ACQUISITIONS

6 Months Ended

Jun. 30, 2014

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ACQUISITIONS

NOTE 7. ACQUISITIONS

The acquisitions described below are accounted for using the acquisition method of accounting whereby assets acquired and liabilities assumed were recognized at their acquisition date fair value.  Any excess of the purchase price over the fair value of the assets acquired and liabilities assumed was recorded to goodwill. For the acquisitions described below, the Company has not presented proforma combined results because the impact on previously reported statements of operations would not have been material. These acquisitions are discussed below in more detail.

Cash paid	$ 86.0
Fair value of equity interest in ICRA prior to obtaining a controlling interest	124.9
Total consideration	$ 210.9
The cash paid in the table above was funded by using Moody's non-U.S. cash on hand.

Current assets				$	24.8
Property and equipment, net					7.3
Intangible assets:
	Trade name	$	50.1
	Client relationships		33.8
	Other		17.5
	Total intangible assets				101.4
Goodwill					294.6
Other assets					56.3
Liabilities					(54.7)
Fair value of non-controlling interest assumed					(218.8)
Net assets acquired				$	210.9

Due to the proximity of the acquisition date to the issuance date of these interim financial statements, the purchase price allocation above as well as the estimated useful lives of the acquired intangible assets are not finalized. Current assets include acquired cash of approximately $5 million. Additionally, current assets includes gross accounts receivable of approximately $14 million, of which an immaterial amount is not expected to be collectible. Goodwill, which has been assigned to the MIS segment, is not deductible for tax.

The fair value of the non-controlling interest was determined based on the quoted market price per share of ICRA on the date that the Company acquired the controlling stake.

Subsequent to the second quarter of 2014, ICRA will operate as its own reporting unit.

WebEquity Solutions, LLC

On July 17, 2014, a subsidiary of the Company acquired 100% ofWebEquity Solutions, LLC, a leading provider of cloud-based loan origination solutions for financial institutions. The Company does not anticipate that this acquisition will have a material impact on its consolidated financial statements subsequent to the acquisition date.

Due to the proximity of the acquisition date to the filing of this Form 10Q, the Company has not yet completed its assessment of WebEquity’s balance sheet as of the date of acquisition nor has an initial purchase price allocation been determined. These and all other required disclosures related to this acquisition will appear in the Company’s Form 10Q for the three and six months ended September 30, 2014

AmbaInvestment Services

On December 10, 2013, Copal Partners Limited, a majority-owned subsidiary of the Company, acquired 100% of Amba Investment Services, a provider of outsourced investment research and quantitative analytics for global financial institutions. Amba currently operates within the PS LOB of MA and will bolster the research and analytical capabilities offered by MA through Copal, a majority owned subsidiary which was acquired in December 2011.

The table below details the total consideration transferred to the sellers of Amba:

Cash paid	$	67.2
Contingent consideration liability assumed		4.3
Additional purchase price to be paid in 2014 based on final working capital acquired		0.1
Total fair value of consideration transferred	$	71.6

The cash payment to the sellers was funded by using Moody’s non-U.S. cash.

The purchase agreement contains a provision for a contingent cash payment to the sellers valued at $4.3 million at the acquisition date. This contingent cash payment was dependent on Amba achieving certain revenue targets for the period from the acquisition date through March 31, 2014. This contingent consideration payment will be made to the sellers in 2014.

Shown below is the purchase price allocation, which summarizes the fair value of the assets acquired and the liabilities assumed, at the date of acquisition:

Current assets				$	23.7
Property and equipment, net					0.4
Intangible assets:
	Trade name (7 year weighted average life)	$	3.3
	Client relationships (12 year weighted average life)		26.7
	Other (3 year weighted average life)		1.6
	Total intangible assets (11 year weighted average life)				31.6
Goodwill					29.2
Indemnification asset					10.4
Other assets					2.0
Liabilities assumed					(25.7)
Net assets acquired				$	71.6

Current assets include acquired cash of approximately $16 million. Additionally, current assets includes gross accounts receivable of approximately $6million, of which an immaterial amount is not expected to be collectible. The acquired goodwill, which has been assigned to the MA segment, will not be deductible for tax.

In connection with the acquisition, the Company assumed liabilities relating to certain UTPs. These UTPs are included in the liabilities assumed in the table above. The sellers have contractually indemnified the Company against any potential payments that may have to be made regarding these UTPs. Accordingly, the Company carries an indemnification asset on its consolidated balance sheet at March 31, 2014 and December 31, 2013.

As of the date of the acquisition, Amba was integrated with Copal to form the Copal Amba reporting unit.