 214.2 204.5 216.1 Anti-dilutive options to purchase common shares and restricted stock as well as contingently issuable restricted stock which are excluded from the table above 0.6 0.5 0.8 0.7 |
Reconciliation of Basic to Dilu
Reconciliation of Basic to Diluted Shares Outstanding (Detail) - shares shares in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Schedule Of Earnings Per Share Basic And Diluted By Common Class [Line Items] | ||||
Basic | 199.4 | 210.4 | 201.1 | 212.1 |
Dilutive effect of shares issuable under stock-based compensation plans | 3.1 | 3.8 | 3.4 | 4 |
Diluted | 202.5 | 214.2 | 204.5 | 216.1 |
Anti-dilutive options to purchase common shares and restricted stock as well as contingently issuable restricted stock which are excluded from the table above | 0.6 | 0.5 | 0.8 | 0.7 |
CASH EQUIVALENT AND INVESTMENTS
CASH EQUIVALENT AND INVESTMENTS | 9 Months Ended |
Sep. 30, 2015 | |
CASH EQUIVALENT AND INVESTMENT | NOTE 5 . CASH EQUIVALENTS AND INVESTMENTS The table below provides additional information on the Company’s cash equivalents and investments: As of September 30, 2015 Balance sheet location Cost Gross Unrealized Gains Fair Value Cash and cash equivalents Short-term investments Other assets Money market mutual funds $ 137.9 $ - $ 137.9 $ 137.9 $ - $ - Certificates of deposit and money market deposit accounts (1) $ 1,088.9 $ - $ 1,088.9 $ 596.0 $ 470.2 $ 22.7 Fixed maturity and open ended mutual funds (2) $ 33.4 $ 2.8 $ 36.2 $ - $ - $ 36.2 As of December 31, 2014 Balance sheet location Cost Gross Unrealized Gains Fair Value Cash and cash equivalents Short-term investments Other assets Money market mutual funds $ 149.7 $ - $ 149.7 $ 149.7 $ - $ - Certificates of deposit and money market deposit accounts (1) $ 842.5 $ - $ 842.5 $ 380.1 $ 458.1 $ 4.3 Fixed maturity and open ended mutual funds (2) $ 47.1 $ 0.9 $ 48.0 $ - $ - $ 48.0 (1) Consists of time deposits and money market deposit accounts. The remaining contractual maturities for the certificates of deposits classified as short-term investments were one month to twelve months and one month to ten months at September 30, 2015 and December 31, 2014, respectively. Time deposits with a maturity of less than 90 days at time of purchase are classified as cash and cash equivalents. (2) Consists of investments in fixed maturity mutual funds and open-ended mutual funds. The remaining contractual maturities for the fixed maturity instruments range from 14 months to 34 months and two months to 23 months at September 30, 2015 and December 31, 2014, respectively. The money market mutual funds as well as the fixed maturity and open ended mutual funds in the table above are deemed to be “ available for sale ” under ASC Topic 320 and the fair value of these instruments is determined using Level 1 inputs as defined in the ASC. |
CASH EQUIVALENT AND INVESTMEN24
CASH EQUIVALENT AND INVESTMENTS (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Schedule of Available For Sale Securities | As of September 30, 2015 Balance sheet location Cost Gross Unrealized Gains Fair Value Cash and cash equivalents Short-term investments Other assets Money market mutual funds $ 137.9 $ - $ 137.9 $ 137.9 $ - $ - Certificates of deposit and money market deposit accounts (1) $ 1,088.9 $ - $ 1,088.9 $ 596.0 $ 470.2 $ 22.7 Fixed maturity and open ended mutual funds (2) $ 33.4 $ 2.8 $ 36.2 $ - $ - $ 36.2 As of December 31, 2014 Balance sheet location Cost Gross Unrealized Gains Fair Value Cash and cash equivalents Short-term investments Other assets Money market mutual funds $ 149.7 $ - $ 149.7 $ 149.7 $ - $ - Certificates of deposit and money market deposit accounts (1) $ 842.5 $ - $ 842.5 $ 380.1 $ 458.1 $ 4.3 Fixed maturity and open ended mutual funds (2) $ 47.1 $ 0.9 $ 48.0 $ - $ - $ 48.0 (1) Consists of time deposits and money market deposit accounts. The remaining contractual maturities for the certificates of deposits classified as short-term investments were one month to twelve months and one month to ten months at September 30, 2015 and December 31, 2014, respectively. Time deposits with a maturity of less than 90 days at time of purchase are classified as cash and cash equivalents. (2) Consists of investments in fixed maturity mutual funds and open-ended mutual funds. The remaining contractual maturities for the fixed maturity instruments range from 14 months to 34 months and two months to 23 months at September 30, 2015 and December 31, 2014, respectively. |
Cash Equivalent and Investmen25
Cash Equivalent and Investments (Detail) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2015 | Dec. 31, 2014 | |
Schedule Of Available For Sale Securities LineItems | ||
Fair Value | $ 36.2 | $ 48 |
Money Market [Member] | ||
Schedule Of Available For Sale Securities LineItems | ||
Cost | $ 137.9 | $ 149.7 |
Gross Unrealized Gain | ||
Fair Value | $ 137.9 | $ 149.7 |
Certificates Of Deposit [Member] | ||
Schedule Of Available For Sale Securities LineItems | ||
Cost | $ 1,088.9 | $ 842.5 |
Gross Unrealized Gain | ||
Fair Value | $ 1,088.9 | $ 842.5 |
Fixed Maturity and Mutual Funds [Member] | ||
Schedule Of Available For Sale Securities LineItems | ||
Cost | 33.4 | 47.1 |
Gross Unrealized Gain | 2.8 | 0.9 |
Fair Value | 36.2 | 48 |
Cash and Cash Equivalents [Member] | Money Market [Member] | ||
Schedule Of Available For Sale Securities LineItems | ||
Fair Value | 137.9 | 149.7 |
Cash and Cash Equivalents [Member] | Certificates Of Deposit [Member] | ||
Schedule Of Available For Sale Securities LineItems | ||
Fair Value | $ 596 | $ 380.1 |
Cash and Cash Equivalents [Member] | Fixed Maturity and Mutual Funds [Member] | ||
Schedule Of Available For Sale Securities LineItems | ||
Fair Value | ||
Short Term Investments [Member] | Money Market [Member] | ||
Schedule Of Available For Sale Securities LineItems | ||
Cost | ||
Fair Value | ||
Short Term Investments [Member] | Certificates Of Deposit [Member] | ||
Schedule Of Available For Sale Securities LineItems | ||
Fair Value | $ 470.2 | $ 458.1 |
Short Term Investments [Member] | Fixed Maturity and Mutual Funds [Member] | ||
Schedule Of Available For Sale Securities LineItems | ||
Fair Value | ||
Other Assets [Member] | Money Market [Member] | ||
Schedule Of Available For Sale Securities LineItems | ||
Fair Value | ||
Other Assets [Member] | Certificates Of Deposit [Member] | ||
Schedule Of Available For Sale Securities LineItems | ||
Fair Value | $ 22.7 | $ 4.3 |
Other Assets [Member] | Fixed Maturity and Mutual Funds [Member] | ||
Schedule Of Available For Sale Securities LineItems | ||
Fair Value | $ 36.2 | $ 48 |
Cash Equivalent and Investmen26
Cash Equivalent and Investments (Parenthetical) (Detail) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2015 | Dec. 31, 2014 | |
Minimum [Member] | Fixed Maturity and Mutual Funds [Member] | ||
Schedule Of Investments [Line Items] | ||
Securities Maturity period | 14 months | 2 months |
Minimum [Member] | Short Term Investments [Member] | ||
Schedule Of Investments [Line Items] | ||
Securities Maturity period | 14 months | 1 month |
Maximum [Member] | Certificates Of Deposit [Member] | ||
Schedule Of Investments [Line Items] | ||
Securities Maturity period | 90 days | |
Maximum [Member] | Fixed Maturity and Mutual Funds [Member] | ||
Schedule Of Investments [Line Items] | ||
Securities Maturity period | 34 months | 23 months |
Maximum [Member] | Short Term Investments [Member] | ||
Schedule Of Investments [Line Items] | ||
Securities Maturity period | 7 months | 10 months |
ACQUISITIONS
ACQUISITIONS | 9 Months Ended |
Sep. 30, 2015 | |
ACQUISITIONS | NOTE 6. ACQUISITIONS The business combinations described below are accounted for using the acquisition method of accounting whereby assets acquired and liabilities assumed were recognized at fair value on the date of the transaction . Any excess of the purchase price over the fair value of the assets acquired and liabilities assumed was recorded to goodwill. T he Company has not presented proforma combined results because the impact on previously reported statements of operations wou ld not have been material. Additionally, for all acquisitions described below, the near term impact to the Company’s operations and cash flows is not material. These acquisitions are discussed below in more detail. Equilibrium On May 21, 2015 , a subsidiary of the Company acquired 100 % of Equilibrium , a provider of credit rating and research services in Peru and Panama. The aggregate purchase price was not material and the near term impact to the Company’s operations and cash flows is not expect ed to be material. Equilibrium operates in the MIS reportable segment and goodwill related to this acquisition has been alloca ted to the MIS reporting unit. Lewtan Technologies On October 27, 2014, a subsidiary of the Company acquired 100 % of Lewtan Technologies, a leading provider of analytical tools and data for the global structured finance market. The acquisition of Lewtan will bolster MA’s Structured Analytics and Valuations (SAV) business within its RD&A LOB, which provides an extensive data and analytics library for securitized assets. The aggregate purchase price and the near term impact to the Company’s operations and cash flows is not material. Lewtan operate s in the RD&A LOB of MA and goodwill related to this acquisition was allocated to the RD&A reporting unit. WebEquity Solutions , LLC On July 17, 2014, a subsidiary of the Company acquired 100 % of WebEquity Solutions, LLC, a leading provider of cloud-based loan origination solutions for financial institutions. The payment of $ 130.5 million was funded with cash on hand. This acquisition will enhance MA’s risk management product portfolio. Shown below is the purchase price allocation, which summarizes the fair value of the assets and liabilities assumed, at the date of the acquisition: Current assets $ 3.0 Property and equipment, net 2.3 Intangible assets: Client relationships (18 year weighted average life) $ 42.8 Software (15 year weighted average life) 11.5 Trade name (4 year weighted average life) 0.5 Total intangible assets (17 year weighted average life) 54.8 Goodwill 77.6 Liabilities assumed (7.2) Net assets acquired $ 130.5 The acquired goodwill, which has been assigned to the MA segment, is tax deductible . As of the date of the acquisition, WebEquity is part of the ERS reporting unit. ICRA Limited On June 26 , 2014, a subs idiary of the Company acquired 2,154,722 ad ditional shares of ICRA Limited, a publicly traded company in India . ICRA is a leading provider of credit ratings and research in India and will extend MIS’s reach in the growing domestic debt market in India as well as other emerging markets in the region. The acquisition of the additional shares increased Moody’s ownershi p stake in ICRA from 28.5 % to 50.06 %, resulting in a controlling interest in ICRA. Accordingly, the C ompany consolidated ICRA’s financial statements. Moody’s consolidates ICRA’s financial statements on a three- month lag. Prior to the acquisition of the additional shares, Moody’s accounted for its investment in ICRA on an equity basis whereby the Company r ecorded its proportional share of the investment’s net income or loss as part of other non-operating income (expense), net . The acquisition of the additional shares has resulted in the Company consolidating ICRA into its financial statements. As a result of this consolidation and in a ccordance with ASC 805, the carrying value of the Company’s equity investment in ICRA was remeasured to fair value as of the acquisition date result ing in a pre-tax gain of $102.8 million ( $78.5 m illion after-tax) in third quarter of 2014. The fair value of the Company’s equity investment was based on ICRA’s quoted market price on the date of acquisition. The table below details the total consideration relating to the ICRA step-acquisition: Cash paid $ 86.0 Fair value of equity interest in ICRA prior to obtaining a controlling interest 124.9 Total consideration $ 210.9 Shown below is the purchase pr ice allocation, which summarizes the fair value of the assets and liabilities assumed, at the date of acquisition: Current assets $ 25.4 Property and equipment, net 15.1 Intangible assets: Trade name (36 year weighted average life) $ 46.8 Client relationships (19 year weighted average life) 33.8 Other (17 year weighted average life)* 18.3 Total intangible assets (26 year weighted average life) 98.9 Goodwill 296.7 Other assets 56.3 Liabilities (62.7) Fair value of non-controlling interest assumed (218.8) Net assets acquired $ 210.9 * Primarily consists of acquired technical know-how and ratings methodologies Current assets in the table above include acquired cash of approximately $ 5 million. Additionally, current assets includes gross accounts receivable of approximately $ 14 million, of which an immaterial amount is not expected to be collectible. Goodwill, which has been assigned to the MIS segment, is not deductible for tax. The fair value of the non-controlling interest was determined based on the quoted market price per share of ICRA on the date that the Company acquired the controlling stake. ICRA operates as its own reporting unit for purposes of the Company’s annual goodwill impairment assessment. |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Web Equity Solutions [Member] | |
Summary of Fair Values of Assets Acquired and Liabilities Assumed | Current assets $ 3.0 Property and equipment, net 2.3 Intangible assets: Client relationships (18 year weighted average life) $ 42.8 Software (15 year weighted average life) 11.5 Trade name (4 year weighted average life) 0.5 Total intangible assets (17 year weighted average life) 54.8 Goodwill 77.6 Liabilities assumed (7.2) Net assets acquired $ 130.5 |
ICRA [Member] | |
Summary of Fair Values of Assets Acquired and Liabilities Assumed | Current assets $ 25.4 Property and equipment, net 15.1 Intangible assets: Trade name (36 year weighted average life) $ 46.8 Client relationships (19 year weighted average life) 33.8 Other (17 year weighted average life)* 18.3 Total intangible assets (26 year weighted average life) 98.9 Goodwill 296.7 Other assets 56.3 Liabilities (62.7) Fair value of non-controlling interest assumed (218.8) Net assets acquired $ 210.9 * Primarily consists of acquired technical know-how and ratings methodologies |
Consideration to the step acquisition | Cash paid $ 86.0 Fair value of equity interest in ICRA prior to obtaining a controlling interest 124.9 Total consideration $ 210.9 |
Purchase Price Allocation (Deta
Purchase Price Allocation (Detail) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 | Jul. 17, 2014 | Jun. 26, 2014 | Dec. 31, 2013 |
Business Acquisition [Line Items] | |||||
Goodwill | $ 990,000 | $ 1,021,100 | $ 665,200 | ||
Fair value of non-controlling interest assumed | $ (218,800) | ||||
Web Equity Solutions [Member] | |||||
Business Acquisition [Line Items] | |||||
Current assets | $ 3,000 | ||||
Property and equipment, net | 2,300 | ||||
Total intangible assets | 54,800 | ||||
Goodwill | 77,600 | ||||
Liabilities assumed | (7,200) | ||||
Net assets acquired | 130,500 | ||||
Web Equity Solutions [Member] | Client relationships | |||||
Business Acquisition [Line Items] | |||||
Total intangible assets | 42,800 | ||||
Web Equity Solutions [Member] | Software | |||||
Business Acquisition [Line Items] | |||||
Total intangible assets | 11,500 | ||||
Web Equity Solutions [Member] | Other intangibles | |||||
Business Acquisition [Line Items] | |||||
Total intangible assets | $ 500 | ||||
ICRA [Member] | |||||
Business Acquisition [Line Items] | |||||
Current assets | $ 25,400 | ||||
Property and equipment, net | 15,100 | ||||
Total intangible assets | 98,900 | ||||
Goodwill | 296,700 | ||||
Other assets | 56,300 | ||||
Liabilities assumed | (62,700) | ||||
Fair value of non-controlling interest assumed | (218,800) | ||||
Net assets acquired | 210,900 | ||||
ICRA [Member] | Trade names | |||||
Business Acquisition [Line Items] | |||||
Total intangible assets | 46,800 | ||||
ICRA [Member] | Client relationships | |||||
Business Acquisition [Line Items] | |||||
Total intangible assets | 33,800 | ||||
ICRA [Member] | Other intangibles | |||||
Business Acquisition [Line Items] | |||||
Total intangible assets | $ 18,300 |
Purchase Price Allocation (Pare
Purchase Price Allocation (Parenthetical) (Detail) | Jul. 17, 2014 | Jun. 26, 2014 |
Web Equity Solutions [Member] | Trade names | ||
Business Acquisition [Line Items] | ||
Weighted average life of intangible assets acquired (in years) | 4 years | |
Web Equity Solutions [Member] | Client relationships | ||
Business Acquisition [Line Items] | ||
Weighted average life of intangible assets acquired (in years) | 18 years | |
Web Equity Solutions [Member] | Software | ||
Business Acquisition [Line Items] | ||
Weighted average life of intangible assets acquired (in years) | 15 years | |
Web Equity Solutions [Member] | Total Intangible Assets | ||
Business Acquisition [Line Items] | ||
Weighted average life of intangible assets acquired (in years) | 17 years | |
ICRA [Member] | Trade names | ||
Business Acquisition [Line Items] | ||
Weighted average life of intangible assets acquired (in years) | 36 years | |
ICRA [Member] | Client relationships | ||
Business Acquisition [Line Items] | ||
Weighted average life of intangible assets acquired (in years) | 19 years | |
ICRA [Member] | Other intangibles | ||
Business Acquisition [Line Items] | ||
Weighted average life of intangible assets acquired (in years) | 17 years | |
ICRA [Member] | Total Intangible Assets | ||
Business Acquisition [Line Items] | ||
Weighted average life of intangible assets acquired (in years) | 26 years |
Total Consideration Transferred
Total Consideration Transferred to Sellers (Detail) - USD ($) $ in Millions | Jun. 26, 2014 | Sep. 30, 2015 | Sep. 30, 2014 |
Business Acquisition [Line Items] | |||
Cash paid | $ 4.6 | $ 210.5 | |
ICRA [Member] | |||
Business Acquisition [Line Items] | |||
Cash paid | $ 86 | ||
Business Combination Fair Value Of Equity Interest | 124.9 | ||
Total fair value of consideration transferred | $ 210.9 |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Detail) - USD ($) $ in Millions | Jul. 17, 2014 | Jun. 26, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | May. 21, 2015 | Oct. 27, 2014 |
Business Acquisition [Line Items] | ||||||||
ICRA Gain | $ 102.8 | |||||||
Cash paid for acquisitions, net of cash required | $ 4.6 | $ 210.5 | ||||||
Equilibrium [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Additional direct equity investment | 100.00% | |||||||
Lewtan [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Additional direct equity investment | 100.00% | |||||||
Web Equity Solutions [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Additional direct equity investment | 100.00% | |||||||
Cash paid for acquisitions, net of cash required | $ 130.5 | |||||||
ICRA [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Acquired cash | $ 5 | |||||||
Acquired receivables gross contractual amount | $ 14 | |||||||
Additional offer shares acquired of ICRA Limited | 2,154,722 | |||||||
ICRA Gain | $ 102.8 | |||||||
Ownership stake | 50.06% | |||||||
Cash paid for acquisitions, net of cash required | $ 86 | |||||||
After Tax Member [Member] | ICRA [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
ICRA Gain | $ 78.5 |
DERIVATIVE INSTRUMENTS AND HEDG
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | 9 Months Ended |
Sep. 30, 2015 | |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | NOTE 7. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES The Company is exposed to global market risks, including risks from changes in FX rates and changes in interest rates. Accordingly, the Company uses derivatives in certain instances to manage the aforementioned financial exposures that occur in the normal course of business. The Company does not hold or issue derivatives for speculative purposes. Derivatives and non-derivative instruments designated as accounting hedges: Interest Rate Swaps In the third quarter of 201 4 , the Company entered into interest rate swaps with a total notional amount of $250 million to convert the fixed interest rate on the 2010 Senior Notes to a floating interest rate based on the 3-month LIBOR . In the third quarter of 2014, the Company entered into interest rate swaps with a total notional amount of $ 250 million to convert the fixed interest rate on the remaining balance of the 2010 Senior Notes to a floatin g interest rate based on the 3-month LIBOR. T he purpose of th ese hedge s is to mitigate the risk associated with changes in the fair value of the 2010 Senior Notes , thus the Company has designated these swaps as fair value hedges. The fair value of the swaps is adjusted quarterly with a corresponding adjustment to the carrying value of the 2010 Senior Notes. The changes in the fair value of the hedges and the underlying hedged item generally offset and the net cash settlements on the swaps are recorded each period within interest income (expense) , net , in the Company’s consolidated statement of operations. In the third quarter of 2014, the Company entered into interest rate swaps with a total notional amount of $ 250 million to convert the fixed interest rate on a portion of the 2014 Senior Notes (5-year ) to a floating interest rate based on the 3-month LIBOR . In the first quarter of 2015, the Company entered into interest rate swaps with a total notional amount of $ 200 million to convert the fixed interest rate on the remaining balance of the 2014 Senior Notes (5-year) to a floating interest rate based on the 3-month LIBOR. The purpose of these hedges is to mitigate the risk associated with changes in the fair value of the 2014 Senior Notes (5-year), thus the Company has designated these swaps as fair val ue hedges. The fair value of the swaps is adjusted quarterly with a corresponding adjustment to the carrying value of the 2014 Senior Notes (5-year). The changes in the fair value of the hedges and the underlying hedged item generally offset and the net ca sh settlements on the swaps are recorded each period within interest income (expense), net, in the Company’s consolidated statement of operations. The following table summarizes the impact to the statement of operations of the Company’s interest rate swaps designated as fair value hedges: Amount of income/(expense) recognized in the consolidated statements of operations Three Months Ended Nine Months Ended September 30, September 30, Derivatives designated as fair value accounting hedges Location on Statement of Operations 2015 2014 2015 2014 Interest rate swaps Interest income(expense), net $ 3.9 $ 7.8 $ 11.5 $ 8.3 Net investment hedges The Company enters into foreign currency forward contracts that are designated as net investment hedges and additionally has designated € 400 million of the 2015 Senior Notes as a net investment hedge. These hedges are intended to mitigate FX exposure related to non-U.S. dollar net investments in certain foreign subsidiaries against changes in foreign exchange rates. These net investment hedges are designated as accounting hedges under the applicable sections of Topic 815 of the AS C. Hedge effectiveness is assessed based on the overall changes in the fair value of the hedge. For hedges that meet the effectiveness requirements, any change in the fair value and any realized gains and losses for the hedge are recorded in AOCI in the foreign currency translation account. Any change in the fair value of these hedges that is the result of ineffectiveness is recognized immediately in other non-operating (expense) income in the Company’s consolidated statement of operations. The followin g table summarizes the notional amounts of the Company’s outstanding net investment hedges: September 30, December 31, 2015 2014 Notional amount of net investment hedges: Long-term debt designated as net investment hedge € 400.0 € - Contracts to sell euros for USD € - € 50.0 Contracts to sell GBP for euros £ 20.4 £ - Contracts to sell Japanese yen for USD ¥ 19,400 ¥ 19,400 The outstanding contracts to sell Japanese yen for USD expire in November 2015. The outstanding contracts to sell GBP for euros expire in December 2015. The hedge relating to the portion of the 2015 Senior Notes that was designated as a net investment hedge will end upon the repayment of the notes in 2027 unless terminated earlier at the discretion of the Company. The following table provides information on the gains/(losses) on the Company’s net investment hedges: Derivatives in Net Investment Hedging Relationships Amount of Gain/(Loss) Recognized in AOCI on Derivative (Effective Portion) Three Months Ended September 30, 2015 2014 FX forwards $ (0.7) $ 12.1 Long-term debt (0.6) - Total $ (1.3) $ 12.1 Nine Months Ended September 30, 2015 2014 FX forwards $ 12.7 $ 8.4 Long-term debt (2.7) - Total $ 10.0 $ 8.4 The cumulative amount of realized and unrecognized net investment hedge gains recorded in AOCI is as follows: Gains/(Losses), net of tax September 30, December 31, 2015 2014 FX forwards $ 33.6 $ 20.9 Long-term debt (2.7) - Total gains on net investment hedges $ 30.9 $ 20.9 Derivatives not designated as accounting hedges: Foreign exchange forwards The Company also enters into foreign exchange forwards to mitigate the change in fair value on certain assets and liabilities denominated in currencies other than a subsidiary’s functional currency. These forward contracts are not designated as accounting hedges under the applicable sections of Topic 815 of the ASC. Accordingly, changes in the fair value of these contracts are recognized immediately in other non-operating (expense) income, net in the Company’s consolidated statements of operations along wit h the FX gain or loss recognized on the assets and liabilities denominated in a currency other than the subsidiary’s functional currency. These contracts have expiration dates at various times through December 2015. The following table summarizes the noti onal amounts of the Company’s outstanding foreign exchange forwards: September 30, December 31, 2015 2014 Notional amount of currency pair: Contracts to purchase USD with euros $ - $ 38.5 Contracts to sell USD for euros $ 48.3 $ 51.5 Contracts to purchase USD with GBP $ - $ 0.2 Contracts to purchase USD with other foreign currencies $ - $ 1.2 Contracts to purchase euros with other foreign currencies € 36.0 € 34.0 Contracts to purchase euros with GBP € - € 25.0 Contracts to sell euros for GBP € 27.3 € 38.2 Cross-currency swaps In conjunction with the issuance of the 2015 Senior Notes, the Company entered into a cross-currency swap to exchange €100 million for U.S. dollars on the date of the settlement of the notes. The purpose of this cross-currency swap is to mitigate FX risk on the remaining principal balance on the 2015 Senior Notes that was not designated as a net investment hedge as more fully discussed above. The Company has not designated these cross-currency swaps as accounting hedges. According ly, changes in fair value on these swaps is recognized immediately in other non-operating (expense), income, net in the Company’s consolidated statements of operations along with the FX gain or loss recognized on the €100 million principal of the 2015 Seni or Notes that was not designated as a net investment hedge. Under the terms of the swap, the Company will pay the counterparty interest on the $ 110.5 million received at 3.945 % per annum and the counterparty will pay the Company interest on the € 100 millio n paid at 1.75 % per annum. These interest payments will be settled in March of each year, beginning in 2016, until either the maturity of the cross-currency swap in 2027 or upon early termination at the discretion of the Company. The principal payments o n this cross currency swap will be settled in 2027, concurrent with the repayment of the 2015 Senior Notes at maturity or upon early termination at the discretion of the Company . The following table summarizes the impact to the consolidated statements of operations relating to the net gain (loss) on the Company’s derivativ es which are not designated as hedging instruments: Three Months Ended September 30, Derivatives not designated as accounting hedges Location on Statement of Operations 2015 2014 Cross-currency swap Other non-operating income (expense), net $ (1.7) $ - Foreign exchange forwards Other non-operating income (expense), net 0.6 (4.8) Total $ (1.1) $ (4.8) Nine Months Ended September 30, Derivatives not designated as accounting hedges Location on Statement of Operations 2015 2014 Cross-currency swap Other non-operating income (expense), net $ (7.0) $ - Foreign exchange forwards Other non-operating income (expense), net (1.3) (3.9) Total $ (8.3) $ (3.9) The table below show s the classification bet ween assets and liabilities on t he Company’s consolidated balance sheets for the fair value of the derivative instrument as well as the carrying value of its nonderivative debt instruments designated and qualifying as net investment hedges : Derivative Instruments Balance Sheet Location September 30, 2015 December 31, 2014 Assets: Derivatives designated as accounting hedges: FX forwards on net investment in certain foreign subsidiaries Other current assets $ 17.7 $ 18.8 Interest rate swaps Other assets 25.5 17.4 Total derivatives designated as accounting hedges 43.2 36.2 Derivatives not designated as accounting hedges: FX forwards on certain assets and liabilities Other current assets 1.7 5.6 Total assets $ 44.9 $ 41.8 Liabilities: Non-derivative instrument designated as accounting hedge: Long-term debt designated as net investment hedge Long-term debt $ 446.5 $ - Derivatives not designated as accounting hedges: Cross-currency swap Other non-current liabilities 5.6 - FX forwards on certain assets and liabilities Accounts payable and accrued liabilities 1.0 2.1 Total liabilities $ 453.1 $ 2.1 |
DERIVATIVE INSTRUMENTS AND HE34
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Gains and Losses on Derivatives Designated as Hedging Instruments | Amount of income/(expense) recognized in the consolidated statements of operations Three Months Ended Nine Months Ended September 30, September 30, Derivatives designated as fair value accounting hedges Location on Statement of Operations 2015 2014 2015 2014 Interest rate swaps Interest income(expense), net $ 3.9 $ 7.8 $ 11.5 $ 8.3 |
Fair Value of Derivative Instruments | Derivative Instruments Balance Sheet Location September 30, 2015 December 31, 2014 Assets: Derivatives designated as accounting hedges: FX forwards on net investment in certain foreign subsidiaries Other current assets $ 17.7 $ 18.8 Interest rate swaps Other assets 25.5 17.4 Total derivatives designated as accounting hedges 43.2 36.2 Derivatives not designated as accounting hedges: FX forwards on certain assets and liabilities Other current assets 1.7 5.6 Total assets $ 44.9 $ 41.8 Liabilities: Non-derivative instrument designated as accounting hedge: Long-term debt designated as net investment hedge Long-term debt $ 446.5 $ - Derivatives not designated as accounting hedges: Cross-currency swap Other non-current liabilities 5.6 - FX forwards on certain assets and liabilities Accounts payable and accrued liabilities 1.0 2.1 Total liabilities $ 453.1 $ 2.1 |
Net Investment Hedging [Member] | |
Gains and Losses on Derivatives Designated as Hedging Instruments | Gains/(Losses), net of tax September 30, December 31, 2015 2014 FX forwards $ 33.6 $ 20.9 Long-term debt (2.7) - Total gains on net investment hedges $ 30.9 $ 20.9 |
Cumulative Amount of Unrecognized Hedge Losses Recorded in Accumulated Other Comprehensive Income | Gains/(Losses), net of tax September 30, December 31, 2015 2014 FX forwards $ 33.6 $ 20.9 Long-term debt (2.7) - Total gains on net investment hedges $ 30.9 $ 20.9 |
Summary of Notional Amounts of Outstanding Foreign Exchange Forwards | September 30, December 31, 2015 2014 Notional amount of net investment hedges: Long-term debt designated as net investment hedge € 400.0 € - Contracts to sell euros for USD € - € 50.0 Contracts to sell GBP for euros £ 20.4 £ - Contracts to sell Japanese yen for USD ¥ 19,400 ¥ 19,400 |
Nondesignated [Member] | |
Gains and Losses on Derivatives Designated as Hedging Instruments | Three Months Ended September 30, Derivatives not designated as accounting hedges Location on Statement of Operations 2015 2014 Cross-currency swap Other non-operating income (expense), net $ (1.7) $ - Foreign exchange forwards Other non-operating income (expense), net 0.6 (4.8) Total $ (1.1) $ (4.8) Nine Months Ended September 30, Derivatives not designated as accounting hedges Location on Statement of Operations 2015 2014 Cross-currency swap Other non-operating income (expense), net $ (7.0) $ - Foreign exchange forwards Other non-operating income (expense), net (1.3) (3.9) Total $ (8.3) $ (3.9) |
Summary of Notional Amounts of Outstanding Foreign Exchange Forwards | September 30, December 31, 2015 2014 Notional amount of currency pair: Contracts to purchase USD with euros $ - $ 38.5 Contracts to sell USD for euros $ 48.3 $ 51.5 Contracts to purchase USD with GBP $ - $ 0.2 Contracts to purchase USD with other foreign currencies $ - $ 1.2 Contracts to purchase euros with other foreign currencies € 36.0 € 34.0 Contracts to purchase euros with GBP € - € 25.0 Contracts to sell euros for GBP € 27.3 € 38.2 |
Gains and Losses on Derivatives
Gains and Losses on Derivatives Designated as Hedging Instruments, Cash Flow Hedging (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Interest Expense [Member] | Interest Rate Swap [Member] | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Amount of income/(expense) recognized in the consolidated statements of operations | $ 3.9 | $ 7.8 | $ 11.5 | $ 8.3 |
Summary of Notional Amounts of
Summary of Notional Amounts of Outstanding Foreign Exchange Forwards, Net Investment Hedging (Detail) - Net Investment Hedging [Member] € in Millions, ¥ in Millions, £ in Millions | Sep. 30, 2015EUR (€) | Sep. 30, 2015GBP (£) | Sep. 30, 2015JPY (¥) | Dec. 31, 2014EUR (€) | Dec. 31, 2014GBP (£) | Dec. 31, 2014JPY (¥) |
Long Term Debt [Member] | ||||||
Derivative [Line Items] | ||||||
Derivative Notional Amount | € 400 | |||||
Forward Contracts [Member] | Contracts to Sell Euros for USD [Member] | ||||||
Derivative [Line Items] | ||||||
Derivative Notional Amount | € | € 50 | |||||
Forward Contracts [Member] | Contracts to Sell GBP for Euros [Member] | ||||||
Derivative [Line Items] | ||||||
Derivative Notional Amount | £ 20.4 | |||||
Forward Contracts [Member] | Contracts to Sell Japanese Yen for USD [Member] | ||||||
Derivative [Line Items] | ||||||
Derivative Notional Amount | ¥ | ¥ 19,400 | ¥ 19,400 |
Gains and Losses on Derivativ37
Gains and Losses on Derivatives Designated as Hedging Instruments, Net Investment Hedging (Detail) - Net Investment Hedging [Member] - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Derivative Instruments Gain Loss [Line Items] | ||||
Amount of Gain/(Loss) Recognized in AOCI on Derivative (Effective Portion) | $ (1.3) | $ 12.1 | $ 10 | $ 8.4 |
Foreign Exchange Contract [Member] | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Amount of Gain/(Loss) Recognized in AOCI on Derivative (Effective Portion) | (0.7) | $ 12.1 | 12.7 | $ 8.4 |
Long Term Debt [Member] | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Amount of Gain/(Loss) Recognized in AOCI on Derivative (Effective Portion) | $ (0.6) | $ (2.7) |
Cumulative Amount of Unrecogniz
Cumulative Amount of Unrecognized Hedge Losses Recorded in Accumulated Other Comprehensive Income (Detail) - Net Investment Hedging [Member] - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 |
Hedge Underlying Gain Loss [Line Items] | ||
Cumulative amount of unrecognized hedge losses recorded in AOCI | $ 30.9 | $ 20.9 |
Foreign Exchange Contract [Member] | ||
Hedge Underlying Gain Loss [Line Items] | ||
Cumulative amount of unrecognized hedge losses recorded in AOCI | 33.6 | $ 20.9 |
Long-Term Debt [Member] | ||
Hedge Underlying Gain Loss [Line Items] | ||
Cumulative amount of unrecognized hedge losses recorded in AOCI | $ (2.7) |
Summary of Notional Amounts o39
Summary of Notional Amounts of Outstanding Foreign Exchange Forwards, Cash Flow Hedging (Detail) - Forward Contracts [Member] € in Millions, $ in Millions | Sep. 30, 2015EUR (€) | Sep. 30, 2015USD ($) | Dec. 31, 2014EUR (€) | Dec. 31, 2014USD ($) |
Foreign Currency Forward Contracts to Purchase US Dollars with Euros [Member] | ||||
Derivative [Line Items] | ||||
Derivative Notional Amount | $ 38.5 | |||
Foreign Currency Forward Contracts To Sell US Dollars For Euros [Member] | ||||
Derivative [Line Items] | ||||
Derivative Notional Amount | $ 48.3 | 51.5 | ||
Foreign Currency Forward Contracts to Purchase US Dollars With GBP [Member] | ||||
Derivative [Line Items] | ||||
Derivative Notional Amount | 0.2 | |||
Foreign Currency Forward Contracts To Sell US Dollars for GBP [Member] | ||||
Derivative [Line Items] | ||||
Derivative Notional Amount | ||||
Foreign Currency Forward Contracts To Purchase US Dollars With Other Foreign Currencies [Member] | ||||
Derivative [Line Items] | ||||
Derivative Notional Amount | $ 1.2 | |||
Foreign Currency Forward Contracts to Sell US Dollars for Other Foreign Currencies [Member] | ||||
Derivative [Line Items] | ||||
Derivative Notional Amount | ||||
Foreign Currency Forward Contracts To Purchase Euros With Other Foreign Currencies [Member] | ||||
Derivative [Line Items] | ||||
Derivative Notional Amount | € | € 36 | € 34 | ||
Foreign Currency Forward Contracts To Purchase Euros With GBP [Member] | ||||
Derivative [Line Items] | ||||
Derivative Notional Amount | € | 25 | |||
Foreign Currency Forward Contracts to Sell Euros for GBP [Member] | ||||
Derivative [Line Items] | ||||
Derivative Notional Amount | € | € 27.3 | € 38.2 |
Summary of Net Gain (Loss) on F
Summary of Net Gain (Loss) on Foreign Exchange Forwards Not Designated as Hedging Instruments (Detail) - Nondesignated [Member] - Other Nonoperating Income Expense [Member] - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Derivative Instruments Gain Loss [Line Items] | ||||
Amount of Gain (Loss) Recognized in Income | $ (1.1) | $ (4.8) | $ (8.3) | $ (3.9) |
Foreign Exchange Forward [Member] | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Amount of Gain (Loss) Recognized in Income | 0.6 | $ (4.8) | (1.3) | $ (3.9) |
Cross-Currency Swap [Member] | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Amount of Gain (Loss) Recognized in Income | $ (1.7) | $ (7) |
Fair Value of Derivative Instru
Fair Value of Derivative Instruments (Detail) - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 |
Derivatives Fair Value [Line Items] | ||
Derivatives assets | $ 44.9 | $ 41.8 |
Derivatives liabilities | 453.1 | 2.1 |
Designated As Hedging Instrument [Member] | ||
Derivatives Fair Value [Line Items] | ||
Derivatives assets | 43.2 | 36.2 |
Designated As Hedging Instrument [Member] | Net Investment Hedging [Member] | Long Term Debt [Member] | ||
Derivatives Fair Value [Line Items] | ||
Derivatives liabilities | 446.5 | |
Designated As Hedging Instrument [Member] | Interest Rate Swap [Member] | Other Assets [Member] | ||
Derivatives Fair Value [Line Items] | ||
Derivatives assets | 25.5 | 17.4 |
Designated As Hedging Instrument [Member] | Foreign Exchange Contract [Member] | Net Investment Hedging [Member] | Other Current Assets [Member] | ||
Derivatives Fair Value [Line Items] | ||
Derivatives assets | 17.7 | 18.8 |
Nondesignated [Member] | Foreign Exchange Contract [Member] | Other Current Assets [Member] | ||
Derivatives Fair Value [Line Items] | ||
Derivatives assets | 1.7 | 5.6 |
Nondesignated [Member] | Foreign Exchange Contract [Member] | Accounts Payable And Accrued Liabilities [Member] | ||
Derivatives Fair Value [Line Items] | ||
Derivatives liabilities | 1 | $ 2.1 |
Nondesignated [Member] | Cross-Currency Swap [Member] | Other Noncurrent Liabilities [Member] | ||
Derivatives Fair Value [Line Items] | ||
Derivatives liabilities | $ 5.6 |
Derivative Instruments And He42
Derivative Instruments And Hedging Activities - Additional Information (Detail) € in Millions, $ in Millions | Sep. 30, 2015EUR (€) | Sep. 30, 2015USD ($) | Mar. 31, 2015 | Sep. 30, 2014USD ($) |
2010 Senior Notes [Member] | ||||
Derivative [Line Items] | ||||
Derivative Notional Amount | $ 250 | |||
2014 Senior Notes (5-Year) [Member] | ||||
Derivative [Line Items] | ||||
Derivative Notional Amount | $ 200 | $ 250 | ||
Cross-Currency Swap [Member] | Currency Paid [Member] | ||||
Derivative [Line Items] | ||||
Derivative Notional Amount | € | € 100 | |||
Derivative Fixed Interest Rate | 1.75% | |||
Cross-Currency Swap [Member] | Currency Received [Member] | ||||
Derivative [Line Items] | ||||
Derivative Notional Amount | $ 110.5 | |||
Derivative Fixed Interest Rate | 3.945% | |||
2015 Senior Notes [Member] | ||||
Derivative [Line Items] | ||||
Derivative Notional Amount | € | € 400 |
GOODWILL AND OTHER ACQUIRED INT
GOODWILL AND OTHER ACQUIRED INTANGIBLE ASSETS | 9 Months Ended |
Sep. 30, 2015 | |
GOODWILL AND OTHER ACQUIRED INTANGIBLE ASSETS | NOTE 8. GOODWILL AND OTHER ACQUIRED INTANGIBLE ASSETS The following table summarizes the activity in goodwill for the periods indicated: Nine Months Ended September 30, 2015 MIS MA Consolidated Gross goodwill Accumulated impairment charge Net goodwill Gross goodwill Accumulated impairment charge Net goodwill Gross goodwill Accumulated impairment charge Net goodwill Balance at beginning of year $ 298.7 $ - $ 298.7 $ 734.6 $ (12.2) $ 722.4 $ 1,033.3 $ (12.2) $ 1,021.1 Additions/adjustments 4.9 - 4.9 3.3 - 3.3 8.2 - 8.2 Foreign currency translation adjustments (10.7) - (10.7) (28.6) - (28.6) (39.3) - (39.3) Ending balance $ 292.9 $ - $ 292.9 $ 709.3 $ (12.2) $ 697.1 $ 1,002.2 $ (12.2) $ 990.0 Year ended December 31, 2014 MIS MA Consolidated Gross goodwill Accumulated impairment charge Net goodwill Gross goodwill Accumulated impairment charge Net goodwill Gross goodwill Accumulated impairment charge Net goodwill Balance at beginning of year $ 11.4 $ - $ 11.4 $ 666.0 $ (12.2) $ 653.8 $ 677.4 $ (12.2) $ 665.2 Additions/adjustments 296.7 - 296.7 101.1 - 101.1 397.8 - 397.8 Foreign currency translation adjustments (9.4) - (9.4) (32.5) - (32.5) (41.9) - (41.9) Ending balance $ 298.7 $ - $ 298.7 $ 734.6 $ (12.2) $ 722.4 $ 1,033.3 $ (12.2) $ 1,021.1 The 2015 additions/adjustments for the MIS segment in the table above relate to the acquisition of Equilibrium. The 2015 additions/adjustments for the MA segment reflect an adjustment to an indemnification asset recognized as part of the Copal acquisition and adjustments to deferred revenue balances and deferred tax assets recognized as part of the Lewtan acquisition. The 2014 additions/adjustments for the MIS segment in the table above relate to the ICRA Acquisition in the second quarter of 2014 as further discussed in Note 6 . The 2014 additions/adjustments for the MA segment in the table above relate to the acquisition of WebEquity in the third quarter of 2014 and Lewtan in the fourth quarter of 2014 as well as adjustments for Amba, which was acquired i n the fourth quarter of 2013. Acquired intangible assets and related amortization consisted of: September 30, December 31, 2015 2014 Customer relationships $ 299.9 $ 310.4 Accumulated amortization (107.0) (98.1) Net customer relationships 192.9 212.3 Trade secrets 29.9 30.6 Accumulated amortization (22.5) (20.9) Net trade secrets 7.4 9.7 Software 75.7 79.8 Accumulated amortization (46.3) (43.0) Net software 29.4 36.8 Trade names 73.8 76.5 Accumulated amortization (15.6) (13.3) Net trade names 58.2 63.2 Other 44.0 44.8 Accumulated amortization (23.1) (21.3) Net other 20.9 23.5 Total acquired intangible assets, net $ 308.8 $ 345.5 Other intangible assets primarily consist of databases, covenants not to compete , and acquired ratings methodologies and models. Amortization expense relating to acquired intangible assets is as follows: Three Months Ended Nine Months Ended September 30, September 30, 2015 2014 2015 2014 Amortization expense $ 7.6 $ 6.9 $ 24.1 $ 20.5 Estimated future amortization expense for acquired intangible assets subject to amortization is as follows: Year Ending December 31, 2015 (after September 30) $ 6.8 2016 29.2 2017 26.9 2018 21.1 2019 18.1 Thereafter 206.7 Total estimated future amortization $ 308.8 |
GOODWILL AND OTHER ACQUIRED I44
GOODWILL AND OTHER ACQUIRED INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Activity in Goodwill | Nine Months Ended September 30, 2015 MIS MA Consolidated Gross goodwill Accumulated impairment charge Net goodwill Gross goodwill Accumulated impairment charge Net goodwill Gross goodwill Accumulated impairment charge Net goodwill Balance at beginning of year $ 298.7 $ - $ 298.7 $ 734.6 $ (12.2) $ 722.4 $ 1,033.3 $ (12.2) $ 1,021.1 Additions/adjustments 4.9 - 4.9 3.3 - 3.3 8.2 - 8.2 Foreign currency translation adjustments (10.7) - (10.7) (28.6) - (28.6) (39.3) - (39.3) Ending balance $ 292.9 $ - $ 292.9 $ 709.3 $ (12.2) $ 697.1 $ 1,002.2 $ (12.2) $ 990.0 Year ended December 31, 2014 MIS MA Consolidated Gross goodwill Accumulated impairment charge Net goodwill Gross goodwill Accumulated impairment charge Net goodwill Gross goodwill Accumulated impairment charge Net goodwill Balance at beginning of year $ 11.4 $ - $ 11.4 $ 666.0 $ (12.2) $ 653.8 $ 677.4 $ (12.2) $ 665.2 Additions/adjustments 296.7 - 296.7 101.1 - 101.1 397.8 - 397.8 Foreign currency translation adjustments (9.4) - (9.4) (32.5) - (32.5) (41.9) - (41.9) Ending balance $ 298.7 $ - $ 298.7 $ 734.6 $ (12.2) $ 722.4 $ 1,033.3 $ (12.2) $ 1,021.1 |
Acquired Intangible Assets and Related Amortization | September 30, December 31, 2015 2014 Customer relationships $ 299.9 $ 310.4 Accumulated amortization (107.0) (98.1) Net customer relationships 192.9 212.3 Trade secrets 29.9 30.6 Accumulated amortization (22.5) (20.9) Net trade secrets 7.4 9.7 Software 75.7 79.8 Accumulated amortization (46.3) (43.0) Net software 29.4 36.8 Trade names 73.8 76.5 Accumulated amortization (15.6) (13.3) Net trade names 58.2 63.2 Other 44.0 44.8 Accumulated amortization (23.1) (21.3) Net other 20.9 23.5 Total acquired intangible assets, net $ 308.8 $ 345.5 |
Finite-lived Intangible Assets Amortization Expense [Table Text Block] | Three Months Ended Nine Months Ended September 30, September 30, 2015 2014 2015 2014 Amortization expense $ 7.6 $ 6.9 $ 24.1 $ 20.5 |
Estimated Future Amortization Expense for Acquired Intangible Assets Subject to Amortization | Year Ending December 31, 2015 (after September 30) $ 6.8 2016 29.2 2017 26.9 2018 21.1 2019 18.1 Thereafter 206.7 Total estimated future amortization $ 308.8 |
Activity in Goodwill (Detail)
Activity in Goodwill (Detail) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2015 | Dec. 31, 2014 | |
Goodwill [Line Items] | ||
Beginning balance, Goodwill gross | $ 1,033.3 | $ 677.4 |
Additions/adjustments, gross | 8.2 | 397.8 |
Foreign currency translation adjustments, gross | (39.3) | (41.9) |
Ending balance, Goodwill gross | 1,002.2 | 1,033.3 |
Beginning balance, Impairment Loss | (12.2) | (12.2) |
Ending balance, Impairment Loss | (12.2) | (12.2) |
Beginning balance | 1,021.1 | 665.2 |
Additions/adjustments | 8.2 | 397.8 |
Foreign currency translation adjustments | (39.3) | (41.9) |
Ending balance | 990 | 1,021.1 |
Moodys Investors Service [Member] | ||
Goodwill [Line Items] | ||
Beginning balance, Goodwill gross | 298.7 | 11.4 |
Additions/adjustments, gross | 4.9 | 296.7 |
Foreign currency translation adjustments, gross | (10.7) | (9.4) |
Ending balance, Goodwill gross | $ 292.9 | $ 298.7 |
Beginning balance, Impairment Loss | ||
Ending balance, Impairment Loss | ||
Beginning balance | $ 298.7 | $ 11.4 |
Additions/adjustments | 4.9 | 296.7 |
Foreign currency translation adjustments | (10.7) | (9.4) |
Ending balance | 292.9 | 298.7 |
Moodys Analytics [Member] | ||
Goodwill [Line Items] | ||
Beginning balance, Goodwill gross | 298.7 | 666 |
Additions/adjustments, gross | 3.3 | 101.1 |
Foreign currency translation adjustments, gross | (28.6) | (32.5) |
Ending balance, Goodwill gross | 709.3 | 298.7 |
Beginning balance, Impairment Loss | (12.2) | (12.2) |
Ending balance, Impairment Loss | (12.2) | (12.2) |
Beginning balance | 722.4 | 653.8 |
Additions/adjustments | 3.3 | 101.1 |
Foreign currency translation adjustments | (28.6) | (32.5) |
Ending balance | $ 697.1 | $ 722.4 |
Acquired Intangible Assets and
Acquired Intangible Assets and Related Amortization (Detail) - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 |
Finite Lived Intangible Assets [Line Items] | ||
Acquired intangible assets, net | $ 308.8 | $ 345.5 |
Customer Relationships [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Acquired intangible assets, gross | 299.9 | 310.4 |
Accumulated amortization | (107) | (98.1) |
Acquired intangible assets, net | 192.9 | 212.3 |
Trade Secrets [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Acquired intangible assets, gross | 29.9 | 30.6 |
Accumulated amortization | (22.5) | (20.9) |
Acquired intangible assets, net | 7.4 | 9.7 |
Computer Software Intangible Asset [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Acquired intangible assets, gross | 75.7 | 79.8 |
Accumulated amortization | (46.3) | (43) |
Acquired intangible assets, net | 29.4 | 36.8 |
Trade Names [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Acquired intangible assets, gross | 73.8 | 76.5 |
Accumulated amortization | (15.6) | (13.3) |
Acquired intangible assets, net | 58.2 | 63.2 |
Other Intangible Assets [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Acquired intangible assets, gross | 44 | 44.8 |
Accumulated amortization | (23.1) | (21.3) |
Acquired intangible assets, net | $ 20.9 | $ 23.5 |
Amortization Expense Relating t
Amortization Expense Relating to Acquired Intangible Assets (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Finite Lived Intangible Assets [Line Items] | ||||
Amortization expense | $ 7.6 | $ 6.9 | $ 24.1 | $ 20.5 |
Estimated Future Amortization E
Estimated Future Amortization Expense for Acquired Intangible Assets Subject to Amortization (Detail) $ in Millions | Sep. 30, 2015USD ($) |
Schedule Of Actual And Estimated Amortization Expense [Line Items] | |
2015 (after September 30) | $ 6.8 |
2,016 | 29.2 |
2,017 | 26.9 |
2,018 | 21.1 |
2,019 | 18.1 |
Thereafter | 206.7 |
Total estimated future amortization | $ 308.8 |
FAIR VALUE
FAIR VALUE | 9 Months Ended |
Sep. 30, 2015 | |
FAIR VALUE | NOTE 9. FAIR VALUE The ASC establishes a fair value hierarchy whereby the inputs contained in valuation techniques used to measure fair value are categorized into three broad levels as follows: Level 1 : quoted market prices in active markets that the reporting entity has the ability to access at the date of the fair value measurement; Level 2 : inputs other than quoted market prices described in Level 1 that are observable for the asset or liability, either directly or indirectly, such as quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and Level 3 : unobservable inputs that are supported by little or no market activity and that are significant to the fair value measurement of the assets or liabilities. The table below presents information about items that are carried at fair value at September 30, 2015 and December 31, 2014 : Fair Value Measurement as of September 30, 2015 Description Balance Level 1 Level 2 Level 3 Assets: Derivatives (a) $ 44.9 $ - $ 44.9 $ - Money market mutual funds 137.9 137.9 - - Fixed maturity and open ended mutual funds (b) 36.2 36.2 - - Total $ 219.0 $ 174.1 $ 44.9 $ - Liabilities: Derivatives (a) $ 6.6 $ - $ 6.6 $ - Total $ 6.6 $ - $ 6.6 $ - Fair Value Measurement as of December 31, 2014 Description Balance Level 1 Level 2 Level 3 Assets: Derivatives (a) $ 41.8 $ - $ 41.8 $ - Money market mutual funds 149.7 149.7 - - Fixed maturity and open ended mutual funds (b) 48.0 48.0 - - Total $ 239.5 $ 197.7 $ 41.8 $ - Liabilities: Derivatives (a) $ 2.1 $ - $ 2.1 $ - Contingent consideration arising from acquisitions (c) 2.1 - - 2.1 Total $ 4.2 $ - $ 2.1 $ 2.1 (a) Represents interest rate swaps, FX forwards on certain assets and liabilities and net investment hedges in certain foreign subsidiaries as more fully described in Note 7 to the financial statements. (b) Consists of investments in fixed maturity mutual funds and open-ended mutual funds. The remaining contractual maturities for the fixed maturity instruments range from 14 month to 34 months and two months to 23 months at September 30, 2015 and December 31, 2014, respectively. (c) Represents contingent consideration liabilities pursuant to the agreements for the CSI acquisition. The following table summarizes the changes in the fair value of the Company’s Level 3 liabilities: Contingent Consideration Nine Months Ended September 30, 2015 2014 Balance as of January 1 $ 2.1 $ 17.5 Contingent consideration payments (1.9) (4.3) Total losses (realized and unrealized): Included in earnings - 0.3 Foreign currency translation adjustments (0.2) (0.2) Balance as of September 30 $ - $ 13.3 The following are descriptions of the methodologies utilized by the Company to estimate the fair value of its derivative contracts, fixed maturity plans and contingent consideration obligations: Derivatives: In determining the fair value of the derivative contracts, the Company utilizes industry standard valuation models. Where applicable, these models project future cash flows and discount the future amounts to a present value using spot rates, forward points, currency volatilities, interest rates as well as the risk of non-performance of the Company and the counterparties with whom it has derivative contracts. The Company established strict counterparty credit guidelines and only enters into transactions with financial institutions that adhere to these gu idelines. Accordingly, the risk of counterparty default is deemed to be minimal. Fixed maturity and open ended mutual funds: The fixed maturity mutual funds and open ended mutual funds primarily represent exchange traded funds in India and are classified as securities available-for-sale. Accordingly, any unrealized gains and losses are recognized through OCI until the instruments mature or are sold. Money market mutual funds: The money market mutual funds represent publicly traded funds with a stable $1 net asset value. Contingent consideration: During the third quarter of 2015, the Company settled a contingent consideration obligation of 2.5 million Canadian dollars related to the acquisition of CSI that was based on certain non-financial metrics set forth in the acquisition agreement. Prior to the settlement of this obligation, the Company utilized a discounted cash flow methodology to value this obligation. At September 30, 2014, the Company also had conti ngent consideration obligations related to the acquisition of Copal. These obligation s were measured using Level 3 inputs as defined in the ASC. The Company record ed the obligations for these contingent consideration arrangements on the date of each resp ective acquisition based on management’s best estimates of the achievement of the metrics and the value of the obligations were adjusted quarterly. For certain of the contingent consideration obligations relating to the acquisition of Copal, a portion of the contingent cash payments were based on revenue and EBITDA growth for certain of the Copal entities. This growth was calculated by comparing revenue and EBITDA in the year immediately prior to the exercise of the put/call option to acquire the remaini ng 33 % ownership interest of Copal Partners Limited, to revenue and EBITDA in Copal’s fiscal year ended March 31, 2011. Payments of $ 12.2 million under this arrangement were made in the fourth quarter of 2014 pursuant to the Company exercising its call o ption to acquire the remaining shares of Copal Amba. The Company had utilized discounted cash flow methodologies to value these obligations prior to their settlement in 2014. The expected future cash flows for these obligations were discounted using a ri sk-free interest rate plus a credit spread based on the option adjusted spread of the Company’s publicly traded debt as of the valuation date plus sovereign and size risk premiums. The most significant unobservable input involved in the measurement of the se obligations was the projected future financial results of the applicable Copal Amba entities. For the contingent consideration obligations relating to the acquisition of Amba, the payment was based on the acquired entity achieving a revenue target for its fiscal year ended March 31 , 201 4 which was met resulting in a $ 4.3 million payment in the third quarter of 2014. |
FAIR VALUE (Tables)
FAIR VALUE (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Financial Instruments Carried at Fair Value on Recurring Basis | Fair Value Measurement as of September 30, 2015 Description Balance Level 1 Level 2 Level 3 Assets: Derivatives (a) $ 44.9 $ - $ 44.9 $ - Money market mutual funds 137.9 137.9 - - Fixed maturity and open ended mutual funds (b) 36.2 36.2 - - Total $ 219.0 $ 174.1 $ 44.9 $ - Liabilities: Derivatives (a) $ 6.6 $ - $ 6.6 $ - Total $ 6.6 $ - $ 6.6 $ - Fair Value Measurement as of December 31, 2014 Description Balance Level 1 Level 2 Level 3 Assets: Derivatives (a) $ 41.8 $ - $ 41.8 $ - Money market mutual funds 149.7 149.7 - - Fixed maturity and open ended mutual funds (b) 48.0 48.0 - - Total $ 239.5 $ 197.7 $ 41.8 $ - Liabilities: Derivatives (a) $ 2.1 $ - $ 2.1 $ - Contingent consideration arising from acquisitions (c) 2.1 - - 2.1 Total $ 4.2 $ - $ 2.1 $ 2.1 (a) Represents interest rate swaps, FX forwards on certain assets and liabilities and net investment hedges in certain foreign subsidiaries as more fully described in Note 7 to the financial statements. (b) Consists of investments in fixed maturity mutual funds and open-ended mutual funds. The remaining contractual maturities for the fixed maturity instruments range from 14 month to 34 months and two months to 23 months at September 30, 2015 and December 31, 2014, respectively. (c) Represents contingent consideration liabilities pursuant to the agreements for the CSI acquisition. |
Changes in Fair Value of Level Three Liabilities | Contingent Consideration Nine Months Ended September 30, 2015 2014 Balance as of January 1 $ 2.1 $ 17.5 Contingent consideration payments (1.9) (4.3) Total losses (realized and unrealized): Included in earnings - 0.3 Foreign currency translation adjustments (0.2) (0.2) Balance as of September 30 $ - $ 13.3 |
Financial Instruments Carried a
Financial Instruments Carried at Fair Value on Recurring Basis (Detail) - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Derivative Contracts | $ 44.9 | $ 41.8 |
Money Market Funds | 137.9 | 149.7 |
Fixed maturity and open ended mutual funds | 36.2 | 48 |
Total, Assets | 219 | 239.5 |
Derivatives, Liabilities | $ 6.6 | 2.1 |
Contingent consideration obligation arising from acquisitions | 2.1 | |
Total, Liabilities | $ 6.6 | $ 4.2 |
Fair Value Inputs Level 1 [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Derivative Contracts | ||
Money Market Funds | $ 137.9 | $ 149.7 |
Fixed maturity and open ended mutual funds | 36.2 | 48 |
Total, Assets | $ 174.1 | $ 197.7 |
Derivatives, Liabilities | ||
Contingent consideration obligation arising from acquisitions | ||
Total, Liabilities | ||
Fair Value Inputs Level 2 [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Derivative Contracts | $ 44.9 | $ 41.8 |
Money Market Funds | ||
Fixed maturity and open ended mutual funds | ||
Total, Assets | $ 44.9 | $ 41.8 |
Derivatives, Liabilities | $ 6.6 | $ 2.1 |
Contingent consideration obligation arising from acquisitions | ||
Total, Liabilities | $ 6.6 | $ 2.1 |
Fair Value Inputs Level 3 [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Derivative Contracts | ||
Money Market Funds | ||
Fixed maturity and open ended mutual funds | ||
Total, Assets | ||
Derivatives, Liabilities | ||
Contingent consideration obligation arising from acquisitions | $ 2.1 | |
Total, Liabilities | $ 2.1 |
Changes in Fair Value of Level
Changes in Fair Value of Level Three Liabilities (Detail) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | ||
Contingent Consideration, beginning balance | $ 2.1 | $ 17.5 |
Contingent consideration payments | $ (1.9) | (4.3) |
Total gains (realized and unrealized), Included in earnings | (0.3) | |
Foreign currency translation adjustments | $ (0.2) | (0.2) |
Contingent Consideration, ending balance | $ 13.3 |
Fair Value - Additional Informa
Fair Value - Additional Information (Detail) CAD in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015USD ($) | Sep. 30, 2015CAD | Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | |
Fair Value Of Financial Instruments [Line Items] | ||||
Contingent consideration obligation arising from acquisitions settlement | $ 1.9 | $ 4.3 | ||
Amba [Member] | ||||
Fair Value Of Financial Instruments [Line Items] | ||||
Contingent consideration obligation arising from acquisitions settlement | $ 4.3 | |||
Copal [Member] | ||||
Fair Value Of Financial Instruments [Line Items] | ||||
Remaining ownership interest | 33.00% | 33.00% | 33.00% | |
CSI [Member] | ||||
Fair Value Of Financial Instruments [Line Items] | ||||
Contingent consideration obligation arising from acquisitions settlement | CAD | CAD 2.5 | |||
Copal Amba [Member] | Call Option [Member] | ||||
Fair Value Of Financial Instruments [Line Items] | ||||
Contingent consideration payments to acquire remaining shares amount | $ 12.2 |
OTHER BALANCE SHEET INFORMATION
OTHER BALANCE SHEET INFORMATION | 9 Months Ended |
Sep. 30, 2015 | |
OTHER BALANCE SHEET AND STATEMENT OF OPERATIONS INFORMATION | N OTE 10 . OTHER BALANCE SHEET AND STATEMENT OF OPERATION S INFORMATION The following tables contain additional detail related to certain balance sheet captions : September 30, December 31, 2015 2014 Other current assets: Prepaid taxes $ 69.8 $ 65.4 Prepaid expenses 56.9 59.9 Other 37.0 47.2 Total other current assets $ 163.7 $ 172.5 September 30, December 31, 2015 2014 Other assets: Investments in joint ventures $ 25.8 $ 21.6 Deposits for real-estate leases 12.5 11.3 Indemnification assets related to acquisitions 19.3 23.5 Fixed maturity, open ended mutual funds, and fixed deposits 58.9 48.0 Other 56.7 41.5 Total other assets $ 173.2 $ 145.9 September 30, December 31, 2015 2014 Accounts payable and accrued liabilities: Salaries and benefits $ 69.3 $ 86.5 Incentive compensation 102.8 155.2 Profit sharing contribution - 9.3 Customer credits, advanced payments and advanced billings 19.0 17.0 Self-insurance reserves for wholly-owned insurance subsidiary 23.8 21.5 Dividends 6.7 75.0 Professional service fees 53.7 47.0 Interest accrued on debt 20.7 45.0 Accounts payable 17.6 19.4 Income taxes 12.0 16.1 Pension and other retirement employee benefits 5.1 5.1 Other 78.5 60.5 Total accounts payable and accrued liabilities $ 409.2 $ 557.6 September 30, December 31, 2015 2014 Other liabilities: Pension and other retirement employee benefits $ 230.1 $ 244.8 Deferred rent-non-current portion 99.5 104.2 Interest accrued on UTPs 29.0 20.8 Legacy and other tax matters 1.7 8.6 Other 57.0 52.5 Total other liabilities $ 417.3 $ 430.9 Changes in the Company’s self-insurance reserves for claims insured by the Company’s wholly-owned insurance subsidiary , which primarily relate to legal defense costs for claims from prior years, are as follows: Nine Months Ended Year Ended September 30, December 31, 2015 2014 Balance January 1, $ 21.5 $ 27.6 Accruals (reversals), net 13.8 5.8 Payments (11.5) (11.9) Balance $ 23.8 $ 21.5 Noncontr olling Interest s : The following table summarizes the changes in the Company’s noncontrolling interest s : Nine Months Ended Year Ended September 30, 2015 December 31, 2014 Noncontrolling Interests Balance January 1, $ 230.7 $ 10.9 Net earnings 5.8 7.9 Dividends (6.8) (6.9) ICRA noncontrolling interest* - 218.8 Balance $ 229.7 $ 230.7 * Represents the fair value of the ICRA noncontrolling interest as of the day majority control was acquired. Other Non-Operating (Expense) Income: The following table summarizes the components of other non-operating (expense) income: Three Months Ended Nine Months Ended September 30, September 30, 2015 2014 2015 2014 FX gain/(loss) $ 9.7 7.6 (2.5) 1.5 Legacy Tax benefit 6.4 6.4 6.4 6.4 Joint venture income 3.5 2.6 8.8 7.9 Other 0.1 (0.2) 1.3 (0.3) Total $ 19.7 16.4 14.0 15.5 |
OTHER BALANCE SHEET INFORMATI55
OTHER BALANCE SHEET INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Additional Details Related to Certain Balance Sheet Captions | September 30, December 31, 2015 2014 Other current assets: Prepaid taxes $ 69.8 $ 65.4 Prepaid expenses 56.9 59.9 Other 37.0 47.2 Total other current assets $ 163.7 $ 172.5 September 30, December 31, 2015 2014 Other assets: Investments in joint ventures $ 25.8 $ 21.6 Deposits for real-estate leases 12.5 11.3 Indemnification assets related to acquisitions 19.3 23.5 Fixed maturity, open ended mutual funds, and fixed deposits 58.9 48.0 Other 56.7 41.5 Total other assets $ 173.2 $ 145.9 September 30, December 31, 2015 2014 Accounts payable and accrued liabilities: Salaries and benefits $ 69.3 $ 86.5 Incentive compensation 102.8 155.2 Profit sharing contribution - 9.3 Customer credits, advanced payments and advanced billings 19.0 17.0 Self-insurance reserves for wholly-owned insurance subsidiary 23.8 21.5 Dividends 6.7 75.0 Professional service fees 53.7 47.0 Interest accrued on debt 20.7 45.0 Accounts payable 17.6 19.4 Income taxes 12.0 16.1 Pension and other retirement employee benefits 5.1 5.1 Other 78.5 60.5 Total accounts payable and accrued liabilities $ 409.2 $ 557.6 September 30, December 31, 2015 2014 Other liabilities: Pension and other retirement employee benefits $ 230.1 $ 244.8 Deferred rent-non-current portion 99.5 104.2 Interest accrued on UTPs 29.0 20.8 Legacy and other tax matters 1.7 8.6 Other 57.0 52.5 Total other liabilities $ 417.3 $ 430.9 |
Changes in Non-Redeemable Noncontrolling Interest | Nine Months Ended Year Ended September 30, 2015 December 31, 2014 Noncontrolling Interests Balance January 1, $ 230.7 $ 10.9 Net earnings 5.8 7.9 Dividends (6.8) (6.9) ICRA noncontrolling interest* - 218.8 Balance $ 229.7 $ 230.7 |
Other Non-Operating | Three Months Ended Nine Months Ended September 30, September 30, 2015 2014 2015 2014 FX gain/(loss) $ 9.7 7.6 (2.5) 1.5 Legacy Tax benefit 6.4 6.4 6.4 6.4 Joint venture income 3.5 2.6 8.8 7.9 Other 0.1 (0.2) 1.3 (0.3) Total $ 19.7 16.4 14.0 15.5 |
Self Insurance Reserves | Nine Months Ended Year Ended September 30, December 31, 2015 2014 Balance January 1, $ 21.5 $ 27.6 Accruals (reversals), net 13.8 5.8 Payments (11.5) (11.9) Balance $ 23.8 $ 21.5 |
Additional Details Related to C
Additional Details Related to Certain Balance Sheet Captions (Detail) - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Other current assets | |||
Prepaid taxes | $ 69.8 | $ 65.4 | |
Prepaid expenses | 56.9 | 59.9 | |
Other | 37 | 47.2 | |
Total other current assets | 163.7 | 172.5 | |
Other assets | |||
Investments in joint ventures | 25.8 | 21.6 | |
Deposits for real-estate leases | 12.5 | 11.3 | |
Indemnification assets related to acquisitions | 19.3 | 23.5 | |
Fixed maturity and other open ended mutual funds | 58.9 | 48 | |
Other | 56.7 | 41.5 | |
Total other assets | 173.2 | 145.9 | |
Accounts payable and accrued liabilities | |||
Salaries and benefits | 69.3 | 86.5 | |
Incentive compensation | $ 102.8 | 155.2 | |
Profit sharing contribution | 9.3 | ||
Customer credits, advanced payments and advanced billings | $ 19 | 17 | |
Self-insurance reserves for wholly-owned insurance subsidiary | 23.8 | 21.5 | $ 27.6 |
Dividends | 6.7 | 75 | |
Professional service fees | 53.7 | 47 | |
Interest accrued on debt | 20.7 | 45 | |
Accounts payable | 17.6 | 19.4 | |
Income taxes | 12 | 16.1 | |
Pension and other post retirement employee benefits | 5.1 | 5.1 | |
Other | 78.5 | 60.5 | |
Total accounts payable and accrued liabilities | 409.2 | 557.6 | |
Other liabilities | |||
Pension and other post retirement employee benefits | 230.1 | 244.8 | |
Deferred rent-non-current portion | 99.5 | 104.2 | |
Interest accrued on UTPs | 29 | 20.8 | |
Legacy and other tax matters | 1.7 | 8.6 | |
Other | 57 | 52.5 | |
Total other liabilities | $ 417.3 | $ 430.9 |
Changes in Self Insurance Reser
Changes in Self Insurance Reserves (Detail) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2015 | Dec. 31, 2014 | |
Disclosure Changes in Self Insurance Reserves [Abstract] | ||
Beginning Balance | $ 21.5 | $ 27.6 |
Accruals (reversals), net | 13.8 | 5.8 |
Payments | (11.5) | (11.9) |
Ending Balance | $ 23.8 | $ 21.5 |
Changes in Non-Redeemable Nonco
Changes in Non-Redeemable Noncontrolling Interest (Detail) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2015 | Dec. 31, 2014 | |
Minority Interest [Line Items] | ||
Beginning balance | $ 230.7 | $ 10.9 |
Net earnings | 5.8 | 7.9 |
Dividends | (6.8) | (6.9) |
ICRA noncontrolling interest | 218.8 | |
Ending balance | $ 229.7 | $ 230.7 |
Other Non-Operating Interest (D
Other Non-Operating Interest (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Component of Other Expense Income Nonoperating [Line Items] | ||||
FX loss | $ 9.7 | $ 7.6 | $ (2.5) | $ 1.5 |
Legacy Tax benefit | 6.4 | 6.4 | 6.4 | 6.4 |
Joint venture income | 3.5 | 2.6 | 8.8 | 7.9 |
Other | 0.1 | (0.2) | 1.3 | (0.3) |
Other non-operating income (expense), net | $ 19.7 | $ 16.4 | $ 14 | $ 15.5 |
COMPREHENSIVE INCOME RECLASSIFI
COMPREHENSIVE INCOME RECLASSIFICATION | 9 Months Ended |
Sep. 30, 2015 | |
COMPREHENSIVE INCOME AND ACCUMULATED OTHER COMPREHENSIVE INCOME | N OTE 11. COMPREHENSIVE INCOME AND ACCUMULATED OTHER COMPREHENSIVE INCOME The following table provides details about the reclassifications out of AOCI : Three Months Ended September 30, 2015 Nine Months Ended September 30, 2015 Affected line in the consolidated statement of operations Gains on foreign currency translation adjustments Liquidation of foreign subsidiary $ - $ 0.1 Other non-operating income (expense), net Total gains on foreign currency translation adjustments - 0.1 Gains on available for sale securities: Gains on available for sale securities 0.6 0.8 Other income Total gains on available for sale securities 0.6 0.8 Pension and other retirement benefits Amortization of actuarial losses and prior service costs included in net income (2.1) (6.4) Operating expense Amortization of actuarial losses and prior service costs included in net income (1.3) (3.9) SG&A expense Total before income taxes (3.4) (10.3) Income tax effect of item above 1.3 3.9 Provision for income taxes Total pension and other retirement benefits (2.1) (6.4) Total losses included in Net Income attributable to reclassifications out of AOCI $ (1.5) $ (5.5) Three Months Ended September 30, 2014 Nine Months Ended September 30, 2014 Affected line in the consolidated statement of operations Losses on foreign currency translation adjustments Loss on foreign currency translation adjustment pursuant to ICRA step-acquisition $ - $ (4.4) ICRA gain Total losses on foreign translation adjustments - (4.4) Pension and other retirement benefits Amortization of actuarial losses and prior service costs included in net income (1.1) (3.6) Operating expense Amortization of actuarial losses and prior service costs included in net income (0.7) (1.9) SG&A expense Total before income taxes (1.8) (5.5) Income tax effect of item above 0.7 3.0 Provision for income taxes Total pension and other retirement benefits (1.1) (2.5) Total losses included in Net Income attributable to reclassifications out of AOCI $ (1.1) $ (6.9) The following table shows c hanges in AOCI by c omponent ( n et of t ax): Three Months Ended September 30, 2015 September 30, 2014 Pension and Other Retirement Benefits Foreign Currency Translation Adjustments Gains on Available for Sale Securities Total Pension and Other Retirement Benefits Foreign Currency Translation Adjustments Gains on Available for Sale Securities Total Balance June 30, $ (94.4) (189.2) 2.8 $ (280.8) $ (55.9) 8.6 - (47.3) Other comprehensive income/(loss) before reclassifications - (41.7) 0.7 (41.0) - (87.4) - (87.4) Amounts reclassified from AOCI 2.1 - (0.6) 1.5 1.1 - - 1.1 Other comprehensive income/(loss) 2.1 (41.7) 0.1 (39.5) 1.1 (87.4) - (86.3) Balance September 30, $ (92.3) $ (230.9) $ 2.9 $ (320.3) $ (54.8) $ (78.8) $ - $ (133.6) Nine Months Ended September 30, 2015 September 30, 2014 Pension and Other Retirement Benefits Foreign Currency Translation Adjustments Gains on Available for Sale Securities Total Pension and Other Retirement Benefits Foreign Currency Translation Adjustments Gains on Available for Sale Securities Total Balance December 31, $ (105.4) $ (130.7) $ 0.9 $ (235.2) $ (53.2) $ (1.4) $ - $ (54.6) Other comprehensive income/(loss) before reclassifications 6.7 (100.1) 2.8 (90.6) (4.1) (81.8) - (85.9) Amounts reclassified from AOCI 6.4 (0.1) (0.8) 5.5 2.5 4.4 - 6.9 Other comprehensive income/(loss) 13.1 (100.2) 2.0 (85.1) (1.6) (77.4) - (79.0) Balance September 30, $ (92.3) $ (230.9) $ 2.9 $ (320.3) $ (54.8) $ (78.8) $ - $ (133.6) |
COMPREHENSIVE INCOME RECLASSI61
COMPREHENSIVE INCOME RECLASSIFICATIONS (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Reclassifications out of AOCI | Three Months Ended September 30, 2015 Nine Months Ended September 30, 2015 Affected line in the consolidated statement of operations Gains on foreign currency translation adjustments Liquidation of foreign subsidiary $ - $ 0.1 Other non-operating income (expense), net Total gains on foreign currency translation adjustments - 0.1 Gains on available for sale securities: Gains on available for sale securities 0.6 0.8 Other income Total gains on available for sale securities 0.6 0.8 Pension and other retirement benefits Amortization of actuarial losses and prior service costs included in net income (2.1) (6.4) Operating expense Amortization of actuarial losses and prior service costs included in net income (1.3) (3.9) SG&A expense Total before income taxes (3.4) (10.3) Income tax effect of item above 1.3 3.9 Provision for income taxes Total pension and other retirement benefits (2.1) (6.4) Total losses included in Net Income attributable to reclassifications out of AOCI $ (1.5) $ (5.5) Three Months Ended September 30, 2014 Nine Months Ended September 30, 2014 Affected line in the consolidated statement of operations Losses on foreign currency translation adjustments Loss on foreign currency translation adjustment pursuant to ICRA step-acquisition $ - $ (4.4) ICRA gain Total losses on foreign translation adjustments - (4.4) Pension and other retirement benefits Amortization of actuarial losses and prior service costs included in net income (1.1) (3.6) Operating expense Amortization of actuarial losses and prior service costs included in net income (0.7) (1.9) SG&A expense Total before income taxes (1.8) (5.5) Income tax effect of item above 0.7 3.0 Provision for income taxes Total pension and other retirement benefits (1.1) (2.5) Total losses included in Net Income attributable to reclassifications out of AOCI $ (1.1) $ (6.9) |
Components of Accumulated Other Comprehensive Income | Three Months Ended September 30, 2015 September 30, 2014 Pension and Other Retirement Benefits Foreign Currency Translation Adjustments Gains on Available for Sale Securities Total Pension and Other Retirement Benefits Foreign Currency Translation Adjustments Gains on Available for Sale Securities Total Balance June 30, $ (94.4) (189.2) 2.8 $ (280.8) $ (55.9) 8.6 - (47.3) Other comprehensive income/(loss) before reclassifications - (41.7) 0.7 (41.0) - (87.4) - (87.4) Amounts reclassified from AOCI 2.1 - (0.6) 1.5 1.1 - - 1.1 Other comprehensive income/(loss) 2.1 (41.7) 0.1 (39.5) 1.1 (87.4) - (86.3) Balance September 30, $ (92.3) $ (230.9) $ 2.9 $ (320.3) $ (54.8) $ (78.8) $ - $ (133.6) Nine Months Ended September 30, 2015 September 30, 2014 Pension and Other Retirement Benefits Foreign Currency Translation Adjustments Gains on Available for Sale Securities Total Pension and Other Retirement Benefits Foreign Currency Translation Adjustments Gains on Available for Sale Securities Total Balance December 31, $ (105.4) $ (130.7) $ 0.9 $ (235.2) $ (53.2) $ (1.4) $ - $ (54.6) Other comprehensive income/(loss) before reclassifications 6.7 (100.1) 2.8 (90.6) (4.1) (81.8) - (85.9) Amounts reclassified from AOCI 6.4 (0.1) (0.8) 5.5 2.5 4.4 - 6.9 Other comprehensive income/(loss) 13.1 (100.2) 2.0 (85.1) (1.6) (77.4) - (79.0) Balance September 30, $ (92.3) $ (230.9) $ 2.9 $ (320.3) $ (54.8) $ (78.8) $ - $ (133.6) |
Reclassification out of AOCI (D
Reclassification out of AOCI (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Gains/(losses) on foreign currency translation adjustments | ||||
Liquidation of foreign subsidiary | $ 0.1 | $ (4.4) | ||
Total gains/(losses) on foreign translation adjustments | 0.1 | $ (4.4) | ||
Gains/(losses) on available for sale securities: | ||||
Gains on available for sale securities | $ 0.6 | 0.8 | ||
Pension and Other Post-Retirement Benefits, net of tax: | ||||
Amortization of actuarial losses and prior service costs included in net income - Pre Tax | (3.4) | $ (1.8) | (10.3) | $ (5.5) |
Amortization of actuarial losses and prior service costs included in net income - Tax | 1.3 | 0.7 | 3.9 | 3 |
Amortization of actuarial losses and prior service costs included in net income - Net of Tax | (2.1) | (1.1) | (6.4) | (2.5) |
Income Loss Attributable to Reclassification Out Of AOCI Net Of Tax | (1.5) | (1.1) | (5.5) | (6.9) |
Selling, General and Administrative Expenses [Member] | ||||
Pension and Other Post-Retirement Benefits, net of tax: | ||||
Amortization of actuarial losses and prior service costs included in net income - Pre Tax | (1.3) | (0.7) | (3.9) | (1.9) |
Operating Expense [Member] | ||||
Pension and Other Post-Retirement Benefits, net of tax: | ||||
Amortization of actuarial losses and prior service costs included in net income - Pre Tax | $ (2.1) | $ (1.1) | (6.4) | (3.6) |
Other Nonoperating Income (Expense) [Member] | ||||
Gains/(losses) on foreign currency translation adjustments | ||||
Liquidation of foreign subsidiary | 0.1 | |||
Icra Gain [Member] | ||||
Gains/(losses) on foreign currency translation adjustments | ||||
Foreign currency translation adjustment reclassification of losses to net income pursuant to ICRA Step Acquisition | $ (4.4) | |||
Other Income [Member] | ||||
Gains/(losses) on available for sale securities: | ||||
Gains on available for sale securities | $ 0.6 | $ 0.8 |
Changes in AOCI (Detail)
Changes in AOCI (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Beginning Balance | $ (280.8) | $ (47.3) | $ (235.2) | $ (54.6) |
Other comprehensive income/(loss), Pension and Retirement Benefit Plans - Net of Tax | 6.7 | (4.1) | ||
Reclassification adjustment from AOCI, Pension and Other Postretirement Benefit Plans - Net of Tax | $ 2.1 | $ 1.1 | 6.4 | 2.5 |
Other comprehensive income (loss), Foreign Currency Translation Adjustment - Net of Tax | $ (41.7) | $ (87.4) | (100.1) | (81.8) |
Amount reclassified from AOCI, Foreign Currency Translation Adjustment - Net of Tax | (0.1) | $ 4.4 | ||
Other comprehensive income (loss), Available for Sale Securities - Net of Tax | $ 0.7 | 2.8 | ||
Amount reclassified from AOCI, Available fo Sale Securities - Net of Tax | (0.6) | (0.8) | ||
Other comprehensive income/(loss) before reclassifications | (41) | $ (87.4) | (90.6) | $ (85.9) |
Amounts reclassified from AOCI | 1.5 | 1.1 | 5.5 | 6.9 |
Total other comprehensive income (loss) - Net of Tax | (39.5) | (86.3) | (85.1) | (79) |
Ending Balance | (320.3) | (133.6) | (320.3) | (133.6) |
Pension And Other Postretirement Plans Costs [Member] | ||||
Beginning Balance | (94.4) | (55.9) | (105.4) | (53.2) |
Total other comprehensive income (loss) - Net of Tax | 2.1 | 1.1 | 13.1 | (1.6) |
Ending Balance | (92.3) | (54.8) | (92.3) | (54.8) |
Foreign Currency Gain Loss [Member] | ||||
Beginning Balance | (189.2) | 8.6 | (130.7) | (1.4) |
Total other comprehensive income (loss) - Net of Tax | (41.7) | (87.4) | (100.2) | (77.4) |
Ending Balance | (230.9) | $ (78.8) | (230.9) | $ (78.8) |
Available for sale Securities [Member] | ||||
Beginning Balance | 2.8 | 0.9 | ||
Total other comprehensive income (loss) - Net of Tax | 0.1 | 2 | ||
Ending Balance | $ 2.9 | $ 2.9 |
PENSION AND OTHER POST-RETIREME
PENSION AND OTHER POST-RETIREMENT BENEFITS | 9 Months Ended |
Sep. 30, 2015 | |
PENSION AND OTHER RETIREMENT BENEFITS | NOTE 12. PENSION AND OTHER RETIREMENT BENEFITS Moody’s maintains funded and unfunded noncontributory Defined Benefit Pension Plans. The U.S. plan s provide defined benefits using a cash balance formula based on years of service and career average salary for its employees or final average pay for selected executives. The Company also provides certain healthcare and life insurance benefits for retired U.S. employees. The retirement healthcare plans are contributory; the life insurance plans are noncontribut ory. Moody’s funded and unfunded U.S. pension plans, the U.S. retirement healthcare plans and the U.S. retirement life insurance plans are collectively referred to herein as the “Retirement Plans”. The U.S. retirement healthcare plans and the U.S. retireme nt life insurance plans are collectively referred to herein as the “Other Retirement Plans”. Effective January 1, 2008, the Company no longer offers DBPPs to U.S. employees hired or rehired on or after January 1, 2008. New U.S. employees will instead rece ive a retirement contribution of similar benefit value under the Company’s Profit Participation Plan. Current participants of the Company’s DBPPs continue to accrue benefits based on existing plan formulas. The comp onents of net periodic benefit expense r elated to the Retirement Plans are as follows: Three Months Ended September 30, Pension Plans Other Retirement Plans 2015 2014 2015 2014 Components of net periodic expense Service cost $ 5.5 $ 4.6 $ 0.5 $ 0.5 Interest cost 4.2 4.2 0.2 0.2 Expected return on plan assets (3.6) (3.7) - - Amortization of net actuarial loss from earlier periods 3.1 1.7 0.1 - Amortization of net prior service costs from earlier periods 0.1 0.2 - - Net periodic expense $ 9.3 $ 7.0 $ 0.8 $ 0.7 Nine Months Ended September 30, Pension Plans Other Retirement Plans 2015 2014 2015 2014 Components of net periodic expense Service cost $ 16.3 $ 13.8 $ 1.6 $ 1.3 Interest cost 12.7 12.4 0.7 0.7 Expected return on plan assets (10.8) (10.7) - - Amortization of net actuarial loss from earlier periods 9.3 5.0 0.3 - Amortization of net prior service costs from earlier periods 0.5 0.5 - - Net periodic expense $ 28.0 $ 21.0 $ 2.6 $ 2.0 The Company made a contribution of $ 21.6 million to its funded pension plan as well as payments of $ 1.6 million related to its unfunded U.S. DBPPs and $ 0.8 million to its U.S. other retirement plans during the nine months ended September 30, 2015. The Company anticipates making payments of $ 2.5 million related to its unfunded U.S. DBPPs during the remainder of 2015. |
PENSION AND OTHER POST-RETIRE65
PENSION AND OTHER POST-RETIREMENT BENEFITS (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Components of Net Periodic Benefit Expense Related to Post-Retirement Plans | Three Months Ended September 30, Pension Plans Other Retirement Plans 2015 2014 2015 2014 Components of net periodic expense Service cost $ 5.5 $ 4.6 $ 0.5 $ 0.5 Interest cost 4.2 4.2 0.2 0.2 Expected return on plan assets (3.6) (3.7) - - Amortization of net actuarial loss from earlier periods 3.1 1.7 0.1 - Amortization of net prior service costs from earlier periods 0.1 0.2 - - Net periodic expense $ 9.3 $ 7.0 $ 0.8 $ 0.7 Nine Months Ended September 30, Pension Plans Other Retirement Plans 2015 2014 2015 2014 Components of net periodic expense Service cost $ 16.3 $ 13.8 $ 1.6 $ 1.3 Interest cost 12.7 12.4 0.7 0.7 Expected return on plan assets (10.8) (10.7) - - Amortization of net actuarial loss from earlier periods 9.3 5.0 0.3 - Amortization of net prior service costs from earlier periods 0.5 0.5 - - Net periodic expense $ 28.0 $ 21.0 $ 2.6 $ 2.0 |
Components of Net Periodic Bene
Components of Net Periodic Benefit Expense Related to Post-Retirement Plans (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Pension Plans Defined Benefit [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | $ 5.5 | $ 4.6 | $ 16.3 | $ 13.8 |
Interest cost | 4.2 | 4.2 | 12.7 | 12.4 |
Expected return on plan assets | (3.6) | (3.7) | (10.8) | (10.7) |
Amortization of net actuarial loss from earlier periods | 3.1 | 1.7 | 9.3 | 5 |
Amortization of net prior service costs from earlier periods | 0.1 | 0.2 | 0.5 | 0.5 |
Net periodic expense | 9.3 | 7 | 28 | 21 |
Other Postretirement Benefit Plans Defined Benefit [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 0.5 | 0.5 | 1.6 | 1.3 |
Interest cost | $ 0.2 | $ 0.2 | $ 0.7 | $ 0.7 |
Expected return on plan assets | ||||
Amortization of net actuarial loss from earlier periods | $ 0.1 | $ 0.3 | ||
Amortization of net prior service costs from earlier periods | ||||
Net periodic expense | $ 0.8 | $ 0.7 | $ 2.6 | $ 2 |
Pension and Other Post-Retire67
Pension and Other Post-Retirement Benefits - Additional Information (Detail) $ in Millions | 9 Months Ended |
Sep. 30, 2015USD ($) | |
Funded Pension Plans [Member] | |
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block [Line Items] | |
Defined Benefit Plan | $ 21.6 |
Unfunded Pension Plans [Member] | |
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block [Line Items] | |
Defined benefit payment amount | 1.6 |
Estimated additional payments in 2013 | 2.5 |
Other Postretirement Benefit Plans Defined Benefit [Member] | |
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block [Line Items] | |
Defined benefit payment amount | $ 0.8 |
INDEBTEDNESS
INDEBTEDNESS | 9 Months Ended |
Sep. 30, 2015 | |
INDEBTEDNESS | NOTE 13 . INDEBTED NESS The following table summarizes total indebtedness: September 30, December 31, 2015 2014 Notes Payable: 6.06% Series 2007-1 Notes due 2017 $ 300.0 $ 300.0 5.50% 2010 Senior Notes, due 2020, net of unamortized discount of $1.7 million in 2015 and $2.0 million in 2014; also includes a fair value adjustment on an interest rate hedge of $17.1 million in 2015 and $5.8 million in 2014 515.4 503.8 4.50% 2012 Senior Notes, due 2022, net of unamortized discount of $2.9 million in 2015 and $3.1 million in 2014 497.1 496.9 4.875% 2013 Senior Notes, due 2024, net of unamortized discount of $2.4 million in 2015 and 2.5 million in 2014 497.6 497.5 2.75% 2014 Senior Notes (5-Year), due 2019, net of unamortized discount of $0.5 million in 2015 and $0.7 million in 2014; also includes a fair value adjustment on an interest rate hedge of $8.4 million in 2015 and $1.4 million in 2014 457.9 450.7 5.25% 2014 Senior Notes (30-Year), due 2044, net of unamortized discount of $1.6 million in 2015 and 2014 298.4 298.4 1.75% 2015 Senior Notes, due 2027 558.1 - Total long-term debt $ 3,124.5 $ 2,547.3 On May 11, 2015, the Company entered into a five-year senior, unsecured revolving credit facility with the capacity to borrow up to $ 1 billion. This replaces the $ 1 billion five-year 2012 Facility that was scheduled to expire in April 2017. Interest on borrowings under the facility is payable at rates that are based on the LIBOR plus a premium that can range from 79.5 basis points to 120 basis points per annum depending on the Company’s ratio of total debt to EBITDA. The Company also pays quarterly facil ity fees, regardless of borrowing activity under the 2015 Facility. The quarterly fees for the 2015 Facility can range from 8 basis points of the facility amount to 17.5 basis points, depending on the Company’s Debt/ EBITDA ratio. The 2015 Facility contain s covenants that, among other things, restrict the ability of the Company and its subsidiaries, without the approval of lenders, to engage in mergers, consolidations, asset sales, transactions with affiliates, sale and leaseback transactions or to incur li ens, as set forth in the facility agreement. The 2015 Facility also contains a financial covenant that requires the Company to maintain a Debt/EBITDA ratio of not more than 4 to 1 at the end of any fiscal quarter. Upon the occurrence of certain financial o r economic events, significant corporate events or certain other events of default constituting a default under the 2015 Facility, all loans outstanding under the 2015 Facility (includ ing accrued interest and fees payable thereunder) may be declared immedi ately due and payable and all lending commitments under the 2015 Facility may be terminated. In addition, certain other events of default under the 2015 Facility would automatically result in amounts outstanding becoming immediately due and payable and the termina tion of all lending commitments. On March 9, 2015, the Company issued € 500 million aggregate principal amount of senior unsecured notes in a public offering. The 2015 Senior Notes bear interest at a fixed rate of 1.75 % and mature on March 9, 2027. Interest on the 2015 Senior Notes is due annually on March 9 of each year, commencing March 9, 2016. The Company may prepay the 2015 Senior Notes, in whole or in part, at any time at a price equal to 100 % of the principal amount being prepaid, plus accrued and unpaid interest and a Make-Whole Am ount. Additionally, at the option of the holders of the notes, the Company may be required to purchase all or a portion of the notes upon occurrence of a “Change of Control Triggering Event,” as defined in the 2015 Indenture, at a price equal to 101 % of th e principal amount thereof, plus accrued and unpaid interest to the date of purchase. The 2015 Indenture contains covenants that limit the ability of the Company and certain of its subsidiaries to, among other things, incur or create liens and enter into s ale and leaseback transactions. In addition, the 2015 Indenture contains a covenant that limits the ability of the Company to consolidate or merge with another entity or to sell all or substantially all of its assets to another entity. The 2015 Indenture c ontains customary default provisions. In addition, an event of default will occur if the Company or certain of its subsidiaries fail to pay the principal of any indebtedness (as defined in the 2015 Indenture) when due at maturity in an aggregate amount of $ 50 million or more, or a default occurs that results in the acceleration of the maturity of the Company’s or certain of its subsidiaries’ indebtedness in an aggregate amount of $ 50 million or more. Upon the occurrence and during the continuation of an eve nt of default under the 2015 Indenture, the 2015 Senior Notes may become immediately due and payable either automatically or by the vote of the holders of more than 25 % of the aggregate principal amount of all of the notes then outstanding. The Company has designated €400 million of the 2015 Senior Notes as a net investment hedge as more fully discussed in Note 7. The Company has entered into interest rate swaps on the 2010 Senior Notes and the 2014 Senior Notes (5-Year) which are more fully discussed in Note 7 above. A t September 30, 2015 , the Company was in compliance with all covenants contained within all of the debt agreements. The 2015 Facility, the 2015 Senior Notes, the 2014 Senior Notes (5-year), the 2014 Senior Notes (30-year), the Series 2007-1 Notes , the 2010 Senior Notes, the 2012 Senior Notes and the 2013 Senior Notes all contain cross default provisions. These provisions state that default under one of the aforementioned debt instruments could in turn permit lenders under other debt instruments to declare b orrowings outstanding under those instruments to be immediately due and payable. As of September 30, 2015 , there were no such cross defaults. Interest expense, net The following table summarizes the components of interest as presented in the consolidated sta tements of operations: Three Months Ended Nine Months Ended September 30, September 30, 2015 2014 2015 2014 Income $ 2.8 $ 1.8 $ 7.0 $ 5.1 Expense on borrowings (1) (29.8) (38.8) (88.8) (90.5) UTPs and other tax related liabilities (2) 0.4 (1.7) (6.3) (3.2) Legacy Tax 0.7 0.7 0.7 0.7 Capitalized 0.1 0.3 0.4 0.4 Total $ (25.8) $ (37.7) $ (87.0) $ (87.5) (1) The three and nine months ended September 30, 2014 both include approximately $11 million in net costs related to the prepayment of the Series 2005-1 Notes. (2) The three and nine months ended September 30, 2015 include approximately $2 million in interest income on a tax refund. The nine months ended September 30, 2014 amount includes a $2.0 million reversal of an interest accrual relating to the favorable resolution of an international tax matter. The following table shows the cash paid for interest: Nine Months Ended September 30, 2015 2014 Interest paid $ 101.0 $ 108.4 The Company’s long-term debt is recorded at its carrying amount, which represents the issuance amount plus or minus any issuance premium or discount, except for the 2010 Senior Notes and the 2014 Senior Notes (5-Year) which are recorded at the carrying amount adjusted for the fair value of an interest rate swap used to hedge the fair value of the note. The fair value and carrying value of the Company’s long-term debt as of September 30, 2015 and December 31, 2014 are as follows: September 30, 2015 December 31, 2014 Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value Series 2007-1 Notes $ 300.0 $ 324.9 $ 300.0 $ 334.6 2010 Senior Notes 515.4 559.0 503.8 564.4 2012 Senior Notes 497.1 530.2 496.9 537.1 2013 Senior Notes 497.6 531.2 497.5 548.4 2014 Senior Notes (5-Year) 457.9 456.7 450.7 454.3 2014 Senior Notes (30-Year) 298.4 311.3 298.4 333.9 2015 Senior Notes 558.1 531.3 - - Total $ 3,124.5 $ 3,244.6 $ 2,547.3 $ 2,772.7 The fair value of the Company’s long-term debt is estimated using discounted cash flows with inputs based on prevailing interest rates available to the Company for borrowings with similar maturities. Accordingly, the inputs used to estimate the fair value of the Company’s long-term debt are classified as Level 2 inputs within the fair value hierarchy. |
INDEBTEDNESS (Tables)
INDEBTEDNESS (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Summary of Total Indebtedness | September 30, December 31, 2015 2014 Notes Payable: 6.06% Series 2007-1 Notes due 2017 $ 300.0 $ 300.0 5.50% 2010 Senior Notes, due 2020, net of unamortized discount of $1.7 million in 2015 and $2.0 million in 2014; also includes a fair value adjustment on an interest rate hedge of $17.1 million in 2015 and $5.8 million in 2014 515.4 503.8 4.50% 2012 Senior Notes, due 2022, net of unamortized discount of $2.9 million in 2015 and $3.1 million in 2014 497.1 496.9 4.875% 2013 Senior Notes, due 2024, net of unamortized discount of $2.4 million in 2015 and 2.5 million in 2014 497.6 497.5 2.75% 2014 Senior Notes (5-Year), due 2019, net of unamortized discount of $0.5 million in 2015 and $0.7 million in 2014; also includes a fair value adjustment on an interest rate hedge of $8.4 million in 2015 and $1.4 million in 2014 457.9 450.7 5.25% 2014 Senior Notes (30-Year), due 2044, net of unamortized discount of $1.6 million in 2015 and 2014 298.4 298.4 1.75% 2015 Senior Notes, due 2027 558.1 - Total long-term debt $ 3,124.5 $ 2,547.3 |
Summary of Components of Interest as Presented in Consolidated Statements of Operations | Three Months Ended Nine Months Ended September 30, September 30, 2015 2014 2015 2014 Income $ 2.8 $ 1.8 $ 7.0 $ 5.1 Expense on borrowings (1) (29.8) (38.8) (88.8) (90.5) UTPs and other tax related liabilities (2) 0.4 (1.7) (6.3) (3.2) Legacy Tax 0.7 0.7 0.7 0.7 Capitalized 0.1 0.3 0.4 0.4 Total $ (25.8) $ (37.7) $ (87.0) $ (87.5) (1) The three and nine months ended September 30, 2014 both include approximately $11 million in net costs related to the prepayment of the Series 2005-1 Notes. (2) The three and nine months ended September 30, 2015 include approximately $2 million in interest income on a tax refund. The nine months ended September 30, 2014 amount includes a $2.0 million reversal of an interest accrual relating to the favorable resolution of an international tax matter. |
Interest Paid | Nine Months Ended September 30, 2015 2014 Interest paid $ 101.0 $ 108.4 |
Fair Value and Carrying Value of Long-Term Debt | September 30, 2015 December 31, 2014 Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value Series 2007-1 Notes $ 300.0 $ 324.9 $ 300.0 $ 334.6 2010 Senior Notes 515.4 559.0 503.8 564.4 2012 Senior Notes 497.1 530.2 496.9 537.1 2013 Senior Notes 497.6 531.2 497.5 548.4 2014 Senior Notes (5-Year) 457.9 456.7 450.7 454.3 2014 Senior Notes (30-Year) 298.4 311.3 298.4 333.9 2015 Senior Notes 558.1 531.3 - - Total $ 3,124.5 $ 3,244.6 $ 2,547.3 $ 2,772.7 |
Summary of Total Indebtedness (
Summary of Total Indebtedness (Detail) - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 |
Debt Instrument [Line Items] | ||
Total long-term debt | $ 3,124.5 | $ 2,547.3 |
Series 2007-1 Notes [Member] | ||
Debt Instrument [Line Items] | ||
Notes Payable | 300 | 300 |
2010 Senior Notes [Member] | ||
Debt Instrument [Line Items] | ||
Notes Payable | 515.4 | 503.8 |
2012 Senior Notes [Member] | ||
Debt Instrument [Line Items] | ||
Notes Payable | 497.1 | 496.9 |
2013 Senior Notes [Member] | ||
Debt Instrument [Line Items] | ||
Notes Payable | 497.6 | 497.5 |
2014 Senior Notes (5-Year) [Member] | ||
Debt Instrument [Line Items] | ||
Notes Payable | 457.9 | 450.7 |
2014 Senior Notes (30-Year) [Member] | ||
Debt Instrument [Line Items] | ||
Notes Payable | 298.4 | $ 298.4 |
2015 Senior Notes [Member] | ||
Debt Instrument [Line Items] | ||
Notes Payable | $ 558.1 |
Summary of Total Indebtedness71
Summary of Total Indebtedness (Parenthetical) (Detail) - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 |
Debt Instrument [Line Items] | ||
Fair value of interest rate swap | $ 44.9 | $ 41.8 |
Series 2007-1 Notes [Member] | ||
Debt Instrument [Line Items] | ||
Notes Payable, interest rate | 6.06% | 6.06% |
2010 Senior Notes [Member] | ||
Debt Instrument [Line Items] | ||
Fair value of interest rate swap | $ 17.1 | $ 5.8 |
Unamortized discount | $ 1.7 | $ 2 |
Notes Payable, interest rate | 5.50% | 5.50% |
2012 Senior Notes [Member] | ||
Debt Instrument [Line Items] | ||
Unamortized discount | $ 2.9 | $ 3.1 |
Notes Payable, interest rate | 4.50% | 4.50% |
2013 Senior Notes [Member] | ||
Debt Instrument [Line Items] | ||
Unamortized discount | $ 2.4 | $ 2.5 |
Notes Payable, interest rate | 4.875% | 4.875% |
2014 Senior Notes (5-Year) [Member] | ||
Debt Instrument [Line Items] | ||
Fair value of interest rate swap | $ 8.4 | $ 1.4 |
Unamortized discount | $ 0.5 | $ 0.7 |
Notes Payable, interest rate | 2.75% | 2.75% |
2014 Senior Notes (30-Year) [Member] | ||
Debt Instrument [Line Items] | ||
Unamortized discount | $ 1.6 | $ 1.6 |
Notes Payable, interest rate | 5.25% | 5.25% |
2015 Senior Notes [Member] | ||
Debt Instrument [Line Items] | ||
Notes Payable, interest rate | 1.75% | 1.75% |
Summary of Components of Intere
Summary of Components of Interest as Presented in Consolidated Statements of Operations (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Debt Instrument [Line Items] | ||||
Income | $ 2.8 | $ 1.8 | $ 7 | $ 5.1 |
Expense on borrowings | (29.8) | (38.8) | (88.8) | (90.5) |
Income (expense) on UTPs and other tax related liabilities | 0.4 | (1.7) | (6.3) | (3.2) |
Legacy Tax | 0.7 | 0.7 | 0.7 | 0.7 |
Capitalized | 0.1 | 0.3 | 0.4 | 0.4 |
Total | $ (25.8) | $ (37.7) | $ (87) | $ (87.5) |
Summary of Components of Inte73
Summary of Components of Interest as Presented in Consolidated Statements of Operations (Parenthetical) (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Debt Instrument [Line Items] | ||||
Reversal of accrued interest expense related to international tax matter | $ 2 | |||
Interest income on a tax refund | $ 2 | $ 2 | ||
Series 2005-1 Notes [Member] | ||||
Debt Instrument [Line Items] | ||||
Payments of Debt Extinguishment Costs | $ 11 | $ 11 |
Interest Paid (Detail)
Interest Paid (Detail) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Debt Instrument [Line Items] | ||
Interest paid | $ 101 | $ 108.4 |
Fair Value and Carrying Value o
Fair Value and Carrying Value of Long-Term Debt (Detail) - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 |
Debt Instrument [Line Items] | ||
Estimated Fair Value | $ 3,244.6 | $ 2,772.7 |
Series 2007-1 Notes [Member] | ||
Debt Instrument [Line Items] | ||
Notes Payable | 300 | 300 |
Estimated Fair Value | 324.9 | 334.6 |
2010 Senior Notes [Member] | ||
Debt Instrument [Line Items] | ||
Notes Payable | 515.4 | 503.8 |
Estimated Fair Value | 559 | 564.4 |
2012 Senior Notes [Member] | ||
Debt Instrument [Line Items] | ||
Notes Payable | 497.1 | 496.9 |
Estimated Fair Value | 530.2 | 537.1 |
2013 Senior Notes [Member] | ||
Debt Instrument [Line Items] | ||
Notes Payable | 497.6 | 497.5 |
Estimated Fair Value | 531.2 | 548.4 |
2014 Senior Notes (5-Year) [Member] | ||
Debt Instrument [Line Items] | ||
Notes Payable | 457.9 | 450.7 |
Estimated Fair Value | 456.7 | 454.3 |
2014 Senior Notes (30-Year) [Member] | ||
Debt Instrument [Line Items] | ||
Notes Payable | 298.4 | 298.4 |
Estimated Fair Value | 311.3 | $ 333.9 |
2015 Senior Notes [Member] | ||
Debt Instrument [Line Items] | ||
Notes Payable | 558.1 | |
Estimated Fair Value | $ 531.3 |
Fair Value and Carrying Value76
Fair Value and Carrying Value of Long-Term Debt (Parenthetical) (Detail) - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 |
Debt Instrument [Line Items] | ||
Fair value of interest rate swap | $ 44.9 | $ 41.8 |
2010 Senior Notes [Member] | ||
Debt Instrument [Line Items] | ||
Fair value of interest rate swap | 17.1 | 5.8 |
Debt Instrument Unamortized Discount | 1.7 | 2 |
2014 Senior Notes (5-Year) [Member] | ||
Debt Instrument [Line Items] | ||
Fair value of interest rate swap | 8.4 | 1.4 |
Debt Instrument Unamortized Discount | 0.5 | 0.7 |
2014 Senior Notes (30-Year) [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument Unamortized Discount | $ 1.6 | $ 1.6 |
Indebtedness - Additional Infor
Indebtedness - Additional Information (Detail) € in Millions | May. 12, 2015 | Mar. 10, 2015USD ($) | May. 11, 2015USD ($) | Mar. 09, 2015EUR (€) | Mar. 09, 2015USD ($) |
2015 Senior Notes [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument Face Amount | € | € 500 | ||||
Debt Instrument Interest Rate Stated Percentage | 1.75% | 1.75% | |||
Minimum Percentage Of Aggregate Principal Amount Of All Notes | 25.00% | ||||
Percentage Of Principal Amount Being Prepaid Plus Accrued And Unpaid Interest | 100.00% | ||||
Percentage Of Principal Amount Plus Accrued And Unpaid Interest To Date Of Purchase | 101.00% | ||||
Aggregate Amount For Default | $ 50,000,000 | ||||
Minimum Amount For Default On Senior Notes Payable | $ 50,000,000 | ||||
2012 Credit Facility [Member] | |||||
Debt Instrument [Line Items] | |||||
Senior unsecured revolving credit facility | $ 1,000,000,000 | ||||
2015 Credit Facility [Member] | |||||
Debt Instrument [Line Items] | |||||
Senior unsecured revolving credit facility | $ 1,000,000,000 | ||||
Interest rate description | LIBOR plus a premium that can range from 79.5 basis points to 120 basis points per annum | ||||
Debt/EBITDA ratio | 4 | ||||
2015 Credit Facility [Member] | Minimum [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument Fee Period Percentage | 0.0008 | ||||
2015 Credit Facility [Member] | Maximum [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument Fee Period Percentage | 0.00175 |
CONTINGENCIES
CONTINGENCIES | 9 Months Ended |
Sep. 30, 2015 | |
CONTINGENCIES | NOTE 14 . CONTINGENCIES Moody’s is involved in legal and tax proceedings, governmental investigations and inquiries, claims and litigation that are incidental to the Company’s business, including claims based on ratings assigned by MIS. Moody’s is also subject to ongoing tax audits in the normal course of business. Management periodically assesses the Company’s liabilities and contingencies in connection with these matters based upon the latest information available. Moody’s discloses material pending legal proceedings pursuan t to SEC rules and other pending matters as it may determine to be appropriate. Following the global credit crisis of 2008, MIS and other credit rating agencies have been the subject of intense scrutiny, increased regulation, ongoing inquiry and government al investigations, and civil litigation. Legislative, regulatory and enforcement entities around the world are considering additional legislation, regulation and enforcement actions, including with respect to MIS’s compliance with regulatory standards. Moo dy’s periodically receives and is continuing to address subpoenas and inquiries from various governmental authorities, including the U.S. Department of Justice and states attorneys general, and is responding to such investigations and inquiries. In additio n, the Company is facing litigation from market participants relating to the performance of MIS rated securities. Although Moody’s in the normal course experiences such litigation, the volume and cost of defending such litigation has significantly increase d following the events in the U.S. subprime residential mortgage sector and global credit markets more broadly over the last several years. On August 25, 2008, Abu Dhabi Commercial Bank filed a purported class action in the United States District Court for the Southern District of New York asserting numerous common-law causes of action against two subsidiaries of the Company, another rating agency, and Morgan Stanley & Co. The action related to securities issued by a structured investment vehicle called Che yne Finance (the “Cheyne SIV”) and sought, among other things, compensatory and punitive damages. The central allegation against the rating agency defendants was that the credit ratings assigned to the securities issued by the Cheyne SIV were false and mis leading. In early proceedings, the court dismissed all claims against the rating agency defendants except those for fraud and aiding and abetting fraud. In June 2010, the court denied plaintiff’s motion for class certification, and additional plaintiffs we re subsequently added to the complaint. In January 2012, the rating agency defendants moved for summary judgment with respect to the fraud and aiding and abetting fraud claims. Also in January 2012, in light of new New York state case law, the court permit ted the plaintiffs to file an amended complaint that reasserted previously dismissed claims against all defendants for breach of fiduciary duty, negligence, negligent misrepresentation, and related aiding and abetting claims. In May 2012, the court, ruling on the rating agency defendants’ motion to dismiss, dismissed all of the reasserted claims except for the negligent misrepresentation claim, and on September 19, 2012, after further proceedings, the court also dismissed the negligent misrepresentation cla im. On August 17, 2012, the court ruled on the rating agencies’ motion for summary judgment on the plaintiffs’ remaining claims for fraud and aiding and abetting fraud. The court dismissed, in whole or in part, the fraud claims of four plaintiffs as agains t Moody’s but allowed the fraud claims to proceed with respect to certain claims of one of those plaintiffs and the claims of the remaining 11 plaintiffs. The court also dismissed all claims against Moody’s for aiding and abetting fraud. Three of the plain tiffs whose claims were dismissed filed motions for reconsideration, and on November 7, 2012, the court granted two of these motions, reinstating the claims of two plaintiffs that were previously dismissed. On February 1, 2013, the court dismissed the clai ms of one additional plaintiff on jurisdictional grounds. Trial on the remaining fraud claims against the rating agencies, and on claims against Morgan Stanley for aiding and abetting fraud and for negligent misrepresentation, was scheduled for May 2013. O n April 24, 2013, pursuant to confidential settlement agreements, the 14 plaintiffs with claims that had been ordered to trial stipulated to the voluntary dismissal, with prejudice, of these claims as against all defendants, and the court so ordered that s tipulation on April 26, 2013. The settlement did not cover certain claims of two plaintiffs, Commonwealth of Pennsylvania Public School Employees’ Retirement System (“PSERS”) and Commerzbank AG (“Commerzbank”), that were previously dismissed by the Court. On May 23, 2013, these two plaintiffs filed a Notice of Appeal to the Second Circuit, seeking reversal of the dismissal of their claims and also seeking reversal of the trial court’s denial of class certification. According to pleadings filed by plaintiffs in earlier proceedings, PSERS and Commerzbank AG seek, respectively, $ 5.75 million and $ 69.6 million in compensatory damages in connection with the two claims at issue on the appeal. In October 2014, the Second Circuit affirmed the denial of class certifi cation and the dismissal of PSERS’ claim but reversed a ruling of the trial court that had excluded certain evidence relevant to Commerzbank’s principal argument on appeal. The Second Circuit did not reverse the dismissal of Commerzbank’s claim but instead certified a legal question concerning Commerzbank’s argument to the New York Court of Appeals. The New York Court of Appeals subsequently agreed to hear the certified question, and on June 30, 2015, the Court of Appeals ruled in Moody’s favor. The case ha s now been returned to the Second Circuit for final disposition of the appeal, and a decision is expected in the near future. On July 9, 2009, the California Public Employees’ Retirement System (“CalPERS”) filed an action in the Superior Court of Californi a in San Francisco (the “Superior Court”) asserting two common-law causes of action, negligent misrepresentation and negligent interference with prospective economic advantage. The complaint named as defendants the Company, MIS, The McGraw-Hill Companies, Fitch, Inc., and various subsidiaries of Fitch, Inc. (CalPERS subsequently released the Fitch entities from the case). The action relates to the plaintiff’s purchase of securities issued by three structured investment vehicles (“SIVs”) known as Cheyne Fina nce, Sigma Finance, and Stanfield Victoria Funding. The plaintiff’s complaint seeks unspecified compensatory damages arising from alleged losses in connection with investments that purportedly totaled approximately $ 1.3 billion; in subsequent court filings , the plaintiff claimed to have suffered “unrealized losses” of approximately $779 million. The central allegation against the defendants is that the credit ratings assigned to the securities issued by the SIVs were inaccurate and that the methodologies us ed by the rating agencies had no reasonable basis. In August 2009, the defendants removed the action to federal court, but the case was remanded to state court in November 2009 based on a finding that CalPERS is an “arm of the State.” In April 2010, in res ponse to a motion by the defendants, the Superior Court dismissed the claim for negligent interference with prospective economic advantage but declined to dismiss the claim for negligent misrepresentation. In October 2010, the defendants filed a special mo tion to dismiss the remaining negligent misrepresentation claim under California’s “anti-SLAPP” statute, which limits the maintenance of lawsuits based on speech on matters of public interest. In January 2012, the Superior Court denied the anti-SLAPP motio n, ruling that, although the ratings qualify as protected speech activity under California law, the plaintiff had provided sufficient evidence in support of its claims to proceed. The defendants appealed this decision to the California Court of Appeal, whi ch affirmed the Superior Court’s rulings in May 2014, and in September 2014, the Supreme Court of California declined to review the Court of Appeal’s decision. The action has been returned to the Superior Court, and discovery has begun. On March 11, 2015, pursuant to a settlement agreement in which S&P agreed to pay CalPERS $125 million, S&P was dismissed from the action. In November 2008, Pursuit Partners, LLC and Pursuit Investment Management, LLC filed an amended complaint adding the Company as a defen dant to an existing action, which was then pending in the Superior Court of Connecticut in Stamford against UBS AG, UBS Securities LLC, and a UBS employee (collectively, “UBS”). The Company was served in January 2009, and in October 2011, the Company’s rat ing agency subsidiary, MIS, was substituted for the Company as a defendant. The action arose out of UBS’s sale of five collateralized debt obligations (“CDOs”) to the plaintiffs, who purchased them on the secondary market in 2007 on behalf of two investmen t funds under their management. With respect to UBS, the plaintiffs alleged, among other things, that UBS made material misrepresentations and omissions in pre-sale communications with the plaintiffs. With respect to MIS, the plaintiffs alleged, among othe r things, that, prior to the plaintiffs’ purchases, MIS provided UBS with non-public information about potential downgrades of the ratings of the CDOs while maintaining inappropriate investment-grade ratings on the CDOs. As to all defendants, plaintiffs so ught compensatory damages for alleged investment losses of approximately $ 44 million, as well as, among other things, attorney’s fees, costs, interest, and punitive damages. Plaintiffs’ initial complaint against the Company asserted claims for fraud, viola tion of the Connecticut Uniform Securities Act (“CUSA”), aiding and abetting fraud and civil theft by UBS, negligent/reckless conduct, unjust enrichment, and civil conspiracy. In March 2012, the court granted MIS’s motion to strike the claim for unjust enr ichment but denied MIS’s motion to strike the other claims. In June 2012, after the close of discovery, MIS moved to dismiss all claims against it for lack of standing and also moved for summary judgment. In October 2012, the court granted the motion to di smiss, but in July 2014, the court granted the plaintiffs’ motion for reconsideration and reinstated the action. In October 2014, MIS filed a new motion to dismiss on jurisdictional grounds, which was denied on February 11, 2015. MIS’s motion for summary j udgment, originally filed in June 2012, was denied on June 17, 2015. Jury selection for trial began on August 18, 2015, in the Superior Court of Connecticut in Waterbury. On August 21, 2015, prior to the conclusion of jury selection, plaintiffs withdrew a ll claims against Moody’s, with prejudice, pursuant to a confidential settlement agreement. For claims, litigation and proceedings and governmental investigations and inquires not related to income taxes, where it is both probable that a liability has bee n incurred and the amount of loss can be reasonably estimated, the Company records liabilities in the consolidated financial statements and periodically adjusts these as appropriate. When the reasonable estimate of the loss is within a range of amounts, th e minimum amount of the range is accrued unless some higher amount within the range is a better estimate than another amount within the range. In other instances, because of uncertainties related to the probable outcome and/or the amount or range of loss, management does not record a liability but discloses the contingency if significant. As additional information becomes available, the Company adjusts its assessments and estimates of such matters accordingly. In view of the inherent difficulty of predictin g the outcome of litigation, regulatory, governmental investigations and inquiries, enforcement and similar matters and contingencies, particularly where the claimants seek large or indeterminate damages or where the parties assert novel legal theories or the matters involve a large number of parties, the Company cannot predict what the eventual outcome of the pending matters will be or the timing of any resolution of such matters. The Company also cannot predict the impact (if any) that any such matters ma y have on how its business is conducted, on its competitive position or on its financial position, results of operations or cash flows. As the process to resolve any pending matters progresses, management will continue to review the latest information avai lable and assess its ability to predict the outcome of such matters and the effects, if any, on its operations and financial condition. However, in light of the large or indeterminate damages sought in some of them, the absence of similar court rulings on the theories of law asserted and uncertainties regarding apportionment of any potential damages, an estimate of the range of possible losses cannot be made at this time. |
Contingencies - Additional Info
Contingencies - Additional Information (Detail) $ in Thousands | 3 Months Ended | ||
Sep. 30, 2015USD ($) | Sep. 30, 2014 | May. 23, 2013USD ($) | |
Abu Dhabi Commercial Bank Litigation [Member] | |||
Loss Contingencies [Line Items] | |||
Number of plaintiffs | 11 | ||
Number of Plaintiffs Dismissed By Court | 4 | 1 | |
Number of Plaintiffs Granted | 2 | ||
Number of plaintiffs filed motions for reconsideration | 3 | ||
Number of Plaintiffs Ordered to Trial | 14 | ||
CalPERS [Member] | |||
Loss Contingencies [Line Items] | |||
Total compensatory damages value | $ 1,300,000 | ||
Unrealized losses claimed by the Plaintiff | 779,000 | ||
Pursuit Partners LLC [Member] | |||
Loss Contingencies [Line Items] | |||
Payment regarding Calpers Litigation matter | 125,000 | ||
Pursuit Partners LLC [Member] | Damages sought for all plaintiffs [Member] | |||
Loss Contingencies [Line Items] | |||
Total compensatory damages value | $ 44,000 | ||
PSERS [Member] | |||
Loss Contingencies [Line Items] | |||
Payment regarding Calpers Litigation matter | $ 5,750 | ||
Commerzbank AG [Member] | |||
Loss Contingencies [Line Items] | |||
Payment regarding Calpers Litigation matter | $ 69,600 |
SEGMENT INFORMATION
SEGMENT INFORMATION | 9 Months Ended |
Sep. 30, 2015 | |
SEGMENT INFORMATION | NOTE 15. SEGMENT INFORMATION The Company is organized into three operating segments: ( i ) MIS, (ii) MA and (iii) Copal Amba. The Copal Amba operating segment has been aggregated with the MA operating segment based on the fact that it has similar economic characteristics to MA. Accordingly, the Company reports in two reportable segments: MIS and MA. In January 2014, the Company revised its op erating segments to create the new Copal Amba operating segment. The new operating segment consists of all operations from Copal and the operations of Amba , which was acquired in December 2013. The Copal Amba operating segment provides offshore research and analytic services to the global financial and corporate sectors. The Company has determined that the Copal Amba and MA operating segments have similar economic characteristics as set forth in ASC 280. As such, Copal Amba has been combined with MA to form the MA reportable segment and Copal Amba’s revenue is reported in the PS LOB. In the fourth quarter of 2014, pursuant to the acquisition of ICRA, Moody’s realigned certain components of its reportable segments to better align with the current manageme nt structure of the Company. The effect of this realignment was to combine non-ratings ICRA operations with certain immaterial research and fixed income pricing operations in the Asia-Pacific region that were previously reported in the RD&A LOB of MA. Al l of these operations are managed by MIS and their revenue is now reported in the new MIS Other LOB. All operating expenses from these operations are reported in the MIS reportable segment. The impact of this realignment did not have a significant impact on previously reported results for the reportable segments and all prior year comparative periods have been restated to reflect this realignment. The MIS segment now co nsists of five LOBs . The corporate finance, structured finance, financial institutio ns and public, project and infrastructure finance LOBs generate revenue principally from fees for the assignment and ongoing monitoring of credit ratings on debt obligations and the entities that issue such obligations in markets worldwide. The MIS Other LOB primarily consists of the distribution of research and fixed income pricing services in the Asia-Pacific region as well as ICRA non-ratings revenue. The MA segment develops a wide range of products and services that support the risk management activiti es of institutional participants in global financial markets. The MA segment con sists of three LOBs – RD&A, ERS and PS. In July 2014, a subsidiary of the Company acquired WebEquity, a leading provider of cloud-based loan origination solutions for financial institutions. WebEquity is part of the MA reportable segment and its revenue is included in the ERS LOB. In October 2014, the Company acquired Lewtan, a leading provider of analytical tools and data for the global structured finance market. Lewtan is par t of the MA reportable segment and its revenue is included in the RD&A LOB. Revenue for MIS and expenses for MA include an intersegment royalty charged to MA for the rights to use and distribute content, data and products developed by MIS. The royalty rat e charged by MIS approximates the fair value of the aforementioned content, data and products and is generally based on comparable market transactions. Also, revenue for MA and expenses for MIS include an intersegment fee charged to MIS from MA for certain MA products and services utilized in MIS’s ratings process. These fees charged by MA are generally equal to the costs incurred by MA to produce these products and services. Additionally, overhead costs and corporate expenses of the Company that exclusive ly benefit only one segment are fully charged to that segment. Overhead costs and corporate expenses of the Company that benefit both segments are allocated to each segment based on a revenue-split methodology. Overhead expenses include costs such as ren t and occupancy, information technology and support staff such as finance, human resources and information technology. “Eliminations” in the table below represent intersegment revenue/expense . Moody’s does not report the Company’s assets by reportable segm ent , as this metric is not used by the chief operating decision maker to allocate resources to the segments. Consequently, it is not practical to show assets by reportable segment. Financial Information by Segment The table below shows revenue, Adjusted Operating Income and operating income by reportable segment. Adjusted Operating Income is a financial metric utilized by the Company’s chief operating decision maker to assess the profitability of each reportable segment. Three Months Ended September 30, 2015 2014 MIS MA Eliminations Consolidated MIS MA Eliminations Consolidated Revenue $ 571.6 $ 290.1 $ (26.8) $ 834.9 $ 568.8 $ 273.0 $ (25.7) $ 816.1 Operating, SG&A 268.1 215.6 (26.8) 456.9 263.4 205.5 (25.7) 443.2 Adjusted Operating Income 303.5 74.5 - 378.0 305.4 67.5 - 372.9 Less: Depreciation and amortization 16.9 11.4 - 28.3 11.6 11.6 - 23.2 Operating income $ 286.6 $ 63.1 $ - $ 349.7 $ 293.8 $ 55.9 $ - $ 349.7 Nine Months Ended September 30, 2015 2014 MIS MA Eliminations Consolidated MIS MA Eliminations Consolidated Revenue $ 1,859.1 $ 838.7 $ (79.2) $ 2,618.6 $ 1,766.3 $ 766.2 $ (75.7) $ 2,456.8 Operating, SG&A 836.4 636.3 (79.2) 1,393.5 783.7 585.8 (75.7) 1,293.8 Adjusted Operating Income 1,022.7 202.4 - 1,225.1 982.6 180.4 - 1,163.0 Less: Depreciation and amortization 48.7 36.1 - 84.8 34.4 34.2 - 68.6 Operating income $ 974.0 $ 166.3 $ - $ 1,140.3 $ 948.2 $ 146.2 $ - $ 1,094.4 MIS and MA Revenue by Line of Business The table below presents revenue by LOB within each reportable segment: Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 MIS: Corporate finance (CFG) $ 248.3 $ 260.7 $ 866.6 $ 846.0 Structured finance (SFG) 112.5 102.1 335.0 308.0 Financial institutions (FIG) 89.5 91.8 273.7 269.4 Public, project and infrastructure finance (PPIF) 90.6 88.5 291.2 267.2 Total ratings revenue 540.9 543.1 1,766.5 1,690.6 MIS Other 7.2 3.5 23.1 10.1 Total external revenue 548.1 546.6 1,789.6 1,700.7 Intersegment royalty 23.5 22.2 69.5 65.6 Total 571.6 568.8 1,859.1 1,766.3 MA: Research, data and analytics (RD&A) 157.9 143.3 465.0 422.3 Enterprise risk solutions (ERS) 92.2 81.1 252.5 208.1 Professional services (PS) 36.7 45.1 111.5 125.7 Total external revenue 286.8 269.5 829.0 756.1 Intersegment revenue 3.3 3.5 9.7 10.1 Total 290.1 273.0 838.7 766.2 Eliminations (26.8) (25.7) (79.2) (75.7) Total MCO $ 834.9 $ 816.1 $ 2,618.6 $ 2,456.8 Consolidated Revenue Information by Geographic Area: Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 United States $ 482.1 $ 449.1 $ 1,527.8 $ 1,335.8 International: EMEA 215.4 231.4 660.4 715.3 Asia-Pacific 85.5 79.3 270.8 237.8 Americas 51.9 56.3 159.6 167.9 Total International 352.8 367.0 1,090.8 1,121.0 Total $ 834.9 $ 816.1 $ 2,618.6 $ 2,456.8 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Financial Information by Segment | Three Months Ended September 30, 2015 2014 MIS MA Eliminations Consolidated MIS MA Eliminations Consolidated Revenue $ 571.6 $ 290.1 $ (26.8) $ 834.9 $ 568.8 $ 273.0 $ (25.7) $ 816.1 Operating, SG&A 268.1 215.6 (26.8) 456.9 263.4 205.5 (25.7) 443.2 Adjusted Operating Income 303.5 74.5 - 378.0 305.4 67.5 - 372.9 Less: Depreciation and amortization 16.9 11.4 - 28.3 11.6 11.6 - 23.2 Operating income $ 286.6 $ 63.1 $ - $ 349.7 $ 293.8 $ 55.9 $ - $ 349.7 Nine Months Ended September 30, 2015 2014 MIS MA Eliminations Consolidated MIS MA Eliminations Consolidated Revenue $ 1,859.1 $ 838.7 $ (79.2) $ 2,618.6 $ 1,766.3 $ 766.2 $ (75.7) $ 2,456.8 Operating, SG&A 836.4 636.3 (79.2) 1,393.5 783.7 585.8 (75.7) 1,293.8 Adjusted Operating Income 1,022.7 202.4 - 1,225.1 982.6 180.4 - 1,163.0 Less: Depreciation and amortization 48.7 36.1 - 84.8 34.4 34.2 - 68.6 Operating income $ 974.0 $ 166.3 $ - $ 1,140.3 $ 948.2 $ 146.2 $ - $ 1,094.4 |
Revenue by Line of Business within Each Reportable Segment | Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 MIS: Corporate finance (CFG) $ 248.3 $ 260.7 $ 866.6 $ 846.0 Structured finance (SFG) 112.5 102.1 335.0 308.0 Financial institutions (FIG) 89.5 91.8 273.7 269.4 Public, project and infrastructure finance (PPIF) 90.6 88.5 291.2 267.2 Total ratings revenue 540.9 543.1 1,766.5 1,690.6 MIS Other 7.2 3.5 23.1 10.1 Total external revenue 548.1 546.6 1,789.6 1,700.7 Intersegment royalty 23.5 22.2 69.5 65.6 Total 571.6 568.8 1,859.1 1,766.3 MA: Research, data and analytics (RD&A) 157.9 143.3 465.0 422.3 Enterprise risk solutions (ERS) 92.2 81.1 252.5 208.1 Professional services (PS) 36.7 45.1 111.5 125.7 Total external revenue 286.8 269.5 829.0 756.1 Intersegment revenue 3.3 3.5 9.7 10.1 Total 290.1 273.0 838.7 766.2 Eliminations (26.8) (25.7) (79.2) (75.7) Total MCO $ 834.9 $ 816.1 $ 2,618.6 $ 2,456.8 |
Consolidated Revenue Information by Geographic Area | Consolidated Revenue Information by Geographic Area: Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 United States $ 482.1 $ 449.1 $ 1,527.8 $ 1,335.8 International: EMEA 215.4 231.4 660.4 715.3 Asia-Pacific 85.5 79.3 270.8 237.8 Americas 51.9 56.3 159.6 167.9 Total International 352.8 367.0 1,090.8 1,121.0 Total $ 834.9 $ 816.1 $ 2,618.6 $ 2,456.8 |
Financial Information by Segmen
Financial Information by Segment (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Segment Reporting Information [Line Items] | ||||
Revenues | $ 834.9 | $ 816.1 | $ 2,618.6 | $ 2,456.8 |
Operating, SG&A | 456.9 | 443.2 | 1,393.5 | 1,293.8 |
Adjusted Operating Income | 378 | 372.9 | 1,225.1 | 1,163 |
Depreciation and amortization | 28.3 | 23.2 | 84.8 | 68.6 |
Operating Income | 349.7 | 349.7 | 1,140.3 | 1,094.4 |
Moodys Investors Service [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 571.6 | 568.8 | 1,859.1 | 1,766.3 |
Operating, SG&A | 268.1 | 263.4 | 836.4 | 783.7 |
Adjusted Operating Income | 303.5 | 305.4 | 1,022.7 | 982.6 |
Depreciation and amortization | 16.9 | 11.6 | 48.7 | 34.4 |
Operating Income | 286.6 | 293.8 | 974 | 948.2 |
Moodys Analytics [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 290.1 | 273 | 838.7 | 766.2 |
Operating, SG&A | 215.6 | 205.5 | 636.3 | 585.8 |
Adjusted Operating Income | 74.5 | 67.5 | 202.4 | 180.4 |
Depreciation and amortization | 11.4 | 11.6 | 36.1 | 34.2 |
Operating Income | 63.1 | 55.9 | 166.3 | 146.2 |
Intersegment Elimination [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | (26.8) | (25.7) | (79.2) | (75.7) |
Operating, SG&A | $ (26.8) | $ (25.7) | $ (79.2) | $ (75.7) |
Adjusted Operating Income | ||||
Depreciation and amortization | ||||
Operating Income |
Revenue by Line of Business wit
Revenue by Line of Business within Each Reportable Segment (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Segment Reporting Information [Line Items] | ||||
Revenues | $ 834.9 | $ 816.1 | $ 2,618.6 | $ 2,456.8 |
Moodys Investors Service [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 571.6 | 568.8 | 1,859.1 | 1,766.3 |
Moodys Investors Service [Member] | Corporate Finance [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 248.3 | 260.7 | 866.6 | 846 |
Moodys Investors Service [Member] | Structured Finance [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 112.5 | 102.1 | 335 | 308 |
Moodys Investors Service [Member] | Financial Institutions [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 89.5 | 91.8 | 273.7 | 269.4 |
Moodys Investors Service [Member] | Public Project And Infrastructure Finance [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 90.6 | 88.5 | 291.2 | 267.2 |
Moodys Investors Service [Member] | MIS Other [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 7.2 | 3.5 | 23.1 | 10.1 |
Moodys Investors Service [Member] | External Revenues [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 548.1 | 546.6 | 1,789.6 | 1,700.7 |
Moodys Investors Service [Member] | Rating Revenue [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 540.9 | 543.1 | 1,766.5 | 1,690.6 |
Moodys Investors Service [Member] | Intersegment Royality [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 23.5 | 22.2 | 69.5 | 65.6 |
Moodys Analytics [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 290.1 | 273 | 838.7 | 766.2 |
Moodys Analytics [Member] | Research Data And Analytics [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 157.9 | 143.3 | 465 | 422.3 |
Moodys Analytics [Member] | Enterprise Risk Solutions [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 92.2 | 81.1 | 252.5 | 208.1 |
Moodys Analytics [Member] | Professional Services [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 36.7 | 45.1 | 111.5 | 125.7 |
Moodys Analytics [Member] | External Revenues [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 286.8 | 269.5 | 829 | 756.1 |
Moodys Analytics [Member] | Intersegment Royality [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 3.3 | 3.5 | 9.7 | 10.1 |
Intersegment Elimination [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | $ (26.8) | $ (25.7) | $ (79.2) | $ (75.7) |
Consolidated Revenue Informatio
Consolidated Revenue Information by Geographic Area (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Segment Reporting Information [Line Items] | ||||
Revenues | $ 834.9 | $ 816.1 | $ 2,618.6 | $ 2,456.8 |
U S | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 482.1 | 449.1 | 1,527.8 | 1,335.8 |
International Regions [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 352.8 | 367 | 1,090.8 | 1,121 |
International Regions [Member] | Europe Middle East And Africa [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 215.4 | 231.4 | 660.4 | 715.3 |
International Regions [Member] | Asia Pacific [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 85.5 | 79.3 | 270.8 | 237.8 |
International Regions [Member] | Americas [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | $ 51.9 | $ 56.3 | $ 159.6 | $ 167.9 |
Segment Information - Additiona
Segment Information - Additional Information (Detail) | 9 Months Ended |
Sep. 30, 2015 | |
Segment Reporting Information [Line Items] | |
Operating Segments | 3 |
RECENTLY ISSUED ACCOUNTING STAN
RECENTLY ISSUED ACCOUNTING STANDARDS | 9 Months Ended |
Sep. 30, 2015 | |
RECENTLY ISSUED ACCOUNTING STANDARDS | In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers”. This ASU outlines a comprehensive new revenue recognition model that requires a company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. The Company is currently evaluating its adoption options and the impact that adoption of this update will have on its consolidated financial stateme nts. Currently, the Company believes this ASU will have an impact on: i ) the capitalization of certain contract implementation costs for its ERS business; ii) the accounting for certain license an d maintenance revenue in MA; iii ) the accounting for certa in ERS revenue arrangements where VSOE is not available and i v) the accounting for contract acquisition costs. In August 2015, the FASB issued ASU No. 2015-14 “Revenue from Contracts with Customers (Topic 606), Deferral of the Effective Date” which defer s the effective date of the ASU for annual and interim reporting periods beginn ing after December 15, 2017, with early adoption permitted up to the original effective date of December 15, 2016. In April 2015, the FASB issued ASU No. 2015-05 “Customer’s Ac counting for Fees Paid in a Cloud Computing Arrangement”. This ASU provides guidance on accounting for fees paid by a customer in a cloud computing arrangement. In accordance with the ASU a cloud computing arrangement that contains a software license shou ld be accounted for consistently with the acquisition of other software licenses. If no software license is present in the contract, the entity should account for the arrangement as a service contract. The Company can elect to apply this ASU either retrosp ectively or prospectively effective for annual and interim reporting periods beginning after December 15, 2015, and early adoption is permitted. The Company is currently evaluating the impact that adoption of this update will have on its consolidated finan cial statements. In April 2015, the FASB issued ASU No. 2015-03, “Simplifying the Presentation of Debt Issuance Costs”. This ASU simplifies the presentation of debt issuance costs in financial statements and requires a company to present such costs in the balance sheet as a direct deduction from the related debt liability rather than as an asset. Amortization costs will continue to be reported as interest expense. The ASU is effective retrospectively for annual and interim reporting periods beginning after December 15, 2015, and early adoption is permitted. The adoption of this ASU will impact the presentation of debt issuance costs in the Company’ s consolidated balance sheets. Additionally, in August 2015, the FASB issued ASU No. 2015-15 “Presentation and S ubsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements”. This ASU codifies that given the lack of authoritative guidance in ASU 2015-03 regarding line-of-credit arrangements, the SEC staff would not object to a Company def erring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt costs ratably over the term of the arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. In May 2015, t he FASB issued ASU No. 2015-07 “Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent)”. This ASU removes the requirement to include investments in the fair value hierarchy for which fair value is measu red using the net asset value per share as a practical expedient. ASU No. 2015-07 is effective retrospectively for fiscal years beginning after December 15, 2015, with early adoption permitted. The adoption of this ASU will only impact the presentation of the Company’s pension assets invested in common/collective trust funds in the fair value hierarchy disclosures. In September 2015, the FASB issued ASU No. 2015-16 “Simplifying the Accounting for Measurement-Period Adjustments”. This ASU requires that an ac quirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The amendments in this ASU require that the acquirer record, in the same period’s financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. ASU No . 2015-16 is applied prospectively for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years. The Company does not believe the adoption of this ASU will have a material impact on its financial statements. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2015 | |
SUBSEQUENT EVENTS | NOTE 17. SUBSEQUENT EVENT On October 20, 2015 , the Board approved the declaration of a quarterly dividend of $0.34 per share of Moody’s common stock, payable on December 10, 2015 to shareholders of record at the close of business on November 20, 2015 . |
Subsequent Events - Additional
Subsequent Events - Additional Information (Detail) - $ / shares | 3 Months Ended | |
Sep. 30, 2015 | Jun. 30, 2014 | |
Dividends Payable [Line Items] | ||
Dividend declared, per share | $ 0.34 | $ 0.34 |
Dividend Declared [Member] | ||
Dividends Payable [Line Items] | ||
Dividend declared, declaration date | Oct. 20, 2015 | |
Dividend declared, payable date | Dec. 10, 2015 | |
Dividend declared, record date | Nov. 20, 2015 |