Moody's Corporation · NYSE:MCO
Moody's — FY2021 Earnings Presentation
86 slides from Moody's's earnings presentation, Feb 28, 2022
Slide 1: 4Q and FY 2021 Investor Presentation
4Q and FY 2021 Investor Presentation February 28, 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 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 4Q & FY 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, Provider of financial credit rating opinions and analytical solutions and insights that intelligence and analytical related information for over empower organizations to make tools suppo
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 Full Year 2021 Revenue: $6.2 billion Recurring Transaction U.S. Non-U.S. MIS Other1 <1% PPIF 45% 45% FIG 8% RD&A MIS 10% 28% MA SFG 9% ERS 11% 55% 55% CFG 34% Full Year 2022 Guidance as of February 10, 20222 Revenue » Increase in the high-single digit % range Ef
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 3.5% – 4.5% Euro area rate spreads to widen, moving slightly above the 4.0% – 5.0% 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 $12.40 - $12.90 MIS Revenue MA Revenue $13.50 $13.00 $12.0 $12.50 $12.00 High-single- $11.50 $11.00 $10.0 digit % growth $10.50 $10.00 $9.50 $8.0 $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.
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 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: Capital Markets Overview
3 Capital Markets Overview
Slide 16: 2021 Issuance Recap
2021 Issuance Recap Historical MIS Rated Issuance1 FY 2021 Year-Over-Year Issuance1 Growth 9% $6.0 Total MIS Rated Issuance 9% Structured Finance 123% $ Trillions $4.0 Leveraged Loans 104% Financial Institutions 13% $2.0 High Yield Bonds 12% $0.0 Public, Project and Infrastructure Finance (20%) 2011
Slide 17: 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 18: Default Rates Outlook and Tight Credit Spreads Create Supportive Issuance Environment
Default Rates Outlook and Tight Credit Spreads Create Supportive Issuance Environment Default Rates for Speculative-Grade Corporate Rated Issuance1 U.S. HY Bond Spreads2 1000 U.S. HY Bond Spreads 9% Global U.S. Europe U.S. Spec Grade Default Rate (R.) 8% 7% 800 6% 4.1% global 5% historic average1 60
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 $ Billions $3,000 $2,500 $1,972 $2,000 $1,500 $1,000 Jan '12 Jan '13 Jan '14 Jan '15 Jan '16 Jan '17 Jan '18 Jan '19 Jan '20 Sep '20 Sep '21 1. Amount reflects total MIS-r
Slide 20: Refunding Needs Support MIS Long-term Fundamentals
Refunding Needs1 Support MIS Long-term Fundamentals Debt Maturities: U.S. Non-Financial Corporate Bonds and Loans ($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% 5% 8% 8% 14% 20% 19% 26% 26% 25% 36% 83% 75% 75% 66% 69% 69% 56% FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 3 Debt Refinancing M&A Other 1. Percent of
Slide 23: 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 4
Slide 24: 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 25: Growth in Private Credit Leads to Mounting Risks
Growth in Private Credit Leads to Mounting Risks U.S. private credit market now rivals that of the Bank Loans to SMBs2 Continue to Grow, but institutional loan market Banks’ Share of the Market Declines1 » Private credit totals ~$1 trillion and is estimated to grow Domestic Commercial & Industrial L
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 Full Year 2021 Revenue: $3.8 billion » 23% recurring revenue U.S. Recurring » 32% recurring revenue Non-U.S. Transaction MIS Other1 1% Public, 39% Project, & Corporate Infrastructure Finance Finance 69% 55% 14% Financial 61% Institutions 16% 31% Structured
Slide 28: 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 Margin low-single-digit % range Low-single-digit % 62.2% Approximately 62% Investment Grade ~15% $3.8B increase High Yield Bonds (~15%) Leveraged
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: 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 32: Managing Ratings in Turbulent Times
Managing Ratings1 in Turbulent Times 1. Non-Financial Corporates as of 4Q 2021. Moody’s | Better decisions 4Q & FY 2021 Investor Presentation 32
Slide 33: 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 Brazil Not under Egypt consideration / OR long-term plans $346M under
Slide 34: 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– 2Q 20211 MIS Cross Border Revenue Total MA Revenue Attributable Income from CCXI 2012 $170 $160 5% $50 2021 $150 $130 $ Trillions $ Millions $4
Slide 35: Moody's Analytics
5 Moody’s Analytics
Slide 36: Moody's Analytics Financial Profile
Moody’s Analytics Financial Profile Full Year 2021 Revenue: $2.4 billion »95% recurring revenue »95% retention rate U.S. Recurring Non-U.S. Transaction 7% Research, Data and Analytics 73% 55% 93% Enterprise Risk Solutions 27% 45% »88% recurring revenue »93% retention rate1 Moody’s | Better decisions
Slide 37: MA 2022 Guidance: Revenue Growth and Reinvestment to Drive Future Expansion
MA 2022 Guidance: Revenue Growth and Reinvestment to Drive Future Expansion MA Revenue MA Adjusted Operating Margin High-teens % $2.4B increase Approximately 29% 26.0% 2021 2022F 2021 2022F Key drivers of MA FY 2022 outlook1 » Retention rates in the mid-90s percent range, in-line with » Recent acqui
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 CAGR Analytics $1,500 12% 2021 Revenue: $2,406M $ Millions 2008 – 2021 CAGR: +12% (~62% organic) $1,000 $500 Enterprise Risk Solutions $0 2021 Revenue: $661M 2008 2009 2010 20
Slide 39: MA Recurring Revenue Above 90%
MA Recurring Revenue Above 90% MA Recurring and Transaction Revenue MA Organic Recurring Revenue1 in High-Growth Markets Recurring Revenue CAGR = 35% ~15% 30% FY 2021 Recuring Revenue Growth KYC and Compliance 93% 25% 91% Insurance and Asset 20% Management2 85% Credit Research and Data Feeds 84% 15%
Slide 40: High Retention Provides Solid Base for Growth
High Retention Provides Solid Base for Growth Moody’s Analytics 2021 renewable sales and growth1 8% 8% growth growth Upgrades2 & Price New Sales2 95% Retained Base + + = 110% Business Base RD&A 95% RD&A 8% RD&A 8% ERS 93% ERS 6% ERS 8% 1. Constant currency. Excludes Regulatory DataCorp, Acquire Medi
Slide 41: Curated Data Combined with Analytics are the Foundation of our Integrated Risk Assessment Strategy
Curated Data Combined with Analytics are the Foundation of our Integrated Risk Assessment Strategy Domain Expertise Curated Data Best in Class Analytics Economic Portfolio News Modeling Monitoring Climate CRE Catastrophe Modeling MA’s approach to deepening Proprietary data assets Risk available data
Slide 42: Diverse Product and Customer Base Enables Growth Across Sectors
Diverse Product and Customer Base Enables Growth Across Sectors Customers 1 1,800+ 2,300+ Asset Managers Commercial Banks 3,600+ 200+ Corporations Securities Dealers and Investment Banks 900+ 5,300+ Insurance Companies Governments & Other Entities grid 800+ Real Estate Entities 1. As of December 31,
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 Deal Initiation synergies across segments ERS solutions RD&A data & insights Digitizing data Portfolio Research Accounting Onboarding Monitoring Integrating risk Opinions and insights that 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 AI reduces false positives 1 Growth 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 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) 8% 111% Full Year 95% 8% 2021 Retained Base Upgrades and Price New Sales Business Base Expansion of ratings coverage Full Year 110% Production of insightful credit analysis 2020 94% 8% 9% Retained Base Upgra
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: ~90% Recurring Revenue in FY 2021; High-Teens Recurring CAGR
ERS ERS: ~90% Recurring Revenue in FY 2021; High-Teens Recurring CAGR ERS Revenue: Recurring1 vs. Non-recurring » ERS recurring revenue has grown by more than $700 Recurring Revenue 88% $350M since 2015 CAGR2 = 17% $600 » Emphasis on subscription products supports scalability, drives operating lever
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: Mission Critical Role in Global Insurance Markets
ERS RMS: Mission Critical Role in Global Insurance Markets Up to $150M in Transition Cross-sell New and incremental RMS- customers existing integrated related revenue to SaaS offerings solutions by 20251 Cross-sell & Product Development Integration Collaboration Exploration » Cross-trained sales for
Slide 51: 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 52: ESG Solutions
6 ESG Solutions
Slide 53: ESG Market Overview
ESG Market Overview Market Trends » Moody’s forecasts global issuance of green, social and sustainability Sustainable bonds set to Climate data and analytics bonds – collectively referred to as sustainable bonds – to exceed $1.3 reach record volumes1 markets continue to grow2 trillion in 20221 $1,40
Slide 54: Moody's is Uniquely Positioned to Develop Critical ESG Market Solutions
ESG Solutions Moody’s is Uniquely Positioned to Develop Critical ESG Market Solutions » Climate Solutions » ESG Measures Asset Managers » Index Solutions MESG » SME Solutions » Sustainable Finance ESG Domain Banks & Insurers » Catastrophe Models Integrated » Lending Solutions and Tools Risk Companie
Slide 55: 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 56: Risk Quantification: ESG and Climate Integrated into Multiple Offerings
ESG Solutions Risk Quantification: ESG and Climate Integrated into Multiple Offerings » ESG & Physical Climate Risk Scores » All of Moody’s data on a Moody’s Analytics CreditEdge centralized platform » Climate-adjusted expected default » ESG Company and Sector Reports » ESG, climate risk and frequen
Slide 57: 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 58: ESG Solution Suite
ESG Solutions ESG Solution Suite ESG Measures Index Solutions » Data, Scores & Benchmarks » 100+ Indices (Equity & Fixed » Assessments & Research Income) » Controversy Monitoring & Alerts » 13 Partnerships » Positive / Negative Screening » Benchmarking Data » Regulatory Datasets » ETFs, Listed & OTC
Slide 59: Moody's ESG Snapshot
ESG Solutions Moody’s ESG Snapshot1 35+ 5,000+ 10 Million + Years of dedicated ESG experience ESG assessments Physical Climate Risk Scores Pioneering ESG analysis since 19832 Covering 273 unique ESG data points 140 Million+ 200+ ~3,315 SME ESG Scores Catastrophe models in nearly 100 countries MIS re
Slide 60: Appendix
sl Appendix
Slide 61: 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 62: 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% 31% 29% 30% 28% 80% 62% 65% 67% 68% 68% 63% 68% 66% 66% 69% 72% 70% 60% 60% 40% 40% 7
Slide 63: 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 $3 $36 $32 $140 $3 $8
Slide 64: 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% 42% 44% 47% 47% 46% 46% 46% 80% 46% 44% 47% 46% 47% 48% 49% 53% 48% 52% 50% 52% 50% 50% 58% 55% 60% 60% 40%
Slide 65: 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 66: 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% 33% 28% 31% 34% 32% 30% 32% 32% 34% 32% 80% 80% 35% 37% 61% 55% 61% 58% 60% 58% 64% 63% 62% 65% 62% 63%
Slide 67: 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 $ Billions $140 $0 $120 $67 $300 $1 $53 $57 $70 $1 $44 $60 $59 $100 $1 $0 $38 $31 $32 $0 $5
Slide 68: 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% 80% 80% 43% 42% 43% 48% 53% 49% 52% 62% 56% 61% 56% 59% 59% 57% 63% 64% 63% 69% 68% 65% 60% 60% 40% 40%
Slide 69: 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 $2,800 $800 100% 6% $700 8% $2,400 28% 26% 27% 27% 27% 26% 24% 27% 32% 27% 80% 29% 27% $2,000 $
Slide 70: 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 $8,000 9% 7.8% +120bps 8% $7,000 7% $6,000 6.5% +100bps $ Millions
Slide 71: Drivers of Sustainable Corporate Value
Better Business Drivers of Sustainable Corporate Value Better Lives Sustainability disclosures in our public filings Better Solutions Better Business Climate Responsible Sourcing » Committed to net-zero by 2040 » Our corporate values are reflected in our supply chain – Full greenhouse gas inventory,
Slide 72: Drivers of Sustainable Corporate Value
Better Business Drivers of Sustainable Corporate Value 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
Slide 73: Drivers of Sustainable Corporate Value
Better Business Drivers of Sustainable Corporate Value 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 (DE&I) » 76%1 of employees agreed Moody’s took a genui
Slide 74: Drivers of Sustainable Corporate Value
Better Business Drivers of Sustainable Corporate Value 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 Statement1: » Diverse Board membership and skill
Slide 76: 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% 500 3.5% 3.9% 4.0% 3.3% 3.1% 300 400 853 3.4% 250 3.0% 3.4% 2.4% 300 568 600 600 2.5% 2.1% 500 500 300 500 500 2.4% 200 400 400 2.0% 25
Slide 77: Modernizing Our Internal Data & Technology Infrastructure to Further Enhance Business Capabilities
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 Poland Belgium Portugal Cyprus Russia Czech Republic Saudi Arabia Denmark Slovak Republic France South Africa Germany Spain Israel Sweden Italy Swit
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 (in $ millions) 2017 2018 2019 2020 2021 (in $ millions) 2017 2018 2019 2020 2021 Operating Income $1,821
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 44% to 45% Depreciation & Amortization Approximately 5% Projected Adjusted Operating Margin 49% to 50% Free Cash Flow Reconcil
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 $11.50 - $12.00 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 | Better decisions
© 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