Moody’s Corporation revenue for the full-year 2009 totaled $1,797.2 million, an increase of 2% from $1,755.4 million for 2008. U.S. revenue of $920.8 million increased 1%, while non-U.S. revenue of $876.4 million increased 4% from the prior year.

Operating income of $687.5 million declined 8% from $748.2 million for the full-year 2008, and the operating margin was 38.3% for the full-year 2009. Excluding the unfavorable impact from foreign currency translation, revenue increased 4% from the prior-year period. The impact of foreign currency translation on operating income was negligible.

Outlook for Full-Year 2010

For Moody’s overall, the Company expects full-year 2010 revenue to increase in the high-single-digit percent range. Full-year 2010 expenses are also expected to increase in the high-single-digit percent range.

Full-year 2010 operating margin is projected in the high-thirties percent range and the effective tax rate is expected in the range of 37 to 38 percent. Share repurchase is expected to resume at modest levels in 2010 subject to available cash flow and other capital allocation decisions. The Company expects diluted earnings per share for full-year 2010 in the range of $1.75 to $1.85. This outlook assumes foreign currency translation at end-of-year 2009 rates.

Legislative and regulatory developments:  Credit rating companies face increased oversight after being criticized by the European Union, members of the U.S. Congress and the U.S. Securities and Exchange Commission for ignoring conflicts of interest and risks that contributed to the seizure in credit markets.  The increased oversight is taking its toll on margins. 

The US House of Representatives has passed the reform bill in December.  Work has begun on the senate reform bill.  The European Union regulation expected to be in effect by the second half of 2010. 


BIIA Newsletter March I – 2010 Issue