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2Q 2020 Investor Presentation
August 11, 2020
2Q 2020 Investor Presentation - August 11, 2020 2
Disclaimer
Certain statements contained in this release are forward-looking statements and are based on future expectations, plans and prospects for the business and operations of Moody’s Corporation (the “Company”)
that involve a number of risks and uncertainties. Such statements may include, among other words, “believe”, “expect”, “anticipate”, “intend”, “plan”, “will”, “predict”, “potential”, “continue”, “strategy”, “aspire”,
“target”, “forecast”, “project”, “estimate”, “should”, “could”, “may” and similar expressions or words and variations thereof that convey the prospective nature of events or outcomes generally indicative of forward-
looking statements. The forward-looking statements and other information in this release are made as of the date hereof and the Company undertakes no obligation (nor does it intend) to publicly supplement,
update or revise such statements on a going-forward basis, whether as a result of subsequent developments, changed expectations or otherwise, except as required by applicable law or regulation. In connection
with the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, the Company is identifying examples of factors, risks and uncertainties that could cause actual results to differ, perhaps
materially, from those indicated by these forward-looking statements. Those factors, risks and uncertainties include, but are not limited to, the impact of COVID-19 on volatility in the U.S. and world financial
markets, on general economic conditions and GDP growth in the U.S. and worldwide, and on the Company’s own operations and personnel. Many other factors could cause actual results to differ from Moody’s
outlook, including credit market disruptions or economic slowdowns, which could affect the volume of debt and other securities issued in domestic and/or global capital markets; other matters that could affect the
volume of debt and other securities issued in domestic and/or global capital markets, including regulation, credit quality concerns, changes in interest rates and other volatility in the financial markets such as that
due to uncertainty as companies transition away from LIBOR and Brexit; the level of merger and acquisition activity in the U.S. and abroad; the uncertain effectiveness and possible collateral consequences of
U.S. and foreign government actions affecting credit markets, international trade and economic policy, including those related to tariffs and trade barriers; concerns in the marketplace affecting our credibility or
otherwise affecting market perceptions of the integrity or utility of independent credit agency ratings; the introduction of competing products or technologies by other companies; pricing pressure from competitors
and/or customers; the level of success of new product development and global expansion; the impact of regulation as an NRSRO, the potential for new U.S., state and local legislation and regulations, including
provisions in the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”) and regulations resulting from Dodd-Frank; the potential for increased competition and regulation in the EU and other
foreign jurisdictions; exposure to litigation related to Moody’s Investors Service’s rating opinions, as well as any other litigation, government and regulatory proceedings, investigations and inquiries to which the
Company may be subject from time to time; provisions in the Dodd-Frank legislation modifying the pleading standards, and EU regulations modifying the liability standards, applicable to credit rating agencies in a
manner adverse to credit rating agencies; provisions of EU regulations imposing additional procedural and substantive requirements on the pricing of services and the expansion of supervisory remit to include
non-EU ratings used for regulatory purposes; the possible loss of key employees; failures or malfunctions of our operations and infrastructure; any vulnerabilities to cyber threats or other cybersecurity concerns;
the outcome of any review by controlling tax authorities of the Company’s global tax planning initiatives; exposure to potential criminal sanctions or civil remedies if the Company fails to comply with foreign and
U.S. laws and regulations that are applicable in the jurisdictions in which the Company operates, including data protection and privacy laws, sanctions laws, anti-corruption laws, and local laws prohibiting corrupt
payments to government officials; the impact of mergers, acquisitions or other business combinations and the ability of the Company to successfully integrate such acquired businesses; currency and foreign
exchange volatility; the level of future cash flows; the levels of capital investments; and a decline in the demand for credit risk management tools by financial institutions. These factors, risks and uncertainties as
well as other risks and uncertainties that could cause Moody’s actual results to differ materially from those contemplated, expressed, projected, anticipated or implied in the forward-looking statements are
currently, or in the future could be, amplified by the COVID-19 outbreak and are described in greater detail under “Risk Factors” in Part I, Item 1A of the Company’s annual report on Form 10-K for the year ended
December 31, 2019, its quarterly report on Form 10-Q for the quarter ended March 31, 2020, and in other filings made by the Company from time to time with the SEC or in materials incorporated herein or therein.
Stockholders and investors are cautioned that the occurrence of any of these factors, risks and uncertainties may cause the Company’s actual results to differ materially from those contemplated, expressed,
projected, anticipated or implied in the forward-looking statements, which could have a material and adverse effect on the Company’s business, results of operations and financial condition. New factors may
emerge from time to time, and it is not possible for the Company to predict new factors, nor can the Company assess the potential effect of any new factors on it.
2Q 2020 Investor Presentation - August 11, 2020 3
1. Moody’s Overview
2. Financial Overview
3. Capital Markets Overview
4. Moody’s Investors Service (MIS)
5. Moody’s Analytics (MA)
6. Appendix
Table of Contents
1 Moody’s Overview
2Q 2020 Investor Presentation - August 11, 2020 5
Independent provider of
credit rating opinions and
related information for over
100 years
Proven ratings accuracy and
deeply experienced analysts
Expanded sales and
marketing activities in
Commercial group
Provides financial intelligence
and analytical tools
supporting our customers’
growth, efficiency and risk
management objectives
Solutions address diverse
needs and customers
Extending brand into new
markets and deepening
customer relationship
Note: Financial data for the trailing twelve months ended June 30, 2020.
Company Overview
Leading global provider of credit
rating opinions, insight and tools
for financial risk measurement
and management
Revenue of
$5.2 billion
Adjusted Operating
Income of $2.6 billion
MIS
78%
MA
22%
MIS
62%
MA
38%
Adjusted
Operating Margin
MIS
60.5%
MA
28.2%
2Q 2020 Investor Presentation - August 11, 2020 6
Moody’s Priorities for Strategic Growth
Global Integrated Risk Assessments Moody’s Core Strengths Expand into New Geographies
and Strategic Adjacencies
» »STANDARDS, SOLUTIONS
& INSIGHTS
Credit
Data Analytics
Trusted brand Proprietary data and
integrated analytics
Business-credit
products
Extended global
customer base
REGIONAL EXPANSION
EMEA Asia Pacific Latin America
BUSINESS ADJACENCIES
Commercial
Real Estate
Know Your
Customer
ESG
Enhance technology infrastructure to enable automation, innovation and efficiency
Foster employee engagement and creative solutions through our diverse workforce and inclusive environment
2Q 2020 Investor Presentation - August 11, 2020 7
Enhanced ESG Solutions
Index Partnerships
» Partnered with Euronext on a new
ESG index powered by Vigeo Eiris’
(VE) data: the Euronext ESG80
» Agreements to provide ESG data in
support of the creation of new ESG
products and indices with The Stock
Exchange of Thailand and Solactive
Second Party
Opinions
(SPOs)
Note: For more information please refer to https://esg.moodys.io/solutions.
Integration of Analytics, Risk
Measurement and CRE tools
» VE and 427 content integrating into
multiple platforms within MA,
including moodys.com and the REIS
commercial real estate portal
» Working with asset managers, banks,
regulators to develop climate-based
stress testing solutions
Second Party Opinions (SPOs)
» VE launched an enhanced SPO
service for sustainable bonds
featuring an updated impact
assessment and a more intuitive,
impactful format
» Includes Green Bonds, Social
Bonds, Sustainability linked
bonds and loan assessments
» VE’s SPO offering provides an
independent assessment of
green, social and sustainability
bond frameworks
Second Party
Opinions
(SPOs)
Sustainability
Ratings
Climate Risk
Solutions
ESG
Assessments
ESG Integration
into Credit
Ratings &
Research
ESG Integration
into Analytics, Risk
Measurement and
CRE tools
Index
Partnerships
https://esg.moodys.io/solutionshttps://www.moodys.com/
2 Financial Overview
2Q 2020 Investor Presentation - August 11, 2020 9
CFG34%
SFG7%
FIG10%
PPIF9%
MIS Other1%
RD&A1
28%
ERS11%
MA
MIS
55%
45%
Recurring Transaction
2Q 2020 TTM Revenue: $5.2 billion
55%
45%
U.S. Non-U.S.
Full Year 2020 Guidance as of July 30, 20202
Revenue » Increase in the low-single-digit % range Effective Tax Rate » 19.5% - 21.5%
Operating Expenses » approximately flat Diluted EPS » $8.15 - $8.55
Operating Margin » 43% - 44% Adjusted Diluted EPS3 » $8.80 - $9.20
Adjusted Operating Margin3 » 48% - 49%
1. Includes trailing twelve months of professional services revenue. Excludes MAKS. Subsequent to the divestiture of MAKS in 2019, revenue from the Moody's Analytics Learning Solutions ("MALS") unit, which previous to 2020 was reported
in the Professional Services line of business ("LOB"), will now be reported as part of the RD&A LOB.
2. See press release titled “Moody's Corporation Reports Results for Second Quarter 2020” from July 30, 2020 for Moody’s full 2020 guidance.
3. These metrics are adjusted measures. See Appendix for reconciliations from adjusted financial measures to U.S. GAAP.
Note: The revenue reclassifications of REITs to Corporate Finance from Structured Finance and the FACT product from RD&A to ERS are reflected in the full year (FY) calculations.
Moody’s Corporation Financial Profile
2Q 2020 Investor Presentation - August 11, 2020 10
Long-Term Growth Opportunities
Three Levers to Achieve EPS Growth
1. Assumes no material change in effective tax rate, foreign exchange rates, leverage profile and/or capital allocation policy.
2. Subject to market conditions and other ongoing capital allocation decisions.
Note: Long-term growth opportunities presented on this slide are on average over time.
EPS Low Teens % Growth Range 1,2
REVENUE High Single Digit % Growth Range1
Issuance Volume & Mix Coverage Moody’s Analytics Pricing Initiatives
ADJ. OPERATING MARGIN High-40s % Range1
Cost Discipline Process Re-Engineering Technology Enablement
CAPITAL ALLOCATION Dividend Growth & Share Count Reduction2
Reinvestment Acquisitions Dividends Share Repurchases
Investing for future growth
2Q 2020 Investor Presentation - August 11, 2020 11
Base Case
Expect continuing economic recovery in 2H 2020
2020 GDP
-6% United States
-9% Euro Zone
-5% Global
Benchmark interest rates
remain low; high-yield
spreads peak above
650 bps
U.S. unemployment rate
of ~10% by year-end
High yield default rate
rising to ~9%2
Macro Assumptions Underpinning Our Outlook1
Developments since April 30th
ACCELERATE
Continued global fiscal support
and monetary stimulus actions
Surge of investment grade capital
raising for liquidity purposes
Rebound in high yield bond issuance
amid tighter spreads
Robust equity markets and sharp
decline in VIX index
Signs of global economic recovery
DECELERATE
COVID-19 cases continued to increase
at rapid pace in the U.S., with some
states rolling back re-opening measures
1. All assumptions and guidance as of July 30, 2020.
2. By the end of 2020.
Sources: “June 2020 Default Report” and “Global Macro Outlook 2020-2021 (June 2020 Update)” from Moody’s Investors Service.
2Q 2020 Investor Presentation - August 11, 2020 12
Financial Performance1
$2.3 $2.4 $2.8 $2.7$2.9
$1.2 $1.2$1.4 $1.7
$2.0
$0.0
$1.0
$2.0
$3.0
$4.0
$5.0
$6.0
2015 2016 2017 2018 2019 2020F
MIS Revenue MA Revenue
$4.8
2
$3.5 $3.6$4.2 $4.4
$1,109 $1,144
$664
$1,370$1,606
$1,500 - $1,700
$500
$700
$900
$1,100
$1,300
$1,500
$1,700
$1,900
2015 2016 2017 2018 2019 2020F2
Adjusted Diluted EPS3Revenue1
Low-single-digit %
growth
$4.71 $4.94$6.07
$7.39$8.29
$2.00
$3.00
$4.00
$5.00
$6.00
$7.00
$8.00
$9.00
$10.00
2015 2016 2017 2018 2019 2020F
Free Cash Flow3
2
1. Totals may not sum due to rounding.
2. Guidance as of July 30, 2020.
3. These figures are adjusted measures. See appendix for reconciliations from adjusted financial measures to U.S. GAAP.
4. 2015 – 2017 operating and adjusted operating margins have been restated to conform to the new presentation for pension expenses.
5. Includes approximately $700 million in net payments pursuant to a settlement charge.
$ Millions
$8.80 - $9.20
Operating Margin4
42.8
%
18.1
%
43.3
%
42.0
%
41.4
%
46.0
%
45.9
%
47.6
%
47.6
%
47.4
%
0%
10%
20%
30%
40%
50%
60%
2015 2016 2017 2018 2019 2020F
Operating Margin Adj. Operating Margin
48%
-49%
43%
-44%
2
3
$ Billions $ Per Share
5
2Q 2020 Investor Presentation - August 11, 2020 13
Capital Allocation Strategy
Prudent approach in uncertain times
Anchored around
a BBB+ rating
Ensure adequate
financial flexibility
Provide
necessary capital
to pursue growth
opportunities
Meet return
thresholds and
create long-term
value for
shareholders
Manage risk
Capital allocation goals
Capital allocation levers
Considerations around
share repurchase program
INVESTING IN GROWTH OPPORTUNITIES
Reinvestment
Acquisitions
RETURN OF CAPITAL
Dividends
Share repurchase
COVID-19 uncertainty
Economic indicators
Market volatility
Free cash flow
3 Capital Markets Overview
2Q 2020 Investor Presentation - August 11, 2020 15
2Q 2020 Credit Market Update
COVID-19 disrupts real economy, credit markets buoyed by stimulus
Real Economy
COVID-19 Pandemic
» New cases of COVID-19 increased in the U.S.,
while declining in Europe and parts of Asia
» Optimism around vaccine success
due to positive early data
» Policy responses: some U.S. states
rolled back re-opening measures
Geopolitical Impact
» U.S. – China frictions escalated
» U.S. election season in focus
» New international travel restrictions
» Oil price recovery
Macroeconomic Response
» IMF: Worldwide 2020 GDP revised lower by 190 bps to -4.9% in June
» U.S. Fed committed to purchasing up to $750 billion of corporate debt
» Ongoing dovish monetary policy by U.S. Fed and other central banks
» Fiscal stimulus in the E.U.
Credit Markets
Investment Grade Bonds
» Record 2Q 2020 issuance volumes1
» Continued liquidity-driven capital raising
» Limited M&A pipeline
High Yield Bonds
» Strength throughout 2Q 2020
» Significant spread tightening
» Increased appetites for risk assets evidenced
by strong equity market performance
Leveraged Loans
» Market re-opened but remained weak
» Leveraged M&A limited
» Continued fund outflows
» Less demand for floating rate
1. MIS rated issuance.
2Q 2020 Investor Presentation - August 11, 2020 16
Record 2Q 2020 Issuance, Mix Shift
Note: MIS rated issuance. Issuance figures displayed in billions.
$264 $256 $278
$186
$358
$660
$101 $114 $103 $113
$119
$171
$138 $135
$170
$135
$210
$103
-12%
-3%
41% 37%
36%
65%
-7%
-12%
40%
25%
37%
85%
1Q19 2Q19 3Q19 4Q19 1Q20 2Q20
Investment grade bond Bank loan Issuance volume growth Y/YHigh yield bond CFG transactional revenue growth Y/Y
2Q 2020 Investor Presentation - August 11, 2020 17
$1,972
$3,466
$1,000
$1,300
$1,600
$1,900
$2,200
$2,500
$2,800
$3,100
$3,400
2012 2013 2014 2015 2016 2017 2018 2019 2020
$ B
illio
ns
Refunding Needs Have Grown Steadily Over Time
Next Four Years North America and EMEA Total Refunding Needs1 as of:
1. Amount reflects total maturities identified below.
Source: Moody’s Investors Service. U.S. and EMEA refunding needs reports January 2012 – January 2020.
Note: Data represents U.S., Canadian and European MIS rated non-financial corporate bonds & loans. Canada data not available before 2015.
2Q 2020 Investor Presentation - August 11, 2020 18
54%64% 71% 62%
68% 72%
54% 41%39%
49%35% 28%
5%6%
5% 5% 7% 4%
16% 17% 13% 15% 13% 7%
5% 9% 8% 8% 8% 15%
0%
20%
40%
60%
80%
100%
2015 2016 2017 2018 2019 1H20
% o
f M
en
tio
ns
Debt Refinancing M&A Capital Spending Shareholder Payments Liquidity / Working Capital
1. Percent of mentions for each respective period in bond issue or bank loan program tranche documents. Excludes issues of less than $25 million and general corporate purposes. An issue can have multiple purposes and, as a result,
percentages do not sum to 100%.
Source: Moody’s Analytics.
Liquidity and Refinancing Prominent Drivers of Issuance in 1H
2020, While M&A Declined
Uses of Funds from USD High Yield Bonds and Bank Loans1
2Q 2020 Investor Presentation - August 11, 2020 19
Debt Leverage and Interest Coverage in
North America and Europe
Credit Metrics: North American Speculative Grade Companies
1. Trailing twelve months ended June 30, 2020.
Source: Moody’s Investors Service.
Note: Historical figures may change due to timing differences in issuer reporting deadlines.
4.6x 4.6x 4.8x 4.5x 4.4x 4.5x 4.6x4.8x 5.1x 5.1x
5.3x 5.4x 5.3x 5.4x5.7x
2.9x 2.6x 2.4x2.7x 2.9x
3.1x 3.0x 2.9x 3.0x 2.9x 3.0x 3.0x 2.8x 2.7x 2.8x
0.0x
1.0x
2.0x
3.0x
4.0x
5.0x
6.0x
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Inte
rest
Covera
ge
Debt / EBITDA EBITDA / Interest Expense
Credit Metrics: European Speculative Grade Companies
5.0x
4.1x 4.2x4.6x
4.1x 4.2x4.4x 4.6x
4.8x 4.5x 4.6x 4.5x5.2x 5.3x
5.6x
2.9x 2.9x 2.7x3.0x
3.4x 3.2x 3.2x 3.1x 3.1x 3.2x3.5x 3.7x 3.5x 3.5x 3.4x
0.0x
1.0x
2.0x
3.0x
4.0x
5.0x
6.0x
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Inte
rest
Covera
ge
Debt / EBITDA EBITDA / Interest Expense
1
1
2Q 2020 Investor Presentation - August 11, 2020 20
Default Rate Forecast Rises in Wake of
Unprecedented Turmoil
Default Rates for Speculative-Grade
Corporate Rated Issuance1
1. Moody’s rated corporate global speculative grade default historical average of 4.1% from 1983 through June 30,2020. 2020 forecast for TTM ended December 31, 2020.
2. Covenant data for European bonds represent a three quarter rolling average, North American loans and bonds represent a two quarter rolling and a three month rolling average, respectively.
Source: Moody’s Investors Service.
4.23x
4.54x
3.91x
2.0
2.5
3.0
3.5
4.0
4.5
5.0
U.S. Loans U.S. Bonds European Bonds Weakening
Improving
Speculative-Grade Covenant Quality Indicators2
12%
9%
6%
0%
2%
4%
6%
8%
10%
12%
14%
16%
Global U.S. Europe
4.1% global
historic average1
2Q 2020 Investor Presentation - August 11, 2020 21
European Non-Financial Corporate Bonds vs.
Bank Loans Outstanding
4
8
%
€0
€1,000
€2,000
€3,000
€4,000
€5,000
€6,000
€7,000
€ B
illi
on
s
Bonds Loans
U.S. Non-Financial Corporate Bonds vs.
Bank Loans Outstanding
4
8
%
$0
$1,500
$3,000
$4,500
$6,000
$7,500
$9,000
$ B
illi
on
s
Bonds Loans
74%
26%
50%
50%
Sources: ECB, Federal Reserve, BarCap Indices. Europe bank loan data includes Eurozone and UK bank loans. Europe bond data includes euro and sterling denominated bonds.
European data is through May 2020 and U.S. data is through June 2020.
Disintermediation of Credit is an Ongoing Trend
in the Global Capital Markets
4 Moody’s Investors Service
2Q 2020 Investor Presentation - August 11, 2020 23
34%
66%
Recurring
Transaction
2Q 2020 TTM Revenue: $3.2 billion
Public, Project,
& Infrastructure
Finance
15%
Financial
Institutions
16%
Corporate
Finance
56%
Structured
Finance
12%
MIS Other
1%
62%
38%
U.S.
Non-U.S.
» 32% recurring revenue
» 48% recurring revenue
» 25% recurring revenue
Note: The revenue reclassification of REITs to Corporate Finance from Structured Finance is reflected in the full year 2019 calculations. Percentages have been rounded and may not total to 100%.
» 52% recurring revenue
Moody’s Investors Service Financial Profile
2Q 2020 Investor Presentation - August 11, 2020 24
MIS Guidance: Strong 1H 2020 Driving Improved Outlook1
» Issuance2 expected to grow in the low-double-digit percent
range from $4.6T in 2019
- Expecting issuance to slow down in 2H 2020, reflecting a mid-teens decline
» Shift in issuance mix
1. Guidance as of July 30, 2020. Refer to Table 12 – “2020 Outlook” in the press release for a complete list of guidance and a reconciliation between adjusted measures to GAAP as well as assumptions used by the Company with respect to its guidance.
2. MIS rated issuance. Total issuance includes CFG, SFG, FIG and PPIF. Excludes sovereign debt.
Key drivers of MIS FY 2020 outlook1
$1,800
$2,000
$2,200
$2,400
$2,600
$2,800
$3,000
2019 2020F
Low-single-digit
% increase$2.9B
Revenue
1
Adjusted Operating Margin1
58.0% Approximately 58%
2019 2020F1
» Approximately 550 first time mandates
» Refinancing and liquidity driven issuance, reduced M&A activity
» Recurring revenue provides stable support
» Higher expectation for incentive compensation, though still
lower year-over-year
FY 2020 Issuance Guidance1
Investment Grade +50%
High Yield Bonds +5%
Bank Loans -20%
Structured -40%
Total Issuance2 Low-double-digit % increase
2Q 2020 Investor Presentation - August 11, 2020 25
The Benefits of a Moody’s Rating
Investors seek our opinions and
particularly value the knowledge of our
analysts and the depth of our research.
Wider access
to capital
Tangible
financing benefits
Planning
and budgeting
Transparency,
credit comparison
and market stability
Responsive to
investor demand
Moody’s opinions on
credit are broadly used
by institutional investors
throughout the world, making an
issuer’s debt more attractive to a
wider range of potential buyers
The credibility of
Moody’s ratings may
allow rated issuers to
enter the capital markets
more economically
through a lower cost
of capital
Helps issuers formulate
internal capital plans
and funding strategies
Signals a willingness
by issuers to be transparent
and provides issuers
with an independent assessment
against which to compare
their own creditworthiness
Moody’s ratings are
the most used by investors,
(when multiple agencies are
used), who have acknowledged
our track record of accuracy
2Q 2020 Investor Presentation - August 11, 2020 26
Managing Ratings in Turbulent TimesTransparency and relevance of credit ratings through the cycle
1. Includes all publicly-rated nonfinancial corporate entities; excludes subsidiaries and project finance-related corporations.
2. Trailing twelve months; Source: Moody’s Investors Service.
Order sectors by degree
of exposure
Order issuers by
vulnerability
within each sector
Reassess all
ratings in the most
vulnerable sectors
Reassess ratings
of the most
vulnerable issuers
in the moderately
vulnerable sectors
Monitor credit profiles
associated with all other
ratings and reassess those
with special situations
that merit prompt
reconsideration
Coordinate
analytical views
and sequencing
of rating actions
Take account of
government policy
measures designed to
soften the effects
of coronavirus
Global corporate default rates ended June 20202Top 10 sectors
most affected
by COVID-191
Mar 1 – June 30, 2020
10.7%
2.4%
0.3%
0.1%
0.0%
0.0%
0.0%
0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0%
Caa_C
B
Ba
Baa
A
Aa
Aaa
2Q 2020 Investor Presentation - August 11, 2020 27
Illustrative Value of a Moody’s Rating
Example: 10 year $500 million corporate bond
$15 million in total interest expense
vs.
lifetime cost of a rating
$500,000,000
x 4.3%
= $21,500,000
x 10 years
= $215,000,000
Unrated Rated by Moody’s
$500,000,000
x 4.0%
= $20,000,000
x 10 years
= $200,000,000
Bond
Interest rate
Annual interest payments
Tenor
Lifetime interest expense
Note: Illustrative spread differential based on feedback from syndicate desks and FBR & Co. research on Moody’s Corporation (January 2014) which stated that obtaining a Moody’s rating typically saves approximately 30 basis points per year for
investment grade issuers. Many factors go into the pricing of a bond.
2Q 2020 Investor Presentation - August 11, 2020 28
1. Institutional Investor Survey.
Source: Moody’s Investors Service.
Note: All data as of January 20, 2020, except Research Data covers the period January 1, 2019 – December 31, 2019.
All numbers are rounded other than those marked *.
Americas APACEMEA
» 29,600+ rated companies and
structured deals
» $35+ trillion total debt rated
» 16,800 research publications
» Offices in 10 cities*
» 4,700+ rated companies and
structured deals
» $20+ trillion total debt rated
» 6,700 research publications
» Offices in 13 cities*
» 2,200+ rated companies and
structured deals
» $13+ trillion total debt rated
» 4,100 research publications
» Offices in 10 cities*
~15 Years Lead/Senior Analyst
tenure
#1 Global Credit
Rating Agency
20191
#1 U.S. Credit
Rating Agency
2012-20181
Broad Coverage Serves Global Needs
2Q 2020 Investor Presentation - August 11, 2020 29
China
India
South Korea
Israel
ChileEgypt
Peru
Mexico
Brazil
ArgentinaSouth Africa
Others
Strongly Positioned in Emerging Markets
Note: Size of pie represents the estimated total CRA revenue from domestic markets ($700 million).
$700 M
Size of domestic
CRA markets
2009 2019
Emerging Asia Latin America Middle East CEE/CIS Africa
$94M
$342M
1. Includes revenue from cross border issuance.
MIS Affiliate (majority)
National Scale Ratings
Other Emerging Markets
Moody’s Local
MIS Affiliate (minority)
MIS Emerging Markets Revenue1Emerging Markets - Domestic TAM
2Q 2020 Investor Presentation - August 11, 2020 30
Moody’s in Greater China
Estimated China Ratings Market Size: Domestic and Cross Border3
58%42%
Rest of Market CCXI's Share
63%
37%
Rest of Market Moody's Share
Domestic Market
~$280MCross Border Market
~$290M3
2019 Revenue and Attributable Income from China2
1. Percentage growth numbers are rounded compound annual growth calculations. Source: Bank for International Settlements’ latest data available as of 4Q19.
2. Greater China: Mainland, Hong Kong and Macau.
3. Revenue as of full year 2019; USD 1 = RMB 6.92 RMB exchange rate as of December 31, 2019 is used for conversion for domestic CRAs’ estimated revenue. Note: These are high level estimates based on MIS & CCXI full year 2019
revenue/market coverage in domestic market; in cross border, market share is coverage/sum of coverage for three major CRAs.
$176
$17
-
50
100
150
200
MIS Cross Border and Total MA Attributable Income from CCXI
$ M
illio
ns
MIS Cross Border Revenue Total MA Revenue Attributable Income from CCXI
» Moody’s participates directly in the cross border China issuance market through
MIS and in the domestic market through a 30% interest in CCXI
» Long-term growth prospects enabled by participation in the ongoing
development of China’s domestic credit markets
» Continuing to foster constructive relationships and partnerships with issuers,
regulators and other market participants
0
10
20
30
40
50
US China Japan UK France
Total debt securities outstanding 2012–20191
2012 2019
2nd Largest Onshore Bond Market at $15 Trillion
1%1%
20% -2%
3%
2Q 2020 Investor Presentation - August 11, 2020 31
Market Trends
» Moody’s forecasts global green, social
and sustainability bond issuance to be
$275 to $325 billion in 20201
» Coronavirus crisis expected to accelerate
credit-relevant ESG trends with increased
impact to credit2
Moody’s ESG Solutions
OUTREACH
» Over 500 media engagements
in 1H 2020 driven by Moody’s Events and
research
» Strategic relationships with industry organizations
and influencers across sustainable finance
» Moody’s ESG & Climate Risk hub: A one stop-
shop for everything ESG at Moody’s
(moodys.com/esg)
1. Moody’s Investors Service “Sector in-depth: Sustainable Finance – Global – Coronavirus fallout dampens 1Q 2020 green bond volumes while spurring social bonds”, May 5, 2020.
2. As of June 30, 2020; combined for all Moody’s entities including affiliates.
Moody’s ESG: Driving Standards Beyond CreditKey Stats2
38,000+Credit ratings
ESG assessments integrated into
Moody’s Investors Services (MIS)
credit ratings
5,000+ESG assessments
Covering 266 unique
ESG data points
6,000+Climate risk scores
Spanning countries, counties, cities,
companies & real estate assets globally
250+ GlobalSustainable bonds
Green, Social, Sustainability
Bonds and Sustainability-
linked loans and bonds
30+Years of ESG experience
Our affiliate Vigeo Eiris has
been a pioneer in ESG
analysis since the 1990s
1000+MIS research reports
Related to ESG
considerations in 1H 2020,
70% COVID-related research
25+ESG related events
Delivered in 1H 2020 through Moody’s
global event program
5 Moody’s Analytics
2Q 2020 Investor Presentation - August 11, 2020 33
Research, Data and Analytics1
72%
Enterprise Risk Solutions
28%
Moody’s Analytics Financial Profile
88%
12%
Recurring Transaction
43%
57%
U.S. Non-U.S.
» 97% recurring revenue2
» ~ 95% retention rate3
» 77% recurring revenue
» 92% retention rate
2Q 2020 TTM Revenue: $2.0 billion
1. Includes trailing twelve months of professional services revenue, excluding MAKS.
2. Recurring revenue for RD&A as reported, including MALS for 1H20. It does not include MALS or other professional services revenue prior to 1H20.
3. 2Q 2020 TTM includes Bureau van Dijk.
Note: The revenue reclassification of the FACT product from RD&A to ERS, MALS to RD&A and the MAKS sale is reflected in the trailing twelve month calculations.
2Q 2020 Investor Presentation - August 11, 2020 34
Integrated Experience:Ease of Use
Enhanced Content & Coverage:More Value
Diverse Product Solutions
Onboard customersConfirm KYC, AML, Ownership tree
Analyze credit and transactionRun credit scores and consider portfolio
Consider risks holisticallyClimate change, cyber, macro-economic
Gather financialsCreate credit statistics
Spreading toolsPrepopulate and digitize financials
World class credit analytics Early warning, and credit scoring
Understand ESG impactof customer’s business
Compliance modules Leverage BvD, RDC data
1,290+ Asset Managers
2,800+Commercial Banks
2,300+Corporations
220+Securities Dealers
and Investment Banks
700+Insurance Companies
3,300+Governments &
Other Entities
Web
Continuous improvement of content and user experience provides tools for customer to make better decisions, faster
Multichannel Delivery:Mobile
Excel add-in
Third party platforms 200+Real Estate Entities
2Q 2020 Investor Presentation - August 11, 2020 35
Moody’s Analytics has Several Platforms for Growth
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
$1,800
$2,000
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
$ M
illio
ns
Moody’s Analytics
2019 Revenue: $1,954m
2008 – 2019 CAGR: +12%
(~60% organic)
Professional Services1
2019 Revenue: $159m
Enterprise Risk Solutions
2019 Revenue: $522m
2008 – 2019 CAGR: +14%
(~68% organic)
Research, Data & Analytics
2019 Revenue: $1,273m
2008 – 2019 CAGR: +11%
(~62% organic)
Revenue Has More Than Tripled Since Inception
1. Subsequent to the divestiture of MAKS in 2019, revenue from the Moody's Analytics Learning Solutions ("MALS") unit, which previous to 2020 was reported in the Professional Services line of business ("LOB"), will now be reported as part of the
RD&A LOB. Prior periods have not been reclassified as the amounts were not material.
Note: Individual line of business revenues may not add up to total Moody’s Analytics revenue due to rounding.
2Q 2020 Investor Presentation - August 11, 2020 36
1. Guidance as of July 30, 2020. Refer to Table 12 – “2020 Outlook” in the press release for a complete list of guidance and a reconciliation between adjusted measures to GAAP as well as assumptions used by the Company with respect to its guidance.
» Strong recurring revenue mitigates COVID-19 impact
» MAKS divestiture weighs on revenue growth, partially offset by
RiskFirst, ABS Suite and RDC acquisitions
– FY revenue guidance includes an unfavorable 2% - 3%
impact from inorganic activity and FX
2019 2020F
$2.0B
Revenue
Mid-single-digit
% increase
1
27.8%
2019 2020F
Approximately 30%
Adjusted Operating Margin1
1
Key drivers of MA FY 2020 outlook1
» RD&A growth driven by strong demand for KYC and compliance
solutions, followed by research and data feeds
» ERS: Strength in software and analytics sales supports steady
growth; modest impact from delays of IFRS 17 and CECL
implementations
» Margin improvement primarily driven by operating leverage and
cost management initiatives
MA Guidance1: Top-line Growth and Margin Improvement
Remain on Track
2Q 2020 Investor Presentation - August 11, 2020 37
MA Sales Outlook1 Resilient Amid COVID-19 Disruption
» Customer engagement is high through virtual
interactions
» Valuable content and insights support strong retention
» Elevated usage of credit and economic research
persists
» Sales grew in 2Q 2020; pipeline outlook is improving
» Face-to-face interactions resuming in some parts of the world
» Continue to expect longer sales cycles than 9-12 month
historical average
1. All assumptions and guidance as of July 30, 2020.
2. Trailing twelve months; includes BvD from 2019 onward.
3. Reflects RD&A excluding BvD.
4. Incorporates retention and pricing components of recurring business growth.
Retention remains strong
2012 2Q 20202
94.6% 94.1%
YTD 2020 ACTUALS
~96%Research3
~91%ERS
~90%BvD
Current Outlook Prior Outlook
Renewal yield4 outlook better
than prior expectations
No change
Adapting to virtual sales
environment; in person meetings
resuming in certain countries
Stable
Existing contractual
obligations being met
by MA and customers
Renewal yield4
might be affected
Social distancing
preventing face to face
selling efforts
Improving
2Q 2020 Investor Presentation - August 11, 2020 38
Expansion of ratings coverage
Production of insightful credit
analysis
New customers in geographies
with developing debt capital
markets
Expansion of data sets and
delivery options
Strong customer retention
Full
Ye
ar
2018 95.8% 109.7%9.1% 4.8%
Retained Base Upgrades and Price New Sales Business Base
Subscription Sales Growth(constant currency)
Full
Ye
ar
2017
95.5% 109.4%8.2%5.7%
Retained Base Upgrades and Price New Sales Business Base
Note: The sales growth attributions presented on this slide are related to RD&A subscription sales on a constant currency basis includes Reis and excludes Bureau van Dijk and ABS Suite. Upgrades reflect amendments to existing customer
contracts. New Sales reflect new contracts with new and existing customers.
Full
Ye
ar
2019 96.2% 110.6%9.0%
5.4%
Retained Base Upgrades and Price New Sales Business Base
RD&A: Subscription Growth Driven by Retention, Upgrades
and Pricing & New Sales
First H
alf
20
20 95.6% 108.5%8.2% 4.7%
Retained Base Upgrades and Price New Sales Business Base
2Q 2020 Investor Presentation - August 11, 2020 39
Technology with a purpose – Enabling better, faster decisions
ERS Empowers Customers’ Success With Analytics
Our business solutions Our customers
Customers
Insurers
CorporatesBanks
Asset
Managers
Pension
Funds
Accounting
Impairments,
IFRS-17
Balance sheet
management
Portfolio,
valuation & ALM
Credit decisioning &
lending
Credit modeling,
scoring
& spreading
RegTech
Regulatory
reporting
2Q 2020 Investor Presentation - August 11, 2020 40
ERS: Recurring 80% of Revenue with Mid-teens CAGR
» ERS recurring revenue has grown by approximately
$200 million since 2015
» Emphasis on subscription products supports scalability,
drives operating leverage and margin
» Ease of use and lower cost of ownership shifting
customer demand to SaaS
» Next gen products enhance customer experience,
improve adoption rates and shorten sales cycles
» TTM3 sales as of 2Q 2020:
– Subscriptions (recurring)4 +13%
– One-time (non-recurring) +14%
1. Recurring revenue includes maintenance and subscription.
2. Compound Annual Growth Rate, 2015-2019.
3. Trailing twelve months ended June 30, 2020.
4. Subscriptions / recurring sales include maintenance. Excluding maintenance, TTM subscription / recurring sales would be +21%.
61%
77%
0%
20%
40%
60%
80%
100%
$0
$100
$200
$300
$400
$500
2015 2016 2017 2018 2019 TTM 2Q20
% R
ecurr
ing
$ M
illio
ns
ERS Revenue: Recurring1 vs. Non-recurringRecurring Revenue CAGR2 = 16%
One-Time (L) Recurring (L) % Recurring (R)
3
1
2Q 2020 Investor Presentation - August 11, 2020 41
EMEA
20192020202120222023 and beyond 2020 2021 2022 2023 and beyond
FRTB*
BoE/ PRA ST
TLAC
CVA review*
Revised IRB
approach CR*
FBO ST
CCAR /
DFAST
EU-wide ST*
SEC Liquidity rules
(ETF, mutual funds)
NCUA RBC
rule for large
credit unions
CECL
Vickers reform
Revised SA
operational risk*Updated Leverage
Ratio*
CCAR /
DFAST
CCAR /
DFASTRevised minimum
capital
requirements for
MR*
Output floor*
Supervisory rating
system for LFIs
Revised G-SIB
assessment*
SCCL for large
banks*
NSFR*
NSFR
Minimum
Leverage
Ratio
BoE/ PRA BES
(Climate-related element)
CCAR /
DFAST
EU Sustainability
taxonomy
Interest Rate
Benchmark Reform
EBA Guidelines on
Outsourcing
Agreements
SFTR regulatory
technical standards
EU “Banking Package”
CRR2, CRD5, BRRD2
and SRMR2*
Incorporate ESG risks into
supervisory process
EU Investment
Firms Directive
and Regulation
EU MLD5
TLAC
IRRBB review
TLAC
New securitization
framework
New securitization
framework
Interest Rate
Benchmark Reform
Interest Rate
Benchmark Reform
HLA requirement
Revised G-SIB
assessment*
Revised G-SIB
assessment*
Output floor*
Output floor*
CVA review*
CVA review*
Revised minimum
capital requirements
for MR*
Revised minimum
capital requirements
for MR*
Revised SA
operational risk*
Revised SA
operational risk*
Revised SA
market risk*
Updated Leverage
Ratio*
Updated Leverage
Ratio*
Revised IRB
approach CR*
Revised IRB
approach CR*
Revised
standardized
approach CR*
Revised
standardized
approach CR*
Revised
standardized
approach CR*
FRTB*
FRTB*
HLA
requirement
HLA
requirement
Climate Change
ST
CCAR /
DFAST
BoE/ PRA ST
BoE/ PRA
ST
DNB
Climate
ST
Credit Risk
Management*
Revised SA
market risk*
Revised SA
market risk*
Source: Moody’s Analytics market research as of July 2020.
Note: *Regulation has been delayed/ cancelled to allow banks to focus their resources on navigating the coronavirus pandemic - please see below for details
OSFI has delayed the Net Stable Funding Ratio Return (DT1) – formal reporting from Q3 2020 to Q1 2021. The FED has extended by 18 months the initial compliance dates under the single-counterparty credit limit (SCCL) rule, for bank holding companies and foreign banking
organizations. The EBA communicated new deadlines within which it plans to implement certain elements of the Capital Requirements Directive and Regulation (CRD 5 and CRR 2) and the amended Bank Recovery and Resolution Directive (BRRD 2). This pushes out Integrated Reporting
and ALMM elements of the package to 2021, but leaves many elements still to happen in 2020. Delays noted in last quarters report; Basel IV, G-SIB, EU-wide Stress Test and APRA delays APS 220 on credit risk management
Global Regulatory and Accounting Drivers for the ERS
Business
2Q 2020 Investor Presentation - August 11, 2020 42
Bureau van Dijk Collects and Enhances Information to Deliver
High Value Solutions…
KYC, compliance and financial crimeConduct on-boarding and anti-money laundering research with
extensive corporate structure and beneficial ownership data combined
with information on politically exposed persons (PEPs), sanctions and
adverse news.
Transfer pricingFind comparable companies and conduct peer analysis for tax compliance.
Credit and financial riskAssess customers, partners or suppliers using globally comparable
financial strength metrics and standardized financial statements.
Corporate finance and M&AFind targets/sellers, perform M&A/deal analysis and conduct due
diligence using detailed deal and company data in a standardized format.
Business developmentImprove efficiency of sales and marketing efforts by using Orbis data to
enrich and refresh CRM systems, research new markets and improve
customer targeting.
Data managementCombine multiple data sources into single entity views using unique
identifiers and matching, de-duplication and data enhancement services.
Supplier risk and procurementIncreased demand to lower risk within the supply chain and for
companies to have a better understanding of who they are doing
business with. Moody’s recently launched a Beta of the Know Your
Supplier tool helping healthcare providers research PPE suppliers for
criminal histories and negative media mentions.
High Value Customer Solutions
2Q 2020 Investor Presentation - August 11, 2020 43
Bank credit risk
Compliance
Corporate finance and M&A
Trade Credit
Data management
Research (Economic/Library)
Business development
Tax/Transfer pricing
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
0% 5% 10% 15% 20% 25% 30% 35%
12%Avg Growth of Other
Use Cases
38%Growth of Compliance
Use Case
… for a Diverse Client Base and Broad Range of Use Cases
Percent of Total Sales1
Yo
Y G
row
th (
20
19
vs. 2
01
8)
Use Case Growth RatesBvD Customer Mix by industry1
Government and
Education, 22%
Professional Services, 20%
Corporates, 29%
Financial Institutions,
29%
1. For full year 2019.
Source: Moody’s Analytics.
2Q 2020 Investor Presentation - August 11, 2020 44
» Bureau van Dijk accelerating growth with Moody’s. BvD post acquisition
revenue growth1 of ~16% and adjusted operating margin2 of ~52%
» BvD + RDC creates a leading provider of data for compliance-related use
cases
» The KYC space is a $900M market with ~18% 5-yr CAGR3
» 2019 pro forma combined compliance product sales of ~$150M4
– Expect combined sales to more than double by 20235
» Complementary assets:
– RDC’s Global Risk Information Database (GRID): over 12 million profiles of
risk-related organizations and individuals
– Worldwide entity and ultimate ownership data from BvD’s Orbis database
and Compliance Catalyst tool
Improved accuracy and streamlined decisions
375M+PUBLIC & PRIVATE
ENTITIES
195M+ACTIVE OWNERSHIP
LINKS
188MSHAREHOLDERS
BvD + RDC Makes Us a Leading Global Player in KYC
BvD
RDC
12.5M+RISK PROFILES
1,000MONITORED LISTS
1.7M+POLITICALLY
EXPOSED
PEOPLE
+
1. 2019 revenue growth. 2018 revenue includes the impact of $17M of revenue reductions relating to previous adjustments to deferred revenue recorded as part of acquisition accounting.
2. Direct adjusted operating margin for Bureau van Dijk for full year 2019. Excludes the allocation of corporate overhead expenses.
3. Source: Burton-Taylor, “AML/KYC Data & Services Global Sizing 2019”, November 2019; Moody’s Analytics estimates.
4. Pro forma estimate assuming RDC owned for full year 2019.
5. Guidance as of February 12, 2020.
6 Appendix
2Q 2020 Investor Presentation - August 11, 2020 46
Corporate Finance: Revenue and Issuance
$139 $135 $145 $128 $140 $140 $139 $145 $139
$72 $55 $57 $97$96 $106 $80
$144
$291$59
$39 $19$57 $69 $57 $75
$75
$99
$121
$78 $70
$73$83 $89 $68
$89
$43
$0
$100
$200
$300
$400
$500
$600
2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20
$ M
illio
ns
Revenue1: Mix by Quarter
Other Investment Grade Speculative Grade Bank Loans
$275 $312 $363$420 $421 $425 $488
$554 $547$137
$197 $193$230 $305 $262
$301$271 $379
$120
$194$229
$219$183 $181
$254 $175
$258
$120
$155$212
$242 $204 $254
$349 $379
$313
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
2011 2012 2013 2014 2015 2016 2017 2018 2019
$ M
illio
ns
Revenue1: Mix by Year
Other Investment Grade Speculative Grade Bank Loans
$305 $236 $221$329 $314 $370
$406 $433
$732$94$64 $33
$105 $120$105
$162 $134
$164
$210
$123$103
$100 $105$111
$108 $119
$44
$72
$39$28
$26 $25$43
$50$55
$18
$0
$200
$400
$600
$800
$1,000
$1,200
2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20
$ B
illio
ns
Issuance3: Mix by Quarter
Global Non-Financial Investment-Grade Bonds Global Non-Financial Speculative-Grade Bonds
U.S. Speculative-Grade Bank Loans Non-U.S. Speculative-Grade Bank Loans
$641 $750$1,125 $1,073 $1,043 $1,120 $1,192
$1,271$1,074
$1,419$293$250
$329 $411 $405 $329 $311$426
$304
$492
$273 $330
$353 $504 $425 $354 $414
$638
$601
$425$120
$247
$204
$144
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
$ B
illio
ns
Issuance3: Mix by Year
Non-U.S. Speculative-Grade Bank Loans U.S. Speculative-Grade Bank LoansGlobal Non-Financial Speculative-Grade Bonds Global Non-Financial Investment-Grade Bonds
2
2
1. Historical data has been adjusted to conform with current information and excludes intercompany revenue. The revenue reclassification of REITs to Corporate Finance from Structured Finance is reflected starting from 1Q 2018.
2. Other includes: monitoring, commercial paper, medium term notes, and ICRA.
3. Sources: Moody’s Analytics, Dealogic. U.S. and Non-U.S. Speculative-Grade Bank Loans represent only Moody’s rated speculative-grade bank loans. Non-U.S. Speculative-Grade Bank Loan Origination data available starting 2016. Note:
Debt issuance categories do not directly correspond to Moody’s revenue categorization.
2Q 2020 Investor Presentation - August 11, 2020 47
35%44% 50% 40% 36% 36% 36% 38% 37% 32%
24%
19%
18%19%
20% 27% 25% 27% 22% 25% 32% 51%
15%13%
7%13%
16% 18% 15% 21% 17% 17%
17%31%26% 24% 28%
20% 22% 23% 19% 21% 20%8%
0%
20%
40%
60%
80%
100%
2Q18 3Q18 4Q18 FY18 1Q19 2Q19 3Q19 4Q19 FY19 1Q20 2Q20
Other Investment Grade Speculative Grade Bank Loans
73%65% 62%
69% 70% 71% 72% 69% 71% 75%80%
27%35% 38%
31% 30% 29% 28% 31% 29% 25%20%
0%
20%
40%
60%
80%
100%
2Q18 3Q18 4Q18 FY18 1Q19 2Q19 3Q19 4Q19 FY19 1Q20 2Q20
Revenue1: Distribution by Recurring vs. Transaction
Transaction Recurring
Corporate Finance: Revenue Diversification
35% 37% 36% 35% 32% 37% 34% 38% 35% 31% 28%
65% 63% 64% 65% 68% 63% 66% 62% 65% 69% 72%
0%
20%
40%
60%
80%
100%
2Q18 3Q18 4Q18 FY18 1Q19 2Q19 3Q19 4Q19 FY19 1Q20 2Q20
Revenue1: Distribution by Geography
Non - U.S. U.S.
Revenue1: Distribution by Product
2
1. Historical data has been adjusted to conform with current information and excludes intercompany revenue. The revenue reclassification of REITs from Corporate Finance to Structured Finance is reflected starting from 1Q 2018.
2. Other includes: monitoring, commercial paper, medium term notes, and ICRA.
Note: Percentages have been rounded and may not total to 100%.
2Q 2020 Investor Presentation - August 11, 2020 48
Structured Finance: Revenue and Issuance
$28 $25 $26 $23 $26 $25 $25 $22 $23
$27 $24 $24 $24 $24 $22 $26 $27 $23
$18$15
$24$18 $20 $18
$25$17 $13
$55$51
$47
$35$41
$40$32
$29$21
$1
$1$0
$1$1
$1 $1
$1
$1
$0
$20
$40
$60
$80
$100
$120
$140
$160
2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20
$ M
illio
ns
Revenue1: Mix by Quarter
ABS RMBS CMBS Structured Credit Other
$110 $98 $92 $91 $94 $97 $107 $99
$85 $73 $76 $81 $85 $90$98 $95
$95 $116 $122 $140 $133$143 $78 $81
$91 $96$137
$135 $122$165
$196$148
$0 $0$0
$2 $2
$2 $2
$4
$0
$200
$400
$600
2012 2013 2014 2015 2016 2017 2018 2019
$ M
illio
ns
Revenue1: Mix by Year
ABS RMBS CMBS Structured Credit Other
$319 $335 $317 $319 $292 $298 $337 $384 $348
$371$231 $189 $238 $200 $204
$254$270 $283
$36
$73
$120 $114 $117 $94$120
$115 $145$39
$65$94
$159$132 $116
$136$200 $153
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
2011 2012 2013 2014 2015 2016 2017 2018 2019
$ B
illio
ns
Issuance2: Mix by Year
ABS RMBS CMBS Structured Credit
$89 $79$115
$65$90 $91 $103
$66$43
$74$64
$70
$48
$87 $63$85
$65
$16
$27$26
$36
$16
$38$34
$57
$31
$4
$64
$51
$49
$21
$49
$39
$44
$25
$3
$0
$50
$100
$150
$200
$250
$300
$350
2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20
$ B
illio
ns
Issuance2: Mix by Quarter
ABS RMBS CMBS Structured Credit
1. Historical data has been adjusted to conform with current information and excludes intercompany revenue. The revenue reclassification of REITs to Corporate Finance from Structured Finance is reflected starting from 1Q 2018.
2. Sources: AB Alert, CM Alert, Moody’s Corporation. Debt issuance categories do not directly correspond to Moody’s revenue categorization.
Notes: ABS (Asset Backed Securitization) includes asset-backed commercial paper and long-term asset-backed securities. RMBS (Residential Mortgage Backed Securitization) includes covered bonds. CMBS includes commercial mortgage-
backed securities and commercial real estate CDOs. Structured Credit includes CLOs and CDOs.
2Q 2020 Investor Presentation - August 11, 2020 49
Structured Finance: Revenue Diversification
Revenue1: Distribution by Product
1. Historical data has been adjusted to conform with current information and excludes intercompany revenue. The revenue reclassification of REITs to Corporate Finance from Structured Finance is reflected starting from 1Q 2018.
Notes: ABS (Asset Backed Securitization) includes asset-backed commercial paper and long-term asset-backed securities. RMBS (Residential Mortgage Backed Securitization) includes covered bonds. CMBS includes commercial mortgage-
backed securities and commercial real estate CDOs. Structured Credit includes CLOs and CDOs.
Percentages have been rounded and may not total to 100%.
67% 64% 63% 64% 56% 61% 55% 57% 58% 52%43%
33% 36% 37% 36% 44% 39% 45% 43% 42% 48%57%
0%
20%
40%
60%
80%
100%
2Q18 3Q18 4Q18 FY18 1Q19 2Q19 3Q19 4Q10 FY19 1Q20 2Q20
Revenue1: Distribution by Recurring vs. Transaction
Transaction Recurring
37% 38% 37% 37% 39% 36% 36% 38% 37% 36%44%
63% 62% 63% 63% 61% 64% 64% 62% 63% 64%56%
0%
20%
40%
60%
80%
100%
2Q18 3Q18 4Q18 FY18 1Q19 2Q19 3Q19 4Q19 FY19 1Q20 2Q20
Revenue1: Distribution by Geography
Non - U.S. U.S.
22% 22% 21% 22% 23% 23% 24% 23% 23% 23%28%
21% 21% 19% 20%23% 21% 21% 24% 22%
28%28%
14% 13% 20% 16%18% 18% 17%
23%19%
18%16%
43% 44% 39% 41%35% 37% 38%
29% 35% 30%26%
1% 0% 0% 0% 1% 1% 1% 1% 1% 1% 1%
0%
20%
40%
60%
80%
100%
2Q18 3Q18 4Q18 FY18 1Q19 2Q19 3Q19 4Q19 FY19 1Q20 2Q20
ABS RMBS CREF Structured Credit Other
2Q 2020 Investor Presentation - August 11, 2020 50
$339 $327
$170
$396$315
$279 $309
$396$333
$24$20
$4
$29
$18
$27$34
$36
$18
$0
$100
$200
$300
$400
$500
2Q18 3Q18 4Q18 1Q19 2Q19 3Q 19 4Q19 1Q20 2Q20
$ B
illio
ns
Issuance2: Mix by Quarter
Global Speculative Grade Financial Corporate Bonds
Global Investment Grade Financial Corporate Bonds
Financial Institutions: Revenue and Issuance
$77 $73 $63$80 $84 $80 $76 $86
$88
$33 $38
$15
$29 $28 $31 $31$30
$44$7 $6
$6
$4$10 $7 $5
$6
$8$3 $3
$3
$3$3 $3
$3$3
$2
$0
$20
$40
$60
$80
$100
$120
$140
$160
2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20
$ M
illio
ns
Revenue1: Mix by Quarter
Banking Insurance Managed Investments Other
$205 $228 $234$242 $244 $240
$300 $290$320
$73$79 $89
$92 $96 $102
$102 $114$119
$17$19 $16
$19 $16 $17
$22 $25$25
$0$0 $0
$2 $9 $10
$13 $13$12
$0
$50
$100
$150
$200
$250
$300
$350
$400
$450
$500
2011 2012 2013 2014 2015 2016 2017 2018 2019
$ M
illio
ns
Revenue1: Mix by Year
Banking Insurance Managed Investments Other
$1,266 $1,312$1,072
$1,247 $1,194 $1,187 $1,232 $1,248 $1,298
$79$137
$161
$197$136 $112
$183$74 $108
$0
$400
$800
$1,200
$1,600
$2,000
2011 2012 2013 2014 2015 2016 2017 2018 2019
$ B
illio
ns
Issuance2: Mix by Year
Global Speculative Grade Financial Corporate Bonds
Global Investment Grade Financial Corporate Bonds
1. Historical data has been adjusted to conform with current information and excludes intercompany revenue.
2. Sources: Moody’s Analytics, Dealogic. Note: Debt issuance categories do not directly correspond to Moody’s revenue categorization.
2Q 2020 Investor Presentation - August 11, 2020 51
Financial Institutions: Revenue Diversification
Revenue1: Distribution by Product
1. Historical data has been adjusted to conform with current information and excludes intercompany revenue.
Note: Percentages have been rounded and may not total to 100%.
55% 50%63%
56% 60% 58% 55% 58% 58% 52% 51%
45% 50%37%
44% 40% 42% 45% 42% 42% 48% 49%
0%
20%
40%
60%
80%
100%
2Q18 3Q18 4Q18 FY18 1Q19 2Q19 3Q19 4Q19 FY19 1Q20 2Q20
Revenue1: Distribution by Geography
Non - U.S. U.S.
47% 47%
28%42% 41%
49% 46% 42% 45% 48%54%
53% 53%
72%58% 59%
51% 54% 58% 55% 52%46%
0%
20%
40%
60%
80%
100%
2Q18 3Q18 4Q18 FY18 1Q19 2Q19 3Q19 4Q19 FY19 1Q20 2Q20
Revenue1: Distribution by Recurring vs. Transaction
Transaction Recurring
66% 69% 68% 66% 66% 67% 69% 62%
26% 25% 22% 26% 27% 25% 24% 31%
5% 3% 8% 5% 4% 5% 5% 6%
3% 3% 2% 2% 3% 3% 2% 1%
0%
20%
40%
60%
80%
100%
FY18 1Q19 2Q19 3Q19 4Q19 FY19 1Q20 2Q20
Banking Insurance Managed Investments Other
2Q 2020 Investor Presentation - August 11, 2020 52
$156 $181 $174 $177$202 $225 $218 $185
$222
$121$142 $167
$181$174
$188 $213$206
$224
$0
$50
$100
$150
$200
$250
$300
$350
$400
$450
$500
2011 2012 2013 2014 2015 2016 2017 2018 2019
$ M
illio
ns
Revenue1: Mix by Year
Public Finance and Sovereign Project & Infrastructure Finance Other
$248 $313 $302 $307
$364 $408 $384 $292
$374
$207 $266
$220
$243
$0
$100
$200
$300
$400
$500
$600
$700
$800
$900
2011 2012 2013 2014 2015 2016 2017 2018 2019
$ B
illio
ns
Issuance2: Mix by Year
Long-Term Rated U.S. Muni Bonds Rated Global Project & Infrastructure Finance Bonds
$82 $78 $74 $71 $79$95
$129$76 $95
$67 $57 $39 $51
$64 $75
$52
$64
$114
$0
$50
$100
$150
$200
$250
2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20
$ B
illio
ns
Issuance2: Mix by Quarter
Long-Term Rated U.S. Muni Bonds Rated Global Project & Infrastructure Finance Bonds
$52 $45 $42 $46 $53$58 $65 $57 $64
$56$54 $49 $47
$55$62
$60$52
$69
$0
$50
$100
$150
2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20
$ M
illio
ns
Revenue1: Mix by Quarter
Public Finance and Sovereign Project & Infrastructure Finance Other
1. Historical data has been adjusted to conform with current information and excludes intercompany revenue.
2. Global Rated Project & Infrastructure Finance available starting in 2016 and represents Moody’s rated issuance.
Sources: Thomson SDC, Moody’s Corporation. Note: Debt issuance categories do not directly correspond to Moody’s revenue categorization.
Public, Project and Infrastructure: Revenue and Issuance
2Q 2020 Investor Presentation - August 11, 2020 53
64% 61% 58% 61% 59%66% 69% 67% 65% 63%
72%
36% 39% 42% 39% 41%34% 31% 33% 35% 37%
28%
0%
20%
40%
60%
80%
100%
2Q18 3Q18 4Q18 FY18 1Q19 2Q19 3Q19 4Q19 FY19 1Q20 2Q20
Revenue1: Distribution by Recurring vs. Transaction
Transaction Recurring
43% 40% 40% 41% 35% 36% 39% 36% 37% 38% 35%
57% 60% 60% 59% 65% 64% 61% 64% 63% 62% 65%
0%
20%
40%
60%
80%
100%
2Q18 3Q18 4Q18 FY18 1Q19 2Q19 3Q19 4Q19 FY19 1Q20 2Q20
Revenue1: Distribution by Geography
Non - U.S. U.S.
48% 46% 45% 47% 49% 49% 48%52% 50% 52% 48%
52% 54% 55% 53% 51% 51% 52%48% 50% 48% 52%
0%
20%
40%
60%
80%
100%
2Q18 3Q18 4Q18 FY18 1Q19 2Q19 3Q19 4Q19 FY19 1Q20 2Q20
Public Finance and Sovereign Project & Infrastructure Finance Other
Revenue1: Distribution by Product
1. Historical data has been adjusted to conform with current information and excludes intercompany revenue.
Note: Percentages have been rounded and may not total to 100%.
Public, Project and Infrastructure: Revenue Diversification
2Q 2020 Investor Presentation - August 11, 2020 54
16% 16% 17% 16% 15% 15% 16% 14% 15% 10% 8%
84% 84% 83% 84% 85% 85% 84% 86% 85% 90% 92%
0%
20%
40%
60%
80%
100%
2Q18 3Q18 4Q18 FY18 1Q19 2Q19 3Q19 4Q19 FY19 1Q20 2Q20
Transaction Recurring
Moody’s Analytics: Financial Overview
$276 $280 $297 $308$315 $318 $333
$358 $366
$110 $115$124 $122 $117
$133$149
$138 $131$37 $40
$44 $42 $43$43
$31
$0
$100
$200
$300
$400
$500
$600
2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20
$ M
illio
ns
Revenue1: Mix by Quarter
Professional Services
Revenue1: Distribution by Line of Business
Revenue1: Distribution by Recurring vs. Transaction
1. Historical data has been adjusted to conform with current information and excludes intercompany revenue. Research, Data and Analytics includes Bureau van Dijk revenue beginning from the acquisition close date, August 10, 2017. The
revenue reclassification of the FACT product from RD&A to ERS is reflected starting from 1Q 2018. Subsequent to the divestiture of MAKS in 2019, revenue from the Moody's Analytics Learning Solutions ("MALS") unit, which previous to
2020 was reported in the Professional Services line of business ("LOB"), will now be reported as part of the RD&A LOB.
Note: Percentages have been rounded and may not total to 100%.
65% 64% 64% 65% 65% 66% 64% 65% 65%72% 74%
26% 26% 27% 26% 26% 25% 27% 29% 27%28% 26%
9% 9% 9% 9% 9% 9% 9% 6% 8%
0%
20%
40%
60%
80%
100%
2Q18 3Q18 4Q18 FY18 1Q19 2Q19 3Q19 4Q19 FY19 1Q20 2Q20
59% 60% 58% 59% 57% 58% 58% 58% 58% 57% 56%
41% 40% 42% 41% 43% 42% 42% 42% 42% 43% 44%
0%
20%
40%
60%
80%
100%
2Q18 3Q18 4Q18 FY18 1Q19 2Q19 3Q19 4Q19 FY19 1Q20 2Q20
Revenue1: Distribution by Geography
Non-U.S. U.S.
Enterprise Risk Solutions Research, Data and Analytics
$445 $483 $520$572 $626 $668
$833$1,121
$1,273$196 $243
$263$329
$374 $419
$449
$451
$522
$62 $108 $119$168
$150$147
$149
$159
$159
$0
$400
$800
$1,200
$1,600
$2,000
$2,400
2011 2012 2013 2014 2015 2016 2017 2018 2019
$ M
illio
ns
Revenue1: Mix by Year
2Q 2020 Investor Presentation - August 11, 2020 55
Historically, Moody’s Revenue and Interest
Rates Have Not Been Strongly Correlated
Note: Gray bars reflect periods of significant increases in the 10-year Treasury Yield.
1. 10-yr U.S. Treasury Yields are represented by the rate at the end-of-period.
2. Guidance as of July 30, 2020.
Source: www.treasury.gov.
+200bps
+120bps
+100bps
+180bps
MCO Revenue and Interest Rates
5.8%
7.8%
4.7%
6.5%
2.3%
3.3%
1.8%
3.0%
1.9%
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
199
2
199
3
199
4
199
5
199
6
199
7
199
8
199
9
200
0
200
1
200
2
200
3
200
4
200
5
200
6
200
7
200
8
200
9
201
0
201
1
201
2
201
3
201
4
201
5
201
6
201
7
201
8
201
9
202
0F
$ M
illio
ns
MIS Revenue (L) MIS Revenue Guidance MA Revenue (L) MA Revenue Guidance MCO Revenue (L) 10-yr U.S. Treasury Yield (R)1
2
http://www.treasury.gov/
2Q 2020 Investor Presentation - August 11, 2020 56
» Strong liquidity with $2.2B in cash and short-term investments,
and a $1.0B revolving credit facility2
» 1.6x net debt to adjusted operating income3
» Leverage well below maximum 4.5x net debt/EBITDA covenant4
Proactive Capital and Liquidity Management
1. WAC = Weighted Average Coupon. As of year-end. 2020 data as of June 30, 2020.
2. As of June 30, 2020.
3. Trailing twelve months adjusted operating income. Amounts are adjusted measures, see Appendix for reconciliations from adjusted financial measures to U.S. GAAP and gross debt to net debt.
4. Total Debt (gross debt less $100M of cash and equivalents) to EBITDA ratio threshold is normally 4.0x, but elevated to 4.5x for three quarters after an acquisition >$500 million.
5. Certain USD denominated debt has been synthetically converted to EUR via cross-currency swaps. EUR converted to USD as of June 30, 2020.
6. Pro forma $500M 40 year maturity bond issued at 2.55% on August 4, 2020 and the prepayment of $500M of senior notes maturing in of December 2021.
700
400
600
400300
500
170250
500562
842
330250
500
0
100
200
300
400
500
600
700
800
900
2022 2023 2024 2025 2026 2027 2028 2029 2030 2044 2048 2050 2060
USD Fixed Commercial Paper EUR Fixed EUR Floating
4.2% 3.9% 4.0%
3.4% 3.4%
2.1%2.2%
4.7%
4.3% 4.3%
3.5%
3.9%
3.3% 3.4%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
4.5%
5.0%
2014 2015 2016 2017 2018 2019 2020
WAC With Hedges WAC Excluding Hedges
Bond portfolio WAC1 Balanced maturity schedule5,6
$ in millions
Annualized Dividend Per Share
$1.36$1.48 $1.52
$1.76$2.00
$2.24
2015 2016 2017 2018 2019 2020F2
$500 million 40 year maturity
bond issued at 2.55% on
August 4th, 2020
2Q 2020 Investor Presentation - August 11, 2020 57
Drivers of Sustainable Corporate Value
Introduced Sustainability Disclosures in our Public Filings
1. Carbon Disclosure Project.
2. While the Company reports its financial results in accordance with GAAP, financial performance targets and results under the Company’s incentive plans are based on adjusted financial measures. These metrics and the related performance
targets are relevant only to Moody’s executive compensation program and should not be used or applied in other contexts.
3. This measure is a qualitative assessment of strategic and operational metrics tied to key non-financial business objectives certified by the Compensation & Human Resources Committee at the beginning of the performance period. The
Committee assessed the achievement of the metric by evaluating performance against the following objectives: (i) new sources of growth; (ii) quality assurance and controls; (iii) operating effectiveness and efficiency; (iv) people and culture; (v)
risk management; and (vi) enabling technologies and capabilities.
Executive compensation metrics include2:
» Moody’s Corporation EPS and operating income
» MIS operating income and ratings performance
» MA operating income and sales
» Strategic & operational3
ENVIRONMENTAL
» Measurement of carbon emissions and
identification of opportunities to reduce indirect
GHG emissions
» Expansion of ESG products and services
» CDP1 participation
» Verifiably carbon neutral in 2019
SOCIAL
» Support a diverse and inclusive workplace
» Active global community and
philanthropic involvement
» Robust data security and privacy practices
» Fair compensation practices and benefits
packages
» Recognized by Working Mother’s list of 100
Best Companies
GOVERNANCE
» Professional integrity
» Systematic risk management
» Diverse Board membership
and skill sets
» Separate CEO and Chairman positions
» Active stockholder engagement
2Q 2020 Investor Presentation - August 11, 2020 58
Ongoing Corporate Social Responsibility Commitment
1. Please see Moody’s press release “Moody’s Announces Environmental Sustainability Commitments” published on July 28, 2020 for more details.
2. To be completed by 2040 through the purchase of verified carbon offsets.
3. The Science Based Targets initiative is a collaboration between CDP, UNGC, World Resources Institute (WRI), and the World Wide Fund for Nature (WWF), that is seeking to reduce corporate GHG emissions.
Employees Communities Customers and Policymakers
» Employee safety and wellbeing
remains our primary priority
- Aligning return-to-office plans
with guidance from relevant
local authorities
» Adapting best practices and
feedback from work-from-home
experience to design our future
organizational model
» Focusing on equality, diversity
and inclusion:
- Anti-racism awareness and
training campaigns
- Named to DiversityInc’s “Top
50 Companies for Diversity”
» Over $10M of in-kind
contributions through free
access to products and
services
» Committing $1M to promote
equal justice and
advancement of the Black
community
- Empowering Black-owned
businesses and developing
employment opportunities
» Increased engagement with
customers to understand their
needs
» Ongoing dialogue with
governments to provide data
and insights relevant to
stimulus and economic
recovery measures
» Tools and information provided
to increase market
transparency and empower
decision makers
Environmental
Sustainability
Program
Enhancements1
Carbon Neutrality
» Committed to remaining
carbon neutral on an
annual basis
» Offsetting greenhouse gas
(GHG) emissions
retroactively to September
20002
Renewable Energy
» Beginning 2020: procure
100% renewable electricity
Science-based Targets
» Validated by the Science
Based Targets initiative3
https://sciencebasedtargets.org/
2Q 2020 Investor Presentation - August 11, 2020 59
» ML and deep learning tools to automate financial
data spreading at both MA and MIS
» AI and NLP used to generate credit reports on
6,000 municipal issuers
» RPA of manual, repeatable tasks within MIS
» Incorporating alternative data sources to augment
SME credit scoring accuracy
» QuantCube pilot program to synthesize
unstructured data to enhance financial analysis
» CompStak’s use of crowd-sourced data on CRE
leases and sales
» NLP based early warning and monitoring tools for
MIS analysts and MA customers
» AI tailored credit training for MA customers – Credit
Coach
» Faster loan approvals with AI powered lending
decisions – CreditLens
» SaaS accelerating product development and
improving customer experience
» Leveraging PaaS to experiment with application of
tools and techniques -- blockchain and big data
» Moody’s IT moving to IaaS to expand capabilities
and lower costs
Enhance
Data & Analytics
Deliver
Efficiencies
Improve
Decisions
Increase
Adaptability
Note: AI: Artificial Intelligence; ML: Machine learning; NLP: Natural language processing; RPA: Robotic process automation; IaaS: Infrastructure-as-a-service;
SaaS: Software-as-a-service; PaaS: Platform-as-a-service.
Technology: Innovating with Purpose
Next Gen Tech is a Defining Element of our Culture, Setting Stage for Growth
2Q 2020 Investor Presentation - August 11, 2020 60
1,168 1,785
$0.0
$500.0
$1,000.0
$1,500.0
$2,000.0
2Q19 2Q20
$ B
illi
on
s
Issuance1
$464
$201 (42) $62360.1%
64.0%
48.0%48.0%48.1%48.1%48.1%48.2%48.2%48.2%48.3%48.3%48.3%48.4%48.4%48.4%48.5%48.5%48.5%48.6%48.6%48.6%48.7%48.7%48.7%48.8%48.8%48.8%48.9%48.9%48.9%49.0%49.0%49.0%49.1%49.1%49.1%49.2%49.2%49.2%49.3%49.3%49.3%49.4%49.4%49.4%49.5%49.5%49.5%49.6%49.6%49.6%49.7%49.7%49.8%49.8%49.8%49.9%49.9%49.9%50.0%50.0%50.0%50.1%50.1%50.1%50.2%50.2%50.2%50.3%50.3%50.3%50.4%50.4%50.4%50.5%50.5%50.5%50.6%50.6%50.6%50.7%50.7%50.7%50.8%50.8%50.8%50.9%50.9%50.9%51.0%51.0%51.0%51.1%51.1%51.1%51.2%51.2%51.2%51.3%51.3%51.3%51.4%51.4%51.4%51.5%51.5%51.5%51.6%51.6%51.6%51.7%51.7%51.7%51.8%51.8%51.8%51.9%51.9%51.9%52.0%52.0%52.0%52.1%52.1%52.1%52.2%52.2%52.2%52.3%52.3%52.3%52.4%52.4%52.4%52.5%52.5%52.5%52.6%52.6%52.6%52.7%52.7%52.7%52.8%52.8%52.8%52.9%52.9%52.9%53.0%53.0%53.0%53.1%53.1%53.2%53.2%53.2%53.3%53.3%53.3%53.4%53.4%53.4%53.5%53.5%53.5%53.6%53.6%53.6%53.7%53.7%53.7%53.8%53.8%53.8%53.9%53.9%53.9%54.0%54.0%54.0%54.1%54.1%54.1%54.2%54.2%54.2%54.3%54.3%54.3%54.4%54.4%54.4%54.5%54.5%54.5%54.6%54.6%54.6%54.7%54.7%54.7%54.8%54.8%54.8%54.9%54.9%54.9%55.0%55.0%55.0%55.1%55.1%55.1%55.2%55.2%55.2%55.3%55.3%55.3%55.4%55.4%55.4%55.5%55.5%55.5%55.6%55.6%55.6%55.7%55.7%55.7%55.8%55.8%55.8%55.9%55.9%55.9%56.0%56.0%56.0%56.1%56.1%56.1%56.2%56.2%56.2%56.3%56.3%56.3%56.4%56.4%56.4%56.5%56.5%56.5%56.6%56.6%56.7%56.7%56.7%56.8%56.8%56.8%56.9%56.9%56.9%57.0%57.0%57.0%57.1%57.1%57.1%57.2%57.2%57.2%57.3%57.3%57.3%57.4%57.4%57.4%57.5%57.5%57.5%57.6%57.6%57.6%57.7%57.7%57.7%57.8%57.8%57.8%57.9%57.9%57.9%58.0%58.0%58.0%58.1%58.1%58.1%58.2%58.2%58.2%58.3%58.3%58.3%58.4%58.4%58.4%58.5%58.5%58.5%58.6%58.6%58.6%58.7%58.7%58.7%58.8%58.8%58.8%58.9%58.9%58.9%59.0%59.0%59.0%59.1%59.1%59.1%59.2%59.2%59.2%59.3%59.3%59.3%59.4%59.4%59.4%59.5%59.5%59.5%59.6%59.6%59.6%59.7%59.7%59.7%59.8%59.8%59.8%59.9%59.9%59.9%60.0%60.0%60.1%60.1%60.1%60.2%60.2%60.2%60.3%60.3%60.3%60.4%60.4%60.4%60.5%60.5%60.5%60.6%60.6%60.6%60.7%60.7%60.7%60.8%60.8%60.8%60.9%60.9%60.9%61.0%61.0%61.0%61.1%61.1%61.1%61.2%61.2%61.2%61.3%61.3%61.3%61.4%61.4%61.4%61.5%61.5%61.5%61.6%61.6%61.6%61.7%61.7%61.7%61.8%61.8%61.8%61.9%61.9%61.9%62.0%62.0%62.0%62.1%62.1%62.1%62.2%62.2%62.2%62.3%62.3%62.3%62.4%62.4%62.4%62.5%62.5%62.5%62.6%62.6%62.6%62.7%62.7%62.7%62.8%62.8%62.8%62.9%62.9%62.9%63.0%63.0%63.0%63.1%63.1%63.1%63.2%63.2%63.2%63.3%63.3%63.3%63.4%63.4%63.5%63.5%63.5%63.6%63.6%63.6%63.7%63.7%63.7%63.8%63.8%63.8%63.9%63.9%63.9%64.0%64.0%64.0%64.1%64.1%64.1%64.2%64.2%64.2%64.3%64.3%64.3%64.4%64.4%64.4%64.5%64.5%64.5%64.6%64.6%64.6%64.7%64.7%64.7%64.8%64.8%64.8%
$0$50
$100$150$200$250$300$350$400$450$500$550$600$650$700
2Q19 MIS AdjustedOperating Income
MIS RevenueIncrease
MIS ExpenseIncrease
2Q20 MIS AdjustedOperating Income
$ M
illi
on
s
MIS Adjusted Operating Income and Margin+390bps
2 2
1. MIS rated issuance, excludes sovereign debt issuance.
2. Includes intercompany revenue and expenses.
$388
$572
$112
$81$125
$142$108
$133
$6
$10
$0
$100
$200
$300
$400
$500
$600
$700
$800
$900
$1,000
2Q19 2Q20
$ M
illi
on
s
MIS Revenue
CFG SFG FIG PPIF MIS Other
$739
$938
47%
(28%)
14%
23%
YoY Change
MIS: Robust IG Issuance Drove Results
» CFG benefitted from liquidity-driven issuance and attractive
refinancing rates, leading to record supply in 2Q 2020
» SFG remains weak: lack of asset supply constraining CLO
and CMBS formation
» PPIF issuance was very strong, but contributed to the less
favorable issuance mix in the quarter
» Revenue growth outpaced personnel expense to drive
390 bps increase in adjusted operating margin
2Q 2020 Investor Presentation - August 11, 2020 61
$143$135
$21 ($13)
28.2% 28.7%
15.0%$0
$100
$200
2Q19 MAAdjustedOperating
Income
MA RevenueIncrease
MA ExpenseIncrease
2Q20 MAAdjustedOperating
Income
$ M
illi
on
s
MA Adjusted Operating Income and Margin
+50bps
2 2
$315$366
$117
$131$43
$0
$100
$200
$300
$400
$500
2Q19 2Q20
$ M
illi
on
s
MA Revenue1
RD&A ERS PS
16%
12%
$475
$497
YoY
Change
1. Subsequent to the divestiture of MAKS in 2019, revenue from the Moody's Analytics Learning Solutions ("MALS") unit, which previous to 2020 was reported in the Professional Services line of business ("LOB"), is now being
reported as part of the RD&A LOB. Prior periods have not been reclassified as the amounts were not material.
2. Includes intercompany revenue and expenses.
MA: Strong Organic Revenue Growth and Margin Expansion
» MA revenue grew 8%, excluding the impact of the MAKS
divestiture, acquisitions and FX
– Driven by KYC and compliance solutions, research
and data feeds
» Year-over-year margin expansion enabled by:
– Top-line growth generating operating leverage
– Reduced marketing, travel and entertainment expense
2Q 2020 Investor Presentation - August 11, 2020 62
Moody’s Global Presence
U.S. employees non-U.S. employees total employees1
4,052 7,227 11,279
20
20 3,903
U.S. employees non-U.S. employees total employees2
9,319 13,222
2019
1. As of June 30, 2020. Reflects acquisition of RDC, VE, Four Twenty Seven, Risk First, ABS Suite and divestiture of MAKS.
2. As of June 30, 2019.
AmericasArgentina Mexico
Brazil Panama
Canada Peru
Chile United States
Costa Rica
Europe, Middle East & AfricaAustria Poland
Belgium Portugal
Cyprus Russia
Czech Republic Saudi Arabia
Denmark Slovak Republic
France South Africa
Germany Spain
Israel Sweden
Italy Switzerland
Lithuania United Arab Emirates
Morocco United Kingdom
Netherlands
Asia-PacificAustralia Nepal
China Singapore
Hong Kong South Korea
India Thailand
Japan Sri Lanka
2Q 2020 Investor Presentation - August 11, 2020 63
Reconciliation of Adjusted Financial Measures to GAAP
Adjusted Operating Income and Adjusted Operating Margin Reconciliation1
(in $ millions) 2015 2016 2017 2018 2019TTM
2Q 2020
Operating Income $1,491 $651 $1,821 $1,868 $1,998 $2,355
Operating Margin 42.8% 18.1% 43.3% 42.0% 41.4% 45.3%
Add Adjustment:
Depreciation & Amortization 114 127 158 192 200 205
Acquisition-Related
Expenses- - 23 8 3 0
Restructuring - 12 - 49 60 -2
Captive insurance company
settlement- - - - 16 16
Settlement Charge - 864 - - - -
Loss pursuant to the
divestiture of MAKS- - - - 14 14
Adjusted Operating Income $1,605 $1,654 $2,002 $2,117 $2,291 $2,588
Adjusted Operating Margin 46.0% 45.9% 47.6% 47.6% 47.4% 49.8%
(in $ millions) 2015 2016 2017 2018 2019 1Q 2020 2Q 2020
Gross debt $3,381 $3,363 $5,540 $5,676 $5,581 $6,788 $6,333
Less: Cash, cash
equivalents and short-
term investments
2,232 2,225 1,183 1,818 1,930 2,231 2,199
Net debt $1,148 $1,138 $4,357 $3,858 $3,651 $4,557 $4,134
Moody's Corporation Net Debt Reconciliation
1. 2014 - 2017 operating and adjusted operating income have been restated to conform to the new presentation of pension accounting.
2Q 2020 Investor Presentation - August 11, 2020 64
2020F1
Projected Operating Margin - GAAP 43% - 44%
Depreciation & Amortization Approximately 4.5%
Restructuring Approximately 0.5%
Loss pursuant to the divestiture