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Moody's Corp  (NYSE:MCO)
Q3 2018 Earnings Conference Call
Oct. 26, 2018, 11:30 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good day and welcome, ladies and gentlemen, to the Moody's Corporation Third Quarter 2018 Earnings Conference Call. At this time, I would like to inform you that this conference is being recorded and that all participants are in a listen-only mode. At the request of the Company, we will open the conference up for question and answers following the presentation.

I will now turn the conference over to Steve Maire, Global Head of Investor Relations and Communications. Please go ahead.

Steve Maire -- Global Head of Investor Relations and Communications

Thank you. Good morning, everyone, and thanks for joining us on this teleconference to discuss Moody's third quarter 2018 results, as well as our current outlook for full-year 2018. I am Steve Maire, Global Head of Investor Relations and Communications. This morning, Moody's released its results for the third quarter of 2018, as well as our current outlook for full-year 2018. The earnings press release and a presentation to accompany this teleconference are both available on our website at ir.moodys.com.

Ray McDaniel, Moody's President and Chief Executive Officer, will lead this morning's conference call. Also making prepared remarks on the call this morning is Mark Kaye, Moody's Senior Vice President and Chief Financial Officer.

During this call, we will also be presenting non-GAAP or adjusted figures. Please refer to the tables at the end of our earnings press release that was filed this morning for a reconciliation of GAAP to all adjusted and organic measures mentioned during this call.

Before we begin, I'll call your attention to the Safe Harbor language, which can be found toward the end of our earnings release. Today's remarks may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. In accordance with the Act, I also direct your attention to the Management's Discussion and Analysis section and the Risk Factors discussed in our Annual Report on Form 10-K for the year ended December 31, 2017, and in other SEC filings made by the Company, which are available on our website and on the SEC's website. These, together with the Safe Harbor statement, set forth important factors that could cause actual results to differ materially from those contained in any such forward-looking statements.

I would also like to point out that members of the media may be on the call this morning in a listen-only mode.

I'll now turn the call over to Ray McDaniel.

Raymond McDaniel -- President and Chief Executive Officer

Thank you, Steve. Good morning and thank you to, everyone, for joining today's call.

Before we begin, I'm pleased to welcome Mark Kaye to his first earnings call. Mark joined Moody's on August 20 as Senior Vice President and Chief Financial Officer.

I'll begin by summarizing Moody's third quarter and year-to-date 2018 financial results. Mark Kaye will then follow with additional third quarter financial details and operating highlights. I will conclude with comments on our current outlook for 2018. After our prepared remarks, we'll be happy to respond to your questions.

In the third quarter, Moody's revenue of $1.1 billion was up 2% from the third quarter of 2017. This result reflected strong growth for Moody's Analytics, partially offset by a decline at Moody's Investors Service, as non-financial corporate debt issuance slowed versus the record level in the prior year period.

Operating expenses for the third quarter of 2018 totaled $614 million, approximately flat to the prior-year period. Operating income was $467 million, up 4% from the third quarter of 2017. Adjusted operating income of $514 million was up 3%. Foreign currency translation had an immaterial impact on operating income and adjusted operating income. The operating margin was 43.2% and the adjusted operating margin was 47.6%.

Moody's diluted EPS for the quarter was $1.59 per share, down 2% from the third quarter of 2017. Adjusted diluted EPS for the quarter was $1.69, up 11% and excluded $0.10 per share related to amortization of acquired intangible assets. Third quarter 2017 adjusted diluted EPS excluded a $0.23 per share foreign currency hedge gain and $0.12 per share related to amortization of acquired intangible assets and acquisition-related expenses associated with the Bureau Van Dijk acquisition.

Turning to the year-to-date performance. Moody's revenue for the first nine months of 2018 was a record $3.4 billion, up 11% from the prior-year period. US revenue was $1.8 billion, up 3%, and non-US revenue was $1.6 billion, up 23%. Foreign currency translation favorably impacted Moody's revenue by 1%.

Moody's Investors Service revenue of $2.1 billion was up 3% from the prior-year period. US revenue was $1.3 billion, up 1%, and non-US revenue was $848 million, up 8%. Foreign currency translation favorably impacted MIS revenue by 1%.

Moody's Analytics revenue was $1.3 billion, 28% increase from the prior-year period. US revenue of $513 million was up 9%, and non-US revenue of $752 million was up 45%. Foreign currency translation favorably impacted MA revenue by 2%. Organic MA revenue for the first nine months of 2018, which included Bureau Van Dijk revenue as of August 11, was $1.1 billion, up 9% from the prior-year period.

Moody's Corporation operating expenses for the first nine months of 2018 were $1.9 billion, up 12% from the prior-year period. This growth was primarily driven by the inclusion of Bureau Van Dijk operating expenses, as well as incremental compensation related to salary adjustments and hiring, partially offset by lower accruals for 2018 incentive compensation awards. Foreign currency translation unfavorably impacted expenses by 1%.

Operating income was $1.5 billion, up 10% from the first nine months of 2017. Adjusted operating income of $1.6 billion was up 11%. Foreign currency translation favorably impacted operating income and adjusted operating income by 2% each. Moody's operating margin was 44.1% and its adjusted operating margin was 48.5%.

The effective tax rate for the first nine months of 2018 was 21%, down from 29% in the prior-year period. The decline was primarily due to lower US statutory tax rate and net uncertain tax position benefits related to a statute of limitations expiration and audit settlement.

Primarily due to our expectation for continued lighter debt issuance into the fourth quarter, we are reducing our outlook for full year diluted EPS to a range of $6.95 to $7.10 and adjusted diluted EPS to a range of $7.50 to $7.65. In response, we intend to undertake cost management activities, which will result in a fourth quarter restructuring charge of $30 million to $40 million and an aggregate charge through the first half of 2019 of $45 million to $60 million. We expect this to result in savings of $20 million to $25 million in 2019 and the aggregate annualized savings of $30 million to $40 million thereafter.

I'll now turn the call over to Mark to provide further commentary on our financial results and other operating updates.

Mark Kaye -- Senior Vice President and Chief Financial Officer

Thanks, Ray. I'll begin by reviewing third quarter 2018 revenue at the Company level. As Ray mentioned, Moody's total revenue for the third quarter was $1.1 billion, up 2%. US revenue of $560 million was down 5%. Non-US revenue of $521 million was up 10% and represented 48% of Moody's total revenue. Recurring revenue of $619 million was up 16% and represented 57% of total revenue. The impact of foreign currency translation on Moody's revenue was negligible.

Looking now at each of our businesses, starting with Moody's Investors Service. Total MIS revenue for the quarter was $645 million, down 7%. US revenue decreased 10% to $385 million. Non-US revenue of $260 million was down 2% and represented 40% of total MIS revenue. The impact of foreign currency translation on MIS revenue was negligible.

Moving to the lines of business for MIS. First, corporate finance revenue for the third quarter was $296 million, down 15%. This result primarily reflected a decline in US investment grade and global high yield bond issuance activity. US and non-US corporate finance revenues were down 21% and 4%, respectively.

Second, structured finance revenue totaled $125 million, down 2%. This result reflected lower US CMBS rated issuance, partially offset by new CLO formation in EMEA and the US. US structured finance revenue was down 9%, while non-US revenue was up 13%.

Third, financial institutions revenue of $120 million was up 17%, driven by strong issuance activity primarily from M&A-related financing in the US insurance sector. US financial institutions revenue was up 48%, while non-US revenue was down 3%.

Fourth, public, project and infrastructure finance revenue of $99 million was down 9% and primarily reflected a decline in global infrastructure and project finance issuance. US and non-US public, project and infrastructure finance revenues were down 7% and 13%, respectively.

Turning now to Moody's Analytics. Total revenue for MA of $436 million was up 18%. US revenue of $175 million was up 9%. Non-US revenue of $261 million was up 26%, and represented 60% of total MA revenue. Foreign currency translation had an unfavorable impact on MA revenue of 1 percentage point. Organic MA revenue for the third quarter of 2018, which included Bureau Van Dijk revenue as of August 11, was $399 million, up 8% from the prior-year period.

Moving now to the lines of business for MA. First, research, data and analytics or RD&A revenue of $283 million was up 29%. US and non-US RD&A revenues were up 9% and 50%, respectively. Organic RD&A revenue, which included Bureau Van Dijk revenue as of August 11, was $246 million, up 13%, driven by strength in sales of credit research and rating data feeds.

Second, enterprise risk solutions or ERS revenue of $113 million was approximately flat to the prior-year period. This result reflected strong growth in loan origination solutions and the timing of revenue recognition under the new revenue accounting standard, ASC 606, offset by the declines in software license revenue as the business transitions to subscription-based products. US ERS revenue was up 9%, while non-US revenue was down 4%. Trailing 12-month revenue and sales for ERS increased 6% and 4%, respectively.

At the end of the third quarter of 2018, trailing 12-month subscription sales were up 9% versus the prior-year period, while one-time sales inclusive of perpetual licenses and service fees were down 11%. During the same 12-month period, ERS revenue from subscriptions was up 11% and one-time revenue was down 6%.

Moving on to professional services, third quarter revenue of $40 million was up to 7%. US and non-US professional services revenues were up 11% and 5%, respectively.

Turning now to operating expenses. Moody's third quarter operating expenses were $614 million, approximately flat to the prior-year period. This result reflected the inclusion of Bureau Van Dijk operating expenses, as well as incremental compensation related to salary adjustments and hiring, offset by lower accruals for 2018 incentive compensation awards. Foreign currency translation favorably impacted operating expenses by 1%.

On January 1, 2018, the Company adopted the new ASC 606 revenue accounting standard using the modified retrospective approach. We continue to expect the impact of the adoption to be immaterial to Moody's Corporation revenue and expenses for the full-year of 2018.

As Ray mentioned, Moody's operating margin was 43.2% and the adjusted operating margin was 47.6%.

Moody's effective tax rate for the quarter was 24.4%, down from 31.4% in the prior-year period. The decline primarily reflected a lower US statutory tax rate. The third quarter 2018 effective tax rate included an increase in uncertain tax positions related to non-US tax matters offset by a decrease related to the transition tax liability, each being approximately $65 million.

Now, I'll provide an update on capital allocation. During the third quarter of 2018, Moody's repurchased approximately 400,000 shares at a total cost of $66 million, or an average cost of $174.33 per share. Moody's also issued approximately 100,000 shares as part of its employee stock-based compensation plans. Moody's returned $84 million to its shareholders via dividend payments during the third quarter of 2018, and on October 22, the Board of Directors declared a regular quarterly dividend of $0.44 per share of Moody's common stock. This dividend will be payable on December 12, 2018, to stockholders of record at the close of business on November 21, 2018.

Year-to-date, Moody's repurchased approximately 900,000 shares at a total cost of $147 million, or an average cost of $168.37 per share, and issued a net 1.5 million shares as part of its employee stock-based compensation plan. The net amount includes shares withheld for employee payroll taxes. Moody's also returned $253 million to its shareholders via dividend payments during the first nine months of 2018.

Outstanding shares as of September 30, 2018 totaled 191.6 million, approximately flat to a year ago. As of September 30, 2018, Moody's had approximately $380 million of share repurchase authority remaining.

At quarter end, Moody's had approximately $5 billion of outstanding debt, and approximately $975 million of additional borrowing capacity under its revolving credit facility.

Total cash, cash equivalents and short-term investments at quarter end were $1.1 billion, down 3% since December 31, 2017 with approximately 87% held outside the US.

As of September 30, 2018, Moody's ratio of net debt-to-trailing 12-month adjusted operating income was 1.8 times, down from 2.2 times as of December 31, 2017. This reflected execution of management's commitment to delever post the Bureau Van Dijk acquisition.

Cash flow from operations for the first nine months of 2018 was $1.1 billion, an increase from $350 million in the first nine months of 2017. Free cash flow for the first nine months of 2018 was $1 billion, an increase from $280 million in the prior-year period. These increases in cash flow were largely due to payments the Company made in the first quarter of 2017 pursuant to its 2016 settlement with the Department of Justice and various states of attorneys general.

And with that, I will turn the call back over to Ray.

Raymond McDaniel -- President and Chief Executive Officer

Thanks, Mark. I'd like to provide some highlights on our progress with Bureau Van Dijk integration and synergy activities. We are just over a year into the Bureau Van Dijk acquisition and the business continues to perform well. The revenue growth is on track to meet our 2018 forecast, while the direct adjusted operating margin for the third quarter and year-to-date was in line with historical business performance at 49% and 44.3%, respectively.

We are particularly pleased with Bureau Van Dijk's very strong sales results. On an FX-neutral basis, sales were up 14% year-to-date with 21% growth in the third quarter. This acceleration reflects strong demand for Bureau Van Dijk's product and the synergies that we are realizing as we drive distribution of Bureau Van Dijk data to more customers in more markets. Importantly, our success in this area positions us for better revenue growth as we move into 2019.

I'll now discuss certain components of our full year guidance for 2018. A complete list of Moody's guidance is included on Table 13 of our third quarter 2018 earnings press release, which can be found at Moody's Investor Relations website at ir.moodys.com. Moody's outlook for 2018 is based on assumptions about many geopolitical conditions and macroeconomic and capital market factors, including interest rates, foreign currency exchange rates, corporate profitability and business investment spending, mergers and acquisitions, consumer borrowing and securitization, and the amount of debt issued. These assumptions are subject to uncertainty and results for the year could differ materially from our current outlook. Our outlook assumes foreign currency translation at end-of-quarter exchange rates. Specifically, our forecast reflects exchange rates for the British pound of $1.30 to GBP1 and for the euro of $1.16 to EUR1.

Moody's now expects full-year 2018 diluted EPS to be $6.95 to $7.10, including the amortization of all acquisition-related intangibles of approximately $0.40, the expected restructuring charge of $0.10 to $0.15 and the acquisition-related expenses of $0.02 to $0.03. Excluding these items, adjusted diluted EPS is now expected to be $7.50 to $7.65.

Before turning to the Q&A, I would like to provide a few updates on recent acquisitions, investments and initiatives. On August 20, we announced the closing of the acquisition of Omega Performance, a leading provider of online credit training, serving over 300 customers ranging from large global banks to local lending solutions. Omega Performance will enhance MA as a worldwide market standard in credit proficiency for financial institutions that offer consumer, small business and corporate lending.

On August 30, we announced a definitive merger agreement to acquire Reis, a leading provider of US commercial real estate or CRE data and commenced a tender offer on September 13 to acquire all issued and outstanding shares of Reis common stock at $23 per share. The tender offer and acquisition were successfully completed on October 15. The Reis acquisition contributes to MA's development of a comprehensive suite of CRE data and analytic solutions, positioning MA to become a leading data and analytics provider in the US commercial real estate market, bringing efficiency to CRE analysis and enhanced capital flows.

We're very excited to welcome our new Omega Performance and Reis colleagues to Moody's and work together to achieve the synergies and commercial opportunities we have identified.

On October 15, Mona Breed joined Moody's as Chief Information Officer. Ms. Breed will lead Moody's global technology infrastructure and programs as we enhance our technology capabilities and leverage our investments. And on October 17, we appointed Derek Vadala, as Global Head of a newly formed Cyber Risk Analytics Group in MIS. This Group will develop MIS' capabilities for evaluating cyber risk as it relates to operational and credit risk. And earlier this week, we announced an investment and a fund managed by Team8, a leading cybersecurity think tank, and incubator that further supports our cyber analytics initiative.

Finally, we recently announced our selection of the inaugural list of partners for Reshape Tomorrow, our global program to help owners of small and growing businesses overcome the challenges of expanding their enterprises. For more information on the programs and partners selected, please see the CSR press release we issued on October 24 or visit moodys.com/CSR.

This concludes our prepared remarks, and joining Mark and me for the question-and-answer session are Mark Almeida, President of Moody's Analytics; and Robert Fauber, President of Moody's Investors Service. We'd be pleased to take any questions you may have.

Questions and Answers:

Operator

Thank you. (Operator Instructions) Our first question comes from Vincent Hung with Autonomous.

Raymond McDaniel -- President and Chief Executive Officer

Vince?

Vincent Hung -- Autonomous Research -- Analyst

Hello. Can you hear me?

Raymond McDaniel -- President and Chief Executive Officer

Yes.

Vincent Hung -- Autonomous Research -- Analyst

Sorry. On the $30 million, $40 million of cost savings, where is it coming from and what's the timing around that?

Mark Almeida -- President

Vince, thank you for the question. We have undertaken a careful review of our expense infrastructure to identify opportunities for efficiencies. The cost management activities will primarily come from two separate and distinct areas. First, reducing, exiting and/or subleasing certain real estate properties. And second, a targeted reduction in headcount with an emphasis on streamlining our operations, eliminating redundancies and meeting regulatory expectations.

We anticipate that the restructuring charge of $30 million to $40 million in the fourth quarter of 2018 and the additional $10 million to $15 million in the first half of 2019 will result in an annualized pre-tax benefit of $30 million to $40 million once complete, and that the net pre-tax benefit for 2019 on a stand-alone basis is estimated between $20 million and $25 million.

Vincent Hung -- Autonomous Research -- Analyst

Got it. And just a follow-up, when we think about expenses, long-term, is there anything else you can do beyond that?

Mark Almeida -- President

Yes. The business is actually undertaking a number of initiatives at the moment with respect to automation and technology to address costs. As we said before, we are first focusing on having the right people doing the right jobs in the right location. Since 2015, over half of our headcount adds had been in our support center in India. We have now opened our hub in Costa Rica and working with other location, specifically related to the MIS business.

We are also investing in major program specifically in MIS around the workflow system and an analytics system that we believe can provide simplification around our end-to-end ratings process and add additional efficiency gains to adjust off (ph).

Vincent Hung -- Autonomous Research -- Analyst

Thanks.

Operator

And we'll take our next question from Manav Patnaik with Barclays.

Manav Patnaik -- Barclays -- Analyst

Thank you. Ray, Just, I think, in your comments you talked about the slowdown that you expect in the fourth quarter to be temporary. And I was hoping, you and maybe, Rob, to just elaborate on that a bit and just explain why you are confident that it's only temporary and not maybe to start of something.

Raymond McDaniel -- President and Chief Executive Officer

Sure. And I'll invite Rob to offer his thoughts as well. I don't think I said temporary. But we are looking at a number of headwinds and tailwinds. And so, determining which of those are going to be stronger going into 2019 and beyond, it's a little difficult to predict. But, obviously, we are experiencing a rising rate environment to the extent that the rising rate environment is associated with strong economic growth that, as I've said before, encourages business expansion, business investment spending, merger and acquisition activity.

The overall condition of the market we think is probably more important than the rates themselves. Rising rates with a maintenance of tight spreads, because again, we are in a strong economy is not a bad news story. What would be a bad news story, as we've talked about, again before, is more of a stagflation environment. If, for some reason, we were -- we in the marketplace was experiencing a rise, especially a short rise in interest rates, but unrelated to underlying core business strength. I don't think that that is going to be the situation, that doesn't look like the central case at this point, which is why you might interpret my comments as relating to a temporary slowdown.

Rob, I don't know if there's anything else to add to that but, please.

Robert Fauber -- President

No, I think that covers everything.

Manav Patnaik -- Barclays -- Analyst

All right. And, Mark, welcome to the call, but just in terms of the cost actions, how much of this was driven by, obviously, the slowdown you expect in the fourth quarter versus how much of it was a fresh set of eyes from your end and thinking that there is more room to be taken out here?

Mark Kaye -- Senior Vice President and Chief Financial Officer

Manav, thank you. And certainly very pleased to be a part of the Moody's management team. I think the restructuring program was really driven by a combination of factors, and I can really think of the three primary ones. First is the expected continuation of the relatively soft issuance environment through year-end. Secondly, is an opportunity to rationalize our real estate footprint, specifically to include synergies from some of our recent acquisition. And then third, it allows to give a continued focus on optimizing our global staffing operations for a greater efficiency, including some of the geographic rebalancing that I spoke about earlier.

Raymond McDaniel -- President and Chief Executive Officer

Yeah. And I'd just add that, while it's always great to get a fresh set of eyes on the Company's operations. This -- the timing was also importantly related to the completion of two recent acquisitions and some of the geographic rebalancing that we're doing, in part in response to regulatory expectations.

Manav Patnaik -- Barclays -- Analyst

All right. Thank you very much.

Operator

And we'll take our next question from Alex Kramm with UBS.

Alex Kramm -- UBS -- Analyst

Hey, good morning, everyone. So, just, I guess, following up on Manav's first question, in terms of the environment in the 2019 outlook, I know this is not a guidance call for next year, but your competitor S&P, as they laid out their initial issuance outlook, calling for kind of 1% growth overall, corporate still down 4%. So, curious if you could comment on that a little bit in terms of your own outlook, or anything that you're seeing that may be different, in particular these guys called out the repatriation is still being something that is going to weigh on the outlook? So, maybe some color there would be really helpful, how much of that will be an impact for your business?

Raymond McDaniel -- President and Chief Executive Officer

Sure. I'll let Rob comment on this, and you're right, we are not going to be offering a full outlook for 2019 on this call, but I know Rob does have some thoughts and perspectives on the environment.

Robert Fauber -- President

Yeah. Right. Thanks, Ray. So, we do like to get to the end of the year where we can see where issuance ends up and then be able to triangulate both our bottom up forecast with what we're also seeing from the street. But that said, I'll give you a little feel for how we're looking at it. I mean, overall, we still have economic growth. We saw today the US GDP rate (ph) for the third quarter at 3.5%, expectations for US GDP growth of close to 3% next year and the major economies in Europe in the 1.5% to 2% range. So continuing to see economic growth and Ray always talks about that, that's a key driver to issuance.

I'd say, modest geopolitical risks we've got, I think, continued healthy investor demand, and we are seeing that now with pretty constructive market conditions, albeit with some volatility, and gradual rate increases. And again, that's the key here is that they are gradual and well-telegraphed. And we think also a strong out -- M&A outlook going into next year. We've got a lot of LBO-driven M&A activity now in the market, you can see that in the bank loan space. We think that's going to continue, as well as some of the jumbo M&A.

We've also expect default rates, particularly spec rates, default rates to remain low next year, that should contain spreads, and then we balance that against, I would acknowledge that, we're seeing both the combination of rates moving and I'd say, in some cases, relatively liquid issuers, which I do think is weighed on some opportunistic supply and we've seen that in the third quarter. We're going to have to look at the sustainability of the bank loan supply if spreads are not further tightening. And I think, all in all, that translates into our corporate issuance outlook that's roughly in line with 2018, and we may see a modest rebound in US high-yield after a pretty sharp decline.

And then maybe just touching on securitization, I think the trends there remain favorable or steady. It's a highly competitive market, but we do expect to see some growth on the back of, again, economic growth and consumer sentiment that will be supporting securitization markets.

Maybe just in terms of first time mandates, I think our view is that, that's going to continue to provide some support for revenues going forward. So, a lot of health warnings on that, we will tighten that up and be able to talk more about it on the next call.

Alex Kramm -- UBS -- Analyst

That's great color. Thank you. And just one more quickly, I think on the same topic. As you think to the remainder of the year, if I look at your updated guidance for the -- I guess, implied guidance for the fourth quarter. If I'm correct, for the corporate side, I think you are assuming a pretty big ramp in the fourth quarter, maybe something like 15% or so. It will be a pretty big ramp by historical standards and I know that third quarter was soft, but I think some people called your guidance this morning, still fairly aggressive in that area. So, maybe just commenting on that real quick in terms of the more near-term assumptions what could still go wrong here?

Robert Fauber -- President

Yeah.

Raymond McDaniel -- President and Chief Executive Officer

Yeah. I'm going to ask Rob to comment, because it's certainly on the MIS side, where you would potentially expect more volatility.

Robert Fauber -- President

Yeah. So, I mean, you can see where we are in terms of year-to-date growth. I would say that, we are expecting 4Q to show some sequential growth, certainly from 3Q 2018, and that's the resumption of that more typical saw tooth pattern that we have typically seen except for last year. This year we saw that typical summer slowdown, last year, you remember every quarter saw sequential growth. So, we think we're back to that saw tooth pattern and think that 4Q 2018 will be up on 3Q 2018.

We've got a -- again, the technical issuance backdrop is good. I think our pipelines look generally healthy. The loan market is active. M&A inquiries are active. But we will need to see some degree of improvement and opportunistic issuance in 4Q versus 3Q to hit our outlook. And I would also note that, we're not looking for the same levels of opportunistic issuance in 4Q that we saw in the first half of 2018, but certainly a pickup from the third quarter.

And the last thing I want to point out is, 4Q is going to be a tough comp -- 4Q 2018 tough comp to 4Q 2017. You might remember, we benefited from some of that pull forward in US PFG, we saw some late jumbo investment grade issuance, I think we put up something close to 20% revenue growth. So, an acceleration, a pickup of revenue from 3Q into 4Q, but a deceleration of that kind of year-to-date growth rate, and that's how we got to our guide.

Alex Kramm -- UBS -- Analyst

Makes a lot of sense. Thanks, guys.

Operator

And our next question comes from Toni Kaplan with Morgan Stanley.

Toni Kaplan -- Morgan Stanley -- Analyst

Hi, good morning. Also wanted to ask on MIS. In terms of just the recent weakness in issuance, I know you could attribute part of it to rates. But do you also attribute part of it to tax reform, and when you do think about -- if so, when do you think about tax reforms impact on issuance, do you see it as more of an ongoing phenomena since companies would be paying less tax and have more cash on the balance sheet? Or would you think about it as, this is a short-term impact because of the repatriation aspect so there is less of we need to issue right now, and so therefore, maybe it's a little bit more temporary? So just wanted to sort of talk about what you think is driving the recent weakness in addition to rates?

Raymond McDaniel -- President and Chief Executive Officer

Yeah. I think, I would place more weight on the repatriation, especially coming out of the tech sector. And that -- we discussed that earlier in the year as being a known headwind, but a somewhat concentrated headwind in that, it was really the repatriation, a large dollars of repatriation were associated with the large technology companies, and that a large part of the corporate debt market certainly in terms of our business coming out of the speculative grade sector is not an area where corporations have large amounts of offshore cash. So, I think what we've seen in terms of a slowdown in spec grade bonds relates more to the rising rate environment and bank loans being favored over spec grade bonds rather than anything having to do with the tax reform.

That being said, the companies that have large amounts of overseas cash to be repatriated, we'll have cash that can be repatriated again in 2019. So, I don't expect that to be a very temporary or one-off phenomenon associated only with 2018.

Toni Kaplan -- Morgan Stanley -- Analyst

Great. And just despite the top line weakness in ratings, the margins in MIS held up well. I guess, what were some of the levers you were able to pull in the quarter? I assume, incentive comp was probably one of them. So, it'd be helpful to hear what that was during the quarter? And also, I think that last quarter we didn't have the incentive comp number for 2Q. So, if you could give 3Q and 2Q incentive comp that'd be helpful? Thank you.

Mark Kaye -- Senior Vice President and Chief Financial Officer

Good morning, Toni. The second quarter 2018 incentive comp number was $51.3 million. The third quarter number is $43.3 million. In terms of the MIS margins quarter-over-quarter, the increase is approximately 140 basis points. We do, however, like to look at margins on a trailing 12-month basis, and there you will see the increase is approximately 40 basis points. The difference is really due to the normalization of the incentive compensation, and ongoing cost control measures within MIS.

Toni Kaplan -- Morgan Stanley -- Analyst

Thank you.

Operator

And our next question comes from Joseph Foresi with Cantor Fitzgerald.

Joseph Foresi -- Cantor Fitzgerald -- Analyst

Hi. I was wondering, what would be the Company's response to prolonged issuance slowdown? Do you expect to protect profitability in that scenario? And how much flexibility do you think you have there?

Raymond McDaniel -- President and Chief Executive Officer

In terms of what protects the business model and business performance in a negative environment, there is a number of things to look at, on the revenue side, look to the steady growth in recurring revenue versus transaction revenue at MIS, pricing opportunities where we are providing particular value, the going forward benefit of new rating mandates that we have picked up in 2018, 2017, which translate into maintenance and monitoring fees on a going forward basis. And, of course, Moody's Analytics, which is not a capital market-sensitive business and it has a very heavy weighting to recurring revenue.

As far as expenses are concerned, there is the formulaic flex in our incentive compensation, that response to what's happening with revenue and operating income. We can also modulate the pace of investments, and those are a variety of different investments whether they're technology related or otherwise. But I would underscore that we think there are some very important opportunities for the Company that we do want to put investment against. And so, for short-term cyclical variations in market conditions, we are going to continue to invest even as we pull on these other levers to make sure that the business model is resilient.

Operator

And we'll take our next question from Peter Appert with Piper Jaffray.

Peter Appert -- Piper Jaffray -- Analyst

Thank you. Good morning. So a question for Mark Almeida. Number one, the BVD momentum, very impressive here in terms of the acceleration in quarterly revenue growth. So I was hoping you just give us more color on what's driving that and the sustainability of that? And then I'll get my follow up in advance. On the ERS business, just any color in terms of progress in improving profitability there? Thank you.

Mark Almeida -- President

Sure, Peter. Yeah. BVD is -- as Ray described, BVD is performing very, very well. We are very pleased with what's happening in the business. We are seeing very good demand from a number of sources and in a number of used cases for the BVD product. We're also building some very solid momentum as we begin to cross-sell the BVD product to the traditional Moody's Analytics customer base. So, we feel like we're doing quite well and performing very well, particularly on the sales side with Bureau van Dijk and that strong sales growth will start to manifest itself in very good revenue production in the coming quarters. So things going quite well there.

In ERS, we are, I would say that, things are going very much as we've expected and as we've been describing for you. As you know, the business is going through a rather profound transition and that transition is going pretty much as we'd expect. We had about 7% revenue growth in ERS last year, in the first half of this year the business has grown 6%, we were flat in this last quarter in ERS. And our full year guidance would imply that, our full year guidance are being down a couple of points, would imply that the fourth quarter is going to be down for ERS.

But the important thing to really look at to understand where the business is headed, is to pickup on the details that Mark shared a couple of minutes ago. He mentioned that total ERS sales were up 4% on a trailing 12-month basis. And that's important because in the first two quarters of this year, trailing 12-month sales in ERS were flat. And so, I think what that suggest is that, we're beginning to make the turn, and that the business is evolving from a traditional software licensing and project business to a true software as a service business, where we're selling things on subscription.

So I think the business performance is moving in the right direction, and that is going to drive much better profitability in ERS, and I think you're starting to see that flow through to the MA margin more generally. We had very good margin expansion in M&A this past quarter. We continue to have good margin expansion on a trailing 12 months basis. That's the result of the high margin BVD business flowing through. But it's also a result of the good work that we're doing in the legacy MA businesses and that's largely an ERS initiative.

Peter Appert -- Piper Jaffray -- Analyst

Great. Thank you, Mark.

Operator

We'll take our next question from Jeff Silber with BMO Capital Markets.

Jeffrey Silber -- BMO Capital Markets -- Analyst

Thank you so much. If I look at your MIS business and if I look at the types of clients that you develop ratings for. Where do you get the most incremental margins and if you maybe can order them, that would be helpful?

Raymond McDaniel -- President and Chief Executive Officer

Yeah. I mean, the new rating mandates are certainly a very attractive source of revenue because they established new relationships that we would expect would be very stable over time. That being said, that is not the highest margin business. New customers, new rating relationships require additional analytical capacity and analytical support capacity. So, I think you can understand that where we have an established relationship and that entity decides to reenter the debt markets, that is a profitable opportunity for us because we already have the cost base installed in terms of our workforce that follows the company or the municipality, and we are earning incremental revenue off of the additional issuance.

Rob, do you want to add anything to that?

Robert Fauber -- President

Yeah. The other thing -- so I think that's right. Balance of first time mandates versus the refi activity we're already rating these companies, but then when you think about maybe on a sector basis, I think you might tie it to complexity. So where there is more analytical complexity, we tend to -- that tends to be reflected in the economics, things like leveraged finance, CLOs, CMBS.

Jeffrey Silber -- BMO Capital Markets -- Analyst

Okay, great. And then just a couple of quick numbers questions. If you could just let us know the interest expense and share count embedded in your guidance for the full year? And also, does your guidance include the impact of Reis?

Mark Kaye -- Senior Vice President and Chief Financial Officer

The guidance does include the impact of Reis and Omega. The expectation in terms of an adjusted EPS impact for 2018 would be $0.02 consistent with the earlier release. And then in terms of the guidance around share repurchase -- interest expense, we don't provide that.

Jeffrey Silber -- BMO Capital Markets -- Analyst

Okay, great. Thanks so much.

Operator

Our next question comes from Craig Huber with Huber Research Partners.

Craig Huber -- Huber Research Partners -- Analyst

Yes, hi. Couple of questions. The first one, Ray, if you think out to next year, can you just walk us through sort of preliminary basis, some of the factors that maybe more positive next year, less of a headwind next year versus what you are dealing with this year on the debt issuance side of your ratings business? I have a follow-up. Thank you.

Raymond McDaniel -- President and Chief Executive Officer

Yeah, sure. I mean, certainly, a gradual and expected change in the interest rate environment would be more beneficial than anything that is unexpected, or overly aggressive. Again, as we've said, tying that to GDP growth, we think is important. And also, our expectation for continued low, in fact, decreasing default rates, which should keep spreads tight is also important. So, really I think it's going to be -- 2019 is going to be a question of -- or the policy actions expected, and with that expectation, are we going to have an M&A and business investment, business expansion environment that is supportive of debt issuance to affect that expansion.

Robert Fauber -- President

Craig, just maybe one area to add to, we saw -- 2017 we saw a lot of issuance out of, of course, the Greater China region this year, with some of the volatility we've seen that slowed down, but we believe there is a pretty big backlog of issuance out of China. So I think there is some potential upside to see that come back into the market in 2019.

Raymond McDaniel -- President and Chief Executive Officer

And then as I think about it, looking for upside as well, if -- in Europe, in particular, it's some of the things that people are worried about in terms of Brexit and whether there was a hard Brexit, the Italian budget situation, if those are resolved in a relatively more benign rather than less benign manner, that's certainly going to help with our confidence and business expansion on the European side.

Craig Huber -- Huber Research Partners -- Analyst

And then also with China, could you just update us on your thoughts on when your best -- like your license over there to rate in the domestic market in China, sort of how you view this opportunity for long-term?

Raymond McDaniel -- President and Chief Executive Officer

Yeah. We view it very positively, obviously. We have a license application in process. We also like the optionality that we have from our investment in CCXI, which is a well-established rating agency in the domestic Chinese market. So, as we look at China, it's the domestic market, it's the Panda bond market for non-Chinese issuers of Renminbi that might attract international capital that's looking for international ratings, and it's the traditional cross-border market, as well as the opportunities that come from Moody's Analytics. And what we can do in China, both in terms of the product and services that are offered by MA alongside MIS. So, it all comes together in a package in a very positive way. The challenge is exactly when, and it has been a process in our experience in China that the Chinese authorities move very deliberately and carefully. And so, trying to predict the timing is a little bit difficult.

Craig Huber -- Huber Research Partners -- Analyst

Okay. Thank you.

Operator

And we'll take our next question from Bill Warmington with Wells Fargo.

William Warmington -- Wells Fargo -- Analyst

Good afternoon, everyone.

Raymond McDaniel -- President and Chief Executive Officer

Good afternoon, Bill.

William Warmington -- Wells Fargo -- Analyst

The first question for you is to ask about how new mandates are doing and whether they are holding up in 3Q and into 4Q?

Robert Fauber -- President

Yeah. Bill, this is Rob, let me take that one. So, I'd say, they decelerating a little bit in the third quarter in tandem with kind of the slowdown in issuance and leveraged finance market. So it's fairly typical. But we're still overall on track, we are very strong. I mean, we're over 200 first-time mandates again signed in the third quarter. So, yes, that's down from the second quarter of 2018, it's actually -- it's also down from last year's quarter. But we're now over 800 first-time mandates for the year through September and we are still expecting to be above that 1,000 first-time mandate mark for the full year, and you might remember we're just north of that, last year something like 1,040. So, a very strong pace.

And I just touched on in my answer to Craig's question, we also have a number of unpublished mandates particularly in China. So you've got some deals that haven't gotten approval to go-to-market, our regulatory approval, others are waiting on more fit favorable. Pricing conditions, given the volatility in the Chinese markets. So there is a pretty robust backlog that hasn't gone into the market.

And the other thing that's just worth noting is that, first-time mandate growth has been now strongest out of the US for the year. Now, you might remember, we had a very mixed growth last year, but we've seen very strong growth out of the United States and we have a good pipeline there.

Raymond McDaniel -- President and Chief Executive Officer

And I'd just add that the numbers we are seeing in Q3 are as expected going into Q4. We did not anticipate, as I think everyone knows from our second quarter outlook, we did not anticipate the third quarter of 2018 behaving like the third quarter of 2017. Just a very unusual quarter, that not only affected issuance, it affected new mandates, et cetera, it just drove an unusual performance profile last year that we've normalized back to typical market performance in 2018.

William Warmington -- Wells Fargo -- Analyst

And then a question for, Mark, and that's Mark Kaye. I have to make a distinction now. So more Mark (multiple speakers) German bank I think. Same more Mark in the German bank as the saying goes. At Brexit (ph) just a couple of weeks ago, you've talked a lot about your goals of introducing more automation to internal processes and Moody's using AI, machine learning, more data science. How does this play into the restructuring announced today, does it give you a chance to implement some of that?

Mark Kaye -- Senior Vice President and Chief Financial Officer

Bill, thank you for the question. I certainly continue on the past of introducing and encouraging the team to implement different and more automated digital approaches to how we think about financing health, finance function interact with the business itself. We did spend some time with our Board talking about that in our October meeting and they are supportive of what we're trying to do here.

On the restructuring, I give you this is an opportunity for us to create capacity, both to expand margins and to really be able to reinvest back into the business. I think from my perspective, it's important to keep the investment at a level that's sustainable, but also which will add value over the long-term.

William Warmington -- Wells Fargo -- Analyst

Thank you very much.

Operator

We'll take our next question from Tim McHugh with William Blair.

Timothy McHugh -- William Blair -- Analyst

Thanks. Just going to ask on ERS. I noticed the description of kind of where the growth came from is more the loan origination side of the product set. I guess, can you talk it all about, I guess, the regulatory-related solutions and what you're seeing from the clients, and it has, I guess, where the growth is coming from shifted a lot versus two to three years ago for ERS?

Mark Almeida -- President

Yes, Tim, it has shifted a fair amount. I think we've talked about this before. But if you go back two, three, four years, we had a lot of demand being driven by post-crisis regulation, whether it was Basel rules or stress testing protocols that were being applied to banks whether in the US or in Europe, there was quite a bit of regulatory-driven demand, that has been replaced by demand from banks that are looking to bring more efficiency and looking to streamline their processes. So that's where the loan origination product has been doing quite well, lots of banks trying to compete, trying to make credit decisions and lending decisions faster and more efficiently, particularly in the mid-sized and small-end of the corporate lending market, that's a very competitive business. And to be able to make a decision, to be able to automate your decision process is becoming increasingly important, and we see a lot of banks investing in that.

We've also got demand coming from, it's not strictly speaking regulated -- regulatory-driven, but we've got these new accounting standards. For a number of years, we've been dealing with IFRS 9 outside the United States, that plays very well to our strengths, and we've done a lot of business in that space. And now you've got a GAAP variant of IFRS 9 called CECL, that it's taking effect in 2020, that's driving a lot of demand for our solutions here in the US. And again, that's largely -- there we're largely focusing on smaller institutions. And we're doing quite well in that space. So, those are the principal things that are driving demand for our ERS solutions at present.

The one other area I should note is, again an accounting-driven issue related to insurance companies, there is a requirement called IFRS 17, which is coming into effect over the next couple of years, that also plays very well to our analytical capabilities, and we've developed a solution for that and are seeing a lot of interest in it. So those are the principal sources of demand for the ERS product currently.

Timothy McHugh -- William Blair -- Analyst

Are you retaining, I guess, the legacy regulatory type subscriptions or licenses or do you see clients drop those? Just trying to understand if you're declining on one part and growing at the other, or I guess, what the underlying dynamics are?

Mark Almeida -- President

No. Those regulations -- by and large those regulations still exist, and financial institutions still need to comply with those rules, again, whether they're Basel or -- most of the stress testing work that we have done has been with larger institutions, and those institutions are still subject to those rules, even though they've been relaxed for some of the smaller institutions in the US. So we don't see customer attrition or product attrition associated with the change in the volume of regulation. It's really a flow versus a stock question. I guess, the way I'd say it is, the stock of regulation is the same, we're just seeing less flow of new regulation driving new demand.

Timothy McHugh -- William Blair -- Analyst

Okay. And then on BVD, just on the new sales, recognizing since it's a sales number rather than a revenue number that can bounce around. And, I guess, you're comparing it to the year ago quarter when there is maybe some disruption, I guess, because of the closing of the merger. Can you, I guess, address that? How steady has that sales number growth been? And so, just trying to understand how outside the norm a 21% growth rate is for BVD or if it's been volatile?

Mark Almeida -- President

Yeah. As Ray said, we had 21% sales growth in Q3, but I think the more useful number frankly is the 14% year-to-date sales growth number, that he cited. And then again, those are -- both of those are at constant FX rates. So you don't have any currency noise in there. But the 14% rate, again I think is a good reflection of the underlying performance of the business. The 21% Q3, frankly, reflected a bit of catch-up that we had from some operational issues that we talked about in the first quarter. But 14% is a good number and that's meaningfully stronger than where the business was performing when we acquired it. So we feel very good about that and we are optimistic about being able to sustain that.

Timothy McHugh -- William Blair -- Analyst

Great. Thank you.

Operator

Our next question comes from Shlomo Rosenbaum with Stifel.

Shlomo Rosenbaum -- Stifel, Nicolaus & Co., Inc. -- Analyst

Hi. Thank you for taking my questions. I want to focus a little bit on the RD&A business. It seems like from the guidance that you're expecting something like a $25 million sequential ramp in revenue. Where is that coming from? And it's coming from the BVD business, it seems that the BVD business when you gross up for deferred revenue, it was actually down over -- just over $1 million sequentially. If you can kind of put that in context?

Mark Almeida -- President

Sure. I mean, first, as we just discussed, there is strong underlying growth in the BVD business, and that acceleration in sales growth that we've talked about, that's going to start flowing through to the P&L and it'll start hitting the top line. And so, that's certainly contributing to a good strong fourth quarter that we expect. I think you've done the math correctly, Shlomo.

The other thing you need to keep in mind is, you mentioned that you've got the haircut going away, there was $22 million of haircut in the fourth quarter of last year. We don't have that problem this year in the fourth quarter. And you've also got Reis coming in to the results this -- next quarter. So you've got those three things, strong underlying growth in BVD, the reversal of the haircut, if you want to put it that way and then Reis coming in, in addition to what I would characterize as very solid performance in the rest of the business.

Shlomo Rosenbaum -- Stifel, Nicolaus & Co., Inc. -- Analyst

Got it. Thanks. And then, I just wanted to ask in terms of the issuance commentary, S&P noted yesterday that they thought that the refi wall would be more meaningful in the second half of 2019 as they look toward kind of pacing on the refis. Are you guys seeing that in the numbers that you're looking at as well?

Raymond McDaniel -- President and Chief Executive Officer

Yeah. When we look at the refi walls, going out -- actually, multi-year. They are increasing each year sequentially through 2022. So, in terms of assessing the importance of the refi wall in 2019, because it is growing, and the 2020 refinancing in 2021 are obviously closer to the back half of next year. I think that's a reasonable expectation that refinancing may pick up later in the year.

That being said, a lot of this ends up being, I think, a company psychology and the expectations and predictions that, Chief Financial Officers and Treasures are making about where rates are going to go, where spreads are going to go, and that could certainly drive issuance -- refinancing issuance to get pulled forward further or to get pushed back further. So there is -- if we look at what has to be refinanced over the next few years, it is a very high wall. Predicting exactly what quarter-over-quarter is that may happen is a more difficult challenge.

Shlomo Rosenbaum -- Stifel, Nicolaus & Co., Inc. -- Analyst

Got it. Thank you very much.

Operator

We'll take our next question from Alex Kramm with UBS.

Alex Kramm -- UBS -- Analyst

Hey, thanks for the follow-up. I was actually going to ask all the refi wall as well, so that got stolen a little bit. But maybe just digging a little bit deeper, is there anything in the refi wall, when you look in more depth that may be different when you think about the next three years that they may not be refinanced this much, meaning, for example, are there a lot of issuers that may have used that money for synthetic repatriation that may just not refi that money when it comes to, or anything else that you're hearing from companies that like, hey, we know this is coming due but we are now in delevering mode. So anything that would be different from that may make the wall look different than in previous years?

Raymond McDaniel -- President and Chief Executive Officer

Well, I mean, I think, an important thing to keep in mind is that, when we talk about opportunistic refinancing in the refinancing walls, we are largely talking about the US speculative grade sector. The investment grade sector refinances on a much more regular basis, steady basis year on year on year, and international companies, both investment grade and speculative grade have a history of refinancing on a more regular basis. The opportunistic refinancing comes out of US spec grade and those aren't companies that have a lot of overseas cash as we've talked about before. So I don't think that's going to be an important factor.

You could certainly have companies deciding that they wish to deleverage. But again, the ability to deleverage across the speculative grade universe and the desire to delever across the speculative grade universe, I think is reasonably low. So, yes, I can think of circumstances where refinancing may decline, but I don't think that's the central case.

Alex Kramm -- UBS -- Analyst

All right. Great. Then last one real quick for Mark Almeida that is, a follow-up on the BVD question and the growth there. I think someone cited it's quarter-over-quarter, but I think year-over-year, if my numbers are correct, that growth was pretty soft as well. I get to maybe like 3%, 4%, 5%. So, is there anything else going on other than the disruption, like any sort of customer losses or anything else that may weigh on that growth even going forward or you think we're now through this and some of the sales growth can actually translate into real revenue growth in the high-single or double-digit growth, just to circle back here?

Mark Almeida -- President

Yeah. I guess, the short answer, Alex is, no. We feel the business performing very well, as I said, better than it was performing pre-acquisition. We are executing on our synergies. We're building momentum in sales production, which will manifest in good solid revenue growth. So we feel very good about what's going on there and we view the numbers all very positive.

Alex Kramm -- UBS -- Analyst

All right. That's it from me. Thanks.

Operator

And we'll take our next question from Joseph Foresi with Cantor Fitzgerald.

Joseph Foresi -- Cantor Fitzgerald -- Analyst

Hi. Some phone issues earlier, but I was wondering how sensitive is BVD and Reis to an economic slowdown, how tighter they to discretionary spending in the real estate market?

Mark Almeida -- President

Well, I'll speak to Bureau Van Dijk first. They do not appear to be like much of Moody's Analytics, all Moody's Analytics really. We don't see -- we have never seen much correlation between macroeconomic conditions either on the positive side or the negative side, and the performance of our business. It seems to be generally very, very steady growth in the business irrespective of macro conditions, except if we're at a very extreme situation such as we had in 2009, for example.

And I believe that would be true Bureau Van Dijk as well. If you look at their performance historically as we did, of course, when we acquired the company. They performed well even in the depths of the financial crisis, they performed not spectacularly but certainly above average, I would say. So we don't see much sensitivity in the Bureau Van Dijk business.

The Reis business, I mean, frankly we've only owned it for less than two weeks now. So we don't have that much experience with it. But our impressions are that that is similarly not particularly susceptible to macro conditions within kind of a normal range of typical cycle.

Raymond McDaniel -- President and Chief Executive Officer

And I would just add, Joe, for the Reis business in particular, we're looking at a business that is assessing, collecting data and with our analytics assessing risk in the commercial real estate sector, which actually may be in more demand in a more distressed environment. So, we're new to Reis and we'll need some time to sort through this but that would be one of the things I would be looking for.

Joseph Foresi -- Cantor Fitzgerald -- Analyst

Thank you.

Operator

And we'll take our final question from Craig Huber with Huber Research Partners.

Craig Huber -- Huber Research Partners -- Analyst

Yeah, thanks. I just had a follow-up. Ray or Rob, get any sense from any of your clients in the US, for example, that are thinking about or starting to act on locking in some of these low rates, or took out all these massive amount of spec rate bank loans over the last few years, where any of them in waves here -- just get any sense to lock in high-yield bond market you kind of think out over the next year? The strategy you think might get deployed more and more here?

Raymond McDaniel -- President and Chief Executive Officer

Yeah. I mean, it's something we're certainly going to be watching for to see whether floating rate converts back over to fixed rate. And in looking at that, obviously, we would also be looking at the yield curve itself and how attractive longer-term debt fixed rate paper is based on spreads in the yield curve itself. So, it's a good area to pay attention to, I agree.

Craig Huber -- Huber Research Partners -- Analyst

Great. Thank you.

Operator

And that does conclude our question-and-answer session. I would now like to hand our conference back over to Ray McDaniel for any additional or closing remarks.

Raymond McDaniel -- President and Chief Executive Officer

Just want to thank everyone for joining the call today and we look forward to speaking to you again in the New Year. Thanks.

Operator

This concludes Moody's third quarter 2018 earnings call. As a reminder, immediately following this call, the Company will post the MIS revenue breakdown under the third quarter 2018 earnings section of the Moody's IR homepage. Additionally, a replay of this call will be available after 3:30 PM Eastern Time on Moody's IR website. Thank you.

Duration: 72 minutes

Call participants:

Steve Maire -- Global Head of Investor Relations and Communications

Raymond McDaniel -- President and Chief Executive Officer

Mark Kaye -- Senior Vice President and Chief Financial Officer

Vincent Hung -- Autonomous Research -- Analyst

Mark Almeida -- President

Manav Patnaik -- Barclays -- Analyst

Robert Fauber -- President

Alex Kramm -- UBS -- Analyst

Toni Kaplan -- Morgan Stanley -- Analyst

Joseph Foresi -- Cantor Fitzgerald -- Analyst

Peter Appert -- Piper Jaffray -- Analyst

Jeffrey Silber -- BMO Capital Markets -- Analyst

Craig Huber -- Huber Research Partners -- Analyst

William Warmington -- Wells Fargo -- Analyst

Timothy McHugh -- William Blair -- Analyst

Shlomo Rosenbaum -- Stifel, Nicolaus & Co., Inc. -- Analyst

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