MOODYS CORP /DE/, 10-Q filed on 11/9/2017
Quarterly Report
Document and Entity Information
In Millions, unless otherwise specified
9 Months Ended
Sep. 30, 2017
Document Information [Line Items]
 
Document Type
10-Q 
Amendment Flag
false 
Document Period End Date
Sep. 30, 2017 
Document Fiscal Year Focus
2017 
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
191.1 
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)
In Millions, except Per Share data, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Revenues
$ 1,062.9 
$ 917.1 
$ 3,038.6 
$ 2,662.1 
Expenses
 
 
 
 
Operating
317.2 
253.2 
880.4 
761.3 
Selling, general and administrative
247.2 
225.3 
686.8 
683.2 
Restructuring
 
8.4 
 
12.0 
Depreciation and amortization
43.0 
32.7 
108.4 
93.8 
Acquisition-Related Expenses
10.1 
 
16.7 
 
Total expenses
617.5 
519.6 
1,692.3 
1,550.3 
Operating Income
445.4 
397.5 
1,346.3 
1,111.8 
Non-operating (expense) income, net
 
 
 
 
Interest income (expense), net
(48.1)
(35.4)
(135.5)
(103.8)
Other non-operating income (expense), net
(1.4)
6.9 
(2.5)
15.5 
Purchase price hedge gain
69.9 
 
111.1 
 
CCXI gains
 
 
59.7 
 
Total non-operating income (expense), net
20.4 
(28.5)
32.8 
(88.3)
Income before provisions for income taxes
465.8 
369.0 
1,379.1 
1,023.5 
Provision for income taxes
146.1 
112.4 
399.9 
322.2 
Net income
319.7 
256.6 
979.2 
701.3 
Less: Net income attributable to noncontrolling interests
2.4 
1.3 
4.1 
6.1 
Net income attributable to Moody's
$ 317.3 
$ 255.3 
$ 975.1 
$ 695.2 
Earnings per share attributable to Moody's common shareholders
 
 
 
 
Basic
$ 1.66 
$ 1.33 
$ 5.1 
$ 3.6 
Diluted
$ 1.63 
$ 1.31 
$ 5.02 
$ 3.55 
Weighted average number of shares outstanding
 
 
 
 
Basic
191.1 
191.7 
191.1 
193.3 
Diluted
194.1 
194.3 
194.1 
196.0 
Dividends declared per share attributable to Moody's common shareholders
$ 0.38 
$ 0.37 
$ 0.76 
$ 0.74 
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Net income
$ 319.7 
$ 256.6 
$ 979.2 
$ 701.3 
Foreign currency translation:
 
 
 
 
Foreign currency translation adjustments - Pre Tax
45.4 
(12.0)
94.9 
(9.4)
Foreign currency translation adjustment - Tax
6.4 
2.6 
19.5 
16.6 
Foreign currency translation adjustments - Net of Tax
51.8 
(9.4)
114.4 
7.2 
Cash flow hedges:
 
 
 
 
Net realized and unrealized gain (loss) on cash flow hedges - Pre Tax
5.2 
5.1 
10.0 
2.5 
Net realized and unrealized gain (loss) on cash flow hedges - Tax Amount
(2.0)
(1.9)
(3.8)
(1.0)
Net realized and unrealized gain (loss) on cash flow hedges - Net of Tax
3.2 
3.2 
6.2 
1.5 
Reclassification of losses (gains) included in net income - Pre Tax
(4.2)
(1.3)
(11.7)
(0.9)
Reclassification of losses included in net income - Tax Amount
1.6 
0.4 
4.9 
0.3 
Reclassification of losses (gains) included in net income- Net of Tax
(2.6)
(0.9)
(6.8)
(0.6)
Available for sale securities:
 
 
 
 
Net unrealized gains on available for sale securities - Pre Tax
0.5 
0.7 
1.6 
1.9 
Net unrealized gains on available for sale securities - Net of Tax
0.5 
0.7 
1.6 
1.9 
Reclassification of gains included in net income - Pre Tax
(2.2)
 
(2.2)
 
Reclassification of gains included in net income - Net of Tax
(2.2)
 
(2.2)
 
Pension and Other Retirement Benefits:
 
 
 
 
Amortization of actuarial losses and prior service costs included in net income - Pre Tax
2.1 
2.4 
6.4 
7.3 
Amortization of actuarial losses and prior service costs included in net income - Tax
(0.8)
(0.9)
(2.5)
(2.8)
Amortization of actuarial losses and prior service costs included in net income - Net of Tax
1.3 
1.5 
3.9 
4.5 
Net actuarial losses and prior service costs - Pre Tax
 
 
7.9 
5.3 
Net actuarial losses and prior service costs - Tax
 
 
(3.0)
(2.0)
Net actuarial losses and prior service costs - Net of Tax
 
 
4.9 
3.3 
Total other comprehensive income (loss) - Pre Tax
46.8 
(5.1)
106.9 
6.7 
Total other comprehensive income (loss) - Tax
5.2 
0.2 
15.1 
11.1 
Total other comprehensive income (loss) - Net of Tax
52.0 
(4.9)
122.0 
17.8 
Comprehensive income
371.7 
251.7 
1,101.2 
719.1 
Less: Comprehensive income attributable to noncontrolling interests and redeemable noncontrolling interest
3.1 
(14.8)
19.6 
(10.0)
Comprehensive income attributable to Moody's
$ 368.6 
$ 266.5 
$ 1,081.6 
$ 729.1 
CONSOLIDATED BALANCE SHEETS (USD $)
In Millions, unless otherwise specified
Sep. 30, 2017
Dec. 31, 2016
Current assets:
 
 
Cash and cash equivalents
$ 962.8 
$ 2,051.5 
Short-term investments
108.3 
173.4 
Accounts receivable, net of allowances of net of allowances of $32.2 in 2017 and $25.7 in 2016
1,007.3 
887.4 
Other current assets
200.5 
140.8 
Total current assets
2,278.9 
3,253.1 
Property and equipment, net of accumulated depreciation of $681.9 in 2017 and $595.5 in 2016
332.1 
325.9 
Goodwill
3,722.1 
1,023.6 
Intangible assets, net
1,633.1 
296.4 
Deferred tax assets, net
170.2 
316.1 
Other assets
168.5 
112.2 
Total assets
8,304.9 
5,327.3 
Current liabilities:
 
 
Accounts payable and accrued liabilities
577.5 
1,444.3 
Commercial paper
314.8 
 
Current portion of long-term debt
299.3 
300.0 
Deferred revenue
791.1 
683.9 
Total current liabilities
1,982.7 
2,428.2 
Non-current portion of deferred revenue
135.5 
134.1 
Long-term debt
5,107.3 
3,063.0 
Deferred tax liabilities, net
452.6 
104.3 
Unrecognized tax benefits
336.3 
199.8 
Other liabilities
447.3 
425.2 
Total liabilities
8,461.7 
6,354.6 
Contingencies (Note 14)
   
   
Shareholders' deficit
 
 
Preferred stock, par value $.01 per share; 10,000,000 shares authorized; no shares issued and outstanding
   
   
Capital surplus
495.6 
477.2 
Retained earnings
7,513.4 
6,688.9 
Treasury stock, at cost; 151,821,294 and 152,208,231 shares of common stock at June 30, 2017 and December 31, 2016, respectively
(8,123.7)
(8,029.6)
Accumulated other comprehensive loss
(257.8)
(364.9)
Total Moody's shareholders' deficit
(369.1)
(1,225.0)
Noncontrolling interests
212.3 
197.7 
Total shareholders' deficit
(156.8)
(1,027.3)
Total liabilities and shareholders' deficit
8,304.9 
5,327.3 
Series common stock
 
 
Shareholders' deficit
 
 
Common stock
   
   
Common Stock
 
 
Shareholders' deficit
 
 
Common stock
$ 3.4 
$ 3.4 
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)
In Millions, except Share data, unless otherwise specified
Sep. 30, 2017
Dec. 31, 2016
Accounts receivable, allowances
$ 32.2 
$ 25.7 
Property and equipment, accumulated depreciation
$ 681.9 
$ 595.5 
Preferred stock, par value
$ 0.01 
$ 0.01 
Preferred stock, shares authorized
10,000,000.0 
10,000,000.0 
Treasury stock, shares
151,821,294.0 
152,208,231.0 
Series common stock
 
 
Common stock, par value
$ 0.01 
$ 0.01 
Common stock, shares authorized
10,000,000.0 
1,000,000,000.0 
Common Stock
 
 
Common stock, par value
$ 0.01 
$ 0.01 
Common stock, shares authorized
1,000,000,000.0 
1,000,000,000.0 
Common stock, shares issued
342,902,272.0 
342,902,272.0 
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)
In Millions, unless otherwise specified
9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Cash flows from operating activities
 
 
Net income
$ 979.2 
$ 701.3 
Reconciliation of net income to net cash provided by operating activities:
 
 
Depreciation and amortization
108.4 
93.8 
Stock-based compensation expense
88.9 
72.8 
CCXI gains
(59.7)
 
Purchase price hedge gain
(111.1)
 
Deferred income taxes
161.4 
7.1 
Legacy Tax Matters
 
(1.6)
Changes in assets and liabilities:
 
 
Accounts receivable
(9.8)
(35.6)
Other current assets
(16.2)
51.1 
Other assets
11.4 
10.2 
Accounts payable and accrued liabilities
(834.3)
(54.6)
Deferred revenue
(19.3)
31.2 
Other liabilities
25.4 
15.1 
Unrecognized tax benefits and other non-current tax liabilities
18.4 
(1.8)
Net cash provided by operating activities
342.7 
889.0 
Cash flows from investing activities
 
 
Capital additions
(69.4)
(84.8)
Purchases of investments
(124.0)
(279.7)
Sales and maturities of investments
183.8 
438.7 
Cash paid for acquisitions, net of cash acquired and equity investments
(3,511.0)
(79.1)
Receipts from Purchase price hedge
111.1 
 
Receipts from settlements of net investment hedges
2.1 
2.5 
Net cash provided by (used in) investing activities
(3,407.4)
(2.4)
Cash flows from financing activities
 
 
Issuance of notes
2,291.9 
 
Repayments of notes
(300.0)
 
Issuance of commercial paper
1,437.5 
 
Repayments of commercial paper
(1,123.2)
 
Proceeds from stock-based compensation plans
49.3 
72.5 
Repurchase of shares related to stock-based compensation
(48.3)
(44.0)
Cost of treasury shares repurchased
(163.6)
(678.9)
Payment of Dividends
(217.8)
(214.5)
Payment of Dividends to noncontrolling interests
(3.2)
(4.6)
Payment for noncontrolling interest
(6.2)
(45.4)
Debt issuance costs and related fees
(19.7)
(0.1)
Net cash (used in) provided by financing activities
1,896.7 
(915.0)
Effect of exchange rate changes on cash and cash equivalents
79.3 
17.1 
Net increase (decrease) in cash and cash equivalents
(1,088.7)
(11.3)
Cash and cash equivalents, beginning of the period
2,051.5 
1,757.4 
Cash and cash equivalents, end of the period
$ 962.8 
$ 1,746.1 
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:
TERMDEFINITION
Acquisition-Related Amortization Amortization of acquired definite-lived intangible assets acquired by the Company from all business combination transactions
Acquisition-Related ExpensesConsists of expenses incurred to complete and integrate the acquisition of Bureau van Dijk for which integration will be a multi-year effort
Adjusted Diluted EPSDiluted EPS excluding the impact of the CCXI Gain, Acquisition-Related Expenses, Acquisition-Related Amortization and the Purchase Price Hedge Gain
Adjusted Net Income Net Income excluding the impact of the CCXI Gain, Acquisition-Related Expenses, Acquisition-Related Amortization and the Purchase Price Hedge Gain
Adjusted Operating Income Operating income excluding depreciation and amortization, Acquisition-Related Expenses and restructuring charges
Adjusted Operating Margin Adjusted Operating Income divided by revenue
AmericasRepresents countries within North and South America, excluding the U.S.
AOCIAccumulated other comprehensive income (loss); a separate component of shareholders’ (deficit) equity
ASCThe 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-PacificRepresents countries in Asia including but not limited to: Australia, China, India, Indonesia, Japan, Korea, Malaysia, Singapore, Sri Lanka and Thailand
ASUThe 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
BoardThe board of directors of the Company
BPSBasis points
Bureau van DijkBureau van Dijk Electronic Publishing, B.V., a global provider of business intelligence and company information; acquired by the Company on August 10, 2017 via the acquisition of Yellow Maple I B.V. an inderect parent of Bureau van Dijk
CCXI China Cheng Xin International Credit Rating Co. Ltd.; China’s first and largest domestic credit rating agency approved by the People's Bank of China; the Company acquired a 49% interest in 2006; currently Moody’s owns 30% of CCXI.
CCXI GainIn the first quarter of 2017 CCXI, as part of a strategic business realignment, issued additional capital to its majority shareholder in exchange for a ratings business wholly-owned by the majority shareholder and which has the right to rate a different class of debt instrument in the Chinese market. The capital issuance by CCXI in exchange for this ratings business diluted Moody’s ownership interest in CCXI to 30% of a larger business and resulted in a $59.7 million non-cash, non-taxable gain.  
CLOCollateralized loan obligation
CommissionEuropean Commission
Common StockThe Company’s common stock
CompanyMoody’s Corporation and its subsidiaries; MCO; Moody’s
CopalCopal Partners; an acquisition completed in November 2011; part of the MA segment; leading provider of research and analytical services to institutional investors
Copal AmbaOperating segment (rebranded as MAKS in 2016) created in January 2014 that consists of all operations from Copal and Amba. Part of the PS LOB within the MA reportable segment. Also a reporting unit.
CouncilCouncil of the European Union
CPCommercial Paper
CP NotesUnsecured commercial paper issued under the CP Program
CP ProgramA program entered into on August 3, 2016 allowing the Company to privately place CP up to a maximum of $1 billion for which the maturity may not exceed 397 days from the date of issue
CRAsCredit rating agencies
CSPPCorporate Sector Purchase Programme; quantative easing program implemented by the ECB. This program allows the central bank to purchase bonds issued by European companies, as well as provides access to the secondary bond market in which existing corporate bonds trade
D&ADepreciation and amortization
DBPPDefined benefit pension plans
Debt/EBITDARatio of Total Debt to EBITDA
EBITDAEarnings before interest, taxes, depreciation and amortization
ECBEuropean Central Bank
EMEARepresents countries within Europe, the Middle East and Africa
EPSEarnings per share
ERSThe enterprise risk solutions LOB within MA, which offers risk management software products as well as software implementation services and related risk management advisory engagements
ESMAEuropean Securities and Markets Authority
ETREffective tax rate
EUEuropean Union
EUREuros
Excess Tax BenefitsThe 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 ActThe Securities Exchange Act of 1934, as amended
FASBFinancial Accounting Standards Board
FIGFinancial institutions group; an LOB of MIS
Financial Reform ActDodd-Frank Wall Street Reform and Consumer Protection Act
Free Cash FlowNet cash provided by operating activities less cash paid for capital additions
FSTCFinancial Services Training and Certifications; part of the PS LOB and a reporting unit within the MA reportable segment; consists of online and classroom-based training services and CSI Global Education, Inc.
FXForeign exchange
GAAPU.S. Generally Accepted Accounting Principles
GBPBritish pounds
GGYGilliland Gold Young; a leading provider of advanced actuarial software for the global insurance industry. The Company acquired GGY on March 1, 2016; part of the ERS LOB and reporting unit within the MA reportable segment
ICRAICRA Limited; a leading provider of credit ratings and research in India. The Company previously held 28.5% equity ownership and in June 2014, increased that ownership stake to just over 50% through the acquisition of additional shares
ICTEASICRA Techno Analytics; formerly a wholly-owned subsidiary of ICRA; divested by ICRA in the fourth quarter of 2016
IRSInternal Revenue Service
ITInformation technology
KISKorea Investors Service, Inc; a leading Korean rating agency and consolidated subsidiary of the Company
KIS PricingKorea Investors Service Pricing, Inc; a leading Korean provider of fixed income securities pricing and consolidated subsidiary of the Company
LIBORLondon Interbank Offered Rate
LOBLine of business
M&AMergers and acquisitions
MAMoody’s Analytics – a reportable segment of MCO formed in January 2008 which provides a wide range of products and services that support financial analysis and risk management activities of institutional participants in global financial markets; consists of three LOBs – RD&A, ERS and PS
Make Whole AmountThe prepayment penalty amount relating to the Series 2007-1 Notes, 2010 Senior Notes, 2012 Senior Notes, 2013 Senior Notes, 2014 Senior Notes (5-year), 2014 Senior Notes (30-year), 2015 Senior Notes, 2017 Senior Notes, 2017 Private Placement Notes Due 2023 and 2017 Private Placement Notes Due 2028 which is a premium based on the excess, if any, of the discounted value of the remaining scheduled payments over the prepaid principal
MAKSMoody’s Analytics Knowledge Services; formerly known as Copal Amba; provides offshore research and analytic services to the global financial and corporate sectors; part of the PS LOB and a reporting unit within the MA reportable segment
MCOMoody’s Corporation and its subsidiaries; the Company; Moody’s
MD&AManagement’s Discussion and Analysis of Financial Condition and Results of Operations
MISMoody’s Investors Service – a reportable segment of MCO; consists of five LOBs – SFG, CFG, FIG, PPIF and MIS Other
MIS OtherConsists of non-ratings revenue from ICRA, KIS Pricing and KIS Research. These businesses are components of MIS; MIS Other is an LOB of MIS
Moody’sMoody’s Corporation and its subsidiaries; MCO; the Company
Net IncomeNet income attributable to Moody’s Corporation, which excludes net income from consolidated noncontrolling interests belonging to the minority interest holder
NMPercentage change is not meaningful
Non-GAAPA financial measure not in accordance with GAAP; these measures, when read in conjunction with the Company’s reported results, can provide useful supplemental information for investors analyzing period-to-period comparisons of the Company’s performance, facilitate comparisons to competitors’ operating results and provide greater transparency to investors of supplemental information used by management in its financial and operational decision making
NRSRONationally Recognized Statistical Rating Organization
OCIOther comprehensive income (loss); includes gains and losses on cash flow and net investment hedges, unrealized gains and losses on available for sale securities, certain gains and losses relating to pension and other retirement benefit obligations and foreign currency translation adjustments
Other Retirement PlanThe U.S. retirement healthcare and U.S. retirement life insurance plans
PPIFPublic, project and infrastructure finance; an LOB of MIS
Profit Participation PlanDefined contribution profit participation plan that covers substantially all U.S. employees of the Company
PSProfessional Services, an LOB within MA consisting of MAKS and FSTC that provides research and analytical services as well as financial training and certification programs
Purchase Price HedgeForeign currency collar and forward contracts entered by the Company to economically hedge the Bureau van Dijk euro denominated purchase price
Purchase Price Hedge GainGain on foreign currency collars to economically hedge the Bureau van Dijk euro denominated purchase price
RD&AResearch, 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. Also includes economic research, data, quantitative risk scores, other analytical tools that are produced within MA and business intelligence and company information products.
Reform ActCredit Rating Agency Reform Act of 2006
REITReal Estate Investment Trust
Relationship RevenueFor MIS represents monitoring of a rated debt obligation and/or entities that issue such obligations, as well as revenue from programs such as commercial paper, medium-term notes and shelf registrations. For MIS Other represents subscription-based revenue. For MA, represents subscription-based license and maintenance revenue
Retirement PlansMoody’s funded and unfunded pension plans, the healthcare plans and life insurance plans
SCDMSCDM Financial, a leading provider of analytical tools for participants in securitization markets. Moody’s acquired SCDM’s structured finance data and analytics business in February 2017
SECU.S. Securities and Exchange Commission
Securities ActSecurities Act of 1933, as amended
Series 2007-1 NotesPrincipal amount of $300 million, 6.06% senior unsecured notes due in September 2017 pursuant to the 2007 Agreement; prepaid in March 2017
Settlement ChargeCharge of $863.8 million recorded in the fourth quarter of 2016 related to an agreement entered into on January 13, 2017 with the U.S. Department of Justice and the attorneys general of 21 U.S states and the District of Columbia to resolve pending and potential civil claims related to the credit ratings that MIS assigned to certain structured finance instruments in the financial crisis era
SFGStructured finance group; an LOB of MIS
SG&ASelling, general and administrative expenses
Total DebtAll indebtedness of the Company as reflected on the consolidated balance sheets
Transaction RevenueFor MIS, represents the initial rating of a new debt issuance as well as other one-time fees. For MIS Other, represents revenue from professional services as well as data services, research and analytical engagements. For MA, represents software license fees and revenue from risk management advisory projects, training and certification services, and research and analytical engagements
U.K.United Kingdom
U.S.United States
USDU.S. dollar
UTBsUnrecognized tax benefits
UTPsUncertain tax positions
VSOEVendor specific objective evidence; as defined in the ASC, evidence of selling price limited to either of the following: the price charged for a deliverable when it is sold separately, or for a deliverable not yet being sold separately, the price established by management having the relevant authority
2007 AgreementNote purchase agreement dated September 7, 2007, relating to the Series 2007-1 Notes
2010 IndentureSupplemental indenture and related agreements dated August 19, 2010, relating to the 2010 Senior Notes
2010 Senior NotesPrincipal amount of $500 million, 5.50% senior unsecured notes due in September 2020 pursuant to the 2010 Indenture
2012 IndentureSupplemental indenture and related agreements dated August 18, 2012, relating to the 2012 Senior Notes
2012 Senior NotesPrincipal amount of $500 million, 4.50% senior unsecured notes due in September 2022 pursuant to the 2012 Indenture
2013 IndentureSupplemental indenture and related agreements dated August 12, 2013, relating to the 2013 Senior Notes
2013 Senior NotesPrincipal amount of the $500 million, 4.875% senior unsecured notes due in February 2024 pursuant to the 2013 Indenture
2014 IndentureSupplemental indenture and related agreements dated July 16, 2014, relating to the 2014 Senior Notes ( 5-year and 30-year)
2017 IndentureCollectively the Supplemental indenture and related agreements dated March 2, 2017, relating to the 2017 Floating Rate Senior Notes and 2017 Senior Notes and the Supplemental indenture and related agreements dated June 12, 2017, relating to the 2017 Private Placement Notes Due 2023 and 2017 Private Placement Notes Due 2028
2014 Senior Notes (5-Year)Principal amount of $450 million, 2.75% senior unsecured notes due in July 2019
2014 Senior Notes (30-Year)Principal amount of $600 million, 5.25% senior unsecured notes due in July 2044
2015 FacilityFive-year unsecured revolving credit facility, with capacity to borrow up to $1 billion
2015 IndentureSupplemental indenture and related agreements dated March 9, 2015, relating to the 2015 Senior Notes
2015 Senior NotesPrincipal amount €500 million, 1.75% senior unsecured notes issued March 9, 2015 and due in March 2027
2017 Bridge Credit FacilityBridge Credit Agreement entered into in May 2017 pursuant to the definitive agreement to acquire Bureau van Dijk; this facility was terminated in June 2017 upon issuance of the 2017 Private Placement Notes Due 2023 and the 2017 Private Placement Notes Due 2028
2017 Floating Rate Senior Notes Principal amount of $300 million, floating rate senior unsecured notes due in September 2018
2017 Private Placement Notes Due 2023Principal amount $500 million, 2.625% senior unsecured notes due January 15, 2023
2017 Private Placement Notes Due 2028Principal amount $500 million, 3.250% senior unsecured notes due January 15, 2028
2017 Senior Notes Principal amount of $500 million, 2.75% senior unsecured notes due in December 2021
2017 Term Loan$500 million three-year term loan facility entered into on June 6, 2017 for which the Company drew down $500 million on August 8, 2017 to fund the acquisition of Bureau van Dijk
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 (v) analytical and research services and (vi) business intelligence and company information products. Moody’s has two reportable segments: MIS and MA.

MIS, the credit rating agency, publishes credit ratings on a wide range of debt obligations and the entities that issue such obligations in markets worldwide. Revenue is primarily derived from the originators and issuers of such transactions who use MIS ratings in the distribution of their debt issues to investors. Additionally, MIS earns revenue from certain non-ratings-related operations which consist primarily of the distribution of research and financial instrument pricing services in the Asia-Pacific region as well as revenue from ICRA’s non-ratings operations. The revenue from these operations is included in the MIS Other LOB and is not material to the results of the MIS segment.

The MA segment develops a wide range of products and services that support financial analysis and risk management activities of institutional participants in global financial markets. Within its RD&A 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 and data and analytical tools such as quantitative credit risk scores as well as business intelligence and company information products. Within its ERS business, MA provides software solutions as well as related risk management services. The PS business provides analytical and research 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 2016 annual report on Form 10-K filed with the SEC on February 25, 2017. The results of interim periods are not necessarily indicative of results for the full year or any subsequent period. In the opinion of management, all adjustments (including normal recurring accruals) considered necessary for a fair presentation of financial position, results of operations and cash flows at the dates and for the periods presented have been included. The year-end consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America.

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

Adoption of New Accounting Standard

In the first quarter of 2017, the Company adopted ASU No. 2016-09 “Improvements to Employee Share-Based Payment Accounting”. As required by ASU 2016-09, Excess Tax Benefits or shortfalls recognized on stock-based compensation expense are reflected in the consolidated statement of operations as a component of the provision for income taxes on a prospective basis. Prior to the adoption of this ASU, Excess Tax Benefits and shortfalls were recorded to capital surplus within shareholders’ deficit. The impact of this adoption was an $7.7 million and $35.6 million benefit to the provision for income taxes for the three and nine months ended September 30, 2017, respectively.

Additionally, in accordance with this ASU, Excess Tax Benefits or shortfalls recognized on stock-based compensation are classified as operating cash flows in the consolidated statement of cash flows, and the Company has applied this provision on a retrospective basis. Under previous accounting guidance, the Excess Tax Benefits or shortfalls were shown as a reduction to operating activity and an increase to financing activity. Furthermore, the Company has elected to continue to estimate the number of stock-based awards expected to vest, rather than accounting for award forfeitures as they occur, to determine the amount of stock-based compensation cost recognized in each period. The impact to the Company’s statement of cash flows for the nine months ended September 30, 2016 relating to the adoption of this provision of the ASU is set forth in the table below:

(amounts in millions)As reported Nine Months Ended September 30, 2016Adoption AdjustmentNine Months Ended September 30, 2016 As adjusted
Net cash provided by operating activities$ 856.6 $ 32.4 $ 889.0
Net cash used in financing activities$ (882.6)$ (32.4)$ (915.0)
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (Tables)
Schedule of Change in Balance Sheets Item Due to Adoption of Debt Issuance Costs Policy
(amounts in millions)As reported Nine Months Ended September 30, 2016Adoption AdjustmentNine Months Ended September 30, 2016 As adjusted
Net cash provided by operating activities$ 856.6 $ 32.4 $ 889.0
Net cash used in financing activities$ (882.6)$ (32.4)$ (915.0)
Change in Financial Statement due to adoption of Policy (Details) (USD $)
In Millions, unless otherwise specified
9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Item Effected [Line Items]
 
 
Net Cash Provided By Used In Operating Activities
$ 342.7 
$ 889.0 
Net Cash Provided By Used In Financing Activities
1,896.7 
(915.0)
As Previously Reported [Member]
 
 
Item Effected [Line Items]
 
 
Net Cash Provided By Used In Operating Activities
 
856.6 
Net Cash Provided By Used In Financing Activities
 
(882.6)
Adoption Adjustment [Member]
 
 
Item Effected [Line Items]
 
 
Net Cash Provided By Used In Operating Activities
 
32.4 
Net Cash Provided By Used In Financing Activities
 
$ (32.4)
Description of Business and Basis of Presentation - Additional Information (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2017
Segment Reporting Information [Line Items]
 
 
Excess tax benefit effect of adoption adjustment on provision for income taxes
$ 7.7 
$ 35.6 
Number of Reporting Segments
 
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

In accordance with the Company’s early adoption of ASU 2017-04, “Simplifying the Test for Goodwill Impairment (Topic 350)”, the Company has modified its accounting policy regarding long-lived assets, including goodwill and other acquired intangible assets. All other significant accounting policies described in the Form 10-K for the year ended December 31, 2016 remain unchanged. The Company’s revised accounting policy regarding long-lived assets, including goodwill and other acquired intangible assets is disclosed below.

Long-Lived Assets, including Goodwill and Other Acquired Intangible Assets

Moody’s evaluates its goodwill for impairment at the reporting unit level, defined as an operating segment or one level below an operating segment, annually as of July 31 or more frequently if impairment indicators arise in accordance with ASC Topic 350.

The Company evaluates the recoverability of goodwill using a two-step impairment test approach at the reporting unit level. In the first step, the Company assesses various qualitative factors to determine whether the fair value of a reporting unit may be less than its carrying amount. If a determination is made that, based on the qualitative factors, an impairment does not exist, the Company is not required to perform further testing. If the aforementioned qualitative assessment results in the Company concluding that it is more likely than not that the fair value of a reporting unit may be less than its carrying amount, the fair value of the reporting unit will be determined and compared to its carrying value including goodwill. If the fair value of the reporting unit exceeds the carrying value of the net assets assigned to that unit, goodwill is not impaired and the Company is not required to perform further testing. If the fair value of the reporting unit is less than the carrying value, the Company will recognize the difference as an impairment charge.

The Company evaluates its reporting units for impairment on an annual basis, or more frequently if there are changes in the reporting structure of the Company due to acquisitions or realignments or if there are indicators of potential impairment. For the reporting units where the Company is consistently able to conclude that an impairment does not exist using only a qualitative approach, the Company’s accounting policy is to perform the second step of the aforementioned goodwill impairment assessment at least once every three years. Goodwill is assigned to a reporting unit at the date when an acquisition is integrated into one of the established reporting units, and is based on which reporting unit is expected to benefit from the synergies of the acquisition.

For purposes of assessing the recoverability of goodwill, the Company has seven primary reporting units at September 30, 2017: two within the Company’s ratings business (one for the ICRA business and one that encompasses all of Moody’s other ratings operations) and five reporting units within MA: RD&A, ERS, FSTC, MAKS and Bureau van Dijk. The RD&A reporting unit encompasses the distribution of investor-oriented research and data developed by MIS as part of its ratings process, in-depth research on major debt issuers, industry studies, economic research and commentary on topical events and credit analytic tools. The ERS reporting unit consists of credit risk management and compliance software that is sold on a license or subscription basis as well as related advisory services for implementation and maintenance. The FSTC reporting unit consists of the portion of the MA business that offers both credit training as well as other professional development training and certification services. The MAKS reporting unit consists of research and analytical services. The Bureau van Dijk reporting unit consists of business intelligence and company information products.

Amortizable intangible assets are reviewed for recoverability whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)
Long-Lived Assets, Including Goodwill and Other Acquired Intangible Assets

Long-Lived Assets, including Goodwill and Other Acquired Intangible Assets

Moody’s evaluates its goodwill for impairment at the reporting unit level, defined as an operating segment or one level below an operating segment, annually as of July 31 or more frequently if impairment indicators arise in accordance with ASC Topic 350.

The Company evaluates the recoverability of goodwill using a two-step impairment test approach at the reporting unit level. In the first step, the Company assesses various qualitative factors to determine whether the fair value of a reporting unit may be less than its carrying amount. If a determination is made that, based on the qualitative factors, an impairment does not exist, the Company is not required to perform further testing. If the aforementioned qualitative assessment results in the Company concluding that it is more likely than not that the fair value of a reporting unit may be less than its carrying amount, the fair value of the reporting unit will be determined and compared to its carrying value including goodwill. If the fair value of the reporting unit exceeds the carrying value of the net assets assigned to that unit, goodwill is not impaired and the Company is not required to perform further testing. If the fair value of the reporting unit is less than the carrying value, the Company will recognize the difference as an impairment charge.

The Company evaluates its reporting units for impairment on an annual basis, or more frequently if there are changes in the reporting structure of the Company due to acquisitions or realignments or if there are indicators of potential impairment. For the reporting units where the Company is consistently able to conclude that an impairment does not exist using only a qualitative approach, the Company’s accounting policy is to perform the second step of the aforementioned goodwill impairment assessment at least once every three years. Goodwill is assigned to a reporting unit at the date when an acquisition is integrated into one of the established reporting units, and is based on which reporting unit is expected to benefit from the synergies of the acquisition.

For purposes of assessing the recoverability of goodwill, the Company has seven primary reporting units at September 30, 2017: two within the Company’s ratings business (one for the ICRA business and one that encompasses all of Moody’s other ratings operations) and five reporting units within MA: RD&A, ERS, FSTC, MAKS and Bureau van Dijk. The RD&A reporting unit encompasses the distribution of investor-oriented research and data developed by MIS as part of its ratings process, in-depth research on major debt issuers, industry studies, economic research and commentary on topical events and credit analytic tools. The ERS reporting unit consists of credit risk management and compliance software that is sold on a license or subscription basis as well as related advisory services for implementation and maintenance. The FSTC reporting unit consists of the portion of the MA business that offers both credit training as well as other professional development training and certification services. The MAKS reporting unit consists of research and analytical services. The Bureau van Dijk reporting unit consists of business intelligence and company information products.

Amortizable intangible assets are reviewed for recoverability whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

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,
2017201620172016
Stock-based compensation cost$31.8$23.9$88.9$72.8
Tax benefit$10.3$7.8$28.8$23.7

During the first nine months of 2017, the Company granted 0.2 million employee stock options, which had a weighted average grant date fair value of $30.00 per share based on the Black-Scholes option-pricing model. The Company also granted 1.0 million shares of restricted stock in the first nine months of 2017, which had a weighted average grant date fair value of $113.39 per share. Both the employee stock options and restricted stock generally vest ratably over a four-year period. Additionally, the Company granted approximately 0.2 million shares of performance-based awards whereby the number of shares that ultimately vest are based on the achievement of certain non-market based performance metrics of the Company over a three-year period. The weighted average grant date fair value of these awards was $109.36 per share.

The following weighted average assumptions were used in determining the fair value for options granted in 2017:

Expected dividend yield1.34%
Expected stock volatility26.8%
Risk-free interest rate2.19%
Expected holding period6.5 years
Grant date fair value$30.00

Unrecognized compensation expense at September 30, 2017 was $8.0 million and $150.1 million for stock options and unvested restricted stock, respectively, which is expected to be recognized over a weighted average period of 1.4 years and 1.6 years, respectively. Additionally, there was $27.7 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 1.1 years.

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

Nine months ended
September 30,
Exercise of stock options:20172016
Proceeds from stock option exercises$44.0$67.7
Aggregate intrinsic value$75.7$67.8
Tax benefit realized upon exercise$26.9$23.1
Number of shares exercised1.01.4
Nine months ended
September 30,
Vesting of restricted stock:20172016
Fair value of shares vested$109.1$92.8
Tax benefit realized upon vesting$34.6$29.5
Number of shares vested1.01.0
Nine months ended
September 30,
Vesting of performance-based restricted stock:20172016
Fair value of shares vested$19.5$23.6
Tax benefit realized upon vesting$6.9$8.4
Number of shares vested0.20.2
STOCK-BASED COMPENSATION (Tables)
Three Months EndedNine months ended
September 30,September 30,
2017201620172016
Stock-based compensation cost$31.8$23.9$88.9$72.8
Tax benefit$10.3$7.8$28.8$23.7
Expected dividend yield1.34%
Expected stock volatility26.8%
Risk-free interest rate2.19%
Expected holding period6.5 years
Grant date fair value$30.00
Nine months ended
September 30,
Exercise of stock options:20172016
Proceeds from stock option exercises$44.0$67.7
Aggregate intrinsic value$75.7$67.8
Tax benefit realized upon exercise$26.9$23.1
Number of shares exercised1.01.4
Nine months ended
September 30,
Vesting of restricted stock:20172016
Fair value of shares vested$109.1$92.8
Tax benefit realized upon vesting$34.6$29.5
Number of shares vested1.01.0
Nine months ended
September 30,
Vesting of performance-based restricted stock:20172016
Fair value of shares vested$19.5$23.6
Tax benefit realized upon vesting$6.9$8.4
Number of shares vested0.20.2
Stock-Based Compensation Cost and Associated Tax Benefit (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Compensation Related Costs Share Based Payments Disclosure [Line Items]
 
 
 
 
Stock-based compensation cost
$ 31.8 
$ 23.9 
$ 88.9 
$ 72.8 
Tax benefit
$ 10.3 
$ 7.8 
$ 28.8 
$ 23.7 
Weighted Average Assumptions used in Determining Fair Value for Options Granted (Detail)
9 Months Ended
Sep. 30, 2017
Schedule Of Weighted Average Assumptions For Fair Values Of Stock Options [Line Items]
 
Expected dividend yield
1.34% 
Expected stock volatility
26.80% 
Risk-free interest rate
2.19% 
Expected holding period
6 years 6 months 
Grant date fair value
$ 30 
Stock Option Exercises and Restricted Stock Vesting (Detail) (USD $)
In Millions, unless otherwise specified
9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Employee Stock Options [Member]
 
 
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items]
 
 
Proceeds from stock option exercises
$ 44.0 
$ 67.7 
Aggregate intrinsic value
75.7 
67.8 
Tax benefit realized upon exercise/vesting
26.9 
23.1 
Number of shares exercised
1.0 
1.4 
Restricted Stock [Member]
 
 
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items]
 
 
Fair value of shares vested
109.1 
92.8 
Tax benefit realized upon exercise/vesting
34.6 
29.5 
Number of shares vested
1.0 
1.0 
Vesting of Performance Based Restricted Stock [Member]
 
 
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items]
 
 
Fair value of shares vested
19.5 
23.6 
Tax benefit realized upon exercise/vesting
$ 6.9 
$ 8.4 
Number of shares vested
0.2 
0.2 
Stock-Based Compensation - Additional Information (Detail) (USD $)
In Millions, except Per Share data, unless otherwise specified
9 Months Ended
Sep. 30, 2017
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
 
Employee stock options, granted
0.2 
Employee stock options, weighted average grant date fair value
$ 30 
Employee Stock Options [Member]
 
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
 
Vesting period (in years)
4 years 
Unrecognized compensation expense
$ 8.0 
Weighted average period to recognize expense
1 year 4 months 24 days 
Restricted Stock [Member]
 
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
 
Other than options, Shares granted
1.0 
Other than options, weighted average grant date fair value
$ 113.39 
Vesting period (in years)
4 years 
Unrecognized compensation expense
150.1 
Weighted average period to recognize expense
1 year 7 months 6 days 
Performance Based Restricted Stock [Member]
 
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
 
Other than options, Shares granted
0.2 
Other than options, weighted average grant date fair value
$ 109.36 
Vesting period (in years)
3 years 
Unrecognized compensation expense
$ 27.7 
Weighted average period to recognize expense
1 year 1 month 6 days 
INCOME TAXES
INCOME TAXES

NOTE 4. INCOME TAXES

Moody’s effective tax rate was 31.4% and 30.5% for the three months ended September 30, 2017 and 2016, respectively and 29.0% and 31.5% for the nine month periods ended September 30, 2017 and 2016, respectively. The increase for the three months ended September 30, 2017 is primarily due to the tax effects of a purchase price hedge gain and higher tax rates on non-US income, partially offset by Excess Tax Benefits of $7.7 million on stock-based compensation, as further discussed in Note 1 above, which favorably benefited the ETR by approximately 160 BPS. The decrease in the ETR for the nine months ended September 30, 2017 was primarily due to Excess Tax Benefits of $35.6 million on stock-based compensation, as further discussed in Note 1, which favorably benefited the ETR by approximately 260 BPS coupled with the non-taxable CCXI Gain as discussed in Note 11 below.

The Company classifies interest related to UTBs in interest expense, net in its consolidated statements of operations. Penalties, if incurred, would be recognized in other non-operating (expense) income, net. The Company had a net increase in its UTBs of $122.7 million ($122.6 million net of federal tax) during the third quarter of 2017 and a net increase in its UTBs during the first nine months of 2017 of $136.6 million ($136.9 million net of federal tax). The increase in reserves is primarily due to the recording of UTBs in connection with the Bureau van Dijk acquisition.

Moody’s Corporation and subsidiaries are subject to U.S. federal income tax as well as income tax in various state, local and foreign jurisdictions. The Company’s U.S. federal income tax returns for the years 2011 and 2012 are under examination and its returns for 2013, 2014 and 2015 remain open to examination. The Company’s New York State tax returns for 2011 through 2014 are currently under examination and the Company’s New York City tax return for 2014 is currently under examination. The Company’s U.K. tax return for 2012 is currently under examination and its returns for 2013, 2014 and 2015 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.

On March 30, 2016, the FASB issued Accounting Standards Update (ASU) 2016-09, Improvements to Employee Share Based Payment Accounting as more fully discussed in Note 1 to the condensed consolidated financial statements. The new guidance requires all tax effects related to share based payments to be recorded through the income statement. The Company has adopted the new guidance as of the first quarter of 2017 and expects the adoption to result in a reduction in its income tax provision of approximately $40 million, or an approximate 225BPS reduction in the Company’s ETR for the full year of 2017.

In the first quarter of 2017, the Company adopted Accounting Standards Update 2016-16, Accounting for Income Taxes: Intra-Entity Asset Transfers of Assets Other than Inventory. Under previous guidance, the tax effects of intra-entity asset transfers (intercompany sales) were deferred until the transferred asset was sold to a third party or otherwise recovered through use. The new guidance eliminates the exception for all intra-entity sales of assets other than inventory. Upon adoption, a cumulative-effect adjustment is recorded in retained earnings as of the beginning of the period of adoption. The net impact upon adoption is a reduction to retained earnings of $4.6 million. The Company does not expect any material impact on its future operations as a result of the adoption of this guidance.

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

Nine months ended
September 30,
20172016
Income taxes paid*$194.7$242.8
*The decrease in income taxes paid is primarily due to tax benefits relating to the Settlement Charge
INCOME TAXES (Tables)
Income Taxes Paid
Nine months ended
September 30,
20172016
Income taxes paid*$194.7$242.8
*The decrease in income taxes paid is primarily due to tax benefits relating to the Settlement Charge
Income Taxes - Additional Information (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Income Tax Contingency [Line Items]
 
 
 
 
Effective tax rate
31.40% 
30.50% 
29.00% 
31.50% 
Overall increase (decrease) in unrecognized tax benefits (UTPs)
$ 122.7 
 
$ 136.6 
 
Expected Benefit to provision for income taxes for full-year 2017 due to change in accounting principle
 
 
40.0 
 
Expected change to tax rate for full-year 2017 due to change in accounting principle
 
 
2.25% 
 
Excess tax benefit effect of adoption adjustment on provision for income taxes
7.7 
 
35.6 
 
Excess tax benefit effect of adoption change on provision for income taxes rates
1.60% 
 
2.60% 
 
Net of federal tax benefit [Member]
 
 
 
 
Income Tax Contingency [Line Items]
 
 
 
 
Overall increase (decrease) in unrecognized tax benefits (UTPs)
122.6 
 
136.9 
 
Retained Earnings [Member]
 
 
 
 
Income Tax Contingency [Line Items]
 
 
 
 
Effect of adoption adjustment Reduction to retained earnings
$ 4.6 
 
$ 4.6 
 
WEIGHTED AVERAGE SHARES OUTSTANDING
WEIGHTED AVERAGE SHARES OUTSTANDING

NOTE 4. WEIGHTED AVERAGE SHARES OUTSTANDING

Below is a reconciliation of basic to diluted shares outstanding:

Three Months EndedNine months ended
September 30,September 30,
2017201620172016
Basic191.1191.7191.1193.3
Dilutive effect of shares issuable under stock-based compensation plans3.02.63.02.7
Diluted194.1194.3194.1196.0
Anti-dilutive options to purchase common shares and restricted stock as well as contingently issuable restricted stock which are excluded from the table above0.50.50.60.9

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, 2017 and 2016. The assumed proceeds in 2017 do not include Excess Tax Benefits pursuant to the prospective adoption of ASU 2016-09 in the first quarter of 2017. The assumed proceeds in 2016 include Excess Tax Benefits.

The decrease in the diluted shares outstanding in the nine months ended September 30, 2017 primarily reflects treasury share repurchases under the Company’s Board authorized share repurchase program.

WEIGHTED AVERAGE SHARES OUTSTANDING (Tables)
Reconciliation of Basic to Diluted Shares Outstanding
Three Months EndedNine months ended
September 30,September 30,
2017201620172016
Basic191.1191.7191.1193.3
Dilutive effect of shares issuable under stock-based compensation plans3.02.63.02.7
Diluted194.1194.3194.1196.0
Anti-dilutive options to purchase common shares and restricted stock as well as contingently issuable restricted stock which are excluded from the table above0.50.50.60.9
Reconciliation of Basic to Diluted Shares Outstanding (Detail)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Schedule Of Earnings Per Share Basic And Diluted By Common Class [Line Items]
 
 
 
 
Basic
191.1 
191.7 
191.1 
193.3 
Dilutive effect of shares issuable under stock-based compensation plans
3.0 
2.6 
3.0 
2.7 
Diluted
194.1 
194.3 
194.1 
196.0 
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 
0.5 
0.6 
0.9 
CASH EQUIVALENT AND INVESTMENTS
CASH EQUIVALENT AND INVESTMENT

NOTE 5. CASH EQUIVALENTS AND INVESTMENTS

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

As of September 30, 2017
Balance sheet location
CostGross Unrealized GainsFair ValueCash and cash equivalentsShort-term investmentsOther assets
Money market mutual funds$18.5$-$18.5$18.5$-$-
Certificates of deposit and money market deposit accounts (1)$253.2$ - $253.2$142.6$108.3$2.3
Fixed maturity and open ended mutual funds (2)$21.8$5.2$27.0$-$-$27.0
As of December 31, 2016
Balance sheet location
CostGross Unrealized GainsFair ValueCash and cash equivalentsShort-term investmentsOther assets
Money market mutual funds$189.0 $ -$189.0$189.0 $ - $ -
Certificates of deposit and money market deposit accounts (1)$1,190.5 $ -$1,190.5$1,017.0 $ 173.4 $ 0.1
Fixed maturity and open ended mutual funds (2)$27.0 $ 5.6$32.6$- $ - $ 32.6
(1) Consists of time deposits and money market deposit accounts. The remaining contractual maturities for the certificates of deposits classified as short-term investments were one to 12 months at both September 30, 2017 and December 31, 2016. The remaining contractual maturities for the certificates of deposits classified in other assets are 13 to 51 months at September 30, 2017 and 13 months to 15 months at December 31, 2016. Time deposits with a maturity of less than 90 days at time of purchase are classified as cash and cash equivalents.
(2) Consists of investments in fixed maturity mutual funds and open-ended mutual funds. The remaining contractual maturities for the fixed maturity instruments range from nine months to ten months and six months to 19 months at September 30, 2017 and December 31, 2016 respectively.

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

CASH EQUIVALENT AND INVESTMENTS (Tables)
Schedule of Cash, Cash Equivalents and Investments
As of September 30, 2017
Balance sheet location
CostGross Unrealized GainsFair ValueCash and cash equivalentsShort-term investmentsOther assets
Money market mutual funds$18.5$-$18.5$18.5$-$-
Certificates of deposit and money market deposit accounts (1)$253.2$ - $253.2$142.6$108.3$2.3
Fixed maturity and open ended mutual funds (2)$21.8$5.2$27.0$-$-$27.0
As of December 31, 2016
Balance sheet location
CostGross Unrealized GainsFair ValueCash and cash equivalentsShort-term investmentsOther assets
Money market mutual funds$189.0 $ -$189.0$189.0 $ - $ -
Certificates of deposit and money market deposit accounts (1)$1,190.5 $ -$1,190.5$1,017.0 $ 173.4 $ 0.1
Fixed maturity and open ended mutual funds (2)$27.0 $ 5.6$32.6$- $ - $ 32.6
(1) Consists of time deposits and money market deposit accounts. The remaining contractual maturities for the certificates of deposits classified as short-term investments were one to 12 months at both September 30, 2017 and December 31, 2016. The remaining contractual maturities for the certificates of deposits classified in other assets are 13 to 51 months at September 30, 2017 and 13 months to 15 months at December 31, 2016. Time deposits with a maturity of less than 90 days at time of purchase are classified as cash and cash equivalents.
(2) Consists of investments in fixed maturity mutual funds and open-ended mutual funds. The remaining contractual maturities for the fixed maturity instruments range from nine months to ten months and six months to 19 months at September 30, 2017 and December 31, 2016 respectively.
Cash Equivalent and Investments (Detail) (USD $)
In Millions, unless otherwise specified
9 Months Ended 12 Months Ended
Sep. 30, 2017
Dec. 31, 2016
Sep. 30, 2016
Dec. 31, 2015
Sep. 30, 2017
Money Market [Member]
Dec. 31, 2016
Money Market [Member]
Sep. 30, 2017
Certificates Of Deposit [Member]
Dec. 31, 2016
Certificates Of Deposit [Member]
Sep. 30, 2017
Fixed Maturity and Mutual Funds [Member]
Dec. 31, 2016
Fixed Maturity and Mutual Funds [Member]
Cash and Cash Equivalents [Line Items]
 
 
 
 
 
 
 
 
 
 
Cost
 
 
 
 
$ 18.5 
$ 189.0 
$ 253.2 
$ 1,190.5 
$ 21.8 
$ 27.0 
Gross unrealized gain
 
 
 
 
 
 
 
 
5.2 
5.6 
Fair value
27.0 
32.6 
 
 
18.5 
189.0 
253.2 
1,190.5 
27.0 
32.6 
Cash and cash equivalents
962.8 
2,051.5 
1,746.1 
1,757.4 
18.5 
189.0 
142.6 
1,017.0 
 
 
Short-term investments
108.3 
173.4 
 
 
 
 
108.3 
173.4 
 
 
Other assets
 
 
 
 
 
 
$ 2.3 
$ 0.1 
$ 27.0 
$ 32.6 
Cash Equivalent and Investments (Parenthetical) (Detail)
9 Months Ended 12 Months Ended
Sep. 30, 2017
Dec. 31, 2016
Minimum [Member] |
Certificates Of Deposit [Member] |
Short Term Investments [Member]
 
 
Schedule Of Investments [Line Items]
 
 
Securities Maturity period
1 month 
1 month 
Minimum [Member] |
Certificates Of Deposit [Member] |
Other Assets [Member]
 
 
Schedule Of Investments [Line Items]
 
 
Securities Maturity period
13 months 
13 months 
Minimum [Member] |
Fixed Maturity and Mutual Funds [Member]
 
 
Schedule Of Investments [Line Items]
 
 
Securities Maturity period
9 months 
6 months 
Maximum [Member] |
Certificates Of Deposit [Member] |
Short Term Investments [Member]
 
 
Schedule Of Investments [Line Items]
 
 
Securities Maturity period
12 months 
12 months 
Maximum [Member] |
Certificates Of Deposit [Member] |
Cash And Cash Equivalents [Member]
 
 
Schedule Of Investments [Line Items]
 
 
Securities Maturity period
90 days 
 
Maximum [Member] |
Certificates Of Deposit [Member] |
Other Assets [Member]
 
 
Schedule Of Investments [Line Items]
 
 
Securities Maturity period
51 months 
15 months 
Maximum [Member] |
Fixed Maturity and Mutual Funds [Member]
 
 
Schedule Of Investments [Line Items]
 
 
Securities Maturity period
10 months 
19 months 
ACQUISITIONS
ACQUISITIONS

NOTE 7. ACQUISITIONS

The business combinations described below are accounted for using the acquisition method of accounting whereby assets acquired and liabilities assumed were recognized at fair value on the date of the transaction. Any excess of the purchase price over the fair value of the assets acquired and liabilities assumed was recorded to goodwill.

Bureau van Dijk

On August 10, 2017, a subsidiary of the Company acquired 100% of Yellow Maple I B.V., an indirect parent company of Bureau van Dijk Electronic Publishing B.V., a global provider of business intelligence and company information products. The cash payment of $3,542.0 million was funded with a combination of cash on hand, primarily offshore, and new debt financing. The acquisition extends Moody’s position as a leader in risk data and analytical insight.

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

(Amounts in millions)
Current assets$160.5
Property and equipment, net4.2
Intangible assets:
Customer relationships (23 year weighted average life)$998.7
Product technology (12 year weighted average life)258.5
Trade name (18 year weighted average life)82.2
Database (10 year weighted average life)13.0
Total intangible assets (21 year weighted average life)1,352.4
Goodwill2,636.1
Other assets4.3
Liabilities
Deferred revenue$(101.1)
Accounts payable and accrued liabilities(48.3)
Deferred tax liabilities, net(348.1)
Other liabilities (118.0)
Total liabilities(615.5)
Net assets acquired$3,542.0

The Company has performed a preliminary valuation analysis of the fair market value of assets and liabilities of the Bureau van Dijk business. The final purchase price allocation will be determined when the Company has completed and fully reviewed the detailed valuations. The final allocation could differ materially from the preliminary allocation. The final allocation may include changes in allocations to acquired intangible assets as well as goodwill and other changes to assets and liabilities including reserves for uncertain tax positions and deferred tax liabilities. The estimated useful lives of acquired intangibles assets are also preliminary.

Current assets in the table above include acquired cash of $36 million. Additionally, current assets include accounts receivable of approximately $90 million (net of an allowance for uncollectible accounts of $1.4 million).

The amount of Bureau van Dijk's revenue and Net Income from August 10, 2017 through September 30, 2017 included in the Company's statement of operations was $30.3 million and ($2.0) million, respectively. The acquired deferred revenue balance was reduced by $53 million as part of acquisition accounting to establish the fair value of deferred revenue. This will reduce reported revenue by $53 million over the remaining contractual period of in progress customer arrangements assumed as of the acquisition date. This resulted in an approximate $14 million reduction in reported revenue for the period from August 10, 2017 to September 30, 2017. Amortization of acquired intangible assets was approximately $10 million for the period from August 10, 2017 through September 30, 2017.

Goodwill

Under the acquisition method of accounting for business combinations, the excess of the purchase price over the fair value of the net assets acquired is allocated to goodwill. Goodwill typically results through expected synergies from combining operations of an acquiree and an acquirer, anticipated new customer acquisition and products, as well as from intangible assets that do not qualify for separate recognition. The goodwill recognized as a result of this acquisition includes, among other things, the value of combining the complementary product portfolios of the Company and Bureau van Dijk which is expected to extend the Company’s reach to new and evolving market segments as well as cost savings synergies, expected new customer acquisitions and products.

Goodwill, which has been assigned to the MA segment, is not deductible for tax purposes.

Bureau van Dijk will be a separate reporting unit for purposes of the Company’s annual goodwill impairment assessment.

Other Liabilities Assumed

In connection with the acquisition, the Company assumed liabilities relating to UTBs as well as deferred tax liabilities which relate to acquired intangible assets. These items are included in other liabilities in the table above.

Transaction and Non-Recurring Integration Costs.

In connection with the acquisition, the Company incurred transaction and non-recurring integration costs (Acquisition-Related Expenses) through the first nine months of 2017. Acquisition-Related Expenses of $16.7 million were comprised of transaction costs (consisting primarily of legal and advisory costs) of $8.5 million and non-recurring integration costs of $8.2 million for the nine months ended September 30, 2017.

Supplementary Unaudited Pro Forma Information

Supplemental information on an unaudited pro forma basis is presented below for the nine months ended September 30, 2017 and 2016 as if the acquisition of Bureau van Dijk occurred on January 1, 2016. The pro forma financial information is presented for comparative purposes only, based on certain estimates and assumptions, which the Company believes to be reasonable but not necessarily indicative of future results of operations or the results that would have been reported if the acquisition had been completed at January 1, 2016. The unaudited pro forma information includes amortization of acquired intangible assets, based on the preliminary purchase price allocation and an estimate of useful lives reflected above, and incremental financing costs resulting from the acquisition, net of income tax, which was estimated using the weighted average statutory tax rates in effect in the jurisdiction for which the pro forma adjustment relates.

(Amounts in millions)For the nine months ended September 30, 2017For the nine months ended September 30, 2016
Proforma Revenue$ 3,226.9 $ 2,821.8
Proforma Net Income attributable to Moody's$ 965.9 $ 695.1

The unaudited pro forma results do not include any anticipated cost savings or other effects of the planned integration of Bureau van Dijk. Accordingly, the pro forma results above are not necessarily indicative of the results that would have been reported if the acquisition had occurred on the dates indicated, nor are the pro forma results indicative of results which may occur in the future. The Bureau van Dijk results included in the above have been converted to U.S. GAAP from IFRS as issued by the IASB and have been translated to USD at rates in effect for the periods presented. The Bureau van Dijk amounts in the pro forma results include a reduction in revenue of approximately $50 million and $1 million relating to a fair value adjustment to deferred revenue required as part of acquisition accounting for the nine months ended September 30, 2016 and 2017, respectively.

The following acquisitions occurred prior to the third quarter 2017. The Company has not presented proforma combined results for these acquisitions because the impact on previously reported statements of operations would not have been material. Additionally, the near term impact to the Company’s operations and cash flows is not material.

SCDM Financial

On February 13, 2017, a subsidiary of the Company acquired the structured finance data and analytics business of SCDM Financial. The aggregate purchase price was not material and the near term impact to the Company’s operations and cash flow is not expected to be material. This business unit operates in the MA reportable segment and goodwill related to this acquisition has been allocated to the RD&A reporting unit.

Korea Investor Service (KIS)

In July 2016, a subsidiary of the Company acquired the non-controlling interest of KIS and additional shares of KIS Pricing. The aggregate purchase price was not material and the near term impact to the Company’s operations and cash flow is not expected to be material. KIS and KIS Pricing are a part of the MIS segment.

Gilliland Gold Young (GGY)

On March 1, 2016, subsidiaries of the Company acquired 100% of GGY, a leading provider of advanced actuarial software for the life insurance industry. The cash payments noted in the table below were funded with cash on hand. The acquisition of GGY will allow MA to provide an industry-leading enterprise risk offering for global life insurers and reinsurers.

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

(amounts in millions)
Cash paid at closing$83.4
Additional consideration paid to sellers in the third quarter 2016(1)3.1
Total consideration $86.5
(1) Represents additional consideration paid to the sellers for amounts withheld at closing pending the completion of certain administrative matters

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

Current assets$11.7
Property and equipment, net2.0
Indemnification assets1.5
Intangible assets:
Trade name (19 year weighted average life)$3.7
Client relationships (21 year weighted average life)13.8
Software (7 year weighted average life)16.6
Total intangible assets (14 year weighted average life)34.1
Goodwill59.4
Liabilities(22.2)
Net assets acquired$86.5

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

In connection with the acquisition, the Company assumed liabilities relating to UTPs and certain other tax exposures which are included in the liabilities assumed in the table above. The sellers have contractually indemnified the Company against any potential payments that may have to be made regarding these amounts. Accordingly, the Company carries an indemnification asset on its consolidated balance sheet at June 30, 2017 and December 31, 2016.

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

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

ACQUISITIONS (Tables)
(amounts in millions)
Cash paid at closing$83.4
Additional consideration paid to sellers in the third quarter 2016(1)3.1
Total consideration $86.5
(1) Represents additional consideration paid to the sellers for amounts withheld at closing pending the completion of certain administrative matters
Current assets$11.7
Property and equipment, net2.0
Indemnification assets1.5
Intangible assets:
Trade name (19 year weighted average life)$3.7
Client relationships (21 year weighted average life)13.8
Software (7 year weighted average life)16.6
Total intangible assets (14 year weighted average life)34.1
Goodwill59.4
Liabilities(22.2)
Net assets acquired$86.5
(Amounts in millions)
Current assets$160.5
Property and equipment, net4.2
Intangible assets:
Customer relationships (23 year weighted average life)$998.7
Product technology (12 year weighted average life)258.5
Trade name (18 year weighted average life)82.2
Database (10 year weighted average life)13.0
Total intangible assets (21 year weighted average life)1,352.4
Goodwill2,636.1
Other assets4.3
Liabilities
Deferred revenue$(101.1)
Accounts payable and accrued liabilities(48.3)
Deferred tax liabilities, net(348.1)
Other liabilities (118.0)
Total liabilities(615.5)
Net assets acquired$3,542.0
(Amounts in millions)For the nine months ended September 30, 2017For the nine months ended September 30, 2016
Proforma Revenue$ 3,226.9 $ 2,821.8
Proforma Net Income attributable to Moody's$ 965.9 $ 695.1
Total Consideration Transferred to Sellers (Detail) (Gilliland Gold Young (GGY) [Member], USD $)
In Millions, unless otherwise specified
0 Months Ended
Mar. 1, 2016
Gilliland Gold Young (GGY) [Member]
 
Business Acquisition [Line Items]
 
Cash paid
$ 83.4 
Additional consideration to be paid to seller in 2016
3.1 
Total consideration
$ 86.5 
Purchase Price Allocation (Detail) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2017
Dec. 31, 2016
Dec. 31, 2015
Mar. 1, 2016
Gilliland Gold Young (GGY) [Member]
Mar. 1, 2016
Gilliland Gold Young (GGY) [Member]
Trade Names [Member]
Mar. 1, 2016
Gilliland Gold Young (GGY) [Member]
Customer Relationships [Member]
Mar. 1, 2016
Gilliland Gold Young (GGY) [Member]
Software [Member]
Aug. 10, 2017
Bureau van Dijk (BvD) [Member]
Aug. 10, 2017
Bureau van Dijk (BvD) [Member]
Trade Names [Member]
Aug. 10, 2017
Bureau van Dijk (BvD) [Member]
Customer Relationships [Member]
Aug. 10, 2017
Bureau van Dijk (BvD) [Member]
Databases [Member]
Aug. 10, 2017
Bureau van Dijk (BvD) [Member]
Product Technology [Member]
Business Acquisition [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
Current assets
 
 
 
$ 11.7 
 
 
 
$ 160.5 
 
 
 
 
Property and equipment, net
 
 
 
2.0 
 
 
 
4.2 
 
 
 
 
Indemnification asset
16.8 
16.5 
 
1.5 
 
 
 
 
 
 
 
 
Total intangible assets
 
 
 
34.1 
3.7 
13.8 
16.6 
1,352.4 
82.2 
998.7 
13.0 
258.5 
Goodwill
3,722.1 
1,023.6 
976.3 
59.4 
 
 
 
2,636.1 
 
 
 
 
Other assets
 
 
 
 
 
 
 
4.3 
 
 
 
 
Deferred revenue
 
 
 
 
 
 
 
(101.1)
 
 
 
 
Accounts payable and accrued liabilities
 
 
 
 
 
 
 
(48.3)
 
 
 
 
Deferred tax liabilities, net
 
 
 
 
 
 
 
(348.1)
 
 
 
 
Other liabilities
 
 
 
 
 
 
 
(118.0)
 
 
 
 
Liabilities assumed
 
 
 
(22.2)
 
 
 
(615.5)
 
 
 
 
Net assets acquired
 
 
 
$ 86.5 
 
 
 
$ 3,542.0 
 
 
 
 
Purchase Price Allocation (Parenthetical) (Detail)
0 Months Ended
Mar. 1, 2016
Gilliland Gold Young (GGY) [Member]
Mar. 1, 2016
Gilliland Gold Young (GGY) [Member]
Trade Names [Member]
Mar. 1, 2016
Gilliland Gold Young (GGY) [Member]
Customer Relationships [Member]
Mar. 1, 2016
Gilliland Gold Young (GGY) [Member]
Software [Member]
Aug. 10, 2017
Bureau van Dijk (BvD) [Member]
Aug. 10, 2017
Bureau van Dijk (BvD) [Member]
Trade Names [Member]
Aug. 10, 2017
Bureau van Dijk (BvD) [Member]
Customer Relationships [Member]
Aug. 10, 2017
Bureau van Dijk (BvD) [Member]
Databases [Member]
Aug. 10, 2017
Bureau van Dijk (BvD) [Member]
Product Technology [Member]
Business Acquisition [Line Items]
 
 
 
 
 
 
 
 
 
Weighted average life of intangible assets acquired (in years)
14 years 
19 years 
21 years 
7 years 
21 years 
18 years 
23 years 
10 years 
12 years 
BvD Pro Forma Information (Detail) (Bureau van Dijk [Member], USD $)
In Millions, unless otherwise specified
9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Bureau van Dijk [Member]
 
 
Business Acquisition [Line Items]
 
 
Proforma revenue
$ 3,226.9 
$ 2,821.8 
Proforma net income from continuing operations
$ 965.9 
$ 695.1 
Acquisitions - Additional Information (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended 0 Months Ended 0 Months Ended 2 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Mar. 1, 2016
Gilliland Gold Young [Member]
Mar. 31, 2016
Gilliland Gold Young [Member]
Dec. 31, 2015
Gilliland Gold Young [Member]
Aug. 10, 2017
Bureau van Dijk (BvD) [Member]
Sep. 30, 2017
Bureau van Dijk (BvD) [Member]
Sep. 30, 2017
Bureau van Dijk (BvD) [Member]
Sep. 30, 2016
Bureau van Dijk (BvD) [Member]
Business Acquisition [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Acquired cash
 
 
 
 
$ 7.5 
 
 
$ 36.0 
 
 
 
Amount related to transaction cost
 
 
 
 
0.9 
0.3 
0.6 
 
8.5 
8.5 
 
Percentage of interests acquired
 
 
 
 
100.00% 
 
 
100.00% 
 
 
 
Acquired account receivables
 
 
 
 
2.9 
 
 
90.0 
 
 
 
Cash paid for acquisitions
 
 
 
 
83.4 
 
 
3,542.0 
 
 
 
Revenue since Acquisition Date, Actual
 
 
 
 
 
 
 
 
30.3 
 
 
Net income from continuing operations since Acquisition Date, Actual
 
 
 
 
 
 
 
 
(2.0)
 
 
Integration Costs
 
 
 
 
 
 
 
 
 
8.2 
 
Reduction in Revenue included in net income
 
 
 
 
 
 
 
 
14.0 
1.0 
50.0 
Reduction in Deferred Revenue to establish the fair value
 
 
 
 
 
 
 
 
53.0 
 
 
Acquisition-Related Expenses
10.1 
 
16.7 
 
 
 
 
 
 
 
 
Allowance for Uncollectible Accounts
 
 
 
 
 
 
 
1.4 
 
 
 
Amortization expense
$ 18.8 
$ 8.9 
$ 35.9 
$ 25.5 
 
 
 
 
$ 10.0 
 
 
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

NOTE 7. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

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

Derivatives and non-derivative instruments designated as accounting hedges:

Interest Rate Swaps

The Company has entered into interest rate swaps to convert the fixed interest rate on certain of its long-term debt 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 long-term debt, 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 debt. The changes in the fair value of the swaps and the underlying hedged item generally offset and the net cash settlements on the swaps are recorded each period within interest (expense) income, net in the Company’s consolidated statement of operations.

The following table summarizes the Company’s interest rate swaps designated as fair value hedges:

Hedged ItemNature of SwapNotional AmountFloating Interest Rate
As of September 30, 2017As of December 31, 2016
2010 Senior Notes due 2020Pay Floating/Receive Fixed$500.0$500.03-month LIBOR
2014 Senior Notes due 2019Pay Floating/Receive Fixed$450.0$450.03-month LIBOR
2012 Senior Notes due 2022Pay Floating/Receive Fixed$80.0$80.03-month LIBOR

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

Amount of income 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 Operations2017201620172016
Interest rate swaps Interest expense, net$1.6$2.7$5.8$8.8

Cross-currency swaps

In conjunction with the issuance of the 2015 Senior Notes, the Company entered into a cross-currency swap to exchange €100 million for U.S. dollars on the date of the settlement of the notes. The purpose of this cross-currency swap is to mitigate FX risk on the remaining principal balance on the 2015 Senior Notes that was not designated as a net investment hedge as more fully discussed below. Under the terms of the swap, the Company will pay the counterparty interest on the $110.5 million received at 3.945% per annum and the counterparty will pay the Company interest on the €100 million paid at 1.75% per annum. These interest payments will be settled in March of each year, beginning in 2016, until either the maturity of the cross-currency swap in 2027 or upon early termination at the discretion of the Company. The principal payments on this cross currency swap will be settled in 2027, concurrent with the repayment of the 2015 Senior Notes at maturity or upon early termination at the discretion of the Company. In March 2016, the Company designated these cross-currency swaps as cash flow hedges. Accordingly, changes in fair value subsequent to the date the swaps were designated as cash flow hedges will initially be recognized in OCI. Gains and losses on the swaps initially recognized in OCI will be reclassified to the statement of operations in the period in which changes in the underlying hedged item affects net income. Ineffectiveness, if any, will be recognized in other non-operating (expense) income, net in the Company’s consolidated statement of operations.

Forward start interest rate swaps

In the second quarter of 2017, in conjunction with the then-forecasted issuance of the Company’s 2017 Private Placement Notes Due 2023 and 2017 Private Placement Notes Due 2028, the Company entered into forward starting interest rate swaps to mitigate the risk of changes in the semi-annual interest payments attributable to changes in market interest rates during the period leading up to the forecasted debt issuance. The swaps were terminated on June 5, 2017 following the issuance of the aforementioned notes and the losses recorded to OCI upon settlement were not material.

Net investment hedges

The Company entered into foreign currency forward contracts that are designated as net investment hedges and additionally has designated €400 million of the 2015 Senior Notes Due 2027 as a net investment hedge. These hedges are intended to mitigate FX exposure related to non-U.S. dollar net investments in certain foreign subsidiaries against changes in foreign exchange rates. These net investment hedges are designated as accounting hedges under the applicable sections of Topic 815 of the ASC. This net investment hedge will end upon the repayment of the notes in 2027 unless terminated earlier at the discretion of the Company.

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

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

September 30,December 31,
20172016
Notional amount of net investment hedges:SellBuySellBuy
Contracts to sell GBP for euros£--£22.126.4

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

Amount of Gain/(Loss) Recognized in AOCI on Derivative (Effective Portion)Amount of Gain/(Loss) Reclassified from AOCI into Income (Effective Portion)Amount of Gain/(Loss) Recognized Directly into Income (Ineffective Portion), net of Tax
Derivatives and non-derivative instruments in Net Investment Hedging RelationshipsThree Months EndedThree Months EndedThree Months Ended
September 30,September 30,September 30,
201720162017201620172016
FX forwards$0.4$(0.2)$-$-$-$-
Long-term debt(10.3)(3.2)----
Total net investment hedges$(9.9)$(3.4)$-$-$-$-
Derivatives in cash flow hedging relationships
Cross currency swap$3.2$3.2$2.6*$0.9*$-$-
Total cash flow hedges$3.2$3.2$2.6$0.9$-$-
Total $(6.7)$(0.2)$2.6$0.9$-$-
Amount of Gain/(Loss) Recognized in AOCI on Derivative (Effective Portion)Amount of Gain/(Loss) Reclassified from AOCI into Income (Effective Portion)Amount of Gain/(Loss) Recognized Directly into Income (Ineffective Portion), net of Tax
Derivatives and non-derivative instruments in Net Investment Hedging RelationshipsNine months endedNine months endedNine months ended
September 30,September 30,September 30,
201720162017201620172016
FX forwards$1.2$(13.4)$-$-$-$-
Long-term debt(31.4)(9.2)----
Total net investment hedges$(30.2)$(22.6)$-$-$-$-
Derivatives in cash flow hedging relationships
Cross currency swap$6.6$1.5$7.9*$0.6*$0.4**$-
Interest rate contracts(0.4)-(1.1)---
Total cash flow hedges$6.2$1.5$6.8$0.6$0.4$-
Total $(24.0)$(21.1)$6.8$0.6$0.4$-
*For the three and nine months ended September 30, 2017, reflects $4.2 million and $12.8 million in gains, respectively, recorded in other non-operating income (expense), net and $1.6 million and $4.9 million relating to the tax effect of the aforementioned item. For the three and nine months ended September 30, 2016, reflects $1.3 million and $0.9 million in losses, respectively, recorded in other non-operating income (expense), net and $0.4 million and $0.3 million relating to the tax effect of the aforementioned item.
**For the nine months ended September 30, 2017, reflects $0.7 million in gains recorded in other non-operating income (expense), net and $0.3 million relating to the tax effect of the aforementioned item.

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

Cumulative
Gains/(Losses), net of tax
September 30,December 31,
Net investment hedges20172016
FX forwards $23.5$22.3
Long-term debt (18.9)12.5
Total net gains on net investment hedges$4.6$34.8
Cash flow hedges
Interest rate contracts$(0.4)$(1.1)
Cross currency swap1.52.8
Total net gains on cash flow hedges1.11.7
Total net gains in AOCI$5.7$36.5

Derivatives not designated as accounting hedges:

Foreign exchange forwards

The Company also enters into foreign exchange forwards to mitigate the change in fair value on certain assets and liabilities denominated in currencies other than a subsidiary’s functional currency. These forward contracts are not designated as accounting hedges under the applicable sections of Topic 815 of the ASC. Accordingly, changes in the fair value of these contracts are recognized immediately in other non-operating (expense), income net in the Company’s consolidated statements of operations along with the FX gain or loss recognized on the assets and liabilities denominated in a currency other than the subsidiary’s functional currency. These contracts have expiration dates at various times through February 2018.

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

September 30,December 31,
20172016
Notional amount of currency pair:SellBuySellBuy
Contracts to sell USD for GBP$471.0£356.1$-£-
Contracts to sell USD for JPY$24.3¥2,700.0$-$-
Contracts to sell USD for CAD$51.9C$64.0$-C$-
Contracts to purchase euros with Singapore dollarsS$ - - S$55.536.0
Contracts to sell euros for GBP - £ - 31.0£25.9
Contracts to sell USD for Singapore dollars$38.9S$53.0$-S$-
Contracts to sell euros for USD6.0$7.2-$-
Contracts to sell USD for EUR$54.345.0$--

Foreign Exchange Options and forward contracts relating to the acquisition of Bureau van Dijk

The Company entered into a foreign currency collar consisting of option contracts to economically hedge the Bureau van Dijk euro denominated purchase price (as discussed further in Note 7). These option contracts are not designated as accounting hedges under the applicable sections of Topic 815 of the ASC. The foreign currency option contracts consisted of separate put and call options each in the aggregate notional amount of €2.7 billion. This collar was settled at the end of July 2017, in advance of the August 10, 2017 closing of the Bureau van Dijk acquisition in connection with the Company’s funding mechanics to fund the euro denominated purchase price.

The Company entered into foreign exchange forwards to hedge the Bureau van Dijk purchase price for the period from the settlement of the aforementioned foreign currency collar until the closing date on August 10, 2017. These forward contracts were not designated as accounting hedges under the applicable sections of Topic 815 of the ASC. The foreign exchange contracts were to sell $2.8 billion and buy €2.4 billion and sell $41 million and buy £31 million.

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

Three Months EndedNine months ended
September 30,September 30,
Derivatives not designated as accounting hedgesLocation on Statement of Operations2017201620172016
Foreign exchange forwardsOther non-operating income (expense), net$9.2$(0.7)$14.0$(5.9)
Foreign exchange forwards relating to Bureau van Dijk acquisitionPurchase Price Hedge Gain10.3-10.3-
FX collar relating to Bureau van Dijk acquisitionPurchase Price Hedge Gain59.6-100.8-
$79.1$(0.7)$125.1$(5.9)

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

Derivative and Non-derivative Instruments
Balance Sheet LocationSeptember 30, 2017December 31, 2016
Assets:
Derivatives designated as accounting hedges:
FX forwards on net investment in certain foreign subsidiariesOther current assets$-$0.6
Cross-currency swapOther assets7.3-
Interest rate swapsOther assets5.07.0
Total derivatives designated as accounting hedges$12.3$7.6
Derivatives not designated as accounting hedges:
FX forwards on certain assets and liabilitiesOther current assets10.6-
Total assets$22.9$7.6
Liabilities:
Derivatives designated as accounting hedges:
Cross-currency swapOther liabilities$-$3.8
Interest rate swapsOther liabilities1.00.8
Total derivatives designated as accounting hedges1.04.6
Non-derivative instrument designated as accounting hedge:
Long-term debt designated as net investment hedgeLong-term debt472.9421.9
Derivatives not designated as accounting hedges:
FX forwards on certain assets and liabilitiesAccounts payable and accrued liabilities4.10.8
Total liabilities$478.0$427.3
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Tables)
Hedged ItemNature of SwapNotional AmountFloating Interest Rate
As of September 30, 2017As of December 31, 2016
2010 Senior Notes due 2020Pay Floating/Receive Fixed$500.0$500.03-month LIBOR
2014 Senior Notes due 2019Pay Floating/Receive Fixed$450.0$450.03-month LIBOR
2012 Senior Notes due 2022Pay Floating/Receive Fixed$80.0$80.03-month LIBOR
Amount of income 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 Operations2017201620172016
Interest rate swaps Interest expense, net$1.6$2.7$5.8$8.8
Amount of Gain/(Loss) Recognized in AOCI on Derivative (Effective Portion)Amount of Gain/(Loss) Reclassified from AOCI into Income (Effective Portion)Amount of Gain/(Loss) Recognized Directly into Income (Ineffective Portion), net of Tax
Derivatives and non-derivative instruments in Net Investment Hedging RelationshipsThree Months EndedThree Months EndedThree Months Ended
September 30,September 30,September 30,
201720162017201620172016
FX forwards$0.4$(0.2)$-$-$-$-
Long-term debt(10.3)(3.2)----
Total net investment hedges$(9.9)$(3.4)$-$-$-$-
Derivatives in cash flow hedging relationships
Cross currency swap$3.2$3.2$2.6*$0.9*$-$-
Total cash flow hedges$3.2$3.2$2.6$0.9$-$-
Total $(6.7)$(0.2)$2.6$0.9$-$-
Amount of Gain/(Loss) Recognized in AOCI on Derivative (Effective Portion)Amount of Gain/(Loss) Reclassified from AOCI into Income (Effective Portion)Amount of Gain/(Loss) Recognized Directly into Income (Ineffective Portion), net of Tax
Derivatives and non-derivative instruments in Net Investment Hedging RelationshipsNine months endedNine months endedNine months ended
September 30,September 30,September 30,
201720162017201620172016
FX forwards$1.2$(13.4)$-$-$-$-
Long-term debt(31.4)(9.2)----
Total net investment hedges$(30.2)$(22.6)$-$-$-$-
Derivatives in cash flow hedging relationships
Cross currency swap$6.6$1.5$7.9*$0.6*$0.4**$-
Interest rate contracts(0.4)-(1.1)---
Total cash flow hedges$6.2$1.5$6.8$0.6$0.4$-
Total $(24.0)$(21.1)$6.8$0.6$0.4$-
*For the three and nine months ended September 30, 2017, reflects $4.2 million and $12.8 million in gains, respectively, recorded in other non-operating income (expense), net and $1.6 million and $4.9 million relating to the tax effect of the aforementioned item. For the three and nine months ended September 30, 2016, reflects $1.3 million and $0.9 million in losses, respectively, recorded in other non-operating income (expense), net and $0.4 million and $0.3 million relating to the tax effect of the aforementioned item.
**For the nine months ended September 30, 2017, reflects $0.7 million in gains recorded in other non-operating income (expense), net and $0.3 million relating to the tax effect of the aforementioned item.
Cumulative
Gains/(Losses), net of tax
September 30,December 31,
Net investment hedges20172016
FX forwards $23.5$22.3
Long-term debt (18.9)12.5
Total net gains on net investment hedges$4.6$34.8
Cash flow hedges
Interest rate contracts$(0.4)$(1.1)
Cross currency swap1.52.8
Total net gains on cash flow hedges1.11.7
Total net gains in AOCI$5.7$36.5
Three Months EndedNine months ended
September 30,September 30,
Derivatives not designated as accounting hedgesLocation on Statement of Operations2017201620172016
Foreign exchange forwardsOther non-operating income (expense), net$9.2$(0.7)$14.0$(5.9)
Foreign exchange forwards relating to Bureau van Dijk acquisitionPurchase Price Hedge Gain10.3-10.3-
FX collar relating to Bureau van Dijk acquisitionPurchase Price Hedge Gain59.6-100.8-
$79.1$(0.7)$125.1$(5.9)
Derivative and Non-derivative Instruments
Balance Sheet LocationSeptember 30, 2017December 31, 2016
Assets:
Derivatives designated as accounting hedges:
FX forwards on net investment in certain foreign subsidiariesOther current assets$-$0.6
Cross-currency swapOther assets7.3-
Interest rate swapsOther assets5.07.0
Total derivatives designated as accounting hedges$12.3$7.6
Derivatives not designated as accounting hedges:
FX forwards on certain assets and liabilitiesOther current assets10.6-
Total assets$22.9$7.6
Liabilities:
Derivatives designated as accounting hedges:
Cross-currency swapOther liabilities$-$3.8
Interest rate swapsOther liabilities1.00.8
Total derivatives designated as accounting hedges1.04.6
Non-derivative instrument designated as accounting hedge:
Long-term debt designated as net investment hedgeLong-term debt472.9421.9
Derivatives not designated as accounting hedges:
FX forwards on certain assets and liabilitiesAccounts payable and accrued liabilities4.10.8
Total liabilities$478.0$427.3
September 30,December 31,
20172016
Notional amount of net investment hedges:SellBuySellBuy
Contracts to sell GBP for euros£--£22.126.4
September 30,December 31,
20172016
Notional amount of currency pair:SellBuySellBuy
Contracts to sell USD for GBP$471.0£356.1$-£-
Contracts to sell USD for JPY$24.3¥2,700.0$-$-
Contracts to sell USD for CAD$51.9C$64.0$-C$-
Contracts to purchase euros with Singapore dollarsS$ - - S$55.536.0
Contracts to sell euros for GBP - £ - 31.0£25.9
Contracts to sell USD for Singapore dollars$38.9S$53.0$-S$-
Contracts to sell euros for USD6.0$7.2-$-
Contracts to sell USD for EUR$54.345.0$--
Schedule of Interest Rate Swap (Details) (Interest Rate Swap (3-month LIBOR) [Member], USD $)
In Millions, unless otherwise specified
9 Months Ended
Sep. 30, 2017
Dec. 31, 2016
2010 Senior Notes [Member]
 
 
Derivative [Line Items]
 
 
Hedged Item
2010 Senior Notes due 2020 
 
Nature of Swap
Pay Floating/Receive Fixed 
 
Notional amount
$ 500.0 
$ 500.0 
Interest rate description
3-month LIBOR 
 
2012 Senior Notes [Member]
 
 
Derivative [Line Items]
 
 
Hedged Item
2012 Senior Notes due 2022 
 
Nature of Swap
Pay Floating/Receive Fixed 
 
Notional amount
80.0 
80.0 
Interest rate description
3-month LIBOR 
 
2014 Senior Notes (5-Year) [Member]
 
 
Derivative [Line Items]
 
 
Hedged Item
2014 Senior Notes due 2019 
 
Nature of Swap
Pay Floating/Receive Fixed 
 
Notional amount
$ 450.0 
$ 450.0 
Interest rate description
3-month LIBOR 
 
Summary of Net Gain (Loss) on Foreign Exchange Forwards Not Designated as Hedging Instruments and on Interest Rate Swaps Designated as Fair Value Hedges (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Derivatives Designated as Accounting Hedges [Member] |
Interest Rate Swap [Member] |
Interest Income (Expense), Net [Member]
 
 
 
 
Derivative Instruments Gain Loss [Line Items]
 
 
 
 
Amount of gain (loss) recognized in income
$ 1.6 
$ 2.7 
$ 5.8 
$ 8.8 
Derivatives Not Designated as Accounting Hedges [Member]
 
 
 
 
Derivative Instruments Gain Loss [Line Items]
 
 
 
 
Amount of gain (loss) recognized in income
79.1 
(0.7)
125.1 
(5.9)
Derivatives Not Designated as Accounting Hedges [Member] |
Foreign Exchange Forward [Member] |
Other Nonoperating Income (Expense) [Member]
 
 
 
 
Derivative Instruments Gain Loss [Line Items]
 
 
 
 
Amount of gain (loss) recognized in income
9.2 
(0.7)
14.0 
(5.9)
Bureau van Dijk (BvD) [Member] |
Derivatives Not Designated as Accounting Hedges [Member] |
Foreign Exchange Forward [Member] |
Purchase price hedge [Member]
 
 
 
 
Derivative Instruments Gain Loss [Line Items]
 
 
 
 
Amount of gain (loss) recognized in income
10.3 
 
10.3 
 
Bureau van Dijk (BvD) [Member] |
Derivatives Not Designated as Accounting Hedges [Member] |
Foreign Exchange Collar [Member] |
Purchase price hedge [Member]
 
 
 
 
Derivative Instruments Gain Loss [Line Items]
 
 
 
 
Amount of gain (loss) recognized in income
$ 59.6 
 
$ 100.8 
 
Summary of Notional Amounts of Outstanding Foreign Exchange Forwards, Net Investment Hedging (Detail) (Net Investment Hedging [Member], Contracts to Sell GBP for Euros [Member])
In Millions, unless otherwise specified
Dec. 31, 2016
Sell [Member]
GBP (£)
Dec. 31, 2016
Buy [Member]
EUR (€)
Derivative [Line Items]
 
 
Derivative Notional Amount
£ 22.1 
€ 26.4 
Gains (Losses) Recognized in AOCI and Reclassified from AOCI on Derivatives (Effective Portion) (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Derivative Instruments Gain Loss [Line Items]
 
 
 
 
Amount of Gain/(Loss) Recognized in AOCI on Derivative (Effective Portion)
$ (6.7)
$ (0.2)
$ (24.0)
$ (21.1)
Amount of Gain/(Loss) Reclassified from AOCI into Income (Effective Portion)
2.6 
0.9 
6.8 
0.6 
Gain/(Loss) Recognized in Income (Ineffective Portion), net of tax
 
 
0.4 
 
Net Investment Hedging [Member]
 
 
 
 
Derivative Instruments Gain Loss [Line Items]
 
 
 
 
Amount of Gain/(Loss) Recognized in AOCI on Derivative (Effective Portion)
(9.9)
(3.4)
(30.2)
(22.6)
Net Investment Hedging [Member] |
Foreign Exchange Forward [Member]
 
 
 
 
Derivative Instruments Gain Loss [Line Items]
 
 
 
 
Amount of Gain/(Loss) Recognized in AOCI on Derivative (Effective Portion)
0.4 
(0.2)
1.2 
(13.4)
Net Investment Hedging [Member] |
Long Term Debt [Member]
 
 
 
 
Derivative Instruments Gain Loss [Line Items]
 
 
 
 
Amount of Gain/(Loss) Recognized in AOCI on Derivative (Effective Portion)
(10.3)
(3.2)
(31.4)
(9.2)
Cash Flow Hedging [Member]
 
 
 
 
Derivative Instruments Gain Loss [Line Items]
 
 
 
 
Amount of Gain/(Loss) Recognized in AOCI on Derivative (Effective Portion)
3.2 
3.2 
6.2 
1.5 
Amount of Gain/(Loss) Reclassified from AOCI into Income (Effective Portion)
2.6 
0.9 
6.8 
0.6 
Gain/(Loss) Recognized in Income (Ineffective Portion), net of tax
 
 
0.4 
 
Cash Flow Hedging [Member] |
Cross-Currency Swap [Member]
 
 
 
 
Derivative Instruments Gain Loss [Line Items]
 
 
 
 
Amount of Gain/(Loss) Recognized in AOCI on Derivative (Effective Portion)
3.2 
3.2 
6.6 
1.5 
Amount of Gain/(Loss) Reclassified from AOCI into Income (Effective Portion)
2.6 
0.9 
7.9 
0.6 
Gain/(Loss) Recognized in Income (Ineffective Portion), net of tax
 
 
0.4 
 
Cash Flow Hedging [Member] |
Interest Rate Contract [Member]
 
 
 
 
Derivative Instruments Gain Loss [Line Items]
 
 
 
 
Amount of Gain/(Loss) Recognized in AOCI on Derivative (Effective Portion)
 
 
(0.4)
 
Amount of Gain/(Loss) Reclassified from AOCI into Income (Effective Portion)
 
 
$ (1.1)
 
Gains (Losses) Recognized in AOCI and Reclassified from AOCI on Derivatives (Effective Portion) (Parenthetical) (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Derivative Instruments Gain Loss [Line Items]
 
 
 
 
Amount of Gain/(Loss) Reclassified from AOCI into Income (Effective Portion)
$ 2.6 
$ 0.9 
$ 6.8 
$ 0.6 
Gain/(Loss) Recognized in Income (Ineffective Portion), net of tax
 
 
0.4 
 
Cash Flow Hedging [Member]
 
 
 
 
Derivative Instruments Gain Loss [Line Items]
 
 
 
 
Amount of Gain/(Loss) Reclassified from AOCI into Income (Effective Portion)
2.6 
0.9 
6.8 
0.6 
Gain/(Loss) Recognized in Income (Ineffective Portion), net of tax
 
 
0.4 
 
Cash Flow Hedging [Member] |
Currency Swap [Member]
 
 
 
 
Derivative Instruments Gain Loss [Line Items]
 
 
 
 
Amount of Gain/(Loss) Reclassified from AOCI into Income (Effective Portion)
2.6 
0.9 
7.9 
0.6 
Gain/(Loss) Recognized in Income (Ineffective Portion), net of tax
 
 
0.4 
 
Cash Flow Hedging [Member] |
Currency Swap [Member] |
Other Nonoperating Income (Expense) [Member]
 
 
 
 
Derivative Instruments Gain Loss [Line Items]
 
 
 
 
Amount of Gain/(Loss) Reclassified from AOCI into Income (Effective Portion)
4.1 
1.3 
12.7 
0.9 
Gain/(Loss) Recognized in Income (Ineffective Portion), net of tax
 
 
0.7 
 
Cash Flow Hedging [Member] |
Currency Swap [Member] |
Tax Effect [Member]
 
 
 
 
Derivative Instruments Gain Loss [Line Items]
 
 
 
 
Amount of Gain/(Loss) Reclassified from AOCI into Income (Effective Portion)
1.5 
0.4 
4.8 
0.3 
Gain/(Loss) Recognized in Income (Ineffective Portion), net of tax
 
 
$ 0.3 
 
Cumulative Amount of Unrecognized Hedge Losses Recorded in Accumulated Other Comprehensive Income (Detail) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2017
Dec. 31, 2016
Derivative [Line Items]
 
 
Cumulative amount of unrecognized hedge losses recorded in AOCI
$ 5.7 
$ 36.5 
Net Investment Hedging [Member]
 
 
Derivative [Line Items]
 
 
Cumulative amount of unrecognized hedge losses recorded in AOCI
4.6 
34.8 
Net Investment Hedging [Member] |
FX forwards [Member]
 
 
Derivative [Line Items]
 
 
Cumulative amount of unrecognized hedge losses recorded in AOCI
23.5 
22.3 
Net Investment Hedging [Member] |
Long Term Debt [Member]
 
 
Derivative [Line Items]
 
 
Cumulative amount of unrecognized hedge losses recorded in AOCI
(18.9)
12.5 
Cash Flow Hedging [Member]
 
 
Derivative [Line Items]
 
 
Cumulative amount of unrecognized hedge losses recorded in AOCI
1.1 
1.7 
Cash Flow Hedging [Member] |
Interest Rate Contract [Member]
 
 
Derivative [Line Items]
 
 
Cumulative amount of unrecognized hedge losses recorded in AOCI
(0.4)
(1.1)
Cash Flow Hedging [Member] |
Cross-Currency Swap [Member]
 
 
Derivative [Line Items]
 
 
Cumulative amount of unrecognized hedge losses recorded in AOCI
$ 1.5 
$ 2.8 
Summary of Notional Amounts of Outstanding Foreign Exchange Forwards, Cash Flow Hedging (Detail)
In Millions, unless otherwise specified
Sep. 30, 2017
Contracts to Sell US Dollars for GBP [Member]
Sell [Member]
USD ($)
Sep. 30, 2017
Contracts to Sell US Dollars for GBP [Member]
Buy [Member]
GBP (£)
Sep. 30, 2017
Contracts to Sell USD for JPY [Member]
Sell [Member]
USD ($)
Sep. 30, 2017
Contracts to Sell USD for JPY [Member]
Buy [Member]
JPY (¥)
Sep. 30, 2017
Contracts to Sell USD for CAD [Member]
Sell [Member]
USD ($)
Sep. 30, 2017
Contracts to Sell USD for CAD [Member]
Buy [Member]
CAD ($)
Dec. 31, 2016
Contracts to Purchase Euros with SGD [Member]
Sell [Member]
SGD ($)
Dec. 31, 2016
Contracts to Purchase Euros with SGD [Member]
Buy [Member]
EUR (€)
Dec. 31, 2016
Contracts to Sell Euros for GBP [Member]
Sell [Member]
EUR (€)
Dec. 31, 2016
Contracts to Sell Euros for GBP [Member]
Buy [Member]
GBP (£)
Sep. 30, 2017
Contracts to sell USD for Singapore dollars [Member]
Sell [Member]
USD ($)
Sep. 30, 2017
Contracts to sell USD for Singapore dollars [Member]
Buy [Member]
SGD ($)
Sep. 30, 2017
Contracts to sell euros for USD [Member]
Sell [Member]
EUR (€)
Sep. 30, 2017
Contracts to sell euros for USD [Member]
Buy [Member]
USD ($)
Sep. 30, 2017
Contracts to sell USD for EUR [Member]
Sell [Member]
USD ($)
Sep. 30, 2017
Contracts to sell USD for EUR [Member]
Buy [Member]
EUR (€)
Derivative [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Derivative Notional Amount
$ 471.0 
£ 356.1 
$ 24.3 
¥ 2,700.0 
$ 51.9 
$ 64.0 
$ 55.5 
€ 36.0 
€ 31.0 
£ 25.9 
$ 38.9 
$ 53.0 
€ 6.0 
$ 7.2 
$ 54.3 
€ 45.0 
Fair Value of Derivative Instruments (Detail) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2017
Dec. 31, 2016
Derivatives Fair Value [Line Items]
 
 
Derivatives assets
$ 22.9 
$ 7.6 
Derivatives liabilities
478.0 
427.3 
Non-Derivatives Designated as Accounting Hedges [Member] |
Net Investment Hedging [Member] |
Long Term Debt [Member]
 
 
Derivatives Fair Value [Line Items]
 
 
Derivatives liabilities
472.9 
421.9 
Derivatives Designated as Accounting Hedges [Member]
 
 
Derivatives Fair Value [Line Items]
 
 
Derivatives assets
12.3 
7.6 
Derivatives liabilities
1.0 
4.6 
Derivatives Designated as Accounting Hedges [Member] |
Cross-Currency Swap [Member] |
Other Assets [Member]
 
 
Derivatives Fair Value [Line Items]
 
 
Derivatives assets
7.3 
 
Derivatives Designated as Accounting Hedges [Member] |
Cross-Currency Swap [Member] |
Other Liabilities [Member]
 
 
Derivatives Fair Value [Line Items]
 
 
Derivatives liabilities
 
3.8 
Derivatives Designated as Accounting Hedges [Member] |
Interest Rate Swap [Member] |
Other Assets [Member]
 
 
Derivatives Fair Value [Line Items]
 
 
Derivatives assets
5.0 
7.0 
Derivatives Designated as Accounting Hedges [Member] |
Interest Rate Swap [Member] |
Other Liabilities [Member]
 
 
Derivatives Fair Value [Line Items]
 
 
Derivatives liabilities
1.0 
0.8 
Derivatives Designated as Accounting Hedges [Member] |
Net Investment Hedging [Member] |
Foreign Exchange Forward [Member] |
Other Current Assets [Member]
 
 
Derivatives Fair Value [Line Items]
 
 
Derivatives assets
 
0.6 
Derivatives Designated as Accounting Hedges [Member] |
Net Investment Hedging [Member] |
Cross-Currency Swap [Member] |
Other Liabilities [Member]
 
 
Derivatives Fair Value [Line Items]
 
 
Derivatives liabilities
 
3.8 
Derivatives Not Designated as Accounting Hedges [Member] |
Foreign Exchange Forward [Member] |
Other Current Assets [Member]
 
 
Derivatives Fair Value [Line Items]
 
 
Derivatives assets
10.6 
 
Derivatives Not Designated as Accounting Hedges [Member] |
Foreign Exchange Forward [Member] |
Accounts Payable And Accrued Liabilities [Member]
 
 
Derivatives Fair Value [Line Items]
 
 
Derivatives liabilities
$ 4.1 
$ 0.8 
Derivative Instruments And Hedging Activities - Additional Information (Detail)
In Millions, unless otherwise specified
Sep. 30, 2017
Sell [Member]
Contracts to Sell US Dollars for GBP [Member]
USD ($)
Sep. 30, 2017
Sell [Member]
Contracts to sell USD for EUR [Member]
USD ($)
Sep. 30, 2017
Buy [Member]
Contracts to Sell US Dollars for GBP [Member]
GBP (£)
Sep. 30, 2017
Buy [Member]
Contracts to sell USD for EUR [Member]
EUR (€)
Sep. 30, 2017
Derivatives Designated as Investment Hedges [Member]
Currency Swap [Member]
Cross-Currency Paid [Member]
2015 Senior Notes [Member]
EUR (€)
Sep. 30, 2017
Derivatives Designated as Investment Hedges [Member]
Currency Swap [Member]
Cross-Currency Received [Member]
2015 Senior Notes [Member]
USD ($)
Sep. 30, 2017
Derivatives Designated as Investment Hedges [Member]
Net Investment Hedging [Member]
2015 Senior Notes [Member]
EUR (€)
Sep. 30, 2017
Bureau van Dijk (BvD) [Member]
Derivatives Not Designated as Investment Hedges [Member]
Foreign Exchange Option [Member]
Sell [Member]
Contracts to Sell US Dollars for GBP [Member]
USD ($)
Sep. 30, 2017
Bureau van Dijk (BvD) [Member]
Derivatives Not Designated as Investment Hedges [Member]
Foreign Exchange Option [Member]
Sell [Member]
Contracts to sell USD for EUR [Member]
USD ($)
Sep. 30, 2017
Bureau van Dijk (BvD) [Member]
Derivatives Not Designated as Investment Hedges [Member]
Foreign Exchange Option [Member]
Buy [Member]
Contracts to Sell US Dollars for GBP [Member]
GBP (£)
Sep. 30, 2017
Bureau van Dijk (BvD) [Member]
Derivatives Not Designated as Investment Hedges [Member]
Foreign Exchange Option [Member]
Buy [Member]
Contracts to sell USD for EUR [Member]
EUR (€)
Sep. 30, 2017
Bureau van Dijk (BvD) [Member]
Derivatives Not Designated as Investment Hedges [Member]
Foreign Exchange Option [Member]
Call Option [Member]
EUR (€)
Sep. 30, 2017
Bureau van Dijk (BvD) [Member]
Derivatives Not Designated as Investment Hedges [Member]
Foreign Exchange Option [Member]
Put Option [Member]
EUR (€)
Derivative [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
Notional amount
$ 471.0 
$ 54.3 
£ 356.1 
€ 45.0 
€ 100.0 
$ 110.5 
€ 400.0 
$ 41.0 
$ 2,800.0 
£ 31.0 
€ 2,400.0 
€ 2,700.0 
€ 2,700.0 
Derivative, swaption interest rate
 
 
 
 
1.75% 
3.945% 
 
 
 
 
 
 
 
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, 2017
MISMAConsolidated
Gross goodwillAccumulated impairment chargeNet goodwillGross goodwillAccumulated impairment chargeNet goodwillGross goodwillAccumulated impairment chargeNet goodwill
Balance at beginning of year$277.0$-$277.0$758.8$(12.2)$746.6$1,035.8$(12.2)$1,023.6
Additions/adjustments---2,639.7-2,639.72,639.7-2,639.7
Foreign currency translation adjustments10.5-10.548.3-48.358.8-58.8
Ending balance$287.5$-$287.5$3,446.8$(12.2)$3,434.6$3,734.3$(12.2)$3,722.1
Year ended December 31, 2016
MISMAConsolidated
Gross goodwillAccumulated impairment chargeNet goodwillGross goodwillAccumulated impairment chargeNet goodwillGross goodwillAccumulated impairment chargeNet goodwill
Balance at beginning of year$284.4$-$284.4$704.1$(12.2)$691.9$988.5$(12.2)$976.3
Additions/adjustments---61.0-61.061.0-61.0
Goodwill derecognized upon sale of subsidiary(3.2)-(3.2)---(3.2)-(3.2)
Foreign currency translation adjustments(4.2)-(4.2)(6.3)-(6.3)(10.5)-(10.5)
Ending balance$277.0$-$277.0$758.8$(12.2)$746.6$1,035.8$(12.2)$1,023.6

The 2017 additions/adjustments for the MA segment in the table above relate to the acquisition of Bureau van Dijk and the structured finance data and analytics business of SCDM. The 2016 additions/adjustments for the MA segment in the table above relate to the acquisition of GGY. The 2016 goodwill derecognized for the MIS segment in the table above relates to the divestiture of ICTEAS in the fourth quarter of 2016.

Acquired intangible assets and related amortization consisted of:

September 30,December 31,
20172016
Customer relationships$1,325.4$310.1
Accumulated amortization(144.4)(124.4)
Net customer relationships1,181.0185.7
Trade secrets30.229.9
Accumulated amortization(27.6)(25.6)
Net trade secrets2.64.3
SoftwareSoftware/Product Technology354.187.7
Accumulated amortization(70.6)(54.9)
Net software283.532.8
Trade names160.775.3
Accumulated amortization(24.4)(19.9)
Net trade names136.355.4
Other (1)57.643.5
Accumulated amortization(27.9)(25.3)
Net other29.718.2
Total acquired intangible assets, net$1,633.1$296.4
(1) Other intangible assets primarily consist of databases, covenants not to compete, and acquired ratings methodologies and models.

Amortization expense relating to acquired intangible assets is as follows:

Three Months EndedNine months ended
September 30,September 30,
2017201620172016
Amortization expense$18.8$8.9$35.9$25.5

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

Year Ending December 31,
2017 (after September 30)$25.4
201899.8
201995.8
202093.5
202193.3
Thereafter1,225.3
Total estimated future amortization$1,633.1

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 nine months ended September 30, 2017 and 2016.

GOODWILL AND OTHER ACQUIRED INTANGIBLE ASSETS (Tables)
Nine months ended September 30, 2017
MISMAConsolidated
Gross goodwillAccumulated impairment chargeNet goodwillGross goodwillAccumulated impairment chargeNet goodwillGross goodwillAccumulated impairment chargeNet goodwill
Balance at beginning of year$277.0$-$277.0$758.8$(12.2)$746.6$1,035.8$(12.2)$1,023.6
Additions/adjustments---2,639.7-2,639.72,639.7-2,639.7
Foreign currency translation adjustments10.5-10.548.3-48.358.8-58.8
Ending balance$287.5$-$287.5$3,446.8$(12.2)$3,434.6$3,734.3$(12.2)$3,722.1
Year ended December 31, 2016
MISMAConsolidated
Gross goodwillAccumulated impairment chargeNet goodwillGross goodwillAccumulated impairment chargeNet goodwillGross goodwillAccumulated impairment chargeNet goodwill
Balance at beginning of year$284.4$-$284.4$704.1$(12.2)$691.9$988.5$(12.2)$976.3
Additions/adjustments---61.0-61.061.0-61.0
Goodwill derecognized upon sale of subsidiary(3.2)-(3.2)---(3.2)-(3.2)
Foreign currency translation adjustments(4.2)-(4.2)(6.3)-(6.3)(10.5)-(10.5)
Ending balance$277.0$-$277.0$758.8$(12.2)$746.6$1,035.8$(12.2)$1,023.6
September 30,December 31,
20172016
Customer relationships$1,325.4$310.1
Accumulated amortization(144.4)(124.4)
Net customer relationships1,181.0185.7
Trade secrets30.229.9
Accumulated amortization(27.6)(25.6)
Net trade secrets2.64.3
SoftwareSoftware/Product Technology354.187.7
Accumulated amortization(70.6)(54.9)
Net software283.532.8
Trade names160.775.3
Accumulated amortization(24.4)(19.9)
Net trade names136.355.4
Other (1)57.643.5
Accumulated amortization(27.9)(25.3)
Net other29.718.2
Total acquired intangible assets, net$1,633.1$296.4
(1) Other intangible assets primarily consist of databases, covenants not to compete, and acquired ratings methodologies and models.
Three Months EndedNine months ended
September 30,September 30,
2017201620172016
Amortization expense$18.8$8.9$35.9$25.5
Year Ending December 31,
2017 (after September 30)$25.4
201899.8
201995.8
202093.5
202193.3
Thereafter1,225.3
Total estimated future amortization$1,633.1
Activity in Goodwill (Detail) (USD $)
In Millions, unless otherwise specified
9 Months Ended 12 Months Ended
Sep. 30, 2017
Dec. 31, 2016
Goodwill [Line Items]
 
 
Beginning balance, Goodwill gross
$ 1,035.8 
$ 988.5 
Additions/adjustments, gross
2,639.7 
61.0 
Goodwill derecognized upon sale of subsidiary gross
 
(3.2)
Foreign currency translation adjustments, gross
58.8 
(10.5)
Ending balance, Goodwill gross
3,734.3 
1,035.8 
Beginning balance, Impairment Loss
(12.2)
(12.2)
Ending balance, Impairment Loss
(12.2)
(12.2)
Beginning balance
1,023.6 
976.3 
Additions/adjustments
2,639.7 
61.0 
Goodwill derecognized upon sale of subsidiary
 
(3.2)
Foreign currency translation adjustments
58.8 
(10.5)
Ending balance
3,722.1 
1,023.6 
Moodys Investors Service [Member]
 
 
Goodwill [Line Items]
 
 
Beginning balance, Goodwill gross
277.0 
284.4 
Goodwill derecognized upon sale of subsidiary gross
 
(3.2)
Foreign currency translation adjustments, gross
10.5 
(4.2)
Ending balance, Goodwill gross
287.5 
277.0 
Beginning balance
277.0 
284.4 
Goodwill derecognized upon sale of subsidiary
 
(3.2)
Foreign currency translation adjustments
10.5 
(4.2)
Ending balance
287.5 
277.0 
Moodys Analytics [Member]
 
 
Goodwill [Line Items]
 
 
Beginning balance, Goodwill gross
758.8 
704.1 
Additions/adjustments, gross
2,639.7 
61.0 
Foreign currency translation adjustments, gross
48.3 
(6.3)
Ending balance, Goodwill gross
3,446.8 
758.8 
Beginning balance, Impairment Loss
(12.2)
(12.2)
Ending balance, Impairment Loss
(12.2)
(12.2)
Beginning balance
746.6 
691.9 
Additions/adjustments
2,639.7 
61.0 
Foreign currency translation adjustments
48.3 
(6.3)
Ending balance
$ 3,434.6 
$ 746.6 
Amortization Expense Relating to Acquired Intangible Assets (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Finite Lived Intangible Assets [Line Items]
 
 
 
 
Amortization expense
$ 18.8 
$ 8.9 
$ 35.9 
$ 25.5 
Estimated Future Amortization Expense for Acquired Intangible Assets Subject to Amortization (Detail) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2017
Schedule Of Actual And Estimated Amortization Expense [Line Items]
 
2017 (after September 30)
$ 25.4 
2018
99.8 
2019
95.8 
2020
93.5 
2021
93.3 
Thereafter
1,225.3 
Total estimated future amortization
$ 1,633.1 
Goodwill And Other Acquired Intangible Assets - Additional Information (Details) (USD $)
In Millions, unless otherwise specified
9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Goodwill [Line Items]
 
 
Impairments to intangible assets
$ 0 
$ 0 
FAIR VALUE
FAIR VALUE

NOTE 10. FAIR VALUE

The table below presents information about items that are carried at fair value at September 30, 2017 and December 31, 2016:

Fair Value Measurement as of September 30, 2017
DescriptionBalanceLevel 1Level 2
Assets:
Derivatives (a)$22.9$ - $22.9
Money market mutual funds 18.518.5 -
Fixed maturity and open ended mutual funds (b)27.027.0 -
Total$68.4$45.5$22.9
Liabilities:
Derivatives (a)$5.1$-$5.1
Total$5.1$-$5.1
Fair Value Measurement as of December 31, 2016
DescriptionBalanceLevel 1Level 2
Assets:
Derivatives (a)$7.6$-$7.6
Money market mutual funds 189.0189.0-
Fixed maturity and open ended mutual funds (b)32.632.6-
Total$229.2$221.6$7.6
Liabilities:
Derivatives (a)$5.4$-$5.4
Total$5.4$-$5.4
(a) Represents FX forwards on certain assets and liabilities and on net investments in certain foreign subsidiaries as well as FX options, interest rate swaps and cross-currency swaps as more fully described in Note 8 to the condensed consolidated financial statements.
(b) Consists of investments in fixed maturity mutual funds and open-ended mutual funds.

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

FAIR VALUE (Tables)
Financial Instruments Carried at Fair Value on Recurring Basis
Fair Value Measurement as of September 30, 2017
DescriptionBalanceLevel 1Level 2
Assets:
Derivatives (a)$22.9$ - $22.9
Money market mutual funds 18.518.5 -
Fixed maturity and open ended mutual funds (b)27.027.0 -
Total$68.4$45.5$22.9
Liabilities:
Derivatives (a)$5.1$-$5.1
Total$5.1$-$5.1
Fair Value Measurement as of December 31, 2016
DescriptionBalanceLevel 1Level 2
Assets:
Derivatives (a)$7.6$-$7.6
Money market mutual funds 189.0189.0-
Fixed maturity and open ended mutual funds (b)32.632.6-
Total$229.2$221.6$7.6
Liabilities:
Derivatives (a)$5.4$-$5.4
Total$5.4$-$5.4
(a) Represents FX forwards on certain assets and liabilities and on net investments in certain foreign subsidiaries as well as FX options, interest rate swaps and cross-currency swaps as more fully described in Note 8 to the condensed consolidated financial statements.
(b) Consists of investments in fixed maturity mutual funds and open-ended mutual funds.
Financial Instruments Carried at Fair Value on Recurring Basis (Detail) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2017
Dec. 31, 2016
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
 
 
Derivative Contracts
$ 22.9 
$ 7.6 
Money market funds
18.5 
189.0 
Fixed maturity and open ended mutual funds
27.0 
32.6 
Total, Assets
68.4 
229.2 
Derivatives, Liabilities
5.1 
5.4 
Total, Liabilities
5.1 
5.4 
Fair Value Inputs Level 1 [Member]
 
 
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
 
 
Money market funds
18.5 
189.0 
Fixed maturity and open ended mutual funds
27.0 
32.6 
Total, Assets
45.5 
221.6 
Fair Value Inputs Level 2 [Member]
 
 
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
 
 
Derivative Contracts
22.9 
7.6 
Total, Assets
22.9 
7.6 
Derivatives, Liabilities
5.1 
5.4 
Total, Liabilities
$ 5.1 
$ 5.4 
OTHER BALANCE SHEET INFORMATION
OTHER BALANCE SHEET AND STATEMENT OF OPERATIONS INFORMATION

NOTE 10. OTHER BALANCE SHEET AND STATEMENT OF OPERATIONS INFORMATION

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

September 30,December 31,
20172016
Other current assets:
Prepaid taxes$74.9$47.0
Prepaid expenses89.965.7
Other35.728.1
Total other current assets$200.5$140.8
September 30,December 31,
20172016
Other assets:
Investments in joint ventures$83.4$26.3
Deposits for real-estate leases12.310.8
Indemnification assets related to acquisitions16.816.5
Mutual funds and fixed deposits27.032.7
Other29.025.9
Total other assets$168.5$112.2
September 30,December 31,
20172016
Accounts payable and accrued liabilities:
Salaries and benefits$93.2$89.3
Incentive compensation180.0151.1
Accrued settlement charge-863.8
Customer credits, advanced payments and advanced billings23.628.4
Self-insurance reserves 9.811.1
Dividends5.378.5
Professional service fees45.640.4
Interest accrued on debt37.559.2
Accounts payable29.228.4
Income taxes49.816.8
Restructuring0.66.3
Pension and other retirement employee benefits7.76.1
Accrued royalties (1)17.31.8
Other77.963.1
Total accounts payable and accrued liabilities$577.5$1,444.3
September 30,December 31,
20172016
Other liabilities:
Pension and other retirement employee benefits$268.3$264.1
Deferred rent-non-current portion104.698.3
Interest accrued on UTPs48.934.1
Legacy and other tax matters1.21.2
Other24.327.5
Total other liabilities$447.3$425.2
(1) Primarily relates to fees due to Bureau van Dijk's data providers

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,
20172016
Balance January 1,$11.1$19.7
Accruals (reversals), net 4.212.1
Payments(5.5)(20.7)
Balance$9.8$11.1

Other Non-Operating Income (Expense):

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

Three Months EndedNine months ended
September 30,September 30,
2017201620172016
FX gain/(loss)$(6.7)$4.3$(12.5)$9.1
Legacy Tax benefit-1.6-1.6
Joint venture income2.72.37.77.2
Other2.6(1.3)2.3(2.4)
Total$(1.4)$6.9$(2.5)$15.5

Purchase Price Hedge Gain:

There was a $111.1 million realized gain reflecting gains on an FX collar and foreign exchange forwards to economically hedge the euro denominated purchase price for Bureau van Dijk as more fully discussed in Note 8 to the condensed consolidated financial statements.

CCXI Gain:

CCXI is a Chinese credit rating agency in which Moody’s acquired a 49% stake in 2006. Moody’s accounts for this investment under the equity method of accounting. On March 21, 2017, CCXI, as part of a strategic business realignment, issued additional capital to its majority shareholder in exchange for a ratings business wholly-owned by the majority shareholder and which has the right to rate a different class of debt instrument in the Chinese market. The capital issuance by CCXI in exchange for this ratings business diluted Moody’s ownership interest in CCXI to 30% of a larger business and resulted in a $59.7 million non-cash, non-taxable gain. The issuance of additional capital by CCXI is treated as if Moody’s sold a 19% interest in CCXI at fair value. The fair value of the 19% interest in CCXI that Moody’s hypothetically sold was estimated using both a discounted cash flow methodology and comparable public company multiples. A DCF analysis requires significant estimates, including projections of future operating results and cash flows based on the budgets and forecasts of CCXI, expected long-term growth rates, terminal values, WACC and the effects of external factors and market conditions. Moody’s will continue to account for its 30% interest in CCXI under the equity method of accounting.

OTHER BALANCE SHEET INFORMATION (Tables)
September 30,December 31,
20172016
Other current assets:
Prepaid taxes$74.9$47.0
Prepaid expenses89.965.7
Other35.728.1
Total other current assets$200.5$140.8
September 30,December 31,
20172016
Other assets:
Investments in joint ventures$83.4$26.3
Deposits for real-estate leases12.310.8
Indemnification assets related to acquisitions16.816.5
Mutual funds and fixed deposits27.032.7
Other29.025.9
Total other assets$168.5$112.2
September 30,December 31,
20172016
Accounts payable and accrued liabilities:
Salaries and benefits$93.2$89.3
Incentive compensation180.0151.1
Accrued settlement charge-863.8
Customer credits, advanced payments and advanced billings23.628.4
Self-insurance reserves 9.811.1
Dividends5.378.5
Professional service fees45.640.4
Interest accrued on debt37.559.2
Accounts payable29.228.4
Income taxes49.816.8
Restructuring0.66.3
Pension and other retirement employee benefits7.76.1
Accrued royalties (1)17.31.8
Other77.963.1
Total accounts payable and accrued liabilities$577.5$1,444.3
September 30,December 31,
20172016
Other liabilities:
Pension and other retirement employee benefits$268.3$264.1
Deferred rent-non-current portion104.698.3
Interest accrued on UTPs48.934.1
Legacy and other tax matters1.21.2
Other24.327.5
Total other liabilities$447.3$425.2
(1) Primarily relates to fees due to Bureau van Dijk's data providers
Nine months endedYear Ended
September 30,December 31,
20172016
Balance January 1,$11.1$19.7
Accruals (reversals), net 4.212.1
Payments(5.5)(20.7)
Balance$9.8$11.1
Three Months EndedNine months ended
September 30,September 30,
2017201620172016
FX gain/(loss)$(6.7)$4.3$(12.5)$9.1
Legacy Tax benefit-1.6-1.6
Joint venture income2.72.37.77.2
Other2.6(1.3)2.3(2.4)
Total$(1.4)$6.9$(2.5)$15.5
Changes in Self Insurance Reserves (Detail) (USD $)
In Millions, unless otherwise specified
9 Months Ended 12 Months Ended
Sep. 30, 2017
Dec. 31, 2016
Disclosure Changes in Self Insurance Reserves [Abstract]
 
 
Self-insurance reserves, beginning balance
$ 11.1 
$ 19.7 
Accruals, net
4.2 
12.1 
Payments
(5.5)
(20.7)
Self-insurance reserves, ending balance
$ 9.8 
$ 11.1 
Other Non-Operating Interest (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Component of Other Expense Income Nonoperating [Line Items]
 
 
 
 
FX gain/(loss)
$ (6.7)
$ 4.3 
$ (12.5)
$ 9.1 
Legacy Tax benefit
 
1.6 
 
1.6 
Joint venture income
2.7 
2.3 
7.7 
7.2 
Other
2.6 
(1.3)
2.3 
(2.4)
Total
$ (1.4)
$ 6.9 
$ (2.5)
$ 15.5 
Other Balance Sheet Information - Additional Detail (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2017
Minority Interest [Line Items]
 
 
Purchase price hedge gain
$ 69.9 
$ 111.1 
Gain on dilution of Stock in Subsidiary
 
59.7 
BvD [Member] |
FX Options on Acquisition-Related purchase Price Hedge [Member]
 
 
Minority Interest [Line Items]
 
 
Purchase price hedge gain
 
111.1 
CCXI [Member]
 
 
Minority Interest [Line Items]
 
 
Gain on dilution of Stock in Subsidiary
 
$ 59.7 
Ownership percentage by parent
30.00% 
30.00% 
Hypothetical percentage sold at fair value
19.00% 
19.00% 
CCXI [Member] |
Business Acquisition Year (2006) [Member]
 
 
Minority Interest [Line Items]
 
 
Ownership percentage by parent
49.00% 
49.00% 
COMPREHENSIVE INCOME RECLASSIFICATION
COMPREHENSIVE INCOME AND ACCUMULATED OTHER COMPREHENSIVE INCOME

NOTE 11. COMPREHENSIVE INCOME AND ACCUMULATED OTHER COMPREHENSIVE INCOME

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

Three Months Ended September 30, 2017Nine months ended September 30, 2017Affected line in the consolidated statement of operations
Gains on cash flow hedges
Cross-currency swap3.512.1Other non-operating income (expense), net
Interest rate contract0.7(0.4)Interest expense, net
Total before income taxes4.211.7
Income tax effect of items above(1.6)(4.9)Provision for income taxes
Total net gains on cash flow hedges2.66.8
Gains on available for sale securities:
Gains on available for sale securities 1.11.1Other non-operating income (expense), net
Total gains on available for sale securities1.11.1
Pension and other retirement benefits
Amortization of actuarial losses and prior service costs included in net income(1.3)(4.0)Operating expense
Amortization of actuarial losses and prior service costs included in net income(0.8)(2.4)SG&A expense
Total before income taxes(2.1)(6.4)
Income tax effect of item above0.82.5Provision for income taxes
Total pension and other retirement benefits(1.3)(3.9)
Total net gains included in Net Income attributable to reclassifications out of AOCI$2.4$4.0
Three Months Ended September 30, 2016Nine months ended September 30, 2016Affected line in the consolidated statement of operations
Gains on cash flow hedges
Cross-currency swap1.30.9Other non-operating income (expense), net
Income tax effect of item above(0.4)(0.3)Provision for income taxes
Total net losses on cash flow hedges0.90.6
Pension and other retirement benefits
Amortization of actuarial losses and prior service costs included in net income(1.5)(4.6)Operating expense
Amortization of actuarial losses and prior service costs included in net income(0.9)(2.7)SG&A expense
Total before income taxes(2.4)(7.3)
Income tax effect of item above0.92.8Provision for income taxes
Total pension and other retirement benefits(1.5)(4.5)
Total losses included in Net Income attributable to reclassifications out of AOCI$(0.6)$(3.9)

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

Three Months Ended
September 30, 2017September 30, 2016
Gains/(Losses)Pension and Other Retirement BenefitsGains/ (Losses) on Cash Flow HedgesForeign Currency Translation AdjustmentsGains on Available for Sale SecuritiesTotalPension and Other Retirement BenefitsGains/ (Losses) on Cash Flow HedgesForeign Currency Translation AdjustmentsGains on Available for Sale SecuritiesTotal
Balance June 30, $(72.0) $ 0.5 $ (241.8) $ 3.6$(309.7)$(79.4)$(2.5)$(239.4)$4.5$(316.8)
Other comprehensive income/(loss) before reclassifications -3.250.80.354.3-3.2 9.2 (1.9)10.5
Amounts reclassified from AOCI1.3(2.6)-(1.1)(2.4)1.5(0.9)--0.6
Other comprehensive income/(loss)1.30.650.8(0.8)51.91.52.39.2(1.9)11.1
Balance September 30, $(70.7)$1.1$(191.0)$2.8$(257.8)$(77.9)$(0.2)$(230.2)$2.6$(305.7)
Nine months ended
September 30, 2017September 30, 2016
Gains/(Losses)Pension and Other Retirement BenefitsGains/ (Losses) on Cash Flow HedgesForeign Currency Translation AdjustmentsGains on Available for Sale SecuritiesTotalPension and Other Retirement BenefitsGains/ (Losses) on Cash Flow HedgesForeign Currency Translation AdjustmentsGains on Available for Sale SecuritiesTotal
Balance December 31,$(79.5) $ 1.7 $ (290.2) $ 3.1$(364.9)$(85.7)$(1.1)$(256.0)$3.3$(339.5)
Other comprehensive income/(loss) before reclassifications 4.96.299.20.8111.13.31.5 25.8 (0.7)29.9
Amounts reclassified from AOCI3.9(6.8)-(1.1)(4.0)4.5(0.6)--3.9
Other comprehensive income/(loss)8.8(0.6)99.2(0.3)107.17.80.925.8(0.7)33.8
Balance September 30, $(70.7)$1.1$(191.0)$2.8$(257.8)$(77.9)$(0.2)$(230.2)$2.6$(305.7)
COMPREHENSIVE INCOME RECLASSIFICATIONS (Tables)
Three Months Ended September 30, 2017Nine months ended September 30, 2017Affected line in the consolidated statement of operations
Gains on cash flow hedges
Cross-currency swap3.512.1Other non-operating income (expense), net
Interest rate contract0.7(0.4)Interest expense, net
Total before income taxes4.211.7
Income tax effect of items above(1.6)(4.9)Provision for income taxes
Total net gains on cash flow hedges2.66.8
Gains on available for sale securities:
Gains on available for sale securities 1.11.1Other non-operating income (expense), net
Total gains on available for sale securities1.11.1
Pension and other retirement benefits
Amortization of actuarial losses and prior service costs included in net income(1.3)(4.0)Operating expense
Amortization of actuarial losses and prior service costs included in net income(0.8)(2.4)SG&A expense
Total before income taxes(2.1)(6.4)
Income tax effect of item above0.82.5Provision for income taxes
Total pension and other retirement benefits(1.3)(3.9)
Total net gains included in Net Income attributable to reclassifications out of AOCI$2.4$4.0
Three Months Ended September 30, 2016Nine months ended September 30, 2016Affected line in the consolidated statement of operations
Gains on cash flow hedges
Cross-currency swap1.30.9Other non-operating income (expense), net
Income tax effect of item above(0.4)(0.3)Provision for income taxes
Total net losses on cash flow hedges0.90.6
Pension and other retirement benefits
Amortization of actuarial losses and prior service costs included in net income(1.5)(4.6)Operating expense
Amortization of actuarial losses and prior service costs included in net income(0.9)(2.7)SG&A expense
Total before income taxes(2.4)(7.3)
Income tax effect of item above0.92.8Provision for income taxes
Total pension and other retirement benefits(1.5)(4.5)
Total losses included in Net Income attributable to reclassifications out of AOCI$(0.6)$(3.9)
Three Months Ended
September 30, 2017September 30, 2016
Gains/(Losses)Pension and Other Retirement BenefitsGains/ (Losses) on Cash Flow HedgesForeign Currency Translation AdjustmentsGains on Available for Sale SecuritiesTotalPension and Other Retirement BenefitsGains/ (Losses) on Cash Flow HedgesForeign Currency Translation AdjustmentsGains on Available for Sale SecuritiesTotal
Balance June 30, $(72.0) $ 0.5 $ (241.8) $ 3.6$(309.7)$(79.4)$(2.5)$(239.4)$4.5$(316.8)
Other comprehensive income/(loss) before reclassifications -3.250.80.354.3-3.2 9.2 (1.9)10.5
Amounts reclassified from AOCI1.3(2.6)-(1.1)(2.4)1.5(0.9)--0.6
Other comprehensive income/(loss)1.30.650.8(0.8)51.91.52.39.2(1.9)11.1
Balance September 30, $(70.7)$1.1$(191.0)$2.8$(257.8)$(77.9)$(0.2)$(230.2)$2.6$(305.7)
Nine months ended
September 30, 2017September 30, 2016
Gains/(Losses)Pension and Other Retirement BenefitsGains/ (Losses) on Cash Flow HedgesForeign Currency Translation AdjustmentsGains on Available for Sale SecuritiesTotalPension and Other Retirement BenefitsGains/ (Losses) on Cash Flow HedgesForeign Currency Translation AdjustmentsGains on Available for Sale SecuritiesTotal
Balance December 31,$(79.5) $ 1.7 $ (290.2) $ 3.1$(364.9)$(85.7)$(1.1)$(256.0)$3.3$(339.5)
Other comprehensive income/(loss) before reclassifications 4.96.299.20.8111.13.31.5 25.8 (0.7)29.9
Amounts reclassified from AOCI3.9(6.8)-(1.1)(4.0)4.5(0.6)--3.9
Other comprehensive income/(loss)8.8(0.6)99.2(0.3)107.17.80.925.8(0.7)33.8
Balance September 30, $(70.7)$1.1$(191.0)$2.8$(257.8)$(77.9)$(0.2)$(230.2)$2.6$(305.7)
Reclassification out of AOCI (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Cash Flow Hedges, net of tax:
 
 
 
 
Gains on cash flow hedges - Pre Tax
$ 4.2 
$ 1.3 
$ 11.7 
$ 0.9 
Gains (losses) on cash flow hedges - Tax
(1.6)
(0.4)
(4.9)
(0.3)
Gains on cash flow hedges - Net of Tax
2.6 
0.9 
6.8 
0.6 
Available for sale securities:
 
 
 
 
Gains on available for sale securities - Pre Tax
2.2 
 
2.2 
 
Gains on available for sale securities
2.2 
 
2.2 
 
Pension and Other Post-Retirement Benefits, net of tax:
 
 
 
 
Amortization of actuarial losses and prior service costs included in net income - Pre Tax
(2.1)
(2.4)
(6.4)
(7.3)
Amortization of actuarial losses and prior service costs included in net income - Tax
0.8 
0.9 
2.5 
2.8 
Amortization of actuarial losses and prior service costs included in net income - Net of Tax
(1.3)
(1.5)
(3.9)
(4.5)
Income Loss Attributable to Reclassification Out Of AOCI Net Of Tax
2.4 
(0.6)
4.0 
(3.9)
Parent [Member]
 
 
 
 
Available for sale securities:
 
 
 
 
Gains on available for sale securities - Pre Tax
1.1 
 
1.1 
 
Gains on available for sale securities
1.1 
 
1.1 
 
Operating Expense [Member]
 
 
 
 
Pension and Other Post-Retirement Benefits, net of tax:
 
 
 
 
Amortization of actuarial losses and prior service costs included in net income - Pre Tax
(1.3)
(1.5)
(4.0)
(4.6)
Other Nonoperating Income (Expense) [Member] |
Parent [Member]
 
 
 
 
Available for sale securities:
 
 
 
 
Gains on available for sale securities - Pre Tax
1.1 
 
1.1 
 
SG&A Expense [Member]
 
 
 
 
Pension and Other Post-Retirement Benefits, net of tax:
 
 
 
 
Amortization of actuarial losses and prior service costs included in net income - Pre Tax
(0.8)
(0.9)
(2.4)
(2.7)
Cross-Currency Swap [Member] |
Other Nonoperating Income (Expense) [Member]
 
 
 
 
Cash Flow Hedges, net of tax:
 
 
 
 
Gains on cash flow hedges - Pre Tax
3.5 
1.3 
12.1 
0.9 
Interest Rate Contract [Member] |
Interest Expense [Member]
 
 
 
 
Cash Flow Hedges, net of tax:
 
 
 
 
Gains on cash flow hedges - Pre Tax
$ 0.7 
 
$ (0.4)
 
Changes in Components of Accumulated Other Comprehensive Income (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Pension and Other Retirement Benefits [Member]
Jun. 30, 2017
Pension and Other Retirement Benefits [Member]
Dec. 31, 2016
Pension and Other Retirement Benefits [Member]
Sep. 30, 2016
Pension and Other Retirement Benefits [Member]
Jun. 30, 2016
Pension and Other Retirement Benefits [Member]
Dec. 31, 2015
Pension and Other Retirement Benefits [Member]
Sep. 30, 2017
Gains Losses On Cash Flow Hedges [Member]
Jun. 30, 2017
Gains Losses On Cash Flow Hedges [Member]
Dec. 31, 2016
Gains Losses On Cash Flow Hedges [Member]
Sep. 30, 2016
Gains Losses On Cash Flow Hedges [Member]
Jun. 30, 2016
Gains Losses On Cash Flow Hedges [Member]
Dec. 31, 2015
Gains Losses On Cash Flow Hedges [Member]
Sep. 30, 2017
Foreign Currency Translation Adjustments [Member]
Jun. 30, 2017
Foreign Currency Translation Adjustments [Member]
Dec. 31, 2016
Foreign Currency Translation Adjustments [Member]
Sep. 30, 2016
Foreign Currency Translation Adjustments [Member]
Jun. 30, 2016
Foreign Currency Translation Adjustments [Member]
Dec. 31, 2015
Foreign Currency Translation Adjustments [Member]
Sep. 30, 2017
Gains on Available for Sale Securities [Member]
Jun. 30, 2017
Gains on Available for Sale Securities [Member]
Dec. 31, 2016
Gains on Available for Sale Securities [Member]
Sep. 30, 2016
Gains on Available for Sale Securities [Member]
Jun. 30, 2016
Gains on Available for Sale Securities [Member]
Dec. 31, 2015
Gains on Available for Sale Securities [Member]
Sep. 30, 2017
Parent [Member]
Sep. 30, 2016
Parent [Member]
Sep. 30, 2017
Parent [Member]
Sep. 30, 2016
Parent [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Beginning Balance
$ (309.7)
$ (316.8)
$ (364.9)
$ (339.5)
$ (70.7)
$ (72.0)
$ (79.5)
$ (77.9)
$ (79.4)
$ (85.7)
$ 1.1 
$ 0.5 
$ 1.7 
$ (0.2)
$ (2.5)
$ (1.1)
$ (191.0)
$ (241.8)
$ (290.2)
$ (230.2)
$ (239.4)
$ (256.0)
$ 2.8 
$ 3.6 
$ 3.1 
$ 2.6 
$ 4.5 
$ 3.3 
 
 
 
 
Pension and other retirement benefit plans before reclassification - Net of Tax
 
 
4.9 
3.3 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reclassification adjustment from AOCI, Pension and Other Postretirement Benefit Plans - Net of Tax
1.3 
 
3.9 
4.5 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pension and other retirement benefit - Net of Tax
1.3 
 
8.8 
7.8 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net unrealized gain (losses) on cash flow - Net of Tax
3.2 
3.2 
6.2 
1.5 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reclassification gain (losses) on cash flow - Net of Tax
(2.6)
(0.9)
(6.8)
(0.6)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gains/(Losses) on cash flow hedges - Net of Tax
0.6 
2.3 
(0.6)
0.9 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Foreign currency translation adjustments before reclassification - Net of Tax
51.8 
(9.4)
114.4 
7.2 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
50.8 
9.2 
99.2 
25.8 
Foreign currency translation adjustments - Net of Tax
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
50.8 
9.2 
99.2 
25.8 
Available for sale securities before reclassification - Net of Tax
0.5 
0.7 
1.6 
1.9 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
0.3 
(1.9)
0.8 
(0.7)
Amount reclassified from AOCI, Available fo Sale Securities - Net of Tax
(2.2)
 
(2.2)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1.1)
 
(1.1)
 
Gains on Available for sale securities - Net of Tax
 
(1.9)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(0.8)
(1.9)
(0.3)
(0.7)
Other comprehensive income/(loss) before reclassifications
54.3 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
10.5 
111.1 
29.9 
Amounts reclassified from AOCI
(2.4)
0.6 
(4.0)
3.9 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total other comprehensive income (loss) - Net of Tax
52.0 
(4.9)
122.0 
17.8 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
51.9 
11.1 
107.1 
33.8 
Ending Balance
$ (257.8)
$ (305.7)
$ (257.8)
$ (305.7)
$ (70.7)
$ (72.0)
$ (79.5)
$ (77.9)
$ (79.4)
$ (85.7)
$ 1.1 
$ 0.5 
$ 1.7 
$ (0.2)
$ (2.5)
$ (1.1)
$ (191.0)
$ (241.8)
$ (290.2)
$ (230.2)
$ (239.4)
$ (256.0)
$ 2.8 
$ 3.6 
$ 3.1 
$ 2.6 
$ 4.5 
$ 3.3 
 
 
 
 
PENSION AND OTHER POST-RETIREMENT BENEFITS
PENSION AND OTHER RETIREMENT BENEFITS

NOTE 12. PENSION AND OTHER RETIREMENT BENEFITS

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

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

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

Three Months Ended September 30,
Pension PlansOther Retirement Plans
2017201620172016
Components of net periodic expense
Service cost$4.6$5.0$0.7$0.6
Interest cost4.74.50.20.3
Expected return on plan assets(4.1)(4.3)--
Amortization of net actuarial loss from earlier periods2.12.50.10.1
Amortization of net prior service costs from earlier periods-0.1(0.1)(0.1)
Net periodic expense$7.3$7.8$0.9$0.9
Nine months ended September 30,
Pension PlansOther Retirement Plans
2017201620172016
Components of net periodic expense
Service cost$13.8$15.1$1.9$1.7
Interest cost13.913.60.80.8
Expected return on plan assets(12.4)(12.8)--
Amortization of net actuarial loss from earlier periods6.67.40.10.1
Amortization of net prior service costs from earlier periods-0.1(0.2)(0.2)
Net periodic expense$21.9$23.4$2.6$2.4

The Company made a contribution of $10.4 million to its funded pension plan as well as payments of $3.5 million related to its unfunded U.S. DBPPs and $0.7 million to its U.S. other retirement plans during the nine months ended September 30, 2017. The Company anticipates making payments of $2.3 million and $0.3 million to its unfunded U.S. DBPPs and U.S. other retirement plans, respectively, during the remainder of 2017.

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
2017201620172016
Components of net periodic expense
Service cost$4.6$5.0$0.7$0.6
Interest cost4.74.50.20.3
Expected return on plan assets(4.1)(4.3)--
Amortization of net actuarial loss from earlier periods2.12.50.10.1
Amortization of net prior service costs from earlier periods-0.1(0.1)(0.1)
Net periodic expense$7.3$7.8$0.9$0.9
Nine months ended September 30,
Pension PlansOther Retirement Plans
2017201620172016
Components of net periodic expense
Service cost$13.8$15.1$1.9$1.7
Interest cost13.913.60.80.8
Expected return on plan assets(12.4)(12.8)--
Amortization of net actuarial loss from earlier periods6.67.40.10.1
Amortization of net prior service costs from earlier periods-0.1(0.2)(0.2)
Net periodic expense$21.9$23.4$2.6$2.4
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, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Pension Plans Defined Benefit [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Service cost
$ 4.6 
$ 5.0 
$ 13.8 
$ 15.1 
Interest cost
4.7 
4.5 
13.9 
13.6 
Expected return on plan assets
(4.1)
(4.3)
(12.4)
(12.8)
Amortization of net actuarial loss from earlier periods
2.1 
2.5 
6.6 
7.4 
Amortization of net prior service costs from earlier periods
 
0.1 
 
0.1 
Net periodic expense
7.3 
7.8 
21.9 
23.4 
Other Postretirement Benefit Plans Defined Benefit [Member]
 
 
 
 
Defined Benefit Plan Disclosure [Line Items]
 
 
 
 
Service cost
0.7 
0.6 
1.9 
1.7 
Interest cost
0.2 
0.3 
0.8 
0.8 
Amortization of net actuarial loss from earlier periods
0.1 
0.1 
0.1 
0.1 
Amortization of net prior service costs from earlier periods
(0.1)
(0.1)
(0.2)
(0.2)
Net periodic expense
$ 0.9 
$ 0.9 
$ 2.6 
$ 2.4 
Pension and Other Post-Retirement Benefits - Additional Information (Detail) (USD $)
In Millions, unless otherwise specified
9 Months Ended
Sep. 30, 2017
Funded Pension Plans [Member]
 
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block [Line Items]
 
Defined benefit payment amount
$ 10.4 
Unfunded Pension Plans [Member]
 
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block [Line Items]
 
Defined benefit payment amount
3.5 
Anticipated future payments
2.3 
Other Postretirement Benefit Plans Defined Benefit [Member]
 
Defined Benefit Plans And Other Postretirement Benefit Plans Table Text Block [Line Items]
 
Defined benefit payment amount
0.7 
Anticipated future payments
$ 0.3 
INDEBTEDNESS
INDEBTEDNESS

NOTE 14. INDEBTEDNESS

The following table summarizes total indebtedness:

September 30, 2017
Principal AmountFair Value of Interest Rate Swap (1)Unamortized (Discount) PremiumUnamortized Debt Issuance CostsCarrying Value
Notes Payable:
5.50% 2010 Senior Notes, due 2020$500.0$4.1$(1.1)$(1.3)$501.7
4.50% 2012 Senior Notes, due 2022500.0-(2.1)(1.8)496.1
4.875% 2013 Senior Notes, due 2024500.0-(1.9)(2.5)495.6
2.75% 2014 Senior Notes (5-Year), due 2019450.0(0.1)(0.3)(1.2)448.4
5.25% 2014 Senior Notes (30-Year), due 2044600.0-3.3(5.7)597.6
1.75% 2015 Senior Notes, due 2027 591.1--(3.5)587.6
2.75% 2017 Senior Notes, due 2021500.0-(1.4)(3.4)495.2
2017 Floating Rate Senior Notes, due 2018300.0--(0.7)299.3
2.625% 2017 Private Placement Notes, due 2023500.0-(1.1)(3.7)495.2
3.25% 2017 Private Placement Notes, due 2028500.0-(5.3)(4.0)490.7
2017 Term Loan Facility, due 2020500.0--(0.8)499.2
Commercial Paper315.0-(0.2)-314.8
Total debt$5,756.1$4.0$(10.1)$(28.6)$5,721.4
Current portion(614.1)
Total long-term debt5,107.3
December 31, 2016
Principal AmountFair Value of Interest Rate Swap (1)Unamortized (Discount) PremiumUnamortized Debt Issuance CostsCarrying Value
Notes Payable:
6.06% Series 2007-1 Notes due 2017$300.0$-$-$-$300.0
5.50% 2010 Senior Notes, due 2020500.05.5(1.3)(1.6)502.6
4.50% 2012 Senior Notes, due 2022500.0(0.2)(2.4)(2.1)495.3
4.875% 2013 Senior Notes, due 2024500.0-(2.1)(2.7)495.2
2.75% 2014 Senior Notes (5-Year), due 2019450.00.9(0.4)(1.7)448.8
5.25% 2014 Senior Notes (30-Year), due 2044600.0-3.3(5.9)597.4
1.75% 2015 Senior Notes, due 2027 527.4--(3.7)523.7
Total debt$3,377.4$6.2$(2.9)$(17.7)$3,363.0
Current portion(300.0)
Total long-term debt$3,063.0
(1) The Company has entered into interest rate swaps on the 2010 Senior Notes, 2012 Senior Notes and the 2014 Senior Notes (5-Year) which are more fully discussed in Note 8 above.

Term Loan Facility

On June 6, 2017, the Company entered into a three-year term loan facility with the capacity to borrow up to $500.0 million. On August 8, 2017, the Company borrowed $500 million under the 2017 Term Loan for which the proceeds were used to fund the acquisition of Bureau van Dijk and to pay acquisition-related fees and expenses. At the Company’s election, interest on borrowings under the 2017 Term Loan is payable at rates that are based on either (a) Alternate Base Rate (as defined in the 2017 Term Loan Facility agreement) plus an applicable rate (ranging from 0 BPS to 50 BPS per annum) or (b) the Adjusted LIBO Rate (as defined in the 2017 Term Loan Facility agreement) plus an applicable rate (ranging from 87.5 BPS to 150 BPS per annum), in each case, depending on the Company’s index debt rating, as set forth in the 2017 Term Loan agreement.

The 2017 Term Loan contains covenants that, among other things, restrict the ability of the Company to engage in mergers, consolidations, asset sales, transactions with affiliates, sale and leaseback transactions or to incur liens, with exceptions as set forth in the 2017 Term Loan Facility agreement. The 2017 Term Loan also contains a financial covenant that requires the Company to maintain a debt to EBITDA ratio of not more than: (i) 4.5 to 1.0 as of the end of each fiscal quarter ending on September 30, 2017, December 31, 2017 and March 31, 2018 and (ii) 4.0 to 1.0 as of the end of the fiscal quarter ended on June 30, 2018. The 2017 Term Loan also contains customary events of default.

Credit Facility

On June 6, 2017, the Company entered into an amendment to the 2015 Facility. Pursuant to the amendment, the applicable rate for borrowings under the 2015 Facility will range from 0 BPS to 32.5 BPS per annum for Alternate Base Rate loans (as defined in the 2015 Facility agreement) and 79.5 BPS to 132.5 BPS per annum for Eurocurrency loans (as defined in the 2015 Facility agreement). In addition, the facility fee paid by the Company now ranges from 8 BPS to 17.5 BPS on the daily amount of commitments (whether used or unused), in each case, depending on the Company’s index debt rating. The amendment also modifies, among other things, the existing financial covenant, so that, the Company’s debt to EBITDA ratio shall not exceed 4.5 to 1.0 as of the end of each fiscal quarter ending on September 30, 2017, December 31, 2017 and March 31, 2018 and shall not exceed 4.0 to 1.0 as of the end of the fiscal quarter ended on June 30, 2018.

Commercial Paper

On August 3, 2016, the Company entered into a private placement commercial paper program under which the Company may issue CP notes up to a maximum amount of $1.0 billion. Borrowings under the CP Program are backstopped by the 2015 Facility. Amounts under the CP Program may be re-borrowed. The maturity of the CP Notes will vary, but may not exceed 397 days from the date of issue. The CP Notes are sold at a discount from par, or alternatively, sold at par and bear interest at rates that will vary based upon market conditions. The rates of interest will depend on whether the CP Notes will be a fixed or floating rate. The interest on a floating rate may be based on the following: (a) certificate of deposit rate; (b) commercial paper rate; (c) the federal funds rate; (d) the LIBOR; (e) prime rate; (f) Treasury rate; or (g) such other base rate as may be specified in a supplement to the private placement agreement. The CP Program contains certain events of default including, among other things: non-payment of principal, interest or fees; entrance into any form of moratorium; and bankruptcy and insolvency events, subject in certain instances to cure periods. As of September 30, 2017, the Company has CP borrowings outstanding of $315 million with a weighted average maturity date at the time of issuance of 56 days. At September 30, 2017, the weighted average remaining maturity and interest rate on CP outstanding was 17 days and 1.51% respectively.

Notes Payable

On March 2, 2017, the Company issued $300 million aggregate principal amount of senior unsecured floating rate notes in a public offering. The 2017 Floating Rate Senior Notes bear interest at a floating rate which is to be calculated by Wells Fargo Bank, National Association, equal to three-month LIBOR as determined on the interest determination date plus 0.35%. The interest determination date for an interest period will be the second London business day preceding the first day of such interest period. The 2017 Floating Rate Senior Notes will mature on September 4, 2018. Interest on the 2017 Floating Rate Senior Notes will accrue from March 2, 2017, and will be paid quarterly in arrears on June 4, 2017, September 4, 2017, December 4, 2017, March 4, 2018, June 4, 2018 and on the maturity date, to the record holders at the close of business on the business date preceding the interest payment date. The 2017 Floating Rate Senior Notes are not redeemable prior to their maturity.

On March 2, 2017, the Company issued $500 million aggregate principal amount of senior unsecured notes in a public offering. The 2017 Senior Notes bear interest at a fixed rate of 2.750% and mature on December 15, 2021. Interest on the 2017 Senior Notes is due semiannually on June 15 and December 15 of each year, commencing June 15, 2017. The Company may redeem the 2017 Senior Notes, in whole or in part, at any time at a price equity to 100% of the principal amount being redeemed, plus accrued and unpaid interest and a Make-Whole Amount.

On June 12, 2017, the Company issued and sold through a private placement transaction, $500 million aggregate principal amount of its 2017 Private Placement Notes Due 2023 and $500 million aggregate principal amount of its 2017 Private Placement Notes Due 2028. The 2017 Private Placement Notes Due 2023 bear interest at the fixed rate of 2.625% per year and mature on January 15, 2023. The 2017 Private Placement Notes Due 2028 bear interest at the fixed rate of 3.250% per year and mature on January 15, 2028. Interest on each tranche of notes will be due semiannually on January 15 and July 15 of each year, commencing January 15, 2018. The Company entered into a registration rights agreement, dated as of June 12, 2017, with the representatives of the initial purchasers of the notes, which sets forth, among other things, the Company’s obligations to register the notes under the Securities Act, within 365 days of issuance. The net proceeds of the note offering were used to finance, in part, the acquisition of Bureau van Dijk. In addition, the Company may redeem each of the notes in whole or in part, at any time at a price equity to 100% of the principal amount being redeemed, plus accrued interest and a Make-Whole Amount.

For all of the aforementioned notes, 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 2017 Indenture, at a price equal to 101% of the principal amount, thereof, plus accrued and unpaid interest to the date of purchase. The 2017 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 2017 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 2017 Indenture also 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 2017 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 2017 Indenture, all the aforementioned notes 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 of the applicable series then outstanding.

In the first quarter of 2017, the Company repaid the Series 2007-1 Notes along with a Make-Whole Amount of approximately $7 million.

2017 Bridge Credit Facility

On May 15, 2017, the Company entered into a 364-Day Bridge Credit Agreement providing for a $1.5 billion bridge facility. On June 12, 2017, the commitments under this facility were terminated upon the issuance of the 2017 Private Placement Notes Due 2023, the 2017 Private Placement Notes Due 2028 and the 2017 Term Loan Facility.

At September 30, 2017, the Company was in compliance with all covenants contained within all of the debt agreements. All the debt agreements contain cross default provisions which 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, 2017, there were no such cross defaults.

The repayment schedule for the Company’s borrowings is as follows:

Year Ended December 31,2010 Senior Notes due 20202012 Senior Notes due 20222013 Senior Notes due 20242014 Senior Notes (5-Year) due 20192014 Senior Notes (30-Year) due 20442015 Senior Notes (1) due 20272017 Floating Rate Senior Notes due 2018Term Loan Facility due 20202017 Senior Notes due 20212017 Private Placement Notes due 20232017 Private Placement Notes due 2028Commercial PaperTotal
2017 (after September 30,)$-$-$-$-$ - $ - $ - $ - $ - $ - $ - $ 315.0 $ 315.0
2018---- - - 300.0 - - - - - 300.0
2019---450.0 - - - - - - - - 450.0
2020500.0--- - - - 500.0 - - - - 1,000.0
2021----- - - - 500.0 - - - 500.0
Thereafter-500.0500.0-600.0591.1- - - 500.0500.0 - 3,191.1
Total$500.0$500.0$500.0$450.0$600.0$591.1$300.0$500.0$500.0$500.0$500.0$315.0$5,756.1
(1) Based on end of quarter FX rates

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,
2017201620172016
Income$4.3$2.5$13.0$8.2
Expense on borrowings (48.8)(35.6)(139.9)(105.6)
Expense on UTPs and other tax related liabilities(3.9)(2.5)(9.4)(7.0)
Legacy Tax-0.2-0.2
Capitalized0.3-0.80.4
Total$(48.1)$(35.4)$(135.5)$(103.8)

The following table shows the cash paid for interest:

Nine months ended
September 30,
20172016
Interest paid$136.2$129.3

The fair value and carrying value of the Company’s debt (excluding Commercial Paper) as of September 30, 2017 and December 31, 2016 are as follows:

September 30, 2017December 31, 2016
Carrying AmountEstimated Fair ValueCarrying AmountEstimated Fair Value
Series 2007-1 Notes$-$-$300.0 $ 308.9
2010 Senior Notes501.7544.8502.6548.3
2012 Senior Notes496.1538.7495.3535.3
2013 Senior Notes495.6551.1495.2539.9
2014 Senior Notes (5-Year) 448.4455.8448.8456.2
2014 Senior Notes (30-Year) 597.6701.8597.4661.5
2015 Senior Notes587.6607.9523.7534.8
2017 Senior Notes (5-Year)495.2503.2--
2017 Floating Rate Senior Notes299.3300.5--
2.65% 2017 Private Placement Notes, due 2023495.2496.8--
3.25% 2017 Private Placement Notes, due 2028490.7496.0--
2017 Term Loan Facility, due 2020499.2499.2--
Total$5,406.6$5,695.8$3,363.0$3,584.9

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

INDEBTEDNESS (Tables)
September 30, 2017
Principal AmountFair Value of Interest Rate Swap (1)Unamortized (Discount) PremiumUnamortized Debt Issuance CostsCarrying Value
Notes Payable:
5.50% 2010 Senior Notes, due 2020$500.0$4.1$(1.1)$(1.3)$501.7
4.50% 2012 Senior Notes, due 2022500.0-(2.1)(1.8)496.1
4.875% 2013 Senior Notes, due 2024500.0-(1.9)(2.5)495.6
2.75% 2014 Senior Notes (5-Year), due 2019450.0(0.1)(0.3)(1.2)448.4
5.25% 2014 Senior Notes (30-Year), due 2044600.0-3.3(5.7)597.6
1.75% 2015 Senior Notes, due 2027 591.1--(3.5)587.6
2.75% 2017 Senior Notes, due 2021500.0-(1.4)(3.4)495.2
2017 Floating Rate Senior Notes, due 2018300.0--(0.7)299.3
2.625% 2017 Private Placement Notes, due 2023500.0-(1.1)(3.7)495.2
3.25% 2017 Private Placement Notes, due 2028500.0-(5.3)(4.0)490.7
2017 Term Loan Facility, due 2020500.0--(0.8)499.2
Commercial Paper315.0-(0.2)-314.8
Total debt$5,756.1$4.0$(10.1)$(28.6)$5,721.4
Current portion(614.1)
Total long-term debt5,107.3
December 31, 2016
Principal AmountFair Value of Interest Rate Swap (1)Unamortized (Discount) PremiumUnamortized Debt Issuance CostsCarrying Value
Notes Payable:
6.06% Series 2007-1 Notes due 2017$300.0$-$-$-$300.0
5.50% 2010 Senior Notes, due 2020500.05.5(1.3)(1.6)502.6
4.50% 2012 Senior Notes, due 2022500.0(0.2)(2.4)(2.1)495.3
4.875% 2013 Senior Notes, due 2024500.0-(2.1)(2.7)495.2
2.75% 2014 Senior Notes (5-Year), due 2019450.00.9(0.4)(1.7)448.8
5.25% 2014 Senior Notes (30-Year), due 2044600.0-3.3(5.9)597.4
1.75% 2015 Senior Notes, due 2027 527.4--(3.7)523.7
Total debt$3,377.4$6.2$(2.9)$(17.7)$3,363.0
Current portion(300.0)
Total long-term debt$3,063.0
(1) The Company has entered into interest rate swaps on the 2010 Senior Notes, 2012 Senior Notes and the 2014 Senior Notes (5-Year) which are more fully discussed in Note 8 above.
Year Ended December 31,2010 Senior Notes due 20202012 Senior Notes due 20222013 Senior Notes due 20242014 Senior Notes (5-Year) due 20192014 Senior Notes (30-Year) due 20442015 Senior Notes (1) due 20272017 Floating Rate Senior Notes due 2018Term Loan Facility due 20202017 Senior Notes due 20212017 Private Placement Notes due 20232017 Private Placement Notes due 2028Commercial PaperTotal
2017 (after September 30,)$-$-$-$-$ - $ - $ - $ - $ - $ - $ - $ 315.0 $ 315.0
2018---- - - 300.0 - - - - - 300.0
2019---450.0 - - - - - - - - 450.0
2020500.0--- - - - 500.0 - - - - 1,000.0
2021----- - - - 500.0 - - - 500.0
Thereafter-500.0500.0-600.0591.1- - - 500.0500.0 - 3,191.1
Total$500.0$500.0$500.0$450.0$600.0$591.1$300.0$500.0$500.0$500.0$500.0$315.0$5,756.1
(1) Based on end of quarter FX rates
Three Months EndedNine months ended
September 30,September 30,
2017201620172016
Income$4.3$2.5$13.0$8.2
Expense on borrowings (48.8)(35.6)(139.9)(105.6)
Expense on UTPs and other tax related liabilities(3.9)(2.5)(9.4)(7.0)
Legacy Tax-0.2-0.2
Capitalized0.3-0.80.4
Total$(48.1)$(35.4)$(135.5)$(103.8)
Nine months ended
September 30,
20172016
Interest paid$136.2$129.3
September 30, 2017December 31, 2016
Carrying AmountEstimated Fair ValueCarrying AmountEstimated Fair Value
Series 2007-1 Notes$-$-$300.0 $ 308.9
2010 Senior Notes501.7544.8502.6548.3
2012 Senior Notes496.1538.7495.3535.3
2013 Senior Notes495.6551.1495.2539.9
2014 Senior Notes (5-Year) 448.4455.8448.8456.2
2014 Senior Notes (30-Year) 597.6701.8597.4661.5
2015 Senior Notes587.6607.9523.7534.8
2017 Senior Notes (5-Year)495.2503.2--
2017 Floating Rate Senior Notes299.3300.5--
2.65% 2017 Private Placement Notes, due 2023495.2496.8--
3.25% 2017 Private Placement Notes, due 2028490.7496.0--
2017 Term Loan Facility, due 2020499.2499.2--
Total$5,406.6$5,695.8$3,363.0$3,584.9
Summary of Total Indebtedness (Detail) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2017
Dec. 31, 2016
Debt Instrument [Line Items]
 
 
Principal Amount
$ 5,756.1 
$ 3,377.4 
Fair Value of Interest Rate Swap
4.0 
6.2 
Unamortized (Discount) Premium
(10.1)
(2.9)
Unamortized Debt Issuance Costs
(28.6)
(17.7)
Total Debt
5,721.4 
 
Current portion
(614.1)
 
Carrying amount
5,406.6 
3,363.0 
Current portion of long-term debt
(299.3)
(300.0)
Total long-term debt
5,107.3 
3,063.0 
Series 2007-1 Notes [Member]
 
 
Debt Instrument [Line Items]
 
 
Principal Amount
 
300.0 
Carrying amount
 
300.0 
2010 Senior Notes [Member]
 
 
Debt Instrument [Line Items]
 
 
Principal Amount
500.0 
500.0 
Fair Value of Interest Rate Swap
4.1 
5.5 
Unamortized (Discount) Premium
(1.1)
(1.3)
Unamortized Debt Issuance Costs
(1.3)
(1.6)
Carrying amount
501.7 
502.6 
2012 Senior Notes [Member]
 
 
Debt Instrument [Line Items]
 
 
Principal Amount
500.0 
500.0 
Fair Value of Interest Rate Swap
 
(0.2)
Unamortized (Discount) Premium
(2.1)
(2.4)
Unamortized Debt Issuance Costs
(1.8)
(2.1)
Carrying amount
496.1 
495.3 
2013 Senior Notes [Member]
 
 
Debt Instrument [Line Items]
 
 
Principal Amount
500.0 
500.0 
Unamortized (Discount) Premium
(1.9)
(2.1)
Unamortized Debt Issuance Costs
(2.5)
(2.7)
Carrying amount
495.6 
495.2 
2014 Senior Notes (5-Year) [Member]
 
 
Debt Instrument [Line Items]
 
 
Principal Amount
450.0 
450.0 
Fair Value of Interest Rate Swap
(0.1)
0.9 
Unamortized (Discount) Premium
(0.3)
(0.4)
Unamortized Debt Issuance Costs
(1.2)
(1.7)
Carrying amount
448.4 
448.8 
2014 Senior Notes (30-Year) [Member]
 
 
Debt Instrument [Line Items]
 
 
Principal Amount
600.0 
600.0 
Unamortized (Discount) Premium
3.3 
3.3 
Unamortized Debt Issuance Costs
(5.7)
(5.9)
Carrying amount
597.6 
597.4 
2015 Senior Notes [Member]
 
 
Debt Instrument [Line Items]
 
 
Principal Amount
591.1 
527.4 
Unamortized Debt Issuance Costs
(3.5)
(3.7)
Carrying amount
587.6 
523.7 
2017 Senior Notes [Member]
 
 
Debt Instrument [Line Items]
 
 
Principal Amount
500.0 
 
Unamortized (Discount) Premium
(1.4)
 
Unamortized Debt Issuance Costs
(3.4)
 
Carrying amount
495.2 
 
2017 Floating Rate Senior Notes [Member]
 
 
Debt Instrument [Line Items]
 
 
Principal Amount
300.0 
 
Unamortized Debt Issuance Costs
(0.7)
 
Carrying amount
299.3 
 
2.625% 2017 Private Placement Notes, due 2023 [Member]
 
 
Debt Instrument [Line Items]
 
 
Principal Amount
500.0 
 
Unamortized (Discount) Premium
(1.1)
 
Unamortized Debt Issuance Costs
(3.7)
 
Carrying amount
495.2 
 
3.25% 2017 Private Placement Notes, due 2028 [Member]
 
 
Debt Instrument [Line Items]
 
 
Principal Amount
500.0 
 
Unamortized (Discount) Premium
(5.3)
 
Unamortized Debt Issuance Costs
(4.0)
 
Carrying amount
490.7 
 
2017 Term Loan Facility, due 2020 [Member]
 
 
Debt Instrument [Line Items]
 
 
Principal Amount
500.0 
 
Unamortized Debt Issuance Costs
(0.8)
 
Carrying amount
499.2 
 
Commercial Paper [Member]
 
 
Debt Instrument [Line Items]
 
 
Principal Amount
315.0 
 
Unamortized (Discount) Premium
(0.2)
 
Total Debt
$ 314.8 
 
Summary of Total Indebtedness (Parenthetical) (Detail)
Sep. 30, 2017
Dec. 31, 2016
Series 2007-1 Notes [Member]
 
 
Debt Instrument [Line Items]
 
 
Notes Payable, interest rate
 
6.06% 
2010 Senior Notes [Member]
 
 
Debt Instrument [Line Items]
 
 
Notes Payable, interest rate
5.50% 
5.50% 
2012 Senior Notes [Member]
 
 
Debt Instrument [Line Items]
 
 
Notes Payable, interest rate
4.50% 
4.50% 
2013 Senior Notes [Member]
 
 
Debt Instrument [Line Items]
 
 
Notes Payable, interest rate
4.875% 
4.875% 
2014 Senior Notes (5-Year) [Member]
 
 
Debt Instrument [Line Items]
 
 
Notes Payable, interest rate
2.75% 
2.75% 
2014 Senior Notes (30-Year) [Member]
 
 
Debt Instrument [Line Items]
 
 
Notes Payable, interest rate
5.25% 
5.25% 
2015 Senior Notes [Member]
 
 
Debt Instrument [Line Items]
 
 
Notes Payable, interest rate
1.75% 
1.75% 
2017 Senior Notes [Member]
 
 
Debt Instrument [Line Items]
 
 
Notes Payable, interest rate
2.75% 
 
2.625% 2017 Private Placement Notes, due 2023 [Member]
 
 
Debt Instrument [Line Items]
 
 
Notes Payable, interest rate
2.65% 
 
3.25% 2017 Private Placement Notes, due 2028 [Member]
 
 
Debt Instrument [Line Items]
 
 
Notes Payable, interest rate
3.25% 
 
Principal Payments Due on Long-Term Borrowings (Detail) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2017
Dec. 31, 2016
Debt Instrument [Line Items]
 
 
2017 (after September 30,)
$ 315.0 
 
2018
300.0 
 
2019
450.0 
 
2020
1,000.0 
 
2021
500.0 
 
Thereafter
3,191.1 
 
Total principal amount
5,756.1 
3,377.4 
2010 Senior Notes [Member]
 
 
Debt Instrument [Line Items]
 
 
2020
500.0 
 
Total principal amount
500.0 
500.0 
2012 Senior Notes [Member]
 
 
Debt Instrument [Line Items]
 
 
Thereafter
500.0 
 
Total principal amount
500.0 
500.0 
2013 Senior Notes [Member]
 
 
Debt Instrument [Line Items]
 
 
Thereafter
500.0 
 
Total principal amount
500.0 
500.0 
2014 Senior Notes (5-Year) [Member]
 
 
Debt Instrument [Line Items]
 
 
2019
450.0 
 
Total principal amount
450.0 
450.0 
2014 Senior Notes (30-Year) [Member]
 
 
Debt Instrument [Line Items]
 
 
Thereafter
600.0 
 
Total principal amount
600.0 
600.0 
2015 Senior Notes [Member]
 
 
Debt Instrument [Line Items]
 
 
Thereafter
591.1 
 
Total principal amount
591.1 
527.4 
2017 Floating Rate Senior Notes [Member]
 
 
Debt Instrument [Line Items]
 
 
2018
300.0 
 
Total principal amount
300.0 
 
2017 Term Loan Facility, due 2020 [Member]
 
 
Debt Instrument [Line Items]
 
 
2020
500.0 
 
Total principal amount
500.0 
 
2017 Senior Notes [Member]
 
 
Debt Instrument [Line Items]
 
 
2021
500.0 
 
Total principal amount
500.0 
 
2.625% 2017 Private Placement Notes, due 2023 [Member]
 
 
Debt Instrument [Line Items]
 
 
Thereafter
500.0 
 
Total principal amount
500.0 
 
3.25% 2017 Private Placement Notes, due 2028 [Member]
 
 
Debt Instrument [Line Items]
 
 
Thereafter
500.0 
 
Total principal amount
500.0 
 
Commercial Paper [Member]
 
 
Debt Instrument [Line Items]
 
 
2017 (after September 30,)
315.0 
 
Total principal amount
$ 315.0 
 
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, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Debt Instrument [Line Items]
 
 
 
 
Income
$ 4.3 
$ 2.5 
$ 13.0 
$ 8.2 
Expense on borrowings
(48.8)
(35.6)
(139.9)
(105.6)
Income (expense) on UTPs and other tax related liabilities
(3.9)
(2.5)
(9.4)
(7.0)
Legacy tax
 
0.2 
 
0.2 
Capitalized
0.3 
 
0.8 
0.4 
Total
$ (48.1)
$ (35.4)
$ (135.5)
$ (103.8)
Fair Value and Carrying Value of Long-Term Debt (Detail) (USD $)
In Millions, unless otherwise specified
Sep. 30, 2017
Dec. 31, 2016
Debt Instrument [Line Items]
 
 
Carrying amount
$ 5,406.6 
$ 3,363.0 
Estimated Fair Value
5,695.8 
3,584.9 
Series 2007-1 Notes [Member]
 
 
Debt Instrument [Line Items]
 
 
Carrying amount
 
300.0 
Estimated Fair Value
 
308.9 
2010 Senior Notes [Member]
 
 
Debt Instrument [Line Items]
 
 
Carrying amount
501.7 
502.6 
Estimated Fair Value
544.8 
548.3 
2012 Senior Notes [Member]
 
 
Debt Instrument [Line Items]
 
 
Carrying amount
496.1 
495.3 
Estimated Fair Value
538.7 
535.3 
2013 Senior Notes [Member]
 
 
Debt Instrument [Line Items]
 
 
Carrying amount
495.6 
495.2 
Estimated Fair Value
551.1 
539.9 
2014 Senior Notes (5-Year) [Member]
 
 
Debt Instrument [Line Items]
 
 
Carrying amount
448.4 
448.8 
Estimated Fair Value
455.8 
456.2 
2014 Senior Notes (30-Year) [Member]
 
 
Debt Instrument [Line Items]
 
 
Carrying amount
597.6 
597.4 
Estimated Fair Value
701.8 
661.5 
2015 Senior Notes [Member]
 
 
Debt Instrument [Line Items]
 
 
Carrying amount
587.6 
523.7 
Estimated Fair Value
607.9 
534.8 
2017 Senior Notes [Member]
 
 
Debt Instrument [Line Items]
 
 
Carrying amount
495.2 
 
Estimated Fair Value
503.2 
 
2017 Floating Rate Senior Notes [Member]
 
 
Debt Instrument [Line Items]
 
 
Carrying amount
299.3 
 
Estimated Fair Value
300.5 
 
2.625% 2017 Private Placement Notes, due 2023 [Member]
 
 
Debt Instrument [Line Items]
 
 
Carrying amount
495.2 
 
Estimated Fair Value
496.8 
 
3.25% 2017 Private Placement Notes, due 2028 [Member]
 
 
Debt Instrument [Line Items]
 
 
Carrying amount
490.7 
 
Estimated Fair Value
496.0 
 
2017 Term Loan Facility, due 2020 [Member]
 
 
Debt Instrument [Line Items]
 
 
Carrying amount
499.2 
 
Estimated Fair Value
$ 499.2 
 
Indebtedness - Additional Information (Details) (USD $)
In Millions, unless otherwise specified
9 Months Ended 9 Months Ended 9 Months Ended
Sep. 30, 2017
Dec. 31, 2016
Sep. 30, 2017
Commercial Paper [Member]
Sep. 30, 2017
Commercial Paper [Member]
Issuance Date [Member]
Sep. 30, 2017
Commercial Paper [Member]
Maximum [Member]
Sep. 30, 2017
2017 Term Loan Facility [Member]
Sep. 30, 2017
2017 Term Loan Facility [Member]
Minimum [Member]
Sep. 30, 2017
2017 Term Loan Facility [Member]
Maximum [Member]
Sep. 30, 2017
2017 Term Loan Facility [Member]
Maximum [Member]
First Three Quarter [Member]
Sep. 30, 2017
2017 Term Loan Facility [Member]
Maximum [Member]
Last Quarter [Member]
Sep. 30, 2017
2015 (A) Credit Facility [Member]
Sep. 30, 2017
2015 (A) Credit Facility [Member]
Minimum [Member]
Sep. 30, 2017
2015 (A) Credit Facility [Member]
Maximum [Member]
Sep. 30, 2017
2015 (A) Credit Facility [Member]
Maximum [Member]
First Three Quarter [Member]
Sep. 30, 2017
2015 (A) Credit Facility [Member]
Maximum [Member]
Last Quarter [Member]
Sep. 30, 2017
2017 Senior Notes [Member]
Sep. 30, 2017
2017 Floating Rate Senior Notes [Member]
Sep. 30, 2017
2.625% 2017 Private Placement Notes, due 2023 [Member]
Sep. 30, 2017
3.25% 2017 Private Placement Notes, due 2028 [Member]
Sep. 30, 2017
2017 Bridge Credit Facility [Member]
Dec. 31, 2016
Series 2007-1 Notes [Member]
Debt Instrument [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Maximum Borrowing Capacity
 
 
$ 1,000.0 
 
 
$ 500.0 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 1,500.0 
 
Term of Debt
 
 
 
 
397 days 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Maturity date of Notes/Loan
 
 
 
 
 
Jun. 06, 2020 
 
 
 
 
 
 
 
 
 
Dec. 15, 2021 
Sep. 04, 2018 
Jan. 15, 2023 
Jan. 15, 2028 
 
 
Issuance Date of Debt
 
 
Aug. 03, 2016 
 
 
Jun. 06, 2017 
 
 
 
 
Jun. 06, 2017 
 
 
 
 
Mar. 02, 2017 
Mar. 02, 2017 
Jun. 12, 2017 
Jun. 12, 2017 
 
 
Debt/EBITDA ratio
 
 
 
 
 
 
 
 
4.5 
 
 
 
4.5 
 
 
 
 
 
 
Debt, aggregate principal amount
5,756.1 
3,377.4 
315.0 
 
 
500.0 
 
 
 
 
 
 
 
 
 
500.0 
300.0 
500.0 
500.0 
 
300.0 
Percentage included in Calculation of Senior Notes Floating Rate Plus LIBOR
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
0.35% 
 
 
 
 
Percentage of principal amount being prepaid plus accrued and unpaid interest
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
100.00% 
 
100.00% 
100.00% 
 
 
Percentage of Principal Amount Being paid after Incompletion of Acquisition or Termination of Share Purchase Agreement
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
101.00% 
101.00% 
 
 
Senior Unsecured Notes, interest
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2.75% 
 
2.625% 
3.25% 
 
6.06% 
Minimum Percentage of Aggregate Principal Amount
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
25.00% 
25.00% 
 
 
Minimum Aggregate Amount to be Paid on Maturity that Trips the Cross Default
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 50.0 
$ 50.0 
 
 
Debt Instrument Premium Rate in Addition to Adjusted LIBO Rate
 
 
 
 
 
 
0.875% 
1.50% 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt Instrument Facility Fee Basis Points
 
 
 
 
 
 
 
 
 
 
 
0.08% 
0.175% 
 
 
 
 
 
 
 
 
Debt Instrument Rate for Eurocurrency Loans
 
 
 
 
 
 
 
 
 
 
 
0.795% 
1.325% 
 
 
 
 
 
 
 
 
Debt Instrument Premium Rate in Addition to Alternate Base Rate
 
 
 
 
 
 
0.00% 
0.50% 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt Instrument Rate for Alternate Base Rate Loans
 
 
 
 
 
 
 
 
 
 
 
0.00% 
0.325% 
 
 
 
 
 
 
 
 
Percentage of Principal Amount Being Paid after Occurence of Triggering Event
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
101.00% 
101.00% 
 
 
Debt Weighted Average Interest Rate
 
 
1.15% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Line Of Credit Facility Expiration Period
 
 
17 days 
57 days 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
CONTINGENCIES
CONTINGENCIES

NOTE 15. CONTINGENCIES

Given the nature of their activities, Moody’s and its subsidiaries are subject to legal and tax proceedings, governmental, regulatory and legislative investigations and inquiries, and claims and litigation that are based on ratings assigned by MIS or that are otherwise incidental to the Company’s business. The Company periodically receives and responds to subpoenas and other inquiries which may relate to Moody’s activities or to activities of others that may result in claims and litigation, proceedings or investigations by private litigants or governmental, regulatory or legislative authorities. Moody’s also is subject to ongoing tax audits as addressed in Note 4 to the financial statements.

Management periodically assesses the Company’s liabilities and contingencies in connection with these matters based upon the latest information available. For claims, litigation and proceedings and governmental investigations and inquiries not related to income taxes, the Company records liabilities in the consolidated financial statements when it is both probable that a liability has been incurred and the amount of loss can be reasonably estimated 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 instances when a loss is reasonably possible but uncertainties exist related to the probable outcome and/or the amount or range of loss, management does not record a liability but discloses the contingency if material. As additional information becomes available, the Company adjusts its assessments and estimates of such matters accordingly. Moody’s also discloses material pending legal proceedings pursuant to SEC rules and other pending matters as it may determine to be appropriate.

In view of the inherent difficulty of assessing the potential outcome of legal proceedings, governmental, regulatory and legislative investigations and inquiries, claims and litigation and similar matters and contingencies, particularly when the claimants seek large or indeterminate damages or assert novel legal theories or the matters involve a large number of parties, the Company often cannot predict what the eventual outcome of the pending matters will be or the timing of any resolution of such matters. The Company also may be unable to 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 and to accrue for and disclose such matters as and when required. However, because such matters are inherently unpredictable and unfavorable developments or resolutions can occur, the ultimate outcome of such matters, including the amount of any loss, may differ from those estimates.

SEGMENT INFORMATION
SEGMENT INFORMATION

NOTE 16. SEGMENT INFORMATION

The Company is organized into two operating segments: MIS and MA and accordingly, the Company reports in two reportable segments: MIS and MA.

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

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

On August 10, 2017, a subsidiary of the Company acquired Yellow Maple I B.V., an indirect parent of Bureau van Dijk, a global provider of business intelligence and company information products. Bureau van Dijk is part of the MA reportable segment and its revenue is included in the RD&A LOB. Refer to Note 7 for further discussion on the acquisition.

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

Financial Information by Segment

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

Three Months Ended September 30,
20172016
MISMAEliminationsConsolidatedMISMAEliminationsConsolidated
Revenue$723.2$372.8$(33.1)$1,062.9$637.6$309.0$(29.5)$917.1
Operating, SG&A319.2278.3(33.1)564.4272.8235.2(29.5)478.5
Adjusted Operating Income404.094.5-498.5364.873.8-438.6
Less:
Restructuring----7.60.8-8.4
Depreciation and amortization18.624.4-43.019.113.6-32.7
Acquisition-Related Expenses-10.1-10.1----
Operating income$385.4$60.0$-$445.4$338.1$59.4$-$397.5
Nine Months Ended September 30,
20172016
MISMAEliminationsConsolidatedMISMAEliminationsConsolidated
Revenue$2,131.1$1,001.1$(93.6)$3,038.6$1,836.9$908.9$(83.7)$2,662.1
Operating, SG&A898.9761.9(93.6)1,567.2830.1698.1(83.7)1,444.5
Adjusted Operating Income1,232.2239.2-1,471.41,006.8210.8-1,217.6
Less:
Restructuring----10.21.8-12.0
Depreciation and amortization56.452.0-108.454.839.0-93.8
Acquisition-Related Expenses-16.7-16.7----
Operating income$1,175.8$170.5$-$1,346.3$941.8$170.0$-$1,111.8

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,
2017201620172016
MIS:
Corporate finance (CFG)$ 350.2 $ 299.6 $ 1,058.8 $ 844.7
Structured finance (SFG) 128.3 104.2 347.7 306.3
Financial institutions (FIG) 102.1 95.8 316.8 280.4
Public, project and infrastructure finance (PPIF) 109.2 105.2 312.0 309.0
Total ratings revenue 689.8 604.8 2,035.3 1,740.4
MIS Other 4.4 7.5 13.8 22.6
Total external revenue 694.2 612.3 2,049.1 1,763.0
Intersegment royalty 29.0 25.3 82.0 73.9
Total 723.2 637.6 2,131.1 1,836.9
MA:
Research, data and analytics (RD&A) 218.4 167.7 574.7 500.9
Enterprise risk solutions (ERS) 112.6 101.5 305.8 288.5
Professional services (PS) 37.7 35.6 109.0 109.7
Total external revenue 368.7 304.8 989.5 899.1
Intersegment revenue 4.1 4.2 11.6 9.8
Total 372.8 309.0 1,001.1 908.9
Eliminations (33.1) (29.5) (93.6) (83.7)
Total MCO$ 1,062.9 $ 917.1 $ 3,038.6 $ 2,662.1

Consolidated Revenue Information by Geographic Area:
Three Months Ended September 30,Nine months ended September 30,
2017201620172016
United States$588.4$545.7$1,734.0$1,571.6
International:
EMEA291.0225.9779.3665.4
Asia-Pacific118.692.5336.0272.0
Americas64.953.0189.3153.1
Total International474.5371.41,304.61,090.5
Total$1,062.9$917.1$3,038.6$2,662.1
SEGMENT INFORMATION (Tables)
Three Months Ended September 30,
20172016
MISMAEliminationsConsolidatedMISMAEliminationsConsolidated
Revenue$723.2$372.8$(33.1)$1,062.9$637.6$309.0$(29.5)$917.1
Operating, SG&A319.2278.3(33.1)564.4272.8235.2(29.5)478.5
Adjusted Operating Income404.094.5-498.5364.873.8-438.6
Less:
Restructuring----7.60.8-8.4
Depreciation and amortization18.624.4-43.019.113.6-32.7
Acquisition-Related Expenses-10.1-10.1----
Operating income$385.4$60.0$-$445.4$338.1$59.4$-$397.5
Nine Months Ended September 30,
20172016
MISMAEliminationsConsolidatedMISMAEliminationsConsolidated
Revenue$2,131.1$1,001.1$(93.6)$3,038.6$1,836.9$908.9$(83.7)$2,662.1
Operating, SG&A898.9761.9(93.6)1,567.2830.1698.1(83.7)1,444.5
Adjusted Operating Income1,232.2239.2-1,471.41,006.8210.8-1,217.6
Less:
Restructuring----10.21.8-12.0
Depreciation and amortization56.452.0-108.454.839.0-93.8
Acquisition-Related Expenses-16.7-16.7----
Operating income$1,175.8$170.5$-$1,346.3$941.8$170.0$-$1,111.8
Three Months Ended September 30,Nine Months Ended September 30,
2017201620172016
MIS:
Corporate finance (CFG)$ 350.2 $ 299.6 $ 1,058.8 $ 844.7
Structured finance (SFG) 128.3 104.2 347.7 306.3
Financial institutions (FIG) 102.1 95.8 316.8 280.4
Public, project and infrastructure finance (PPIF) 109.2 105.2 312.0 309.0
Total ratings revenue 689.8 604.8 2,035.3 1,740.4
MIS Other 4.4 7.5 13.8 22.6
Total external revenue 694.2 612.3 2,049.1 1,763.0
Intersegment royalty 29.0 25.3 82.0 73.9
Total 723.2 637.6 2,131.1 1,836.9
MA:
Research, data and analytics (RD&A) 218.4 167.7 574.7 500.9
Enterprise risk solutions (ERS) 112.6 101.5 305.8 288.5
Professional services (PS) 37.7 35.6 109.0 109.7
Total external revenue 368.7 304.8 989.5 899.1
Intersegment revenue 4.1 4.2 11.6 9.8
Total 372.8 309.0 1,001.1 908.9
Eliminations (33.1) (29.5) (93.6) (83.7)
Total MCO$ 1,062.9 $ 917.1 $ 3,038.6 $ 2,662.1
Consolidated Revenue Information by Geographic Area:
Three Months Ended September 30,Nine months ended September 30,
2017201620172016
United States$588.4$545.7$1,734.0$1,571.6
International:
EMEA291.0225.9779.3665.4
Asia-Pacific118.692.5336.0272.0
Americas64.953.0189.3153.1
Total International474.5371.41,304.61,090.5
Total$1,062.9$917.1$3,038.6$2,662.1
Financial Information by Segment (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Segment Reporting Information [Line Items]
 
 
 
 
Revenues
$ 1,062.9 
$ 917.1 
$ 3,038.6 
$ 2,662.1 
Operating, SG&A
564.4 
478.5 
1,567.2 
1,444.5 
Adjusted Operating Income
498.5 
438.6 
1,471.4 
1,217.6 
Restructuring
 
8.4 
 
12.0 
Depreciation and amortization
43.0 
32.7 
108.4 
93.8 
Acquisition-Related Expenses
10.1 
 
16.7 
 
Operating Income
445.4 
397.5 
1,346.3 
1,111.8 
MIS [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Revenues
723.2 
637.6 
2,131.1 
1,836.9 
Operating, SG&A
319.2 
272.8 
898.9 
830.1 
Adjusted Operating Income
404.0 
364.8 
1,232.2 
1,006.8 
Restructuring
 
7.6 
 
10.2 
Depreciation and amortization
18.6 
19.1 
56.4 
54.8 
Acquisition-Related Expenses
 
 
 
Operating Income
385.4 
338.1 
1,175.8 
941.8 
MA [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Revenues
372.8 
309.0 
1,001.1 
908.9 
Operating, SG&A
278.3 
235.2 
761.9 
698.1 
Adjusted Operating Income
94.5 
73.8 
239.2 
210.8 
Restructuring
 
0.8 
 
1.8 
Depreciation and amortization
24.4 
13.6 
52.0 
39.0 
Acquisition-Related Expenses
10.1 
 
16.7 
 
Operating Income
60.0 
59.4 
170.5 
170.0 
Eliminations [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Revenues
(33.1)
(29.5)
(93.6)
(83.7)
Operating, SG&A
$ (33.1)
$ (29.5)
$ (93.6)
$ (83.7)
Revenue by Line of Business within Each Reportable Segment (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Segment Reporting Information [Line Items]
 
 
 
 
Revenues
$ 1,062.9 
$ 917.1 
$ 3,038.6 
$ 2,662.1 
Moodys Investors Service [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Revenues
723.2 
637.6 
2,131.1 
1,836.9 
Moodys Investors Service [Member] |
Corporate Finance [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Revenues
350.2 
299.6 
1,058.8 
844.7 
Moodys Investors Service [Member] |
Structured Finance [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Revenues
128.3 
104.2 
347.7 
306.3 
Moodys Investors Service [Member] |
Financial Institutions [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Revenues
102.1 
95.8 
316.8 
280.4 
Moodys Investors Service [Member] |
Public Project And Infrastructure Finance [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Revenues
109.2 
105.2 
312.0 
309.0 
Moodys Investors Service [Member] |
Rating Revenue [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Revenues
689.8 
604.8 
2,035.3 
1,740.4 
Moodys Investors Service [Member] |
MIS Other [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Revenues
4.4 
7.5 
13.8 
22.6 
Moodys Investors Service [Member] |
External Revenues [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Revenues
694.2 
612.3 
2,049.1 
1,763.0 
Moodys Investors Service [Member] |
Intersegment Royality [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Revenues
29.0 
25.3 
82.0 
73.9 
Moodys Analytics [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Revenues
372.8 
309.0 
1,001.1 
908.9 
Moodys Analytics [Member] |
Research Data And Analytics [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Revenues
218.4 
167.7 
574.7 
500.9 
Moodys Analytics [Member] |
Enterprise Risk Solutions [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Revenues
112.6 
101.5 
305.8 
288.5 
Moodys Analytics [Member] |
Professional Services [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Revenues
37.7 
35.6 
109.0 
109.7 
Moodys Analytics [Member] |
External Revenues [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Revenues
368.7 
304.8 
989.5 
899.1 
Moodys Analytics [Member] |
Intersegment Royality [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Revenues
4.1 
4.2 
11.6 
9.8 
Intersegment Elimination [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Revenues
$ (33.1)
$ (29.5)
$ (93.6)
$ (83.7)
Consolidated Revenue Information by Geographic Area (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Segment Reporting Information [Line Items]
 
 
 
 
Revenues
$ 1,062.9 
$ 917.1 
$ 3,038.6 
$ 2,662.1 
U S
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Revenues
588.4 
545.7 
1,734.0 
1,571.6 
International Regions [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Revenues
474.5 
371.4 
1,304.6 
1,090.5 
International Regions [Member] |
Europe Middle East And Africa [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Revenues
291.0 
225.9 
779.3 
665.4 
International Regions [Member] |
Asia Pacific [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Revenues
118.6 
92.5 
336.0 
272.0 
International Regions [Member] |
Americas [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Revenues
$ 64.9 
$ 53.0 
$ 189.3 
$ 153.1 
RECENTLY ISSUED ACCOUNTING STANDARDS
RECENTLY ISSUED ACCOUNTING STANDARDS

NOTE 17. RECENTLY ISSUED ACCOUNTING STANDARDS

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

The Company intends to adopt the new revenue guidance as of January 1, 2018 using the modified retrospective transition method. Under this adoption method, the Company will record a cumulative adjustment to retained earnings at January 1, 2018 and apply the provisions of the ASU prospectively. Currently, the Company believes this ASU will have an impact on, which is not limited to: i) the accounting for certain software subscription revenue in MA whereby the license rights within the arrangement would be recognized at the inception of the contract based on estimated stand-alone selling price with the remainder recognized over the subscription period (compared to ASC 605 whereby all software subscription revenue is currently recognized over the subscription period); ii) the accounting for certain ERS and ESA revenue arrangements where VSOE is not currently available under ASC 605 would result in the acceleration of revenue recognition (compared to ASC 605 whereby revenue is currently deferred due to lack of VSOE); iii) the capitalization and related period of expense recognition for sales commissions, which are incurred in the MA segment; iv) the capitalization of software implementation project costs to fulfill a contract for its ERS and ESA businesses which will be expensed as incurred under the new standard; and v) the capitalization of work in process costs for in-progress MIS ratings at the end of each reporting period. This ASU will also require new comprehensive disclosures about contracts with customers including the significant reasonable judgments the Company has made when applying the ASU.

At September 30, 2017, the Company continues to assess and document key changes to its accounting policies relating to the adoption of the new revenue accounting standard. Additionally, the Company is assessing the impact that the standard will have on its processes and controls. Furthermore, the Company is in the process of implementing software in order to support the accounting under the new standard as well as assessing the impact that the new standard for MA multi-element arrangements, which primarily occur within the ERS and ESA revenue streams.

In January 2016, the FASB issued ASU No. 2016-01 “Financial Instruments – Overall (Subtopic 825-10), Recognition and Measurement of Financial Assets and Financial Liabilities”. The amendments in this ASU update various aspects of recognition, measurement, presentation and disclosures relating to financial instruments. This ASU is effective for fiscal years beginning after December 15, 2017. The Company is currently evaluating the impact of this ASU on the Company’s financial statements. The Company believes that the most pertinent impact to its financial statements upon the adoption of this ASU will relate to the discontinuance of the available-for-sale classification for investments in equity securities (unrealized gains and losses were recorded through OCI). Accordingly, subsequent to adoption of this ASU, changes in the fair value of equity securities held by the Company will be recorded through earnings.

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

In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments – Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments”. The amendments in this ASU require the use of an “expected credit loss” impairment model for most financial assets reported at amortized cost which will require entities to estimate expected credit losses over the lifetime of the instrument. This may result in the earlier recognition of allowances for losses. For available-for-sale debt securities with unrealized losses, an allowance for credit losses will be recognized as a contra account to the amortized cost carrying value of the asset rather than a direct reduction to the carrying value, with changes in the allowance impacting earnings. This ASU is effective for annual and interim reporting periods beginning after December 15, 2019, with early adoption permitted in annual and interim reporting periods beginning after December 15, 2018. Entities will apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first effective reporting period. The Company is currently evaluating the impact of this ASU on its financial statements. Currently, the Company believes that the most notable impact of this ASU will relate to its processes around the assessment of the adequacy of its allowance for doubtful accounts on accounts receivable.

In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Cash Payments”. This ASU adds or clarifies guidance on the classification of certain cash receipts and payments in the statement of cash flows with the intent to alleviate diversity in practice for classifying various types of cash flows. This ASU is effective for annual and interim reporting periods beginning after December 15, 2017, with early adoption permitted. The Company will apply this clarification guidance in its statements of cash flows upon adoption.

In January 2017, the FASB issued ASU No. 2017-01, “Business Combinations (Topic 805), Clarifying the Definition of a Business”. This ASU clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. This ASU is effective for annual and interim reporting periods beginning after December 15, 2017 and should be applied prospectively. Upon adoption, the Company will apply the guidance in this ASU when evaluating whether acquired assets and activities constitute a business.

In March 2017, the FASB issued ASU No. 2017-07, “Compensation – Retirement Benefits (Topic 715), Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost”. This ASU impacts the presentation of net periodic pension costs in the statement of operations. Entities will be required to report the service cost component in the same line item or items as other compensation costs (either Operating or SG&A in Moody’s statement of operations). The other components of net benefit cost are required to be presented in the statement of operations separately from the service cost component and outside of operating income. The ASU permits only the service cost component of net periodic pension cost to be eligible for capitalization, when applicable. This ASU is effective for annual and interim reporting periods beginning after December 15, 2017. Upon adoption, the Company will bifurcate its net periodic pension costs reported in its statements of operations in accordance with this ASU.

In May 2017, the FASB issued ASU No. 2017-09, “Compensation—Stock Compensation (Topic 718), Scope of Modification Accounting. This ASU clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as modifications. Under this ASU, an entity will not apply modification accounting to a share-based payment award if the award’s fair value, vesting conditions and classification as an equity or liability instrument are the same immediately before and after the change. The new guidance will reduce diversity in practice and result in fewer changes to the terms of an award being accounted for as modifications. This ASU is effective for annual and interim reporting periods beginning after December 15, 2017 and should be applied prospectively to awards modified on or after the adoption date. The Company does not expect the adoption of this ASU to have a material impact on its financial statements.

In July 2017, the FASB issued ASU No. 2017-12, “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities”. This ASU enables entities to enhance transparency relating to risk management activities and simplifies the application of hedge accounting in certain circumstances. This ASU is effective for fiscal years beginning after December 15, 2018, including interim periods within those years with early adoption permitted. The Company is currently in the process of assessing the impact that this ASU will have on its financial statements.

SUBSEQUENT EVENTS
SUBSEQUENT EVENTS

NOTE 18. SUBSEQUENT EVENT

On October 23, 2017 , the Board approved the declaration of a quarterly dividend of $0.38 per share of Moody’s common stock, payable on December 12, 2017 to shareholders of record at the close of business on November 21, 2017.

Subsequent Events - Additional Information (Detail)
9 Months Ended
Sep. 30, 2017
Dividends Payable [Line Items]
 
Dividend declared, per share
$ 0.38 
Dividend declared, declaration date
Oct. 23, 2017 
Dividend declared, payable date
Dec. 12, 2017 
Dividend declared, record date
Nov. 21, 2017