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SEGMENT INFORMATION
 9 Months Ended
Sep. 30, 2017
SEGMENT INFORMATION

NOTE 16. SEGMENT INFORMATION

The Company is organized into two operating segments: MIS and MA and accordingly, the Company reports in two reportable segments: MIS and MA.

The MIS segment consists of five LOBs. The CFG, SFG, FIG and PPIF LOBs 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 MIS Other LOB primarily consists of the distribution of research and financial instruments pricing services in the Asia-Pacific region as well as ICRA non-ratings revenue.

The MA segment 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 LOBs - RD&A, ERS and PS.

On August 10, 2017, a subsidiary of the Company acquired Yellow Maple I B.V., an indirect parent of Bureau van Dijk, a global provider of business intelligence and company information products. Bureau van Dijk is part of the MA reportable segment and its revenue is included in the RD&A LOB. Refer to Note 7 for further discussion on the acquisition.

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 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 that exclusively benefit only one segment are fully charged to that segment. Overhead costs and corporate expenses of the Company that benefit both segments are allocated to each segment based on a revenue-split methodology. Accordingly, a reportable segment’s share of these costs will increase as its proportion of revenue relative to Moody’s total revenue increases. Overhead expenses include costs such as rent and occupancy, information technology and support staff such as finance, human resources and information technology. “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.

Three Months Ended September 30,
20172016
MISMAEliminationsConsolidatedMISMAEliminationsConsolidated
Revenue$723.2$372.8$(33.1)$1,062.9$637.6$309.0$(29.5)$917.1
Operating, SG&A319.2278.3(33.1)564.4272.8235.2(29.5)478.5
Adjusted Operating Income404.094.5-498.5364.873.8-438.6
Less:
Restructuring----7.60.8-8.4
Depreciation and amortization18.624.4-43.019.113.6-32.7
Acquisition-Related Expenses-10.1-10.1----
Operating income$385.4$60.0$-$445.4$338.1$59.4$-$397.5
Nine Months Ended September 30,
20172016
MISMAEliminationsConsolidatedMISMAEliminationsConsolidated
Revenue$2,131.1$1,001.1$(93.6)$3,038.6$1,836.9$908.9$(83.7)$2,662.1
Operating, SG&A898.9761.9(93.6)1,567.2830.1698.1(83.7)1,444.5
Adjusted Operating Income1,232.2239.2-1,471.41,006.8210.8-1,217.6
Less:
Restructuring----10.21.8-12.0
Depreciation and amortization56.452.0-108.454.839.0-93.8
Acquisition-Related Expenses-16.7-16.7----
Operating income$1,175.8$170.5$-$1,346.3$941.8$170.0$-$1,111.8

MIS and MA Revenue by Line of Business

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

Three Months Ended September 30,Nine Months Ended September 30,
2017201620172016
MIS:
Corporate finance (CFG)$ 350.2 $ 299.6 $ 1,058.8 $ 844.7
Structured finance (SFG) 128.3 104.2 347.7 306.3
Financial institutions (FIG) 102.1 95.8 316.8 280.4
Public, project and infrastructure finance (PPIF) 109.2 105.2 312.0 309.0
Total ratings revenue 689.8 604.8 2,035.3 1,740.4
MIS Other 4.4 7.5 13.8 22.6
Total external revenue 694.2 612.3 2,049.1 1,763.0
Intersegment royalty 29.0 25.3 82.0 73.9
Total 723.2 637.6 2,131.1 1,836.9
MA:
Research, data and analytics (RD&A) 218.4 167.7 574.7 500.9
Enterprise risk solutions (ERS) 112.6 101.5 305.8 288.5
Professional services (PS) 37.7 35.6 109.0 109.7
Total external revenue 368.7 304.8 989.5 899.1
Intersegment revenue 4.1 4.2 11.6 9.8
Total 372.8 309.0 1,001.1 908.9
Eliminations (33.1) (29.5) (93.6) (83.7)
Total MCO$ 1,062.9 $ 917.1 $ 3,038.6 $ 2,662.1

Consolidated Revenue Information by Geographic Area:
Three Months Ended September 30,Nine months ended September 30,
2017201620172016
United States$588.4$545.7$1,734.0$1,571.6
International:
EMEA291.0225.9779.3665.4
Asia-Pacific118.692.5336.0272.0
Americas64.953.0189.3153.1
Total International474.5371.41,304.61,090.5
Total$1,062.9$917.1$3,038.6$2,662.1