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
0
Preferred stock, shares outstanding
0
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
0
Common stock, shares outstanding
0
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
2
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION

NOTE 2. STOCK-BASED COMPENSATION

Presented below is a summary of the stock-based compensation cost and associated tax benefit included in the accompanying consolidated statements of operations:

Three Months 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