Moody's Corporation · NYSE:MCO
Moody's — Q3 2023 Earnings Presentation
81 slides from Moody's's earnings presentation, Nov 16, 2023
Slide 1: 3Q 2023 Investor Presentation
3Q 2023 Investor Presentation November 16, 2023 May 18, 2023
Slide 2: Table of Contents
Table of Contents 1. Moody’s Overview 2. Financial Overview 3. Moody’s Analytics (MA) 4. Moody’s Investors Service (MIS) 5. Capital Markets Overview 6. Innovation 7. Appendix Moody’s | Decode risk. Unlock opportunity. 3Q 2023 Investor Presentation 2
Slide 3: 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
Slide 4: Moody's Overview
BASS Moody's Overview a a s = = me
Slide 5: 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
Slide 6: 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
Slide 7: Financial Overview
2 Financial Overview
Slide 8: Moody's Corporation Financial Profile
Moody’s Corporation Financial Profile 3Q 2023 TTM Revenue: $5.7 billion DS PPIF 24% MA1 8% R&I MIS2 48% 30% FIG 15% Non-U.S. Transaction 9% SFG D&I 7% 52% 70% CFG 13% U.S. Recurring 23% Full Year 2023 Guidance 3 Revenue Increase in the high-single-digit percent range Diluted EPS $8.60 - $9.10 Operat
Slide 9: 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
Slide 10: 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 first screen external (and internal) investments
Slide 11: Moody's Analytics
3 Moody’s Analytics
Slide 12: 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%+ 63 Proprietary Data Current Addressable Market1 ARR2 Retention Rate3 Quarters of Consecutive »
Slide 13: 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
Slide 14: 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
Slide 15: 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
Slide 16: Data & Information
Data & Information Value proposition $764m We provide data and solutions to be used across the enterprise for master data needs and to help customers make decisions across Origination & Underwriting, Portfolio Monitoring & Management, Risk & Capital Management, and Finance & Reporting activities. TT
Slide 17: Research & Insights
Research & Insights Value proposition $859m We provide solutions that offer customers a consistent, holistic view of risk to make decisions across Origination & Underwriting, Portfolio Monitoring & Management, Risk & Capital Management, and Finance & Reporting activities. TTM Revenue Sustainable com
Slide 18: Decision Solutions: Banking
Decision Solutions: Banking Value proposition $516m We provide powerful, scalable tools to help enable banks to make decisions about Lending, Risk & Capital Management, and Finance & Reporting activities. TTM Revenue Sustainable competitive advantage Expertise » Award-winning Cashflow analytics & Ri
Slide 19: Decision Solutions: Insurance
Decision Solutions: Insurance Value proposition $538m We provide powerful, scalable tools to help enable insurers, reinsurers and brokers to make decisions with Underwriting, Risk & Capital Management, and Finance & Reporting activities. TTM Revenue Sustainable competitive advantage Expertise » Prop
Slide 20: Decision Solutions: KYC
Decision Solutions: KYC Value proposition $297m We provide workflow solutions to banks, insurers, corporates, and governments, enabling them to onboard and monitor their customers and suppliers, as well as perform third-party risk management. TTM Revenue Sustainable competitive advantage Expertise »
Slide 21: Recurring Revenue Growth Drives Margin Expansion
Recurring Revenue Growth Drives Margin Expansion TTM Recurring and Transaction Revenue Adjusted Operating Margin1 Recurring Transaction Recurring % ~15% Recurring Revenue CAGR +~410bps 94% 94% 93% 30.0% to 31.0% 89% 84% 26.4% 82% 3Q18 3Q19 3Q20 3Q21 3Q22 3Q23 2018 2023F 1. Guidance as of October 25,
Slide 22: 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
Slide 23: MA Outlook: Delivering Double-Digit Growth
MA Outlook: Delivering Double-Digit Growth; Capitalizing on Innovation Opportunities ARR1 Revenue1 Adjusted Operating Margin1 Increase in the Increase by low-double-digit approximately 30.2% 30% - 31% percent range $2.8B 10% 10% growth 2022 2023F 2022 2023F 2022 2023F » MA’s products and solutions a
Slide 24: 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.
Slide 25: 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) Workflow Initial ARR1 » Customer Acquisition Solution » Customer Onboarding » Credit Decisions Workflow » Loan Monitoring
Slide 26: Insurance Customer Spotlight
Insurance Customer Spotlight: Integrating Data, Analytics and Software to Deliver Workflow Solutions Case study: Leading Global Insurer 2 Underwriting $30M 82% » Risk Selection » Risk Pricing » Portfolio Risk Exposure Management Decision Solutions USE CASES Risk & Capital Management » Balance Sheet
Slide 27: Award-Winning Solutions for Insurance Customers with Cross-Selling Opportunity
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
Slide 28: KYC: Land & Expand Strategy in Action
KYC: Land & Expand Strategy in Action Unparalleled Value Proposition ARR1 Mix by Customer Segment2 Moody’s SaaS Platform ~13% Gov’t & Education Workflow Capabilities Enabled by Software & APIs ~44% ~43% Financial Corporate Analytics Enabled by AI Land: Driving New Business New customer ARR1 attribut
Slide 29: 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- »
Slide 30: Moody's Investors Service
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Slide 31: Moody's Investors Service Financial Profile
Moody’s Investors Service Financial Profile 3Q 2023 TTM Revenue: $2.8 billion MIS Other1 39% recurring revenue 1% 37% recurring revenue U.S. Recurring Non-U.S. Transaction Public, Project, & Infrastructure 40% Finance 56% 17% 54% recurring revenue Corporate Finance Financial 48% Institutions 60% 19%
Slide 32: MIS: Macroeconomic Assumptions Underpinning our Full Year 2023 Outlook
MIS: Macroeconomic Assumptions Underpinning our Full Year 2023 Outlook Macroeconomic Assumptions1 Tailwinds Real GDP2 U.S.: 1.5% - 2.5%; Euro area: 0.0% - 1.0%; Global: Slow to Rates nearing their peaks for most major central banks as inflation eases about 2.5% by year-end ~$4.4T of refinancing need
Slide 33: Updated Full Year 2023 Issuance Guidance
Updated Full Year 2023 Issuance Guidance FY2023 Issuance Guidance1,2 2023 Issuance Factors As of October 25, 2023 As of July 25, 2023 Macroeconomics & Policy Total Issuance Low to Mid-Single-Digit % » Global GDP: recession or recovery » Geopolitical risks » Energy, trade, climate, and regulatory pol
Slide 34: Updated Full Year 2023 Forecast
Updated Full Year 2023 Forecast Total MIS-rated Issuance1,2 Revenue1 Adjusted Operating Margin1 Increase in the low Increase in the mid to mid-single-digit to high-single-digit ~ 55.0% 3 percentage range percentage range 51.8% $4.2T $2.7B 2022 2023F 2022 2023F 2022 2023F » FY 2023 guidance updated t
Slide 35: 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
Slide 36: 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 a willingness by issuers to be transparent and provides »
Slide 37: 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
Slide 38: 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
Slide 39: 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 South
Slide 40: Capital Markets Overview
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Slide 41: Default Rates Expected to Rise Amid High Interest Rates
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 Baseline Optimistic Moderately Pessimistic Severely Pessimistic Global US Europe 14% 10% 12%
Slide 42: Sustained Refinancing Demand Post Outsized 2020/2021 Issuance Surge
Sustained Refinancing Demand Post Outsized 2020/2021 Issuance Surge Four-Year U.S. and EMEA Non-Financial Corporate Refinancing Walls1 2 Withdrawn Russian Debt $Trillions ~$4.0 ~$4.4 ~$2.0 2 Jan '13 Jan '14 Jan '15 Jan '16 Jan '17 Jan '18 Jan '19 Jan '20 Sep '20 Sep '21 Sep '22 Sep '23 MIS-Rated Q3
Slide 43: Refunding Needs Support MIS Long-term Fundamentals
Refunding Needs1 Support MIS Long-term Fundamentals Debt Maturities: U.S. Non-Financial Corporate Bonds and Loans ($B)2 » Refinancing needs up from ~$4T to ~$4.4T over the next $688 $690 four years $534 276 299 168 Speculative Grade Bank Loans » U.S. refunding needs remain $293 86 134 58 142 Specula
Slide 44: Spotlight on 5-Year U.S. Refunding Wall
Spotlight on 5-Year U.S. Refunding Wall ~27% Growth in U.S. Speculative Grade Refinancing Needs1,2 Investment Grade Speculative Grade $3,123 ~21% $2,476 $2,537 $2,585 $2,241 $2,019 $2,099 $1,867 $ billions ~27% $1,412 $1,448 $1,466 $1,044 $1,185 $987 $1,054 $1,055 $1,064 $1,088 $1,118 ~12% $1,256 $1
Slide 45: 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 6.0x 5.1x 5.1x 5.3x 5.3x 5.4x 5.3x 5.3x 4.8x 5.0x Interest Coverage 4.6x 4.5x 4.3x 4.6x 4.2x 4.0x 3.0x 3.1x 3.0x 3.0x 3.0x 3.0x 3.0
Slide 46: 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% 2% 8% 14% 20% 19% 24% 26% 26% 42% 83% 75% 75% 73% 69% 69% 50% FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 YTD 2023 Debt Refinancing M&A Other 3 1. Percent of
Slide 47: 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
Slide 48: 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
Slide 49: Innovation
6 Innovation
Slide 50: Integrating Data & Analytics at Moody's
Integrating Data & Analytics SaaS Increased Leveraging Platforming Migration Interoperability GenAI Harnessing the Power of New Product Development Innovation at Moody’s Research Digital Sanctions 360 Assistant Finance Established Third-Party Partnership Program Moody’s | Decode risk. Unlock opportu
Slide 51: 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
Slide 52: Moody's is Positioned to Win in a GenAI World
Moody’s is Positioned to Win in a GenAI World Exceptional Insights Moody's Data Estate Moody's CoPilot Decades of Extensive, Moody’s GenAI Engine to On Demand Proprietary and Historically Leverage Large Indexed Data, Analytics Language Models and Research Content Accelerates Value in Era of Exponent
Slide 53: Moody's Platform Architecture
Moody’s Platform Architecture Front Door Single Sign-On User experience Entitlements Applications Quota Platform Elements Workflows Logging Metering APIs Data Shared Components CICD Develop Test Deploy Operate Note: CICD = Continuous Integration and Continuous Delivery – a software development pract
Slide 54: 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
Slide 55: Appendix
7 Appendix
Slide 56: Corporate Finance: Issuance and Revenue
Corporate Finance: Issuance1 and Revenue Global Issuance2: Mix by Quarter MIS Revenue3: Mix by Year Other 4 Investment Grade Speculative Grade Bank Loans Global Non-Financial Speculative-Grade Bonds $2,500 Global Non-Financial Investment-Grade Bonds $2,000 $400 $606 $ Millions $287 $1,500 $313 $352
Slide 57: Corporate Finance: Revenue
Corporate Finance: Revenue MIS Revenue1: Distribution by Geography MIS Revenue1: Distribution by Recurring vs. Transaction Non-U.S. U.S. Transaction Recurring 25% 28% 23% 30% 38% 39% 35% 35% 38% 45% 50% 68% 66% 66% 66% 65% 68% 63% 66% 69% 65% 70% 75% 72% 77% 70% 62% 61% 65% 65% 62% 55% 50% 32% 34% 3
Slide 58: Financial Institutions: Issuance and Revenue
Financial Institutions: Issuance1 and Revenue Global Issuance2: Mix by Quarter MIS Revenue3: Mix by Year Global Speculative Grade Financial Corporate Bonds Banking Insurance Managed Investments Other Global Investment Grade Financial Corporate Bonds $10 $600 $600 $10 $36 $28 $13 $18 $13 $12 $145 $13
Slide 59: Financial Institutions: Revenue
Financial Institutions: Revenue MIS Revenue1: Distribution by Geography MIS Revenue1: Distribution by Recurring vs. Transaction Non-U.S. U.S. Transaction Recurring 46% 46% 48% 41% 43% 47% 45% 44% 41% 46% 47% 50% 50% 50% 53% 55% 51% 50% 62% 58% 57% 59% 54% 54% 52% 59% 57% 53% 55% 56% 59% 54% 53% 50%
Slide 60: Infrastructure Issuance; Public, Project & Infrastructure Revenue
Infrastructure Issuance1; Public, Project & Infrastructure Revenue Global Issuance2: Mix by Quarter MIS Revenue3: Mix by Year Global Infrastructure Finance Speculative-Grade Bonds Public Finance and Sovereign Project & Infrastructure Finance Global Infrastructure Finance Investment-Grade Bonds $600
Slide 61: Public, Project and Infrastructure: Revenue
Public, Project and Infrastructure: Revenue MIS Revenue1: Distribution by Geography MIS Revenue1: Distribution by Recurring vs. Transaction Non-U.S. U.S. Transaction Recurring 32% 34% 32% 36% 33% 33% 35% 38% 46% 45% 39% 58% 60% 58% 61% 64% 62% 60% 62% 59% 60% 65% 68% 66% 68% 64% 67% 67% 65% 62% 54%
Slide 62: Structured Finance: Revenue
Structured Finance: Revenue MIS Revenue1: Mix by Quarter MIS Revenue1: Mix by Year ABS RMBS CMBS Structured Credit Other ABS RMBS CMBS Structured Credit Other $200 $600 $2 $2 $1 $2 $2 $2 $150 $450 $2 $215 $ Millions $ Millions $4 $165 $140 $67 $1 $135 $122 $196 $2 $39 $148 $57 $36 $1 $1 $105 $100 $1
Slide 63: Structured Finance: Revenue
Structured Finance: Revenue MIS Revenue1: Distribution by Geography MIS Revenue1: Distribution by Recurring vs. Transaction Non-U.S. U.S. Transaction Recurring 35% 31% 35% 35% 41% 43% 50% 52% 55% 52% 53% 65% 63% 62% 59% 64% 69% 68% 67% 67% 68% 67% 65% 69% 65% 65% 59% 57% 50% 48% 45% 48% 47% 35% 37%
Slide 64: 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% 26% $2,500 $200 29% $712 $188 $196 $178 $180 $600 $178
Slide 65: 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
Slide 66: Awards & Accolades
Awards & Accolades Recognition for our industry-leading solutions: data, research, analytics and software Moody’s | Decode Risk. risk. Unlock Unlockopportunity. Opportunity. 3Q 2023 Investor Presentation 66
Slide 67: Awards & Accolades
2022 2021 Multi-award winner: 2015– Best Rating Agency for US Best Rating Agency for 2022 including Best Rating Best Credit Rating Agency: CLO Investors: 2021-2022 EURO CLO Investors: 2021 Agency for Corporate Bonds, 2019-2022 2022 Financial Institution Bonds, #1 US Credit Rating Agency: Best Rating
Slide 68: 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
Slide 69: 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% 3.5% 3.4% 3.4% 2.6% 3.2% 3.0% 2.1% 2.1% 2.4% 2.4% 1.6% » Well-laddered maturities; attractive l
Slide 70: 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
Slide 71: 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 » Mood
Slide 72: 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
Slide 73: 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
Slide 74: 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
Slide 75: 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 3Q 2023 (in $ millions) 2018 2019 2020 2021 2022 3Q 2023 Oper
Slide 76: 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 $8.60 to $9.10 Acquisition-Related Intangible Amortization Expenses $0.40 $0.42 $0.51 $0.65 $0.83 ~
Slide 77: 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 Approximat
Slide 78: 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
Slide 79: 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.
Slide 80: 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
Slide 81: 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