What is the significance of the separation from The Dun & Bradstreet Corporation?

The separation, completed on September 30, 2000, established Moody's Corporation as an independent, publicly traded entity. This allows Moody's to focus solely on its core ratings and related services business, potentially leading to greater strategic flexibility and clearer financial performance evaluation for investors.

How did the company perform in the third quarter of 2000 compared to the prior year?

Moody's experienced a 9.5% increase in revenue to $152.5 million in the third quarter of 2000, driven by strong international and structured finance ratings. However, net income saw a slight decrease to $40.5 million from $42.2 million in the prior year, primarily due to a significant one-time gain from a business sale in the third quarter of 1999. Earnings per share remained largely consistent.

What is the company's outlook regarding future growth and financial health?

The company highlighted strong international revenue growth and ongoing demand for its core ratings services, as well as growth in opinion research products and risk management services. Moody's expects its current cash, operational cash flow, and debt capacity to be sufficient to fund its operating needs, service debt, and pay dividends over the next year. The company also announced a $250 million share repurchase program and a quarterly dividend.

Are there any significant legal or tax contingencies that investors should be aware of?

Moody's is involved in legal proceedings, notably the Information Resources, Inc. (IRI) antitrust lawsuit, the outcome of which remains uncertain and for which no amount has been accrued. Additionally, the company is subject to potential tax liabilities related to D&B's past global tax planning initiatives, with Moody's and New D&B sharing 50% of potential liabilities not directly attributable to their respective operations. A significant payment was made to the IRS related to capital losses from 1989-1990, with Moody's share impacting cash flow from operations.

MCO 10-Q Quarterly Report Q3 FY2000 — Revenue, Net Income, EPS

Summary

Moody's Corporation (MCO) reported its financial results for the quarter and nine months ended September 30, 2000. The company completed its separation from The Dun & Bradstreet Corporation (D&B) on September 30, 2000, and now operates as an independent, publicly traded entity. This marks a significant transition for Moody's, with financial statements restated to reflect its standalone operations. For the third quarter of 2000, Moody's saw revenue growth of 9.5% year-over-year, driven by strong international ratings, particularly in structured finance and corporate finance in Europe, as well as double-digit growth in opinion research products and risk management services, the latter boosted by a recent acquisition. Despite this revenue growth, net income slightly declined compared to the prior year, largely due to a significant gain from the sale of a division in the prior year's comparable period. Earnings per share remained stable. The company also highlighted its efforts to manage expenses and indicated a strong focus on international growth as a key driver for the future.

Key Highlights

1Moody's Corporation successfully separated from The Dun & Bradstreet Corporation on September 30, 2000, becoming an independent public company.
2Third-quarter 2000 revenue increased by 9.5% to $152.5 million compared to the prior year, driven by strong international and structured finance ratings, alongside growth in other service areas.
3Net income for the third quarter was $40.5 million, a slight decrease from $42.2 million in the prior year, impacted by a significant gain from a divestiture in the prior year's comparable period.
4Earnings per share remained flat at $0.25 for the third quarter compared to $0.26 in the prior year.
5The company reported a notable increase in international revenue, which represented 29% of total revenue in the third quarter, up from 24% in the prior year.
6Operating expenses increased by 7.9% to $75.1 million due to higher compensation and benefit costs and increased depreciation and amortization related to an acquisition.
7Moody's acquired a financial software products company in January 2000, contributing to revenue growth in its Risk Management Services segment.

MOODYS CORP /DE/ Quarterly Report for Q3 Ended Sep 30, 2000

Summary

Key Highlights

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