3Q 2019 Investor Presentation
November 4, 2019
November 4, 2019 2
Disclaimer
Certain statements contained in this release are forward-looking statements and are based on future expectations, plans and prospects for the Company’s business and operations
that involve a number of risks and uncertainties. Such statements may include, among other words, “believe”, “expect”, “anticipate”, “intend”, “plan”, “will”, “predict”, “potential”,
“continue”, “strategy”, “aspire”, “target”, “forecast”, “project”, “estimate”, “should”, “could”, “may” and similar expressions or words and variations thereof that convey the prospective
nature of events or outcomes generally indicative of forward-looking statements. The forward-looking statements and other information in this release are made as of the date hereof
(except where noted otherwise), and the Company undertakes no obligation (nor does it intend) to publicly supplement, update or revise such statements on a going-forward basis,
whether as a result of subsequent developments, changed expectations or otherwise, except as required by applicable law or regulation. In connection with the “safe harbor”
provisions of the Private Securities Litigation Reform Act of 1995, the Company is identifying examples of factors, risks and uncertainties that could cause actual results to differ,
perhaps materially, from those indicated by these forward-looking statements. Those factors, risks and uncertainties include, but are not limited to, credit market disruptions or
economic slowdowns, which could affect the volume of debt and other securities issued in domestic and/or global capital markets; other matters that could affect the volume of debt
and other securities issued in domestic and/or global capital markets, including regulation, credit quality concerns, changes in interest rates and other volatility in the financial markets
such as that due to uncertainty as companies transition away from LIBOR and the U.K.’s pending withdrawal from the EU; the level of merger and acquisition activity in the U.S. and
abroad; the uncertain effectiveness and possible collateral consequences of U.S. and foreign government actions affecting credit markets, international trade and economic policy,
including those related to tariffs and trade barriers; concerns in the marketplace affecting our credibility or otherwise affecting market perceptions of the integrity or utility of
independent credit agency ratings; the introduction of competing products or technologies by other companies; pricing pressure from competitors and/or customers; the level of
success of new product development and global expansion; the impact of regulation as an NRSRO, the potential for new U.S., state and local legislation and regulations, including
provisions in the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”) and regulations resulting from Dodd-Frank; the potential for increased competition and
regulation in the EU and other foreign jurisdictions; exposure to litigation related to our rating opinions, as well as any other litigation, government and regulatory proceedings,
investigations and inquires to which the Company may be subject from time to time; provisions in the Dodd-Frank legislation modifying the pleading standards, and EU regulations
modifying the liability standards, applicable to credit rating agencies in a manner adverse to credit rating agencies; provisions of EU regulations imposing additional procedural and
substantive requirements on the pricing of services and the expansion of supervisory remit to include non-EU ratings used for regulatory purposes; the possible loss of key
employees; failures or malfunctions of our operations and infrastructure; any vulnerabilities to cyber threats or other cybersecurity concerns; the outcome of any review by controlling
tax authorities of the Company’s global tax planning initiatives; exposure to potential criminal sanctions or civil remedies if the Company fails to comply with foreign and U.S. laws and
regulations that are applicable in the jurisdictions in which the Company operates, including data protection and privacy laws, sanctions laws, anti-corruption laws, and local laws
prohibiting corrupt payments to government officials; the impact of mergers, acquisitions or other business combinations and the ability of the Company to successfully integrate such
acquired businesses; currency and foreign exchange volatility; the level of future cash flows; the levels of capital investments; and a decline in the demand for credit risk management
tools by financial institutions. These factors, risks and uncertainties as well as other risks and uncertainties that could cause Moody’s actual results to differ materially from those
contemplated, expressed, projected, anticipated or implied in the forward-looking statements are described in greater detail under “Risk Factors” in Part I, Item 1A of the Company’s
annual report on Form 10-K for the year ended December 31, 2018, 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.
November 4, 2019 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
November 4, 2019 5
Provides financial
intelligence and analytical
tools supporting our clients’
growth, efficiency and risk
management objectives
Solutions address diverse
needs and customers
Extending brand into new
markets and deepening
customer relationship
Leading global provider of
credit rating opinions,
insight and tools for
financial risk measurement
and management
Independent provider of
credit rating opinions and
related information for over
100 years
Proven ratings accuracy
and deeply experienced
analysts
Expanded sales and
marketing activities in
Commercial group
Revenue of
$4.7 billion
Adjusted
Operating Income
of $2.2 billion
MIS
76%
MA
24%MIS
59%
MA
41%
Note: Financial data for the trailing twelve months ended September 30, 2019.
Company Overview
Adjusted
Operating Margin
MIS
57.9%
MA
28.3%
November 4, 2019 6
Moody’s Strategic Core
Purpose
Clarity, knowledge
and fairness
Vision
Informed decisions that
promote progress
Mission
Trusted insights and
standards
November 4, 2019 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
Credit Pyramid
Asia-
Pacific
Latin
AmericaEMEA
November 4, 2019 8
Enhancing Regional Presence…
» CCXI maintains its leadership
position in the domestic ratings market,
with 1,700 rated customers and ~40%
issuance coverage
» We are continuing to collaborate with
CCXI on opportunities to leverage and
enhance CCXI’s strong domestic
market position and thought leadership
» Minority investment in SynTao Green
Finance, a leading provider of ESG
data, tools and solutions based in,
and serving, China
» Launched Moody’s Local, a new platform that
provides domestic ratings and research in
Peru, Panama and Bolivia1
» Regional domestic market expansion
continues
China Latin America
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.
November 4, 2019 9
… and Adding New Product Capabilities
» Award-winning PFaroe platform: a leading
solution for asset managers and pension plan
sponsors, supporting over 3,000 plans and
more than $1.4 trillion in assets
» Complete rebuild of popular risk platform
» Streamlines know-your-customer, anti-money
laundering, and anti-bribery and corruption
research
» Used data and
analytics from Four
Twenty Seven to
analyze U.S. local
government heat
stress exposure and
credit risk
» Software platform used by issuers and
trustees for administering and reporting on
asset-backed and mortgage-backed securities
programs
November 4, 2019 10
Why Invest in Moody’s?
We strive to be the world’s
most respected authority
serving risk-sensitive
financial markets
We have had strong
revenue and earnings
growth, as well as cash
flow conversion
We are committed to
returning capital to
our stockholders
We will selectively
invest in strategic
growth opportunities
November 4, 2019 11
ESG Drives Sustained Corporate ValueIntroduced ESG Disclosures in our Public Filings
1. Carbon Disclosure Project.
2. While the Company reports its financial results in accordance with GAAP, financial performance targets and results under the Company’s incentive plans are based on adjusted financial
measures. These metrics and the related performance targets are relevant only to Moody’s executive compensation program and should not be used or applied in other contexts.
3. This measure is a qualitative assessment of strategic and operational metrics tied to key non-financial business objectives certified by the Compensation & Human Resources Committee at
the beginning of the performance period. The Committee assessed the achievement of the metric by evaluating performance against the following objectives: (i) new sources of growth; (ii)
quality assurance and controls; (iii) operating effectiveness and efficiency; (iv) people and culture; (v) risk management; and (vi) enabling technologies and capabilities.
Executive compensation metrics include2:
» Moody’s Corporation EPS, operating income and EBITDA
» MIS operating income and ratings accuracy
» MA operating income and sales
» Strategic & operational3
E N V I R O NM E N TAL
» Measurement of carbon
emissions and identification
of opportunities to reduce
indirect GHG emissions
» Expansion of ESG
products and services
» CDP1 participation
S O C I AL
» Support a diverse
and inclusive workplace
» Active global community
and philanthropic involvement
» Robust data security
and privacy practices
» Fair compensation practices and benefits packages
» Recognized by Working Mother’s list of 100 Best
Companies
G O V E R N AN C E
» Professional integrity
» Systematic risk management
» Diverse Board membership
and skill sets
» Separate CEO and
Chairman positions
» Active shareholder
engagement
November 4, 2019 12
Furthering our Commitment to a Sustainable Future
» Highlighting sections of the 2018 CSR Report and Moody’s other public disclosures that
include information consistent with SASB’s objectives
» Our inaugural SASB Index is now available at moodys.com/csr
» FTSE Russell confirms that Moody’s has, for the first time, been independently assessed
according to the FTSE4Good criteria
» Satisfied the requirements to become a constituent of the FTSE4Good Index Series
» Senior management participated in UN Global Compact events related to ESG
» MIS, in partnership with the Climate Bond Initiative, hosted a briefing on carbon transition and
the financial tools deployed to facilitate it with a keynote by CEO and President of Ceres
» Announced Pathway to Prosperity, a financial empowerment initiative for the nation's largest
small business assistance network, America's Small Business Development Centers (SBDCs)
» Hosted ESG Conference in London together with Vigeo Eiris and Four Twenty Seven,
where key industry figures will share their insights on important ESG themes and the impact
on global credit markets
2 Financial Overview
November 4, 2019 14
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.
November 4, 2019 15
$2.3 $2.3 $2.4 $2.8 $2.7
$1.1 $1.2 $1.2$1.4 $1.7
$0.0
$1.0
$2.0
$3.0
$4.0
$5.0
$6.0
2014 2015 2016 2017 2018 2019F
$ B
illio
ns
MIS Revenue MA Revenue
$3.3 $3.5 $3.6$4.2 $4.4
$1,003 $1,109 $1,144
$664
$1,371
$1,600 - $1,700
$500
$700
$900
$1,100
$1,300
$1,500
$1,700
2014 2015 2016 2017 2018 2019F14
Operating Margin3
Adjusted Diluted EPS2Revenue
High-single-digit
% growth
$4.31 $4.71 $4.94$6.07
$7.39
$2.00
$3.00
$4.00
$5.00
$6.00
$7.00
$8.00
2014 2015 2016 2017 2018 2019F
43
.5%
42
.8%
18
.1%
43
.3%
42
.1%
46
.3%
46
.0%
45
.9%
47
.6%
47
.7%
0%
10%
20%
30%
40%
50%
60%
2014 2015 2016 2017 2018 2019F
Operating Margin Adj. Operating Margin
~ 4
8%
~ 4
2%
Free Cash Flow2
1 1
1
2
Financial Performance
1. Guidance as of October 30, 2019.
2. These figures are adjusted measures. See appendix for reconciliations from adjusted financial measures to U.S. GAAP.
3. 2014 – 2017 operating and adjusted operating margins have been restated to conform to the new presentation for pension expenses.
4. Reflects reduction by $701 million net of tax settlement charge.
$ Millions
$8.05
to
$8.20
November 4, 2019 16
57%
43%
Recurring Transaction
3Q 2019 TTM Revenue: $4.7 billion
Moody’s Corporation Financial Profile
53%
47%
U.S. Non-U.S.
Full Year 2019 Guidance as of October 30, 20191
Revenue • increase in the high-single-digit % range
Operating Expenses2 • increase in the high-single-digit % range
Operating Margin • approximately 42%
Adjusted Operating Margin3 • approximately 48%
Effective Tax Rate • 21.5% - 22.5%
Diluted EPS • $7.20 - $7.35
Adjusted Diluted EPS3 • $8.05 - $8.201. See press release titled “Moody's Corporation Reports Results for Third Quarter 2019” from October 30, 2019 for Moody’s full 2019 guidance.
2. Includes depreciation and amortization, restructuring charges, captive insurance company settlement, impairment pursuant to the planned divestiture of MAKS and Acquisition-Related Expenses.
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 trailing twelve month (TTM) calculations.
CFG31%
SFG9%
FIG9%
PPIF9%
MIS Other1%
RD&A27%
ERS11%
PS3%
MA
MIS
November 4, 2019 17
$1,221$1,098
$739
$200 $203
~$1,000
$236$272
$285
$290 $337
25%-30% payout1
$0
$400
$800
$1,200
$1,600
150
170
190
210
230
2014 2015 2016 2017 2018 2019
$ M
illions
Mill
ion
s o
f S
ha
res
Share Repurchases (R) Dividends Paid (R)
Shares Outstanding (L)
$1,457$1,370
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
$1.12
$1.36$1.48 $1.52
$1.76
$2.00
2014 2015 2016 2017 2018 3Q192
$490 $540
1. Dividend payout ratio is defined as total dividends paid/adjusted net income.
2. Annualized dividend total, based on 2019 year-to-date dividends of $0.50 declared on February 15, April 16, July 9 and October 21, 2019.
3 Capital Markets Overview
November 4, 2019 19
Q3 Issuance ActivityReceptive Market Conditions Overcame Geopolitical and Macro Headwinds
United States Rest of World
Geopolitical
Headwinds
» Trade disputes
» Political turmoil
» Trade disputes
» Brexit uncertainty
» Hong Kong protests
Negative 2020
GDP Revisions1
» 2.0%, down 30 bps » China: 5.7%, down 30 bps
» Euro Zone: 1.0%, down 40 bps
- Germany: 0.6%, down 60 bps
» UK: 0.9%, down 10 bps
Central Bank
Actions
» 25 bps rate cuts in July and
September
» Money market liquidity
provision
» ECB cut rates and restarted
bond purchasing program
Falling 10-Year
Benchmark Rates
» Sharp decline (50+ bps)
to average 1.8%; still high
among developed economies
» Sub-zero benchmarks enabled
negative-rate investment grade
corporate borrowing in Europe
and Japan
MIS Rated
Issuance2 Growth
» Up 18% » Up 2%
1. Organization for Economic Co-operation and Development September 2019 Interim Projection; revised from May 2019.
2. Excludes sovereign debt issuance.
November 4, 2019 20
Debt Leverage and Interest Coverage Remain Stable
in North America and Europe
Credit Metrics: North American Speculative Grade Companies
1. Trailing twelve months as of September 30, 2019.
Note: Historical figures may change due to timing differences in issuer reporting deadlines. Source: Moody’s Investors Service.
4.6x 4.6x 4.7x 4.5x 4.3x 4.4x 4.6x 4.8x 5.0x 5.1x 5.2x 5.4x 5.2x 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 2.9x
0.0x
1.0x
2.0x
3.0x
4.0x
5.0x
6.0x
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Inte
rest
Covera
ge
Debt / EBITDA EBITDA / Interest Expense
Credit Metrics: European Speculative Grade Companies
4.8x4.1x 4.1x
4.5x4.0x 4.0x 4.2x 4.4x 4.6x 4.5x 4.5x 4.5x
5.1x4.7x
3.0x 3.0x 2.9x 3.1x 3.4x 3.4x 3.2x 3.1x 3.2x 3.3x 3.6x 3.8x 3.6x 3.7x
0.0x
1.0x
2.0x
3.0x
4.0x
5.0x
6.0x
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Inte
rest
Covera
ge
Debt / EBITDA EBITDA / Interest Expense
1
1
November 4, 2019 21
Global Default Rates Remain Under Historic
Average; Continue to Monitor Covenant Quality
Default Rates for Speculative-
Grade Corporate Rated Issuance1
» Global speculative-grade default rate at 2.4% as of September 30, 2019; expected to
increase to 3.6% by September 2020
» Recent strengthening in U.S. loan covenants reflects weakening investor demand, while
U.S. bond covenants weaken simultaneously with pickup in issuance activity
1. Moody’s rated corporate global speculative grade default historical average of 4.2% from 1983 through 2018. 2020 forecast for trailing twelve months ended September 30, 2020.
2. As of the trailing twelve months ended September 30, 2019.
Source: Moody’s Investors Service.
3.88x
4.51x
3.75x
2.00
2.50
3.00
3.50
4.00
4.50
5.00
2012 2013 2014 2015 2016 2017 2018 3Q19
U.S. Loans U.S. Bonds European Bonds
Speculative-Grade Covenant
Quality Indicators
Weakening
Improving
2
3.6%
3.7%3.7%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%Global U.S. Europe
4.1% global
historic average1
November 4, 2019 22
Baa-Credit Concentration Has Grown, with Mitigating
Factors
$0.1
$1.9
Potential Fallen Angels
$ Trillions
$744
$2,0402.4x
3.0x
0.0x
1.0x
2.0x
3.0x
$0
$500
$1,000
$1,500
$2,000
$2,500
$ B
illio
ns
Face Value of Rated Debt Debt / EBITDA
0%
10%
20%
30%
40%
Aaa Aa A Baa Ba B Caa-C2007 2018
Rated Debt of Baa U.S. Nonfinancial Companies Has
Almost Tripled Since 2007
2018 Baa-rated Debt Accounted for More than One-third of
The Total Rated Debt of U.S. Nonfinancial Companies
2018 Potential Fallen Angels1 Accounted for $0.1 Trillion of the
$2 Trillion of U.S. Baa-Rated Nonfinancial Debt Outstanding
Ratio of Potential Fallen Angels1 to Potential Rising Stars1
Trends Downward Globally
1. Fallen Angels and Rising Stars fall within the “The Crossover Zone” which refers to the ratings closest to the line between speculative grade and investment grade. Companies in
the zone are rated Baa3 or Ba1. To be considered in the zone, companies rated Baa3 must be on review for downgrade or have a negative outlook, while companies rated Ba1
must be on review for upgrade or have a positive outlook.
Source: Moody’s Investors Service.
» As compared to 2007, 2018 representative median companies generated more revenue ($4.7B to $7.1B),
with improved EBITDA margins (20% to 24%) and EBITDA / Interest Expense ratios (7.0x to 8.2x)
0.0
1.0
2.0
3.0
4.0
5.0
6.0
November 4, 2019 23
226 254 231 205
6893 146 15347
97
189 266
$0
$100
$200
$300
$400
$500
$600
$700
2020 2021 2022 2023
$ B
illio
ns
Investment Grade Speculative Grade Bonds Speculative Grade Bank Loans
North America and EMEA Non-Financial Corporates
Have Significant Refunding Needs1
Debt Maturities: North America Moody’s-Rated Corporate Bonds and Loans
Source: Moody’s Investors Service, January 2019.
Note: Data represents U.S. & Canadian MIS rated corporate bonds & loans.
Debt Maturities: EMEA Moody’s-Rated Corporate Bonds and Loans
Source: Moody’s Investors Service, July 2019.
1. Amount reflects total maturities identified in the above sources.
$341
$444
$566$624
338 327 356 349
28 3984 7239 46
64 69
$0
$100
$200
$300
$400
$500
$600
2020 2021 2022 2023
$ B
illio
ns
Investment Grade Speculative Grade Bonds Speculative Grade Bank Loans
$405 $412
$504 $490
» Four-year debt maturities for
North America non-financial
investment-grade corporates
approaching $1 trillion
» Four-year U.S. speculative
grade bank loans refinancing
needs up $44 billion, or 8%,
from a year ago
» Four-year debt maturities for
EMEA non-financial
corporates exceed $1.8
trillion, up more than $370
billion, or 26%, from the
prior year
November 4, 2019 24
$1,972
$2,948
$1,000
$1,300
$1,600
$1,900
$2,200
$2,500
$2,800
$3,100
2012 2013 2014 2015 2016 2017 2018 2019
$ B
illio
ns
Refunding Needs Have Grown Strongly Over Time
Next Four Years U.S. and EMEA Total Refunding Needs1 as of:
1. Amount reflects total maturities identified below.
Source: Moody’s Investors Service. U.S. and EMEA refunding needs reports January 2012 – January 2019.
Note: Data represents U.S. and European MIS rated corporate bonds & loans.
November 4, 2019 25
Debt Refinancing and M&A are Most Frequently
Stated Uses of Proceeds
Uses of Funds from USD High Yield Bonds and Bank Loans1
62% 52%
83%
71% 74% 78%71%
65%54%
64%71%
63%66%
63% 53%
19%
31% 30% 25%31%
41% 54%41%
39%48%
37%
22% 17%11%
7% 8% 8%7% 8%
5% 6%5% 6%
8%
12% 9% 4%
18% 17% 18% 22% 20% 16% 17% 13% 14%9%
1999 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 YTD 3Q2019
% o
f M
entions
Debt Refinancing M&A Capital Spending Shareholder Payments
1. Percent of mentions for each respective period in bond issue or bank loan program tranche documents. Excludes issues of less than $25 million and general corporate purposes.
An issue can have multiple purposes and, as a result, percentages do not sum to 100%.
Source: Moody’s Analytics.
November 4, 2019 26
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
75%
25%
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 2019 and U.S. data is through September 2019.
November 4, 2019 27
691
0
400
800
1,200
2014 2015 2016 2017 2018 2019F
# o
f N
ew
Mandate
s
EMEA United States Rest of World
1,044
New Rating Mandates Provide Recurring Revenue1
GrowthGlobal New Rating Mandates2
» In 3Q19, Moody’s new rating mandates increased by 232; in line with 3Q18
» Expect ~900 new mandates in 20193
» MIS recurring revenue growth driven by increased volume of monitoring fees from
recent new mandates, as well as pricing initiatives
990
771 738
1. MIS recurring revenue is typically billed annually and recognized ratably over 12 months. Recurring revenue can also be billed upfront and recognized over the life of the security.
2. Rated by Moody’s Investors Service.
3. New mandates estimate as of October 30, 2019.
1,046
~900
3
4 Moody’s Investors Service
November 4, 2019 29
38%
62%
Recurring Transaction
3Q 2019 TTM Revenue: $2.8 billion
Public,
Project, &
Infrastructure
Finance
15%
Financial
Institutions
16%
Corporate
Finance
52%
Structured
Finance
16%
MIS Other
1%
60%
40%
U.S. Non-U.S.
» 37% recurring revenue
» 58% recurring revenue
» 41% recurring revenue
Full Year 2019 Guidance as of October 30, 2019
Global • increase in the mid-single-digit % range
U.S. • increase in the mid-single-digit % range
Non-U.S. • Increase in the low-single-digit % range
Adjusted Operating Margin • approximately 58%
» 31% recurring revenue
Moody’s Investors Service Financial Profile
Note: The revenue reclassification of REITs to Corporate Finance from Structured Finance is reflected in the trailing twelve month (TTM) calculations.
November 4, 2019 30
WIDER ACCESS TO CAPITAL INCREASED MARKET STABILITY
PLANNING & BUDGETING
TRANSPARENCY AND
CREDIT COMPARISON
TANGIBLE
FINANCING BENEFITS
RESPONSIVE TO INVESTOR
DEMAND
Investors seek
our opinions and
particularly value the
knowledge of our
analysts and the depth of
our research
The Benefits of a Moody’s Rating
November 4, 2019 31
» We remain focused on analytical expertise and our credit methodologies to provide
predictive, predictable and transparent ratings
» Accuracy reinforces investor demand pull
Rating Performance Drives Investor Confidence
2%6%7%
16%19%
26%
32%
44%
63%
87%88%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Aaa
Aa1
Aa2
Aa3
A1
A2
A3
Baa1
Baa2
Baa3
Ba1
Ba2
Ba3
B1
B2
B3
Ca
a1
Ca
a2
Ca
a3
Ca
_C
0%
2%
5%
8%
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
Aaa Aa A Baa Ba B
1 Source: Moody’s Investors Service. The data in the chart above shows the ten-year cumulative default rates by rating from January 2009, through January 2018 of fundamental Moody’s
rated universe globally. Rating category is based on senior unsecured rating (or equivalent) of the issuer.
2 Source: Moody’s Investors Service: Global multi-year cumulative WR-adjusted impairment rates by original rating,1993-2018.
Ten-Year Cumulative 1993-2018 CLO
Impairments2
Ten-Year Default Rates by Rating for 2009-
2018 Cohort: Non-Financial Corporates1
November 4, 2019 32
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.
November 4, 2019 33
Americas APACEMEA
» 30,400+ rated
companies and
structured deals
» $34+ trillion total
debt rated
» 18,600 research
publications
» Offices in 10 cities*
» 4,700+ rated
companies and
structured deals
» $21+ trillion total
debt rated
» 6,700 research
publications
» Offices in 13 cities*
» 2,100+ rated
companies and
structured deals
» $14+ trillion total
debt rated
» 3,500 research
publications
» Offices in 10 cities*
Broad Coverage Serves Global Needs
1. Institutional Investor Survey.
Source: Moody’s Investors Service.
All data as of January, 28 2019, except Research Data covers the period January 1, 2018 – December 31, 2018.
All numbers are rounded other than those marked *
~15 Years Lead/Senior Analyst
tenure
#1 U.S. Credit
Rating Agency
2012-20181
November 4, 2019 34
Continue to Invest in Key International Markets
Asia Pacific
» China:
- Successful joint venture with CCXI, leading
rating agency in China’s ~$270M domestic
single-rating bond market1
- ~$310M cross-border multi-rating bond
market rated from MIS Hong Kong office1
» 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 Bolivia2
» Minority investment in ICR Chile deepens
Moody’s presence in dynamic and expanding
market
EMEA» Opened Moody’s offices in Saudi
Arabia and Lithuania
2008 2018
Emerging Asia Latin America Middle East
CEE/CIS Africa
Revenue in Emerging Markets
$84M
$313M
EMEA1. Forecast for full year 2019.
2. 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.
November 4, 2019 35
~260
05101520253035404550556065707580859095100105110115120125130135140145150155160165170175180185190195200205210215220225230235240245250255260265270275
Moody's Vigeo Eiris
Analysis
» Moody’s forecasts global
green bond issuance to
exceed $200 billion in
2019, a projected increase
of 20% over 20181
» Moody’s Green Bond
Assessment (“GBA”)
portfolio is expected to
save an estimated 2.6
million metric tons of
annual carbon emissions2
» Majority acquisition of Four
Twenty Seven
complements majority
stake in Vigeo Eiris
underscoring work to
advance global standards
for assessing
environmental and
climate risk factors
Outreach
» Organized or participated
at 100+ global ESG events
in 2018, attracting 5,500+
market participants
» Strategic relationships
with industry organizations
and influencers across
sustainable finance
Research
» In 2018, Moody’s published
200+ research reports
focused on ESG risks and
opportunities, up ~170%
from 2017
10
18
21
0
5
10
15
20
25
2016 2017 2018
1. Forecast as of January 31, 2019.
2. Based on preliminary 2018 data. Sources: Climate Bonds Initiative, Moody's Investors Service.
3. Year-to-date as of September 30, 2019. Includes approximately 60 Moody’s GBAs and 200 Vigeo Eiris Second Party Opinions on green, sustainability and social bonds.
3Annual Moody’s
Assessments
Total Combined
Assessments
MIS ESG Opportunity: Driving Expansion
Beyond Credit
5 Moody’s Analytics
November 4, 2019 37
Research, Data and Analytics
65%
Enterprise Risk Solutions
26%
Professional Services
9%
Moody’s Analytics Financial Profile
84%
16%
Recurring Transaction
42%
58%
U.S. Non-U.S.
» 99% recurring revenue
» ~ 96% retention rate1
» 78% recurring revenue
» Combination of one-off contracts and
semi-recurring revenue
Full Year 2019 Guidance as of October 30, 2019
Global • increase in the low-double-digit % range
U.S. • increase in the mid-teens % range
Non-U.S. • increase in the high-single-digit % range
Adjusted Operating Margin • 28% - 29%
3Q 2019 TTM Revenue: $1.9 billion
1. Excludes Bureau van Dijk.
Note: The revenue reclassification of the FACT product from RD&A to ERS is reflected in the trailing twelve month (TTM) calculations.
November 4, 2019 38
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
$ M
illio
ns
Moody’s Analytics
2018 Revenue: $1,730m
2008 – 2018 CAGR: +12%
(~55% organic)
Professional Services
2018 Revenue: $159m
2008 – 2018 CAGR: +30%
(~18% organic)
Enterprise Risk Solutions
2018 Revenue: $437m
2008 – 2018 CAGR: +14%
(~66% organic)
Research, Data & Analytics
2018 Revenue: $1,134m
2008 – 2018 CAGR: +11%
(~57% 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.
November 4, 2019 39
Expansion of ratings coverage
Production of insightful credit
analysis
New customers in
geographies with developing
debt capital markets
Expansion of data sets and
delivery options
Strong customer retention
RD&A: Subscription Growth Driven by Retention, Upgrades and Pricing & New Sales
Full
Ye
ar
201
8
95.8% 109.7%9.1% 4.8%
Retained Base Upgrades and Price New Sales Business Base
Subscription Sales Growth(constant currency)
Full
Ye
ar
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.
1H
201
9
96.2% 111.3%9.4%5.7%
Retained Base Upgrades and Price New Sales Business Base
Full
Ye
ar
201
6
95.4% 110.2%8.0% 6.8%
Retained Base Upgrades and Price New Sales Business Base
November 4, 2019 40
ERS Revenue1: Recurring vs. Non-recurring
61%
78%
0%
20%
40%
60%
80%
100%
$0
$100
$200
$300
$400
2015 2016 2017 2018 TTM 3Q19
% R
ecu
rring$
Mill
ions
One-Time Recurring % Recurring
Recurring Revenue CAGR2 = 16%
» ERS recurring revenue has grown by $160 million since 2015
» Emphasis on subscription products supports scalability, drives operating leverage
» 3Q19 results enhanced by one-time license delivery
» Sales growth driven by IFRS174 (insurance), CECL5 (U.S. banking) and CreditLens (credit
decision solutions platform) product roll-out
1. Recurring revenue includes maintenance and subscription.
2. Compound Annual Growth Rate, 2015-2018.
3. Trailing twelve months ended September 30, 2019.
4. International Financial Reporting Standards Foundation – Standards No. 17.
5. Current Expected Credit Losses.
ERS: Driving Growth via Recurring Revenue
3
November 4, 2019 41
Global Regulatory and Accounting Drivers for the
ERS Business
Source: Moody’s Analytics market research as of January 2019.
Note: MiFID II, MiFIR and GDPR regulations are relevant to the banking sector but do not impact on Moody’s Analytics products and so have not been included on the radar.
1. The implementation of the LCR in the EU was: 60% in 2015, 70% in 2016, 80% in 2017 and 100% in 2018. In the US, advanced-approach banks had to meet 80% of the LCR
by January 1, 2015 and 100% of the ratio by January 1, 2017.
2. The G-SIB surcharge will expand the conservation buffer, subject to a 3 year phase in period. G-SIBs will be required to hold a minimum Total Loss-Absorbing Capacity”
(TLAC) of at least 16% from 2019 and 18% by 2022.
EMEA
20182019202020212022 and beyond 2019 2020 2021 2022 and beyond
Leverage
Ratio
BoE/ PRA ST
Revised
Concentration
Large Exposures
IFRS 9TLAC2NSFR
New securitization
framework
IRRBB review
CVA review FRTB
Revised SA
approach CR
Leverage
Ratio
FRTB
BoE/ PRA ST
Revised Concentration
& Large Exposures
IFRS 9
TLAC2
NSFR
New securitization
framework
IRRBB review
CVA review
Revised SA
approach CR
ECB Anacredit
FBO ST
BoE/ PRA ST
CCAR /DFAST
Leverage
Ratio
CCAR /
DFAST
NSFR
FRTB
EU-wide ST Supplementary
leverage ratio
Revised Concentration
Large Exposures
IRRBB
review
Revised SA
approach CR
TLAC2 CVA review
SEC Liquidity rules
(ETF, mutual funds)
NCUA RBC rule for
large credit unions IFRS 9
CECL
LCR1
Vickers reform
Revised SA
operational risk
Revised SA
operational risk
Revised SA
operational risk
Restrictions use
internal models for
CR RWA
Restrictions
internal models
for CR RWA
Restrictions use
internal models for
CR RWA
BoE/ PRA ST
BoE/ PRA ST
Updated
Leverage Ratio
CCAR /
DFAST
CCAR /
DFAST
CCAR /
DFAST
SCCL large
BHCs & FBO
Revised minimum
capital requirements
for MR
Revised minimum
capital requirements
for MR
Revised minimum capital
requirements for MR
Output floor
Output floor
Output floor
Supervisory rating
system for LFIs
Revised G-SIB
assessment and
HLA requirement
Revised G-SIB
assessment and
HLA requirement
Revised G-SIB
assessment and
HLA requirement
SCCL for large
banks
PSD II
6 Appendix
November 4, 2019 43
Corporate Finance: Revenue and Issuance
$124 $126 $134 $139 $135 $145 $128 $140 $140
$79 $66$87 $72 $55 $57 $97 $96 $106
$63 $64$58 $59
$39 $19
$57$68 $57
$85 $78
$110 $121
$78 $70
$73$84 $89
$0
$50
$100
$150
$200
$250
$300
$350
$400
3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19
$ M
illio
ns
Revenue1: Mix by Quarter
Other Investment Grade Speculative Grade Bank Loans
$216 $275 $312 $363 $420 $421 $425 $488 $553$109$137
$197$193
$230 $305 $262$301
$271
$143$120
$194$229
$219$183 $181
$254 $175
$96$120
$155
$212$242 $204 $254
$349 $380
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
2010 2011 2012 2013 2014 2015 2016 2017 2018
$ M
illio
ns
Revenue1: Mix by Year
Other Investment Grade Speculative Grade Bank Loans
$322 $269 $312 $305$236 $221
$329 $314$370
$99$100
$112 $94
$64$33
$105 $120$105
$138$134
$165 $210
$123$103
$100 $105$111
$44
$59
$65 $72
$39
$28
$26 $25 $43
$0
$200
$400
$600
$800
3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19
$ 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
$293 $250
$329 $411 $405 $329 $311$426
$304$273 $330
$353$504 $425 $354 $414
$638
$601
$120
$247
$204
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
2010 2011 2012 2013 2014 2015 2016 2017 2018
$ 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.
November 4, 2019 44
38% 39% 38% 34% 34% 35%44% 50%
40% 36% 36% 36%
21%27% 23%
22% 22% 19%
18%19%
20% 27% 25% 27%
20%16%
16%18% 15% 15%
13%7%
13%16% 18% 15%
22% 18% 23% 26% 28% 31% 26% 24% 28%20% 22% 23%
0%
20%
40%
60%
80%
100%
FY14 FY15 FY16 FY17 1Q18 2Q18 3Q18 4Q18 FY18 1Q19 2Q19 3Q19
Other Investment Grade Speculative Grade Bank Loans
70% 69% 68% 73% 73% 73%65% 62%
69% 70% 71% 72%
30% 31% 32% 27% 27% 27%35% 38%
31% 30% 29% 28%
0%
20%
40%
60%
80%
100%
FY14 FY15 FY16 FY17 1Q18 2Q18 3Q18 4Q18 FY18 1Q19 2Q19 3Q19
Revenue1: Distribution by Recurring vs. Transaction
Transaction Recurring
Corporate Finance: Revenue Diversification
38% 32% 32% 35% 34% 35% 37% 36% 35% 32% 37% 34%
62% 68% 68% 65% 66% 65% 63% 64% 65% 68% 63% 66%
0%
20%
40%
60%
80%
100%
FY14 FY15 FY16 FY17 1Q18 2Q18 3Q18 4Q18 FY18 1Q19 2Q19 3Q19
Revenue1: Distribution by Geography
Non - U.S. U.S.
Revenue1: Distribution by Product
2
1. Historical data has been adjusted to conform with current information and excludes intercompany revenue. The revenue reclassification of REITs to Corporate Finance from
Structured Finance is reflected starting from 1Q 2018.
2. Other includes: monitoring, commercial paper, medium term notes, and ICRA.
Percentages have been rounded and may not total to 100%.
November 4, 2019 45
Structured Finance: Revenue and Issuance
$23 $27 $28 $28 $25 $26 $23 $26 $25
$22$25 $24 $27
$24 $23 $24 $24 $22
$38$46
$21 $18$15
$24$18 $20 $18
$46
$50
$43 $55$51
$48
$35$41
$40
$1
$1
$1$1
$1$0
$1$1
$1
$0
$20
$40
$60
$80
$100
$120
$140
$160
3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19
$ M
illio
ns
Revenue1: Mix by Quarter
ABS RMBS CMBS Structured Credit Other
$91 $107 $110 $98 $92 $91 $94 $97 $106
$65$90 $85
$73 $76 $81 $85 $90 $98$53
$70 $95 $116 $122 $140 $133 $143 $78$82
$78$91 $96
$137$135 $122
$165$196
$0
$0$0 $0
$0$2 $2
$2 $2
$0
$200
$400
$600
2010 2011 2012 2013 2014 2015 2016 2017 2018
$ M
illio
ns
Revenue1: Mix by Year
ABS RMBS CMBS Structured Credit Other
$220$319 $335 $317 $319 $292 $298 $337 $384
$396$371
$231 $189 $238$200 $204
$254$270
$24$36
$73
$120$114
$117 $94$120
$115
$59 $39 $65
$94$159
$132 $116
$136$200
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
2010 2011 2012 2013 2014 2015 2016 2017 2018
$ B
illio
ns
Issuance2: Mix by Year
ABS RMBS CMBS Structured Credit
$67$107 $102 $89 $79
$115$65
$90 $91
$59
$73$62 $74
$64
$70
$48
$87$63
$34
$41$26 $27
$26
$36
$16
$38$34
$42
$48
$36$64
$51
$49
$21
$49
$39
$0
$50
$100
$150
$200
$250
$300
3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19
$ 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.
November 4, 2019 46
Structured Finance: Revenue Diversification
62% 64% 62% 65% 63% 67% 64% 63% 64%57% 61% 55%
38% 36% 38% 35% 37% 33% 36% 37% 36%43% 39% 45%
0%
20%
40%
60%
80%
100%
FY14 FY15 FY16 FY17 1Q18 2Q18 3Q18 4Q18 FY18 1Q19 2Q19 3Q19
Revenue1: Distribution by Recurring vs. Transaction
Transaction Recurring
34% 31% 33% 31% 37% 37% 38% 37% 37% 38% 36% 36%
66% 69% 67% 69% 63% 63% 62% 63% 63% 62% 64% 64%
0%
20%
40%
60%
80%
100%
FY14 FY15 FY16 FY17 1Q18 2Q18 3Q18 4Q18 FY18 1Q19 2Q19 3Q19
Revenue1: Distribution by Geography
Non - U.S. U.S.
22% 20% 19% 24% 22% 22% 21% 22% 23% 23% 24%
18% 18% 18%21% 21% 21% 19% 20% 23% 21% 21%
28% 31% 29% 18%14% 13% 20% 16%
18% 18% 17%
32% 31% 33% 37% 43% 44% 39% 41% 35% 37% 38%
0% 0% 0% 1% 1% 0% 0% 0% 1% 1% 1%
0%
20%
40%
60%
80%
100%
FY14 FY15 FY17 1Q18 2Q18 3Q18 4Q18 FY18 1Q19 2Q19 3Q19
ABS RMBS CMBS Structured Credit Other
Revenue1: Distribution by Product
1. Historical data has been adjusted to conform with current information and excludes intercompany revenue. The revenue reclassification of REITs to Corporate Finance from Structured Finance is
reflected starting from 1Q 2018.
Notes: ABS (Asset Backed Securitization) includes asset-backed commercial paper and long-term asset-backed securities. RMBS (Residential Mortgage Backed Securitization) includes covered bonds.
CMBS includes commercial mortgage-backed securities and commercial real estate CDOs. Structured Credit includes CLOs and CDOs.
Percentages have been rounded and may not total to 100%.
November 4, 2019 47
Financial Institutions: Revenue and Issuance
$70$80 $77 $77 $73
$63$80 $85 $80
$24
$30 $28 $33 $38
$15
$29 $28 $31$5
$6 $6$7 $6
$6
$4$10 $7
$4
$3 $3$3 $3
$3
$3$3 $3
$0
$20
$40
$60
$80
$100
$120
$140
3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19
$ M
illio
ns
Revenue1: Mix by Quarter
Banking Insurance Managed Investments Other
$192 $205 $228 $234 $242 $244 $240$300 $290
$69 $73$79 $89 $92 $96 $102
$102 $114
$18$17
$19 $16 $19 $16 $17
$22 $24
$0$0
$0 $0 $2 $9 $10
$13 $13
$0
$50
$100
$150
$200
$250
$300
$350
$400
$450
$500
2010 2011 2012 2013 2014 2015 2016 2017 2018
$ M
illio
ns
Revenue1: Mix by Year
Banking Insurance Managed Investments Other
$1,340 $1,266 $1,312$1,072
$1,247 $1,194 $1,187 $1,232 $1,248
$87 $79$137
$161
$197$136 $112
$183$74
$0
$400
$800
$1,200
$1,600
$2,000
2010 2011 2012 2013 2014 2015 2016 2017 2018
$ B
illio
ns
Issuance2: Mix by Year
Global Speculative Grade Financial Corporate Bonds
Global Investment Grade Financial Corporate Bonds
$278$241
$411$339 $327
$170
$396$315
$279
$39$49
$26$24
$20
$4
$29
$18$27
$0
$100
$200
$300
$400
$500
3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q 19
$ 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.
November 4, 2019 48
Financial Institutions: Revenue Diversification
35% 37% 37%45% 44% 47% 47%
28%42% 41%
49% 46%
65% 63% 63%55% 56% 53% 53%
72%58% 59%
51% 54%
0%
20%
40%
60%
80%
100%
FY14 FY15 FY16 FY17 1Q18 2Q18 3Q18 4Q18 FY18 1Q19 2Q19 3Q19
Revenue1: Distribution by Recurring vs. Transaction
Transaction Recurring
60% 57% 57% 57% 58% 55% 50%63%
56% 60% 58% 55%
40% 43% 43% 43% 42% 45% 50%37%
44% 40% 42% 45%
0%
20%
40%
60%
80%
100%
FY14 FY15 FY16 FY17 1Q18 2Q18 3Q18 4Q18 FY18 1Q19 2Q19 3Q19
Revenue1: Distribution by Geography
Non - U.S. U.S.
68% 67% 65% 69% 67% 64% 61%72%
66% 69% 68% 66%
26% 26% 28% 23% 25% 27% 32%17% 26% 25% 22% 26%
5% 4% 5% 5% 5% 6% 5% 7% 5% 3% 8% 5%
1% 3% 3% 3% 3% 3% 3% 4% 3% 3% 2% 2%
0%
20%
40%
60%
80%
100%
FY14 FY15 FY16 FY17 1Q18 2Q18 3Q18 4Q18 FY18 1Q19 2Q19 3Q19
Banking Insurance Managed Investments Other
Revenue1: Distribution by Product
1. Historical data has been adjusted to conform with current information and excludes intercompany revenue.
Percentages have been rounded and may not total to 100%.
November 4, 2019 49
$159 $156 $181 $174 $177 $202 $225 $218$185
$113 $121
$142 $167 $181$174
$188 $213
$206$0 $0
$0$0
$0$0
$0$0
$0
$0
$50
$100
$150
$200
$250
$300
$350
$400
$450
$500
2010 2011 2012 2013 2014 2015 2016 2017 2018
$ M
illio
ns
Revenue1: Mix by Year
Public Finance and SovereignProject & Infrastructure FinanceOther
$374 $248
$313 $302 $307 $364 $408 $384
$292
$207 $266
$220
$0
$100
$200
$300
$400
$500
$600
$700
$800
$900
2010 2011 2012 2013 2014 2015 2016 2017 2018
$ 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
$80
$127
$59$82 $78 $74 $71 $79
$95
$75
$66
$57
$67 $57
$39 $57 $71
$86
$0
$50
$100
$150
$200
$250
3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19
$ B
illio
ns
Issuance2: Mix by Quarter
Rated Global Project & Infrastructure Finance Bonds
Long-Term Rated U.S. Muni Bonds
$49$62
$47 $52 $45 $41 $46 $53 $58
$60
$57
$46$56
$54$50 $47
$56$62
$0$0
$0
$0$0
$0 $0
$0$0
$0
$20
$40
$60
$80
$100
$120
$140
3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19
$ 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.
November 4, 2019 50
58% 60% 63% 65%58% 64% 61% 58% 61% 59%
66% 69%
42% 40% 37% 35%42% 36% 39% 42% 39% 41%
34% 31%
0%
20%
40%
60%
80%
100%
FY14 FY15 FY16 FY17 1Q18 2Q18 3Q18 4Q18 FY18 1Q19 2Q19 3Q19
Revenue1: Distribution by Recurring vs. Transaction
Transaction Recurring
37% 35% 33% 38% 43% 43% 40% 40% 41% 35% 36% 39%
63% 65% 67% 62% 57% 57% 60% 60% 59% 65% 64% 61%
0%
20%
40%
60%
80%
100%
FY14 FY15 FY16 FY17 1Q18 2Q18 3Q18 4Q18 FY18 1Q19 2Q19 3Q19
Revenue1: Distribution by Geography
Non - U.S. U.S.
49% 54% 54% 51% 50% 48% 46% 45% 47% 50% 49% 48%
51% 46% 46% 49% 50% 52% 54% 55% 53% 50% 51% 52%
0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
0%
20%
40%
60%
80%
100%
FY14 FY15 FY16 FY17 1Q18 2Q18 3Q18 4Q18 FY18 1Q19 2Q19 3Q19
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%.
November 4, 2019 51
Moody’s Analytics: Financial Overview
$218$258 $267 $276 $280 $297 $308 $315 $318
$113
$143 $102 $110 $115$124 $122 $118 $133
$38
$40$38 $37 $40
$44 $42 $42 $43
$0
$100
$200
$300
$400
$500
$600
3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19
$ M
illio
ns
Revenue1: Mix by Quarter
$419 $445 $483 $520 $572 $626 $668$833
$1,120$181 $196 $243 $263
$329$374 $419
$449
$451
$19 $62 $108 $119$168
$150$147
$149
$159
$0
$400
$800
$1,200
$1,600
$2,000
2010 2011 2012 2013 2014 2015 2016 2017 2018
$ M
illio
ns
Revenue1: Mix by Year
Professional Services
Enterprise Risk Solutions
Research, Data and
Analytics
27% 26% 25% 22% 15% 16% 16% 17% 16% 15% 15% 16%
73% 74% 75% 78% 85% 84% 84% 83% 84% 85% 85% 84%
0%
20%
40%
60%
80%
100%
FY14 FY15 FY16 FY17 1Q18 2Q18 3Q18 4Q18 FY18 1Q19 2Q19 3Q19
Transaction Recurring
56% 54% 51% 55% 60% 59% 60% 58% 59% 57% 58% 58%
44% 46% 49% 45% 40% 41% 40% 42% 41% 43% 42% 42%
0%
20%
40%
60%
80%
100%
FY14 FY15 FY16 FY17 1Q18 2Q18 3Q18 4Q18 FY18 1Q19 2Q19 3Q19
Revenue1: Distribution by Geography
Non-U.S. U.S.
54% 54% 54% 58% 66% 65% 64% 64% 65% 65% 66% 64%
31% 33% 34% 31%25% 26% 26% 27% 26% 26% 25% 27%
16% 13% 12% 10% 9% 9% 9% 9% 9% 9% 9% 9%
0%
20%
40%
60%
80%
100%
FY14 FY15 FY16 FY17 1Q18 2Q18 3Q18 4Q18 FY18 1Q19 2Q19 3Q19
Revenue1: Distribution by Line of Business
Revenue1: Distribution by Recurring vs. Transaction
1. Historical data has been adjusted to conform with current information and excludes intercompany revenue. Research, Data and Analytics includes Bureau van Dijk revenue
beginning from the acquisition close date, August 10, 2017. The revenue reclassification of the FACT product from RD&A to ERS is reflected starting from 1Q 2018.
Percentages have been rounded and may not total to 100%.
November 4, 2019 52
Historically, Moody’s Revenue and Interest Rates
Have Not Been Strongly Correlated
+200bps
+120bps
+100bps
+180bps
MCO Revenue and Interest Rates
Note: Gray bars reflect periods of significant increases in the 10-year Treasury Yield.
1. 10-yr U.S. Treasury Yields are represented by the rate at the end-of-period.
Source: www.treasury.gov.
5.8%
7.8%
4.7%
6.5%
2.3%
3.3%
1.8%
3.0%2.7%
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
199
2
199
3
199
4
199
5
199
6
199
7
199
8
199
9
200
0
200
1
200
2
200
3
200
4
200
5
200
6
200
7
200
8
200
9
201
0
201
1
201
2
201
3
201
4
201
5
201
6
201
7
201
8
201
9F
$ 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
November 4, 2019 53
1.8x
0.0x
0.5x
1.0x
1.5x
2.0x
2.5x
$0.0
$1.0
$2.0
$3.0
$4.0
$5.0
$6.0
2017 2018 1Q19 2Q19 3Q19
$ B
illio
ns
Net Debt
Net Debt/TTM Adj. Operating Income (R)
» Committed to leverage anchored around
a BBB+ rating
» Strong track record of de-leveraging
through cash flow (e.g., de-levered
within nine months of the Bureau van
Dijk acquisition)
» Well-laddered maturities; no significant
debt maturities until September 2020
Capital Management
1
1. Trailing twelve months adjusted operating income. Amounts are adjusted measures. See Appendix for reconciliations from adjusted financial measures to U.S. GAAP
and gross debt to net debt.
2. TTM only applies to income and cash flow statement items.
3. Amounts are adjusted measures. See Appendix for reconciliations from adjusted financial measures to U.S. GAAP and gross debt to net debt.
($ Billions) TTM 3Q192
Adjusted Operating Income3 $2.2
Interest Expense $0.2
Capital Expenditures $0.1
Free Cash Flow3 $1.5
Debt $5.2
Cash, Cash Equivalents & ST Investments $1.3
Net Debt $4.0
Net Debt/Adjusted Operating Income1 1.8x
November 4, 2019 54
» ML and deep learning tools
to automate financial data
spreading at both MA and
MIS
» AI and NLP used to generate
credit reports on 6,000
municipal issuers
» RPA of manual, repeatable
tasks within MIS
» Incorporating alternative
data sources to augment
SME credit scoring accuracy
» QuantCube pilot program to
synthesize unstructured
data to enhance financial
analysis
» CompStak’s use of crowd-
sourced data on CRE leases
and sales
» NLP based early warning and
monitoring tools for MIS
analysts and MA customers
» AI tailored credit training for
MA customers – Credit Coach
» Faster loan approvals with AI
powered lending decisions –
CreditLens
» SaaS accelerating product
development and improving
customer experience
» Leveraging PaaS to
experiment with application of
tools and techniques --
blockchain and big data
» Moody’s IT moving to IaaS to
expand capabilities and lower
costs
Enhance
Data & Analytics
Deliver
Efficiencies
Improve
Decisions
Increase
Adaptability
Note: AI: Aritificial 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
November 4, 2019 55
Moody’s Global Presence
U.S. employees non-U.S. employees total employees2
U.S. employees non-U.S. employees total employees1
3,875 9,850 13,725
2019
3,743 8,878 12,621
2018
1. As of September 30, 2019. Includes ~2,800 MAKS employees.
2. As of September 30, 2018.
Americas
Argentina Mexico
Brazil Panama
Canada Peru
Chile United States
Costa Rica
Europe, Middle East & Africa
Austria Poland
Belgium Portugal
Cyprus Russia
Czech Republic Saudi Arabia
Denmark Slovak Republic
France South Africa
Germany Spain
Israel Sri Lanka
Italy Sweden
Lithuania Switzerland
Mauritius United Arab Emirates
Morocco United Kingdom
Netherlands
Asia-Pacific
Australia Malaysia
China Nepal
Hong Kong Singapore
India South Korea
Japan Thailand
November 4, 2019 56
Reconciliation of Adjusted Financial Measures to
GAAPAdjusted Operating Income and Adjusted Operating Margin Reconciliation1
(in $ millions) 2014 2015 2016 2017 2018 TTM 3Q19
Operating Income $1,449.8 $1,490.7 $650.9 $1,820.8 $1,868.2 $1,870.6
Operating Margin 43.5% 42.8% 18.1% 43.3% 42.1% 40.2%
Add Adjustment:
Depreciation & Amortization 95.6 113.5 126.7 158.3 191.9 198.2
Acquisition-Related Expenses - - - 22.5 8.3 7.6
Restructuring - - 12.0 - 48.7 107.0
Captive insurance company settlement - - - - - 15.5
Settlement Charge - - 863.8 - - -
Impairment pursuant to the planned
divestiture of MAKS - - - - - 10.7
Adjusted Operating Income $1,545.4 $1,604.2 $1,653.4 $2,001.6 $2,117.1 $2,209.6
Adjusted Operating Margin 46.3% 46.0% 45.9% 47.6% 47.7% 47.5%
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.
(in $ millions) 2014 2015 2016 2017 2018 3Q19
Gross debt $2,532.1 $3,380.6 $3,363.0 $5,540.5 $5,676.0 $5,238.0
Less: Cash, cash equivalents and
short-term investments1,677.6 2,232.2 2,224.9 1,183.3 1,817.5 1,273.8
Net debt $854.5 $1,148.4 $1,138.1 $4,357.2 $3,858.5 $3,964.2
November 4, 2019 57
Reconciliation of Adjusted Financial Measures to
GAAP (cont.)
Moody's Corporation Operating Margin Guidance Reconciliation
2019F1
Projected Operating Margin - GAAP Approximately 42%
Depreciation & Amortization Approximately 4.2%
Restructuring Approximately 1.2%
Captive insurance company settlement Approximately 0.3%
Impairment pursuant to the planned divestiture of MAKS Approximately 0.2%
Acquisition-Related Expenses Approximately 0.1%
Projected Adjusted Operating Margin Approximately 48%
Free Cash Flow Reconciliation2
(in $ millions) 2014 2015 2016 2017 2018 2019F1
Net cash flows from operating
activities$1,077.3 $1,198.1 $1,259.2 $754.6 $1,461.1 $1,700.0 - $1,800.0
Less: Capital expenditures 74.6 89.0 115.2 90.6 90.4 ~100.0
Free Cash Flow $1,002.7 $1,109.1 $1,144.0 $664.0 $1,370.7 $1,600.0 to $1,700.0
1. Guidance as of October 30, 2019.
2. In 2017, the Company adopted ASU 2016-09 “Improvements to Employee Share-Based Payment Accounting” on a retrospective basis. In Q1 2018, the Company adopted ASU No. 2016-
15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (a Consensus of the Emerging Issues Task Force)” on a retrospective basis.
November 4, 2019 58
Reconciliation of Adjusted Financial Measures to
GAAP (cont.)Moody's Corporation Diluted EPS Reconciliation
2014 2015 2016 2017 2018 2019F1
Diluted EPS - GAAP $4.61 $4.63 $1.36 $5.15 $6.74 $7.20 - $7.35
Legacy Tax (0.03) (0.03) - - - -
Impact of Litigation Settlement - - $3.59 - - -
Captive insurance company settlement~0.06
ICRA Gain (0.37) - - - - -
FX Gain due to Subsidiary Liquidation - - ($0.18) - - -
Restructuring - - $0.04 - $0.19 ~$0.23
CCXI Gain - - - ($0.31) - -
Acquisition-Related Expenses - - - $0.10 $0.03 ~$0.01
Purchase Price Hedge Gain - - - ($0.37) - -
Acquisition-Related Intangible
Amortization Expenses$0.10 $0.11 $0.13 $0.23 $0.40 ~$0.41
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 associated with planned
divestiture of MAKS- - - - - ~$0.08
Impairment pursuant to the planned
divestiture of MAKS- - - - - ~$0.06
Adjusted Diluted EPS $4.31 $4.71 $4.94 $6.07 $7.39 $8.05 - $8.20
1. Guidance as of October 30, 2019.
Note: Table may not sum to total due to rounding.
Investor Relations
ir.moodys.com
moodys.com
November 4, 2019 60
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Moody’s Investors Service, Inc., a wholly-owned credit rating agency subsidiary of Moody’s Corporation (“MCO”),
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creditworthiness of a debt obligation of the issuer, not on the equity securities of the issuer or any form of
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opinions and services rendered by it fees ranging from JPY125,000 to approximately JPY250,000,000.
MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements.
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