MOODYS CORP /DE/, 10-Q filed on 10/29/2014
Quarterly Report
Document and Entity Information
In Millions, unless otherwise specified
9 Months Ended
Sep. 30, 2014
Document Information [Line Items]
 
Document Type
10-Q 
Amendment Flag
false 
Document Period End Date
Sep. 30, 2014 
Document Fiscal Year Focus
2014 
Document Fiscal Period Focus
Q3 
Trading Symbol
MCO 
Entity Registrant Name
MOODYS CORP /DE/ 
Entity Central Index Key
0001059556 
Current Fiscal Year End Date
--12-31 
Entity Filer Category
Large Accelerated Filer 
Entity Common Stock, Shares Outstanding
208.6 
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)
In Millions, except Per Share data, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2014
Sep. 30, 2013
Revenues
$ 816.1 
$ 705.5 
$ 2,456.8 
$ 2,193.3 
Expenses
 
 
 
 
Operating
236.7 
203.5 
674.8 
601.4 
Selling, general and administrative
206.5 
187.1 
619.0 
599.1 
Depreciation and amortization
23.2 
23.4 
68.6 
70.1 
Total expenses
466.4 
414.0 
1,362.4 
1,270.6 
Operating Income
349.7 
291.5 
1,094.4 
922.7 
Non-operating (expense) income, net
 
 
 
 
Interest expense, net
(37.7)
(24.4)
(87.5)
(68.1)
Other non-operating income (expense), net
16.4 
(3.6)
15.5 
12.9 
ICRA Gain
102.8 
Total non-operating (expense) income, net
(21.3)
(28.0)
30.8 
(55.2)
Income before provisions for income taxes
328.4 
263.5 
1,125.2 
867.5 
Provision for income taxes
109.9 
76.7 
360.6 
261.2 
Net income
218.5 
186.8 
764.6 
606.3 
Less: Net income attributable to noncontrolling interests
3.3 
2.9 
12.2 
8.5 
Net income attributable to Moody's
$ 215.2 
$ 183.9 
$ 752.4 
$ 597.8 
Earnings per share attributable to Moody's common shareholders
 
 
 
 
Basic
$ 1.02 
$ 0.84 
$ 3.55 
$ 2.7 
Diluted
$ 1 
$ 0.83 
$ 3.48 
$ 2.66 
Weighted average number of shares outstanding
 
 
 
 
Basic
210.4 
217.8 
212.1 
221.1 
Diluted
214.2 
222.0 
216.1 
225.1 
Dividends declared per share attributable to Moody's common shareholders
$ 0.28 
$ 0.25 
$ 0.56 
$ 0.45 
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $)
3 Months Ended 9 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2014
Sep. 30, 2013
Net income
$ 218,500,000 
$ 186,800,000 
$ 764,600,000 
$ 606,300,000 
Foreign currency translation adjustment-Pre Tax Amount
(99,500,000)
48,100,000 
(90,200,000)
(24,700,000)
Foreign currency translation adjustment-Tax Amount
Foreign currency translation adjustments-Net of Tax
(99,500,000)
48,100,000 
(90,200,000)
(24,700,000)
Cash Flow And Net Investment Hedges [Abstract]
 
 
 
 
Net unrealized gain (losses) on cash flow and net investment hedges- Pre Tax
20,300,000 
(2,700,000)
14,000,000 
(1,700,000)
Net unrealized gain (losses) on cash flow and net investment hedges-Tax Amount
(8,200,000)
1,200,000 
(5,600,000)
700,000 
Net unrealized losses on cash flow and net investment hedges
12,100,000 
(1,500,000)
8,400,000 
(1,000,000)
Reclassification of losses included in net income-Pre Tax
 
 
(700,000)
Reclassification of losses included in net income-Tax Amount
 
 
200,000 
Reclassification of losses included in net income- Net of Tax
 
 
(500,000)
Pension and Other Retirement Benefits Net of Tax [Abstract]
 
 
 
 
Amortization of actuarial losses and prior service costs included in net income (pre-tax)
(1,800,000)
(3,100,000)
(5,500,000)
(9,000,000)
Amortization of actuarial losses and prior service costs included in net income (tax)
(700,000)
(1,300,000)
(3,000,000)
(3,700,000)
Amortization of actuarial losses and prior service costs included in net income
(1,100,000)
(1,800,000)
(2,500,000)
(5,300,000)
Net actuarial losses and prior service costs
(4,100,000)
500,000 
Total other comprehensive income (loss)-Pre Tax
(77,400,000)
49,800,000 
(73,200,000)
(14,500,000)
Net current period other comprehensive income/(loss)
(8,900,000)
(100,000)
(5,800,000)
(3,600,000)
Total other comprehensive income (loss)-Net of Tax
(86,300,000)
49,700,000 
(79,000,000)
(18,100,000)
Comprehensive income (loss)
132,200,000 
236,500,000 
685,600,000 
588,200,000 
Comprehensive income attributable to noncontrolling interests and redeemable noncontrolling interest
3,300,000 
2,900,000 
12,200,000 
8,500,000 
Comprehensive income attributable to Moody's
128,900,000 
233,600,000 
673,400,000 
579,700,000 
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Reclassification Adjustment from AOCI, Realized upon Sale or Liquidation, before Tax
1,300,000 
4,400,000 
1.3 
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Reclassification Adjustment from AOCI, Realized upon Sale or Liquidation, Tax
Total Reclassifications
$ 0 
$ 1,300,000 
$ 4,400,000 
$ 1.3 
CONSOLIDATED BALANCE SHEETS (USD $)
In Millions, unless otherwise specified
Sep. 30, 2014
Dec. 31, 2013
Current assets:
 
 
Cash and cash equivalents
$ 1,940.8 
$ 1,919.5 
Short-term investments
164.8 
186.8 
Accounts receivable, net of allowances of $30.0 in 2012 and $28.0 in 2011
712.2 
694.2 
Deferred tax assets, net
46.9 
53.9 
Other current assets
197.2 
114.4 
Total current assets
3,061.9 
2,968.8 
Property and equipment, net of accumulated depreciation of $286.6 in 2012 and $258.2 in 2011
303.5 
278.7 
Goodwill
1,000.3 
665.2 
Intangible assets, net
349.8 
221.6 
Deferred tax assets, net
136.0 
148.7 
Other assets
142.2 
112.1 
Total assets
4,993.7 
4,395.1 
Current liabilities:
 
 
Accounts payable and accrued liabilities
420.2 
538.9 
Deferred revenue
613.2 
598.4 
Total current liabilities
1,041.7 
1,141.3 
Deferred tax liabilities, net
8.3 
4.0 
Non-current portion of deferred revenue
123.2 
109.2 
Long-term debt
2,536.5 
2,101.8 
Deferred tax liabilities, net
114.8 
59.1 
Unrecognized tax benefits
211.6 
195.6 
Other liabilities
348.0 
360.2 
Total liabilities
4,375.8 
3,967.2 
Contingencies (Note 14)
   
   
Redeemable noncontrolling interest
137.6 
80.0 
Shareholders' equity(deficit):
 
 
Preferred stock, par value $.01 per share; 10,000,000 shares authorized; no shares issued and outstanding
Capital surplus
402.3 
405.8 
Retained earnings
5,936.2 
5,302.1 
Treasury stock, at cost; 120,619,040 and 120,462,232 shares of common stock at June 30, 2012 and December 31, 2011, respectively
5,957.6 
5,319.7 
Accumulated other comprehensive loss
(133.6)
(54.6)
Total Moody's shareholders' equity (deficit)
250.7 
337.0 
Noncontrolling interests
229.6 
10.9 
Total shareholders' equity (deficit)
480.3 
347.9 
Total liabilities, redeemable noncontrolling interest and shareholders' equity (deficit)
4,993.7 
4,395.1 
Nonvoting Common Stock [Member]
 
 
Shareholders' equity(deficit):
 
 
Common stock
   
   
Common Stock [Member]
 
 
Shareholders' equity(deficit):
 
 
Common stock
$ 3.4 
$ 3.4 
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)
In Millions, except Share data, unless otherwise specified
Sep. 30, 2014
Dec. 31, 2013
Accounts receivable, allowances
$ 30.6 
$ 28.9 
Property and equipment, accumulated depreciation
$ 414.9 
$ 375.7 
Preferred stock, par value
$ 0.01 
$ 0.01 
Preferred stock, shares issued
Preferred stock, shares outstanding
Common stock, shares authorized
 
1,000,000,000 
Treasury stock, shares
134,278,898 
128,941,621 
Nonvoting Common Stock [Member]
 
 
Preferred stock, shares authorized
10,000,000.0 
10,000,000.0 
Common stock, par value
$ 0.01 
$ 0.01 
Common stock, shares authorized
10,000,000 
10,000,000 
Common stock, shares issued
Common stock, shares outstanding
Common Stock [Member]
 
 
Common stock, par value
$ 0.01 
$ 0.01 
Common stock, shares authorized
1,000,000,000 
 
Common stock, shares issued
342,902,272 
342,902,272 
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)
In Millions, unless otherwise specified
9 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Cash flows from operating activities
 
 
Net income
$ 764.6 
$ 606.3 
Reconciliation of net income to net cash provided by operating activities:
 
 
Depreciation and amortization
68.6 
70.1 
Stock-based compensation expense
59.9 
49.3 
Deferred income taxes
43.7 
(13.0)
Excess tax benefits from stock-based compensation plans
(54.5)
(32.4)
ICRA Gain
(102.8)
Legacy Tax Matters
(6.4)
Changes in assets and liabilities:
 
 
Accounts receivable
(11.9)
26.8 
Other current assets
(63.3)
(7.0)
Other assets
(4.8)
(6.0)
Accounts payable and accrued liabilities
(16.3)
(138.6)
Deferred revenue
25.8 
25.6 
Unrecognized tax benefits
18.5 
44.8 
Other liabilities
(11.3)
27.6 
Net cash provided by operating activities
709.8 
653.5 
Cash flows from investing activities
 
 
Capital additions
(56.8)
(31.0)
Purchases of short-term investments
(68.0)
(215.2)
Sales and maturities of short-term investments
90.7 
23.4 
Net cash used in investing activities
(244.6)
(222.8)
Cash paid into escrow for ICRA share tender offer
(210.5)
Cash flows from financing activities
 
 
Issuance of notes
747.7 
497.2 
Repayments of notes
(300.0)
(63.8)
Net proceeds from stock-based compensation plans
83.3 
96.6 
Cost of treasury shares repurchased
(780.2)
(747.6)
Excess tax benefits from stock-based compensation plans
54.5 
32.4 
Payment of dividends
(178.2)
(143.7)
Payment of dividends to noncontrolling interests
(9.7)
(9.9)
Contingent consideration paid
(4.3)
(0.3)
Debt issuance costs and related fees
(6.5)
(4.1)
Net cash used in financing activities
(393.4)
(343.2)
Effect of exchange rate changes on cash and cash equivalents
(50.5)
(7.8)
Net increase in cash and cash equivalents
21.3 
79.7 
Cash and cash equivalents, beginning of the period
1,919.5 
1,755.4 
Cash and cash equivalents, end of the period
$ 1,940.8 
$ 1,835.1 
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.

Analytics Moody’s Analytics – a reportable segment of MCO formed in January 2008, which includes the non-rating commercial activities of MCO

AOCI Accumulated other comprehensive income (loss); a separate component of shareholders’ equity

ASC The FASB Accounting Standards Codification; the sole source of authoritative GAAP as of July 1, 2009 except for rules and interpretive releases of the SEC, which are also sources of authoritative GAAP for SEC registrants

Asia-Pacific Represents countries in Asia including but not limited to: Australia, China, India, Indonesia, Japan, Korea, Malaysia, Singapore, Sri Lanka and Thailand

ASU The FASB Accounting Standards Update to the ASC. It also provides background information for accounting guidance and the bases for conclusions on the changes in the ASC. ASUs are not considered authoritative until codified into the ASC

Board The board of directors of the Company

Bps Basis points

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

CDO Collateralized debt obligation

CFG Corporate finance group; an LOB of MIS

CLO Collateralized loan obligation

CMBS Commercial mortgage-backed securities; part of CREF

Commission European Commission

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

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

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

Council Council of the European Union

CRAs Credit rating agencies

CRA1 Regulation (EC) No 1060/2009 of the European Parliament and of the Council, establishing an oversight regime for the CRA industry in the EU

TERM DEFINITION

CRA2 Regulation (EU) No 513/2011 of the European Parliament and of the Council, which transferred direct supervisory responsibility for the registered CRA industry in the EU to ESMA

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

DBPP Defined benefit pension plans

DCF Discounted cash flow; a fair value calculation methodology whereby future projected cash flows are discounted back to their present value using a discount rate

Debt/EBITDA Ratio of Total Debt to EBITDA

EBITDA Earnings before interest, taxes, depreciation and amortization

EMEA Represents countries within Europe, the Middle East and Africa

EPS Earnings per share

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

EU Parliament European Parliament

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

TERM DEFINITION

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

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

IRS Internal Revenue Service

IT Information technology

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

LIBOR London Interbank Offered Rate

LOB Line of business

MA Moody’s Analytics – a reportable segment of MCO formed in January 2008, which includes the non-rating commercial activities of MCO

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) and 2014 Senior Notes (30-year) 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 four LOBs – SFG, CFG, FIG and PPIF

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

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

New D&B The New D&B Corporation – which comprises the D&B Business

NM Percentage change is not meaningful

NRSRO Nationally Recognized Statistical Rating Organization

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

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

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

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

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

TERM DEFINITION

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

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

REIT Real Estate Investment Trust

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

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

SEC U.S. Securities and Exchange Commission

Securities Act Securities Act of 1933

Series 2005-1 Notes Principal amount of $300 million, 4.98% senior unsecured notes due in September 2015 pursuant to the 2005 Agreement

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, revenue representing the initial rating of a new debt issuance as well as other one-time fees. For MA, revenue represents software license fees and revenue from risk management advisory projects, training and certification services, and knowledge outsourcing engagements

U.K. United Kingdom

U.S. United States

USD U.S. dollar

UTBs Unrecognized tax benefits

UTPs Uncertain tax positions

WebEquity WebEquity Solutions LLC; a leading provider of cloud-based loan origination solutions for financial institutions

TERM DEFINITION

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

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

2005 Agreement Note purchase agreement dated September 30, 2005, relating to the Series 2005-1 Notes

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

2008 Term Loan Five-year $150 million senior unsecured term loan entered into by the Company on May 7, 2008

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 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

2012 Facility Revolving credit facility of $1 billion entered into on April 18, 2012, expiring in 2017

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

2013 Senior Notes Principal amount of $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, 2.750% senior unsecured notes due in July 2019

2014 Senior Notes (30-Year) Principal amount of $300 million, 5.250% senior unsecured notes due in July 2044

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 to institutional customers. 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 derived from the originators and issuers of such transactions who use MIS ratings in the distribution of their debt issues to investors.

The MA segment, which includes all of the Company’s non-rating commercial activities, 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. It also provides fixed income pricing in the Asia-Pacific region. 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 2013 annual report on Form 10-K filed with the SEC on February 27, 2014. 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.

STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION

NOTE 2. STOCK-BASED COMPENSATION

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

Three Months EndedNine Months Ended
September 30,September 30,
2014201320142013
Stock-based compensation cost$ 19.3$ 16.0$ 59.9$ 49.3
Tax benefit$ 6.2$ 5.9$ 19.0$ 17.9

During the first nine months of 2014, the Company granted 0.3 million employee stock options, which had a weighted average grant date fair value of $31.53 per share based on the Black-Scholes option-pricing model. The Company also granted 0.9 million shares of restricted stock in the first nine months of 2014, which had a weighted average grant date fair value of $79.62 per share and generally vest ratably over a four-year period. Additionally, the Company granted approximately 0.2 million shares of performance-based awards whereby the number of shares that ultimately vest are based on the achievement of certain non-market based performance metrics of the Company over a three-year period. The weighted average grant date fair value of these awards was $76.35 per share.

The following weighted average assumptions were used in determining the fair value for options granted in 2014:

Expected dividend yield 1.41%
Expected stock volatility 41.2%
Risk-free interest rate 2.30%
Expected holding period7.2 years
Grant date fair value$ 31.53

Unrecognized compensation expense at September 30, 2014 was $9.9 million and $96.2 million for stock options and unvested restricted stock, respectively, which is expected to be recognized over a weighted average period of 1.3 years and 1.7 years, respectively. Additionally, there was $17.8 million of unrecognized compensation expense relating to the aforementioned non-market based performance-based awards, which is expected to be recognized over a weighted average period of 1.0 years.

The following tables summarize information relating to stock option exercises, restricted stock vesting and the delivery of performance-based awards:

Nine Months Ended
September 30,
Exercise of stock options:20142013
Proceeds from stock option exercises$ 131.5$ 124.4
Aggregate intrinsic value$ 107.7$ 89.0
Tax benefit realized upon exercise$ 38.7$ 32.6
Number of shares exercised 2.8 3.5
Nine Months Ended
September 30,
Vesting of restricted stock:20142013
Fair value of shares vested$ 92.3$ 54.0
Tax benefit realized upon vesting$ 31.6$ 19.2
Number of shares vested 1.2 1.1
Nine Months Ended
September 30,
Vesting of performance-based restricted stock:20142013
Fair value of shares vested$ 38.0$ 25.5
Tax benefit realized upon vesting$ 14.6$ 9.7
Number of shares vested 0.5 0.5
INCOME TAXES
INCOME TAXES

NOTE 3. INCOME TAXES

Moody’s effective tax rate was 33.5% and 29.1% for the three months ended September 30, 2014 and 2013, respectively. The increase in the ETR compared to the third quarter of 2013 is primarily due to higher U.S. and non-U.S. taxes on foreign income in 2014 and certain discrete items that reduced the ETR in 2013.

Moody’s ETR was 32.0% and 30.1% for the nine month periods ended September 30, 2014 and 2013, respectively. The increase over the prior year is primarily due to higher U.S. and non-U.S. taxes on foreign income. The nine months ended September 30, 2013 ETR included a tax benefit related to U.S. tax legislation enacted in early 2013 which retroactively extended certain tax benefits to the 2012 tax year, as well as tax benefits on a litigation settlement in the first quarter of 2013. The ETR for the nine month period ended September 30, 2014 includes a benefit related to the reversal of UTPs resulting from the favorable resolution of certain international tax matters. 

The Company classifies interest related to UTPs in interest expense, net in its consolidated statements of operations. Penalties, if incurred, would be recognized in other non-operating (expense) income, net. The Company had an increase in its UTPs of $7.1 million ($4.0 million net of federal tax benefit) during the third quarter of 2014 and an overall increase in its UTPs during the first nine months of 2014 of $16.0 million ($8.4 million net of federal tax benefits).

Moody’s Corporation and subsidiaries are subject to U.S. federal income tax as well as income tax in various states, local and foreign jurisdictions. The Company’s U.S. federal income tax returns for the years 2008 through 2010 are under examination and its returns for 2011 through 2013 remain open to examination. The Company’s New York State tax returns for 2011 and 2012 remain open to examination. Income tax filings in the U.K. for 2012 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:

Nine Months Ended
September 30,
20142013
Income Taxes Paid*$ 334.6$ 267.3
* Payments in 2013 include $50 million of 2012 estimated federal taxes paid in the first quarter of 2013 pursuant to IRS relief due to Hurricane Sandy.
WEIGHTED AVERAGE SHARES OUTSTANDING
WEIGHTED AVERAGE SHARES OUTSTANDING

NOTE 4. WEIGHTED AVERAGE SHARES OUTSTANDING

Below is a reconciliation of basic to diluted shares outstanding:

Three Months EndedNine Months Ended
September 30,September 30,
2014201320142013
Basic 210.4 217.8 212.1 221.1
Dilutive effect of shares issuable under stock-based compensation plans 3.8 4.2 4.0 4.0
Diluted 214.2 222.0 216.1 225.1
Anti-dilutive options to purchase common shares and restricted stock as well as contingently issuable restricted stock which are excluded from the table above 0.5 2.6 0.7 4.3

The calculation of diluted EPS requires certain assumptions regarding the use of both cash proceeds and assumed proceeds that would be received upon the exercise of stock options and vesting of restricted stock outstanding as of September 30, 2014 and 2013. These assumed proceeds include Excess Tax Benefits and any unrecognized compensation of the awards.

SHORT-TERM INVESTMENTS
SHORT-TERM INVESTMENTS

NOTE 5. SHORT-TERM INVESTMENTS

Short-term investments are securities with maturities greater than 90 days at the time of purchase that are available for operations in the next twelve months. The short-term investments, primarily consisting of certificates of deposit, are classified as held-to-maturity and therefore are carried at cost. The remaining contractual maturities of the short-term investments were one month to 11 months and one month to nine months as of September 30, 2014 and December 31, 2013, respectively. Interest and dividends are recorded into income when earned.

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

NOTE 6. 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.

Interest Rate Swaps

In the fourth quarter of 2010, the Company entered into interest rate swaps with a total notional amount of $300 million to convert the fixed interest rate on the Series 2005-1 Notes to a floating interest rate based on the 3-month LIBOR. The purpose of this hedge was to mitigate the risk associated with changes in the fair value of the Series 2005-1 Notes, thus the Company has designated these swaps as fair value hedges. The fair value of the swaps was adjusted quarterly with a corresponding adjustment to the carrying value of the Series 2005-1 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 were recorded each period within interest income (expense), net, in the Company’s consolidated statement of operations. In August of 2014, the Company terminated the swaps on the Series 2005-1 Notes concurrent with the early retirement of those notes as further described in Note 13. The termination of these swaps resulted in a gain of approximately $4 million in the third quarter of 2014 which is recorded in interest income (expense), net in the Company’s condensed consolidated financial statements.

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. The purpose of this hedge was to mitigate the risk associated with changes in the fair value of a portion 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.

Foreign Exchange Forwards

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

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

September 30,December 31,
20142013
Notional amount of currency pair:
Contracts to purchase USD with euros$ 38.5$ 14.2
Contracts to sell USD for euros$ 53.7$ 53.2
Contracts to purchase USD with GBP$ 0.2$ -
Contracts to purchase USD with other foreign currencies$ 1.0$ -
Contracts to purchase euros with other foreign currencies 55.3 13.1
Contracts to purchase euros with GBP 24.5 22.1
Contracts to sell euros for GBP 35.4 -

Net Investment Hedges

The Company enters into foreign currency forward contracts to hedge the exposure related to non-U.S. dollar net investments in certain foreign subsidiaries against adverse changes in foreign exchange rates. These forward contracts 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 forward contracts on a pre-tax basis. For hedges that meet the effectiveness requirements, any change in the fair value for the hedge is recorded in the currency translation adjustment component of AOCI. Any change in the fair value of these hedges that is the result of ineffectiveness would be recognized immediately in other non-operating (expense) income in the Company’s consolidated statement of operations. These outstanding contracts expire in December 2014 for contracts to sell euros for USD and in November 2014 for contracts to sell Japanese yen for USD.

The following table summarizes the notional amounts of the Company’s outstanding foreign exchange forward contracts that are designated as net investment hedges:

September 30,December 31,
20142013
Notional amount of currency pair:
Contracts to sell euros for USD 50.0 50.0
Contracts to sell Japanese yen for USD 19,700 19,700

The table below shows the classification between assets and liabilities on the Company’s consolidated balance sheets for the fair value of the derivative instruments:

Fair Value of Derivative Instruments
Derivatives InstrumentsBalance Sheet LocationSeptember 30, 2014December 31, 2013
Assets:
Derivatives designated as accounting hedges:
Interest rate swapsOther assets$ -$ 10.3
FX forwards on net investment in certain foreign subsidiariesOther current assets 20.2 9.3
Total derivatives designated as accounting hedges 20.2 19.6
Derivatives not designated as accounting hedges:
FX forwards on certain assets and liabilitiesOther current assets 4.6 0.9
Total assets$ 24.8$ 20.5
Liabilities:
Derivatives designated as accounting hedges:
Interest rate swapsAccounts payable and accrued liabilities$ 3.4$ -
FX forwards on net investment in certain foreign subsidiariesAccounts payable and accrued liabilities$ -$ 1.0
Derivatives not designated as accounting hedges:
FX forwards on certain assets and liabilitiesAccounts payable and accrued liabilities 5.1 0.7
Total liabilities$ 8.5$ 1.7

The following table summarizes the net gain (loss) on the Company’s foreign exchange forwards which are not designated as hedging instruments as well as the gain (loss) on the interest rate swaps designated as fair value hedges:

Amount of gain (loss) recognized in the consolidated statements of operations
Three Months EndedNine Months Ended
September 30,September 30,
Derivatives designated as fair value accounting hedgesLocation on Statement of Operations2014201320142013
Interest rate swaps (1)Interest income(expense), net$7.8$1.0$8.3$3.1
Derivatives not designated as accounting hedges
Foreign exchange forwardsOther non-operating income (expense), net$(4.8)$2.1$ (3.9)$ 2.0

(1) Represents the periodic net interest accruals/settlements with the counterparties based on the notional amount of the derivative and the agreed upon interest rates.

All gains and losses on interest rate swaps designated as cash flow hedges were initially recognized through OCI. Realized gains and losses reported in AOCI were reclassified into interest income (expense), net as the underlying transaction was recognized. There were no cash flow hedges outstanding at both September 30, 2014 and 2013. Accordingly, there were no gains or losses recorded in AOCI in the three and nine months ended September 30, 2014.

 

All gains and losses on derivatives designated as net investment hedges are recognized in the currency translation adjustment component of AOCI. Additionally, the cumulative amount of unrecognized hedge losses recorded in AOCI at September 30, 2014 and December 31, 2013 was not material.

Derivatives in Net Investment Hedging RelationshipsAmount of Gain/(Loss) Recognized in AOCI on Derivative (Effective Portion)
Three Months Ended
September 30,
20142013
FX forwards$ 12.1$ (1.5)
Total$ 12.1$ (1.5)
Nine Months Ended
September 30,
20142013
FX forwards$ 8.4$ (1.0)
Total$ 8.4$ (1.0)
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:

Nine Months Ended September 30, 2014
MISMAConsolidated
Gross goodwillAccumulated impairment chargeNet goodwillGross goodwillAccumulated impairment chargeNet goodwillGross goodwillAccumulated impairment chargeNet goodwill
Balance at beginning of year$ 11.4$ -$ 11.4$ 666.0$ (12.2)$ 653.8$ 677.4$ (12.2)$ 665.2
Additions/adjustments 291.1 - 291.1 71.0 - 71.0 362.1 - 362.1
Foreign currency translation adjustments (7.7) - (7.7) (19.3) - (19.3) (27.0) - (27.0)
Ending balance$ 294.8$ -$ 294.8$ 717.7$ (12.2)$ 705.5$ 1,012.5$ (12.2)$ 1,000.3
Year ended December 31, 2013
MISMAConsolidated
Gross goodwillAccumulated impairment chargeNet goodwillGross goodwillAccumulated impairment chargeNet goodwillGross goodwillAccumulated impairment chargeNet goodwill
Balance at beginning of year$ 11.5$ -$ 11.5$ 637.8$ (12.2)$ 625.6$ 649.3$ (12.2)$ 637.1
Additions - - - 34.5 - 34.5 34.5 - 34.5
Foreign currency translation adjustments (0.1) - (0.1) (6.3) - (6.3) (6.4) - (6.4)
Ending balance$ 11.4$ -$ 11.4$ 666.0$ (12.2)$ 653.8$ 677.4$ (12.2)$ 665.2

The 2014 additions/adjustments for the MIS segment in the table above relate to the ICRA acquisition in the second quarter of 2014 as further discussed in Note 7. The 2014 and 2013 additions/adjustments for the MA segment in the table above relate to the acquisition of Amba in the fourth quarter of 2013 and WebEquity in the third quarter of 2014. There were no impairments to goodwill in the nine months ended September 30, 2014 and year ended December 31, 2013.

Acquired intangible assets and related amortization consisted of:

September 30,December 31,
20142013
Customer relationships$ 311.1$ 237.4
Accumulated amortization (95.5) (86.6)
Net customer relationships 215.6 150.8
Trade secrets 30.8 31.1
Accumulated amortization (20.2) (18.5)
Net trade secrets 10.6 12.6
Software 80.1 71.0
Accumulated amortization (42.4) (38.8)
Net software 37.7 32.2
Trade names 76.6 31.3
Accumulated amortization (12.8) (11.7)
Net trade names 63.8 19.6
Other 43.0 26.1
Accumulated amortization (20.9) (19.7)
Net other 22.1 6.4
Total acquired intangible assets, net$ 349.8$ 221.6

Other intangible assets primarily consist of databases and covenants not to compete.

Amortization expense relating to acquired intangible assets is as follows:

Three Months EndedNine Months Ended
September 30,September 30,
2014201320142013
Amortization expense$ 6.9$ 7.0$ 20.5$ 21.0

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

Year Ending December 31,
2014 (after September 30)$ 7.9
2015 30.8
2016 30.0
2017 26.7
2018 22.0
Thereafter 232.4

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 and nine months ended September 30, 2014 and 2013.

FAIR VALUE
FAIR VALUE

NOTE 9. FAIR VALUE

The table below presents information about items which are carried at fair value on a recurring basis at September 30, 2014 and December 31, 2013:

Fair Value Measurement as of September 30, 2014
DescriptionBalanceLevel 1Level 2Level 3
Assets:
Derivatives (a)$ 24.8$ -$ 24.8$ -
Fixed maturity and open ended mutual funds (b) 43.4 43.4 - -
Total$ 68.2$ 43.4$ 24.8$ -
Liabilities:
Derivatives (a)$ 8.5$ -$ 8.5$ -
Contingent consideration arising from acquisitions (c) 13.3 - - 13.3
Total$ 21.8$ -$ 8.5$ 13.3
Fair Value Measurement as of December 31, 2013
DescriptionBalanceLevel 1Level 2Level 3
Assets:
Derivatives (a)$ 20.5$ -$ 20.5$ -
Total$ 20.5$ -$ 20.5$ -
Liabilities:
Derivatives (a)$ 1.7$ -$ 1.7$ -
Contingent consideration arising from acquisitions (c) 17.5 - - 17.5
Total$ 19.2$ -$ 1.7$ 17.5

(a) Represents interest rate swaps and FX forwards on certain assets and liabilities as well as on certain non-U.S. dollar net investments in certain foreign subsidiaries as more fully described in Note 6 to the financial statements.

(b) Represents investments in fixed maturity mutual funds and open ended mutual funds held by ICRA. The remaining contractual maturities for the fixed maturity instruments range from one month to 11 months.

(c) Represents contingent consideration liabilities pursuant to the agreements for certain acquisitions.

The following table summarizes the changes in the fair value of the Company’s Level 3 liabilities:

Contingent Consideration
Nine Months Ended
September 30,
20142013
Balance as of January 1$ 17.5$ 9.0
Contingent consideration payments (4.3) (2.5)
Total losses (realized and unrealized):
Included in earnings 0.3 6.0
Foreign currency translation adjustments (0.2) (0.1)
Balance as of September 30$ 13.3$ 12.4

The losses included in earnings in the table above are recorded within SG&A expenses in the Company’s consolidated statements of operations and relate to contingent consideration obligations outstanding at September 30, 2014.

Of the $13.3 million of contingent consideration obligations as of September 30, 2014, $11.1 million is classified in accounts payable and accrued liabilities and $2.2 million is classified in other liabilities within the Company’s consolidated balance sheet.

The following are descriptions of the methodologies utilized by the Company to estimate the fair value of its derivative contracts, fixed maturity plans and contingent consideration obligations:

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 held by ICRA and are classified as securities available-for-sale. Accordingly, any unrealized gains and losses in future quarters will be recognized through OCI until the instruments mature. The cost basis of these investments is $41.2 million at September 30, 2014.

Contingent consideration:

At September 30, 2014, the Company has contingent consideration obligations related to the acquisitions of CSI and Copal which are carried at estimated fair value, and are based on certain financial and non-financial metrics set forth in the acquisition agreements. These obligations are measured using Level 3 inputs as defined in the ASC. The Company recorded the obligations for these contingent consideration arrangements on the date of each respective acquisition based on management’s best estimates of the achievement of the metrics and the value of the obligations are adjusted quarterly.

The contingent consideration obligation for CSI is based on the achievement of a certain contractual milestone by January 2016. The Company utilizes a discounted cash flow methodology to value this obligation. The future expected cash flow for this obligation is discounted using an interest rate available to borrowers with similar credit risk profiles to that of the Company. The most significant unobservable input involved in the measurement of this obligation is the probability that the milestone will be reached by January 2016. At September 30, 2014, the Company expects that this milestone will be reached by the aforementioned date.

There are several contingent consideration obligations relating to the acquisition of Copal. A portion of the contingent cash payments are based on revenue and EBITDA growth for certain of the Copal entities. This growth is calculated by comparing revenue and EBITDA in the year immediately prior to the exercise of the put/call option to acquire the remaining 33% ownership interest of Copal Partners Limited which the Company does not currently own, to revenue and EBITDA in Copal’s fiscal year ended March 31, 2011. There are no limitations set forth in the acquisition agreement relating to the amount payable under this contingent consideration arrangement. Payments under this arrangement, if any, would be made upon the exercise of the aforementioned put/call option, which expires in November 2017. The Company utilizes discounted cash flow methodologies to value these obligations. The expected future cash flows for these obligations are discounted using a risk-free interest rate plus a credit spread based on the option adjusted spread of the Company’s publicly traded debt as of the valuation date plus sovereign and size risk premiums. The most significant unobservable input involved in the measurement of these obligations is the projected future financial results of the applicable Copal entities. These remaining obligations will be settled upon closing of Moody’s exercise of its call option which is expected to occur in the fourth quarter of 2014 as discussed in Note 10. The payment is expected to be approximately $11 million. Other contingent cash payments were based on the achievement of revenue targets for Copal’s fiscal year ended March 31, 2013 and a $2.5 million payment was made in 2013.

For the contingent consideration obligations relating to the acquisition of Amba, the payment was based on the acquired entity achieving a revenue target for its fiscal year ended March 31, 2014 which was met resulting in a $4.3 million payment in 2014.

A significant increase or decrease in any of the aforementioned significant unobservable inputs related to the fair value measurement of the Company’s contingent consideration obligations would result in a significantly higher or lower reported fair value for these obligations.

OTHER BALANCE SHEET INFORMATION
OTHER BALANCE SHEET INFORMATION

NOTE 10. OTHER BALANCE SHEET AND STATEMENT OF OPERATIONS INFORMATION

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

September 30,December 31,
20142013
Other current assets:
Prepaid taxes$ 108.2$ 40.0
Prepaid expenses 46.1 48.1
Other 42.9 26.3
Total other current assets$ 197.2$ 114.4
September 30,December 31,
20142013
Other assets:
Investments in joint ventures$ 20.0$ 37.5
Deposits for real-estate leases 11.8 10.3
Indemnification assets related to acquisitions 25.7 27.0
Fixed maturity and open ended mutual funds 43.4 -
Other 41.3 37.3
Total other assets$ 142.2$ 112.1
September 30,December 31,
20142013
Accounts payable and accrued liabilities:
Salaries and benefits$ 70.5$ 77.1
Incentive compensation 114.4 135.9
Profit sharing contribution 2.3 -
Customer credits, advanced payments and advanced billings 19.9 21.7
Self-insurance reserves for wholly-owned insurance subsidiary 19.1 27.6
Dividends 4.9 65.5
Professional service fees 47.7 32.9
Interest accrued on debt 14.8 36.3
Accounts payable 17.6 16.4
Income taxes 22.1 47.5
Pension and other retirement employee benefits 7.1 7.0
Other 79.8 71.0
Total accounts payable and accrued liabilities$ 420.2$ 538.9
September 30,December 31,
20142013
Other liabilities:
Pension and other retirement employee benefits$ 166.1$ 164.0
Deferred rent-non-current portion 106.2 106.3
Interest accrued on UTPs 18.1 18.0
Legacy and other tax matters 8.6 15.4
Other 49.0 56.5
Total other liabilities$ 348.0$ 360.2

Redeemable Noncontrolling Interest:

In connection with the acquisition of Copal, the Company and the non-controlling shareholders entered into a put/call option agreement whereby the Company has the option to purchase from the non-controlling shareholders and the non-controlling shareholders have the option to sell to the Company the remaining 33% ownership interest of Copal Partners Limited based on a strike price to be calculated on pre-determined formulas using a combination of revenue and EBITDA multiples when exercised. The value of the estimated put/call option strike price on the date of acquisition was based on a Monte Carlo simulation model. This model contemplated multiple scenarios which simulated certain of Copal’s revenue, EBITDA margins and equity values to estimate the present value of the expected strike price of the option. In connection with the acquisition of Amba in December 2013, which was combined with Copal to form the Copal Amba reporting unit, the aforementioned revenue and EBITDA multiples set forth in the put/call option were modified to include the results of Amba. The option is subject to a minimum exercise price of $46 million. There is no limit as to the maximum amount of the strike price on the put/call option.

In the third quarter of 2014, the Company notified the non-controlling shareholders that it planned to exercise its call option to acquire the remaining interest of Copal Amba that it does not currently own which is expected to close in the fourth quarter of 2014. In accordance with certain agreements relating to the acquisition of Copal Amba, the Company will incur a 25% premium to the formulaic redemption value of the non-controlling interest.

The following table shows changes in the redeemable noncontrolling interest related to the acquisition of Copal:

Nine Months EndedYear Ended
September 30, 2014December 31, 2013
(in millions)Redeemable Noncontrolling Interest
Balance January 1,$ 80.0$ 72.3
Net earnings 7.2 5.8
Dividends (4.9) (6.0)
Adjustment to redemption value * 55.3 7.9
Balance $ 137.6$ 80.0
* The adjustment to the redemption value in the nine months ended September 30, 2014 reflects the aforementioned revisions to the revenue and EBITDA multiples pursuant to the amendment of the put/call agreement which occurred contemporaneously with the acquisition of Amba coupled with growth in the Copal Amba reporting unit.

Noncontrolling Interests:

The following table summarizes the changes in the Company’s noncontrolling interests:

Nine Months EndedYear Ended
September 30, 2014December 31, 2013
(in millions)Noncontrolling Interests
Balance January 1,$ 10.9$ 11.4
Net earnings 5.0 5.7
Dividends (5.2) (6.2)
ICRA noncontrolling interest* 218.9 -
Balance $ 229.6$ 10.9

* Represents the fair value of the ICRA noncontrolling interest as of the day majority control was acquired.

Other Non-Operating (Expense) Income:

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

Three Months EndedNine Months Ended
September 30,September 30,
2014201320142013
FX gain/(loss)$ 7.6$ (5.8)$ 1.5$ 6.9
Legacy Tax benefit 6.4 - 6.4 -
Joint venture income 2.6 2.5 7.9 7.4
Other (0.2) (0.3) (0.3) (1.4)
Total$ 16.4$ (3.6)$ 15.5$ 12.9

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:

Nine Months EndedYear Ended
September 30,December 31,
(in millions)20142013
Balance January 1,$ 27.6$ 55.8
Accruals (reversals), net (1.2) (0.9)
Payments (7.3) (27.3)
Balance$ 19.1$ 27.6
PENSION AND OTHER POST-RETIREMENT BENEFITS
PENSION AND OTHER POST-RETIREMENT BENEFITS

NOTE 12. PENSION AND OTHER RETIREMENT BENEFITS

Moody’s maintains funded and unfunded noncontributory Defined Benefit Pension Plans. The U.S. DBPPs 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 funded and unfunded U.S. pension plans are referred to herein as “Pension 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 September 30,
Pension PlansOther Retirement Plans
2014201320142013
Components of net periodic expense
Service cost$ 4.6$ 4.9$ 0.5$ 0.5
Interest cost 4.2 3.4 0.2 0.2
Expected return on plan assets (3.7) (3.3) - -
Amortization of net actuarial loss from earlier periods 1.7 2.8 - -
Amortization of net prior service costs from earlier periods 0.2 0.2 - -
Net periodic expense$ 7.0$ 8.0$ 0.7$ 0.7
Nine Months Ended September 30,
Pension PlansOther Retirement Plans
2014201320142013
Components of net periodic expense
Service cost$ 13.8$ 14.8$ 1.3$ 1.3
Interest cost 12.4 10.1 0.7 0.6
Expected return on plan assets (10.7) (9.7) - -
Amortization of net actuarial loss from earlier periods 5.0 8.2 - -
Amortization of net prior service costs from earlier periods 0.5 0.5 - 0.2
Net periodic expense$ 21.0$ 23.9$ 2.0$ 2.1

The Company contributed $20.7 million to its U.S. funded pension plan and made payments of $2.6 million related to its unfunded U.S. DBPPs and $0.3 million to its U.S. other retirement plans, respectively during the nine months ended September 30, 2014. The Company presently anticipates making additional payments of $1.8 million related to its unfunded U.S. DBPPs and $0.3 million to its U.S. other retirement plans during the remainder of 2014.

INDEBTEDNESS
INDEBTEDNESS

NOTE 13. INDEBTEDNESS

The following table summarizes total indebtedness:

September 30,December 31,
20142013
2012 Facility$ -$ -
Notes Payable:
4.98% Series 2005-1 Notes, due 2015; includes the fair value of interest rate swap of $10.3 million at 2013 - 310.3
6.06% Series 2007-1 Notes due 2017 300.0 300.0
5.50% 2010 Senior Notes, due 2020, net of unamortized discount of $2.0 million in 2014 and $2.2 million in 2013; also includes the fair value of interest rate swap of $2.1 million in 2014 495.9 497.8
4.50% 2012 Senior Notes, due 2022, net of unamortized discount of $3.2 million in 2014 and $3.5 million in 2013 496.8 496.5
4.875% 2013 Senior Notes, due 2024, net of unamortized discount of $2.6 million in 2014 and $2.8 million in 2013 497.4 497.2
2.750% 2014 Senior Notes (5-Year), due 2019, net of unamortized discount of $0.7 million in 2014; also includes the fair value of interest rate swap of $1.3 million in 2014 448.0 -
5.250% 2014 Senior Notes (30-Year), due 2044, net of unamortized discount of $1.6 million in 2014 298.4 -
Total long-term debt$ 2,536.5$ 2,101.8

The Company has entered into interest rate swaps on the Series 2005-1 Notes, the 2010 Senior Notes and the 2014 Senior Notes (5-Year) which are more fully discussed in Note 6 above.

At September 30, 2014, the Company was in compliance with all covenants contained within all of the debt agreements. In addition to the covenants described above, the 2014 Indenture, the 2012 Facility, the 2005 Agreement, the 2007 Agreement, the 2010 Senior Notes, the 2012 Senior Notes and the 2013 Senior Notes 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 September 30, 2014, 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 EndedNine Months Ended
September 30,September 30,
2014201320142013
Income$ 1.8$ 1.6$ 5.1$ 4.0
Expense on borrowings (1) (38.8) (23.9) (90.5) (65.4)
UTPs and other tax related liabilities (2) (1.7) (2.1) (3.2) (6.7)
Legacy Tax 0.7 - 0.7 -
Capitalized 0.3 - 0.4 -
Total$ (37.7)$ (24.4)$ (87.5)$ (68.1)
(1) The three and nine months ended September 30, 2014 both include approximately $11 million in net costs related to the prepayment of the Series 2005-1 Notes. (2) The nine months ended September 30, 2014 amount includes $2.0 million reversal of an interest accrual relating to the favorable resolution of an international tax matter.
Nine Months Ended
September 30,
20142013
Interest paid$ 108.4$ 78.7

The Company’s long-term debt is recorded at its carrying amount, which represents the issuance amount plus or minus any issuance premium or discount, except for the Series 2005-1 Notes, the 2010 Senior Notes, and the 2014 Senior Notes (5-Year) which are recorded at the carrying amount adjusted for the fair value of an interest rate swap used to hedge the fair value of the note. The fair value and carrying value of the Company’s long-term debt as of September 30, 2014 and December 31, 2013 are as follows:

September 30, 2014December 31, 2013
Carrying AmountEstimated Fair ValueCarrying AmountEstimated Fair Value
Series 2005-1 Notes(1)$ -$ -$ 310.3$ 319.2
Series 2007-1 Notes 300.0 336.3 300.0 334.7
2010 Senior Notes(2) 495.9 559.9 497.8 536.6
2012 Senior Notes 496.8 527.6 496.5 497.0
2013 Senior Notes 497.4 538.0 497.2 501.2
2014 Senior Notes (5-Year) (3) 448.0 452.5 - -
2014 Senior Notes (30-Year) 298.4 313.3 - -
Total$ 2,536.5$ 2,727.6$ 2,101.8$ 2,188.7
  • The carrying amount for the Series 2005-1 Notes includes a $10.3 million fair value adjustment on an interest rate hedge at December 31, 2013
  • The carrying amount for the 2010 Senior Notes includes the unamortized discount of $2.0 million and $2.2 million in 2014 and 2013, respectively, and a $2.1 million fair value adjustment on an interest rate hedge at September 30, 2014.
  • The carrying amount for the 2014 Senior Notes (5-Year) includes the unamortized discount of $0.7 million in 2014 and a ($1.3) million fair value adjustment on an interest rate hedge at September 30, 2014.

The fair value of the Company’s long-term debt is estimated using discounted cash flows with inputs based on prevailing interest rates available to the Company for borrowings with similar maturities.

The Company has the capacity to borrow up to $1 billion under its unsecured revolving credit facility which expires in April 2017. Any future borrowings under this facility would accrue interest at LIBOR plus a premium that can range from 77.5 bps to 120 bps per annum based on the Company’s debt/EBITDA ratio.

On August 7, 2014, the Company prepaid the Series 2005-1 Notes using proceeds from the issuance of the 2014 Senior Notes (30-year) and the 2014 Senior Notes (5-year), which are discussed below.

On July 16, 2014, the Company issued $300 million aggregate principal amount of senior unsecured notes in a public offering. The 2014 Senior Notes (30-year) bear interest at a fixed rate of 5.250% and mature on July 15, 2044. Interest on the 2014 Senior Notes (30-year) will be due semi-annually on January 15 and July 15 of each year, commencing January 15, 2015. The Company may prepay the 2014 Senior Notes (30-year), in whole or in part, at any time at a price equal to 100% of the principal amount being prepaid, plus accrued and unpaid interest and a Make-Whole Amount. Additionally, at the option of the holders of the notes, the Company may be required to purchase all or a portion of the notes upon occurrence of a “Change of Control Triggering Event,” as defined in the 2014 Indenture, at a price equal to 101% of the principal amount thereof, plus accrued and unpaid interest to the date of purchase. The 2014 Indenture contains covenants that limit the ability of the Company and certain of its subsidiaries to, among other things, incur or create liens and enter into sale and leaseback transactions. In addition, the 2014 Indenture contains a covenant that limits the ability of the Company to consolidate or merge with another entity or to sell all or substantially all of its assets to another entity. The 2014 Indenture contains customary default provisions. In addition, an event of default will occur if the Company or certain of its subsidiaries fail to pay the principal of any indebtedness (as defined in the 2014 Indenture) when due at maturity in an aggregate amount of $50 million or more, or a default occurs that results in the acceleration of the maturity of the Company’s or certain of its subsidiaries’ indebtedness in an aggregate amount of $50 million or more. Upon the occurrence and during the continuation of an event of default under the 2014 Indenture, the 2014 Senior Notes (30-year) may become immediately due and payable either automatically or by the vote of the holders of more than 25% of the aggregate principal amount of all of the notes then outstanding.

On July 16, 2014, the Company issued $450 million aggregate principal amount of senior unsecured notes in a public offering. The 2014 Senior Notes (5-year) bear interest at a fixed rate of 2.750% and mature July 15, 2019. Interest on the 2014 Senior Notes (5-year) will be due semi-annually on January 15 and July 15 of each year, commencing January 15, 2015. The Company may prepay the 2014 Senior Notes (5-year), in whole or in part, at any time at a price prior to June 15, 2019, equal to 100% of the principal amount being prepaid, plus accrued and unpaid interest and a Make-Whole Amount. Notwithstanding the immediately preceding sentence, the Company may redeem the 2014 Senior Notes (5-year), in whole or in part, at any time or from time to time on or after June 15, 2019 (one month prior to their maturity), at a redemption price equal to 100% of the principal amount of the notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding the redemption date. Additionally, at the option of the holders of the notes, the Company may be required to purchase all or a portion of the notes upon occurrence of a “Change of Control Triggering Event,” as defined in the 2014 Indenture, at a price equal to 101% of the principal amount thereof, plus accrued and unpaid interest to the date of purchase. The 2014 Indenture contains covenants that limit the ability of the Company and certain of its subsidiaries to, among other things, incur or create liens and enter into sale and leaseback transactions. In addition, the 2014 Indenture contains a covenant that limits the ability of the Company to consolidate or merge with another entity or to sell all or substantially all of its assets to another entity. The 2014 Indenture contains customary default provisions. In addition, an event of default will occur if the Company or certain of its subsidiaries fail to pay the principal of any indebtedness (as defined in the 2014 Indenture) when due at maturity in an aggregate amount of $50 million or more, or a default occurs that results in the acceleration of the maturity of the Company’s or certain of its subsidiaries’ indebtedness in an aggregate amount of $50 million or more. Upon the occurrence and during the continuation of an event of default under the 2014 Indenture, the 2014 Senior Notes (5-year) may become immediately due and payable either automatically or by the vote of the holders of more than 25% of the aggregate principal amount of all of the notes then outstanding.

The proceeds from both notes issued on July 16, 2014 were used for the aforementioned prepayment of the Series 2005-1 Notes and will also be used for general corporate purposes.

CONTINGENCIES
CONTINGENCIES

From time to time, 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 has received subpoenas and inquiries from states attorneys general and other domestic and foreign governmental authorities 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 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 Court’s denial of class certification. According to pleadings filed by plaintiffs in earlier proceedings, they seek approximately $76 million in total compensatory damages in connection with the two claims at issue on the appeal.

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, one of the Company’s subsidiaries (Moody’s Investors Service, Inc.), The McGraw-Hill Companies, Fitch, Inc., and various subsidiaries of Fitch, Inc. (CalPERS subsequently released the Fitch entities from the case). The action relates to the plaintiff’s purchase of securities issued by three structured investment vehicles (“SIVs”), known as Cheyne, Sigma, and Stanfield Victoria. The plaintiff’s complaint seeks 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 is 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. In October 2010, the defendants filed a special motion to dismiss the remaining negligent misrepresentation claim under California’s “anti-SLAPP” statute, which limits the maintenance of lawsuits based on speech on matters of public interest. In January 2012, the Superior Court denied the anti-SLAPP motion, ruling that, although the ratings qualify as protected speech activity under California law, the plaintiff had provided sufficient evidence in support of its claims to proceed. The defendants appealed this decision to the California Court of Appeal, which affirmed the Superior Court’s rulings in May 2014, and in September 2014, the Supreme Court of California declined to review the Court of Appeal’s decision. The action has been returned to the Superior Court, and discovery is likely to begin shortly.

For claims, litigation and proceedings and governmental investigations and inquires not related to income taxes, where it is both probable that a liability is expected to be 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.

Legacy Tax Matters

Moody’s continues to have exposure to potential liabilities arising from Legacy Tax Matters. As of September 30, 2014, Moody’s has recorded liabilities for Legacy Tax Matters totaling $10.8 million. This includes liabilities and accrued interest due to New D&B arising from the 2000 Distribution Agreement. It is possible that the ultimate liability for Legacy Tax Matters could be greater than the liabilities recorded by the Company, which could result in additional charges that may be material to Moody’s future reported results, financial position and cash flows.

In the fourth quarter of 2013, certain Legacy Tax Matters were resolved, resulting in a $19.2 million reduction of Legacy Tax liabilities and a $3.6 million reduction of related accrued interest expense.

In the third quarter of 2014, the year 2010 Legacy Tax Matters statute of limitations lapsed, resulting in a $6.4 million reduction of Legacy Tax liabilities and a $0.7 million reduction of related accrued interest expense.

SEGMENT INFORMATION
SEGMENT INFORMATION

NOTE 15. SEGMENT INFORMATION

Beginning in January 2014, pursuant to certain management realignment, the Company revised its operating segments. Accordingly, the Company is now organized into four operating segments: (i) MIS, (ii) MA, (iii) Copal Amba and (iv) an immaterial operating segment that provides fixed income pricing services and research in the Asia-Pacific region. The Copal Amba and the immaterial operating segment have been aggregated with the MA operating segment to form the MA reportable segment based on the determination that all of the operating segments demonstrate similar economic characteristics. Accordingly, the Company continues to be organized into two reportable segments: (i) MIS and (ii) MA. The MIS segment is comprised of all of the Company’s ratings activities. All of Moody’s other non-rating commercial activities are included in the MA reportable segment. Revenue from the Copal Amba operating segment continues to be reported within the PS LOB while revenue from the immaterial operating segment that provides fixed income pricing services and research in the Asia-Pacific region continues to be reported within RD&A.

The MIS segment consists of four lines of business—corporate finance, structured finance, financial institutions and public, project and infrastructure finance—that 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 MA segment, which includes all of the Company’s non-rating commercial activities, 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 lines of business – RD&A, ERS and PS.

In December 2013, a subsidiary of the Company acquired Amba, a provider of investment research and quantitative analytics for global financial institutions. Amba is part of the MA reportable segment and its revenue is included in the PS LOB. In July 2014, a subsidiary of the Company acquired WebEquity, a leading provider of cloud-based loan origination solutions for financial institutions. WebEquity is part of the MA reporting segment and its revenue is included in the ERS LOB.

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 which exclusively benefit only one segment, are fully charged to that segment. Overhead costs and corporate expenses of the Company which benefit both segments are allocated to each segment based on a revenue-split methodology. 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.

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 September 30,
20142013
MISMAEliminationsConsolidatedMISMAEliminationsConsolidated
Revenue$ 565.4$ 276.4$ (25.7)$ 816.1$ 497.7$ 230.4$ (22.6)$ 705.5
Operating, SG&A 260.8 208.1 (25.7) 443.2 235.6 177.6 (22.6) 390.6
Adjusted Operating Income 304.6 68.3 - 372.9 262.1 52.8 - 314.9
Less:
Depreciation and amortization 11.5 11.7 - 23.2 12.1 11.3 - 23.4
Operating income$ 293.1$ 56.6$ -$ 349.7$ 250.0$ 41.5$ -$ 291.5
Nine Months Ended September 30,
20142013
MISMAEliminationsConsolidatedMISMAEliminationsConsolidated
Revenue$ 1,756.3$ 776.2$ (75.7)$ 2,456.8$ 1,594.1$ 665.2$ (66.0)$ 2,193.3
Operating, SG&A 775.4 594.1 (75.7) 1,293.8 756.1 510.4 (66.0) 1,200.5
Adjusted Operating Income 980.9 182.1 - 1,163.0 838.0 154.8 - 992.8
Less:
Depreciation and amortization 34.3 34.3 - 68.6 34.9 35.2 - 70.1
Operating income$ 946.6$ 147.8$ -$ 1,094.4$ 803.1$ 119.6$ -$ 922.7

MIS and MA Revenue by Line of Business

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

Three Months Ended September 30,Nine Months Ended September 30,
2014201320142013
MIS:
Corporate finance (CFG)$ 260.7$ 233.0$ 846.0$ 754.2
Structured finance (SFG) 102.1 83.5 308.0 273.7
Financial institutions (FIG) 91.8 78.9 269.4 249.9
Public, project and infrastructure finance (PPIF) 88.5 82.7 267.2 258.8
Total external revenue 543.1 478.1 1,690.6 1,536.6
Intersegment royalty 22.3 19.6 65.7 57.5
Total 565.4 497.7 1,756.3 1,594.1
MA:
Research, data and analytics (RD&A) 146.8 133.7 432.4 393.6
Enterprise risk solutions (ERS) 81.1 64.4 208.1 177.6
Professional services (PS) 45.1 29.3 125.7 85.5
Total external revenue 273.0 227.4 766.2 656.7
Intersegment revenue 3.4 3.0 10.0 8.5
Total 276.4 230.4 776.2 665.2
Eliminations (25.7) (22.6) (75.7) (66.0)
Total MCO$ 816.1$ 705.5$ 2,456.8$ 2,193.3
Consolidated Revenue Information by Geographic Area:
Three Months Ended September 30,Nine Months Ended September 30,
2014201320142013
United States$ 449.1$ 391.0$ 1,335.8$ 1,209.3
International:
EMEA 231.4 207.4 715.3 637.0
Asia-Pacific 79.3 62.1 237.8 205.8
Americas 56.3 45.0 167.9 141.2
Total International 367.0 314.5 1,121.0 984.0
Total$ 816.1$ 705.5$ 2,456.8$ 2,193.3
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. This ASU is effective for annual and interim reporting periods beginning after December 15, 2016 and early adoption is not permitted. The Company is currently evaluating its adoption options and the impact that adoption of this update will have on its consolidated financial statements.

In June 2014, the FASB issued ASU No. 2014-12, Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period. This ASU clarifies the current accounting guidance for entities that issue share-based payment awards that require a specific performance target be achieved for employees to become eligible to vest in the awards, which may occur subsequent to a required service period. The current accounting guidance does not explicitly address how to account for these types of award. The ASU provides explicit guidance and clarifies that these types of performance targets should be treated as performance conditions, and accordingly should not be reflected in the determination of the grant-date fair value of the award. This ASU is effective for all annual periods and interim reporting periods beginning after December 15, 2015, with early adoption permitted. The Company currently accounts for transactions involving stock-based compensation awards with performance conditions in accordance with the provisions set forth in this ASU. Accordingly, the adoption of this update will not have an impact on the Company's consolidated financial statements.

SUBSEQUENT EVENTS
SUBSEQUENT EVENTS

NOTE 17. SUBSEQUENT EVENTS

On October 21, 2014, the Board approved the declaration of a quarterly dividend of $0.28 per share of Moody’s common stock, payable on December 10, 2014 to shareholders of record at the close of business on November 20, 2014.

STOCK-BASED COMPENSATION (Tables)
Three Months EndedNine Months Ended
September 30,September 30,
2014201320142013
Stock-based compensation cost$ 19.3$ 16.0$ 59.9$ 49.3
Tax benefit$ 6.2$ 5.9$ 19.0$ 17.9
Expected dividend yield 1.41%
Expected stock volatility 41.2%
Risk-free interest rate 2.30%
Expected holding period7.2 years
Grant date fair value$ 31.53
Nine Months Ended
September 30,
Exercise of stock options:20142013
Proceeds from stock option exercises$ 131.5$ 124.4
Aggregate intrinsic value$ 107.7$ 89.0
Tax benefit realized upon exercise$ 38.7$ 32.6
Number of shares exercised 2.8 3.5
Nine Months Ended
September 30,
Vesting of restricted stock:20142013
Fair value of shares vested$ 92.3$ 54.0
Tax benefit realized upon vesting$ 31.6$ 19.2
Number of shares vested 1.2 1.1
Nine Months Ended
September 30,
Vesting of performance-based restricted stock:20142013
Fair value of shares vested$ 38.0$ 25.5
Tax benefit realized upon vesting$ 14.6$ 9.7
Number of shares vested 0.5 0.5
INCOME TAXES (Tables)
Income Taxes Paid
Nine Months Ended
September 30,
20142013
Income Taxes Paid*$ 334.6$ 267.3
* Payments in 2013 include $50 million of 2012 estimated federal taxes paid in the first quarter of 2013 pursuant to IRS relief due to Hurricane Sandy.
WEIGHTED AVERAGE SHARES OUTSTANDING (Tables)
Reconciliation of Basic to Diluted Shares Outstanding
Three Months EndedNine Months Ended
September 30,September 30,
2014201320142013
Basic 210.4 217.8 212.1 221.1
Dilutive effect of shares issuable under stock-based compensation plans 3.8 4.2 4.0 4.0
Diluted 214.2 222.0 216.1 225.1
Anti-dilutive options to purchase common shares and restricted stock as well as contingently issuable restricted stock which are excluded from the table above 0.5 2.6 0.7 4.3
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Tables)
Fair Value of Derivative Instruments
Derivatives InstrumentsBalance Sheet LocationSeptember 30, 2014December 31, 2013
Assets:
Derivatives designated as accounting hedges:
Interest rate swapsOther assets$ -$ 10.3
FX forwards on net investment in certain foreign subsidiariesOther current assets 20.2 9.3
Total derivatives designated as accounting hedges 20.2 19.6
Derivatives not designated as accounting hedges:
FX forwards on certain assets and liabilitiesOther current assets 4.6 0.9
Total assets$ 24.8$ 20.5
Liabilities:
Derivatives designated as accounting hedges:
Interest rate swapsAccounts payable and accrued liabilities$ 3.4$ -
FX forwards on net investment in certain foreign subsidiariesAccounts payable and accrued liabilities$ -$ 1.0
Derivatives not designated as accounting hedges:
FX forwards on certain assets and liabilitiesAccounts payable and accrued liabilities 5.1 0.7
Total liabilities$ 8.5$ 1.7
Amount of gain (loss) recognized in the consolidated statements of operations
Three Months EndedNine Months Ended
September 30,September 30,
Derivatives designated as fair value accounting hedgesLocation on Statement of Operations2014201320142013
Interest rate swaps (1)Interest income(expense), net$7.8$1.0$8.3$3.1
Derivatives not designated as accounting hedges
Foreign exchange forwardsOther non-operating income (expense), net$(4.8)$2.1$ (3.9)$ 2.0
September 30,December 31,
20142013
Notional amount of currency pair:
Contracts to sell euros for USD 50.0 50.0
Contracts to sell Japanese yen for USD 19,700 19,700
Derivatives in Net Investment Hedging RelationshipsAmount of Gain/(Loss) Recognized in AOCI on Derivative (Effective Portion)
Three Months Ended
September 30,
20142013
FX forwards$ 12.1$ (1.5)
Total$ 12.1$ (1.5)
Nine Months Ended
September 30,
20142013
FX forwards$ 8.4$ (1.0)
Total$ 8.4$ (1.0)
September 30,December 31,
20142013
Notional amount of currency pair:
Contracts to purchase USD with euros$ 38.5$ 14.2
Contracts to sell USD for euros$ 53.7$ 53.2
Contracts to purchase USD with GBP$ 0.2$ -
Contracts to purchase USD with other foreign currencies$ 1.0$ -
Contracts to purchase euros with other foreign currencies 55.3 13.1
Contracts to purchase euros with GBP 24.5 22.1
Contracts to sell euros for GBP 35.4 -
GOODWILL AND OTHER ACQUIRED INTANGIBLE ASSETS (Tables)
Nine Months Ended September 30, 2014
MISMAConsolidated
Gross goodwillAccumulated impairment chargeNet goodwillGross goodwillAccumulated impairment chargeNet goodwillGross goodwillAccumulated impairment chargeNet goodwill
Balance at beginning of year$ 11.4$ -$ 11.4$ 666.0$ (12.2)$ 653.8$ 677.4$ (12.2)$ 665.2
Additions/adjustments 291.1 - 291.1 71.0 - 71.0 362.1 - 362.1
Foreign currency translation adjustments (7.7) - (7.7) (19.3) - (19.3) (27.0) - (27.0)
Ending balance$ 294.8$ -$ 294.8$ 717.7$ (12.2)$ 705.5$ 1,012.5$ (12.2)$ 1,000.3
Year ended December 31, 2013
MISMAConsolidated
Gross goodwillAccumulated impairment chargeNet goodwillGross goodwillAccumulated impairment chargeNet goodwillGross goodwillAccumulated impairment chargeNet goodwill
Balance at beginning of year$ 11.5$ -$ 11.5$ 637.8$ (12.2)$ 625.6$ 649.3$ (12.2)$ 637.1
Additions - - - 34.5 - 34.5 34.5 - 34.5
Foreign currency translation adjustments (0.1) - (0.1) (6.3) - (6.3) (6.4) - (6.4)
Ending balance$ 11.4$ -$ 11.4$ 666.0$ (12.2)$ 653.8$ 677.4$ (12.2)$ 665.2
September 30,December 31,
20142013
Customer relationships$ 311.1$ 237.4
Accumulated amortization (95.5) (86.6)
Net customer relationships 215.6 150.8
Trade secrets 30.8 31.1
Accumulated amortization (20.2) (18.5)
Net trade secrets 10.6 12.6
Software 80.1 71.0
Accumulated amortization (42.4) (38.8)
Net software 37.7 32.2
Trade names 76.6 31.3
Accumulated amortization (12.8) (11.7)
Net trade names 63.8 19.6
Other 43.0 26.1
Accumulated amortization (20.9) (19.7)
Net other 22.1 6.4
Total acquired intangible assets, net$ 349.8$ 221.6
Three Months EndedNine Months Ended
September 30,September 30,
2014201320142013
Amortization expense$ 6.9$ 7.0$ 20.5$ 21.0
Year Ending December 31,
2014 (after September 30)$ 7.9
2015 30.8
2016 30.0
2017 26.7
2018 22.0
Thereafter 232.4
FAIR VALUE (Tables)
Fair Value Measurement as of September 30, 2014
DescriptionBalanceLevel 1Level 2Level 3
Assets:
Derivatives (a)$ 24.8$ -$ 24.8$ -
Fixed maturity and open ended mutual funds (b) 43.4 43.4 - -
Total$ 68.2$ 43.4$ 24.8$ -
Liabilities:
Derivatives (a)$ 8.5$ -$ 8.5$ -
Contingent consideration arising from acquisitions (c) 13.3 - - 13.3
Total$ 21.8$ -$ 8.5$ 13.3
Fair Value Measurement as of December 31, 2013
DescriptionBalanceLevel 1Level 2Level 3
Assets:
Derivatives (a)$ 20.5$ -$ 20.5$ -
Total$ 20.5$ -$ 20.5$ -
Liabilities:
Derivatives (a)$ 1.7$ -$ 1.7$ -
Contingent consideration arising from acquisitions (c) 17.5 - - 17.5
Total$ 19.2$ -$ 1.7$ 17.5
Contingent Consideration
Nine Months Ended
September 30,
20142013
Balance as of January 1$ 17.5$ 9.0
Contingent consideration payments (4.3) (2.5)
Total losses (realized and unrealized):
Included in earnings 0.3 6.0
Foreign currency translation adjustments (0.2) (0.1)
Balance as of September 30$ 13.3$ 12.4
OTHER BALANCE SHEET INFORMATION (Tables)
September 30,December 31,
20142013
Other current assets:
Prepaid taxes$ 108.2$ 40.0
Prepaid expenses 46.1 48.1
Other 42.9 26.3
Total other current assets$ 197.2$ 114.4
September 30,December 31,
20142013
Other assets:
Investments in joint ventures$ 20.0$ 37.5
Deposits for real-estate leases 11.8 10.3
Indemnification assets related to acquisitions 25.7 27.0
Fixed maturity and open ended mutual funds 43.4 -
Other 41.3 37.3
Total other assets$ 142.2$ 112.1
September 30,December 31,
20142013
Accounts payable and accrued liabilities:
Salaries and benefits$ 70.5$ 77.1
Incentive compensation 114.4 135.9
Profit sharing contribution 2.3 -
Customer credits, advanced payments and advanced billings 19.9 21.7
Self-insurance reserves for wholly-owned insurance subsidiary 19.1 27.6
Dividends 4.9 65.5
Professional service fees 47.7 32.9
Interest accrued on debt 14.8 36.3
Accounts payable 17.6 16.4
Income taxes 22.1 47.5
Pension and other retirement employee benefits 7.1 7.0
Other 79.8 71.0
Total accounts payable and accrued liabilities$ 420.2$ 538.9
September 30,December 31,
20142013
Other liabilities:
Pension and other retirement employee benefits$ 166.1$ 164.0
Deferred rent-non-current portion 106.2 106.3
Interest accrued on UTPs 18.1 18.0
Legacy and other tax matters 8.6 15.4
Other 49.0 56.5
Total other liabilities$ 348.0$ 360.2
Nine Months EndedYear Ended
September 30, 2014December 31, 2013
(in millions)Redeemable Noncontrolling Interest
Balance January 1,$ 80.0$ 72.3
Net earnings 7.2 5.8
Dividends (4.9) (6.0)
Adjustment to redemption value * 55.3 7.9
Balance $ 137.6$ 80.0
* The adjustment to the redemption value in the nine months ended September 30, 2014 reflects the aforementioned revisions to the revenue and EBITDA multiples pursuant to the amendment of the put/call agreement which occurred contemporaneously with the acquisition of Amba coupled with growth in the Copal Amba reporting unit.
Nine Months EndedYear Ended
September 30, 2014December 31, 2013
(in millions)Noncontrolling Interests
Balance January 1,$ 10.9$ 11.4
Net earnings 5.0 5.7
Dividends (5.2) (6.2)
ICRA noncontrolling interest* 218.9 -
Balance $ 229.6$ 10.9
Three Months EndedNine Months Ended
September 30,September 30,
2014201320142013
FX gain/(loss)$ 7.6$ (5.8)$ 1.5$ 6.9
Legacy Tax benefit 6.4 - 6.4 -
Joint venture income 2.6 2.5 7.9 7.4
Other (0.2) (0.3) (0.3) (1.4)
Total$ 16.4$ (3.6)$ 15.5$ 12.9
Nine Months EndedYear Ended
September 30,December 31,
(in millions)20142013
Balance January 1,$ 27.6$ 55.8
Accruals (reversals), net (1.2) (0.9)
Payments (7.3) (27.3)
Balance$ 19.1$ 27.6
PENSION AND OTHER POST-RETIREMENT BENEFITS (Tables)
Components of Net Periodic Benefit Expense Related to Post-Retirement Plans
Three Months Ended September 30,
Pension PlansOther Retirement Plans
2014201320142013
Components of net periodic expense
Service cost$ 4.6$ 4.9$ 0.5$ 0.5
Interest cost 4.2 3.4 0.2 0.2
Expected return on plan assets (3.7) (3.3) - -
Amortization of net actuarial loss from earlier periods 1.7 2.8 - -
Amortization of net prior service costs from earlier periods 0.2 0.2 - -
Net periodic expense$ 7.0$ 8.0$ 0.7$ 0.7
Nine Months Ended September 30,
Pension PlansOther Retirement Plans
2014201320142013
Components of net periodic expense
Service cost$ 13.8$ 14.8$ 1.3$ 1.3
Interest cost 12.4 10.1 0.7 0.6
Expected return on plan assets (10.7) (9.7) - -
Amortization of net actuarial loss from earlier periods 5.0 8.2 - -
Amortization of net prior service costs from earlier periods 0.5 0.5 - 0.2
Net periodic expense$ 21.0$ 23.9$ 2.0$ 2.1
INDEBTEDNESS (Tables)
September 30,December 31,
20142013
2012 Facility$ -$ -
Notes Payable:
4.98% Series 2005-1 Notes, due 2015; includes the fair value of interest rate swap of $10.3 million at 2013 - 310.3
6.06% Series 2007-1 Notes due 2017 300.0 300.0
5.50% 2010 Senior Notes, due 2020, net of unamortized discount of $2.0 million in 2014 and $2.2 million in 2013; also includes the fair value of interest rate swap of $2.1 million in 2014 495.9 497.8
4.50% 2012 Senior Notes, due 2022, net of unamortized discount of $3.2 million in 2014 and $3.5 million in 2013 496.8 496.5
4.875% 2013 Senior Notes, due 2024, net of unamortized discount of $2.6 million in 2014 and $2.8 million in 2013 497.4 497.2
2.750% 2014 Senior Notes (5-Year), due 2019, net of unamortized discount of $0.7 million in 2014; also includes the fair value of interest rate swap of $1.3 million in 2014 448.0 -
5.250% 2014 Senior Notes (30-Year), due 2044, net of unamortized discount of $1.6 million in 2014 298.4 -
Total long-term debt$ 2,536.5$ 2,101.8
Three Months EndedNine Months Ended
September 30,September 30,
2014201320142013
Income$ 1.8$ 1.6$ 5.1$ 4.0
Expense on borrowings (1) (38.8) (23.9) (90.5) (65.4)
UTPs and other tax related liabilities (2) (1.7) (2.1) (3.2) (6.7)
Legacy Tax 0.7 - 0.7 -
Capitalized 0.3 - 0.4 -
Total$ (37.7)$ (24.4)$ (87.5)$ (68.1)
(1) The three and nine months ended September 30, 2014 both include approximately $11 million in net costs related to the prepayment of the Series 2005-1 Notes. (2) The nine months ended September 30, 2014 amount includes $2.0 million reversal of an interest accrual relating to the favorable resolution of an international tax matter.
Nine Months Ended
September 30,
20142013
Interest paid$ 108.4$ 78.7
September 30, 2014December 31, 2013
Carrying AmountEstimated Fair ValueCarrying AmountEstimated Fair Value
Series 2005-1 Notes(1)$ -$ -$ 310.3$ 319.2
Series 2007-1 Notes 300.0 336.3 300.0 334.7
2010 Senior Notes(2) 495.9 559.9 497.8 536.6
2012 Senior Notes 496.8 527.6 496.5 497.0
2013 Senior Notes 497.4 538.0 497.2 501.2
2014 Senior Notes (5-Year) (3) 448.0 452.5 - -
2014 Senior Notes (30-Year) 298.4 313.3 - -
Total$ 2,536.5$ 2,727.6$ 2,101.8$ 2,188.7
SEGMENT INFORMATION (Tables)
Three Months Ended September 30,
20142013
MISMAEliminationsConsolidatedMISMAEliminationsConsolidated
Revenue$ 565.4$ 276.4$ (25.7)$ 816.1$ 497.7$ 230.4$ (22.6)$ 705.5
Operating, SG&A 260.8 208.1 (25.7) 443.2 235.6 177.6 (22.6) 390.6
Adjusted Operating Income 304.6 68.3 - 372.9 262.1 52.8 - 314.9
Less:
Depreciation and amortization 11.5 11.7 - 23.2 12.1 11.3 - 23.4
Operating income$ 293.1$ 56.6$ -$ 349.7$ 250.0$ 41.5$ -$ 291.5
Nine Months Ended September 30,
20142013
MISMAEliminationsConsolidatedMISMAEliminationsConsolidated
Revenue$ 1,756.3$ 776.2$ (75.7)$ 2,456.8$ 1,594.1$ 665.2$ (66.0)$ 2,193.3
Operating, SG&A 775.4 594.1 (75.7) 1,293.8 756.1 510.4 (66.0) 1,200.5
Adjusted Operating Income 980.9 182.1 - 1,163.0 838.0 154.8 - 992.8
Less:
Depreciation and amortization 34.3 34.3 - 68.6 34.9 35.2 - 70.1
Operating income$ 946.6$ 147.8$ -$ 1,094.4$ 803.1$ 119.6$ -$ 922.7
Three Months Ended September 30,Nine Months Ended September 30,
2014201320142013
MIS:
Corporate finance (CFG)$ 260.7$ 233.0$ 846.0$ 754.2
Structured finance (SFG) 102.1 83.5 308.0 273.7
Financial institutions (FIG) 91.8 78.9 269.4 249.9
Public, project and infrastructure finance (PPIF) 88.5 82.7 267.2 258.8
Total external revenue 543.1 478.1 1,690.6 1,536.6
Intersegment royalty 22.3 19.6 65.7 57.5
Total 565.4 497.7 1,756.3 1,594.1
MA:
Research, data and analytics (RD&A) 146.8 133.7 432.4 393.6
Enterprise risk solutions (ERS) 81.1 64.4 208.1 177.6
Professional services (PS) 45.1 29.3 125.7 85.5
Total external revenue 273.0 227.4 766.2 656.7
Intersegment revenue 3.4 3.0 10.0 8.5
Total 276.4 230.4 776.2 665.2
Eliminations (25.7) (22.6) (75.7) (66.0)
Total MCO$ 816.1$ 705.5$ 2,456.8$ 2,193.3
Consolidated Revenue Information by Geographic Area:
Three Months Ended September 30,Nine Months Ended September 30,
2014201320142013
United States$ 449.1$ 391.0$ 1,335.8$ 1,209.3
International:
EMEA 231.4 207.4 715.3 637.0
Asia-Pacific 79.3 62.1 237.8 205.8
Americas 56.3 45.0 167.9 141.2
Total International 367.0 314.5 1,121.0 984.0
Total$ 816.1$ 705.5$ 2,456.8$ 2,193.3
Description of Business and Basis of Presentation - Additional Information (Detail)
9 Months Ended
Sep. 30, 2014
Segment Reporting Information [Line Items]
 
Number of reportable segments
Stock-Based Compensation Cost and Associated Tax Benefit (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2014
Sep. 30, 2013
Compensation Related Costs Share Based Payments Disclosure [Line Items]
 
 
 
 
Stock compensation cost
$ 19.3 
$ 16.0 
$ 59.9 
$ 49.3 
Tax benefit
$ 6.2 
$ 5.9 
$ 19.0 
$ 17.9 
Stock-Based Compensation - Additional Information (Detail) (USD $)
In Millions, except Per Share data, unless otherwise specified
9 Months Ended
Sep. 30, 2014
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
 
Employee stock options, weighted average grant date fair value
$ 31.53 
Employee Stock Options [Member]
 
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
 
Employee stock options, granted
0.3 
Restricted stock, weighted average grant date fair value
$ 79.62 
Unrecognized compensation expense
$ 9.9 
Weighted average period to recognize expense
1 year 4 months 
Restricted Stock [Member]
 
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
 
Restricted stock, granted
0.9 
Unrecognized compensation expense
96.2 
Weighted average period to recognize expense
1 year 10 months 
Non Market Performance Based Vesting Condition [Member] |
Employee Stock Options [Member]
 
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
 
Restricted stock, weighted average grant date fair value
$ 76.35 
Unrecognized compensation expense
$ 17.8 
Non Market Performance Based Vesting Condition [Member] |
Restricted Stock [Member]
 
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
 
Restricted stock, granted
0.2 
Weighted average period to recognize expense
1 year 1 month 6 days 
Weighted Average Assumptions used in Determining Fair Value for Options Granted (Detail)
9 Months Ended
Sep. 30, 2014
Schedule Of Weighted Average Assumptions For Fair Values Of Stock Options [Line Items]
 
Expected dividend yield
1.41% 
Expected stock volatility
41.15% 
Risk-free interest rate
2.30% 
Expected holding period
7 years 2 months 12 days 
Grant date fair value
$ 31.53 
Stock Option Exercises and Restricted Stock Vesting (Detail) (USD $)
In Millions, unless otherwise specified
9 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items]
 
 
Proceeds from stock option exercises
$ 131.5 
$ 124.4 
Aggregate intrinsic value
107.7 
89.0 
Tax benefit realized upon exercise/vesting
38.7 
32.6 
Number of shares exercised
2.8 
3.5 
Restricted Stock [Member]
 
 
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items]
 
 
Fair value of shares vested
92.3 
54.0 
Tax benefit realized upon exercise/vesting
31.6 
19.2 
Number of shares vested
1.2 
1.1 
Restricted Stock [Member] |
Non Market Performance Based Vesting Condition [Member]
 
 
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items]
 
 
Fair value of shares vested
38.0 
25.5 
Tax benefit realized upon exercise/vesting
$ 14.6 
$ 9.7 
Number of shares vested
0.5 
0.5 
Income Taxes - Additional Information (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2014
Sep. 30, 2013
Income Tax Contingency [Line Items]
 
 
 
 
Effective tax rate
33.50% 
29.10% 
32.00% 
30.10% 
Overall increase (decrease) in unrecognized tax benefits (UTPs)
 
 
$ (18.5)
$ (44.8)
Gross [Member]
 
 
 
 
Income Tax Contingency [Line Items]
 
 
 
 
Overall increase (decrease) in unrecognized tax benefits (UTPs)
(7.1)
 
(16.0)
 
Net [Member]
 
 
 
 
Income Tax Contingency [Line Items]
 
 
 
 
Overall increase (decrease) in unrecognized tax benefits (UTPs)
$ (4.0)
 
$ (8.4)
 
Reconciliation of Basic to Diluted Shares Outstanding (Detail)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2014
Sep. 30, 2013
Schedule Of Earnings Per Share Basic And Diluted By Common Class [Line Items]
 
 
 
 
Basic
210.4 
217.8 
212.1 
221.1 
Dilutive effect of shares issuable under stock-based compensation plans
3.8 
4.2 
4.0 
4.0 
Diluted
214.2 
222.0 
216.1 
225.1 
Anti-dilutive options to purchase common shares and restricted stock excluded from the table above
0.5 
2.6 
0.7 
4.3 
Short -Term Investments - Additional Information (Detail)
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2014
Minimum [Member]
Dec. 31, 2013
Minimum [Member]
Sep. 30, 2014
Maximum [Member]
Dec. 31, 2013
Maximum [Member]
Schedule Of Investments [Line Items]
 
 
 
 
 
 
Short-term investment securities, maturity date
90 
90 
 
 
 
 
Short Term Investments Maturity Period
 
 
12 
Derivative Instruments And Hedging Activities - Additional Information (Detail) (USD $)
In Millions, unless otherwise specified
12 Months Ended 9 Months Ended
Dec. 31, 2012
Sep. 30, 2014
Jun. 30, 2014
Dec. 31, 2013
Sep. 30, 2013
Jun. 30, 2013
Sep. 30, 2014
Twenty Ten Senior Notes [Member]
Sep. 30, 2014
Two Thousand Fourteen Senior Notes Five Year [Member]
Sep. 30, 2014
Interest Income Expense Net [Member]
Derivative [Line Items]
 
 
 
 
 
 
 
 
 
Derivative Notional Amount
 
 
 
 
 
 
$ 250.0 
$ 250.0 
 
Floating interest rate base
3-month LIBOR 
 
 
 
 
 
3-month LIBOR 
3-month LIBOR 
 
Gain Due To Termination Of Swap
 
 
 
 
 
 
 
 
4.0 
Accumulated Other Comprehensive Income Loss Net Of Tax
$ (82.1)
$ (133.6)
$ (47.3)
$ (54.6)
$ (100.2)
$ (149.9)
 
 
 
Summary of Notional Amounts of Outstanding Foreign Exchange Forwards, Cash Flow Hedging (Detail) (Cash Flow Hedging [Member], Forward Contracts [Member])
In Millions, unless otherwise specified
Sep. 30, 2014
Foreign Currency Forward Contracts to Purchase US Dollars with Euros [Member]
USD ($)
Dec. 31, 2013
Foreign Currency Forward Contracts to Purchase US Dollars with Euros [Member]
USD ($)
Sep. 30, 2014
Foreign Currency Forward Contracts To Sell US Dollars For Euros [Member]
USD ($)
Dec. 31, 2013
Foreign Currency Forward Contracts To Sell US Dollars For Euros [Member]
USD ($)
Sep. 30, 2014
Foreign Currency Forward Contracts to Purchase US Dollars With GBP [Member]
USD ($)
Dec. 31, 2013
Foreign Currency Forward Contracts to Purchase US Dollars With GBP [Member]
USD ($)
Sep. 30, 2014
Foreign Currency Forward Contracts To Purchase US Dollars With Other Foreign Currencies [Member]
USD ($)
Dec. 31, 2013
Foreign Currency Forward Contracts To Purchase US Dollars With Other Foreign Currencies [Member]
USD ($)
Sep. 30, 2014
Foreign Currency Forward Contracts to Sell US Dollars for Other Foreign Currencies [Member]
USD ($)
Dec. 31, 2013
Foreign Currency Forward Contracts to Sell US Dollars for Other Foreign Currencies [Member]
USD ($)
Sep. 30, 2014
Foreign Currency Forward Contracts To Purchase Euros With Other Foreign Currencies [Member]
EUR (€)
Dec. 31, 2013
Foreign Currency Forward Contracts To Purchase Euros With Other Foreign Currencies [Member]
EUR (€)
Sep. 30, 2014
Foreign Currency Forward Contracts To Purchase Euros With GBP [Member]
EUR (€)
Dec. 31, 2013
Foreign Currency Forward Contracts To Purchase Euros With GBP [Member]
EUR (€)
Sep. 30, 2014
Foreign Currency Forward Contracts to Sell Euros for GBP [Member]
EUR (€)
Dec. 31, 2013
Foreign Currency Forward Contracts to Sell Euros for GBP [Member]
EUR (€)
Derivative [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Derivative Notional Amount
$ 38.5 
$ 14.2 
$ 53.7 
$ 53.2 
$ 0.2 
$ 0 
$ 1.0 
$ 0 
$ 0 
$ 0 
€ 55.3 
€ 13.1 
€ 24.5 
€ 22.1 
€ 35.4 
€ 0 
Summary of Notional Amounts of Outstanding Foreign Exchange Forwards, Net Investment Hedging (Detail) (Net Investment Hedging [Member], Forward Contracts [Member])
In Millions, unless otherwise specified
Sep. 30, 2014
Foreign Currency Forward Contracts To Sell Euros for U S Dollars [Member]
EUR (€)
Dec. 31, 2013
Foreign Currency Forward Contracts To Sell Euros for U S Dollars [Member]
EUR (€)
Sep. 30, 2014
Foreign Currency Forward Contracts To Sell Japanese Yen For US Dollars [Member]
JPY (¥)
Dec. 31, 2013
Foreign Currency Forward Contracts To Sell Japanese Yen For US Dollars [Member]
JPY (¥)
Derivative [Line Items]
 
 
 
 
Derivative Notional Amount
€ 50.0 
€ 50.0 
¥ 19,700.0 
¥ 19,700.0 
Fair Value of Derivative Instruments (Detail) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2014
Dec. 31, 2013
Derivatives Fair Value [Line Items]
 
 
Derivatives assets
$ 24.8 
$ 20.5 
Derivatives liabilities
8.5 
1.7 
Designated As Hedging Instrument [Member]
 
 
Derivatives Fair Value [Line Items]
 
 
Derivatives assets
20.2 
19.6 
Designated As Hedging Instrument [Member] |
Interest Rate Swap [Member] |
Other Assets [Member]
 
 
Derivatives Fair Value [Line Items]
 
 
Derivatives assets
   
10.3 
Designated As Hedging Instrument [Member] |
Foreign Exchange Contract [Member] |
Net Investment Hedging [Member] |
Other Current Assets [Member]
 
 
Derivatives Fair Value [Line Items]
 
 
Derivatives assets
20.2 
9.3 
Designated As Hedging Instrument [Member] |
Foreign Exchange Contract [Member] |
Net Investment Hedging [Member] |
Accounts Payable And Accrued Liabilities [Member]
 
 
Derivatives Fair Value [Line Items]
 
 
Derivatives liabilities
1.0 
Nondesignated [Member] |
Foreign Exchange Contract [Member] |
Other Current Assets [Member]
 
 
Derivatives Fair Value [Line Items]
 
 
Derivatives assets
4.6 
0.9 
Nondesignated [Member] |
Foreign Exchange Contract [Member] |
Accounts Payable And Accrued Liabilities [Member]
 
 
Derivatives Fair Value [Line Items]
 
 
Derivatives liabilities
$ 5.1 
$ 0.7 
Summary of Net Gain (Loss) on Foreign Exchange Forwards Not Designated as Hedging Instruments and on Interest Rate Swaps Designated as Fair Value Hedge (Detail) (Nondesignated [Member], Fair Value Hedge [Member], USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2014
Sep. 30, 2013
Interest Rate Swap [Member] |
Interest Income Expense Net [Member]
 
 
 
 
Derivative Instruments Gain Loss [Line Items]
 
 
 
 
Amount of Gain (Loss) Recognized in Income
$ 7.8 
$ 1.0 
$ 8.3 
$ 3.1 
Foreign Exchange Forward [Member] |
Other Nonoperating Income Expense [Member]
 
 
 
 
Derivative Instruments Gain Loss [Line Items]
 
 
 
 
Amount of Gain (Loss) Recognized in Income
$ (4.8)
$ 2.1 
$ (3.9)
$ 2.0 
Gains and Losses on Derivatives Designated as Hedging Instruments, Net Investment Hedging (Detail) (Net Investment Hedging [Member], USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2014
Sep. 30, 2013
Foreign Exchange Contract [Member]
 
 
 
 
Derivative Instruments Gain Loss [Line Items]
 
 
 
 
Amount of Gain/(Loss) Recognized in AOCI on Derivative (Effective Portion)
$ 12.1 
$ (1.5)
$ 8.4 
$ (1.0)
N/A
 
 
 
 
Derivative Instruments Gain Loss [Line Items]
 
 
 
 
Amount of Gain/(Loss) Reclassified from AOCI into Income (Effective Portion)
Gain/(Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)
$ 0 
$ 0 
$ 0 
$ 0 
Activity in Goodwill (Detail) (USD $)
In Millions, unless otherwise specified
9 Months Ended 12 Months Ended
Sep. 30, 2014
Dec. 31, 2013
Goodwill [Line Items]
 
 
Ending balance
$ 1,000.3 
$ 665.2 
Gross Goodwill [Member]
 
 
Goodwill [Line Items]
 
 
Beginning balance
677.4 
649.3 
Additions/adjustments
362.1 
34.5 
FX translation
(27.0)
(6.4)
Ending balance
1,012.5 
677.4 
Accumulated Impairment Charge [Member]
 
 
Goodwill [Line Items]
 
 
Beginning balance
(12.2)
(12.2)
Additions/adjustments
FX translation
   
   
Ending balance
(12.2)
(12.2)
Net Goodwill [Member]
 
 
Goodwill [Line Items]
 
 
Beginning balance
665.2 
637.1 
Additions/adjustments
362.1 
34.5 
FX translation
(27.0)
(6.4)
Ending balance
1,000.3 
665.2 
Moodys Investors Service [Member] |
Gross Goodwill [Member]
 
 
Goodwill [Line Items]
 
 
Beginning balance
11.4 
11.5 
Additions/adjustments
291.1 
FX translation
(7.7)
(0.1)
Ending balance
294.8 
11.4 
Moodys Investors Service [Member] |
Accumulated Impairment Charge [Member]
 
 
Goodwill [Line Items]
 
 
Beginning balance
   
   
Additions/adjustments
FX translation
   
   
Ending balance
   
Moodys Investors Service [Member] |
Net Goodwill [Member]
 
 
Goodwill [Line Items]
 
 
Beginning balance
11.4 
11.5 
Additions/adjustments
291.1 
FX translation
(7.7)
(0.1)
Ending balance
294.8 
11.4 
Moodys Analytics [Member] |
Gross Goodwill [Member]
 
 
Goodwill [Line Items]
 
 
Beginning balance
666.0 
637.8 
Additions/adjustments
71.0 
34.5 
FX translation
(19.3)
(6.3)
Ending balance
717.7 
666.0 
Moodys Analytics [Member] |
Accumulated Impairment Charge [Member]
 
 
Goodwill [Line Items]
 
 
Beginning balance
(12.2)
(12.2)
Additions/adjustments
FX translation
   
   
Ending balance
(12.2)
(12.2)
Moodys Analytics [Member] |
Net Goodwill [Member]
 
 
Goodwill [Line Items]
 
 
Beginning balance
653.8 
625.6 
Additions/adjustments
71.0 
34.5 
FX translation
(19.3)
(6.3)
Ending balance
$ 705.5 
$ 653.8 
Amortization Expense Relating to Acquired Intangible Assets (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2014
Sep. 30, 2013
Finite Lived Intangible Assets [Line Items]
 
 
 
 
Amortization expense
$ 6.9 
$ 7.0 
$ 20.5 
$ 21.0 
Estimated Future Amortization Expense for Acquired Intangible Assets Subject to Amortization (Detail) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2014
Schedule Of Actual And Estimated Amortization Expense [Line Items]
 
2014 (after September 30,)
$ 7.9 
2015
30.8 
2016
30.0 
2017
26.7 
2018
22.0 
Thereafter
$ 232.4 
Financial Instruments Carried at Fair Value on Recurring Basis (Detail) (USD $)
Sep. 30, 2014
Dec. 31, 2013
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
 
 
Derivative Contracts
$ 24,800,000 
$ 20,500,000 
Total, Assets
68,200,000 
20,500,000 
Derivatives, Liabilities
8,500,000 
1,700,000 
Contingent consideration arising from acquisitions, liabilities
13,300,000 
17,500,000 
Total, Liabilities
21,800,000 
19,200,000 
Fixed Maturity Mutual Funds and Open Ended Mutual Funds
43,400,000 
 
Fair Value Inputs Level 2 [Member]
 
 
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
 
 
Derivative Contracts
24,800,000 
20,500,000 
Total, Assets
24,800,000 
20,500,000 
Derivatives, Liabilities
8,500,000 
1,700,000 
Contingent consideration arising from acquisitions, liabilities
Total, Liabilities
8,500,000 
1,700,000 
Fixed Maturity Mutual Funds and Open Ended Mutual Funds
 
Fair Value Inputs Level 3 [Member]
 
 
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
 
 
Derivative Contracts
   
   
Total, Assets
   
   
Derivatives, Liabilities
Contingent consideration arising from acquisitions, liabilities
13,300,000 
17,500,000 
Total, Liabilities
13,300,000 
17,500,000 
Fixed Maturity Mutual Funds and Open Ended Mutual Funds
 
Fair Value Inputs Level 1 [Member]
 
 
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
 
 
Derivative Contracts
   
   
Total, Assets
43,400,000 
   
Derivatives, Liabilities
Contingent consideration arising from acquisitions, liabilities
Total, Liabilities
   
   
Fixed Maturity Mutual Funds and Open Ended Mutual Funds
$ 43,400,000 
 
Changes in Fair Value of Level Three Liabilities (Detail) (USD $)
In Millions, unless otherwise specified
9 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
 
 
Contingent Consideration, beginning balance
$ 17.5 
$ 9.0 
Settlements
4.3 
2.5 
Total gains (realized and unrealized), Included in earnings
(0.3)
(6.0)
Foreign currency translation adjustments
(0.2)
(0.1)
Contingent Consideration, ending balance
$ 13.3 
$ 12.4 
Fair Value - Additional Information (Detail) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2014
Dec. 31, 2013
Sep. 30, 2013
Dec. 31, 2012
Fair Value Of Financial Instruments [Line Items]
 
 
 
 
Contingent consideration at fair value
$ 13.3 
$ 17.5 
$ 12.4 
$ 9.0 
Minority Interest Ownership Percentage By Noncontrolling Owners
3,300.00% 
 
 
 
Available For Sale Equity Securities Amortized Cost Basis
41.20 
 
 
 
Purchase Of Remaining Ownership Interest
11 
 
 
 
Minimum [Member]
 
 
 
 
Fair Value Of Financial Instruments [Line Items]
 
 
 
 
Range of Fixed Maturity and Open Ended Mutual Funds
 
 
 
Maximum [Member]
 
 
 
 
Fair Value Of Financial Instruments [Line Items]
 
 
 
 
Range of Fixed Maturity and Open Ended Mutual Funds
11 
 
 
 
Other Liabilities
 
 
 
 
Fair Value Of Financial Instruments [Line Items]
 
 
 
 
Contingent consideration at fair value
2.3 
 
 
 
Accounts Payable And Accrued Liabilities [Member]
 
 
 
 
Fair Value Of Financial Instruments [Line Items]
 
 
 
 
Contingent consideration at fair value
$ 11.1 
 
 
 
Changes in Non-Redeemable Noncontrolling Interest (Detail) (USD $)
In Millions, unless otherwise specified
9 Months Ended 12 Months Ended
Sep. 30, 2014
Dec. 31, 2013
Minority Interest [Line Items]
 
 
Beginning balance
$ 10.9 
$ 11.4 
Net Income
5.0 
5.7 
Distributions
5.2 
6.2 
Ending balance
229.6 
10.9 
Noncontrolling Interest [Member]
 
 
Minority Interest [Line Items]
 
 
ICRA noncontrolling interest
$ 218.90 
 
Components of Accumulated Other Comprehensive Income (Detail) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2014
Jun. 30, 2014
Dec. 31, 2013
Sep. 30, 2013
Jun. 30, 2013
Dec. 31, 2012
Supplemental Balance Sheet Information [Line Items]
 
 
 
 
 
 
Total accumulated other comprehensive loss
$ (133.6)
$ (47.3)
$ (54.6)
$ (100.2)
$ (149.9)
$ (82.1)
Components of Net Periodic Benefit Expense Related to Post-Retirement Plans (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2014
Sep. 30, 2013
Pension Plans Defined Benefit [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Service cost
$ 4.6 
$ 4.9 
$ 13.8 
$ 14.8 
Interest cost
4.2 
3.4 
12.4 
10.1 
Expected return on plan assets
(3.7)
(3.3)
(10.7)
(9.7)
Amortization of net actuarial loss from earlier periods
1.7 
2.8 
5.0 
8.2 
Amortization of net prior service costs from earlier periods
0.2 
0.2 
0.5 
0.5 
Net periodic expense
7.0 
8.0 
21.0 
23.9 
Benefit Plan Recognized
   
   
 
 
Other Postretirement Benefit Plans Defined Benefit [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Service cost
0.5 
0.5 
1.3 
1.3 
Interest cost
0.2 
0.2 
0.7 
0.6 
Expected return on plan assets
   
   
Amortization of net actuarial loss from earlier periods
   
   
Amortization of net prior service costs from earlier periods
   
   
0.2 
Net periodic expense
0.7 
0.7 
2.0 
2.1 
Benefit Plan Recognized
   
   
 
 
Pension and Other Post-Retirement Benefits - Additional Information (Detail) (USD $)
In Millions, unless otherwise specified
9 Months Ended
Sep. 30, 2014
Funded Pension Plans [Member]
 
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block [Line Items]
 
Defined benefit payment amount
$ 20.7 
Unfunded Pension Plans [Member]
 
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block [Line Items]
 
Estimated additional payments in 2013
1.8 
Defined Benefit Plan
2.6 
Other Postretirement Benefit Plans Defined Benefit [Member]
 
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block [Line Items]
 
Estimated additional payments in 2013
0.3 
Defined Benefit Plan
$ 0.3 
Summary of Total Indebtedness (Detail) (USD $)
Sep. 30, 2014
Dec. 31, 2013
Debt Instrument [Line Items]
 
 
2012 Facility
$ 0 
$ 0 
Total long-term debt
2,536,500,000 
2,101,800,000 
Series Two Thousand Five Dash One Notes [Member]
 
 
Debt Instrument [Line Items]
 
 
Notes Payable
   
310,300,000 
Series Two Thousand Seven Dash One Notes [Member]
 
 
Debt Instrument [Line Items]
 
 
Notes Payable
300,000,000 
300,000,000 
Twenty Ten Senior Notes [Member]
 
 
Debt Instrument [Line Items]
 
 
Notes Payable
495,900,000 
497,800,000 
Twenty Twelve Senior Notes [Member]
 
 
Debt Instrument [Line Items]
 
 
Notes Payable
496,800,000 
496,500,000 
Twenty Thirteen Senior Notes [Member]
 
 
Debt Instrument [Line Items]
 
 
Notes Payable
497,400,000 
497,200,000 
Two Thousand Fourteen Senior Notes Five Year [Member]
 
 
Debt Instrument [Line Items]
 
 
Notes Payable
448,000,000 
Two Thousand Fourteen Senior Notes Thirty Year [Member]
 
 
Debt Instrument [Line Items]
 
 
Notes Payable
$ 298,400,000 
$ 0 
Summary of Total Indebtedness (Parenthetical) (Detail) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2014
Dec. 31, 2013
Debt Instrument [Line Items]
 
 
Fair value of interest rate swap
$ 24.8 
$ 20.5 
Series Two Thousand Five Dash One Notes [Member]
 
 
Debt Instrument [Line Items]
 
 
Fair value of interest rate swap
   
10.3 
Twenty Ten Senior Notes [Member]
 
 
Debt Instrument [Line Items]
 
 
Fair value of interest rate swap
2.1 
Unamortized discount
2.0 
2.2 
Twenty Twelve Senior Notes [Member]
 
 
Debt Instrument [Line Items]
 
 
Unamortized discount
3.2 
3.5 
Twenty Thirteen Senior Notes [Member]
 
 
Debt Instrument [Line Items]
 
 
Unamortized discount
2.6 
2.8 
Two Thousand Fourteen Senior Notes Five Year [Member]
 
 
Debt Instrument [Line Items]
 
 
Fair value of interest rate swap
1.3 
Unamortized discount
0.7 
Two Thousand Fourteen Senior Notes Thirty Year [Member]
 
 
Debt Instrument [Line Items]
 
 
Fair value of interest rate swap
 
Unamortized discount
$ 1.6 
 
Indebtedness - Additional Information (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended 0 Months Ended 0 Months Ended
Sep. 30, 2014
Two Thousand Twelve Facility [Member]
Jul. 17, 2014
Two Thousand Fourteen Senior Notes Five Year [Member]
Jul. 16, 2014
Two Thousand Fourteen Senior Notes Five Year [Member]
Jul. 17, 2014
Two Thousand Fourteen Senior Notes Thirty Year [Member]
Jul. 16, 2014
Two Thousand Fourteen Senior Notes Thirty Year [Member]
Debt Instrument [Line Items]
 
 
 
 
 
Date of expiry of credit facility
Apr. 17, 2017 
 
 
 
 
Debt Instrument Face Amount
 
 
$ 450.0 
 
$ 300.0 
Debt Instrument Interest Rate Stated Percentage
 
 
275.00% 
 
525.00% 
Minimum Percentage Of Aggregate Principal Amount Of All Notes
 
2,500.00% 
 
2,500.00% 
 
Percentage Of Principal Amount Being Prepaid Plus Accrued And Unpaid Interest
 
10,000.00% 
 
10,000.00% 
 
Percentage Of Principal Amount Plus Accrued And Unpaid Interest To Date Of Purchase
 
10,100.00% 
 
10,100.00% 
 
Aggregate Amount Due At Maturity
 
 
50 
 
50 
Minimum Amount For Default On Senior Notes Payable
 
$ 50 
 
$ 50 
 
Summary of Components of Interest as Presented in Consolidated Statements of Operations (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2014
Sep. 30, 2013
Debt Instrument [Line Items]
 
 
 
 
Income
$ 1.8 
$ 1.6 
$ 5.1 
$ 4.0 
Expense on borrowings
(38.8)
(23.9)
(90.5)
(65.4)
Income (expense) on UTPs and other tax related liabilities
(1.7)
(2.1)
(3.2)
(6.7)
Legacy Tax
0.7 
0.7 
Capitalized
0.3 
0.4 
Total
$ (37.7)
$ (24.4)
$ (87.5)
$ (68.1)
Summary of Components of Interest as Presented in Consolidated Statements of Operations (Parenthetical) (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2014
Sep. 30, 2013
Debt Instrument [Line Items]
 
 
 
 
Reversal of accrued interest expense related to Legacy Tax Matter
 
 
$ 2.0 
 
Income
1.8 
1.6 
5.1 
4.0 
Spin Off Obligation [Member]
 
 
 
 
Debt Instrument [Line Items]
 
 
 
 
DebtExtinguishCosts
$ 11.0 
 
$ 11.0 
 
Fair Value and Carrying Value of Long-Term Debt (Detail) (USD $)
Sep. 30, 2014
Dec. 31, 2013
Debt Instrument [Line Items]
 
 
2012 Facility
$ 0 
$ 0 
Long Term Debt Noncurrent
2,536,500,000 
2,101,800,000 
Estimated Fair Value
2,727,600,000 
2,188,700,000 
Series Two Thousand Five Dash One Notes [Member]
 
 
Debt Instrument [Line Items]
 
 
Notes Payable
   
310,300,000 
Estimated Fair Value
   
319,200,000 
Series Two Thousand Seven Dash One Notes [Member]
 
 
Debt Instrument [Line Items]
 
 
Notes Payable
300,000,000 
300,000,000 
Estimated Fair Value
336,300,000 
334,700,000 
Twenty Ten Senior Notes [Member]
 
 
Debt Instrument [Line Items]
 
 
Notes Payable
495,900,000 
497,800,000 
Estimated Fair Value
559,900,000 
536,600,000 
Twenty Twelve Senior Notes [Member]
 
 
Debt Instrument [Line Items]
 
 
Notes Payable
496,800,000 
496,500,000 
Estimated Fair Value
527,600,000 
497,000,000 
Twenty Thirteen Senior Notes [Member]
 
 
Debt Instrument [Line Items]
 
 
Notes Payable
497,400,000 
497,200,000 
Estimated Fair Value
538,000,000 
501,200,000 
Two Thousand Fourteen Senior Notes Five Year [Member]
 
 
Debt Instrument [Line Items]
 
 
Notes Payable
448,000,000 
Estimated Fair Value
452,500,000 
Two Thousand Fourteen Senior Notes Thirty Year [Member]
 
 
Debt Instrument [Line Items]
 
 
Notes Payable
298,400,000 
Estimated Fair Value
$ 313,300,000 
$ 0 
Fair Value and Carrying Value of Long-Term Debt (Parenthetical) (Detail) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2014
Dec. 31, 2013
Debt Instrument [Line Items]
 
 
Fair value of interest rate swap
$ 24.8 
$ 20.5 
Twenty Ten Senior Notes [Member]
 
 
Debt Instrument [Line Items]
 
 
Fair value of interest rate swap
2.1 
Debt Instrument Unamortized Discount
2.0 
2.2 
Series Two Thousand Five Dash One Notes [Member]
 
 
Debt Instrument [Line Items]
 
 
Fair value of interest rate swap
   
10.3 
Two Thousand Fourteen Senior Notes Five Year [Member]
 
 
Debt Instrument [Line Items]
 
 
Fair value of interest rate swap
1.3 
Debt Instrument Unamortized Discount
0.7 
Two Thousand Fourteen Senior Notes Thirty Year [Member]
 
 
Debt Instrument [Line Items]
 
 
Fair value of interest rate swap
 
Debt Instrument Unamortized Discount
$ 1.6 
 
Contingencies - Additional Information (Detail) (USD $)
3 Months Ended 9 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2014
Sep. 30, 2013
Loss Contingencies [Line Items]
 
 
 
 
Legacy Tax Liabilities
$ 6,400,000 
$ 0 
$ 6,400,000 
$ 0 
Interest Income Expense Legacy Tax
700,000 
700,000 
Abu Dhabi Commercial Bank Litigation [Member]
 
 
 
 
Loss Contingencies [Line Items]
 
 
 
 
Number of plaintiffs
 
 
11 
 
Number of Plaintiffs Dismissed By Court
 
 
Number of Plaintiffs Granted
 
 
Number of plaintiffs filed motions for reconsideration
 
 
Number of Plaintiffs Ordered to Trial
14 
 
14 
 
Alleged Additional Compensatory Damages
76,000,000 
 
76,000,000 
 
Legacy Tax Matters [Member] |
litigation
 
 
 
 
Loss Contingencies [Line Items]
 
 
 
 
Liabilities for 2000 Distribution Agreement and Liabilities for Legacy Tax Matters, liability for the remaining potential exposure including accrued interest
10,800,000 
 
10,800,000 
 
CalPERS [Member] |
litigation
 
 
 
 
Loss Contingencies [Line Items]
 
 
 
 
Unrealized Losses Claimed by the Plaintiff
779,000,000 
 
779,000,000 
 
Compensatory damages arising from alleged losses
$ 1,300,000,000 
 
$ 1,300,000,000 
 
Financial Information by Segment (Detail) (USD $)
3 Months Ended 9 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2014
Sep. 30, 2013
Segment Reporting Information [Line Items]
 
 
 
 
Instersegment Revenue
$ 816,100,000 
$ 705,500,000 
$ 2,456,800,000 
$ 2,193,300,000 
Operating, SG&A
443,200,000 
390,600,000 
1,293,800,000 
1,200,500,000 
Adjusted Operating Income
372,900,000 
314,900,000 
1,163,000,000 
992,800,000 
Depreciation and amortization
23,200,000 
23,400,000 
68,600,000 
70,100,000 
Operating Income
349,700,000 
291,500,000 
1,094,400,000 
922,700,000 
Moodys Investors Service [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Instersegment Revenue
565,400,000 
497,700,000 
1,756,300,000 
1,594,100,000 
Operating, SG&A
260,800,000 
235,600,000 
775,400,000 
756,100,000 
Adjusted Operating Income
304,600,000 
262,100,000 
980,900,000 
838,000,000 
Depreciation and amortization
11,500,000 
12,100,000 
34,300,000 
34,900,000 
Operating Income
293,100,000 
250,000,000 
946,600,000 
803,100,000 
Moodys Analytics [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Instersegment Revenue
276,400,000 
230,400,000 
776,200,000 
665,200,000 
Operating, SG&A
208,100,000 
177,600,000 
594,100,000 
510,400,000 
Adjusted Operating Income
68,300,000 
52,800,000 
182,100,000 
154,800,000 
Depreciation and amortization
11,700,000 
11,300,000 
34,300,000 
35,200,000 
Operating Income
56,600,000 
41,500,000 
147,800,000 
 
Intersegment Elimination [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Instersegment Revenue
(25,700,000)
(22,600,000)
(75,700,000)
(66,000,000)
Operating, SG&A
(25,700,000)
(22,600,000)
(75,700,000)
(66,000,000)
Adjusted Operating Income
   
   
Depreciation and amortization
   
   
Operating Income
    
    
$ 0 
$ 0 
Revenue by Line of Business within Each Reportable Segment (Detail) (USD $)
3 Months Ended 9 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2014
Sep. 30, 2013
Segment Reporting Information [Line Items]
 
 
 
 
Revenues
$ 816,100,000 
$ 705,500,000 
$ 2,456,800,000 
$ 2,193,300,000 
Moodys Investors Service [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Revenues
565,400,000 
497,700,000 
1,756,300,000 
1,594,100,000 
Intersegment revenue
22,300,000 
19,600,000 
65,700,000 
57,500,000 
Moodys Investors Service [Member] |
Corporate Finance [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Revenues
260,700,000 
233,000,000 
846,000,000 
754,200,000 
Moodys Investors Service [Member] |
Structured Finance [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Revenues
102,100,000 
83,500,000 
308,000,000 
273,700,000 
Moodys Investors Service [Member] |
Financial Institutions [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Revenues
91,800,000 
78,900,000 
269,400,000 
249,900,000 
Moodys Investors Service [Member] |
Public Project And Infrastructure Finance [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Revenues
88,500,000 
82,700,000 
267,200,000 
258,800,000 
Moodys Investors Service [Member] |
External Revenues
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Revenues
543,100,000 
478,100,000 
1,690,600,000 
1,536,600,000 
Moodys Analytics [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Revenues
276,400,000 
230,400,000 
776,200,000 
665,200,000 
Intersegment revenue
3,400,000 
3,000,000 
10,000,000 
8,500,000 
Moodys Analytics [Member] |
Research Data And Analytics [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Revenues
146,800,000 
133,700,000 
432,400,000 
393,600,000 
Moodys Analytics [Member] |
Enterprise Risk Solutions [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Revenues
81,100,000 
64,400,000 
208,100,000 
177,600,000 
Moodys Analytics [Member] |
Professional Services [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Revenues
45,100,000 
29,300,000 
125,700,000 
85,500,000 
Moodys Analytics [Member] |
External Revenues
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Revenues
273,000,000 
227,400,000 
766,200,000 
656,700,000 
Intersegment Elimination [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Revenues
$ (25,700,000)
$ (22,600,000)
$ (75,700,000)
$ (66,000,000)
Consolidated Revenue Information by Geographic Area (Detail) (USD $)
3 Months Ended 9 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2014
Sep. 30, 2013
Segment Reporting Information [Line Items]
 
 
 
 
Instersegment Revenue
$ 816,100,000 
$ 705,500,000 
$ 2,456,800,000 
$ 2,193,300,000 
U S
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Instersegment Revenue
449,100,000 
391,000,000 
1,335,800,000 
1,209,300,000 
International Regions [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Instersegment Revenue
367,000,000 
314,500,000 
1,121,000,000 
984,000,000 
International Regions [Member] |
Europe Middle East And Africa [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Instersegment Revenue
231,400,000 
207,400,000 
715,300,000 
637,000,000 
International Regions [Member] |
Asia Pacific [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Instersegment Revenue
79,300,000 
62,100,000 
237,800,000 
205,800,000 
International Regions [Member] |
Americas [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Instersegment Revenue
$ 56,300,000 
$ 45,000,000 
$ 167,900,000 
$ 141,200,000 
Subsequent Events - Additional Information (Detail)
3 Months Ended
Sep. 30, 2014
Dividends Payable [Line Items]
 
Dividend declared, per share
$ 0.28 
Dividend declared, declaration date
Jul. 14, 2014 
Dividend declared, payable date
Sep. 10, 2014 
Dividend declared, record date
Aug. 20, 2014 
Other Non-Operating Interest (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2014
Sep. 30, 2013
Component of Other Expense Income Nonoperating [Line Items]
 
 
 
 
Foreign Currency
$ 7.6 
$ (5.8)
$ 1.5 
$ 6.9 
Legacy Tax Liabilities
6.4 
6.4 
Income Loss From Joint Venture
2.6 
2.5 
7.9 
7.4 
Other Non Operating Income Expense Other
(0.2)
(0.3)
(0.3)
(1.4)
Other non-operating income (expense), net
$ 16.4 
$ (3.6)
$ 15.5 
$ 12.9 
COMPREHENSIVE INCOME RECLASSIFICATION
Comprehensiveincome

NOTE 11. COMPREHENSIVE INCOME AND ACCUMULATED OTHER COMPREHENSIVE INCOME

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

Three Months Ended September 30, 2014Nine Months Ended September 30, 2014Affected line in the consolidated statement of operations
Gains/(losses) on foreign currency translation adjustments
Loss on foreign currency translation adjustment pursuant to ICRA step-acquisition$ -$ (4.4)ICRA gain
Total gains/(losses) on foreign currency translation adjustments - (4.4)
Pension and other retirement benefits
Amortization of actuarial losses and prior service costs included in net income (1.1) (3.6)Operating expense
Amortization of actuarial losses and prior service costs included in net income (0.7) (1.9)SG&A expense
Total before income taxes (1.8) (5.5)
Income tax effect of item above 0.7 3.0Provision for income taxes
Total pension and other retirement benefits (1.1) (2.5)
Total losses included in Net Income attributable to reclassifications out of AOCI$ (1.1)$ (6.9)
Three Months Ended September 30, 2013Nine Months Ended September 30, 2013Affected line in the consolidated statement of operations
Gains/(losses) on foreign translation adjustments
Liquidation of foreign subsidiary$ (1.3)$ (1.3)Other non-operating income (expense), net
Total gains/(losses) on foreign translation adjustments (1.3) (1.3)
Gains/(losses) on cash flow hedges
Interest rate swap derivative contracts$ -$ (0.7)Interest income (expense),net
Income tax effect of item above - 0.2Provision for income taxes
Total losses on cash flow hedges - (0.5)
Pension and other retirement benefits
Amortization of actuarial losses and prior service costs included in net income (2.0) (5.9)Operating expense
Amortization of actuarial losses and prior service costs included in net income (1.1) (3.1)SG&A expense
Total before income taxes (3.1) (9.0)
Income tax effect of item above 1.3 3.7Provision for income taxes
Total pension and other retirement benefits (1.8) (5.3)
Total losses included in Net Income attributable to reclassifications out of AOCI$ (3.1)$ (7.1)

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

Three Months Ended
September 30, 2014September 30, 2013
Gains/ (Losses) on Net Investment HedgesPension and Other Retirement BenefitsForeign Currency Translation AdjustmentsTotalGains/ (Losses) on Net Investment HedgesPension and Other Retirement BenefitsForeign Currency Translation AdjustmentsTotal
Balance June 30, $ (2.2)$ (55.9)$ 10.8$ (47.3)$ (1.9)$ (86.1)$ (61.9)$ (149.9)
Other comprehensive income/(loss) before reclassifications 12.1 - (99.5) (87.4) (1.5) - 48.1 46.6
Amounts reclassified from AOCI - 1.1 - 1.1 - 1.8 1.3 3.1
Other comprehensive income/(loss) 12.1 1.1 (99.5) (86.3) (1.5) 1.8 49.4 49.7
Balance September 30, $ 9.9$ (54.8)$ (88.7)$ (133.6)$ (3.4)$ (84.3)$ (12.5)$ (100.2)
Nine Months Ended
September 30, 2014September 30, 2013
Gains/ (Losses) on Net Investment HedgesPension and Other Retirement BenefitsForeign Currency Translation AdjustmentsTotalGains/ (Losses) on Net Investment HedgesPension and Other Retirement BenefitsForeign Currency Translation AdjustmentsTotal
Balance December 31,$ 1.5$ (53.2)$ (2.9)$ (54.6)$ (2.9)$ (90.1)$ 10.9$ (82.1)
Other comprehensive income/(loss) before reclassifications 8.4 (4.1) (90.2) (85.9) (1.0) 0.5 (24.7) (25.2)
Amounts reclassified from AOCI - 2.5 4.4 6.9 0.5 5.3 1.3 7.1
Net current period other comprehensive income/(loss) 8.4 (1.6) (85.8) (79.0) (0.5) 5.8 (23.4) (18.1)
Balance September 30, $ 9.9$ (54.8)$ (88.7)$ (133.6)$ (3.4)$ (84.3)$ (12.5)$ (100.2)
COMPREHENSIVE INCOME RECLASSIFICATIONS (Tables)
Three Months Ended September 30, 2014Nine Months Ended September 30, 2014Affected line in the consolidated statement of operations
Gains/(losses) on foreign currency translation adjustments
Loss on foreign currency translation adjustment pursuant to ICRA step-acquisition$ -$ (4.4)ICRA gain
Total gains/(losses) on foreign currency translation adjustments - (4.4)
Pension and other retirement benefits
Amortization of actuarial losses and prior service costs included in net income (1.1) (3.6)Operating expense
Amortization of actuarial losses and prior service costs included in net income (0.7) (1.9)SG&A expense
Total before income taxes (1.8) (5.5)
Income tax effect of item above 0.7 3.0Provision for income taxes
Total pension and other retirement benefits (1.1) (2.5)
Total losses included in Net Income attributable to reclassifications out of AOCI$ (1.1)$ (6.9)
Three Months Ended September 30, 2013Nine Months Ended September 30, 2013Affected line in the consolidated statement of operations
Gains/(losses) on foreign translation adjustments
Liquidation of foreign subsidiary$ (1.3)$ (1.3)Other non-operating income (expense), net
Total gains/(losses) on foreign translation adjustments (1.3) (1.3)
Gains/(losses) on cash flow hedges
Interest rate swap derivative contracts$ -$ (0.7)Interest income (expense),net
Income tax effect of item above - 0.2Provision for income taxes
Total losses on cash flow hedges - (0.5)
Pension and other retirement benefits
Amortization of actuarial losses and prior service costs included in net income (2.0) (5.9)Operating expense
Amortization of actuarial losses and prior service costs included in net income (1.1) (3.1)SG&A expense
Total before income taxes (3.1) (9.0)
Income tax effect of item above 1.3 3.7Provision for income taxes
Total pension and other retirement benefits (1.8) (5.3)
Total losses included in Net Income attributable to reclassifications out of AOCI$ (3.1)$ (7.1)
Three Months Ended
September 30, 2014September 30, 2013
Gains/ (Losses) on Net Investment HedgesPension and Other Retirement BenefitsForeign Currency Translation AdjustmentsTotalGains/ (Losses) on Net Investment HedgesPension and Other Retirement BenefitsForeign Currency Translation AdjustmentsTotal
Balance June 30, $ (2.2)$ (55.9)$ 10.8$ (47.3)$ (1.9)$ (86.1)$ (61.9)$ (149.9)
Other comprehensive income/(loss) before reclassifications 12.1 - (99.5) (87.4) (1.5) - 48.1 46.6
Amounts reclassified from AOCI - 1.1 - 1.1 - 1.8 1.3 3.1
Other comprehensive income/(loss) 12.1 1.1 (99.5) (86.3) (1.5) 1.8 49.4 49.7
Balance September 30, $ 9.9$ (54.8)$ (88.7)$ (133.6)$ (3.4)$ (84.3)$ (12.5)$ (100.2)
Nine Months Ended
September 30, 2014September 30, 2013
Gains/ (Losses) on Net Investment HedgesPension and Other Retirement BenefitsForeign Currency Translation AdjustmentsTotalGains/ (Losses) on Net Investment HedgesPension and Other Retirement BenefitsForeign Currency Translation AdjustmentsTotal
Balance December 31,$ 1.5$ (53.2)$ (2.9)$ (54.6)$ (2.9)$ (90.1)$ 10.9$ (82.1)
Other comprehensive income/(loss) before reclassifications 8.4 (4.1) (90.2) (85.9) (1.0) 0.5 (24.7) (25.2)
Amounts reclassified from AOCI - 2.5 4.4 6.9 0.5 5.3 1.3 7.1
Net current period other comprehensive income/(loss) 8.4 (1.6) (85.8) (79.0) (0.5) 5.8 (23.4) (18.1)
Balance September 30, $ 9.9$ (54.8)$ (88.7)$ (133.6)$ (3.4)$ (84.3)$ (12.5)$ (100.2)
Reclassification out of AOCI (Detail) (USD $)
3 Months Ended 9 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2014
Sep. 30, 2013
Cash flow and net investment hedges, net of tax:
 
 
 
 
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, before Tax
 
 
$ 0 
$ (700,000)
Other Comprehensive Income Loss Reclassification Adjustment From AOCI On Derivatives Tax
 
 
(200,000)
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, Net of Tax
 
 
(500,000)
Pension and Other Post-Retirement Benefits, net of tax:
 
 
 
 
Other Comprehensive Income Loss Pension And Other Postretirement Benefit Plans Net Unamortized Gain Loss Arising During Period Before Tax
(1,800,000)
(3,100,000)
(5,500,000)
(9,000,000)
Other Comprehensive Income Defined Benefit Plans Net Unamortized Gain Loss Arising During Period Tax
(700,000)
(1,300,000)
(3,000,000)
(3,700,000)
Amortization of actuarial losses and prior service costs included in net income
(1,100,000)
(1,800,000)
(2,500,000)
(5,300,000)
Total Reclassifications
(1,100,000)
(3,100,000)
(6,900,000)
(7,100,000)
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Reclassification Adjustment from AOCI, Realized upon Sale or Liquidation, before Tax
1,300,000 
4,400,000 
1.3 
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Reclassification Adjustment from AOCI, Realized upon Sale or Liquidation, Tax
Total Reclassifications
1,300,000 
4,400,000 
1.3 
Selling, General and Administrative Expenses [Member]
 
 
 
 
Pension and Other Post-Retirement Benefits, net of tax:
 
 
 
 
Other Comprehensive Income Loss Pension And Other Postretirement Benefit Plans Net Unamortized Gain Loss Arising During Period Before Tax
(700,000)
(1,100,000)
(1,900,000)
(3,100,000)
Operating Expense [Member]
 
 
 
 
Pension and Other Post-Retirement Benefits, net of tax:
 
 
 
 
Other Comprehensive Income Loss Pension And Other Postretirement Benefit Plans Net Unamortized Gain Loss Arising During Period Before Tax
(1,100,000)
(2,000,000)
(3,600,000)
(5,900,000)
Provisions for Income Taxes [Member]
 
 
 
 
Pension and Other Post-Retirement Benefits, net of tax:
 
 
 
 
Other Comprehensive Income Defined Benefit Plans Net Unamortized Gain Loss Arising During Period Tax
700,000 
1,300,000 
3,000,000 
3,700,000 
Icra Gain [Member]
 
 
 
 
Foreign Currency Translation Adjustment Reclassification Of Losses To Net Income Pursuant To Icra Step Acquisition Pre Tax
$ 0 
 
$ (4,400,000)
 
Changes in AOCI (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2014
Sep. 30, 2013
Beginning Balance
$ (47.3)
$ (149.9)
$ (54.6)
$ (82.1)
Change in Other Comprehensive Income
(87.4)
46.6 
(85.9)
(25.2)
Amounts reclassified from AOCI
(1.1)
(3.1)
(6.9)
(7.1)
Net current period other comprehensive income/(loss)
8.9 
0.1 
5.8 
3.6 
Ending Balance
(133.6)
(100.2)
(133.6)
(100.2)
Gains Losses On Cash Flow and Net Investment Hedges [Member]
 
 
 
 
Beginning Balance
(2.2)
(1.9)
1.5 
(2.9)
Change in Other Comprehensive Income
12.1 
(1.5)
8.4 
(1.0)
Amounts reclassified from AOCI
0.5 
Net current period other comprehensive income/(loss)
12.1 
(1.5)
8.4 
(0.5)
Ending Balance
9.9 
(3.4)
9.9 
(3.4)
Pension And Other Retirement Benefits [Member]
 
 
 
 
Beginning Balance
(55.9)
(86.1)
(53.2)
(90.1)
Change in Other Comprehensive Income
(4.1)
0.5 
Amounts reclassified from AOCI
1.1 
1.8 
2.5 
5.3 
Net current period other comprehensive income/(loss)
1.1 
1.8 
(1.6)
5.8 
Ending Balance
(54.8)
(84.3)
(54.8)
(84.3)
Foreign Currency Translation Adjustments [Member]
 
 
 
 
Beginning Balance
10.8 
(61.9)
(2.9)
10.9 
Change in Other Comprehensive Income
(99.5)
48.1 
(90.2)
(24.7)
Amounts reclassified from AOCI
1.3 
4.4 
1.3 
Net current period other comprehensive income/(loss)
(99.5)
49.4 
(85.8)
(23.4)
Ending Balance
$ (88.7)
$ (12.5)
$ (88.7)
$ (12.5)
Changes in Self Insurance Reserves (Detail) (USD $)
9 Months Ended 12 Months Ended
Sep. 30, 2014
Dec. 31, 2013
Disclosure Changes in Self Insurance Reserves [Abstract]
 
 
Beginning Balance
$ 27,600,000 
$ 55,800,000 
Accruals (reversals), net
(1,200,000)
(900,000)
Payments
(7,300,000)
(27,300,000)
Ending Balance
$ 19,100,000 
$ 27,600,000 
Other Balance Sheet and Statement of Operations Information Additional Detail (Detail) (USD $)
In Millions, unless otherwise specified
9 Months Ended
Sep. 30, 2014
Minority Interest Ownership Percentage By Noncontrolling Owners
3,300.00% 
Minimum Exercise Price
$ 46.0 
Call Option Premium
2,500.00% 
ACQUISITIONS
ACQUISITIONS

NOTE 7. ACQUISITIONS

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

Cash paid$ 86.0
Fair value of equity interest in ICRA prior to obtaining a controlling interest 124.9
Total consideration $ 210.9
The cash paid in the table above was funded by using Moody's non-U.S. cash on hand.
Current assets$ 26.0
Property and equipment, net 15.1
Intangible assets:
Trade name (36 year weighted average life)$ 46.8
Client relationships (19 year weighted average life) 33.8
Other (17 year weighted average life)* 18.5
Total intangible assets (26 year weighted average life) 99.1
Goodwill 291.1
Other assets 56.3
Liabilities (57.9)
Fair value of non-controlling interest assumed (218.8)
Net assets acquired$ 210.9
* Primarily consists of acquired technical knowhow and ratings methodologies

As of the date of the filing of this Form 10Q, the Company is still in the process of determining the fair value of certain real estate utilized by ICRA and deferred revenue. Current assets include acquired cash of approximately $5 million. Additionally, current assets includes gross accounts receivable of approximately $14 million, of which an immaterial amount is not expected to be collectible. Goodwill, which has been assigned to the MIS segment, is not deductible for tax.

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

ICRA will operate as its own reporting unit.

WebEquity Solutions, LLC

Amba Investment Services

On December 10, 2013, Copal Partners Limited, a majority-owned subsidiary of the Company, acquired 100% of Amba Investment Services, a provider of outsourced investment research and quantitative analytics for global financial institutions. Amba currently operates within the PS LOB of MA and will bolster the research and analytical capabilities offered by MA through Copal, a majority owned subsidiary which was acquired in December 2011.

The table below details the total consideration transferred to the sellers of Amba:

Cash paid $ 67.2
Contingent consideration liability assumed 4.3
Additional purchase price to be paid in 2014 based on final working capital acquired 0.1
Total fair value of consideration transferred$ 71.6

The cash payment to the sellers was funded by using Moody’s non-U.S. cash.

The purchase agreement contained a provision for a contingent cash payment to the sellers valued at $4.3 million at the acquisition date which was dependent on Amba achieving certain revenue targets for the period from the acquisition date through March 31, 2014. The target was met and a $4.3 million payment was made to the sellers in the third quarter of 2014.

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

Current assets$ 23.7
Property and equipment, net 0.4
Intangible assets:
Trade name (7 year weighted average life)$ 3.3
Client relationships (12 year weighted average life) 26.7
Other (3 year weighted average life) 1.6
Total intangible assets (11 year weighted average life) 31.6
Goodwill 29.2
Indemnification asset 10.4
Other assets 2.0
Liabilities assumed (25.7)
Net assets acquired$ 71.6

Current assets include acquired cash of approximately $16 million. Additionally, current assets includes gross accounts receivable of approximately $6 million, of which an immaterial amount is not expected to be collectible. The acquired goodwill, which has been assigned to the MA segment, will not be deductible for tax.

In connection with the acquisition, the Company assumed liabilities relating to certain UTPs. These UTPs 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 UTPs. Accordingly, the Company carries an indemnification asset on its consolidated balance sheet at September 30, 2014 and December 31, 2013.

As of the date of the acquisition, Amba was combined with Copal to form the Copal Amba reporting unit.

Current assets$ 3.0
Property and equipment, net 2.3
Intangible assets:
Client relationships (18 year weighted average life)$ 44.6
Software (15 year weighted average life) 11.5
Trade name (4 year weighted average life) 0.5
Total intangible assets (17 year weighted average life) 56.6
Goodwill 76.3
Liabilities assumed (7.6)
Net assets acquired$ 130.6

WebEquity Solutions, LLC

On July 17, 2014, a subsidiary of the Company acquired 100% of WebEquity Solutions, LLC, a leading provider of cloud-based loan origination solutions for financial institutions. The cash payment to the sellers of $130.6 million was funded using Moody’s U.S. cash. This acquisition will enhance MA’s risk management product portfolio.

The Company incurred approximately $2 million of costs directly related to this acquisition in the nine months ended September 30, 2014, which are recorded within selling, general and administrative expenses in the Company’s consolidated statements of operations.

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

Current assets include acquired cash of $0.6 million. Additionally, current assets includes gross accounts receivable of $0.7 million, of which an immaterial amount is not expected to be collectible. The acquired goodwill, which has been assigned to the MA segment, will be deductible for tax.

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

The amount of revenue and expenses for WebEquity from the date of acquisition through September 30, 2014 was not material.

ICRA Limited

On June 26, 2014, a subsidiary of the Company acquired 2,154,722 additional shares of ICRA Limited, a publicly traded company in India, pursuant to a conditional open tender offer which was initiated in February 2014. ICRA is a leading provider of credit ratings and research in India and will extend MIS’s reach in the growing domestic debt market in India as well as other emerging markets in the region. The acquisition of the additional shares increased Moody’s ownership stake in ICRA from 28.5% to 50.06%, resulting in a controlling interest in ICRA. Accordingly, the Company will consolidate ICRA’s financial statements and as of September 30, 2014, ICRA’s balance sheet was consolidated. Moody’s will consolidate ICRA’s financial statements on a three month lag, and accordingly, did not consolidate ICRA’s operating results for the third quarter and will consolidate only one quarter of ICRA’s operating results in 2014.

Prior to the acquisition of the additional shares, Moody’s accounted for its investment in ICRA on an equity basis whereby the Company recorded its proportional share of the investment’s net income or loss as part of other non-operating income (expense), net. The acquisition of the additional shares has resulted in the Company consolidating ICRA into its financial statements. As a result of this consolidation and in accordance with ASC 805, the carrying value of the Company’s equity investment in ICRA was remeasured to fair value as of the acquisition date resulting in a pre-tax gain of $102.8 million ($78.5 million after-tax) in the nine months ended September 30, 2014. The fair value of the Company’s equity investment was based on ICRA’s quoted market price on the date of acquisition.

The Company incurred approximately $2 million of costs directly related to the acquisition of ICRA during the nine months ended September 30, 2014 which are recorded within selling, general and administrative expenses in the Company’s consolidated statements of operations.

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

ACQUISITIONS (Tables)
Cash paid $ 67.2
Contingent consideration liability assumed 4.3
Additional purchase price to be paid in 2014 based on final working capital acquired 0.1
Total fair value of consideration transferred$ 71.6
Current assets$ 23.7
Property and equipment, net 0.4
Intangible assets:
Trade name (7 year weighted average life)$ 3.3
Client relationships (12 year weighted average life) 26.7
Other (3 year weighted average life) 1.6
Total intangible assets (11 year weighted average life) 31.6
Goodwill 29.2
Indemnification asset 10.4
Other assets 2.0
Liabilities assumed (25.7)
Net assets acquired$ 71.6
Cash paid$ 86.0
Fair value of equity interest in ICRA prior to obtaining a controlling interest 124.9
Total consideration $ 210.9
The cash paid in the table above was funded by using Moody's non-U.S. cash on hand.
Current assets$ 26.0
Property and equipment, net 15.1
Intangible assets:
Trade name (36 year weighted average life)$ 46.8
Client relationships (19 year weighted average life) 33.8
Other (17 year weighted average life)* 18.5
Total intangible assets (26 year weighted average life) 99.1
Goodwill 291.1
Other assets 56.3
Liabilities (57.9)
Fair value of non-controlling interest assumed (218.8)
Net assets acquired$ 210.9
* Primarily consists of acquired technical knowhow and ratings methodologies
Current assets$ 3.0
Property and equipment, net 2.3
Intangible assets:
Client relationships (18 year weighted average life)$ 44.6
Software (15 year weighted average life) 11.5
Trade name (4 year weighted average life) 0.5
Total intangible assets (17 year weighted average life) 56.6
Goodwill 76.3
Liabilities assumed (7.6)
Net assets acquired$ 130.6
Acquisitions - Additional Information (Detail) (USD $)
In Millions, except Share data, unless otherwise specified
3 Months Ended 9 Months Ended 0 Months Ended 0 Months Ended
Sep. 30, 2014
Sep. 30, 2013
Sep. 30, 2014
Sep. 30, 2013
Dec. 11, 2013
Amba
Dec. 10, 2013
Amba
Jun. 26, 2014
ICRA
Jul. 17, 2014
Web Equity Solutions [Member]
Jun. 26, 2014
After Tax Member [Member]
ICRA
Business Acquisition [Line Items]
 
 
 
 
 
 
 
 
 
Acquired cash
 
 
 
 
$ 16.0 
 
 
$ 0.6 
 
Amount related to transaction cost
 
 
 
 
 
 
2.0 
2.0 
 
Additional direct equity investment
 
 
 
 
 
10,000.00% 
 
10,000.00% 
 
Acquired receivables gross contractual amount
 
 
 
 
 
6.0 
14.0 
0.7 
 
Additional Offer Shares Acquired of ICRA Limited
 
 
 
 
 
 
2,154,722.0 
 
 
ICRA Gain
102.8 
 
 
 
 
78.5 
Ownership stake
 
 
 
 
 
 
5,006.00% 
 
 
Business Acquisition Cost Of Acquired Entity Cash Paid
 
 
 
 
$ 67.2 
 
$ 86.0 
$ 130.6 
 
Purchase Price Allocation (Detail) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2014
Dec. 31, 2013
Dec. 10, 2013
Amba
Dec. 10, 2013
Amba
Trade names
Dec. 10, 2013
Amba
Client relationships
Dec. 10, 2013
Amba
Other intangibles
Jun. 26, 2014
ICRA
Jun. 26, 2014
ICRA
Trade names
Jun. 26, 2014
ICRA
Client relationships
Jun. 26, 2014
ICRA
Other intangibles
Jul. 17, 2014
Web Equity Solutions [Member]
Jul. 17, 2014
Web Equity Solutions [Member]
Client relationships
Jul. 17, 2014
Web Equity Solutions [Member]
Software
Jul. 17, 2014
Web Equity Solutions [Member]
Other intangibles
Business Acquisition [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Current assets
 
 
$ 23.7 
 
 
 
$ 26.0 
 
 
 
$ 3.0 
 
 
 
Property and equipment, net
 
 
0.4 
 
 
 
15.1 
 
 
 
2.3 
 
 
 
Total intangible assets
 
 
31.6 
3.3 
26.7 
1.6 
99.1 
46.8 
33.8 
18.5 
56.6 
44.6 
11.5 
0.5 
Goodwill
1,000.3 
665.2 
29.2 
 
 
 
291.1 
 
 
 
76.3 
 
 
 
Indemnification asset
 
 
10.4 
 
 
 
 
 
 
 
 
 
 
 
Other assets
 
 
2.00 
 
 
 
56.30 
 
 
 
 
 
 
 
Liabilities assumed
 
 
(25.70)
 
 
 
(57.90)
 
 
 
(7.60)
 
 
 
Net assets acquired
 
 
71.6 
 
 
 
210.9 
 
 
 
130.6 
 
 
 
Fair value of non-controlling interest assumed
 
 
 
 
 
 
$ 218.80 
 
 
 
 
 
 
 
Purchase Price Allocation (Parenthetical) (Detail)
0 Months Ended
Dec. 11, 2013
Amba
Trade names
Dec. 11, 2013
Amba
Client relationships
Dec. 11, 2013
Amba
Other intangibles
Dec. 11, 2013
Amba
Total Intangible Assets
Jun. 26, 2014
ICRA
Trade names
Jun. 26, 2014
ICRA
Client relationships
Jun. 26, 2014
ICRA
Other intangibles
Jun. 26, 2014
ICRA
Total Intangible Assets
Jul. 17, 2014
Web Equity Solutions [Member]
Trade names
Jul. 17, 2014
Web Equity Solutions [Member]
Client relationships
Jul. 17, 2014
Web Equity Solutions [Member]
Software
Jul. 17, 2014
Web Equity Solutions [Member]
Total Intangible Assets
Business Acquisition [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average life of intangible assets acquired (in years)
7 years 
12 years 
3 years 
11 years 
36 years 
19 years 
17 years 
26 years 
4 years 
18 years 
15 years 
17 years 
Total Consideration Transferred to Sellers (Detail) (USD $)
In Millions, unless otherwise specified
0 Months Ended
Dec. 11, 2013
Amba
Jun. 26, 2014
ICRA
Jul. 17, 2014
Web Equity Solutions [Member]
Business Acquisition [Line Items]
 
 
 
Cash paid
$ 67.2 
$ 86.0 
$ 130.6 
Contingent consideration arising from acquisitions, Liabilities
(4.3)
 
 
Additional purchase price on working capital
0.1 
 
 
Total fair value of consideration transferred
 
210.9 
 
Business Combination Fair Value Of Equity Interest
$ 71.6 
$ 124.9 
 
Segment Information - Additional Information (Detail)
9 Months Ended
Sep. 30, 2014
Segment Reporting Information [Line Items]
 
Operating Segments