SECOND QUARTER 2022 SUMMARY | ||||||||||||||
Moody’s Corporation (MCO) Revenue | Moody’s Investors Service (MIS) Revenue | Moody’s Analytics (MA) Revenue | ||||||||||||
2Q 2022 | 2Q 2022 | 2Q 2022 | ||||||||||||
$1.4 billion ⇓ 11% | $706 million ⇓ 28% | $675 million ⇑ 18% | ||||||||||||
YTD 2022 | YTD 2022 | YTD 2022 | ||||||||||||
$2.9 billion ⇓ 8% | $1.5 billion ⇓ 24% | $1.4 billion ⇑ 20% | ||||||||||||
MCO Diluted EPS | MCO Adjusted Diluted EPS1 | MCO FY 2022 Projected | ||||||||||||
2Q 2022 | 2Q 2022 | Diluted EPS | ||||||||||||
$1.77 ⇓ 42% | $2.22 ⇓ 31% | $8.10 - $8.60 | ||||||||||||
YTD 2022 | YTD 2022 | Adjusted Diluted EPS1 | ||||||||||||
$4.45 ⇓ 36% | $5.11 ⇓ 30% | $9.20 - $9.70 |
“In times of heightened uncertainty, our customers rely on Moody’s unparalleled global insights and analysis to deliver comprehensive and integrated perspectives on risk.” “Demand for our market-leading products and solutions that enable decision makers to holistically identify, measure and manage risk propelled Moody’s Analytics to another quarter of impressive growth. While the fundamental drivers underpinning debt issuance remain firmly intact, global economic uncertainty significantly curtailed market activity. Given year-to-date performance and our expectation for continued cyclical market disruption, we have lowered our full year 2022 adjusted diluted EPS guidance range to $9.20 to $9.70.” | |||||
Rob Fauber President and Chief Executive Officer |
REVENUE |
Moody’s Corporation (MCO) |
Second Quarter 2022 | Year-to-Date 2022 | ||||
•Revenue declined 11% and 13% on a reported and organic constant currency basis1, respectively, from the prior-year period. •Foreign currency translation unfavorably impacted Moody's revenue by 3%. | •Revenue declined 8% and 11% on a reported and organic constant currency basis1, respectively, from the prior-year period. •Foreign currency translation unfavorably impacted Moody’s revenue by 2%. |
Moody’s Investors Service (MIS) |
Second Quarter 2022 | Year-to-Date 2022 | ||||
•Revenue declined 28% against a record prior-year period. •Issuance, particularly for leveraged loans and high yield bonds, was dampened due to volatile market conditions. •Investment grade activity decreased due to lower opportunistic refinancing. •Foreign currency translation unfavorably impacted MIS revenue by 2%. | •Revenue declined 24% against a record prior-year period. •Sustained weakness in the macroeconomic environment significantly impacted issuer and investor demand for debt issuance across all asset classes. •Foreign currency translation unfavorably impacted MIS revenue by 2%. |
Moody’s Analytics (MA) |
Second Quarter 2022 | Year-to-Date 2022 | ||||
•Revenue grew 18% from the prior-year period, driven by the RMS acquisition, as well as sustained demand for Know Your Customer solutions and credit research. •Organic constant currency revenue1 growth was 8%. Foreign currency translation unfavorably impacted total MA revenue by 5%. •Organic Annualized Recurring Revenue2 was $2.3 billion, up 9%. | •Multi-year strategic shift toward subscription-based products continued to drive MA’s recurring revenue growth, which comprised 94% of total MA revenue, up from 93% in the prior-year period. •Customer retention of ~96% demonstrates the value of our offerings, particularly in an evolving and increasingly complex risk environment. •Organic constant currency revenue1 growth was 10%. Foreign currency translation unfavorably impacted total MA revenue by 4%. |
2 Refer to Table 8 at the end of this press release for the definition of and further information on the Annualized Recurring Revenue metric. |
OPERATING EXPENSES |
Operating Expenses |
Second Quarter 2022 | Year-to-Date 2022 | ||||
•Operating expense growth of 16% from the prior-year period was primarily due to acquisitions completed in the prior twelve months. •2022 - 2023 Geolocation Restructuring Program to accelerate ongoing cost efficiency initiatives, including the utilization of lower-cost locations and real estate rationalization efforts. •Foreign currency translation favorably impacted operating expenses by 4%. | •Operating expenses grew 16% from the prior-year period, including costs associated with acquisitions completed in the prior twelve months, primarily RMS, of approximately 12 percentage points. •Operating growth, including continued organic investment in high priority growth markets, was balanced by cost control initiatives and lower incentive compensation accruals. •Foreign currency translation favorably impacted operating expenses by 3%. |
Operating Margin and Adjusted Operating Margin1 |
Second Quarter 2022 | Year-to-Date 2022 | ||||
•MCO’s adjusted operating margin1 decreased from the prior-year period, primarily driven by lower MIS transaction revenue related to subdued market activity. Foreign currency translation unfavorably impacted adjusted operating income1 by 2%. •Recent acquisitions unfavorably impacted MA’s adjusted operating margin by 200 basis points. | •MCO’s adjusted operating margin1 declined from the prior-year period due to sustained weakness in the macroeconomic environment, which significantly impacted demand for debt issuance. Foreign currency translation unfavorably impacted adjusted operating income1 by 2%. •Acquisitions completed in the prior twelve months unfavorably impacted MA’s adjusted operating margin by 290 basis points. |
EARNINGS PER SHARE |
Diluted Earnings Per Share (EPS) and Adjusted Diluted EPS1 |
Second Quarter 2022 | Year-to-Date 2022 | ||||
•The decline in EPS from the prior-year period reflected the adverse impact of a cyclical disruption in the issuance markets, partially offset by robust demand for MA’s global integrated risk assessment offerings. •The effective tax rate was 26.2%, up from 23.9%. The increase was primarily due to a non-recurring tax benefit realized in 2021 and a non-deductible loss associated with the Company no longer conducting commercial operations in Russia. | •The decline in EPS from the prior-year period was driven by credit market volatility, partially offset by strong organic growth from MA. •The effective tax rate was 21.6%, up from 19.0%. The increase was largely due to non-recurring tax benefits, including the resolution of uncertain tax positions in the first half of 2021, as well as a non-deductible loss associated with the Company no longer conducting commercial operations in Russia. |
CAPITAL ALLOCATION AND LIQUIDITY |
Capital Returned to Shareholders & Free Cash Flow1 |
ASSUMPTIONS AND OUTLOOK |
Forecasted Item | Current assumption | Last publicly disclosed assumption | ||||||
U.S. GDP(1) growth | 1.5% - 2.5% | 3.5% - 4.5% | ||||||
Euro area GDP(1) growth | 1.5% - 2.5% | 2.5% - 3.5% | ||||||
Global benchmark rates | Continue to rise | Increase from historic lows | ||||||
U.S. high yield interest spreads | Fluctuate around 500 bps with periodic volatility for remainder of the year | Widen, moving slightly above historical average of 500 bps | ||||||
U.S. inflation rate | 6.5% - 7.5% | Remain elevated, above central bank targets in many countries | ||||||
Euro area inflation rate | 6.0% - 8.0% | Remain elevated, above central bank targets in many countries | ||||||
U.S. unemployment rate | Rise to approximately 3.7% by end of 2022 | Remain low at approximately 3.5% | ||||||
Global high yield default rate | Rise to 2.5% - 3.5% by end of 2022 | Initially decline before gradually rising to approximately 2.7% by end of 2022 | ||||||
Global MIS rated issuance | Decrease by approximately 30% | Decrease in the mid-teens percent range | ||||||
USD/GBP exchange rate | $1.21 for remainder of the year | $1.32 for remainder of the year | ||||||
USD/EUR exchange rate | $1.05 for remainder of the year | $1.11 for remainder of the year | ||||||
Note: All current assumptions are as of July 26, 2022. All last publicly disclosed assumptions are as of May 2, 2022. (1) GDP growth represents real GDP. |
TELECONFERENCE DETAILS |
Date and Time | July 26, 2022, at 12:00 p.m. Eastern Time (ET) | |||||||
Webcast | The replay and supplemental presentation can be accessed through Moody’s Investor Relations website, ir.moodys.com under “Events & Presentations”. | |||||||
Dial In | U.S. and Canada | ‘+1-877-400-505 | ||||||
Other callers | ‘+1-720-452-9084 | |||||||
Passcode | 8161371 | |||||||
Dial In Replay | A replay will be available from 4:00 p.m. ET, July 26, 2022 until 4:00 p.m. ET, August 24, 2022. | |||||||
U.S. and Canada | ‘+1-888-203-1112 | |||||||
Other callers | ‘+1-719-457-0820 | |||||||
Passcode | 8161371 |
ABOUT MOODY’S CORPORATION |
“SAFE HARBOR” STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
Amounts in millions, except per share amounts | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
Revenue | $ | 1,381 | $ | 1,553 | $ | 2,903 | $ | 3,153 | |||||||||||||||
Expenses: | |||||||||||||||||||||||
Operating | 393 | 365 | 810 | 758 | |||||||||||||||||||
Selling, general and administrative | 368 | 327 | 739 | 620 | |||||||||||||||||||
Depreciation and amortization | 81 | 60 | 159 | 119 | |||||||||||||||||||
Restructuring | 31 | — | 31 | 2 | |||||||||||||||||||
Total expenses | 873 | 752 | 1,739 | 1,499 | |||||||||||||||||||
Operating income | 508 | 801 | 1,164 | 1,654 | |||||||||||||||||||
Non-operating (expense) income, net | |||||||||||||||||||||||
Interest expense, net | (55) | (49) | (108) | (56) | |||||||||||||||||||
Other non-operating (expense) income, net | (10) | 6 | (4) | 22 | |||||||||||||||||||
Total non-operating (expense) income, net | (65) | (43) | (112) | (34) | |||||||||||||||||||
Income before provision for income taxes | 443 | 758 | 1,052 | 1,620 | |||||||||||||||||||
Provision for income taxes | 116 | 181 | 227 | 307 | |||||||||||||||||||
Net income attributable to Moody's Corporation | $ | 327 | $ | 577 | $ | 825 | $ | 1,313 | |||||||||||||||
Earnings per share attributable to Moody's common shareholders | |||||||||||||||||||||||
Basic | $ | 1.78 | $ | 3.09 | $ | 4.47 | $ | 7.02 | |||||||||||||||
Diluted | $ | 1.77 | $ | 3.07 | $ | 4.45 | $ | 6.98 | |||||||||||||||
Weighted average number of shares outstanding | |||||||||||||||||||||||
Basic | 184.1 | 186.7 | 184.6 | 187.0 | |||||||||||||||||||
Diluted | 184.9 | 187.9 | 185.4 | 188.2 |
Amounts in millions | June 30, 2022 | December 31, 2021 | |||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 1,617 | $ | 1,811 | |||||||
Short-term investments | 86 | 91 | |||||||||
Accounts receivable, net of allowance for credit losses of $46 in 2022 and $32 in 2021 | 1,602 | 1,720 | |||||||||
Other current assets | 515 | 389 | |||||||||
Total current assets | 3,820 | 4,011 | |||||||||
Property and equipment, net of accumulated depreciation of $1,058 in 2022 and $1,010 in 2021 | 433 | 347 | |||||||||
Operating lease right-of-use assets | 413 | 438 | |||||||||
Goodwill | 5,841 | 5,999 | |||||||||
Intangible assets, net | 2,300 | 2,467 | |||||||||
Deferred tax assets, net | 341 | 384 | |||||||||
Other assets | 1,167 | 1,034 | |||||||||
Total assets | $ | 14,315 | $ | 14,680 | |||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||||
Current liabilities: | |||||||||||
Accounts payable and accrued liabilities | $ | 866 | $ | 1,142 | |||||||
Current portion of operating lease liabilities | 105 | 105 | |||||||||
Current portion of long-term debt | 499 | — | |||||||||
Deferred revenue | 1,285 | 1,249 | |||||||||
Total current liabilities | 2,755 | 2,496 | |||||||||
Non-current portion of deferred revenue | 81 | 86 | |||||||||
Long-term debt | 7,158 | 7,413 | |||||||||
Deferred tax liabilities, net | 572 | 488 | |||||||||
Uncertain tax positions | 336 | 388 | |||||||||
Operating lease liabilities | 421 | 455 | |||||||||
Other liabilities | 513 | 438 | |||||||||
Total liabilities | 11,836 | 11,764 | |||||||||
Total Moody's shareholders' equity | 2,294 | 2,727 | |||||||||
Noncontrolling interests | 185 | 189 | |||||||||
Total shareholders' equity | 2,479 | 2,916 | |||||||||
Total liabilities, noncontrolling interests and shareholders' equity | $ | 14,315 | $ | 14,680 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
Amounts in millions | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
Interest: | |||||||||||||||||||||||
Expense on borrowings | $ | (50) | $ | (41) | $ | (98) | $ | (82) | |||||||||||||||
UTPs and other tax related liabilities (1) | (3) | (5) | (6) | 30 | |||||||||||||||||||
Net periodic pension costs - interest component | (4) | (4) | (8) | (8) | |||||||||||||||||||
Income | 2 | 1 | 4 | 4 | |||||||||||||||||||
Total interest expense, net | $ | (55) | $ | (49) | $ | (108) | $ | (56) | |||||||||||||||
Other non-operating (expense) income, net: | |||||||||||||||||||||||
FX gain/(loss) (2) | $ | (22) | $ | 2 | $ | (22) | $ | — | |||||||||||||||
Net periodic pension costs - other components (3) | 6 | (3) | 12 | 1 | |||||||||||||||||||
Income from investments in non-consolidated affiliates | 2 | 1 | 4 | 9 | |||||||||||||||||||
Other | 4 | 6 | 2 | 12 | |||||||||||||||||||
Other non-operating (expense) income, net | (10) | 6 | (4) | 22 | |||||||||||||||||||
Total non-operating (expense) income, net | $ | (65) | $ | (43) | $ | (112) | $ | (34) |
(1) The amount for the six months ended June 30, 2021 includes a $40 million benefit related to the reversal of tax-related interest accruals pursuant to the resolution of tax matters. (2) The 2022 amount reflects $20 million of foreign exchange translation losses reclassified to earnings resulting from the Company no longer conducting commercial operations in Russia. (3) The increase reflects a $7 million loss related to a settlement of pension obligations in 2021 that did not recur in 2022. |
Three Months Ended June 30, | |||||||||||||||||||||||||||||||||||||||||||||||
2022 | 2021 | ||||||||||||||||||||||||||||||||||||||||||||||
Amounts in millions | MIS | MA | Eliminations | Consolidated | MIS | MA | Eliminations | Consolidated | |||||||||||||||||||||||||||||||||||||||
Total external revenue | $ | 706 | $ | 675 | $ | — | $ | 1,381 | $ | 980 | $ | 573 | $ | — | $ | 1,553 | |||||||||||||||||||||||||||||||
Intersegment revenue | 43 | 1 | (44) | — | 42 | 2 | (44) | — | |||||||||||||||||||||||||||||||||||||||
Total revenue | 749 | 676 | (44) | 1,381 | 1,022 | 575 | (44) | 1,553 | |||||||||||||||||||||||||||||||||||||||
Operating, SG&A | 334 | 471 | (44) | 761 | 344 | 392 | (44) | 692 | |||||||||||||||||||||||||||||||||||||||
Adjusted Operating Income | $ | 415 | $ | 205 | $ | — | $ | 620 | $ | 678 | $ | 183 | $ | — | $ | 861 | |||||||||||||||||||||||||||||||
Adjusted Operating Margin | 55.4 | % | 30.3 | % | 44.9 | % | 66.3 | % | 31.8 | % | 55.4 | % | |||||||||||||||||||||||||||||||||||
Depreciation and amortization | 21 | 60 | — | 81 | 18 | 42 | — | 60 | |||||||||||||||||||||||||||||||||||||||
Restructuring | 15 | 16 | — | 31 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Operating income | $ | 508 | $ | 801 | |||||||||||||||||||||||||||||||||||||||||||
Operating margin | 36.8 | % | 51.6 | % | |||||||||||||||||||||||||||||||||||||||||||
Six Months Ended June 30, | |||||||||||||||||||||||||||||||||||||||||||||||
2022 | 2021 | ||||||||||||||||||||||||||||||||||||||||||||||
Amounts in millions | MIS | MA | Eliminations | Consolidated | MIS | MA | Eliminations | Consolidated | |||||||||||||||||||||||||||||||||||||||
Total external revenue | $ | 1,533 | $ | 1,370 | $ | — | $ | 2,903 | $ | 2,016 | $ | 1,137 | $ | — | $ | 3,153 | |||||||||||||||||||||||||||||||
Intersegment revenue | 86 | 3 | (89) | — | 82 | 4 | (86) | — | |||||||||||||||||||||||||||||||||||||||
Total revenue | 1,619 | 1,373 | (89) | 2,903 | 2,098 | 1,141 | (86) | 3,153 | |||||||||||||||||||||||||||||||||||||||
Operating, SG&A | 694 | 944 | (89) | 1,549 | 692 | 772 | (86) | 1,378 | |||||||||||||||||||||||||||||||||||||||
Adjusted Operating Income | $ | 925 | $ | 429 | $ | — | $ | 1,354 | $ | 1,406 | $ | 369 | $ | — | $ | 1,775 | |||||||||||||||||||||||||||||||
Adjusted Operating Margin | 57.1 | % | 31.2 | % | 46.6 | % | 67.0 | % | 32.3 | % | 56.3 | % | |||||||||||||||||||||||||||||||||||
Depreciation and amortization | 39 | 120 | — | 159 | 36 | 83 | — | 119 | |||||||||||||||||||||||||||||||||||||||
Restructuring | 15 | 16 | — | 31 | — | 2 | — | 2 | |||||||||||||||||||||||||||||||||||||||
Operating income | $ | 1,164 | $ | 1,654 | |||||||||||||||||||||||||||||||||||||||||||
Operating margin | 40.1 | % | 52.5 | % |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
Amounts in millions | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
Operating income | $ | 508 | $ | 801 | $ | 1,164 | $ | 1,654 | |||||||||||||||
Depreciation and amortization | 81 | 60 | 159 | 119 | |||||||||||||||||||
Restructuring | 31 | — | 31 | 2 | |||||||||||||||||||
Adjusted Operating Income | $ | 620 | $ | 861 | $ | 1,354 | $ | 1,775 | |||||||||||||||
Operating margin | 36.8 | % | 51.6 | % | 40.1 | % | 52.5 | % | |||||||||||||||
Adjusted Operating Margin | 44.9 | % | 55.4 | % | 46.6 | % | 56.3 | % |
Six Months Ended June 30, | |||||||||||
Amounts in millions | 2022 | 2021 | |||||||||
Net cash provided by operating activities | $ | 761 | $ | 1,270 | |||||||
Capital additions | (133) | (44) | |||||||||
Free Cash Flow | $ | 628 | $ | 1,226 | |||||||
Net cash used in investing activities | $ | (172) | $ | (251) | |||||||
Net cash used in financing activities | $ | (712) | $ | (792) |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||||||||||||||
Amounts in millions | 2022 | 2021 | Change | Growth | 2022 | 2021 | Change | Growth | |||||||||||||||||||||||||||||||||||||||
MCO revenue | $ | 1,381 | $ | 1,553 | $ | (172) | (11)% | $ | 2,903 | $ | 3,153 | $ | (250) | (8)% | |||||||||||||||||||||||||||||||||
FX impact | 47 | — | 47 | 75 | — | 75 | |||||||||||||||||||||||||||||||||||||||||
Inorganic revenue from acquisitions | (83) | — | (83) | (162) | — | (162) | |||||||||||||||||||||||||||||||||||||||||
Organic constant currency MCO revenue | $ | 1,345 | $ | 1,553 | $ | (208) | (13)% | $ | 2,816 | $ | 3,153 | $ | (337) | (11)% | |||||||||||||||||||||||||||||||||
MA revenue | $ | 675 | $ | 573 | $ | 102 | 18% | $ | 1,370 | $ | 1,137 | $ | 233 | 20% | |||||||||||||||||||||||||||||||||
FX impact | 27 | — | 27 | 40 | — | 40 | |||||||||||||||||||||||||||||||||||||||||
Inorganic revenue from acquisitions | (83) | — | (83) | (162) | — | (162) | |||||||||||||||||||||||||||||||||||||||||
Organic constant currency MA revenue | $ | 619 | $ | 573 | $ | 46 | 8% | $ | 1,248 | $ | 1,137 | $ | 111 | 10% | |||||||||||||||||||||||||||||||||
Decision Solutions revenue | $ | 312 | $ | 222 | $ | 90 | 41% | $ | 646 | $ | 447 | $ | 199 | 45% | |||||||||||||||||||||||||||||||||
FX impact | 11 | — | 11 | 16 | — | 16 | |||||||||||||||||||||||||||||||||||||||||
Inorganic revenue from acquisitions | (83) | — | (83) | (160) | — | (160) | |||||||||||||||||||||||||||||||||||||||||
Organic constant currency Decision Solutions revenue | $ | 240 | $ | 222 | $ | 18 | 8% | $ | 502 | $ | 447 | $ | 55 | 12% | |||||||||||||||||||||||||||||||||
Research and Insights revenue | $ | 185 | $ | 175 | $ | 10 | 6% | $ | 368 | $ | 346 | $ | 22 | 6% | |||||||||||||||||||||||||||||||||
FX impact | 4 | — | 4 | 5 | — | 5 | |||||||||||||||||||||||||||||||||||||||||
Constant currency Research and Insights revenue | $ | 189 | $ | 175 | $ | 14 | 8% | $ | 373 | $ | 346 | $ | 27 | 8% | |||||||||||||||||||||||||||||||||
Data and Information revenue | $ | 178 | $ | 176 | $ | 2 | 1% | $ | 356 | $ | 344 | $ | 12 | 3% | |||||||||||||||||||||||||||||||||
FX impact | 12 | — | 12 | 19 | — | 19 | |||||||||||||||||||||||||||||||||||||||||
Inorganic revenue from acquisitions | — | — | — | (2) | — | (2) | |||||||||||||||||||||||||||||||||||||||||
Organic constant currency Data and Information revenue | $ | 190 | $ | 176 | $ | 14 | 8% | $ | 373 | $ | 344 | $ | 29 | 8% | |||||||||||||||||||||||||||||||||
MA recurring revenue | $ | 633 | $ | 533 | $ | 100 | 19% | $ | 1,284 | $ | 1,054 | $ | 230 | 22% | |||||||||||||||||||||||||||||||||
FX impact | 25 | — | 25 | 37 | — | 37 | |||||||||||||||||||||||||||||||||||||||||
Inorganic recurring revenue from acquisitions | (78) | — | (78) | (153) | — | (153) | |||||||||||||||||||||||||||||||||||||||||
Organic constant currency MA recurring revenue | $ | 580 | $ | 533 | $ | 47 | 9% | $ | 1,168 | $ | 1,054 | $ | 114 | 11% | |||||||||||||||||||||||||||||||||
Amounts in millions | June 30, 2022 | June 30, 2021 | Change | Growth | |||||||||||||||||||
MA ARR | $ | 2,608 | $ | 2,084 | $ | 524 | 25% | ||||||||||||||||
Organic MA ARR | $ | 2,276 | $ | 2,084 | $ | 192 | 9% | ||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||
Amounts in millions | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||||||||||
Net income attributable to Moody's common shareholders | $ | 327 | $ | 577 | $ | 825 | $ | 1,313 | |||||||||||||||||||||||||||
Pre-tax Acquisition-Related Intangible Amortization Expenses | $ | 51 | $ | 36 | $ | 102 | $ | 71 | |||||||||||||||||||||||||||
Tax on Acquisition-Related Intangible Amortization Expenses | (12) | (8) | (24) | (16) | |||||||||||||||||||||||||||||||
Net Acquisition-Related Intangible Amortization Expenses | 39 | 28 | 78 | 55 | |||||||||||||||||||||||||||||||
Pre-tax restructuring | $ | 31 | $ | — | $ | 31 | $ | 2 | |||||||||||||||||||||||||||
Tax on restructuring | (7) | — | (7) | — | |||||||||||||||||||||||||||||||
Net restructuring | 24 | — | 24 | 2 | |||||||||||||||||||||||||||||||
FX losses resulting from the Company no longer conducting commercial operations in Russia | 20 | — | 20 | — | |||||||||||||||||||||||||||||||
Adjusted Net Income | $ | 410 | $ | 605 | $ | 947 | $ | 1,370 | |||||||||||||||||||||||||||
Note: The tax impacts in the table above were calculated using tax rates in effect in the jurisdiction for which the item relates. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||
Amounts in millions | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||||||||||
Diluted earnings per share attributable to Moody's common shareholders | $ | 1.77 | $ | 3.07 | $ | 4.45 | $ | 6.98 | |||||||||||||||||||||||||||
Pre-tax Acquisition-Related Intangible Amortization Expenses | $ | 0.28 | $ | 0.19 | $ | 0.55 | $ | 0.38 | |||||||||||||||||||||||||||
Tax on Acquisition-Related Intangible Amortization Expenses | (0.07) | (0.04) | (0.13) | (0.09) | |||||||||||||||||||||||||||||||
Net Acquisition-Related Intangible Amortization Expenses | 0.21 | 0.15 | 0.42 | 0.29 | |||||||||||||||||||||||||||||||
Pre-tax restructuring | $ | 0.17 | $ | — | $ | 0.17 | $ | 0.01 | |||||||||||||||||||||||||||
Tax on restructuring | (0.04) | — | (0.04) | — | |||||||||||||||||||||||||||||||
Net restructuring | 0.13 | — | 0.13 | 0.01 | |||||||||||||||||||||||||||||||
FX losses resulting from the Company no longer conducting commercial operations in Russia | 0.11 | — | 0.11 | — | |||||||||||||||||||||||||||||||
Adjusted Diluted EPS | $ | 2.22 | $ | 3.22 | $ | 5.11 | $ | 7.28 | |||||||||||||||||||||||||||
Note: The tax impacts in the table above were calculated using tax rates in effect in the jurisdiction for which the item relates. |
Full Year 2022 Moody's Corporation Guidance as of July 26, 2022 | ||||||||
MOODY'S CORPORATION | Current guidance | Last publicly disclosed guidance | ||||||
Revenue | Decline in the high-single-digit percent range | Approximately flat | ||||||
Operating expenses | Increase in the high-single-digit percent range | NC | ||||||
Operating margin | 37% to 38% | 41% to 42% | ||||||
Adjusted Operating Margin (1) | Approximately 44% | Approximately 47% | ||||||
Interest expense, net | $220 to $240 million | $200 to $220 million | ||||||
Effective tax rate | 20.5% to 22.5% | NC | ||||||
Diluted EPS | $8.10 to $8.60 | $9.85 to $10.35 | ||||||
Adjusted Diluted EPS (1) | $9.20 to $9.70 | $10.75 to $11.25 | ||||||
Operating cash flow | $1.7 to $1.9 billion | $2.1 to $2.3 billion | ||||||
Free Cash Flow (1) | $1.4 to $1.6 billion | $1.8 to $2.0 billion | ||||||
Share repurchases | Approximately $1.0 billion (subject to available cash, market conditions, M&A opportunities and other ongoing capital allocation decisions) | At least $1.5 billion (subject to available cash, market conditions, M&A opportunities and other ongoing capital allocation decisions) | ||||||
Moody's Investors Service (MIS) | Current guidance | Last publicly disclosed guidance | ||||||
MIS global revenue | Decrease in the low-twenties percent range | Decrease in the low-double-digit percent range | ||||||
MIS Adjusted Operating Margin | 54% to 55% | Approximately 59% | ||||||
Moody's Analytics (MA) | Current guidance | Last publicly disclosed guidance | ||||||
MA global revenue | Increase in the mid-teens percent range | Increase in the high-teens percent range | ||||||
Organic MA ARR (2) | Increase in the low-double-digit percent range | NC | ||||||
MA Adjusted Operating Margin | Approximately 29% | NC | ||||||
NC - There is no difference between the Company’s current guidance and the last publicly disclosed guidance for this item. Note: All current guidance as of July 26, 2022. All last publicly disclosed guidance is as of May 2, 2022. (1) These metrics are adjusted measures. See below for reconciliation of these measures to their comparable U.S. GAAP measure. (2) Refer to Table 8 within this earnings release for the definition of and further information on the Organic MA ARR metric. |
Projected for the Year Ended December 31, 2022 | |||||
Operating margin guidance | 37% to 38% | ||||
Depreciation and amortization | Approximately 6% | ||||
Restructuring Expense | 0.5% to 1.0% | ||||
Adjusted Operating Margin guidance | Approximately 44% | ||||
Projected for the Year Ended December 31, 2022 | |||||
Operating cash flow guidance | $1.7 to $1.9 billion | ||||
Less: Capital expenditures | $250 to $300 million | ||||
Free Cash Flow guidance | $1.4 to $1.6 billion | ||||
Projected for the Year Ended December 31, 2022 | |||||
Diluted EPS guidance | $8.10 to $8.60 | ||||
Acquisition-Related Intangible Amortization | Approximately $0.85 | ||||
Restructuring | Approximately $0.15 | ||||
FX losses resulting from the Company no longer conducting commercial operations in Russia | Approximately $0.11 | ||||
Adjusted Diluted EPS guidance | $9.20 to $9.70 |