Moody''s (MCO: chart) reported revenue of $504.9 million for the three months ended December 31, 2007, a decrease of 14% from $590.0 million for the same quarter of 2006.

Operating income was $212.1 million and diluted earnings per share were $0.49, which included a restructuring charge of $47.8 million or $0.11 per share. Excluding the restructuring charge in 2007 and the gain from a building sale in 2006, operating income of $259.9 million declined 14% from $302.7 million in the year-ago period.

Raymond McDaniel, Chairman and Chief Executive Officer of Moody''s, commented, ""The severity and protracted nature of current credit market dislocations confirms that the challenges of 2007 will persist well into 2008.""

Revenue for the full year 2007 totaled $2,259.0 million, an increase of 11% from $2,037.1 million for the same period of 2006.

Operating income for the full year 2007 was $1,131.0 million and included a restructuring charge of $50.0 million.

Diluted earnings per share of $2.58 for the full year 2007 included a $0.19 per share benefit from the settlement of a legacy tax matter in the second quarter of 2007 and an $0.11 per share charge related to restructuring actions.

Excluding the 2007 restructuring charge and the 2006 gain on building sale, operating income of $1,181.0 for 2007 grew 7% from $1,098.9 million in 2006.

Excluding the adjustments listed above and the impact of legacy tax matters in both years, full year 2007 diluted earnings per share were $2.50, 11% higher than $2.25 in 2006.

Segment Review

Revenue at Moody''s Investors Service for the fourth quarter of 2007 was $460.7 million, 16% lower than the prior year period. Ratings revenue totaled $372.6 million in the quarter, a decrease of 23% from a year ago.

Global structured finance revenue totaled $164.9 million for the fourth quarter of 2007, a decrease of 40% from a year earlier. U.S. structured finance revenue decreased 53%, driven by significant declines in issuance across most asset categories.

Global corporate finance revenue of $104.5 million in the fourth quarter of 2007 was down slightly with the same quarter of 2006 as growth in relationship-based fees mitigated declines in issuance-based revenue.

Global financial institutions and sovereigns revenue totaled $73.8 million for the fourth quarter of 2007, increasing 6% from the prior year period.

Outlook

For the global Moody''s Investors Service business, revenue for the full year 2008 is expected to decline in the mid-to high-teens percent range.

Within the U.S., Moody''s Investors Service revenue is expected to decrease in the mid-twenties percent range for the full year 2008.

In the U.S. structured finance business, Moody''s expect revenue for the year to decline in the low- to mid-40 percent range, reflecting double-digit percent declines in most asset classes, led by residential mortgage-backed securities and credit derivatives ratings.

In the U.S. corporate finance business, revenue is expected to decrease in the low-teens percent range for the year driven by declines across all asset classes. In both the U.S. financial institutions and public, project and infrastructure finance sectors, revenue in 2008 to is estimated to grow in the low single-digit percent range.