Moody's Corp. (MCO, Financial) filed Quarterly Report for the period ended 2009-09-30.
Moody's Corporation is the parent company of Moody's Investors Service a leading provider of credit ratings research and analysis covering debt instruments and securities in the global capital markets Moody's KMV a leading provider of credit risk processing and credit risk management products for banks and investors in credit-sensitive assets serving the world's largest financial institutions Moody's Economy.com a provider of economic research and data services and Moody's Wall Street Analytics a provider of software tools and analysis for the structured finance industry. Moody's Corp. has a market cap of $5.53 billion; its shares were traded at around $23.39 with a P/E ratio of 14.3 and P/S ratio of 3.1. The dividend yield of Moody's Corp. stocks is 1.7%.
SG&A expenses of $124.3 million were $16.2 million higher than the prior year, reflecting increases in both compensation and non-compensation costs, partially offset by favorable changes in FX translation. Non-compensation costs of $63.0 million increased $12.1 million from the prior year reflecting an increase in professional fees which includes legal and IT consulting costs, as well as higher rent and occupancy costs relating to the January 1, 2009 commencement of the Canary Wharf Lease in London. Additionally, non-compensation costs for the third quarter of 2009 include approximately $3 million relating to an international VAT tax matter. Compensation costs were $61.3 million, up $4.1 million compared to 2008, due primarily to higher incentive compensation accruals reflecting greater achievement against targeted results in 2009 compared to the prior year, partially offset by the favorable impact in FX translation.
Other non-operating (expense) income, net, was $1.7 million in the third quarter of 2009, compared to $7.5 million in 2008. The change reflects a charge of approximately $5 million relating to an international non-income tax matter and $2.1 million higher FX gains than in 2008 due to the strengthening of the euro against the U.S. dollar and British pound during the third quarter of 2009. Additionally, the 2008 amount reflects a $4.6 million benefit for the reversal of a Legacy Tax Matter.
Net Income of $100.6 million was down $12.4 million compared to 2008, reflecting the $18.4 million increase in revenue more than offset by increases in both operating and non-operating expenses, partially offset by a lower provision for income taxes. Excluding the impact of restructuring and Legacy Tax in both years, Net Income was $102.9 million, a decrease of $6.2 million from 2008.
Global SFG revenue of $79.2 million decreased $16.5 million reflecting the continued slowdown in new issuance in the securitization markets due to reduced investor appetite, continued high credit spreads and higher credit enhancements. As a result, transaction revenue declined to 43% of total SFG compared to 48% in the same period of 2008. In the U.S., revenue of $37.0 million decreased $3.0 million, or 8% against prior year, and represented 47% of total SFG revenue, compared to 42% in the prior year period. The decline was most notable within the Derivatives sector of the business. Internationally, revenue of $42.2 million declined $13.5 million, with approximately 59% of the decline occurring within EMEA Derivatives. Changes in FX translation rates had a negative $1 million impact on international SFG revenue in 2009.
Global PPIF revenue of $61.8 million increased $2.1 million from the prior year, reflecting modest growth internationally. U.S. revenue of $39.2 million was flat compared to 2008 due primarily to low issuance volumes for municipal structured products, particularly in variable-rate and auction-rate securities. Partially offsetting this decrease was a modest increase in both the U.S. public finance and project finance sectors compared to the prior year. Outside the U.S., revenue increased $2.7 million, reflecting strong growth in the EMEA infrastructure finance sector due to higher issuance coupled with increases in the project finance sector primarily resulting from two large debt issues in the region during the third quarter of 2009. Transaction revenue in the third quarter of 2009 represented 57% of total PPIF, down from 60% in 2008. Changes in FX translation rates had a negative $1 million impact on international PPIF revenue in 2009.
Read the The complete ReportMCO is in the portfolios of Warren Buffett of Berkshire Hathaway, Chris Davis of Davis Selected Advisers, Richard Pzena of Pzena Investment Management LLC, Dodge & Cox.
Moody's Corporation is the parent company of Moody's Investors Service a leading provider of credit ratings research and analysis covering debt instruments and securities in the global capital markets Moody's KMV a leading provider of credit risk processing and credit risk management products for banks and investors in credit-sensitive assets serving the world's largest financial institutions Moody's Economy.com a provider of economic research and data services and Moody's Wall Street Analytics a provider of software tools and analysis for the structured finance industry. Moody's Corp. has a market cap of $5.53 billion; its shares were traded at around $23.39 with a P/E ratio of 14.3 and P/S ratio of 3.1. The dividend yield of Moody's Corp. stocks is 1.7%.
Highlight of Business Operations:
Moodys revenue in 2009 of $451.8 million, which included a $10 million negative impact from FX translation, increased $18.4 million from $433.4 million in 2008. Total expenses of $279.3 million increased $35.7 million from prior year and included a $7 million favorable benefit related to FX translation. Operating income for the quarter was $172.5 million, a 9.1% decline from $189.8 million for the same period in 2008. Moodys operating margin was 38.2% compared to 43.8% in the prior year. Excluding the impact of restructuring in both years, operating margin was 39.0% in 2009 compared to 43.4% in 2008. Net Income for the quarter was $100.6 million, a decrease of $12.4 million, reflecting the decline in operating income combined with the increase in interest and other non-operating expenses, partially offset by a lower provision for income taxes. Diluted EPS was $0.42 in 2009, and included a $0.01 charge related to restructuring actions. Excluding the aforementioned impact related to restructuring in 2009, diluted EPS was $0.43, a decrease from $0.45 in 2008 which excludes a $0.01 impact related to a favorable resolution of a Legacy Tax Matter.SG&A expenses of $124.3 million were $16.2 million higher than the prior year, reflecting increases in both compensation and non-compensation costs, partially offset by favorable changes in FX translation. Non-compensation costs of $63.0 million increased $12.1 million from the prior year reflecting an increase in professional fees which includes legal and IT consulting costs, as well as higher rent and occupancy costs relating to the January 1, 2009 commencement of the Canary Wharf Lease in London. Additionally, non-compensation costs for the third quarter of 2009 include approximately $3 million relating to an international VAT tax matter. Compensation costs were $61.3 million, up $4.1 million compared to 2008, due primarily to higher incentive compensation accruals reflecting greater achievement against targeted results in 2009 compared to the prior year, partially offset by the favorable impact in FX translation.
Other non-operating (expense) income, net, was $1.7 million in the third quarter of 2009, compared to $7.5 million in 2008. The change reflects a charge of approximately $5 million relating to an international non-income tax matter and $2.1 million higher FX gains than in 2008 due to the strengthening of the euro against the U.S. dollar and British pound during the third quarter of 2009. Additionally, the 2008 amount reflects a $4.6 million benefit for the reversal of a Legacy Tax Matter.
Net Income of $100.6 million was down $12.4 million compared to 2008, reflecting the $18.4 million increase in revenue more than offset by increases in both operating and non-operating expenses, partially offset by a lower provision for income taxes. Excluding the impact of restructuring and Legacy Tax in both years, Net Income was $102.9 million, a decrease of $6.2 million from 2008.
Global SFG revenue of $79.2 million decreased $16.5 million reflecting the continued slowdown in new issuance in the securitization markets due to reduced investor appetite, continued high credit spreads and higher credit enhancements. As a result, transaction revenue declined to 43% of total SFG compared to 48% in the same period of 2008. In the U.S., revenue of $37.0 million decreased $3.0 million, or 8% against prior year, and represented 47% of total SFG revenue, compared to 42% in the prior year period. The decline was most notable within the Derivatives sector of the business. Internationally, revenue of $42.2 million declined $13.5 million, with approximately 59% of the decline occurring within EMEA Derivatives. Changes in FX translation rates had a negative $1 million impact on international SFG revenue in 2009.
Global PPIF revenue of $61.8 million increased $2.1 million from the prior year, reflecting modest growth internationally. U.S. revenue of $39.2 million was flat compared to 2008 due primarily to low issuance volumes for municipal structured products, particularly in variable-rate and auction-rate securities. Partially offsetting this decrease was a modest increase in both the U.S. public finance and project finance sectors compared to the prior year. Outside the U.S., revenue increased $2.7 million, reflecting strong growth in the EMEA infrastructure finance sector due to higher issuance coupled with increases in the project finance sector primarily resulting from two large debt issues in the region during the third quarter of 2009. Transaction revenue in the third quarter of 2009 represented 57% of total PPIF, down from 60% in 2008. Changes in FX translation rates had a negative $1 million impact on international PPIF revenue in 2009.
Read the The complete ReportMCO is in the portfolios of Warren Buffett of Berkshire Hathaway, Chris Davis of Davis Selected Advisers, Richard Pzena of Pzena Investment Management LLC, Dodge & Cox.
