SEGMENT INFORMATION

3 Months Ended

Mar. 31, 2013

SEGMENT INFORMATION

NOTE 14. SEGMENT INFORMATION

The Company is organized into two reportable segments: (i) MIS and (ii) MA. The MIS segment is comprised of all of the Company's ratings activities. All of Moody's other non-rating commercial activities are included in the MA segment.

The MIS segment consists of four lines of business—corporate finance, structured finance, financial institutions and public, project and infrastructure finance—that generate revenue principally from fees for the assignment and ongoing monitoring of credit ratings on debt obligations and the entities that issue such obligations in markets worldwide.

The MA segment, which includes all of the Company's non-rating commercial activities, develops a wide range of products and services that support the risk management activities of institutional participants in global financial markets. The MA segment consists of three lines of business – RD&A, ERS and PS.

Revenue for MIS and expenses for MA include an intersegment royalty charged to MA for the rights to use and distribute content, data and products developed by MIS. Also, revenue for MA and expenses for MIS include an intersegment fee charged to MIS from MA for certain MA products and services utilized in MIS's ratings process. These fees charged by MA are generally equal to the costs incurred by MA to produce these products and services. Additionally, overhead costs and corporate expenses of the Company which exclusively benefit only one segment, are fully charged to that segment. Overhead costs and corporate expenses of the Company which benefit both segments are allocated to each segment based on a revenue-split methodology. Overhead expenses include costs such as rent and occupancy, information technology and support staff such as finance, human resources and information technology. Beginning on January 1, 2013, the Company refined its methodology for allocating certain overhead departments to its segments to better align the costs allocated based on each segment's usage of the overhead service. The refined methodology is reflected in the segment results for the three months ended March 31, 2013 and accordingly, the segment results for the three months ended March 31, 2012 have been reclassified to conform to the new presentation. “Eliminations” in the table below represent intersegment revenue/expense.

Financial Information by Segment

The table below shows revenue, Adjusted Operating Income and operating income by reportable segment. Adjusted Operating Income is a financial metric utilized by the Company's chief operating decision maker to assess the profitability of each reportable segment.

		Three Months Ended March 31,
		2013								2012
		MIS		MA		Eliminations		Consolidated		MIS		MA		Eliminations		Consolidated
Revenue		$	540.1	$	213.4	$	(21.7)	$	731.8	$	469.8	$	197.1	$	(20.1)	$	646.8
Operating, SG&A			284.3		165.2		(21.7)		427.8		221.1		153.3		(20.1)		354.3
Adjusted Operating Income			255.8		48.2		-		304.0		248.7		43.8		-		292.5
Less:
	Depreciation and amortization		11.3		12.3		-		23.6		11.2		12.3		-		23.5
Operating income		$	244.5	$	35.9	$	-	$	280.4	$	237.5	$	31.5	$	-	$	269.0

MIS and MA Revenue by Line of Business

The table below presents revenue by LOB within each reportable segment:

		Three Months Ended March 31,
		2013		2012
MIS:
Corporate finance (CFG)		$	258.3	$	200.5
Structured finance (SFG)			93.0		94.3
Financial institutions (FIG)			86.5		78.8
Public, project and infrastructure finance (PPIF)			83.4		79.1
	Total external revenue		521.2		452.7
Intersegment royalty			18.9		17.1
	Total		540.1		469.8
MA:
Research, data and analytics (RD&A)			129.6		119.8
Enterprise risk solutions (ERS)			53.0		48.1
Professional services (PS)			28.0		26.2
	Total external revenue		210.6		194.1
Intersegment revenue			2.8		3.0
	Total		213.4		197.1
Eliminations			(21.7)		(20.1)
	Total MCO	$	731.8	$	646.8
Consolidated Revenue Information by Geographic Area:
		Three Months Ended March 31,
		2013		2012
United States		$	406.1	$	344.0
International:
	EMEA		213.7		195.4
	Other		112.0		107.4
Total International			325.7		302.8
Total		$	731.8	$	646.8

Total Assets by Segment:
	March 31, 2013								December 31, 2012
	MIS		MA		Corporate Assets (a)		Consolidated		MIS		MA		Corporate Assets (a)		Consolidated
Total Assets	$	1,099.3		1,254.8		1,557.1	$	3,911.2	$	884.9		1,386.7		1,689.3	$	3,960.9
(a) Represents common assets that are shared between each segment or utilized by the corporate entity. Such assets primarily include cash and cash equivalents, short-term investments, unallocated property and equipment and deferred taxes.