View this Presentation (PDF 2.29 MB) - s21.q4cdn.coms21.q4cdn.com/.../11/MCO-3Q-2017-Investor-Presentation-vFINAL2.pdf3Q 2017 Investor Presentation ... Item 1A of the Company’s annual

3Q 2017 Investor Presentation

November 13, 2017

November 13, 2017 2

Certain statements contained in this document are forward-looking statements and are based on future expectations, plans and prospects for Moody’s business and operations that involve a number of risks and uncertainties. The forward-looking statements in this document are made as of the date hereof, and Moody’s disclaims any duty to supplement, update or revise such statements on a going-forward basis, whether as a result of subsequent developments, changed expectations or otherwise. In connection with the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, Moody’s is identifying certain factors 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, world-wide credit market disruptions or an economic slowdown, 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 the U.K.’s referendum vote whereby the U.K. citizens voted to withdraw from the EU; 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 world-wide credit markets, international trade and economic policy; 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 Financial Reform Act and regulations resulting from that Act; 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 Financial Reform Act 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; 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 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 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. Other factors, risks and uncertainties relating to our acquisition of Bureau van Dijk could cause our actual results to differ, perhaps materially, from those indicated by these forward-looking statements, including risks relating to the integration of Bureau van Dijk’s operations, products and employees into Moody’s and the possibility that anticipated synergies and other benefits of the acquisition will not be realized in the amounts anticipated or will not be realized within the expected timeframe; risks that the acquisition could have an adverse effect on the business of Bureau van Dijk or its prospects, including, without limitation, on relationships with vendors, suppliers or customers; claims made, from time to time, by vendors, suppliers or customers; changes in the European or global marketplaces that have an adverse effect on the business of Bureau van Dijk; and other factors, risks and uncertainties relating to the transaction as set forth under the caption “‘Safe Harbor’ Statement under the Private Securities Litigation Reform Act of 1995 ” in Moody’s report on Form 8-K filed on May 15, 2017, which are incorporated by reference herein. 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, 2016, 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.

Disclaimer

November 13, 2017 3

Table of Contents1. Financial Overview2. Capital Markets Overview3. Moody’s Investors Service (MIS)4. Moody’s Analytics (MA)5. Conclusion 6. Appendix

November 13, 2017 4

Moody’s Mission: To be the World’s Most Respected Authority Serving Risk-Sensitive Financial Markets

Risk Understanding

» Methodologies» Training & Certification

» Analyst Outreach

Risk Measurement

» Ratings» Estimated Default Frequency

Analytics (EDFs)» Market-Implied Ratings

(MIRs)

Risk Management

» Research & Data» Advisory Services

» Software

Moody’s is an essential component of the global capital markets, providing credit ratings, research, tools and analysis that contribute to open and integrated financial markets.

1 Financial Overview

November 13, 2017 6

Research, data and software for financial risk analysis and related professional services

Customers in 145 countries3

4,600 institutional customers; business with 86 of top 100 global banks3

Independent provider of credit rating opinions and related information for over 100 years

MIS provides ratings in more than 120 countries3

Ratings relationships with ~11,000 corporateissuers, ~18,000 public finance issuers and has rated and currently monitors ~64,000 structured finance obligations3

Leading global provider of credit rating opinions, insight and tools for financial risk measurement and management

Overview of Moody’s Corporation1

1 All financial data is for the trailing twelve months (TTM) ended September 30, 2017.2 Adjusted operating income is an adjusted measure. See appendix for reconciliation from adjusted financial measures to U.S. GAAP.3 As of December 31, 2016. Moody’s Analytics data does not include Bureau van Dijk.

TTM Revenue of $4.0 billion

TTM Adjusted Operating Income2

of $2.0 billion

MIS 83%

MA 17%

MIS 67%

MA 33%

November 13, 2017 7

MIS MA Non-U.S.U.S.

Corporate Finance

33%

Structured Finance

12%

Financial Institutions

10%

Public, Project & Infrastructure

10%

MIS Other1%Research,

Data & Analytics

19%

Enterprise Risk Solutions

11%

Professional Services

4%

Revenue is Diversified by Business, Geography and Type

TTM 3Q17 Revenue by Business

United States57%

EMEA26%

Asia-Pacific11%

Americas6%

TTM 3Q17 Revenue by Geography

TTM 3Q17 Revenue by Type

50%36%

77%

50%64%

23%

MCO MIS MA

Recurring Transaction

Note: All financial data is for the trailing twelve months (TTM) ended September 30, 2017.

November 13, 2017 8

1 Guidance as of November 3, 2017.2 Adjusted diluted EPS is an adjusted measure. This measure now excludes the impact of amortization of all acquisition-related intangible assets. See appendix for reconciliations from adjusted financial measures to U.S. GAAP.3 Excludes $0.36 gain on Bureau van Dijk purchase price hedge, $0.31 CCXI gain, $0.23 related to amortization of all acquisition-related intangibles and $0.11 Bureau van Dijk acquisition-related expenses.4 Adjusted Operating Margin is an adjusted measure. See appendix for reconciliation from adjusted financial measures to U.S. GAAP.5 As of October 2017, over last five available fiscal years. Free Cash Flow is an adjusted financial measure. Source: FactSet.6 Includes: CLGX, DNB, EXPN, FDS, INFO, MORN, MSCI, SPGI, TRI and VRSK.

Operating Margin

Adjusted Diluted EPS2Revenue

$0.0

$1.0

$2.0

$3.0

$4.0

$5.0

2012 2013 2014 2015 2016 2017F

$ Bi

llions

Low-teens% growth

$1 ofRevenue

$3.08$3.74

$4.31 $4.71 $4.94

$2.00

$3.00

$4.00

$5.00

$6.00

2012 2013 2014 2015 2016 2017F

39.5

%

41.5

%

43.2

%

42.3

%

17.7

%43.3

%

44.7

%

46.0

%

45.5

%

45.5

%

0%10%20%30%40%50%60%

2012 2013 2014 2015 2016 2017F

Operating Margin Adj. Operating Margin~4

7%~

43%

$0.10

$0.23

$0.30

S&P 500

Select Peers

Moody's

5-year Average Free Cash Flow Conversion5

$5.85to

$6.003

1 1

1

4

6

Financial Performance

November 13, 2017 9

Long-Term Growth Opportunities

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.

Three Levers to Achieve EPS Growth

November 13, 2017 10

Actively Managing Expense Base

Moody’s Investors Service

» Revised organizational structure» Reengineering analytical support

group» Upgrading IT for improved

system automation

Moody’s Analytics Moody’s Shared Services

» Higher margin product focus » Limited growth of low-margin

services » Salesforce efficiency» Bureau van Dijk cost synergies

» Staffing shift to low-cost locations» Improved process efficiency

through re-engineering and technology enablement

Expense and best practice initiatives to drive operating margin to the mid-40s % range over the next several years


$0.40

$0.60

$0.80

$1.00

$1.20

$1.40

$1.60

Sep

-12

Dec

-12

Mar

-13

Jun-

13S

ep-1

3D

ec-1

3M

ar-1

4Ju

n-14

Sep

-14

Dec

-14

Mar

-15

Jun-

15S

ep-1

5D

ec-1

5M

ar-1

6Ju

n-16

Sep

-16

Dec

-16

Mar

-17

Jun-

17S

ep-1

7

$1.52

Disciplined Approach to Capital AllocationInvesting in Growth Opportunities Return of Capital

Reinvestment Acquisitions Dividends Share Repurchases

» Invest in existing businesses to support organic growth

» FY 2017 capex guidance: ~$100 million1

» Aligned with strategy

» Opportunistic; ideally able to use offshore cash

» Payout ratio potential is 25% - 30% of net income at current leverage2

» TTM 3Q 2017 payout ratio was ~25%3

» FY 2017 share repurchase guidance: ~$200 million4

» Average annualized net share count reduction of ~3% from 2012 to 3Q 2017

» YTD 2017 average repurchase price of $116.70

1 Guidance as of November 3, 2017. 2 Assumes continued balance of return of capital between dividends and share repurchase subject to available cash, market conditions and other ongoing capital allocation decisions.3 Dividend payout ratio is defined as trailing twelve months (TTM) ended September 30, 2017 dividend paid/adjusted net income.4 Guidance as of November 3, 2017 (subject to available cash, market conditions and other ongoing capital allocation decisions).

Share Repurchases and Dividends Paid Annualized Dividend Per Share

$197

$893$1,221 $1,098

$739

$164

$143

$197

$236$272

$285

$218

$0

$400

$800

$1,200

$1,600

150

170

190

210

230

2012 2013 2014 2015 2016 YTD 3Q2017

$ Millions

Mill

ions

of S

hare

s

Share Repurchases (R) Dividends Paid (R)Shares Outstanding (L)

$340

$1,090

$1,457$1,370

$1,024

$381


0.0x

0.5x

1.0x

1.5x

2.0x

2.5x

3.0x

3.5x

$0

$500

$1,000

$1,500

$2,000

$2,500

2012 2013 2014 2015 2016 TTM 3Q2017

$ M

illion

s

Adjusted EBITDA (L)Gross Debt/Adjusted EBITDA (R)

Moody’s Plan is to Maintain a Solid Investment Grade Rating

» Issued $1.8 billion of debt to partially finance the Bureau van Dijk acquisition:– $1 billion of notes– $500 million term loan – $300 million of commercial paper– Combined blended interest rate of approximately 2.6%

» Moody’s is reducing its debt over the course of the next 18 – 24 months

1 Amount is an adjusted measure. See appendix for reconciliations from adjusted financial measures to U.S. GAAP.

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

2012 2013 2014 2015 2016 3Q2017

$ M

illion

s

Cash and Cash Equivalents (L) Total Debt Outstanding (L)

1

Debt / Adjusted EBITDADebt Outstanding


Full Year 2017 Guidance as of November 3, 2017

1 These metrics are adjusted measures. See appendix for reconciliations from adjusted financial measures to U.S. GAAP.2 Excludes $0.36 gain on Bureau van Dijk purchase price hedge, $0.31 CCXI gain, $0.23 for acquisition-related intangible amortization expenses and $0.11 Bureau van Dijk acquisition-related expenses.3 Includes payment of the settlement charge related to an agreement with the U.S. Department of Justice and the attorneys general of 21 U.S. states and the District of Columbia.

» Revenue: Increase in the low-teens % range

» Operating Expense: Decrease in the 20% - 25% range

» Adjusted Operating Expense1: Increase in the low-double-digit % range

» Operating Margin: Approximately 43%

» Adjusted Operating Margin1: Approximately 47%

» Effective Tax Rate: Approximately 30%

» Earnings Per Share $6.18 - $6.33

» Adjusted Earnings Per Share1,2: $5.85 - $6.00

» Share Repurchases: Approximately $200 million (subject to available cash, market conditions and other ongoing capital allocation decisions)

» Capital Expenditures: Approximately $100 million

» Depreciation & Amortization: Approximately $160 million

» Operating Cash Flow: Approximately $700 million

» Free Cash Flow1,3: Approximately $600 million


Drivers of FY 2017 Adjusted Diluted EPS Guidance Increase

1 Legacy MCO Business Performance includes $0.04 from adoption of ASU 2016-09.2 Bureau van Dijk Business Performance excludes amortization of acquisition-related intangibles and Acquisition-Related Expenses. Net impact of Bureau van Dijk on adjusted diluted EPS also includes ($0.14) for deal-related financing, which was already included in old adjusted diluted EPS guidance as of July 21, 2017.3 Guidance as of November 3, 2017.

23

1

2 Capital Markets Overview


Historically, Rising Rates Have not had a Significant Impact on Moody’s Revenue

1 10-yr U.S. Treasury Yields are represented by the rate at the end-of-period.2 10-yr U.S. Treasury Yields are represented by the rate as of November 9, 2017.Source: www.treasury.gov.

+200bps

+120bps

+100bps

+180bps

MCO Revenue and Interest Rates

» Despite recent Fed rate hikes in December 2016 and March and June 2017, the 10-year U.S. Treasury yield eased from mid-December’s 2.6% to ~2.3%2

5.8%

7.8%

4.7%

6.5%

2.3%

3.3%

1.8%

3.0%2.5%

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

$ M

illion

s

MIS Revenue (L) MA Revenue (L) MCO Revenue (L) 10-yr U.S. Treasury Yield (R) 1

http://www.treasury.gov/


-1%

0%

1%

2%

3%

4%

5%

6%

7%

8%

U.S. TreasuryGerman BundJapanese Government Bond

Potential Moderators to Rising Rates in the U.S.

Source: Moody’s Analytics. 10-year government bond yield data as of November 7, 2017. 30-year mortgage yield data through October 2017.

2.33%

0.36%0.04% 0%

1%

2%

3%

4%

5%

Oct-12 Oct-13 Oct-14 Oct-15 Oct-16 Oct-17

10-Year U.S. Treasury Yield30-Year Mortgage Yield

3.90%

2.36%

1) The gap between U.S. and international government bond yields2) The impact of 10-year U.S. Treasury yields on mortgage rates

10-Year Government Bond Yields 10-Year U.S. Treasury vs. 30-Year Mortgage Yield


Debt Leverage up in North America, down in Europe; Interest Coverage Remains SteadyCredit Metrics: North American Speculative Grade Companies

Source: Moody’s Investors Service.

1.7x 1.6x 1.4x 1.3x 1.6x 1.9x 1.7x 1.7x 1.6x 1.7x 1.7x 1.8x 1.9x

4.2x 4.2x 4.5x 4.5x 4.4x 4.2x 4.3x 4.6x 4.8x 4.9x 5.1x 5.2x 5.1x

0.0x1.0x2.0x3.0x4.0x5.0x6.0x

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 1Q 2017

Inte

rest

Cov

erag

e

(EBITDA - Capex) / Interest Expense Debt / EBITDA

Credit Metrics: European Speculative Grade Companies

1.4x 1.8x 1.6x 1.5x 1.5x 1.5x 1.8x 1.6x

4.9x4.3x 4.5x 4.8x 5.0x 4.9x

4.1x 4.5x

0.0x1.0x2.0x3.0x4.0x5.0x6.0x

2009 2010 2011 2012 2013 2014 2015 2016

Inte

rest

Cov

erag

e

(EBITDA - Capex) / Interest Expense Debt / EBITDA


1.9%2.3%

1.3%1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

4.5%

5.0%

5.5%

6.0%

2012 2013 2014 2015 2016 2017F 2018F

Global U.S. Europe

Global Default Rates Remain Under Historic Average

Default Rates for Corporate Rated Issuance1

4.3% global historic average1

1 Moody’s rated corporate global speculative grade default historical average of 4.3% since 1998. 2018 forecast for trailing twelve months ended September 30, 2018.Source: Moody’s Investors Service.

» Global speculative-grade default rate at 2.8% as of September 30, 2017; expected to decline to 1.9% by September 2018


North America and EMEA Non-Financial Corporates Have Significant Refunding Needs1

Debt Maturities: North America Moody’s-Rated Corporate Bonds and Loans

$196 $199 $193$220

$57$87

$130$162

$46

$122

$221$260

$0$50

$100$150$200$250$300

2018 2019 2020 2021

$ Bi

llions

Source: MIS, February 2017.Note: Data represents U.S. & Canadian MIS rated corporate bonds & loans.

Debt Maturities: EMEA Moody’s-Rated Corporate Bonds and Loans

$188 $193 $179 $186

$45 $49 $65 $65$52 $58 $59 $66

$0$50

$100$150$200$250$300

2018 2019 2020 2021

$ Bi

llions

Source: MIS, July 2017.

2018 – 2021 CAGRInvestment Grade Bonds: 4%Speculative Grade Bonds: 42%Speculative Grade Bank Loans: 78%

1 Amount reflects total maturities identified in the above sources.

Investment Grade Bonds Speculative Grade Bonds Speculative Grade Bank Loans

2018 – 2021 CAGRInvestment Grade Bonds: flatSpeculative Grade Bonds: 13%Speculative Grade Bank Loans: 8%


Debt Refinancing and M&A are Most Frequently Stated Uses of Proceeds

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.

Uses of Funds from USD High Yield Bonds and Bank Loans1

62% 52%

83%

71% 74% 78%71%

65%54%

64%71%

63% 53%

19%

31% 30% 25%31%

41% 54%41%

39%

22% 17%11%

7% 8% 8% 7% 8%5% 6%

5%

12% 9% 4%18% 17% 18% 22% 20% 16% 17% 13%

1999 2008 2009 2010 2011 2012 2013 2014 2015 2016 YTD 3Q2017

% o

f Men

tions

Debt Refinancing M&A Capital Spending Shareholder Payments


Disintermediation of Credit is an Ongoing Trend in the Global Capital Markets

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 and U.S. data is through September 2017.

European Non-Financial Corporate Bonds vs. Bank Loans Outstanding

48%

€0

€1,000

€2,000

€3,000

€4,000

€5,000

€6,000

€7,000

€Bi

llions

Bonds Loans

U.S. Non-Financial Corporate Bonds vs. Bank Loans Outstanding

48%

$0

$1,500

$3,000

$4,500

$6,000

$7,500

$9,000

$ Bi

llions

Bonds Loans

77%

23%

48%

52%


Disintermediation is a Key Driver of Moody’s Global New Rating Mandates

0

400

800

1,200

2012 2013 2014 2015 2016 YTD 3Q 2016

YTD 3Q2017

# of

New

Man

date

s

EMEA United States Rest of World

Global New Rating Mandates1

1 Rated by Moody’s Investors Service.Source: Moody’s Investors Service.

» YTD 3Q 2017 new rating mandate count of ~780 has surpassed 2015 and 2016 annual activity

» Expect over 900 new mandates in 2017

854

1,026 990

771 738

561

781+39%


» Tightening leveraged loan (and CLO) spreads have contributed to very strong 3Q 2017 loan refinancing and repricing activity

» Investor demand remains elevated as rising rate concerns persist

Moody’s Rated Corporate Speculative-Grade Bank Loans1

Rising Rates are Supporting Leveraged Loan Activity

1 Speculative-Grade Bank Loans represent Moody’s rated new bank loan programs. Non-U.S. Speculative-Grade Bank Loans data available starting in 2016. Sources: Moody’s Analytics, Dealogic.

$0

$200

$400

$600

$800

2009 2010 2011 2012 2013 2014 2015 2016 3Q YTD2016

3Q YTD2017

U.S. Rated Non-U.S. Rated

$ Bi

llions

2009 – 2016 CAGR 27%

+96%

3 Moody’s Investors Service


Moody’s Investors Service: A Leading Provider of Credit Ratings, Research and Risk Analysis

Proven ratings accuracy and deeply experienced analysts

Expanded sales and marketing activities in Commercial Group

Focus on research leadership

Improving the issuer / investor experience


Illustrative Value of a Moody’s Rating

Example: 10 year $500 million corporate bond

$15 million in total interest expensevs.

lifetime cost of a rating

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.

$500,000,000x 4.3%

= $21,500,000x 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

BondInterest rate

Annual interest paymentsTenor

Lifetime interest expense


Moody’s Continues to Invest in Key International Markets

$100

$150

$200

$250

$300

$350

$ Bi

llions

Emerging Markets Rated Corporate Bond Issuance1

Moody’s-Rated Chinese Issuers2

1 Moving twelve month sum; includes rated investment grade and high yield corporate bond issuance (financial and non-financial). Chart is through September 2017.2 Includes rated issuers where major operations or headquarters are in Mainland China. Hong Kong, Macau and Taiwan are not included.Sources: Dealogic, Moody’s Analytics, Moody’s Investors Service.

China» Successful joint venture with CCXI,

leading domestic rating agency» Cross border market rated via MIS

Hong Kong office» China recently announced it will allow

foreign firms to provide credit rating services in part of the domestic market

Latin America» Deepens Moody’s presence in a

dynamic and expanding market

Rest of World» Acquired full ownership of KIS, a

leading provider of domestic credit ratings

» Increased majority stake in ICRA to serve growing domestic bond market60

84 96128

156187

213253

050

100150200250300

Sep2010

Sep2011

Sep2012

Sep2013

Sep2014

Sep2015

Sep2016

Sep2017

Num

ber o

f Iss

uers


36%

64%


TTM 3Q 2017 Revenue: $2.7 billion

Moody’s Investors Service Financial Profile

Public, Project, &

Infrastructure Finance

16%

Financial Institutions

15%

CorporateFinance

50%

StructuredFinance

18%

MIS Other 1%

62%

38%

U.S. Non-U.S.

» 37% recurring revenue



2017 Revenue Guidance as of November 3, 2017Global low-teens % range

U.S. low-double-digit % range

Non-U.S. high-teens % range

Corporate Finance low-twenties % range

Structured Finance approximately 10%

Financial Institutions low-double-digit % range

Public, Project & Infrastructure Finance approximately flat


Note: All financial data, except guidance, is for the trailing twelve months (TTM) ended September 30, 2017.

4 Moody’s Analytics


Enterprise Risk SolutionsCredit risk & actuarial analytics

Software that automates credit risk & actuarial activitySolutions that facilitate compliance with regulation & accounting standards

Platforms that improve portfolio & capital strategy

Moody’s Analytics Provides Essential Insight Serving Financial Markets

» Data and data visualization

» Models

» Software and software-as-a-service

» Advisory services

Professional ServicesOutsourced research & consulting

Professional certificationsIn-house training

eLearning

Research Data & AnalyticsCredit research, data & ratings feeds

Global private company dataEconomic research, data & modelsStructured finance analytics & data


Research, Data and Analytics

56%Enterprise Risk

Solutions33%


11%

Moody’s Analytics Financial Profile

77%

23%


48%

52%

U.S. Non-U.S.» > 95% recurring revenue» 95% retention rate


» Combination of one-off contracts and semi-recurring revenue

2017 Revenue Guidance as of November 3, 2017Global low-teens % range

U.S. mid-single-digit % range

Non-U.S. low-twenties % range

Research, Data & Analytics low-twenties % range

Enterprise Risk Solutions mid-single-digit % range

Professional Services low-single-digit % range

Note: All financial data, except guidance, is for the trailing twelve months (TTM) ended September 30, 2017.

TTM 3Q 2017 Revenue: $1.3 billion


Moody’s Analytics has Several Platforms for Growth

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

2008 2009 2010 2011 2012 2013 2014 2015 2016

$ M

illion

s

Moody’s Analytics

2016 Revenue: $1,233m

2008 – 2016 CAGR: +11%(~65% organic)


2016 Revenue: $147m

2008 – 2016 CAGR: +37% (~15% organic)

Enterprise Risk Solutions

2016 Revenue: $419m

2008 – 2016 CAGR: +17% (~65% organic)

Research, Data & Analytics

2016 Revenue: $668m

2008 – 2016 CAGR: +6%(>90% organic)

Added ~$700 Million in Revenue Since Inception


» €3 billion acquisition closed on August 10, 2017» Strong and consistent financial performance. Revenue

growth CAGR of 9.3%, with demonstrated operating leverage over last ten years (EBITDA margin expansion from 38% to 51%)

» Powerful cash flow generator. Subscription business; 90%+ recurring revenue and renewal rates

» Combination anticipated to deliver significant synergies. Expect ~$45 million in annual revenue and expense synergies by 2019, increasing to ~$80 million by 2021

» Rapid positive impact on earnings. Expected to be accretive to GAAP EPS in 2019 and to adjusted EPS in 20182

» Increases Moody’s long-term growth outlook. Revenue and EPS growth rates now expected to be "High Single Digit" and "Low Teens", respectively

» Efficiently financed. Productive use of $1.4 billion of offshore cash and $1.8 billion of debt issuance

Bureau van Dijk AcquisitionBureau van Dijk aggregates, standardizes and distributes an extensive private company data set

Note: All expectations are as of November 3, 2017.1 Full year ended December 31st, based on IFRS. € in millions.2 Adjusted EPS excludes amortization of all acquisition-related intangible assets and one-time integration costs.

€10

6

€25

8

€41

€13

2

Revenue EBITDA

Long History of Profitable Growth1


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

Year

201

5Fu

ll Ye

ar 2

016

95.4% 110.2%8.0% 6.8%

Retained Base Upgrades and Price New Sales Business Base

96.3% 110.5%7.2% 7.0%


Note: The sales growth attributions presented on this slide are related to RD&A subscription sales on a constant currency basis. Upgrades reflect amendments to existing customer contracts. New Sales reflect new contracts with new and existing customers.

Subscription Sales Growth(constant currency)

1H20

17 94.6% 110.1%9.0% 6.5%



ERS Solutions Address Diverse Needs and Customers

Credit Risk & Actuarial AnalyticsHelps risk managers assess and manage current and future exposures across all asset classes

Accounting Calculation & ReportingProduces key calculations and reports required by many of the world’s accounting standards

Regulatory Calculation & ReportingGenerates key calculations and reports required by many of the world’s financial regulations

Credit Assessment & Origination

Automates financial spreading and credit scoring, decision

making and monitoring

Portfolio & Capital StrategyHelps firms to improve portfolio

performance and meet regulatory and economic capital requirements

Asset & Liability ManagementIntegrates ALM, liquidity risk management,

funds transfer pricing and regulatory reporting capabilities into a seamless enterprise platform

Banks Insurers Asset Managers Corporates


$0

$50

$100

$150

$200

$250

$300

$350

$400

$ M

illion

s

Services Products 1

ERS Business and Technology Drivers Shifting Mix to Higher Margin Product Sales

ERS: TTM Revenue

Technology DriversNew technologies are giving rise to changing client requirements and expectations, opportunities for innovation and new sources of growth.

Cloud Big Data Technologies

Blockchain Data Visualization

Artificial Intelligence

Business DriversEnd user objectives are shifting to efficiency and business growth, while regulatory and accounting requirements continue to drive investment.

Regulation Accounting StandardsEfficiency Business

Growth

End User Requirements

Third Party Requirements

1 Products revenue include subscriptions, license and maintenance.


Professional Services: Extending the Brand Into New Markets and Deepening Customer Relationships

Knowledge Process Outsourcing

Certificates, Designations & Accreditations

Financial Services Training

» Leading provider of research, analytics and business intelligence services that help global financial institutions improve processes, enhance profitability and drive revenues

» Bespoke solutions delivered by client-dedicated analyst teams for over 150 clients

» More than 2,600 employees, with client delivery centers in India, China, Sri Lanka and Costa Rica

» Exclusive provider of licensing courses and exams to meet regulatory standards set by the Investment Industry Regulatory Organization of Canada (IIROC)

» Approved by Reserve Bank of India (RBI) to provide banking professionals with mandatory credit certifications

» Partnered with National Institute of Securities Markets (NISM) to provide Indian securities professionals with advanced capital markets certifications

» Artificial Intelligence-powered scalable personalized learning solutions

» Deliver targeted online training to address individual behavioral deficiencies

» Focus on developing markets:- Africa- Asia- Middle East

5 Conclusion


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

– 2012 – 2016 revenue CAGR of 7%

– 2012 – 2016 adjusted diluted EPS1 CAGR of 13%

– 2012 – 2016 free cash flow conversion rate of ~30%

» We are committed to returning capital to our shareholders

– 2012 – 2016 returned $5.3 billion, or 110% of free cash flow, to shareholders via share repurchases and dividends

» We will selectively invest in strategic growth opportunities

– Leverage brand to extend our relevance in financial markets

– Expand our product offerings and geographic influence

1 Adjusted diluted EPS is an adjusted measure. See appendix for reconciliations from adjusted financial measures to U.S. GAAP.

6 Appendix


Corporate Finance: Revenue and Issuance

1 Historical data has been adjusted to conform with current information and excludes intercompany revenue.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.

$105 $104 $103 $105 $109 $108 $113 $116 $124

$63 $71 $66 $79 $61 $56 $72 $85 $79$33 $27 $30

$51 $59 $41$64 $63 $63$48 $44 $41

$69 $71$73

$104 $92 $85

$0

$50

$100

$150

$200

$250

$300

$350

$400

3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17

$ M

illio

ns

Revenue1: Mix by Quarter

Other Investment Grade Speculative Grade Bank Loans

$179 $178 $216 $275 $312 $363 $420 $421 $425$66 $119 $109$137

$197$193

$230 $305 $262

$27

$84$143

$120

$194$229

$219$183 $181

$36

$28

$96$120

$155

$212$242 $204 $254

$0

$200

$400

$600

$800

$1,000

$1,200

2008 2009 2010 2011 2012 2013 2014 2015 2016

$ M

illio

ns

Revenue1: Mix by Year


$237 $209$317 $339 $320

$215$348 $332

$254

$62$48

$53$103 $91

$64

$123 $99$99

$95$75

$71$99 $120

$124

$206$160

$138$8

$25 $32

$47

$77

$59

$56

$0$100$200$300$400$500$600$700$800

3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17

$ 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

$763$1,129

$641 $750$1,125 $1,073 $1,043 $1,120 $1,191

$65 $221

$293 $250

$329 $411 $405 $329 $311$134

$79

$273 $330

$353 $504 $425 $354 $414

$112

$0

$500

$1,000

$1,500

$2,000

$2,500

2008 2009 2010 2011 2012 2013 2014 2015 2016

$ 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


36% 36% 38% 39% 43% 35% 36% 39% 38% 32% 32% 35%

23% 19% 21% 27% 27%26% 20% 20% 23%

20% 24% 22%

23% 23% 20%16% 13%

17% 20% 15% 16%18% 18% 18%

18% 21% 22% 18% 17% 22% 23% 26% 23% 29% 26% 24%

0%

20%

40%

60%

80%

100%

FY12 FY13 FY14 FY15 1Q16 2Q16 3Q16 4Q16 FY16 1Q17 2Q17 3Q17


74% 73% 70% 69% 63% 71% 70% 68% 68% 74% 74% 73%

26% 27% 30% 31% 37% 29% 30% 32% 32% 26% 26% 27%

0%

20%

40%

60%

80%

100%


Revenue1: Distribution by Recurring vs. Transaction

Transaction Recurring

Corporate Finance: Revenue Diversification

1 Historical data has been adjusted to conform with current information and excludes intercompany revenue.2 Other includes: monitoring, commercial paper, medium term notes, and ICRA.Percentages have been rounded and may not total to 100%.

34% 38% 38% 32% 28% 32% 33% 34% 32% 31% 38% 33%

66% 62% 62% 68% 72% 68% 67% 66% 68% 69% 62% 67%

0%

20%

40%

60%

80%

100%


Revenue1: Distribution by Geography

Non - U.S. U.S.

Revenue1: Distribution by Product

2


Structured Finance: Revenue and Issuance

$21 $24 $20 $27 $23 $24 $23 $24 $23

$19 $23 $21$21 $19 $25 $20 $22 $22

$37$38

$28$33 $33

$40$29 $30 $38

$36 $30

$22

$30$29

$42

$27$42

$46$0 $0

$1

$1$0

$1

$0

$1$1

$0

$20

$40

$60

$80

$100

$120

$140

3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17

$ M

illio

ns


ABS RMBS CREF Structured Credit Other

1 Historical data has been adjusted to conform with current information and excludes intercompany revenue.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. CREF (Commercial Real Estate Finance) includes commercial mortgage-backed securities, real estate finance, commercial real estate CDOs, and real estate investment trusts (REITs). Structured Credit includes CLOs and CDOs.

$133 $101 $91 $107 $110 $98 $92 $91 $94

$74$59 $65

$90 $85 $73 $76 $81 $85

$55$46 $53

$70 $95 $116 $122 $140 $133

$142

$99 $82$78

$91 $96 $137 $135 $122$0

$0 $0$0

$0 $0$0 $2 $2

$0

$200

$400

$600

2008 2009 2010 2011 2012 2013 2014 2015 2016

$ M

illio

ns



$346 $296 $220 $319 $335 $317 $319 $292 $298

$766

$355 $396$371 $231 $189 $238 $200 $204

$36

$30 $24$36

$73

$120 $114 $117 $94

$107

$93

$59 $39 $65

$94$159

$132 $116

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

2008 2009 2010 2011 2012 2013 2014 2015 2016

$ B

illio

ns


ABS RMBS CREF Structured Credit

$64 $74 $62$88 $68 $80 $79 $89 $68

$58 $63$58

$61

$36$48 $48

$75$59

$27$28

$21$16

$25$33 $18

$26

$34$32

$30

$12

$24

$25

$56

$14

$32$41

$0

$50

$100

$150

$200

$250

3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17

$ B

illio

ns


ABS RMBS CREF Structured Credit


Structured Finance: Revenue Diversification

58% 60% 62% 64% 55% 61% 60% 68% 62% 57% 63% 66%

42% 40% 38% 36% 45% 39% 40% 32% 38% 43% 37% 34%

0%

20%

40%

60%

80%

100%




46%36% 34% 31% 34% 35% 31% 32% 33% 35% 32% 30%

54%64% 66% 69% 66% 65% 69% 68% 67% 65% 68% 70%

0%

20%

40%

60%

80%

100%



Non - U.S. U.S.

29% 26% 22% 20% 22% 24% 22% 19% 22% 23% 20% 18%

22%19%

18% 18% 23% 19% 18% 19% 19% 20% 19% 17%

25% 30%28% 31%

30% 30% 31% 30% 31% 29%25% 29%

24% 25% 32% 31% 24% 26% 27% 32% 28% 27% 35% 36%

0% 0% 0% 0% 1% 1% 0% 0% 1% 0% 1% 0%

0%

20%

40%

60%

80%

100%




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%.Notes: ABS (Asset Backed Securitization) includes asset-backed commercial paper and long-term asset-backed securities. RMBS (Residential Mortgage Backed Securitization) includes covered bonds. CREF (Commercial Real Estate Finance) includes commercial mortgage-backed securities, real estate finance, commercial real estate CDOs, and real estate investment trusts (REITs). Structured Credit includes CLOs and CDOs.


Financial Institutions: Revenue and Issuance

$58 $61 $59 $60 $63 $59$79 $70 $70

$26 $24 $30 $24 $26 $23

$25$23 $24$3 $4 $4 $4 $4

$4

$5$6 $5$2 $2 $3 $3

$3$3

$3$3 $4

$0

$20

$40

$60

$80

$100

$120

3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17

$ M

illio

ns


Banking Insurance Managed Investments Other

$175 $176 $192 $205 $228 $234 $242 $244 $240

$71 $66$69 $73

$79 $89 $92 $96 $102$17 $16

$18 $17$19 $16 $19 $16 $17

$0 $0$0 $0

$0 $0 $2 $9 $10

$0

$50

$100

$150

$200

$250

$300

$350

$400

2008 2009 2010 2011 2012 2013 2014 2015 2016

$ M

illio

ns



$1,779 $1,764$1,340 $1,266 $1,312

$1,072 $1,247 $1,194 $1,186

$32 $80

$87 $79 $137$161

$197 $136 $113

$0

$400

$800

$1,200

$1,600

$2,000

2008 2009 2010 2011 2012 2013 2014 2015 2016

$ B

illio

ns


Global Speculative Grade Financial Corporate BondsGlobal 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.

$262 $268$369

$318 $284$216

$419$294

$190

$28 $24

$26$29

$38$19

$45

$46

$23

$0

$100

$200

$300

$400

$500

3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17

$ B

illio

ns


Global Speculative Grade Financial Corporate BondsGlobal Investment Grade Financial Corporate Bonds


Financial Institutions: Revenue Diversification

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%.

37% 35% 35% 37% 39% 33% 41% 35% 37%48% 43% 40%

63% 65% 65% 63% 61% 67% 59% 65% 63%52% 57% 60%

0%

20%

40%

60%

80%

100%




59% 58% 60% 57% 58% 55% 57% 58% 57% 55% 57% 60%

41% 42% 40% 43% 42% 45% 43% 42% 43% 45% 43% 40%

0%

20%

40%

60%

80%

100%



Non - U.S. U.S.

70% 69% 68% 67% 62% 66% 65% 66% 65% 70% 69% 69%

24% 26% 26% 26% 31% 26% 27% 26% 28% 22% 23% 23%

6% 5% 5% 4% 4% 5% 6% 5% 5% 5% 6% 5%0% 0% 1% 3% 3% 3% 3% 3% 3% 3% 3% 3%

0%

20%

40%

60%

80%

100%





$143 $142 $159 $156 $181 $174 $177 $202 $225

$87 $104$113 $121

$142 $167 $181$174

$188

$0 $0$0 $0

$0$0 $0

$0$0

$0

$50

$100

$150

$200

$250

$300

$350

$400

$450

2008 2009 2010 2011 2012 2013 2014 2015 2016

$ M

illio

ns


Public Finance and SovereignProject & Infrastructure FinanceOther

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.

$350 $355 $374$248

$302 $307$364 $358 $408

$190

$0

$100

$200

$300

$400

$500

$600

2008 2009 2010 2011 2012 2013 2014 2015 2016

$ B

illio

ns


Rated Global Project & Infrastructure Finance Bonds

Long-Term Rated U.S. Muni Bonds

Public, Project and Infrastructure: Revenue and Issuance

$84 $74 $94 $114 $105 $95 $82 $95 $80

$22

$66 $48 $54

$111 $128

$129

$0

$50

$100

$150

$200

$250

3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17

$ B

illio

ns


Rated Global Project & Infrastructure Finance BondsLong-Term Rated U.S. Muni Bonds

$46 $46 $55 $55 $60 $54 $53 $53 $49

$45 $40$37

$57 $45 $49 $45 $51 $60$0 $0

$0

$0$0 $0 $0

$0 $0

$0

$20

$40

$60

$80

$100

$120

3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17

$ M

illio

ns


Public Finance and SovereignProject & Infrastructure FinanceOther



61% 60% 58% 60% 59% 65% 63% 62% 63% 60% 64% 65%

39% 40% 42% 40% 41% 35% 37% 38% 37% 40% 36% 35%

0%

20%

40%

60%

80%

100%




35% 37% 37% 35% 33% 33% 28% 37% 33% 36% 37% 42%

65% 63% 63% 65% 67% 67% 72% 63% 67% 64% 63% 58%

0%

20%

40%

60%

80%

100%



Non - U.S. U.S.

56% 51% 49% 54% 60%49% 57% 53% 54% 54% 51% 45%

44% 49% 51% 46% 40%51% 43% 47% 46% 46% 49% 55%

0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%

0%

20%

40%

60%

80%

100%


Public Finance and Sovereign Project & Infrastructure Finance Other


Public, Project and Infrastructure: Revenue Diversification


Moody’s Analytics: Financial Overview

$158 $161 $165 $168 $168 $167 $175 $181 $218

$92 $122 $90 $98 $102 $130 $96 $97$113$37

$38$37 $38 $36

$37$36 $36

$38

$0$50

$100$150$200$250$300$350$400

3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17

$ M

illio

ns



$413 $411 $419 $445 $483 $520 $572 $626 $668$119 $151 $181 $196 $243 $263

$329$374 $419

$12 $11 $19 $62 $108 $119$168

$150$147

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

2008 2009 2010 2011 2012 2013 2014 2015 2016

$ M

illio

ns


Professional ServicesEnterprise Risk SolutionsResearch, Data and Analytics

23% 23% 27% 26% 24% 24% 24% 29% 25% 21% 20% 21%

77% 77% 73% 74% 76% 76% 76% 71% 75% 79% 80% 79%

0%

20%

40%

60%

80%

100%

FY12 FY13 FY14 FY15 1Q16 2Q16 3Q16 4Q16 FY16 1Q17 2Q17 3Q17Transaction Recurring

57% 55% 56% 54% 51% 52% 51% 53% 51% 49% 50% 56%

43% 45% 44% 46% 49% 48% 49% 47% 49% 51% 50% 44%

0%

20%

40%

60%

80%

100%



Non-U.S. U.S.

58% 58% 54% 54% 57% 55% 55% 50% 54% 57% 58% 59%

29% 29% 31% 33% 31% 32% 33% 39% 34% 31% 31% 31%

13% 13% 16% 13% 13% 12% 12% 11% 12% 12% 11% 10%

0%

20%

40%

60%

80%

100%





Moody’s Corporate Speculative Grade Credit Cycle Gauge

1 North America long-term average: LSI: from 2002, B3-Neg: from 2007, Refunding: from 2007, Downgrade / Update Ratio: from 2008, CQ score: from 2011, Default rate: from 1990.2 Europe long-term average: LSI: from 2012, CQ Score: from 2011, B3-Neg: from 2010, Downgrade / Update Ratio: from 2009, Default rate: from 1999.3 Trailing twelve months (TTM) ended September 30, 2017.Source: Moody’s Investors Service.

Improving Neutral Trending Worse

Latest Metric

1-YearAgo

Long-Term Average1

RecordWorst

Latest Metric

1-YearAgo

Long-Term Average2

RecordWorst

Liquidity Stress Index 3.0% 7.1% 6.7% 20.8% 8.6% 12.4% 12.0% 18.5%

B3-Neg / Lower 214 269 194 291 48 60 40 60

% B3-Neg / Lower 14.6% 19% 15% 26% 10.8% 13.8% 11.9% 17.2%

3-Year Refunding Index 4.2x 3.4x 6.3x 1.5x N/A N/A N/A N/A

Downgrade / Upgrade Ratio3 0.8x 0.9x 3.5x 11.7x 0.4x 0.9x 2.5x 20.5x

Covenant Quality Score 4.48 4.32 4.05 4.52 3.59 3.53 3.47 4.85

Default Rate (forecast) 2.3% 3.3% 4.7% 15.0% 1.3% 2.4% 3.8% 13.0%

North America Europe


-20%

-10%

0%

10%

20%

30%

40%

50%

Q2'

11

Q3'

11

Q4'

11

Q1'

12

Q2'

12

Q3'

12

Q4'

12

Q1'

13

Q2'

13

Q3'

13

Q4'

13

Q1'

14

Q2'

14

Q3'

14

Q4'

14

Q1'

15

Q2'

15

Q3'

15

Q4'

15

Q1'

16

Q2'

16

Q3'

16

Q4'

16

Q1'

17

Q2'

17

Q3'

17

MIS MA MCO

Revenue Growth by Quarter: MCO, MIS and MAYear-over-Year % Change

(2%)

3%

16%

1%

6%

19%

15%

5%

1%

23%

13%

7%

12%

5%

2%

U.S

. deb

t cei

ling

stan

doff

Fear

s E

uro

debt

cris

is m

ay

spre

ad to

Ital

y &

Spa

in

Crim

ean

cris

is

Oil

pric

es c

rash

Euro

/ G

reec

e st

ando

ff

Glo

bal m

acro

con

cern

s

(13%)

(6%)

11%9%

1%

(2%)

13%

16%

21%


$1.90 $2.07$2.27 $2.33 $2.37

$1.76$2.05

$0.0

$0.5

$1.0

$1.5

$2.0

$2.5

$0.0

$1.0

$2.0

$3.0

$4.0

$5.0

2012 2013 2014 2015 2016 YTD 3Q2016

YTD 3Q2017

Revenue $ BillionsIs

suan

ce $

Tril

lions

Global Non-Financial Bonds and HY Bank Loans (L) Global Financial Bonds (L)

Global Structured Finance (L) U.S. Municipal Bonds (L)

MIS Revenue (R)

MIS Revenue vs. Rated Issuance1

» In addition to issuance activity levels, MIS revenue is impacted by (i) the mix of issuance activity, (ii) pricing and (iii) growth in monitored credits

1 Rated global investment grade bonds, global high yield bonds, high yield bank loans, global structured finance, and U.S. municipal issuance.2 Annual HY bank loan data includes U.S. rated issuance only. YTD 3Q 2016 and YTD 3Q 2017 data includes U.S. and Non-U.S. rated issuance. Non-U.S. HY bank loan data available starting in 2016. Source: Moody’s Analytics, Dealogic, AB Alert, CM Alert, Thomson SDC. U.S. High Yield Bank Loans represent Moody’s rated new U.S. bank loan programs.

Year-over-Year Percent Change 2012 2013 2014 2015 2016 2012-2016

CAGRYTD 3Q

2017Issuance 16% 0% 6% -6% 2% 3% 14%

Revenue 20% 9% 9% 3% 2% 6% 16%2

November 13, 2017 551 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.

$0

$100

$200

$300

$400

$500

$600

$700

$800

$900

$1,000

2012 2013 2014 2015 2016 TTM 3Q 2016 TTM 3Q 2017

$ M

illion

s

Corporate Finance Structured FinanceFinancial Institutions Public, Project, & Infrastructure FinanceMIS Other

» Drivers of MIS recurring revenue include growth in monitoring fees and select elements of pricing» Recurring revenue averages ~40% of total MIS revenue» 3Q 2017 recurring revenue up 6%

MIS Recurring Revenue

As a % of MIS revenue

38% 38% 39% 39% 39% 36%40%

MIS’s Recurring Revenue1 Provides Stability


Moody’s Global Presence

1 As of September 30, 2017.2 As of September 30, 2016.

Introduction | Financial Overview | Capital Markets Overview | Moody’s Investors Service | Moody’s Analytics | Conclusion | Appendix

U.S. employees non-U.S. employees total employees2

U.S. employees non-U.S. employees total employees1

3,566 8,182 11,748

2017

3,417 7,440 10,857

2016


Bureau van Dijk: Accounting Adjusted EBITDA Margin Reconciliation for FY 2016: IFRS to U.S. GAAP1

(in $ millions) IFRS Adjustments2 U.S. GAAP

Revenue $ 285.7 (5.8) $ 279.9 Operating Expenses (excluding D&A) 141.2 14.4 155.6 Adjusted EBITDA $ 144.5 - $ 124.3

Adjusted EBITDA Margin 50.6% 44.4%

1 As reported in Form 8-K/A filed on October 26, 2017. Adjusted EBITDA is an adjusted measure. See Appendix for reconciliation from adjusted financial measures to U.S. GAAP.2 Adjustments were primarily due to U.S. GAAP revenue recognition policies and the expensing of software development costs required under U.S. GAAP.

Deferred Revenue Adjustment: Impact on 2H 2017 & FY 2018

Amortization of Acquisition-Related Intangibles» Approximate $70 million in annual amortization expense from Bureau van Dijk acquisition » Approximate $95 million in annual amortization expense from all acquisitions (including Bureau van Dijk)» Refer to 3Q 2017 10-Q page 30 for estimated future amortization expense for acquired intangible assets

» The adjustment is required by acquisition accounting and will reduce reported revenue over the remaining contractual period of in-progress customer arrangements assumed as of the acquisition date

» Total estimated impact is expected to be approximately $53 million - $39 million for FY 2017 ($14 million in 3Q 2017 and $25 million in 4Q 2017)- $14 million for FY 2018 (through August 2018)


Adjusted Operating Income and Adjusted Operating Margin Reconciliation

Reconciliation of Adjusted Financial Measures to GAAP

(in $ millions) 2012 2013 2014 2015 2016TTM 3Q 20171

As Reported Operating Income $1,077.4 $1,234.6 $1,439.1 $1,473.4 $638.7 $873.2Operating Margin 39.5% 41.5% 43.2% 42.3% 17.7% 21.9%

Add Adjustment:Depreciation & Amortization 93.5 93.4 95.6 113.5 126.7 141.3

Acquisition-Related Expenses - - - - - 16.7

Restructuring - - - - 12.0 -

Goodwill Impairment Charge 12.2 - - - - -

Settlement Charge - - - - 863.8 863.8

Adjusted Operating Income $1,183.1 $1,328.0 $1,534.7 $1,586.9 $1,641.2 $1,895.0Adjusted Operating Margin 43.3% 44.7% 46.0% 45.5% 45.5% 47.6%

Moody's Corporation Operating Margin Guidance Reconciliation

Moody's Corporation Free Cash Flow Guidance Reconciliation

1 Trailing twelve months (TTM) ended September 30, 2017.2 Guidance as of November 3, 2017. This guidance includes revenue and operating expense estimates related to the acquisition of Bureau van Dijk.

2017F2

Projected Operating Margin - GAAP Approximately 43%Projected impact from Depreciation & Amortization Approximately 3%

Projected impact from Acquisition-Related Expenses Approximately 1%Projected Adjusted Operating Margin Approximately 47%

(in $ millions) 2017F2

Cash Flow from Operations Approximately $700 million

Less Capital Expenditures Approximately $100 million

Free Cash Flow Approximately $600 million


Reconciliation of Adjusted Financial Measures to GAAP (cont.)

Moody's Corporation Diluted EPS Reconciliation2012 2013 2014 2015 2016 2017F1

Diluted EPS - GAAP $3.05 $3.60 $4.61 $4.63 $1.36 $6.18 - $6.33

Legacy Tax (0.06) (0.09) (0.03) (0.03) - -Impact of Litigation Settlement - 0.14 - - $3.59 -ICRA Gain - - (0.37) - - -FX Gain due to SubsidiaryLiquidation ($0.18) -Restructuring $0.04 -CCXI Gain - - - - - ($0.31)

Acquisition-Related Expenses - - - - - $0.11

Purchase Price Hedge Gain - - - - - ($0.36)Net Acquisition-Related Intangible Amortization Expenses $0.09 $0.09 $0.10 $0.11 $0.13 $0.23

Adjusted Diluted EPS $3.08 $3.74 $4.31 $4.71 $4.94 $5.85 - $6.001 Guidance as of November 3, 2017.Note: Table may not sum to total due to rounding.

Moody's Corporation Adjusted Operating Expense Reconciliation2017F1

Operating Expense Guidance Decreased in the 20% to 25% rangeImpact of 2016 settlement and restructuring chargesand 2017 Bureau van Dijk acquisition-related costs

Adjusted Operating Expense Guidance Increase in the low-double-digit percent range


Reconciliation of Adjusted Financial Measures to GAAP (cont.)Moody's Corporation Adjusted EBITDA Reconciliation

($ Millions) 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016TTM

3Q 20171

Net Income Attributable to Moody's $753.9 $701.5 $457.6 $402.0 $507.8 $571.4 $690.0 $804.5 $988.7 $941.3 $266.6 $546.5

Provision for Income Taxes $506.6 $415.0 $268.2 $239.1 $201.0 $261.8 $324.3 $353.4 $455.0 $430.0 $282.2 $359.9Interest Expense, Net ($3.0) $24.3 $52.2 $33.4 $52.5 $62.1 $63.8 $91.8 $116.8 $115.1 $137.8 $169.5Depreciation & Amortization $39.5 $42.9 $75.1 $64.1 $66.3 $79.2 $93.5 $93.4 $95.6 $113.5 $126.7 $141.3EBITDA $1,297.0 $1,183.7 $853.1 $738.6 $827.6 $974.5 $1,171.6 $1,343.1 $1,656.1 $1,599.9 $813.3 $1,217.2Net Settlement2 - - - - - - - - - - $700.7 $700.7Net Restructuring3 - $29.9 ($1.6) $10.9 - - - - - - $8.1 -Adjusted EBITDA $1,297.0 $1,213.6 $851.5 $749.5 $827.6 $974.5 $1,171.6 $1,343.1 $1,656.1 $1,599.9 $1,522.1 $1,917.9

1 Trailing twelve months (TTM) ended September 30, 2017.2 Net of $163.1m tax on settlement charge. 3 Net of $20.1m, ($0.9m), $6.6m, and $3.9m tax on restructuring charges for full-years 2007, 2008, 2009 and 2016, respectively.Note: Tables may not sum to total due to rounding.

Bureau van Dijk Adjusted EBITDA Reconciliation

($ Millions) 2016Net Income (Loss) Attributable to Bureau van Dijk ($175.6) Provision for Income Taxes $35.7 Interest Expense, Net $219.2Depreciation & Amortization $53.7 EBITDA $133.0Non-operating Income, Net ($8.7)Adjusted EBITDA $124.3

Investor [email protected]

moodys.com

http://ir.moodys.com/

mailto:[email protected]


© 2017 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). All rights reserved.

CREDIT RATINGS ISSUED BY MOODY'S INVESTORS SERVICE, INC. AND ITS RATINGS AFFILIATES (“MIS”) ARE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND MOODY’S PUBLICATIONS MAY INCLUDE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES. MOODY’S DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL, FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS AND MOODY’S OPINIONS INCLUDED IN MOODY’S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. MOODY’S PUBLICATIONS MAY ALSO INCLUDE QUANTITATIVE MODEL-BASED ESTIMATES OF CREDIT RISK AND RELATED OPINIONS OR COMMENTARY PUBLISHED BY MOODY’S ANALYTICS, INC. CREDIT RATINGS AND MOODY’S PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. NEITHER CREDIT RATINGS NOR MOODY’S PUBLICATIONS COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY’S ISSUES ITS CREDIT RATINGS AND PUBLISHES MOODY’S PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL, WITH DUE CARE, MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE.

MOODY’S CREDIT RATINGS AND MOODY’S PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS AND INAPPROPRIATE FOR RETAIL INVESTORS TO USE MOODY’S CREDIT RATINGS OR MOODY’S PUBLICATIONS WHEN MAKING AN INVESTMENT DECISION. IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER.

ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY’S PRIOR WRITTEN CONSENT.

All information contained herein is obtained by MOODY’S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, all information contained herein is provided “AS IS” without warranty of any kind. MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However, MOODY’S is not an auditor and cannot in every instance independently verify or validate information received in the rating process or in preparing the Moody’s publications.

To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability to any person or entity for any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with the information contained herein or the use of or inability to use any such information, even if MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers is advised in advance of the possibility of such losses or damages, including but not limited to: (a) any loss of present or prospective profits or (b) any loss or damage arising where the relevant financial instrument is not the subject of a particular credit rating assigned by MOODY’S.

To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability for any direct or compensatory losses or damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud, willful misconduct or any other type of liability that, for the avoidance of doubt, by law cannot be excluded) on the part of, or any contingency within or beyond the control of, MOODY’S or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with the information contained herein or the use of or inability to use any such information.

NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY SUCH RATING OR OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY’S IN ANY FORM OR MANNER WHATSOEVER.

Moody’s Investors Service, Inc., a wholly-owned credit rating agency subsidiary of Moody’s Corporation (“MCO”), hereby discloses that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by Moody’s Investors Service, Inc. have, prior to assignment of any rating, agreed to pay to Moody’s Investors Service, Inc. for appraisal and rating services rendered by it fees ranging from $1,500 to approximately $2,500,000. MCO and MIS also maintain policies and procedures to address the independence of MIS’s ratings and rating processes. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold ratings from MIS and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually at www.moodys.com under the heading “Investor Relations — Corporate Governance — Director and Shareholder Affiliation Policy.”

Additional terms for Australia only: Any publication into Australia of this document is pursuant to the Australian Financial Services License of MOODY’S affiliate, Moody’s Investors Service Pty Limited ABN 61 003 399 657AFSL 336969 and/or Moody’s Analytics Australia Pty Ltd ABN 94 105 136 972 AFSL 383569 (as applicable). This document is intended to be provided only to “wholesale clients” within the meaning of section 761G of the Corporations Act 2001. By continuing to access this document from within Australia, you represent to MOODY’S that you are, or are accessing the document as a representative of, a “wholesale client” and that neither you nor the entity you represent will directly or indirectly disseminate this document or its contents to “retail clients” within the meaning of section 761G of the Corporations Act 2001. MOODY’S credit rating is an opinion as to the creditworthiness of a debt obligation of the issuer, not on the equity securities of the issuer or any form of security that is available to retail investors. It would be reckless and inappropriate for retail investors to use MOODY’S credit ratings or publications when making an investment decision. If in doubt you should contact your financial or other professional adviser.

Additional terms for Japan only: Moody's Japan K.K. (“MJKK”) is a wholly-owned credit rating agency subsidiary of Moody's Group Japan G.K., which is wholly-owned by Moody’s Overseas Holdings Inc., a wholly-owned subsidiary of MCO. Moody’s SF Japan K.K. (“MSFJ”) is a wholly-owned credit rating agency subsidiary of MJKK. MSFJ is not a Nationally Recognized Statistical Rating Organization (“NRSRO”). Therefore, credit ratings assigned by MSFJ are Non-NRSRO Credit Ratings. Non-NRSRO Credit Ratings are assigned by an entity that is not a NRSRO and, consequently, the rated obligation will not qualify for certain types of treatment under U.S. laws. MJKK and MSFJ are credit rating agencies registered with the Japan Financial Services Agency and their registration numbers are FSA Commissioner (Ratings) No. 2 and 3 respectively.

MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MJKK or MSFJ (as applicable) have, prior to assignment of any rating, agreed to pay to MJKK or MSFJ (as applicable) for appraisal and rating services rendered by it fees ranging from JPY200,000 to approximately JPY350,000,000.

MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements.

Documents

View this Presentation (PDF 2.29 MB) - s21.q4cdn.coms21.q4cdn.com/.../11/MCO-3Q-2017-Investor-Presentation-vFINAL2.pdf3Q 2017 Investor Presentation ... Item 1A of the Company’s annual