MOODYS CORP /DE/, 10-Q filed on 11/4/2015
Quarterly Report
Document and Entity Information
In Millions, unless otherwise specified
9 Months Ended
Sep. 30, 2015
Document Information [Line Items]
Document Type
10-Q
Amendment Flag
false
Document Period End Date
Sep. 30, 2015
Document Fiscal Year Focus
2015
Document Fiscal Period Focus
Q3
Trading Symbol
MCO
Entity Registrant Name
MOODYS CORP /DE/
Entity Central Index Key
0001059556
Current Fiscal Year End Date
--12-31
Entity Filer Category
Large Accelerated Filer
Entity Common Stock, Shares Outstanding
197.7
CONSOLIDATED STATEMENTS OF OPERATIONS(USD $)
In Millions, except Per Share data, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2015
Sep. 30, 2014
Revenues
$834.9
$816.1
$2,618.6
$2,456.8
Expenses
Operating
236.1
236.7
724.4
674.8
Selling, general and administrative
220.8
206.5
669.1
619.0
Depreciation and amortization
28.3
23.2
84.8
68.6
Total expenses
485.2
466.4
1,478.3
1,362.4
Operating Income
349.7
349.7
1,140.3
1,094.4
Non-operating (expense) income, net
Interest income (expense), net
(25.8)
(37.7)
(87.0)
(87.5)
Other non-operating income (expense), net
19.7
16.4
14.0
15.5
ICRA Gain
  
  
  
102.8
Total non-operating (expense) income, net
(6.1)
(21.3)
(73.0)
30.8
Income before provisions for income taxes
343.6
328.4
1,067.3
1,125.2
Provision for income taxes
109.8
109.9
338.1
360.6
Net income
233.8
218.5
729.2
764.6
Less: Net income attributable to noncontrolling interests
2.2
3.3
5.8
12.2
Net income attributable to Moody's
$231.6
$215.2
$723.4
$752.4
Earnings per share attributable to Moody's common shareholders
Basic
$1.16
$1.02
$3.6
$3.55
Diluted
$1.14
$1
$3.54
$3.48
Weighted average number of shares outstanding
Basic
199.4
210.4
201.1
212.1
Diluted
202.5
214.2
204.5
216.1
Dividends declared per share attributable to Moody's common shareholders
$0.34
$0.28
$0.68
$0.56
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME(USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2015
Sep. 30, 2014
Net income
$233.8
$218.5
$729.2
$764.6
Foreign currency translation:
Foreign currency translation adjustments - Pre Tax
(43.2)
(79.2)
(94.3)
(76.2)
Foreign currency translation adjustment - Tax Amount
1.5
(8.2)
(5.8)
(5.6)
Foreign currency translation adjustments - Net of Tax
(41.7)
(87.4)
(100.1)
(81.8)
Foreign currency translation adjustments - reclassification of losses included in net income - Pre Tax
  
  
(0.1)
4.4
Foreign currency translation adjustments - reclassification of losses included in net income - Tax Effect
  
  
  
  
Foreign currency translation adjustments - reclassification of losses included in net income - Net of Tax
  
  
(0.1)
4.4
Available for sale securities:
Net unrealized gains on available for sale securities - Pre Tax
0.7
  
2.8
  
Net unrealized gains on available for sale securities - Tax
  
  
  
  
Net unrealized gains on available for sale securities - Net of Tax
0.7
  
2.8
  
Reclassification of gains included in net income - Pre Tax
(0.6)
  
(0.8)
  
Reclassification of gains included in net income - Tax
  
  
  
  
Reclassification of gains included in net income - Net of Tax
(0.6)
  
(0.8)
  
Pension and Other Retirement Benefits:
Amortization of actuarial losses and prior service costs included in net income - Pre Tax
3.4
1.8
10.3
5.5
Amortization of actuarial losses and prior service costs included in net income - Tax
(1.3)
(0.7)
(3.9)
(3.0)
Amortization of actuarial losses and prior service costs included in net income - Net of Tax
2.1
1.1
6.4
2.5
Net actuarial losses and prior service costs - Pre Tax
  
  
10.9
(6.9)
Net actuarial losses and prior service costs - Tax
  
  
(4.2)
2.8
Net actuarial losses and prior service costs - Net of Tax
  
  
6.7
(4.1)
Total other comprehensive income (loss) - Pre Tax
(39.7)
(77.4)
(71.2)
(73.2)
Total other comprehensive income (loss) - Tax
0.2
(8.9)
(13.9)
(5.8)
Total other comprehensive income (loss) - Net of Tax
(39.5)
(86.3)
(85.1)
(79.0)
Comprehensive income
194.3
132.2
644.1
685.6
Less: Comprehensive income attributable to noncontrolling interests and redeemable noncontrolling interest
2.2
3.3
5.8
12.2
Comprehensive income attributable to Moody's
$192.1
$128.9
$638.3
$673.4
CONSOLIDATED BALANCE SHEETS(USD $)
In Millions, unless otherwise specified
Sep. 30, 2015
Dec. 31, 2014
Current assets:
Cash and cash equivalents
$1,471.1
$1,219.5
Short-term investments
470.2
458.1
Accounts receivable, net of allowances of net of allowances of $27.1 in 2015 and $29.4 in 2014
720.5
792.4
Deferred tax assets, net
36.6
43.9
Other current assets
163.7
172.5
Total current assets
2,862.1
2,686.4
Property and equipment, net of accumulated depreciation of $501.4 in 2015 and $451.5 in 2014
306.1
302.3
Goodwill
990.0
1,021.1
Intangible assets, net
308.8
345.5
Deferred tax assets, net
132.7
167.8
Other assets
173.2
145.9
Total assets
4,772.9
4,669.0
Current liabilities:
Accounts payable and accrued liabilities
409.2
557.6
Deferred tax liabilities, net
15.5
17.5
Deferred revenue
625.5
624.6
Total current liabilities
1,050.2
1,199.7
Non-current portion of deferred revenue
128.4
132.2
Long-term debt
3,124.5
2,547.3
Deferred tax liabilities, net
84.3
95.7
Unrecognized tax benefits
208.4
220.3
Other liabilities
417.3
430.9
Total liabilities
5,013.1
4,626.1
Contingencies (Note 14)
  
  
Redeemable noncontrolling interest
  
  
Shareholders' equity
Preferred stock, par value $.01 per share; 10,000,000 shares authorized; no shares issued and outstanding
  
  
Capital surplus
424.8
383.9
Retained earnings
6,631.7
6,044.3
Treasury stock, at cost; 145,161,779 and 138,539,128 shares of common stock at September 30, 2014 and December 31, 2014, respectively
(7,209.5)
(6,384.2)
Accumulated other comprehensive loss
(320.3)
(235.2)
Total Moody's shareholders' equity
(469.9)
(187.8)
Noncontrolling interests
229.7
230.7
Total shareholders' (deficit) equity
(240.2)
42.9
Total liabilities, redeemable noncontrolling interest and shareholders' equity
4,772.9
4,669.0
Series common stock
Shareholders' equity
Common stock
  
  
Common Stock
Shareholders' equity
Common stock
$3.4
$3.4
CONSOLIDATED BALANCE SHEETS (Parenthetical)(USD $)
In Millions, except Share data, unless otherwise specified
Sep. 30, 2015
Dec. 31, 2014
Accounts receivable, allowances
$27.1
$29.4
Property and equipment, accumulated depreciation
$501.4
$451.5
Preferred stock, par value
$0.01
$0.01
Preferred stock, shares authorized
10,000,000
10,000,000
Preferred stock, shares issued
0
0
Preferred stock, shares outstanding
0
0
Common stock, shares authorized
1,000,000,000
1,000,000,000
Treasury stock, shares
145,161,779
138,539,128
Series common stock
Common stock, par value
$0.01
$0.01
Common stock, shares authorized
10,000,000
10,000,000
Common stock, shares issued
0
0
Common stock, shares outstanding
0
0
Common Stock
Common stock, par value
$0.01
$0.01
Common stock, shares authorized
1,000,000,000
1,000,000,000
Common stock, shares issued
342,902,272
342,902,272
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(USD $)
In Millions, unless otherwise specified
9 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Cash flows from operating activities
Net income
$729.2
$764.6
Reconciliation of net income to net cash provided by operating activities:
Depreciation and amortization
84.8
68.6
Stock-based compensation expense
66.5
59.9
Deferred income taxes
19.7
43.7
Excess tax benefits from stock-based compensation plans
(44.5)
(54.5)
ICRA Gain
  
(102.8)
Legacy Tax Matters
(6.4)
(6.4)
Changes in assets and liabilities:
Accounts receivable
61.0
(11.9)
Other current assets
4.9
(63.3)
Other assets
(6.6)
(4.8)
Accounts payable and accrued liabilities
(35.7)
(16.3)
Deferred revenue
10.6
25.8
Unrecognized tax benefits and other non-current tax liabilities
(9.9)
18.5
Other liabilities
19.9
(11.3)
Net cash provided by operating activities
893.5
709.8
Cash flows from investing activities
Capital additions
(65.9)
(56.8)
Purchases of short-term investments
(480.4)
(68.0)
Sales and maturities of short-term investments
448.6
90.7
Cash paid for acquisitions, net of cash required
(4.6)
(210.5)
Settlement of net investment hedges
20.8
  
Net cash used in investing activities
(81.5)
(244.6)
Cash flows from financing activities
Issuance of notes
552.8
747.7
Repayments of notes
  
(300.0)
Proceeds from stock-based compensation plans
72.1
134.6
Repurchase of shares for payroll tax withholdings related to stock-based compensation
(59.3)
(51.3)
Cost of treasury shares repurchased
(905.6)
(780.2)
Excess tax benefits from settlement of stock-based compensation plans
44.5
54.5
Payment of dividends
(205.0)
(178.2)
Payment of dividends to noncontrolling interests
(4.6)
(9.7)
Contingent consideration paid
(1.5)
(4.3)
Debt issuance costs and related fees
(5.9)
(6.5)
Net cash provided by (used in) financing activities
(512.5)
(393.4)
Effect of exchange rate changes on cash and cash equivalents
(47.9)
(50.5)
Net increase/(decrease) in cash and cash equivalents
251.6
21.3
Cash and cash equivalents, beginning of the period
1,219.5
1,919.5
Cash and cash equivalents, end of the period
$1,471.1
$1,940.8
GLOSSARY OF TERMS AND ABBREVIATIONS
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

Board The board of directors of the Company

BPS Basis points

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

CDO Collateralized debt obligation

CFG Corporate finance group; an LOB of MIS

CLO Collateralized loan obligation

CMBS Commercial mortgage-backed securities; part of the CREF asset class within SFG

Company Moody’s Corporation and its subsidiaries; MCO; Moody’s

Copal Copal Partners; an acquisition completed in November 2011; part of the MA segment; leading provider of outsourced research and analytical services to institutional investors

Copal Amba Operating segment created in January 2014 that consists of all operations from Copal as well as the operations of Amba. The Copal Amba operating segment provides outsourced research and analytical services to the global financial and corporate sectors

Council Council of the European Union

CRAs Credit rating agencies

CRA3 Regulation (EU) No 462/2013 of the European Parliament and of the Council, which updated the regulatory regimes imposing additional procedural 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

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

ICRA ICRA Limited. is a leading provider of credit ratings and research in India. The Company previously held 28.51% equity ownership and in June 2014, increased that ownership stake to 50.06% through the acquisition of additional shares

ICRA Acquisition The June 2014 purchase of an additional 21.55% ownership interest in ICRA resulting in majority ownership and consolidation of ICRAs financial statements; ICRAs results are consolidated into Moody’s financial statements on a three-month lag and accordingly the Company began including the results of operations for ICRA in its consolidated financial statements beginning in the fourth quarter of 2014

ICRA Gain Gain relating to the step-acquisition of ICRA; U.S. GAAP requires the remeasurement to fair value of the previously held non-controlling shares held upon obtaining a controlling interest in a step-acquisition. This remeasurement of the Company’s equity investment in ICRA to fair value resulted in a pre-tax gain of $102.8 million ($78.5 million after tax) in the second quarter of 2014.

IRS Internal Revenue Service

IT Information 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

Legacy Tax Matter(s) Exposures to certain potential tax liabilities assumed in connection with the 2000 Distribution

Lewtan Lewtan Technologies; a leading provider of analytical tools and data for the global structured finance market; part of the RD&A LOB within MA; an acquisition completed in October 2014

LIBOR London Interbank Offered Rate

LOB Line of business

MA Moody’s Analytics – a reportable segment of MCO formed in January 2008 which provides a wide range of products and services that 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

Net Income Net income attributable to Moody’s Corporation, which excludes net income from consolidated noncontrolling interests belonging to the minority interest holder

New D&B The New D&B Corporation – which is comprised of the D&B Business

NM Percentage change is not meaningful

NRSRO Nationally Recognized Statistical Rating Organization

OCI Other comprehensive income (loss); includes gains and losses on cash flow and net investment hedges, certain gains and losses relating to pension and other retirement benefit obligations and foreign currency translation adjustments

Old D&B The former Dun and Bradstreet Company which distributed New D&B shares on September 30, 2000, and was renamed Moody’s Corporation

PPIF Public, project and 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

Redeemable Noncontrolling Represents minority shareholders’ interest in entities that are controlled but not

Interest wholly-owned by Moody’s and for which Moody’s obligation to redeem the minority shareholders’ interest is in the control of the minority shareholders

Reform Act Credit Rating Agency Reform Act of 2006

REIT Real Estate Investment Trust

Relationship Revenue Represents MIS recurring monitoring of a rated debt obligation and/or entities that issue such obligations, as well as revenue from programs such as commercial paper, medium-term notes and shelf registrations. For MIS Other represents subscription-based revenue. For MA, represents subscription-based and maintenance revenue

Retirement Plans Moody’s funded and unfunded pension plans, the healthcare plans and life insurance plans

SEC U.S. Securities and Exchange Commission

Securities Act Securities Act of 1933

Series 2005-1 Notes Principal amount of $300 million, 4.98% senior unsecured notes; notes were paid in 2014

Series 2007-1 Notes Principal amount of $300 million, 6.06% senior unsecured notes due in September 2017 pursuant to the 2007 Agreement

SFG Structured finance group; an LOB of MIS

SG&A Selling, general and administrative expenses

Total Debt All indebtedness of the Company as reflected on the consolidated balance sheets

Transaction Revenue For MIS, represents the initial rating of a new debt issuance as well as other one-time fees. For MIS Other, represents revenue from professional services and outsourcing engagements. For MA, represents software license fees and revenue from risk management advisory projects, training and certification services, and outsourced research and analytical engagements

U.K. United Kingdom

U.S. United States

U.S. Shared National Credit Interagency program designed to evaluate large and complex syndicated credits. Program The program is administered by the three federal banking regulatory agencies which

include the Federal Reserve System, Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation (FDIC).

USD U.S. dollar

UTBs Unrecognized tax benefits

UTPs Uncertain tax positions

VSOE Vendor 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

WebEquity WebEquity Solutions LLC; a leading provider of cloud-based loan origination solutions for financial institutions; part of the ERS LOB within MA; an acquisition completed in July 2014

2000 Distribution The distribution by Old D&B to its shareholders of all the outstanding shares of New D&B common stock on September 30, 2000

2000 Distribution Agreement Agreement governing certain ongoing relationships between the Company and New D&B after the 2000 Distribution including the sharing of any liabilities for the payment of taxes, penalties and interest resulting from unfavorable IRS rulings on certain tax matters and certain other potential tax liabilities

2007 Agreement Note purchase agreement dated September 7, 2007, relating to the Series 2007-1 Notes

2010 Indenture Supplemental indenture and related agreements dated August 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 $300 million, 5.25% senior unsecured notes due in July 2044

2015 Facility Five-year unsecured revolving credit facility, with capacity to borrow up to $1

billion; replaces the 2012 Facility

2015 Indenture Supplemental indenture and related agreements 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 BASIS OF PRESENTATION
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) outsourced 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. Revenue 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 develops a wide range of products and services that support financial analysis and risk management activities of institutional participants in global financial markets. Within its Research, Data and Analytics business, MA distributes research and data developed by MIS as part of its ratings process, including in-depth research on major debt issuers, industry studies and commentary on topical credit-related events. The RD&A business also produces economic research as well as data and analytical tools such as quantitative credit risk scores. Within its Enterprise Risk Solutions business, MA provides software solutions as well as related risk management services. The Professional Services business provides outsourced research and analytical services along with financial training and certification programs.

These interim financial statements have been prepared in accordance with the instructions to Form 10-Q and should be read in conjunction with the Company’s consolidated financial statements and related notes in the Company’s 2014 annual report on Form 10-K filed with the SEC on February 25, 2015. The results of interim periods are not necessarily indicative of results for the full year or any subsequent period. In the opinion of management, all 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.

Description of Business and Basis of Presentation - Additional Information (Detail)
9 Months Ended
Sep. 30, 2015
Segment Reporting Information [Line Items]
Number of reportable segments
2
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION

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 EndedNine Months Ended
September 30,September 30,
2015201420152014
Stock-based compensation cost$ 22.1 $ 19.3 $ 66.5 $ 59.9
Tax benefit$ 7.2 $ 6.2 $ 21.8 $ 19.0

During the first nine months of 2015, the Company granted 0.3 million employee stock options, which had a weighted average grant date fair value of $36.08 per share based on the Black-Scholes option-pricing model. The Company also granted 0.9 million shares of restricted stock in the first nine months of 2015, which had a weighted average grant date fair value of $98.06 per share and 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 the Company over a three-year period. The weighted average grant date fair value of these awards was $94.08 per share.

The following weighted average assumptions were used in determining the fair value for options granted in 2015:

Expected dividend yield 1.39%
Expected stock volatility 39.4%
Risk-free interest rate 1.88%
Expected holding period6.9 years
Grant date fair value $36.08

Unrecognized compensation expense at September 30, 2015 was $9.8 million and $113.5 million for stock options and unvested restricted stock, respectively, which is expected to be recognized over a weighted average period of 1.3  years and 1.7 years, respectively. Additionally, there was $17.8 million of unrecognized compensation expense relating to the aforementioned non-market based performance-based awards, which is expected to be recognized over a weighted average period of 1.0 years.

The following tables summarize information relating to stock option exercises and restricted stock vesting:

Nine Months Ended
September 30,
Exercise of stock options:20152014
Proceeds from stock option exercises$ 68.0 $131.5
Aggregate intrinsic value$ 64.7 $107.7
Tax benefit realized upon exercise$ 23.0 $38.7
Number of shares exercised 1.3 2.8
Nine Months Ended
September 30,
Vesting of restricted stock:20152014
Fair value of shares vested$ 111.3 $92.3
Tax benefit realized upon vesting$ 35.7 $31.6
Number of shares vested 1.1 1.2
Nine Months Ended
September 30,
Vesting of performance-based restricted stock:20152014
Fair value of shares vested$ 43.1 $38.0
Tax benefit realized upon vesting$ 15.6 $14.6
Number of shares vested 0.5 0.5
STOCK-BASED COMPENSATION (Tables)
Three Months EndedNine Months Ended
September 30,September 30,
2015201420152014
Stock-based compensation cost$ 22.1 $ 19.3 $ 66.5 $ 59.9
Tax benefit$ 7.2 $ 6.2 $ 21.8 $ 19.0
Expected dividend yield 1.39%
Expected stock volatility 39.4%
Risk-free interest rate 1.88%
Expected holding period6.9 years
Grant date fair value $36.08
Nine Months Ended
September 30,
Exercise of stock options:20152014
Proceeds from stock option exercises$ 68.0 $131.5
Aggregate intrinsic value$ 64.7 $107.7
Tax benefit realized upon exercise$ 23.0 $38.7
Number of shares exercised 1.3 2.8
Nine Months Ended
September 30,
Vesting of restricted stock:20152014
Fair value of shares vested$ 111.3 $92.3
Tax benefit realized upon vesting$ 35.7 $31.6
Number of shares vested 1.1 1.2
Nine Months Ended
September 30,
Vesting of performance-based restricted stock:20152014
Fair value of shares vested$ 43.1 $38.0
Tax benefit realized upon vesting$ 15.6 $14.6
Number of shares vested 0.5 0.5
Stock-Based Compensation Cost and Associated Tax Benefit (Detail)(USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2015
Sep. 30, 2014
Compensation Related Costs Share Based Payments Disclosure [Line Items]
Stock compensation cost
$22.1
$19.3
$66.5
$59.9
Tax benefit
$7.2
$6.2
$21.8
$19.0
Weighted Average Assumptions used in Determining Fair Value for Options Granted (Detail)
9 Months Ended
Sep. 30, 2015
Schedule Of Weighted Average Assumptions For Fair Values Of Stock Options [Line Items]
Expected dividend yield
1.39%
Expected stock volatility
39.40%
Risk-free interest rate
1.88%
Expected holding period
6 years 10 months 20 days
Grant date fair value
$36.08
Stock Option Exercises and Restricted Stock Vesting (Detail)(USD $)
In Millions, unless otherwise specified
9 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Employee Stock Options [Member]
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items]
Proceeds from stock option exercises
$68.0
$131.5
Aggregate intrinsic value
64.7
107.7
Tax benefit realized upon exercise/vesting
23.0
38.7
Number of shares exercised
1.3
2.8
Restricted Stock [Member]
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items]
Fair value of shares vested
111.3
92.3
Tax benefit realized upon exercise/vesting
35.7
31.6
Number of shares vested
1.1
1.2
Vesting of Performance Based Restricted Stock [Member]
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items]
Fair value of shares vested
43.1
38.0
Tax benefit realized upon exercise/vesting
$15.6
$14.6
Number of shares vested
0.5
0.5
Stock-Based Compensation - Additional Information (Detail)(USD $)
In Millions, except Per Share data, unless otherwise specified
9 Months Ended
Sep. 30, 2015
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Employee stock options, weighted average grant date fair value
$36.08
Employee Stock Options [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Employee stock options, granted
0.3
Employee stock options, weighted average grant date fair value
$36.08
Unrecognized compensation expense
$9.8
Weighted average period to recognize expense
1 year 3 months 18 days
Restricted Stock [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Restricted stock, granted
0.9
Restricted stock, weighted average grant date fair value
$98.06
Unrecognized compensation expense
113.5
Weighted average period to recognize expense
1 year 8 months 12 days
Non Market Performance Based Vesting Condition [Member] |
Restricted Stock [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Restricted stock, granted
0.2
Restricted stock, weighted average grant date fair value
$94.08
Unrecognized compensation expense
$17.8
Weighted average period to recognize expense
1 year
INCOME TAXES
INCOME TAXES

Moody’s effective tax rate was 32.0% and 33.5% for the three months ended September 30, 2015 and 2014, respectively and 31.7% and 32.0% for the nine month periods ended September 30, 2015 and 2014, respectively. The decrease in the ETR compared to the third quarter of 2014 was primarily due to changes in New York State and New York City tax laws relating to income apportionment.

The Company classifies interest related to UTPs in interest expense, net in its consolidated statements of operations. Penalties, if incurred, would be recognized in other non-operating (expense) income, net. The Company had an increase in its UTPs of $0.1 million during the third quarter of 2015 and an overall decrease in its UTPs during the first nine months of 2015 of $11.9 million ($7.6 million net of federal tax benefits).

Moody’s Corporation and subsidiaries are subject to U.S. federal income tax as well as income tax in various state, local and foreign jurisdictions. The Company’s U.S. federal income tax returns for the years 2008 through 2012 are under examination and its returns for 2013 through 2014 remain open to examination. The Company’s New York State tax returns for 2011 through 2013 are currently under examination and the Company’s New York City tax return for 2013 is currently under examination. The Company’s U.K. tax return for 2012 is currently under examination and its return for 2013 remains open to examination.

For ongoing audits, it is possible the balance of UTBs could decrease in the next twelve months as a result of the settlement of these audits, which might involve the payment of additional taxes, the adjustment of certain deferred taxes and/or the recognition of tax benefits. It is also possible that new issues might be raised by tax authorities that could necessitate increases to the balance of UTBs. As the Company is unable to predict the timing or outcome of these audits, it is therefore unable to estimate the amount of changes to the balance of UTBs at this time. However, the 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 ASC regarding UTBs.

Nine Months Ended
September 30,
20152014
Income taxes paid$299.9$334.6
INCOME TAXES (Tables)
Income Taxes Paid
Nine Months Ended
September 30,
20152014
Income taxes paid$299.9$334.6
Income Taxes - Additional Information (Detail)(USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2015
Sep. 30, 2014
Income Tax Contingency [Line Items]
Effective tax rate
32.00%
33.50%
31.70%
32.00%
Overall increase (decrease) in unrecognized tax benefits (UTPs)
$9.9
$(18.5)
Gross [Member]
Income Tax Contingency [Line Items]
Overall increase (decrease) in unrecognized tax benefits (UTPs)
0.1
(11.9)
Net [Member]
Income Tax Contingency [Line Items]
Overall increase (decrease) in unrecognized tax benefits (UTPs)
$(7.6)
WEIGHTED AVERAGE SHARES OUTSTANDING
WEIGHTED AVERAGE SHARES OUTSTANDING

NOTE 4. WEIGHTED AVERAGE SHARES OUTSTANDING

Below is a reconciliation of basic to diluted shares outstanding:

Three Months EndedNine Months Ended
September 30,September 30,
2015201420152014
Basic199.4210.4201.1212.1
Dilutive effect of shares issuable under stock-based compensation plans3.13.83.44.0
Diluted202.5214.2204.5216.1
Anti-dilutive options to purchase common shares and restricted stock as well as contingently issuable restricted stock which are excluded from the table above0.60.50.80.7

The calculation of diluted EPS requires certain assumptions regarding the use of both cash proceeds and assumed proceeds that would be received upon the exercise of stock options and vesting of restricted stock outstanding as of September 30, 2015 and 2014. These assumed proceeds include Excess Tax Benefits and any unrecognized compensation of the awards.

The decrease in the diluted shares outstanding primarily reflects treasury share repurchases

WEIGHTED AVERAGE SHARES OUTSTANDING (Tables)
Reconciliation of Basic to Diluted Shares Outstanding
Three Months EndedNine Months Ended
September 30,September 30,
2015201420152014
Basic199.4210.4201.1212.1
Dilutive effect of shares issuable under stock-based compensation plans3.13.83.44.0
Diluted202.5214.2204.5216.1
Anti-dilutive options to purchase common shares and restricted stock as well as contingently issuable restricted stock which are excluded from the table above0.60.50.80.7
Reconciliation of Basic to Diluted Shares Outstanding (Detail)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2015
Sep. 30, 2014
Schedule Of Earnings Per Share Basic And Diluted By Common Class [Line Items]
Basic
199.4
210.4
201.1
212.1
Dilutive effect of shares issuable under stock-based compensation plans
3.1
3.8
3.4
4.0
Diluted
202.5
214.2
204.5
216.1
Anti-dilutive options to purchase common shares and restricted stock as well as contingently issuable restricted stock which are excluded from the table above
0.6
0.5
0.8
0.7
CASH EQUIVALENT AND INVESTMENTS
CASH EQUIVALENT AND INVESTMENT

NOTE 5. CASH EQUIVALENTS AND INVESTMENTS

The table below provides additional information on the Company’s cash equivalents and investments:

As of September 30, 2015
Balance sheet location
CostGross Unrealized GainsFair ValueCash and cash equivalentsShort-term investmentsOther assets
Money market mutual funds$137.9$-$137.9$137.9$-$-
Certificates of deposit and money market deposit accounts (1)$1,088.9$ - $1,088.9$596.0$470.2$22.7
Fixed maturity and open ended mutual funds (2)$33.4$2.8$36.2$-$-$36.2
As of December 31, 2014
Balance sheet location
CostGross Unrealized GainsFair ValueCash and cash equivalentsShort-term investmentsOther assets
Money market mutual funds$149.7$-$149.7$149.7$-$-
Certificates of deposit and money market deposit accounts (1)$842.5$-$842.5$380.1$458.1$4.3
Fixed maturity and open ended mutual funds (2)$47.1$0.9$48.0$-$-$48.0
(1) Consists of time deposits and money market deposit accounts. The remaining contractual maturities for the certificates of deposits classified as short-term investments were one month to twelve months and one month to ten months at September 30, 2015 and December 31, 2014, respectively. Time deposits with a maturity of less than 90 days at time of purchase are classified as cash and cash equivalents.
(2) Consists of investments in fixed maturity mutual funds and open-ended mutual funds. The remaining contractual maturities for the fixed maturity instruments range from 14 months to 34 months and two months to 23 months at September 30, 2015 and December 31, 2014, respectively.

The money market mutual funds as well as the fixed maturity and open ended mutual funds in the table above are deemed to be available for sale under ASC Topic 320 and the fair value of these instruments is determined using Level 1 inputs as defined in the ASC.

CASH EQUIVALENT AND INVESTMENTS (Tables)
Schedule of Available For Sale Securities
As of September 30, 2015
Balance sheet location
CostGross Unrealized GainsFair ValueCash and cash equivalentsShort-term investmentsOther assets
Money market mutual funds$137.9$-$137.9$137.9$-$-
Certificates of deposit and money market deposit accounts (1)$1,088.9$ - $1,088.9$596.0$470.2$22.7
Fixed maturity and open ended mutual funds (2)$33.4$2.8$36.2$-$-$36.2
As of December 31, 2014
Balance sheet location
CostGross Unrealized GainsFair ValueCash and cash equivalentsShort-term investmentsOther assets
Money market mutual funds$149.7$-$149.7$149.7$-$-
Certificates of deposit and money market deposit accounts (1)$842.5$-$842.5$380.1$458.1$4.3
Fixed maturity and open ended mutual funds (2)$47.1$0.9$48.0$-$-$48.0
(1) Consists of time deposits and money market deposit accounts. The remaining contractual maturities for the certificates of deposits classified as short-term investments were one month to twelve months and one month to ten months at September 30, 2015 and December 31, 2014, respectively. Time deposits with a maturity of less than 90 days at time of purchase are classified as cash and cash equivalents.
(2) Consists of investments in fixed maturity mutual funds and open-ended mutual funds. The remaining contractual maturities for the fixed maturity instruments range from 14 months to 34 months and two months to 23 months at September 30, 2015 and December 31, 2014, respectively.
Cash Equivalent and Investments (Detail)(USD $)
In Millions, unless otherwise specified
9 Months Ended 12 Months Ended
Sep. 30, 2015
Dec. 31, 2014
Schedule Of Available For Sale Securities LineItems
Fair Value
$36.2
$48.0
Money Market [Member]
Schedule Of Available For Sale Securities LineItems
Cost
137.9
149.7
Gross Unrealized Gain
  
  
Fair Value
137.9
149.7
Certificates Of Deposit [Member]
Schedule Of Available For Sale Securities LineItems
Cost
1,088.9
842.5
Gross Unrealized Gain
  
  
Fair Value
1,088.9
842.5
Fixed Maturity and Mutual Funds [Member]
Schedule Of Available For Sale Securities LineItems
Cost
33.4
47.1
Gross Unrealized Gain
2.8
0.9
Fair Value
36.2
48.0
Cash and Cash Equivalents [Member] |
Money Market [Member]
Schedule Of Available For Sale Securities LineItems
Fair Value
137.9
149.7
Cash and Cash Equivalents [Member] |
Certificates Of Deposit [Member]
Schedule Of Available For Sale Securities LineItems
Fair Value
596.0
380.1
Cash and Cash Equivalents [Member] |
Fixed Maturity and Mutual Funds [Member]
Schedule Of Available For Sale Securities LineItems
Fair Value
  
  
Short Term Investments [Member] |
Money Market [Member]
Schedule Of Available For Sale Securities LineItems
Cost
  
Fair Value
  
  
Short Term Investments [Member] |
Certificates Of Deposit [Member]
Schedule Of Available For Sale Securities LineItems
Fair Value
470.2
458.1
Short Term Investments [Member] |
Fixed Maturity and Mutual Funds [Member]
Schedule Of Available For Sale Securities LineItems
Fair Value
  
  
Other Assets [Member] |
Money Market [Member]
Schedule Of Available For Sale Securities LineItems
Fair Value
  
  
Other Assets [Member] |
Certificates Of Deposit [Member]
Schedule Of Available For Sale Securities LineItems
Fair Value
22.7
4.3
Other Assets [Member] |
Fixed Maturity and Mutual Funds [Member]
Schedule Of Available For Sale Securities LineItems
Fair Value
$36.2
$48.0
Cash Equivalent and Investments (Parenthetical) (Detail)
9 Months Ended 12 Months Ended
Sep. 30, 2015
Dec. 31, 2014
Minimum [Member] |
Fixed Maturity and Mutual Funds [Member]
Schedule Of Investments [Line Items]
Securities Maturity period
14 months
2 months
Minimum [Member] |
Short Term Investments [Member]
Schedule Of Investments [Line Items]
Securities Maturity period
14 months
1 month
Maximum [Member] |
Certificates Of Deposit [Member]
Schedule Of Investments [Line Items]
Securities Maturity period
90 days
Maximum [Member] |
Fixed Maturity and Mutual Funds [Member]
Schedule Of Investments [Line Items]
Securities Maturity period
34 months
23 months
Maximum [Member] |
Short Term Investments [Member]
Schedule Of Investments [Line Items]
Securities Maturity period
7 months
10 months
ACQUISITIONS
ACQUISITIONS

NOTE 6. ACQUISITIONS

The business combinations described below are accounted for using the acquisition method of accounting whereby assets acquired and liabilities assumed were recognized at fair value on the date of the transaction.  Any excess of the purchase price over the fair value of the assets acquired and liabilities assumed was recorded to goodwill. The Company has not presented proforma combined results because the impact on previously reported statements of operations would not have been material. Additionally, for all acquisitions described below, the near term impact to the Company’s operations and cash flows is not material. These acquisitions are discussed below in more detail.

Equilibrium

On May 21, 2015, a subsidiary of the Company acquired 100% of Equilibrium, a provider of credit rating and research services in Peru and Panama. The aggregate purchase price was not material and the near term impact to the Company’s operations and cash flows is not expected to be material. Equilibrium operates in the MIS reportable segment and goodwill related to this acquisition has been allocated to the MIS reporting unit.

Lewtan Technologies

On October 27, 2014, a subsidiary of the Company acquired 100% of Lewtan Technologies, a leading provider of analytical tools and data for the global structured finance market. The acquisition of Lewtan will bolster MA’s Structured Analytics and Valuations (SAV) business within its RD&A LOB, which provides an extensive data and analytics library for securitized assets. The aggregate purchase price and the near term impact to the Company’s operations and cash flows is not material. Lewtan operates in the RD&A LOB of MA and goodwill related to this acquisition was allocated to the RD&A reporting unit.

WebEquity Solutions, LLC

On July 17, 2014, a subsidiary of the Company acquired 100% of WebEquity Solutions, LLC, a leading provider of cloud-based loan origination solutions for financial institutions. The payment of $130.5 million was funded with cash on hand. This acquisition will enhance MA’s risk management product portfolio.

Shown below is the purchase price allocation, which summarizes the fair value of the assets and liabilities assumed, at the date of the acquisition:

Current assets$3.0
Property and equipment, net2.3
Intangible assets:
Client relationships (18 year weighted average life)$42.8
Software (15 year weighted average life)11.5
Trade name (4 year weighted average life)0.5
Total intangible assets (17 year weighted average life)54.8
Goodwill77.6
Liabilities assumed(7.2)
Net assets acquired$130.5

The acquired goodwill, which has been assigned to the MA segment, is tax deductible.

As of the date of the acquisition, WebEquity is part of the ERS reporting unit.

ICRA Limited

On June 26, 2014, a subsidiary of the Company acquired 2,154,722 additional shares of ICRA Limited, a publicly traded company in India. ICRA is a leading provider of credit ratings and research in India and will extend MIS’s reach in the growing domestic debt market in India as well as other emerging markets in the region. The acquisition of the additional shares increased Moody’s ownership stake in ICRA from 28.5% to 50.06%, resulting in a controlling interest in ICRA. Accordingly, the Company consolidated ICRA’s financial statements. Moody’s consolidates ICRA’s financial statements on a three-month lag.

Prior to the acquisition of the additional shares, Moody’s accounted for its investment in ICRA on an equity basis whereby the Company recorded its proportional share of the investment’s net income or loss as part of other non-operating income (expense), net. The acquisition of the additional shares has resulted in the Company consolidating ICRA into its financial statements. As a result of this consolidation and in accordance with ASC 805, the carrying value of the Company’s equity investment in ICRA was remeasured to fair value as of the acquisition date resulting in a pre-tax gain of $102.8 million ($78.5 million after-tax) in third quarter of 2014. The fair value of the Company’s equity investment was based on ICRA’s quoted market price on the date of acquisition.

The table below details the total consideration relating to the ICRA step-acquisition:

Cash paid$86.0
Fair value of equity interest in ICRA prior to obtaining a controlling interest124.9
Total consideration $210.9

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$25.4
Property and equipment, net15.1
Intangible assets:
Trade name (36 year weighted average life)$46.8
Client relationships (19 year weighted average life)33.8
Other (17 year weighted average life)*18.3
Total intangible assets (26 year weighted average life)98.9
Goodwill296.7
Other assets56.3
Liabilities(62.7)
Fair value of non-controlling interest assumed(218.8)
Net assets acquired$210.9
* Primarily consists of acquired technical know-how and ratings methodologies

Current assets in the table above include acquired cash of approximately $5 million. Additionally, current assets includes gross accounts receivable of approximately $14 million, of which an immaterial amount is not expected to be collectible. Goodwill, which has been assigned to the MIS segment, is not deductible for tax.

The fair value of the non-controlling interest was determined based on the quoted market price per share of ICRA on the date that the Company acquired the controlling stake.

ICRA operates as its own reporting unit for purposes of the Company’s annual goodwill impairment assessment.

ACQUISITIONS (Tables)
Current assets$3.0
Property and equipment, net2.3
Intangible assets:
Client relationships (18 year weighted average life)$42.8
Software (15 year weighted average life)11.5
Trade name (4 year weighted average life)0.5
Total intangible assets (17 year weighted average life)54.8
Goodwill77.6
Liabilities assumed(7.2)
Net assets acquired$130.5
Current assets$25.4
Property and equipment, net15.1
Intangible assets:
Trade name (36 year weighted average life)$46.8
Client relationships (19 year weighted average life)33.8
Other (17 year weighted average life)*18.3
Total intangible assets (26 year weighted average life)98.9
Goodwill296.7
Other assets56.3
Liabilities(62.7)
Fair value of non-controlling interest assumed(218.8)
Net assets acquired$210.9
* Primarily consists of acquired technical know-how and ratings methodologies
Cash paid$86.0
Fair value of equity interest in ICRA prior to obtaining a controlling interest124.9
Total consideration $210.9
Purchase Price Allocation (Detail)(USD $)
In Millions, unless otherwise specified
Sep. 30, 2015
Dec. 31, 2014
Dec. 31, 2013
Jul. 17, 2014
Web Equity Solutions [Member]
Jul. 17, 2014
Web Equity Solutions [Member]
Client relationships
Jul. 17, 2014
Web Equity Solutions [Member]
Software
Jul. 17, 2014
Web Equity Solutions [Member]
Other intangibles
Jun. 26, 2014
ICRA [Member]
Jun. 26, 2014
ICRA [Member]
Trade names
Jun. 26, 2014
ICRA [Member]
Client relationships
Jun. 26, 2014
ICRA [Member]
Other intangibles
Business Acquisition [Line Items]
Current assets
$3.0
$25.4
Property and equipment, net
2.3
15.1
Total intangible assets
54.8
42.8
11.5
0.5
98.9
46.8
33.8
18.3
Goodwill
990.0
1,021.1
665.2
77.6
296.7
Other assets
56.30
Liabilities assumed
(7.20)
(62.70)
Fair value of non-controlling interest assumed
(218.80)
(218.80)
Net assets acquired
$130.5
$210.9
Purchase Price Allocation (Parenthetical) (Detail)
0 Months Ended
Jul. 17, 2014
Web Equity Solutions [Member]
Trade names
Jul. 17, 2014
Web Equity Solutions [Member]
Client relationships
Jul. 17, 2014
Web Equity Solutions [Member]
Software
Jul. 17, 2014
Web Equity Solutions [Member]
Total Intangible Assets
Jun. 26, 2014
ICRA [Member]
Trade names
Jun. 26, 2014
ICRA [Member]
Client relationships
Jun. 26, 2014
ICRA [Member]
Other intangibles
Jun. 26, 2014
ICRA [Member]
Total Intangible Assets
Business Acquisition [Line Items]
Weighted average life of intangible assets acquired (in years)
4 years
18 years
15 years
17 years
36 years
19 years
17 years
26 years
Total Consideration Transferred to Sellers (Detail)(USD $)
In Millions, unless otherwise specified
9 Months Ended 0 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Jun. 26, 2014
ICRA [Member]
Business Acquisition [Line Items]
Cash paid
$4.6
$210.5
$86.0
Business Combination Fair Value Of Equity Interest
124.9
Total fair value of consideration transferred
$210.9
Acquisitions - Additional Information (Detail)(USD $)
In Millions, except Share data, unless otherwise specified
3 Months Ended 9 Months Ended 0 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2015
Sep. 30, 2014
May 21, 2015
Equilibrium [Member]
Oct. 27, 2014
Lewtan [Member]
Jul. 17, 2014
Web Equity Solutions [Member]
Jun. 26, 2014
ICRA [Member]
Jun. 26, 2014
After Tax Member [Member]
ICRA [Member]
Business Acquisition [Line Items]
Acquired cash
$5.0
Additional direct equity investment
100.00%
100.00%
100.00%
Acquired receivables gross contractual amount
14.0
Additional offer shares acquired of ICRA Limited
2,154,722
ICRA Gain
  
  
  
102.8
102.8
78.5
Ownership stake
50.06%
Cash paid for acquisitions, net of cash required
$4.6
$210.5
$130.5
$86.0
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

NOTE 7. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

The Company is exposed to global market risks, including risks from changes in FX rates and changes in interest rates. Accordingly, the Company uses derivatives in certain instances to manage the aforementioned financial exposures that occur in the normal course of business. The Company does not hold or issue derivatives for speculative purposes.

Derivatives and non-derivative instruments designated as accounting hedges:

Interest Rate Swaps

In the third quarter of 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. The 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 value 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 cash settlements on the swaps are recorded each period within interest income (expense), net, in the Company’s consolidated statement of operations.

The following table summarizes the impact to the statement of operations of the Company’s interest rate swaps designated as fair value hedges:

Amount of income/(expense) recognized in the consolidated statements of operations
Three Months EndedNine Months Ended
September 30,September 30,
Derivatives designated as fair value accounting hedgesLocation on Statement of Operations2015201420152014
Interest rate swaps Interest income(expense), net$3.9$7.8$11.5$8.3

Net investment hedges

The Company enters into foreign currency forward contracts that are designated as net investment hedges and additionally has designated €400 million of the 2015 Senior Notes as a net investment hedge. These hedges are intended to mitigate FX exposure related to non-U.S. dollar net investments in certain foreign subsidiaries against changes in foreign exchange rates. These net investment hedges are designated as accounting hedges under the applicable sections of Topic 815 of the ASC.

Hedge effectiveness is assessed based on the overall changes in the fair value of the hedge. For hedges that meet the effectiveness requirements, any change in the fair value and any realized gains and losses for the hedge are recorded in AOCI in the foreign currency translation account. Any change in the fair value of these hedges that is the result of ineffectiveness is recognized immediately in other non-operating (expense) income in the Company’s consolidated statement of operations.

The following table summarizes the notional amounts of the Company’s outstanding net investment hedges:

September 30,December 31,
20152014
Notional amount of net investment hedges:
Long-term debt designated as net investment hedge400.0-
Contracts to sell euros for USD-50.0
Contracts to sell GBP for euros£20.4£-
Contracts to sell Japanese yen for USD19,40019,400

The outstanding contracts to sell Japanese yen for USD expire in November 2015. The outstanding contracts to sell GBP for euros expire in December 2015. The hedge relating to the portion of the 2015 Senior Notes that was designated as a net investment hedge will end upon the repayment of the notes in 2027 unless terminated earlier at the discretion of the Company.

The following table provides information on the gains/(losses) on the Company’s net investment hedges:

Derivatives in Net Investment Hedging RelationshipsAmount of Gain/(Loss) Recognized in AOCI on Derivative (Effective Portion)
Three Months Ended
September 30,
20152014
FX forwards$(0.7)$12.1
Long-term debt(0.6)-
Total$(1.3)$12.1
Nine Months Ended
September 30,
20152014
FX forwards$12.7$8.4
Long-term debt(2.7)-
Total$10.0$8.4

The cumulative amount of realized and unrecognized net investment hedge gains recorded in AOCI is as follows:

Gains/(Losses), net of tax
September 30,December 31,
20152014
FX forwards $33.6$20.9
Long-term debt (2.7)-
Total gains on net investment hedges$30.9$20.9

Derivatives not designated as accounting hedges:

Foreign exchange forwards

The Company also enters into foreign exchange forwards to mitigate the change in fair value on certain assets and liabilities denominated in currencies other than a subsidiary’s functional currency. These forward contracts are not designated as accounting hedges under the applicable sections of Topic 815 of the ASC. Accordingly, changes in the fair value of these contracts are recognized immediately in other non-operating (expense) income, net in the Company’s consolidated statements of operations along with the FX gain or loss recognized on the assets and liabilities denominated in a currency other than the subsidiary’s functional currency. These contracts have expiration dates at various times through December 2015.

The following table summarizes the notional amounts of the Company’s outstanding foreign exchange forwards:

September 30,December 31,
20152014
Notional amount of currency pair:
Contracts to purchase USD with euros$-$38.5
Contracts to sell USD for euros$48.3$51.5
Contracts to purchase USD with GBP$-$0.2
Contracts to purchase USD with other foreign currencies$-$1.2
Contracts to purchase euros with other foreign currencies36.034.0
Contracts to purchase euros with GBP-25.0
Contracts to sell euros for GBP27.338.2

Cross-currency swaps

In conjunction with the issuance of the 2015 Senior Notes, the Company entered into a cross-currency swap to exchange €100 million for U.S. dollars on the date of the settlement of the notes.  The purpose of this cross-currency swap is to mitigate FX risk on the remaining principal balance on the 2015 Senior Notes that was not designated as a net investment hedge as more fully discussed above.   The Company has not designated these cross-currency swaps as accounting hedges.  Accordingly, changes in fair value on these swaps is recognized immediately in other non-operating (expense), income, net in the Company’s consolidated statements of operations along with the FX gain or loss recognized on the €100 million principal of the 2015 Senior Notes that was not designated as a net investment hedge. Under the terms of the swap, the Company will pay the counterparty interest on the $110.5 million received at 3.945% per annum and the counterparty will pay the Company interest on the €100 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-currency 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 discretion of the Company.

The following table summarizes the impact to the consolidated statements of operations relating to the net gain (loss) on the Company’s derivatives which are not designated as hedging instruments:

Three Months Ended
September 30,
Derivatives not designated as accounting hedgesLocation on Statement of Operations20152014
Cross-currency swapOther non-operating income (expense), net$(1.7)$-
Foreign exchange forwardsOther non-operating income (expense), net0.6(4.8)
Total$(1.1)$(4.8)
Nine Months Ended
September 30,
Derivatives not designated as accounting hedgesLocation on Statement of Operations20152014
Cross-currency swapOther non-operating income (expense), net$(7.0)$-
Foreign exchange forwardsOther non-operating income (expense), net(1.3)(3.9)
Total$(8.3)$(3.9)

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 Instruments
Balance Sheet LocationSeptember 30, 2015December 31, 2014
Assets:
Derivatives designated as accounting hedges:
FX forwards on net investment in certain foreign subsidiariesOther current assets$17.7$18.8
Interest rate swapsOther assets25.517.4
Total derivatives designated as accounting hedges43.236.2
Derivatives not designated as accounting hedges:
FX forwards on certain assets and liabilitiesOther current assets1.75.6
Total assets$44.9$41.8
Liabilities:
Non-derivative instrument designated as accounting hedge:
Long-term debt designated as net investment hedgeLong-term debt$446.5$-
Derivatives not designated as accounting hedges:
Cross-currency swapOther non-current liabilities5.6-
FX forwards on certain assets and liabilitiesAccounts payable and accrued liabilities1.02.1
Total liabilities$453.1$2.1
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Tables)
Amount of income/(expense) recognized in the consolidated statements of operations
Three Months EndedNine Months Ended
September 30,September 30,
Derivatives designated as fair value accounting hedgesLocation on Statement of Operations2015201420152014
Interest rate swaps Interest income(expense), net$3.9$7.8$11.5$8.3
Derivative Instruments
Balance Sheet LocationSeptember 30, 2015December 31, 2014
Assets:
Derivatives designated as accounting hedges:
FX forwards on net investment in certain foreign subsidiariesOther current assets$17.7$18.8
Interest rate swapsOther assets25.517.4
Total derivatives designated as accounting hedges43.236.2
Derivatives not designated as accounting hedges:
FX forwards on certain assets and liabilitiesOther current assets1.75.6
Total assets$44.9$41.8
Liabilities:
Non-derivative instrument designated as accounting hedge:
Long-term debt designated as net investment hedgeLong-term debt$446.5$-
Derivatives not designated as accounting hedges:
Cross-currency swapOther non-current liabilities5.6-
FX forwards on certain assets and liabilitiesAccounts payable and accrued liabilities1.02.1
Total liabilities$453.1$2.1
Gains/(Losses), net of tax
September 30,December 31,
20152014
FX forwards $33.6$20.9
Long-term debt (2.7)-
Total gains on net investment hedges$30.9$20.9
Gains/(Losses), net of tax
September 30,December 31,
20152014
FX forwards $33.6$20.9
Long-term debt (2.7)-
Total gains on net investment hedges$30.9$20.9
September 30,December 31,
20152014
Notional amount of net investment hedges:
Long-term debt designated as net investment hedge400.0-
Contracts to sell euros for USD-50.0
Contracts to sell GBP for euros£20.4£-
Contracts to sell Japanese yen for USD19,40019,400
Three Months Ended
September 30,
Derivatives not designated as accounting hedgesLocation on Statement of Operations20152014
Cross-currency swapOther non-operating income (expense), net$(1.7)$-
Foreign exchange forwardsOther non-operating income (expense), net0.6(4.8)
Total$(1.1)$(4.8)
Nine Months Ended
September 30,
Derivatives not designated as accounting hedgesLocation on Statement of Operations20152014
Cross-currency swapOther non-operating income (expense), net$(7.0)$-
Foreign exchange forwardsOther non-operating income (expense), net(1.3)(3.9)
Total$(8.3)$(3.9)
September 30,December 31,
20152014
Notional amount of currency pair:
Contracts to purchase USD with euros$-$38.5
Contracts to sell USD for euros$48.3$51.5
Contracts to purchase USD with GBP$-$0.2
Contracts to purchase USD with other foreign currencies$-$1.2
Contracts to purchase euros with other foreign currencies36.034.0
Contracts to purchase euros with GBP-25.0
Contracts to sell euros for GBP27.338.2
Gains and Losses on Derivatives Designated as Hedging Instruments, Cash Flow Hedging (Detail) (Interest Expense [Member], Interest Rate Swap [Member], USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2015
Sep. 30, 2014
Interest Expense [Member] |
Interest Rate Swap [Member]
Derivative Instruments Gain Loss [Line Items]
Amount of income/(expense) recognized in the consolidated statements of operations
$3.9
$7.8
$11.5
$8.3
Summary of Notional Amounts of Outstanding Foreign Exchange Forwards, Net Investment Hedging (Detail) (Net Investment Hedging [Member])
In Millions, unless otherwise specified
Sep. 30, 2015
Long Term Debt [Member]
EUR ()
Dec. 31, 2014
Long Term Debt [Member]
JPY ()
Sep. 30, 2015
Forward Contracts [Member]
Contracts to Sell Euros for USD [Member]
EUR ()
Dec. 31, 2014
Forward Contracts [Member]
Contracts to Sell Euros for USD [Member]
EUR ()
Sep. 30, 2015
Forward Contracts [Member]
Contracts to Sell GBP for Euros [Member]
GBP ()
Dec. 31, 2014
Forward Contracts [Member]
Contracts to Sell GBP for Euros [Member]
GBP ()
Sep. 30, 2015
Forward Contracts [Member]
Contracts to Sell Japanese Yen for USD [Member]
JPY ()
Dec. 31, 2014
Forward Contracts [Member]
Contracts to Sell Japanese Yen for USD [Member]
JPY ()
Derivative [Line Items]
Derivative Notional Amount
400.0
  
  
50.0
20.4
  
19,400.0
19,400.0
Gains and Losses on Derivatives Designated as Hedging Instruments, Net Investment Hedging (Detail) (Net Investment Hedging [Member], USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2015
Sep. 30, 2014
Derivative Instruments Gain Loss [Line Items]
Amount of Gain/(Loss) Recognized in AOCI on Derivative (Effective Portion)
$(1.3)
$12.1
$10.0
$8.4
Foreign Exchange Contract [Member]
Derivative Instruments Gain Loss [Line Items]
Amount of Gain/(Loss) Recognized in AOCI on Derivative (Effective Portion)
(0.7)
12.1
12.7
8.4
Long Term Debt [Member]
Derivative Instruments Gain Loss [Line Items]
Amount of Gain/(Loss) Recognized in AOCI on Derivative (Effective Portion)
$(0.6)
  
$(2.7)
  
Cumulative Amount of Unrecognized Hedge Losses Recorded in Accumulated Other Comprehensive Income (Detail) (Net Investment Hedging [Member], USD $)
In Millions, unless otherwise specified
Sep. 30, 2015
Dec. 31, 2014
Hedge Underlying Gain Loss [Line Items]
Cumulative amount of unrecognized hedge losses recorded in AOCI
$30.9
$20.9
Foreign Exchange Contract [Member]
Hedge Underlying Gain Loss [Line Items]
Cumulative amount of unrecognized hedge losses recorded in AOCI
33.6
20.9
Long-Term Debt [Member]
Hedge Underlying Gain Loss [Line Items]
Cumulative amount of unrecognized hedge losses recorded in AOCI
$(2.7)
  
Summary of Notional Amounts of Outstanding Foreign Exchange Forwards, Cash Flow Hedging (Detail) (Forward Contracts [Member])
In Millions, unless otherwise specified
Sep. 30, 2015
Foreign Currency Forward Contracts to Purchase US Dollars with Euros [Member]
USD ($)
Dec. 31, 2014
Foreign Currency Forward Contracts to Purchase US Dollars with Euros [Member]
USD ($)
Sep. 30, 2015
Foreign Currency Forward Contracts To Sell US Dollars For Euros [Member]
USD ($)
Dec. 31, 2014
Foreign Currency Forward Contracts To Sell US Dollars For Euros [Member]
USD ($)
Sep. 30, 2015
Foreign Currency Forward Contracts to Purchase US Dollars With GBP [Member]
USD ($)
Dec. 31, 2014
Foreign Currency Forward Contracts to Purchase US Dollars With GBP [Member]
USD ($)
Sep. 30, 2015
Foreign Currency Forward Contracts To Sell US Dollars for GBP [Member]
USD ($)
Sep. 30, 2015
Foreign Currency Forward Contracts To Purchase US Dollars With Other Foreign Currencies [Member]
USD ($)
Dec. 31, 2014
Foreign Currency Forward Contracts To Purchase US Dollars With Other Foreign Currencies [Member]
USD ($)
Sep. 30, 2015
Foreign Currency Forward Contracts to Sell US Dollars for Other Foreign Currencies [Member]
USD ($)
Sep. 30, 2015
Foreign Currency Forward Contracts To Purchase Euros With Other Foreign Currencies [Member]
EUR ()
Dec. 31, 2014
Foreign Currency Forward Contracts To Purchase Euros With Other Foreign Currencies [Member]
EUR ()
Sep. 30, 2015
Foreign Currency Forward Contracts To Purchase Euros With GBP [Member]
EUR ()
Dec. 31, 2014
Foreign Currency Forward Contracts To Purchase Euros With GBP [Member]
EUR ()
Sep. 30, 2015
Foreign Currency Forward Contracts to Sell Euros for GBP [Member]
EUR ()
Dec. 31, 2014
Foreign Currency Forward Contracts to Sell Euros for GBP [Member]
EUR ()
Derivative [Line Items]
Derivative Notional Amount
  
$38.5
$48.3
$51.5
  
$0.2
  
  
$1.2
  
36.0
34.0
  
25.0
27.3
38.2
Summary of Net Gain (Loss) on Foreign Exchange Forwards Not Designated as Hedging Instruments (Detail) (Nondesignated [Member], Other Nonoperating Income Expense [Member], USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2015
Sep. 30, 2014
Derivative Instruments Gain Loss [Line Items]
Amount of Gain (Loss) Recognized in Income
$(1.1)
$(4.8)
$(8.3)
$(3.9)
Foreign Exchange Forward [Member]
Derivative Instruments Gain Loss [Line Items]
Amount of Gain (Loss) Recognized in Income
0.6
(4.8)
(1.3)
(3.9)
Cross-Currency Swap [Member]
Derivative Instruments Gain Loss [Line Items]
Amount of Gain (Loss) Recognized in Income
$(1.7)
$(7.0)
Fair Value of Derivative Instruments (Detail)(USD $)
In Millions, unless otherwise specified
Sep. 30, 2015
Dec. 31, 2014
Derivatives Fair Value [Line Items]
Derivatives assets
$44.9
$41.8
Derivatives liabilities
453.1
2.1
Designated As Hedging Instrument [Member]
Derivatives Fair Value [Line Items]
Derivatives assets
43.2
36.2
Designated As Hedging Instrument [Member] |
Net Investment Hedging [Member] |
Long Term Debt [Member]
Derivatives Fair Value [Line Items]
Derivatives liabilities
446.5
Designated As Hedging Instrument [Member] |
Interest Rate Swap [Member] |
Other Assets [Member]
Derivatives Fair Value [Line Items]
Derivatives assets
25.5
17.4
Designated As Hedging Instrument [Member] |
Foreign Exchange Contract [Member] |
Net Investment Hedging [Member] |
Other Current Assets [Member]
Derivatives Fair Value [Line Items]
Derivatives assets
17.7
18.8
Nondesignated [Member] |
Foreign Exchange Contract [Member] |
Other Current Assets [Member]
Derivatives Fair Value [Line Items]
Derivatives assets
1.7
5.6