MOODYS CORP /DE/, 10-Q filed on 5/4/2016
Quarterly Report
Document and Entity Information
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2016
Document Information [Line Items]
 
Document Type
10-Q 
Amendment Flag
false 
Document Period End Date
Mar. 31, 2016 
Document Fiscal Year Focus
2016 
Document Fiscal Period Focus
Q1 
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
194.3 
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)
In Millions, except Per Share data, unless otherwise specified
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Revenues
$ 816.1 
$ 865.6 
Expenses
 
 
Operating
249.2 
244.4 
Selling, general and administrative
232.9 
221.3 
Depreciation and amortization
29.9 
28.6 
Total expenses
512.0 
494.3 
Operating Income
304.1 
371.3 
Non-operating (expense) income, net
 
 
Interest income (expense), net
(34.1)
(29.3)
Other non-operating income (expense), net
5.6 
2.5 
Total non-operating (expense) income, net
(28.5)
(26.8)
Income before provisions for income taxes
275.6 
344.5 
Provision for income taxes
89.0 
113.2 
Net income
186.6 
231.3 
Less: Net income attributable to noncontrolling interests
2.2 
1.2 
Net income attributable to Moody's
$ 184.4 
$ 230.1 
Earnings per share attributable to Moody's common shareholders
 
 
Basic
$ 0.95 
$ 1.14 
Diluted
$ 0.93 
$ 1.11 
Weighted average number of shares outstanding
 
 
Basic
195.0 
202.7 
Diluted
197.9 
206.5 
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Net income
$ 186.6 
$ 231.3 
Foreign currency translation:
 
 
Foreign currency translation adjustments - Pre Tax
48.5 
(77.8)
Foreign currency translation adjustment - Tax
(12.5)
(12.7)
Foreign currency translation adjustments - Net of Tax
36.0 
(90.5)
Foreign currency translation adjustments - reclassification of losses included in net income - Pre Tax
 
(0.1)
Foreign currency translation adjustments - reclassification of losses included in net income - Tax Effect
 
   
Foreign currency translation adjustments - reclassification of losses included in net income - Net of Tax
 
(0.1)
Cash flow hedges:
 
 
Net realized and unrealized gain (loss) on cash flow hedges - Pre Tax
2.0 
 
Net realized and unrealized gain (loss) on cash flow hedges - Tax Amount
(0.8)
 
Net realized and unrealized gain (loss) on cash flow hedges - Net of Tax
1.2 
 
Reclassification of losses included in net income - Pre Tax
(2.2)
 
Reclassification of losses included in net income - Tax Amount
0.8 
 
Reclassification of losses included in net income- Net of Tax
(1.4)
 
Available for sale securities:
 
 
Net unrealized gains on available for sale securities - Pre Tax
0.6 
1.1 
Net unrealized gains on available for sale securities - Tax
   
   
Net unrealized gains on available for sale securities - Net of Tax
0.6 
1.1 
Pension and Other Retirement Benefits:
 
 
Amortization of actuarial losses and prior service costs included in net income - Pre Tax
2.6 
3.8 
Amortization of actuarial losses and prior service costs included in net income - Tax
(1.0)
(1.5)
Amortization of actuarial losses and prior service costs included in net income - Net of Tax
1.6 
2.3 
Total other comprehensive income (loss) - Pre Tax
51.5 
(73.0)
Total other comprehensive income (loss) - Tax
(13.5)
(14.2)
Total other comprehensive income (loss) - Net of Tax
38.0 
(87.2)
Comprehensive income
224.6 
144.1 
Less: Comprehensive income attributable to noncontrolling interests and redeemable noncontrolling interest
2.2 
1.2 
Comprehensive income attributable to Moody's
$ 222.4 
$ 142.9 
CONSOLIDATED BALANCE SHEETS (USD $)
In Millions, unless otherwise specified
Mar. 31, 2016
Dec. 31, 2015
Current assets:
 
 
Cash and cash equivalents
$ 1,576.1 
$ 1,757.4 
Short-term investments
490.6 
474.8 
Accounts receivable, net of allowances of net of allowances of $27.6 in 2016 and $27.5 in 2015
852.1 
802.0 
Deferred tax assets, net
 
29.3 
Other current assets
166.5 
179.6 
Total current assets
3,085.3 
3,243.1 
Property and equipment, net of accumulated depreciation of $541.6 in 2016 and $518.9 in 2015
310.5 
306.4 
Goodwill
1,050.9 
976.3 
Intangible assets, net
329.2 
299.1 
Deferred tax assets, net
176.2 
137.7 
Other assets
162.8 
140.4 
Total assets
5,114.9 
5,103.0 
Current liabilities:
 
 
Accounts payable and accrued liabilities
391.5 
566.6 
Deferred tax liabilities, net
 
16.7 
Deferred revenue
760.4 
635.2 
Total current liabilities
1,151.9 
1,218.5 
Non-current portion of deferred revenue
135.1 
132.5 
Long-term debt
3,428.6 
3,380.6 
Deferred tax liabilities, net
118.6 
83.8 
Unrecognized tax benefits
209.9 
203.4 
Other liabilities
422.3 
417.2 
Total liabilities
5,466.4 
5,436.0 
Contingencies (Note 14)
   
   
Shareholders' (deficit) equity
 
 
Preferred stock, par value $.01 per share; 10,000,000 shares authorized; no shares issued and outstanding
   
   
Capital surplus
431.7 
451.3 
Retained earnings
6,895.1 
6,709.0 
Treasury stock, at cost; 148,575,058 and 146,826,744 shares of common stock at March 31, 2016 and December 31, 2015, respectively
(7,610.3)
(7,389.2)
Accumulated other comprehensive loss
(301.5)
(339.5)
Total Moody's shareholders' deficit
(581.6)
(565.0)
Noncontrolling interests
230.1 
232.0 
Total shareholders' deficit
(351.5)
(333.0)
Total liabilities and shareholders' (deficit) equity
5,114.9 
5,103.0 
Series common stock
 
 
Shareholders' (deficit) equity
 
 
Common stock
   
   
Common Stock
 
 
Shareholders' (deficit) equity
 
 
Common stock
$ 3.4 
$ 3.4 
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)
In Millions, except Share data, unless otherwise specified
Mar. 31, 2016
Dec. 31, 2015
Accounts receivable, allowances
$ 27.6 
$ 27.5 
Property and equipment, accumulated depreciation
$ 541.6 
$ 518.9 
Preferred stock, par value
$ 0.01 
$ 0.01 
Preferred stock, shares authorized
10,000,000.0 
10,000,000.0 
Preferred stock, shares issued
 
Preferred stock, shares outstanding
 
Common stock, shares authorized
1,000,000,000.0 
1,000,000,000.0 
Treasury stock, shares
148,575,058.0 
146,826,744.0 
Series common stock
 
 
Common stock, par value
$ 0.01 
$ 0.01 
Common stock, shares authorized
10,000,000.0 
1,000,000,000.0 
Common stock, shares issued
 
Common stock, shares outstanding
 
Common Stock
 
 
Common stock, par value
$ 0.01 
$ 0.01 
Common stock, shares authorized
1,000,000,000.0 
1,000,000,000.0 
Common stock, shares issued
342,902,272.0 
342,902,272.0 
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Cash flows from operating activities
 
 
Net income
$ 186.6 
$ 231.3 
Reconciliation of net income to net cash provided by operating activities:
 
 
Depreciation and amortization
29.9 
28.6 
Stock-based compensation expense
25.4 
22.7 
Deferred income taxes
11.3 
7.6 
Excess tax benefits from stock-based compensation plans
(16.3)
(37.4)
Changes in assets and liabilities:
 
 
Accounts receivable
(45.5)
(62.7)
Other current assets
13.6 
2.9 
Other assets
1.5 
(13.9)
Accounts payable and accrued liabilities
(99.0)
(72.8)
Deferred revenue
122.6 
127.9 
Unrecognized tax benefits and other non-current tax liabilities
5.3 
7.4 
Other liabilities
1.9 
20.2 
Net cash provided by operating activities
237.3 
261.8 
Cash flows from investing activities
 
 
Capital additions
(26.3)
(19.0)
Purchases of short-term investments
(134.6)
(167.9)
Sales and maturities of short-term investments
126.1 
116.8 
Acquisitions, net of cash required
(75.9)
 
Settlement of net investment hedges
2.3 
20.8 
Net cash used in investing activities
(108.4)
(49.3)
Cash flows from financing activities
 
 
Issuance of notes
 
552.8 
Proceeds from stock-based compensation plans
24.3 
34.8 
Repurchase of shares for payroll tax withholdings related to stock-based compensation
(42.7)
(58.7)
Cost of treasury shares repurchased
(262.1)
(365.8)
Excess tax benefits from settlement of stock-based compensation plans
16.3 
37.4 
Payment of dividends
(72.1)
(68.7)
Payment of dividends to noncontrolling interests
(2.9)
(3.7)
Debt issuance costs and related fees
 
(4.2)
Net cash (used in) provided by financing activities
(339.2)
123.9 
Effect of exchange rate changes on cash and cash equivalents
29.0 
(46.0)
Net increase (decrease) in cash and cash equivalents
(181.3)
290.4 
Cash and cash equivalents, beginning of the period
1,757.4 
1,219.5 
Cash and cash equivalents, end of the period
$ 1,576.1 
$ 1,509.9 
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

BlackBox BlackBox Logic; a leading provider of Residential Mortgage-Backed securities loan level data. The Company acquired the customer base and products of BlackBox Logic in December 2015

Board The board of directors of the Company

BPS Basis points

Canary Wharf Lease Operating lease agreement entered into on February 6, 2008 for office space in London, England, occupied by the Company in the second half of 2009

CFG Corporate finance group; an LOB of MIS

CLO Collateralized loan obligation

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

Commission European Commission

Common Stock The Company’s common stock

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

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

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

Council Council of the European Union

CRAs Credit rating agencies

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

CREF Commercial real estate finance which includes REITs, commercial real estate CDOs and mortgage-backed securities; part of SFG

CSI CSI Global Education, Inc.; an acquisition completed in November 2010; part of the MA segment; a provider of financial learning, credentials, and certification services primarily in Canada

D&A Depreciation and amortization

D&B Business Old D&B’s Dun & Bradstreet operating company

DBPP Defined benefit pension plans

Debt/EBITDA Ratio of Total Debt to EBITDA

EBITDA Earnings before interest, taxes, depreciation and amortization

ECCA Economics and Consumer Credit Analytics; a business within the RD&A LOB which provides economic and consumer credit trend analytics

EMEA Represents countries within Europe, the Middle East and Africa

EPS Earnings per share

Equilibrium A leading provider of credit rating and research services in Peru and Panama; acquired by Moody’s in May 2015

ERS The enterprise risk solutions LOB within MA, which offers risk management software products as well as software implementation services and related risk management advisory engagements

ESMA European Securities and Markets Authority

ETR Effective tax rate

EU European Union

EUR Euros

European Ratings Platform Central credit ratings website administered by ESMA

Excess Tax Benefits The difference between the tax benefit realized at exercise of an option or delivery of a restricted share and the tax benefit recorded at the time the option or restricted share is expensed under GAAP

Exchange Act The Securities Exchange Act of 1934, as amended

FASB Financial Accounting Standards Board

FIG Financial institutions group; an LOB of MIS

Financial Reform Act Dodd-Frank Wall Street Reform and Consumer Protection Act

Free Cash Flow Net cash provided by operating activities less cash paid for capital additions

FSTC Financial Services Training and Certifications; a reporting unit within the MA segment that includes on-line and classroom-based training services and CSI

FX Foreign exchange

GAAP U.S. Generally Accepted Accounting Principles

GBP British pounds

GGY Gilliland Gold Young; a leading provider of advanced actuarial software for the global insurance industry. The Company acquired GGY on March 1, 2016

ICRA ICRA Limited; a leading provider of credit ratings and research in India. The Company previously held 28.5% equity ownership and in June 2014, increased that ownership stake to just over 50% through the acquisition of additional shares

IRS Internal Revenue Service

IT Information technology

KIS Korea Investors Service, Inc; a leading Korean rating agency and consolidated subsidiary of the Company

KIS Pricing Korea Investors Service Pricing, Inc; a leading Korean provider of fixed income securities pricing and consolidated subsidiary of the Company

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

MSS Moody’s Shared Services

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

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

NM Percentage change is not meaningful

Non-GAAP A financial measure not in accordance with GAAP; these measures, when read in conjunction with the Company’s reported results, can provide useful supplemental information for investors analyzing period-to-period comparisons of the Company’s performance, facilitate comparisons to competitors’ operating results and to provide greater transparency to investors of supplemental information used by management in its financial and operational decision making

NRSRO Nationally Recognized Statistical Rating Organization

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

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

Other Retirement Plan The U.S. retirement healthcare and U.S. retirement life insurance plans

PPIF Public, project and infrastructure finance; an LOB of MIS

Profit Participation Plan Defined contribution profit participation plan that covers substantially all U.S. employees of the Company

PS Professional Services, an LOB within MA that provides outsourced research and analytical services as well as financial training and certification programs

RD&A Research, Data and Analytics; an LOB within MA that produces, sells and distributes research, data and related content. Includes products generated by MIS, such as analyses on major debt issuers, industry studies, and commentary on topical credit events, as well as economic research, data, quantitative risk scores, and other analytical tools that are produced within MA

Reform Act Credit Rating Agency Reform Act of 2006

REIT Real Estate Investment Trust

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

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

SAV Structured Analytics and Valuation; a business within the RD&A LOB which provides data and analytics for securitized assets

SEC U.S. Securities and Exchange Commission

Securities Act Securities Act of 1933

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

SFG Structured finance group; an LOB of MIS

SG&A Selling, general and administrative expenses

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

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

U.K. United Kingdom

U.S. United States

USD U.S. dollar

UTBs Unrecognized tax benefits

UTPs Uncertain tax positions

VSOE Vendor specific objective evidence; as defined in the ASC, evidence of selling price limited to either of the following: the price charged for a deliverable when it is sold separately, or for a deliverable not yet being sold separately, the price established by management having the relevant authority

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

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

2010 Indenture Supplemental indenture and related agreements dated August 19, 2010, relating to the 2010 Senior Notes

2010 Senior Notes Principal amount of $500 million, 5.50% senior unsecured notes due in September 2020 pursuant to the 2010 Indenture

2012 Facility Revolving credit facility of $1 billion entered into on April 18,2012; was replaced with the 2015 Facility

2012 Indenture Supplemental indenture and related agreements dated August 18, 2012, relating to the 2012 Senior Notes

2012 Senior Notes Principal amount of $500 million, 4.50% senior unsecured notes due in September 2022 pursuant to the 2012 Indenture

2013 Indenture Supplemental indenture and related agreements dated August 12, 2013, relating to the 2013 Senior Notes

2013 Senior Notes Principal amount of the $500 million, 4.875% senior unsecured notes due in February 2024 pursuant to the 2013 Indenture

2014 Indenture Supplemental indenture and related agreements dated July 16, 2014, relating to the 2014 Senior Notes

2014 Senior Notes (5-Year) Principal amount of $450 million, 2.75% senior unsecured notes due in July 2019

2014 Senior Notes (30-Year) Principal amount of $600 million, 5.25% senior unsecured notes due in July 2044

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

billion; replaces the 2012 Facility

2015 Indenture Supplemental indenture and related agreements dated March 9, 2015, relating to the 2015 Senior Notes

2015 Senior Notes Principal amount €500 million, 1.75% senior unsecured notes issued March 9, 2015 and due in March 2027

7WTC The Company’s corporate headquarters located at 7 World Trade Center in New York, NY

7WTC Lease Operating lease agreement entered into on October 20, 2006

DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

NOTE 1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

Moody’s is a provider of (i) credit ratings, (ii) credit, capital markets and economic research, data and analytical tools, (iii) software solutions and related risk management services, (iv) quantitative credit risk measures, financial services training and certification services and (v) 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 2015 annual report on Form 10-K filed with the SEC on February 25, 2016. The results of interim periods are not necessarily indicative of results for the full year or any subsequent period. In the opinion of management, all adjustments (including normal recurring accruals) considered necessary for a fair presentation of financial position, results of operations and cash flows at the dates and for the periods presented have been included. The year-end consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America.

Certain reclassifications have been made to prior period amounts to conform to the current presentation.

In the first quarter of 2016, the Company adopted ASU No. 2015-17 “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes” on a prospective basis, and accordingly, prior year comparative periods have not been adjusted. This ASU requires the classification of all deferred income tax assets and liabilities as noncurrent on the balance sheet.

In the first quarter of 2016, the Company adopted ASU No. 2015-03,“Simplifying the Presentation of Debt Issuance Costs” on a retrospective basis. This ASU requires a company to present debt issuance costs in the balance sheet as a reduction of debt rather than as an asset. The impact to the Company’s balance sheet as of December 31, 2015 and March 31, 2016 relating to the adoption of this ASU is set forth in the table below:

As reported December 31, 2015ReclassificationDecember 31, 2015 As adjustedAs reported March 31, 2016ReclassificationMarch 31, 2016 Under previous accounting guidance
Long-term debt$ 3,401.0 $ (20.4)$ 3,380.6 $ 3,428.6 $ 19.9 $ 3,448.5
Other Assets$ 160.8 $ (20.4)$ 140.4 $ 162.8 $ 19.9 $ 182.7
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (Tables)
Schedule of Change in Balance Sheets Item Due to Adoption of Debt Issuance Costs Policy
As reported December 31, 2015ReclassificationDecember 31, 2015 As adjustedAs reported March 31, 2016ReclassificationMarch 31, 2016 Under previous accounting guidance
Long-term debt$ 3,401.0 $ (20.4)$ 3,380.6 $ 3,428.6 $ 19.9 $ 3,448.5
Other Assets$ 160.8 $ (20.4)$ 140.4 $ 162.8 $ 19.9 $ 182.7
Change in Financial Statement due to adoption of Policy (Details) (USD $)
In Millions, unless otherwise specified
Mar. 31, 2016
Dec. 31, 2015
Item Effected [Line Items]
 
 
Long-term debt
$ 3,428.6 
$ 3,380.6 
Other assets
162.8 
140.4 
As Previously Reported [Member]
 
 
Item Effected [Line Items]
 
 
Long-term debt
 
3,401.0 
Other assets
 
160.8 
Reclassification [Member]
 
 
Item Effected [Line Items]
 
 
Long-term debt
19.9 
(20.4)
Other assets
19.9 
(20.4)
Previous Accounting Guidance [Member]
 
 
Item Effected [Line Items]
 
 
Long-term debt
3,448.5 
 
Other assets
$ 182.7 
 
Description of Business and Basis of Presentation - Additional Information (Detail)
3 Months Ended
Mar. 31, 2016
Segment Reporting Information [Line Items]
 
Number of reportable segments
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 Ended
March 31,
20162015
Stock-based compensation cost$25.4$22.7
Tax benefit$8.4$7.9

During the first three months of 2016, the Company granted 0.5 million employee stock options, which had a weighted average grant date fair value of $22.93 per share based on the Black-Scholes option-pricing model. The Company also granted 1.2 million shares of restricted stock in the first three months of 2016, which had a weighted average grant date fair value of $80.83 per share. Both the employee stock options and restricted stock generally vest ratably over a four-year period. Additionally, the Company granted approximately 0.2 million shares of performance-based awards whereby the number of shares that ultimately vest are based on the achievement of certain non-market based performance metrics of the Company over a three-year period. The weighted average grant date fair value of these awards was $76.45 per share.

The following weighted average assumptions were used in determining the fair value for options granted in 2016:

Expected dividend yield1.83%
Expected stock volatility32.3%
Risk-free interest rate1.60%
Expected holding period6.8 years
Grant date fair value$22.93

Unrecognized compensation expense at March 31, 2016 was $16.0 million and $172.5 million for stock options and unvested restricted stock, respectively, which is expected to be recognized over a weighted average period of 1.5  years and 1.9 years, respectively. Additionally, there was $23.8 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 1.2 years.

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

Three Months Ended
March 31,
Exercise of stock options:20162015
Proceeds from stock option exercises$22.8$33.5
Aggregate intrinsic value$11.0$32.1
Tax benefit realized upon exercise$3.9$11.9
Number of shares exercised0.40.7
Three Months Ended
March 31,
Vesting of restricted stock:20162015
Fair value of shares vested$89.3$108.9
Tax benefit realized upon vesting$29.5$35.9
Number of shares vested1.01.1
Three Months Ended
March 31,
Vesting of performance-based restricted stock:20162015
Fair value of shares vested$23.6$43.1
Tax benefit realized upon vesting$8.4$16.1
Number of shares vested0.20.5
STOCK-BASED COMPENSATION (Tables)
Three Months Ended
March 31,
20162015
Stock-based compensation cost$25.4$22.7
Tax benefit$8.4$7.9
Expected dividend yield1.83%
Expected stock volatility32.3%
Risk-free interest rate1.60%
Expected holding period6.8 years
Grant date fair value$22.93
Three Months Ended
March 31,
Exercise of stock options:20162015
Proceeds from stock option exercises$22.8$33.5
Aggregate intrinsic value$11.0$32.1
Tax benefit realized upon exercise$3.9$11.9
Number of shares exercised0.40.7
Three Months Ended
March 31,
Vesting of restricted stock:20162015
Fair value of shares vested$89.3$108.9
Tax benefit realized upon vesting$29.5$35.9
Number of shares vested1.01.1
Three Months Ended
March 31,
Vesting of performance-based restricted stock:20162015
Fair value of shares vested$23.6$43.1
Tax benefit realized upon vesting$8.4$16.1
Number of shares vested0.20.5
Stock-Based Compensation Cost and Associated Tax Benefit (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Compensation Related Costs Share Based Payments Disclosure [Line Items]
 
 
Stock compensation cost
$ 25.4 
$ 22.7 
Tax benefit
$ 8.4 
$ 7.9 
Weighted Average Assumptions used in Determining Fair Value for Options Granted (Detail)
3 Months Ended
Mar. 31, 2016
Schedule Of Weighted Average Assumptions For Fair Values Of Stock Options [Line Items]
 
Expected dividend yield
1.83% 
Expected stock volatility
32.30% 
Risk-free interest rate
1.60% 
Expected holding period
6 years 9 months 18 days 
Grant date fair value
$ 22.93 
Stock Option Exercises and Restricted Stock Vesting (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Employee Stock Options [Member]
 
 
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items]
 
 
Proceeds from stock option exercises
$ 22.8 
$ 33.5 
Aggregate intrinsic value
11.0 
32.1 
Tax benefit realized upon exercise/vesting
3.9 
11.9 
Number of shares exercised
0.4 
0.7 
Restricted Stock [Member]
 
 
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items]
 
 
Fair value of shares vested
89.3 
108.9 
Tax benefit realized upon exercise/vesting
29.5 
35.9 
Number of shares vested
1.0 
1.1 
Vesting of Performance Based Restricted Stock [Member]
 
 
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items]
 
 
Fair value of shares vested
23.6 
43.1 
Tax benefit realized upon exercise/vesting
$ 8.4 
$ 16.1 
Number of shares vested
0.2 
0.5 
Stock-Based Compensation - Additional Information (Detail) (USD $)
In Millions, except Per Share data, unless otherwise specified
3 Months Ended
Mar. 31, 2016
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
 
Employee stock options, weighted average grant date fair value
$ 22.93 
Employee Stock Options [Member]
 
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
 
Employee stock options, granted
0.5 
Employee stock options, weighted average grant date fair value
$ 22.93 
Unrecognized compensation expense
$ 16.0 
Weighted average period to recognize expense
1 year 6 months 
Restricted Stock [Member]
 
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
 
Other than options, Shares granted
1.2 
Other than options, weighted average grant date fair value
$ 80.83 
Other than options, award vesting period (in years)
4 years 
Unrecognized compensation expense
172.5 
Weighted average period to recognize expense
1 year 10 months 24 days 
Performance Based Restricted Stock [Member]
 
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
 
Other than options, Shares granted
0.2 
Other than options, weighted average grant date fair value
$ 76.45 
Other than options, award vesting period (in years)
3 years 
Unrecognized compensation expense
$ 23.8 
Weighted average period to recognize expense
1 year 1 month 6 days 
INCOME TAXES
INCOME TAXES

NOTE 3. INCOME TAXES

Moody’s effective tax rate was 32.3% and 32.9% for the three months ended March 31, 2016 and 2015, respectively. The decrease in the ETR compared to the first quarter of 2015 was primarily due to a reduction in UTBs resulting from a change in New York City tax law relating to income apportionment.

The Company classifies interest related to UTBs 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 UTBs of $6.5 million ($6.2 million net of federal tax benefit) during the first quarter of 2016.

Moody’s Corporation and subsidiaries are subject to U.S. federal income tax as well as income tax in various state, local and foreign jurisdictions. The Company’s U.S. federal income tax returns for the years 2011 through 2012 are under examination and its returns for 2013 through 2014 remain open to examination. 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 returns for 2013 and 2014 remain 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 which could necessitate increases to the balance of UTBs. As the Company is unable to predict the timing or outcome of these audits, it is therefore unable to estimate the 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.

The following table shows the amount the Company paid for income taxes:

Three Months Ended
March 31,
20162015
Income taxes paid$22.0$31.4
INCOME TAXES (Tables)
Income Taxes Paid
Three Months Ended
March 31,
20162015
Income taxes paid$22.0$31.4
Income Taxes - Additional Information (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Income Tax Contingency [Line Items]
 
 
Effective tax rate
32.30% 
32.90% 
Overall increase (decrease) in unrecognized tax benefits (UTPs)
$ 5.3 
$ 7.4 
Gross [Member]
 
 
Income Tax Contingency [Line Items]
 
 
Overall increase (decrease) in unrecognized tax benefits (UTPs)
6.5 
 
Net of federal tax benefit [Member]
 
 
Income Tax Contingency [Line Items]
 
 
Overall increase (decrease) in unrecognized tax benefits (UTPs)
$ 6.2 
 
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 Ended
March 31,
20162015
Basic195.0202.7
Dilutive effect of shares issuable under stock-based compensation plans2.93.8
Diluted197.9206.5
Anti-dilutive options to purchase common shares and restricted stock as well as contingently issuable restricted stock excluded from the table above1.51.0

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 March 31, 2016 and 2015. These assumed proceeds include Excess Tax Benefits and any unrecognized compensation of the awards.

The decrease in the diluted shares outstanding primarily reflects treasury share repurchases under the Company’s Board authorized share repurchase program.

WEIGHTED AVERAGE SHARES OUTSTANDING (Tables)
Reconciliation of Basic to Diluted Shares Outstanding
Three Months Ended
March 31,
20162015
Basic195.0202.7
Dilutive effect of shares issuable under stock-based compensation plans2.93.8
Diluted197.9206.5
Anti-dilutive options to purchase common shares and restricted stock as well as contingently issuable restricted stock excluded from the table above1.51.0
Reconciliation of Basic to Diluted Shares Outstanding (Detail)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Schedule Of Earnings Per Share Basic And Diluted By Common Class [Line Items]
 
 
Basic
195.0 
202.7 
Dilutive effect of shares issuable under stock-based compensation plans
2.9 
3.8 
Diluted
197.9 
206.5 
Anti-dilutive options to purchase common shares and restricted stock as well as contingently issuable restricted stock which are excluded from the table above
1.5 
1.0 
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 March 31, 2016
Balance sheet location
CostGross Unrealized GainsFair ValueCash and cash equivalentsShort-term investmentsOther assets
Money market mutual funds$228.6$-$228.6$228.6$-$-
Certificates of deposit and money market deposit accounts (1)$1,097.4$ - $1,097.4$583.9$490.6$22.9
Fixed maturity and open ended mutual funds (2)$28.5$3.7$32.2$-$-$32.2
As of December 31, 2015
Balance sheet location
CostGross Unrealized GainsFair ValueCash and cash equivalentsShort-term investmentsOther assets
Money market mutual funds$188.3$-$188.3$188.3$-$-
Certificates of deposit and money market deposit accounts (1)$1,307.3$-$1,307.3$809.4$474.8$23.1
Fixed maturity and open ended mutual funds (2)$28.7$3.2$31.9$-$-$31.9
(1) Consists of time deposits and money market deposit accounts. The remaining contractual maturities for the certificates of deposits classified as short-term investments were one month to 13 months at March 31, 2016 and one month to 12 months at December 31, 2015. The remaining contractual maturities for the certificates of deposits classified in other assets are one month to 24 months at March 31, 2016 and one month to 27 months at December 31, 2015. Time deposits with a maturity of less than 90 days at time of purchase are classified as cash and cash equivalents.
(2) Consists of investments in fixed maturity mutual funds and open-ended mutual funds. The remaining contractual maturities for the fixed maturity instruments range from eight months to 28 months and 11 months to 31 months at March 31, 2016 and December 31, 2015 respectively.

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

CASH EQUIVALENT AND INVESTMENTS (Tables)
Schedule of Available For Sale Securities
As of March 31, 2016
Balance sheet location
CostGross Unrealized GainsFair ValueCash and cash equivalentsShort-term investmentsOther assets
Money market mutual funds$228.6$-$228.6$228.6$-$-
Certificates of deposit and money market deposit accounts (1)$1,097.4$ - $1,097.4$583.9$490.6$22.9
Fixed maturity and open ended mutual funds (2)$28.5$3.7$32.2$-$-$32.2
As of December 31, 2015
Balance sheet location
CostGross Unrealized GainsFair ValueCash and cash equivalentsShort-term investmentsOther assets
Money market mutual funds$188.3$-$188.3$188.3$-$-
Certificates of deposit and money market deposit accounts (1)$1,307.3$-$1,307.3$809.4$474.8$23.1
Fixed maturity and open ended mutual funds (2)$28.7$3.2$31.9$-$-$31.9
(1) Consists of time deposits and money market deposit accounts. The remaining contractual maturities for the certificates of deposits classified as short-term investments were one month to 13 months at March 31, 2016 and one month to 12 months at December 31, 2015. The remaining contractual maturities for the certificates of deposits classified in other assets are one month to 24 months at March 31, 2016 and one month to 27 months at December 31, 2015. Time deposits with a maturity of less than 90 days at time of purchase are classified as cash and cash equivalents.
(2) Consists of investments in fixed maturity mutual funds and open-ended mutual funds. The remaining contractual maturities for the fixed maturity instruments range from eight months to 28 months and 11 months to 31 months at March 31, 2016 and December 31, 2015 respectively.
Cash Equivalent and Investments (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended 3 Months Ended 3 Months Ended 12 Months Ended
Mar. 31, 2016
Dec. 31, 2015
Mar. 31, 2015
Dec. 31, 2014
Mar. 31, 2016
Money Market [Member]
Dec. 31, 2015
Money Market [Member]
Mar. 31, 2016
Certificates Of Deposit [Member]
Dec. 31, 2015
Certificates Of Deposit [Member]
Mar. 31, 2016
Fixed Maturity and Mutual Funds [Member]
Dec. 31, 2015
Fixed Maturity and Mutual Funds [Member]
Schedule Of Available For Sale Securities [Line Items]
 
 
 
 
 
 
 
 
 
 
Cost
 
 
 
 
$ 228.6 
$ 188.3 
$ 1,097.4 
$ 1,307.3 
$ 28.5 
$ 28.7 
Gross unrealized gain
 
 
 
 
   
 
   
 
3.7 
3.2 
Fair value
32.2 
31.9 
 
 
228.6 
188.3 
1,097.4 
1,307.3 
32.2 
31.9 
Cash and cash equivalents
1,576.1 
1,757.4 
1,509.9 
1,219.5 
228.6 
188.3 
583.9 
809.4 
   
 
Short-term investments
490.6 
474.8 
 
 
   
 
490.6 
474.8 
   
 
Other assets
 
 
 
 
    
 
$ 22.9 
$ 23.1 
$ 32.2 
$ 31.9 
Cash Equivalent and Investments (Parenthetical) (Detail)
3 Months Ended 12 Months Ended
Mar. 31, 2016
Dec. 31, 2015
Minimum [Member] |
Certificates Of Deposit [Member] |
Short Term Investments [Member]
 
 
Schedule Of Investments [Line Items]
 
 
Securities Maturity period
1 month 
1 month 
Minimum [Member] |
Certificates Of Deposit [Member] |
Other Assets [Member]
 
 
Schedule Of Investments [Line Items]
 
 
Securities Maturity period
1 month 
1 month 
Minimum [Member] |
Fixed Maturity and Mutual Funds [Member]
 
 
Schedule Of Investments [Line Items]
 
 
Securities Maturity period
8 months 
11 months 
Maximum [Member] |
Certificates Of Deposit [Member] |
Short Term Investments [Member]
 
 
Schedule Of Investments [Line Items]
 
 
Securities Maturity period
13 months 
12 months 
Maximum [Member] |
Certificates Of Deposit [Member] |
Cash And Cash Equivalents [Member]
 
 
Schedule Of Investments [Line Items]
 
 
Securities Maturity period
90 days 
 
Maximum [Member] |
Certificates Of Deposit [Member] |
Other Assets [Member]
 
 
Schedule Of Investments [Line Items]
 
 
Securities Maturity period
24 months 
27 months 
Maximum [Member] |
Fixed Maturity and Mutual Funds [Member]
 
 
Schedule Of Investments [Line Items]
 
 
Securities Maturity period
24 months 
31 months 
ACQUISITIONS
ACQUISITIONS

NOTE 6. ACQUISITIONS

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

Gilliland Gold Young (GGY)

On March 1, 2016, subsidiaries of the Company acquired 100% of GGY, a leading provider of advanced actuarial software for the life insurance industry. The cash payment of $83.4 million made at closing was funded with cash on hand. The acquisition of GGY will allow MA to provide an industry-leading enterprise risk offering for global life insurers and reinsurers.

The table below details the total consideration relating to the acquisition:

Cash paid at closing$83.4
Additional consideration to be paid to sellers in 2016(1)3.5
Total consideration $86.9
(1) Represents additional consideration due to the sellers for amounts withheld at closing pending the completion of certain administrative matters

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

Current assets$11.9
Property and equipment, net2.1
Indemnification assets1.5
Intangible assets:
Trade name (19 year weighted average life)$3.7
Client relationships (21 year weighted average life)13.8
Software (7 year weighted average life)16.6
Total intangible assets (14 year weighted average life)34.1
Goodwill58.8
Liabilities(21.5)
Net assets acquired$86.9

Current assets in the table above include acquired cash of $7.5 million. Additionally, current assets include accounts receivable of $2.9 million. Goodwill, which has been assigned to the MA segment, is not deductible for tax.

In connection with the acquisition, the Company assumed liabilities relating to UTPs and certain other tax exposures which are included in the liabilities assumed in the table above. The sellers have contractually indemnified the Company against any potential payments that may have to be made regarding these amounts. Accordingly, the Company carries an indemnification asset on its consolidated balance sheet at March 31, 2016.

The Company incurred $0.9 million of costs directly related to the GGY acquisition of which $0.6 million was incurred in 2015 and $0.3 million was incurred in the first quarter of 2016. These costs are recorded within selling, general and administrative expenses in the Company’s consolidated statements of operations.

GGY is part of the ERS reporting unit for purposes of the Company’s annual goodwill impairment assessment.

ACQUISITIONS (Tables) (Gilliland Gold Young (GGY) [Member])
Cash paid at closing$83.4
Additional consideration to be paid to sellers in 2016(1)3.5
Total consideration $86.9
(1) Represents additional consideration due to the sellers for amounts withheld at closing pending the completion of certain administrative matters
Current assets$11.9
Property and equipment, net2.1
Indemnification assets1.5
Intangible assets:
Trade name (19 year weighted average life)$3.7
Client relationships (21 year weighted average life)13.8
Software (7 year weighted average life)16.6
Total intangible assets (14 year weighted average life)34.1
Goodwill58.8
Liabilities(21.5)
Net assets acquired$86.9
Total Consideration Transferred to Sellers (Detail) (Gilliland Gold Young (GGY) [Member], USD $)
In Millions, unless otherwise specified
0 Months Ended
Mar. 1, 2016
Gilliland Gold Young (GGY) [Member]
 
Business Acquisition [Line Items]
 
Cash paid
$ 83.4 
Additional consideration to be paid to seller in 2016
3.5 
Total consideration
$ 86.9 
Purchase Price Allocation (Detail) (USD $)
In Millions, unless otherwise specified
Mar. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Mar. 1, 2016
Gilliland Gold Young (GGY) [Member]
Mar. 1, 2016
Gilliland Gold Young (GGY) [Member]
Trade Names [Member]
Mar. 1, 2016
Gilliland Gold Young (GGY) [Member]
Customer Relationships [Member]
Mar. 1, 2016
Gilliland Gold Young (GGY) [Member]
Software [Member]
Business Acquisition [Line Items]
 
 
 
 
 
 
 
Current assets
 
 
 
$ 11.9 
 
 
 
Property and equipment, net
 
 
 
2.1 
 
 
 
Indemnification asset
20.7 
19.2 
 
1.5 
 
 
 
Total intangible assets
 
 
 
34.1 
3.7 
13.8 
16.6 
Goodwill
1,050.9 
976.3 
1,021.1 
58.8 
 
 
 
Liabilities assumed
 
 
 
(21.5)
 
 
 
Net assets acquired
 
 
 
$ 86.9 
 
 
 
Purchase Price Allocation (Parenthetical) (Detail) (Gilliland Gold Young (GGY) [Member])
0 Months Ended
Mar. 1, 2016
Business Acquisition [Line Items]
 
Weighted average life of intangible assets acquired (in years)
14 years 
Trade Names [Member]
 
Business Acquisition [Line Items]
 
Weighted average life of intangible assets acquired (in years)
19 years 
Customer Relationships [Member]
 
Business Acquisition [Line Items]
 
Weighted average life of intangible assets acquired (in years)
21 years 
Software [Member]
 
Business Acquisition [Line Items]
 
Weighted average life of intangible assets acquired (in years)
7 years 
Acquisitions - Additional Information (Detail) (Gilliland Gold Young [Member], USD $)
In Millions, unless otherwise specified
0 Months Ended
Mar. 1, 2016
Mar. 31, 2016
Dec. 31, 2015
Gilliland Gold Young [Member]
 
 
 
Business Acquisition [Line Items]
 
 
 
Acquired cash
$ 7.5 
 
 
Amount related to transaction cost
0.9 
0.3 
0.6 
Percentage of interests acquired
100.00% 
 
 
Acquired account receivables
2.9 
 
 
Cash paid for acquisitions, net of cash required
$ 83.4 
 
 
DERIVATIVE INSTRUMENTS AND 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 second quarter of 2014, the Company entered into interest rate swaps with a total notional amount of $250 million to convert the fixed interest rate on the 2010 Senior Notes to a floating interest rate based on the 3-month LIBOR. In the third quarter of 2014, the Company entered into interest rate swaps with a total notional amount of $250 million to convert the fixed interest rate on the remaining balance of the 2010 Senior Notes to a floating interest rate based on the 3-month LIBOR. 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:

Three Months Ended
March 31,
Derivatives designated as fair value accounting hedgesLocation on Statement of Operations20162015
Interest rate swapsInterest income(expense), net$ 3.0 $ 3.5

Cross-currency swaps

In conjunction with the issuance of the 2015 Senior Notes, the Company entered into a cross-currency swap to exchange €100 million for U.S. dollars on the date of the settlement of the notes. The purpose of this cross-currency swap is to mitigate FX risk on the remaining principal balance on the 2015 Senior Notes that was not designated as a net investment hedge as more fully discussed below. Under the terms of the swap, the Company will pay the counterparty interest on the $110.5 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. In March 2016, the Company designated these cross-currency swaps as cash flow hedges. Accordingly, changes in fair value subsequent to the date the swaps were designated as cash flow hedges will initially be recognized in OCI. Gains and losses on the swaps initially recognized in OCI will be reclassified to the statement of operations in the period in which changes in the underlying hedged item affects net income. Ineffectiveness, if any, will be recognized in other non-operating (expense), income, net in the Company’s consolidated statement of operations.

Net investment hedges

The Company enters into foreign currency forward contracts which are designated as net investment hedges and has designated €400 million of the 2015 Senior 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, changes in the fair value are recorded in AOCI in the foreign currency translation account. Any change in the fair value of these hedges that is the result of ineffectiveness is recognized immediately in other non-operating (expense) income in the Company’s consolidated statement of operations.

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

March 31,December 31,
20162015
Notional amount of net investment hedges:
Long-term debt designated as net investment hedge400.0400.0
Contracts to sell GBP for euros£21.5£21.2
Contracts to sell Japanese yen for USD19,40019,400

The outstanding contracts to sell Japanese yen for USD expire in November 2016. The outstanding contracts to sell GBP for euros expire in June 2016. The hedge relating to the portion of the 2015 Senior Notes that was designated as a net investment hedge will end upon the repayment of the notes in 2027 unless terminated earlier at the discretion of the Company.

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

Derivatives and non-derivative instruments in Net Investment Hedging RelationshipsAmount of Gain/(Loss) Recognized in AOCI on Derivative (Effective Portion), net of taxLocation of Gain/(Loss) Reclassified from AOCI into Income (Effective Portion)Amount of Gain/(Loss) Reclassified from AOCI into Income (Effective Portion)
Three Months EndedThree Months Ended
March 31,March 31,
2016201520162015
FX forwards$(4.6)$11.3NA$-$-
Long-term debt(13.1)7.6NA--
Total net investment hedges$(17.7)$18.9NA$-$-
Derivatives in cash flow hedging relationships
Cross currency swap$1.2$-Other non-operating income, net$1.4$-
Total $(16.5)$18.9Total $1.4 $-

The cumulative amount of realized and unrecognized net investment hedge and cash flow hedge gains (losses) recorded in AOCI is as follows:

Gains (Losses), net of tax
March 31,December 31,
Net investment hedges20162015
FX forwards $29.7$34.3
Long-term debt (8.4)4.7
Total gains (losses) on net investment hedges$21.3$39.0
Cash flow hedges
Treasury rate lock$(1.1)$(1.1)
Cross currency swap(0.2)-
Total losses on cash flow hedges(1.3)(1.1)
Total net gains in AOCI$20.0$37.9

Derivatives not designated as accounting hedges:

Foreign exchange forwards

The Company also enters into foreign exchange forwards to mitigate the change in fair value on certain assets and liabilities denominated in currencies other than a subsidiary’s functional currency. These forward contracts are not designated as accounting hedges under the applicable sections of Topic 815 of the ASC. Accordingly, changes in the fair value of these contracts are recognized immediately in other non-operating income, net in the Company’s consolidated statements of operations along with the FX 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 June 2016.

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

March 31,December 31,
20162015
Notional amount of currency pair:
Contracts to purchase USD with euros$0.5$-
Contracts to sell USD for euros$71.2$70.1
Contracts to purchase euros with other foreign currencies34.135.5
Contracts to sell euros for other foreign currencies-1.4
Contracts to sell euros for GBP38.223.1

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

Three Months Ended
March 31,
Derivatives not designated as accounting hedgesLocation on Statement of Operations20162015
Foreign exchange forwardsOther non-operating income (expense), net 0.5 (4.4)

The table below shows the classification between assets and liabilities on the Company’s consolidated balance sheets for the fair value of the derivative instrument as well as the carrying value of its nonderivative debt instruments designated and qualifying as net investment hedges:

Derivative and Non-derivative Instruments
Balance Sheet LocationMarch 31, 2016December 31, 2015
Assets:
Derivatives not designated as accounting hedges:
FX forwards on certain assets and liabilitiesOther current assets1.80.1
Derivatives designated as accounting hedges:
FX forwards on net investment in certain foreign subsidiariesOther current assets$0.3$0.4
Interest rate swapsOther assets32.312.1
Total derivatives designated as accounting hedges32.612.5
Total assets$34.4$12.6
Liabilities:
Derivatives designated as accounting hedges:
Cross-currency swapOther non-current liabilities$0.4-
FX forwards on net investment in certain foreign subsidiariesAccounts payable and accrued liabilities12.11.2
Interest rate swapsOther non-current liabilities-0.3
Total derivatives designated as accounting hedges$12.5$1.5
Non-derivative instrument designated as accounting hedge
Long-term debt designated as net investment hedgeLong-term debt$455.8$434.5
Derivatives not designated as accounting hedges:
Cross-currency swapOther non-current liabilities-9.0
FX forwards on certain assets and liabilitiesAccounts payable and accrued liabilities1.01.9
Total liabilities$469.3$446.9
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Tables)
Three Months Ended
March 31,
Derivatives designated as fair value accounting hedgesLocation on Statement of Operations20162015
Interest rate swapsInterest income(expense), net$ 3.0 $ 3.5
Derivatives and non-derivative instruments in Net Investment Hedging RelationshipsAmount of Gain/(Loss) Recognized in AOCI on Derivative (Effective Portion), net of taxLocation of Gain/(Loss) Reclassified from AOCI into Income (Effective Portion)Amount of Gain/(Loss) Reclassified from AOCI into Income (Effective Portion)
Three Months EndedThree Months Ended
March 31,March 31,
2016201520162015
FX forwards$(4.6)$11.3NA$-$-
Long-term debt(13.1)7.6NA--
Total net investment hedges$(17.7)$18.9NA$-$-
Derivatives in cash flow hedging relationships
Cross currency swap$1.2$-Other non-operating income, net$1.4$-
Total $(16.5)$18.9Total $1.4 $-
Gains (Losses), net of tax
March 31,December 31,
Net investment hedges20162015
FX forwards $29.7$34.3
Long-term debt (8.4)4.7
Total gains (losses) on net investment hedges$21.3$39.0
Cash flow hedges
Treasury rate lock$(1.1)$(1.1)
Cross currency swap(0.2)-
Total losses on cash flow hedges(1.3)(1.1)
Total net gains in AOCI$20.0$37.9
Three Months Ended
March 31,
Derivatives not designated as accounting hedgesLocation on Statement of Operations20162015
Foreign exchange forwardsOther non-operating income (expense), net 0.5 (4.4)
Derivative and Non-derivative Instruments
Balance Sheet LocationMarch 31, 2016December 31, 2015
Assets:
Derivatives not designated as accounting hedges:
FX forwards on certain assets and liabilitiesOther current assets1.80.1
Derivatives designated as accounting hedges:
FX forwards on net investment in certain foreign subsidiariesOther current assets$0.3$0.4
Interest rate swapsOther assets32.312.1
Total derivatives designated as accounting hedges32.612.5
Total assets$34.4$12.6
Liabilities:
Derivatives designated as accounting hedges:
Cross-currency swapOther non-current liabilities$0.4-
FX forwards on net investment in certain foreign subsidiariesAccounts payable and accrued liabilities12.11.2
Interest rate swapsOther non-current liabilities-0.3
Total derivatives designated as accounting hedges$12.5$1.5
Non-derivative instrument designated as accounting hedge
Long-term debt designated as net investment hedgeLong-term debt$455.8$434.5
Derivatives not designated as accounting hedges:
Cross-currency swapOther non-current liabilities-9.0
FX forwards on certain assets and liabilitiesAccounts payable and accrued liabilities1.01.9
Total liabilities$469.3$446.9
March 31,December 31,
20162015
Notional amount of net investment hedges:
Long-term debt designated as net investment hedge400.0400.0
Contracts to sell GBP for euros£21.5£21.2
Contracts to sell Japanese yen for USD19,40019,400
March 31,December 31,
20162015
Notional amount of currency pair:
Contracts to purchase USD with euros$0.5$-
Contracts to sell USD for euros$71.2$70.1
Contracts to purchase euros with other foreign currencies34.135.5
Contracts to sell euros for other foreign currencies-1.4
Contracts to sell euros for GBP38.223.1
Summary of Net Gain (Loss) on Foreign Exchange Forwards Not Designated as Hedging Instruments and on Interest Rate Swaps Designated as Fair Value Hedges (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Derivatives Designated as Accounting Hedges [Member] |
Interest Rate Swap [Member] |
Interest Income (Expense), Net [Member]
 
 
Derivative Instruments Gain Loss [Line Items]
 
 
Amount of gain (loss) recognized in income
$ 3.0 
$ 3.5 
Derivatives Not Designated as Accounting Hedges [Member] |
Foreign Exchange Forward [Member] |
Other Nonoperating Income [Member]
 
 
Derivative Instruments Gain Loss [Line Items]
 
 
Amount of gain (loss) recognized in income
$ 0.5 
$ (4.4)
Summary of Notional Amounts of Outstanding Foreign Exchange Forwards, Net Investment Hedging (Detail) (Net Investment Hedging [Member])
In Millions, unless otherwise specified
Mar. 31, 2016
Contracts to Sell GBP for Euros [Member]
GBP (£)
Dec. 31, 2015
Contracts to Sell GBP for Euros [Member]
GBP (£)
Mar. 31, 2016
Contracts to Sell Japanese Yen for USD [Member]
JPY (¥)
Dec. 31, 2015
Contracts to Sell Japanese Yen for USD [Member]
JPY (¥)
Mar. 31, 2016
Long Term Debt [Member]
EUR (€)
Dec. 31, 2015
Long Term Debt [Member]
EUR (€)
Derivative [Line Items]
 
 
 
 
 
 
Derivative Notional Amount
£ 21.5 
£ 21.2 
¥ 19,400.0 
¥ 19,400.0 
€ 400.0 
€ 400.0 
Gains (Losses) Recognized in AOCI and Reclassified from AOCI on Derivatives (Effective Portion) (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Derivative Instruments Gain Loss [Line Items]
 
 
Amount of Gain/(Loss) Recognized in AOCI on Derivative (Effective Portion)
$ (16.5)
$ 18.9 
Amount of Gain/(Loss) Reclassified from AOCI into Income (Effective Portion)
1.4 
 
Net Investment Hedging [Member]
 
 
Derivative Instruments Gain Loss [Line Items]
 
 
Amount of Gain/(Loss) Recognized in AOCI on Derivative (Effective Portion)
(17.7)
18.9 
Net Investment Hedging [Member] |
Foreign Exchange Contract [Member]
 
 
Derivative Instruments Gain Loss [Line Items]
 
 
Amount of Gain/(Loss) Recognized in AOCI on Derivative (Effective Portion)
(4.6)
11.3 
Net Investment Hedging [Member] |
Long Term Debt [Member]
 
 
Derivative Instruments Gain Loss [Line Items]
 
 
Amount of Gain/(Loss) Recognized in AOCI on Derivative (Effective Portion)
(13.1)
7.6 
Cash Flow Hedging [Member] |
Cross-Currency Swap [Member]
 
 
Derivative Instruments Gain Loss [Line Items]
 
 
Amount of Gain/(Loss) Recognized in AOCI on Derivative (Effective Portion)
1.2 
 
Cash Flow Hedging [Member] |
Cross-Currency Swap [Member] |
Other Nonoperating Income (Expense) [Member]
 
 
Derivative Instruments Gain Loss [Line Items]
 
 
Amount of Gain/(Loss) Reclassified from AOCI into Income (Effective Portion)
$ 1.4 
 
Cumulative Amount of Unrecognized Hedge Losses Recorded in Accumulated Other Comprehensive Income (Detail) (USD $)
In Millions, unless otherwise specified
Mar. 31, 2016
Dec. 31, 2015
Derivative [Line Items]
 
 
Cumulative amount of unrecognized hedge losses recorded in AOCI
$ 20.0 
$ 37.9 
Net Investment Hedging [Member]
 
 
Derivative [Line Items]
 
 
Cumulative amount of unrecognized hedge losses recorded in AOCI
21.3 
39.0 
Net Investment Hedging [Member] |
Foreign Exchange Contract [Member]
 
 
Derivative [Line Items]
 
 
Cumulative amount of unrecognized hedge losses recorded in AOCI
29.7 
34.3 
Net Investment Hedging [Member] |
Long-Term Debt [Member]
 
 
Derivative [Line Items]
 
 
Cumulative amount of unrecognized hedge losses recorded in AOCI
(8.4)
4.7 
Cash Flow Hedging [Member]
 
 
Derivative [Line Items]
 
 
Cumulative amount of unrecognized hedge losses recorded in AOCI
(1.3)
(1.1)
Cash Flow Hedging [Member] |
Interest Rate Cap [Member]
 
 
Derivative [Line Items]
 
 
Cumulative amount of unrecognized hedge losses recorded in AOCI
(1.1)
(1.1)
Cash Flow Hedging [Member] |
Cross-Currency Swap [Member]
 
 
Derivative [Line Items]
 
 
Cumulative amount of unrecognized hedge losses recorded in AOCI
$ (0.2)
 
Summary of Notional Amounts of Outstanding Foreign Exchange Forwards, Cash Flow Hedging (Detail)
In Millions, unless otherwise specified
Mar. 31, 2016
Contracts to Purchase USD with Euros [Member]
USD ($)
Mar. 31, 2016
Contracts to Sell USD for Euros [Member]
USD ($)
Dec. 31, 2015
Contracts to Sell USD for Euros [Member]
USD ($)
Mar. 31, 2016
Contracts to Purchase Euros with Other Foreign Currencies [Member]
EUR (€)
Dec. 31, 2015
Contracts to Purchase Euros with Other Foreign Currencies [Member]
EUR (€)
Dec. 31, 2015
Contracts to Sell Euros for Other Foreign Currencies [Member]
EUR (€)
Mar. 31, 2016
Contracts to Sell Euros for GBP [Member]
EUR (€)
Dec. 31, 2015
Contracts to Sell Euros for GBP [Member]
EUR (€)
Derivative [Line Items]
 
 
 
 
 
 
 
 
Derivative Notional Amount
$ 0.5 
$ 71.2 
$ 70.1 
€ 34.1 
€ 35.5 
€ 1.4 
€ 38.2 
€ 23.1 
Fair Value of Derivative Instruments (Detail) (USD $)
In Millions, unless otherwise specified
Mar. 31, 2016
Dec. 31, 2015
Derivatives Fair Value [Line Items]
 
 
Derivatives assets
$ 34.4 
$ 12.6 
Derivatives liabilities
469.3 
446.9 
Net Investment Hedging [Member] |
Long Term Debt [Member]
 
 
Derivatives Fair Value [Line Items]
 
 
Derivatives liabilities
455.8 
434.5 
Derivatives Designated as Accounting Hedges [Member]
 
 
Derivatives Fair Value [Line Items]
 
 
Derivatives assets
32.6 
12.5 
Derivatives liabilities
12.5 
1.5 
Derivatives Designated as Accounting Hedges [Member] |
Interest Rate Swap [Member] |
Other Assets [Member]
 
 
Derivatives Fair Value [Line Items]
 
 
Derivatives assets
32.3 
12.1 
Derivatives Designated as Accounting Hedges [Member] |
Interest Rate Swap [Member] |
Other Noncurrent Liabilities [Member]
 
 
Derivatives Fair Value [Line Items]
 
 
Derivatives liabilities
 
0.3 
Derivatives Designated as Accounting Hedges [Member] |
Cross-Currency Swap [Member] |
Other Noncurrent Liabilities [Member]
 
 
Derivatives Fair Value [Line Items]
 
 
Derivatives liabilities
0.4 
 
Derivatives Designated as Accounting Hedges [Member] |
Net Investment Hedging [Member] |
Foreign Exchange Contract [Member] |
Other Current Assets [Member]
 
 
Derivatives Fair Value [Line Items]
 
 
Derivatives assets
0.3 
0.4 
Derivatives Designated as Accounting Hedges [Member] |
Net Investment Hedging [Member] |
Foreign Exchange Contract [Member] |
Accounts Payable And Accrued Liabilities [Member]
 
 
Derivatives Fair Value [Line Items]
 
 
Derivatives liabilities
12.1 
1.2 
Derivatives Not Designated as Accounting Hedges [Member] |
Foreign Exchange Contract [Member] |
Other Current Assets [Member]
 
 
Derivatives Fair Value [Line Items]
 
 
Derivatives assets
1.8 
0.1 
Derivatives Not Designated as Accounting Hedges [Member] |
Foreign Exchange Contract [Member] |
Accounts Payable And Accrued Liabilities [Member]
 
 
Derivatives Fair Value [Line Items]
 
 
Derivatives liabilities
1.0 
1.9 
Derivatives Not Designated as Accounting Hedges [Member] |
Cross-Currency Swap [Member] |
Other Noncurrent Liabilities [Member]
 
 
Derivatives Fair Value [Line Items]
 
 
Derivatives liabilities
 
$ 9.0 
Derivative Instruments And Hedging Activities - Additional Information (Detail)
In Millions, unless otherwise specified
Sep. 30, 2014
Interest Rate Swap [Member]
2010 Senior Notes [Member]
USD ($)
Jun. 30, 2014
Interest Rate Swap [Member]
2010 Senior Notes [Member]
USD ($)
Mar. 31, 2015
Interest Rate Swap [Member]
2014 Senior Notes (5-Year) [Member]
USD ($)
Sep. 30, 2014
Interest Rate Swap [Member]
2014 Senior Notes (5-Year) [Member]
USD ($)
Dec. 31, 2015
Interest Rate Cap [Member]
2014 Senior Notes (30-Year) [Member]
USD ($)
Dec. 31, 2015
Derivatives Not Designated as Investment Hedges [Member]
Currency Swap [Member]
2015 Senior Notes [Member]
USD ($)
Mar. 31, 2016
Derivatives Designated as Investment Hedges [Member]
Currency Swap [Member]
2015 Senior Notes [Member]
Cross-Currency Paid [Member]
USD ($)
Mar. 31, 2016
Derivatives Designated as Investment Hedges [Member]
Currency Swap [Member]
2015 Senior Notes [Member]
Cross-Currency Received [Member]
EUR (€)
Dec. 31, 2015
Net Investment Hedging [Member]
Derivatives Designated as Investment Hedges [Member]
2015 Senior Notes [Member]
EUR (€)
Derivative [Line Items]
 
 
 
 
 
 
 
 
 
Notional amount
$ 250.0 
$ 250.0 
$ 200.0 
$ 250.0 
$ 150.0 
$ 100.0 
$ 110.5 
€ 100.0 
€ 400.0 
Derivative, swaption interest rate
 
 
 
 
 
 
3.945% 
1.75% 
 
GOODWILL AND OTHER ACQUIRED INTANGIBLE ASSETS
GOODWILL AND OTHER ACQUIRED INTANGIBLE ASSETS

NOTE 8. GOODWILL AND OTHER ACQUIRED INTANGIBLE ASSETS

The following table summarizes the activity in goodwill for the periods indicated:

Three Months Ended March 31, 2016
MISMAConsolidated
Gross goodwillAccumulated impairment chargeNet goodwillGross goodwillAccumulated impairment chargeNet goodwillGross goodwillAccumulated impairment chargeNet goodwill
Balance at beginning of year$284.4$-$284.4$704.1$(12.2)$691.9$988.5$(12.2)$976.3
Additions/adjustments---58.8-58.858.8-58.8
Foreign currency translation adjustments0.1-0.115.7-15.715.8-15.8
Ending balance$284.5$-$284.5$778.6$(12.2)$766.4$1,063.1$(12.2)$1,050.9
Year ended December 31, 2015
MISMAConsolidated
Gross goodwillAccumulated impairment chargeNet goodwillGross goodwillAccumulated impairment chargeNet goodwillGross goodwillAccumulated impairment chargeNet goodwill
Balance at beginning of year$298.7$-$298.7$734.6$(12.2)$722.4$1,033.3$(12.2)$1,021.1
Additions/adjustments3.7-3.75.0-5.08.7-8.7
Foreign currency translation adjustments(18.0)-(18.0)(35.5)-(35.5)(53.5)-(53.5)
Ending balance$284.4$-$284.4$704.1$(12.2)$691.9$988.5$(12.2)$976.3

The 2016 additions/adjustments for the MA segment in the table above relate to the acquisition of GGY. The 2015 additions/adjustments for the MIS segment in the table above relate to the acquisition of Equilibrium. The 2015 additions/adjustments for the MA segment primarily reflect an adjustment to an indemnification asset recognized as part of the Copal acquisition, goodwill acquired from the acquisition of a business from BlackBox Logic and adjustments to deferred revenue balances and deferred tax assets recognized as part of the Lewtan acquisition.

The accumulated impairment charge in the table above reflects an impairment charge recognized in 2012 relating to the FSTC reporting unit within MA. This impairment charge reflected a contraction in spending for training and certification services for many individuals and global financial institutions in 2012 due to macroeconomic uncertainties at the time. The fair value of the FSTC reporting unit utilized in this impairment assessment was estimated using a discounted cash flow methodology and comparable public company and precedent transaction multiples.

Acquired intangible assets and related amortization consisted of:

March 31,December 31,
20162015
Customer relationships$316.2$298.4
Accumulated amortization(114.8)(110.0)
Net customer relationships201.4188.4
Trade secrets30.129.7
Accumulated amortization(23.8)(23.1)
Net trade secrets6.36.6
Software93.674.7
Accumulated amortization(51.4)(47.7)
Net software42.227.0
Trade names76.472.4
Accumulated amortization(17.1)(16.2)
Net trade names59.356.2
Other44.244.3
Accumulated amortization(24.2)(23.4)
Net other20.020.9
Total acquired intangible assets, net$329.2$299.1

Other intangible assets primarily consist of databases, covenants not to compete, and acquired ratings methodologies and models.

Amortization expense relating to acquired intangible assets is as follows:

Three Months Ended
March 31,
20162015
Amortization expense$ 7.9 $ 8.5

Estimated future amortization expense for acquired intangible assets subject to amortization is as follows:

Year Ending December 31,
2016 (after March 31)$25.3
201732.3
201826.3
201923.4
202022.3
Thereafter199.6
Total estimated future amortization$329.2

Amortizable intangible assets are reviewed for recoverability whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If the estimated undiscounted future cash flows are lower than the carrying amount of the related asset, a loss is recognized for the difference between the carrying amount and the estimated fair value of the asset. There were no impairments to intangible assets during the three months ended March 31, 2016 and 2015.

GOODWILL AND OTHER ACQUIRED INTANGIBLE ASSETS (Tables)
Three Months Ended March 31, 2016
MISMAConsolidated
Gross goodwillAccumulated impairment chargeNet goodwillGross goodwillAccumulated impairment chargeNet goodwillGross goodwillAccumulated impairment chargeNet goodwill
Balance at beginning of year$284.4$-$284.4$704.1$(12.2)$691.9$988.5$(12.2)$976.3
Additions/adjustments---58.8-58.858.8-58.8
Foreign currency translation adjustments0.1-0.115.7-15.715.8-15.8
Ending balance$284.5$-$284.5$778.6$(12.2)$766.4$1,063.1$(12.2)$1,050.9
Year ended December 31, 2015
MISMAConsolidated
Gross goodwillAccumulated impairment chargeNet goodwillGross goodwillAccumulated impairment chargeNet goodwillGross goodwillAccumulated impairment chargeNet goodwill
Balance at beginning of year$298.7$-$298.7$734.6$(12.2)$722.4$1,033.3$(12.2)$1,021.1
Additions/adjustments3.7-3.75.0-5.08.7-8.7
Foreign currency translation adjustments(18.0)-(18.0)(35.5)-(35.5)(53.5)-(53.5)
Ending balance$284.4$-$284.4$704.1$(12.2)$691.9$988.5$(12.2)$976.3
March 31,December 31,
20162015
Customer relationships$316.2$298.4
Accumulated amortization(114.8)(110.0)
Net customer relationships201.4188.4
Trade secrets30.129.7
Accumulated amortization(23.8)(23.1)
Net trade secrets6.36.6
Software93.674.7
Accumulated amortization(51.4)(47.7)
Net software42.227.0
Trade names76.472.4
Accumulated amortization(17.1)(16.2)
Net trade names59.356.2
Other44.244.3
Accumulated amortization(24.2)(23.4)
Net other20.020.9
Total acquired intangible assets, net$329.2$299.1
Three Months Ended
March 31,
20162015
Amortization expense$ 7.9 $ 8.5
Year Ending December 31,
2016 (after March 31)$25.3
201732.3
201826.3
201923.4
202022.3
Thereafter199.6
Total estimated future amortization$329.2
Activity in Goodwill (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended 12 Months Ended
Mar. 31, 2016
Dec. 31, 2015
Goodwill [Line Items]
 
 
Beginning balance, Goodwill gross
$ 988.5 
$ 1,033.3 
Additions/adjustments, gross
58.8 
8.7 
Foreign currency translation adjustments, gross
15.8 
(53.5)
Ending balance, Goodwill gross
1,063.1 
988.5 
Beginning balance, Impairment Loss
(12.2)
(12.2)
Ending balance, Impairment Loss
(12.2)
(12.2)
Beginning balance
976.3 
1,021.1 
Additions/adjustments
58.8 
8.7 
Foreign currency translation adjustments
15.8 
(53.5)
Ending balance
1,050.9 
976.3 
Moodys Investors Service [Member]
 
 
Goodwill [Line Items]
 
 
Beginning balance, Goodwill gross
284.4 
298.7 
Additions/adjustments, gross
 
3.7 
Foreign currency translation adjustments, gross
0.1 
(18.0)
Ending balance, Goodwill gross
284.5 
284.4 
Beginning balance
284.4 
298.7 
Additions/adjustments
 
3.7 
Foreign currency translation adjustments
0.1 
(18.0)
Ending balance
284.5 
284.4 
Moodys Analytics [Member]
 
 
Goodwill [Line Items]
 
 
Beginning balance, Goodwill gross
704.1 
734.6 
Additions/adjustments, gross
58.8 
5.0 
Foreign currency translation adjustments, gross
15.7 
(35.5)
Ending balance, Goodwill gross
778.6 
704.1 
Beginning balance, Impairment Loss
(12.2)
(12.2)
Ending balance, Impairment Loss
(12.2)
(12.2)
Beginning balance
691.9 
722.4 
Additions/adjustments
58.8 
5.0 
Foreign currency translation adjustments
15.7 
(35.5)
Ending balance
$ 766.4 
$ 691.9 
Amortization Expense Relating to Acquired Intangible Assets (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Finite Lived Intangible Assets [Line Items]
 
 
Amortization expense
$ 7.9 
$ 8.5 
Estimated Future Amortization Expense for Acquired Intangible Assets Subject to Amortization (Detail) (USD $)
In Millions, unless otherwise specified
Mar. 31, 2016
Schedule Of Actual And Estimated Amortization Expense [Line Items]
 
2016 (after March 31)
$ 25.3 
2017
32.3 
2018
26.3 
2019
23.4 
2020
22.3 
Thereafter
199.6 
Total estimated future amortization
$ 329.2 
Goodwill And Other Acquired Intangible Assets - Additional Information (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Goodwill [Line Items]
 
 
Impairments to intangible assets
$ 0 
$ 0 
FAIR VALUE
FAIR VALUE

NOTE 9. FAIR VALUE

The table below presents information about items that are carried at fair value at March 31, 2016 and December 31, 2015:

Fair Value Measurement as of March 31, 2016
DescriptionBalanceLevel 1Level 2
Assets:
Derivatives (a)$34.4$-$34.4
Money market mutual funds 228.6228.6-
Fixed maturity and open ended mutual funds (b)32.232.2-
Total$295.2$260.8$34.4
Liabilities:
Derivatives (a)$13.5$-$13.5
Total$13.5$-$13.5
Fair Value Measurement as of December 31, 2015
DescriptionBalanceLevel 1Level 2
Assets:
Derivatives (a)$12.6$-$12.6
Money market mutual funds 188.3188.3-
Fixed maturity and open ended mutual funds (b)31.931.9-
Total$232.8$220.2$12.6
Liabilities:
Derivatives (a)$12.4$-$12.4
Total$12.4$-$12.4
(a) Represents FX forwards, interest rate swaps and cross-currency swaps as more fully described in Note 7 to the financial statements.
(b) Consists of investments in fixed maturity mutual funds and open-ended mutual funds.

The following are descriptions of the methodologies utilized by the Company to estimate the fair value of its derivative contracts, fixed maturity plans, open ended mutual funds and money market mutual funds:

Derivatives:

In determining the fair value of the derivative contracts, the Company utilizes industry standard valuation models. Where applicable, these models project future cash flows and discount the future amounts to a present value using spot rates, forward points, currency volatilities, interest rates as well as the risk of non-performance of the Company and the counterparties with whom it has derivative contracts. The Company established strict counterparty credit guidelines and only enters into transactions with financial institutions that adhere to these guidelines. Accordingly, the risk of counterparty default is deemed to be minimal.

Fixed maturity and open ended mutual funds:

The fixed maturity mutual funds and open ended mutual funds primarily represent exchange traded funds in India and are classified as securities available-for-sale. Accordingly, any unrealized gains and losses are recognized through OCI until the instruments mature or are sold.

Money market mutual funds:

The money market mutual funds represent publicly traded funds with a stable $1 net asset value.

FAIR VALUE (Tables)
Financial Instruments Carried at Fair Value on Recurring Basis
Fair Value Measurement as of March 31, 2016
DescriptionBalanceLevel 1Level 2
Assets:
Derivatives (a)$34.4$-$34.4
Money market mutual funds 228.6228.6-
Fixed maturity and open ended mutual funds (b)32.232.2-
Total$295.2$260.8$34.4
Liabilities:
Derivatives (a)$13.5$-$13.5
Total$13.5$-$13.5
Fair Value Measurement as of December 31, 2015
DescriptionBalanceLevel 1Level 2
Assets:
Derivatives (a)$12.6$-$12.6
Money market mutual funds 188.3188.3-
Fixed maturity and open ended mutual funds (b)31.931.9-
Total$232.8$220.2$12.6
Liabilities:
Derivatives (a)$12.4$-$12.4
Total$12.4$-$12.4
(a) Represents FX forwards, interest rate swaps and cross-currency swaps as more fully described in Note 7 to the financial statements.
(b) Consists of investments in fixed maturity mutual funds and open-ended mutual funds.
Financial Instruments Carried at Fair Value on Recurring Basis (Detail) (USD $)
In Millions, unless otherwise specified
Mar. 31, 2016
Dec. 31, 2015
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
 
 
Derivative Contracts
$ 34.4 
$ 12.6 
Money Market Funds
228.6 
188.3 
Fixed maturity and open ended mutual funds
32.2 
31.9 
Total, Assets
295.2 
232.8 
Derivatives, Liabilities
13.5 
12.4 
Total, Liabilities
13.5 
12.4 
Fair Value Inputs Level 1 [Member]
 
 
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
 
 
Money Market Funds
228.6 
188.3 
Fixed maturity and open ended mutual funds
32.2 
31.9 
Total, Assets
260.8 
220.2 
Fair Value Inputs Level 2 [Member]
 
 
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
 
 
Derivative Contracts
34.4 
12.6 
Total, Assets
34.4 
12.6 
Derivatives, Liabilities
13.5 
12.4 
Total, Liabilities
$ 13.5 
$ 12.4 
Fair Value - Additional Information (Detail) (USD $)
Mar. 31, 2016
Fair Value Of Financial Instruments [Line Items]
 
Net asset stable value for public traded funds
$ 1 
OTHER BALANCE SHEET INFORMATION
OTHER BALANCE SHEET AND STATEMENT OF OPERATIONS INFORMATION

NOTE 10. OTHER BALANCE SHEET AND STATEMENT OF OPERATIONS INFORMATION

The following tables contain additional detail related to certain balance sheet captions:

March 31,December 31,
20162015
Other current assets:
Prepaid taxes$74.1$83.3
Prepaid expenses69.266.9
Other23.229.4
Total other current assets$166.5$179.6
March 31,December 31,
20162015
Other assets:
Investments in joint ventures$30.3$28.7
Deposits for real-estate leases11.811.4
Indemnification assets related to acquisitions20.719.2
Mutual funds and fixed deposits55.155.0
Other44.926.1
Total other assets$162.8$140.4
March 31,December 31,
20162015
Accounts payable and accrued liabilities:
Salaries and benefits$91.0$83.0
Incentive compensation35.3137.2
Customer credits, advanced payments and advanced billings26.924.6
Self-insurance reserves 18.819.7
Dividends6.878.2
Professional service fees59.354.5
Interest accrued on debt18.259.4
Accounts payable14.422.2
Income taxes41.511.5
Pension and other retirement employee benefits5.86.2
Other73.570.1
Total accounts payable and accrued liabilities$391.5$566.6
March 31,December 31,
20162015
Other liabilities:
Pension and other retirement employee benefits$270.0$261.7
Deferred rent-non-current portion98.998.4
Interest accrued on UTPs30.727.9
Legacy and other tax matters2.91.7
Other19.827.5
Total other liabilities$422.3$417.2

Changes in the Company’s self-insurance reserves for claims insured by the Company’s wholly-owned insurance subsidiary, which primarily relate to legal defense costs for claims from prior years, are as follows:

Three Months EndedYear Ended
March 31,December 31,
20162015
Balance January 1,$19.7$21.5
Accruals (reversals), net0.422.2
Payments(1.3)(24.0)
Balance$18.8$19.7

Other Non-Operating (Expense) Income:

The following table summarizes the components of other non-operating (expense) income:

Three Months Ended
March 31,
20162015
FX gain$4.0$-
Joint venture income1.91.9
Other(0.3)0.6
Total$5.6$2.5
OTHER BALANCE SHEET INFORMATION (Tables)
March 31,December 31,
20162015
Other current assets:
Prepaid taxes$74.1$83.3
Prepaid expenses69.266.9
Other23.229.4
Total other current assets$166.5$179.6
March 31,December 31,
20162015
Other assets:
Investments in joint ventures$30.3$28.7
Deposits for real-estate leases11.811.4
Indemnification assets related to acquisitions20.719.2
Mutual funds and fixed deposits55.155.0
Other44.926.1
Total other assets$162.8$140.4
March 31,December 31,
20162015
Accounts payable and accrued liabilities:
Salaries and benefits$91.0$83.0
Incentive compensation35.3137.2
Customer credits, advanced payments and advanced billings26.924.6
Self-insurance reserves 18.819.7
Dividends6.878.2
Professional service fees59.354.5
Interest accrued on debt18.259.4
Accounts payable14.422.2
Income taxes41.511.5
Pension and other retirement employee benefits5.86.2
Other73.570.1
Total accounts payable and accrued liabilities$391.5$566.6
March 31,December 31,
20162015
Other liabilities:
Pension and other retirement employee benefits$270.0$261.7
Deferred rent-non-current portion98.998.4
Interest accrued on UTPs30.727.9
Legacy and other tax matters2.91.7
Other19.827.5
Total other liabilities$422.3$417.2
Three Months EndedYear Ended
March 31,December 31,
20162015
Balance January 1,$19.7$21.5
Accruals (reversals), net0.422.2
Payments(1.3)(24.0)
Balance$18.8$19.7
Three Months Ended
March 31,
20162015
FX gain$4.0$-
Joint venture income1.91.9
Other(0.3)0.6
Total$5.6$2.5
Changes in Self Insurance Reserves (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended 12 Months Ended
Mar. 31, 2016
Dec. 31, 2015
Disclosure Changes in Self Insurance Reserves [Abstract]
 
 
Self-insurance reserves, beginning balance
$ 19.7 
$ 21.5 
Accruals (reversals), net
0.4 
22.2 
Payments
(1.3)
(24.0)
Self-insurance reserves, ending balance
$ 18.8 
$ 19.7 
Other Non-Operating Interest (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Component of Other Expense Income Nonoperating [Line Items]
 
 
FX gain/(loss)
$ 4.0 
 
Joint venture income
1.9 
1.9 
Other
(0.3)
0.6 
Total
$ 5.6 
$ 2.5 
COMPREHENSIVE INCOME RECLASSIFICATION
COMPREHENSIVE INCOME AND ACCUMULATED OTHER COMPREHENSIVE INCOME

NOTE 11. COMPREHENSIVE INCOME AND ACCUMULATED OTHER COMPREHENSIVE INCOME

The following table provides details about the reclassifications out of AOCI:

  Three Months Ended March 31, 2016Three Months Ended March 31, 2015Affected line in the consolidated statement of operations
Gains (losses) on currency translation adjustments
Liquidation of foreign subsidiary$-$0.1Other non-operating income, net
  
Total gains on currency translation adjustments-0.1
  
Gains on cash flow hedges
Cross-currency derivative contracts2.2-Other non-operating income, net
Income tax effect of item above(0.8)-Provision for income taxes
  
Total gains on cash flow hedges1.4-
  
  
Pension and other retirement benefits
Amortization of actuarial losses and prior service costs included in net income(1.6)(2.3)Operating expense
Amortization of actuarial losses and prior service costs included in net income(1.0)(1.5)SG&A expense
  
Total before income taxes(2.6)(3.8)
Income tax effect of item above1.01.5Provision for income taxes
  
Total pension and other retirement benefits(1.6)(2.3)
Total losses included in Net Income attributable to reclassifications out of AOCI$(0.2)$(2.2)

The following table shows changes in AOCI by component (net of tax):

Three Months Ended
March 31, 2016
Gains/(Losses) on Cash FlowHedgesPension and Other Retirement BenefitsForeign Currency Translation AdjustmentsGains on Available for Sale SecuritiesTotal
Balance December 31, 2015$(1.1)$(85.7)$(256.0)$3.3$(339.5)
Other comprehensive income before reclassifications 1.2-36.00.637.8
Amounts reclassified from AOCI(1.4)1.6--0.2
Other comprehensive income/(loss)(0.2)1.636.00.638.0
Balance March 31, 2016$(1.3)$(84.1)$(220.0)$3.9$(301.5)
Three Months Ended
March 31, 2015
Gains/(Losses) on Cash FlowHedgesPension and Other Retirement BenefitsForeign Currency Translation AdjustmentsGains on Available for Sale SecuritiesTotal
Balance December 31, 2014$-$(105.4)$(130.7)$0.9$(235.2)
Other comprehensive income/(loss) before reclassifications --(90.5)1.1(89.4)
Amounts reclassified from AOCI-2.3(0.1)-2.2
Net current period other comprehensive income/(loss)-2.3(90.6)1.1(87.2)
Balance March 31, 2015$-$(103.1)$(221.3)$2.0$(322.4)
COMPREHENSIVE INCOME RECLASSIFICATIONS (Tables)
  Three Months Ended March 31, 2016Three Months Ended March 31, 2015Affected line in the consolidated statement of operations
Gains (losses) on currency translation adjustments
Liquidation of foreign subsidiary$-$0.1Other non-operating income, net
  
Total gains on currency translation adjustments-0.1
  
Gains on cash flow hedges
Cross-currency derivative contracts2.2-Other non-operating income, net
Income tax effect of item above(0.8)-Provision for income taxes
  
Total gains on cash flow hedges1.4-
  
  
Pension and other retirement benefits
Amortization of actuarial losses and prior service costs included in net income(1.6)(2.3)Operating expense
Amortization of actuarial losses and prior service costs included in net income(1.0)(1.5)SG&A expense
  
Total before income taxes(2.6)(3.8)
Income tax effect of item above1.01.5Provision for income taxes
  
Total pension and other retirement benefits(1.6)(2.3)
Total losses included in Net Income attributable to reclassifications out of AOCI$(0.2)$(2.2)
Three Months Ended
March 31, 2016
Gains/(Losses) on Cash FlowHedgesPension and Other Retirement BenefitsForeign Currency Translation AdjustmentsGains on Available for Sale SecuritiesTotal
Balance December 31, 2015$(1.1)$(85.7)$(256.0)$3.3$(339.5)
Other comprehensive income before reclassifications 1.2-36.00.637.8
Amounts reclassified from AOCI(1.4)1.6--0.2
Other comprehensive income/(loss)(0.2)1.636.00.638.0
Balance March 31, 2016$(1.3)$(84.1)$(220.0)$3.9$(301.5)
Three Months Ended
March 31, 2015
Gains/(Losses) on Cash FlowHedgesPension and Other Retirement BenefitsForeign Currency Translation AdjustmentsGains on Available for Sale SecuritiesTotal
Balance December 31, 2014$-$(105.4)$(130.7)$0.9$(235.2)
Other comprehensive income/(loss) before reclassifications --(90.5)1.1(89.4)
Amounts reclassified from AOCI-2.3(0.1)-2.2
Net current period other comprehensive income/(loss)-2.3(90.6)1.1(87.2)
Balance March 31, 2015$-$(103.1)$(221.3)$2.0$(322.4)
Reclassification out of AOCI (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Gains/(losses) on foreign currency translation adjustments
 
 
Liquidation of foreign subsidiary
 
$ 0.1 
Total gains/(losses) on currency translation adjustments
 
0.1 
Cash Flow Hedges, net of tax:
 
 
Losses on cash flow hedges - Pre Tax
2.2 
 
Losses on cash flow hedges - Tax
(0.8)
 
Losses on cash flow hedges - Net of Tax
1.4 
 
Pension and Other Post-Retirement Benefits, net of tax:
 
 
Amortization of actuarial losses and prior service costs included in net income - Pre Tax
(2.6)
(3.8)
Amortization of actuarial losses and prior service costs included in net income - Tax
1.0 
1.5 
Amortization of actuarial losses and prior service costs included in net income - Net of Tax
(1.6)
(2.3)
Income Loss Attributable to Reclassification Out Of AOCI Net Of Tax
(0.2)
(2.2)
Operating Expense [Member]
 
 
Pension and Other Post-Retirement Benefits, net of tax:
 
 
Amortization of actuarial losses and prior service costs included in net income - Pre Tax
(1.6)
(2.3)
Other Nonoperating Income (Expense) [Member]
 
 
Gains/(losses) on foreign currency translation adjustments
 
 
Liquidation of foreign subsidiary
 
0.1 
Selling, General and Administrative Expenses [Member]
 
 
Pension and Other Post-Retirement Benefits, net of tax:
 
 
Amortization of actuarial losses and prior service costs included in net income - Pre Tax
(1.0)
(1.5)
Cross-Currency Dervivative Contract [Member] |
Other Nonoperating Income (Expense) [Member]
 
 
Cash Flow Hedges, net of tax:
 
 
Losses on cash flow hedges - Pre Tax
$ 2.2 
 
Changes in Components of Accumulated Other Comprehensive Income (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Mar. 31, 2016
Gains Losses On Net Investment Hedges [Member]
Dec. 31, 2015
Gains Losses On Net Investment Hedges [Member]
Mar. 31, 2016
Pension and Other Retirement Benefits [Member]
Dec. 31, 2015
Pension and Other Retirement Benefits [Member]
Mar. 31, 2015
Pension and Other Retirement Benefits [Member]
Dec. 31, 2014
Pension and Other Retirement Benefits [Member]
Mar. 31, 2016
Foreign Currency Translation Adjustments [Member]
Dec. 31, 2015
Foreign Currency Translation Adjustments [Member]
Mar. 31, 2015
Foreign Currency Translation Adjustments [Member]
Dec. 31, 2014
Foreign Currency Translation Adjustments [Member]
Mar. 31, 2016
Gains on Available for Sale Securities [Member]
Dec. 31, 2015
Gains on Available for Sale Securities [Member]
Mar. 31, 2015
Gains on Available for Sale Securities [Member]
Dec. 31, 2014
Gains on Available for Sale Securities [Member]
Beginning Balance
$ (339.5)
$ (235.2)
$ (1.3)
$ (1.1)
$ (84.1)
$ (85.7)
$ (103.1)
$ (105.4)
$ (220.0)
$ (256.0)
$ (221.3)
$ (130.7)
$ 3.9 
$ 3.3 
$ 2.0 
$ 0.9 
Net unrealized gain (losses) on cash flow - Net of Tax
1.2 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reclassification gain (losses) on cash flow - Net of Tax
(1.4)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gains/(Losses) on cash flow hedges - Net of Tax
(0.2)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reclassification adjustment from AOCI, Pension and Other Postretirement Benefit Plans - Net of Tax
1.6 
2.3 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pension and other retirement benefit - Net of Tax
1.6 
2.3 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Foreign currency translation adjustments before reclassification - Net of Tax
36.0 
(90.5)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amount reclassified from AOCI, Foreign Currency Translation Adjustment - Net of Tax
 
(0.1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Foreign currency translation adjustments - Net of Tax
36.0 
(90.6)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Available for sale securities before reclassification - Net of Tax
0.6 
1.1 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gains on Available for sale securities - Net of Tax
0.6 
1.1 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other comprehensive income/(loss) before reclassifications
37.8 
(89.4)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amounts reclassified from AOCI
0.2 
2.2 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total other comprehensive income (loss) - Net of Tax
38.0 
(87.2)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ending Balance
$ (301.5)
$ (322.4)
$ (1.3)
$ (1.1)
$ (84.1)
$ (85.7)
$ (103.1)
$ (105.4)
$ (220.0)
$ (256.0)
$ (221.3)
$ (130.7)
$ 3.9 
$ 3.3 
$ 2.0 
$ 0.9 
PENSION AND OTHER POST-RETIREMENT BENEFITS
PENSION AND OTHER RETIREMENT BENEFITS

NOTE 12. PENSION AND OTHER RETIREMENT BENEFITS

Moody’s maintains funded and unfunded noncontributory Defined Benefit Pension Plans. The U.S. plans provide defined benefits using a cash balance formula based on years of service and career average salary for its employees or final average pay for selected executives. The Company also provides certain healthcare and life insurance benefits for retired U.S. employees. The retirement healthcare plans are contributory; the life insurance plans are noncontributory. Moody’s funded and unfunded U.S. pension plans, the U.S. retirement healthcare plans and the U.S. retirement life insurance plans are collectively referred to herein as the “Retirement Plans”. The U.S. retirement healthcare plans and the U.S. retirement life insurance plans are collectively referred to herein as the “Other Retirement Plans”.

Effective January 1, 2008, the Company no longer offers DBPPs to U.S. employees hired or rehired on or after January 1, 2008. New U.S. employees will instead receive a retirement contribution of similar benefit value under the Company’s Profit Participation Plan. Current participants of the Company’s DBPPs continue to accrue benefits based on existing plan formulas.

The components of net periodic benefit expense related to the Retirement Plans are as follows:

Three Months Ended March 31,
Pension PlansOther Retirement Plans
2016201520162015
Components of net periodic expense
Service cost$5.2$5.8$0.5$0.5
Interest cost4.64.30.30.2
Expected return on plan assets(4.3)(3.6)--
Amortization of net actuarial loss from earlier periods2.63.4-0.1
Amortization of net prior service costs from earlier periods-0.2--
Net periodic expense$8.1$10.1$0.8$0.8

The Company made payments of $1.2 million related to its unfunded U.S. DBPPs and $0.1 million to its U.S. other retirement plans during the three months ended March 31, 2016. The Company anticipates making payments of $22 million related to its funded pension plan and making payments of $3.2 million related to its unfunded U.S. DBPPs and $0.9 million to its U.S. other retirement plans, respectively, during the remainder of 2016.

PENSION AND OTHER POST-RETIREMENT BENEFITS (Tables)
Components of Net Periodic Benefit Expense Related to Post-Retirement Plans
Three Months Ended March 31,
Pension PlansOther Retirement Plans
2016201520162015
Components of net periodic expense
Service cost$5.2$5.8$0.5$0.5
Interest cost4.64.30.30.2
Expected return on plan assets(4.3)(3.6)--
Amortization of net actuarial loss from earlier periods2.63.4-0.1
Amortization of net prior service costs from earlier periods-0.2--
Net periodic expense$8.1$10.1$0.8$0.8
Components of Net Periodic Benefit Expense Related to Post-Retirement Plans (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Pension Plans Defined Benefit [Member]
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
Service cost
$ 5.2 
$ 5.8 
Interest cost
4.6 
4.3 
Expected return on plan assets
(4.3)
(3.6)
Amortization of net actuarial loss from earlier periods
2.6 
3.4 
Amortization of net prior service costs from earlier periods
 
0.2 
Net periodic expense
8.1 
10.1 
Other Postretirement Benefit Plans Defined Benefit [Member]
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
Service cost
0.5 
0.5 
Interest cost
0.3 
0.2 
Amortization of net actuarial loss from earlier periods
 
0.1 
Net periodic expense
$ 0.8 
$ 0.8 
Pension and Other Post-Retirement Benefits - Additional Information (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2016
Funded Pension Plans [Member]
 
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block [Line Items]
 
Estimated additional payments in 2013
$ 22.0 
Unfunded Pension Plans [Member]
 
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block [Line Items]
 
Defined benefit payment amount
1.2 
Estimated additional payments in 2013
3.2 
Other Postretirement Benefit Plans Defined Benefit [Member]
 
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block [Line Items]
 
Defined benefit payment amount
0.1 
Estimated additional payments in 2013
$ 0.9 
INDEBTEDNESS
INDEBTEDNESS

NOTE 13. INDEBTEDNESS

The following table summarizes total indebtedness:

March 31, 2016
Principal AmountFair Value of Interest Rate Swap (1)Unamortized (Discount) PremiumUnamortized Debt Issuance Costs (2)Carrying Value
Notes Payable:
6.06% Series 2007-1 Notes due 2017$300.0$-$-$(0.1)$299.9
5.50% 2010 Senior Notes, due 2020500.022.1(1.6)(1.9)518.6
4.50% 2012 Senior Notes, due 2022500.0-(2.7)(2.4)494.9
4.875% 2013 Senior Notes, due 2024500.0-(2.2)(3.0)494.8
2.75% 2014 Senior Notes (5-Year), due 2019450.010.2(0.5)(2.2)457.5
5.25% 2014 Senior Notes (30-Year), due 2044600.0-3.4(6.1)597.3
1.75% 2015 Senior Notes, due 2027 569.8--(4.2)565.6
Total long-term debt$3,419.8$32.3$(3.6)$(19.9)$3,428.6
December 31, 2015
Principal AmountFair Value of Interest Rate Swap (1)Unamortized (Discount) PremiumUnamortized Debt Issuance Costs (2)Carrying Value
Notes Payable:
6.06% Series 2007-1 Notes due 2017$300.0$-$-$(0.2)$299.8
5.50% 2010 Senior Notes, due 2020500.09.4(1.6)(2.0)505.8
4.50% 2012 Senior Notes, due 2022500.0-(2.8)(2.5)494.7
4.875% 2013 Senior Notes, due 2024500.0-(2.3)(3.1)494.6
2.75% 2014 Senior Notes (5-Year), due 2019450.02.3(0.5)(2.4)449.4
5.25% 2014 Senior Notes (30-Year), due 2044600.0-3.4(6.2)597.2
1.75% 2015 Senior Notes, due 2027 543.1--(4.0)539.1
Total long-term debt$3,393.1$11.7$(3.8)$(20.4)$3,380.6
(1) The Company has entered into interest rate swaps on the 2010 Senior Notes and the 2014 Senior Notes (5-Year) which are more fully discussed in Note 7 above.
(2) Pursuant to ASU No. 2015-03, unamortized debt issuance costs are presented as a reduction to the carrying value of the notes payable. See Note 1 for additional discussion.

At March 31, 2016, the Company was in compliance with all covenants contained within all of the debt agreements. The 2015 Facility, the 2015 Senior Notes, the 2014 Senior Notes (5-year), the 2014 Senior Notes (30-year), the Series 2007-1 Notes, the 2010 Senior Notes, the 2012 Senior Notes and the 2013 Senior Notes all contain cross default provisions. These provisions state that default under one of the aforementioned debt instruments could in turn permit lenders under other debt instruments to declare borrowings outstanding under those instruments to be immediately due and payable. As of March 31, 2016, there were no such cross defaults.

Interest expense, net

The following table summarizes the components of interest as presented in the consolidated statements of operations:

Three Months Ended
March 31,
20162015
Income$2.9$1.9
Expense on borrowings (34.6)(28.3)
UTPs and other tax related liabilities (2.8)(3.2)
Capitalized0.40.3
Total$(34.1)$(29.3)

The following table shows the cash paid for interest:

Three Months Ended
March 31,
20162015
Interest paid$67.1$48.2

The fair value and carrying value of the Company’s long-term debt as of March 31, 2016 and December 31, 2015 are as follows:

March 31, 2016December 31, 2015
Carrying AmountEstimated Fair ValueCarrying AmountEstimated Fair Value
Series 2007-1 Notes$299.9$318.9$299.8$320.6
2010 Senior Notes518.6560.6505.8551.2
2012 Senior Notes494.9548.1494.7530.0
2013 Senior Notes494.8553.9494.6533.8
2014 Senior Notes (5-Year) 457.5461.5449.4454.3
2014 Senior Notes (30-Year) 597.3668.3597.2617.7
2015 Senior Notes565.6575.8539.1520.2
Total$3,428.6$3,687.1$3,380.6$3,527.8

The fair value of the Company’s long-term debt is estimated based on quoted market prices for similar instruments. Accordingly, the inputs used to estimate the fair value of the Company’s long-term debt are classified as Level 2 inputs within the fair value hierarchy.

INDEBTEDNESS (Tables)
March 31, 2016
Principal AmountFair Value of Interest Rate Swap (1)Unamortized (Discount) PremiumUnamortized Debt Issuance Costs (2)Carrying Value
Notes Payable:
6.06% Series 2007-1 Notes due 2017$300.0$-$-$(0.1)$299.9
5.50% 2010 Senior Notes, due 2020500.022.1(1.6)(1.9)518.6
4.50% 2012 Senior Notes, due 2022500.0-(2.7)(2.4)494.9
4.875% 2013 Senior Notes, due 2024500.0-(2.2)(3.0)494.8
2.75% 2014 Senior Notes (5-Year), due 2019450.010.2(0.5)(2.2)457.5
5.25% 2014 Senior Notes (30-Year), due 2044600.0-3.4(6.1)597.3
1.75% 2015 Senior Notes, due 2027 569.8--(4.2)565.6
Total long-term debt$3,419.8$32.3$(3.6)$(19.9)$3,428.6
December 31, 2015
Principal AmountFair Value of Interest Rate Swap (1)Unamortized (Discount) PremiumUnamortized Debt Issuance Costs (2)Carrying Value
Notes Payable:
6.06% Series 2007-1 Notes due 2017$300.0$-$-$(0.2)$299.8
5.50% 2010 Senior Notes, due 2020500.09.4(1.6)(2.0)505.8
4.50% 2012 Senior Notes, due 2022500.0-(2.8)(2.5)494.7
4.875% 2013 Senior Notes, due 2024500.0-(2.3)(3.1)494.6
2.75% 2014 Senior Notes (5-Year), due 2019450.02.3(0.5)(2.4)449.4
5.25% 2014 Senior Notes (30-Year), due 2044600.0-3.4(6.2)597.2
1.75% 2015 Senior Notes, due 2027 543.1--(4.0)539.1
Total long-term debt$3,393.1$11.7$(3.8)$(20.4)$3,380.6
(1) The Company has entered into interest rate swaps on the 2010 Senior Notes and the 2014 Senior Notes (5-Year) which are more fully discussed in Note 7 above.
(2) Pursuant to ASU No. 2015-03, unamortized debt issuance costs are presented as a reduction to the carrying value of the notes payable. See Note 1 for additional discussion.
Three Months Ended
March 31,
20162015
Income$2.9$1.9
Expense on borrowings (34.6)(28.3)
UTPs and other tax related liabilities (2.8)(3.2)
Capitalized0.40.3
Total$(34.1)$(29.3)
Three Months Ended
March 31,
20162015
Interest paid$67.1$48.2
March 31, 2016December 31, 2015
Carrying AmountEstimated Fair ValueCarrying AmountEstimated Fair Value
Series 2007-1 Notes$299.9$318.9$299.8$320.6
2010 Senior Notes518.6560.6505.8551.2
2012 Senior Notes494.9548.1494.7530.0
2013 Senior Notes494.8553.9494.6533.8
2014 Senior Notes (5-Year) 457.5461.5449.4454.3
2014 Senior Notes (30-Year) 597.3668.3597.2617.7
2015 Senior Notes565.6575.8539.1520.2
Total$3,428.6$3,687.1$3,380.6$3,527.8
Summary of Total Indebtedness (Detail) (USD $)
In Millions, unless otherwise specified
Mar. 31, 2016
Dec. 31, 2015
Debt Instrument [Line Items]
 
 
Principal Amount
$ 3,419.8 
$ 3,393.1 
Fair Value of Interest Rate Swap
32.3 
11.7 
Unamortized (Discount) Premium
(3.6)
(3.8)
Unamortized Debt Issuance Costs
(19.9)
(20.4)
Carrying Amount
3,428.6 
3,380.6 
Series 2007-1 Notes [Member]
 
 
Debt Instrument [Line Items]
 
 
Principal Amount
300.0 
300.0 
Unamortized Debt Issuance Costs
(0.1)
(0.2)
Carrying Amount
299.9 
299.8 
2010 Senior Notes [Member]
 
 
Debt Instrument [Line Items]
 
 
Principal Amount
500.0 
500.0 
Fair Value of Interest Rate Swap
22.1 
9.4 
Unamortized (Discount) Premium
(1.6)
(1.6)
Unamortized Debt Issuance Costs
(1.9)
(2.0)
Carrying Amount
518.6 
505.8 
2012 Senior Notes [Member]
 
 
Debt Instrument [Line Items]
 
 
Principal Amount
500.0 
500.0 
Unamortized (Discount) Premium
(2.7)
(2.8)
Unamortized Debt Issuance Costs
(2.4)
(2.5)
Carrying Amount
494.9 
494.7 
2013 Senior Notes [Member]
 
 
Debt Instrument [Line Items]
 
 
Principal Amount
500.0 
500.0 
Unamortized (Discount) Premium
(2.2)
(2.3)
Unamortized Debt Issuance Costs
(3.0)
(3.1)
Carrying Amount
494.8 
494.6 
2014 Senior Notes (5-Year) [Member]
 
 
Debt Instrument [Line Items]
 
 
Principal Amount
450.0 
450.0 
Fair Value of Interest Rate Swap
10.2 
2.3 
Unamortized (Discount) Premium
(0.5)
(0.5)
Unamortized Debt Issuance Costs
(2.2)
(2.4)
Carrying Amount
457.5 
449.4 
2014 Senior Notes (30-Year) [Member]
 
 
Debt Instrument [Line Items]
 
 
Principal Amount
600.0 
600.0 
Unamortized (Discount) Premium
3.4 
3.4 
Unamortized Debt Issuance Costs
(6.1)
(6.2)
Carrying Amount
597.3 
597.2 
2015 Senior Notes [Member]
 
 
Debt Instrument [Line Items]
 
 
Principal Amount
569.8 
543.1 
Unamortized Debt Issuance Costs
(4.2)
(4.0)
Carrying Amount
$ 565.6 
$ 539.1 
Summary of Total Indebtedness (Parenthetical) (Detail)
Mar. 31, 2016
Dec. 31, 2015
Series 2007-1 Notes [Member]
 
 
Debt Instrument [Line Items]
 
 
Notes Payable, interest rate
6.06% 
6.06% 
2010 Senior Notes [Member]
 
 
Debt Instrument [Line Items]
 
 
Notes Payable, interest rate
5.50% 
5.50% 
2012 Senior Notes [Member]
 
 
Debt Instrument [Line Items]
 
 
Notes Payable, interest rate
4.50% 
4.50% 
2013 Senior Notes [Member]
 
 
Debt Instrument [Line Items]
 
 
Notes Payable, interest rate
4.875% 
4.875% 
2014 Senior Notes (5-Year) [Member]
 
 
Debt Instrument [Line Items]
 
 
Notes Payable, interest rate
2.75% 
2.75% 
2014 Senior Notes (30-Year) [Member]
 
 
Debt Instrument [Line Items]
 
 
Notes Payable, interest rate
5.25% 
5.25% 
2015 Senior Notes [Member]
 
 
Debt Instrument [Line Items]
 
 
Notes Payable, interest rate
1.75% 
1.75% 
2016 Senior Notes [Member]
 
 
Debt Instrument [Line Items]
 
 
Notes Payable, interest rate
0.00% 
0.00% 
Summary of Components of Interest as Presented in Consolidated Statements of Operations (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Debt Instrument [Line Items]
 
 
Income
$ 2.9 
$ 1.9 
Expense on borrowings
(34.6)
(28.3)
Income (expense) on UTPs and other tax related liabilities
(2.8)
(3.2)
Capitalized
0.4 
0.3 
Total
$ (34.1)
$ (29.3)
Fair Value and Carrying Value of Long-Term Debt (Detail) (USD $)
In Millions, unless otherwise specified
Mar. 31, 2016
Dec. 31, 2015
Debt Instrument [Line Items]
 
 
Carrying Amount
$ 3,428.6 
$ 3,380.6 
Estimated Fair Value
3,687.1 
3,527.8 
Series 2007-1 Notes [Member]
 
 
Debt Instrument [Line Items]
 
 
Carrying Amount
299.9 
299.8 
Estimated Fair Value
318.9 
320.6 
2010 Senior Notes [Member]
 
 
Debt Instrument [Line Items]
 
 
Carrying Amount
518.6 
505.8 
Estimated Fair Value
560.6 
551.2 
2012 Senior Notes [Member]
 
 
Debt Instrument [Line Items]
 
 
Carrying Amount
494.9 
494.7 
Estimated Fair Value
548.1 
530.0 
2013 Senior Notes [Member]
 
 
Debt Instrument [Line Items]
 
 
Carrying Amount
494.8 
494.6 
Estimated Fair Value
553.9 
533.8 
2014 Senior Notes (5-Year) [Member]
 
 
Debt Instrument [Line Items]
 
 
Carrying Amount
457.5 
449.4 
Estimated Fair Value
461.5 
454.3 
2014 Senior Notes (30-Year) [Member]
 
 
Debt Instrument [Line Items]
 
 
Carrying Amount
597.3 
597.2 
Estimated Fair Value
668.3 
617.7 
2015 Senior Notes [Member]
 
 
Debt Instrument [Line Items]
 
 
Carrying Amount
565.6 
539.1 
Estimated Fair Value
$ 575.8 
$ 520.2 
CONTINGENCIES
CONTINGENCIES

NOTE 14. CONTINGENCIES

Moody’s is involved in legal and tax proceedings, governmental investigations and inquiries, claims and litigation that are incidental to the Company’s business, including claims based on ratings assigned by MIS. Moody’s is also subject to ongoing tax audits in the normal course of business. Management periodically assesses the Company’s liabilities and contingencies in connection with these matters based upon the latest information available. Moody’s discloses material pending legal proceedings pursuant to SEC rules and other pending matters as it may determine to be appropriate.

Following the global credit crisis of 2008, MIS and other credit rating agencies have been the subject of intense scrutiny, increased regulation, ongoing inquiry and governmental investigations, and civil litigation. Legislative, regulatory and enforcement entities around the world are considering additional legislation, regulation and enforcement actions, including with respect to MIS’s compliance with regulatory standards. Moody’s periodically receives and is continuing to address subpoenas and inquiries from various governmental authorities, including the U.S. Department of Justice and states attorneys general, and is responding to such investigations and inquiries.

In addition, the Company is facing litigation from market participants relating to the performance of MIS rated securities. Although Moody’s in the normal course experiences such litigation, the volume and cost of defending such litigation has significantly increased following the events in the U.S. subprime residential mortgage sector and global credit markets more broadly over the last several years.

On August 25, 2008, Abu Dhabi Commercial Bank filed a purported class action in the United States District Court for the Southern District of New York asserting numerous common-law causes of action against two subsidiaries of the Company, another rating agency, and Morgan Stanley & Co. The action related to securities issued by a structured investment vehicle called Cheyne Finance (the “Cheyne SIV”) and sought, among other things, compensatory and punitive damages. The central allegation against the rating agency defendants was that the credit ratings assigned to the securities issued by the Cheyne SIV were false and misleading. In early proceedings, the court dismissed all claims against the rating agency defendants except those for fraud and aiding and abetting fraud. In June 2010, the court denied plaintiff’s motion for class certification, and additional plaintiffs were subsequently added to the complaint. In January 2012, the rating agency defendants moved for summary judgment with respect to the fraud and aiding and abetting fraud claims. Also in January 2012, in light of new New York state case law, the court permitted the plaintiffs to file an amended complaint that reasserted previously dismissed claims against all defendants for breach of fiduciary duty, negligence, negligent misrepresentation, and related aiding and abetting claims. In May 2012, the court, ruling on the rating agency defendants’ motion to dismiss, dismissed all of the reasserted claims except for the negligent misrepresentation claim, and on September 19, 2012, after further proceedings, the court also dismissed the negligent misrepresentation claim. On August 17, 2012, the court ruled on the rating agencies’ motion for summary judgment on the plaintiffs’ remaining claims for fraud and aiding and abetting fraud. The court dismissed, in whole or in part, the fraud claims of four plaintiffs as against Moody’s but allowed the fraud claims to proceed with respect to certain claims of one of those plaintiffs and the claims of the remaining 11 plaintiffs. The court also dismissed all claims against Moody’s for aiding and abetting fraud. Three of the plaintiffs whose claims were dismissed filed motions for reconsideration, and on November 7, 2012, the court granted two of these motions, reinstating the claims of two plaintiffs that were previously dismissed. On February 1, 2013, the court dismissed the claims of one additional plaintiff on jurisdictional grounds. Trial on the remaining fraud claims against the rating agencies, and on claims against Morgan Stanley for aiding and abetting fraud and for negligent misrepresentation, was scheduled for May 2013. On April 24, 2013, pursuant to confidential settlement agreements, the 14 plaintiffs with claims that had been ordered to trial stipulated to the voluntary dismissal, with prejudice, of these claims as against all defendants, and the court so ordered that stipulation on April 26, 2013. The settlement did not cover certain claims of two plaintiffs, Commonwealth of Pennsylvania Public School Employees’ Retirement System (“PSERS”) and Commerzbank AG (“Commerzbank”), that were previously dismissed by the Court. On May 23, 2013, these two plaintiffs filed a Notice of Appeal to the Second Circuit, seeking reversal of the dismissal of their claims and also seeking reversal of the trial court’s denial of class certification. According to pleadings filed by plaintiffs in earlier proceedings, PSERS and Commerzbank AG seek, respectively, $5.75 million and $69.6 million in compensatory damages in connection with the two claims at issue on the appeal. In October 2014, the Second Circuit affirmed the denial of class certification and the dismissal of PSERS’ claim but reversed a ruling of the trial court that had excluded certain evidence relevant to Commerzbank’s principal argument on appeal. The Second Circuit did not reverse the dismissal of Commerzbank’s claim but instead certified a legal question concerning Commerzbank’s argument to the New York Court of Appeals. The New York Court of Appeals subsequently agreed to hear the certified question, and on June 30, 2015, the Court of Appeals ruled in Moody’s favor. The case was then returned to the Second Circuit for final disposition of the appeal. On February 23, 2016, the Second Circuit affirmed the dismissal of Commerzbank’s claim.

On July 9, 2009, the California Public Employees’ Retirement System (“CalPERS”) filed an action in the Superior Court of California in San Francisco (the “Superior Court”) asserting two common-law causes of action, negligent misrepresentation and negligent interference with prospective economic advantage. The complaint named as defendants the Company, MIS, The McGraw-Hill Companies, Fitch, Inc., and various subsidiaries of Fitch, Inc. The action related to the plaintiff’s purchase of securities issued by three structured investment vehicles (“SIVs”) known as Cheyne Finance, Sigma Finance, and Stanfield Victoria Funding. The plaintiff’s complaint sought unspecified compensatory damages arising from alleged losses in connection with investments that purportedly totaled approximately $1.3 billion; in subsequent court filings, the plaintiff claimed to have suffered “unrealized losses” of approximately $779 million. The central allegation against the defendants was that the credit ratings assigned to the securities issued by the SIVs were inaccurate and that the methodologies used by the rating agencies had no reasonable basis. In August 2009, the defendants removed the action to federal court, but the case was remanded to state court in November 2009 based on a finding that CalPERS is an “arm of the State.” In April 2010, in response to a motion by the defendants, the Superior Court dismissed the claim for negligent interference with prospective economic advantage but declined to dismiss the claim for negligent misrepresentation. On December 23, 2015, following the close of fact discovery, the Company and MIS filed a motion for summary judgment. On March 8, 2016, prior to argument or decision on the motion for summary judgment, the Company and CalPERS entered into an agreement to settle this matter, and the case was subsequently dismissed with prejudice. This resolution did not have a negative financial impact on the Company.

For claims, litigation and proceedings and governmental investigations and inquiries not related to income taxes, where it is both probable that a liability has been incurred and the amount of loss can be reasonably estimated, the Company records liabilities in the consolidated financial statements and periodically adjusts these as appropriate. When the reasonable estimate of the loss is within a range of amounts, the minimum amount of the range is accrued unless some higher amount within the range is a better estimate than another amount within the range. In other instances, because of uncertainties related to the probable outcome and/or the amount or range of loss, management does not record a liability but discloses the contingency if significant. As additional information becomes available, the Company adjusts its assessments and estimates of such matters accordingly. In view of the inherent difficulty of predicting the outcome of litigation, regulatory, governmental investigations and inquiries, enforcement and similar matters and contingencies, particularly where the claimants seek large or indeterminate damages or where the parties assert novel legal theories or the matters involve a large number of parties, the Company cannot predict what the eventual outcome of the pending matters will be or the timing of any resolution of such matters. The Company also cannot predict the impact (if any) that any such matters may have on how its business is conducted, on its competitive position or on its financial position, results of operations or cash flows. As the process to resolve any pending matters progresses, management will continue to review the latest information available and assess its ability to predict the outcome of such matters and the effects, if any, on its operations and financial condition. However, in light of the large or indeterminate damages sought in some of them, the absence of similar court rulings on the theories of law asserted and uncertainties regarding apportionment of any potential damages, an estimate of the range of possible losses cannot be made at this time.

Contingencies - Additional Information (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2016
CalPERS [Member]
 
Loss Contingencies [Line Items]
 
Total compensatory damages value
$ 1,300.00 
Unrealized losses claimed by the Plaintiff
779.0 
Abu Dhabi Commercial Bank [Member]
 
Loss Contingencies [Line Items]
 
Number of plaintiffs dismissed by court
Number of plaintiffs remaining
11 
Number of plaintiffs filed motions for reconsideration
Number of plaintiffs granted
Number of additional plaintiffs dismissed by court
Number of plaintiffs ordered to trial
14 
Number of plaintiffs filled notice of appeal
Abu Dhabi Commercial Bank [Member] |
PSERS [Member]
 
Loss Contingencies [Line Items]
 
Total compensatory damages value
5.75 
Abu Dhabi Commercial Bank [Member] |
Commerzbank AG [Member]
 
Loss Contingencies [Line Items]
 
Total compensatory damages value
$ 69.60 
SEGMENT INFORMATION
SEGMENT INFORMATION

NOTE 15 SEGMENT INFORMATION

The Company is organized into three operating segments: (i) MIS, (ii) MA and (iii) Copal Amba. The Copal Amba operating segment has been aggregated with the MA operating segment based on the fact that it has similar economic characteristics to MA. Accordingly, the Company reports in two reportable segments: MIS and MA.

The MIS segment consists of five LOBs. The CFG, SFG, FIG and PPIF LOBs generate revenue principally from fees for the assignment and ongoing monitoring of credit ratings on debt obligations and the entities that issue such obligations in markets worldwide. The MIS Other LOB primarily consists of the distribution of research and financial instruments pricing services in the Asia-Pacific region as well as ICRA non-ratings revenue.

The MA segment develops a wide range of products and services that support the risk management activities of institutional participants in global financial markets. The MA segment consists of three LOBs - RD&A, ERS and PS.

Revenue for MIS and expenses for MA include an intersegment royalty charged to MA for the rights to use and distribute content, data and products developed by MIS. The royalty rate charged by MIS approximates the fair value of the aforementioned content, data and products and is generally based on comparable market transactions. Also, revenue for MA and expenses for MIS include an intersegment fee charged to MIS from MA for certain MA products and services utilized in MIS’s ratings process. These fees charged by MA are generally equal to the costs incurred by MA to produce these products and services. Additionally, overhead costs and corporate expenses of the Company that exclusively benefit only one segment are fully charged to that segment. Overhead costs and corporate expenses of the Company that benefit both segments are allocated to each segment based on a revenue-split methodology. Accordingly, a reportable segment’s share of these costs will increase as its proportion of revenue relative to Moody’s total revenue increases. Overhead expenses include costs such as rent and occupancy, information technology and support staff such as finance, human resources and information technology. “Eliminations” in the table below represent intersegment revenue/expense. Moody’s does not report the Company’s assets by reportable segment, as this metric is not used by the chief operating decision maker to allocate resources to the segments. Consequently, it is not practical to show assets by reportable segment.

Financial Information by Segment

The table below shows revenue, Adjusted Operating Income and operating income by reportable segment. Adjusted Operating Income is a financial metric utilized by the Company’s chief operating decision maker to assess the profitability of each reportable segment.

Three Months Ended March 31,
20162015
MISMAEliminationsConsolidatedMISMAEliminationsConsolidated
Revenue$549.1$293.8$(26.8)$816.1$624.6$266.6$(25.6)$865.6
Operating, SG&A278.6230.3(26.8)482.1281.1210.2(25.6)465.7
Adjusted Operating Income270.563.5-334.0343.556.4-399.9
Less:
Depreciation and amortization17.512.4-29.916.012.6-28.6
Operating income$253.0$51.1$-$304.1$327.5$43.8$-$371.3

MIS and MA Revenue by Line of Business

The table below presents revenue by LOB within each reportable segment:

Three Months Ended March 31,
20162015
MIS:
Corporate finance (CFG)$240.3$298.7
Structured finance (SFG)90.6101.3
Financial institutions (FIG)94.993.8
Public, project and infrastructure finance (PPIF)91.5100.7
Total ratings revenue517.3594.5
MIS Other7.87.8
Total external revenue525.1602.3
Intersegment royalty24.022.3
Total549.1624.6
MA:
Research, data and analytics (RD&A)164.9149.6
Enterprise risk solutions (ERS)89.577.1
Professional services (PS)36.636.6
Total external revenue291.0263.3
Intersegment revenue2.83.3
Total293.8266.6
Eliminations(26.8)(25.6)
Total MCO$816.1$865.6

Consolidated Revenue Information by Geographic Area:
Three Months Ended March 31,
20162015
Revenue
United States$480.0$499.8
International:
EMEA210.2227.6
Asia-Pacific82.086.1
Americas43.952.1
Total International336.1365.8
Total$816.1$865.6
SEGMENT INFORMATION (Tables)
Three Months Ended March 31,
20162015
MISMAEliminationsConsolidatedMISMAEliminationsConsolidated
Revenue$549.1$293.8$(26.8)$816.1$624.6$266.6$(25.6)$865.6
Operating, SG&A278.6230.3(26.8)482.1281.1210.2(25.6)465.7
Adjusted Operating Income270.563.5-334.0343.556.4-399.9
Less:
Depreciation and amortization17.512.4-29.916.012.6-28.6
Operating income$253.0$51.1$-$304.1$327.5$43.8$-$371.3
Three Months Ended March 31,
20162015
MIS:
Corporate finance (CFG)$240.3$298.7
Structured finance (SFG)90.6101.3
Financial institutions (FIG)94.993.8
Public, project and infrastructure finance (PPIF)91.5100.7
Total ratings revenue517.3594.5
MIS Other7.87.8
Total external revenue525.1602.3
Intersegment royalty24.022.3
Total549.1624.6
MA:
Research, data and analytics (RD&A)164.9149.6
Enterprise risk solutions (ERS)89.577.1
Professional services (PS)36.636.6
Total external revenue291.0263.3
Intersegment revenue2.83.3
Total293.8266.6
Eliminations(26.8)(25.6)
Total MCO$816.1$865.6
Consolidated Revenue Information by Geographic Area:
Three Months Ended March 31,
20162015
Revenue
United States$480.1$499.8
International:
EMEA210.1227.6
Asia-Pacific81.786.1
Americas43.752.1
Total International335.5365.8
Total$815.6$865.6
Financial Information by Segment (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Segment Reporting Information [Line Items]
 
 
Revenues
$ 816.1 
$ 865.6 
Operating, SG&A
482.1 
465.7 
Adjusted Operating Income
334.0 
399.9 
Depreciation and amortization
29.9 
28.6 
Operating Income
304.1 
371.3 
Moodys Investors Service [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Revenues
549.1 
624.6 
Operating, SG&A
278.6 
281.3 
Adjusted Operating Income
270.5 
343.3 
Depreciation and amortization
17.5 
16.0 
Operating Income
253.0 
327.3 
Moodys Analytics [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Revenues
293.8 
266.6 
Operating, SG&A
230.3 
210.0 
Adjusted Operating Income
63.5 
56.6 
Depreciation and amortization
12.4 
12.6 
Operating Income
51.1 
44.0 
Intersegment Elimination [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Revenues
(26.8)
(25.6)
Operating, SG&A
$ (26.8)
$ (25.6)
Revenue by Line of Business within Each Reportable Segment (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Segment Reporting Information [Line Items]
 
 
Revenues
$ 816.1 
$ 865.6 
Moodys Investors Service [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Revenues
549.1 
624.6 
Moodys Investors Service [Member] |
Corporate Finance [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Revenues
240.3 
298.7 
Moodys Investors Service [Member] |
Structured Finance [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Revenues
90.6 
101.3 
Moodys Investors Service [Member] |
Financial Institutions [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Revenues
94.9 
93.8 
Moodys Investors Service [Member] |
Public Project And Infrastructure Finance [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Revenues
91.5 
100.7 
Moodys Investors Service [Member] |
Rating Revenue [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Revenues
517.3 
594.5 
Moodys Investors Service [Member] |
MIS Other [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Revenues
7.8 
7.8 
Moodys Investors Service [Member] |
External Revenues [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Revenues
525.1 
602.3 
Moodys Investors Service [Member] |
Intersegment Royality [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Revenues
24.0 
22.3 
Moodys Analytics [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Revenues
293.8 
266.6 
Moodys Analytics [Member] |
Research Data And Analytics [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Revenues
164.9 
149.6 
Moodys Analytics [Member] |
Enterprise Risk Solutions [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Revenues
89.5 
77.1 
Moodys Analytics [Member] |
Professional Services [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Revenues
36.6 
36.6 
Moodys Analytics [Member] |
External Revenues [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Revenues
291.0 
263.3 
Moodys Analytics [Member] |
Intersegment Royality [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Revenues
2.8 
3.3 
Intersegment Elimination [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Revenues
$ (26.8)
$ (25.6)
Consolidated Revenue Information by Geographic Area (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Segment Reporting Information [Line Items]
 
 
Revenues
$ 816.1 
$ 865.6 
U S
 
 
Segment Reporting Information [Line Items]
 
 
Revenues
480.0 
499.8 
International Regions [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Revenues
336.1 
365.8 
International Regions [Member] |
Europe Middle East And Africa [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Revenues
210.2 
227.6 
International Regions [Member] |
Asia Pacific [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Revenues
82.0 
86.1 
International Regions [Member] |
Americas [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Revenues
$ 43.9 
$ 52.1 
Segment Information - Additional Information (Detail)
3 Months Ended
Mar. 31, 2016
Segment Reporting Information [Line Items]
 
Operating Segments
RECENTLY ISSUED ACCOUNTING STANDARDS
RECENTLY ISSUED ACCOUNTING STANDARDS

NOTE 16. RECENTLY ISSUED ACCOUNTING STANDARDS

In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers”. This ASU outlines a comprehensive new revenue recognition model that requires a company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services. In August 2015, the FASB issued ASU No. 2015-14 “Revenue from Contracts with Customers (Topic 606), Deferral of the Effective Date” which defers the effective date of the ASU for annual and interim reporting periods beginning after December 15, 2017, with early adoption permitted up to the original effective date of December 15, 2016. In addition, in March and April 2016, the FASB issued additional updates clarifying the implementation guidance for the new revenue recognition standard.

The Company is currently evaluating its adoption options with regard to the aforementioned ASU’s relating to revenue recognition and the impact that adoption of these update will have on its consolidated financial statements.  Currently, the Company believes this ASU will have an impact on: i) the capitalization of certain contract implementation costs for its ERS business which will be expensed as incurred under the new standard; ii) the accounting for certain software subscription revenue in MA whereby the license rights within the arrangement would be recognized at the inception of the contract based on estimated stand-alone selling price with the remainder recognized over the subscription period; iii) the accounting for certain ERS revenue arrangements where VSOE is not available should result in the acceleration of revenue recognition and iv) the accounting for contract acquisition costs which will be expensed as incurred under the new standard.

In January 2016, the FASB issued ASU No. 2016-01 “Financial Instruments – Recognition and Measurement of Financial Assets and Financial Liabilities (Subtopic 825-10).” The amendments in this ASU update various aspects of recognition, measurement, presentation and disclosures relating to financial instruments. This ASU is effective for fiscal years beginning after December 15, 2017. The Company is currently evaluating the impact of this ASU on the Company’s financial statements.

In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)” requiring lessees to recognize a right-of-use asset and lease liability for all leases with terms of more than 12 months. Recognition, measurement and presentation of expenses and cash flows will depend on classification as either a finance or operating lease. This ASU is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. This standard must be adopted using a modified retrospective approach whereby leases will be presented in accordance with the new standard as of the earliest period presented. The Company is currently evaluating the impact of this ASU on the Company’s financial statements.

In March 2016, the FASB issued ASU No. 2016-07, “Investments – Equity Method and Joint Ventures (Topic 323), Simplifying the Transition to the Equity Method of Accounting.” This ASU amends the accounting for an investment not previously accounted for under the equity method that subsequently qualifies for the equity method of accounting. It requires a company to add the cost of the additional interest acquired to its current basis and the commencement of the equity method of accounting when the criteria are met. In addition, the unrealized gains or losses in accumulated other comprehensive related to an available for sale equity security should be recognized through earnings if the investment subsequently qualifies for the equity method of accounting. The amendments of this ASU are effective for fiscal years beginning after December 15, 2016, with early adoption permitted. The adoption of this ASU will only impact the Company if an investment not previously accounted for under the equity method qualifies for accounting under the equity method.

In March 2016, the FASB issued ASU No. 2016-09, “Improvements to Employee Share-Based Payment Accounting”. This ASU changes various aspects related to the accounting for share-based payments including: i) accounting for Excess Tax Benefits and shortfalls; ii) the accounting for forfeitures; iii) restrictions on the value of shares retained by an entity to fund the employee’s portion of payroll taxes; and iv) classification of Excess Tax Benefits in the statement of cash flows. This ASU is effective for fiscal years beginning after December 15, 2016 and early adoption is permitted if all amendments are adopted in the same period. The Company is evaluating the impact of this ASU on its financial statements but currently expects that the most significant effect of this ASU will be the impact on its reported Net Income and Diluted EPS as Excess Tax Benefits and shortfalls will be recorded to the provision for income taxes under this ASU as compared to a charge to capital surplus under current GAAP.

SUBSEQUENT EVENTS
SUBSEQUENT EVENTS

NOTE 17. SUBSEQUENT EVENT

On April 11, 2016, the Board approved the declaration of a quarterly dividend of $0.37 per share of Moody’s common stock, payable on June 10, 2016 to shareholders of record at the close of business on May 20, 2016.

Subsequent Events - Additional Information (Detail)
3 Months Ended
Mar. 31, 2016
Dividends Payable [Line Items]
 
Dividend declared, per share
$ 0.37 
Dividend Declared [Member]
 
Dividends Payable [Line Items]
 
Dividend declared, declaration date
Apr. 14, 2016 
Dividend declared, payable date
Jun. 10, 2016 
Dividend declared, record date
May 20, 2016