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1Q 2020 Investor Presentation
May 6, 2020
May 6, 2020 2
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 our 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, and in other filings made by the Company from time to time
with the SEC or in materials incorporated herein or therein. Stockholders and investors are cautioned that the occurrence of any of these factors, risks and
uncertainties may cause the Company’s actual results to differ materially from those contemplated, expressed, projected, anticipated or implied in the forward-
looking statements, which could have a material and adverse effect on the Company’s business, results of operations and financial condition. New factors may
emerge from time to time, and it is not possible for the Company to predict new factors, nor can the Company assess the potential effect of any new factors on it.
Disclaimer
May 6, 2020 3
Table of Contents
1. Moody’s Overview
2. Financial Overview
3. Capital Markets Overview
4. Moody’s Investors Service (MIS)
5. Moody’s Analytics (MA)
6. Appendix
1 Moody’s Overview
May 6, 2020 5
Provides financial
intelligence and analytical
tools supporting our
customers’ growth, efficiency
and risk management
objectives
Solutions address diverse
needs and customers
Extending brand into new
markets and deepening
customer relationship
Leading global provider of
credit rating opinions,
insight and tools for
financial risk measurement
and management
Independent provider of
credit rating opinions and
related information for over
100 years
Proven ratings accuracy
and deeply experienced
analysts
Expanded sales and
marketing activities in
Commercial group
Revenue of
$5.0 billion
Adjusted
Operating Income
of $2.4 billion
MIS
77%
MA
23%MIS
60%
MA
40%
Note: Financial data for the trailing twelve months ended March 31, 2020.
Company Overview
Adjusted
Operating Margin
MIS
59.4%
MA
28.1%
May 6, 2020 6
Moody’s Stakeholder Engagement
Employees Customers Communities Policymakers
» Employee safety and
wellbeing remains our priority
» Successful enactment of
business contingency plans
has resulted in over 11,000 of
our global workforce working
from home
» Monitoring situation on a
local level and aligning our
work processes with
guidance from relevant
authorities
» “Return to work” planning
well underway
» Dedicated
microsite showing research
and analytics from both
MIS and MA
» Engaging with customers
through virtual meetings as
well as near daily webcasts
» Creating innovative
products and services
to assist customers and
market participants
» Focusing on areas
where we can leverage
our core business expertise
to help the communities in
which we operate
» Providing virtual
volunteering opportunities
to our employees across
the globe
» Providing global and local
grants for humanitarian aid
and to address the impact
of COVID-19 on small
businesses and education
systems.
» Increased dialogue with
government officials to
share insights, provide data
and resources
» Regular interactions with
fiscal and monetary
authorities to enhance
efficacy of stimulus
programs
» Moody’s breadth and depth
of data and expertise
across economic and
market views; credit, KYC,
ESG and other risk
measurements- and related
software tools- makes it a
natural partner for
policymakers
Supporting our stakeholders
during COVID-19 crisis
May 6, 2020 7
Moody’s Strategic Priorities
Enhance technology infrastructure to enable automation, innovation and efficiency
Foster employee engagement and creative solutions through our diverse workforce
and inclusive environment
Private Co.
Data / SME
Business Adjacencies
ESG Cyber RiskCommercial
Real Estate
Emerging
Markets
Private Co.
Data / SME
Regional Expansion
Integrated Risk
Pyramid
Asia-
Pacific
Latin
AmericaEMEA
May 6, 2020 8
Key Business Development and Growth Initiatives
Better decisions through unique and powerful customer solutions
Know-Your-Customer
(KYC)
Environment, Social
and Governance (ESG)
Commercial Real Estate
(CRE)
WORLD CLASS KYC SOLUTIONS
BvD and RDC recognized as
category leaders in new Chartis
Research report1
Integration of RDC on-track
Unique data assets and AI
improve speed and effectiveness
in identifying risks
NEW CRE PLATFORMS
Launched new REIS website with
dedicated COVID-19 topic page
Integrating Moody’s data and
analytics including ratings,
proprietary commercial location
scores and 427 physical risk
scores
EXTENSIVE ESG CAPABILITIES
~50 Q1 mandates for sustainability
ratings, sustainability-linked loans and
second party opinions for labeled bonds
Leveraging data and analytics
to support new value propositions
» Ratings & research
» Climate and credit models
» Scenario projections
» Portfolio attribution tools1. Chartis Research report: KYC/AML Data Solutions, 2020 Market and Vendor Landscape.
May 6, 2020 9
Drivers of Sustainable Corporate ValueIntroduced Sustainability Disclosures in our Public Filings
1. Carbon Disclosure Project.
2. While the Company reports its financial results in accordance with GAAP, financial performance targets and results under the Company’s incentive plans are based on adjusted financial
measures. These metrics and the related performance targets are relevant only to Moody’s executive compensation program and should not be used or applied in other contexts.
3. This measure is a qualitative assessment of strategic and operational metrics tied to key non-financial business objectives certified by the Compensation & Human Resources Committee at
the beginning of the performance period. The Committee assessed the achievement of the metric by evaluating performance against the following objectives: (i) new sources of growth; (ii)
quality assurance and controls; (iii) operating effectiveness and efficiency; (iv) people and culture; (v) risk management; and (vi) enabling technologies and capabilities.
Executive compensation metrics include2:
» Moody’s Corporation EPS and operating income
» MIS operating income and ratings performance
» MA operating income and sales
» Strategic & operational3
EN VI R O N M E N TA L
» 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
SOC I A L
» 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
GOVER N A N C E
» Professional integrity
» Systematic risk management
» Diverse Board membership
and skill sets
» Separate CEO and
Chairman positions
» Active stockholder
engagement
May 6, 2020 10
CSR and Sustainability Initiatives
Remain a Focus
We drive progress and measurable impact in
our complex and changing world by building
more inclusive economies, stronger communities
and an environmentally sustainable future.
Empowering people
with financial knowledge
Activating an environmentally
sustainable future
Helping young people
reach their potential
Pathway to Prosperity
» Helping business advisors and, ultimately, their
clients better understand cash flow management
Technoserve
» Serving the developing world to build
competitive farms, businesses and industries
Finance Forward Latin America 2019
» Through Moody’s Local, collaborated with
Reshape Tomorrow™ partner Village Capital
» Supporting the social, environmental and
financial health of Latin American communities
» Continually seek to improve Moody’s impact on
the planet
Energy Use and Travel/Commuting1
» 10% reduction in electricity use year-over year;
16% reduction in use per employee
» 11% renewable energy use
» 75% miles commuted using public
transport or carpool
Grants: Prioritize organizations with a mission
of environmental sustainability
» Instituto Perene – a nonprofit dedicated to
promoting development while protecting natural
resources in rural Brazil
» Future Food Institute – Improve and enrich
degraded land in Brazil while creating jobs for
forest workers
» We work with schools and nonprofits around
the world to prepare students ages 15–24
for successful careers in finance, technology
and economics
» Moody’s provides mentorship initiatives, skills
development programs, internships and other
educational opportunities
Urban Scholars Widening Access Programme
» Funded and supported by Moody’s
for 15 years.
1. Data per Moody’s 2019 CSR report.
2 Financial Overview
May 6, 2020 12
Long-Term Growth Opportunities
Three Levers to Achieve EPS Growth
Note: Long-term growth opportunities presented on this slide are on average over time.
1. Assumes no material change in effective tax rate, foreign exchange rates, leverage profile and/or capital allocation policy.
2. Subject to market conditions and other ongoing capital allocation decisions.
May 6, 2020 13
$2.3 $2.4 $2.8 $2.7 $2.9
$1.2 $1.2$1.4 $1.7 $2.0
$0.0
$1.0
$2.0
$3.0
$4.0
$5.0
$6.0
2015 2016 2017 2018 2019 2020F
$ B
illio
ns
MIS Revenue MA Revenue
$4.8
2
$3.5 $3.6$4.2
$4.4
$1,109 $1,144
$664
$1,370$1,606
$1,200 - $1,400
$500
$700
$900
$1,100
$1,300
$1,500
$1,700
2015 2016 2017 2018 2019 2020F25
Adjusted Diluted EPS3Revenue1
mid-single-digit
% decline
$4.71 $4.94$6.07
$7.39$8.29
$2.00
$3.00
$4.00
$5.00
$6.00
$7.00
$8.00
2015 2016 2017 2018 2019 2020F
Free Cash Flow3
1
2
Financial Performance
1. Totals may not sum due to rounding.
2. Guidance as of April 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. Reflects reduction by $701 million net of tax settlement charge.
$ Millions
$7.80
to
$8.40
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
46%
-48%
41%
-43%
2
3
May 6, 2020 14
Accelerate Decelerate
Global fiscal support and
monetary stimulus actions
COVID-19 declared a pandemic
by the World Health Organization
Wave of investment grade capital
raising for liquidity purposes
Shelter-in-place policies implemented
across most of the world
Over 30 million people in the U.S. filed for
unemployment benefits over the last 2 months
VIX index spiked north of 80
Record low oil prices
U.S. HY spreads widened to north of 1,000 bps;
spreads on Aaa portions of CLOs reached ~300 bps
Macro Environment Informing Our Outlook
Note: Outlook is as of April 30, 2020.
1. Assumes 2Q20 peak unemployment of 12% - 17%.
2. Peak default rate. Represents one year forecast ending March 2021.
Sources: “Default Scenarios as Coronavirus-Induces Economic Turmoil
Intensifies”, “March 2020 Default Report” and “Global Macro Outlook 2020-
2021 (April 2020 Update) Moody’s Investors Service.
2020 GDP
U.S. -5.7%
Europe -6.5%
Benchmark interest
rates remain low;
high yield spreads
remain >700 bps
Full year average
2020 U.S.
unemployment rate of
~10%1
High yield default
rate of 11%-16%2
BASE CASE ASSUMPTIONS
Expect economic
recovery late 3Q/4Q 2020
CHANGES SINCE MARCH 11TH
May 6, 2020 15
56%
44%
Recurring Transaction
1Q 2020 TTM Revenue: $5.0 billion
Moody’s Corporation Financial Profile
53%
47%
U.S. Non-U.S.
Full Year 2020 Guidance as of April 30, 20202
Revenue • decline in the mid-single-digit % range
Operating Expenses • decline in the mid-single-digit % range
Operating Margin • approximately 41% - 43%
Adjusted Operating Margin3 • 46% - 48%
Effective Tax Rate • 19.5% - 21.5%
Diluted EPS • $7.25 - $7.85
Adjusted Diluted EPS3 • $7.80 - $8.40
1. Includes trailing twelve months of professional services revenue. 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 First Quarter 2020” from April 30, 2020 for Moody’s full 2020 guidance.
3. These metrics are adjusted measures. See Appendix for reconciliations from adjusted financial measures to U.S. GAAP.
Note: The revenue reclassifications of REITs to Corporate Finance from Structured Finance and the FACT product from RD&A to ERS are reflected in the full year (FY) calculations.
CFG32%
SFG8%
FIG10%
PPIF9%
MIS Other1%
RD&A1
29%
ERS11%
MA
MIS
May 6, 2020 16
$1,098
$739
$200 $203
$991
$272
$285
$290 $337
$378
$0
$400
$800
$1,200
$1,600
150
170
190
210
230
2015 2016 2017 2018 2019
$ M
illions
Mill
ions o
f S
hare
s
Share Repurchases (R) Dividends Paid (R)
Shares Outstanding (L)
$1,370 $1,369
Disciplined Approach to Capital Allocation
Share Repurchases and Dividends Paid Annualized Dividend Per Share
$1,024
Investing in Growth Opportunities Return of Capital
Reinvestment
Invest in existing
businesses to
support organic
growth
Acquisitions
Evaluate carefully to
make sure aligned
with strategy and
market evolution
Dividends
Grow dividend in line
with earnings; target
25% - 30% payout1
Share Repurchase
Follow reinvestment,
dividends and
acquisitions in capital
allocation prioritization
$1.36$1.48 $1.52
$1.76
$2.00
$2.24
2015 2016 2017 2018 2019 2020F2
$490 $540
1. Dividend payout ratio is defined as total dividends paid/adjusted net income.
2. Annualized dividend total, based on first quarter dividend declared on April 20, 2020.
3. Share repurchases have been temporarily suspended as of April 30, 2020. Year-to-date share repurchases as of March 31, 2020 is approximately $253 million.
3
3 Capital Markets Overview
May 6, 2020 18
Coronavirus disrupts real economy, impact to credit market may be delayed
Credit Market Update
1. MIS rated issuance.
COVID-19 PANDEMIC
» Abrupt shock
» Heroic health community response
» Significant human toll
» Policy responses: social distancing
implemented
– Reopening tactics under review
as infection curves flatten
GEOPOLITICAL IMPACT
» Global fiscal easing
– Trillions more in loan
guarantees
» Oil prices plummet on lack
of global demand/storage
capacity and production disputes
MACROECONOMIC RESPONSE
» Aggressive worldwide central bank rate cuts
» U.S. Fed supports mortgage, investment
grade, fallen angel and high-yield ETF
markets
» Various other central bank asset purchase
programs and new credit facilities instituted
» IMF: -3% worldwide 2020 GDP
» Job losses and furloughs
» Record March issuance1
» Opportunistic capital raising
bolsters balance sheet liquidity
» Commercial paper access limited
Investment grade bonds High yield bonds
» Significant spread widening, though
subsequent tightening
» Access remains for fallen angels
and higher-end of spec grade
Leveraged loans
» Revolver draw-downs bolster liquidity
» Issuance market shutters
» Fund outflows and lack of
CLO demand
CREDIT MARKETS
REAL ECONOMY
May 6, 2020 19
U.S. Investment Grade Drives Issuance in 1Q20Investment grade issuance surged in March, while leveraged finance stalled
Note: MIS rated issuance. Investment Grade and High Yield Bond spreads in basis points. Issuance figures displayed in billions.
$41
$65 $66
$23
$12
$26
$41
$27
$39
150 130 130
460 410 400
Jan-19 Feb-19 Mar-19
1Q 2019
$24
$57
$160
$37 $29
$4
$87
$56
$14
100 110260
360390
790
Jan-20 Feb-20 Mar-20
1Q 2020
Investment grade bond Bank loan High-yield bond spreadHigh-yield bond Investment grade bond spread
May 6, 2020 20
Debt Leverage and Interest Coverage in
North America and Europe
Credit Metrics: North American Speculative Grade Companies
1. Trailing twelve months ended December 31, 2019.
Note: Historical figures may change due to timing differences in issuer reporting deadlines. Source: Moody’s Investors Service.
4.6x 4.6x 4.6x 4.4x 4.3x 4.4x 4.6x 4.8x 5.0x 5.1x 5.2x 5.4x 5.3x 5.2x
2.9x 2.6x 2.4x 2.7x 3.0x 3.1x 3.0x 3.0x 3.0x 2.9x 3.0x 3.0x 2.8x 2.8x
0.0x
1.0x
2.0x
3.0x
4.0x
5.0x
6.0x
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Inte
rest C
ove
rag
e
Debt / EBITDA EBITDA / Interest Expense
Credit Metrics: European Speculative Grade Companies
5.0x
4.1x4.5x 4.8x
4.1x 4.2x 4.4x 4.6x 4.7x 4.5x 4.6x 4.6x5.2x 5.0x
2.9x 2.9x 2.6x 2.8x3.4x 3.2x 3.0x 3.0x 3.1x 3.3x 3.5x 3.7x 3.5x 3.8x
0.0x
1.0x
2.0x
3.0x
4.0x
5.0x
6.0x
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Inte
rest C
ove
rag
e
Debt / EBITDA EBITDA / Interest Expense
1
1
May 6, 2020 21
Default Rate Forecast Rises in Wake of
Unprecedented TurmoilDefault Rates for Speculative-
Grade Corporate Rated Issuance1
1. Moody’s rated corporate global speculative grade default historical average of 4.1% from 1983 through March 31,2020. 2020 forecast for TTM ended December 31, 2020. Peak
global default rate downside case forecast of ~16%; represents one year forecast ending March 2021.
2. Covenant data for European bonds represent a three quarter rolling average, North American loans and bonds represent a two quarter rolling and a three month rolling average,
respectively.
Source: Moody’s Investors Service.
4.23x
4.47x
3.84x
2.0
2.5
3.0
3.5
4.0
4.5
5.0
2012 2013 2014 2015 2016 2017 2018 2019
U.S. Loans U.S. Bonds European Bonds
Speculative-Grade Covenant
Quality Indicators2
Weakening
Improving
11%
13%
8%
0%
2%
4%
6%
8%
10%
12%
14%
16%
Global U.S. Europe
4.1% global
historic average1
May 6, 2020 22
1. Non-financial corporates.
2. Source: Moody’s Investors Service, January 2020. Data represents U.S. & Canadian MIS rated corporate bonds & loans.
3. Source: Moody’s Investors Service, July 2019.
203 245 253 199 193
3058 97
127 142858
140 239342
2020 2021 2022 2023 2024
$ B
illio
ns
Speculative Grade Bank Loans
Speculative Grade Bonds
Investment Grade
Refunding Needs1 Support MIS
Long-term Fundamentals
$241$360
$490$565
338 327 356 349
28 3984 7239 46
64 69
2020 2021 2022 2023
$ B
illio
ns
Speculative Grade Bank Loans
Speculative Grade Bonds
Investment Grade
$405 $412
$504 $490
$677
>$2.3 Trillion in Debt Maturities: North America Moody’s-Rated Corporate Bonds and Loans2
>$1.8 Trillion in Debt Maturities: EMEA Moody’s-Rated Corporate Bonds and Loans3
May 6, 2020 23
$1,972
$3,466
$1,000
$1,300
$1,600
$1,900
$2,200
$2,500
$2,800
$3,100
$3,400
2012 2013 2014 2015 2016 2017 2018 2019 2020
$ B
illio
ns
Refunding Needs Have Grown Strongly Over Time
Next Four Years 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 corporate bonds & loans. Canada data not available before 2015.
May 6, 2020 24
Debt Refinancing and M&A are Most Frequently
Stated Uses of Proceeds
Uses of Funds from USD High Yield Bonds and Bank Loans1
62%
0
83%
71% 74%78%
71%65%
54%64%
71%62%
68%
0
73%
63%
0
19%
31% 30%25%
31%41% 54%
41%
39%
49%35%
0
35%
22%
0
11%
7% 8% 8%7% 8%
5% 6%5% 5% 7%
0
3%
12%
0
4%
18% 17% 18% 22% 20% 16% 17% 13% 15% 13%
0
10%
1999 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 1Q20
% o
f M
en
tio
ns
Debt Refinancing M&A Capital Spending Shareholder Payments
1. Percent of mentions for each respective period in bond issue or bank loan program tranche documents. Excludes issues of less than $25 million and general corporate purposes.
An issue can have multiple purposes and, as a result, percentages do not sum to 100%.
Source: Moody’s Analytics.
May 6, 2020 25
Disintermediation of Credit is an Ongoing Trend in the Global Capital Markets
European Non-Financial Corporate
Bonds vs. Bank Loans Outstanding
4
8
%
€0
€1,000
€2,000
€3,000
€4,000
€5,000
€6,000
€7,000
€ B
illio
ns
Bonds Loans
U.S. Non-Financial Corporate
Bonds vs. Bank Loans Outstanding
4
8
%
$0
$1,500
$3,000
$4,500
$6,000
$7,500
$9,000
$ B
illio
ns
Bonds Loans
74%
26%
50%
50%
Sources: ECB, Federal Reserve, BarCap Indices. Europe bank loan data includes Eurozone and UK bank loans. Europe bond data includes euro and sterling denominated bonds.
European data is through February 2020 and U.S. data is through March 2020.
4 Moody’s Investors Service
May 6, 2020 27
36%
64%
Recurring
Transaction
1Q 2020 TTM Revenue: $3.0 billion
Public, Project,
& Infrastructure
Finance
15%
Financial
Institutions
16%
Corporate
Finance
53%
Structured
Finance
14%
MIS Other
1%
60%
40%
U.S.
Non-U.S.
» 34% recurring revenue
» 43% recurring revenue
» 28% 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%.
» 54% recurring revenue
Moody’s Investors Service Financial Profile
May 6, 2020 28
» Issuance2 expected to decline in the low-double-digit percent range from $4.6T in 2019
- Non-financial corporate investment grade issuance to increase ~10%; high yield bonds to decline ~20%;
leveraged loans to decline ~40%
» Approximately 600 first time mandates
» Refinancing and liquidity driven issuance, reduced M&A activity
» Less favorable issuance mix
» Recurring revenue provides ballast
» Lower incentive compensation and additional cost efficiency initiatives support margin
1. Guidance as of April 30, 2020.
2. Global debt issuance. Excludes sovereign debt.
MIS Guidance: COVID-19 Lowers Outlook1
Key drivers of MIS FY 2020 outlook1
High-single-digit
% decline
$2.9B
$1,700
$1,900
$2,100
$2,300
$2,500
$2,700
$2,900
2019 2020F
Revenue
1
Adjusted Operating Margin1
58.0%55% - 57%
2019 2020F1
May 6, 2020 29
The Benefits of a Moody’s Rating
Investors seek our opinions and
particularly value the knowledge of our
analysts and the depth of our research.
Wider access
to capital
Tangible
financing benefits
Planning
and budgeting
Transparency,
credit comparison
and market stability
Responsive to
investor demand
Moody’s opinions on
credit are broadly used
by institutional investors
throughout the world,
making an issuer’s debt
more attractive to a wider
range of potential buyers
The credibility of
Moody’s ratings may
allow rated issuers to
enter the capital markets
more economically
through a lower cost
of capital
Helps issuers formulate
internal capital plans
and funding strategies
Signals a willingness
by issuers to be
transparent and
provides issuers
with an independent
assessment against
which to compare
their own creditworthiness
Moody’s ratings are
the most used by investors,
(when multiple agencies
are used), who have
acknowledged our track
record of accuracy
May 6, 2020 30
» We remain focused on analytical expertise and our credit methodologies to provide predictive,
predictable and transparent ratings
» Accuracy reinforces investor demand pull
» April 2020 ratings review reports provide update of rating actions by sector3
2%6%7%
16%19%
26%32%
44%
63%
87%88%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Aa
a
Aa
1
Aa
2
Aa
3
A1
A2
A3
Ba
a1
Ba
a2
Ba
a3
Ba
1
Ba
2
Ba
3
B1
B2
B3
Ca
a1
Ca
a2
Ca
a3
Ca
_C
0%
2%
5%
8%
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
Aaa Aa A Baa Ba B
1 Source: Moody’s Investors Service. The data in the chart above shows the ten-year cumulative default rates by rating from January 2009, through January 2018 of fundamental Moody’s
rated universe globally. Rating category is based on senior unsecured rating (or equivalent) of the issuer.
2 Source: Moody’s Investors Service: Global multi-year cumulative WR-adjusted impairment rates by original rating,1993-2018.
3 Corporate Finance and Financial Institutions Ratings Review Summaries published April 1, 2020 and April 15, 2020, respectively.
Ten-Year Cumulative 1993-2018 CLO
Impairments2
Ten-Year Default Rates by Rating for 2009-
2018 Cohort: Non-Financial Corporates1
Rating Performance Drives Investor Confidence
May 6, 2020 31
Illustrative Value of a Moody’s Rating
Example: 10 year $500 million corporate bond
$15 million in total interest expense
vs.
lifetime cost of a rating
$500,000,000
x 4.3%
= $21,500,000
x 10 years
= $215,000,000
Unrated Rated by Moody’s
$500,000,000
x 4.0%
= $20,000,000
x 10 years
= $200,000,000
Bond
Interest rate
Annual interest payments
Tenor
Lifetime interest expense
Note: Illustrative spread differential based on feedback from syndicate desks and FBR & Co. research on Moody’s Corporation (January 2014) which stated that obtaining a Moody’s
rating typically saves approximately 30 basis points per year for investment grade issuers. Many factors go into the pricing of a bond.
May 6, 2020 32
Americas APACEMEA
» 29,600+ rated
companies and
structured deals
» $35+ trillion total
debt rated
» 16,800 research
publications
» Offices in 10 cities*
» 4,700+ rated
companies and
structured deals
» $20+ trillion total
debt rated
» 6,700 research
publications
» Offices in 13 cities*
» 2,200+ rated
companies and
structured deals
» $13+ trillion total
debt rated
» 4,100 research
publications
» Offices in 10 cities*
1. Institutional Investor Survey.
Source: Moody’s Investors Service.
All data as of January 20, 2020, except Research Data covers the period January 1, 2019 – December 31, 2019.
All numbers are rounded other than those marked *
~15 Years Lead/Senior Analyst
tenure
#1 Global Credit
Rating Agency
20191
#1 U.S. Credit
Rating Agency
2012-20181
Broad Coverage Serves Global Needs
May 6, 2020 33
Continue to Invest in Key International Markets
Asia Pacific
» China: Successful joint venture with CCXI and
robust cross-border operations
» South Korea: Full ownership of KIS subsidiary,
a leading provider of domestic credit ratings in
South Korea
» India: Majority stake in ICRA serves growing
domestic Indian bond market
Latin America
» Launched Moody’s Local, a new platform that will
provide domestic credit ratings and research in
Peru, Panama and Bolivia1
» Minority investment in ICR Chile deepens
Moody’s presence in dynamic and expanding
market
EMEA
» Opened Moody’s offices in Saudi
Arabia and Lithuania
2009 2019
Emerging Asia Latin America Middle East
CEE/CIS Africa
Revenue in Emerging Markets
$94M
$342M
EMEA
1. Subject to regulatory approvals. Moody’s Local ratings represent forward-looking rank-orderings of creditworthiness within the domestic market of a specific country. They are not
comparable between countries, and are distinct from and independent of the opinions of MIS and its global ratings.
May 6, 2020 34
0
10
20
30
40
50
US China Japan UK France
Total debt securities outstanding 2012–20191
2012 2019
Moody’s in Greater China
» 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
Estimated China Ratings Market Size: Domestic and Cross Border2
58%42%
Rest of Market CCXI's Share
63%
37%
Rest of Market Moody's Share
Domestic Market
~$280M
Cross Border Market
~$290M3
2nd Largest Onshore Bond Market at $14 Trillion2019 Revenue and Attributable Income
from China3
1%0%
-2%
3%
20%
1. Source: Bank for International Settlements (latest data available as of 2Q19).
2. Revenue as of full year 2019; USD 1 = RMB 6.92 RMB exchange rate as of December 31, 2019 is used for conversion for domestic CRAs’ estimated revenue. Note: These are high
level estimates based on MIS & CCXI full year 2019 revenue/market coverage in domestic market; in cross border, market share is coverage/sum of coverage for three major CRAs.
3. Greater China: Mainland, Hong Kong and Macau.
$176
$17 -
50
100
150
200
MIS Cross Border andTotal MA
Attributable Income fromCCXI
$ M
illio
ns
Total MA Revenue
MIS Cross Border Revenue
Attributable Income from CCXI
» 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
May 6, 2020 35
RESEARCH2
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
200+Sustainable bonds
Assessed globally
30+Years of ESG experience
Our affiliate Vigeo Eiris has
been a pioneer in ESG
analysis since the 1990s
300+MIS research reports
Related to ESG
considerations in 2019
20+ESG related events
Delivered in 2019 through
Moody’s global event program
MIS ESG Opportunity:
Driving Expansion Beyond Credit
ANALYSIS
» Moody’s forecasts global green,
social and sustainability bond
issuance to be $275 to $325
billion in 20201
» Our minority stake in SynTao
Green Finance’s China-specific
datasets enhance Moody’s
global ESG research and data,
and complement Moody’s
majority ownership of Vigeo
Eiris, a leading provider of
ESG research, data and
assessments, and of Four
Twenty Seven, a leader in
climate data and risk analysis.
» Moody’s offers a comprehensive
suite of solutions for ESG
assessments
OUTREACH
» ~200 media engagements
in 1Q20 driven by Moody’s
Events and MIS research
» MIS maintains a leading
share of voice in key global
media with 58%
» Strategic relationships with
industry organizations and
influencers across sustainable
finance
» New Moody’s ESG &
Climate Risk microsite:
moodys.com/esg
1. Forecast as of May 5, 2020.
2. As of November 2019, combined for all Moody’s entities including affiliates.
May 6, 2020 36
Research report on exposure to future heat
stress for U.S. counties» Relative projections of future heat stress for each U.S.
county to demonstrate high risk areas provided by 427
Research report on
public safety power
shutoffs in California» Maps of heat/water stress
in California provided by 427
Near term
MIS publishing report on the climate change scenarios» Climate scenario expertise on the physical impacts of the
different scenarios provided by 427
427 data to be incorporated into tools
for the U.S. PFG team» Data and scores for all U.S. Municipalities from 427
will either complement or replace data from prior sources
» 427 includes greater amount of risk hazards than prior sources
REIS Network data partner
Joint by-line article: the changing climate
of credit risk management
Integrating 427 Climate Analytics
to Better Inform the Market
+ +
5 Moody’s Analytics
May 6, 2020 38
Research, Data and Analytics1
73%
Enterprise Risk Solutions
27%
Moody’s Analytics Financial Profile
86%
14%
Recurring
Transaction
42%
58%
U.S.
Non-U.S.
» 98% recurring revenue2
» ~ 96% retention rate3
» 77% recurring revenue
1Q 2020 TTM Revenue: $2.0 billion
1. Includes trailing twelve months of professional services revenue.
2. 98% recurring revenue for RD&A as reported, including MALS for 1Q20. It does not include MALS or other professional services revenue prior to 1Q20.
3. As of FY 2019. Excludes 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.
May 6, 2020 39
MA Guidance: Continue to Expect
Revenue Growth and Margin Expansion1
1. Guidance as of April 30, 2020.
» Strong recurring revenue moderates COVID-19 impact
» MAKS divestiture weighs on revenue growth, partially offset by RiskFirst, Deloitte ABS, RDC acquisitions
» FY revenue guidance including an unfavorable 2% - 3% impact from FX and inorganic activity
» RD&A: Strong demand for BvD data and tools, continued upgrades for research platform, and data feeds
» ERS: Strength in software sales and delivery; modest impact from delays of IFRS 17 and CECL implementations
» Lower incentive compensation and additional cost efficiency initiatives support margin
2019 2020F
$2.0B
Revenue
Mid-single-digit
% growth
1
27.8%
2019 2020F
Approximately 30%
Adjusted Operating Margin1
1
Key drivers of MA FY 2020 outlook
May 6, 2020 40
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 More Than Tripled Since Inception
Note: Individual line of business revenues may not add up to total Moody’s Analytics revenue due to rounding.
1. Subsequent to the divestiture of MAKS in 2019, revenue from the Moody's Analytics Learning Solutions ("MALS") unit, which previous to 2020 was reported in the Professional
Services line of business ("LOB"), will now be reported as part of the RD&A LOB. Prior periods have not been reclassified as the amounts were not material.
May 6, 2020 41
89%1
Recurring
Revenue
~50%Revenue from sales
closed prior to 1/1/2020
Revenue components 2020 Current Outlook2
Renewal yield might be affected
~10%Revenue from new
sales in 2020
~40%Revenue from
scheduled renewals
Existing contractual obligations
being met by MA and Customers
Social distancing preventing face
to face selling efforts
2019 Actuals
Research ~96%
ERS ~94%
BvD ~92%
94.6% 95.2%
2012 2019
94.3% - 8 year low point
96.0% - 8 year high point
Note: Recurring refers to the repeatable nature of sales or revenue, as a result of a subscription-based fee model. Product retention
rate refers to the dollars retained from existing customers on an annual basis.
1. Full Year 2019, excluding MAKS.
2. Guidance as of April 30, 2020.
MA’s Strong Retention Rates Mitigate
COVID-19 Impact
Stable Retention of Recurring Base Ensures Predictable Revenue
May 6, 2020 42
Sales Strategies Adapting to COVID-19
Sales Activities
Shifting
Mar-19 Mar-20 Mar-19 Mar-20
Number of
In-Person Meetings
Number of
Virtual Meetings
Down 50%
Up +400%
Converting selling
activities from
face-to-Face to
virtual
Updating sales campaigns
Observing some impact
on new business pipeline
» Expect sales cycles to take
longer than 9-12 month
historical average
» Business development
activities are seasonal,
COVID-19 interrupting
important period
FOR CURRENT CUSTOMERS…
» Emphasis on pro-active
customer support during crisis
to maintain retention rates
» Adding new content and
analytics to address shifting
customer needs
FOR NEW CUSTOMERS…
» Test new value propositions
» Highlight COVID related
features
May 6, 2020 43
Expansion of ratings coverage
Production of insightful credit
analysis
New customers in
geographies with developing
debt capital markets
Expansion of data sets and
delivery options
Strong customer retention
RD&A: Subscription Growth Driven by Retention, Upgrades and Pricing & New Sales
Full
Year
2018
95.8% 109.7%9.1% 4.8%
Retained Base Upgrades and Price New Sales Business Base
Subscription Sales Growth(constant currency)
Full
Year
20
17
95.5% 109.4%8.2%5.7%
Retained Base Upgrades and Price New Sales Business Base
Note: The sales growth attributions presented on this slide are related to RD&A subscription sales on a constant currency basis and excludes Bureau van Dijk and Reis. Upgrades
reflect amendments to existing customer contracts. New Sales reflect new contracts with new and existing customers.
Full
Yea
r 201
9
96.2% 110.6%9.0%5.4%
Retained Base Upgrades and Price New Sales Business Base
Full
Year
2016
95.4% 110.2%8.0% 6.8%
Retained Base Upgrades and Price New Sales Business Base
May 6, 2020 44
Global Regulatory and Accounting Drivers for the
ERS Business
Source: Moody’s Analytics market research as of April 2020.
Note: *Regulation has been delayed/ cancelled to allow banks to focus their resources on navigating the coronavirus pandemic - please see below for details
The Basel Committee has delayed the implementation of outstanding capital standards - commonly referred to as “Basel IV” - originally set to be implemented on Jan. 1, 2022 - will now have an
implementation date of Jan. 1, 2023. Additionally, the Committee has decided to postpone the implementation of the revised G-SIB framework by one year, from 2021 to 2022. The EBA has delayed the EU-
wide stress test by one year to 2021. In Australia APRA has delayed the implementation of APS 220 on credit risk management by one year from January 2021, to January 2022.
EMEA
20192020202120222023 and beyond 2020 2021 2022 2023 and beyond
FRTB*
BoE/ PRA ST
TLAC
CVA review*
Revised IRB
approach CR*
FBO ST
CCAR /
DFAST
EU-wide ST*
SEC Liquidity rules
(ETF, mutual funds)
NCUA RBC
rule for large
credit unions
CECL
Vickers reform
Revised SA
operational risk*
Updated
Leverage Ratio*
CCAR /
DFAST
CCAR /
DFASTRevised
minimum capital
requirements for
MR*
Output floor*
Supervisory rating
system for LFIs
Revised G-SIB
assessment*
SCCL for large
banks
NSFR
NSFR
Minimum
Leverage
Ratio
BoE/ PRA BES
(Climate-related element)
CCAR /
DFAST
EU Sustainability
taxonomy
Interest Rate
Benchmark
Reform
EBA Guidelines on
Outsourcing
Agreements
SFTR regulatory
technical standards
EU “Banking Package”
CRR2, CRD5, BRRD2
and SRMR2
Incorporate ESG risks
into supervisory process
EU Investment
Firms Directive
and Regulation
EU MLD5
TLAC
IRRBB review
TLAC
New securitization
framework
New securitization
framework
Interest Rate
Benchmark Reform
Interest Rate
Benchmark
Reform
HLA requirement
Revised G-SIB
assessment*
Revised G-SIB
assessment*
Output floor*
Output floor*
CVA review*
CVA review*
Revised minimum
capital requirements
for MR*
Revised minimum
capital requirements
for MR*
Revised SA
operational risk*
Revised SA
operational risk*
Revised SA
market risk*
Updated
Leverage Ratio*
Updated
Leverage Ratio*
Revised IRB
approach CR*
Revised IRB
approach CR*
Revised
standardized
approach CR*
Revised
standardized
approach CR*
Revised
standardized
approach CR*
FRTB*
FRTB*
HLA
requirement
HLA
requirement
Climate Change
ST
CCAR /
DFAST
BoE/ PRA ST
BoE/ PRA
ST
DNB
Climate
ST
Credit Risk
Management*
Revised SA
market risk*
Revised SA
market risk*
6 Appendix
May 6, 2020 46
Corporate Finance: Revenue and Issuance
$134 $139 $135 $145 $128 $140 $140 $139 $145
$87 $72 $55 $57 $97 $96 $106 $80
$144$58 $59
$39 $19
$57$68 $57
$75
$75$110 $121
$78 $70
$73$84 $89
$68
$89
$0
$50
$100
$150
$200
$250
$300
$350
$400
$450
1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20
$ M
illio
ns
Revenue1: Mix by Quarter
Other Investment Grade Speculative Grade Bank Loans
$275 $312 $363 $420 $421 $425 $488 $554 $547$137
$197$193
$230 $305 $262$301
$271$379
$120
$194$229
$219$183 $181
$254 $175
$258
$120
$155
$212$242 $204 $254
$349 $379
$313
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
2011 2012 2013 2014 2015 2016 2017 2018 2019
$ M
illio
ns
Revenue1: Mix by Year
Other Investment Grade Speculative Grade Bank Loans
$312 $305$236 $221
$329 $314$370 $406 $431
$112 $94
$64$33
$105 $120$105
$162 $132$165 $210
$123$103
$100 $105$111
$108 $119$65 $72
$39
$28
$26 $25
$43
$50$55
$0
$200
$400
$600
$800
1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20
$ B
illio
ns
Issuance3: Mix by Quarter
Non-U.S. Speculative-Grade Bank LoansU.S. Speculative-Grade Bank LoansGlobal Non-Financial Speculative-Grade BondsGlobal Non-Financial Investment-Grade Bonds
$641 $750$1,125 $1,073 $1,043 $1,120 $1,192 $1,271
$1,074$1,419$293 $250
$329 $411 $405 $329 $311$426
$304
$492
$273 $330
$353$504 $425 $354 $414
$638
$601
$425$120
$247
$204
$144
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
$ B
illio
ns
Issuance3: Mix by Year
Non-U.S. Speculative-Grade Bank LoansU.S. Speculative-Grade Bank LoansGlobal Non-Financial Speculative-Grade BondsGlobal Non-Financial Investment-Grade Bonds
2
2
1. Historical data has been adjusted to conform with current information and excludes intercompany revenue. The revenue reclassification of REITs to Corporate Finance from Structured Finance is
reflected starting from 1Q 2018.
2. Other includes: monitoring, commercial paper, medium term notes, and ICRA.
3. Sources: Moody’s Analytics, Dealogic. U.S. and Non-U.S. Speculative-Grade Bank Loans represent only Moody’s rated speculative-grade bank loans. Non-U.S. Speculative-Grade Bank Loan
Origination data available starting 2016. Note: Debt issuance categories do not directly correspond to Moody’s revenue categorization.
May 6, 2020 47
34% 35%44% 50%
40% 36% 36% 36% 38% 37% 32%
22% 19%
18%19%
20% 27% 25% 27% 22% 25% 32%
15% 15%13%
7%13%
16% 18% 15% 21% 17% 17%
28% 31% 26% 24% 28%20% 22% 23% 19% 21% 20%
0%
20%
40%
60%
80%
100%
1Q18 2Q18 3Q18 4Q18 FY18 1Q19 2Q19 3Q19 4Q19 FY19 1Q20
Other Investment Grade Speculative Grade Bank Loans
73% 73%65% 62%
69% 70% 71% 72% 69% 71% 75%
27% 27%35% 38%
31% 30% 29% 28% 31% 29% 25%
0%
20%
40%
60%
80%
100%
1Q18 2Q18 3Q18 4Q18 FY18 1Q19 2Q19 3Q19 4Q19 FY19 1Q20
Revenue1: Distribution by Recurring vs. Transaction
Transaction Recurring
Corporate Finance: Revenue Diversification
34% 35% 37% 36% 35% 32% 37% 34% 38% 35% 31%
66% 65% 63% 64% 65% 68% 63% 66% 62% 65% 69%
0%
20%
40%
60%
80%
100%
1Q18 2Q18 3Q18 4Q18 FY18 1Q19 2Q19 3Q19 4Q19 FY19 1Q20
Revenue1: Distribution by Geography
Non - U.S. U.S.
Revenue1: Distribution by Product
2
1. Historical data has been adjusted to conform with current information and excludes intercompany revenue. The revenue reclassification of REITs from Corporate Finance to
Structured Finance is reflected starting from 1Q 2018.
2. Other includes: monitoring, commercial paper, medium term notes, and ICRA.
Percentages have been rounded and may not total to 100%.
May 6, 2020 48
Structured Finance: Revenue and Issuance
$28 $28 $25 $26 $23 $26 $25 $25 $22
$24 $27$24 $24 $24 $24 $22 $26 $27
$21 $18$15
$24$18 $20 $18
$25$17
$43 $55
$51$47
$35$41
$40$32
$29
$1$1
$1$0
$1$1
$1 $1
$1
$0
$20
$40
$60
$80
$100
$120
$140
$160
1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20
$ M
illio
ns
Revenue1: Mix by Quarter
ABS RMBS CMBS Structured Credit Other
$110 $98 $92 $91 $94 $97 $107 $99
$85$73 $76 $81 $85 $90 $98 $95
$95 $116 $122 $140 $133 $143 $78 $81
$91 $96$137
$135 $122$165
$196$148
$0 $0$0
$2 $2
$2 $2
$4
$0
$200
$400
$600
2012 2013 2014 2015 2016 2017 2018 2019
$ M
illio
ns
Revenue1: Mix by Year
ABS RMBS CMBS Structured Credit Other
$319 $335 $317 $319 $292 $298 $337 $384 $348
$371$231 $189 $238
$200 $204$254
$270 $283
$36 $73
$120$114
$117 $94$120
$115 $145
$39$65
$94$159
$132 $116
$136$200 $153
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
2011 2012 2013 2014 2015 2016 2017 2018 2019
$ B
illio
ns
Issuance2: Mix by Year
ABS RMBS CMBS Structured Credit
$102 $89 $79$115
$65$90 $91 $103
$65
$62 $74$64
$70
$48
$87 $63$85
$67
$26 $27$26
$36
$16
$38$34
$57
$33
$36$64
$51
$49
$21
$49
$39
$44
$27
$0
$50
$100
$150
$200
$250
$300
$350
1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20
$ B
illio
ns
Issuance2: Mix by Quarter
ABS RMBS CMBS Structured Credit
1. Historical data has been adjusted to conform with current information and excludes intercompany revenue. The revenue reclassification of REITs to Corporate Finance from Structured Finance is
reflected starting from 1Q 2018.
2. Sources: AB Alert, CM Alert, Moody’s Corporation. Debt issuance categories do not directly correspond to Moody’s revenue categorization.
Notes: ABS (Asset Backed Securitization) includes asset-backed commercial paper and long-term asset-backed securities. RMBS (Residential Mortgage Backed Securitization) includes covered bonds.
CMBS includes commercial mortgage-backed securities and commercial real estate CDOs. Structured Credit includes CLOs and CDOs.
May 6, 2020 49
Structured Finance: Revenue Diversification
Revenue1: Distribution by Product
1. Historical data has been adjusted to conform with current information and excludes intercompany revenue. The revenue reclassification of REITs to Corporate Finance from Structured Finance is
reflected starting from 1Q 2018.
Notes: ABS (Asset Backed Securitization) includes asset-backed commercial paper and long-term asset-backed securities. RMBS (Residential Mortgage Backed Securitization) includes covered bonds.
CMBS includes commercial mortgage-backed securities and commercial real estate CDOs. Structured Credit includes CLOs and CDOs.
Percentages have been rounded and may not total to 100%.
63% 67% 64% 63% 64%56% 61% 55% 57% 58% 52%
37% 33% 36% 37% 36%44% 39% 45% 43% 42% 48%
0%
20%
40%
60%
80%
100%
1Q18 2Q18 3Q18 4Q18 FY18 1Q19 2Q19 3Q19 4Q10 FY19 1Q20
Revenue1: Distribution by Recurring vs. Transaction
Transaction Recurring
37% 37% 38% 37% 37% 39% 36% 36% 38% 37% 36%
63% 63% 62% 63% 63% 61% 64% 64% 62% 63% 64%
0%
20%
40%
60%
80%
100%
1Q18 2Q18 3Q18 4Q18 FY18 1Q19 2Q19 3Q19 4Q19 FY19 1Q20
Revenue1: Distribution by Geography
Non - U.S. U.S.
24% 22% 22% 21% 22% 23% 23% 24% 23% 23% 23%
21% 21% 21% 19% 20% 23% 21% 21% 24% 22% 28%
18%14% 13% 20% 16%
18% 18% 17%23%
19%18%
37% 43% 44% 39% 41% 35% 37% 38%29% 35% 30%
1% 1% 0% 0% 0% 1% 1% 1% 1% 1% 1%
0%
20%
40%
60%
80%
100%
1Q18 2Q18 3Q18 4Q18 FY18 1Q19 2Q19 3Q19 4Q19 FY19 1Q20
ABS RMBS CREF Structured Credit Other
May 6, 2020 50
Financial Institutions: Revenue and Issuance
$77 $77 $73$63
$80 $85 $80 $76$86
$28 $33 $38
$15
$29 $28 $31 $31$30
$6$7 $6
$6
$4$10 $7
$5$6$3
$3 $3
$3
$3$3 $3
$3$3
$0
$20
$40
$60
$80
$100
$120
$140
1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20
$ M
illio
ns
Revenue1: Mix by Quarter
Banking Insurance Managed Investments Other
$205 $228 $234 $242 $244 $240$300 $290
$320
$73$79 $89 $92 $96 $102
$102 $114$119
$17$19
$16 $19 $16 $17
$22 $25$25
$0$0 $0 $2 $9 $10
$13 $13$12
$0
$50
$100
$150
$200
$250
$300
$350
$400
$450
$500
2011 2012 2013 2014 2015 2016 2017 2018 2019
$ M
illio
ns
Revenue1: Mix by Year
Banking Insurance Managed Investments Other
$1,266 $1,312$1,072
$1,247 $1,194 $1,187 $1,232 $1,248 $1,298
$79$137
$161
$197$136 $112
$183$74 $108
$0
$400
$800
$1,200
$1,600
$2,000
2011 2012 2013 2014 2015 2016 2017 2018 2019
$ B
illio
ns
Issuance2: Mix by Year
Global Speculative Grade Financial Corporate Bonds
Global Investment Grade Financial Corporate Bonds
$411$339 $327
$170
$396$315
$279 $309
$396
$26$24
$20
$4
$29
$18
$27$34
$36
$0
$100
$200
$300
$400
$500
1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q 19 4Q19 1Q20
$ B
illio
ns
Issuance2: Mix by Quarter
Global Speculative Grade Financial Corporate Bonds
Global Investment Grade Financial Corporate Bonds
1. Historical data has been adjusted to conform with current information and excludes intercompany revenue.
2. Sources: Moody’s Analytics, Dealogic. Note: Debt issuance categories do not directly correspond to Moody’s revenue categorization.
May 6, 2020 51
Financial Institutions: Revenue Diversification
Revenue1: Distribution by Product
1. Historical data has been adjusted to conform with current information and excludes intercompany revenue.
Percentages have been rounded and may not total to 100%.
58% 55% 50%63%
56% 60% 58% 55% 58% 58% 52%
42% 45% 50%37%
44% 40% 42% 45% 42% 42% 48%
0%
20%
40%
60%
80%
100%
1Q18 2Q18 3Q18 4Q18 FY18 1Q19 2Q19 3Q19 4Q19 FY19 1Q20
Revenue1: Distribution by Geography
Non - U.S. U.S.
44% 47% 47%
28%42% 41%
49% 46% 42% 45% 48%
56% 53% 53%
72%58% 59%
51% 54% 58% 55% 52%
0%
20%
40%
60%
80%
100%
1Q18 2Q18 3Q18 4Q18 FY18 1Q19 2Q19 3Q19 4Q19 FY19 1Q20
Revenue1: Distribution by Recurring vs. Transaction
Transaction Recurring
67% 64% 61%72%
66% 69% 68% 66% 66% 67% 69%
25% 27% 32%17% 26%
25% 22% 26% 27% 25% 24%
5% 6% 5% 7% 5% 3% 8% 5% 4% 5% 5%
3% 3% 3% 4% 3% 3% 2% 2% 3% 3% 2%
0%
20%
40%
60%
80%
100%
1Q18 2Q18 3Q18 4Q18 FY18 1Q19 2Q19 3Q19 4Q19 FY19 1Q20
Banking Insurance Managed Investments Other
May 6, 2020 52
$156 $181 $174 $177 $202 $225 $218$185
$222
$121
$142 $167 $181$174
$188 $213
$206
$224
$0
$50
$100
$150
$200
$250
$300
$350
$400
$450
$500
2011 2012 2013 2014 2015 2016 2017 2018 2019
$ M
illio
ns
Revenue1: Mix by Year
Public Finance and SovereignProject & Infrastructure FinanceOther
$248 $313 $302 $307
$364 $408 $384 $292
$374
$207 $266
$220
$243
$0
$100
$200
$300
$400
$500
$600
$700
$800
$900
2011 2012 2013 2014 2015 2016 2017 2018 2019
$ B
illio
ns
Issuance2: Mix by Year
Rated Global Project & Infrastructure Finance Bonds
Long-Term Rated U.S. Muni Bonds
Public, Project and Infrastructure: Revenue and Issuance
$59$82 $78 $74 $71 $79
$95
$129
$76
$57
$67 $57
$39 $51 $64
$75
$52
$64
$0
$50
$100
$150
$200
1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20
$ B
illio
ns
Issuance2: Mix by Quarter
Rated Global Project & Infrastructure Finance Bonds
Long-Term Rated U.S. Muni Bonds
$47 $52 $45 $42 $46 $53 $58 $65 $57
$46$56
$54$49 $47
$56$62
$60
$52
$0
$20
$40
$60
$80
$100
$120
$140
1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20
$ M
illio
ns
Revenue1: Mix by Quarter
Public Finance and Sovereign
Project & Infrastructure Finance
Other
1. Historical data has been adjusted to conform with current information and excludes intercompany revenue.
2. Global Rated Project & Infrastructure Finance available starting in 2016 and represents Moody’s rated issuance.
Sources: Thomson SDC, Moody’s Corporation. Note: Debt issuance categories do not directly correspond to Moody’s revenue categorization.
May 6, 2020 53
58% 64% 61% 58% 61% 59%66% 69% 67% 65% 63%
42% 36% 39% 42% 39% 41%34% 31% 33% 35% 37%
0%
20%
40%
60%
80%
100%
1Q18 2Q18 3Q18 4Q18 FY18 1Q19 2Q19 3Q19 4Q19 FY19 1Q20
Revenue1: Distribution by Recurring vs. Transaction
Transaction Recurring
43% 43% 40% 40% 41% 35% 36% 39% 36% 37% 38%
57% 57% 60% 60% 59% 65% 64% 61% 64% 63% 62%
0%
20%
40%
60%
80%
100%
1Q18 2Q18 3Q18 4Q18 FY18 1Q19 2Q19 3Q19 4Q19 FY19 1Q20
Revenue1: Distribution by Geography
Non - U.S. U.S.
50% 48% 46% 45% 47% 49% 49% 48% 52% 50% 52%
50% 52% 54% 55% 53% 51% 51% 52% 48% 50% 48%
0%
20%
40%
60%
80%
100%
1Q18 2Q18 3Q18 4Q18 FY18 1Q19 2Q19 3Q19 4Q19 FY19 1Q20
Public Finance and Sovereign Project & Infrastructure Finance Other
Revenue1: Distribution by Product
Public, Project and Infrastructure: Revenue Diversification
1. Historical data has been adjusted to conform with current information and excludes intercompany revenue.
Percentages have been rounded and may not total to 100%.
May 6, 2020 54
Moody’s Analytics: Financial Overview
$267 $276 $280 $297 $308 $315 $318 $333 $358
$102 $110 $115$124 $122 $118 $133
$149 $138$38 $37 $40
$44 $42 $42 $43$31
$0
$100
$200
$300
$400
$500
$600
1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20
$ M
illio
ns
Revenue1: Mix by Quarter
$445 $483 $520 $572 $626 $668$833
$1,121$1,273
$196 $243 $263$329 $374 $419
$449
$451$522
$62 $108 $119$168
$150$147
$149
$159
$159
$0
$400
$800
$1,200
$1,600
$2,000
$2,400
2011 2012 2013 2014 2015 2016 2017 2018 2019
$ M
illio
ns
Revenue1: Mix by Year
Professional Services
Enterprise Risk Solutions
Research, Data and
Analytics
Revenue1: Distribution by Line of Business
Revenue1: Distribution by Recurring vs. Transaction
Note: Percentages have been rounded and may not total to 100%.
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.
66% 65% 64% 64% 65% 65% 66% 64% 65% 65% 72%
25% 26% 26% 27% 26% 26% 25% 27% 29% 27%28%
9% 9% 9% 9% 9% 9% 9% 9% 6% 8%
0%
20%
40%
60%
80%
100%
1Q18 2Q18 3Q18 4Q18 FY18 1Q19 2Q19 3Q19 4Q19 FY19 1Q20
60% 59% 60% 58% 59% 57% 58% 58% 58% 58% 57%
40% 41% 40% 42% 41% 43% 42% 42% 42% 42% 43%
0%
20%
40%
60%
80%
100%
1Q18 2Q18 3Q18 4Q18 FY18 1Q19 2Q19 3Q19 4Q19 FY19 1Q20
Revenue1: Distribution by Geography
Non-U.S. U.S.
15% 16% 16% 17% 16% 15% 15% 16% 14% 15% 10%
85% 84% 84% 83% 84% 85% 85% 84% 86% 85% 90%
0%
20%
40%
60%
80%
100%
1Q18 2Q18 3Q18 4Q18 FY18 1Q19 2Q19 3Q19 4Q19 FY19 1Q20
Transaction Recurring
May 6, 2020 55
RDC Acquisition Provides Leadership
Position in the KYC Market
1. Source: Burton-Taylor, “AML/KYC Data & Services Global Sizing 2019”, November 2019; Moody’s Analytics estimates.
» RDC’s data and decision tools combined with BvD’s
compliance products position MA to become a leading
KYC solutions provider
» 2019 pro forma combined compliance product sales
of ~$150M
» The KYC space is a $900M market with ~18% 5-yr
CAGR1
RDC’sProprietary
Global Regulatory Information Database (“GRID”)
Adverse Media
» ~120K sources across public data from
240 countries
» ~3.0 billion articles scanned in the last
decade
Special Collections
» Sanctions Connect provides information on
individuals and organizations associated
with sanctioned entities
» Specialized datasets include: Iran Connect,
Panama Papers and Marijuana-Related
Business
Politically-Exposed Persons
» ~1.5 million PEPs featured from a full
spectrum of government, media and
academic sources
» Regional desks covering 70+ languages and
local dialects
Sanctions & Watchlists
» 800+ regulatory and disciplinary authority /
government lists
» Features local, state and federal sources
from across the world covering fugitives,
exclusions, fraud warnings, debarments,
sex offenses and law enforcement actions
11M+ Profiles | ~10,000 profiles updated daily | ~300M daily screens
May 6, 2020 56
Historically, Moody’s Revenue and Interest Rates
Have Not Been Strongly Correlated
+200bps
+120bps
+100bps
+180bps
MCO Revenue and Interest Rates
Note: Gray bars reflect periods of significant increases in the 10-year Treasury Yield.
1. 10-yr U.S. Treasury Yields are represented by the rate at the end-of-period.
2. Guidance as of April 30, 2020.
Source: www.treasury.gov.
5.8%
7.8%
4.7%
6.5%
2.3%
3.3%
1.8%
3.0%
1.9%
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
1992
1993
1994
1995
1996
19
97
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
20
08
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
20
19
2020F
$ 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
May 6, 2020 57
» Strong liquidity with $2.2B in cash and short-term
investments, and a $1.0B revolving credit facility2
» 1.9x 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. As of year-end. 2020 data as of March 31, 2020.
2. As of March 31, 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 3/31/2020.
700
400
600
400487
300170
250
500 549
823
500
330250
500
0
100
200
300
400
500
600
700
800
900
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2044 2048
USD Fixed Commercial Paper EUR Fixed EUR Floating
» Issued $700M of 5-year notes in March,
demonstrating strong investor confidence in Moody’s
» Fixed-to-floating-rate swaps portfolio benefits from low
rate environment
‒ Approximately 31% of debt portfolio exposed to
floating rate
» Anchored around BBB+ rating
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
$ in millions
May 6, 2020 58
» ML and deep learning tools
to automate financial data
spreading at both MA and
MIS
» AI and NLP used to generate
credit reports on 6,000
municipal issuers
» RPA of manual, repeatable
tasks within MIS
» Incorporating alternative
data sources to augment
SME credit scoring accuracy
» QuantCube pilot program to
synthesize unstructured
data to enhance financial
analysis
» CompStak’s use of crowd-
sourced data on CRE leases
and sales
» NLP based early warning and
monitoring tools for MIS
analysts and MA customers
» AI tailored credit training for
MA customers – Credit Coach
» Faster loan approvals with AI
powered lending decisions –
CreditLens
» SaaS accelerating product
development and improving
customer experience
» Leveraging PaaS to
experiment with application of
tools and techniques --
blockchain and big data
» Moody’s IT moving to IaaS to
expand capabilities and lower
costs
Enhance
Data & Analytics
Deliver
Efficiencies
Improve
Decisions
Increase
Adaptability
Note: AI: Artificial Intelligence; ML: Machine learning; NLP: Natural language processing; RPA: Robotic process automation; IaaS: Infrastructure-as-a-service; SaaS: Software-as-a-
service; PaaS: Platform-as-a-service.
Technology: Innovating with PurposeNext Gen Tech is a Defining Element of our Culture, Setting Stage for Growth
May 6, 2020 59
1,205 1,422
$500.0
$700.0
$900.0
$1,100.0
$1,300.0
1Q19 1Q20
$ B
illi
on
s
Issuance1
MIS 1Q20 Results
$129
$386
($12) $503
55.0%60.5%
35.0%35.1%35.1%35.2%35.2%35.3%35.3%35.4%35.4%35.5%35.5%35.6%35.6%35.7%35.8%35.8%35.9%35.9%36.0%36.0%36.1%36.1%36.2%36.2%36.3%36.4%36.4%36.5%36.5%36.6%36.6%36.7%36.7%36.8%36.8%36.9%36.9%37.0%37.1%37.1%37.2%37.2%37.3%37.3%37.4%37.4%37.5%37.5%37.6%37.6%37.7%37.8%37.8%37.9%37.9%38.0%38.0%38.1%38.1%38.2%38.2%38.3%38.3%38.4%38.5%38.5%38.6%38.6%38.7%38.7%38.8%38.8%38.9%38.9%39.0%39.1%39.1%39.2%39.2%39.3%39.3%39.4%39.4%39.5%39.5%39.6%39.6%39.7%39.8%39.8%39.9%39.9%40.0%40.0%40.1%40.1%40.2%40.2%40.3%40.3%40.4%40.5%40.5%40.6%40.6%40.7%40.7%40.8%40.8%40.9%40.9%41.0%41.0%41.1%41.2%41.2%41.3%41.3%41.4%41.4%41.5%41.5%41.6%41.6%41.7%41.8%41.8%41.9%41.9%42.0%42.0%42.1%42.1%42.2%42.2%42.3%42.3%42.4%42.5%42.5%42.6%42.6%42.7%42.7%42.8%42.8%42.9%42.9%43.0%43.0%43.1%43.2%43.2%43.3%43.3%43.4%43.4%43.5%43.5%43.6%43.6%43.7%43.7%43.8%43.9%43.9%44.0%44.0%44.1%44.1%44.2%44.2%44.3%44.3%44.4%44.5%44.5%44.6%44.6%44.7%44.7%44.8%44.8%44.9%44.9%45.0%45.0%45.1%45.2%45.2%45.3%45.3%45.4%45.4%45.5%45.5%45.6%45.6%45.7%45.7%45.8%45.9%45.9%46.0%46.0%46.1%46.1%46.2%46.2%46.3%46.3%46.4%46.4%46.5%46.6%46.6%46.7%46.7%46.8%46.8%46.9%46.9%47.0%47.0%47.1%47.2%47.2%47.3%47.3%47.4%47.4%47.5%47.5%47.6%47.6%47.7%47.7%47.8%47.9%47.9%48.0%48.0%48.1%48.1%48.2%48.2%48.3%48.3%48.4%48.4%48.5%48.6%48.6%48.7%48.7%48.8%48.8%48.9%48.9%49.0%49.0%49.1%49.1%49.2%49.3%49.3%49.4%49.4%49.5%49.5%49.6%49.6%49.7%49.7%49.8%49.9%49.9%50.0%50.0%50.1%50.1%50.2%50.2%50.3%50.3%50.4%50.4%50.5%50.6%50.6%50.7%50.7%50.8%50.8%50.9%50.9%51.0%51.0%51.1%51.1%51.2%51.3%51.3%51.4%51.4%51.5%51.5%51.6%51.6%51.7%51.7%51.8%51.8%51.9%52.0%52.0%52.1%52.1%52.2%52.2%52.3%52.3%52.4%52.4%52.5%52.6%52.6%52.7%52.7%52.8%52.8%52.9%52.9%53.0%53.0%53.1%53.1%53.2%53.3%53.3%53.4%53.4%53.5%53.5%53.6%53.6%53.7%53.7%53.8%53.8%53.9%54.0%54.0%54.1%54.1%54.2%54.2%54.3%54.3%54.4%54.4%54.5%54.5%54.6%54.7%54.7%54.8%54.8%54.9%54.9%55.0%55.0%55.1%55.1%55.2%55.3%55.3%55.4%55.4%55.5%55.5%55.6%55.6%55.7%55.7%55.8%55.8%55.9%56.0%56.0%56.1%56.1%56.2%56.2%56.3%56.3%56.4%56.4%56.5%56.5%56.6%56.7%56.7%56.8%56.8%56.9%56.9%57.0%57.0%57.1%57.1%57.2%57.2%57.3%57.4%57.4%57.5%57.5%57.6%57.6%57.7%57.7%57.8%57.8%57.9%58.0%58.0%58.1%58.1%58.2%58.2%58.3%58.3%58.4%58.4%58.5%58.5%58.6%58.7%58.7%58.8%58.8%58.9%58.9%59.0%59.0%59.1%59.1%59.2%59.2%59.3%59.4%59.4%59.5%59.5%59.6%59.6%59.7%59.7%59.8%59.8%59.9%59.9%60.0%60.1%60.1%60.2%60.2%60.3%60.3%60.4%60.4%60.5%60.5%60.6%60.7%60.7%60.8%60.8%60.9%60.9%61.0%61.0%61.1%61.1%61.2%61.2%61.3%61.4%61.4%61.5%61.5%61.6%61.6%61.7%61.7%61.8%61.8%61.9%61.9%62.0%
$0$50
$100$150$200$250$300$350$400$450$500$550$600$650
1Q19 MISAdjustedOperating
Income
MIS RevenueIncrease
MIS ExpenseIncrease
1Q20 MISAdjustedOperating
Income
$ M
illio
ns
MIS Adjusted Operating Income and Margin
+550bps
2 2
$355$453
$101
$96$116
$125$93
$109
$5
$11
$0
$100
$200
$300
$400
$500
$600
$700
$800
1Q19 1Q20
$ M
illio
ns
MIS Revenue
CFG SFG FIG PPIF MIS Other
$670
$794
28%
(5%)
8%
17%
YoY
Change
1. Excludes sovereign debt issuance.
2. Includes intercompany revenue and expenses.
May 6, 2020 60
$146
($43)
$133
$24 ($11)
28.1%29.3%
15.0%$0
$100
$200
1Q19 MAAdjustedOperating
Income
MA RevenueIncrease
MA ExpenseIncrease
1Q20 MAAdjustedOperating
Income$ M
illio
ns
MA Adjusted Operating Income and Margin
+120bps
2 2
$308$358
$122
$138$42
$0
$100
$200
$300
$400
$500
1Q19 1Q20
$ M
illio
ns
MA Revenue1
RD&A ERS PS
16%
13%
$472
$496
YoY
Change
MA 1Q20 Results
1. Subsequent to the divestiture of MAKS in 2019, revenue from the Moody's Analytics Learning Solutions ("MALS") unit, which previous to 2020 was reported in the Professional
Services line of business ("LOB"), will now be reported as part of the RD&A LOB. Prior periods have not been reclassified as the amounts were not material.
2. Includes intercompany revenue and expenses.
May 6, 2020 61
Low-single-digit% increase
1,750 1,770 1,790 1,810 1,830 1,850 1,870 1,890 1,910 1,930 1,950 1,970 1,990 2,010 2,030 2,050 2,070 2,090 2,110 2,130 2,150 2,170 2,190 2,210 2,230 2,250 2,270 2,290 2,310 2,330 2,350 2,370 2,390 2,410 2,430 2,450 2,470 2,490 2,510 2,530 2,550 2,570 2,590 2,610 2,630 2,650 2,670 2,690 2,710 2,730 2,750 2,770 2,790 2,810 2,830 2,850 2,870 2,890 2,910 2,930
3/11 FY 2020F TotalOperating Expenses
VariableCompensation
Savings Associatedwith Social Distancing
Investment and ProjectReprioritization
FX 4/30 FY 2020F TotalOperating Expenses
$ M
illio
ns
(3.0% - 4.0%)
Note: Guidance as of April 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.
Percentages and totals may not foot due to rounding.
1. Operating growth of expenses moderated by lower expenses resulting from 2018/2019 restructuring program and ongoing expense efficiency initiatives.
2. Incremental operating expenses of acquired companies, net of divestitures, including transaction expenses. Also includes non-tax-deductible loss related to the divestiture of MAKS
and transaction expenses.
3. Includes travel, entertainment, marketing, recruiting and training expenses.
Mid-single-digit % decline
~(2.5%)
$2,831
2,000 2,050 2,100 2,150 2,200 2,250 2,300 2,350 2,400 2,450 2,500 2,550 2,600 2,650 2,700 2,750 2,800 2,850 2,900 2,950 3,000 3,050 3,100
FY 2019 TotalOperating Expenses
Operating Growth,Net of Efficiencies
Acquired andDivested
Companies
Additional ExpenseManagement
RestructuringCharge andSeverance
FX FY 2020F TotalOperating Expenses
$ M
illio
ns
+2.0% - 2.5%
2
Prudently Reducing ExpensesFY20F vs. FY19A
FY20F New (4/30) vs. Prior (3/11)
+~0.5%
~(5.0% - 6.0%)
~(1.0%)
(1.0% - 1.5%) ~(1.5%)~(0.5%)
Mid-single-digit
% decline
3
1
May 6, 2020 62
Moody’s Global Presence
U.S. employees non-U.S. employees total employees2
U.S. employees non-U.S. employees total employees1
4,065 7,298 11,363
20
20
3,908 7,173 11,081
20
19
1. As of March 31, 2020. Reflects acquisition of RDC.
2. As of December 31, 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 Sri Lanka
Italy Sweden
Lithuania Switzerland
Morocco United Arab Emirates
Netherlands United Kingdom
Asia-PacificAustralia Nepal
China Singapore
Hong Kong South Korea
India Thailand
Japan
May 6, 2020 63
Reconciliation of Adjusted Financial Measures to
GAAPAdjusted Operating Income and Adjusted Operating Margin Reconciliation1
Year Ended March 31, 2020
(in $ millions) 2015 2016 2017 2018 2019 TTM 1Q20
Operating Income $1,490.7 $650.9 $1,820.8 $1,868 $1,998 $2,128
Operating Margin 42.8% 18.1% 43.3% 42.0% 41.4% 42.8%
Add Adjustment:
Depreciation & Amortization 113.5 126.7 158.3 192 200 199
Acquisition-Related Expenses - - 22.5 8 3 2
Restructuring - 12.0 - 49 60 53
Captive insurance company
settlement - - - - 16 16
Settlement Charge - 863.8 - - - -
Loss pursuant to the divestiture of
MAKS - - - - 14 23
Adjusted Operating Income $1,604.2 $1,653.4 $2,001.6 $2,117 $2,291 $2,421
Adjusted Operating Margin 46.0% 45.9% 47.6% 47.6% 47.4% 48.6%
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.
March 31, 2020
(in $ millions) 2015 2016 2017 2018 2019 1Q20
Gross debt $3,380.6 $3,363.0 $5,540.5 $5,676 $5,581 $6,778
Less: Cash, cash equivalents and
short-term investments2,232.2 2,224.9 1,183.3 1,818 1,930 2,231
Net debt $1,148.4 $1,138.1 $4,357.2 $3,858 $3,651 $4,557
May 6, 2020 64
Reconciliation of Adjusted Financial Measures to
GAAP (cont.)
Moody's Corporation Operating Margin Guidance Reconciliation
2020F1
Projected Operating Margin - GAAP 41% - 43%
Depreciation & Amortization Approximately 4.8%
Loss pursuant to the divestiture of MAKS 0.2%
Projected Adjusted Operating Margin 46% - 48%
Free Cash Flow Reconciliation
(in $ millions) 2015 2016 2017 2018 2019 2020F1
Net cash flows from
operating activities$1,198.1 $1,259.2 $754.6 $1,461 $1,675 $1,300 - $1,500
Less: Capital expenditures 89.0 115.2 90.6 91 69 ~100
Free Cash Flow $1,109.1 $1,144.0 $664.0 $1,370 $1,606 $1,200 - $1,400
1. Guidance as of April 30, 2020.
May 6, 2020 65
Reconciliation of Adjusted Financial Measures to
GAAP (cont.)Moody's Corporation Diluted EPS Reconciliation
2015 2016 2017 2018 2019 2020F1
Diluted EPS - GAAP $4.63 $1.36 $5.15 $6.74 $7.42 $7.25 - $7.85
Legacy Tax (0.03) - - - - -
Impact of Litigation Settlement - $3.59 - - - -
Captive insurance company settlement $0.06 -
ICRA Gain - - - - - -
FX gain on liquidation of a subsidiary - ($0.18) - - - -
Restructuring - $0.04 - $0.19 $0.23 -
CCXI Gain - - ($0.31) - - -
Acquisition-Related Expenses - - $0.10 $0.03 $0.02 -
Purchase Price Hedge Gain - - ($0.37) - - -
Acquisition-Related Intangible
Amortization Expenses$0.11 $0.13 $0.23 $0.40 $0.42 ~ $0.50
Loss pursuant to the divestiture of
MAKS- - - - $0.07 $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 $7.80 – $8.40
1. Guidance as of April 30, 2020.
Note: Table may not sum to total due to rounding.
Investor Relations
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May 6, 2020 67
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