Moody's Corporation · NYSE:MCO

Moody's — Investor Presentation (May 2023)

73 slides from Moody's's investor presentation, May 18, 2023

  1. Slide 1: 2Q 2023 Investor Presentation

    2Q 2023 Investor Presentation May 18, 2023

  2. Slide 2: Disclaimer

    Disclaimer Certain statements contained in this document are forward-looking statements and are based on future expectations, plans and prospects for Moody’s business and operations that involve a number of risks and uncertainties. Such statements involve estimates, projections, goals, forecasts, as

  3. Slide 3: Moody's Overview

    BASS Moody's Overview a a s = = me

  4. Slide 4: Table of Contents

    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 Moody’s | Decode risk. Unlock opportunity. 2Q 2023 Investor Presentation 4

  5. Slide 5: Our Company

    Our Company Moody’s Analytics Moody’s Corporation Moody’s Investors Service Financial intelligence and analytical tools Global provider of integrated perspectives on risk, Delivering independent credit supporting customers’ growth, efficiency and risk including credit rating opinions, analytical rat

  6. Slide 6: Helping Customers Accelerate Value Creation in an Era of Exponential Risk

    Helping Customers Accelerate Value Creation in an Era of Exponential Risk Research Data Decision Solutions Ratings & Insights & Information Banking Insurance KYC Moody’s Agency of Premier fixed income Unparalleled database on SaaS businesses serving Choice research business companies & credit missio

  7. Slide 7: Providing Integrated Perspectives on Risk

    Providing Integrated Perspectives on Risk Selection of use cases addressable by Moody’s solutions Weather and natural disaster analysis $40B+ Helping customers make better decisions Current Addressable Transfer pricing Supply chain management Market and trade credit Curated Data Fixed income Commerc

  8. Slide 8: Financial Overview

    2 Financial Overview

  9. Slide 9: Moody's Corporation Financial Profile

    Moody’s Corporation Financial Profile 2Q 2023 TTM Revenue: $5.5 billion DS 24% MA1 PPIF 8% R&I MIS2 48% 29% FIG 15% Non-U.S. Transaction 9% SFG D&I 7% 52% 71% CFG 13% U.S. Recurring 23% Full Year 2023 Guidance 3 Revenue Increase in the high-single-digit percent range Diluted EPS $8.70 - $9.20 Operat

  10. Slide 10: MIS: Macroeconomic Assumptions Underpinning our Full Year 2023 Outlook

    MIS: Macroeconomic Assumptions Underpinning our Full Year 2023 Outlook Macroeconomic Assumptions1 Tailwinds Rates nearing their peaks for most major central banks as inflation eases Real GDP2 U.S.: 0.5% - 1.5%; Euro area: 0.0% - 1.0%; Global 1.5% - 2.5% ~$4T of refinancing needs between 2023 and 202

  11. Slide 11: Medium-Term Guidance with 2022 Base Year

    Medium-Term Guidance with 2022 Base Year1 M E D I U M - T E R M 2,3 MCO Revenue At least 10% growth MA Revenue Low-to-mid-teens % growth MIS Revenue Low-to-mid-single-digit % growth MCO Adjusted Operating Margin Low-50s % range MA Adjusted Operating Margin Mid-30s % range MIS Adjusted Operating Marg

  12. Slide 12: Investment Criteria and Post-Acquisition Review

    Investment Criteria and Post-Acquisition Review Clear Industrial Logic Disciplined Financial Targets Post-Acquisition Review Strategic fit, the most important factor, is the Long held, clear financial framework for Disciplined and rigorous monitoring post-close first screen external (and internal) i

  13. Slide 13: Capital Markets Overview

    or Capital Markers ¢ Overview o\

  14. Slide 14: Default Rates Expected to Rise Amid High Interest Rates and Tight Lending Conditions

    Default Rates Expected to Rise Amid High Interest Rates and Tight Lending Conditions1 Default Rates for Global Speculative-Grade Speculative-Grade Corporate Default Rates by Corporate Rated Issuance Region2 Global US Europe Baseline Optimistic Moderately Pessimistic Severely Pessimistic 14% 10% 12%

  15. Slide 15: Following Outsized Issuance in 2020 and 2021, Refinancing Needs Remain Significant

    Following Outsized Issuance in 2020 and 2021, Refinancing Needs Remain Significant MIS-Rated Q2 Non-Financial Global Corporate Investment Grade (IG) Issuance MIS-Rated Q2 Non-Financial Global Corporate High Yield (HY) Issuance IG Bond Issuance IG Bond Issuance Avg U.S. 10YR Treasury U.S. 10YR Treasu

  16. Slide 16: Refunding Needs Support MIS Long-term Fundamentals

    Refunding Needs1 Support MIS Long-term Fundamentals Debt Maturities: U.S. Non-Financial Corporate Bonds and Loans ($B)2 » Refinancing needs remain approximately flat compared to $666 September 2021, totaling ~$4T $610 over the next four years 246 291 Speculative Grade Bank Loans $412 $255 160 113 14

  17. Slide 17: Debt Leverage and Interest Coverage in North America and Europe

    Debt Leverage and Interest Coverage in North America and Europe1 Credit Metrics: North American Speculative Grade Companies Debt / EBITDA EBITDA / Interest Expense 5.8x Interest Coverage 6.0x 5.0x 5.1x 5.1x 5.3x 5.3x 5.4x 5.3x 5.3x 4.6x 4.5x 4.6x 4.8x 4.2x 4.3x 4.0x 3.0x 3.1x 3.0x 3.0x 3.0x 2.9x 3.0

  18. Slide 18: Leveraged Finance Activity Driven by Refinancing and M&A

    Leveraged Finance Activity Driven by Refinancing and M&A Uses of Funds from USD High Yield Bonds and Bank Loans Issuance1,2 5% 5% 6% 3% 5% 3% 8% 14% 20% 19% 29% 26% 26% 42% 83% 75% 75% 69% 69% 68% 50% FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 1H 2023 Debt Refinancing M&A Other 3 1. Percent of

  19. Slide 19: Debt Capital Market Penetration

    Debt Capital Market Penetration 2022 Private Sector Capital Market Debt Securities (International & Domestic) Outstanding / GDP (%) Size of bubble reflects 2022 GDP Emerging Developed Developed Asia3 North America6 Other Asia7 CEE/CIS2 ASEAN1 India Latin M.E. & Africa5 America4 China Western Europe8

  20. Slide 20: Private Credit Markets

    Private Credit Markets 2023 Issuance Factors Overview » Constitutes loans, bonds, and other credit instruments ~$1.4 Trillion1 issued by private companies or in private offerings » Market has grown significantly since the 2007 – 2008 Global Financial Crisis Large Direct Loans » Most direct loans are

  21. Slide 21: Moody's Investors Service

    ~ . 7 AQ = e . Moody’s Investors Service BG

  22. Slide 22: Moody's Investors Service Financial Profile

    Moody’s Investors Service Financial Profile 2Q 2023 TTM Revenue: $2.6 billion » 40% recurring revenue » 38% recurring revenue U.S. Recurring Non-U.S. Transaction MIS Other1 1% Public, Project, & Infrastructure 40% Finance 55% 17% » 55% recurring revenue Corporate Financial Finance Institutions 47% 6

  23. Slide 23: Constructive Markets Underpin Guidance Uplift

    Constructive Markets Underpin Guidance Uplift Investment Grade Issuance Grew in 2Q 2023 FY 2023 Issuance Guidance1,2 As of April 25, 2023 As of July 25, 2023 Total Issuance Mid-Single-Digit % Investment Grade ~30% High Yield Bonds ~40% Leveraged Loans Mid-Single-Digit % Financial Institutions Approx

  24. Slide 24: Full Year 2023 Forecast Raised on Constructive Market Conditions

    Full Year 2023 Forecast Raised on Constructive Market Conditions Total MIS-rated Issuance1,2 Revenue1 Adjusted Operating Margin1 Increase in the Increase in the mid-single-digit high-single-digit 55% - 56% percentage range 51.8% 3 percentage range $4.2T $2.7B 2022 2023F 2022 2023F 2022 2023F » Stron

  25. Slide 25: MIS Long-term Revenue Growth Drivers Intact

    MIS Long-term Revenue Growth Drivers Intact Long-term Growth Building Blocks Economic Expansion1 Value Proposition Developing Capital Markets » GDP growth drives demand for debt capital to » Proven rating accuracy and deeply experienced » Bank system capacity remains constrained fund business invest

  26. Slide 26: The Benefits of a Moody's Rating

    The Benefits of a Moody’s Access to capital Transparency, credit Responsive to investor Rating comparison and market stability demand Investors seek Moody’s » Moody’s opinions on credit are used by institutional investors throughout » Signals transparency by issuers and provides market participants

  27. Slide 27: Illustrative Impact of Adding a Moody's Credit Rating

    Illustrative Impact of Adding a Moody’s Credit Rating Example: 5-year $500 million corporate bond NOT RATED BY MOODY’S RATED BY MOODY’S $500,000,000 Bond $500,000,000 1.20% 5-Yr US Treasury Bond Rate 1.20% 500 Option Adjusted Spread (bps)1 435 6.20% Interest Rate 5.55% = $31,000,000 Annual Interest

  28. Slide 28: Facts & Figures

    Facts & Figures ~$73 trillion Full Year 2022 Total rated debt Americas EMEA Asia Pacific 33,900+ Rated Organizations and Structured Deals Total Rated Debt $41+ trillion $19+ trillion $10+ trillion 5,100+ 3,400+ Rated Organizations and Structured Deals 27,200+ 4,400+ 2,200+ Non-Financial Corporates F

  29. Slide 29: How we Participate in Global Domestic Markets

    How we Participate in Global Domestic Markets MIS Emerging Markets Revenue1 South Africa Nigeria Others Chile Malaysia $343M Mexico CAGR Argentina Brazil 7% Peru Egypt $179M Israel $750 million China Size of domestic CRA markets India MIS affiliate (majority) MIS affiliate (minority) 2012 2022 Moody

  30. Slide 30: Moody's in Greater China

    Moody’s in Greater China 2nd Largest Onshore Bond Market at ~$22 Trillion Revenue and Attributable Income from China2 Total debt securities outstanding 4Q 2012 - 4Q 20221 4Q 2012 4Q 2022 MIS Cross Border Revenue Total MA Revenue Attributable Income from CCXI 5% $60 $125 $ Trillions $ Millions $40 18

  31. Slide 31: Moody's Analytics

    5 Moody’s Analytics

  32. Slide 32: Integrated Perspectives on Risk Deliver Impressive Results

    Integrated Perspectives on Risk Deliver Impressive Results Leveraging Unmatched Deep Market Currents Delivering Results Capabilities » Extensive, Uniquely Curated, » Outpacing Competitors in $30B+ 10% 90%+ 62 Proprietary Data Current Addressable Market1 ARR2 Retention Rate3 Quarters of Consecutive »

  33. Slide 33: Diverse Customer Base Across Multiple Sectors

    Diverse Customer Base Across Multiple Sectors1 4,400+ 900+ Corporates Insurance Companies 2,600+ 900+ Commercial Banks Real Estate Entities 70% 52% 2,300+ 600+ of the Fortune 1002 of the Forbes 1,0003 Professional Services Educational Institutions 15,200+ 165+ 1,900+ 200+ Customers Countries Asset M

  34. Slide 34: Assembling and Integrating Capabilities

    Assembling Lending & Underwriting ESG & Climate and Integrating Origination Portfolio Mgmt. Assessment Regulatory Investment Capabilities Compliance KYC Analysis Decision Data & Solutions Research & Information Insights Other Economic Proprietary Forecasts Data & Models Private & Models & Public Ana

  35. Slide 35: Data & Information Snapshot

    Data & Standardize, cleanse and Create and aggregate Distribute through cloud- Information extensive data from multiple sources curate data based platforms, APIs and other web interfaces Snapshot Raw ingredients for Data Sets Include Curated Data Data feeds from the MIS ratings process unique insigh

  36. Slide 36: Research & Insights Snapshot

    Research & Model and measure risks related Forecast and benchmark Provide valuable insights Insights to credit, financial, climate, operational, cyber and others micro and macroeconomic implications and opinions that inform global decision makers Snapshot Generating actionable Capabilities Include C

  37. Slide 37: Decision Solutions Snapshot

    Decision Integrate and connect data, Build and support Embedded components Solutions research and analytics for enriching customer applications software for specific customer workflows in external ecosystems Snapshot Integrating best-in-class Solutions Include Select Use Cases Curated Data data and

  38. Slide 38: Strong Execution Enables Consistent Revenue Growth

    Strong Execution Enables Consistent Revenue Growth Exceptional value creation - revenue has more than tripled since inception $3,000 2022 Revenue: 2008 – 2022 CAGR: $2,500 $2,769M +12% (~60% organic) $2,000 CAGR $1,500 12% $1,000 $500 $0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 20

  39. Slide 39: Recurring Revenue Growth Drives Margin Expansion

    Recurring Revenue Growth Drives Margin Expansion TTM Recurring And Transaction Revenue Adjusted Operating Margin1 Recurring Transaction Recurring % ~16% Recurring Revenue CAGR +~410bps 94% 93% 92% 30.0% to 31.0% 88% 84% 26.4% 81% 2Q18 2Q19 2Q20 2Q21 2Q22 2Q23 2018 2023F 1. Guidance as of August 3, 2

  40. Slide 40: Building on a Foundation of Strong Customer Retention

    Building on a Foundation of Strong Customer Retention 93% 6% 7% 106% First Half 2023 Retained Base Upgrades and Price New Sales Business Base 8% 9% 111% 94% Full Year 2022 Retained Base1 Upgrades and Price New Sales Business Base 7% 9% 111% 95% Full Year 2021 Retained Base Upgrades and Price New Sal

  41. Slide 41: MA: Full Year 2023 Guidance

    MA: Full Year 2023 Guidance1 ARR1 Revenue1 Adjusted Operating Margin1 Increase by Increase in the approximately 30.2% 30% - 31% low-double-digit 10% percent range $2.8B 10% growth YE 2022 Growth YE 2023F Growth 2022 2023F 2022 2023F » MA’s products and solutions are deeply embedded in our customers’

  42. Slide 42: Accelerating Revenue Growth

    Accelerating Revenue Growth Medium-Term Revenue Target Drivers Strong Customer Retention Rates New Product Development Cross-selling, Upgrades & Pricing Within 5 years1 Low-to-mid-teens % Total Revenue CAGR Increased Distribution Capacity Continued SaaS Transition Note: SaaS = Software as a Service.

  43. Slide 43: Decision Solutions: Integrating Content and Capabilities Across Moody's

    Decision Solutions: Integrating Content and Capabilities Across Moody's Workflow solutions that address key customer use cases Banking Insurance KYC » Lending » Underwriting » Onboarding, Perpetual Screening & Key Use Cases » Risk & Capital Management » Risk & Capital Management Monitoring – Asset L

  44. Slide 44: Banking Customer Spotlight

    Banking Customer Spotlight: Workflow Solutions that Combine Data, Analytics, and Software Case Study: A North American Bank Lending Broaden 5x » Customer Verification (KYC / KYS) Initial ARR2 Workflow » Customer Acquisition Solution » Customer Onboarding » Credit Decisions » Loan Monitoring Software

  45. Slide 45: Insurance Customer Spotlight

    Insurance Customer Spotlight: Integrating Data, Analytics and Software to Deliver Workflow Solutions Case study: Leading Global Insurer Underwriting $30M1 82% » Risk Selection » Risk Pricing » Portfolio Risk Exposure Management Decision Solutions USE CASES Risk & Capital Management » Balance Sheet F

  46. Slide 46: Delivering Award-Winning Solutions for Insurance Customers

    Delivering Award-Winning Solutions for Insurance Customers with Significant Expansion Opportunity from Cross-Selling Average number of MA product families1 used by 900+2 Insurance customers Top 10 Customers Following 90 6-7 Customers Product Bottom 800+ Families Customers 4-5 Product Families 1-2 Pr

  47. Slide 47: RMS: Driving Strong Results through Innovation and Integration

    RMS: Driving Strong Results through Innovation and Integration Continued Focus on P&C Expanding via Cross-sell to Expanding Climate Capabilities Delivering New Synergistic Insurance Market Existing Customers to New Markets Solutions » Announced Open Modeling Engine and » Doubled the rate of cross- »

  48. Slide 48: Appendix

    6 Appendix

  49. Slide 49: Corporate Finance: Revenue and Issuance

    Corporate Finance: Revenue and Issuance1 Revenue2: Mix by Quarter Issuance4: Mix by Quarter Global Non-Financial Investment-Grade Bonds Global Non-Financial Speculative-Grade Bonds Other3 Investment Grade Speculative Grade Bank Loans U.S. Speculative-Grade Bank Loans Non-U.S. Speculative-Grade Bank

  50. Slide 50: Corporate Finance: Revenue

    Corporate Finance: Revenue Revenue1: Distribution by Geography Revenue1: Distribution by Recurring vs. Transaction Non-U.S. U.S. Transaction Recurring 22% 25% 28% 23% 30% 35% 35% 38% 45% 39% 50% 63% 68% 66% 66% 66% 65% 68% 63% 66% 69% 65% 78% 75% 72% 77% 70% 65% 65% 62% 55% 61% 50% 37% 32% 34% 34% 3

  51. Slide 51: Financial Institutions: Revenue and Issuance

    Financial Institutions: Revenue and Issuance1 Revenue2: Mix by Quarter Issuance3: Mix by Quarter Global Speculative Grade Financial Corporate Bonds Banking Insurance Managed Investments Other Global Investment Grade Financial Corporate Bonds $700 $180 $3 $2 $600 $20 $160 $3 $3 $8 $3 $3 $27 $ Billion

  52. Slide 52: Financial Institutions: Revenue

    Financial Institutions: Revenue Revenue1: Distribution by Geography Revenue1: Distribution by Recurring vs. Transaction Non-U.S. U.S. Transaction Recurring 46% 46% 46% 48% 41% 43% 47% 45% 44% 47% 46% 47% 50% 50% 50% 53% 55% 51% 50% 62% 58% 57% 54% 54% 54% 52% 59% 57% 53% 55% 56% 53% 54% 53% 50% 50%

  53. Slide 53: Public, Project and Infrastructure: Revenue and Issuance

    Public, Project and Infrastructure: Revenue and Issuance1 Revenue2: Mix by Quarter Issuance3: Mix by Quarter Public Finance and Sovereign Project & Infrastructure Finance Long-Term Rated U.S. Muni Bonds Rated Global Project & Infrastructure Finance Bonds $150 $200 $ Billions $ Millions $100 $150 $67

  54. Slide 54: Public, Project and Infrastructure: Revenue

    Public, Project and Infrastructure: Revenue Revenue1: Distribution by Geography Revenue1: Distribution by Recurring vs. Transaction Non-U.S. U.S. Transaction Recurring 32% 32% 34% 32% 36% 33% 33% 34% 46% 45% 39% 61% 58% 60% 58% 61% 64% 62% 60% 62% 59% 65% 68% 68% 66% 68% 64% 67% 67% 66% 54% 55% 61%

  55. Slide 55: Structured Finance: Revenue and Issuance

    Structured Finance: Revenue and Issuance1 Revenue2: Mix by Quarter Issuance3: Mix by Quarter ABS RMBS CMBS Structured Credit Other ABS RMBS CMBS Structured Credit $200 $500 $180 $160 $400 $97 $ Millions $ Billions $140 $1 $120 $67 $39 $300 $53 $57 $1 $70 $36 $60 $59 $32 $100 $52 $38 $34 $31 $44 $56

  56. Slide 56: Structured Finance: Revenue

    Structured Finance: Revenue Revenue1: Distribution by Geography Revenue1: Distribution by Recurring vs. Transaction Non-U.S. U.S. Transaction Recurring 34% 35% 31% 35% 35% 41% 43% 50% 52% 55% 53% 63% 65% 63% 62% 59% 69% 68% 67% 67% 68% 67% 66% 65% 69% 65% 65% 59% 57% 50% 48% 45% 47% 37% 35% 37% 38%

  57. Slide 57: Moody's Analytics: Financial Overview

    Moody’s Analytics: Financial Overview Decision Solutions Research & Insights Data & Information Moody’s Analytics Revenue: Mix by Quarter Revenue: Mix by Year Revenue: Distribution by Line of Business $3,000 $800 $700 27% 26% 26% 26% 25% 26% 26% $2,500 31% 29% $712 $188 $196 $178 $180 $600 $178 $176

  58. Slide 58: Awards & Accolades

    Awards & Accolades Recognition for our industry-leading solutions: data, research, analytics and software Moody’s | Decode Risk. risk. Unlock Unlockopportunity. Opportunity. 2Q 2023 Investor Presentation 58

  59. Slide 59: Moody's Revenue and Interest Rates Over Time

    Moody’s Revenue and Interest Rates1 Over Time MIS Revenue (L) MIS Revenue Guidance MA Revenue (L) MA Revenue Guidance MCO Revenue (L) 10-yr U.S. Treasury Yield (R) 1 $7,000 9% +240bps 7.8% 8% $6,000 7% $ Millions 6.5% $5,000 +100bps +120bps 6% 5.8% $4,000 5% 4.7% 3.9% $3,000 4% 3.3% +200bps +180bps

  60. Slide 60: Maintaining Financial Flexibility through Proactive Management

    Maintaining Financial Bond portfolio WAC1 WAC With Hedges WAC Excluding Hedges Flexibility through 5.1% 4.6% 4.7% 4.3% 4.3% 3.9% 4.1% Proactive Management 3.6% 3.1% 4.2% 3.9% 4.0% 3.5% 3.3% 3.3% 3.1% 3.3% 3.4% 3.4% 3.4% 3.3% 2.6% 3.0% 2.1% 2.1% 2.4% 2.4% 1.6% » Well-laddered maturities; attractive l

  61. Slide 61: Disciplined Approach to Capital Management

    Disciplined Approach to Capital Management Capital Allocation Priorities Increasing Dividends Through Market Cycles COVID-19 $3.50 Recession INVESTING FOR GROWTH $3.00 $2.50 CAGR Great Reinvestment Accelerating organic growth $2.00 $1.50 2001 Recession Recession 17% $1.00 Acquisitions $0.50 Advance

  62. Slide 62: Market-leading ESG & Climate Capabilities

    Moody’s Market-leading » Our deep ESG & Climate domain expertise and trusted insights ESG are integrated across our business and capabilities & Climate » We enable customers to obtain a holistic view of their ESG & Climate risk that considers both Capabilities financial and stakeholder impact. » Moo

  63. Slide 63: Workflow-Driven ESG & Climate Solutions

    Workflow-Driven ESG & Climate Solutions Moody’s adaptable solutions help customers address evolving business needs F O U N D A T I O N A L A N A L Y S I S Conduct foundational, company & sector-level ESG risk analysis & benchmarking across all workflows Lending Underwriting Investing Disclosure Supp

  64. Slide 64: ESG & Climate at Moody's

    ESG & Climate at Moody’s Snapshot1 35+ 10,000+ ~300M 10,000+ Years of ESG experience ESG Credit Impact Scores Companies scored Climate physical risk scores Pioneers of ESG analysis for over (CIS) and Issuer Profile Scores Via a combination of analyst- Spanning countries, sub three decades, providing

  65. Slide 65: Drivers of Sustainable Corporate Value

    Drivers of Sustainable Corporate Value Placing sustainability at the core of the business Better Business Better Lives Better Solutions » Committed to net-zero by 2040: Moody’s is one of the » Progressed on our customer-focused diversity, equity » Expanded our Issuer Profile Scores (IPS) and Credit

  66. Slide 66: Modernizing our Internal Data & Technology

    DevOps Modernizing our » Continuing our DevOps journey within MIS and MA to promote high quality, secure solutions with optimal speed to market » MIS quadrupled its releases by significantly reducing release times, greatly increasing productivity Internal Data Integration Management Office & Technol

  67. Slide 67: Extensive Suite of AI Products and Capabilities

    Extensive Suite of AI Products and Capabilities QUIQspread » Employs AI and Machine Learning for digitizing financial data from public and private companies in a user-friendly interface that allows an analyst to review and approve the machine output; analyst corrections are fed back into the AI mode

  68. Slide 68: Reconciliation of Adjusted Financial Measures to U.S. GAAP

    Reconciliation of Adjusted Financial Measures to U.S. GAAP Moody's Corporation Adjusted Operating Income and Moody's Corporation Net Debt Reconciliation Adjusted Operating Margin Reconciliation TTM (in $ millions) 2018 2019 2020 2021 2022 2Q 2023 (in $ millions) 2018 2019 2020 2021 2022 2Q 2023 Oper

  69. Slide 69: Reconciliation of Adjusted Financial Measures to U.S. GAAP (cont.)

    Reconciliation of Adjusted Financial Measures to U.S. GAAP (cont.) Moody's Corporation Diluted EPS Reconciliation 2018 2019 2020 2021 2022 2023F1 Diluted EPS – U.S. GAAP $6.74 $7.42 $9.39 $11.78 $7.44 $8.70 to $9.20 Acquisition-Related Intangible Amortization Expenses $0.40 $0.42 $0.51 $0.65 $0.83 ~

  70. Slide 70: Reconciliation of Adjusted Financial Measures to U.S. GAAP (cont.)

    Reconciliation of Adjusted Financial Measures to U.S. GAAP (cont.) Moody's Corporation Operating Margin Guidance Free Cash Flow Reconciliation Reconciliation 2023F1 (in $ millions) 2018 2019 2020 2021 2022 2023F1 Projected Operating Margin – U.S. GAAP Approximately 37% Net cash flows from $1.9 to $2

  71. Slide 71: Annualized Recurring Revenue (ARR)

    Annualized Recurring Revenue (ARR) The Company presents Annualized Recurring Revenue (“ARR”) on a constant currency organic basis for its MA business as a supplemental performance metric to provide additional insight on the estimated value of MA's recurring revenue contracts at a given point in time

  72. Slide 72: Key Assumptions Underlying our Medium-Term Targets

    Key Assumptions Underlying our Medium-Term Targets Moody’s medium-term guidance refers to a time period within 5 years and reflects assumptions about numerous factors that could affect its business and is based on currently available information reviewed by management through and as of today’s date.

  73. Slide 73: Moody's Decode risk. Unlock opportunity.

    © 2023 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). All To the extent permitted by law, MOODY’S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liabilit

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