3q 2020 investor presentation v36€¦ · 11/3/2020 · 3q 2020 investor presentation -november...

3Q 2020 Investor Presentation

November 11, 2020

3Q 2020 Investor Presentation - November 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 Brexit and uncertainty as companies transition away from LIBOR; 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 Overview2. Financial Overview3. Capital Markets Overview4. Moody’s Investors Service (MIS)5. Moody’s Analytics (MA)6. Appendix

Table of Contents

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 September 30, 2020.

Company Overview

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

Revenue of $5.3 billion

Adjusted Operating Income of $2.7 billion

MIS 78%

MA 22%

MIS 62%

MA 38%

Adjusted Operating Margin

MIS 61.6%

MA 28.8%


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 andintegrated 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


Recent investments accelerate strategic growth prioritiesPriorities for Strategic Growth: Investing with Intent

BUSINESS ADJACENCIES

Acquire Media

» Enhances KYC business» Curated news and workflow solutions

enable the creation of early warning and real-time insights

ESG Solutions Group

» Brings together Moody’s portfolio of premier ESG assets

» Creates unified solutions and accelerates innovation to drive new products and research

REGIONAL EXPANSION

Know Your Customer

ESG

Latin America

Asia Pacific

» MARC: Minority investment in a Malaysian domestic rating agency

» Created the Commercial Strategies Group in China to focus on growth opportunities for MA

– Facilitates development of new products and insights

– Better align with market opportunities, as well as local regulatory requirements

» MioTech: Minority investment in China based ESG and KYC data provider

» Expansion of Moody’s Local in Uruguay and Argentina


Real Estate Solutions Moodys.com

Lending Solutions and Tools

APIs, Data Feeds and Other

Subscriptions

Priorities for Strategic Growth: ESG Integrated Across All Platforms, Driving Growth and Enhanced Relevance

MIS Integration MA Integration Stand-alone ESG & Climate Solutions

+ +

Carbon Transition Assessment

ESG & Climate Risk Impact on Credit

Corporate Governance Assessment

Thematic Reports

Climate Risk Solutions

Sustainability Ratings

ESG Assessments

ESG Data (Indices)

Second Party Opinions (Green Bonds)

Financial Overview


CFG35%

SFG7%

FIG10%

PPIF9%

MIS Other1%

RD&A128%

ERS10%

MA

MIS

55%

45%

Recurring Transaction

3Q 2020 TTM Revenue: $5.3 billion

55%

45%

U.S. Non-U.S.

Full Year 2020 Guidance as of October 29, 20202

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

Operating Expenses » Increase in the low-single-digit % range Diluted EPS » $9.30 - $9.50

Operating Margin » Approximately 45% Adjusted Diluted EPS3 » $9.95 - $10.15

Adjusted Operating Margin3 » Approximately 50% Share Repurchases » Approximately $500 million

1. Includes trailing twelve months of professional services revenue. Excludes MAKS. Subsequent to the divestiture of MAKS in 2019, revenue from the Moody's Analytics Learning Solutions ("MALS") unit, which previous to 2020 was reported in the Professional Services line of business ("LOB"), will now be reported as part of the RD&A LOB.

2. See press release titled “Moody's Corporation Reports Results for Third Quarter 2020” from October 29, 2020 for Moody’s complete full year 2020 guidance. 3. These metrics are adjusted measures. See Appendix for reconciliations from adjusted financial measures to U.S. GAAP.Note: The revenue reclassifications of REITs to Corporate Finance from Structured Finance and the FACT product from RD&A to ERS are reflected in the full year (FY) calculations.

Moody’s Corporation Financial Profile


Macro assumptions underpinning our guidance1

2020 GDP

-6% United States-9% Euro area-5% Global

Benchmark interest rates remain low; U.S. high-yield spreads of ~500 bps

U.S. unemployment rate of ~8% by year-end

High yield default rate rising to ~8%2

Macro Assumptions Underpinning Our Outlook

1. Sources: “September 2020 Default Report” and “Global Macro Outlook 2020-2021 (August 2020 Update)” from Moody’s Investors Service. Assumptions underpinning guidance that was issued on October 29, 2020.2. Global high yield default rate by the end of 2020.


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

Approximately $1,800

$500$700$900

$1,100$1,300$1,500$1,700$1,900$2,100

2015 2016 2017 2018 2019 2020F2

Adjusted Diluted EPS3Revenue1High-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 October 29, 2020.3. These figures are adjusted measures. See appendix for reconciliations from adjusted financial measures to U.S. GAAP.4. 2015 – 2017 operating and adjusted operating margins have been restated to conform to the new presentation for pension expenses.5. Includes approximately $700 million in net payments pursuant to a settlement charge.

$ Millions

$9.95 - $10.15

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

App

rox.

50%

App

rox.

45%

2

3

$ Billions $ Per Share

5


Long-Term Growth OpportunitiesThree 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


Capital Allocation StrategyPrudent 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

INVESTING IN GROWTH OPPORTUNITIES

Reinvestment

Acquisitions

RETURN OF CAPITAL

Dividends

Share repurchase


Investment Criteria and Post Acquisition Review

Clear Industrial LogicStrategic fit is the most important factor and the first screen

Disciplined Financial TargetsLong held, clear financial framework for external (and internal) investments

Post-Acquisition ReviewDisciplined and rigorous monitoring post close

» Complementary ratings, content, data, analytics, risk management, etc., in existing and / or high growth markets

» Financial services and adjacent client base that can leverage Moody’s brand, distribution,core credit expertise andanalytic capabilities

» Preference for recurring or “repeat” revenue and lowcapital intensity

» IRR at / above Moody’s cost of capital

» >10% annual cash return yield within 3-5 years

» Cash payback within7-9 years

» GAAP EPS accretive by year 3 (where applicable)

» Transactions evaluated on an unlevered basis

» Clear accountability with regular reporting to senior management and board

» Integrate within acquiring business unit while maintaining unique and / or entrepreneurial characteristics

» Acquisition tracking for minimum of 3 years after close for transactions>$10 million


Operational Excellence

Key Takeaways

Disciplined Capital Allocation

Growth Company

» Long-term financial expectations remain positive

» Balanced revenue model maximizes growth potential while ensuring resilience

» Strong free cash flow generation

» Strategic initiatives generate cost efficiencies, enabling reinvestment and margin improvement

» Continued MA margin expansion

» Investment in innovation creates sustainable value

» Emphasis on returning excess capital to stockholders through dividends and share repurchases

» Strong track record of investment success exemplified by Bureau van Dijk

» Efficient balance sheet management

Capital Markets Overview


3Q 2020 Credit Market UpdateBuoyant credit markets despite ongoing real economy disruption from COVID-19

Real EconomyCOVID-19 Pandemic» New cases of COVID-19 increased in the U.S. and Europe» Policy responses: some U.S. states and European

countries rolled back re-opening measures» Vaccine / treatment timing unclear; optimism for 1H 2021

Geopolitical Impact» U.S. – China frictions remained elevated» U.S. election season in heightened focus» Continued international travel restrictions» Oil prices recovered from lows but subdued

Macroeconomic Response» U.S. Fed and other central bank actions are accommodative» Fiscal stimulus measures in the E.U.» Additional fiscal stimulus in the U.S. delayed» Many businesses have fully utilized PPP funding» Some industries resuming furloughs (travel, entertainment, etc.)

Credit MarketsInvestment Grade Bonds» Record issuance volumes1» Liquidity-driven capital raising» Opportunistic refinancing driven by effective yields

lower than pre-pandemic for many issuers » M&A pipeline limited, though indications of

improvement

High Yield Bonds» Continued strength» Significant spread tightening from March, with

spreads now approximately in line with historical averages (U.S. HY ~500 bps)

» Appetite for risk assets evidenced by continued equity market strength

Leveraged Loans» Improving, but relatively weak» Demand for floating rate debt limited» Modest M&A pipeline

1. MIS rated issuance.

3Q 2020 Investor Presentation - November 11, 2020 19Note: MIS rated issuance.

CFG Spotlight: Issuance-driven Revenue Growth

42% 43% 46% 43% 47%51% 49%

34% 30% 29% 25%31% 24% 24%

14% 14% 15%18%

16% 20% 20%

10% 12% 10% 14%7% 4% 7%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

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

Corporate Finance Financial Institutions

Public, Proj. & Infra. Fin. Structured Finance

Issuance by Line of Business

$264 $256 $278 $186

$358

$660

$322

$101 $114 $103

$113

$119

$171

$151

$138 $135 $170

$135

$210

$103

$133

-12%

-3%

41% 37%36%

65%

23%

-7%-12%

40%

25%

37%

85%

10%

-60%

-40%

-20%

0%

20%

40%

60%

80%

100%

1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20$0

$100

$200

$300

$400

$500

$600

$700

$800

$900

$1,000

Bank Loans High Yield BondsInvestment Grade Bonds CFG Transaction Revenue Y/Y Growth %CFG Y/Y Issuance Growth

CFG Issuance Volume and Transaction Revenue($ Billions)


$1,972

$3,466

$3,806

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

Jan '12 Jan '13 Jan '14 Jan '15 Jan '16 Jan '17 Jan '18 Jan '19 Jan '20 Sep '20

$ Bi

llions

Refunding Needs Continue to BuildNext Four Years North America and EMEA Total Refunding Needs1 as of:

1. Amount reflects total maturities as defined in Moody’s Investors Service’s U.S., Canada and EMEA refunding needs reports January 2012 – October 2020. Note: Data represents U.S., Canadian and European MIS rated non-financial corporate bonds & loans. Canadian data not available before 2015.

10%


1. Non-financial corporates.2. Source: Moody’s Investors Service, October 2020. Data represents U.S. & Canadian MIS rated corporate bonds & loans.3. Source: Moody’s Investors Service, October 2020. Data represents EMEA Investment-Grade & EMEA Speculative-Grade.4. Comparison to previously provided refinancing needs data for the upcoming four years from 1Q 2020 Investor Presentation.

Prior data: Moody’s Investors Service. U.S. & Canadian MIS rated corporate bonds & loans for North America as of January 2020 & EMEA as of July 2019.

191 230 222 186

3871 105 1272386

205 311

$252$387

$532$624

2021 2022 2023 2024

$ Bi

llions Speculative Grade Bank Loans

Speculative Grade BondsInvestment Grade

Refunding Needs1 Support MIS Long-term Fundamentals

346 363 363 358

34 5374 7762

79 84119$442

$495 $521$554

2021 2022 2023 2024

$ Bi

llions Speculative Grade Bank Loans

Speculative Grade Bonds

Investment Grade

Debt Maturities: North America Moody’s-Rated Corporate Bonds and Loans2

Debt Maturities: EMEA Moody’s-Rated Corporate Bonds and Loans3

» Approximately $1.8 trillion of non-financial corporate debt maturing in North America through 2024, up ~8%4

» North America speculative grade bank loans refinancing needs up ~$180 billion, or ~40%4

» Four-year debt maturities for EMEA non-financial corporates exceed $2 trillion, up ~$200 billion, or 11%4


- - -$19

$27

$98

$167 $165

$10 $15 $19$1 $3 $2

FY 2018 FY 2019 YTD 2020

$36 $28 $16

$130$119

$176

$230

$341

$108

$166

$264

$12 $16

$74

FY 2018 FY 2019 YTD 2020

1-2 years3-5 years6-10 years11-30 yearsLong term

1. YTD through September 30, 2020. | 2. Proxy calculation uses weighted average years of tenor. | Source: Moody’s Investors Service. | Note: Data represents tenors on Moody’s rated debt in U.S.

Increased Issuance Volume Offsets Impact of Longer Average Maturities

TOTAL ISSUANCE ($B) $462 $561 $880 $128 $212 $287

AVG. MATURITY2 12.0 12.4 14.5 8.6 8.4 7.5

$184

$101

U.S. Investment Grade Bond Issuance by Maturity Length ($ Billions)

U.S. High Yield Bond Issuance by Maturity Length($ Billions)

1 1


Debt Leverage and Interest Coverage inNorth America and EuropeCredit Metrics: North American Speculative Grade Companies

1. Trailing twelve months ended September 30, 2020.Source: Moody’s Investors Service.Note: Historical figures may change due to timing differences in issuer reporting deadlines.

4.6x 4.6x 4.7x 4.5x 4.3x 4.4x 4.6x 4.9x5.1x 5.2x 5.3x 5.5x 5.4x 5.5x

6.2x

2.9x 2.6x 2.4x 2.7x 2.9x3.0x 3.0x 3.0x 3.0x 2.9x 2.9x 2.9x 2.7x 2.6x 2.5x

0.0x

2.0x

4.0x

6.0x

8.0x

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

Inte

rest

Cov

erag

e

Debt / EBITDA EBITDA / Interest Expense

Credit Metrics: European Speculative Grade Companies

5.0x4.1x 4.6x

4.8x4.2x 4.3x 4.5x 4.6x

4.8x 4.6x 4.6x 4.6x5.3x 5.3x 5.5x

2.9x 2.9x 2.6x 2.8x3.3x 3.1x 3.0x 3.0x 3.0x 3.1x 3.5x

3.7x 3.4x 3.5x 3.5x

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

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

Inte

rest

Cov

erag

e

Debt / EBITDA EBITDA / Interest Expense

1

1


Default Rate Forecast Reflects COVID-19 Impacts; Expected to Peak in 1Q 2021Default Rates for Speculative-GradeCorporate Rated Issuance1

1. Moody’s rated corporate global speculative grade default historical average of 4.1% from 1983 through September 30,2020. 2020 forecast for TTM ended December 31, 2020 and March 31, 2021 from Moody’s Investor Service “October 2020 Default Report”, published November 10, 2020.

2. Covenant data for European bonds represent a three quarter rolling average, North American loans and bonds represent a two quarter rolling and a three month rolling average, respectively.Source: Moody’s Investors Service.

4.22x

4.51x

3.91x

2.0

2.5

3.0

3.5

4.0

4.5

5.0U.S. Loans U.S. Bonds European Bonds Weakening

Improving

Speculative-Grade Covenant Quality Indicators2

7%10%

5%

0%2%4%6%8%

10%12%14%16%

Global U.S. Europe

4.1% global historic average1

» Global trailing twelve month speculative-grade default rate at 6.4% as of September 30, 2020; expected to increase to 7.2% by December 2020 and peak at 8.1% by March 2021, before declining to 6.3% by September 2021


64% 71% 62% 68%72%

41%39% 49% 35% 25%

6% 5% 5% 7% 4%17% 13% 15% 13% 9%

9% 8% 8% 8% 17%

0%

20%

40%

60%

80%

100%

2016 2017 2018 2019 YTD 3Q20

% o

f Men

tions

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

1. Percent of mentions for each respective period in bond issue or bank loan program tranche documents. Excludes issues of less than $25 million and general corporate purposes. An issue can have multiple purposes and, as a result, percentages do not sum to 100%.

2. YTD through September 30, 2020.Source: Moody’s Analytics.

Liquidity and Refinancing Prominent Drivers of Issuance YTD 2020, While M&A DeclinedUses of Funds from USD High Yield Bonds and Bank Loans1

Opportunistic refinancing driven by lower effective yields

Liquidity and working capital

Lower M&A related issuance

YTD 20202 Issuance Drivers:


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

€ B

illio

ns

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

$ B

illio

ns

Bonds Loans

73%

27%

50%

50%

Sources: ECB, Federal Reserve, BarCap Indices. Europe bank loan data includes Eurozone and UK bank loans. Europe bond data includes euro and sterling denominated bonds. European data is through August 2020 and U.S. data is through September 2020.

Disintermediation of Credit is an Ongoing Trendin the Global Capital Markets

Moody’s Investors Service


34%

66%

RecurringTransaction


Public, Project, & Infrastructure

Finance15%

Financial Institutions

16%

CorporateFinance

56%

StructuredFinance

12%

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 2019’s calculations. Percentages have been rounded and may not total to 100%.


Moody’s Investors Service Financial Profile


MIS Guidance: Robust YTD Driving Improved Outlook1

» Strong YTD results driving increased full-year outlook» Issuance2 expected to grow in the high-teens percent range

from $4.6T in 2019

- Pace of issuance likely to moderate in 4Q 2020» Favorable issuance mix

1. Guidance as of October 29, 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. 3. Total issuance includes CFG, SFG, FIG and PPIF. Excludes sovereign debt.

Key drivers of MIS FY 2020 outlook1

$1,600$1,800$2,000$2,200$2,400$2,600$2,800$3,000$3,200

2019 2020F

Low-double-digit % increase

$2.9B

Revenue

1

Adjusted Operating Margin1

58.0%Approximately 60%

2019 2020F1

» Approximately 600-700 first time mandates

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

» Higher expectation for incentive compensation, though in-line with full year 2019

FY 2020 Issuance Guidance1,260%

25%

-10%

-35%

High-teens % range

-42%

-22%

-2%

18%

38%

58%

78%

InvestmentGrade

High YieldBonds

BankLoans

StructuredFinance

TotalIssuance3


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 transparent

and provides issuers with an independent assessment

against which to compare their own creditworthiness

Moody’s ratings are the most used by investors, (when multiple agencies are

used), who have acknowledged our track record of accuracy


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 September 20202March 1 – September 30, 2020

11.9%

3.5%

0.4%

0.1%

0.0%

0.0%

0.0%

0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0%

Caa_C

B

Ba

Baa

A

Aa

Aaa

Top 10 sectors most affected by COVID-191


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

$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

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.


Broad Coverage Serves Global Needs

~15 Years Lead/Senior

Analyst tenure

33Offices*

1,000+Analysts

~11,400+MCO employees***

***As at 30 September 2020.


Strongly Positioned in Emerging Markets

Note: Size of pie represents the estimated total CRA revenue from domestic markets ($700 million) as of June 30, 2020.

2009 2019

Emerging Asia Latin America Middle East CEE/CIS Africa

$94M

$342M

1. Includes revenue from cross border issuance.

MIS Affiliate (majority)

National Scale RatingsOther Emerging Markets

Moody’s Local MIS Affiliate (minority)

MIS Emerging Markets Revenue1Emerging Markets - Domestic TAM

China

India

South Korea

IsraelEgypt

PeruArgentina

Mexico

Brazil

South Africa

OthersChile Malaysia

$700M

Size of domestic CRA markets


Moody’s in Greater China

Estimated China Ratings Market Size: Domestic and Cross Border3

58%42%

Rest of Market CCXI's Share

57%43%

Rest of Market Moody's Share

Domestic Market ~$310M

Cross Border Market~$270M3

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 1Q 2020.2. Greater China: Mainland, Hong Kong and Macau. Revenue and attributable income data for full year 2019.3. Revenue as of 3Q 2020; USD 1 = RMB 6.79 RMB exchange rate as of September 30, 2020 is used for conversion for domestic CRAs’ estimated revenue. Note: These are high level estimates based on MIS & CCXI 3Q 2020 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

illion

s

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

01020304050

US China Japan UK France

Total debt securities outstanding 2012–20201

2012 2020

2nd Largest Onshore Bond Market at $15 Trillion

0%0%21% -2%

4%


Key Stats2

30+Years of ESG experienceOur affiliate VE hasbeen a pioneer in ESG analysis since the 1990s

5,000+ESG assessmentsCovering 273 unique ESG data points

100%Systematic integration of ESG considerations into credit ratingsA detailed discussion is now required in all rating committees

6,000+Climate risk scoresSpanning countries, counties, cities, companies and real estate assets globally

260+ Global sustainable bonds and loansGreen, social, sustainability bonds and sustainability-linked loans and bonds

51% Green Bonds

19% Sustainability Bonds

13% CBI Verified

11% Social Bonds

6% Sustainability LinkedLoans and Bonds

Market Trends

» Moody’s forecasts global green, social and sustainability bond issuance to be $325 to $375 billion in 20201

» Coronavirus crisis expected to accelerate credit-relevant ESG trends with increased impact to credit2

Moody’s ESG Solutions

Outreach

» Over 700 media engagements from January to September 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 – Record sustainable bond issuance in second quarter as social bonds surge”, August 17, 2020.2. As of September 30, 2020; combined for all Moody’s entities including affiliates.3. Includes 3% for sustainability/green bonds and Climate Bond Initiative verification.

Moody’s ESG: Driving Standards Beyond Credit

ESG & Climate Measures

Sustainable Finance

Solutions

ESG & Credit

Risk Management

Solutions

3SPOsProduct Type


Enhanced ESG Solutions

Index Partnerships

» Partnered with Euronext on a new ESG index powered by 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

Moody’s Analytics


Research, Data and Analytics1

72%

Enterprise Risk Solutions

28%

Moody’s Analytics Financial Profile

89%

11%

Recurring Transaction

43%

57%

U.S. Non-U.S.

» 96% recurring revenue2» 94% retention rate3

» 77% recurring revenue» 93% retention rate


1. Includes trailing twelve months of professional services revenue, excluding MAKS.2. Recurring revenue for RD&A as reported, including MALS for YTD 2020. It does not include MALS or other professional services revenue prior to 2020.3. 3Q 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.

3Q 2020 Investor Presentation - November 11, 2020 401. Guidance as of October 29, 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 RDC, RiskFirst, ABS Suite and Acquire Media acquisitions

– FY revenue guidance includes an approximately 2% unfavorable 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 lending 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 Guidance: Recurring Revenue Creates Stability1


Subscription Sales Resilient Through COVID-19 Disruption

» Strong retention» Softer demand for lower margin, one-time sales» Robust subscriptions sales growth expected to continue

1. Reflects RD&A excluding BvD. | 2. Incorporates retention and pricing components of recurring business growth.

YTD 2020 RETENTION

~94%Total MA

~96% Research1

~92% ERS

~90% BvD

PositiveRetention holding at ~94% despite initial concerns

PositiveRetention expected to remain stable

PositiveRenewal yield2outlook better than prior expectations

PositiveRenewal yields2expected to remain at existing levels

StableSocial distancing challenged sales efforts, but strong pipeline execution

COVID-19 Related ImpactHealthy new renewable sales pipeline

Softness in one-time project sales pipeline

2020 OUTLOOK 2021 OUTLOOK

Retention

Subscription Sales Growth

Pipeline

Continued demand for insights and analytics


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

illion

s

Moody’s Analytics

2019 Revenue: $1,954m

2008 – 2019 CAGR: +12%(~60% organic)

Enterprise Risk Solutions

2019 Revenue: $522M

2008 – 2019 CAGR: +14% (~68% organic)

Research, Data & Analytics1

2019 Revenue2: $1,432M

2008 – 2019 CAGR3: +11%(~62% organic)

Revenue Has More Than Tripled Since Inception

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

2. RD&A reported revenue in 2019, excluding Professional Services, was $1,273M.3. RD&A CAGR calculation excludes professional services.Note: Individual line of business revenues may not add up to total Moody’s Analytics revenue due to rounding.


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

1,400+ Asset Managers

2,900+Commercial Banks

2,300+Corporations

240+Securities Dealers and Investment Banks

780+Insurance Companies

3,370+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 300+Real Estate Entities

Note: Data as of September 30, 2020.


Newly Integrated Capabilities Help Customers Make Better DecisionsLeveraging interoperability to create new solutions

» »

CUSTOMER NEEDS CAPABILITIES & DATA NEW INTEGRATED SOLUTIONS

Early warning tools to identify credit deterioration

Incorporating ESG and climate information to enhance understanding of credit

Credit Sentiment Score

CreditEdge

RiskCalc

moodys.com

VE

Four Twenty Seven

Credit Sentiment Score and AI powered news feed added to CreditEdge and RiskCalc solutions

CreditView users can access ESG and climate resources from affiliates VE and Four Twenty Seven


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

Full

Year

20

18 95.8% 109.7%9.1% 4.8%

Retained Base Upgrades and Price New Sales Business Base

Subscription Sales Growth(constant currency)

Full

Year

2017 95.5% 109.4%8.2% 5.7%

Retained Base Upgrades and Price New Sales Business BaseNote: The sales growth attributions presented on this slide are related to RD&A subscription sales on a constant currency basis includes Reis and excludes Bureau van Dijk and ABS Suite. Upgrades reflect amendments to existing customer contracts. New Sales reflect new contracts with new and existing customers.

Full

Year

20

19 96.2% 110.6%9.0%5.4%


RD&A: Subscription Growth Driven by Retention, Upgrades and Pricing & New Sales

Firs

t Hal

f20

20 95.6%108.5%8.2% 4.7%


RD&A


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

RD&A


Today1,2TTM 2020 Q3

Approx. $400m~33% growth in Rev

Strong tailwinds in Compliance, RDC acquisition

Sales playbook – segment expertise and team selling

Significant investment in coverage and product enhancement

Investment in revenue producing FTE’s

Leveraging Moody’s financial stability and scale BvD Acquisition – Growth Synergies Are Coming Through

Pre-Moody’s12017 Revenue Approx. $300m

Operational efficiencies and modernization

1. Excludes FACT.2. Excludes RDC.

RD&A


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

BvD: Diverse Client Base and Broad Range of Use Cases

Percent of Total Sales1

YoY

Gro

wth

(201

9 vs

. 201

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.

RD&A


» Bureau van Dijk accelerating growth with Moody’s: BvD post acquisition revenue growth1 of ~16% and adjusted operating margin2 of ~52%

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

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

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

– Expect combined sales to more than double by 20235

» Complementary assets:

– RDC’s Global Risk Information Database (GRID): over 12.7+ 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

381M+PUBLIC & PRIVATEENTITIES

198M+ACTIVE OWNERSHIP LINKS6

155MBENEFICIAL OWNERSHIP7

BvD + RDC Makes Us a Leading Global Player in KYC

BvD

RDC12.7M+RISK PROFILES

1,100MONITORED LISTS

1.8MPOLITICALLY 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. As of October 15, 2020. 7. Beneficial owner is any individual or individuals who ultimately own or control an entity. Beneficial ownership

calculated based on ownership links: 5% threshold at all levels. As of September 30, 2020.

RD&A


Technology with a purpose – Enabling better, faster decisionsERS Empowers Customers’ Success With Analytics

Our business solutions Our customers

Customers

Insurers

CorporatesBanks

AssetManagers

PensionFunds

Accounting

Impairments,IFRS-17

Balance sheet management

Portfolio, valuation and ALM1

Credit decisioning & lending

Credit modeling,scoringand spreading

RegTech

Regulatoryreporting

1. Asset and liability management.

ERS


61%

77%

0%

20%

40%

60%

80%

100%

$0

$100

$200

$300

$400

$500

2015 2016 2017 2018 2019 TTM 3Q20

% R

ecur

ring

$ M

illio

ns

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

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

3

1

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 revenue as of 3Q 2020:

– Subscriptions (recurring)4 +12%

– One-time (non-recurring) +19%

1. Recurring revenue includes maintenance and subscription.2. Compound Annual Growth Rate, 2015-2019.3. Trailing twelve months ended September 30, 2020.4. Subscriptions / recurring revenue include maintenance. Excluding maintenance, TTM subscription / recurring revenue would be +16%.

ERS


EMEA

20192020202120222023 and beyond 2020 2021 2022 2023 and beyond

FRTB

BoE/ PRA ST

TLAC

CVA review

Revised IRB approach CR

FBO ST

CCAR /DFAST

EU-wide ST

SEC Liquidity rules (ETF, mutual funds)

NCUA RBC rule for large credit unions

CECL*

Vickers reform

Revised SA operational risk

Updated Leverage Ratio

CCAR / DFAST

CCAR /DFAST

Revised minimum capital requirements for MR

Output floor

Supervisory rating system for LFIs

Revised G-SIB assessment

SCCL for large banks

NSFR

NSFR

Minimum Leverage Ratio

BoE/ PRA BES(Climate-related element)

CCAR / DFAST

EU Sustainability taxonomy

Interest Rate Benchmark Reform

EBA Guidelines on Outsourcing Agreements

SFTR regulatory technical standards

EU “Banking Package” CRR2, CRD5, BRRD2 and SRMR2

Incorporate ESG risks into supervisory process

EU Investment Firms Directive and Regulation

EU MLD5

TLAC

IRRBB review

TLAC

New securitization framework

New securitization framework



HLA requirement



Output floorOutput floor

CVA review

CVA review





Revised SA market risk





Revised standardized approach CR



FRTB

FRTB

HLA requirement

HLA requirement

Climate ChangeST

CCAR /DFAST

BoE/ PRA ST

BoE/ PRAST

DNB Climate ST

Credit Risk Management



* Regulation has been delayed/ cancelled to allow banks to focus their resources on navigating the coronavirus pandemic (the FED has implemented a transition rule that provides a two-years delay period to eligible institutions, followed by a three-year transition period (the pre-existing 2020 CECL transition period))Pandemic related delays noted in last quarters report; OSFI NSFR; FED SCCL; EBA CRD 5, CRR 2 and BRRD 2Source: Moody’s Analytics market research as of October 2020.

Global Regulatory and Accounting Drivers for the ERS Business

ERS

Appendix


Corporate Finance: Revenue and Issuance1

$135 $145 $128 $140 $140 $139 $145 $139 $146

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

$291$141$39 $19

$57 $69 $56 $75$75

$99

$101$78 $70

$73 $83 $90 $68

$89

$43

$73

$0

$100

$200

$300

$400

$500

$600

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

$ M

illion

s

Revenue2: 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

illion

s

Revenue2: Mix by YearOther Investment Grade Speculative Grade Bank Loans

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

$732

$378$64 $33

$105 $120 $105$162 $134

$164

$161$123 $103

$100 $105 $111$108 $119

$44

$88$39$28

$26 $25$43

$50 $55

$18

$28

$0

$200

$400

$600

$800

$1,000

$1,200

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

$ Bi

llions

Issuance4: Mix by QuarterGlobal Non-Financial Investment-Grade Bonds Global Non-Financial Speculative-Grade BondsU.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

$ Bi

llions

Issuance4: Mix by YearNon-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. Total estimated market issuance unless otherwise noted.2. Historical data has been adjusted to conform with current information and excludes intercompany revenue. The revenue reclassification of REITs to Corporate Finance from Structured Finance is reflected starting from 1Q 2018.3. Other includes: monitoring, commercial paper, medium term notes, and ICRA.4. 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.


44% 50% 40% 36% 36% 36% 38% 37% 32% 24% 32%

18%19%

20% 27% 25% 27% 22% 25% 32% 51% 31%

13% 7% 13%16% 18% 15% 21% 17% 17%

17%22%

26% 24% 28% 20% 22% 23% 19% 21% 20%8% 16%

0%

20%

40%

60%

80%

100%

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

Other Investment Grade Speculative Grade Bank Loans

65% 62% 69% 70% 71% 72% 69% 71%75% 80% 75%

35% 38% 31% 30% 29% 28% 31% 29%25% 20% 25%

0%

20%

40%

60%

80%

100%

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

Revenue1: Distribution by Recurring vs. TransactionTransaction Recurring

Corporate Finance: Revenue Diversification

37% 36% 35% 32% 37% 34% 38% 35% 31% 28% 33%

63% 64% 65% 68% 63% 66% 62% 65% 69% 72% 67%

0%

20%

40%

60%

80%

100%

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

Revenue1: Distribution by GeographyNon - U.S. U.S.

Revenue1: Distribution by Product2

1. Historical data has been adjusted to conform with current information and excludes intercompany revenue. The revenue reclassification of REITs from Corporate Finance to Structured Finance is reflected starting from 1Q 2018.2. Other includes: monitoring, commercial paper, medium term notes, and ICRA. Note: Percentages have been rounded and may not total to 100%.


Structured Finance: Revenue and Issuance1

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

$24 $24 $24 $24 $21 $26 $27 $23 $24$15 $24 $18 $20 $18

$25 $17 $13 $15

$51$47

$35$41 $40

$32$29

$21 $24

$1 $0

$1$1 $1 $1

$1$1 $0

$0$20$40$60$80

$100$120$140$160

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

$ M

illion

s

Revenue2: Mix by QuarterABS 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

illion

s

Revenue2: Mix by YearABS 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

$ Bi

llions

Issuance3: Mix by YearABS RMBS CMBS Structured Credit

$79$115

$65 $90 $91$103

$66 $74 $89

$64$70

$48

$87 $63$85

$65 $40$66

$26

$36

$16

$38$34

$57

$31$13

$22$51

$49

$21

$49$39

$44

$25 $22

$31

$0

$50

$100

$150

$200

$250

$300

$350

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

$ Bi

llions

Issuance3: Mix by Quarter ABS RMBS CMBS Structured Credit

1. Total estimated market issuance unless otherwise noted.2. Historical data has been adjusted to conform with current information and excludes intercompany revenue. The revenue reclassification of REITs to Corporate Finance from Structured Finance is reflected starting from 1Q 2018.3. Sources: AB Alert, CM Alert, Moody’s Corporation. Debt issuance categories do not directly correspond to Moody’s revenue categorization.Notes: ABS (Asset Backed Securitization) includes asset-backed commercial paper and long-term asset-backed securities. RMBS (Residential Mortgage Backed Securitization) includes covered bonds. CMBS includes commercial mortgage-backed securities and commercial real estate CDOs. Structured Credit includes CLOs and CDOs.


Structured Finance: Revenue Diversification

Revenue1: Distribution by Product

1. Historical data has been adjusted to conform with current information and excludes intercompany revenue. The revenue reclassification of REITs to Corporate Finance from Structured Finance is reflected starting from 1Q 2018.Notes: ABS (Asset Backed Securitization) includes asset-backed commercial paper and long-term asset-backed securities. RMBS (Residential Mortgage Backed Securitization) includes covered bonds. CMBS includes commercial mortgage-backed securities and commercial real estate CDOs. Structured Credit includes CLOs and CDOs.Percentages have been rounded and may not total to 100%.

64% 63% 64% 56% 61% 55% 57% 58% 52% 43% 47%

36% 37% 36% 44% 39% 45% 43% 42% 48% 57% 53%

0%

20%

40%

60%

80%

100%

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


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

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

0%

20%

40%

60%

80%

100%

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


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

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

28% 27%13% 20% 16%

18% 18% 17%23% 19%

18% 16% 17%

44% 39% 41% 35% 37% 38%29% 35% 30% 26% 27%

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

ABS RMBS CMBS Structured Credit Other


$327

$170

$396$315 $279 $309

$396$333

$235

$20

$4

$29

$18

$27$34

$36

$18

$29

$0

$100

$200

$300

$400

$500

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

$ Bi

llions

Issuance3: Mix by QuarterGlobal Speculative Grade Financial Corporate BondsGlobal Investment Grade Financial Corporate Bonds

Financial Institutions: Revenue and Issuance1

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

$95

$38

$15

$29 $28 $31 $31$30

$44 $31$6

$6

$4 $10 $6 $5$6

$8 $6$3

$3

$3$3 $3 $3

$3$2 $2

$0$20$40$60$80

$100$120$140$160

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

$ M

illion

s

Revenue2: Mix by QuarterBanking 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

$100

$200

$300

$400

$500

2011 2012 2013 2014 2015 2016 2017 2018 2019

$ M

illion

s

Revenue2: Mix by YearBanking Insurance Managed Investments Other

$1,266 $1,312$1,072 $1,247 $1,194 $1,187 $1,232 $1,248

$1,298

$79 $137$161

$197 $136 $112 $183$74 $108

$0

$400

$800

$1,200

$1,600

$2,000

2011 2012 2013 2014 2015 2016 2017 2018 2019$

Billio

ns

Issuance3: Mix by YearGlobal Speculative Grade Financial Corporate BondsGlobal Investment Grade Financial Corporate Bonds

1. Total estimated market issuance unless otherwise noted.2. Historical data has been adjusted to conform with current information and excludes intercompany revenue. 3. Sources: Moody’s Analytics, Dealogic. Note: Debt issuance categories do not directly correspond to Moody’s revenue categorization.


Financial Institutions: Revenue Diversification


1. Historical data has been adjusted to conform with current information and excludes intercompany revenue.Note: Percentages have been rounded and may not total to 100%.

50%63% 56% 60% 58% 55% 58% 58% 52% 51% 56%

50%37% 44% 40% 42% 45% 42% 42% 48% 49% 44%

0%

20%

40%

60%

80%

100%

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

Revenue1: Distribution by Geography

Non - U.S. U.S.

47%28%

42% 41% 49% 46% 42% 45% 48%54% 50%

53%72%

58% 59% 51% 54% 58% 55% 52%46% 50%

0%

20%

40%

60%

80%

100%

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

Revenue1: Distribution by Recurring vs. Transaction

Transaction Recurring

66% 69% 68% 67% 66% 67% 69% 62% 71%

26% 25% 22% 26% 27% 25% 24% 31%23%

5% 3% 8% 5% 4% 5% 5% 6% 4%3% 3% 2% 3% 3% 3% 2% 1% 1%

0%

20%

40%

60%

80%

100%

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

Banking Insurance Managed Investments Other


$156 $181 $174 $177$202 $225 $218 $185 $222

$121$142 $167 $181

$174$188 $213

$206$224

$0

$100

$200

$300

$400

$500

2011 2012 2013 2014 2015 2016 2017 2018 2019

$ M

illion

s

Revenue2: Mix by YearPublic Finance and Sovereign Project and Infrastructure Finance Other

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

$292 $374

$207 $266

$220

$243

$0

$100

$200

$300

$400

$500

$600

$700

2011 2012 2013 2014 2015 2016 2017 2018 2019

$ Bi

llions

Issuance3: Mix by YearLong-Term Rated U.S. Muni Bonds Rated Global Project and Infrastructure Finance Bonds

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

$76 $95$132

$57 $39 $51 $64

$75 $52

$64

$114 $84

$0

$50

$100

$150

$200

$250

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

$ Bi

llions

Issuance3: Mix by QuarterLong-Term Rated U.S. Muni Bonds Rated Global Project and Infrastructure Finance Bonds

$45 $42 $46 $53 $58$65 $57 $64 $71

$54 $49 $47$55 $62

$60$52

$69 $62

$0

$50

$100

$150

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

$ M

illion

s

Revenue2: Mix by Quarter Public Finance and Sovereign Project and Infrastructure Finance Other

1. Total estimated market issuance unless otherwise noted.2. Historical data has been adjusted to conform with current information and excludes intercompany revenue. 3. Global Rated Project & Infrastructure Finance available starting in 2016 and represents Moody’s rated issuance. Sources: Thomson SDC, Moody’s Corporation. Note: Debt issuance categories do not directly correspond to Moody’s revenue categorization.

Public, Project and Infrastructure: Revenue and Issuance1


61% 58% 61% 59% 66%69% 67% 65% 63% 72% 69%

39% 42% 39% 41% 34%31% 33% 35% 37% 28% 31%

0%

20%

40%

60%

80%

100%

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


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

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

0%

20%

40%

60%

80%

100%

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


46% 45% 47% 49% 49% 48% 52% 50% 52% 48% 53%

54% 55% 53% 51% 51% 52% 48% 50% 48% 52% 47%

0%

20%

40%

60%

80%

100%

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

Public Finance and Sovereign Project and Infrastructure Finance Other


1. Historical data has been adjusted to conform with current information and excludes intercompany revenue.Note: Percentages have been rounded and may not total to 100%.

Public, Project and Infrastructure: Revenue Diversification


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

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

0%

20%

40%

60%

80%

100%

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

Transaction Recurring

Moody’s Analytics: Financial Overview

$280 $297 $308 $315 $317 $333$358 $366 $386

$115 $124$122 $117 $134

$149 $138 $131$145

$40 $44$42 $43 $43

$31

$0

$100

$200

$300

$400

$500

$600

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

$ M

illion

s

Revenue1: Mix by Quarter

Professional Services

Revenue1: Distribution by Line of Business

Revenue1: Distribution by Recurring vs. Transaction

1. Historical data has been adjusted to conform with current information and excludes intercompany revenue. Research, Data and Analytics includes Bureau van Dijk revenue beginning from the acquisition close date, August 10, 2017. The revenue reclassification of the FACT product from RD&A to ERS is reflected starting from 1Q 2018. Subsequent to the divestiture of MAKS in 2019, revenue from the Moody's Analytics Learning Solutions ("MALS") unit, which previous to 2020 was reported in the Professional Services line of business ("LOB"), will now be reported as part of the RD&A LOB.

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

64% 64% 65% 65% 66% 64% 65% 65% 72% 74% 73%

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

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

0%

20%

40%

60%

80%

100%

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

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

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

0%

20%

40%

60%

80%

100%

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

Revenue1: Distribution by GeographyNon-U.S. U.S.

Enterprise Risk Solutions Research, Data and Analytics

$445 $483 $520 $572$626 $668

$833$1,121

$1,273$196 $243$263 $329

$374 $419$449

$451$522

$62 $108 $119$168 $150

$147$149

$159$159

$0

$400

$800

$1,200

$1,600

$2,000

$2,400

2011 2012 2013 2014 2015 2016 2017 2018 2019

$ M

illion

s

Revenue1: Mix by Year


Historically, Moody’s Revenue and InterestRates Have Not Been Strongly Correlated

Note: Gray bars reflect periods of significant increases in the 10-year Treasury Yield.1. 10-yr U.S. Treasury Yields are represented by the rate at the end-of-period.2. Guidance as of October 29, 2020. Source: www.treasury.gov.

+200bps

+120bps

+100bps

+180bps

MCO Revenue and Interest Rates

5.8%

7.8%

4.7%

6.5%

2.3%

3.3%

1.8%

3.0%

1.9%

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

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

2017

2018

2019

2020

F

$ M

illion

s

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

2


» Strong liquidity with $2.6B in cash and short-term investments, and a $1.0B revolving credit facility2

» 0.9x 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. 2014-2019 data as of year-end. 2020 data as of September 30, 2020.2. As of September 30, 2020.3. Trailing twelve months adjusted operating income. Amounts are adjusted measures, see Appendix for reconciliations from adjusted financial measures to U.S. GAAP and gross debt to net debt.4. Total Debt (gross debt less $100M of cash and equivalents) to EBITDA ratio threshold is normally 4.0x, but elevated to 4.5x for three quarters after an acquisition >$500 million.5. Certain USD denominated debt has been synthetically converted to EUR via cross-currency swaps. EUR converted to USD as of September 30, 2020.

400 400600

400500

300

170 250

500 586

879

300

330 250

500

0100200300400500600700800900

1000

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

USD Fixed USD Floating EUR Fixed EUR Floating

4.2% 3.9% 4.0%3.4% 3.4%

2.1% 2.4%

4.7%4.3% 4.3%

3.5%3.9%

3.3% 3.3%

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

$ in millions

Annualized Dividend Per Share

$1.36 $1.48$1.52

$1.76$2.00

$2.24

2015 2016 2017 2018 2019 2020F 2


1,189 1,242

$1,150.0

$1,200.0

$1,250.0

3Q19 3Q20

$ B

illio

ns

Issuance1

$469 $82

$3 $554

60.1%64.2%

46.0%46.0%46.1%46.1%46.2%46.2%46.2%46.3%46.3%46.3%46.4%46.4%46.5%46.5%46.5%46.6%46.6%46.6%46.7%46.7%46.8%46.8%46.8%46.9%46.9%47.0%47.0%47.0%47.1%47.1%47.1%47.2%47.2%47.3%47.3%47.3%47.4%47.4%47.5%47.5%47.5%47.6%47.6%47.6%47.7%47.7%47.8%47.8%47.8%47.9%47.9%47.9%48.0%48.0%48.1%48.1%48.1%48.2%48.2%48.3%48.3%48.3%48.4%48.4%48.4%48.5%48.5%48.6%48.6%48.6%48.7%48.7%48.8%48.8%48.8%48.9%48.9%48.9%49.0%49.0%49.1%49.1%49.1%49.2%49.2%49.2%49.3%49.3%49.4%49.4%49.4%49.5%49.5%49.6%49.6%49.6%49.7%49.7%49.7%49.8%49.8%49.9%49.9%49.9%50.0%50.0%50.1%50.1%50.1%50.2%50.2%50.2%50.3%50.3%50.4%50.4%50.4%50.5%50.5%50.5%50.6%50.6%50.7%50.7%50.7%50.8%50.8%50.9%50.9%50.9%51.0%51.0%51.0%51.1%51.1%51.2%51.2%51.2%51.3%51.3%51.3%51.4%51.4%51.5%51.5%51.5%51.6%51.6%51.7%51.7%51.7%51.8%51.8%51.8%51.9%51.9%52.0%52.0%52.0%52.1%52.1%52.2%52.2%52.2%52.3%52.3%52.3%52.4%52.4%52.5%52.5%52.5%52.6%52.6%52.6%52.7%52.7%52.8%52.8%52.8%52.9%52.9%53.0%53.0%53.0%53.1%53.1%53.1%53.2%53.2%53.3%53.3%53.3%53.4%53.4%53.5%53.5%53.5%53.6%53.6%53.6%53.7%53.7%53.8%53.8%53.8%53.9%53.9%53.9%54.0%54.0%54.1%54.1%54.1%54.2%54.2%54.3%54.3%54.3%54.4%54.4%54.4%54.5%54.5%54.6%54.6%54.6%54.7%54.7%54.7%54.8%54.8%54.9%54.9%54.9%55.0%55.0%55.1%55.1%55.1%55.2%55.2%55.2%55.3%55.3%55.4%55.4%55.4%55.5%55.5%55.6%55.6%55.6%55.7%55.7%55.7%55.8%55.8%55.9%55.9%55.9%56.0%56.0%56.0%56.1%56.1%56.2%56.2%56.2%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%56.9%56.9%56.9%57.0%57.0%57.0%57.1%57.1%57.2%57.2%57.2%57.3%57.3%57.3%57.4%57.4%57.5%57.5%57.5%57.6%57.6%57.7%57.7%57.7%57.8%57.8%57.8%57.9%57.9%58.0%58.0%58.0%58.1%58.1%58.2%58.2%58.2%58.3%58.3%58.3%58.4%58.4%58.5%58.5%58.5%58.6%58.6%58.6%58.7%58.7%58.8%58.8%58.8%58.9%58.9%59.0%59.0%59.0%59.1%59.1%59.1%59.2%59.2%59.3%59.3%59.3%59.4%59.4%59.4%59.5%59.5%59.6%59.6%59.6%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%60.3%60.3%60.3%60.4%60.4%60.4%60.5%60.5%60.6%60.6%60.6%60.7%60.7%60.7%60.8%60.8%60.9%60.9%60.9%61.0%61.0%61.1%61.1%61.1%61.2%61.2%61.2%61.3%61.3%61.4%61.4%61.4%61.5%61.5%61.6%61.6%61.6%61.7%61.7%61.7%61.8%61.8%61.9%61.9%61.9%62.0%62.0%62.0%62.1%62.1%62.2%62.2%62.2%62.3%62.3%62.4%62.4%62.4%62.5%62.5%62.5%62.6%62.6%62.7%62.7%62.7%62.8%62.8%62.9%62.9%62.9%63.0%63.0%63.0%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%63.7%63.7%63.7%63.8%63.8%63.8%63.9%63.9%64.0%64.0%64.0%64.1%64.1%64.1%64.2%64.2%64.3%64.3%64.3%64.4%64.4%64.5%64.5%64.5%64.6%64.6%64.6%64.7%64.7%64.8%64.8%64.8%64.9%64.9%65.0%65.0%65.0%65.1%65.1%

$0$50$100$150$200$250$300$350$400$450$500$550$600$650$700

3Q19 MIS AdjustedOperating Income

MIS RevenueIncrease

MIS ExpenseDecrease

3Q20 MIS AdjustedOperating Income

$ M

illio

ns

MIS Adjusted Operating Income and Margin+410bps

2 2

1. MIS rated issuance, excludes sovereign debt issuance.2. Includes intercompany revenue and expenses. Changes in expenses include the impact of adjusting items.

$392 $461

$105$88

$120$134

$120$133$9$9

-$50$50

$150$250$350$450$550$650$750$850$950

3Q19 3Q20

$ M

illio

ns

MIS Revenue

CFG SFG FIG PPIF MIS Other

$746$825

18%

(16%)12%

11%

YoY Change

MIS 3Q 2020: Favorable Revenue Mix

» CFG: Opportunistic refinancing, liquidity driven issuance and speculative grade strength contributed to favorable mix

» FIG: Revenue growth on active participation from infrequent issuers

» SFG: Slightly improved, but remains weak overall due to preference for fixed rate instruments

» Stronger than expected first time mandates YTD: ~540» Revenue growth and accompanying expense discipline

drove 410 bps increase in adjusted operating margin


$167$145

$36 ($14)29.2%

31.4%

15.0%$0

$100

$200

3Q19 MAAdjustedOperating

Income

MA RevenueIncrease

MA ExpenseIncrease

3Q20 MAAdjustedOperating

Income

$ M

illio

ns

MA Adjusted Operating Income and Margin

+220bps

3 3

$317$386

$134$145$43

$0

$100

$200

$300

$400

$500

3Q19 3Q20

$ M

illio

ns

MA Revenue2

RD&A ERS PS

22%

8%$494

$531YoY

Change

1. MA organic constant currency growth as defined in the reconciliation tables in the Appendix.2. Subsequent to the divestiture of MAKS in 2019, revenue from the Moody's Analytics Learning Solutions ("MALS") unit that 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.3. Includes intercompany revenue and expenses. Changes in expenses include the impact of adjusting items.

MA 3Q 2020: 8%1 Organic Constant Currency Revenue Growth

» MA revenue grew 8%, excluding the impact of divestiture, acquisitions and FX1

– RD&A: Driven by KYC and compliance solutions, research and data feeds

– ERS: Growth from credit assessment and origination solutions, as well as insurance products

» Year-over-year margin expansion enabled by:– Scalable top-line growth generating operating leverage– Continued savings from reduced marketing, travel and

entertainment expenses


Drivers of Sustainable Corporate ValueIntroduced Sustainability Disclosures in our Public Filings

1. The Science Based Targets initiative is a collaboration between CDP, UNGC, World Resources Institute (WRI), and the World Wide Fund for Nature (WWF), that is seeking to reduce corporate GHG emissions. 2. To be completed by 2040 through the purchase of verified carbon offsets.3. Carbon Disclosure Project.4. 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.5. 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) business focus and innovation and growth; (ii) people and culture; (iii) operating effectiveness and efficiency; and (iv) quality and risk management.

Executive compensation metrics include4:» Moody’s Corporation EPS and operating income» MIS operating income and ratings performance

» MA operating income and sales» Strategic & operational5

ENVIRONMENTAL» Focused on reducing greenhouse gas emissions with

science-based targets1 on our path to net-zero» Committed to remaining carbon neutral on an annual

basis and retroactively since September 20002

» Expansion of ESG products and services» CDP3 participation» Procuring 100% renewable electricity

SOCIAL» Support a diverse and inclusive workplace» Active global community and

philanthropic involvement» Robust data security and privacy practices» Fair compensation practices and benefits

packages» Recognized by Working Mother’s list of 100

Best Companies

GOVERNANCE» Professional integrity» Systematic risk management» Diverse Board membership

and skill sets» Separate CEO and Chairman positions» Active stockholder engagement


» 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

EnhanceData & Analytics

Deliver Efficiencies

Improve Decisions

IncreaseAdaptability

Note: AI: Artificial Intelligence; ML: Machine learning; NLP: Natural language processing; RPA: Robotic process automation; IaaS: Infrastructure-as-a-service;SaaS: Software-as-a-service; PaaS: Platform-as-a-service.

Technology: Innovating with PurposeNext Gen Tech is a Defining Element of our Culture, Setting Stage for Growth


Moody’s Global Presence

U.S. employees non-U.S. employees total employees14,087 7,310 11,397

2020 3,875

U.S. employees non-U.S. employees total employees29,850 13,725

2019

1. As of September 30, 2020. Reflects acquisition of RDC, VE, Four Twenty Seven, Risk First, ABS Suite and divestiture of MAKS.2. As of September 30, 2019.

AmericasArgentina MexicoBrazil PanamaCanada PeruChile United StatesCosta RicaEurope, Middle East & AfricaAustria PolandBelgium PortugalCyprus RussiaCzech Republic Saudi ArabiaDenmark Slovak RepublicFrance South AfricaGermany SpainIsrael SwedenItaly SwitzerlandLithuania United Arab EmiratesMorocco United KingdomNetherlandsAsia-PacificAustralia NepalChina SingaporeHong Kong South KoreaIndia ThailandJapan Sri Lanka


Reconciliation of Adjusted Financial Measures to GAAPAdjusted Operating Income and Adjusted Operating Margin Reconciliation1

(in $ millions) 2015 2016 2017 2018 2019 TTM 3Q 2020

Operating Income $1,491 $651 $1,821 $1,868 $1,998 $2,448Operating Margin 42.8% 18.1% 43.3% 42.0% 41.4% 46.1%

Add Adjustment:Depreciation & Amortization 114 127 158 192 200 213Acquisition-RelatedExpenses - - 23 8 3 0

Restructuring - 12 - 49 60 22Captive insurance company settlement - - - - 16 0

Settlement Charge - 864

3q 2020 investor presentation v36€¦ · 11/3/2020 · 3q 2020 investor presentation -november...

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