-
1Q18 revenue of $1.1 billion up 16% from 1Q17
-
1Q18 operating income up 10% from 1Q17; adjusted operating income up
13%1
-
1Q18 diluted EPS of $1.92 up 8% from 1Q17; adjusted diluted EPS of
$2.02, up 35%1
-
Affirming FY 2018 diluted EPS and adjusted diluted EPS guidance ranges
of $7.20 to $7.40 and $7.65 to $7.85, respectively
NEW YORK--(BUSINESS WIRE)--
Moody’s Corporation (NYSE:MCO) today announced results for the first
quarter of 2018, as well as provided its current outlook for full year
2018.
“Moody’s record first quarter revenue reflects a strong contribution
from Bureau van Dijk and solid organic growth from Moody’s Analytics, as
well as strength in rated structured finance volumes in Moody’s
Investors Service,” said Raymond McDaniel, President and Chief Executive
Officer of Moody’s. “Our business remains well-positioned to benefit
from continued global economic expansion in 2018, and as such we are
affirming our full year 2018 guidance of $7.20 to $7.40 for diluted EPS
and $7.65 to $7.85 for adjusted diluted EPS.”
FIRST QUARTER HIGHLIGHTS
Moody’s Corporation reported record first quarter revenue of $1.1
billion for the three months ended March 31, 2018, up 16% from the first
quarter of 2017, including eight percentage points attributable to
Bureau van Dijk.
Operating expenses totaled $635.9 million, up 20% from the prior-year
period, including 12 percentage points attributable to Bureau van Dijk
operating expenses, amortization of acquired intangible assets, as well
as non-recurring acquisition and integration expenses associated with
the Bureau van Dijk acquisition (“Acquisition-Related Expenses”).
Operating income was $490.8 million, up 10% from the first quarter of
2017. Adjusted operating income, which excludes depreciation and
amortization, as well as Acquisition-Related Expenses, was $540.7
million, up 13% from the prior-year period. Operating margin for the
first quarter was 43.6% and the adjusted operating margin was 48.0%.
Diluted EPS of $1.92 was up 8% from the first quarter of 2017. Adjusted
diluted EPS of $2.02 was up 35%. First quarter 2018 adjusted diluted EPS
excludes $0.10 per share related to amortization of acquired intangible
assets and Acquisition-Related Expenses. First quarter 2017 adjusted
diluted EPS primarily excludes a $0.31 per share non-cash, non-taxable
gain from a strategic realignment and expansion involving Moody’s China
affiliate China Cheng Xin International Credit Rating Co. Ltd. (“CCXI
Gain”). Both first quarter 2018 diluted EPS and adjusted diluted EPS
include a $0.15 per share tax benefit related to the adoption of
accounting standard update ASU 2016-09, “Improvements to Employee
Share-Based Payment Accounting,” compared to a $0.10 per share tax
benefit in the first quarter of 2017.
MCO FIRST QUARTER REVENUE UP 16%
Moody’s Corporation reported record first quarter revenue of $1.1
billion for the three months ended March 31, 2018, up 16% from the
prior-year period.
U.S. revenue was $597.7 million, up 3%, and non-U.S. revenue was $529.0
million, up 33%. Revenue generated outside the U.S. constituted 47% of
total revenue, up from 41% in the prior-year period. Foreign currency
translation favorably impacted Moody’s revenue by 4%.
Moody’s Investors Service (MIS) First Quarter
Revenue Up 8%
Revenue for MIS in the first quarter of 2018 was $719.9 million, up 8%
from the prior-year period. U.S. revenue was $433.4 million, up 3%, and
non-U.S. revenue was $286.5 million, up 17%. Foreign currency
translation favorably impacted MIS revenue by 3%.
Corporate finance revenue was $377.7 million, up 7% from the prior-year
period. This result reflected strong contribution from EMEA bank loans
and U.S. investment grade, as well as growth in recurring revenue. U.S.
and non-U.S. corporate finance revenues were up 1% and 20%, respectively.
Structured finance revenue totaled $129.7 million, up 29% from the
prior-year period. This result reflected broad strength in
securitization markets, with particularly strong levels of new CLO
formation. U.S. and non-U.S. structured finance revenues were up 30% and
28%, respectively.
Financial institutions revenue was $114.3 million, up 2% from the
prior-year period. This result reflected growth in issuance from EMEA
banks and U.S. insurance companies, partially offset by a decrease in
activity from Asian and U.S. banks. U.S. financial institutions revenue
was down 4% while non-U.S. revenue was up 7%.
Public, project and infrastructure finance revenue was $93.2 million,
down 5% from the prior-year period. This result primarily reflected a
decrease in U.S. municipal issuance due to the loss of tax-exemption for
advance refunding transactions. U.S. public, project and infrastructure
finance revenue was down 15% while non-U.S. revenue was up 13%.
Moody’s Analytics (MA) First Quarter Revenue Up
33%
Revenue for MA in the first quarter of 2018 was $406.8 million, up 33%
from the prior-year period. U.S. revenue was $164.3 million, up 6%, and
non-U.S. revenue was $242.5 million, up 60%. Foreign currency
translation favorably impacted MA revenue by 4%. Organic MA revenue for
the first quarter of 2018 was $333.3 million, up 9% from the prior-year
period.
Research, data and analytics (RD&A) revenue was $269.2 million, up 53%
from the prior-year period. U.S. RD&A revenue was up 11% and non-U.S.
revenue more than doubled. Bureau van Dijk’s revenue contribution of
approximately $74 million included a $10 million reduction as a result
of a deferred revenue adjustment required under acquisition accounting
rules. Organic RD&A revenue was $195.7 million, up 12%, driven by
strength in sales of credit research and ratings data feeds.
Enterprise risk solutions (ERS) revenue of $100.1 million was up 4% from
the prior-year period. This result reflected strength in software
subscription revenues, partially offset by a revenue decline for
one-time projects and licenses. U.S. ERS revenue was down 4% while
non-U.S. revenue was up 11%.
Professional services revenue of $37.5 million was up 5% from the
prior-year period. U.S. professional services revenue was down 4% while
non-U.S. revenue was up 10%.
FIRST QUARTER OPERATING EXPENSES AND INCOME
First quarter 2018 operating expenses for Moody’s Corporation totaled
$635.9 million, up 20% from the prior-year period. Twelve percentage
points of this increase were attributable to Bureau van Dijk operating
expenses, amortization of acquired intangible assets and
Acquisition-Related Expenses. Other drivers of expense growth included
additional compensation expense for merit increases and hiring. Foreign
currency translation unfavorably impacted operating expenses by 3%.
Operating income was $490.8 million, up 10% from the first quarter of
2017. Adjusted operating income was $540.7 million, up 13% from the
prior-year period. Foreign currency translation favorably impacted
operating income and adjusted operating income by 4% each. Operating
margin was 43.6%, down from 45.8%. Adjusted operating margin was 48.0%,
down from 49.1%. On January 1, 2018 the Company adopted a new revenue
accounting standard (ASC 606) using the modified retrospective approach.
The impact of adoption was immaterial to both revenues and expenses.
Moody’s effective tax rate for the first quarter of 2018 was 14.6%, down
from 23.4% for the prior-year period. The decline in the tax rate
reflects a lower U.S. statutory tax rate, net uncertain tax position
benefits related to a statute of limitation expiration and a higher
benefit related to the tax accounting for equity compensation.
CAPITAL ALLOCATION AND LIQUIDITY
$127.5 Million Returned to Shareholders in the
First Quarter
During the first quarter of 2018, Moody’s repurchased 0.3 million shares
at a total cost of $43.4 million, or an average cost of $161.10 per
share, and issued a net 1.2 million shares as part of its employee
stock-based compensation plans. The net amount includes shares withheld
for employee payroll taxes. Moody’s returned $84.1 million to its
shareholders via dividend payments during the first quarter.
Outstanding shares as of March 31, 2018 totaled 191.9 million,
approximately flat to March 31, 2017. As of March 31, 2018, Moody’s had
approximately $500 million of share repurchase authority remaining.
At quarter-end, Moody’s had $5.5 billion of outstanding debt and $910
million of additional borrowing capacity under its revolving credit
facility. Total cash, cash equivalents and short-term investments at
quarter-end were $1.4 billion, up 16% from December 31, 2017. Cash flow
from operations for the first three months of 2018 was $391.5 million,
an increase from $(512.4) million in the prior-year period. Free cash
flow for the first three months of 2018 was $376.5 million, an increase
from $(531.1) million in the prior-year period. These increases in cash
flow were largely due to payments the Company made in the first quarter
of 2017 pursuant to its 2016 settlement with the U.S. Department of
Justice and various states attorneys general.
ASSUMPTIONS AND OUTLOOK FOR FULL YEAR 2018
Moody’s outlook for 2018 is based on assumptions about many geopolitical
conditions and macroeconomic and capital market factors, including
interest rates, foreign currency exchange rates, corporate profitability
and business investment spending, mergers and acquisitions, consumer
borrowing and securitization, and the amount of debt issued. These
assumptions are subject to uncertainty, and results for the year could
differ materially from our current outlook. Our guidance assumes foreign
currency translation at end-of-quarter exchange rates. Specifically, our
forecast reflects exchange rates for the British pound (£) of $1.40 to
£1 and for the euro (€) of $1.23 to €1.
Certain components of Moody’s 2018 guidance have been modified to
reflect the company’s current view of business conditions:
Corporate finance revenue is now expected to increase in the
mid-single-digit percent range. Structured finance revenue is now
expected to increase in the high-single-digit percent range.
A full summary of Moody’s guidance as of April 27, 2018, is included in
Table 12 – 2018 Outlook table at the end of this press release.
CONFERENCE CALL
Moody’s will hold a conference call to discuss first quarter 2018
results as well as its 2018 outlook on April 27, 2018, at 11:30 a.m.
Eastern Time (“ET”). Individuals within the U.S. and Canada can access
the call by dialing +1-877-400-0505. Other callers should dial
+1-720-452-9084. Please dial into the call by 11:20 a.m. ET. The
passcode for the call is 3829550.
The teleconference will also be webcast with an accompanying slide
presentation which can be accessed through Moody's Investor Relations
website, http://ir.moodys.com
under “Featured and Upcoming Events and Presentations”. The webcast will
be available until 3:30 p.m. ET on May 26, 2018.
A replay of the teleconference will be available from 3:30 p.m. ET,
April 27, 2018 until 3:30 p.m. ET, May 26, 2018. The replay can be
accessed from within the United States and Canada by dialing
+1-888-203-1112. Other callers can access the replay at +1-719-457-0820.
The replay confirmation code is 3829550.
*****
ABOUT MOODY'S CORPORATION
Moody's is an essential component of the global capital markets,
providing credit ratings, research, tools and analysis that contribute
to transparent and integrated financial markets. Moody’s Corporation
(NYSE: MCO) is the parent company of Moody's Investors Service, which
provides credit ratings and research covering debt instruments and
securities, and Moody's Analytics, which offers leading-edge software,
advisory services and research for credit and economic analysis and
financial risk management. The corporation, which reported revenue of
$4.2 billion in 2017, employs approximately 12,000 people worldwide and
maintains a presence in 42 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. The forward-looking statements in this release are made
as of the date hereof, and Moody’s 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, Moody’s is identifying certain factors
that could cause actual results to differ, perhaps materially, from
those indicated by these forward-looking statements. Those factors,
risks and uncertainties include, but are not limited to, world-wide
credit market disruptions or an economic slowdown, which could affect
the volume of debt and other securities issued in domestic and/or global
capital markets; other matters that could affect the volume of debt and
other securities issued in domestic and/or global capital markets,
including regulation, credit quality concerns, changes in interest rates
and other volatility in the financial markets such as that due to the
U.K.’s referendum vote whereby the U.K. citizens voted to withdraw from
the EU; the level of merger and acquisition activity in the U.S. and
abroad; the uncertain effectiveness and possible collateral consequences
of U.S. and foreign government actions affecting world-wide credit
markets, international trade and economic policy; concerns in the
marketplace affecting our credibility or otherwise affecting market
perceptions of the integrity or utility of independent credit agency
ratings; the introduction of competing products or technologies by other
companies; pricing pressure from competitors and/or customers; the level
of success of new product development and global expansion; the impact
of regulation as an NRSRO, the potential for new U.S., state and local
legislation and regulations, including provisions in the Financial
Reform Act and regulations resulting from that Act; the potential for
increased competition and regulation in the EU and other foreign
jurisdictions; exposure to litigation related to our rating opinions, as
well as any other litigation, government and regulatory proceedings,
investigations and inquires to which the Company may be subject from
time to time; provisions in the Financial Reform Act legislation
modifying the pleading standards, and EU regulations modifying the
liability standards, applicable to credit rating agencies in a manner
adverse to credit rating agencies; provisions of EU regulations imposing
additional procedural and substantive requirements on the pricing of
services and the expansion of supervisory remit to include non-EU
ratings used for regulatory purposes; the possible loss of key
employees; failures or malfunctions of our operations and
infrastructure; any vulnerabilities to cyber threats or other
cybersecurity concerns; the outcome of any review by controlling tax
authorities of the Company’s global tax planning initiatives; exposure
to potential criminal sanctions or civil remedies if the Company fails
to comply with foreign and U.S. laws and regulations that are applicable
in the jurisdictions in which the Company operates, including sanctions
laws, anti-corruption laws, and local laws prohibiting corrupt payments
to government officials; the impact of mergers, acquisitions or other
business combinations and the ability of the Company to successfully
integrate acquired businesses; currency and foreign exchange volatility;
the level of future cash flows; the levels of capital investments; and a
decline in the demand for credit risk management tools by financial
institutions. Other factors, risks and uncertainties relating to our
acquisition of Bureau van Dijk could cause our actual results to differ,
perhaps materially, from those indicated by these forward-looking
statements, including risks relating to the integration of Bureau van
Dijk’s operations, products and employees into Moody’s and the
possibility that anticipated synergies and other benefits of the
acquisition will not be realized in the amounts anticipated or will not
be realized within the expected timeframe; risks that the acquisition
could have an adverse effect on the business of Bureau van Dijk or its
prospects, including, without limitation, on relationships with vendors,
suppliers or customers; claims made, from time to time, by vendors,
suppliers or customers; changes in the European or global marketplaces
that have an adverse effect on the business of Bureau van Dijk. These
factors, risks and uncertainties as well as other risks and
uncertainties that could cause Moody’s actual results to differ
materially from those contemplated, expressed, projected, anticipated or
implied in the forward-looking statements are described in greater
detail under “Risk Factors” in Part I, Item 1A of the Company’s annual
report on Form 10-K for the year ended December 31, 2017, and in other
filings made by the Company from time to time with the SEC or in
materials incorporated herein or therein. Stockholders and investors are
cautioned that the occurrence of any of these factors, risks and
uncertainties may cause the Company’s actual results to differ
materially from those contemplated, expressed, projected, anticipated or
implied in the forward-looking statements, which could have a material
and adverse effect on the Company’s business, results of operations and
financial condition. New factors may emerge from time to time, and it is
not possible for the Company to predict new factors, nor can the Company
assess the potential effect of any new factors on it.
__________________________
1 Refer to the tables at the
end of this press release for a reconciliation of all GAAP to adjusted
measures mentioned throughout this press release.
|
|
|
|
|
|
|
Table 1 - Consolidated Statements Operations (Unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
March 31,
|
|
|
|
|
|
|
|
|
|
2018
|
|
2017
|
|
Amounts in millions, except per share amounts
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
1,126.7
|
|
|
$
|
975.2
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
Operating
|
|
|
314.9
|
|
|
|
275.3
|
|
|
Selling, general and administrative
|
|
|
271.1
|
|
|
|
220.7
|
|
|
Depreciation and amortization
|
|
|
49.1
|
|
|
|
32.5
|
|
|
Acquisition-Related Expenses
|
|
|
0.8
|
|
|
|
-
|
|
|
Total expenses
|
|
|
635.9
|
|
|
|
528.5
|
|
|
|
|
|
|
|
|
Operating income
|
|
|
490.8
|
|
|
|
446.7
|
|
|
Non-operating (expense) income, net
|
|
|
|
|
|
Interest expense, net
|
|
|
(50.7
|
)
|
|
|
(47.4
|
)
|
|
Other non-operating income (expense), net
|
|
|
1.0
|
|
|
|
(7.7
|
)
|
|
CCXI Gain
|
|
|
-
|
|
|
|
59.7
|
|
|
Total non-operating (expense) income, net
|
|
|
(49.7
|
)
|
|
|
4.6
|
|
|
Income before provision for income taxes
|
|
|
441.1
|
|
|
|
451.3
|
|
|
Provision for income taxes
|
|
|
64.3
|
|
|
|
105.4
|
|
|
Net income
|
|
|
376.8
|
|
|
|
345.9
|
|
|
Less: net income attributable to noncontrolling interests
|
|
|
3.9
|
|
|
|
0.3
|
|
|
Net income attributable to Moody's Corporation
|
|
$
|
372.9
|
|
|
$
|
345.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share attributable to Moody's common shareholders
|
|
|
|
|
|
Basic
|
|
$
|
1.95
|
|
|
$
|
1.81
|
|
|
Diluted
|
|
$
|
1.92
|
|
|
$
|
1.78
|
|
|
|
|
|
|
|
|
Weighted average number of shares outstanding
|
|
|
|
|
|
Basic
|
|
|
191.4
|
|
|
|
191.1
|
|
|
Diluted
|
|
|
194.5
|
|
|
|
194.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 2 - Supplemental Revenue Information (Unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
March 31,
|
|
Amounts in millions
|
|
2018
|
|
2017
|
|
Moody's Investors Service
|
|
|
|
|
|
Corporate Finance
|
|
$
|
377.7
|
|
|
$
|
352.8
|
|
|
Structured Finance
|
|
|
129.7
|
|
|
|
100.2
|
|
|
Financial Institutions
|
|
|
114.3
|
|
|
|
112.3
|
|
|
Public, Project and Infrastructure Finance
|
|
|
93.2
|
|
|
|
98.1
|
|
|
MIS Other
|
|
|
5.0
|
|
|
|
4.8
|
|
|
Intersegment royalty
|
|
|
29.8
|
|
|
|
26.0
|
|
|
Sub-total MIS
|
|
|
749.7
|
|
|
|
694.2
|
|
|
Eliminations
|
|
|
(29.8
|
)
|
|
|
(26.0
|
)
|
|
Total MIS revenue
|
|
|
719.9
|
|
|
|
668.2
|
|
|
|
|
|
|
|
|
Moody's Analytics
|
|
|
|
|
|
Research, Data and Analytics
|
|
|
269.2
|
|
|
|
175.4
|
|
|
Enterprise Risk Solutions
|
|
|
100.1
|
|
|
|
95.9
|
|
|
Professional Services
|
|
|
37.5
|
|
|
|
35.7
|
|
|
Intersegment revenue
|
|
|
5.0
|
|
|
|
3.7
|
|
|
Sub-total MA
|
|
|
411.8
|
|
|
|
310.7
|
|
|
Eliminations
|
|
|
(5.0
|
)
|
|
|
(3.7
|
)
|
|
Total MA revenue
|
|
|
406.8
|
|
|
|
307.0
|
|
|
Total Moody's Corporation revenue
|
|
$
|
1,126.7
|
|
|
$
|
975.2
|
|
|
|
|
|
|
|
|
Moody's Corporation revenue by geographic area
|
|
|
|
|
|
|
|
|
|
|
|
United States
|
|
$
|
597.7
|
|
|
$
|
577.8
|
|
|
International
|
|
|
529.0
|
|
|
|
397.4
|
|
|
|
|
$
|
1,126.7
|
|
|
$
|
975.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 3 - Selected Consolidated Balance Sheet Data (Unaudited)
|
|
|
|
|
|
|
|
|
|
March 31,
|
|
December 31,
|
|
|
|
2018
|
|
2017
|
|
Amounts in millions
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
1,277.3
|
|
$
|
1,071.5
|
|
|
Short-term investments
|
|
|
100.5
|
|
|
111.8
|
|
|
Total current assets
|
|
|
2,818.8
|
|
|
2,580.6
|
|
|
Non-current assets
|
|
|
6,195.2
|
|
|
6,013.6
|
|
|
Total assets
|
|
|
9,014.0
|
|
|
8,594.2
|
|
|
Total current liabilities (1)
|
|
|
1,920.9
|
|
|
2,063.3
|
|
|
Total debt (2)
|
|
|
5,507.6
|
|
|
5,540.5
|
|
|
Other long-term liabilities
|
|
|
1,555.1
|
|
|
1,534.7
|
|
|
Total shareholders' equity (deficit)
|
|
|
420.0
|
|
|
(114.9
|
)
|
|
|
|
|
|
|
|
Total liabilities and shareholders' equity (deficit)
|
|
|
9,014.0
|
|
|
8,594.2
|
|
|
|
|
|
|
|
|
Actual number of shares outstanding
|
|
|
191.9
|
|
|
191.0
|
|
|
(1) The March 31, 2018 and December 31, 2017 amounts
include $389.6 million and $429.4 million, respectively, of debt and
commercial paper classified as a current liability as the maturities
are within twelve months of the balance sheet date.
|
|
(2) Includes debt classified in both current liabilities
and long-term debt.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 4 - Selected Consolidated Balance Sheet Data (Unaudited)
Continued
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total debt consists of the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2018
|
|
Amounts in millions
|
|
Principal
Amount
|
|
Fair Value of
Interest Rate
Swaps
(1)
|
|
Unamortized
(Discount)
Premium
|
|
Unamortized
Debt Issuance
Costs
|
|
Carrying
Value
|
|
Notes Payable:
|
|
|
|
|
|
|
|
|
|
|
|
5.50% 2010 Senior Notes, due 2020
|
|
$
|
500.0
|
|
$
|
(5.6
|
)
|
|
$
|
(0.9
|
)
|
|
$
|
(1.0
|
)
|
|
$
|
492.5
|
|
|
4.50% 2012 Senior Notes, due 2022
|
|
|
500.0
|
|
|
(2.3
|
)
|
|
|
(1.9
|
)
|
|
|
(1.7
|
)
|
|
|
494.1
|
|
|
4.875% 2013 Senior Notes, due 2024
|
|
|
500.0
|
|
|
-
|
|
|
|
(1.8
|
)
|
|
|
(2.3
|
)
|
|
|
495.9
|
|
|
2.75% 2014 Senior Notes (5-Year), due 2019
|
|
|
450.0
|
|
|
(4.3
|
)
|
|
|
(0.2
|
)
|
|
|
(0.9
|
)
|
|
|
444.6
|
|
|
5.25% 2014 Senior Notes (30-Year), due 2044
|
|
|
600.0
|
|
|
-
|
|
|
|
3.3
|
|
|
|
(5.6
|
)
|
|
|
597.7
|
|
|
1.75% 2015 Senior Notes, due 2027
|
|
|
614.9
|
|
|
-
|
|
|
|
-
|
|
|
|
(3.5
|
)
|
|
|
611.4
|
|
|
2.75% 2017 Senior Notes, due 2021
|
|
|
500.0
|
|
|
-
|
|
|
|
(1.2
|
)
|
|
|
(3.0
|
)
|
|
|
495.8
|
|
|
2017 Floating Rate Senior Notes, due 2018
|
|
|
300.0
|
|
|
-
|
|
|
|
-
|
|
|
|
(0.3
|
)
|
|
|
299.7
|
|
|
2.625% 2017 Private Placement Notes, due 2023
|
|
|
500.0
|
|
|
-
|
|
|
|
(1.0
|
)
|
|
|
(3.4
|
)
|
|
|
495.6
|
|
|
3.25% 2017 Private Placement Notes, due 2028
|
|
|
500.0
|
|
|
-
|
|
|
|
(5.1
|
)
|
|
|
(3.9
|
)
|
|
|
491.0
|
|
|
2017 Term Loan Facility, due 2020
|
|
|
500.0
|
|
|
-
|
|
|
|
-
|
|
|
|
(0.6
|
)
|
|
|
499.4
|
|
|
Commercial Paper
|
|
|
90.0
|
|
|
-
|
|
|
|
(0.1
|
)
|
|
|
|
|
89.9
|
|
|
Total debt
|
|
$
|
5,554.9
|
|
$
|
(12.2
|
)
|
|
$
|
(8.9
|
)
|
|
$
|
(26.2
|
)
|
|
$
|
5,507.6
|
|
|
Current portion
|
|
|
|
|
|
|
|
|
|
|
(389.6
|
)
|
|
Total long-term debt
|
|
|
|
|
|
|
|
|
|
$
|
5,118.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2017
|
|
|
|
Principal
Amount
|
|
Fair Value of
Interest Rate
Swaps (1)
|
|
Unamortized
(Discount)
Premium
|
|
Unamortized
Debt Issuance
Costs
|
|
Carrying
Value
|
|
Notes Payable:
|
|
|
|
|
|
|
|
|
|
|
|
5.50% 2010 Senior Notes, due 2020
|
|
$
|
500.0
|
|
$
|
-
|
|
|
$
|
(1.0
|
)
|
|
$
|
(1.2
|
)
|
|
$
|
497.8
|
|
|
4.50% 2012 Senior Notes, due 2022
|
|
|
500.0
|
|
|
(0.8
|
)
|
|
|
(2.0
|
)
|
|
|
(1.7
|
)
|
|
|
495.5
|
|
|
4.875% 2013 Senior Notes, due 2024
|
|
|
500.0
|
|
|
-
|
|
|
|
(1.8
|
)
|
|
|
(2.4
|
)
|
|
|
495.8
|
|
|
2.75% 2014 Senior Notes (5-Year), due 2019
|
|
|
450.0
|
|
|
(2.2
|
)
|
|
|
(0.2
|
)
|
|
|
(1.1
|
)
|
|
|
446.5
|
|
|
5.25% 2014 Senior Notes (30-Year), due 2044
|
|
|
600.0
|
|
|
-
|
|
|
|
3.3
|
|
|
|
(5.7
|
)
|
|
|
597.6
|
|
|
1.75% 2015 Senior Notes, due 2027
|
|
|
600.4
|
|
|
-
|
|
|
|
-
|
|
|
|
(3.6
|
)
|
|
|
596.8
|
|
|
2.75% 2017 Senior Notes, due 2021
|
|
|
500.0
|
|
|
-
|
|
|
|
(1.3
|
)
|
|
|
(3.2
|
)
|
|
|
495.5
|
|
|
2017 Floating Rate Senior Notes, due 2018
|
|
|
300.0
|
|
|
-
|
|
|
|
-
|
|
|
|
(0.5
|
)
|
|
|
299.5
|
|
|
2.625% 2017 Private Placement Notes, due 2023
|
|
|
500.0
|
|
|
-
|
|
|
|
(1.1
|
)
|
|
|
(3.5
|
)
|
|
|
495.4
|
|
|
3.25% 2017 Private Placement Notes, due 2028
|
|
|
500.0
|
|
|
-
|
|
|
|
(5.2
|
)
|
|
|
(3.9
|
)
|
|
|
490.9
|
|
|
2017 Term Loan Facility, due 2020
|
|
|
500.0
|
|
|
-
|
|
|
|
-
|
|
|
|
(0.7
|
)
|
|
|
499.3
|
|
|
Commercial Paper
|
|
|
130.0
|
|
|
-
|
|
|
|
(0.1
|
)
|
|
|
-
|
|
|
|
129.9
|
|
|
Total debt
|
|
$
|
5,580.4
|
|
$
|
(3.0
|
)
|
|
$
|
(9.4
|
)
|
|
$
|
(27.5
|
)
|
|
$
|
5,540.5
|
|
|
Current portion
|
|
|
|
|
|
|
|
|
|
|
(429.4
|
)
|
|
Total long-term debt
|
|
|
|
|
|
|
|
|
|
$
|
5,111.1
|
|
|
(1) The Company has entered into interest rate swaps on
the 2010 Senior Notes, the 2012 Senior Notes and the 2014 Senior
Notes (5-Year).
|
|
|
|
|
|
|
|
|
|
Table 5 - Non-Operating (Expense) Income, Net
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
March 31,
|
|
|
|
|
|
|
|
|
|
2018
|
|
2017
|
|
Amounts in millions
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net:
|
|
|
|
|
|
Expense on borrowings
|
|
$
|
(51.3
|
)
|
|
$
|
(44.7
|
)
|
|
Income
|
|
|
3.2
|
|
|
|
4.1
|
|
|
UTPs and other tax related liabilities
|
|
|
1.8
|
|
|
|
(2.1
|
)
|
|
Net periodic pension costs-interest component(1)
|
|
|
(4.7
|
)
|
|
|
(5.0
|
)
|
|
Interest capitalized
|
|
|
0.3
|
|
|
|
0.3
|
|
|
Total interest expense, net
|
|
$
|
(50.7
|
)
|
|
$
|
(47.4
|
)
|
|
Other non-operating (expense) income, net:
|
|
|
|
|
|
FX loss
|
|
$
|
(5.9
|
)
|
|
$
|
(9.6
|
)
|
|
Net periodic pension costs - other components(1)
|
|
|
2.3
|
|
|
|
1.7
|
|
|
Joint venture income
|
|
|
1.3
|
|
|
|
1.0
|
|
|
Other
|
|
|
3.3
|
|
|
|
(0.8
|
)
|
|
Other non-operating income (expense), net
|
|
1.0
|
|
|
|
(7.7
|
)
|
|
CCXI Gain
|
|
|
-
|
|
|
|
59.7
|
|
|
Total non-operating (expense) income, net
|
|
$
|
(49.7
|
)
|
|
$
|
4.6
|
|
|
(1) The Company adopted a new accounting standard
relating to the accounting for pension costs in the first quarter
of 2018 whereby all components of pension expense except for the
service cost component are required to be presented in other
non-operating income (expense). The service cost component
continues to be reported as a component of operating and selling,
general and administrative (SG&A) expense. This standard required
retrospective adoption resulting in the reclassification of prior
period results.
|
|
|
|
|
|
Table 6 - Financial Information by Segment
|
|
|
|
The table below presents revenue, adjusted operating income and
operating income by reportable segment. The Company defines adjusted
operating income as operating income excluding depreciation and
amortization and Acquisition-Related Expenses.
|
|
|
|
|
|
Three Months Ended March 31,
|
|
|
|
2018
|
|
2017 (1)
|
|
Amounts in millions
|
|
MIS
|
|
MA
|
|
Eliminations
|
|
Consolidated
|
|
MIS
|
|
MA
|
|
Eliminations
|
|
Consolidated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
749.7
|
|
|
$
|
411.8
|
|
|
$
|
(34.8
|
)
|
|
$
|
1,126.7
|
|
|
$
|
694.2
|
|
|
$
|
310.7
|
|
|
$
|
(29.7
|
)
|
|
$
|
975.2
|
|
|
Operating, selling, general and administrative expense
|
|
|
310.4
|
|
|
|
310.4
|
|
|
|
(34.8
|
)
|
|
|
586.0
|
|
|
|
286.2
|
|
|
|
239.5
|
|
|
|
(29.7
|
)
|
|
|
496.0
|
|
|
Adjusted operating income
|
|
|
439.3
|
|
|
|
101.4
|
|
|
|
-
|
|
|
|
540.7
|
|
|
|
408.0
|
|
|
|
71.2
|
|
|
|
-
|
|
|
|
479.2
|
|
|
Depreciation and amortization
|
|
|
16.8
|
|
|
|
32.3
|
|
|
|
-
|
|
|
|
49.1
|
|
|
|
18.9
|
|
|
|
13.6
|
|
|
|
-
|
|
|
|
32.5
|
|
|
Acquisition-Related Expenses
|
|
|
-
|
|
|
|
0.8
|
|
|
|
-
|
|
|
|
0.8
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Operating income
|
|
$
|
422.5
|
|
|
$
|
68.3
|
|
|
$
|
-
|
|
|
$
|
490.8
|
|
|
$
|
389.1
|
|
|
$
|
57.6
|
|
|
$
|
-
|
|
|
$
|
446.7
|
|
|
Adjusted operating margin
|
|
|
58.6
|
%
|
|
|
24.6
|
%
|
|
|
|
|
48.0
|
%
|
|
|
58.8
|
%
|
|
|
22.9
|
%
|
|
|
|
|
49.1
|
%
|
|
Operating margin
|
|
|
56.4
|
%
|
|
|
16.6
|
%
|
|
|
|
|
43.6
|
%
|
|
|
56.1
|
%
|
|
|
18.5
|
%
|
|
|
|
|
45.8
|
%
|
|
(1) Pursuant to the adoption of a new accounting
standard relating to the accounting for pension costs, which
required retrospective adoption, only the service cost component
of net periodic pension expense will be classified within
operating and SG&A expenses with the remaining components being
classified in non-operating income (expense). Prior period segment
results have been reclassified to reflect the adoption.
Accordingly, operating and SG&A expenses for MIS and MA were
reduced by $2.1 million and $1.2 million, respectively, for the
three months ended March 31, 2017.
|
|
|
|
|
|
Table 7 - Transaction and Relationship Revenue
|
|
|
|
The tables below summarize the split between transaction and
relationship revenue. In the MIS segment, excluding MIS Other,
transaction revenue represents the initial rating of a new debt
issuance as well as other one-time fees while relationship revenue
represents the recurring monitoring of a rated debt obligation
and/or entities that issue such obligations, as well as revenue
from programs such as commercial paper, medium-term notes and
shelf registrations. In MIS Other, transaction revenue represents
revenue from professional services and outsourcing engagements and
relationship revenue represents subscription-based revenues. In
the MA segment, relationship revenue represents subscription-based
revenues and software maintenance revenue. Transaction revenue in
MA represents software license fees from the sale of perpetual
licenses and revenue from risk management advisory projects,
training and certification services, and research and analytical
engagements.
|
|
|
|
|
|
Three Months Ended March 31,
|
|
Amounts in millions
|
|
2018
|
|
2017
|
|
|
|
Transaction
|
|
Relationship
|
|
Total
|
|
Transaction
|
|
Relationship
|
|
Total
|
|
Corporate Finance
|
|
$
|
274.9
|
|
|
$
|
102.8
|
|
|
$
|
377.7
|
|
|
$
|
260.6
|
|
|
$
|
92.2
|
|
|
$
|
352.8
|
|
|
|
|
|
73
|
%
|
|
|
27
|
%
|
|
|
100
|
%
|
|
|
74
|
%
|
|
|
26
|
%
|
|
|
100
|
%
|
|
Structured Finance
|
|
$
|
83.1
|
|
|
$
|
46.6
|
|
|
$
|
129.7
|
|
|
$
|
57.5
|
|
|
$
|
42.7
|
|
|
$
|
100.2
|
|
|
|
|
|
64
|
%
|
|
|
36
|
%
|
|
|
100
|
%
|
|
|
57
|
%
|
|
|
43
|
%
|
|
|
100
|
%
|
|
Financial Institutions
|
|
$
|
50.0
|
|
|
$
|
64.3
|
|
|
$
|
114.3
|
|
|
$
|
53.4
|
|
|
$
|
58.9
|
|
|
$
|
112.3
|
|
|
|
|
|
44
|
%
|
|
|
56
|
%
|
|
|
100
|
%
|
|
|
48
|
%
|
|
|
52
|
%
|
|
|
100
|
%
|
|
Public, Project and Infrastructure Finance
|
|
$
|
54.4
|
|
|
$
|
38.8
|
|
|
$
|
93.2
|
|
|
$
|
59.2
|
|
|
$
|
38.9
|
|
|
$
|
98.1
|
|
|
|
|
|
58
|
%
|
|
|
42
|
%
|
|
|
100
|
%
|
|
|
60
|
%
|
|
|
40
|
%
|
|
|
100
|
%
|
|
MIS Other
|
|
$
|
0.6
|
|
|
$
|
4.4
|
|
|
$
|
5.0
|
|
|
$
|
0.3
|
|
|
$
|
4.5
|
|
|
$
|
4.8
|
|
|
|
|
|
12
|
%
|
|
|
88
|
%
|
|
|
100
|
%
|
|
|
6
|
%
|
|
|
94
|
%
|
|
|
100
|
%
|
|
Total MIS
|
|
$
|
463.0
|
|
|
$
|
256.9
|
|
|
$
|
719.9
|
|
|
$
|
431.0
|
|
|
$
|
237.2
|
|
|
$
|
668.2
|
|
|
|
|
|
64
|
%
|
|
|
36
|
%
|
|
|
100
|
%
|
|
|
65
|
%
|
|
|
35
|
%
|
|
|
100
|
%
|
|
Moody's Analytics
|
|
$
|
60.8
|
|
|
$
|
346.0
|
|
|
$
|
406.8
|
|
|
$
|
64.6
|
|
|
$
|
242.4
|
|
|
$
|
307.0
|
|
|
|
|
|
15
|
%
|
|
|
85
|
%
|
|
|
100
|
%
|
|
|
21
|
%
|
|
|
79
|
%
|
|
|
100
|
%
|
|
Total Moody's Corporation
|
|
$
|
523.8
|
|
|
$
|
602.9
|
|
|
$
|
1,126.7
|
|
|
$
|
495.6
|
|
|
$
|
479.6
|
|
|
$
|
975.2
|
|
|
|
|
|
46
|
%
|
|
|
54
|
%
|
|
|
100
|
%
|
|
|
51
|
%
|
|
|
49
|
%
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Financial Measures
|
|
|
|
The tables below reflect certain adjusted results that the SEC
defines as "non-GAAP financial measures" as well as a reconciliation
of each non-GAAP measure to its most directly comparable GAAP
measure. Management believes that such adjusted financial measures,
when read in conjunction with the Company's reported results, can
provide useful supplemental information for investors analyzing
period-to-period comparisons of the Company's performance,
facilitate comparisons to competitors' operating results and provide
greater transparency to investors of supplemental information used
by management in its financial and operational decision-making.
These adjusted measures, as defined by the Company, are not
necessarily comparable to similarly defined measures of other
companies. Furthermore, these adjusted measures should not be viewed
in isolation or used as a substitute for other GAAP measures in
assessing the operating performance or cash flows of the Company.
|
|
|
|
Table 8 - Adjusted Operating Income and Adjusted Operating Margin
|
|
|
|
The Company presents Adjusted Operating Income because management
deems this metric to be a useful measure of assessing the
operating performance of Moody’s. Adjusted Operating Income
excludes depreciation and amortization and Acquisition-Related
Expenses. Depreciation and amortization are excluded because
companies utilize productive assets of different ages and use
different methods of acquiring and depreciating productive assets.
Acquisition-Related Expenses consist of expenses incurred to
complete and integrate the acquisition of Bureau van Dijk and are
excluded due to the material nature of these expenses on an annual
basis which are not expected to recur at this dollar magnitude
subsequent to the completion of the multi-year integration effort.
Acquisition-Related Expenses from previous acquisitions were not
material. Management believes that the exclusion of depreciation
and amortization and Acquisition-Related Expenses, as detailed in
the reconciliation below, allows for an additional perspective on
the Company’s operating results from period to period and across
companies. The Company defines Adjusted Operating Margin as
Adjusted Operating Income divided by revenue.
|
|
|
|
|
|
Three Months Ended
|
|
|
|
March 31,
|
|
Amounts in millions
|
|
2018
|
|
2017
|
|
Operating income
|
|
$
|
490.8
|
|
|
$
|
446.7
|
|
|
Depreciation & amortization
|
|
|
49.1
|
|
|
|
32.5
|
|
|
Acquisition-Related Expenses
|
|
|
0.8
|
|
|
|
-
|
|
|
Adjusted operating income
|
|
$
|
540.7
|
|
|
$
|
479.2
|
|
|
Operating margin
|
|
|
43.6
|
%
|
|
|
45.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted operating margin
|
|
|
48.0
|
%
|
|
|
49.1
|
%
|
|
|
|
|
|
|
|
|
|
Table 9 - Free Cash Flow
|
|
|
|
The table below reflects a reconciliation of the Company’s net cash
flows from operating activities to free cash flow. The Company
defines free cash flow as net cash provided by operating activities
minus payments for capital expenditures. Management believes that
free cash flow is a useful metric in assessing the Company’s cash
flows to service debt, pay dividends and to fund acquisitions and
share repurchases. Management deems capital expenditures essential
to the Company’s product and service innovations and maintenance of
Moody’s operational capabilities. Accordingly, capital expenditures
are deemed to be a recurring use of Moody’s cash flow.
|
|
|
|
|
|
Three Months Ended
|
|
|
|
March 31,
|
|
Amounts in millions
|
|
2018
|
|
2017
|
|
Net cash flows provided by (used in) operating activities
|
|
$
|
391.5
|
|
|
$
|
(512.4
|
)
|
|
Capital expenditures
|
|
|
(15.0
|
)
|
|
|
(18.7
|
)
|
|
Free cash flow
|
|
|
376.5
|
|
|
|
(531.1
|
)
|
|
Net cash (used in) provided by investing activities
|
|
$
|
(18.5
|
)
|
|
$
|
18.6
|
|
|
Net cash (used in) provided by financing activities
|
|
$
|
(182.3
|
)
|
|
$
|
553.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 10 - Organic Revenue and Growth Measures
|
|
|
|
The Company presents the organic revenue and growth for the MA
segment and RD&A LOB because management deems this metric to be a
useful measure which provides additional perspective in assessing
the revenue growth of the Company's MA segment and RD&A LOB
excluding the revenue impacts from Bureau van Dijk, a material
acquisition. The organic revenue and growth for MA in the three
months ended March 31, 2018 exclude three months of revenue from
Bureau van Dijk, which was acquired in August 2017. The Company
calculates organic revenue and growth by excluding $73.5 million in
revenue from Bureau van Dijk in the first quarter of 2018 (which is
net of an approximate $10 million reduction to revenue due to a $53
million fair value adjustment, as part of acquisition accounting, to
acquired deferred revenue) from the global MA revenue and RD&A
revenue. Below is a reconciliation of the Company’s organic dollar
revenue and growth rates:
|
|
|
|
|
|
Three Months Ended
|
|
|
|
March 31,
|
|
Amounts in millions
|
|
2018
|
|
2017
|
|
Change
|
|
Growth
|
|
MA Revenue
|
|
$
|
406.8
|
|
|
$
|
307.0
|
|
$
|
99.8
|
|
|
33%
|
|
Bureau van Dijk Revenue
|
|
|
(73.5
|
)
|
|
|
-
|
|
|
(73.5
|
)
|
|
|
|
Organic MA revenue
|
|
$
|
333.3
|
|
|
$
|
307.0
|
|
$
|
26.3
|
|
|
9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
March 31,
|
|
Amounts in millions
|
|
2018
|
|
2017
|
|
Change
|
|
Growth
|
|
RD&A Revenue
|
|
$
|
269.2
|
|
|
$
|
175.4
|
|
$
|
93.8
|
|
|
53%
|
|
Bureau van Dijk Revenue
|
|
|
(73.5
|
)
|
|
|
-
|
|
|
(73.5
|
)
|
|
|
|
Organic RD&A revenue
|
|
$
|
195.7
|
|
|
$
|
175.4
|
|
$
|
20.3
|
|
|
12%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 11 - Adjusted Net Income and Adjusted Diluted EPS
Attributable to Moody's Common Shareholders
|
|
|
|
Beginning in the third quarter of 2017, the Company modified this
adjusted measure to exclude the impact of amortization of acquired
intangible assets as companies utilize intangible assets with
different ages and have different methods of acquiring and
amortizing intangible assets. Furthermore, the timing and
magnitude of business combination transactions are not predictable
and the purchase price allocated to amortizable intangible assets
and the related amortization period are unique to each acquisition
and can vary significantly from period to period and across
companies. Also, management believes that excluding
acquisition-related amortization expense provides additional
perspective when comparing operating results from period to
period, and with both acquisitive and non-acquisitive peer
companies. The Company modified the adjusted measures to exclude
amortization of acquired intangible assets to provide additional
perspective when comparing net income and diluted EPS from period
to period and across companies.
|
|
|
|
In addition to excluding acquisition-related amortization expense,
adjusted net income and adjusted diluted earnings per share
exclude the CCXI Gain and Acquisition-Related Expenses. The
Company excludes these items to provide additional perspective on
the Company’s operating results from period to period and across
companies as the frequency and magnitude of similar transactions
may vary widely across periods. Additionally, the
Acquisition-Related Expenses are excluded due to the material
nature of these expenses on an annual basis which are not expected
to recur at this dollar magnitude subsequent to the completion of
the multi-year integration effort relating to Bureau van Dijk.
Acquisition-Related Expenses from previous acquisitions were not
material.
|
|
|
|
Below is a reconciliation of this measure to its most directly
comparable U.S. GAAP amount:
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|
Amounts in millions
|
|
2018
|
|
2017
|
|
Net income attributable to Moody's common shareholders
|
|
|
|
$
|
372.9
|
|
|
|
$
|
345.6
|
|
|
CCXI Gain
|
|
|
|
|
-
|
|
|
|
|
(59.7
|
)
|
|
Pre-Tax Acquisition-Related Expenses
|
|
$
|
0.8
|
|
|
|
|
$
|
-
|
|
|
|
|
Tax on Acquisition-Related Expenses
|
|
|
(0.2
|
)
|
|
|
|
|
-
|
|
|
|
|
Acquisition-Related Expenses
|
|
|
|
|
0.6
|
|
|
|
|
-
|
|
|
Pre-Tax Acquisition-Related Intangible Amortization Expenses
|
|
$
|
25.7
|
|
|
|
|
$
|
8.5
|
|
|
|
|
Tax on Acquisition-Related Intangible Amortization Expenses
|
|
|
(5.9
|
)
|
|
|
|
|
(2.3
|
)
|
|
|
|
Net Acquisition-Related Intangible Amortization Expenses
|
|
|
|
|
19.8
|
|
|
|
|
6.2
|
|
|
Adjusted Net Income
|
|
|
|
$
|
393.3
|
|
|
|
$
|
292.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|
|
|
2018
|
|
2017
|
|
Earnings per share attributable to Moody's common shareholders
|
|
|
|
$
|
1.92
|
|
|
|
$
|
1.78
|
|
|
CCXI Gain
|
|
|
|
|
-
|
|
|
|
|
(0.31
|
)
|
|
Pre-Tax Acquisition-Related Expenses
|
|
$
|
-
|
|
|
|
|
$
|
-
|
|
|
|
|
Tax on Acquisition-Related Expenses
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
Acquisition-Related Expenses
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
Pre-Tax Acquisition-Related Intangible Amortization Expenses
|
|
$
|
0.13
|
|
|
|
|
$
|
0.04
|
|
|
|
|
Tax on Acquisition-Related Intangible Amortization Expenses
|
|
|
(0.03
|
)
|
|
|
|
|
(0.01
|
)
|
|
|
|
Net Acquisition-Related Intangible Amortization Expenses
|
|
|
|
|
0.10
|
|
|
|
|
0.03
|
|
|
Adjusted Diluted EPS
|
|
|
|
$
|
2.02
|
|
|
|
$
|
1.50
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Table 12 - 2018 Outlook
|
|
|
|
Moody’s outlook for 2018 is based on assumptions about many
macroeconomic and capital market factors, including interest rates,
foreign currency exchange rates, corporate profitability and
business investment spending, merger and acquisitions, consumer
borrowing and securitization, and the amount of debt issued. These
assumptions are subject to uncertainty, and results for the year
could differ materially from our current outlook. Our guidance
assumes foreign currency translation at end-of-quarter exchange
rates. Specifically, our forecast reflects exchange rates for the
British pound (£) of $1.40 to £1 and for the euro (€) of $1.23 to €1.
|
|
|
|
|
|
|
|
Full Year 2018 Moody's Corporation Guidance as of April 27, 2018
|
|
|
|
|
|
|
|
MOODY'S CORPORATION
|
|
Current guidance
|
|
Last publicly disclosed guidance
|
|
Revenue
|
|
increase in the low-double-digit percent range
|
|
NC
|
|
Operating expenses
|
|
increase in the low-double-digit percent range
|
|
NC
|
|
Depreciation & amortization
|
|
approximately $200 million
|
|
NC
|
|
Operating margin
|
|
43% - 44%
|
|
NC
|
|
Adjusted operating margin(1)
|
|
approximately 48%
|
|
NC
|
|
Effective tax rate
|
|
22% - 23%
|
|
NC
|
|
Diluted EPS
|
|
$7.20 to $7.40
|
|
NC
|
|
Adjusted Diluted EPS(1)
|
|
$7.65 to $7.85
|
|
NC
|
|
Capital expenditures
|
|
approximately $120 million
|
|
NC
|
|
Operating cash flow
|
|
approximately $1.7 billion
|
|
NC
|
|
Free cash flow(1)
|
|
approximately $1.6 billion
|
|
NC
|
|
Share repurchases
|
|
approximately $200 million (subject to available cash, market
conditions and other ongoing capital allocation decisions)
|
|
NC
|
|
NC - There is no difference between the Company's current guidance
and the last publicly disclosed guidance for this item.
|
|
Note: All last publicly disclosed guidance is as of February 9, 2018.
|
|
(1) These metrics are adjusted measures. See below for
reconciliation of these measures to their comparable GAAP measure.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Full Year 2018 Moody's Corporation Guidance as of April 27, 2018
|
|
|
|
|
|
|
|
MIS
|
|
Current guidance
|
|
Last publicly disclosed guidance
|
|
MIS global
|
|
increase in the mid-single-digit percent range
|
|
NC
|
|
MIS U.S.
|
|
increase in the low-single-digit percent range
|
|
NC
|
|
MIS non-U.S.
|
|
increase in the high-single-digit percent range
|
|
NC
|
|
CFG
|
|
increase in the mid-single-digit percent range
|
|
increase in the high-single-digit percent range
|
|
SFG
|
|
increase in the high-single-digit percent range
|
|
increase in the mid-single-digit percent range
|
|
FIG
|
|
increase in the mid-single-digit percent range
|
|
NC
|
|
PPIF
|
|
decrease in the low-single-digit percent range
|
|
NC
|
|
MA
|
|
|
|
|
|
MA global(2)
|
|
increase in the mid-twenties percent range
|
|
NC
|
|
MA U.S.
|
|
increase in the low-double-digit percent range
|
|
NC
|
|
MA non-U.S.
|
|
increase in the mid-thirties percent range
|
|
NC
|
|
RD&A(2)
|
|
increase approximately 40%
|
|
NC
|
|
ERS
|
|
increase in the low-single-digit percent range
|
|
NC
|
|
PS
|
|
increase in the high-single-digit percent range
|
|
NC
|
|
NC - There is no difference between the Company's current guidance
and the last publicly disclosed guidance for this item.
|
|
Note: All last publicly disclosed guidance is as of February 9, 2018.
|
|
(2) Organic MA global revenue is still expected to increase in the
low-double-digit percent range and organic RD&A revenue is still
expected to increase in the mid-teens percent range.
|
|
|
|
|
|
Table 12 - 2018 Outlook Continued
|
|
|
|
The following are reconciliations of the Company's adjusted forward
looking measures to their comparable GAAP measure:
|
|
|
|
|
|
Projected for the Year Ended
|
|
|
|
December 31, 2018
|
|
Operating margin guidance
|
|
43% - 44%
|
|
Depreciation and amortization
|
|
Approximately 4.0%
|
|
Acquisition-Related Expenses
|
|
Approximately 0.5%
|
|
Adjusted operating margin guidance
|
|
Approximately 48%
|
|
|
|
|
|
|
|
|
|
|
|
Projected for the Year Ended
|
|
|
|
December 31, 2018
|
|
Operating cash flow guidance
|
|
Approximately $1.7 billion
|
|
Less: Capital expenditures
|
|
Approximately $120 million
|
|
Free cash flow guidance
|
|
Approximately $1.6 billion
|
|
|
|
|
|
|
|
|
|
|
|
Projected for the Year Ended
|
|
|
|
December 31, 2018
|
|
MA global revenue
|
|
Increase in the mid-twenties percent range
|
|
|
|
(Partial year impact of Bureau van Dijk)
|
|
Organic MA global revenue
|
|
Increase in the low-double-digit percent range
|
|
|
|
|
|
|
|
|
|
|
|
Projected for the Year Ended
|
|
|
|
December 31, 2018
|
|
RD&A revenue
|
|
Increase approximately 40%
|
|
|
|
(Partial year impact of Bureau van Dijk)
|
|
Organic RD&A revenue
|
|
Increase in the mid-teens percent range
|
|
|
|
|
|
|
|
|
|
|
|
Projected for the Year Ended
|
|
|
|
December 31, 2018
|
|
Diluted EPS
|
|
$7.20 to $7.40
|
|
Acquisition-related intangibles
|
|
Approximately $0.40
|
|
Acquisition-Related Expenses
|
|
Approximately $0.05
|
|
Adjusted diluted EPS
|
|
$7.65 to $7.85
|
|
|
|
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20180427005181/en/
Source: Moody’s Corporation Investor Relations