filings.toolsItem 6. SELECTED FINANCIAL DATA
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Item 6. SELECTED FINANCIAL DATA
The Company’s selected consolidated financial data should be read in conjunction with Item 7. “MD&A” and the Moody’s Corporation consolidated financial statements and notes thereto.
| Year Ended December 31, | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| amounts in millions, except per share data | 2019 | 2018 | 2017 | 2016 | 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Results of operations | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Revenue | $ | 4,829 | $ | 4,443 | $ | 4,204 | $ | 3,604 | $ | 3,485 | ||||||||||||||||||||||||||||||||||||||||||||||
| Expenses | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Operating and SG&A Expenses (1) | 2,554 | 2,326 | 2,202 | 1,950 | 1,880 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Restructuring | 60 | 49 | — | 12 | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | 200 | 192 | 158 | 127 | 114 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Acquisition-Related Expenses | 3 | 8 | 23 | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Settlement Charge | — | — | — | 864 | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Loss pursuant to the divestiture of MAKS | 14 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Total Expenses | 2,831 | 2,575 | 2,383 | 2,953 | 1,994 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Operating income(2) | 1,998 | 1,868 | 1,821 | 651 | 1,491 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Non-operating (expense) income, net (3)(1) | (188) | (196) | (34) | (94) | (112) | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Income before provision for income taxes (2) | 1,810 | 1,672 | 1,787 | 557 | 1,379 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Provision for income taxes (4) | 381 | 352 | 779 | 282 | 430 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income (2) (5) | 1,429 | 1,320 | 1,008 | 275 | 949 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Less: Net income attributable to noncontrolling interests | 7 | 10 | 7 | 9 | 8 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income attributable to Moody’s (2)(5) | $ | 1,422 | $ | 1,310 | $ | 1,001 | $ | 266 | $ | 941 | ||||||||||||||||||||||||||||||||||||||||||||||
| Earnings per share | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Basic (2) (5) | $ | 7.51 | $ | 6.84 | $ | 5.24 | $ | 1.38 | $ | 4.70 | ||||||||||||||||||||||||||||||||||||||||||||||
| Diluted (2) (5) | $ | 7.42 | $ | 6.74 | $ | 5.15 | $ | 1.36 | $ | 4.63 | ||||||||||||||||||||||||||||||||||||||||||||||
| Weighted average shares outstanding | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Basic | 189.3 | 191.6 | 191.1 | 192.7 | 200.1 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Diluted | 191.6 | 194.4 | 194.2 | 195.4 | 203.4 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Dividends declared per share | $ | 2.00 | $ | 1.76 | $ | 1.14 | $ | 1.49 | $ | 1.39 | ||||||||||||||||||||||||||||||||||||||||||||||
| Operating margin (2) | 41.4 | % | 42.0 | % | 43.3 | % | 18.1 | % | 42.8 | % | ||||||||||||||||||||||||||||||||||||||||||||||
| Operating Cash Flow (6) | $ | 1,675 | $ | 1,461 | $ | 755 | $ | 1,259 | $ | 1,198 |
| December 31, | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2019 | 2018 | 2017 | 2016 | 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Balance sheet data | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total assets | $ | 10,265 | $ | 9,526 | $ | 8,594 | $ | 5,327 | $ | 5,103 | |||||||||||||||||||||||||||||||||||||||||||
| Long-term debt | $ | 5,581 | $ | 5,226 | $ | 5,111 | $ | 3,063 | $ | 3,381 | |||||||||||||||||||||||||||||||||||||||||||
| Operating lease liabilities, long-term | $ | 485 | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||||||||||||||||||||||||||||
| Total shareholders’ equity (deficit) | $ | 831 | $ | 656 | $ | (115) | $ | (1,027) | $ | (333) |
(1)Pursuant to the adoption of a new accounting standard relating to pension accounting in 2018, only the service cost component of net periodic expense is classified within operating and SG&A expenses with the remaining components being classified as non-operating (expenses) income. Prior period results have been restated to reflect this classification.
(2)The significant decrease in 2016 was primarily due to the $864 million Settlement Charge ($701 million, net of tax, or $3.59 per diluted share).
(3)The 2017 amount includes a $111 million Purchase Price Hedge Gain as well as the $60 million CCXI Gain. The 2016 amount includes a $35 million FX gain relating to the substantial liquidation of a subsidiary. The 2015 amount includes a benefit of $7 million related to the favorable resolution of certain Legacy Tax Matters.
MOODY'S 2019 10-K 29
(4)Provision for income taxes in the year ended December 31, 2019 includes a tax charge of $13 million pursuant to the divestiture of MAKS. Provision for income taxes in the year ended December 31, 2018 includes a charge of $64 million relating to an increase in non-U.S. UTPs, partially offset by a $59 million benefit from potential realization of foreign tax credits and other adjustments to previous estimates relating to the Tax Act. Provision for income taxes in the year ended December 31, 2017 includes a net charge of $246 million related to the impact of U.S. tax reform and a statutory tax rate reduction in Belgium.
(5)The 2019 amount includes i) a $45 million ($0.23 per share) restructuring charge, ii) a $14 million loss and $13 million tax charge ($0.07 per share each) pursuant to the divestiture of MAKS. The 2018 amount includes: i) a $59 million ($0.30 per share) benefit related to the impact of U.S. tax reform, ii) a $64 million ($0.33 per share) charge related to an increase to non-U.S UTPs; and iii) $37 million ($0.19 per share) net restructuring charge. The 2017 amount includes: i) a $246 million ($1.27 per share) charge related to the impact of U.S. tax reform; ii) a $72 million ($0.37 per share) Purchase Price Hedge Gain; and iii) the $60 million ($0.31 per share) CCXI Gain. The 2016 amount includes: i) a $701 million ($3.59 per share) Settlement Charge; ii) an $8 million ($0.04 per share) restructuring charge; and iii) a $35 million ($0.18 per share) FX gain relating to the substantial liquidation of a subsidiary. The 2015 amount includes a benefit of $6 million ($0.03 per share) related to the resolution of certain Legacy Tax Matters.
(6)The decline in operating cash flow in 2017 is primarily due to payments made relating to the Settlement Charge. Additionally, in the first quarter of 2017, the Company adopted ASU No. 2016-09 “Improvements to Employee Share-Based Payment Accounting”. As required by ASU 2016-09, Excess Tax Benefits or shortfalls relating to employee stock-based compensation are reflected in operating cash flow and the Company has applied this provision on a retrospective basis. Under previous accounting guidance, Excess Tax Benefits or shortfalls were shown as a reduction to operating cash flow and an increase to financing cash flow.
30 MOODY'S 2019 10-K
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