Moody's Corporation · NYSE:MCO
Moody's — Q2 2021 Earnings Presentation
82 slides from Moody's's earnings presentation, Aug 10, 2021
Slide 1: 2Q 2021 Investor Presentation
2Q 2021 Investor Presentation August 10, 2021
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. The forward-looking statements in this document are made as of the d
Slide 3: 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. ESG Solutions 7. Appendix Moody’s | Better decisions 2Q 2021 Investor Presentation 3
Slide 4: Moody's Overview
1 Moody’s Overview
Slide 5: Company Overview
Company Overview Global integrated risk assessment Independent provider of firm, providing credit rating opinions, Provides financial intelligence credit rating opinions and analytical solutions and insights that and analytical tools related information for over empower organizations to make support
Slide 6: Moody's as an Integrated Risk Assessment Business
Moody’s as an Integrated Risk Assessment Business Selection of use cases addressable by Moody’s solutions $40B+ Helping customers make Current Addressable Weather and natural BETTER DECISIONS Market disaster analysis Transfer pricing Supply chain management CURATED DATA1 and trade credit Entities Se
Slide 7: Key Strategic Investments To Drive Further Growth
Key Strategic Investments To Drive Further Growth COMMERCIAL REAL ESTATE KYC AND COMPLIANCE CHINA AND LATIN AMERICA Develop new analytic tools to serve Deepen curated data sets, nurture Build out local talent and enhance diverse CRE market, accelerate data the development of new use cases domain-spe
Slide 8: Financial Overview
2 Financial Overview
Slide 9: Moody's Corporation Financial Profile
Moody’s Corporation Financial Profile 2Q 2021 TTM Revenue: $5.8 billion MIS Other1 Recurring Transaction U.S. Non-U.S. 1% PPIF 45% 9% RD&A 46% FIG MIS 10% 28% MA SFG 8% ERS CFG 10% 55% 54% 34% Full Year 2021 Guidance as of August 5, 20212 Revenue » Increase in the low-double-digit % range Effective
Slide 10: Macro Assumptions Underpinning Our Outlook
1 Macro Assumptions Underpinning Our Outlook 2021 GDP Benchmark interest rates remain low; U.S. high-yield 6.0% – 7.0% United States spreads to remain below 4.0% – 5.0% Euro area the historical average of ~500 bps 5.5% – 6.5% Global U.S. unemployment rate to Global high yield default rate decline to
Slide 11: Financial Performance
Financial Performance1 Revenue2 Adjusted Diluted EPS3 $ Billions $ Per Share MIS Revenue MA Revenue Low-double-digit $14.00 $13.00 $11.55 - $11.85 $7.0 % growth $12.00 $6.0 $5.4 $11.00 $4.8 $10.00 $5.0 $4.2 $4.4 $3.6 $2.1 $9.00 $4.0 $2.0 $8.00 $1.4 $1.7 $7.00 $3.0 $1.2 $6.00 $10.15 $2.0 $5.00 $8.29
Slide 12: Long-Term Growth Opportunities
Long-Term Growth Opportunities Three levers to achieve EPS growth REVENUE High-Single-Digit % Growth Range1 Issuance Volume & Mix Coverage Moody’s Analytics Pricing Initiatives ADJ. OPERATING MARGIN High-40s % Range1 Cost Process Technology Investing for Medium-term MA Adj. Op. Discipline Re-Enginee
Slide 13: Prudent Approach to Capital Allocation
Prudent Approach to Capital Allocation Capital allocation goals Capital allocation levers INVESTING IN GROWTH OPPORTUNITIES Reinvestment Acquisitions RETURN OF CAPITAL Dividends Anchored around Ensure adequate Provide Meet return Manage risk Share repurchases a BBB+ rating financial flexibility nece
Slide 14: Key Takeaways
Key Takeaways Growth Company Operational Excellence Disciplined Capital Allocation » Long-term financial expectations » Strategic initiatives generate » Emphasis on returning excess remain robust cost efficiencies, enabling capital to stockholders through » Balanced revenue model reinvestment and ma
Slide 15: Capital Markets Overview
3 Capital Markets Overview
Slide 16: Robust Leveraged Loan and Structured Finance Issuance Growth
Robust Leveraged Loan and Structured Finance Issuance Growth Historical MIS Rated Issuance1 – Second Quarters 2Q 2021 Year-Over-Year Issuance1 Growth -150% -50% 50% 150% 250% 2,000 Leveraged Loans 208% 1,500 ~$1,200 Structured Finance 203% $ Billions 1,000 High Yield Bonds 6% Financial Institutions
Slide 17: Favorable Issuance Mix Drove Revenue Growth
Favorable Issuance Mix Drove Revenue Growth Investment grade High-yield bonds 2Q20 2Q21 Larger number of infrequent high yield bond Leveraged loans Structured finance and leveraged loan issuers accessed the market in 2Q 2021 ISSUANCE (% CHANGE YoY) 250% 164% 272% 200% transaction transaction revenue
Slide 18: Improving Default Outlook Creates Supportive Issuance Environment
Improving Default Outlook Creates Supportive Issuance Environment Default Rates for Speculative-Grade Speculative-Grade Covenant Corporate Rated Issuance1 Quality Indicators2 Global U.S. Europe U.S. Loans U.S. Bonds European Bonds Weakening 16% 5.0 14% 4.5 4.5x 12% 4.4x 10% 4.0 3.8x 8% 4.2% global 3
Slide 19: Constructive Go-Forward Market Conditions
Constructive Go-Forward Market Conditions: Lower Defaults, Tighter Spreads and Accelerating M&A U.S. HY Bond Spreads1,2 and U.S. Spec Grade Default Rate1,3 Global M&A Announced Transactions ($B)1,4,5 1,550 1,390 1,350 1,000 10% 1,221 1,188 900 9% 1,150 1,053 800 8% 959 944 950 700 7% Basis points (b
Slide 20: Refunding Needs Continue to Build
Refunding Needs Continue to Build Next four years North America and EMEA total refunding needs1 as of: $4,000 $3,806 10% $3,466 $3,500 $3,000 $ Billions $2,500 $1,972 $2,000 $1,500 $1,000 Jan '12 Jan '13 Jan '14 Jan '15 Jan '16 Jan '17 Jan '18 Jan '19 Jan '20 Sep '20 1. Amount reflects total maturit
Slide 21: Refunding Needs Support MIS Long-term Fundamentals
Refunding Needs1 Support MIS Long-term Fundamentals Debt Maturities: North America Moody’s-Rated Corporate Bonds and Loans2 $624 $532 » Approximately $1.8 trillion of $ Billions 311 non-financial corporate debt $387 205 Speculative Grade Bank Loans $252 86 Speculative Grade Bonds maturing in North A
Slide 22: Debt Leverage and Interest Coverage in North America and Europe
Debt Leverage and Interest Coverage in North America and Europe Credit Metrics: North American Speculative Grade Companies1 Debt / EBITDA EBITDA / Interest Expense 8.0x Interest Coverage 5.5x 5.4x 5.6x 5.8x 6.0x 4.9x 5.1x 5.1x 5.3x 4.6x 4.6x 4.6x 4.5x 4.3x 4.4x 4.6x 4.0x 2.9x 2.6x 2.7x 2.9x 3.0x 3.0
Slide 23: Leveraged Finance Issuance Driven by Refinancing and M&A Activity
Leveraged Finance Issuance Driven by Refinancing and M&A Activity in 1H 2021 Uses of Funds from USD High Yield Bonds and Bank Loans1 Debt Refinancing M&A Capital Spending Shareholder Payments Liquidity / Working Capital 100% 5% 9% 8% 8% 7% 9% 6% 16% 13% 15% 13% 9% 17% 12% 3% 80% 5% 5% 5% 5% 4% 6% 34
Slide 24: Disintermediation of Credit is an Ongoing Trend
Disintermediation of Credit is an Ongoing Trend in the Global Capital Markets European Non-Financial Corporate Bonds vs. U.S. Non-Financial Corporate Bonds vs. Bank Loans Outstanding Bank Loans Outstanding Bonds Loans Bonds Loans €8,000 $11,000 €7,000 $10,000 $9,000 €6,000 $8,000 47% €5,000 $7,000 $
Slide 25: Debt Capital Market Penetration Continues
Debt Capital Market Penetration Continues Emerging Developed Size of bubble reflects 2020 GDP Developed Western Europe North America Other M.E. & Asia Asia Africa ASEAN India CEE/CIS Latin America China 0% 20% 40% 60% 80% 100% 120% 2020 Private Sector Capital Market Debt Securities (International &
Slide 26: Moody's Investors Service
4 Moody’s Investors Service
Slide 27: Moody's Investors Service Financial Profile
Moody’s Investors Service Financial Profile 2Q 2021 TTM Revenue: $3.6 billion » 24% recurring revenue U.S. Recurring » 32% recurring revenue Non-U.S. Transaction MIS Other1 1% 39% Corporate Public, Project, Finance & Infrastructure 68% 56% Finance 15% Financial 61% Institutions 16% 32% Structured »
Slide 28: MIS 2021 Guidance: Improvement in Issuance Outlook
MIS 2021 Guidance: Improvement in Issuance Outlook Driven by Leveraged Loans and Structured Finance FY 2021 Issuance Guidance1,2 1Q 2021F 2Q 2021F MIS Revenue1,2 MIS Adjusted Operating Margin1,2 Increase in the low Total Issuance3 – single – digit % range High-single-digit % increase 59.7% Approxima
Slide 29: The Benefits of a Moody's Rating
The Benefits of a Moody’s Rating Investors seek Moody’s opinions and particularly value the knowledge of its analysts and the depth of Moody’s research Transparency, Access to capital credit comparison and Responsive to Planning Analytical market stability investor demand and budgeting capabilities
Slide 30: Illustrative Impact of Adding a Moody's Credit Rating
Illustrative Impact of Adding a Moody’s Credit Rating Example: 10 year $500 million U.S. corporate bond Not Rated by Moody’s Rated by Moody’s $500,000,000 Bond $500,000,000 x 2.5% Interest rate x 2.1% = $12,500,000 Annual interest payments = $10,500,000 x 10 years Tenor x 10 years = $125,000,000 Lif
Slide 31: MIS Facts and Figures: Full Year 2020
MIS Facts and Figures: $70+ PEOPLE 1,000+ trillion Full Year 2020 Total rated debt Analysts 40+ Countries/Regions 35,000+ Rated Organizations and Structured Deals AMERICAS EMEA ASIA PACIFIC EVENTS TOTAL RATED DEBT 5,000+ 3,600+ $37.8+ trillion $19.8+ trillion $11.7+ trillion 750+ Non-Financial Finan
Slide 32: Managing Ratings in Turbulent Times
Managing Ratings1 in Turbulent Times 1. Non-Financial Corporates as of 2Q 2021. Moody’s | Better decisions 2Q 2021 Investor Presentation 32
Slide 33: Strongly Positioned in Emerging Markets
Strongly Positioned in Emerging Markets Emerging Markets - Domestic TAM MIS Emerging Markets Revenue1 Chile Malaysia MIS Affiliate (majority) Others MIS Affiliate (minority) Moody’s Local South Africa $411M National Scale Ratings Other Emerging Markets Mexico Argentina Brazil China Peru Egypt $700M
Slide 34: Moody's in Greater China
Moody’s in Greater China 2nd Largest Onshore Bond Market at $17 Trillion Revenue and Attributable Income from China2 Total debt securities outstanding 2012–20201 MIS Cross Border Revenue Total MA Revenue Attributable Income from CCXI 2012 2020 180 $169 50 5% 160 140 $ Trillions $ Millions 40 120 100
Slide 35: Moody's Analytics
5 Moody’s Analytics
Slide 36: Moody's Analytics Financial Profile
Moody’s Analytics Financial Profile 2Q 2021 TTM Revenue: $2.2 billion » 95% recurring revenue » 94% retention rate1 U.S. Recurring Non-U.S. Transaction 8% Research, Data 58% and Analytics 74% 92% Enterprise Risk 42% Solutions 26% » 83% recurring revenue » 93% retention rate1 1. Trailing twelve month
Slide 37: MA 2021 Guidance: Revenue Growth and Reinvestment
MA 2021 Guidance: Revenue Growth and Reinvestment to Drive Future Expansion MA Revenue1 MA Adjusted Operating Margin1 Mid-teens-digit Approximately 29% % increase 29.4% $2.1B 2020 2021F 2020 2021F Key drivers of MA FY 2021 outlook1 » Expect recurring revenue proportion and retention rates to persist
Slide 38: Moody's Analytics: Consistent Execution Drives Long-Term Growth
Moody’s Analytics: Consistent Execution Drives Long-Term Growth Revenue has more than tripled since inception $2,000 Moody’s Analytics CAGR 2020 Revenue: $2,079m $1,500 12% $ Millions 2008 – 2020 CAGR: +12% (~63% organic) $1,000 $500 Enterprise Risk Solutions $0 2020 Revenue: $565M 2008 2009 2010 20
Slide 39: Healthy Growth in MA's Recurring Revenue
Healthy Growth in MA’s Recurring Revenue Supports Long-Term Margin Expansion Amidst Investment MA's strategic shift towards subscriptions and SaaS-based products 100% 90% MA ADJUSTED OPERATING MARGIN 2 EXPANSION MA Renewable Revenue Share 78% 29.4% 27.8% 26.4% 50% 24.6% 0% 2017 2018 2019 2020 2017 2
Slide 40: High Retention Provides Solid Base for Growth
High Retention Provides Solid Base for Growth Moody’s Analytics 2Q 2021 TTM renewable sales and growth1 7% 8% growth growth Upgrades2 & Price New Sales2 94% Retained Base + + = 109% Business Base RD&A 94% RD&A 7% RD&A 8% ERS 93% ERS 7% ERS 8% 1. Constant currency. 2. Upgrades reflect amendments to e
Slide 41: Curated Data Combined with Analytics are the Foundation
Curated Data Combined with Analytics are the Foundation of our Integrated Risk Assessment Strategy Domain Expertise Curated Data Best in Class Analytics Portfolio News Monitoring Climate CRE Economic Modeling MA’s approach to deepening Proprietary data assets Risk available data sets and Financials
Slide 42: Diverse Product and Customer Base Enables Growth Across Sectors
Diverse Product and Customer Base Enables Growth Across Sectors Customers 1 1,500+ 2,900+ Asset Managers Commercial Banks 3,100+ 225+ Corporations Securities Dealers and Investment Banks 675+ 4,000+ Insurance Companies Governments & Other Entities grid 300+ Real Estate Entities 1. As of full year 20
Slide 43: Moody's Software Serves as a Chassis for Integrated Risk Assessment
Moody’s Software Serves as a Chassis for Integrated Risk Assessment Lending use case highlights synergies across segments Deal Initiation ERS solutions RD&A data & insights Digitizing data Portfolio Research Accounting Integrating risk Onboarding Opinions and insights that Monitoring Impairments: ex
Slide 44: Best-in-Class KYC and Compliance Solutions Driving MA Growth
RD&A Best-in-Class KYC and Compliance Solutions Driving MA Growth KYC and Compliance AI2 reduces false positives TTM Organic Revenue1 and increases automation $152 ORBIS Entity and Ownership GRID Risk Profiles $120 Linkage Data Analyze corporate Identify all directors Monitor politically Early warni
Slide 45: RD&A Enables Better Decisions through Data and Insights
RD&A RD&A Enables Better Decisions through Data and Insights Our business solutions Our customers Research Data Insurers Opinions and insights Public and private that explain ratings, company information1 methodologies and markets MIS Ratings Banks Corporates Customers Economics Commercial Real Esta
Slide 46: RD&A Growth Driven by Stronger Retention
RD&A RD&A Growth Driven by Stronger Retention Subscription Sales Growth1 (constant currency) 94% 7% 109% First Half 8% 2021 Retained Base Upgrades and Price New Sales Business Base Expansion of ratings coverage Full Year 94% 8% 9% 110% Production of insightful credit analysis 2020 Retained Base Upgr
Slide 47: ERS Empowers Customers' Success With Analytics
ERS ERS Empowers Customers’ Success With Analytics Technology with a purpose – enabling better, faster decisions Our business solutions Our customers Accounting Balance sheet Insurers management Impairments, Portfolio, valuation IFRS-17 and ALM1 Banks Corporates Customers Credit decisioning & RegTec
Slide 48: ERS: 88% Recurring Revenue in 2Q 2021
ERS ERS: 88% Recurring Revenue in 2Q 2021; Mid-Teens Recurring CAGR ERS Revenue: Recurring1 vs. Non-recurring Recurring Revenue » ERS recurring revenue has grown by more than $600 83% $250 million since 2015 CAGR2 = 14% $500 » Emphasis on subscription products supports scalability, drives operating
Slide 49: Large Growth Opportunity in Insurance Data and Analytics Markets
ERS Large Growth Opportunity in Insurance Data and Analytics Markets Insurance data and analytics markets are large and growing rapidly… …while pressures to transform are accelerating » Insurers are increasingly incorporating CAT Risk ESG, Climate and other risk factors into Models and Data ~13% los
Slide 50: RMS Enhances and Scales Moody's Insurance Analytics Offerings
ERS RMS Enhances and Scales Moody’s Insurance Analytics Offerings Moody’s and RMS have complementary assets in the Life and P&C insurance segments; potential for significant revenue opportunities with combined scale and capabilities 5% Other 5% Other ~400 ~$170M1 ~$320M2 Risk Models of Revenue of Re
Slide 51: Moody's and RMS Will Enable CRE Professionals to Make Better Decisions
ERS Locale Moody’s and RMS Will Enable CRE What are the characteristics of this neighborhood and location? Professionals to Make Better Decisions » » Forecasts for the local economy Location attractiveness » Construction trends Environment How exposed is this property to catastrophe risk and extreme
Slide 52: Expanding Moody's Climate Solutions
ERS Expanding Moody’s Climate Solutions RMS data can be leveraged for a wide range of Moody’s applications Floods Earthquakes Extensive coverage RMS & Consolidated data Expanded and improved coverage MOODY’S Combined data will feed into of climate-related hazards Moody’s climate-adjusted credit and
Slide 53: ESG Solutions
6 ESG Solutions
Slide 54: ESG Market Overview
ESG Market Overview Market Trends » Multiple drivers and stakeholders supporting the growth of ESG, with Sustainable bonds set to Rapidly growing spend on increasing relevance to corporates, banks, insurers, investors, reach record volumes1 ESG data & metrics2 governments and consumers $900 1,000 An
Slide 55: Priorities for Strategic Growth: ESG Integrated Across All Platforms
ESG Solutions Priorities for Strategic Growth: ESG Integrated Across All Platforms, Driving Growth and Enhanced Relevance MIS Integration MA Integration Moody’s ESG Solutions Real Estate Moody's CreditView ESG Measures Climate Solutions Solutions Credit Ratings & ESG Credit Scores Research Risk Anal
Slide 56: MIS: Four Components to MIS Integration of ESG
ESG Solutions MIS: Four Components to MIS Integration of ESG New ESG scores will assist in transparently and systematically demonstrating the impact of ESG on credit ratings Credit Ratings & Research ESG Credit Scores ESG Classification Heat Maps How is ESG integrated into How is a specific issuer W
Slide 57: MA: ESG Integrated into Multiple Offerings
ESG Solutions MA: ESG Integrated into Multiple Offerings » All of Moody’s data on a centralized platform » ESG, climate risk and controversy data » ESG & Physical Climate Risk Scores » ESG Company and Sector Reports » MIS Sector Heatmaps & classifications » MIS Entity CTA, IPS, CIS scores1 ESG Score
Slide 58: Moody's ESG Solutions Group
ESG Solutions Moody’s ESG Solutions Group A leader in ESG: providing a range of risk management, equity and credit market solutions SME Solutions » Brings together over 30 years of ESG expertise Climate Index to meet rapidly Solutions Solutions evolving needs » Delivers data, analytics and insight t
Slide 59: MESG Current Solution Suite
ESG Solutions MESG Current Solution Suite ESG Measures Index Solutions » Data, Scores & Benchmarks » ~90 Indices (Equity & Fixed » Assessments & Research Income) » Controversy Monitoring & Alerts » 10+ Partnerships » Positive / Negative Screening » Benchmarking Data » Regulatory Datasets » ETFs, Lis
Slide 60: Moody's ESG Snapshot
ESG Solutions Moody’s ESG Snapshot1 30+ 5,000+ 10 Million + Years of dedicated ESG experience ESG assessments Climate Risk Scores Pioneering ESG analysis since 19832 Covering 273 unique ESG data points Spanning countries, counties, cities, companies & real estate assets globally ~2,400 140 Million +
Slide 61: Appendix
7 Appendix
Slide 62: Corporate Finance: Revenue and Issuance
Corporate Finance: Revenue and Issuance1 Issuance4: Mix by Quarter Revenue2: Mix by Quarter Global Non-Financial Investment-Grade Bonds Global Non-Financial Speculative-Grade Bonds Other 3 Investment Grade Speculative Grade Bank Loans U.S. Speculative-Grade Bank Loans Non-U.S. Speculative-Grade Bank
Slide 63: Corporate Finance: Revenue Diversification
Corporate Finance: Revenue Diversification Revenue1: Distribution by Geography Revenue1: Distribution by Recurring vs. Transaction Non - U.S. U.S. Transaction Recurring 100% 100% 80% 25% 20% 25% 25% 20% 22% 30% 29% 28% 31% 29% 30% 80% 68% 62% 66% 62% 65% 67% 68% 68% 63% 69% 72% 70% 60% 60% 40% 40% 7
Slide 64: 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 $160 $350 $140 $0 $300 $120 $44 $60 $ Millions $1 $53 $250 $ Billions $1 $1 $49 $100 $1 $1 $57 $31 $43 $32 $1 $0 $38 $200 $39 $41 $41 $0
Slide 65: Structured Finance: Revenue Diversification
Structured Finance: Revenue Diversification Revenue1: Distribution by Geography Revenue1: Distribution by Recurring vs. Transaction Non - U.S. U.S. Transaction Recurring 100% 100% 80% 80% 39% 42% 34% 44% 45% 43% 48% 49% 43% 61% 62% 56% 61% 56% 59% 59% 57% 53% 52% 64% 64% 63% 64% 63% 60% 60% 40% 40%
Slide 66: Financial Institutions: Revenue and Issuance
Financial Institutions: Revenue and Issuance1 Revenue2: Mix by Quarter Issuance3: Mix by Quarter Banking Insurance Managed Investments Other Global Speculative Grade Financial Corporate Bonds Global Investment Grade Financial Corporate Bonds $180 $2 $160 $3 $500 $2 $8 $2 $30 $140 $3 $3 $8 $3 $13 $36
Slide 67: Financial Institutions: Revenue Diversification
Financial Institutions: Revenue Diversification Revenue1: Distribution by Geography Revenue1: Distribution by Recurring vs. Transaction Non - U.S. U.S. Transaction Recurring 100% 100% 80% 40% 42% 45% 42% 42% 44% 47% 47% 46% 48% 49% 53% 80% 46% 44% 47% 51% 54% 55% 52% 50% 52% 50% 59% 58% 60% 60% 40%
Slide 68: 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 and Infrastructure Finance Other Long-Term Rated U.S. Muni Bonds Rated Global Project and Infrastructure Finance Bonds $200 $250 $150 $200 $ Billions $ Mi
Slide 69: Public, Project and Infrastructure: Revenue Diversification
Public, Project and Infrastructure: Revenue Diversification Revenue1: Distribution by Geography Revenue1: Distribution by Recurring vs. Transaction Non - U.S. U.S. Transaction Recurring 100% 100% 34% 31% 33% 35% 28% 31% 34% 32% 30% 32% 80% 80% 41% 37% 61% 61% 55% 61% 65% 64% 64% 63% 62% 65% 62% 63%
Slide 70: Moody's Analytics: Financial Overview
Moody’s Analytics: Financial Overview Professional Services Enterprise Risk Solutions Research, Data and Analytics Revenue1: Distribution by Line of Business Revenue1: Mix by Year Revenue1: Mix by Quarter $2,400 $700 100% 6% 9% 9% 9% 8% $2,000 $600 28% 26% 27% 27% 27% 26% 24% $159 80% $565 26% 25% 2
Slide 71: Historically, Moody's Revenue and Interest Rates Have Not Been Strongly Correlated
Historically, Moody’s Revenue and Interest Rates Have Not Been Strongly Correlated MCO revenue and interest rates 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% 7.8% +120bps 8% $6,000 7% 6.5% +100bps $ Millions $5,000
Slide 72: Proactive Capital and Liquidity Management
Proactive Capital and Liquidity Management Bond portfolio WAC1 Balanced maturity schedule5 $ in millions 1000 5.0% 4.7% 900 4.3% 4.3% 800 4.5% 3.9% 700 4.0% 3.5% 3.3% 3.3% 600 4.2% 3.3% 300 3.5% 3.9% 4.0% 500 889 300 3.0% 3.4% 3.4% 400 250 2.4% 300 330 2.5% 593 2.1% 2.4% 500 500 500 200 400 400 400
Slide 73: Drivers of Sustainable Corporate Value: Environmental and Social
ENVIRONMENTAL Drivers of Sustainable Corporate Value SOCIAL SOCIAL Sustainability disclosures in our public filings GOVERNANCE Environmental SOCIAL » Reduced greenhouse emissions with science-based targets1 on » Support a diverse, equitable and inclusive workplace our path to net-zero » Launched DE&
Slide 74: Drivers of Sustainable Corporate Value: Governance
ENVIRONMENTAL Drivers of Sustainable Corporate Value SOCIAL Sustainability disclosures in our public filings GOVERNANCE GOVERNANCE » Professional integrity » Announced the new Sustainability Framework and » Systematic risk management launched the Stakeholder Sustainability website, along with the fo
Slide 75: Modernizing Our Internal Data & Technology Infrastructure
Modernizing Our Internal Data & Technology Infrastructure to Further Enhance Business Capabilities Cloud and Platform DevOps » Progressing on our cloud infrastructure journey to » Continuing our DevOps journey within MIS and allow “always on”; majority of MA workloads are in MA to promote high quali
Slide 76: Innovation Enabled by Artificial Intelligence (AI)
Innovation Enabled by Artificial Intelligence (AI) Utilizing natural language processing (NLP) and machine learning (ML) across Moody’s external products and solutions mlfabric™ MA Products » Extensible modular machine learning framework » QUIQspread: product capable of automating to accelerate & sc
Slide 77: Moody's Global Presence
Moody’s Global Presence 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 Sweden Italy Switzerland
Slide 78: 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 Adjusted Operating Margin Reconciliation1 Moody's Corporation Net Debt Reconciliation TTM 1Q 2Q (in $ millions) 2015 2016 2017 2018 2019 2020 (in $ millions) 2015 2016 2017 2018 2019 2020 2Q
Slide 79: 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 Reconciliation 2021F1 Projected Operating Margin – U.S. GAAP 45% - 46% Depreciation & Amortization Approximately 4.5% Restructuring Negligible Projected Adjusted Operating Margin Approxim
Slide 80: 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 2015 2016 2017 2018 2019 2020 2021F1 Diluted EPS – U.S. GAAP $4.63 $1.36 $5.15 $6.74 $7.42 $9.39 $10.90 – $11.20 Legacy Tax (0.03) - - - - - - Impact of Litigation Settlement - $3.59 - -
Slide 81: Investor Relations
Investor Relations ir.moodys.com ir@moodys.com moodys.com
Slide 82: Moody's | Better decisions
© 2021 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