How has the company's financial position changed regarding cash and debt?

Moody's has seen a significant improvement in its liquidity. Cash and cash equivalents increased to $174.7 million by September 30, 2001, from $119.1 million at the beginning of the year, largely due to strong net cash provided by operating activities. The company also has access to undrawn credit facilities.

Are there any significant legal proceedings that could impact the company's financials?

Moody's is involved in several legal proceedings, including an antitrust lawsuit by Information Resources, Inc. (IRI) and a claim by L’Association Francaise des Porteurs d’ Emprunts Russes (AFPER). While management believes the ultimate liability in these matters will not materially affect the company's financial position, the outcomes are uncertain, particularly for the AFPER lawsuit which seeks substantial damages.

What was the impact of the September 11th terrorist attacks on Moody's?

The September 11th attacks led to Moody's displacement from its New York City headquarters. While there were some incremental costs and a temporary increase in the allowance for doubtful accounts due to billing processing issues, the company anticipates that losses will be largely covered by insurance, and the overall financial impact is not expected to be material.

MCO 10-Q Quarterly Report Q3 FY2001 — Revenue, Net Income, EPS

Q: What is the primary driver of Moody's revenue growth?

Moody's revenue growth is primarily driven by the increase in global ratings revenue, which is fueled by robust debt issuance in the U.S. capital markets and strong gains in European ratings, particularly in structured finance. Declining interest rates and narrower yield spreads in the U.S. also contributed to strong issuance growth in corporate bonds.

Summary

Moody's Corporation (MCO) reported a strong third quarter and nine-month performance for the period ending September 30, 2001, marked by significant revenue growth across its primary ratings segment and other services. Total revenue increased by 24.9% for the quarter and 30.5% for the nine months, driven by robust debt issuance in U.S. capital markets and strong gains in European ratings, particularly in structured finance. Net income also saw substantial growth, rising 23.2% for the quarter to $49.9 million and 30.0% for the nine months to $153.4 million. Diluted earnings per share followed suit, increasing to $0.31 for the quarter and $0.95 for the nine months. The company's liquidity position strengthened considerably, with cash and cash equivalents increasing significantly, supported by strong operating cash flows. The company also announced an expansion of its share repurchase program and a quarterly dividend payment, signaling confidence in its financial outlook.

Key Highlights

1Revenue for the third quarter of 2001 increased by 24.9% to $190.4 million compared to the prior year period.
2Nine-month revenue grew by 30.5% to $575.8 million.
3Net income for the third quarter rose 23.2% to $49.9 million, with diluted EPS at $0.31.
4Nine-month net income increased 30.0% to $153.4 million, with diluted EPS at $0.95.
5Operating income showed strong growth, up 28.5% for the quarter and 35.9% for the nine months.
6Cash and cash equivalents increased significantly, reaching $174.7 million by September 30, 2001, driven by robust operating cash flows.
7The company expanded its share repurchase program by an additional $300 million in October 2001 and declared a quarterly dividend.

MOODYS CORP /DE/ Quarterly Report for Q3 Ended Sep 30, 2001

Summary

Key Highlights

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