Moody's Corporation · NYSE:MCO
Moody's — Q1 2022 Earnings Presentation
86 slides from Moody's's earnings presentation, May 16, 2022
Slide 1: 1Q 2022 Investor Presentation
1Q 2022 Investor Presentation May 16, 2022
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 release are made as of the da
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 & Climate Solutions 7. Appendix 1Q 2022 Investor Presentation 3
Slide 4: Moody's Overview
1 Moody’s Overview
Slide 5: Company Overview
Company Overview Global integrated risk assessment firm providing credit rating opinions, analytical Independent provider of solutions and insights that empower Provider of financial intelligence credit rating opinions and organizations to make better, faster decisions and analytical tools supportin
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: Multi-Year Investment Approach
Multi-Year Investment Approach Market Penetration and KYC, CRE, Banking and Technology and Customer Access ESG & Climate Product Development Incremental sales staff, Continuation of strategic New capabilities, including customer-oriented travel, investment roadmaps across continued development of Be
Slide 8: Financial Overview
2 Financial Overview
Slide 9: Moody's Corporation Financial Profile
Moody’s Corporation Financial Profile 1Q 2022 TTM Revenue: $6.1 billion Recurring Transaction U.S. Non-U.S. MIS Other1 <1% PPIF 8% DS 42% FIG 45% 9% 18% MIS2 SFG R&I MA2 10% 12% CFG D&I 58% 55% 31% 12% Full Year 2022 Guidance as of May 2, 20223 Revenue » Approximately flat Effective Tax Rate » 20.5%
Slide 10: Macro Assumptions Underpinning Our Outlook
Macro Assumptions Underpinning Our Outlook1 2022 GDP Global benchmark rates to increase from historic 3.5% – 4.5% United States lows; U.S. high yield interest 2.5% – 3.5% Euro area rate spreads to widen, moving slightly above the 3.0% – 4.0% Global historical average of ~500 bps Inflation rates to r
Slide 11: Financial Performance
Financial Performance1 Revenue2 Adjusted Diluted EPS3 $ Billions $ Per Share $14.00 MIS Revenue MA Revenue $13.50 $13.00 $12.0 $12.50 $10.75 to $11.25 $12.00 $11.50 $11.00 $10.0 $10.50 Approximately $10.00 $9.50 $8.0 flat $9.00 $8.50 $6.2 $8.00 $6.0 $4.8 $5.4 $7.50 $4.2 $4.4 $7.00 $12.29 $2.4 $6.50
Slide 12: Medium-Term Growth Targets
Medium-Term Growth Targets M E D I U M - T E R M 1,2,3 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 Margin Low-60s %
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 Allow for Provide Meet return Manage risk Share repurchases a BBB+ rating adequate necessary capital thres
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: Capital Markets Overview
3 Capital Markets Overview
Slide 16: 2022 Issuance Factors
2022 Issuance Factors GROWTH & INVESTMENT POLITICS & POLICY » Global GDP growth and post- » Trade, climate, tax and regulatory pandemic recovery policies » Ample dry powder at private equity » Government investment (e.g., U.S. firms supports M&A activity Infrastructure Bill and Next Generation EU pa
Slide 17: Default Rates and High Yield Bond Spreads Remain Low
Default Rates and High Yield Bond Spreads Remain Low Compared to Historical Averages Default Rates for Speculative-Grade Corporate Rated Issuance1 U.S. HY Bond Spreads2 1000 U.S. HY Bond Spreads 16% Global U.S. Europe 14% 800 12% 10% 600 ~550 bps historic average2 8% 6% 4.1% global historic average1
Slide 18: Refunding Walls Continue to Build
Refunding Walls Continue to Build Next four years U.S. and EMEA total refunding needs1 as of: $4,500 ~$4,100 $4,000 ~$3,700 $3,500 $ Billions $3,000 $2,500 ~$2,000 $2,000 $1,500 $1,000 Jan '12 Jan '13 Jan '14 Jan '15 Jan '16 Jan '17 Jan '18 Jan '19 Jan '20 Sep '20 Sep '21 1. Amount reflects total MI
Slide 19: Refunding Needs Support MIS Long-term Fundamentals
Refunding Needs1 Support MIS Long-term Fundamentals Debt Maturities: U.S. Non-Financial Corporate Bonds and Loans ($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 20: 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 5.2x 4.6x 4.6x 4.6x 4.5x 4.3x 4.5x 4.6x 4.0x 2.9x 2.7x 2.9x 3.0x 3.0
Slide 21: 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% 5% 8% 10% 14% 20% 19% 26% 26% 25% 47% 83% 75% 75% 66% 69% 69% 43% FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 1Q22 Debt Refinancing M&A Other 3 1. Percent of me
Slide 22: 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 $12 €7 $10 €6 47% $8 €5 $ Trillions € Trillions 4 72% 4 €4 8 $6 8 %
Slide 23: Debt Capital Market Penetration Continues
Debt Capital Market Penetration Continues Emerging Developed Size of bubble reflects 2021 GDP Developed North America6 Other M.E. & Asia3 Asia7 Africa5 ASEAN1 CEE/CIS2 India Latin America4 China Western Europe8 0% 20% 40% 60% 80% 100% 120% 2021 Private Sector Capital Market Debt Securities (Internat
Slide 24: Growth in Private Credit Leads to Mounting Risks
Growth in Private Credit Leads to Mounting Risks1,2 U.S. private credit market now rivals that of the Bank Loans to SMBs3 Continue to Grow, but institutional loan market Banks’ Share of the Market Declines » Private credit totals ~$1 trillion and is estimated to grow Domestic Commercial & Industrial
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 1Q 2022 TTM Revenue: $3.6 billion » 26% recurring revenue » 34% recurring revenue U.S. Recurring Non-U.S. Transaction MIS Other1 1% Public, Project, & Infrastructure 39% Finance 14% 67% Corporate Financial » 49% recurring revenue Finance Institutions 53% 1
Slide 27: MIS 2022 Guidance: Issuance Outlook to Remain Constructive
MIS 2022 Guidance: Issuance Outlook to Remain Constructive FY 2022 Issuance Guidance1,2 Total Issuance Decrease in the MIS Revenue MIS Adjusted Operating Margin1 mid-teens % range 62.2% Investment Grade (~10%) $3.8B Low-double-digit % Approximately decrease 59% High Yield Bonds (~40%) Leveraged Loan
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: Full Year 2021 Facts & Figures
PEOPLE $73+ trillion 12,000+ MCO employees FACTS & FIGURES Total rated debt Full Year 2021 1,500+ Analysts AMERICAS EMEA ASIA PACIFIC 40+ Countries/Regions 35,000+ TOTAL RATED DEBT 1 Rated Organizations and Structured Deals $39+ trillion $20+ trillion $10+ trillion EVENTS 5,300+ 3,500+ RATED ORGANIZ
Slide 31: How We Participate in Global Domestic Markets
How We Participate in Global Domestic Markets MIS affiliate (majority) Nigeria Turkey Others MIS affiliate (minority) South Africa Peru Moody’s Local (current) MIS Emerging Markets Revenue1 Mexico Argentina National Scale Ratings Brazil Not under Egypt consideration / OR $346M long-term plans under
Slide 32: Moody's in Greater China
Moody’s in Greater China 2nd Largest Onshore Bond Market at $20 Trillion Revenue and Attributable Income from China2 Total debt securities outstanding 2012– 3Q 20211 MIS Cross Border Revenue Total MA Revenue Attributable Income from CCXI 2012 $170 $160 5% 2021 $50 $150 $130 $ Trillions $ Millions $4
Slide 33: Moody's Analytics
5 Moody’s Analytics
Slide 34: Moody's Analytics at a Glance
Moody’s Analytics at a Glance Strong Financial Profile $2.5bn $30bn+ » Large markets with significant Revenue TTM 1Q 2022 2021 Current Addressable Market1 opportunity for topline growth » Expanding revenue organically and 23% 96% through strategic acquisitions Revenue Growth 1Q 2022 Retention Rate 1
Slide 35: Helping Customers Navigate Increasing Global Risks
Helping Customers Navigate Increasing Global Risks MA PROVIDES… Evolving Heightened regulatory Proprietary data with models, software and environment operational and reputational risks 1 expertise that empower customers to better measure, monitor and manage various types of risk Climate change GLOBA
Slide 36: Diverse Customer Base Across Multiple Sectors
Diverse Customer Base Across Multiple Sectors 5,300+ 900+ 70% 52% Governments & Other Entities Insurance Companies of the Fortune 1001 of the Forbes 1,0002 2,300+ 800+ Real Estate Entities ~15,000 Commercial Banks Customers3 3,600+ 200+ Corporates Securities Dealers 155+ and Investment Banks Countri
Slide 37: Compelling Value Proposition
Compelling Value Proposition High-quality franchise » Tech-enabled solutions deeply embedded in customers’ workflows » Proprietary databases » Long-term and strong customer relationships with retention rates in the mid-90’s % range » Resilient recurring subscription business with profitable growth M
Slide 38: Assembling and Integrating Capabilities
Assembling and Integrating Capabilities Underwriting Lending & ESG & Climate Origination Portfolio Assessment Mgmt. Regulatory Investment Compliance Analysis KYC Decision Data & Solutions Research & Information Other Insights Proprietary Economic Data Forecasts Private & & Models Public Company Mode
Slide 39: Data & Information Snapshot
D&I Data & Information Snapshot Raw ingredients for unique insights $708M REVENUE » Create and aggregate extensive data from multiple sources » Standardize, cleanse and curate » Distribute through cloud-based platforms, APIs and other web interfaces 14% REVENUE GROWTH DATA SETS INCLUDE Data feeds fr
Slide 40: Research & Insights Snapshot
R&I Research & Insights Snapshot Generating actionable insights $709M REVENUE » Model and measure risks related to credit, financial, climate, operational, cyber and others » Forecast and benchmark micro and macroeconomic implications » Provide valuable insights and opinions that inform global decis
Slide 41: Decision Solutions Snapshot
DS Decision Solutions Snapshot Integrating best-in-class data and analytics $1,120M REVENUE » Integrate and connect data, research and analytics for enriching customer applications » Build and support software for specific customer workflows » Embedded components in external ecosystems 30% REVENUE G
Slide 42: Current Addressable Market Expanding
$30B+ Current Addressable Market Expanding 1Q 2022 TTM Revenue Operating in Growing Markets Decision 30% 44% Solutions KYC 1Q22 -TTM Recurring Revenue Growth 86% recurring revenue 25% 94% retention rate1 Decision Solutions 20% Research & 28% Insights 15% Data Applications $2.5 billion 99% recurring
Slide 43: Strong Execution Enables Consistent Revenue Growth
Strong Execution Enables Consistent Revenue Growth Exceptional value creation - revenue has more than tripled since inception $2,500 2021 Revenue: 2008 – 2021 CAGR: $2,406M +12% (~62% organic) $2,000 CAGR 12% $ Millions $1,500 $1,000 $500 $0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 201
Slide 44: Recurring Revenue Growth Drives Margin Expansion
Recurring Revenue Growth Drives Margin Expansion TTM Recurring And Transaction Revenue Adjusted Operating Margin1 Recurring Transaction Recurring % ~20% Recurring Revenue 29.0% CAGR 93% +~440bps 91% 24.6% 86% 84% 80% 75% 1Q17 1Q18 1Q19 1Q20 1Q21 1Q22 2017 2022F 1. Guidance as of May 2, 2022. Refer t
Slide 45: Building on a Foundation of Strong Customer Retention
Building on a Foundation of Strong Customer Retention 95% 8% 9% 111% Q1 TTM 2022 Retained Base Upgrades and Price New Sales Business Base 95% 7% 9% 111% Full Year 2021 Retained Base Upgrades and Price New Sales Business Base 93% 7% 10% 110% Full Year 2020 Retained Base Upgrades and Price New Sales B
Slide 46: FY 2022 Guidance
FY 2022 Guidance1 Continued focus on profitable revenue growth and reinvestment to fuel future expansion KEY DRIVERS OF » Increased demand for MA’s best-in-class solutions, coupled with retention rates in the mid-90’s percent range FY 2022 OUTLOOK » Revenue growth and strategic investments in high-p
Slide 47: Accelerating Revenue Growth
Accelerating Revenue Growth Recurring Revenue Growth Rate1 Organic growth Acquired growth 2 2020 ~9% ~4% ~13% Strong Customer Retention Rates 2 Cross-selling, Upgrades & Pricing 2021 ~10% ~7% ~17% Continued SaaS Transition Low-double Low- Low- 2022F double- -digit %1 digit % twenties % Increased Dis
Slide 48: KYC: Best-in-Class Compliance Solutions
DS KYC: Best-in-Class Compliance Solutions Well-positioned to deliver differentiated solutions in a growing market INDUSTRY TRENDS KYC SOLUTIONS Complex Sophisticated D ATA 425+ Companies regulatory crime tactics World’s preeminent and comprehensive database on: million and entities environment » En
Slide 49: RMS: Expanding Mission-Critical Role to other Industries
DS RMS: Expanding Mission-Critical Role to other Industries » Cross-trained sales forces to offer » Deepening relationships with P&C » Embedding climate-related breadth of combined product suite customers by providing Moody’s financial loss estimates across holistic suite of products and multiple us
Slide 50: MA Meets Customers' Needs
MA Meets Customers’ Refreshed Needs Reporting Lines Strategy Fuels MA Growth Sample use cases DATA & INFORMATION RESEARCH & INSIGHTS DECISION SOLUTIONS Global vehicle manufacturer needed data: Investment management division of International trade credit underwriter » To identify and assess a broad s
Slide 51: Awards & Accolades
Awards & Accolades Recognition for our industry-leading solutions: data, research, analytics and software 1Q 2022 Investor Presentation 51
Slide 52: ESG & Climate Solutions
6 ESG & Climate Solutions
Slide 53: Moody's is Uniquely Positioned to Develop Critical ESG & Climate Market Solutions
Moody’s is Uniquely Positioned to Develop Critical ESG & Climate Market Solutions ESG Domain » Climate Solutions Asset Managers » ESG Measures MESG » Sustainable Finance Banks & Insurers » Catastrophe Models Integrated » Lending Solutions and Tools Companies & Organizations Risk MA » Risk Analytics
Slide 54: Comprehensive ESG & Climate Offering
Comprehensive ESG & Climate Offering Holistic, detailed, MESG applies a double materiality Insight delivery suited to customers’ needs. clear: a leading lens to its analysis to capture Includes powerful ESG platforms that give a and reliable financial and stakeholder impact singular view of ESG risk
Slide 55: MIS: Four Components to Integration of ESG & Climate
MIS: Four Components to Integration of ESG & Climate ESG scores transparently and systematically demonstrate the impact of ESG factors on credit ratings Credit Ratings & Research ESG Credit Scores ESG Classification Heat Maps Are ESG factors integrated How is a specific issuer What is ESG? Is ESG ma
Slide 56: MA: Identifying and Quantifying ESG & Climate Risk
MA: Identifying Moody’s.com » Physical climate risk exposure scores and Moody’s Analytics Climate Risk » RMS catastrophe models provide ESG performance scores physical risk data and analysis on a and Quantifying » ESG company and sector reports wide range of perils » Economic climate risk impact » M
Slide 57: Double Materiality
Double Materiality How It Works In Our Corporate ESG Assessments A balanced and comprehensive view Looking at a broader range of ESG factors is key because: on ESG performance » Over time, these factors could translate into financial risks that impact enterprise value, and » Today’s investors demand
Slide 58: Moody's ESG360
Moody’s ESG360™ Enhancing customer access to ESG & Climate insights Investing to expand our data universe and develop delivery Moody's ESG360TM for Investors Moody's ESG360TM Connect for Corporates channels to facilitate » A new easy to use approach to » Enables companies to easily engage with easy
Slide 59: Appendix
sl 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% 23% 80% 30% 28% 30% 80% 69% 67% 68% 70% 68% 63% 68% 66% 66% 66% 72% 60% 60% 40% 40% 75% 80% 7
Slide 62: 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 $700 $160 $3 $2 $2 $8 $2 $8 $3 $3 $600 $20 $140 $3
Slide 63: 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% 44% 47% 47% 46% 46% 46% 80% 46% 44% 47% 46% 47% 48% 49% 53% 48% 50% 52% 50% 52% 50% 50% 53% 60% 60% 40% 40% 52%
Slide 64: 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 Long-Term Rated U.S. Muni Bonds Rated Global Project and Infrastructure Finance Bonds $200 $250 $150 $200 $ Billions $ Millions
Slide 65: 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% 28% 31% 34% 32% 30% 32% 32% 34% 32% 80% 80% 37% 36% 61% 55% 61% 58% 60% 58% 61% 62% 65% 62% 63% 60% 60%
Slide 66: 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 $1 $400 $97 $ Millions $0 $0 $ Billions $140 $0 $120 $67 $39 $300 $1 $53 $57 $70 $60 $59 $31 $100 $1 $0 $38 $31 $0 $3
Slide 67: 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% 34% 35% 31% 35% 35% 80% 80% 43% 48% 53% 49% 52% 56% 61% 56% 59% 59% 57% 64% 63% 69% 68% 65% 67% 60% 60% 40% 40% 66% 65%
Slide 68: 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 $800 Revenue: Distribution by Line of Business $3,000 $700 100% $2,500 $2,406 90% 26% $600 $178 28% 29% 28% 29% 30% 31% 29% 27% $180 80% $2,0
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 $ Millions $5,000
Slide 70: Proactive Capital and Liquidity Management
Proactive Capital and Liquidity Management Bond portfolio WAC1 Balanced maturity schedule5 $ in millions 900 5.0% 800 4.3% 4.3% 700 4.5% 3.9% 600 4.0% 300 3.5% 3.3% 3.3% 500 3.5% 3.9% 4.0% 3.1% 3.1% 300 400 834 250 3.0% 3.4% 3.4% 300 556 500 600 600 2.5% 500 300 500 500 500 200 400 400 2.0% 250 300
Slide 71: ESG & Climate at Moody's: Snapshot
ESG & Climate at Moody’s: Snapshot1 35+ Years of dedicated ESG ~300M Companies scored via a 31 Awards in the ESG & experience combination of analyst- Climate space (from verified and modeled 2021), including IFR’s scores ‘Best ESG Opinion Provider’ 2021 ~3,500 MIS research reports 10K Companies with
Slide 72: Drivers of Sustainable Corporate Value
Better Business Better Lives Drivers of Sustainable Corporate Value Better Solutions Sustainability disclosures in our public filings Better Business Climate » Committed to aligning relevant products and services to net-zero through Net-Zero Financial Services Provider Alliance, a new GFANZ alliance
Slide 73: Drivers of Sustainable Corporate Value
Better Business Better Lives Drivers of Sustainable Corporate Value Better Solutions Sustainability disclosures in our public filings Better Business Responsible Sourcing Data Privacy and Cybersecurity » Corporate values are reflected in our supply chain » Updated our Privacy Policy to highlight exi
Slide 74: Drivers of Sustainable Corporate Value
Better Business Better Lives Drivers of Sustainable Corporate Value Better Solutions Sustainability disclosures in our public filings Better Business Corporate Governance » Three committees of the Board of Directors oversee Moody’s key strategic sustainability efforts: » Adopted the principles set f
Slide 75: Drivers of Sustainable Corporate Value
Better Business Better Lives Drivers of Sustainable Corporate Value Better Solutions Sustainability disclosures in our public filings Better Lives Diversity, Equity and Inclusion Health and wellbeing We support a diverse, equitable and inclusive (DE&I) workplace » 76%1 of employees agreed Moody’s to
Slide 76: Drivers of Sustainable Corporate Value
Better Business Better Lives Drivers of Sustainable Corporate Value Better Solutions Sustainability disclosures in our public filings Better Solutions Continued to apply ESG best practices to the development of new solutions and the evolution of our legacy platforms and offerings » Through our integ
Slide 77: 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 78: 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 79: Addressing the Needs of the Greater China Market
Addressing the Needs of the Greater China Market1 25+ 8,000+ years Research reports International Investors Domestic Investors Covering and serving Related to Asia Pacific, » MIS’s credit ratings help dimension » CCXI provides market-leading rating Chinese markets attracting 800,000+ risk associated
Slide 80: 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 Netherlands Belgium Poland Cyprus Portugal Czech Republic Russia Denmark Saudi Arabia France Slovak Republic Germany South Africa Ireland Spain Isra
Slide 81: 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 (in $ millions) 2017 2018 2019 2020 2021 1Q 2022 (in $ millions) 2017 2018 2019 2020 2021 1Q 2022 Gro
Slide 82: 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 2022F1 Projected Operating Margin – U.S. GAAP 41% to 42% Depreciation & Amortization 5% to 6% Projected Adjusted Operating Margin Approximately 47% Free Cash Flow Reconcili
Slide 83: 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 2017 2018 2019 2020 2021 2022F1 Diluted EPS – U.S. GAAP $5.15 $6.74 $7.42 $9.39 $11.78 $9.85 to $10.35 Acquisition-Related Intangible Amortization Expenses $0.23 $0.40 $0.42 $0.51 $0.65
Slide 84: 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 85: Investor Relations
Investor Relations ir.moodys.com ir@moodys.com moodys.com
Slide 86: Moody's legal disclaimer
© 2022 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