SEGMENT INFORMATION

12 Months Ended

Dec. 31, 2013

SEGMENT INFORMATION

NOTE 19 SEGMENT INFORMATION

The Company is organized into three operating segments: (i) MIS, (ii) MA and (iii) an immaterial operating segment that provides fixed income pricing services in the Asia-Pacific region. This aforementioned immaterial operating segment has been aggregated with the MA operating segment based on the fact that it has similar economic characteristics to MA. Accordingly, the Company reports in two reportable segments: MIS and 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.

In the first quarter of 2013, a portion of a division within the PS LOB that provides solutions for structured finance securities was transferred to the RD&A LOB.  Additionally, in the first quarter of 2012, a division within the PS LOB that provides various financial modeling services was transferred to the ERS LOB. Accordingly, the prior year revenue by LOB for MA has been reclassified to reflect these transfers.

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. The royalty rate charged by MIS approximates the fair value of the aforementioned content, data and products and is generally based on comparable market transactions. Also, revenue for MA and expenses for MIS include an intersegment fee charged to MIS from MA for certain MA products and servicesutilized 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 year ended December 31, 2013 and accordingly, the segment results for the years ended December 31, 2012 and 2011 have been reclassified to conform to the new presentation. These reclassifications were not material. “Eliminations” in the table below represent intersegment revenue/expense

Moody's does not report the Company's assets by reportable segment as this metric is not used by the chief operating decision maker to allocate resources to the segments. Consequently, it is not practical to show assets by reportable segment.

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.

		Year Ended December 31,
		2013								2012
		MIS		MA		Eliminations		Consolidated		MIS		MA		Eliminations		Consolidated
Revenue		$	2,138.0	$	924.7	$	(90.2)	$	2,972.5	$	1,958.3	$	855.3	$	(83.3)	$	2,730.3
Operating, SG&A			1,022.6		712.1		(90.2)		1,644.5		967.6		662.9		(83.3)		1,547.2
Adjusted Operating Income			1,115.4		212.6		-		1,328.0		990.7		192.4		-		1,183.1
	Depreciation and amortization		46.6		46.8		-		93.4		44.2		49.3		-		93.5
	Goodwill impairment charge		-		-				-		-		12.2		-		12.2
Operating income		$	1,068.8	$	165.8	$	-	$	1,234.6	$	946.5	$	130.9	$	-	$	1,077.4
										Year Ended December 31,
										2011
										MIS		MA		Eliminations		Consolidated
Revenue										$	1,634.7	$	722.4	$	(76.4)	$	2,280.7
Operating, SG&A											832.3		557.2		(76.4)		1,313.1
Adjusted Operating Income											802.4		165.2		-		967.6
	Depreciation and amortization										41.2		38.0		-		79.2
Operating income										$	761.2	$	127.2	$	-	$	888.4

MIS AND MA REVENUE BY LINE OF BUSINESS

The tables below present revenue by LOB:

		Year Ended December 31,
		2013		2012		2011
MIS:
Corporate finance (CFG)		$	996.8	$	857.6	$	652.1
Structured finance (SFG)			382.5		381.0		344.6
Financial institutions (FIG)			338.8		325.5		294.9
Public, project and infrastructure finance (PPIF)			341.3		322.7		277.3
	Total external revenue		2,059.4		1,886.8		1,568.9
Intersegment royalty			78.6		71.5		65.8
	Total		2,138.0		1,958.3		1,634.7
MA:
Research, data and analytics (RD&A)			532.0		493.2		453.9
Enterprise risk solutions (ERS)			262.5		242.6		196.1
Professional services (PS)			118.6		107.7		61.8
	Total external revenue		913.1		843.5		711.8
Intersegment revenue			11.6		11.8		10.6
	Total		924.7		855.3		722.4
Eliminations			(90.2)		(83.3)		(76.4)
	Total MCO	$	2,972.5	$	2,730.3	$	2,280.7

CONSOLIDATED REVENUE AND LONG-LIVED ASSETS INFORMATION BY GEOGRAPHIC AREA

		Year Ended December 31,
		2013		2012		2011
Revenue:
U.S.		$	1,626.5	$	1,472.4	$	1,177.0
International:
	EMEA		862.8		800.2		708.4
	Asia-Pacific		286.1		266.5		233.0
	Americas		197.1		191.2		162.3
	Total International		1,346.0		1,257.9		1,103.7
Total		$	2,972.5	$	2,730.3	$	2,280.7
Long-lived assets at December 31:
United States		$	547.1	$	498.4	$	495.8
International			618.0		672.3		727.5
Total		$	1,165.1	$	1,170.7	$	1,223.3