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4Q & Full Year 2019 Investor
Presentation
FEBRUARY 2020
February 27, 2020 2
Disclaimer
Certain statements contained in this release are forward-looking statements and are based on future expectations, plans and prospects for the Company’s business and operations
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
(except where noted otherwise), 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, 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 our rating opinions, as well as any other litigation, government and regulatory proceedings, investigations and inquires 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 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, 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.
February 27, 2020 3
Table of Contents
1. Moody’s Overview
2. Financial Overview
3. Capital Markets Overview
4. Moody’s Investors Service (MIS)
5. Moody’s Analytics (MA)
6. Appendix
1 Moody’s Overview
February 27, 2020 5
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
Leading global provider of
credit rating opinions,
insight and tools for
financial risk measurement
and management
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
Revenue of
$4.8 billion
Adjusted
Operating Income
of $2.3 billion
MIS
76%
MA
24%MIS
60%
MA
40%
Note: Financial data for the trailing twelve months ended December 31, 2019.
Company Overview
Adjusted
Operating Margin
MIS
58.0%
MA
27.8%
February 27, 2020 6
Moody’s Strategic Priorities
Enhance technology infrastructure to enable automation, innovation and efficiency
Foster employee engagement and creative solutions through our diverse workforce
and inclusive environment
Private Co.
Data / SME
Business Adjacencies
ESG Cyber RiskCommercial
Real Estate
Emerging
Markets
Private Co.
Data / SME
Regional Expansion
Integrated Risk
Pyramid
Asia-
Pacific
Latin
AmericaEMEA
February 27, 2020 7
RDC Acquisition Provides Leadership
Position in the KYC Market
1. Guidance as of February 12, 2020.
2. Source: Burton-Taylor, “AML/KYC Data & Services Global Sizing 2019”, November 2019; Moody’s Analytics estimates.
» RDC’s data and decision tools combined with BvD’s
compliance products position MA to become a leading
KYC solutions provider
» 2019 pro forma combined compliance product sales of
~$150M1
» Expect combined sales to more than double by 20231
» The KYC space is a $900M market with ~18% 5-yr
CAGR2
RDC’sProprietary
Global Regulatory Information Database (“GRID”)
Adverse Media
» 120K sources across public data from
240 countries
» 3.0 billion articles scanned in the last
decade
Special Collections
» Sanctions Connect provides information on
individuals and organizations associated
with sanctioned entities
» Specialized datasets include: Iran Connect,
Panama Papers and Marijuana-Related
Business
Politically-Exposed Persons
» 1.5 million PEPs featured from a full
spectrum of government, media and
academic sources
» Regional desks covering 70+ languages and
local dialects
Sanctions & Watchlists
» 800+ regulatory and disciplinary authority /
government lists
» Features local, state and federal sources
from across the world covering fugitives,
exclusions, fraud warnings, debarments,
sex offenses and law enforcement actions
11M+ Profiles | 10,000 profiles updated daily | 300M daily screens
February 27, 2020 8
Drivers of Sustainable Corporate ValueIntroduced 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, operating income and EBITDA
» MIS operating income and ratings accuracy
» MA operating income and sales
» Strategic & operational3
E NV I RO NM E NTAL
» 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
S O C I AL
» 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
G O V E R N AN C E
» Professional integrity
» Systematic risk management
» Diverse Board membership
and skill sets
» Separate CEO and
Chairman positions
» Active stockholder
engagement
February 27, 2020 9
STOCKHOLDERS CUSTOMERS EMPLOYEES COMMUNITIES
Celebrating Demonstrated Success in 2019
Stakeholder and Sustainability Initiatives
Joined the UN Global Compact
(UNGC) initiative
Published updated
TCFD Report and inaugural
SASB Index
Recognized for the first
time in FTSE4Good
Index and Bloomberg
Gender-Equality Index
100% on the Corporate
Equality Index
Stonewall's Top 100
Employers for 2019
Working Mother
100 Best Companies
Working Mother Best
Companies for Dads
Investments in Vigeo Eiris,
Four Twenty Seven and
SynTao Green Finance
Verifiably
carbon neutral
Pyxera Global Immersive
Pro Bono Program
Partnerships with WeConnect
International and Pathway to
Prosperity
Institutional Investor #1
Global Credit Rating Agency
#4 Overall Ranking in the
Chartis RiskTech100®
February 27, 2020 10
Why Invest in Moody’s?
We strive to be the world’s
most respected authority
serving risk-sensitive
financial markets
We have had strong
revenue and earnings
growth, as well as cash
flow conversion
We are committed to
returning capital to
our stockholders
We will selectively
invest in strategic
growth opportunities
2 Financial Overview
February 27, 2020 12
Long-Term Growth Opportunities
Three Levers to Achieve EPS Growth
Note: Long-term growth opportunities presented on this slide are on average over time.
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.
February 27, 2020 13
$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
$ B
illio
ns
MIS Revenue MA Revenue
$4.8
2
$3.5 $3.6$4.2
$4.4
$1,109 $1,144
$664
$1,370$1,606
$1,700 - $1,800
$500
$700
$900
$1,100
$1,300
$1,500
$1,700
$1,900
2015 2016 2017 2018 2019 2020F25
Adjusted Diluted EPS3Revenue1
Mid - 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
2015 2016 2017 2018 2019 2020F
Free Cash Flow3
1
2
Financial Performance
1. Totals may not sum due to rounding.
2. Guidance as of February 12, 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. Reflects reduction by $701 million net of tax settlement charge.
$ Millions
$9.10
to
$9.30
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
%
~ 4
4%
2
3
February 27, 2020 14
56%
44%
Recurring Transaction
Full Year 2019 Revenue: $4.8 billion
Moody’s Corporation Financial Profile
53%
47%
U.S. Non-U.S.
Full Year 2020 Guidance as of February 12, 20201
Revenue • increase in the mid-single-digit % range
Operating Expenses • increase in the low-single-digit % range
Operating Margin • approximately 44%
Adjusted Operating Margin2 • 48% - 49%
Effective Tax Rate • 20% - 22%
Diluted EPS • $8.60 - $8.80
Adjusted Diluted EPS2 • $9.10 - $9.30
1. See press release titled “Moody's Corporation Reports Results for Fourth Quarter and Full Year 2019; Sets Outlook for Full Year 2020” from February 12, 2020 for Moody’s full 2020 guidance.
2. 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.
CFG31%
SFG9%
FIG10%
PPIF9%
MIS Other1%
RD&A26%
ERS11%
PS3%
MA
MIS
February 27, 2020 15
$1,098
$739
$200 $203
$991 $1,300
$272
$285
$290 $337
$378
$0
$400
$800
$1,200
$1,600
$2,000
150
170
190
210
230
2015 2016 2017 2018 2019 2020F
$ M
illions
Mill
ion
s o
f S
ha
res
Share Repurchases (R) Dividends Paid (R)
Shares Outstanding (L)
$1,370 $1,369
>$1,700
Disciplined Approach to Capital Allocation
Share Repurchases and Dividends Paid Annualized Dividend Per Share
$1,024
Investing in Growth Opportunities Return of Capital
Reinvestment
Invest in existing
businesses to
support organic
growth
Acquisitions
Evaluate carefully to
make sure aligned
with strategy and
market evolution
Dividends
Grow dividend in line
with earnings; target
25% - 30% payout1
Share Repurchase
Follow reinvestment,
dividends and
acquisitions in capital
allocation prioritization
$1.36$1.48 $1.52
$1.76
$2.00
$2.24
2015 2016 2017 2018 2019 2020F3
$490 $540
1. Dividend payout ratio is defined as total dividends paid/adjusted net income.
2. Guidance as of February 12, 2020.
3. Annualized dividend total, based on first quarter dividend declared on February 12, 2020.
2
3 Capital Markets Overview
February 27, 2020 17
Six Themes Will Shape Global Credit in 2020
February 27, 2020 18
MacroU.S. 10-Year Treasury 3.0% 1.8%
Fed rate stance Tightening Neutral
German 10-Year Bund 0.3% -0.3%
Geopolitical U.S.-China trade dispute Heightened uncertaintyPhase one trade deal agreement
in principle
BrexitKey U.K. parliamentary vote
delayed
U.K. elections provide clarity
of direction
Washington gridlockLongest government shutdown in
U.S. history initiated
Impeachment procedures
initiated
Credit Markets
U.S. and EMEA Credit
spreadsMulti-year highs at year-end Lowest levels of 2019
High yield bond issuanceSubstantially shut down,
especially in December
Heightened activity to cap the
year
U.S. Public Finance
issuance1
Multi-year low on high benchmark
rates
Multi-year high as low
benchmark rates induce taxable
transactions
4Q18 Sentiment 4Q19 Sentiment
Credit market sentiment improved during 2019
ShiftMarket AttributeFactor
1. MIS rated issuance.
4Q 2019 Issuance Activity
February 27, 2020 19
Debt Leverage and Interest Coverage Remain Stable
in North America and Europe
Credit Metrics: North American Speculative Grade Companies
1. Trailing twelve months ended December 31, 2019.
Note: Historical figures may change due to timing differences in issuer reporting deadlines. Source: Moody’s Investors Service.
4.6x 4.6x 4.6x 4.4x 4.3x 4.4x 4.6x 4.8x 5.0x 5.1x 5.2x 5.4x 5.3x 5.2x
2.9x 2.6x 2.4x 2.7x 3.0x 3.1x 3.0x 3.0x 3.0x 2.9x 3.0x 3.0x 2.8x 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
Inte
rest
Covera
ge
Debt / EBITDA EBITDA / Interest Expense
Credit Metrics: European Speculative Grade Companies
5.0x
4.1x4.5x 4.8x
4.1x 4.2x 4.4x 4.6x 4.7x 4.5x 4.6x 4.6x5.2x 5.0x
2.9x 2.9x 2.6x 2.8x3.4x 3.2x 3.0x 3.0x 3.1x 3.3x 3.5x 3.7x 3.5x 3.8x
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
Inte
rest
Covera
ge
Debt / EBITDA EBITDA / Interest Expense
1
1
February 27, 2020 20
Global Default Rates Remain Under Historic
Average; Continue to Monitor Covenant Quality
Default Rates for Speculative-
Grade Corporate Rated Issuance1
» Global speculative-grade default rate at 3.0% as of December 31, 2019; expected to increase
to 3.3% by December 2020
» Large concentration of recent U.S. bond issuance at the higher-end of speculative grade has
led to weakened covenant quality, as higher rated credits typically carry weaker covenants
1. Moody’s rated corporate global speculative grade default historical average of 4.1% from 1983 through 2018. 2020 forecast for trailing twelve months ended December 31, 2020.
2. Covenant data for European and U.S. bonds as of the trailing twelve months ended September 30, 2019 and December 31, 2019, respectively.
Source: Moody’s Investors Service.
4.02x
4.47x
3.70x
2.0
2.5
3.0
3.5
4.0
4.5
5.0
2012 2013 2014 2015 2016 2017 2018 2019
U.S. Loans U.S. Bonds European Bonds
Speculative-Grade Covenant
Quality Indicators
Weakening
Improving
2
3.3%
3.5%
3.3%0%
2%
4%
6%
8%
10%
12%
14%
16%Global U.S. Europe
4.1% global
historic average1
February 27, 2020 21
Baa-Credit Concentration Has Grown, with Mitigating
Factors
$0.1
$1.9
Potential Fallen Angels
$ Trillions
$744
$2,0402.4x
3.0x
0.0x
1.0x
2.0x
3.0x
$0
$500
$1,000
$1,500
$2,000
$2,500
$ B
illio
ns
Face Value of Rated Debt Debt / EBITDA
0%
10%
20%
30%
40%
Aaa Aa A Baa Ba B Caa-C2007 2018
Rated Debt of Baa U.S. Nonfinancial Companies Has
Almost Tripled Since 2007
2018 Baa-rated Debt Accounted for More than One-third of
The Total Rated Debt of U.S. Nonfinancial Companies
2018 Potential Fallen Angels1 Accounted for $0.1 Trillion of the
$2 Trillion of U.S. Baa-Rated Nonfinancial Debt Outstanding
Ratio of Potential Fallen Angels1 to Potential Rising Stars1
Trends Downward Globally
1. Fallen Angels and Rising Stars fall within the “The Crossover Zone” which refers to the ratings closest to the line between speculative grade and investment grade. Companies in
the zone are rated Baa3 or Ba1. To be considered in the zone, companies rated Baa3 must be on review for downgrade or have a negative outlook, while companies rated Ba1
must be on review for upgrade or have a positive outlook.
Source: Moody’s Investors Service.
» As compared to 2007, 2018 representative median companies generated more revenue ($4.7B to $7.1B),
with improved EBITDA margins (20% to 24%) and EBITDA / Interest Expense ratios (7.0x to 8.2x)
0
1
2
3
4
5
6
February 27, 2020 22
203 245 253 199 193
3058 97
127 142858
140 239342
$0
$100
$200
$300
$400
$500
$600
$700
$800
2020 2021 2022 2023 2024
$ B
illio
ns
Investment Grade Speculative Grade Bonds Speculative Grade Bank Loans
North America and EMEA Non-Financial Corporates
Have Significant Refunding Needs1
Debt Maturities: North America Moody’s-Rated Corporate Bonds and Loans
Source: Moody’s Investors Service, January 2020.
Note: Data represents U.S. & Canadian MIS rated corporate bonds & loans.
Debt Maturities: EMEA Moody’s-Rated Corporate Bonds and Loans
Source: Moody’s Investors Service, July 2019.
1. Amount reflects total maturities identified in the above sources.
$241$360
$490$565
338 327 356 349
28 3984 7239 46
64 69
$0
$100
$200
$300
$400
$500
$600
2020 2021 2022 2023
$ B
illio
ns
Investment Grade Speculative Grade Bonds Speculative Grade Bank Loans
$405 $412
$504 $490
» More than $2.3 trillion of non-
financial corporate debt
maturing in North America
through 2024, up ~6% from
2019
» North America speculative
grade bank loans refinancing
needs up $177 billion, or
29%, from a year ago
» Four-year debt maturities for
EMEA non-financial
corporates exceed $1.8
trillion, up more than $370
billion, or 26%, from the
prior year
$677
February 27, 2020 23
$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 Strongly Over Time
Next Four Years U.S. 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. and European MIS rated corporate bonds & loans.
February 27, 2020 24
Debt Refinancing and M&A are Most Frequently
Stated Uses of Proceeds
Uses of Funds from USD High Yield Bonds and Bank Loans1
62%
0
52%
83%
71% 74%78%
71%65%
54%64%
71%63%
68%
63%
0
53%
19%
31% 30%25%
31%41% 54%
41%
39%48%
35%
22%
0
17%
11%
7% 8% 8%7% 8%
5% 6%5% 6% 7%
12%
0
9% 4%
18% 17% 18% 22% 20% 16% 17% 13% 14% 13%
1999 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
% o
f M
entions
Debt Refinancing M&A Capital Spending Shareholder Payments
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.
February 27, 2020 25
Disintermediation of Credit is an Ongoing Trend in the Global Capital Markets
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
illio
ns
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
illio
ns
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 November 2019 and U.S. data is through December 2019.
February 27, 2020 26
New Rating Mandates Provide Recurring Revenue1
GrowthGlobal New Rating Mandates2
1. MIS recurring revenue is typically billed annually and recognized ratably over 12 months. Recurring revenue can also be billed upfront and recognized over the life of the security.
2. Rated by Moody’s Investors Service.
3. New mandates estimate as of February 12, 2020.
0
400
800
1,200
2015 2016 2017 2018 2019 2020F
# o
f N
ew
Ma
nd
ate
s
EMEA United States Rest of World
1,044 1,046
800 - 900864
738771
3
» Expect 800 - 900 new mandates in 20203
» MIS recurring revenue growth driven by increased volume of monitoring fees from
recent new mandates, as well as pricing initiatives
4 Moody’s Investors Service
February 27, 2020 28
37%
63%
Recurring Transaction
Full Year 2019 Revenue: $2.9 billion
Public,
Project, &
Infrastructure
Finance
15%
Financial
Institutions
17%
Corporate
Finance
52%
Structured
Finance
15%
MIS Other
1%
60%
40%
U.S. Non-U.S.
» 35% recurring revenue
» 55% recurring revenue
» 42% recurring revenue
Full Year 2020 Guidance as of February 12, 20201
Revenue • increase in the mid-single-digit % range
Adjusted Operating Margin • 58% - 59%
» 29% recurring revenue
Moody’s Investors Service Financial Profile
1. See press release titled “Moody's Corporation Reports Results for Fourth Quarter and Full Year 2019; Sets Outlook for Full Year 2020” from February 12, 2020 for Moody’s full 2020
guidance.
Note: The revenue reclassification of REITs to Corporate Finance from Structured Finance is reflected in the full year 2019 calculations.
February 27, 2020 29
WIDER ACCESS TO CAPITAL INCREASED MARKET STABILITY
PLANNING & BUDGETING
TRANSPARENCY AND
CREDIT COMPARISON
TANGIBLE
FINANCING BENEFITS
RESPONSIVE TO INVESTOR
DEMAND
Investors seek
our opinions and
particularly value the
knowledge of our
analysts and the depth of
our research
The Benefits of a Moody’s Rating
February 27, 2020 30
» We remain focused on analytical expertise and our credit methodologies to provide
predictive, predictable and transparent ratings
» Accuracy reinforces investor demand pull
Rating Performance Drives Investor Confidence
2%6%7%
16%19%
26%
32%
44%
63%
87%88%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Aaa
Aa1
Aa2
Aa3
A1
A2
A3
Baa1
Baa2
Baa3
Ba1
Ba2
Ba3
B1
B2
B3
Ca
a1
Ca
a2
Ca
a3
Ca
_C
0%
2%
5%
8%
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
Aaa Aa A Baa Ba B
1 Source: Moody’s Investors Service. The data in the chart above shows the ten-year cumulative default rates by rating from January 2009, through January 2018 of fundamental Moody’s
rated universe globally. Rating category is based on senior unsecured rating (or equivalent) of the issuer.
2 Source: Moody’s Investors Service: Global multi-year cumulative WR-adjusted impairment rates by original rating,1993-2018.
Ten-Year Cumulative 1993-2018 CLO
Impairments2
Ten-Year Default Rates by Rating for 2009-
2018 Cohort: Non-Financial Corporates1
February 27, 2020 31
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.
February 27, 2020 32
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*
Broad Coverage Serves Global Needs
1. Institutional Investor Survey.
Source: Moody’s Investors Service.
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 *
~15 Years Lead/Senior Analyst
tenure
#1 Global Credit
Rating Agency
20191
#1 U.S. Credit
Rating Agency
2012-20181
February 27, 2020 33
Continue to Invest in Key International Markets
Asia Pacific
» China: Successful joint venture with CCXI and
robust cross-border operations
» South Korea: Full ownership of KIS subsidiary,
a leading provider of domestic credit ratings in
South Korea
» India: Majority stake in ICRA serves growing
domestic Indian bond market
Latin America
» Launched Moody’s Local, a new platform that will
provide domestic credit ratings and research in
Peru, Panama and Bolivia1
» Minority investment in ICR Chile deepens
Moody’s presence in dynamic and expanding
market
EMEA
» Opened Moody’s offices in Saudi
Arabia and Lithuania
2009 2019
Emerging Asia Latin America Middle East
CEE/CIS Africa
Revenue in Emerging Markets
$94M
$342M
EMEA
1. Subject to regulatory approvals. Moody’s Local ratings represent forward-looking rank-orderings of creditworthiness within the domestic market of a specific country. They are not
comparable between countries, and are distinct from and independent of the opinions of MIS and its global ratings.
February 27, 2020 34
0
10
20
30
40
50
US China Japan UK France
Total debt securities outstanding 2012–20191
2012 2019
Moody’s in Greater China: 2019 Performance Update
Estimated China Ratings Market Size: Domestic and Cross Border2
» 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
58%42%
Rest of Market CCXI's Share
63%
37%
Rest of Market Moody's Share
Domestic Market
~$280M
Cross Border Market
~$290M3
2nd Largest Onshore Bond Market at $14 Trillion2019 Revenue and Attributable Income
from China3
1%0%
-2%
3%
20%
1. Source: Bank for International Settlements (latest data available as of 2Q19).
2. 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.
3. Greater China: Mainland, Hong Kong and Macau.
$176
$17 -
50
100
150
200
MIS Cross Border andTotal MA
Attributable Income fromCCXI
$ M
illio
ns
Total MA Revenue
MIS Cross Border Revenue
Attributable Income from CCXI
February 27, 2020 35
100
~290
05101520253035404550556065707580859095100105110115120125130135140145150155160165170175180185190195200205210215220225230235240245250255260265270275280285290295300305310
2019 2012-2019
Analysis
» Moody’s forecasts global
green, social and
sustainability bond
issuance to reach $400
billion in 2020, a projected
increase of 24% over 20191
» Majority acquisition of Four
Twenty Seven
complements majority
stake in Vigeo Eiris
underscoring work to
advance global standards
for assessing
environmental and
climate risk factors
Outreach
» ~400 media engagements
in 2019
» Strategic relationships
with industry organizations
and influencers across
sustainable finance
» Hosted 2nd annual ESG
conference in London in
4Q19
Research
» In 2019, Moody’s published
300+ research reports
focused on ESG risks and
opportunities, up ~30% from
2018
10
18
21
0
5
10
15
20
25
2016 2017 2018
1. Forecast as of February 3, 2020.
2. Total combined assessments are from full year 2012 through full year 2019. Includes approximately 60 Moody’s GBAs and 230 Vigeo Eiris Second Party Opinions on green,
sustainability and social bonds.
Annual Moody’s
Assessments
Total Combined
Assessments
MIS ESG Opportunity: Driving Expansion
Beyond Credit
2
February 27, 2020 36
» Research report on exposure to future heat stress for
U.S. counties
Relative projections of future heat stress for each U.S.
county to demonstrate high risk areas provided by 427
» Research report on public safety power shutoffs in
California
Maps of heat/water stress in California provided by 427
Near term
» MIS publishing report on the climate change scenarios
Climate scenario expertise on the physical impacts of the
different scenarios provided by 427
» 427 data to be incorporated into tools for the U.S. PFG
team
Data and scores for all U.S. Municipalities from 427
will either complement or replace data supplied by MA
427 includes greater amount of risk hazards than MA
» REIS Network data partner
» Joint by-line article: the changing climate of credit risk
management
Integrating 427 Climate Analytics to Better Inform
the Market+ +
5 Moody’s Analytics
February 27, 2020 38
Research, Data and Analytics
65%
Enterprise Risk Solutions
27%
Professional Services
8%
Moody’s Analytics Financial Profile
85%
15%
Recurring Transaction
42%
58%
U.S. Non-U.S.
» 99% recurring revenue
» ~ 97% retention rate1
» 77% recurring revenue
» Combination of one-off contracts and
semi-recurring revenue
Full Year 2020 Guidance as of February 12, 20202
Revenue • increase in the high-single-digit % range
Adjusted Operating Margin • Approximately 30%
Full Year 2019 Revenue: $2.0 billion
1. Excludes Bureau van Dijk.
2. See press release titled “Moody's Corporation Reports Results for Fourth Quarter and Full Year 2019; Sets Outlook for Full Year 2020” from February 12, 2020 for Moody’s full
2020 guidance.
Note: The revenue reclassification of the FACT product from RD&A to ERS is reflected in the full year calculations.
February 27, 2020 39
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 Services
2019 Revenue: $159m
2008 – 2019 CAGR: +27%
(~26% organic)
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 More Than Tripled Since Inception
Note: Individual line of business revenues may not add up to total Moody’s Analytics revenue due to rounding.
February 27, 2020 40
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
RD&A: Subscription Growth Driven by Retention, Upgrades and Pricing & New Sales
Full
Ye
ar
201
8
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 and excludes Bureau van Dijk and Reis. Upgrades
reflect amendments to existing customer contracts. New Sales reflect new contracts with new and existing customers.
Full
Ye
ar
201
9
96.2% 110.6%9.0%5.4%
Retained Base Upgrades and Price New Sales Business Base
Full
Ye
ar
201
6
95.4% 110.2%8.0% 6.8%
Retained Base Upgrades and Price New Sales Business Base
February 27, 2020 41
Source: Moody’s Analytics market research as of January 2020.
Note: MiFID II, MiFIR and GDPR regulations are relevant to the banking sector but do not impact on Moody’s Analytics products and so have not been included on the radar.
The G-SIB surcharge will expand the conservation buffer, subject to a 3 year phase in period. G-SIBs will be required to hold a minimum Total Loss-Absorbing Capacity” (TLAC) of
at least 16% from 2019 and 18% by 2022.
EMEA
20192020202120222023 and beyond 2020 2021 2022 2023 and beyond
FRTB
BoE/ PRA ST
TLAC1
CVA review
Revised IRB
approach CR
FBO ST
BoE/ PRA 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 /
DFAST
Revised minimum
capital requirements
for MR
Output floor
Supervisory rating
system for LFIs
Revised G-SIB
assessment
SCCL for large
banks
NSFR
NSFR
Market Risk
Minimum
Leverage
Ratio
BoE/ PRA BES
(Climate-related element)
CCAR /
DFASTEU 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
TLAC1
IRRBB review
TLAC1
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
Market Risk
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
BoE/ PRA ST
DNB
Climate
ST
Global Regulatory and Accounting Drivers for the
ERS Business
6 Appendix
February 27, 2020 43
Corporate Finance: Revenue and Issuance
$126 $134 $139 $135 $145 $128 $140 $140 $139
$66$87 $72 $55 $57 $97 $96 $106
$80
$64$58 $59
$39 $19
$57$68 $57
$75
$78
$110 $121
$78 $70
$73$84 $89
$68
$0
$50
$100
$150
$200
$250
$300
$350
$400
4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19
$ 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
$269 $312 $305$236 $221
$329 $314$370 $406
$100$112 $94
$64$33
$105 $120$105
$162$134
$165 $210
$123$103
$100 $105$111
$108
$59
$65 $72
$39
$28
$26 $25
$43
$50
$0
$200
$400
$600
$800
4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19
$ B
illio
ns
Issuance3: Mix by Quarter
Non-U.S. Speculative-Grade Bank LoansU.S. Speculative-Grade Bank LoansGlobal Non-Financial Speculative-Grade BondsGlobal Non-Financial Investment-Grade Bonds
$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 LoansU.S. Speculative-Grade Bank LoansGlobal Non-Financial Speculative-Grade BondsGlobal 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.
February 27, 2020 44
39% 38% 34% 40% 36% 36% 36% 38% 37%
27% 23%22%
20% 27% 25% 27% 22% 25%
16%16%
18% 13%16% 18% 15% 21% 17%
18% 23% 26% 28%20% 22% 23% 19% 21%
0%
20%
40%
60%
80%
100%
FY15 FY16 FY17 FY18 1Q19 2Q19 3Q19 4Q19 FY19
Other Investment Grade Speculative Grade Bank Loans
69% 68% 73% 69% 70% 71% 72% 69% 71%
31% 32% 27% 31% 30% 29% 28% 31% 29%
0%
20%
40%
60%
80%
100%
FY15 FY16 FY17 FY18 1Q19 2Q19 3Q19 4Q19 FY19
Revenue1: Distribution by Recurring vs. Transaction
Transaction Recurring
Corporate Finance: Revenue Diversification
32% 32% 35% 35% 32% 37% 34% 38% 35%
68% 68% 65% 65% 68% 63% 66% 62% 65%
0%
20%
40%
60%
80%
100%
FY15 FY16 FY17 FY18 1Q19 2Q19 3Q19 4Q19 FY19
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 to Corporate Finance from
Structured Finance is reflected starting from 1Q 2018.
2. Other includes: monitoring, commercial paper, medium term notes, and ICRA.
Percentages have been rounded and may not total to 100%.
February 27, 2020 45
Structured Finance: Revenue and Issuance
$27 $28 $28 $25 $26 $23 $26 $25 $25
$25 $24 $27$24 $24 $24 $24 $22 $26
$46$21 $18
$15$24
$18 $20 $18$25
$50
$43 $55$51
$47
$35$41
$40$32
$1
$1$1
$1$0
$1$1
$1 $1
$0
$20
$40
$60
$80
$100
$120
$140
$160
4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19
$ 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
$107 $102 $89 $79$115
$65$90 $91 $103
$73 $62 $74$64
$70
$48
$87 $63$85
$41$26 $27
$26
$36
$16
$38$34
$57$48
$36$64
$51
$49
$21
$49
$39
$44
$0
$50
$100
$150
$200
$250
$300
$350
4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19
$ 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.
February 27, 2020 46
Structured Finance: Revenue Diversification
64% 62% 65% 64%57% 61% 55% 57% 58%
36% 38% 35% 36%43% 39% 45% 43% 42%
0%
20%
40%
60%
80%
100%
FY15 FY16 FY17 FY18 1Q19 2Q19 3Q19 4Q19 FY19
Revenue1: Distribution by Recurring vs. Transaction
Transaction Recurring
31% 33% 31% 37% 38% 36% 36% 38% 37%
69% 67% 69% 63% 62% 64% 64% 62% 63%
0%
20%
40%
60%
80%
100%
FY15 FY16 FY17 FY18 1Q19 2Q19 3Q19 4Q19 FY19
Revenue1: Distribution by Geography
Non - U.S. U.S.
20% 22% 19% 22% 23% 23% 24% 23% 23%
18% 19% 18%20% 23% 21% 21% 24% 22%
31% 31%29% 16%
18% 18% 17%23%
19%
31% 28% 33%41% 35% 37% 38%
29% 35%
0% 1% 0% 0% 1% 1% 1% 1% 1%
0%
20%
40%
60%
80%
100%
FY15 FY16 FY17 FY18 1Q19 2Q19 3Q19 4Q19 FY19
ABS RMBS CMBS Structured Credit Other
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%.
February 27, 2020 47
Financial Institutions: Revenue and Issuance
$80 $77 $77 $73$63
$80 $85 $80 $76
$30 $28 $33 $38
$15
$29 $28 $31 $31
$6 $6$7 $6
$6
$4$10 $7
$5
$3 $3$3 $3
$3
$3$3 $3
$3
$0
$20
$40
$60
$80
$100
$120
$140
4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19
$ 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
$241
$411$339 $327
$170
$396$315
$279 $309
$49
$26$24
$20
$4
$29
$18
$27$34
$0
$100
$200
$300
$400
$500
4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q 19 4Q19
$ B
illio
ns
Issuance2: Mix by Quarter
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.
February 27, 2020 48
Financial Institutions: Revenue Diversification
37% 37%45% 42% 41%
49% 46% 42% 45%
63% 63%55% 58% 59%
51% 54% 58% 55%
0%
20%
40%
60%
80%
100%
FY15 FY16 FY17 FY18 1Q19 2Q19 3Q19 4Q19 FY19
Revenue1: Distribution by Recurring vs. Transaction
Transaction Recurring
57% 57% 57% 56% 60% 58% 55% 58% 58%
43% 43% 43% 44% 40% 42% 45% 42% 42%
0%
20%
40%
60%
80%
100%
FY15 FY16 FY17 FY18 1Q19 2Q19 3Q19 4Q19 FY19
Revenue1: Distribution by Geography
Non - U.S. U.S.
67% 65% 69% 66% 69% 68% 66% 66% 67%
26% 28% 23% 26% 25% 22% 26% 27% 25%
4% 5% 5% 5% 3% 8% 5% 4% 5%
3% 3% 3% 3% 3% 2% 2% 3% 3%
0%
20%
40%
60%
80%
100%
FY15 FY16 FY17 FY18 1Q19 2Q19 3Q19 4Q19 FY19
Banking Insurance Managed Investments Other
Revenue1: Distribution by Product
1. Historical data has been adjusted to conform with current information and excludes intercompany revenue.
Percentages have been rounded and may not total to 100%.
February 27, 2020 49
$156 $181 $174 $177 $202 $225 $218$185
$222
$121
$142 $167 $181$174
$188 $213
$206
$224
$0
$0$0
$0$0
$0$0
$0
$0
$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 SovereignProject & Infrastructure FinanceOther
$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
Rated Global Project & Infrastructure Finance Bonds
Long-Term Rated U.S. Muni Bonds
Public, Project and Infrastructure: Revenue and Issuance
$127
$59$82 $78 $74 $71 $79
$95$130
$66
$57
$67 $57
$39 $51 $64
$75
$52
$0
$50
$100
$150
$200
$250
4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19
$ B
illio
ns
Issuance2: Mix by Quarter
Rated Global Project & Infrastructure Finance Bonds
Long-Term Rated U.S. Muni Bonds
$62$47 $52 $45 $42 $46 $53 $58 $65
$57
$46$56
$54$49 $47
$56$62
$60
$0
$0
$0$0
$0 $0
$0$0
$0
$0
$20
$40
$60
$80
$100
$120
$140
4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19
$ 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.
February 27, 2020 50
60% 63% 65% 61% 59%66% 69% 67% 65%
40% 37% 35% 39% 41%34% 31% 33% 35%
0%
20%
40%
60%
80%
100%
FY15 FY16 FY17 FY18 1Q19 2Q19 3Q19 4Q19 FY19
Revenue1: Distribution by Recurring vs. Transaction
Transaction Recurring
35% 33% 38% 41% 35% 36% 39% 36% 37%
65% 67% 62% 59% 65% 64% 61% 64% 63%
0%
20%
40%
60%
80%
100%
FY15 FY16 FY17 FY18 1Q19 2Q19 3Q19 4Q19 FY19
Revenue1: Distribution by Geography
Non - U.S. U.S.
54% 54% 51% 47% 50% 49% 48% 52% 50%
46% 46% 49% 53% 50% 51% 52% 48% 50%
0% 0% 0% 0% 0% 0% 0% 0% 0%
0%
20%
40%
60%
80%
100%
FY15 FY16 FY17 FY18 1Q19 2Q19 3Q19 4Q19 FY19
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.
Percentages have been rounded and may not total to 100%.
Public, Project and Infrastructure: Revenue Diversification
February 27, 2020 51
Moody’s Analytics: Financial Overview
$258 $267 $276 $280 $297 $308 $315 $318 $333
$143 $102 $110 $115$124 $122 $118 $133
$149$40$38 $37 $40
$44 $42 $42 $43$31
$0
$100
$200
$300
$400
$500
$600
4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19
$ M
illio
ns
Revenue1: Mix by Quarter
$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
Professional Services
Enterprise Risk Solutions
Research, Data and
Analytics
26% 25% 22% 16% 15% 15% 16% 14% 15%
74% 75% 78% 84% 85% 85% 84% 86% 85%
0%
20%
40%
60%
80%
100%
FY15 FY16 FY17 FY18 1Q19 2Q19 3Q19 4Q19 FY19
Transaction Recurring
54% 51% 55% 59% 57% 58% 58% 58% 58%
46% 49% 45% 41% 43% 42% 42% 42% 42%
0%
20%
40%
60%
80%
100%
FY15 FY16 FY17 FY18 1Q19 2Q19 3Q19 4Q19 FY19
Revenue1: Distribution by Geography
Non-U.S. U.S.
54% 54% 58% 65% 65% 66% 64% 65% 65%
33% 34% 31%26% 26% 25% 27% 29% 27%
13% 12% 10% 9% 9% 9% 9% 6% 8%
0%
20%
40%
60%
80%
100%
FY15 FY16 FY17 FY18 1Q19 2Q19 3Q19 4Q19 FY19
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.
Percentages have been rounded and may not total to 100%.
February 27, 2020 52
Historically, Moody’s Revenue and Interest Rates
Have Not Been Strongly Correlated
+200bps
+120bps
+100bps
+180bps
MCO Revenue and Interest Rates
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 February 12, 2020.
Source: www.treasury.gov.
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
February 27, 2020 53
1.6x
0.0x
0.5x
1.0x
1.5x
2.0x
2.5x
$0.0
$1.0
$2.0
$3.0
$4.0
$5.0
$6.0
2017 2018 1Q19 2Q19 3Q19 4Q19
$ B
illio
ns
Net Debt
Net Debt/TTM Adj. Operating Income (R)
» Committed to leverage anchored around
a BBB+ rating
» Strong track record of de-leveraging
through cash flow (e.g., de-levered
within nine months of the Bureau van
Dijk acquisition)
» Well-laddered maturities; no significant
debt maturities until 2021
Capital Management
1
1. 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.
2. TTM only applies to income and cash flow statement items.
3. Amounts are adjusted measures. See Appendix for reconciliations from adjusted financial measures to U.S. GAAP and gross debt to net debt.
($ Billions) TTM 4Q192
Adjusted Operating Income3 $2.3
Interest Expense $0.2
Capital Expenditures $0.1
Free Cash Flow3 $1.6
Debt $5.6
Cash, Cash Equivalents & ST Investments $1.9
Net Debt $3.7
Net Debt/Adjusted Operating Income1 1.6x
February 27, 2020 54
» 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 PurposeNext Gen Tech is a Defining Element of our Culture, Setting Stage for Growth
February 27, 2020 55
Moody’s Global Presence
U.S. employees non-U.S. employees total employees2
U.S. employees non-U.S. employees total employees1
3,908 7,173 11,081
2019
4,007 9,050 13,057
2018
1. As of December 31, 2019. Reflects decrease of ~2,800 MAKS employees.
2. As of December 31, 2018.
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 Sri Lanka
Italy Sweden
Lithuania Switzerland
Morocco United Arab Emirates
Netherlands United Kingdom
Asia-PacificAustralia Nepal
China Singapore
Hong Kong South Korea
India Thailand
Japan
February 27, 2020 56
Reconciliation of Adjusted Financial Measures to
GAAPAdjusted Operating Income and Adjusted Operating Margin Reconciliation1
Year Ended December 31,
(in $ millions) 2015 2016 2017 2018 2019
Operating Income $1,490.7 $650.9 $1,820.8 $1,868 $1,998
Operating Margin 42.8% 18.1% 43.3% 42.0% 41.4%
Add Adjustment:
Depreciation & Amortization 113.5 126.7 158.3 192 200
Acquisition-Related Expenses - - 22.5 8 3
Restructuring - 12.0 - 49 60
Captive insurance company settlement - - - - 16
Settlement Charge - 863.8 - - -
Non-tax-deductible loss related to the
divestiture of MAKS - - - - 14
Adjusted Operating Income $1,604.2 $1,653.4 $2,001.6 $2,117 $2,291
Adjusted Operating Margin 46.0% 45.9% 47.6% 47.6% 47.4%
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.
December 31,
(in $ millions) 2015 2016 2017 2018 2019
Gross debt $3,380.6 $3,363.0 $5,540.5 $5,676 $5,581
Less: Cash, cash equivalents and
short-term investments2,232.2 2,224.9 1,183.3 1,818 1,930
Net debt $1,148.4 $1,138.1 $4,357.2 $3,858 $3,651
February 27, 2020 57
Reconciliation of Adjusted Financial Measures to
GAAP (cont.)
Moody's Corporation Operating Margin Guidance Reconciliation
2020F1
Projected Operating Margin - GAAP Approximately 44%
Depreciation & Amortization Approximately 4.5%
Projected Adjusted Operating Margin 48% - 49%
Free Cash Flow Reconciliation2
(in $ millions) 2015 2016 2017 2018 2019 2020F1
Net cash flows from
operating activities$1,198.1 $1,259.2 $754.6 $1,461 $1,675 $1,800 - $1,900
Less: Capital expenditures 89.0 115.2 90.6 91 69 ~100.0
Free Cash Flow $1,109.1 $1,144.0 $664.0 $1,370 $1,606 $1,700.0 - $1,800.0
1. Guidance as of February 12, 2020.
2. In 2017, the Company adopted ASU 2016-09 “Improvements to Employee Share-Based Payment Accounting” on a retrospective basis. In Q1 2018, the Company adopted ASU No. 2016-
15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (a Consensus of the Emerging Issues Task Force)” on a retrospective basis.
February 27, 2020 58
Reconciliation of Adjusted Financial Measures to
GAAP (cont.)Moody's Corporation Diluted EPS Reconciliation
2015 2016 2017 2018 2019 2020F1
Diluted EPS - GAAP $4.63 $1.36 $5.15 $6.74 $7.42 $8.60 - $8.80
Legacy Tax (0.03) - - - - -
Impact of Litigation Settlement - $3.59 - - - -
Captive insurance company settlement $0.06 -
ICRA Gain - - - - - -
FX gain on liquidation of a subsidiary - ($0.18) - - - -
Restructuring - $0.04 - $0.19 $0.23 -
CCXI Gain - - ($0.31) - - -
Acquisition-Related Expenses - - $0.10 $0.03 $0.02 -
Purchase Price Hedge Gain - - ($0.37) - - -
Acquisition-Related Intangible
Amortization Expenses$0.11 $0.13 $0.23 $0.40 $0.42 ~ $0.50
Loss pursuant to the divestiture of
MAKS- - - - $0.07 -
Impact of U.S. tax reform - - $1.28 ($0.30) - -
Net Impact of U.S./European tax change
on deferred taxes- - ($0.01) - - -
Increase to non-U.S. UTPs - - - $0.33 - -
Tax charge pursuant to the divestiture of
MAKS- - - - $0.07 -
Adjusted Diluted EPS $4.71 $4.94 $6.07 $7.39 $8.29 $9.10 – $9.30
1. Guidance as of February 12, 2020.
Note: Table may not sum to total due to rounding.
Investor Relations
ir.moodys.com
moodys.com
February 27, 2020 60
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