Document and Entity Information
Document and Entity Information shares in Millions | 6 Months Ended |
Jun. 30, 2016shares | |
Document Information [Line Items] | |
Document Type | 10-Q |
Amendment Flag | false |
Document Period End Date | Jun. 30, 2016 |
Document Fiscal Year Focus | 2,016 |
Document Fiscal Period Focus | Q2 |
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 | 192.3 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Revenues | $ 928.9 | $ 918.1 | $ 1,745 | $ 1,783.7 |
Expenses | ||||
Operating | 258.9 | 243.9 | 508.1 | 488.3 |
Selling, general and administrative | 228.6 | 227 | 461.5 | 448.3 |
Depreciation and amortization | 31.2 | 27.9 | 61.1 | 56.5 |
Total expenses | 518.7 | 498.8 | 1,030.7 | 993.1 |
Operating Income | 410.2 | 419.3 | 714.3 | 790.6 |
Non-operating (expense) income, net | ||||
Interest income (expense), net | (34.3) | (31.9) | (68.4) | (61.2) |
Other non-operating income (expense), net | 3 | (8.2) | 8.6 | (5.7) |
Total non-operating (expense) income, net | (31.3) | (40.1) | (59.8) | (66.9) |
Income before provisions for income taxes | 378.9 | 379.2 | 654.5 | 723.7 |
Provision for income taxes | 120.8 | 115.1 | 209.8 | 228.3 |
Net income | 258.1 | 264.1 | 444.7 | 495.4 |
Less: Net income attributable to noncontrolling interests | 2.6 | 2.4 | 4.8 | 3.6 |
Net income attributable to Moody's | $ 255.5 | $ 261.7 | $ 439.9 | $ 491.8 |
Earnings per share attributable to Moody's common shareholders | ||||
Basic | $ 1.32 | $ 1.3 | $ 2.27 | $ 2.43 |
Diluted | $ 1.3 | $ 1.28 | $ 2.24 | $ 2.39 |
Weighted average number of shares outstanding | ||||
Basic | 193.4 | 201.3 | 194.2 | 202 |
Diluted | 195.8 | 204.4 | 196.8 | 205.4 |
Dividends declared per share attributable to Moody's common shareholders | $ 0.37 | $ 0.34 | $ 0.37 | $ 0.34 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Net income | $ 258.1 | $ 264.1 | $ 444.7 | $ 495.4 |
Foreign currency translation: | ||||
Foreign currency translation adjustments - Pre Tax | (45.9) | 26.7 | 2.6 | (51.1) |
Foreign currency translation adjustment - Tax | 26.5 | 5.4 | 14 | (7.3) |
Foreign currency translation adjustments - Net of Tax | (19.4) | 32.1 | 16.6 | (58.4) |
Foreign currency translation adjustments - reclassification of losses included in net income - Pre Tax | (0.1) | |||
Foreign currency translation adjustments - reclassification of losses included in net income - Net of Tax | (0.1) | |||
Cash flow hedges: | ||||
Net realized and unrealized gain (loss) on cash flow hedges - Pre Tax | (4.6) | (2.6) | ||
Net realized and unrealized gain (loss) on cash flow hedges - Tax Amount | 1.7 | 0.9 | ||
Net realized and unrealized gain (loss) on cash flow hedges - Net of Tax | (2.9) | (1.7) | ||
Reclassification of losses included in net income - Pre Tax | 2.6 | 0.4 | ||
Reclassification of losses included in net income - Tax Amount | (0.9) | (0.1) | ||
Reclassification of losses included in net income- Net of Tax | 1.7 | 0.3 | ||
Available for sale securities: | ||||
Net unrealized gains on available for sale securities - Pre Tax | 0.6 | 1 | 1.2 | 2.1 |
Net unrealized gains on available for sale securities - Net of Tax | 0.6 | 1 | 1.2 | 2.1 |
Reclassification of gains included in net income - Pre Tax | (0.2) | (0.2) | ||
Reclassification of gains included in net income - Net of Tax | (0.2) | (0.2) | ||
Pension and Other Retirement Benefits: | ||||
Amortization of actuarial losses and prior service costs included in net income - Pre Tax | 2.3 | 3.1 | 4.9 | 6.9 |
Amortization of actuarial losses and prior service costs included in net income - Tax | (0.9) | (1.1) | (1.9) | (2.6) |
Amortization of actuarial losses and prior service costs included in net income - Net of Tax | 1.4 | 2 | 3 | 4.3 |
Net actuarial losses and prior service costs - Pre Tax | 5.3 | 10.9 | 5.3 | 10.9 |
Net actuarial losses and prior service costs - Tax | (2) | (4.2) | (2) | (4.2) |
Net actuarial losses and prior service costs - Net of Tax | 3.3 | 6.7 | 3.3 | 6.7 |
Total other comprehensive income (loss) - Pre Tax | (39.7) | 41.5 | 11.8 | (31.5) |
Total other comprehensive income (loss) - Tax | 24.4 | 0.1 | 10.9 | (14.1) |
Total other comprehensive income (loss) - Net of Tax | (15.3) | 41.6 | 22.7 | (45.6) |
Comprehensive income | 242.8 | 305.7 | 467.4 | 449.8 |
Less: Comprehensive income attributable to noncontrolling interests and redeemable noncontrolling interest | 2.6 | 2.4 | 4.8 | 3.6 |
Comprehensive income attributable to Moody's | $ 240.2 | $ 303.3 | $ 462.6 | $ 446.2 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Jun. 30, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 1,674.3 | $ 1,757.4 |
Short-term investments | 352.5 | 474.8 |
Accounts receivable, net of allowances of net of allowances of $27.6 in 2016 and $27.5 in 2015 | 843.7 | 802 |
Deferred tax assets, net | 29.3 | |
Other current assets | 159.6 | 179.6 |
Total current assets | 3,030.1 | 3,243.1 |
Property and equipment, net of accumulated depreciation of $560.6 in 2016 and $518.9 in 2015 | 323 | 306.4 |
Goodwill | 1,047.2 | 976.3 |
Intangible assets, net | 319.2 | 299.1 |
Deferred tax assets, net | 167.2 | 137.7 |
Other assets | 158.2 | 140.4 |
Total assets | 5,044.9 | 5,103 |
Current liabilities: | ||
Accounts payable and accrued liabilities | 453.8 | 566.6 |
Deferred tax liabilities, net | 16.7 | |
Deferred revenue | 692.6 | 635.2 |
Total current liabilities | 1,146.4 | 1,218.5 |
Non-current portion of deferred revenue | 134.1 | 132.5 |
Long-term debt | 3,420.4 | 3,380.6 |
Deferred tax liabilities, net | 111.4 | 83.8 |
Unrecognized tax benefits | 198.1 | 203.4 |
Other liabilities | 404 | 417.2 |
Total liabilities | 5,414.4 | 5,436 |
Contingencies (Note 14) | ||
Shareholders' deficit | ||
Preferred stock, par value $.01 per share; 10,000,000 shares authorized; no shares issued and outstanding | ||
Capital surplus | 457.3 | 451.3 |
Retained earnings | 7,077.8 | 6,709 |
Treasury stock, at cost; 150,647,727 and 146,826,744 shares of common stock at June 30, 2016 and December 31, 2015, respectively | (7,821.7) | (7,389.2) |
Accumulated other comprehensive loss | (316.8) | (339.5) |
Total Moody's shareholders' deficit | (600) | (565) |
Noncontrolling interests | 230.5 | 232 |
Total shareholders' deficit | (369.5) | (333) |
Total liabilities and shareholders' deficit | 5,044.9 | 5,103 |
Series common stock | ||
Shareholders' deficit | ||
Common stock | ||
Common Stock | ||
Shareholders' deficit | ||
Common stock | $ 3.4 | $ 3.4 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions | Jun. 30, 2016 | Dec. 31, 2015 |
Accounts receivable, allowances | $ 27.2 | $ 27.5 |
Property and equipment, accumulated depreciation | $ 560.5 | $ 518.9 |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Common stock, shares authorized | 1,000,000,000 | 1,000,000,000 |
Treasury stock, shares | 150,647,727 | 146,826,744 |
Series common stock | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 10,000,000 | 10,000,000 |
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 | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Cash flows from operating activities | ||
Net income | $ 444.7 | $ 495.4 |
Reconciliation of net income to net cash provided by operating activities: | ||
Depreciation and amortization | 61.1 | 56.5 |
Stock-based compensation expense | 48.9 | 44.4 |
Deferred income taxes | 13.7 | 10.6 |
Excess tax benefits from stock-based compensation plans | (17.6) | (41.1) |
Changes in assets and liabilities: | ||
Accounts receivable | (45.2) | (11.8) |
Other current assets | 19.2 | (3.3) |
Other assets | 13.7 | (3.5) |
Accounts payable and accrued liabilities | (69.8) | (35) |
Deferred revenue | 66.7 | 63 |
Unrecognized tax benefits and other non-current tax liabilities | (4.3) | (12.1) |
Other liabilities | (2.3) | 31.3 |
Net cash provided by operating activities | 528.8 | 594.4 |
Cash flows from investing activities | ||
Capital additions | (54.3) | (40.7) |
Purchases of investments | (174.5) | (289.2) |
Sales and maturities of investments | 294.9 | 221.9 |
Acquisitions, net of cash required | (75.9) | (4.6) |
Settlement of net investment hedges | 2.5 | 20.8 |
Net cash used in investing activities | (7.3) | (91.8) |
Cash flows from financing activities | ||
Issuance of notes | 552.8 | |
Proceeds from stock-based compensation plans | 36.9 | 55 |
Repurchase of shares for payroll tax withholdings related to stock-based compensation | (43.2) | (59.1) |
Cost of treasury shares repurchased | (485.9) | (600.7) |
Excess tax benefits from settlement of stock-based compensation plans | 17.6 | 41.1 |
Payment of dividends | (143.6) | (137.2) |
Payment of dividends to noncontrolling interests | (4.6) | (3.7) |
Debt issuance costs and related fees | (5.8) | |
Net cash (used in) provided by financing activities | (622.8) | (157.6) |
Effect of exchange rate changes on cash and cash equivalents | 18.2 | (25.9) |
Net increase (decrease) in cash and cash equivalents | (83.1) | 319.1 |
Cash and cash equivalents, beginning of the period | 1,757.4 | 1,219.5 |
Cash and cash equivalents, end of the period | $ 1,674.3 | $ 1,538.6 |
GLOSSARY OF TERMS AND ABBREVIAT
GLOSSARY OF TERMS AND ABBREVIATIONS | 6 Months Ended |
Jun. 30, 2016 | |
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 majority 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 of 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 BlackBox BlackBox Logic; a leading provider of Residential Mortgage-Backed securities loan level data. The Company acquired the customer base and products of BlackBox Logic in December 2015 Board The board of directors of the Company BPS Basis points Brexit Abbreviation of "British exit", which refers to the June 23, 2016 referendum by British voters to exit the European Union Canary Wharf Lease Operating lease agreement entered into on February 6, 2008 for office space in London, England, occupied by the Company in the second half of 2009 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 Commission European Commission Common Stock The Company’s common stock 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 institutional investors Copal Amba Operating segment and reporting unit 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 requirements 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 ECCA Economics and Consumer Credit Analytics; a business within the RD&A LOB which provides economic and consumer credit trend analytics 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 by 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 Markets Authority 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 share 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 GGY Gilliland Gold Young; a leading provider of advanced actuarial software for the global insurance industry. The Company acquired GGY on March 1, 2016 ICRA ICRA Limited; a leading provider of credit ratings and research in India. The Company previously held 28.5% equity ownership and in June 2014, increased that ownership stake to just over 50% through the acquisition of additional shares IRS Internal Revenue Service IT Information technology 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 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 support 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 MSS Moody’s Shared Services Net Income Net income attributable to Moody’s Corporation, which excludes net income from consolidated noncontrolling interests belonging to the minority interest holder NM Percentage change is not meaningful Non-GAAP A financial measure not in accordance with GAAP; these measures, when read in conjunction with the Company’s reported results, can provide useful supplemental information for investors analyzing period-to-period comparisons of the Company’s performance, facilitate comparisons to competitors’ operating results and to provide greater transparency to investors of supplemental information used by management in its financial and operational decision making NRSRO Nationally Recognized Statistical Rating Organization OCI Other comprehensive income (loss); includes gains and losses on cash flow and net investment hedges, unrealized gains and losses on available for sale securities, certain gains and losses relating to pension and other retirement benefit obligations and foreign currency translation adjustments Other Retirement Plan The U.S. retirement healthcare and U.S. retirement life insurance plans PPIF Public, project and infrastructure 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 debt 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 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 unfunded pension plans, the healthcare plans and life insurance plans SAV Structured Analytics and Valuation; a business within the RD&A LOB which provides data and analytics for securitized assets SEC U.S. Securities and Exchange Commission Securities Act Securities Act of 1933, as amended 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 advisory projects, training and certification services, and outsourced research and analytical engagements U.K. United Kingdom U.S. United States USD U.S. dollar UTBs Unrecognized tax benefits UTPs Uncertain tax positions VSOE Vendor specific 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 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 19, 2010, relating to the 2010 Senior Notes 2010 Senior Notes 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 Supplemental 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 Supplemental indenture and related agreements dated July 16, 2014, relating to the 2014 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) Principal amount of $600 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 dated March 9, 2015, relating to the 2015 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 headquarters 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 | 6 Months Ended |
Jun. 30, 2016 | |
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION | NOTE 1. 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 segment dev elops 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 develop ed 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 qu antitative 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 with fin ancial 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 t he Company’s 2015 annual report on Form 10-K filed with the SEC on February 25, 2016 . 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 adjustments (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 current presentation. In the first quarter of 2016, the Company adopted ASU No. 2015-17 “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes” on a prospective basis, and accordingly, prior year comparative periods have not been adjusted. T his ASU requir es the classification of all deferred income tax assets and liabilities as noncurrent on the balance sheet. In the first quarter of 2016, the Company adopted ASU No. 2015-03,“Simplifying the Presentation of Debt Issuance Costs” on a retrospective basis. This ASU requires a company to present debt issuance costs in the balance sheet as a reduction of debt rather than as an asset. The impact to the Company’s balance sheet as of December 31, 2015 and June 30, 2016 relating to the adoption of this ASU is set forth in the table below: As reported December 31, 2015 Reclassification December 31, 2015 As adjusted As reported June 30, 2016 Reclassification June 30, 2016 Under previous accounting guidance Long-term debt $ 3,401.0 $ (20.4) $ 3,380.6 $ 3,420.4 $ 19.1 $ 3,439.5 Other assets $ 160.8 $ (20.4) $ 140.4 $ 158.2 $ 19.1 $ 177.3 |
DESCRIPTION OF BUSINESS AND BA9
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Schedule of Change in Balance Sheets Item Due to Adoption of Debt Issuance Costs Policy | As reported December 31, 2015 Reclassification December 31, 2015 As adjusted As reported June 30, 2016 Reclassification June 30, 2016 Under previous accounting guidance Long-term debt $ 3,401.0 $ (20.4) $ 3,380.6 $ 3,420.4 $ 19.1 $ 3,439.5 Other assets $ 160.8 $ (20.4) $ 140.4 $ 158.2 $ 19.1 $ 177.3 |
Change in Financial Statement d
Change in Financial Statement due to adoption of Policy (Details) - USD ($) $ in Millions | Jun. 30, 2016 | Dec. 31, 2015 |
Item Effected [Line Items] | ||
Long-term debt | $ 3,420.4 | $ 3,380.6 |
Other assets | 158.2 | 140.4 |
As Previously Reported [Member] | ||
Item Effected [Line Items] | ||
Long-term debt | 3,401 | |
Other assets | 160.8 | |
Reclassification [Member] | ||
Item Effected [Line Items] | ||
Long-term debt | 19.1 | (20.4) |
Other assets | 19.1 | $ (20.4) |
Previous Accounting Guidance [Member] | ||
Item Effected [Line Items] | ||
Long-term debt | 3,439.5 | |
Other assets | $ 177.3 |
Description of Business and B11
Description of Business and Basis of Presentation - Additional Information (Detail) | 6 Months Ended |
Jun. 30, 2016 | |
Segment Reporting Information [Line Items] | |
Number of reportable segments | 2 |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 6 Months Ended |
Jun. 30, 2016 | |
STOCK-BASED COMPENSATION | NOTE 2. STOCK-BASED COMPENSATION Presented below is a summary of the stock-based compensation cost and associated tax benefit included in the accompanying consolidated statements of operations: Three Months Ended Six Months Ended June 30, June 30, 2016 2015 2016 2015 Stock-based compensation cost $ 23.5 $ 21.7 $ 48.9 $ 44.4 Tax benefit $ 7.5 $ 6.7 $ 15.9 $ 14.6 During the first six months of 2016 , the Company granted 0.5 million employee stock options, which had a weighted average grant date fair value of $22.95 per share based on the Black-Scholes option-pricing model. The Company also granted 1.2 million shares of restricted stock in the first six months of 2016 , which had a weighted average grant date fair value of $80.88 per share. Both the employee stock options and restricted stock generally vest ratably over a four-year period. Additionally, the Company granted 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 th e Company over a three-year period. The weighted average grant date fair value of these awards was $76.50 per share. The following weighted average assumptions were used in determining the fair value for options granted in 2016 : Expected dividend yield 1.83% Expected stock volatility 32.3% Risk-free interest rate 1.60% Expected holding period 6.8 years Grant date fair value $22.95 Unrecognized compensation expense at June 30, 2016 was $13.0 million and $150.7 million for stock options and unvested restricted stock, respectively, which is expected to be recognized over a weigh ted average period of 1.4 years and 1.8 years, respect ively. Additionally, there was $16.7 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 1.1 years. The following tables summ arize information relating to stock option exercises and restricted stock vesting: Six Months Ended June 30, Exercise of stock options: 2016 2015 Proceeds from stock option exercises $ 33.4 $ 51.9 Aggregate intrinsic value $ 21.0 $ 49.9 Tax benefit realized upon exercise $ 7.4 $ 17.9 Number of shares exercised 0.6 1.0 Six Months Ended June 30, Vesting of restricted stock: 2016 2015 Fair value of shares vested $ 90.6 $ 110.8 Tax benefit realized upon vesting $ 29.6 $ 35.6 Number of shares vested 1.0 1.1 Six Months Ended June 30, Vesting of performance-based restricted stock: 2016 2015 Fair value of shares vested $ 23.6 $ 43.1 Tax benefit realized upon vesting $ 8.4 $ 15.6 Number of shares vested 0.2 0.5 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Stock-Based Compensation Cost and Associated Tax Benefit | Three Months Ended Six Months Ended June 30, June 30, 2016 2015 2016 2015 Stock-based compensation cost $ 23.5 $ 21.7 $ 48.9 $ 44.4 Tax benefit $ 7.5 $ 6.7 $ 15.9 $ 14.6 |
Weighted Average Assumptions used in Determining Fair Value for Options Granted | Expected dividend yield 1.83% Expected stock volatility 32.3% Risk-free interest rate 1.60% Expected holding period 6.8 years Grant date fair value $22.95 |
Stock Option Exercises and Restricted Stock Vesting | Six Months Ended June 30, Exercise of stock options: 2016 2015 Proceeds from stock option exercises $ 33.4 $ 51.9 Aggregate intrinsic value $ 21.0 $ 49.9 Tax benefit realized upon exercise $ 7.4 $ 17.9 Number of shares exercised 0.6 1.0 Six Months Ended June 30, Vesting of restricted stock: 2016 2015 Fair value of shares vested $ 90.6 $ 110.8 Tax benefit realized upon vesting $ 29.6 $ 35.6 Number of shares vested 1.0 1.1 Six Months Ended June 30, Vesting of performance-based restricted stock: 2016 2015 Fair value of shares vested $ 23.6 $ 43.1 Tax benefit realized upon vesting $ 8.4 $ 15.6 Number of shares vested 0.2 0.5 |
Stock-Based Compensation Cost a
Stock-Based Compensation Cost and Associated Tax Benefit (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Compensation Related Costs Share Based Payments Disclosure [Line Items] | ||||
Stock-based compensation cost | $ 23.5 | $ 21.7 | $ 48.9 | $ 44.4 |
Tax benefit | $ 7.5 | $ 6.7 | $ 15.9 | $ 14.6 |
Weighted Average Assumptions us
Weighted Average Assumptions used in Determining Fair Value for Options Granted (Detail) | 6 Months Ended |
Jun. 30, 2016$ / shares | |
Schedule Of Weighted Average Assumptions For Fair Values Of Stock Options [Line Items] | |
Expected dividend yield | 1.83% |
Expected stock volatility | 32.30% |
Risk-free interest rate | 1.60% |
Expected holding period | 6 years 9 months 18 days |
Grant date fair value | $ 22.95 |
Stock Option Exercises and Rest
Stock Option Exercises and Restricted Stock Vesting (Detail) - USD ($) shares in Millions, $ in Millions | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Employee Stock Options [Member] | ||
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items] | ||
Proceeds from stock option exercises | $ 33.4 | $ 51.9 |
Aggregate intrinsic value | 21 | 49.9 |
Tax benefit realized upon exercise/vesting | $ 7.4 | $ 17.9 |
Number of shares exercised | 0.6 | 1 |
Restricted Stock [Member] | ||
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items] | ||
Fair value of shares vested | $ 90.6 | $ 110.8 |
Tax benefit realized upon exercise/vesting | $ 29.6 | $ 35.6 |
Number of shares vested | 1 | 1.1 |
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 | $ 23.6 | $ 43.1 |
Tax benefit realized upon exercise/vesting | $ 8.4 | $ 15.6 |
Number of shares vested | 0.2 | 0.5 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) $ / shares in Units, shares in Millions, $ in Millions | 6 Months Ended |
Jun. 30, 2016USD ($)$ / sharesshares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Employee stock options, weighted average grant date fair value | $ 22.95 |
Employee Stock Options [Member] | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Employee stock options, granted | shares | 0.5 |
Employee stock options, weighted average grant date fair value | $ 22.95 |
Vesting period (in years) | 4 years |
Unrecognized compensation expense | $ | $ 13 |
Weighted average period to recognize expense | 1 year 4 months 24 days |
Restricted Stock [Member] | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Other than options, Shares granted | shares | 1.2 |
Other than options, weighted average grant date fair value | $ 80.88 |
Vesting period (in years) | 4 years |
Unrecognized compensation expense | $ | $ 150.7 |
Weighted average period to recognize expense | 1 year 5 months 18 days |
Performance Based Restricted Stock [Member] | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Other than options, Shares granted | shares | 0.2 |
Other than options, weighted average grant date fair value | $ 76.5 |
Vesting period (in years) | 3 years |
Unrecognized compensation expense | $ | $ 16.7 |
Weighted average period to recognize expense | 1 year 1 month 6 days |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jun. 30, 2016 | |
INCOME TAXES | NOTE 3. INCOME TAXES Moody’s effective tax rate was 31.9 % and 30.4 % for the three months ended June 30, 2016 and 2015, respectively, and 32.1 % and 31.5 % for the six month periods ended June 30, 2016 and 2015, respectively. The increase in the ETR compared to the second quarter of 2015 and the six month period ended June 30, 2015 was primarily due to a benefit in the prior year resulting from a favorable state tax ruling. The Company classifies interest related to UTBs in interest expense, net in i ts consolidated statements of operations. Penalties, if incurred, would be recognized in other non-operating (expense) income, net. The Company had a decrease in its UTBs of $ 11.7 million ($ 7.6 million net of federal tax benefit) during the second quarter of 2016 and an overall decrease in its UTBs during the first six months of 2016 of $ 5.3 million ($ 1.4 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 2011 and 2012 are under examination and its returns for 2013 and 2014 remain open to examination. The Company’s New York State tax returns for 2011 through 2014 ar e currently under examination and the Company’s New York City tax return for 2014 remains open to examination. The Company’s U.K. tax return for 2012 is currently under examination and its returns for 2013 and 2014 remain open to examination. For ongoing a udits, 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 be nefits. It is also possible that new issues might be raised by tax authorities which 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 amoun t of changes to the balance of UTBs at this time. However, the Company 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 A SC regarding UTBs. The following table shows the amount the Company paid for income taxes: Six Months Ended June 30, 2016 2015 Income taxes paid $ 151.8 $ 191.1 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Income Taxes Paid | Six Months Ended June 30, 2016 2015 Income taxes paid $ 151.8 $ 191.1 |
Income Taxes Paid (Detail)
Income Taxes Paid (Detail) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Income Taxes [Line Items] | ||
Income Taxes Paid | $ 151.8 | $ 191.1 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Income Tax Contingency [Line Items] | ||||
Effective tax rate | 31.90% | 30.40% | 32.10% | 31.50% |
Overall increase (decrease) in unrecognized tax benefits (UTPs) | $ (4.3) | $ (12.1) | ||
Gross [Member] | ||||
Income Tax Contingency [Line Items] | ||||
Overall increase (decrease) in unrecognized tax benefits (UTPs) | $ (11.7) | (5.3) | ||
Net of federal tax benefit [Member] | ||||
Income Tax Contingency [Line Items] | ||||
Overall increase (decrease) in unrecognized tax benefits (UTPs) | $ (7.6) | $ (1.4) |
WEIGHTED AVERAGE SHARES OUTSTAN
WEIGHTED AVERAGE SHARES OUTSTANDING | 6 Months Ended |
Jun. 30, 2016 | |
WEIGHTED AVERAGE SHARES OUTSTANDING | NOTE 4. WEIGHTED AVERAGE SHARES OUTSTANDING Below is a reconciliation of basic to diluted shares outstanding: Three Months Ended Six Months Ended June 30, June 30, 2016 2015 2016 2015 Basic 193.4 201.3 194.2 202.0 Dilutive effect of shares issuable under stock-based compensation plans 2.4 3.1 2.6 3.4 Diluted 195.8 204.4 196.8 205.4 Anti-dilutive options to purchase common shares and restricted stock as well as contingently issuable restricted stock which are excluded from the table above 1.2 0.8 1.5 0.8 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 June 30, 2016 and 2015 . 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 under the Company’s Board authorized share repurch ase program. |
WEIGHTED AVERAGE SHARES OUTST23
WEIGHTED AVERAGE SHARES OUTSTANDING (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Reconciliation of Basic to Diluted Shares Outstanding | Three Months Ended Six Months Ended June 30, June 30, 2016 2015 2016 2015 Basic 193.4 201.3 194.2 202.0 Dilutive effect of shares issuable under stock-based compensation plans 2.4 3.1 2.6 3.4 Diluted 195.8 204.4 196.8 205.4 Anti-dilutive options to purchase common shares and restricted stock as well as contingently issuable restricted stock which are excluded from the table above 1.2 0.8 1.5 0.8 |
Reconciliation of Basic to Dilu
Reconciliation of Basic to Diluted Shares Outstanding (Detail) - shares shares in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Schedule Of Earnings Per Share Basic And Diluted By Common Class [Line Items] | ||||
Basic | 193.4 | 201.3 | 194.2 | 202 |
Dilutive effect of shares issuable under stock-based compensation plans | 2.4 | 3.1 | 2.6 | 3.4 |
Diluted | 195.8 | 204.4 | 196.8 | 205.4 |
Anti-dilutive options to purchase common shares and restricted stock as well as contingently issuable restricted stock which are excluded from the table above | 1.2 | 0.8 | 1.5 | 0.8 |
CASH EQUIVALENT AND INVESTMENTS
CASH EQUIVALENT AND INVESTMENTS | 6 Months Ended |
Jun. 30, 2016 | |
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 June 30, 2016 Balance sheet location Cost Gross Unrealized Gains Fair Value Cash and cash equivalents Short-term investments Other assets Money market mutual funds $ 55.5 $ - $ 55.5 $ 55.5 $ - $ - Certificates of deposit and money market deposit accounts (1) $ 913.2 $ - $ 913.2 $ 533.7 $ 352.5 $ 27.0 Fixed maturity and open ended mutual funds (2) $ 28.5 $ 4.4 $ 32.9 $ - $ - $ 32.9 As of December 31, 2015 Balance sheet location Cost Gross Unrealized Gains Fair Value Cash and cash equivalents Short-term investments Other assets Money market mutual funds $ 188.3 $ - $ 188.3 $ 188.3 $ - $ - Certificates of deposit and money market deposit accounts (1) $ 1,307.3 $ - $ 1,307.3 $ 809.4 $ 474.8 $ 23.1 Fixed maturity and open ended mutual funds (2) $ 28.7 $ 3.2 $ 31.9 $ - $ - $ 31.9 (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 12 months at both June 30, 2016 and December 31, 2015. The remaining contractual maturities for the certificates of deposits classified in other assets are one month to 21 months at June 30, 2016 and one month to 27 months at December 31, 2015. 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 five months to 25 months and 11 months to 31 months at June 30, 2016 and December 31, 2015 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 INVESTMEN26
CASH EQUIVALENT AND INVESTMENTS (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Schedule of Available For Sale Securities | As of June 30, 2016 Balance sheet location Cost Gross Unrealized Gains Fair Value Cash and cash equivalents Short-term investments Other assets Money market mutual funds $ 55.5 $ - $ 55.5 $ 55.5 $ - $ - Certificates of deposit and money market deposit accounts (1) $ 913.2 $ - $ 913.2 $ 533.7 $ 352.5 $ 27.0 Fixed maturity and open ended mutual funds (2) $ 28.5 $ 4.4 $ 32.9 $ - $ - $ 32.9 As of December 31, 2015 Balance sheet location Cost Gross Unrealized Gains Fair Value Cash and cash equivalents Short-term investments Other assets Money market mutual funds $ 188.3 $ - $ 188.3 $ 188.3 $ - $ - Certificates of deposit and money market deposit accounts (1) $ 1,307.3 $ - $ 1,307.3 $ 809.4 $ 474.8 $ 23.1 Fixed maturity and open ended mutual funds (2) $ 28.7 $ 3.2 $ 31.9 $ - $ - $ 31.9 (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 12 months at both June 30, 2016 and December 31, 2015. The remaining contractual maturities for the certificates of deposits classified in other assets are one month to 21 months at June 30, 2016 and one month to 27 months at December 31, 2015. 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 five months to 25 months and 11 months to 31 months at June 30, 2016 and December 31, 2015 respectively. |
Cash Equivalent and Investmen27
Cash Equivalent and Investments (Detail) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2016 | Dec. 31, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |
Schedule Of Available For Sale Securities [Line Items] | ||||
Fair value | $ 32.9 | $ 31.9 | ||
Cash and cash equivalents | 1,674.3 | 1,757.4 | $ 1,538.6 | $ 1,219.5 |
Short-term investments | 352.5 | 474.8 | ||
Money Market [Member] | ||||
Schedule Of Available For Sale Securities [Line Items] | ||||
Cost | 55.5 | 188.3 | ||
Gross unrealized gain | ||||
Fair value | 55.5 | 188.3 | ||
Cash and cash equivalents | 55.5 | 188.3 | ||
Short-term investments | ||||
Other assets | ||||
Certificates Of Deposit [Member] | ||||
Schedule Of Available For Sale Securities [Line Items] | ||||
Cost | 913.2 | 1,307.3 | ||
Gross unrealized gain | ||||
Fair value | 913.2 | 1,307.3 | ||
Cash and cash equivalents | 533.7 | 809.4 | ||
Short-term investments | 352.5 | 474.8 | ||
Other assets | 27 | 23.1 | ||
Fixed Maturity and Mutual Funds [Member] | ||||
Schedule Of Available For Sale Securities [Line Items] | ||||
Cost | 28.5 | 28.7 | ||
Gross unrealized gain | 4.4 | 3.2 | ||
Fair value | 32.9 | 31.9 | ||
Cash and cash equivalents | ||||
Short-term investments | ||||
Other assets | $ 32.9 | $ 31.9 |
Cash Equivalent and Investmen28
Cash Equivalent and Investments (Parenthetical) (Detail) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Minimum [Member] | Certificates Of Deposit [Member] | Short Term Investments [Member] | ||
Schedule Of Investments [Line Items] | ||
Securities Maturity period | 1 month | 1 month |
Minimum [Member] | Certificates Of Deposit [Member] | Other Assets [Member] | ||
Schedule Of Investments [Line Items] | ||
Securities Maturity period | 1 month | 1 month |
Minimum [Member] | Fixed Maturity and Mutual Funds [Member] | ||
Schedule Of Investments [Line Items] | ||
Securities Maturity period | 5 months | 11 months |
Maximum [Member] | Certificates Of Deposit [Member] | Short Term Investments [Member] | ||
Schedule Of Investments [Line Items] | ||
Securities Maturity period | 12 months | 12 months |
Maximum [Member] | Certificates Of Deposit [Member] | Cash And Cash Equivalents [Member] | ||
Schedule Of Investments [Line Items] | ||
Securities Maturity period | 90 days | |
Maximum [Member] | Certificates Of Deposit [Member] | Other Assets [Member] | ||
Schedule Of Investments [Line Items] | ||
Securities Maturity period | 21 months | 27 months |
Maximum [Member] | Fixed Maturity and Mutual Funds [Member] | ||
Schedule Of Investments [Line Items] | ||
Securities Maturity period | 25 months | 31 months |
ACQUISITIONS
ACQUISITIONS | 6 Months Ended |
Jun. 30, 2016 | |
ACQUISITIONS | NOTE 6. ACQUISITIONS The business combination described below is 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. The Company has not presented proforma combined results because the impact on previously reported statements of operations would not have been mate rial. Additionally, the near term impact to the Company’s operations and cash flows is not material. Gilliland Gold Young (GGY) On March 1, 2016, subsidiaries of the Company acquired 100 % of GGY, a leading provider of advan ced actuarial software for the life insurance industry. The cash payment of $83.4 million made at closing was funded with cash on hand. The acquisition of GGY will allow MA to provide an industry-leading enterprise risk offering for global life insurers and reinsurers. The table below details the total consideration relating to the acquisition: Cash paid at closing $ 83.4 Additional consideration to be paid to sellers in 2016 (1) 3.5 Total consideration $ 86.9 (1) Represents additional consideration due to the sellers for amounts withheld at closing pending the completion of certain administrative matters Shown below is the purchase price allocation, which summarizes the fair value of the assets and liabilities assumed, at the date of acquisition: Current assets $ 11.9 Property and equipment, net 2.0 Indemnification assets 1.5 Intangible assets: Trade name (19 year weighted average life) $ 3.7 Client relationships (21 year weighted average life) 13.8 Software (7 year weighted average life) 16.6 Total intangible assets (14 year weighted average life) 34.1 Goodwill 59.4 Liabilities (22.0) Net assets acquired $ 86.9 Current assets in the table above include acquired cash of $ 7.5 million. Additionally, current assets include accounts receivable of $ 2.9 million. Goodwill, which has been assigned to the MA segment, is not deductible for tax. In connection with the acquisition, the Company assumed liabilities relating to UTPs and certain other tax exposures which are included in the liabilities assumed in the table above. The sellers have contractually indemnified the Company against any potential payments that may h ave to be made regarding these amounts. Accordingly, the Company carries an indemnification asset on its consolidated balance sheet at June 30, 2016. The Company incurred $ 0.9 million of costs directly related to the GGY acquisition of which $ 0.6 million w as incurred in 2015 and $ 0.3 million was incurred in the first quarter of 2016. These costs are recorded within selling, general and administrative expenses in the Company’s consolidated statements of operations. GGY is part of the ERS reporting unit for p urposes of the Company’s annual goodwill impairment assessment. |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) - Gilliland Gold Young (GGY) [Member] | 6 Months Ended |
Jun. 30, 2016 | |
Consideration to The Step Acquisition | Cash paid at closing $ 83.4 Additional consideration to be paid to sellers in 2016 (1) 3.5 Total consideration $ 86.9 (1) Represents additional consideration due to the sellers for amounts withheld at closing pending the completion of certain administrative matters |
Summary of Fair Values of Assets Acquired and Liabilities Assumed | Current assets $ 11.9 Property and equipment, net 2.0 Indemnification assets 1.5 Intangible assets: Trade name (19 year weighted average life) $ 3.7 Client relationships (21 year weighted average life) 13.8 Software (7 year weighted average life) 16.6 Total intangible assets (14 year weighted average life) 34.1 Goodwill 59.4 Liabilities (22.0) Net assets acquired $ 86.9 |
Total Consideration Transferred
Total Consideration Transferred to Sellers (Detail) - Gilliland Gold Young (GGY) [Member] $ in Millions | Mar. 01, 2016USD ($) |
Business Acquisition [Line Items] | |
Cash paid | $ 83.4 |
Additional consideration to be paid to seller in 2016 | 3.5 |
Total consideration | $ 86.9 |
Purchase Price Allocation (Deta
Purchase Price Allocation (Detail) - USD ($) $ in Millions | Jun. 30, 2016 | Mar. 01, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Business Acquisition [Line Items] | ||||
Indemnification asset | $ 20.5 | $ 19.2 | ||
Goodwill | $ 1,047.2 | $ 976.3 | $ 1,021.1 | |
Gilliland Gold Young (GGY) [Member] | ||||
Business Acquisition [Line Items] | ||||
Current assets | $ 11.9 | |||
Property and equipment, net | 2 | |||
Indemnification asset | 1.5 | |||
Total intangible assets | 34.1 | |||
Goodwill | 59.4 | |||
Liabilities assumed | (22) | |||
Net assets acquired | 86.9 | |||
Gilliland Gold Young (GGY) [Member] | Trade Names [Member] | ||||
Business Acquisition [Line Items] | ||||
Total intangible assets | 3.7 | |||
Gilliland Gold Young (GGY) [Member] | Customer Relationships [Member] | ||||
Business Acquisition [Line Items] | ||||
Total intangible assets | 13.8 | |||
Gilliland Gold Young (GGY) [Member] | Software [Member] | ||||
Business Acquisition [Line Items] | ||||
Total intangible assets | $ 16.6 |
Purchase Price Allocation (Pare
Purchase Price Allocation (Parenthetical) (Detail) - Gilliland Gold Young (GGY) [Member] | Mar. 01, 2016 |
Business Acquisition [Line Items] | |
Weighted average life of intangible assets acquired (in years) | 14 years |
Trade Names [Member] | |
Business Acquisition [Line Items] | |
Weighted average life of intangible assets acquired (in years) | 19 years |
Customer Relationships [Member] | |
Business Acquisition [Line Items] | |
Weighted average life of intangible assets acquired (in years) | 21 years |
Software [Member] | |
Business Acquisition [Line Items] | |
Weighted average life of intangible assets acquired (in years) | 7 years |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Detail) - Gilliland Gold Young [Member] - USD ($) $ in Millions | Mar. 01, 2016 | Mar. 31, 2016 | Dec. 31, 2015 |
Business Acquisition [Line Items] | |||
Acquired cash | $ 7.5 | ||
Amount related to transaction cost | $ 0.9 | $ 0.3 | $ 0.6 |
Percentage of interests acquired | 100.00% | ||
Acquired account receivables | $ 2.9 | ||
Cash paid for acquisitions, net of cash required | $ 83.4 |
DERIVATIVE INSTRUMENTS AND HEDG
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | 6 Months Ended |
Jun. 30, 2016 | |
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 second 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 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 floating interest rate based on the 3-month LIBOR. T he purpose of these hedges 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 recognized in the consolidated statements of operations Three Months Ended Six Months Ended June 30, June 30, Derivatives designated as fair value accounting hedges Location on Statement of Operations 2016 2015 2016 2015 Interest rate swaps Interest income(expense), net $ 3.1 $ 4.1 $ 6.1 $ 7.6 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 below. Under the terms of the swap, the Company will pay the counterparty interest on the $110.5 mill ion received at 3.945% per annum and the counterparty will pay the Company interest on the €100 million 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-curren cy swap in 2027 or upon early termination at the discretion of the Company. The principal payments on 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 disc retion of the Company. In March 2016, the Company designated these cross-currency swaps as cash flow hedges. Accordingly, changes in fair value subsequent to the date the swaps were designated as cash flow hedges will initially be recognized in OCI. Gains and losses on the swaps initially recognized in OCI will be reclassified to the statement of operations in the period in which changes in the underlying hedged item affects net income. Ineffectiveness, if any, will be recognized in other non-operating (exp ense), income, net in the Company’s consolidated statement of operations. Net investment hedges The Company enters into foreign currency forward contracts which are designated as net investment hedges and has designated €400 million of the 2015 Senior Note s 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 he dges under the applicable sections of Topic 815 of the ASC. Hedge effectiveness is assessed based on the overall changes in the fair value of the hedge. For hedges that meet the effectiveness requirements, changes in the fair value 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 foll owing table summarizes the notional amounts of the Company’s outstanding net investment hedges: June 30, December 31, 2016 2015 Notional amount of net investment hedges: Long-term debt designated as net investment hedge € 400.0 € 400.0 Contracts to sell GBP for euros £ 22.1 £ 21.2 Contracts to sell Japanese yen for USD ¥ 19,400 ¥ 19,400 The outstanding contracts to sell Japanese yen for USD expire in November 2016 . The outstanding contracts to sell GBP for euros expire in December 201 6 . 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 and cash flow hedges: Amount of Gain/(Loss) Recognized in AOCI on Derivative (Effective Portion) Location of Gain/(Loss) Reclassified from AOCI into Income (Effective Portion) Amount of Gain/(Loss) Reclassified from AOCI into Income (Effective Portion) Derivatives and non-derivative instruments in Net Investment Hedging Relationships Three Months Ended Three Months Ended June 30, June 30, 2016 2015 2016 2015 FX forwards $ (8.6) $ 2.1 N/A $ - $ - Long-term debt 7.1 (9.7) N/A - - Total net investment hedges $ (1.5) $ (7.6) N/A $ - $ - Three Months Ended Three Months Ended Derivatives in cash flow hedging relationships June 30, June 30, 2016 2015 2016 2015 Cross currency swap $ (2.9) $ - Other non-operating income, net $ (1.7) $ - Total cash flow hedges (2.9) - (1.7) - Total $ (4.4) $ (7.6) Total $ (1.7) $ - Amount of Gain/(Loss) Recognized in AOCI on Derivative (Effective Portion) Location of Gain/(Loss) Reclassified from AOCI into Income (Effective Portion) Amount of Gain/(Loss) Reclassified from AOCI into Income (Effective Portion) Derivatives and non-derivative instruments in Net Investment Hedging Relationships Six Months Ended Six Months Ended June 30, June 30, 2016 2015 2016 2015 FX forwards $ (13.2) $ 13.4 N/A $ - $ - Long-term debt (6.0) (2.1) N/A - - Total net investment hedges $ (19.2) $ 11.3 N/A $ - $ - Six Months Ended Six Months Ended June 30, June 30, Derivatives in cash flow hedging relationships 2016 2015 2016 2015 Cross currency swap $ (1.7) $ - Other non-operating income, net $ (0.3) $ - Total cash flow hedges (1.7) - (0.3) - Total $ (20.9) $ 11.3 Total $ (0.3) $ - The cumulative amount of realized and unrecognized net investment hedge and cash flow hedge gains (losses) recorded in AOCI is as follows: Gains/(Losses), net of tax June 30, December 31, Net investment hedges 2016 2015 FX forwards $ 21.1 $ 34.3 Long-term debt (1.3) 4.7 Total gains on net investment hedges $ 19.8 $ 39.0 Cash flow hedges Treasury rate lock $ (1.1) $ (1.1) Cross currency swap (1.4) - Total losses on cash flow hedges (2.5) (1.1) Total net gains in AOCI $ 17.3 $ 37.9 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 income, net in the Company’s consolidated statements of operations along with the FX g ain or loss recognized on the assets and liabilities denominated in a currency other than the subsidiary’s functional currency. These contracts have expiration dates a t various times through December 201 6 . The following table summarizes the notional amounts o f the Company’s outstanding foreign exchange forwards: June 30, December 31, 2016 2015 Notional amount of currency pair: Contracts to sell USD for euros $ 72.6 $ 70.1 Contracts to purchase euros with other foreign currencies € 34.4 € 35.5 Contracts to sell euros for other foreign currencies € - € 1.4 Contracts to sell euros for GBP € 36.2 € 23.1 The following table summarizes the impact to the consolidated statements of operations relating to the net gain (loss) on the Company’s derivatives which are not designated as hedging instruments: Three Months Ended Six Months Ended June 30, June 30, Derivatives not designated as accounting hedges Location on Statement of Operations 2016 2015 2016 2015 Foreign exchange forwards Other non-operating income (expense), net $ (5.7) $ 2.5 $ (5.2) $ (1.9) The table below shows the classification between assets and liabilities on the 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 and Non-derivative Instruments Balance Sheet Location June 30, 2016 #REF! Assets: Derivatives not designated as accounting hedges: FX forwards on certain assets and liabilities Other current assets - 0.1 Derivatives designated as accounting hedges: FX forwards on net investment in certain foreign subsidiaries Other current assets $ 1.6 $ 0.4 Interest rate swaps Other assets 37.4 12.1 Total assets $ 39.0 $ 12.6 Liabilities: Derivatives designated as accounting hedges: Cross-currency swap Other liabilities $ 5.0 - FX forwards on net investment in certain foreign subsidiaries Accounts payable and accrued liabilities 28.3 1.2 Interest rate swaps Other liabilities - 0.3 Non-derivative instrument designated as accounting hedge: Long-term debt designated as net investment hedge Long-term debt $ 444.4 $ 434.5 Derivatives not designated as accounting hedges: Cross-currency swap Other liabilities - 7.0 FX forwards on certain assets and liabilities Accounts payable and accrued liabilities 3.7 1.9 Total liabilities $ 481.4 $ 444.9 |
DERIVATIVE INSTRUMENTS AND HE36
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Gains and Losses on Derivatives Designated as Hedging Instruments | Amount of income recognized in the consolidated statements of operations Three Months Ended Six Months Ended June 30, June 30, Derivatives designated as fair value accounting hedges Location on Statement of Operations 2016 2015 2016 2015 Interest rate swaps Interest income(expense), net $ 3.1 $ 4.1 $ 6.1 $ 7.6 |
Amount of Gain/(Loss) Recognized in AOCI on Derivative Net Investment Hedging and Cash Flow Hedging Relationships (Effectiveness Portion) | Amount of Gain/(Loss) Recognized in AOCI on Derivative (Effective Portion) Location of Gain/(Loss) Reclassified from AOCI into Income (Effective Portion) Amount of Gain/(Loss) Reclassified from AOCI into Income (Effective Portion) Derivatives and non-derivative instruments in Net Investment Hedging Relationships Three Months Ended Three Months Ended June 30, June 30, 2016 2015 2016 2015 FX forwards $ (8.6) $ 2.1 N/A $ - $ - Long-term debt 7.1 (9.7) N/A - - Total net investment hedges $ (1.5) $ (7.6) N/A $ - $ - Three Months Ended Three Months Ended Derivatives in cash flow hedging relationships June 30, June 30, 2016 2015 2016 2015 Cross currency swap $ (2.9) $ - Other non-operating income, net $ (1.7) $ - Total cash flow hedges (2.9) - (1.7) - Total $ (4.4) $ (7.6) Total $ (1.7) $ - Amount of Gain/(Loss) Recognized in AOCI on Derivative (Effective Portion) Location of Gain/(Loss) Reclassified from AOCI into Income (Effective Portion) Amount of Gain/(Loss) Reclassified from AOCI into Income (Effective Portion) Derivatives and non-derivative instruments in Net Investment Hedging Relationships Six Months Ended Six Months Ended June 30, June 30, 2016 2015 2016 2015 FX forwards $ (13.2) $ 13.4 N/A $ - $ - Long-term debt (6.0) (2.1) N/A - - Total net investment hedges $ (19.2) $ 11.3 N/A $ - $ - Six Months Ended Six Months Ended June 30, June 30, Derivatives in cash flow hedging relationships 2016 2015 2016 2015 Cross currency swap $ (1.7) $ - Other non-operating income, net $ (0.3) $ - Total cash flow hedges (1.7) - (0.3) - Total $ (20.9) $ 11.3 Total $ (0.3) $ - |
Cumulative Amount of Unrecognized Hedge Losses Recorded in Accumulated Other Comprehensive Income | Gains/(Losses), net of tax June 30, December 31, Net investment hedges 2016 2015 FX forwards $ 21.1 $ 34.3 Long-term debt (1.3) 4.7 Total gains on net investment hedges $ 19.8 $ 39.0 Cash flow hedges Treasury rate lock $ (1.1) $ (1.1) Cross currency swap (1.4) - Total losses on cash flow hedges (2.5) (1.1) Total net gains in AOCI $ 17.3 $ 37.9 |
Gains and Losses Recognized in Consolidated Statement of Operations on Derivatives Not Designated as Hedging instruments | Three Months Ended Six Months Ended June 30, June 30, Derivatives not designated as accounting hedges Location on Statement of Operations 2016 2015 2016 2015 Foreign exchange forwards Other non-operating income (expense), net $ (5.7) $ 2.5 $ (5.2) $ (1.9) |
Fair Value of Derivative Instruments | Derivative and Non-derivative Instruments Balance Sheet Location June 30, 2016 #REF! Assets: Derivatives not designated as accounting hedges: FX forwards on certain assets and liabilities Other current assets - 0.1 Derivatives designated as accounting hedges: FX forwards on net investment in certain foreign subsidiaries Other current assets $ 1.6 $ 0.4 Interest rate swaps Other assets 37.4 12.1 Total assets $ 39.0 $ 12.6 Liabilities: Derivatives designated as accounting hedges: Cross-currency swap Other liabilities $ 5.0 - FX forwards on net investment in certain foreign subsidiaries Accounts payable and accrued liabilities 28.3 1.2 Interest rate swaps Other liabilities - 0.3 Non-derivative instrument designated as accounting hedge: Long-term debt designated as net investment hedge Long-term debt $ 444.4 $ 434.5 Derivatives not designated as accounting hedges: Cross-currency swap Other liabilities - 7.0 FX forwards on certain assets and liabilities Accounts payable and accrued liabilities 3.7 1.9 Total liabilities $ 481.4 $ 444.9 |
Net Investment Hedging [Member] | |
Summary of Notional Amounts of Outstanding Foreign Exchange Forwards | June 30, December 31, 2016 2015 Notional amount of net investment hedges: Long-term debt designated as net investment hedge € 400.0 € 400.0 Contracts to sell GBP for euros £ 22.1 £ 21.2 Contracts to sell Japanese yen for USD ¥ 19,400 ¥ 19,400 |
Foreign Exchange Forward [Member] | |
Summary of Notional Amounts of Outstanding Foreign Exchange Forwards | June 30, December 31, 2016 2015 Notional amount of currency pair: Contracts to sell USD for euros $ 72.6 $ 70.1 Contracts to purchase euros with other foreign currencies € 34.4 € 35.5 Contracts to sell euros for other foreign currencies € - € 1.4 Contracts to sell euros for GBP € 36.2 € 23.1 |
Summary of Net Gain (Loss) on F
Summary of Net Gain (Loss) on Foreign Exchange Forwards Not Designated as Hedging Instruments and on Interest Rate Swaps Designated as Fair Value Hedges (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Derivatives Designated as Accounting Hedges [Member] | Interest Rate Swap [Member] | Interest Income (Expense), Net [Member] | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Amount of gain (loss) recognized in income | $ 3.1 | $ 4.1 | $ 6.1 | $ 7.6 |
Derivatives Not Designated as Accounting Hedges [Member] | Foreign Exchange Forward [Member] | Other Nonoperating Income (Expense) [Member] | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Amount of gain (loss) recognized in income | $ (5.7) | $ 2.5 | $ (5.2) | $ (1.9) |
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 | Jun. 30, 2016EUR (€) | Jun. 30, 2016GBP (£) | Jun. 30, 2016JPY (¥) | Dec. 31, 2015EUR (€) | Dec. 31, 2015GBP (£) | Dec. 31, 2015JPY (¥) |
Contracts to Sell GBP for Euros [Member] | ||||||
Derivative [Line Items] | ||||||
Derivative Notional Amount | £ | £ 22.1 | £ 21.2 | ||||
Contracts to Sell Japanese Yen for USD [Member] | ||||||
Derivative [Line Items] | ||||||
Derivative Notional Amount | ¥ | ¥ 19,400 | ¥ 19,400 | ||||
Long Term Debt [Member] | ||||||
Derivative [Line Items] | ||||||
Derivative Notional Amount | € | € 400 | € 400 |
Gains (Losses) Recognized in AO
Gains (Losses) Recognized in AOCI and Reclassified from AOCI on Derivatives (Effective Portion) (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Derivative Instruments Gain Loss [Line Items] | ||||
Amount of Gain/(Loss) Recognized in AOCI on Derivative (Effective Portion) | $ (4.4) | $ (7.6) | $ (20.9) | $ 11.3 |
Amount of Gain/(Loss) Reclassified from AOCI into Income (Effective Portion) | (1.7) | (0.3) | ||
Net Investment Hedging [Member] | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Amount of Gain/(Loss) Recognized in AOCI on Derivative (Effective Portion) | (1.5) | (7.6) | (19.2) | 11.3 |
Net Investment Hedging [Member] | Foreign Exchange Contract [Member] | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Amount of Gain/(Loss) Recognized in AOCI on Derivative (Effective Portion) | (8.6) | 2.1 | (13.2) | 13.4 |
Net Investment Hedging [Member] | Long Term Debt [Member] | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Amount of Gain/(Loss) Recognized in AOCI on Derivative (Effective Portion) | 7.1 | $ (9.7) | (6) | $ (2.1) |
Cash Flow Hedging [Member] | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Amount of Gain/(Loss) Recognized in AOCI on Derivative (Effective Portion) | (2.9) | (1.7) | ||
Amount of Gain/(Loss) Reclassified from AOCI into Income (Effective Portion) | (1.7) | (0.3) | ||
Cash Flow Hedging [Member] | Cross-Currency Swap [Member] | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Amount of Gain/(Loss) Recognized in AOCI on Derivative (Effective Portion) | (2.9) | (1.7) | ||
Cash Flow Hedging [Member] | Cross-Currency Swap [Member] | Other Nonoperating Income (Expense) [Member] | ||||
Derivative Instruments Gain Loss [Line Items] | ||||
Amount of Gain/(Loss) Reclassified from AOCI into Income (Effective Portion) | $ (1.7) | $ (0.3) |
Cumulative Amount of Unrecogniz
Cumulative Amount of Unrecognized Hedge Losses Recorded in Accumulated Other Comprehensive Income (Detail) - USD ($) $ in Millions | Jun. 30, 2016 | Dec. 31, 2015 |
Derivative [Line Items] | ||
Cumulative amount of unrecognized hedge losses recorded in AOCI | $ 17.3 | $ 37.9 |
Net Investment Hedging [Member] | ||
Derivative [Line Items] | ||
Cumulative amount of unrecognized hedge losses recorded in AOCI | 19.8 | 39 |
Net Investment Hedging [Member] | Foreign exchange forward [Member] | ||
Derivative [Line Items] | ||
Cumulative amount of unrecognized hedge losses recorded in AOCI | 21.1 | 34.3 |
Net Investment Hedging [Member] | Long Term Debt [Member] | ||
Derivative [Line Items] | ||
Cumulative amount of unrecognized hedge losses recorded in AOCI | (1.3) | 4.7 |
Cash Flow Hedging [Member] | ||
Derivative [Line Items] | ||
Cumulative amount of unrecognized hedge losses recorded in AOCI | (2.5) | (1.1) |
Cash Flow Hedging [Member] | Treasury Rate Lock [Member] | ||
Derivative [Line Items] | ||
Cumulative amount of unrecognized hedge losses recorded in AOCI | (1.1) | $ (1.1) |
Cash Flow Hedging [Member] | Cross-Currency Swap [Member] | ||
Derivative [Line Items] | ||
Cumulative amount of unrecognized hedge losses recorded in AOCI | $ (1.4) |
Summary of Notional Amounts o41
Summary of Notional Amounts of Outstanding Foreign Exchange Forwards, Cash Flow Hedging (Detail) € in Millions, $ in Millions | Jun. 30, 2016EUR (€) | Jun. 30, 2016USD ($) | Dec. 31, 2015EUR (€) | Dec. 31, 2015USD ($) |
Contracts to Sell USD for Euros [Member] | ||||
Derivative [Line Items] | ||||
Derivative Notional Amount | $ | $ 72.6 | $ 70.1 | ||
Contracts to Purchase Euros with Other Foreign Currencies [Member] | ||||
Derivative [Line Items] | ||||
Derivative Notional Amount | € 34.4 | € 35.5 | ||
Contracts to Sell Euros for Other Foreign Currencies [Member] | ||||
Derivative [Line Items] | ||||
Derivative Notional Amount | 1.4 | |||
Contracts to Sell Euros for GBP [Member] | ||||
Derivative [Line Items] | ||||
Derivative Notional Amount | € 36.2 | € 23.1 |
Fair Value of Derivative Instru
Fair Value of Derivative Instruments (Detail) - USD ($) $ in Millions | Jun. 30, 2016 | Dec. 31, 2015 |
Derivatives Fair Value [Line Items] | ||
Derivatives assets | $ 39 | $ 12.6 |
Derivatives liabilities | 481.4 | 444.9 |
Net Investment Hedging [Member] | Long Term Debt [Member] | ||
Derivatives Fair Value [Line Items] | ||
Derivatives liabilities | 444.4 | 434.5 |
Derivatives Designated as Accounting Hedges [Member] | Interest Rate Swap [Member] | Other Assets [Member] | ||
Derivatives Fair Value [Line Items] | ||
Derivatives assets | 37.4 | 12.1 |
Derivatives Designated as Accounting Hedges [Member] | Interest Rate Swap [Member] | Other Liabilities [Member] | ||
Derivatives Fair Value [Line Items] | ||
Derivatives liabilities | 0.3 | |
Derivatives Designated as Accounting Hedges [Member] | Cross-Currency Swap [Member] | Other Liabilities [Member] | ||
Derivatives Fair Value [Line Items] | ||
Derivatives liabilities | 5 | |
Derivatives Designated as Accounting Hedges [Member] | Net Investment Hedging [Member] | Foreign Exchange Contract [Member] | Other Current Assets [Member] | ||
Derivatives Fair Value [Line Items] | ||
Derivatives assets | 1.6 | 0.4 |
Derivatives Designated as Accounting Hedges [Member] | Net Investment Hedging [Member] | Foreign Exchange Contract [Member] | Accounts Payable And Accrued Liabilities [Member] | ||
Derivatives Fair Value [Line Items] | ||
Derivatives liabilities | 28.3 | 1.2 |
Derivatives Not Designated as Accounting Hedges [Member] | Foreign Exchange Contract [Member] | Other Current Assets [Member] | ||
Derivatives Fair Value [Line Items] | ||
Derivatives assets | 0.1 | |
Derivatives Not Designated as Accounting Hedges [Member] | Foreign Exchange Contract [Member] | Accounts Payable And Accrued Liabilities [Member] | ||
Derivatives Fair Value [Line Items] | ||
Derivatives liabilities | $ 3.7 | 1.9 |
Derivatives Not Designated as Accounting Hedges [Member] | Cross-Currency Swap [Member] | Other Liabilities [Member] | ||
Derivatives Fair Value [Line Items] | ||
Derivatives liabilities | $ 7 |
Derivative Instruments And He43
Derivative Instruments And Hedging Activities - Additional Information (Detail) € in Millions, $ in Millions | Jun. 30, 2016EUR (€) | Jun. 30, 2016USD ($) | Dec. 31, 2015EUR (€) | Mar. 31, 2015USD ($) | Sep. 30, 2014USD ($) | Jun. 30, 2014USD ($) |
Interest Rate Swap [Member] | 2010 Senior Notes [Member] | ||||||
Derivative [Line Items] | ||||||
Notional amount | $ 250 | $ 250 | ||||
Interest Rate Swap [Member] | 2014 Senior Notes (5-Year) [Member] | ||||||
Derivative [Line Items] | ||||||
Notional amount | $ 200 | $ 250 | ||||
Derivatives Designated as Investment Hedges [Member] | Currency Swap [Member] | 2015 Senior Notes [Member] | Cross-Currency Paid [Member] | ||||||
Derivative [Line Items] | ||||||
Notional amount | $ 110.5 | |||||
Derivative, swaption interest rate | 3.945% | 3.945% | ||||
Derivatives Designated as Investment Hedges [Member] | Currency Swap [Member] | 2015 Senior Notes [Member] | Cross-Currency Received [Member] | ||||||
Derivative [Line Items] | ||||||
Notional amount | € | € 100 | |||||
Derivative, swaption interest rate | 1.75% | 1.75% | ||||
Net Investment Hedging [Member] | Derivatives Designated as Investment Hedges [Member] | 2015 Senior Notes [Member] | ||||||
Derivative [Line Items] | ||||||
Notional amount | € | € 400 |
GOODWILL AND OTHER ACQUIRED INT
GOODWILL AND OTHER ACQUIRED INTANGIBLE ASSETS | 6 Months Ended |
Jun. 30, 2016 | |
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: Six Months Ended June 30, 2016 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 $ 284.4 $ - $ 284.4 $ 704.1 $ (12.2) $ 691.9 $ 988.5 $ (12.2) $ 976.3 Additions/adjustments - - - 61.1 - 61.1 61.1 - 61.1 Foreign currency translation adjustments (0.1) - (0.1) 9.9 - 9.9 9.8 - 9.8 Ending balance $ 284.3 $ - $ 284.3 $ 775.1 $ (12.2) $ 762.9 $ 1,059.4 $ (12.2) $ 1,047.2 Year ended December 31, 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 3.7 - 3.7 5.0 - 5.0 8.7 - 8.7 Foreign currency translation adjustments (18.0) - (18.0) (35.5) - (35.5) (53.5) - (53.5) Ending balance $ 284.4 $ - $ 284.4 $ 704.1 $ (12.2) $ 691.9 $ 988.5 $ (12.2) $ 976.3 The 2016 additions/adjustments for the MA segment in the table above primarily relate to the acquisition of GGY. 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 primarily reflect an adjustment to an indemnification asset recognized as part of the Copal acquisition, goodwill acquired from the acquisition of a business from BlackBox Logic and adjustments to deferred revenue balances and deferred tax asset s recognized as part of the Lewtan acquisition. The accumulated impairment charge in the table above reflects an impairment charge recognized in 2012 relating to the FSTC reporting unit within MA. This impairment charge reflected a contraction in spending for training and certification services for many individuals and global financial institutions in 2012 due to macroeconomic uncertainties at the time. The fair value of the FSTC reporting unit utilized in this impairment assessment was estimated using a d iscounted cash flow methodology and comparable public company and precedent transaction multiples. Acquired intangible assets and related amortization consisted of: June 30, December 31, 2016 2015 Customer relationships $ 315.0 $ 298.4 Accumulated amortization (118.2) (110.0) Net customer relationships 196.8 188.4 Trade secrets 30.0 29.7 Accumulated amortization (24.4) (23.1) Net trade secrets 5.6 6.6 Software 91.8 74.7 Accumulated amortization (52.9) (47.7) Net software 38.9 27.0 Trade names 76.3 72.4 Accumulated amortization (17.8) (16.2) Net trade names 58.5 56.2 Other (1) 43.9 44.3 Accumulated amortization (24.5) (23.4) Net other 19.4 20.9 Total acquired intangible assets, net $ 319.2 $ 299.1 (1) 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 Six Months Ended June 30, June 30, 2016 2015 2016 2015 Amortization expense $ 8.7 $ 8.0 $ 16.6 $ 16.5 Estimated future amortization expense for acquired intangible assets subject to amortization is as follows: Year Ending December 31, 2016 (after June 30) $ 17.0 2017 32.1 2018 26.2 2019 23.4 2020 22.0 Thereafter 198.5 Total estimated future amortization $ 319.2 |
GOODWILL AND OTHER ACQUIRED I45
GOODWILL AND OTHER ACQUIRED INTANGIBLE ASSETS (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Activity in Goodwill | Six Months Ended June 30, 2016 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 $ 284.4 $ - $ 284.4 $ 704.1 $ (12.2) $ 691.9 $ 988.5 $ (12.2) $ 976.3 Additions/adjustments - - - 61.1 - 61.1 61.1 - 61.1 Foreign currency translation adjustments (0.1) - (0.1) 9.9 - 9.9 9.8 - 9.8 Ending balance $ 284.3 $ - $ 284.3 $ 775.1 $ (12.2) $ 762.9 $ 1,059.4 $ (12.2) $ 1,047.2 Year ended December 31, 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 3.7 - 3.7 5.0 - 5.0 8.7 - 8.7 Foreign currency translation adjustments (18.0) - (18.0) (35.5) - (35.5) (53.5) - (53.5) Ending balance $ 284.4 $ - $ 284.4 $ 704.1 $ (12.2) $ 691.9 $ 988.5 $ (12.2) $ 976.3 |
Acquired Intangible Assets and Related Amortization | June 30, December 31, 2016 2015 Customer relationships $ 315.0 $ 298.4 Accumulated amortization (118.2) (110.0) Net customer relationships 196.8 188.4 Trade secrets 30.0 29.7 Accumulated amortization (24.4) (23.1) Net trade secrets 5.6 6.6 Software 91.8 74.7 Accumulated amortization (52.9) (47.7) Net software 38.9 27.0 Trade names 76.3 72.4 Accumulated amortization (17.8) (16.2) Net trade names 58.5 56.2 Other (1) 43.9 44.3 Accumulated amortization (24.5) (23.4) Net other 19.4 20.9 Total acquired intangible assets, net $ 319.2 $ 299.1 (1) Other intangible assets primarily consist of databases, covenants not to compete, and acquired ratings methodologies and models. |
Amortization Expense Relating to Acquired Intangible Assets | Three Months Ended Six Months Ended June 30, June 30, 2016 2015 2016 2015 Amortization expense $ 8.7 $ 8.0 $ 16.6 $ 16.5 |
Estimated Future Amortization Expense for Acquired Intangible Assets Subject to Amortization | Year Ending December 31, 2016 (after June 30) $ 17.0 2017 32.1 2018 26.2 2019 23.4 2020 22.0 Thereafter 198.5 Total estimated future amortization $ 319.2 |
Activity in Goodwill (Detail)
Activity in Goodwill (Detail) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Goodwill [Line Items] | ||
Beginning balance, Goodwill gross | $ 988.5 | $ 1,033.3 |
Additions/adjustments, gross | 61.1 | 8.7 |
Foreign currency translation adjustments, gross | 9.8 | (53.5) |
Ending balance, Goodwill gross | 1,059.4 | 988.5 |
Beginning balance, Impairment Loss | (12.2) | (12.2) |
Ending balance, Impairment Loss | (12.2) | (12.2) |
Beginning balance | 976.3 | 1,021.1 |
Additions/adjustments | 61.1 | 8.7 |
Foreign currency translation adjustments | 9.8 | (53.5) |
Ending balance | 1,047.2 | 976.3 |
Moodys Investors Service [Member] | ||
Goodwill [Line Items] | ||
Beginning balance, Goodwill gross | 284.4 | 298.7 |
Additions/adjustments, gross | 3.7 | |
Foreign currency translation adjustments, gross | (0.1) | (18) |
Ending balance, Goodwill gross | 284.3 | 284.4 |
Beginning balance | 284.4 | 298.7 |
Additions/adjustments | 3.7 | |
Foreign currency translation adjustments | (0.1) | (18) |
Ending balance | 284.3 | 284.4 |
Moodys Analytics [Member] | ||
Goodwill [Line Items] | ||
Beginning balance, Goodwill gross | 704.1 | 734.6 |
Additions/adjustments, gross | 61.1 | 5 |
Foreign currency translation adjustments, gross | 9.9 | (35.5) |
Ending balance, Goodwill gross | 775.1 | 704.1 |
Beginning balance, Impairment Loss | (12.2) | (12.2) |
Ending balance, Impairment Loss | (12.2) | (12.2) |
Beginning balance | 691.9 | 722.4 |
Additions/adjustments | 61.1 | 5 |
Foreign currency translation adjustments | 9.9 | (35.5) |
Ending balance | $ 762.9 | $ 691.9 |
Acquired Intangible Assets and
Acquired Intangible Assets and Related Amortization (Detail) - USD ($) $ in Millions | Jun. 30, 2016 | Dec. 31, 2015 |
Finite Lived Intangible Assets [Line Items] | ||
Acquired intangible assets, net | $ 319.2 | $ 299.1 |
Customer Relationships [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Acquired intangible assets, gross | 315 | 298.4 |
Accumulated amortization | (118.2) | (110) |
Acquired intangible assets, net | 196.8 | 188.4 |
Trade Secrets [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Acquired intangible assets, gross | 30 | 29.7 |
Accumulated amortization | (24.4) | (23.1) |
Acquired intangible assets, net | 5.6 | 6.6 |
Computer Software Intangible Asset [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Acquired intangible assets, gross | 91.8 | 74.7 |
Accumulated amortization | (52.9) | (47.7) |
Acquired intangible assets, net | 38.9 | 27 |
Trade Names [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Acquired intangible assets, gross | 76.3 | 72.4 |
Accumulated amortization | (17.8) | (16.2) |
Acquired intangible assets, net | 58.5 | 56.2 |
Other Intangible Assets [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Acquired intangible assets, gross | 43.9 | 44.3 |
Accumulated amortization | (24.5) | (23.4) |
Acquired intangible assets, net | $ 19.4 | $ 20.9 |
Amortization Expense Relating t
Amortization Expense Relating to Acquired Intangible Assets (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Finite Lived Intangible Assets [Line Items] | ||||
Amortization expense | $ 8.7 | $ 8 | $ 16.6 | $ 16.5 |
Estimated Future Amortization E
Estimated Future Amortization Expense for Acquired Intangible Assets Subject to Amortization (Detail) $ in Millions | Jun. 30, 2016USD ($) |
Schedule Of Actual And Estimated Amortization Expense [Line Items] | |
2016 (after June 30) | $ 17 |
2,017 | 32.1 |
2,018 | 26.2 |
2,019 | 23.4 |
2,020 | 22 |
Thereafter | 198.5 |
Total estimated future amortization | $ 319.2 |
FAIR VALUE
FAIR VALUE | 6 Months Ended |
Jun. 30, 2016 | |
FAIR VALUE | NOTE 9. FAIR VALUE The table below presents information about items that are carried at fair value at June 30, 2016 and December 31, 2015 : Fair Value Measurement as of June 30, 2016 Description Balance Level 1 Level 2 Assets: Derivatives (a) $ 39.0 $ - $ 39.0 Money market mutual funds 55.5 55.5 - Fixed maturity and open ended mutual funds (b) 32.9 32.9 - Total $ 127.4 $ 88.4 $ 39.0 Liabilities: Derivatives (a) $ 37.0 $ - $ 37.0 Total $ 37.0 $ - $ 37.0 Fair Value Measurement as of December 31, 2015 Description Balance Level 1 Level 2 Assets: Derivatives (a) $ 12.6 $ - $ 12.6 Money market mutual funds 188.3 188.3 - Fixed maturity and open ended mutual funds (b) 31.9 31.9 - Total $ 232.8 $ 220.2 $ 12.6 Liabilities: Derivatives (a) $ 10.4 $ - $ 10.4 Total $ 10.4 $ - $ 10.4 (a) Represents FX forwards, interest rate swaps and cross-currency swaps 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 following are descriptions of the methodologies utilized by the Company to estimate the fair value of its derivative contracts, fixed maturity plans, open ended mutual funds and money market mutual funds : 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 adhe re to these guidelines. 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 a re 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 wit h a stable $ 1 net asset value. |
FAIR VALUE (Tables)
FAIR VALUE (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Financial Instruments Carried at Fair Value on Recurring Basis | Fair Value Measurement as of June 30, 2016 Description Balance Level 1 Level 2 Assets: Derivatives (a) $ 39.0 $ - $ 39.0 Money market mutual funds 55.5 55.5 - Fixed maturity and open ended mutual funds (b) 32.9 32.9 - Total $ 127.4 $ 88.4 $ 39.0 Liabilities: Derivatives (a) $ 37.0 $ - $ 37.0 Total $ 37.0 $ - $ 37.0 Fair Value Measurement as of December 31, 2015 Description Balance Level 1 Level 2 Assets: Derivatives (a) $ 12.6 $ - $ 12.6 Money market mutual funds 188.3 188.3 - Fixed maturity and open ended mutual funds (b) 31.9 31.9 - Total $ 232.8 $ 220.2 $ 12.6 Liabilities: Derivatives (a) $ 10.4 $ - $ 10.4 Total $ 10.4 $ - $ 10.4 (a) Represents FX forwards, interest rate swaps and cross-currency swaps 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. |
Financial Instruments Carried a
Financial Instruments Carried at Fair Value on Recurring Basis (Detail) - USD ($) $ in Millions | Jun. 30, 2016 | Dec. 31, 2015 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Derivative Contracts | $ 39 | $ 12.6 |
Money market funds | 55.5 | 188.3 |
Fixed maturity and open ended mutual funds | 32.9 | 31.9 |
Total, Assets | 127.4 | 232.8 |
Derivatives, Liabilities | 37 | 10.4 |
Total, Liabilities | 37 | 10.4 |
Fair Value Inputs Level 1 [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Money market funds | 55.5 | 188.3 |
Fixed maturity and open ended mutual funds | 32.9 | 31.9 |
Total, Assets | 88.4 | 220.2 |
Fair Value Inputs Level 2 [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Derivative Contracts | 39 | 12.6 |
Total, Assets | 39 | 12.6 |
Derivatives, Liabilities | 37 | 10.4 |
Total, Liabilities | $ 37 | $ 10.4 |
Fair Value - Additional Informa
Fair Value - Additional Information (Detail) | Jun. 30, 2016USD ($) |
Fair Value Of Financial Instruments [Line Items] | |
Net asset stable value for public traded funds | $ 1 |
OTHER BALANCE SHEET INFORMATION
OTHER BALANCE SHEET INFORMATION | 6 Months Ended |
Jun. 30, 2016 | |
OTHER BALANCE SHEET AND STATEMENT OF OPERATIONS INFORMATION | NOTE 10. OTHER BALANCE SHEET AND STATEMENT OF OPERATIONS INFORMATION The following tables contain additional detail related to certain balance sheet captions: June 30, December 31, 2016 2015 Other current assets: Prepaid taxes $ 67.7 $ 83.3 Prepaid expenses 58.4 66.9 Other 33.5 29.4 Total other current assets $ 159.6 $ 179.6 June 30, December 31, 2016 2015 Other assets: Investments in joint ventures $ 16.2 $ 28.7 Deposits for real-estate leases 11.5 11.4 Indemnification assets related to acquisitions 20.5 19.2 Mutual funds and fixed deposits 59.9 55.0 Other 50.1 26.1 Total other assets $ 158.2 $ 140.4 June 30, December 31, 2016 2015 Accounts payable and accrued liabilities: Salaries and benefits $ 73.7 $ 83.0 Incentive compensation 62.8 137.2 Customer credits, advanced payments and advanced billings 25.4 24.6 Self-insurance reserves 25.1 19.7 Dividends 6.7 78.2 Professional service fees 51.8 54.5 Interest accrued on debt 56.1 59.4 Accounts payable 35.6 22.2 Income taxes 21.7 11.5 Pension and other retirement employee benefits 6.2 6.2 Other 88.7 70.1 Total accounts payable and accrued liabilities $ 453.8 $ 566.6 June 30, December 31, 2016 2015 Other liabilities: Pension and other retirement employee benefits $ 248.0 $ 261.7 Deferred rent-non-current portion 98.0 98.4 Interest accrued on UTPs 30.9 27.9 Legacy and other tax matters 3.0 1.7 Other 24.1 27.5 Total other liabilities $ 404.0 $ 417.2 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: Six Months Ended Year Ended June 30, December 31, 2016 2015 Balance January 1, $ 19.7 $ 21.5 Accruals 8.8 22.2 Payments (3.4) (24.0) Balance $ 25.1 $ 19.7 Other Non-Operating Income (Expense) : The following table summarizes the components of other non-operating (expense) income: Three Months Ended Six Months Ended June 30, June 30, 2016 2015 2016 2015 FX gain/(loss) $ 0.8 (12.2) 4.8 (12.2) Joint venture income 3.0 3.4 4.9 5.3 Other (0.8) 0.6 (1.1) 1.2 Total $ 3.0 (8.2) 8.6 (5.7) |
OTHER BALANCE SHEET INFORMATI55
OTHER BALANCE SHEET INFORMATION (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Additional Details Related to Certain Balance Sheet Captions | June 30, December 31, 2016 2015 Other current assets: Prepaid taxes $ 67.7 $ 83.3 Prepaid expenses 58.4 66.9 Other 33.5 29.4 Total other current assets $ 159.6 $ 179.6 June 30, December 31, 2016 2015 Other assets: Investments in joint ventures $ 16.2 $ 28.7 Deposits for real-estate leases 11.5 11.4 Indemnification assets related to acquisitions 20.5 19.2 Mutual funds and fixed deposits 59.9 55.0 Other 50.1 26.1 Total other assets $ 158.2 $ 140.4 June 30, December 31, 2016 2015 Accounts payable and accrued liabilities: Salaries and benefits $ 73.7 $ 83.0 Incentive compensation 62.8 137.2 Customer credits, advanced payments and advanced billings 25.4 24.6 Self-insurance reserves 25.1 19.7 Dividends 6.7 78.2 Professional service fees 51.8 54.5 Interest accrued on debt 56.1 59.4 Accounts payable 35.6 22.2 Income taxes 21.7 11.5 Pension and other retirement employee benefits 6.2 6.2 Other 88.7 70.1 Total accounts payable and accrued liabilities $ 453.8 $ 566.6 June 30, December 31, 2016 2015 Other liabilities: Pension and other retirement employee benefits $ 248.0 $ 261.7 Deferred rent-non-current portion 98.0 98.4 Interest accrued on UTPs 30.9 27.9 Legacy and other tax matters 3.0 1.7 Other 24.1 27.5 Total other liabilities $ 404.0 $ 417.2 |
Self Insurance Reserves | Six Months Ended Year Ended June 30, December 31, 2016 2015 Balance January 1, $ 19.7 $ 21.5 Accruals 8.8 22.2 Payments (3.4) (24.0) Balance $ 25.1 $ 19.7 |
Other Non-Operating | Three Months Ended Six Months Ended June 30, June 30, 2016 2015 2016 2015 FX gain/(loss) $ 0.8 (12.2) 4.8 (12.2) Joint venture income 3.0 3.4 4.9 5.3 Other (0.8) 0.6 (1.1) 1.2 Total $ 3.0 (8.2) 8.6 (5.7) |
Additional Details Related to C
Additional Details Related to Certain Balance Sheet Captions (Detail) - USD ($) $ in Millions | Jun. 30, 2016 | Dec. 31, 2015 |
Other current assets: | ||
Prepaid taxes | $ 67.7 | $ 83.3 |
Prepaid expenses | 58.4 | 66.9 |
Other | 33.5 | 29.4 |
Total other current assets | 159.6 | 179.6 |
Other assets | ||
Investments in joint ventures | 16.2 | 28.7 |
Deposits for real-estate leases | 11.5 | 11.4 |
Indemnification assets related to acquisitions | 20.5 | 19.2 |
Mutual funds and fixed deposits | 59.9 | 55 |
Other | 50.1 | 26.1 |
Total other assets | 158.2 | 140.4 |
Accounts payable and accrued liabilities | ||
Salaries and benefits | 73.7 | 83 |
Incentive compensation | 62.8 | 137.2 |
Customer credits, advanced payments and advanced billings | 25.4 | 24.6 |
Self-insurance reserves | 25.1 | 19.7 |
Dividends | 6.7 | 78.2 |
Professional service fees | 51.8 | 54.5 |
Interest accrued on debt | 56.1 | 59.4 |
Accounts payable | 35.6 | 22.2 |
Income taxes | 21.7 | 11.5 |
Pension and other post retirement employee benefits | 6.2 | 6.2 |
Other | 88.7 | 70.1 |
Total accounts payable and accrued liabilities | 453.8 | 566.6 |
Other liabilities | ||
Pension and other post retirement employee benefits | 248 | 261.7 |
Deferred rent-non-current portion | 98 | 98.4 |
Interest accrued on UTPs | 30.9 | 27.9 |
Legacy and other tax matters | 3 | 1.7 |
Other | 24.1 | 27.5 |
Total other liabilities | $ 404 | $ 417.2 |
Changes in Self Insurance Reser
Changes in Self Insurance Reserves (Detail) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Disclosure Changes in Self Insurance Reserves [Abstract] | ||
Self-insurance reserves, beginning balance | $ 19.7 | $ 21.5 |
Accruals (reversals), net | 8.8 | 22.2 |
Payments | (3.4) | (24) |
Self-insurance reserves, ending balance | $ 25.1 | $ 19.7 |
Other Non-Operating Interest (D
Other Non-Operating Interest (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Component of Other Expense Income Nonoperating [Line Items] | ||||
FX gain/(loss) | $ 0.8 | $ (12.2) | $ 4.8 | $ (12.2) |
Joint venture income | 3 | 3.4 | 4.9 | 5.3 |
Other | (0.8) | 0.6 | (1.1) | 1.2 |
Total | $ 3 | $ (8.2) | $ 8.6 | $ (5.7) |
COMPREHENSIVE INCOME RECLASSIFI
COMPREHENSIVE INCOME RECLASSIFICATION | 6 Months Ended |
Jun. 30, 2016 | |
COMPREHENSIVE INCOME AND ACCUMULATED OTHER COMPREHENSIVE INCOME | NOTE 11. COMPREHENSIVE INCOME AND ACCUMULATED OTHER COMPREHENSIVE INCOME The following table provides details about the reclassifications out of AOCI: Three Months Ended June 30, 2016 Six Months Ended June 30, 2016 Affected line in the consolidated statement of operations Losses on cash flow hedges Cross-currency swap (2.6) (0.4) Other non-operating income (expense), net Income tax effect of item above 0.9 0.1 Provision for income taxes Total losses on cash flow hedges (1.7) (0.3) Pension and other retirement benefits Amortization of actuarial losses and prior service costs included in net income (1.5) (3.1) Operating expense Amortization of actuarial losses and prior service costs included in net income (0.8) (1.8) SG&A expense Total before income taxes (2.3) (4.9) Income tax effect of item above 0.9 1.9 Provision for income taxes Total pension and other retirement benefits (1.4) (3.0) Total losses included in Net Income attributable to reclassifications out of AOCI $ (3.1) $ (3.3) Three Months Ended June 30, 2015 Six Months Ended June 30, 2015 Affected line in the consolidated statement of operations Losses on foreign currency translation adjustments Liquidation of foreign subsidiary $ - $ 0.1 Other non-operating income (expense), net Total losses on foreign translation adjustments - 0.1 Gains on available for sale securities: Gains on available for sale securities 0.2 0.2 Other non-operating income (expense), net Total gains on available for sale securities 0.2 0.2 Pension and other retirement benefits Amortization of actuarial losses and prior service costs included in net income (2.0) (4.3) Operating expense Amortization of actuarial losses and prior service costs included in net income (1.1) (2.6) SG&A expense Total before income taxes (3.1) (6.9) Income tax effect of item above 1.1 2.6 Provision for income taxes Total pension and other retirement benefits (2.0) (4.3) Total losses included in Net Income attributable to reclassifications out of AOCI $ (1.8) $ (4.0) The following table shows changes in AOCI by c omponent ( n et of t ax): Three Months Ended June 30, 2016 June 30, 2015 Gains/(Losses) on Cash Flow Hedges Pension and Other Retirement Benefits Foreign Currency Translation Adjustments Gains on Available for Sale Securities Total Gains/(Losses) on Cash Flow Hedges Pension and Other Retirement Benefits Foreign Currency Translation Adjustments Gains on Available for Sale Securities Total Balance March 31, $ (1.3) (84.1) (220.0) 3.9 $ (301.5) $ (103.1) (221.3) 2.0 $ (322.4) Other comprehensive income/(loss) before reclassifications (2.9) 3.3 (19.4) 0.6 (18.4) 6.7 32.1 1.0 39.8 Amounts reclassified from AOCI 1.7 1.4 - - 3.1 2.0 - (0.2) 1.8 Other comprehensive income/(loss) (1.2) 4.7 (19.4) 0.6 (15.3) 8.7 32.1 0.8 41.6 Balance June 30, $ (2.5) $ (79.4) $ (239.4) $ 4.5 $ (316.8) $ $ (94.4) $ (189.2) $ 2.8 $ (280.8) Six Months Ended June 30, 2016 June 30, 2015 Gains/(Losses) on Cash Flow Hedges Pension and Other Retirement Benefits Foreign Currency Translation Adjustments Gains on Available for Sale Securities Total Gains/(Losses) on Cash Flow Hedges Pension and Other Retirement Benefits Foreign Currency Translation Adjustments Gains on Available for Sale Securities Total Balance December 31, $ (1.1) (85.7) (256.0) 3.3 $ (339.5) $ (105.4) (130.7) 0.9 $ (235.2) Other comprehensive income/(loss) before reclassifications (1.7) 3.3 16.6 1.2 19.4 6.7 (58.4) 2.1 (49.6) Amounts reclassified from AOCI 0.3 3.0 - - 3.3 4.3 (0.1) (0.2) 4.0 Other comprehensive income/(loss) (1.4) 6.3 16.6 1.2 22.7 11.0 (58.5) 1.9 (45.6) Balance June 30, $ (2.5) (79.4) (239.4) 4.5 $ (316.8) $ (94.4) (189.2) 2.8 $ (280.8) |
COMPREHENSIVE INCOME RECLASSI60
COMPREHENSIVE INCOME RECLASSIFICATIONS (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Reclassifications out of AOCI | Three Months Ended June 30, 2016 Six Months Ended June 30, 2016 Affected line in the consolidated statement of operations Losses on cash flow hedges Cross-currency swap (2.6) (0.4) Other non-operating income (expense), net Income tax effect of item above 0.9 0.1 Provision for income taxes Total losses on cash flow hedges (1.7) (0.3) Pension and other retirement benefits Amortization of actuarial losses and prior service costs included in net income (1.5) (3.1) Operating expense Amortization of actuarial losses and prior service costs included in net income (0.8) (1.8) SG&A expense Total before income taxes (2.3) (4.9) Income tax effect of item above 0.9 1.9 Provision for income taxes Total pension and other retirement benefits (1.4) (3.0) Total losses included in Net Income attributable to reclassifications out of AOCI $ (3.1) $ (3.3) Three Months Ended June 30, 2015 Six Months Ended June 30, 2015 Affected line in the consolidated statement of operations Losses on foreign currency translation adjustments Liquidation of foreign subsidiary $ - $ 0.1 Other non-operating income (expense), net Total losses on foreign translation adjustments - 0.1 Gains on available for sale securities: Gains on available for sale securities 0.2 0.2 Other non-operating income (expense), net Total gains on available for sale securities 0.2 0.2 Pension and other retirement benefits Amortization of actuarial losses and prior service costs included in net income (2.0) (4.3) Operating expense Amortization of actuarial losses and prior service costs included in net income (1.1) (2.6) SG&A expense Total before income taxes (3.1) (6.9) Income tax effect of item above 1.1 2.6 Provision for income taxes Total pension and other retirement benefits (2.0) (4.3) Total losses included in Net Income attributable to reclassifications out of AOCI $ (1.8) $ (4.0) |
Components of Accumulated Other Comprehensive Income | Three Months Ended June 30, 2016 June 30, 2015 Gains/(Losses) on Cash Flow Hedges Pension and Other Retirement Benefits Foreign Currency Translation Adjustments Gains on Available for Sale Securities Total Gains/(Losses) on Cash Flow Hedges Pension and Other Retirement Benefits Foreign Currency Translation Adjustments Gains on Available for Sale Securities Total Balance March 31, $ (1.3) (84.1) (220.0) 3.9 $ (301.5) $ (103.1) (221.3) 2.0 $ (322.4) Other comprehensive income/(loss) before reclassifications (2.9) 3.3 (19.4) 0.6 (18.4) 6.7 32.1 1.0 39.8 Amounts reclassified from AOCI 1.7 1.4 - - 3.1 2.0 - (0.2) 1.8 Other comprehensive income/(loss) (1.2) 4.7 (19.4) 0.6 (15.3) 8.7 32.1 0.8 41.6 Balance June 30, $ (2.5) $ (79.4) $ (239.4) $ 4.5 $ (316.8) $ $ (94.4) $ (189.2) $ 2.8 $ (280.8) Six Months Ended June 30, 2016 June 30, 2015 Gains/(Losses) on Cash Flow Hedges Pension and Other Retirement Benefits Foreign Currency Translation Adjustments Gains on Available for Sale Securities Total Gains/(Losses) on Cash Flow Hedges Pension and Other Retirement Benefits Foreign Currency Translation Adjustments Gains on Available for Sale Securities Total Balance December 31, $ (1.1) (85.7) (256.0) 3.3 $ (339.5) $ (105.4) (130.7) 0.9 $ (235.2) Other comprehensive income/(loss) before reclassifications (1.7) 3.3 16.6 1.2 19.4 6.7 (58.4) 2.1 (49.6) Amounts reclassified from AOCI 0.3 3.0 - - 3.3 4.3 (0.1) (0.2) 4.0 Other comprehensive income/(loss) (1.4) 6.3 16.6 1.2 22.7 11.0 (58.5) 1.9 (45.6) Balance June 30, $ (2.5) (79.4) (239.4) 4.5 $ (316.8) $ (94.4) (189.2) 2.8 $ (280.8) |
Reclassification out of AOCI (D
Reclassification out of AOCI (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Gains/(losses) on foreign currency translation adjustments | ||||
Liquidation of foreign subsidiary | $ 0.1 | |||
Total gains/(losses) on currency translation adjustments | 0.1 | |||
Cash Flow Hedges, net of tax: | ||||
Losses on cash flow hedges - Pre Tax | $ (2.6) | $ (0.4) | ||
Losses on cash flow hedges - Tax | 0.9 | 0.1 | ||
Losses on cash flow hedges - Net of Tax | (1.7) | (0.3) | ||
Gains/(losses) on available for sale securities: | ||||
Gains on available for sale securities | $ 0.2 | 0.2 | ||
Pension and Other Post-Retirement Benefits, net of tax: | ||||
Amortization of actuarial losses and prior service costs included in net income - Pre Tax | (2.3) | (3.1) | (4.9) | (6.9) |
Amortization of actuarial losses and prior service costs included in net income - Tax | 0.9 | 1.1 | 1.9 | 2.6 |
Amortization of actuarial losses and prior service costs included in net income - Net of Tax | (1.4) | (2) | (3) | (4.3) |
Income Loss Attributable to Reclassification Out Of AOCI Net Of Tax | (3.1) | (1.8) | (3.3) | (4) |
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 | (1.5) | (2) | (3.1) | (4.3) |
Other Nonoperating Income (Expense) [Member] | ||||
Gains/(losses) on foreign currency translation adjustments | ||||
Liquidation of foreign subsidiary | 0.1 | |||
Gains/(losses) on available for sale securities: | ||||
Gains on available for sale securities | 0.2 | 0.2 | ||
SG&A 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 | (0.8) | $ (1.1) | (1.8) | $ (2.6) |
Cross-Currency Swap [Member] | Other Nonoperating Income (Expense) [Member] | ||||
Cash Flow Hedges, net of tax: | ||||
Losses on cash flow hedges - Pre Tax | $ (2.6) | $ (0.4) |
Changes in Components of Accumu
Changes in Components of Accumulated Other Comprehensive Income (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Beginning Balance | $ (301.5) | $ (322.4) | $ (339.5) | $ (235.2) |
Net unrealized gain (losses) on cash flow - Net of Tax | (2.9) | (1.7) | ||
Reclassification gain (losses) on cash flow - Net of Tax | 1.7 | 0.3 | ||
Gains/(Losses) on cash flow hedges - Net of Tax | (1.2) | (1.4) | ||
Pension and other retirement benefit plans before reclassification - Net of Tax | 3.3 | 6.7 | 3.3 | 6.7 |
Reclassification adjustment from AOCI, Pension and Other Postretirement Benefit Plans - Net of Tax | 1.4 | 2 | 3 | 4.3 |
Pension and other retirement benefit - Net of Tax | 4.7 | 8.7 | 6.3 | 11 |
Foreign currency translation adjustments before reclassification - Net of Tax | (19.4) | 32.1 | 16.6 | (58.4) |
Amount reclassified from AOCI, Foreign Currency Translation Adjustment - Net of Tax | (0.1) | |||
Foreign currency translation adjustments - Net of Tax | (19.4) | 32.1 | 16.6 | (58.5) |
Available for sale securities before reclassification - Net of Tax | 0.6 | 1 | 1.2 | 2.1 |
Amount reclassified from AOCI, Available fo Sale Securities - Net of Tax | (0.2) | (0.2) | ||
Gains on Available for sale securities - Net of Tax | 0.6 | 0.8 | 1.2 | 1.9 |
Other comprehensive income/(loss) before reclassifications | (18.4) | 39.8 | 19.4 | (49.6) |
Amounts reclassified from AOCI | 3.1 | 1.8 | 3.3 | 4 |
Total other comprehensive income (loss) - Net of Tax | (15.3) | 41.6 | 22.7 | (45.6) |
Ending Balance | (316.8) | (280.8) | (316.8) | (280.8) |
Gains Losses On Net Investment Hedges [Member] | ||||
Beginning Balance | (1.3) | (1.1) | ||
Ending Balance | (2.5) | (2.5) | ||
Pension and Other Retirement Benefits [Member] | ||||
Beginning Balance | (84.1) | (103.1) | (85.7) | (105.4) |
Ending Balance | (79.4) | (94.4) | (79.4) | (94.4) |
Foreign Currency Translation Adjustments [Member] | ||||
Beginning Balance | (220) | (221.3) | (256) | (130.7) |
Ending Balance | (239.4) | (189.2) | (239.4) | (189.2) |
Gains on Available for Sale Securities [Member] | ||||
Beginning Balance | 3.9 | 2 | 3.3 | 0.9 |
Ending Balance | $ 4.5 | $ 2.8 | $ 4.5 | $ 2.8 |
PENSION AND OTHER POST-RETIREME
PENSION AND OTHER POST-RETIREMENT BENEFITS | 6 Months Ended |
Jun. 30, 2016 | |
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. plans 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 components of net periodic benefit expense r elated to the Retirement Plans are as follows: Three Months Ended June 30, Pension Plans Other Retirement Plans 2016 2015 2016 2015 Components of net periodic expense Service cost $ 4.9 $ 5.0 $ 0.6 $ 0.6 Interest cost 4.5 4.2 0.2 0.3 Expected return on plan assets (4.2) (3.6) - - Amortization of net actuarial loss from earlier periods 2.3 2.8 - 0.1 Amortization of net prior service costs from earlier periods - 0.2 (0.1) - Net periodic expense $ 7.5 $ 8.6 $ 0.7 $ 1.0 Six Months Ended June 30, Pension Plans Other Retirement Plans 2016 2015 2016 2015 Components of net periodic expense Service cost $ 10.1 $ 10.8 $ 1.1 $ 1.1 Interest cost 9.1 8.5 0.5 0.5 Expected return on plan assets (8.5) (7.2) - - Amortization of net actuarial loss from earlier periods 4.9 6.2 - 0.2 Amortization of net prior service costs from earlier periods - 0.4 (0.1) - Net periodic expense $ 15.6 $ 18.7 $ 1.5 $ 1.8 The Company made a contribution of $ 22.4 million to its funded pension plan well as payments of $ 1.9 million related to its unfunded U.S. DBPPs and $ 0.3 million to its U.S. other r etirement plans during the six months ended June 30 , 2016. The Company anticipates making payments of $ 3 .2 million related to its unfunded U.S. DBPPs and $ 0.5 million to its U.S. other retirement plans, respectively, during the remainder of 2016. |
PENSION AND OTHER POST-RETIRE64
PENSION AND OTHER POST-RETIREMENT BENEFITS (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Components of Net Periodic Benefit Expense Related to Post-Retirement Plans | Three Months Ended June 30, Pension Plans Other Retirement Plans 2016 2015 2016 2015 Components of net periodic expense Service cost $ 4.9 $ 5.0 $ 0.6 $ 0.6 Interest cost 4.5 4.2 0.2 0.3 Expected return on plan assets (4.2) (3.6) - - Amortization of net actuarial loss from earlier periods 2.3 2.8 - 0.1 Amortization of net prior service costs from earlier periods - 0.2 (0.1) - Net periodic expense $ 7.5 $ 8.6 $ 0.7 $ 1.0 Six Months Ended June 30, Pension Plans Other Retirement Plans 2016 2015 2016 2015 Components of net periodic expense Service cost $ 10.1 $ 10.8 $ 1.1 $ 1.1 Interest cost 9.1 8.5 0.5 0.5 Expected return on plan assets (8.5) (7.2) - - Amortization of net actuarial loss from earlier periods 4.9 6.2 - 0.2 Amortization of net prior service costs from earlier periods - 0.4 (0.1) - Net periodic expense $ 15.6 $ 18.7 $ 1.5 $ 1.8 |
Components of Net Periodic Bene
Components of Net Periodic Benefit Expense Related to Post-Retirement Plans (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Pension Plans Defined Benefit [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | $ 4.9 | $ 5 | $ 10.1 | $ 10.8 |
Interest cost | 4.5 | 4.2 | 9.1 | 8.5 |
Expected return on plan assets | (4.2) | (3.6) | (8.5) | (7.2) |
Amortization of net actuarial loss from earlier periods | 2.3 | 2.8 | 4.9 | 6.2 |
Amortization of net prior service costs from earlier periods | 0.2 | 0.4 | ||
Net periodic expense | 7.5 | 8.6 | 15.6 | 18.7 |
Other Postretirement Benefit Plans Defined Benefit [Member] | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 0.6 | 0.6 | 1.1 | 1.1 |
Interest cost | 0.2 | 0.3 | 0.5 | 0.5 |
Expected return on plan assets | ||||
Amortization of net actuarial loss from earlier periods | 0.1 | 0.2 | ||
Amortization of net prior service costs from earlier periods | (0.1) | (0.1) | ||
Net periodic expense | $ 0.7 | $ 1 | $ 1.5 | $ 1.8 |
Pension and Other Post-Retire66
Pension and Other Post-Retirement Benefits - Additional Information (Detail) $ in Millions | 6 Months Ended |
Jun. 30, 2016USD ($) | |
Funded Pension Plans [Member] | |
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block [Line Items] | |
Defined benefit payment amount | $ 22.4 |
Unfunded Pension Plans [Member] | |
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block [Line Items] | |
Defined benefit payment amount | 1.9 |
Anticipated future payments | 3.2 |
Other Postretirement Benefit Plans Defined Benefit [Member] | |
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block [Line Items] | |
Defined benefit payment amount | 0.3 |
Anticipated future payments | $ 0.5 |
INDEBTEDNESS
INDEBTEDNESS | 6 Months Ended |
Jun. 30, 2016 | |
INDEBTEDNESS | NOTE 13. INDEBTEDNESS The following table summarizes total indebtedness: June 30, 2016 Principal Amount Fair Value of Interest Rate Swap (1) Unamortized (Discount) Premium Unamortized Debt Issuance Costs (2) Carrying Value Notes Payable: 6.06% Series 2007-1 Notes due 2017 $ 300.0 $ - $ - $ (0.1) $ 299.9 5.50% 2010 Senior Notes, due 2020 500.0 25.5 (1.5) (1.8) 522.2 4.50% 2012 Senior Notes, due 2022 500.0 - (2.6) (2.3) 495.1 4.875% 2013 Senior Notes, due 2024 500.0 - (2.2) (2.9) 494.9 2.75% 2014 Senior Notes (5-Year), due 2019 450.0 12.0 (0.5) (2.1) 459.4 5.25% 2014 Senior Notes (30-Year), due 2044 600.0 - 3.3 (6.0) 597.3 1.75% 2015 Senior Notes, due 2027 555.5 - - (3.9) 551.6 Total long-term debt $ 3,405.5 $ 37.5 $ (3.5) $ (19.1) $ 3,420.4 December 31, 2015 Principal Amount Fair Value of Interest Rate Swap (1) Unamortized (Discount) Premium Unamortized Debt Issuance Costs (2) Carrying Value Notes Payable: 6.06% Series 2007-1 Notes due 2017 $ 300.0 $ - $ - $ (0.2) $ 299.8 5.50% 2010 Senior Notes, due 2020 500.0 9.4 (1.6) (2.0) 505.8 4.50% 2012 Senior Notes, due 2022 500.0 - (2.8) (2.5) 494.7 4.875% 2013 Senior Notes, due 2024 500.0 - (2.3) (3.1) 494.6 2.75% 2014 Senior Notes (5-Year), due 2019 450.0 2.3 (0.5) (2.4) 449.4 5.25% 2014 Senior Notes (30-Year), due 2044 600.0 - 3.4 (6.2) 597.2 1.75% 2015 Senior Notes, due 2027 543.1 - - (4.0) 539.1 Total long-term debt $ 3,393.1 $ 11.7 $ (3.8) $ (20.4) $ 3,380.6 (1) 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. (2) Pursuant to ASU No. 2015-03, unamortized debt issuance costs are presented as a reduction to the carrying value of the notes payable. See Note 1 for additional discussion. At June 30, 2016 , 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 June 30, 2016 , there were no such cross defaults. Interest expense, net The following table summarizes the components of interest as presented in the consolidated stat ements of operations: Three Months Ended Six Months Ended June 30, June 30, 2016 2015 2016 2015 Income $ 2.8 $ 2.3 $ 5.7 $ 4.2 Expense on borrowings (35.4) (30.7) (70.0) (59.0) Expense on UTPs and other tax related liabilities (1.7) (3.5) (4.5) (6.7) Capitalized - - 0.4 0.3 Total $ (34.3) $ (31.9) $ (68.4) $ (61.2) The following table shows the cash paid for interest: Six Months Ended June 30, 2016 2015 Interest paid $ 73.9 $ 53.3 The fair value and carrying value of the Company’s long-term debt as of June 30, 2016 and December 31, 2015 are as follows: June 30, 2016 December 31, 2015 Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value Series 2007-1 Notes $ 299.9 $ 316.6 $ 299.8 $ 320.6 2010 Senior Notes 522.2 566.9 505.8 551.2 2012 Senior Notes 495.1 558.7 494.7 530.0 2013 Senior Notes 494.9 569.9 494.6 533.8 2014 Senior Notes (5-Year) 459.4 463.8 449.4 454.3 2014 Senior Notes (30-Year) 597.3 734.0 597.2 617.7 2015 Senior Notes 551.6 577.6 539.1 520.2 Total $ 3,420.4 $ 3,787.5 $ 3,380.6 $ 3,527.8 The fair value of the Company’s long-term debt is estimated based on quoted market prices for similar instruments . 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) | 6 Months Ended |
Jun. 30, 2016 | |
Summary of Total Indebtedness | June 30, 2016 Principal Amount Fair Value of Interest Rate Swap (1) Unamortized (Discount) Premium Unamortized Debt Issuance Costs (2) Carrying Value Notes Payable: 6.06% Series 2007-1 Notes due 2017 $ 300.0 $ - $ - $ (0.1) $ 299.9 5.50% 2010 Senior Notes, due 2020 500.0 25.5 (1.5) (1.8) 522.2 4.50% 2012 Senior Notes, due 2022 500.0 - (2.6) (2.3) 495.1 4.875% 2013 Senior Notes, due 2024 500.0 - (2.2) (2.9) 494.9 2.75% 2014 Senior Notes (5-Year), due 2019 450.0 12.0 (0.5) (2.1) 459.4 5.25% 2014 Senior Notes (30-Year), due 2044 600.0 - 3.3 (6.0) 597.3 1.75% 2015 Senior Notes, due 2027 555.5 - - (3.9) 551.6 Total long-term debt $ 3,405.5 $ 37.5 $ (3.5) $ (19.1) $ 3,420.4 December 31, 2015 Principal Amount Fair Value of Interest Rate Swap (1) Unamortized (Discount) Premium Unamortized Debt Issuance Costs (2) Carrying Value Notes Payable: 6.06% Series 2007-1 Notes due 2017 $ 300.0 $ - $ - $ (0.2) $ 299.8 5.50% 2010 Senior Notes, due 2020 500.0 9.4 (1.6) (2.0) 505.8 4.50% 2012 Senior Notes, due 2022 500.0 - (2.8) (2.5) 494.7 4.875% 2013 Senior Notes, due 2024 500.0 - (2.3) (3.1) 494.6 2.75% 2014 Senior Notes (5-Year), due 2019 450.0 2.3 (0.5) (2.4) 449.4 5.25% 2014 Senior Notes (30-Year), due 2044 600.0 - 3.4 (6.2) 597.2 1.75% 2015 Senior Notes, due 2027 543.1 - - (4.0) 539.1 Total long-term debt $ 3,393.1 $ 11.7 $ (3.8) $ (20.4) $ 3,380.6 (1) 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. (2) Pursuant to ASU No. 2015-03, unamortized debt issuance costs are presented as a reduction to the carrying value of the notes payable. See Note 1 for additional discussion. |
Summary of Components of Interest as Presented in Consolidated Statements of Operations | Three Months Ended Six Months Ended June 30, June 30, 2016 2015 2016 2015 Income $ 2.8 $ 2.3 $ 5.7 $ 4.2 Expense on borrowings (35.4) (30.7) (70.0) (59.0) Expense on UTPs and other tax related liabilities (1.7) (3.5) (4.5) (6.7) Capitalized - - 0.4 0.3 Total $ (34.3) $ (31.9) $ (68.4) $ (61.2) |
Interest Paid | Six Months Ended June 30, 2016 2015 Interest paid $ 73.9 $ 53.3 |
Fair Value and Carrying Value of Long-Term Debt | June 30, 2016 December 31, 2015 Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value Series 2007-1 Notes $ 299.9 $ 316.6 $ 299.8 $ 320.6 2010 Senior Notes 522.2 566.9 505.8 551.2 2012 Senior Notes 495.1 558.7 494.7 530.0 2013 Senior Notes 494.9 569.9 494.6 533.8 2014 Senior Notes (5-Year) 459.4 463.8 449.4 454.3 2014 Senior Notes (30-Year) 597.3 734.0 597.2 617.7 2015 Senior Notes 551.6 577.6 539.1 520.2 Total $ 3,420.4 $ 3,787.5 $ 3,380.6 $ 3,527.8 |
Summary of Total Indebtedness (
Summary of Total Indebtedness (Detail) - USD ($) $ in Millions | Jun. 30, 2016 | Dec. 31, 2015 |
Debt Instrument [Line Items] | ||
Principal Amount | $ 3,405.5 | $ 3,393.1 |
Fair Value of Interest Rate Swap | 37.5 | 11.7 |
Unamortized (Discount) Premium | (3.5) | (3.8) |
Unamortized Debt Issuance Costs | (19.1) | (20.4) |
Carrying Amount | 3,420.4 | 3,380.6 |
Series 2007-1 Notes [Member] | ||
Debt Instrument [Line Items] | ||
Principal Amount | 300 | 300 |
Unamortized Debt Issuance Costs | (0.1) | (0.2) |
Carrying Amount | 299.9 | 299.8 |
2010 Senior Notes [Member] | ||
Debt Instrument [Line Items] | ||
Principal Amount | 500 | 500 |
Fair Value of Interest Rate Swap | 25.5 | 9.4 |
Unamortized (Discount) Premium | (1.5) | (1.6) |
Unamortized Debt Issuance Costs | (1.8) | (2) |
Carrying Amount | 522.2 | 505.8 |
2012 Senior Notes [Member] | ||
Debt Instrument [Line Items] | ||
Principal Amount | 500 | 500 |
Unamortized (Discount) Premium | (2.6) | (2.8) |
Unamortized Debt Issuance Costs | (2.3) | (2.5) |
Carrying Amount | 495.1 | 494.7 |
2013 Senior Notes [Member] | ||
Debt Instrument [Line Items] | ||
Principal Amount | 500 | 500 |
Unamortized (Discount) Premium | (2.2) | (2.3) |
Unamortized Debt Issuance Costs | (2.9) | (3.1) |
Carrying Amount | 494.9 | 494.6 |
2014 Senior Notes (5-Year) [Member] | ||
Debt Instrument [Line Items] | ||
Principal Amount | 450 | 450 |
Fair Value of Interest Rate Swap | 12 | 2.3 |
Unamortized (Discount) Premium | (0.5) | (0.5) |
Unamortized Debt Issuance Costs | (2.1) | (2.4) |
Carrying Amount | 459.4 | 449.4 |
2014 Senior Notes (30-Year) [Member] | ||
Debt Instrument [Line Items] | ||
Principal Amount | 600 | 600 |
Fair Value of Interest Rate Swap | ||
Unamortized (Discount) Premium | 3.3 | 3.4 |
Unamortized Debt Issuance Costs | (6) | (6.2) |
Carrying Amount | 597.3 | 597.2 |
2015 Senior Notes [Member] | ||
Debt Instrument [Line Items] | ||
Principal Amount | 555.5 | 543.1 |
Unamortized Debt Issuance Costs | (3.9) | (4) |
Carrying Amount | $ 551.6 | $ 539.1 |
Summary of Total Indebtedness70
Summary of Total Indebtedness (Parenthetical) (Detail) | Jun. 30, 2016 | Dec. 31, 2015 |
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] | ||
Notes Payable, interest rate | 5.50% | 5.50% |
2012 Senior Notes [Member] | ||
Debt Instrument [Line Items] | ||
Notes Payable, interest rate | 4.50% | 4.50% |
2013 Senior Notes [Member] | ||
Debt Instrument [Line Items] | ||
Notes Payable, interest rate | 4.875% | 4.875% |
2014 Senior Notes (5-Year) [Member] | ||
Debt Instrument [Line Items] | ||
Notes Payable, interest rate | 2.75% | 2.75% |
2014 Senior Notes (30-Year) [Member] | ||
Debt Instrument [Line Items] | ||
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 | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Debt Instrument [Line Items] | ||||
Income | $ 2.8 | $ 2.3 | $ 5.7 | $ 4.2 |
Expense on borrowings | (35.4) | (30.7) | (70) | (59) |
Income (expense) on UTPs and other tax related liabilities | (1.7) | (3.5) | (4.5) | (6.7) |
Capitalized | 0.4 | 0.3 | ||
Total | $ (34.3) | $ (31.9) | $ (68.4) | $ (61.2) |
Interest Paid (Detail)
Interest Paid (Detail) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Debt Instrument [Line Items] | ||
Interest paid | $ 73.9 | $ 53.3 |
Fair Value and Carrying Value o
Fair Value and Carrying Value of Long-Term Debt (Detail) - USD ($) $ in Millions | Jun. 30, 2016 | Dec. 31, 2015 |
Debt Instrument [Line Items] | ||
Carrying Amount | $ 3,420.4 | $ 3,380.6 |
Estimated Fair Value | 3,787.5 | 3,527.8 |
Series 2007-1 Notes [Member] | ||
Debt Instrument [Line Items] | ||
Carrying Amount | 299.9 | 299.8 |
Estimated Fair Value | 316.6 | 320.6 |
2010 Senior Notes [Member] | ||
Debt Instrument [Line Items] | ||
Carrying Amount | 522.2 | 505.8 |
Estimated Fair Value | 566.9 | 551.2 |
2012 Senior Notes [Member] | ||
Debt Instrument [Line Items] | ||
Carrying Amount | 495.1 | 494.7 |
Estimated Fair Value | 558.7 | 530 |
2013 Senior Notes [Member] | ||
Debt Instrument [Line Items] | ||
Carrying Amount | 494.9 | 494.6 |
Estimated Fair Value | 569.9 | 533.8 |
2014 Senior Notes (5-Year) [Member] | ||
Debt Instrument [Line Items] | ||
Carrying Amount | 459.4 | 449.4 |
Estimated Fair Value | 463.8 | 454.3 |
2014 Senior Notes (30-Year) [Member] | ||
Debt Instrument [Line Items] | ||
Carrying Amount | 597.3 | 597.2 |
Estimated Fair Value | 734 | 617.7 |
2015 Senior Notes [Member] | ||
Debt Instrument [Line Items] | ||
Carrying Amount | 551.6 | 539.1 |
Estimated Fair Value | $ 577.6 | $ 520.2 |
CONTINGENCIES
CONTINGENCIES | 6 Months Ended |
Jun. 30, 2016 | |
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 governmen tal 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. Mo ody’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 add ition, 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 incr eased following the events in the U.S. subprime residential mortgage sector and global credit markets more broadly over the last several years. For claims, litigation and proceedings and governmental investigations and inquiries not related to income ta xes, where it is both probable that a liability has been 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 reasonabl e estimate of the loss is within a range of amounts, the 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 th e 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 accor dingly. In view of the inherent difficulty of predicting the outcome of litigation, regulatory, governmental investigations and inquiries, enforcement and similar matters and contingencies, particularly where the claimants seek large or indeterminate damag es 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 cann ot predict the impact (if any) that any such matters may 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, managem ent will continue to review the latest information available 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 such matters , 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. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 6 Months Ended |
Jun. 30, 2016 | |
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. The MIS segment consists of five LOBs. The C FG, SFG, FIG and PPIF 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 financial instruments 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 activities of institutional participants in global financial markets. The MA segment consists of three LOBs - RD&A, ERS and PS. 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 rate 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 exclusively 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. Accordingly, a reportab le segment’s share of these costs will increase as its proportion of revenue relative to Moody’s total revenue increases. Overhead expenses include costs such as rent 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 segment, 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 f inancial metric utilized by the Company’s chief operating decision maker to assess the profitability of each reportable segment. Three Months Ended June 30, 2016 2015 MIS MA Eliminations Consolidated MIS MA Eliminations Consolidated Revenue $ 650.2 $ 306.1 $ (27.4) $ 928.9 $ 662.9 $ 282.0 $ (26.8) $ 918.1 Operating, SG&A 281.3 233.6 (27.4) 487.5 287.0 210.7 (26.8) 470.9 Adjusted Operating Income 368.9 72.5 - 441.4 375.9 71.3 - 447.2 Less: Depreciation and amortization 18.2 13.0 - 31.2 15.8 12.1 - 27.9 Operating income $ 350.7 $ 59.5 $ - $ 410.2 $ 360.1 $ 59.2 $ - $ 419.3 Six Months Ended June 30, 2016 2015 MIS MA Eliminations Consolidated MIS MA Eliminations Consolidated Revenue $ 1,199.3 $ 599.9 $ (54.2) $ 1,745.0 $ 1,287.5 $ 548.6 $ (52.4) $ 1,783.7 Operating, SG&A 559.9 463.9 (54.2) 969.6 568.3 420.7 (52.4) 936.6 Adjusted Operating Income 639.4 136.0 - 775.4 719.2 127.9 - 847.1 Less: Depreciation and amortization 35.7 25.4 - 61.1 31.8 24.7 - 56.5 Operating income $ 603.7 $ 110.6 $ - $ 714.3 $ 687.4 $ 103.2 $ - $ 790.6 MIS and MA Revenue by Line of Business The table below presents revenue by LOB within each reportable segment: Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 MIS: Corporate finance (CFG) $ 304.8 $ 319.6 $ 545.1 $ 618.3 Structured finance (SFG) 111.5 121.2 202.1 222.5 Financial institutions (FIG) 89.7 90.4 184.6 184.2 Public, project and infrastructure finance (PPIF) 112.3 99.9 203.8 200.6 Total ratings revenue 618.3 631.1 1,135.6 1,225.6 MIS Other 7.3 8.1 15.1 15.9 Total external revenue 625.6 639.2 1,150.7 1,241.5 Intersegment royalty 24.6 23.7 48.6 46.0 Total 650.2 662.9 1,199.3 1,287.5 MA: Research, data and analytics (RD&A) 168.3 157.5 333.2 307.1 Enterprise risk solutions (ERS) 97.5 83.2 187.0 160.3 Professional services (PS) 37.5 38.2 74.1 74.8 Total external revenue 303.3 278.9 594.3 542.2 Intersegment revenue 2.8 3.1 5.6 6.4 Total 306.1 282.0 599.9 548.6 Eliminations (27.4) (26.8) (54.2) (52.4) Total MCO $ 928.9 $ 918.1 $ 1,745.0 $ 1,783.7 Consolidated Revenue Information by Geographic Area: Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 United States $ 545.9 $ 545.9 $ 1,025.9 $ 1,045.7 International: EMEA 229.3 217.4 439.5 445.0 Asia-Pacific 97.5 99.2 179.5 185.3 Americas 56.2 55.6 100.1 107.7 Total International 383.0 372.2 719.1 738.0 Total $ 928.9 $ 918.1 $ 1,745.0 $ 1,783.7 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Financial Information by Segment | Three Months Ended June 30, 2016 2015 MIS MA Eliminations Consolidated MIS MA Eliminations Consolidated Revenue $ 650.2 $ 306.1 $ (27.4) $ 928.9 $ 662.9 $ 282.0 $ (26.8) $ 918.1 Operating, SG&A 281.3 233.6 (27.4) 487.5 287.0 210.7 (26.8) 470.9 Adjusted Operating Income 368.9 72.5 - 441.4 375.9 71.3 - 447.2 Less: Depreciation and amortization 18.2 13.0 - 31.2 15.8 12.1 - 27.9 Operating income $ 350.7 $ 59.5 $ - $ 410.2 $ 360.1 $ 59.2 $ - $ 419.3 Six Months Ended June 30, 2016 2015 MIS MA Eliminations Consolidated MIS MA Eliminations Consolidated Revenue $ 1,199.3 $ 599.9 $ (54.2) $ 1,745.0 $ 1,287.5 $ 548.6 $ (52.4) $ 1,783.7 Operating, SG&A 559.9 463.9 (54.2) 969.6 568.3 420.7 (52.4) 936.6 Adjusted Operating Income 639.4 136.0 - 775.4 719.2 127.9 - 847.1 Less: Depreciation and amortization 35.7 25.4 - 61.1 31.8 24.7 - 56.5 Operating income $ 603.7 $ 110.6 $ - $ 714.3 $ 687.4 $ 103.2 $ - $ 790.6 |
Revenue by Line of Business within Each Reportable Segment | Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 MIS: Corporate finance (CFG) $ 304.8 $ 319.6 $ 545.1 $ 618.3 Structured finance (SFG) 111.5 121.2 202.1 222.5 Financial institutions (FIG) 89.7 90.4 184.6 184.2 Public, project and infrastructure finance (PPIF) 112.3 99.9 203.8 200.6 Total ratings revenue 618.3 631.1 1,135.6 1,225.6 MIS Other 7.3 8.1 15.1 15.9 Total external revenue 625.6 639.2 1,150.7 1,241.5 Intersegment royalty 24.6 23.7 48.6 46.0 Total 650.2 662.9 1,199.3 1,287.5 MA: Research, data and analytics (RD&A) 168.3 157.5 333.2 307.1 Enterprise risk solutions (ERS) 97.5 83.2 187.0 160.3 Professional services (PS) 37.5 38.2 74.1 74.8 Total external revenue 303.3 278.9 594.3 542.2 Intersegment revenue 2.8 3.1 5.6 6.4 Total 306.1 282.0 599.9 548.6 Eliminations (27.4) (26.8) (54.2) (52.4) Total MCO $ 928.9 $ 918.1 $ 1,745.0 $ 1,783.7 |
Consolidated Revenue Information by Geographic Area | Consolidated Revenue Information by Geographic Area: Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 United States $ 545.9 $ 545.9 $ 1,025.9 $ 1,045.7 International: EMEA 229.3 217.4 439.5 445.0 Asia-Pacific 97.5 99.2 179.5 185.3 Americas 56.2 55.6 100.1 107.7 Total International 383.0 372.2 719.1 738.0 Total $ 928.9 $ 918.1 $ 1,745.0 $ 1,783.7 |
Financial Information by Segmen
Financial Information by Segment (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Segment Reporting Information [Line Items] | ||||
Revenues | $ 928.9 | $ 918.1 | $ 1,745 | $ 1,783.7 |
Operating, SG&A | 487.5 | 470.9 | 969.6 | 936.6 |
Adjusted Operating Income | 441.4 | 447.2 | 775.4 | 847.1 |
Depreciation and amortization | 31.2 | 27.9 | 61.1 | 56.5 |
Operating Income | 410.2 | 419.3 | 714.3 | 790.6 |
Moodys Investors Service [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 650.2 | 662.9 | 1,199.3 | 1,287.5 |
Operating, SG&A | 281.3 | 287 | 559.9 | 568.3 |
Adjusted Operating Income | 368.9 | 375.9 | 639.4 | 719.2 |
Depreciation and amortization | 18.2 | 15.8 | 35.7 | 31.8 |
Operating Income | 350.7 | 360.1 | 603.7 | 687.4 |
Moodys Analytics [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 306.1 | 282 | 599.9 | 548.6 |
Operating, SG&A | 233.6 | 210.7 | 463.9 | 420.7 |
Adjusted Operating Income | 72.5 | 71.3 | 136 | 127.9 |
Depreciation and amortization | 13 | 12.1 | 25.4 | 24.7 |
Operating Income | 59.5 | 59.2 | 110.6 | 103.2 |
Intersegment Elimination [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | (27.4) | (26.8) | (54.2) | (52.4) |
Operating, SG&A | $ (27.4) | $ (26.8) | $ (54.2) | $ (52.4) |
Revenue by Line of Business wit
Revenue by Line of Business within Each Reportable Segment (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Segment Reporting Information [Line Items] | ||||
Revenues | $ 928.9 | $ 918.1 | $ 1,745 | $ 1,783.7 |
Moodys Investors Service [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 650.2 | 662.9 | 1,199.3 | 1,287.5 |
Moodys Investors Service [Member] | Corporate Finance [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 304.8 | 319.6 | 545.1 | 618.3 |
Moodys Investors Service [Member] | Structured Finance [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 111.5 | 121.2 | 202.1 | 222.5 |
Moodys Investors Service [Member] | Financial Institutions [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 89.7 | 90.4 | 184.6 | 184.2 |
Moodys Investors Service [Member] | Public Project And Infrastructure Finance [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 112.3 | 99.9 | 203.8 | 200.6 |
Moodys Investors Service [Member] | Rating Revenue [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 618.3 | 631.1 | 1,135.6 | 1,225.6 |
Moodys Investors Service [Member] | MIS Other [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 7.3 | 8.1 | 15.1 | 15.9 |
Moodys Investors Service [Member] | External Revenues [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 625.6 | 639.2 | 1,150.7 | 1,241.5 |
Moodys Investors Service [Member] | Intersegment Royality [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 24.6 | 23.7 | (48.6) | 46 |
Moodys Analytics [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 306.1 | 282 | 599.9 | 548.6 |
Moodys Analytics [Member] | Research Data And Analytics [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 168.3 | 157.5 | 333.2 | 307.1 |
Moodys Analytics [Member] | Enterprise Risk Solutions [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 97.5 | 83.2 | 187 | 307.1 |
Moodys Analytics [Member] | Professional Services [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 37.5 | 38.2 | 74.1 | 74.8 |
Moodys Analytics [Member] | External Revenues [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 303.3 | 278.9 | 594.3 | 542.2 |
Moodys Analytics [Member] | Intersegment Royality [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 2.8 | 3.1 | 5.6 | 6.4 |
Intersegment Elimination [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | $ (27.4) | $ (26.8) | $ (54.2) | $ (52.4) |
Consolidated Revenue Informatio
Consolidated Revenue Information by Geographic Area (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Segment Reporting Information [Line Items] | ||||
Revenues | $ 928.9 | $ 918.1 | $ 1,745 | $ 1,783.7 |
U S | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 545.9 | 545.9 | 1,025.9 | 1,045.7 |
International Regions [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 383 | 372.2 | 719.1 | 738 |
International Regions [Member] | Europe Middle East And Africa [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 229.3 | 217.4 | 439.5 | 445 |
International Regions [Member] | Asia Pacific [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 97.5 | 99.2 | 179.5 | 185.3 |
International Regions [Member] | Americas [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | $ 56.2 | $ 55.6 | $ 100.1 | $ 107.7 |
Segment Information - Additiona
Segment Information - Additional Information (Detail) | 6 Months Ended |
Jun. 30, 2016 | |
Segment Reporting Information [Line Items] | |
Operating Segments | 3 |
RECENTLY ISSUED ACCOUNTING STAN
RECENTLY ISSUED ACCOUNTING STANDARDS | 6 Months Ended |
Jun. 30, 2016 | |
RECENTLY ISSUED ACCOUNTING STANDARDS | NOTE 16. 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. In August 2015, the FASB issued ASU No. 2015-14 “Revenue from Contracts with Customers (Topic 606), Deferral of the Effective Date” which defers the effective date of the ASU for annual and interim reporting periods beginning after December 15, 2017, with early adoption permitted up to the original effective date of December 15, 2016. In addition, in the first and second quarter of 2016, the FASB issu ed additional updates clarifying the implementation guidance for the new revenue recognition standard. The Company intends to adopt the new revenue guidance as of January 1, 2018 and is currently evaluating the application of a transition method and the i mpact that adoption of these updates will have on its consolidated financial statements. Currently, the Company believes this ASU will have an impact on: i) the capitalization of certain contract implementation costs for its ERS business which will be expe nsed as incurred under the new standard; ii) the accounting for certain software subscription revenue in MA whereby the license rights within the arrangement would be recognized at the inception of the contract based on estimated stand-alone selling price with the remainder recognized over the subscription period; iii) the accounting for certain ERS revenue arrangements where VSOE is not available should result in the acceleration of revenue recognition and iv) the accounting for contract acquisition costs which will be expensed as incurred under the new standard. In January 2016, the FASB issued ASU No. 2016-01 “Financial Instruments – Recognition and Measurement of Financial Assets and Financial Liabilities (Subtopic 825-10).” The amendments in this ASU u pdate various aspects of recognition, measurement, presentation and disclosures relating to financial instruments. This ASU is effective for fiscal years beginning after December 15, 2017. The Company is currently evaluating the impact of this ASU on the C ompany’s financial statements. In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)” requiring lessees to recognize a right-of-use asset and lease liability for all leases with terms of more than 12 months. Recognition, measurement and p resentation of expenses and cash flows will depend on classification as either a finance or operating lease. This ASU is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. This standard must be adopted using a modi fied retrospective approach whereby leases will be presented in accordance with the new standard as of the earliest period presented. The Company is currently evaluating the impact of this ASU on the Company’s financial statements. In March 2016, the FASB issued ASU No. 2016-07, “Investments – Equity Method and Joint Ventures (Topic 323), Simplifying the Transition to the Equity Method of Accounting.” This ASU amends the accounting for an investment not previously accounted for under the equity method that subsequently qualifies for the equity method of accounting. It requires a company to add the cost of the additional interest acquired to its current basis and the commencement of the equity method of accounting when the criteria are met. In addition, the unrealized gains or losses in accumulated other comprehensive related to an available for sale equity security should be recognized through earnings if the investment subsequently qualifies for the equity method of accounting. The amendments of this ASU ar e effective for fiscal years beginning after December 15, 2016, with early adoption permitted. The adoption of this ASU will only impact the Company if an investment not previously accounted for under the equity method qualifies for accounting under the eq uity method. In March 2016, the FASB issued ASU No. 2016-09, “Improvements to Employee Share-Based Payment Accounting”. This ASU changes various aspects related to the accounting for share-based payments including: i) accounting for Excess Tax Benefits an d shortfalls; ii) the accounting for forfeitures; iii) restrictions on the value of shares retained by an entity to fund the employee’s portion of payroll taxes; and iv) classification of Excess Tax Benefits in the statement of cash flows. This ASU is effe ctive for fiscal years beginning after December 15, 2016 and early adoption is permitted if all amendments are adopted in the same period. The Company is evaluating the impact of this ASU on its financial statements but currently expects that the most sign ificant effect of this ASU will be the impact on its reported Net Income and Diluted EPS as Excess Tax Benefits and shortfalls will be recorded to the provision for income taxes under this ASU as compared to a charge to capital surplus under current GAAP. In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments – Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments.” The amendments in this ASU require the use of an “expected credit loss” impairment model for most fi nancial assets reported at amortized cost which will require entities to estimate expected credit losses over the lifetime of the instrument. This may result in the earlier recognition of allowances for losses. For available-for-sale debt securities with u nrealized losses, an allowance for credit losses will be recognized as a contra account to the amortized cost carrying value of the asset rather than a direct reduction to the carrying value, with changes in the allowance impacting earnings. This ASU is ef fective for annual and interim reporting periods beginning after December 15, 2019, with early adoption permitted in annual and interim reporting periods beginning after December 15, 2018. Entities will apply the standard’s provisions as a cumulative-effec t adjustment to retained earnings as of the beginning of the first effective reporting period. The Company is currently evaluating the impact of this ASU on its financial statements. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2016 | |
SUBSEQUENT EVENTS | NOTE 17. SUBSEQUENT EVENT On July 11, 2016 , the Board approved the declaration of a quarterly dividend of $0.37 per share of Moody’s common stock, payable on September 12, 2016 to shareholders of record at the close of business on August 22, 2016 . |
Subsequent Events - Additional
Subsequent Events - Additional Information (Detail) | 6 Months Ended |
Jun. 30, 2016$ / shares | |
Dividends Payable [Line Items] | |
Dividend declared, per share | $ 0.37 |
Dividend declared, declaration date | Jul. 11, 2016 |
Dividend declared, payable date | Sep. 10, 2016 |
Dividend declared, record date | Aug. 20, 2016 |