2Q 2020 Investor Presentation...2020/08/02 · 2Q 2020 Credit Market Update COVID-19 disrupts real...

2Q 2020 Investor Presentation

August 11, 2020

2Q 2020 Investor Presentation - August 11, 2020 2

Disclaimer

Certain statements contained in this release are forward-looking statements and are based on future expectations, plans and prospects for the business and operations of Moody’s Corporation (the “Company”) that involve a number of risks and uncertainties. Such statements may include, among other words, “believe”, “expect”, “anticipate”, “intend”, “plan”, “will”, “predict”, “potential”, “continue”, “strategy”, “aspire”, “target”, “forecast”, “project”, “estimate”, “should”, “could”, “may” and similar expressions or words and variations thereof that convey the prospective nature of events or outcomes generally indicative of forward-looking statements. The forward-looking statements and other information in this release are made as of the date hereof and the Company undertakes no obligation (nor does it intend) to publicly supplement,

update or revise such statements on a going-forward basis, whether as a result of subsequent developments, changed expectations or otherwise, except as required by applicable law or regulation. In connection with the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, the Company is identifying examples of factors, risks and uncertainties that could cause actual results to differ, perhaps materially, from those indicated by these forward-looking statements. Those factors, risks and uncertainties include, but are not limited to, the impact of COVID-19 on volatility in the U.S. and world financial markets, on general economic conditions and GDP growth in the U.S. and worldwide, and on the Company’s own operations and personnel. Many other factors could cause actual results to differ from Moody’s

outlook, including credit market disruptions or economic slowdowns, which could affect the volume of debt and other securities issued in domestic and/or global capital markets; other matters that could affect the volume of debt and other securities issued in domestic and/or global capital markets, including regulation, credit quality concerns, changes in interest rates and other volatility in the financial markets such as that due to uncertainty as companies transition away from LIBOR and Brexit; the level of merger and acquisition activity in the U.S. and abroad; the uncertain effectiveness and possible collateral consequences of U.S. and foreign government actions affecting credit markets, international trade and economic policy, including those related to tariffs and trade barriers; concerns in the marketplace affecting our credibility or

otherwise affecting market perceptions of the integrity or utility of independent credit agency ratings; the introduction of competing products or technologies by other companies; pricing pressure from competitors and/or customers; the level of success of new product development and global expansion; the impact of regulation as an NRSRO,the potential for new U.S., state and local legislation and regulations, including provisions in the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”) and regulations resulting from Dodd-Frank; the potential for increased competition and regulation in the EU and other foreign jurisdictions; exposure to litigation related to Moody’s Investors Service’s rating opinions, as well as any other litigation, government and regulatory proceedings, investigations and inquiries to which the

Company may be subject from time to time; provisions in the Dodd-Frank legislation modifying the pleading standards, and EU regulations modifying the liability standards, applicable to credit rating agencies in a manner adverse to credit rating agencies; provisions of EU regulations imposing additional procedural and substantive requirements on the pricing of services and the expansion of supervisory remit to include non-EU ratings used for regulatory purposes; the possible loss of key employees; failures or malfunctions of our operations and infrastructure; any vulnerabilities to cyber threats or other cybersecurity concerns; the outcome of any review by controlling tax authorities of the Company’s global tax planning initiatives; exposure to potential criminal sanctions or civil remedies if the Company fails to comply with foreign and

U.S. laws and regulations that are applicable in the jurisdictions in which the Company operates, including data protection and privacy laws, sanctions laws, anti-corruption laws, and local laws prohibiting corrupt payments to government officials; the impact of mergers, acquisitions or other business combinations and the ability of the Company to successfully integrate such acquired businesses; currency and foreign exchange volatility; the level of future cash flows; the levels of capital investments; and a decline in the demand for credit risk management tools by financial institutions. These factors, risks and uncertainties as well as other risks and uncertainties that could cause Moody’s actual results to differ materially from those contemplated, expressed, projected, anticipated or implied in the forward-looking statements are

currently, or in the future could be, amplified by the COVID-19 outbreak and are described in greater detail under “Risk Factors” in Part I, Item 1A of the Company’s annual report on Form 10-K for the year ended December 31, 2019, its quarterly report on Form 10-Q for the quarter ended March 31, 2020, and in other filings made by the Company from time to time with the SEC or in materials incorporated herein or therein. Stockholders and investors are cautioned that the occurrence of any of these factors, risks and uncertainties may cause the Company’s actual results to differ materially from those contemplated, expressed, projected, anticipated or implied in the forward-looking statements, which could have a material and adverse effect on the Company’s business, results of operations and financial condition. New factors may

emerge from time to time, and it is not possible for the Company to predict new factors, nor can the Company assess the potential effect of any new factors on it.


1. Moody’s Overview

2. Financial Overview

3. Capital Markets Overview

4. Moody’s Investors Service (MIS)

5. Moody’s Analytics (MA)

6. Appendix

Table of Contents

1 Moody’s Overview


Independent provider of

credit rating opinions and

related information for over

100 years

Proven ratings accuracy and

deeply experienced analysts

Expanded sales and

marketing activities in

Commercial group

Provides financial intelligence

and analytical tools

supporting our customers’

growth, efficiency and risk

management objectives

Solutions address diverse

needs and customers

Extending brand into new

markets and deepening

customer relationship

Note: Financial data for the trailing twelve months ended June 30, 2020.

Company Overview

Leading global provider of credit

rating opinions, insight and tools

for financial risk measurement

and management

Revenue of

$5.2 billion

Adjusted Operating

Income of $2.6 billion

MIS 78%

MA 22%

MIS 62%

MA 38%

Adjusted

Operating Margin

MIS 60.5%

MA 28.2%


Moody’s Priorities for Strategic Growth

Global Integrated Risk Assessments Moody’s Core Strengths Expand into New Geographies

and Strategic Adjacencies

» »STANDARDS,

SOLUTIONS & INSIGHTS

Credit

Data Analytics

Trusted brand Proprietary data and

integrated analytics

Business-credit

products

Extended global

customer base

REGIONAL EXPANSION

EMEA Asia Pacific Latin America

BUSINESS ADJACENCIES

Commercial

Real Estate

Know Your

Customer

ESG

Enhance technology infrastructure to enable automation, innovation and efficiency

Foster employee engagement and creative solutions through our diverse workforce and inclusive environment


Enhanced ESG Solutions

Index Partnerships

» Partnered with Euronext on a new

ESG index powered by Vigeo Eiris’

(VE) data: the Euronext ESG80

» Agreements to provide ESG data in

support of the creation of new ESG

products and indices with The Stock

Exchange of Thailand and Solactive

Second Party Opinions(SPOs)

Note: For more information please refer to https://esg.moodys.io/solutions.

Integration of Analytics, Risk

Measurement and CRE tools

» VE and 427 content integrating into

multiple platforms within MA,

including moodys.com and the REIS

commercial real estate portal

» Working with asset managers, banks,

regulators to develop climate-based

stress testing solutions

Second Party Opinions (SPOs)

» VE launched an enhanced SPO

service for sustainable bonds

featuring an updated impact

assessment and a more intuitive,

impactful format

» Includes Green Bonds, Social

Bonds, Sustainability linked

bonds and loan assessments

» VE’s SPO offering provides an

independent assessment of

green, social and sustainability

bond frameworks

Second Party Opinions(SPOs)

Sustainability Ratings

Climate Risk Solutions

ESG Assessments

ESG Integration into Credit Ratings & Research

ESG Integration into Analytics, Risk Measurement and CRE tools

Index Partnerships

https://esg.moodys.io/solutions

https://www.moodys.com/

2 Financial Overview


CFG34%

SFG7%

FIG10%

PPIF9%

MIS Other1%

RD&A1

28%

ERS11%

MA

MIS

55%

45%

Recurring Transaction

2Q 2020 TTM Revenue: $5.2 billion

55%

45%

U.S. Non-U.S.

Full Year 2020 Guidance as of July 30, 20202

Revenue » Increase in the low-single-digit % range Effective Tax Rate » 19.5% - 21.5%

Operating Expenses » approximately flat Diluted EPS » $8.15 - $8.55

Operating Margin » 43% - 44% Adjusted Diluted EPS3 » $8.80 - $9.20

Adjusted Operating Margin3 » 48% - 49%

1. Includes trail ing twelve months of professional services revenue. Excludes MAKS. Subsequent to the divestiture of MAKS in 201 9, revenue from the Moody's Analytics Learning Solutions ("MALS") unit, which previous to 2020 was reported

in the Professional Services line of business ("LOB"), will now be reported as part of the RD&A LOB.

2. See press release titled “Moody's Corporation Reports Results for Second Quarter 2020” from July 30, 2020 for Moody’s full 20 20 guidance.

3. These metrics are adjusted measures. See Appendix for reconciliations from adjusted financial measures to U.S. GAAP.

Note: The revenue reclassifications of REITs to Corporate Finance from Structured Finance and the FACT product from RD&A to E RS are reflected in the full year (FY) calculations.

Moody’s Corporation Financial Profile


Long-Term Growth Opportunities

Three Levers to Achieve EPS Growth

1. Assumes no material change in effective tax rate, foreign exchange rates, leverage profile and/or capital allocation policy.

2. Subject to market conditions and other ongoing capital allocation decisions.

Note: Long-term growth opportunities presented on this slide are on average over time.

EPS Low Teens % Growth Range 1,2

REVENUE High Single Digit % Growth Range1

Issuance Volume & Mix Coverage Moody’s Analytics Pricing Initiatives

ADJ. OPERATING MARGIN High-40s % Range1

Cost Discipline Process Re-Engineering Technology Enablement

CAPITAL ALLOCATION Dividend Growth & Share Count Reduction2

Reinvestment Acquisitions Dividends Share Repurchases

Investing for future growth


Base Case

Expect continuing economic recovery in 2H 2020

2020 GDP

-6% United States

-9% Euro Zone

-5% Global

Benchmark interest rates remain low; high-yield spreads peak above 650 bps

U.S. unemployment rate of ~10% by year-end

High yield default rate rising to ~9%2

Macro Assumptions Underpinning Our Outlook1

Developments since April 30th

ACCELERATE

Continued global fiscal support

and monetary stimulus actions

Surge of investment grade capital

raising for liquidity purposes

Rebound in high yield bond issuance

amid tighter spreads

Robust equity markets and sharp

decline in VIX index

Signs of global economic recovery

DECELERATE

COVID-19 cases continued to increase

at rapid pace in the U.S., with some states rolling back re-opening measures

1. All assumptions and guidance as of July 30, 2020.

2. By the end of 2020.

Sources: “June 2020 Default Report” and “Global Macro Outlook 2020 -2021 (June 2020 Update)” from Moody’s Investors Service.


Financial Performance1

$2.3 $2.4 $2.8 $2.7 $2.9

$1.2 $1.2$1.4 $1.7 $2.0

$0.0

$1.0

$2.0

$3.0

$4.0

$5.0

$6.0

2015 2016 2017 2018 2019 2020F

MIS Revenue MA Revenue

$4.8

2

$3.5 $3.6$4.2 $4.4

$1,109 $1,144

$664

$1,370$1,606

$1,500 - $1,700

$500

$700

$900

$1,100

$1,300

$1,500

$1,700

$1,900

2015 2016 2017 2018 2019 2020F2

Adjusted Diluted EPS3Revenue1

Low-single-digit % growth

$4.71 $4.94$6.07

$7.39$8.29

$2.00

$3.00

$4.00

$5.00

$6.00

$7.00

$8.00

$9.00

$10.00

2015 2016 2017 2018 2019 2020F

Free Cash Flow3

2

1. Totals may not sum due to rounding.

2. Guidance as of July 30, 2020.

3. These figures are adjusted measures. See appendix for reconciliations from adjusted financial measures to U.S. GAAP.

4. 2015 – 2017 operating and adjusted operating margins have been restated to conform to the new presentation for pension expenses.

5. Includes approximately $700 million in net payments pursuant to a settlement charge.

$ M illions

$8.80 - $9.20

Operating Margin4

42.8

%

18.1

%

43.3

%

42.0

%

41.4

%

46.0

%

45.9

%

47.6

%

47.6

%

47.4

%

0%

10%

20%

30%

40%

50%

60%

2015 2016 2017 2018 2019 2020F

Operating Margin Adj. Operating Margin

48%

-49%

43%

-44%

2

3

$ Billions $ Per Share

5


Capital Allocation Strategy

Prudent approach in uncertain times

Anchored around

a BBB+ rating

Ensure adequate

financial flexibility

Provide

necessary capital

to pursue growth

opportunities

Meet return

thresholds and

create long-term

value for

shareholders

Manage risk

Capital allocation goals

Capital allocation levers

Considerations around

share repurchase program

INVESTING IN GROWTH OPPORTUNITIES

Reinvestment

Acquisitions

RETURN OF CAPITAL

Dividends

Share repurchase

COVID-19 uncertainty

Economic indicators

Market volatility

Free cash flow

3 Capital Markets Overview


2Q 2020 Credit Market Update

COVID-19 disrupts real economy, credit markets buoyed by stimulus

Real Economy

COVID-19 Pandemic

» New cases of COVID-19 increased in the U.S.,

while declining in Europe and parts of Asia

» Optimism around vaccine success

due to positive early data

» Policy responses: some U.S. states

rolled back re-opening measures

Geopolitical Impact

» U.S. – China frictions escalated

» U.S. election season in focus

» New international travel restrictions

» Oil price recovery

Macroeconomic Response

» IMF: Worldwide 2020 GDP revised lower by 190 bps to -4.9% in June

» U.S. Fed committed to purchasing up to $750 billion of corporate debt

» Ongoing dovish monetary policy by U.S. Fed and other central banks

» Fiscal stimulus in the E.U.

Credit Markets

Investment Grade Bonds

» Record 2Q 2020 issuance volumes1

» Continued liquidity-driven capital raising

» Limited M&A pipeline

High Yield Bonds

» Strength throughout 2Q 2020

» Significant spread tightening

» Increased appetites for risk assets evidenced

by strong equity market performance

Leveraged Loans

» Market re-opened but remained weak

» Leveraged M&A limited

» Continued fund outflows

» Less demand for floating rate

1. MIS rated issuance.


Record 2Q 2020 Issuance, Mix Shift

Note: MIS rated issuance. Issuance figures displayed in bil lions.

$264 $256 $278

$186

$358

$660

$101 $114 $103 $113 $119

$171

$138 $135

$170

$135

$210

$103

-12%

-3%

41% 37%

36%

65%

-7%

-12%

40%

25%

37%

85%

1Q19 2Q19 3Q19 4Q19 1Q20 2Q20

Investment grade bond Bank loan Issuance volume growth Y/YHigh yield bond CFG transactional revenue growth Y/Y


$1,972

$3,466

$1,000

$1,300

$1,600

$1,900

$2,200

$2,500

$2,800

$3,100

$3,400

2012 2013 2014 2015 2016 2017 2018 2019 2020

$ B

illio

ns

Refunding Needs Have Grown Steadily Over Time

Next Four Years North America and EMEA Total Refunding Needs1 as of:

1. Amount reflects total maturities identified below.

Source: Moody’s Investors Service. U.S. and EMEA refunding needs reports January 2012 – January 2020.

Note: Data represents U.S., Canadian and European MIS rated non-financial corporate bonds & loans. Canada data not available before 2015.


54%64% 71%

62%68% 72%

54% 41%39%

49% 35% 28%

5%6%

5% 5% 7% 4%

16% 17% 13% 15% 13%7%

5% 9% 8% 8% 8%15%

0%

20%

40%

60%

80%

100%

2015 2016 2017 2018 2019 1H20

% o

f M

en

tio

ns

Debt Refinancing M&A Capital Spending Shareholder Payments Liquidity / Working Capital

1. Percent of mentions for each respective period in bond issue or bank loan program tranche documents. Excludes issues of less than $25 mill ion and general corporate purposes. An issue can have multiple purposes and, as a result,

percentages do not sum to 100%.

Source: Moody’s Analytics.

Liquidity and Refinancing Prominent Drivers of Issuance in 1H

2020, While M&A Declined

Uses of Funds from USD High Yield Bonds and Bank Loans1


Debt Leverage and Interest Coverage in

North America and Europe

Credit Metrics: North American Speculative Grade Companies

1. Trailing twelve months ended June 30, 2020.

Source: Moody’s Investors Service.

Note: Historical figures may change due to timing differences in issuer reporting deadlines.

4.6x 4.6x 4.8x4.5x 4.4x 4.5x 4.6x 4.8x 5.1x 5.1x 5.3x 5.4x 5.3x 5.4x 5.7x

2.9x 2.6x 2.4x 2.7x 2.9x 3.1x 3.0x 2.9x 3.0x 2.9x 3.0x 3.0x 2.8x 2.7x 2.8x

0.0x

1.0x

2.0x

3.0x

4.0x

5.0x

6.0x

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Inte

rest C

ove

rage

Debt / EBITDA EBITDA / Interest Expense

Credit Metrics: European Speculative Grade Companies

5.0x

4.1x 4.2x4.6x

4.1x 4.2x 4.4x 4.6x 4.8x 4.5x 4.6x 4.5x5.2x 5.3x

5.6x

2.9x 2.9x 2.7x3.0x

3.4x 3.2x 3.2x 3.1x 3.1x 3.2x 3.5x 3.7x 3.5x 3.5x 3.4x

0.0x

1.0x

2.0x

3.0x

4.0x

5.0x

6.0x

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Inte

rest C

ove

rage

Debt / EBITDA EBITDA / Interest Expense

1

1


Default Rate Forecast Rises in Wake of

Unprecedented Turmoil

Default Rates for Speculative-Grade

Corporate Rated Issuance1

1. Moody’s rated corporate global speculative grade default historical average of 4.1% from 1983 through June 30,2020. 2020 forecast for TTM ended December 31, 2020.

2. Covenant data for European bonds represent a three quarter roll ing average, North American loans and bonds represent a two quarter roll ing and a three month rolling average, respectively.


4.23x

4.54x

3.91x

2.0

2.5

3.0

3.5

4.0

4.5

5.0

U.S. Loans U.S. Bonds European Bonds Weakening

Improving

Speculative-Grade Covenant Quality Indicators2

12%

9%

6%

0%

2%

4%

6%

8%

10%

12%

14%

16%

Global U.S. Europe

4.1% global

historic average1


European Non-Financial Corporate Bonds vs.

Bank Loans Outstanding

4

8

%

€0

€1,000

€2,000

€3,000

€4,000

€5,000

€6,000

€7,000

€ B

illi

on

s

Bonds Loans

U.S. Non-Financial Corporate Bonds vs.

Bank Loans Outstanding

4

8

%

$0

$1,500

$3,000

$4,500

$6,000

$7,500

$9,000

$ B

illi

on

s

Bonds Loans

74%

26%

50%

50%

Sources: ECB, Federal Reserve, BarCap Indices. Europe bank loan data includes Eurozone and UK bank loans. Europe bond data in cludes euro and sterling denominated bonds.

European data is through May 2020 and U.S. data is through June 2020.

Disintermediation of Credit is an Ongoing Trend

in the Global Capital Markets

4 Moody’s Investors Service


34%

66%

Recurring

Transaction


Public, Project,

& Infrastructure Finance

15%

Financial

Institutions16%

Corporate

Finance56%

Structured

Finance12%

MIS Other

1%

62%

38%

U.S.

Non-U.S.

» 32% recurring revenue



Note: The revenue reclassification of REITs to Corporate Finance from Structured Finance is reflected in the full year 2019 calculations. Percentages have been rounded and may not total to 100%.


Moody’s Investors Service Financial Profile


MIS Guidance: Strong 1H 2020 Driving Improved Outlook1

» Issuance2 expected to grow in the low-double-digit percent range from $4.6T in 2019

- Expecting issuance to slow down in 2H 2020, reflecting a mid-teens decline

» Shift in issuance mix

1. Guidance as of July 30, 2020. Refer to Table 12 – “2020 Outlook” in the press release for a complete list of guidance and a reconciliation between adjusted measures to GAAP as well as assumptions used by the Company with respect to its guidance.

2. MIS rated issuance. Total issuance includes CFG, SFG, FIG and PPIF. Excludes sovereign debt.

Key drivers of MIS FY 2020 outlook1

$1,800

$2,000

$2,200

$2,400

$2,600

$2,800

$3,000

2019 2020F

Low-single-digit

% increase$2.9B

Revenue

1

Adjusted Operating Margin1

58.0% Approximately 58%

2019 2020F1

» Approximately 550 first time mandates

» Refinancing and liquidity driven issuance, reduced M&A activity

» Recurring revenue provides stable support

» Higher expectation for incentive compensation, though still lower year-over-year

FY 2020 Issuance Guidance1

Investment Grade +50%

High Yield Bonds +5%

Bank Loans -20%

Structured -40%

Total Issuance2 Low-double-digit % increase


The Benefits of a Moody’s Rating

Investors seek our opinions and

particularly value the knowledge of our

analysts and the depth of our research.

Wider access to capital

Tangible financing benefits

Planningand budgeting

Transparency,credit comparison

and market stability

Responsive toinvestor demand

Moody’s opinions on

credit are broadly used by institutional investors

throughout the world, making an issuer’s debt more attractive to a

wider range of potential buyers

The credibility of

Moody’s ratings may allow rated issuers to

enter the capital marketsmore economically

through a lower cost of capital

Helps issuers formulate

internal capital plans and funding strategies

Signals a willingness

by issuers to be transparentand provides issuers

with an independent assessment against which to compare

their own creditworthiness

Moody’s ratings are

the most used by investors, (when multiple agencies are

used), who have acknowledged our track record of accuracy


Managing Ratings in Turbulent TimesTransparency and relevance of credit ratings through the cycle

1. Includes all publicly-rated nonfinancial corporate entities; excludes subsidiaries and project finance-related corporations.

2. Trailing twelve months; Source: Moody’s Investors Service.

Order sectors by degreeof exposure

Order issuers by vulnerability

within each sector

Reassess all ratings in the most vulnerable sectors

Reassess ratings of the most

vulnerable issuers in the moderately vulnerable sectors

Monitor credit profiles associated with all other

ratings and reassess those with special situations

that merit prompt reconsideration

Coordinate analytical views and sequencing of rating actions

Take account of government policy

measures designed to soften the effects

of coronavirus

Global corporate default rates ended June 20202Top 10 sectors

most affected

by COVID-191

Mar 1 – June 30, 2020

10.7%

2.4%

0.3%

0.1%

0.0%

0.0%

0.0%

0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0%

Caa_C

B

Ba

Baa

A

Aa

Aaa


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: Il lustrative 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.


1. Institutional Investor Survey.


Note: All data as of January 20, 2020, except Research Data covers the period January 1, 2019 – December 31, 2019.

All numbers are rounded other than those marked *.

Americas APACEMEA

» 29,600+ rated companies and

structured deals

» $35+ trillion total debt rated

» 16,800 research publications

» Offices in 10 cities*


structured deals





structured deals




~15 Years Lead/Senior Analyst

tenure

#1 Global Credit

Rating Agency

20191

#1 U.S. Credit

Rating Agency

2012-20181

Broad Coverage Serves Global Needs


China

India

South Korea

Israel

ChileEgypt

Peru

Mexico

Brazil

ArgentinaSouth Africa

Others

Strongly Positioned in Emerging Markets

Note: Size of pie represents the estimated total CRA revenue from domestic markets ($700 million).

$700 M

Size of domestic

CRA markets

2009 2019

Emerging Asia Latin America Middle East CEE/CIS Africa

$94M

$342M

1. Includes revenue from cross border issuance.

MIS Af f iliate (majority)

National Scale Ratings

Other Emerging Markets

Moody ’s Local

MIS Af f iliate (minority)

MIS Emerging Markets Revenue1Emerging Markets - Domestic TAM


Moody’s in Greater China

Estimated China Ratings Market Size: Domestic and Cross Border3

58%42%

Rest of Market CCXI's Share

63%

37%

Rest of Market Moody's Share

Domestic Market

~$280MCross Border Market

~$290M3

2019 Revenue and Attributable Income from China2

1. Percentage growth numbers are rounded compound annual growth calculations. Source: Bank for International Settlements’ latest data available as of 4Q19.

2. Greater China: Mainland, Hong Kong and Macau.

3. Revenue as of full year 2019; USD 1 = RMB 6.92 RMB exchange rate as of December 31, 2019 is used for conversion for domestic CRAs’ estimated revenue. Note: These are high level estimates based on MIS & CCXI full year 2019

revenue/market coverage in domestic market; in cross border, market share is coverage/sum of coverage for three major CRAs.

$176

$17 -

50

100

150

200

MIS Cross Border and Total MA Attributable Income from CCXI

$ M

illio

ns

MIS Cross Border Revenue Total MA Revenue Attributable Income from CCXI

» Moody’s participates directly in the cross border China issuance market through

MIS and in the domestic market through a 30% interest in CCXI

» Long-term growth prospects enabled by participation in the ongoing development of China’s domestic credit markets

» Continuing to foster constructive relationships and partnerships with issuers,

regulators and other market participants

0

10

20

30

40

50

US China Japan UK France

Total debt securities outstanding 2012–20191

2012 2019

2nd Largest Onshore Bond Market at $15 Trillion

1%1%

20% -2%

3%


Market Trends

» Moody’s forecasts global green, social

and sustainability bond issuance to be $275 to $325 billion in 20201

» Coronavirus crisis expected to accelerate

credit-relevant ESG trends with increased impact to credit2

Moody’s ESG Solutions

OUTREACH

» Over 500 media engagements

in 1H 2020 driven by Moody’s Events and research

» Strategic relationships with industry organizations

and influencers across sustainable finance

» Moody’s ESG & Climate Risk hub: A one stop-shop for everything ESG at Moody’s

(moodys.com/esg)

1. Moody’s Investors Service “Sector in-depth: Sustainable Finance – Global – Coronavirus fallout dampens 1Q 2020 green bond volumes while spurring social bonds”, May 5, 2020.

2. As of June 30, 2020; combined for all Moody’s entities including affiliates.

Moody’s ESG: Driving Standards Beyond CreditKey Stats2

38,000+Credit ratings

ESG assessments integrated into Moody’s Investors Services (MIS) credit ratings

5,000+ESG assessments

Covering 266 unique ESG data points

6,000+Climate risk scores

Spanning countries, counties, cities, companies & real estate assets globally

250+ GlobalSustainable bonds

Green, Social, Sustainability Bonds and Sustainability-linked loans and bonds

30+Years of ESG experience

Our affiliate Vigeo Eiris has been a pioneer in ESG analysis since the 1990s

1000+MIS research reports

Related to ESG considerations in 1H 2020, 70% COVID-related research

25+ESG related events

Delivered in 1H 2020 through Moody’s global event program

5 Moody’s Analytics


Research, Data and Analytics1

72%

Enterprise Risk Solutions

28%

Moody’s Analytics Financial Profile

88%

12%

Recurring Transaction

43%

57%

U.S. Non-U.S.

» 97% recurring revenue2

» ~ 95% retention rate3


» 92% retention rate


1. Includes trail ing twelve months of professional services revenue, excluding MAKS.

2. Recurring revenue for RD&A as reported, including MALS for 1H20. It does not include MALS or other professional services reve nue prior to 1H20.

3. 2Q 2020 TTM includes Bureau van Dijk.

Note: The revenue reclassification of the FACT product from RD&A to ERS, MALS to RD&A and the MAKS sale is reflected in the trailing twelve month calculations.


Integrated Experience:Ease of Use

Enhanced Content & Coverage:More Value

Diverse Product Solutions

Onboard customersConfirm KYC, AML, Ownership tree

Analyze credit and transactionRun credit scores and consider portfolio

Consider risks holisticallyClimate change, cyber, macro-economic

Gather financialsCreate credit statistics

Spreading toolsPrepopulate and digitize financials

World class credit analytics Early warning, and credit scoring

Understand ESG impactof customer’s business

Compliance modules Leverage BvD, RDC data

1,290+ Asset Managers

2,800+Commercial Banks

2,300+Corporations

220+Securities Dealers

and Investment Banks

700+Insurance Companies

3,300+Governments &

Other Entities

Web

Continuous improvement of content and user experience provides tools for customer to make better decisions, faster

Multichannel Delivery:Mobile

Excel add-in

Third party platforms 200+Real Estate Entities


Moody’s Analytics has Several Platforms for Growth

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,800

$2,000

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

$ M

illio

ns

Moody’s Analytics

2019 Revenue: $1,954m

2008 – 2019 CAGR: +12%

(~60% organic)

Professional Services1

2019 Revenue: $159m

Enterprise Risk Solutions

2019 Revenue: $522m

2008 – 2019 CAGR: +14%

(~68% organic)

Research, Data & Analytics

2019 Revenue: $1,273m

2008 – 2019 CAGR: +11%

(~62% organic)

Revenue Has More Than Tripled Since Inception

1. Subsequent to the divestiture of MAKS in 2019, revenue from the Moody's Analytics Learning Solutions ("MALS") unit, which pre vious to 2020 was reported in the Professional Services line of business ("LOB"), will now be reported as part of the

RD&A LOB. Prior periods have not been reclassified as the amounts were not material.

Note: Individual l ine of business revenues may not add up to total Moody’s Analytics revenue due to rounding.


1. Guidance as of July 30, 2020. Refer to Table 12 – “2020 Outlook” in the press release for a complete list of guidance and a reconciliation between adjusted measures to GAAP as well as assumptions used by the Company with respect to its guidance.

» Strong recurring revenue mitigates COVID-19 impact

» MAKS divestiture weighs on revenue growth, partially offset by RiskFirst, ABS Suite and RDC acquisitions

– FY revenue guidance includes an unfavorable 2% - 3% impact from inorganic activity and FX

2019 2020F

$2.0B

Revenue

Mid-single-digit

% increase

1

27.8%

2019 2020F

Approximately 30%

Adjusted Operating Margin1

1

Key drivers of MA FY 2020 outlook1

» RD&A growth driven by strong demand for KYC and compliance solutions, followed by research and data feeds

» ERS: Strength in software and analytics sales supports steady growth; modest impact from delays of IFRS 17 and CECL implementations

» Margin improvement primarily driven by operating leverage and cost management initiatives

MA Guidance1: Top-line Growth and Margin Improvement

Remain on Track


MA Sales Outlook1 Resilient Amid COVID-19 Disruption

» Customer engagement is high through virtual

interactions

» Valuable content and insights support strong retention

» Elevated usage of credit and economic research

persists

» Sales grew in 2Q 2020; pipeline outlook is improving

» Face-to-face interactions resuming in some parts of the world

» Continue to expect longer sales cycles than 9-12 month

historical average

1. All assumptions and guidance as of July 30, 2020.

2. Trailing twelve months; includes BvD from 2019 onward.

3. Reflects RD&A excluding BvD.

4. Incorporates retention and pricing components of recurring business growth.

Retention remains strong

2012 2Q 20202

94.6% 94.1%

YTD 2020 ACTUALS

~96%Research3

~91%ERS

~90%BvD

Current Outlook Prior Outlook

Renewal yield4 outlook better

than prior expectations

No change

Adapting to virtual sales

environment; in person meetings resuming in certain countries

Stable

Existing contractual

obligations being met by MA and customers

Renewal yield4

might be affected

Social distancing

preventing face to face selling efforts

Improving


Expansion of ratings coverage

Production of insightful credit analysis

New customers in geographies with developing debt capital markets

Expansion of data sets anddelivery options

Strong customer retention

Fu

ll Y

ea

r

20

18 95.8% 109.7%9.1% 4.8%

Retained Base Upgrades and Price New Sales Business Base

Subscription Sales Growth(constant currency)

Fu

ll Y

ea

r

20

17

95.5% 109.4%8.2% 5.7%


Note: The sales growth attributions presented on this slide are related to RD&A subscription sales on a constant currency basis includes Reis and excludes Bureau van Dijk and ABS Suite. Upgrades reflect amendments to existing customer

contracts. New Sales reflect new contracts with new and existing customers.

Fu

ll Y

ea

r

20

19 96.2% 110.6%9.0% 5.4%


RD&A: Subscription Growth Driven by Retention, Upgrades

and Pricing & New Sales

Fir

st H

alf

20

20 95.6% 108.5%8.2% 4.7%



Technology with a purpose – Enabling better, faster decisions

ERS Empowers Customers’ Success With Analytics

Our business solutions Our customers

Customers

Insurers

CorporatesBanks

AssetManagers

PensionFunds

Accounting

Impairments,IFRS-17

Balance sheet

management

Portfolio,valuation & ALM

Credit decisioning &

lending

Credit modeling,scoring& spreading

RegTech

Regulatoryreporting


ERS: Recurring 80% of Revenue with Mid-teens CAGR

» ERS recurring revenue has grown by approximately $200 million since 2015

» Emphasis on subscription products supports scalability, drives operating leverage and margin

» Ease of use and lower cost of ownership shifting customer demand to SaaS

» Next gen products enhance customer experience, improve adoption rates and shorten sales cycles

» TTM3 sales as of 2Q 2020:

– Subscriptions (recurring)4 +13%

– One-time (non-recurring) +14%

1. Recurring revenue includes maintenance and subscription.

2. Compound Annual Growth Rate, 2015-2019.

3. Trail ing twelve months ended June 30, 2020.

4. Subscriptions / recurring sales include maintenance. Excluding maintenance, TTM subscription / recurring sales would be +21%.

61%

77%

0%

20%

40%

60%

80%

100%

$0

$100

$200

$300

$400

$500

2015 2016 2017 2018 2019 TTM 2Q20

% R

ecurr

ing

$ M

illio

ns

ERS Revenue: Recurring1 vs. Non-recurringRecurring Revenue CAGR2 = 16%

One-Time (L) Recurring (L) % Recurring (R)

3

1


EMEA

20192020202120222023 and beyond 2020 2021 2022 2023 and beyond

FRTB*

BoE/ PRA ST

TLAC

CVA rev iew*

Rev ised IRB approach CR*

FBO ST

CCAR /DFAST

EU-wide ST*

SEC Liquidity rules (ETF, mutual f unds)

NCUA RBC rule f or large

credit unions

CECL

Vickers reform

Rev ised SA operational risk*

Updated Lev erage Ratio*

CCAR / DFAST

CCAR /DFAST

Rev ised minimum capital

requirements for MR*

Output f loor*

Superv isory rating sy stem for LFIs

Rev ised G-SIB assessment*

SCCL f or large banks*

NSFR*

NSFR

Minimum Lev erage

Ratio

BoE/ PRA BES(Climate-related element)

CCAR / DFAST

EU Sustainability taxonomy

Interest Rate Benchmark Reform

EBA Guidelines on Outsourcing

Agreements

SFTR regulatory technical standards

EU “Banking Package” CRR2, CRD5, BRRD2

and SRMR2*

Incorporate ESG risks into superv isory process

EU Inv estment Firms Directive

and Regulation

EU MLD5

TLAC

IRRBB review

TLAC

New securitization f ramework

New securitization f ramework



HLA requirement



Output f loor*

Output f loor*

CVA rev iew*

CVA rev iew*

Rev ised minimum capital requirements

f or MR*

Rev ised minimum capital requirements

f or MR*



Rev ised SA market risk*





Rev ised standardized

approach CR*


approach CR*


approach CR*

FRTB*

FRTB*

HLA requirement

HLA requirement

Climate ChangeST

CCAR /DFAST

BoE/ PRA ST

BoE/ PRAST

DNB Climate

ST

Credit Risk Management*



Source: Moody ’s Analytics market research as of July 2020.Note: *Regulation has been delayed/ cancelled to allow banks to focus their resources on navigating the coronavirus pandemic - please see below for details

OSFI has delayed the Net Stable Funding Ratio Return (DT1) – formal reporting from Q3 2020 to Q1 2021. The FED has extended by 18 months the initial compliance dates under the single-counterparty credit limit (SCCL) rule, for bank holding companies and foreign banking organizations. The EBA communicated new deadlines within which it plans to implement certain elements of the Capital Requirements Directive and Regulation (CRD 5 and CRR 2) and the amended Bank Recovery and Resolution Directive (BRRD 2). This pushes out Integrated Reporting

and ALMM elements of the package to 2021, but leaves many elements still to happen in 2020. Delays noted in last quarters report; Basel IV, G-SIB, EU-wide Stress Test and APRA delays APS 220 on credit risk management

Global Regulatory and Accounting Drivers for the ERS

Business


Bureau van Dijk Collects and Enhances Information to Deliver

High Value Solutions…

KYC, compliance and financial crimeConduct on-boarding and anti-money laundering research with extensive corporate structure and beneficial ownership data combined

with information on politically exposed persons (PEPs), sanctions and adverse news.

Transfer pricingFind comparable companies and conduct peer analysis for tax compliance.

Credit and financial riskAssess customers, partners or suppliers using globally comparable financial strength metrics and standardized financial statements.

Corporate finance and M&AFind targets/sellers, perform M&A/deal analysis and conduct due diligence using detailed deal and company data in a standardized format.

Business developmentImprove efficiency of sales and marketing efforts by using Orbis data to enrich and refresh CRM systems, research new markets and improve

customer targeting.

Data managementCombine multiple data sources into single entity views using unique identifiers and matching, de-duplication and data enhancement services.

Supplier risk and procurementIncreased demand to lower risk within the supply chain and for companies to have a better understanding of who they are doing

business with. Moody’s recently launched a Beta of the Know Your Supplier tool helping healthcare providers research PPE suppliers for

criminal histories and negative media mentions.

High Value Customer Solutions


Bank credit risk

Compliance

Corporate finance and M&A

Trade Credit

Data management

Research (Economic/Library)

Business development

Tax/Transfer pricing

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

0% 5% 10% 15% 20% 25% 30% 35%

12%Avg Growth of Other

Use Cases

38%Growth of Compliance

Use Case

… for a Diverse Client Base and Broad Range of Use Cases

Percent of Total Sales1

Yo

Y G

row

th (2

01

9 v

s. 2

01

8)

Use Case Growth RatesBvD Customer Mix by industry1

Government and

Education, 22%

Professional Services, 20%

Corporates, 29%

Financial Institutions,

29%

1. For full year 2019.

Source: Moody’s Analytics.


» Bureau van Dijk accelerating growth with Moody’s. BvD post acquisition

revenue growth1 of ~16% and adjustment operating margin2 of ~52%

» BvD + RDC creates a leading provider of data for compliance-related use

cases

» The KYC space is a $900M market with ~18% 5-yr CAGR3

» 2019 pro forma combined compliance product sales of ~$150M4

– Expect combined sales to more than double by 20235

» Complementary assets:

– RDC’s Global Risk Information Database (GRID): over 12 million profiles of

risk-related organizations and individuals

– Worldwide entity and ultimate ownership data from BvD’s Orbis database

and Compliance Catalyst tool

Improved accuracy and streamlined decisions

375M+PUBLIC & PRIVATE

ENTITIES

195M+ACTIVE OWNERSHIP

LINKS

188MSHAREHOLDERS

BvD + RDC Makes Us a Leading Global Player in KYC

BvD

RDC

12.5M+RISK PROFILES

1,000MONITORED LISTS

1.7M+POLITICALLY

EXPOSED

PEOPLE

+

1. 2019 revenue growth. 2018 revenue includes the impact of $17M of revenue reductions relating to previous adjustments to deferred revenue recorded as part of acquisition accounting.

2. Direct adjusted operating margin for Bureau van Dijk for full year 2019. Excludes the allocation of corporate overhead expenses.

3. Source: Burton-Taylor, “AML/KYC Data & Services Global Sizing 2019”, November 2019; Moody’s Analytics estimates.

4. Pro forma estimate assuming RDC owned for full year 2019.

5. Guidance as of February 12, 2020.

6 Appendix


Corporate Finance: Revenue and Issuance

$139 $135 $145 $128 $140 $140 $139 $145 $139

$72 $55 $57 $97 $96 $106 $80$144

$291$59

$39 $19$57 $69 $57 $75

$75

$99

$121

$78 $70

$73$83 $89 $68

$89

$43

$0

$100

$200

$300

$400

$500

$600

2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20

$ M

illio

ns

Revenue1: Mix by Quarter

Other Investment Grade Speculative Grade Bank Loans

$275 $312 $363 $420 $421 $425 $488 $554 $547$137

$197 $193$230 $305 $262

$301$271 $379

$120

$194$229

$219$183 $181

$254 $175

$258

$120

$155$212

$242 $204 $254

$349 $379

$313

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

2011 2012 2013 2014 2015 2016 2017 2018 2019

$ M

illio

ns

Revenue1: Mix by Year


$305 $236 $221$329 $314 $370 $406 $433

$732$94$64 $33

$105 $120$105

$162 $134

$164

$210

$123$103

$100 $105$111

$108 $119

$44

$72

$39$28

$26 $25$43

$50$55

$18

$0

$200

$400

$600

$800

$1,000

$1,200

2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20

$ B

illio

ns

Issuance3: Mix by Quarter

Global Non-Financial Investment-Grade Bonds Global Non-Financial Speculative-Grade Bonds

U.S. Speculative-Grade Bank Loans Non-U.S. Speculative-Grade Bank Loans

$641 $750$1,125 $1,073 $1,043 $1,120 $1,192 $1,271 $1,074

$1,419$293 $250

$329 $411 $405 $329 $311$426

$304

$492

$273 $330

$353 $504 $425 $354 $414

$638

$601

$425$120

$247

$204

$144

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

$ B

illio

ns

Issuance3: Mix by Year

Non-U.S. Speculative-Grade Bank Loans U.S. Speculative-Grade Bank LoansGlobal Non-Financial Speculative-Grade Bonds Global Non-Financial Investment-Grade Bonds

2

2

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


35%44% 50%

40% 36% 36% 36% 38% 37% 32%24%

19%

18%19%

20% 27% 25% 27% 22% 25% 32% 51%

15%13%

7%13%

16% 18% 15% 21% 17% 17%

17%31% 26% 24% 28%20% 22% 23% 19% 21% 20%

8%

0%

20%

40%

60%

80%

100%

2Q18 3Q18 4Q18 FY18 1Q19 2Q19 3Q19 4Q19 FY19 1Q20 2Q20


73%65% 62%

69% 70% 71% 72% 69% 71% 75% 80%

27%35% 38%

31% 30% 29% 28% 31% 29% 25% 20%

0%

20%

40%

60%

80%

100%

2Q18 3Q18 4Q18 FY18 1Q19 2Q19 3Q19 4Q19 FY19 1Q20 2Q20

Revenue1: Distribution by Recurring vs. Transaction

Transaction Recurring

Corporate Finance: Revenue Diversification

35% 37% 36% 35% 32% 37% 34% 38% 35% 31% 28%

65% 63% 64% 65% 68% 63% 66% 62% 65% 69% 72%

0%

20%

40%

60%

80%

100%

2Q18 3Q18 4Q18 FY18 1Q19 2Q19 3Q19 4Q19 FY19 1Q20 2Q20

Revenue1: Distribution by Geography

Non - U.S. U.S.

Revenue1: Distribution by Product

2

1. Historical data has been adjusted to conform with current information and excludes intercompany revenue. The revenue reclassi fication of REITs from Corporate Finance to Structured Finance is reflected starting from 1Q 2018.

2. Other includes: monitoring, commercial paper, medium term notes, and ICRA.

Note: Percentages have been rounded and may not total to 100%.


Structured Finance: Revenue and Issuance

$28 $25 $26 $23 $26 $25 $25 $22 $23

$27 $24 $24 $24 $24 $22 $26 $27 $23

$18$15

$24$18 $20 $18

$25$17 $13

$55$51

$47

$35$41

$40$32

$29$21

$1

$1$0

$1$1

$1 $1

$1

$1

$0

$20

$40

$60

$80

$100

$120

$140

$160

2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20

$ M

illio

ns


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


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


ABS RMBS CMBS Structured Credit

$89 $79$115

$65$90 $91 $103

$66$43

$74$64

$70

$48

$87$63

$85

$65

$16

$27$26

$36

$16

$38$34

$57

$31

$4

$64

$51

$49

$21

$49

$39

$44

$25

$3

$0

$50

$100

$150

$200

$250

$300

$350

2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20

$ B

illio

ns


ABS RMBS CMBS Structured Credit


2. Sources: AB Alert, CM Alert, Moody’s Corporation. Debt issuance categories do not directly correspond to Moody’s revenue cate gorization.

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.


Structured Finance: Revenue Diversification



Notes: ABS (Asset Backed Securitization) includes asset-backed commercial paper and long-term asset-backed securities. RMBS (Residential Mortgage Backed Securitization) includes covered bonds. CMBS includes commercial mortgage -

backed securities and commercial real estate CDOs. Structured Credit includes CLOs and CDOs.

Percentages have been rounded and may not total to 100%.

67% 64% 63% 64%56% 61% 55% 57% 58% 52%

43%

33% 36% 37% 36%44% 39% 45% 43% 42% 48%

57%

0%

20%

40%

60%

80%

100%

2Q18 3Q18 4Q18 FY18 1Q19 2Q19 3Q19 4Q10 FY19 1Q20 2Q20



37% 38% 37% 37% 39% 36% 36% 38% 37% 36%44%

63% 62% 63% 63% 61% 64% 64% 62% 63% 64%56%

0%

20%

40%

60%

80%

100%

2Q18 3Q18 4Q18 FY18 1Q19 2Q19 3Q19 4Q19 FY19 1Q20 2Q20


Non - U.S. U.S.

22% 22% 21% 22% 23% 23% 24% 23% 23% 23% 28%

21% 21% 19% 20% 23% 21% 21% 24% 22% 28%28%

14% 13% 20% 16%18% 18% 17%

23%19%

18%16%

43% 44% 39% 41% 35% 37% 38%29% 35% 30% 26%

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

0%

20%

40%

60%

80%

100%

2Q18 3Q18 4Q18 FY18 1Q19 2Q19 3Q19 4Q19 FY19 1Q20 2Q20

ABS RMBS CREF Structured Credit Other


$339 $327

$170

$396$315

$279 $309

$396$333

$24$20

$4

$29

$18

$27$34

$36

$18

$0

$100

$200

$300

$400

$500

2Q18 3Q18 4Q18 1Q19 2Q19 3Q 19 4Q19 1Q20 2Q20

$ B

illio

ns


Global Speculative Grade Financial Corporate Bonds

Global Investment Grade Financial Corporate Bonds

Financial Institutions: Revenue and Issuance

$77 $73 $63$80 $84 $80 $76 $86 $88

$33 $38

$15

$29 $28 $31 $31$30

$44$7 $6

$6

$4$10 $7 $5

$6

$8$3 $3

$3

$3$3 $3

$3$3

$2

$0

$20

$40

$60

$80

$100

$120

$140

$160

2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20

$ M

illio

ns


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



$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


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.


Financial Institutions: Revenue Diversification




55% 50%63%

56% 60% 58% 55% 58% 58% 52% 51%

45% 50%37%

44% 40% 42% 45% 42% 42% 48% 49%

0%

20%

40%

60%

80%

100%

2Q18 3Q18 4Q18 FY18 1Q19 2Q19 3Q19 4Q19 FY19 1Q20 2Q20


Non - U.S. U.S.

47% 47%

28%42% 41%

49% 46% 42% 45% 48% 54%

53% 53%

72%58% 59%

51% 54% 58% 55% 52% 46%

0%

20%

40%

60%

80%

100%

2Q18 3Q18 4Q18 FY18 1Q19 2Q19 3Q19 4Q19 FY19 1Q20 2Q20



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

26% 25% 22% 26% 27% 25% 24%31%

5% 3% 8% 5% 4% 5% 5% 6%

3% 3% 2% 2% 3% 3% 2% 1%

0%

20%

40%

60%

80%

100%

FY18 1Q19 2Q19 3Q19 4Q19 FY19 1Q20 2Q20



$156 $181 $174 $177 $202 $225 $218$185

$222

$121$142 $167 $181

$174$188 $213

$206

$224

$0

$50

$100

$150

$200

$250

$300

$350

$400

$450

$500

2011 2012 2013 2014 2015 2016 2017 2018 2019

$ M

illio

ns


Public Finance and Sovereign Project & Infrastructure Finance Other

$248 $313 $302 $307 $364 $408 $384

$292 $374

$207 $266

$220

$243

$0

$100

$200

$300

$400

$500

$600

$700

$800

$900

2011 2012 2013 2014 2015 2016 2017 2018 2019

$ B

illio

ns


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

$82 $78 $74 $71 $79 $95$129

$76 $95

$67 $57 $39 $51

$64 $75

$52

$64

$114

$0

$50

$100

$150

$200

$250

2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20

$ B

illio

ns


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

$52 $45 $42 $46 $53 $58 $65 $57 $64

$56$54 $49 $47

$55$62

$60$52

$69

$0

$50

$100

$150

2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20

$ M

illio

ns




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 categ orization.

Public, Project and Infrastructure: Revenue and Issuance


64% 61% 58% 61% 59%66% 69% 67% 65% 63%

72%

36% 39% 42% 39% 41%34% 31% 33% 35% 37%

28%

0%

20%

40%

60%

80%

100%

2Q18 3Q18 4Q18 FY18 1Q19 2Q19 3Q19 4Q19 FY19 1Q20 2Q20



43% 40% 40% 41% 35% 36% 39% 36% 37% 38% 35%

57% 60% 60% 59% 65% 64% 61% 64% 63% 62% 65%

0%

20%

40%

60%

80%

100%

2Q18 3Q18 4Q18 FY18 1Q19 2Q19 3Q19 4Q19 FY19 1Q20 2Q20


Non - U.S. U.S.

48% 46% 45% 47% 49% 49% 48% 52% 50% 52% 48%

52% 54% 55% 53% 51% 51% 52% 48% 50% 48% 52%

0%

20%

40%

60%

80%

100%

2Q18 3Q18 4Q18 FY18 1Q19 2Q19 3Q19 4Q19 FY19 1Q20 2Q20





Public, Project and Infrastructure: Revenue Diversification


16% 16% 17% 16% 15% 15% 16% 14% 15% 10% 8%

84% 84% 83% 84% 85% 85% 84% 86% 85% 90% 92%

0%

20%

40%

60%

80%

100%

2Q18 3Q18 4Q18 FY18 1Q19 2Q19 3Q19 4Q19 FY19 1Q20 2Q20


Moody’s Analytics: Financial Overview

$276 $280 $297 $308 $315 $318 $333 $358 $366

$110 $115$124 $122 $117 $133

$149$138 $131

$37 $40$44 $42 $43

$43$31

$0

$100

$200

$300

$400

$500

$600

2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20

$ M

illio

ns


$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


Professional Services

Revenue1: Distribution by Line of Business


1. Historical data has been adjusted to conform with current information and excludes intercompany revenue. Research, Data and A nalytics includes Bureau van Dijk revenue beginning from the acquisition close date, August 10, 2017. The

revenue reclassification of the FACT product from RD&A to ERS is reflected starting from 1Q 2018. Subsequent to the divestiture of MAKS in 2019, revenue from the Moody's Analytics Learning Solutions ("MALS") unit, which previous to

2020 was reported in the Professional Services line of business ("LOB"), will now be reported as part of the RD&A LOB.


65% 64% 64% 65% 65% 66% 64% 65% 65%72% 74%

26% 26% 27% 26% 26% 25% 27% 29% 27%28% 26%

9% 9% 9% 9% 9% 9% 9% 6% 8%

0%

20%

40%

60%

80%

100%

2Q18 3Q18 4Q18 FY18 1Q19 2Q19 3Q19 4Q19 FY19 1Q20 2Q20

59% 60% 58% 59% 57% 58% 58% 58% 58% 57% 56%

41% 40% 42% 41% 43% 42% 42% 42% 42% 43% 44%

0%

20%

40%

60%

80%

100%

2Q18 3Q18 4Q18 FY18 1Q19 2Q19 3Q19 4Q19 FY19 1Q20 2Q20


Non-U.S. U.S.

Enterprise Risk Solutions Research, Data and Analytics


Historically, Moody’s Revenue and Interest

Rates Have Not Been Strongly Correlated

Note: Gray bars reflect periods of significant increases in the 10-year Treasury Yield.

1. 10-yr U.S. Treasury Yields are represented by the rate at the end-of-period.


Source: www.treasury.gov.

+200bps

+120bps

+100bps

+180bps

MCO Revenue and Interest Rates

5.8%

7.8%

4.7%

6.5%

2.3%

3.3%

1.8%

3.0%

1.9%

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

19

92

19

93

19

94

19

95

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

20

18

20

19

20

20F

$ M

illio

ns

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

2

http://www.treasury.gov/


» Strong liquidity with $2.2B in cash and short-term investments, and a $1.0B revolving credit facility2

» 1.6x net debt to adjusted operating income3

» Leverage well below maximum 4.5x net debt/EBITDA covenant4

Proactive Capital and Liquidity Management

1. WAC = Weighted Average Coupon. As of year-end. 2020 data as of June 30, 2020.

2. As of June 30, 2020.

3. Trailing twelve months adjusted operating income. Amounts are adjusted measures, see Appendix for reconciliations from adjust ed financial measures to U.S. GAAP and gross debt to net debt.

4. Total Debt (gross debt less $100M of cash and equivalents) to EBITDA ratio threshold is normally 4.0x, but elevated to 4.5x f or three quarters after an acquisition >$500 million.

5. Certain USD denominated debt has been synthetically converted to EUR via cross-currency swaps. EUR converted to USD as of June 30, 2020.

6. Pro forma $500M 40 year maturity bond issued at 2.55% on August 4, 2020 and the prepayment of $500M of senior notes maturing in of December 2021.

700

400

600

400300

500

170250

500562

842

330250

500

0

100

200

300

400

500

600

700

800

900

2022 2023 2024 2025 2026 2027 2028 2029 2030 2044 2048 2050 2060

USD Fixed Commercial Paper EUR Fixed EUR Floating

4.2% 3.9% 4.0%

3.4% 3.4%

2.1%2.2%

4.7%

4.3% 4.3%

3.5%

3.9%

3.3% 3.4%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

4.5%

5.0%

2014 2015 2016 2017 2018 2019 2020

WAC With Hedges WAC Excluding Hedges

Bond portfolio WAC1 Balanced maturity schedule5,6

$ in mill ions

Annualized Dividend Per Share

$1.36$1.48 $1.52

$1.76

$2.00

$2.24

2015 2016 2017 2018 2019 2020F2

$500 million 40 year maturity

bond issued at 2.55% on

August 4th, 2020


Drivers of Sustainable Corporate Value

Introduced Sustainability Disclosures in our Public Filings

1. Carbon Disclosure Project.

2. While the Company reports its financial results in accordance with GAAP, financial performance targets and results under the Company’s incentive plans are based on adjusted financial measures. These metrics and the related performance

targets are relevant only to Moody’s executive compensation program and should not be used or applied in other contexts.

3. This measure is a qualitative assessment of strategic and operational metrics tied to key non-financial business objectives certified by the Compensation & Human Resources Committee at the beginning of the performance period. The

Committee assessed the achievement of the metric by evaluating performance against the following objectives: (i) new sources of growth; (i i) quality assurance and controls; (i i i) operating effectiveness and efficiency; (iv) people and culture; (v)

risk management; and (vi) enabling technologies and capabilities.

Executive compensation metrics include2:

» Moody’s Corporation EPS and operating income

» MIS operating income and ratings performance

» MA operating income and sales

» Strategic & operational3

ENVIRO NM ENTAL

» 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

SO CIAL

» 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 VERNANCE

» Professional integrity

» Systematic risk management

» Diverse Board membership

and skill sets

» Separate CEO and Chairman positions

» Active stockholder engagement


Ongoing Corporate Social Responsibility Commitment

1. Please see Moody’s press release “Moody’s Announces Environmental Sustainability Commitments” published on July 28, 2020 for more details.

2. To be completed by 2040 through the purchase of verified carbon offsets.

3. The Science Based Targets initiative is a collaboration between CDP, UNGC, World Resources Institute (WRI), and the World Wid e Fund for Nature (WWF), that is seeking to reduce corporate GHG emissions.

Employees Communities Customers and Policymakers

» Employee safety and wellbeing

remains our primary priority

- Aligning return-to-office plans

with guidance from relevant

local authorities

» Adapting best practices and

feedback from work-from-home

experience to design our future

organizational model

» Focusing on equality, diversity

and inclusion:

- Anti-racism awareness and

training campaigns

- Named to DiversityInc’s “Top

50 Companies for Diversity”

» Over $10M of in-kind

contributions through free

access to products and

services

» Committing $1M to promote

equal justice and

advancement of the Black

community

- Empowering Black-owned

businesses and developing

employment opportunities

» Increased engagement with

customers to understand their

needs

» Ongoing dialogue with

governments to provide data

and insights relevant to

stimulus and economic

recovery measures

» Tools and information provided

to increase market

transparency and empower

decision makers

Environmental

Sustainability

Program

Enhancements1

Carbon Neutrality

» Committed to remaining

carbon neutral on an

annual basis

» Offsetting greenhouse gas

(GHG) emissions

retroactively to September

20002

Renewable Energy

» Beginning 2020: procure

100% renewable electricity

Science-based Targets

» Validated by the Science

Based Targets initiative3

https://sciencebasedtargets.org/


» 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; I aaS: Infrastructure-as-a-service;

SaaS: Software-as-a-service; PaaS: Platform-as-a-service.

Technology: Innovating with Purpose

Next Gen Tech is a Defining Element of our Culture, Setting Stage for Growth


1,168 1,785

$0.0

$500.0

$1,000.0

$1,500.0

$2,000.0

2Q19 2Q20

$ B

illi

on

s

Issuance1

$464

$201 (42) $62360.1%

64.0%

48.0%48.0%48.1%48.1%48.1%48.2%48.2%48.2%48.3%48.3%48.3%48.4%48.4%48.4%48.5%48.5%48.5%48.6%48.6%48.6%48.7%48.7%48.7%48.8%48.8%48.8%48.9%48.9%48.9%49.0%49.0%49.0%49.1%49.1%49.1%49.2%49.2%49.2%49.3%49.3%49.3%49.4%49.4%49.4%49.5%49.5%49.5%49.6%49.6%49.6%49.7%49.7%49.8%49.8%49.8%49.9%49.9%49.9%50.0%50.0%50.0%50.1%50.1%50.1%50.2%50.2%50.2%50.3%50.3%50.3%50.4%50.4%50.4%50.5%50.5%50.5%50.6%50.6%50.6%50.7%50.7%50.7%50.8%50.8%50.8%50.9%50.9%50.9%51.0%51.0%51.0%51.1%51.1%51.1%51.2%51.2%51.2%51.3%51.3%51.3%51.4%51.4%51.4%51.5%51.5%51.5%51.6%51.6%51.6%51.7%51.7%51.7%51.8%51.8%51.8%51.9%51.9%51.9%52.0%52.0%52.0%52.1%52.1%52.1%52.2%52.2%52.2%52.3%52.3%52.3%52.4%52.4%52.4%52.5%52.5%52.5%52.6%52.6%52.6%52.7%52.7%52.7%52.8%52.8%52.8%52.9%52.9%52.9%53.0%53.0%53.0%53.1%53.1%53.2%53.2%53.2%53.3%53.3%53.3%53.4%53.4%53.4%53.5%53.5%53.5%53.6%53.6%53.6%53.7%53.7%53.7%53.8%53.8%53.8%53.9%53.9%53.9%54.0%54.0%54.0%54.1%54.1%54.1%54.2%54.2%54.2%54.3%54.3%54.3%54.4%54.4%54.4%54.5%54.5%54.5%54.6%54.6%54.6%54.7%54.7%54.7%54.8%54.8%54.8%54.9%54.9%54.9%55.0%55.0%55.0%55.1%55.1%55.1%55.2%55.2%55.2%55.3%55.3%55.3%55.4%55.4%55.4%55.5%55.5%55.5%55.6%55.6%55.6%55.7%55.7%55.7%55.8%55.8%55.8%55.9%55.9%55.9%56.0%56.0%56.0%56.1%56.1%56.1%56.2%56.2%56.2%56.3%56.3%56.3%56.4%56.4%56.4%56.5%56.5%56.5%56.6%56.6%56.7%56.7%56.7%56.8%56.8%56.8%56.9%56.9%56.9%57.0%57.0%57.0%57.1%57.1%57.1%57.2%57.2%57.2%57.3%57.3%57.3%57.4%57.4%57.4%57.5%57.5%57.5%57.6%57.6%57.6%57.7%57.7%57.7%57.8%57.8%57.8%57.9%57.9%57.9%58.0%58.0%58.0%58.1%58.1%58.1%58.2%58.2%58.2%58.3%58.3%58.3%58.4%58.4%58.4%58.5%58.5%58.5%58.6%58.6%58.6%58.7%58.7%58.7%58.8%58.8%58.8%58.9%58.9%58.9%59.0%59.0%59.0%59.1%59.1%59.1%59.2%59.2%59.2%59.3%59.3%59.3%59.4%59.4%59.4%59.5%59.5%59.5%59.6%59.6%59.6%59.7%59.7%59.7%59.8%59.8%59.8%59.9%59.9%59.9%60.0%60.0%60.1%60.1%60.1%60.2%60.2%60.2%60.3%60.3%60.3%60.4%60.4%60.4%60.5%60.5%60.5%60.6%60.6%60.6%60.7%60.7%60.7%60.8%60.8%60.8%60.9%60.9%60.9%61.0%61.0%61.0%61.1%61.1%61.1%61.2%61.2%61.2%61.3%61.3%61.3%61.4%61.4%61.4%61.5%61.5%61.5%61.6%61.6%61.6%61.7%61.7%61.7%61.8%61.8%61.8%61.9%61.9%61.9%62.0%62.0%62.0%62.1%62.1%62.1%62.2%62.2%62.2%62.3%62.3%62.3%62.4%62.4%62.4%62.5%62.5%62.5%62.6%62.6%62.6%62.7%62.7%62.7%62.8%62.8%62.8%62.9%62.9%62.9%63.0%63.0%63.0%63.1%63.1%63.1%63.2%63.2%63.2%63.3%63.3%63.3%63.4%63.4%63.5%63.5%63.5%63.6%63.6%63.6%63.7%63.7%63.7%63.8%63.8%63.8%63.9%63.9%63.9%64.0%64.0%64.0%64.1%64.1%64.1%64.2%64.2%64.2%64.3%64.3%64.3%64.4%64.4%64.4%64.5%64.5%64.5%64.6%64.6%64.6%64.7%64.7%64.7%64.8%64.8%64.8%

$0$50

$100$150$200$250$300$350$400$450$500$550$600$650$700

2Q19 MIS AdjustedOperating Income

MIS RevenueIncrease

MIS ExpenseIncrease

2Q20 MIS AdjustedOperating Income

$ M

illi

on

s

MIS Adjusted Operating Income and Margin+390bps

2 2

1. MIS rated issuance, excludes sovereign debt issuance.

2. Includes intercompany revenue and expenses.

$388

$572

$112

$81$125

$142$108

$133

$6

$10

$0

$100

$200

$300

$400

$500

$600

$700

$800

$900

$1,000

2Q19 2Q20

$ M

illi

on

s

MIS Revenue

CFG SFG FIG PPIF MIS Other

$739

$938

47%

(28%)

14%

23%

YoY Change

MIS: Robust IG Issuance Drove Results

» CFG benefitted from liquidity-driven issuance and attractive

refinancing rates, leading to record supply in 2Q 2020

» SFG remains weak: lack of asset supply constraining CLO

and CMBS formation

» PPIF issuance was very strong, but contributed to the less

favorable issuance mix in the quarter

» Revenue growth outpaced personnel expense to drive

390 bps increase in adjusted operating margin


$143$135

$21 ($13)

28.2% 28.7%

15.0%$0

$100

$200

2Q19 MAAdjustedOperating

Income

MA RevenueIncrease

MA ExpenseIncrease

2Q20 MAAdjustedOperating

Income

$ M

illi

on

s

MA Adjusted Operating Income and Margin

+50bps

2 2

$315$366

$117

$131$43

$0

$100

$200

$300

$400

$500

2Q19 2Q20

$ M

illi

on

s

MA Revenue1

RD&A ERS PS

16%

12%

$475

$497YoY

Change

1. Subsequent to the divestiture of MAKS in 2019, revenue from the Moody's Analytics Learning Solutions ("MALS") unit, which pre vious to 2020 was reported in the Professional Services line of business ("LOB"), is now being

reported as part of the RD&A LOB. Prior periods have not been reclassified as the amounts were not material.

2. Includes intercompany revenue and expenses.

MA: Strong Organic Revenue Growth and Margin Expansion

» MA revenue grew 8%, excluding the impact of the MAKS

divestiture, acquisitions and FX

– Driven by KYC and compliance solutions, research

and data feeds

» Year-over-year margin expansion enabled by:

– Top-line growth generating operating leverage

– Reduced marketing, travel and entertainment expense


Moody’s Global Presence

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

4,052 7,227 11,279

20

20 3,903

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

9,319 13,222

20

19

1. As of June 30, 2020. Reflects acquisition of RDC, VE, Four Twenty Seven, Risk First, ABS Suite and divestiture of MAKS.

2. As of June 30, 2019.

AmericasArgentina Mexico

Brazil Panama

Canada Peru

Chile United States

Costa Rica

Europe, Middle East & AfricaAustria Poland

Belgium Portugal

Cyprus Russia

Czech Republic Saudi Arabia

Denmark Slovak Republic

France South Africa

Germany Spain

Israel Sweden

Italy Switzerland

Lithuania United Arab Emirates

Morocco United Kingdom

Netherlands

Asia-PacificAustralia Nepal

China Singapore

Hong Kong South Korea

India Thailand

Japan Sri Lanka


Reconciliation of Adjusted Financial Measures to GAAP

Adjusted Operating Income and Adjusted Operating Margin Reconciliation1

(in $ millions) 2015 2016 2017 2018 2019TTM

2Q 2020

Operating Income $1,491 $651 $1,821 $1,868 $1,998 $2,355

Operating Margin 42.8% 18.1% 43.3% 42.0% 41.4% 45.3%

Add Adjustment:

Depreciation & Amortization 114 127 158 192 200 205

Acquisition-RelatedExpenses

- - 23 8 3 0

Restructuring - 12 - 49 60 -2

Captive insurance company settlement

- - - - 16 16

Settlement Charge - 864 - - - -

Loss pursuant to the divestiture of MAKS

- - - - 14 14

Adjusted Operating Income $1,605 $1,654 $2,002 $2,117 $2,291 $2,588

Adjusted Operating Margin 46.0% 45.9% 47.6% 47.6% 47.4% 49.8%

(in $ millions) 2015 2016 2017 2018 2019 1Q 2020 2Q 2020

Gross debt $3,381 $3,363 $5,540 $5,676 $5,581 $6,788 $6,333

Less: Cash, cash equivalents and short-

term investments

2,232 2,225 1,183 1,818 1,930 2,231 2,199

Net debt $1,148 $1,138 $4,357 $3,858 $3,651 $4,557 $4,134

Moody's Corporation Net Debt Reconciliation

1. 2014 - 2017 operating and adjusted operating income have been restated to conform to the new presentation of pension accounting.


2020F1

Projected Operating Margin - GAAP 43% - 44%

Depreciation & Amortization Approximately 4.5%

Restructuring Approximately 0.5%

Loss pursuant to the divestiture of MAKS Negligible

Projected Adjusted Operating Margin 48% - 49%

(in $ millions) 2015 2016 2017 2018 2019 2020F1

Net cash flows from operating activities $1,198 $1,259 $755 $1,461 $1,675 $1,600 - $1,800

Less: Capital expenditures 89 115 91 91 69 ~100

Free Cash Flow $1,109 $1,144 $664 $1,370 $1,606 $1,500 - $1,700


Reconciliation of Adjusted Financial Measures

to GAAP (cont.)

Moody's Corporation Operating Margin Guidance Reconciliation

Free Cash Flow Reconciliation


Reconciliation of Adjusted Financial Measures

to GAAP (cont.)

2015 2016 2017 2018 2019 2020F1

Diluted EPS - GAAP $4.63 $1.36 $5.15 $6.74 $7.42 $8.15 - $8.55

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 ~ $0.10

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 $0.05

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 $8.80 – $9.20


Note: Table may not sum to total due to rounding.

Moody's Corporation Diluted EPS Reconciliation

moodys.com

Investor Relations

ir.moodys.com

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© 2020 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/OR ITS CREDIT RATINGS AFFILIATES ARE MOODY’S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND

MATERIALS, PRODUCTS, SERVICES AND INFORMATION PUBLISHED BY MOODY’S (COLLECTIVELY, “PUBLICATIONS”) MAY INCLUDE SUCH CURRENT OPINIONS. MOODY’S INVESTORS SERVICE 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 OR

IMPAIRMENT. SEE MOODY’S RATING SYMBOLS AND DEFINITIONS PUBLICATION FOR INFORMATION ON THE TYPES OF CONTRACTUAL FINANCIAL OBLIGATIONS ADDRESSED BY MOODY’S INVESTORS SERVICE CREDIT RATINGS. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS, NON-

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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 its Publications.

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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 credit rating, agreed to pay to Moody’s Investors Service, Inc. for credit ratings opinions and services rendered by it fees

ranging from $1,000 to approximately $2,700,000. MCO and Moody’s investors Service also maintain policies and procedures to address the independence of Moody’s Investors Service credit ratings and credit rating processes. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold credit ratings from Moody’s Investors Service 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.

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 credit rating, agreed to pay to MJKK or

MSFJ (as applicable) for credit ratings opinions and services rendered by it fees ranging from JPY125,000 to approximately JPY250,000,000.

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

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