10-KPeriod: FY2014

MOODYS CORP /DE/ Annual Report, Year Ended Dec 31, 2014

Filed February 26, 2015For Securities:MCO

Summary

Moody's Corporation's 2014 10-K filing reveals a strong financial performance characterized by significant revenue growth in both its core credit ratings business (MIS) and its analytics segment (MA). The company demonstrated robust operational income and healthy profit margins, buoyed by increased debt issuance activity across various sectors and expansion within its analytics offerings. Strategic acquisitions, including ICRA Ltd. and Copal Amba, aimed to strengthen its market position and diversify its revenue streams, particularly in emerging markets. Looking ahead, Moody's anticipates continued growth, driven by global economic expansion and increased demand for credit risk analysis and related services. However, the company acknowledges potential headwinds from evolving regulatory landscapes in the U.S. and EU, as well as ongoing litigation risks. Despite these challenges, Moody's remains committed to returning value to shareholders through share repurchases and dividends, while also investing in strategic growth initiatives and IT infrastructure to maintain its competitive edge.

Financial Highlights

54 data points
Beta

Revenue

$3.33B

Net Income

$988.70M

29.7% Net Margin

EPS (Diluted)

$4.61

Total Assets

$4.67B

Cash & Equivalents

$1.22B

Free Cash Flow

$944.00M

Financial Statements
Beta
Revenue$3.33B
R&D Expenses$37.90M
SG&A Expenses$869.30M
Operating Expenses$1.90B
Operating Income$1.44B
Net Income$988.70M
EPS (Basic)$4.69
EPS (Diluted)$4.61
Shares Outstanding (Basic)210.70M
Shares Outstanding (Diluted)214.70M

Key Highlights

  • 1Moody's reported significant revenue growth in 2014, reaching $3,334.3 million, an increase of 12% from 2013, driven by both the MIS and MA segments.
  • 2Operating income increased by 17% to $1,439.1 million in 2014, with an operating margin of 43.2%, demonstrating improved profitability.
  • 3The company completed several strategic acquisitions in 2014, including increasing its stake in ICRA Ltd. (India) and acquiring Copal Amba, WebEquity Solutions, and Lewtan Technologies, aimed at expanding its global reach and service offerings.
  • 4Moody's continues to prioritize shareholder returns, with share repurchases totaling $1,220.5 million in 2014 and an increase in dividends paid per share to $1.12.
  • 5The company's outlook for 2015 projects continued mid-single-digit revenue growth, supported by favorable market conditions and strategic investments.
  • 6Significant investments were made in IT infrastructure and headcount growth to support business expansion and enhance service delivery.
  • 7The company faces ongoing regulatory scrutiny and potential legal risks, particularly in the U.S. and EU, which could impact future operations and costs.

Frequently Asked Questions

Moody's operated through two primary segments: MIS (Moody's Investors Service), which focuses on credit ratings, and MA (Moody's Analytics), which provides a range of financial analysis, data, and risk management solutions. Both segments experienced revenue growth in 2014, with MIS benefiting from increased debt issuance and MA driven by its various product and service lines, including RD&A, ERS, and PS. Overall, total revenue increased to $3,334.3 million.

In 2014, Moody's made several key acquisitions to bolster its growth and market position. These included increasing its ownership in ICRA Ltd. in India, acquiring Copal Amba (combining Copal Partners and Amba Investment Services), WebEquity Solutions (a cloud-based loan origination provider), and Lewtan Technologies (a provider of structured finance analytical tools and data).

Moody's identified several key risks and challenges. These include the rapidly evolving U.S. and international regulatory landscape affecting the credit rating industry, exposure to litigation related to rating opinions and business practices, the impact of global economic conditions on debt capital markets, competition and pricing pressures, potential cybersecurity threats, and the risk of losing key employees. The company also noted the significant amount of goodwill and intangible assets on its balance sheet, which carry potential impairment risk.

Moody's demonstrated a strong commitment to shareholder returns. In 2014, the company repurchased $1,220.5 million of its common stock and increased its quarterly dividend to $0.34 per share. The company also reported healthy free cash flow of $944.0 million and indicated plans for approximately $1 billion in share repurchases for 2015.