-
Reported 2Q10 EPS of $0.51; excluding legacy tax and
restructuring-related adjustment, EPS of $0.49
-
2Q10 revenue of $477.8 million, up 6% from prior-year period
-
Reaffirming FY 2010 EPS guidance range of $1.75 to $1.85
NEW YORK--(BUSINESS WIRE)--
Moody’s Corporation (NYSE: MCO) today announced results for the second
quarter of 2010.
Summary of Results for Second Quarter 2010
Moody’s Corporation reported revenue of $477.8 million for the three
months ended June 30, 2010, an increase of 6% from $450.7 million for
the second quarter of 2009. Operating income for the quarter was $190.5
million, a 2% increase from $187.2 million for the same period last
year. Diluted earnings per share of $0.51 for the second quarter of 2010
included a benefit of $0.02 associated with certain legacy tax matters
and a minor restructuring-related adjustment. Excluding legacy tax and
restructuring items from both periods, diluted earnings per share of
$0.49 for the quarter grew 14% from $0.43 in the prior-year period.
“Moody’s results in the second quarter were strong given the greater
volatility in debt capital markets as compared to the first quarter,”
said Raymond McDaniel, Chairman and Chief Executive Officer of Moody’s
Corporation. “We reaffirm our full-year 2010 EPS guidance of $1.75 to
$1.85 based on sound first half performance but we expect that uneven
credit market conditions will persist during the second half.”
Second Quarter Revenue
For Moody’s Corporation overall, global revenue of $477.8 million
increased 6% from the second quarter of 2009. The impact of foreign
currency translation on revenue was negligible. U.S. revenue of $261.5
million for the quarter rose 10%, while non-U.S. revenue of $216.3
million increased 1% from the prior-year period. Excluding the favorable
impact of foreign currency translation, non-U.S. revenue in the second
quarter was about flat and represented 45% of total revenue for the
quarter, compared to 47% in the year-ago period.
Global revenue for Moody’s Investors Service (“MIS”) for the second
quarter of 2010 was $328.6 million, 6% above the prior-year period. The
impact of foreign currency translation was negligible. U.S. revenue of
$194.5 million for the second quarter of 2010 increased 12% from the
second quarter of 2009. Outside the U.S., revenue of $134.1 million
declined 2% from the year-ago period.
Within MIS, global corporate finance revenue of $127.9 million in the
second quarter of 2010 increased 19% from the same quarter of 2009. U.S.
corporate finance revenue grew 30% from the second quarter of 2009,
driven primarily by strong high-yield bank loan origination, which more
than offset reduced issuance in the investment-grade bond market.
Outside the U.S., revenue increased 1% from the prior-year period, as
strong issuance in Asia and Latin America was partially offset by
decreased activity in Europe and Canada.
Global structured finance revenue totaled $73.1 million for the second
quarter of 2010, a decline of 2% from a year earlier. U.S. structured
finance revenue decreased 4% from the year-ago period, as a result of
reduced activity in derivatives and asset-backed commercial paper
programs, partially offset by commercial real estate finance issuance.
Non-U.S. structured finance revenue grew 1%, driven primarily by
European covered bond issuance, partially offset by lower securitization
activity due to market and regulatory uncertainty and reduced use of
government-sponsored facilities.
Global financial institutions revenue of $63.2 million in the second
quarter of 2010 declined 6% compared to the same quarter of 2009.
Financial institutions revenue decreased 9% in the U.S. and 4% outside
the U.S., primarily due to issuance declines in the U.S. and European
insurance and banking sectors.
Global public, project and infrastructure finance revenue was $64.4
million for the second quarter of 2010, increasing 6% from the second
quarter of 2009. U.S. revenue grew 13% from the prior-year period with
higher revenue in the public and project finance sectors. Non-U.S.
revenue declined 8% primarily due to reduced issuance for European
infrastructure finance.
Global revenue for Moody’s Analytics (“MA”) for the second quarter of
2010 reached $149.2 million, up 6% from the same quarter of 2009. The
impact of foreign currency translation was negligible. Revenue from
research, data and analytics of $105.2 million increased by 3% from the
prior-year period and risk management software revenue of $39.2 million
grew 16 percent. Professional services revenue of $4.8 million increased
14% from the prior-year period.
Moody’s Analytics revenue in the second quarter of 2010 was $67.0
million in the U.S. and $82.2 million outside the U.S., an increase of
6% and 7% respectively from the prior-year period, primarily driven by
the delivery of risk management software projects.
Second Quarter Expenses
Second quarter 2010 expenses for Moody’s Corporation of $287.3 million
were 9% greater than in the prior-year period primarily due to increased
headcount and incentive compensation and higher spending related to
legal and regulatory requirements. Moody’s reported operating margin for
the second quarter of 2010 was 39.9 percent. Excluding restructuring
items in both periods, Moody’s second quarter 2010 expenses of $287.0
million increased 10% from the prior-year period, and operating margin
was 39.9%, compared to 42.2% in the second quarter of 2009. The impact
of foreign currency translation on operating expenses was negligible.
Moody’s effective tax rate was 31.1% for the second quarter of 2010,
compared with 36.4% for the prior-year period. The decrease was
primarily due to a reduction in unrecognized tax benefits and other
tax-related liabilities resulting from the closing of various tax
audits, lower taxes on foreign income and the favorable resolution of a
legacy tax matter.
Year-to-Date Results
Moody’s Corporation revenue for the first six months of 2010 totaled
$954.4 million, an increase of 11% from $859.6 million for the same
period of 2009. Expenses for the first six months of 2010 were $567.1
million, an increase of 8% from a year ago. First half operating income
of $387.3 million grew 15% from $336.1 million for the same period of
2009. Excluding the positive impact of foreign currency translation,
revenue and operating income for the first six months of 2010 grew 10%
and 14%, respectively. Diluted earnings per share of $0.99 for the first
half of 2010 included a benefit of $0.02 associated with certain legacy
tax matters and minor restructuring-related adjustments. Excluding these
items in the first half of 2010, and excluding a legacy tax benefit and
restructuring charges and adjustments in the prior-year period, diluted
earnings per share of $0.97 for the first half of 2010 increased 14%
from $0.85 for the first half of 2009.
Revenue at Moody’s Investors Service totaled $664.1 million for the
first six months of 2010, an increase of 14% from the prior-year period.
Moody’s Analytics revenue rose 4% from the first half of 2009 to $290.3
million.
Capital Allocation and Liquidity
During the second quarter of 2010, Moody’s repurchased 2.8 million
shares at a total cost of $70 million and issued 0.1 million shares
under employee stock-based compensation plans. Outstanding shares as of
June 30, 2010 totaled 234.3 million, a 1% reduction from a year earlier.
As of June 30, 2010, Moody’s had $1.3 billion of share repurchase
authority remaining under its current program. At quarter-end, Moody’s
had $1.1 billion of outstanding debt and $644 million of additional debt
capacity available under its revolving credit facility. Moody’s reduced
total outstanding debt by $16 million during the second quarter. At
quarter-end, total cash and cash equivalents were $486 million, an
increase of $93 million from a year earlier.
Assumptions and Outlook for Full-Year 2010
Moody’s outlook for 2010 is based on assumptions about many
macroeconomic and capital market factors, including interest rates,
corporate profitability and business investment spending, merger and
acquisition activity, consumer borrowing and securitization, and the
eventual withdrawal of government-sponsored economic stabilization
initiatives. There is an important degree of uncertainty surrounding
these assumptions and, if actual conditions differ from these
assumptions, Moody’s results for the year may differ materially from the
current outlook. Our guidance assumes foreign currency translation at
end-of-quarter exchange rates.
Moody’s is reaffirming its guidance for diluted earnings per share for
full-year 2010 in the range of $1.75 to $1.85; however, certain
components of 2010 guidance have been modified to reflect our current
view of credit market conditions and implications for the Company. For
Moody’s overall, the Company now expects full-year 2010 revenue to
increase in the mid-single-digit percent range and expenses to increase
in the mid- to high-single-digit percent range. We continue to believe
incremental compliance costs related to new regulation will be
approximately $15 million for this year and $15 – 25 million for next
year. The Company still projects the full-year 2010 operating margin in
the high-thirties percent range and now expects the effective tax rate
in the range of 34 to 35 percent. Share repurchase is expected to
continue at modest levels in 2010 subject to available cash flow and
other capital allocation decisions.
For the global MIS business, we now expect revenue for the full-year
2010 to increase in the mid-single-digit percent range. Within the U.S.,
we continue to expect MIS revenue to increase in the low-double-digit
percent range, while non-U.S. revenue is now expected to decline in the
low-single-digit percent range. Corporate finance revenue is now
expected to increase in the high-teens to low-twenties percent range.
Structured finance revenue is now expected to decrease in the
high-single to low-double-digit percent range. We now expect revenue
from financial institutions to be relatively flat compared to the prior
year, and revenue from public, project and infrastructure finance to
increase in the mid-single-digit percent range.
For Moody’s Analytics, we continue to expect full-year 2010 revenue to
increase in the mid-single-digit percent range. We continue to expect
revenue growth in the low-single-digit percent range for research, data
and analytics, while we now expect revenue growth in the
low-double-digit percent range for risk management software, and in the
mid-single-digit percent range for professional services. We now expect
MA revenue in the U.S. to increase in the mid-single-digit percent
range, while revenue outside the U.S. is still expected to grow in the
mid-single-digit percent range.
Conference Call
A conference call to discuss second quarter 2010 results will be held
this morning, July 29, at 11:30 a.m. Eastern Time. Individuals within
the U.S. and Canada can access the call by dialing 1-800-289-0722. Other
callers should dial +1-913-905-3198. Please dial into the call by 11:20
a.m. Eastern Time. The passcode for the call is “Moody’s Corporation.”
The teleconference will be webcast with a slide presentation and can be
accessed under “Featured Events” on Moody's Shareholder Relations
website, http://ir.moodys.com,
until midnight Eastern Time, August 31, 2010.
A replay of the teleconference will be available from 4:00 p.m. Eastern
Time, July 29, 2010 until midnight Eastern Time, August 31, 2010. The
replay can be accessed from within the U.S. and Canada by dialing
1-888-203-1112. Other callers can access the replay at +1-719-457-0820.
The replay confirmation code is 4966904.
*****
Moody's is an essential component of the global capital markets,
providing credit ratings, research, tools and analysis that contribute
to transparent and integrated financial markets. Moody’s Corporation
(NYSE: MCO) is the parent company of Moody's Investors Service, which
provides credit ratings and research covering debt instruments and
securities, and Moody's Analytics, which encompasses the growing array
of Moody’s non-ratings businesses including risk management software for
financial institutions, quantitative credit analysis tools, economic
research and data services, data and analytical tools for the structured
finance market, and training and other professional services. The
Corporation, which reported revenue of $1.8 billion in 2009, employs
approximately 4,100 people worldwide and maintains a presence in 26
countries. Further information is available at www.moodys.com.
“Safe Harbor” Statement under the Private Securities Litigation
Reform Act of 1995
Certain statements contained in this release are forward-looking
statements and are based on future expectations, plans and prospects for
Moody’s business and operations that involve a number of risks and
uncertainties. Moody’s outlook for 2010 and other forward-looking
statements in this release are made as of July 29, 2010, and the Company
disclaims any duty to supplement, update or revise such statements on a
going-forward basis, whether as a result of subsequent developments,
changed expectations or otherwise. In connection with the “safe harbor”
provisions of the Private Securities Litigation Reform Act of 1995, the
Company is identifying certain factors that could cause actual results
to differ, perhaps materially, from those indicated by these
forward-looking statements. Those factors include, but are not limited
to, the current world-wide credit market disruptions and economic
slowdown, which is affecting and could continue to affect the volume of
debt securities issued in domestic and/or global capital markets; other
matters that could affect the volume of debt securities issued,
including credit quality concerns, changes in interest rates and other
volatility in the financial markets; the uncertain effectiveness and
possible collateral consequences of U.S. and foreign government
initiatives to respond to the economic slowdown; possible loss of market
share through competition; introduction of competing products or
technologies by other companies; pricing pressures from competitors
and/or customers; the potential emergence of government-sponsored credit
rating agencies; both proposed and recently adopted U.S., foreign, state
and local legislation and regulations, including the Dodd-Frank Wall
Street Reform and Consumer Protection Act; regulations relating to the
oversight of credit rating agencies; provisions in the Dodd-Frank Act
modifying pleading and liability standards applicable to credit rating
agencies in a manner adverse to rating agencies; possible judicial
decisions in various jurisdictions regarding the status of and potential
liabilities of credit rating agencies; the possible loss of key
employees; the outcome of any review by controlling tax authorities of
the Company’s global tax planning initiatives; the outcome of those
legacy tax and legal contingencies that relate to the Company, its
predecessors and their affiliated companies for which Moody’s has
assumed portions of the financial responsibility; the outcome of other
legal actions to which the Company, from time to time, may be named as a
party; the ability of the Company to successfully integrate acquired
businesses; a decline in the demand from financial institutions for
credit risk management tools; and other risk factors as discussed in the
Company’s annual report on Form 10-K for the year ended December 31,
2009, quarterly report on Form 10-Q for the quarter ended March 31,
2010, and in other filings made by the Company from time to time with
the Securities and Exchange Commission.
|
Moody's Corporation
|
|
Consolidated Statements of Operations (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
|
June 30,
|
|
June 30,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2010
|
|
|
|
|
2009
|
|
|
|
2010
|
|
|
|
2009
|
|
|
Amounts in millions, except per share amounts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
477.8
|
|
|
$
|
|
450.7
|
|
|
$
|
954.4
|
|
|
$
|
859.6
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
Operating
|
|
|
134.3
|
|
|
|
|
128.0
|
|
|
|
270.2
|
|
|
|
250.4
|
|
|
Selling, general and administrative
|
|
|
137.5
|
|
|
|
|
116.7
|
|
|
|
266.3
|
|
|
|
226.9
|
|
|
Restructuring
|
|
|
0.3
|
|
|
|
|
3.1
|
|
|
|
(0.4
|
)
|
|
|
14.9
|
|
|
Depreciation and amortization
|
|
|
15.2
|
|
|
|
|
15.7
|
|
|
|
31.0
|
|
|
|
31.3
|
|
|
Total expenses
|
|
|
287.3
|
|
|
|
|
263.5
|
|
|
|
567.1
|
|
|
|
523.5
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
190.5
|
|
|
|
|
187.2
|
|
|
|
387.3
|
|
|
|
336.1
|
|
|
Non-operating (expense) income, net
|
|
|
|
|
|
|
|
|
|
Interest (expense) income, net
|
|
|
(9.0
|
)
|
|
|
|
(6.1
|
)
|
|
|
(22.3
|
)
|
|
|
(9.4
|
)
|
|
Other non-operating (expense) income, net
|
|
|
(3.6
|
)
|
|
|
|
(6.5
|
)
|
|
|
(4.6
|
)
|
|
|
(10.5
|
)
|
|
Total
|
|
|
(12.6
|
)
|
|
|
|
(12.6
|
)
|
|
|
(26.9
|
)
|
|
|
(19.9
|
)
|
|
Income before provision for income taxes
|
|
|
177.9
|
|
|
|
|
174.6
|
|
|
|
360.4
|
|
|
|
316.2
|
|
|
Provision for income taxes
|
|
|
55.3
|
|
|
|
|
63.6
|
|
|
|
123.1
|
|
|
|
114.1
|
|
|
Net income
|
|
|
122.6
|
|
|
|
|
111.0
|
|
|
|
237.3
|
|
|
|
202.1
|
|
|
Less: net income attributable to noncontrolling interests
|
|
|
1.6
|
|
|
|
|
1.7
|
|
|
|
2.9
|
|
|
|
2.6
|
|
|
Net income attributable to Moody's Corporation
|
|
$
|
121.0
|
|
|
$
|
|
109.3
|
|
|
$
|
234.4
|
|
|
$
|
199.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share attributable to Moody's common shareholders
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.51
|
|
|
$
|
|
0.46
|
|
|
$
|
0.99
|
|
|
$
|
0.85
|
|
|
Diluted
|
|
$
|
0.51
|
|
|
$
|
|
0.46
|
|
|
$
|
0.99
|
|
|
$
|
0.84
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares outstanding
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
235.3
|
|
|
|
|
236.1
|
|
|
|
236.1
|
|
|
|
235.8
|
|
|
Diluted
|
|
|
236.5
|
|
|
|
|
238.1
|
|
|
|
237.8
|
|
|
|
237.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Moody's Corporation
|
|
Supplemental Revenue Information (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
|
June 30,
|
|
June 30,
|
|
|
|
|
|
|
|
|
|
|
|
Amounts in millions
|
|
|
2010
|
|
|
|
2009
|
|
|
|
2010
|
|
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Moody's Investors Service
|
|
|
|
|
|
|
|
|
|
Structured Finance
|
|
$
|
73.1
|
|
|
$
|
74.6
|
|
|
$
|
144.6
|
|
|
$
|
147.0
|
|
|
Corporate Finance
|
|
|
127.9
|
|
|
|
107.5
|
|
|
|
254.3
|
|
|
|
191.6
|
|
|
Financial Institutions
|
|
|
63.2
|
|
|
|
67.3
|
|
|
|
139.4
|
|
|
|
123.6
|
|
|
Public, Project and Infrastructure Finance
|
|
|
64.4
|
|
|
|
60.9
|
|
|
|
125.8
|
|
|
|
118.3
|
|
|
Intersegment royalty
|
|
|
15.5
|
|
|
|
14.4
|
|
|
|
30.8
|
|
|
|
29.1
|
|
|
Sub-total MIS
|
|
|
344.1
|
|
|
|
324.7
|
|
|
|
694.9
|
|
|
|
609.6
|
|
|
Eliminations
|
|
|
(15.5
|
)
|
|
|
(14.4
|
)
|
|
|
(30.8
|
)
|
|
|
(29.1
|
)
|
|
Total MIS revenue
|
|
|
328.6
|
|
|
|
310.3
|
|
|
|
664.1
|
|
|
|
580.5
|
|
|
|
|
|
|
|
|
|
|
|
|
Moody's Analytics (a)
|
|
|
|
|
|
|
|
|
|
Research, Data and Analytics
|
|
|
105.2
|
|
|
|
102.3
|
|
|
|
209.8
|
|
|
|
204.3
|
|
|
Risk Management Software
|
|
|
39.2
|
|
|
|
33.9
|
|
|
|
72.5
|
|
|
|
66.0
|
|
|
Professional Services
|
|
|
4.8
|
|
|
|
4.2
|
|
|
|
8.0
|
|
|
|
8.8
|
|
|
Total MA revenue
|
|
|
149.2
|
|
|
|
140.4
|
|
|
|
290.3
|
|
|
|
279.1
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Moody's Corporation revenue
|
|
$
|
477.8
|
|
|
$
|
450.7
|
|
|
$
|
954.4
|
|
|
$
|
859.6
|
|
|
|
|
|
|
|
|
|
|
|
|
Moody's Corporation revenue by geographic area
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United States
|
|
$
|
261.5
|
|
|
$
|
237.1
|
|
|
$
|
516.1
|
|
|
$
|
446.0
|
|
|
International
|
|
|
216.3
|
|
|
|
213.6
|
|
|
|
438.3
|
|
|
|
413.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
477.8
|
|
|
$
|
450.7
|
|
|
$
|
954.4
|
|
|
$
|
859.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) During the fourth quarter of 2009, the MA businesses were realigned
and renamed to reflect the reporting unit structure for the MA segment
at December 31, 2009. Certain prior-year amounts have been reclassified
to conform to the current presentation.
|
Moody's Corporation
|
|
Consolidated Interest (Expense) / Income, Net (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
|
June 30,
|
|
June 30,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2010
|
|
|
|
2009
|
|
|
|
2010
|
|
|
|
2009
|
|
|
Amounts in millions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest (expense) / income:
|
|
|
|
|
|
|
|
|
|
Expense on borrowings
|
|
$
|
(10.6
|
)
|
|
$
|
(12.5
|
)
|
|
$
|
(21.4
|
)
|
|
$
|
(24.4
|
)
|
|
Income
|
|
|
0.5
|
|
|
|
0.6
|
|
|
|
1.1
|
|
|
|
1.4
|
|
|
Legacy Tax (a)
|
|
|
2.5
|
|
|
|
6.5
|
|
|
|
2.5
|
|
|
|
6.5
|
|
|
UTPs and other tax related liabilities
|
|
|
(1.6
|
)
|
|
|
(0.7
|
)
|
|
|
(5.1
|
)
|
|
|
6.7
|
|
|
Interest capitalized
|
|
|
0.2
|
|
|
|
-
|
|
|
|
0.6
|
|
|
|
0.4
|
|
|
Total interest (expense) income, net
|
|
$
|
(9.0
|
)
|
|
$
|
(6.1
|
)
|
|
$
|
(22.3
|
)
|
|
$
|
(9.4
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) The amounts in both years represent interest income related to the
favorable settlement of Legacy Tax Matters.
|
Moody's Corporation
|
|
Selected Consolidated Balance Sheet Data (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
December 31,
|
|
|
|
|
2010
|
|
|
|
2009
|
|
|
Amounts in millions
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
|
485.9
|
|
|
$
|
|
473.9
|
|
|
Short-term investments
|
|
|
|
7.7
|
|
|
|
|
10.0
|
|
|
Total current assets
|
|
|
|
960.0
|
|
|
|
|
1,012.9
|
|
|
Non-current assets
|
|
|
|
997.7
|
|
|
|
|
990.4
|
|
|
Total assets
|
|
|
|
1,957.7
|
|
|
|
|
2,003.3
|
|
|
Total current liabilities
|
|
|
|
1,094.2
|
|
|
|
|
1,236.0
|
|
|
Total debt (1)
|
|
|
|
1,106.4
|
|
|
|
|
1,193.7
|
|
|
Other long-term liabilities
|
|
|
|
612.9
|
|
|
|
|
617.2
|
|
|
Total shareholders' deficit
|
|
|
|
(491.9
|
)
|
|
|
|
(596.1
|
)
|
|
Total liabilities and shareholders' deficit
|
|
|
|
1,957.7
|
|
|
|
|
2,003.3
|
|
|
|
|
|
|
|
|
Actual number of shares outstanding
|
|
|
|
234.3
|
|
|
|
|
236.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Includes long-term debt of $742.5 million and $746.2
million at June 30, 2010 and December 31, 2009, respectively.
Additionally, this includes amounts outstanding under the Company's
commercial paper program of $356.4 million and $443.7 million at June
30, 2010 and December 31, 2009, respectively, as well as the current
portion of long-term debt of $7.5 million and $3.8 million at June 30,
2010 and December 31, 2009, respectively, both of which are included in
total current liabilities.
|
Moody's Corporation
|
|
Reconciliation to Non-GAAP Financial Measures (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts in millions,
except per share amounts
|
|
2010
|
|
|
|
2009
|
|
|
|
|
|
|
|
|
Non-
|
|
|
|
|
|
|
|
|
Non-
|
|
|
|
|
|
|
|
|
GAAP
|
|
|
|
|
|
|
|
|
GAAP
|
|
|
|
As
|
|
|
|
|
Financial
|
|
|
|
As
|
|
|
|
|
Financial
|
|
|
|
Reported
|
|
Adjustments
|
|
|
Measures*
|
|
|
|
Reported
|
|
Adjustments
|
|
|
Measures*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
477.8
|
|
|
$
|
-
|
|
|
|
$
|
477.8
|
|
|
|
|
$
|
450.7
|
|
|
$
|
-
|
|
|
|
$
|
450.7
|
|
|
Expenses
|
|
|
287.3
|
|
|
|
(0.3
|
)
|
(a)
|
|
|
287.0
|
|
|
|
|
|
263.5
|
|
|
|
(3.1
|
)
|
(a)
|
|
|
260.4
|
|
|
Operating income
|
|
|
190.5
|
|
|
|
0.3
|
|
|
|
|
190.8
|
|
|
|
|
|
187.2
|
|
|
|
3.1
|
|
|
|
|
190.3
|
|
|
Non-operating
(expense)
income, net
|
|
|
(12.6
|
)
|
|
|
(2.5
|
)
|
(b)
|
|
|
(15.1
|
)
|
|
|
|
|
(12.6
|
)
|
|
|
(6.5
|
)
|
(b)
|
|
|
(19.1
|
)
|
|
Income before provision
for income taxes
|
|
|
177.9
|
|
|
|
(2.2
|
)
|
|
|
|
175.7
|
|
|
|
|
|
174.6
|
|
|
|
(3.4
|
)
|
|
|
|
171.2
|
|
|
Provision for income
taxes
|
|
|
55.3
|
|
|
|
2.2
|
|
(c)
|
|
|
57.5
|
|
|
|
|
|
63.6
|
|
|
|
2.9
|
|
(c)
|
|
|
66.5
|
|
|
Net income
|
|
|
122.6
|
|
|
|
(4.4
|
)
|
|
|
|
118.2
|
|
|
|
|
|
111.0
|
|
|
|
(6.3
|
)
|
|
|
|
104.7
|
|
|
Less: net income
attributable to
noncontrolling
interests
|
|
|
1.6
|
|
|
|
-
|
|
|
|
|
1.6
|
|
|
|
|
|
1.7
|
|
|
|
-
|
|
|
|
|
1.7
|
|
|
Net income attributable to
Moody's
Corporation
|
|
$
|
121.0
|
|
|
$
|
(4.4
|
)
|
|
|
$
|
116.6
|
|
|
|
|
$
|
109.3
|
|
|
$
|
(6.3
|
)
|
|
|
$
|
103.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share
attributable to
Moody's
common shareholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.51
|
|
|
|
|
|
$
|
0.50
|
|
|
|
|
$
|
0.46
|
|
|
|
|
|
$
|
0.44
|
|
|
Diluted
|
|
$
|
0.51
|
|
|
|
|
|
$
|
0.49
|
|
|
|
|
$
|
0.46
|
|
|
|
|
|
$
|
0.43
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*In addition to its reported results, Moody’s has included in the table
above adjusted results that the Securities and Exchange Commission
defines as “non-GAAP financial measures.” Management believes that such
non-GAAP financial measures, when read in conjunction with the Company’s
reported results, can provide useful supplemental information for
investors analyzing period to period comparisons of the Company’s
results. May not add due to rounding.
The tables above show Moody's consolidated results for each of the three
month periods ended June 30, 2010 and 2009, adjusted to exclude the
impact of the following:
(a) To exclude amounts related to the 2009 restructuring charge as well
as minor adjustments related to both the 2009 and 2007 restructuring
charges
(b) To exclude benefits relating to the resolution of certain legacy tax
matters
(c) To reflect the income tax impacts related to the adjustments
described in notes (a) and (b) above, and to exclude tax benefits of
$3.1 million and $4.3 million recorded in the second quarter of 2010 and
2009, respectively, related to the settlement of Legacy Tax Matters
|
Moody's Corporation
|
|
Reconciliation to Non-GAAP Financial Measures (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts in millions,
except per share amounts
|
|
2010
|
|
|
|
|
2009
|
|
|
|
|
|
|
|
|
|
Non-
|
|
|
|
|
|
|
|
|
Non-
|
|
|
|
|
|
|
|
|
GAAP
|
|
|
|
|
|
|
|
|
GAAP
|
|
|
|
As
|
|
|
|
|
Financial
|
|
|
|
As
|
|
|
|
|
Financial
|
|
|
|
Reported
|
|
Adjustments
|
|
|
Measures*
|
|
|
|
Reported
|
|
Adjustments
|
|
|
Measures*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
954.4
|
|
|
$
|
-
|
|
|
|
$
|
954.4
|
|
|
|
|
$
|
859.6
|
|
|
$
|
-
|
|
|
|
$
|
859.6
|
|
|
Expenses
|
|
|
567.1
|
|
|
|
0.4
|
|
(a)
|
|
|
567.5
|
|
|
|
|
|
523.5
|
|
|
|
(14.9
|
)
|
(a)
|
|
|
508.6
|
|
|
Operating income
|
|
|
387.3
|
|
|
|
(0.4
|
)
|
|
|
|
386.9
|
|
|
|
|
|
336.1
|
|
|
|
14.9
|
|
|
|
|
351.0
|
|
|
Non-operating
(expense)
income, net
|
|
|
(26.9
|
)
|
|
|
(2.5
|
)
|
(b)
|
|
|
(29.4
|
)
|
|
|
|
|
(19.9
|
)
|
|
|
(6.5
|
)
|
(b)
|
|
|
(26.4
|
)
|
|
Income before provision
for income
taxes
|
|
|
360.4
|
|
|
|
(2.9
|
)
|
|
|
|
357.5
|
|
|
|
|
|
316.2
|
|
|
|
8.4
|
|
|
|
|
324.6
|
|
|
Provision for income
taxes
|
|
|
123.1
|
|
|
|
2.0
|
|
(c)
|
|
|
125.1
|
|
|
|
|
|
114.1
|
|
|
|
7.3
|
|
(c)
|
|
|
121.4
|
|
|
Net income
|
|
|
237.3
|
|
|
|
(4.9
|
)
|
|
|
|
232.4
|
|
|
|
|
|
202.1
|
|
|
|
1.1
|
|
|
|
|
203.2
|
|
|
Less: net income
attributable to
noncontrolling
interests
|
|
|
2.9
|
|
|
|
-
|
|
|
|
|
2.9
|
|
|
|
|
|
2.6
|
|
|
|
-
|
|
|
|
|
2.6
|
|
|
Net income attributable to
Moody's
Corporation
|
|
$
|
234.4
|
|
|
$
|
(4.9
|
)
|
|
|
$
|
229.5
|
|
|
|
|
$
|
199.5
|
|
|
$
|
1.1
|
|
|
|
$
|
200.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share attributable to
Moody's
common shareholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.99
|
|
|
|
|
|
$
|
0.97
|
|
|
|
|
$
|
0.85
|
|
|
|
|
|
$
|
0.85
|
|
|
Diluted
|
|
$
|
0.99
|
|
|
|
|
|
$
|
0.97
|
|
|
|
|
$
|
0.84
|
|
|
|
|
|
$
|
0.85
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*In addition to its reported results, Moody’s has included in the table
above adjusted results that the Securities and Exchange Commission
defines as “non-GAAP financial measures.” Management believes that such
non-GAAP financial measures, when read in conjunction with the Company’s
reported results, can provide useful supplemental information for
investors analyzing period to period comparisons of the Company’s
results. May not add due to rounding.
The tables above show Moody's consolidated results for each of the six
month periods ended June 30, 2010 and 2009, adjusted to exclude the
impact of the following:
(a) To exclude amounts related to the 2009 restructuring charge as well
as minor adjustments related to both the 2009 and 2007 restructuring
charges
(b) To exclude benefits relating to the resolution of certain legacy tax
matters
(c) To reflect the income tax impacts related to the adjustments
described in notes (a) and (b) above, and to exclude tax benefits of
$3.1 million and $4.3 million recorded in the second quarter of 2010 and
2009, respectively, related to the settlement of Legacy Tax Matters
Source: Moody's