Moody's Corporation · NYSE:MCO
Moody's — Q3 2021 Earnings Presentation
83 slides from Moody's's earnings presentation, Nov 10, 2021
Slide 1: 3Q 2021 Investor Presentation
3Q 2021 Investor Presentation November 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 3Q 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 supporti
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+ Current Addressable Helping customers make Weather and natural Market BETTER DECISIONS 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 ESG AND CLIMATE KYC AND COMPLIANCE CHINA AND LATIN AMERICA Expand coverage, data collection and Deepen curated data sets, nurture Build out local talent and enhance analytics; enhance distribution, improve the development of new use cases domain-spec
Slide 8: Financial Overview
2 Financial Overview
Slide 9: Moody's Corporation Financial Profile
Moody’s Corporation Financial Profile 3Q 2021 TTM Revenue: $6.0 billion Recurring Transaction U.S. Non-U.S. MIS Other1 1% PPIF 45% 46% 9% RD&A FIG MIS 10% 28% MA SFG 8% ERS CFG 10% 55% 54% 34% Full Year 2021 Guidance as of October 28, 20212 Revenue » Increase in the low-teens % range Effective Tax R
Slide 10: Macro Assumptions Underpinning Our Outlook
Macro Assumptions Underpinning Our Outlook1 2021 GDP Benchmark rates to increase gradually from historic lows; 5.5% – 6.5% United States U.S. high yield spreads to 4.5% – 5.5% Euro area slightly widen but remain below the historical average 5.5% – 6.5% Global of ~500 bps U.S. unemployment rate to Gl
Slide 11: Financial Performance
Financial Performance1 Revenue2 Adjusted Diluted EPS3 $ Billions $ Per Share $14.00 MIS Revenue MA Revenue Low-teens % $13.50 $13.00 $12.15 - $12.35 $7.0 growth $12.50 $12.00 $11.50 $6.0 $5.4 $11.00 $4.8 $10.50 $10.00 $5.0 $4.2 $4.4 $9.50 $9.00 $3.6 $2.1 $8.50 $4.0 $2.0 $8.00 $1.4 $1.7 $7.50 $7.00 $
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: 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 first Long held, clear financial framework for Disciplined and rigorous monitoring post-close screen external (and internal) i
Slide 15: 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 16: Capital Markets Overview
3 Capital Markets Overview
Slide 17: Heightened Issuance Activity Continued in 3Q 2021
Heightened Issuance Activity Continued in 3Q 2021 Historical MIS Rated Issuance1 – Third Quarters 3Q 2021 Year-Over-Year Issuance1 Growth 1,500 Total MIS Rated Issuance 11% ~$1,050 Structured Finance 104% 1,000 Leveraged Loans 96% $ Billions Financial Institutions 25% 500 Public, Project and -17% In
Slide 18: Improving Default Outlook and Tight Spreads Create Supportive Issuance Environment
Improving Default Outlook and Tight Spreads Create Supportive Issuance Environment Default Rates for Speculative-Grade Corporate Rated Issuance1 U.S. HY Bond Spreads2,3 1000 U.S. HY Bond Spreads (L) 16% Global U.S. Europe 14% 800 12% 10% 600 8% 4.1% global historic average1 6% 4% 400 1.7% 2% 1.6% 1.
Slide 19: Refunding Walls Continue to Build
Refunding Walls Continue to Build Next four years U.S. and EMEA total refunding needs1 as of: $4,500 $4,062 $4,000 $3,729 $3,500 $3,000 $2,500 $1,972 $2,000 $1,500 $1,000 Jan '12 Jan '13 Jan '14 Jan '15 Jan '16 Jan '17 Jan '18 Jan '19 Jan '20 Sep '20 Sep '21 1. Amount reflects total MIS-rated U.S. n
Slide 20: Refunding Needs Support MIS Long-term Fundamentals
Refunding Needs1 Support MIS Long-term Fundamentals Debt Maturities: U.S. Non-Financial Corporate Bonds and Loans ($B)2 $719 » U.S. four-year refinancing $524 308 needs grew ~9%, driven by a $387 Speculative Grade Bank Loans ~19% and ~7% increase in 266 Speculative Grade Bonds leveraged loans and 12
Slide 21: 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 5.6x 5.8x 6.0x 4.9x 5.1x 5.1x 5.3x 5.3x 4.6x 4.6x 4.6x 4.5x 4.3x 4.5x 4.6x 4.0x 2.9x 2.6x 2.7x 2.9x 3.0x 3.0
Slide 22: Leveraged Finance Issuance Driven by Refinancing and M&A Activity
Leveraged Finance Issuance Driven by Refinancing and M&A Activity Uses of Funds from USD High Yield Bonds and Bank Loans1,2 5% 5% 6% 3% 2% 7% 6% 14% 14% 20% 19% 26% 29% 28% 83% 83% 75% 75% 69% 65% 65% FY 2017 FY 2018 FY 2019 FY 2020 1Q21 2Q21 3Q21 3 Debt Refinancing M&A Other 1. Percent of mentions
Slide 23: Disintermediation of Credit is an Ongoing Trend in the Global Capital Markets
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 4 $7,000
Slide 24: Debt Capital Market Penetration Continues
Debt Capital Market Penetration Continues Emerging Developed Size of bubble reflects 2020 GDP Developed Western Europe8 North America6 Other M.E. & Asia3 Asia7 Africa5 ASEAN1 India CEE/CIS2 Latin America4 China 0% 20% 40% 60% 80% 100% 120% 2020 Private Sector Capital Market Debt Securities (Internat
Slide 25: Moody's Investors Service
4 Moody’s Investors Service
Slide 26: Moody's Investors Service Financial Profile
Moody’s Investors Service Financial Profile 3Q 2021 TTM Revenue: $3.7 billion » 24% recurring revenue U.S. Recurring » 32% recurring revenue Non-U.S. Transaction MIS Other1 1% 39% Corporate Public, Project, Finance & Infrastructure 68% 55% Finance 14% Financial 61% Institutions 16% 32% Structured »
Slide 27: MIS 2021 Guidance: Improvement in Issuance Outlook
MIS 2021 Guidance: Improvement in Issuance Outlook Driven by Leveraged Loans and Structured Finance MIS Revenue1 MIS Adjusted Operating Margin1 Low-teens % increase Approximately 62% 59.7% $3.3B 2020 2021F 2020 2021F Key drivers of MIS FY 2021 outlook1 » Total Issuance2: Increase in the high-single-
Slide 28: 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 29: 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 30: 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 Fin
Slide 31: Managing Ratings in Turbulent Times
Managing Ratings1 in Turbulent Times 1. Non-Financial Corporates as of 3Q 2021. Moody’s | Better decisions 3Q 2021 Investor Presentation 31
Slide 32: How We Participate in Global Domestic Markets
How We Participate in Global Domestic Markets MIS Emerging Markets Revenue1 MIS affiliate (majority) Nigeria Turkey Others MIS affiliate (minority) South Africa Peru Moody’s Local (current) Mexico Argentina National Scale Ratings $411M Brazil Not under Egypt consideration / OR long-term plans under
Slide 33: 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 5% 180 $169 50 2020 160 140 $ Trillions $ Millions 40 120 100
Slide 34: Moody's Analytics
5 Moody’s Analytics
Slide 35: Moody's Analytics Financial Profile
Moody’s Analytics Financial Profile 3Q 2021 TTM Revenue: $2.3 billion »95% recurring revenue »95% retention rate1 U.S. Recurring Non-U.S. Transaction 7% Research, Data and Analytics 74% 57% 93% Enterprise Risk Solutions 26% 43% »86% recurring revenue »93% retention rate1 1. Trailing twelve months as
Slide 36: 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 » Overall mid-90’s percent retention rate » Expense discipline funds
Slide 37: 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 38: MA Recurring Revenue Above 90%
MA Recurring Revenue Above 90% TTM MA Recurring and Transaction Revenue1 Key Contributors to TTM MA Organic Recurring Revenue1 35% TTM Recuring Revenue YoY Growth 30% KYC and Compliance 93% 25% Insurance and Asset 89% Credit Research and 20% Management 2 84% Data Feeds 82% 15% Banking 10% 5% 0% 3Q18
Slide 39: High Retention Provides Solid Base for Growth
High Retention Provides Solid Base for Growth Moody’s Analytics 3Q 2021 TTM renewable sales and growth1 7% 8% growth growth Upgrades2 & Price New Sales2 94% Retained Base + + = 110% Business Base RD&A 95% RD&A 7% RD&A 8% ERS 93% ERS 7% ERS 8% 1. Constant currency. Excludes RDC, Acquire Media, ZM Fin
Slide 40: Curated Data Combined with Analytics are the Foundation of Strategy
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 Economic Climate CRE Modeling MA’s approach to deepening Proprietary data assets Risk available data sets and Financials
Slide 41: 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 42: 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 Deal Initiation synergies across segments ERS solutions RD&A data & insights Digitizing data Portfolio Research Accounting Integrating risk Onboarding Opinions and insights that Monitoring Impairments: ex
Slide 43: Best-in-Class KYC and Compliance Solutions Driving MA Growth
RD&A Best-in-Class KYC and Compliance Solutions Driving MA Growth AI reduces false positives 1 and increases automation ORBIS Entity and Ownership GRID Risk Profiles Linkage Data Analyze corporate Identify all directors Monitor politically Early warning – NLP2 and structure and owners exposed people
Slide 44: 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 45: RD&A Growth Driven by Stronger Retention
RD&A RD&A Growth Driven by Stronger Retention Subscription Sales Growth1 (constant currency) 94% 8% 7% 109% First Half 2021 Retained Base Upgrades and Price New Sales Business Base Expansion of ratings coverage Production of insightful credit analysis Full Year 94% 8% 9% 110% 2020 Retained Base Upgr
Slide 46: 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 47: ERS: 90% Recurring Revenue in 3Q 2021
ERS ERS: 90% Recurring Revenue in 3Q 2021; Mid-Teens Recurring CAGR ERS Revenue: Recurring1 vs. Non-recurring » ERS recurring revenue has grown by more than $600 Recurring Revenue $270 million since 2015 86% CAGR2 = 14% $500 » Emphasis on subscription products supports scalability, drives operating
Slide 48: 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 49: RMS: Mission Critical Role in Global Insurance Markets
RMS: Mission Critical Role in Global Insurance Markets Climate capabilities further accelerate our integrated risk assessment strategy Areas of Focus for Integration Path to Achieving Targets Financial Targets Life and P&C Cross-selling Combined revenues from Insurance Opportunities RMS and Insuranc
Slide 50: 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 51: ESG Solutions
6 ESG Solutions
Slide 52: ESG Market Overview
ESG Market Overview Market Trends Sustainable bonds set to Rapidly growing spend on » Multiple drivers and stakeholders supporting the growth of ESG, with reach record volumes1 ESG data & metrics2 increasing relevance to corporates, banks, insurers, investors, governments and consumers $900 1,000 An
Slide 53: 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 54: 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 55: MA: ESG Integrated into Multiple Offerings
ESG Solutions MA: ESG Integrated into Multiple Offerings » ESG & Physical Climate Risk Scores » All of Moody’s data on a centralized Moody’s Analytics CreditEdge » ESG Company and Sector Reports platform » Climate-adjusted expected default » ESG, climate risk and controversy data frequencies (EDFs)
Slide 56: 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 57: MESG Current Solution Suite
ESG Solutions MESG Current Solution Suite ESG Measures Index Solutions » Data, Scores & Benchmarks » 100 Indices (Equity & Fixed » Assessments & Research Income) » Controversy Monitoring & Alerts » 10+ Partnerships » Positive / Negative Screening » Benchmarking Data » Regulatory Datasets » ETFs, Lis
Slide 58: Moody's ESG Snapshot
ESG Solutions Moody’s ESG Snapshot1 35+ 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 ~3,100 140 Million+ 4
Slide 59: Appendix
7 Appendix
Slide 60: 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 61: 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% 25% 20% 25% 25% 20% 22% 25% 80% 29% 28% 31% 29% 30% 80% 62% 66% 62% 65% 67% 68% 68% 63% 68% 69% 72% 70% 60% 60% 40% 40% 7
Slide 62: 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 $0 $300 $120 $44 $59 $1 $53 $57 $250 $60 $ Millions $1 $49 $ Billions $1 $1 $31 $43 $100 $0 $57 $44 $32 $1 $38 $200 $39
Slide 63: 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% 34% 35% 45% 43% 42% 48% 43% 56% 56% 53% 49% 52% 62% 63% 61% 59% 59% 63% 57% 64% 64% 64% 69% 60% 60% 40% 40%
Slide 64: 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 $180 $2 $500 $160 $3 $2 $2 $8 $2 $8 $36 $32 $140 $3 $3 $8
Slide 65: Financial Institutions: Revenue Diversification
Financial Institutions: Revenue Diversification Revenue1: Distribution by Recurring vs. Transaction Revenue1: Distribution by Geography Transaction Recurring Non - U.S. U.S. 100% 100% 80% 42% 45% 42% 42% 44% 47% 47% 46% 46% 80% 46% 44% 47% 46% 48% 49% 53% 51% 54% 52% 50% 52% 50% 58% 55% 60% 60% 40%
Slide 66: 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 67: 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% 32% 80% 80% 37% 61% 61% 55% 61% 58% 64% 64% 63% 62% 65% 62% 63%
Slide 68: 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% 8% $2,000 $600 28% 26% 27% 27% 27% 26% 24% 26% $159 80% $565 $156 25%
Slide 69: 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 $5,000 $ Millions
Slide 70: 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% 600 4.2% 3.3% 3.2% 300 3.5% 3.9% 4.0% 500 869 300 3.0% 3.4% 3.4% 400 250 2.4% 300 330 579 600 600 2.5% 2.1% 500 500 300 500 2.3% 200
Slide 71: Drivers of Sustainable Corporate Value
Drivers of Sustainable Corporate Value Better Business Better Lives Sustainability disclosures in our public filings Better Solutions Better Business Climate Responsible Sourcing » Committed to net-zero by 2040 » Our corporate values reflected in our supply chain – Full greenhouse gas inventory, int
Slide 72: Drivers of Sustainable Corporate Value
Drivers of Sustainable Corporate Value Better Business Better Lives Sustainability disclosures in our public filings Better Solutions Better Business Data Privacy and Cybersecurity Reporting » Meeting our data governance obligations through » Announced the new Sustainability Framework and – Robust d
Slide 73: Drivers of Sustainable Corporate Value
Drivers of Sustainable Corporate Value Better Business Better Lives Sustainability disclosures in our public filings Better Solutions Better Lives Diversity, Equity and Inclusion Health and wellbeing We support a diverse, equitable and inclusive workplace » 80%1 of employees agreed Moody’s took a ge
Slide 74: Drivers of Sustainable Corporate Value
Drivers of Sustainable Corporate Value Better Business Better Lives Sustainability disclosures in our public filings Better Solutions Better Solutions » Through our integrated data and analytics capabilities, Moody’s ESG Solutions: coupled with deep domain expertise, we provide our » We created Mood
Slide 75: Corporate Governance
Corporate Governance Adopted the principles set forth as a framework for the governance of the Company » Professional integrity Executive compensation metrics include a mix of » Systematic risk management the following, as disclosed in the 2021 Proxy » Diverse Board membership and skill sets Stateme
Slide 76: 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 77: 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 78: Moody's Global Presence
Moody’s Global Presence Americas Argentina Costa Rica Brazil Mexico Bermuda Panama Canada Peru Chile United States 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 Swit
Slide 79: 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 3Q (in $ millions) 2015 2016 2017 2018 2019 2020 (in $ millions) 2015 2016 2017 2018 2019 2020
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 Operating Margin Guidance Reconciliation 2021F1 Projected Operating Margin – U.S. GAAP 46% to 47% Depreciation & Amortization Approximately 4.5% Restructuring Negligible Projected Adjusted Operating Margin Approxi
Slide 81: 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 $11.65 to $11.85 Legacy Tax (0.03) - - - - - - Impact of Litigation Settlement - $3.59 -
Slide 82: moodys.com
Investor Relations ir.moodys.com ir@moodys.com moodys.com
Slide 83: Moody’s | Better decisions 3Q 2021 Investor Presentation
© 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