Moody's Corporation · NYSE:MCO

Moody's — Q2 2015 Earnings Presentation

41 slides from Moody's's earnings presentation, Jul 24, 2015

  1. Slide 1: Second-Quarter 2015 Earnings Call

    Second-Quarter 2015 Earnings Call July 24, 2015

  2. Slide 2: Overview

    Overview SALLI SCHWARTZ GLOBAL HEAD OF INVESTOR RELATIONS Second-Quarter 2015 Earnings Call, July 24, 2015 2

  3. Slide 3: Disclaimer

    Disclaimer Certain statements contained in this presentation are forward-looking statements and are based on future expectations, plans and prospects for Moody’s business and operations that involve a number of risks and uncertainties. Moody’s outlook for 2015 and other forward-looking statements in

  4. Slide 4: 1. Second-Quarter 2015 Results

    1. Second-Quarter 2015 Results RAY MCDANIEL PRESIDENT AND CHIEF EXECUTIVE OFFICER Second-Quarter 2015 Earnings Call, July 24, 2015 4

  5. Slide 5: Agenda

    Agenda 1. Second-Quarter 2015 Results Ray McDaniel, President and Chief Executive Officer 2. Financial and Operating Highlights Linda Huber, Executive Vice President and Chief Financial Officer 3. 2015 Outlook Ray McDaniel, President and Chief Executive Officer 4. Q&A Ray McDaniel, President and Chi

  6. Slide 6: Second-Quarter 2015 Results and Comparison to Second-Quarter 2014

    Second-Quarter 2015 Results and Comparison to Second- Quarter 2014 Moody’s Corporation » Revenue  5% to $918 million – US  18% – Non-US  10% » Expense  8% to $499 million » Operating Income  2% to $419 million » Adjusted Operating Income  3% to $447 million Second-Quarter 2015 Earnings Call, J

  7. Slide 7: Second-Quarter 2015 Results and Comparison to Second-Quarter 2014 (continued)

    Second-Quarter 2015 Results and Comparison to Second- Quarter 2014 (continued) Moody’s Corporation » Operating Margin • 45.7% » Adjusted Operating Margin • 48.7% » EPS  14% to $1.28 (vs. non-GAAP 2Q14 EPS)* *Excluded a $103 million non-cash, pre-tax gain, or $0.36 per share, resulting from Moody’s

  8. Slide 8: Year-to-Date 2015 Performance and Comparison to Year-to-Date 2014

    Year-to-Date 2015 Performance and Comparison to Year- to-Date 2014 Moody’s Corporation » Revenue  9% to $1.8 billion – MIS  8% to $1.2 billion – MA  11% to $542 million » Expense  11% to $993 million » Operating Income  6% to $791 million » Adjusted Operated Income  7% to $847 million Second-Q

  9. Slide 9: Year-to-Date 2015 Performance and Comparison to Year-to-Date 2014 (continued)

    Year-to-Date 2015 Performance and Comparison to Year- to-Date 2014 (continued) Moody’s Corporation » Operating Margin • 44.3% » Adjusted Operating Margin • 47.5 % » On a constant currency basis and excluding our 2014 acquisitions, operating margin and adjusted operating margin would each have increa

  10. Slide 10: 2. Financial and Operating Highlights

    2. Financial and Operating Highlights LINDA HUBER EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER Second-Quarter 2015 Earnings Call, July 24, 2015 10

  11. Slide 11: Second-Quarter 2015 Results: Moody's Corporation Revenue

    Second-Quarter 2015 Results and Comparison to Second- Quarter 2014 Moody’s Corporation Revenue » Total Global  5% to $918 million  10% on a constant currency basis » US  18% to $546 million » Non-US  10% to $372 million • 41% of total global » Recurring Revenue • $439 million • 48% of total reve

  12. Slide 12: MIS Revenue by Geography

    Second-Quarter 2015 Results and Comparison to Second-Quarter 2014 (continued) MIS Revenue by Geography » Total MIS  2% to $639 million • Foreign currency translation unfavorably impacted revenue by 5% » US  17% to $412 million » Non-US  17% to $227 million • 36% of total MIS Second-Quarter 2015 E

  13. Slide 13: MIS Revenue by Line of Business

    Second-Quarter 2015 Results and Comparison to Second-Quarter 2014 (continued) MIS Revenue by Line of Business » Corporate Finance: $320 million – Global Approximately Flat – US  18% – Non-US  25% » Structured Finance: $121 million – Global  10% – US  20% – Non-US  10% Second-Quarter 2015 Earnin

  14. Slide 14: MIS Revenue by Line of Business (continued)

    Second-Quarter 2015 Results and Comparison to Second-Quarter 2014 (continued) MIS Revenue by Line of Business » Financial Institutions: $90 million – Global  2% – Constant Currency Basis  6% – US  10% – Non-US  9% » Public, Project & Infrastructure Finance: $100 million – Global  2% – US  10%

  15. Slide 15: MA Revenue by Geography

    Second-Quarter 2015 Results and Comparison to Second-Quarter 2014 (continued) MA Revenue by Geography » Total MA  12% to $279 million • Foreign currency translation unfavorably impacted revenue by 6% • Excluding 2014 acquisitions of WebEquity and Lewtan, revenue grew by 7% » US  23% to $134 millio

  16. Slide 16: MA Revenue by Line of Business

    Second-Quarter 2015 Results and Comparison to Second-Quarter 2014 (continued) MA Revenue by Line of Business » RD&A: $158 million – Global  11% • 56% of total MA – US  19% – Non-US  2% Second-Quarter 2015 Earnings Call, July 24, 2015 16

  17. Slide 17: MA Revenue by Line of Business (continued)

    Second-Quarter 2015 Results and Comparison to Second-Quarter 2014 (continued) MA Revenue by Line of Business » ERS: $83 million – Global  24% – US  44% – Non-US  14% – TTM* Revenue  31% – TTM* Sales  11% » Professional Services: $38 million – Global  4% – US  10% – Non-US  10% *Trailing twel

  18. Slide 18: Second-Quarter 2015 Expense and Margins

    Second-Quarter 2015 Results and Comparison to Second-Quarter 2014 (continued) Moody’s Corporation » Total Expense  8% to $499 million • Foreign currency translation favorably impacted expense by 5% » Operating Margin • 45.7% » Adjusted Operating Margin • 48.7% » On a constant currency basis and exc

  19. Slide 19: Capital Allocation

    Capital Allocation » During 2Q15 repurchased 2.2 million shares at a total cost of $235 million, or an average cost of $107.35 per share, and issued approximately 374,000 shares under annual employee stock-based compensation plans » During the first half of 2015 repurchased 6 million shares at a tot

  20. Slide 20: Balance Sheet and Free Cash Flow

    Balance Sheet and Free Cash Flow » As of June 30, 2015, Moody’s had: – $3.1 billion of outstanding debt – $1 billion of additional debt capacity under revolving credit facility – Cash, cash equivalents and short-term investments of $2 billion » Free cash flow of $554 million in first half of 2015, u

  21. Slide 21: 3. 2015 Outlook

    3. 2015 Outlook RAY MCDANIEL PRESIDENT AND CHIEF EXECUTIVE OFFICER Second-Quarter 2015 Earnings Call, July 24, 2015 21

  22. Slide 22: 2015 Outlook

    2015 Outlook » Our guidance assumes foreign currency translation at end-of-quarter exchange rates. Specifically, our forecast reflects exchange rates for the British pound and the euro of $1.57 to £1 and $1.11 to €1, respectively Changes to 2015 Full-Year Financial Outlook* MIS Current Guidance as o

  23. Slide 23: 4. Q&A Session

    4. Q&A Session » Ray McDaniel President and Chief Executive Officer, Moody’s Corporation » Linda Huber Executive Vice President and Chief Financial Officer, Moody’s Corporation » Michel Madelain President and Chief Operating Officer, Moody’s Investors Service » Mark Almeida President, Moody’s Analyt

  24. Slide 24: Investor Day 2015

    Investor Day 2015 Second-Quarter 2015 Earnings Call, July 24, 2015 24

  25. Slide 25: Replay Details

    Replay Details » Available from 3:30pm (Eastern Time) July 24, 2015 until 3:30pm (Eastern Time) August 22, 2015 » Telephone Details: – US +1-877-400-0505 – Non-US +1-719-234-7477 – Passcode 2759861 » Webcast Details: – Go to http://ir.moodys.com – Click on “Events & Presentations” featured on the le

  26. Slide 26: Appendix

    Appendix Second-Quarter 2015 Earnings Call, July 24, 2015 26

  27. Slide 27: Consolidated Statements of Operations (Unaudited)

    Consolidated Statements of Operations (Unaudited) Second-Quarter 2015 Earnings Call, July 24, 2015 27

  28. Slide 28: Supplemental Revenue Information (Unaudited)

    Supplemental Revenue Information (Unaudited) Second-Quarter 2015 Earnings Call, July 24, 2015 28

  29. Slide 29: Non-Operating (Expense) Income, Net

    Non-Operating (Expense) Income, Net Second-Quarter 2015 Earnings Call, July 24, 2015 29

  30. Slide 30: Selected Consolidated Balance Sheet Data (Unaudited)

    Selected Consolidated Balance Sheet Data (Unaudited) Second-Quarter 2015 Earnings Call, July 24, 2015 30

  31. Slide 31: Non-operating (expense) income, net

    Non-operating (expense) income, net Second-Quarter 2015 Earnings Call, July 24, 2015 31

  32. Slide 32: Financial Information by Segment

    Financial Information by Segment Second-Quarter 2015 Earnings Call, July 24, 2015 32

  33. Slide 33: Transaction and Relationship Revenue

    Transaction and Relationship Revenue Refer to “Moody’s Corporation Reports Results for Second-Quarter 2015” press release for table details Second-Quarter 2015 Earnings Call, July 24, 2015 33

  34. Slide 34: Transaction and Relationship Revenue (continued)

    Transaction and Relationship Revenue (continued) Refer to “Moody’s Corporation Reports Results for Second-Quarter 2015” press release for table details Second-Quarter 2015 Earnings Call, July 24, 2015 34

  35. Slide 35: Non-GAAP Financial Measures

    Non-GAAP Financial Measures Refer to “Moody’s Corporation Reports Results for Second-Quarter 2015” press release for table details Second-Quarter 2015 Earnings Call, July 24, 2015 35

  36. Slide 36: Adjusted Operating Income and Adjusted Operating Margin

    Adjusted Operating Income and Adjusted Operating Margin Refer to “Moody’s Corporation Reports Results for Second-Quarter 2015” press release for table details Second-Quarter 2015 Earnings Call, July 24, 2015 36

  37. Slide 37: Free Cash Flow

    Free Cash Flow Refer to “Moody’s Corporation Reports Results for Second-Quarter 2015” press release for table details Second-Quarter 2015 Earnings Call, July 24, 2015 37

  38. Slide 38: Constant Currency Measures

    Constant Currency Measures Second-Quarter 2015 Earnings Call, July 24, 2015 38

  39. Slide 39: 2015 Outlook

    2015 Outlook Second-Quarter 2015 Earnings Call, July 24, 2015 39

  40. Slide 40: moodys.com

    40 moodys.com Website: http://ir.moodys.com Email: ir@moodys.com Second-Quarter 2015 Earnings Call, July 24, 2015 40

  41. Slide 41: Copyright and Ratings Disclaimer

    © 2015 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, licensors and affiliates (collectively, “MOODY’S”). All rights reserved. representatives, licensors and suppliers

Moody's — Q2 2015 Earnings Presentation on 6ix