2Q 2020 Investor Presentation - August 11, 2020 - Public now
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2Q 2020 Investor Presentation
August 11, 2020
Disclaimer
Certain statements contained in this release are forward-looking statements and are based on future expectations, plans and prospects for the business and operations of Moody’s Corporation (the “Company”)
that involve a number of risks and uncertainties. Such statements may include, among other words, “believe”, “expect”, “anticipate”, “intend”, “plan”, “will”, “predict”, “potential”, “continue”, “strategy”, “aspire”,
“target”, “forecast”, “project”, “estimate”, “should”, “could”, “may” and similar expressions or words and variations thereofthat convey the prospective nature of events or outcomes generally indicative of forward-
looking statements. The forward-looking statements and other information in this release are made as of the date hereof and the Company undertakes no obligation (nor does it intend) to publicly supplement,
update or revise such statements on a going-forward basis, whether as a result of subsequent developments, changed expectations or otherwise, except as required by applicable law or regulation. In connection
with the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, the Company is identifying examples of factors, risks and uncertainties that could cause actual results to differ, perhaps
materially, from those indicated by these forward-looking statements. Those factors, risks and uncertainties include, but are not limited to, the impact of COVID-19 on volatility in the U.S. and world financial
markets, on general economic conditions and GDP growth in the U.S. and worldwide, and on the Company’s own operations and personnel. Many other factors could cause actual results to differ from Moody’s
outlook, including credit market disruptions or economic slowdowns, which could affect the volume of debt and other securities issued in domestic and/or global capital markets; other matters that could affect the
volume of debt and other securities issued in domestic and/or global capital markets, including regulation, credit quality concerns, changes in interest rates and other volatility in the financial markets such as that
due to uncertainty as companies transition away from LIBOR and Brexit; the level of merger and acquisition activity in the U.S. and abroad; the uncertain effectiveness and possible collateral consequences of
U.S. and foreign government actions affecting credit markets, international trade and economic policy, including those related to tariffs and trade barriers; concerns in the marketplace affecting our credibility or
otherwise affecting market perceptions of the integrity or utility of independent credit agency ratings; the introduction of competing products or technologies by other companies; pricing pressure from competitors
and/or customers; the level of success of new product development and global expansion; the impact of regulation as an NRSRO,the potential for new U.S., state and local legislation and regulations, including
provisions in the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”) and regulations resulting from Dodd-Frank; the potential for increased competition and regulation in the EU and other
foreign jurisdictions; exposure to litigation related to Moody’s Investors Service’s rating opinions, as well as any other litigation, government and regulatory proceedings, investigations and inquiries to which the
Company may be subject from time to time; provisions in the Dodd-Frank legislation modifying the pleading standards, and EU regulations modifying the liability standards, applicable to credit rating agencies in a
manner adverse to credit rating agencies; provisions of EU regulations imposing additional procedural and substantive requirements on the pricing of services and the expansion of supervisory remit to include
non-EU ratings used for regulatory purposes; the possible loss of key employees; failures or malfunctions of our operations and infrastructure; any vulnerabilities to cyber threats or other cybersecurity concerns;
the outcome of any review by controlling tax authorities of the Company’s global tax planning initiatives; exposure to potential criminal sanctions or civil remedies if the Company fails to comply with foreign and
U.S. laws and regulations that are applicable in the jurisdictions in which the Company operates, including data protection and privacy laws, sanctions laws, anti-corruption laws, and local laws prohibiting corrupt
payments to government officials; the impact of mergers, acquisitions or other business combinations and the ability of the Company to successfully integrate such acquired businesses; currency and foreign
exchange volatility; the level of future cash flows; the levels of capital investments; and a decline in the demand for credit risk management tools by financial institutions. These factors, risks and uncertainties as
well as other risks and uncertainties that could cause Moody’s actual results to differ materially from those contemplated, expressed, projected, anticipated or implied in the forward-looking statements are
currently, or in the future could be, amplified by the COVID-19 outbreak and are described in greater detail under “Risk Factors” in Part I, Item 1A of the Company’s annual report on Form 10-K for the year ended
December 31, 2019, its quarterly report on Form 10-Q for the quarter ended March 31, 2020, and in other filings made by the Comp any from time to time with the SEC or in materials incorporated herein or therein.
Stockholders and investors are cautioned that the occurrence of any of these factors, risks and uncertainties may cause the Company’s actual results to differ materially from those contemplated, expressed,
projected, anticipated or implied in the forward-looking statements, which could have a material and adverse effect on the Compa ny’s business, results of operations and financial condition. New factors may
emerge from time to time, and it is not possible for the Company to predict new factors, nor can the Company assess the potential effect of any new factors on it.
2Q 2020 Investor Presentation - August 11, 2020 2
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. Appendix
2Q 2020 Investor Presentation - August 11, 2020 3
1 Moody’s Overview
Company Overview
Leading global provider of credit
Independent provider of rating opinions, insight and tools Provides financial intelligence
credit rating opinions and for financial risk measurement and analytical tools
related information for over and management supporting our customers’
100 years growth, efficiency and risk
management objectives
Revenue of Adjusted Operating
$5.2 billion Income of $2.6 billion
Proven ratings accuracy and
deeply experienced analysts Solutions address diverse
needs and customers
MIS MA MIS MA
62% 38% 78% 22%
Expanded sales and
marketing activities in Extending brand into new
Commercial group Adjusted markets and deepening
Operating Margin customer relationship
MIS MA
60.5% 28.2%
Note: Financial data for the trailing twelve months ended June 30, 2020.
2Q 2020 Investor Presentation - August 11, 2020 5
Moody’s Priorities for Strategic Growth
Enhance technology infrastructure to enable automation, innovation and efficiency
Foster employee engagement and creative solutions through our diverse workforce and inclusive environment
Global Integrated Risk Assessments Moody’s Core Strengths Expand into New Geographies
and Strategic Adjacencies
Credit
REGI ONAL EX P ANS I ON
Trusted brand Proprietary data and
integrated analytics
STANDARDS,
SOLUTIONS
» » EMEA Asia Pacific Latin America
& INSIGHTS BUSI NESS ADJACENCI ES
Data Analytics
Business-credit Extended global
Commercial Know Your ESG
products customer base
Real Estate Customer
2Q 2020 Investor Presentation - August 11, 2020 6
Enhanced ESG Solutions
Index Partnerships Second Party Opinions (SPOs)
» Partnered with Euronext on a new » VE launched an enhanced SPO
ESG index powered by Vigeo Eiris’ service for sustainable bonds
(VE) data: the Euronext ESG80 ESG Integration featuring an updated impact
» Agreements to provide ESG data in into Credit assessment and a more intuitive,
Ratings & Index impactful format
support of the creation of new ESG
Research Partnerships
products and indices with The Stock » Includes Green Bonds, Social
Exchange of Thailand and Solactive Bonds, Sustainability linked
bonds and loan assessments
ESG Integration
into Analytics, Risk » VE’s SPO offering provides an
Measurement and ESG independent assessment of
CRE tools Assessments
green, social and sustainability
bond frameworks
Integration of Analytics, Risk
Measurement and CRE tools Second Party
Opinions
Second Party
» VE and 427 content integrating into Climate Risk
(SPOs)
Opinions
Solutions
multiple platforms within MA, (SPOs)
including moodys.com and the REIS
Sustainability
commercial real estate portal
Ratings
» Working with asset managers, banks,
regulators to develop climate-based
stress testing solutions
Note: For more information please refer to https://esg.moodys.io/solutions.
2Q 2020 Investor Presentation - August 11, 2020 7
2 Financial Overview
Moody’s Corporation Financial Profile
2Q 2020 TTM Revenue: $5.2 billion
MIS Other
1%
Recurring Transaction U.S. Non-U.S.
PPIF
9%
RD&A1
45% 45% FIG MIS
28%
10%
MA
SFG
7%
ERS
55% 55% CFG 11%
34%
Full Year 2020 Guidance as of July 30, 20202
Revenue » Increase in the low-single-digit % range Effective Tax Rate » 19.5% - 21.5%
Operating Expenses » approximately flat Diluted EPS » $8.15 - $8.55
Operating Margin » 43% - 44% Adjusted Diluted EPS3 » $8.80 - $9.20
Adjusted Operating Margin3 » 48% - 49%
1. Includes trailing twelve months of professional services revenue. Excludes MAKS. Subsequent to the divestiture of MAKS in 201 9, revenue from the Moody's Analytics Learning Solutions ("MALS") unit, which previous to 2020 was reported
in the Professional Services line of business ("LOB"), will now be reported as part of the RD&A LOB.
2. See press release titled “Moody's Corporation Reports Results for Second Quarter 2020” from July 30, 2020 for Moody’s full 20 20 guidance.
3. These metrics are adjusted measures. See Appendix for reconciliations from adjusted financial measures to U.S. GAAP.
Note: The revenue reclassifications of REITs to Corporate Finance from Structured Finance and the FACT product from RD&A to E RS are reflected in the full year (FY) calculations.
2Q 2020 Investor Presentation - August 11, 2020 9
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 Discipline Process Re-Engineering Technology Enablement Investing for future growth
CAPITAL ALLOCATION Dividend Growth & Share Count Reduction2
Reinvestment Acquisitions Dividends Share Repurchases
EPS Low Teens % Growth Range 1,2
1. Assumes no material change in effective tax rate, foreign exchange rates, leverage profile and/or capital allocation policy.
2. Subject to market conditions and other ongoing capital allocation decisions.
Note: Long-term growth opportunities presented on this slide are on average over time.
2Q 2020 Investor Presentation - August 11, 2020 10Macro Assumptions Underpinning Our Outlook1
Base Case Developments since April 30 th
Expect continuing economic recovery in 2H 2020 ACCELERATE
Continued global fiscal support
and monetary stimulus actions
2020 GDP Benchmark interest rates
remain low; high-yield Surge of investment grade capital
spreads peak above raising for liquidity purposes
-6% United States
650 bps Rebound in high yield bond issuance
-9% Euro Zone amid tighter spreads
-5% Global Robust equity markets and sharp
decline in VIX index
Signs of global economic recovery
U.S. unemployment rate High yield default rate
of ~10% by year-end rising to ~9%2
DECELERATE
COVID-19 cases continued to increase
at rapid pace in the U.S., with some
states rolling back re-opening measures
1. All assumptions and guidance as of July 30, 2020.
2. By the end of 2020.
Sources: “June 2020 Default Report” and “Global Macro Outlook 2020 -2021 (June 2020 Update)” from Moody’s Investors Service.
2Q 2020 Investor Presentation - August 11, 2020 11Financial Performance1
Revenue1 Adjusted Diluted EPS3
$ Billions $ Per Share
MIS Revenue MA Revenue $10.00 $8.80 - $9.20
$6.0 Low-single-digit % $9.00
$4.8 growth $8.00
$5.0 $4.2 $4.4
$3.5 $3.6 $7.00
$4.0 $2.0
$1.4 $1.7 $6.00
$3.0 $1.2 $1.2
$5.00 $8.29
$2.0 $7.39
$2.9 $4.00 $6.07
$2.3 $2.4 $2.8 $2.7 $4.71 $4.94
$1.0 $3.00
$0.0 $2.00
2 2
2015 2016 2017 2018 2019 2020F 2015 2016 2017 2018 2019 2020F
Operating Margin4 Free Cash Flow3
$ M illions
Operating Margin Adj. Operating Margin3
$1,900
60% $1,500 - $1,700
$1,700
50%
$1,500
48% - 49%
40%
43% - 44%
43.3%
42.8%
$1,300
18.1%
42.0%
47.4%
41.4%
47.6%
47.6%
30%
46.0%
45.9%
$1,100 $1,606
20% $900
$1,370
$1,109 $1,144
10% $700
0% $500
$664
2
2015 2016 2017 2018 2019 2020F 5
2015 2016 2017 2018 2019 2020F 2
1. Totals may not sum due to rounding.
2. Guidance as of July 30, 2020.
3. These figures are adjusted measures. See appendix for reconciliations from adjusted financial measures to U.S. GAAP.
4. 2015 – 2017 operating and adjusted operating margins have been restated to conform to the new presentation for pension expenses.
5. Includes approximately $700 million in net payments pursuant to a settlement charge.
2Q 2020 Investor Presentation - August 11, 2020 12Capital Allocation Strategy Capital allocation levers
Prudent approach in uncertain times INVESTING IN GROWTH OPPORTUNITIES
Reinvestment
Capital allocation goals
Acquisitions
RETURN OF CAPITAL
Dividends
Share repurchase
Considerations around
share repurchase program
COVID-19 uncertainty
Anchored around Ensure adequate Provide Meet return Manage risk Economic indicators
a BBB+ rating financial flexibility necessary capital thresholds and
to pursue growth create long-term Market volatility
opportunities value for
shareholders
Free cash flow
2Q 2020 Investor Presentation - August 11, 2020 133 Capital Markets Overview
2Q 2020 Credit Market Update
COVID-19 disrupts real economy, credit markets buoyed by stimulus
Real Economy Credit Markets
COVID-19 Pandemic
Investment Grade Bonds
» New cases of COVID-19 increased in the U.S.,
while declining in Europe and parts of Asia » Record 2Q 2020 issuance volumes 1
» Optimism around vaccine success » Continued liquidity-driven capital raising
due to positive early data » Limited M&A pipeline
» Policy responses: some U.S. states
rolled back re-opening measures
High Yield Bonds
Geopolitical Impact
» Strength throughout 2Q 2020
» U.S. – China frictions escalated » Significant spread tightening
» U.S. election season in focus » Increased appetites for risk assets evidenced
» New international travel restrictions by strong equity market performance
» Oil price recovery
Macroeconomic Response Leveraged Loans
» IMF: Worldwide 2020 GDP revised lower by 190 bps to -4.9% in June » Market re-opened but remained weak
» U.S. Fed committed to purchasing up to $750 billion of corporate debt » Leveraged M&A limited
» Ongoing dovish monetary policy by U.S. Fed and other central banks » Continued fund outflows
» Fiscal stimulus in the E.U. » Less demand for floating rate
1. MIS rated issuance.
2Q 2020 Investor Presentation - August 11, 2020 15Record 2Q 2020 Issuance, Mix Shift
Investment grade bond High yield bond Bank loan CFG transactional revenue growth Y/Y Issuance volume growth Y/Y
$660
85%
65%
41% 37% 37%
36%
40%
$358
25%
-3%
$278
$264 -7% $256
$210
-12% $186
$170 $171
-12%
$138 $135 $135
$114 $113 $119
$101 $103 $103
1Q19 2Q19 3Q19 4Q19 1Q20 2Q20
Note: MIS rated issuance. Issuance figures displayed in billions.
2Q 2020 Investor Presentation - August 11, 2020 16Refunding Needs Have Grown Steadily Over Time
Next Four Years North America and EMEA Total Refunding Needs1 as of:
$3,466
$3,400
$3,100
$2,800
$2,500
$ Billions
$2,200 $1,972
$1,900
$1,600
$1,300
$1,000
2012 2013 2014 2015 2016 2017 2018 2019 2020
1. Amount reflects total maturities identified below.
Source: Moody’s Investors Service. U.S. and EMEA refunding needs reports January 2012 – January 2020.
Note: Data represents U.S., Canadian and European MIS rated non -financial corporate bonds & loans. Canada data not available before 2015.
2Q 2020 Investor Presentation - August 11, 2020 17Liquidity and Refinancing Prominent Drivers of Issuance in 1H
2020, While M&A Declined
Uses of Funds from USD High Yield Bonds and Bank Loans1
Debt Refinancing M&A Capital Spending Shareholder Payments Liquidity / Working Capital
100%
5% 9% 8% 8% 8% 15%
16% 17% 13% 15% 13%
5% 5% 5% 7%
80%
6% 7% 4%
28%
% of Mentions
39% 35%
60% 54% 41% 49%
40%
71% 68% 72%
20% 54% 64% 62%
0%
2015 2016 2017 2018 2019 1H20
1. Percent of mentions for each respective period in bond issue or bank loan program tranche documents. Excludes issues of less than $25 million and general corporate purposes. An issue can have multiple purposes and, as a result,
percentages do not sum to 100%.
Source: Moody’s Analytics.
2Q 2020 Investor Presentation - August 11, 2020 18Debt Leverage and Interest Coverage in
North America and Europe
Credit Metrics: North American Speculative Grade Companies
Debt / EBITDA EBITDA / Interest Expense
5.7x
Interest Coverage
6.0x 5.1x 5.1x 5.3x 5.4x 5.3x 5.4x
4.6x 4.6x 4.8x 4.6x 4.8x
5.0x 4.5x 4.4x 4.5x
4.0x
3.0x 2.9x 2.9x 3.1x 3.0x 2.9x 3.0x 2.9x 3.0x 3.0x 2.8x 2.8x
2.6x 2.7x 2.7x
2.0x 2.4x
1.0x
0.0x
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 20201
Credit Metrics: European Speculative Grade Companies
Debt / EBITDA EBITDA / Interest Expense
Interest Coverage
6.0x 5.3x 5.6x
5.0x 5.2x
4.6x 4.4x 4.6x 4.8x 4.5x 4.6x 4.5x
5.0x 4.1x 4.2x 4.1x 4.2x
4.0x
3.4x 3.5x 3.7x 3.5x 3.5x 3.4x
3.0x 2.9x 2.9x 3.0x 3.2x 3.2x 3.1x 3.1x 3.2x
2.7x
2.0x
1.0x
0.0x
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 20201
1. Trailing twelve months ended June 30, 2020.
Source: Moody’s Investors Service.
Note: Historical figures may change due to timing differences in issuer reporting deadlines.
2Q 2020 Investor Presentation - August 11, 2020 19Default Rate Forecast Rises in Wake of
Unprecedented Turmoil
Default Rates for Speculative-Grade Speculative-Grade Covenant Quality Indicators2
Corporate Rated Issuance1
Global U.S. Europe U.S. Loans U.S. Bonds European Bonds Weakening
16% 5.0
14% 4.54x
12% 4.5
12% 4.23x
10% 4.1% global 9% 4.0
3.91x
historic average 1
8% 6% 3.5
6%
3.0
4%
2% 2.5
0% 2.0 Improving
1. Moody’s rated corporate global speculative grade default historical average of 4.1% from 1983 through June 30,2020. 2020 forecast for TTM ended December 31, 2020.
2. Covenant data for European bonds represent a three quarter rolling average, North American loans and bonds represent a two quarter rolling and a three month rolling average, respectively.
Source: Moody’s Investors Service.
2Q 2020 Investor Presentation - August 11, 2020 20Disintermediation 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
€7,000 $9,000
€6,000 $7,500
50%
€5,000
74% $6,000
$ Billions
€ Billions
€4,000 4 4
8 8
$4,500
€3,000 % %
€2,000 $3,000
50%
€1,000 26% $1,500
€0 $0
Sources: ECB, Federal Reserve, BarCap Indices. Europe bank loan data includes Eurozone and UK bank loans. Europe bond data in cludes euro and sterling denominated bonds.
European data is through May 2020 and U.S. data is through June 2020.
2Q 2020 Investor Presentation - August 11, 2020 214 Moody’s Investors Service
Moody’s Investors Service Financial Profile
2Q 2020 TTM Revenue: $3.2 billion
» 25% recurring revenue
Recurring U.S. » 32% recurring revenue
Transaction Non-U.S. MIS Other
1%
38% Corporate Public, Project,
Finance & Infrastructure
66% 56% Finance
15%
Financial
62% Institutions
16%
34%
Structured » 52% recurring revenue
Finance
12%
» 48% recurring revenue
Note: The revenue reclassification of REITs to Corporate Finance from Structured Finance is reflected in the full year 2019 c alculations. Percentages have been rounded and may not total to 100%.
2Q 2020 Investor Presentation - August 11, 2020 23MIS Guidance: Strong 1H 2020 Driving Improved Outlook1
Revenue Adjusted Operating Margin1
FY 2020 Issuance Guidance1
Low-single-digit
$3,000 % increase 58.0% Approximately 58%
Investment Grade +50% $2.9B
$2,800
High Yield Bonds +5% $2,600
$2,400
Bank Loans -20%
$2,200
Structured -40% $2,000
$1,800
Total Issuance2 Low-double-digit % increase 1
2019 2020F 1 2019 2020F
Key drivers of MIS FY 2020 outlook1
» Issuance2 expected to grow in the low-double-digit percent » Approximately 550 first time mandates
range from $4.6T in 2019 » Refinancing and liquidity driven issuance, reduced M&A activity
- Expecting issuance to slow down in 2H 2020, reflecting a » Recurring revenue provides stable support
mid-teens decline » Higher expectation for incentive compensation, though still
» Shift in issuance mix lower year-over-year
1. Guidance as of July 30, 2020. Refer to Table 12 – “2020 Outlook” in the press release for a complete list of guidance and a reco nciliation between adjusted measures to GAAP as well as assumptions used by the Company with respect to its guidance.
2. MIS rated issuance. Total issuance includes CFG, SFG, FIG and PPIF. Excludes sovereign debt.
2Q 2020 Investor Presentation - August 11, 2020 24The Benefits of a Moody’s Rating
Investors seek our opinions and
particularly value the knowledge of our
analysts and the depth of our research.
Wider access Tangible Planning Transparency, Responsive to
to capital financing benefits and budgeting credit comparison investor demand
and market stability
Moody’s opinions on The credibility of Helps issuers formulate Signals a willingness Moody’s ratings are
credit are broadly used Moody’s ratings may internal capital plans by issuers to be transparent the most used by investors,
by institutional investors allow rated issuers to and funding strategies and provides issuers (when multiple agencies are
throughout the world, making an enter the capital markets with an independent assessment used), who have acknowledged
issuer’s debt more attractive to a more economically against which to compare our track record of accuracy
wider range of potential buyers through a lower cost their own creditworthiness
of capital
2Q 2020 Investor Presentation - August 11, 2020 25Managing Ratings in Turbulent Times
Transparency and relevance of credit ratings through the cycle
Order sectors by degree Order issuers by Reassess all Reassess ratings Monitor credit profiles Coordinate Take account of
of exposure vulnerability ratings in the most of the most associated with all other analytical views government policy
within each sector vulnerable sectors vulnerable issuers ratings and reassess those and sequencing measures designed to
in the moderately with special situations of rating actions soften the effects
vulnerable sectors that merit prompt of coronavirus
reconsideration
Mar 1 – June 30, 2020
Top 10 sectors Global corporate default rates ended June 20202
most affected
by COVID-191
Aaa 0.0%
Aa 0.0%
A 0.0%
Baa 0.1%
Ba 0.3%
B 2.4%
Caa_C 10.7%
0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0%
1. Includes all publicly-rated nonfinancial corporate entities; excludes subsidiaries and project finance-related corporations.
2. Trailing twelve months; Source: Moody’s Investors Service.
2Q 2020 Investor Presentation - August 11, 2020 26Illustrative Value of a Moody’s Rating
Example: 10 year $500 million corporate bond
Unrated Rated by Moody’s
$500,000,000 Bond $500,000,000
x 4.3% Interest rate x 4.0%
= $21,500,000 Annual interest payments = $20,000,000
x 10 years Tenor x 10 years
= $215,000,000 Lifetime interest expense = $200,000,000
$15 million in total interest expense
vs.
lifetime cost of a rating
Note: Illustrative spread differential based on feedback from syndicate desks and FBR & Co. research on Moody’s Corporation (January 2014) which stated that obtaining a Moody’s rating typically saves approximately 30 basis points per year for
investment grade issuers. Many factors go into the pricing of a bond.
2Q 2020 Investor Presentation - August 11, 2020 27Broad Coverage Serves Global Needs
~15 Years
Lead/Senior Analyst
tenure
#1 Global Credit
Americas EMEA APAC Rating Agency
20191
» 29,600+ rated companies and » 4,700+ rated companies and » 2,200+ rated companies and
structured deals structured deals structured deals #1 U.S. Credit
Rating Agency
» $35+ trillion total debt rated » $20+ trillion total debt rated » $13+ trillion total debt rated 2012-20181
» 16,800 research publications » 6,700 research publications » 4,100 research publications
» Offices in 10 cities* » Offices in 13 cities* » Offices in 10 cities*
1. Institutional Investor Survey.
Source: Moody’s Investors Service.
Note: All data as of January 20, 2020, except Research Data covers the period January 1, 2019 – December 31, 2019.
All numbers are rounded other than those marked *.
2Q 2020 Investor Presentation - August 11, 2020 28Strongly Positioned in Emerging Markets
Emerging Markets - Domestic TAM MIS Emerging Markets Revenue 1
Others MIS Af f iliate (majority)
MIS Af f iliate (minority)
South Africa Moody ’s Local $342M
Argentina
Brazil National Scale Ratings
Other Emerging Markets
Mexico
Peru China
Egypt
Chile
Israel $700 M
Size of domestic
CRA markets
$94M
South Korea
2009 2019
India
Emerging Asia Latin America Middle East CEE/CIS Africa
Note: Size of pie represents the estimated total CRA revenue from domestic markets ($700 million). 1. Includes revenue from cross border issuance.
2Q 2020 Investor Presentation - August 11, 2020 29Moody’s in Greater China
2nd Largest Onshore Bond Market at $15 Trillion 2019 Revenue and Attributable Income from China2
Total debt securities outstanding 2012–20191 MIS Cross Border Revenue Total MA Revenue Attributable Income from CCXI
2012 2019
200
$176
50 3%
40 150
$ Millions
30 100
20% -2%
20 1% 1%
50
10
$17
0 -
US China Japan UK France MIS Cross Border and Total MA Attributable Income from CCXI
Cross Border Market Domestic Market
Estimated China Ratings Market Size: Domestic and Cross Border3
~$290M3 ~$280M
» Moody’s participates directly in the cross border China issuance market through
MIS and in the domestic market through a 30% interest in CCXI
» Long-term growth prospects enabled by participation in the ongoing 37% 42%
58%
development of China’s domestic credit markets 63%
» Continuing to foster constructive relationships and partnerships with issuers,
regulators and other market participants
Rest of Market Moody's Share Rest of Market CCXI's Share
1. Percentage growth numbers are rounded compound annual growth calculations. Source: Bank for International Settlements’ latest data available as of 4Q19.
2. Greater China: Mainland, Hong Kong and Macau.
3. Revenue as of full year 2019; USD 1 = RMB 6.92 RMB exchange rate as of December 31, 2019 is used for conversion for domestic CRAs’ estimated revenue. Note: These are high level estimates based on MIS & CCXI full year 2019
revenue/market coverage in domestic market; in cross border, market share is coverage/sum of coverage for three major CRAs.
2Q 2020 Investor Presentation - August 11, 2020 30Moody’s ESG: Driving Standards Beyond Credit
Market Trends Key Stats2 OUTREACH
» Moody’s forecasts global green, social » Over 500 media engagements
and sustainability bond issuance to be 38,000+ 5,000+ in 1H 2020 driven by Moody’s Events and
$275 to $325 billion in 2020 1 Credit ratings ESG assessments research
ESG assessments integrated into Covering 266 unique
» Coronavirus crisis expected to accelerate » Strategic relationships with industry organizations
Moody’s Investors Services (MIS) ESG data points
credit-relevant ESG trends with increased credit ratings and influencers across sustainable finance
impact to credit2
» Moody’s ESG & Climate Risk hub: A one stop-
6,000+ 250+ Global shop for everything ESG at Moody’s
Climate risk scores Sustainable bonds (moodys.com/esg)
Spanning countries, counties, cities, Green, Social, Sustainability
companies & real estate assets globally Bonds and Sustainability-
linked loans and bonds
30+ 1000+
Years of ESG experience MIS research reports
Our affiliate Vigeo Eiris has Related to ESG
been a pioneer in ESG considerations in 1H 2020,
Moody’s ESG Solutions analysis since the 1990s 70% COVID-related research
25+
ESG related events
Delivered in 1H 2020 through Moody’s
global event program
1. Moody’s Investors Service “Sector in-depth: Sustainable Finance – Global – Coronavirus fallout dampens 1Q 2020 green bond volumes while spurring social bonds”, May 5, 2020.
2. As of June 30, 2020; combined for all Moody’s entities including affiliates.
2Q 2020 Investor Presentation - August 11, 2020 315 Moody’s Analytics
Moody’s Analytics Financial Profile
2Q 2020 TTM Revenue: $2.0 billion
» 97% recurring revenue2
» ~ 95% retention rate 3
Recurring Transaction U.S. Non-U.S.
12%
Research, Data
and Analytics1
57%
72%
88%
Enterprise Risk
43% Solutions
28%
» 77% recurring revenue
» 92% retention rate
1. Includes trailing twelve months of professional services revenue, excluding MAKS.
2. Recurring revenue for RD&A as reported, including MALS for 1H20. It does not include MALS or other professional services reve nue prior to 1H20.
3. 2Q 2020 TTM includes Bureau van Dijk.
Note: The revenue reclassification of the FACT product from RD&A to ERS, MALS to RD&A and the MAKS sale is reflected in the trailing twelve month calculations.
2Q 2020 Investor Presentation - August 11, 2020 33Diverse Product Solutions
Continuous improvement of content and user experience provides tools for
customer to make better decisions, faster
Integrated Experience: Enhanced Content & Coverage:
Ease of Use More Value
1,290+ 2,800+
Asset Managers Commercial Banks
Onboard customers Compliance modules
Confirm KYC, AML, Ownership tree Leverage BvD, RDC data
Gather financials
Create credit statistics
Spreading tools
Prepopulate and digitize financials
2,300+ 220+
Corporations Securities Dealers
and Investment Banks
Analyze credit and transaction
World class credit analytics
Run credit scores and consider
Early warning, and credit scoring
portfolio
Consider risks holistically
Understand ESG impact
700+ 3,300+
Climate change, cyber,
of customer’s business Insurance Companies Governments &
macro-economic
Other Entities
Web Excel add-in
Multichannel Delivery: 200+
Mobile Third party platforms
Real Estate Entities
2Q 2020 Investor Presentation - August 11, 2020 34Moody’s Analytics has Several Platforms for Growth
Revenue Has More Than Tripled Since Inception
$2,000 Moody’s Analytics
2019 Revenue: $1,954m
$1,800 2008 – 2019 CAGR: +12%
(~60% organic)
$1,600
$1,400 Enterprise Risk Solutions
2019 Revenue: $522m
$1,200
$ Millions
2008 – 2019 CAGR: +14%
(~68% organic)
$1,000
$800
Professional Services 1
$600 2019 Revenue: $159m
$400
Research, Data & Analytics
$200
2019 Revenue: $1,273m
$0 2008 – 2019 CAGR: +11%
(~62% organic)
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
1. Subsequent to the divestiture of MAKS in 2019, revenue from the Moody's Analytics Learning Solutions ("MALS") unit, which pre vious to 2020 was reported in the Professional Services line of business ("LOB"), will now be reported as part of the
RD&A LOB. Prior periods have not been reclassified as the amounts were not material.
Note: Individual line of business revenues may not add up to total Moody’s Analytics revenue due to rounding.
2Q 2020 Investor Presentation - August 11, 2020 35MA Guidance1: Top-line Growth and Margin Improvement
Remain on Track
Revenue Adjusted Operating Margin1
Mid-single-digit Approximately 30%
% increase
$2.0B 27.8%
1 1
2019 2020F 2019 2020F
Key drivers of MA FY 2020 outlook1
» Strong recurring revenue mitigates COVID-19 impact » RD&A growth driven by strong demand for KYC and compliance
solutions, followed by research and data feeds
» MAKS divestiture weighs on revenue growth, partially offset by » ERS: Strength in software and analytics sales supports steady
RiskFirst, ABS Suite and RDC acquisitions growth; modest impact from delays of IFRS 17 and CECL
– FY revenue guidance includes an unfavorable 2% - 3% implementations
impact from inorganic activity and FX » Margin improvement primarily driven by operating leverage and
cost management initiatives
1. Guidance as of July 30, 2020. Refer to Table 12 – “2020 Outlook” in the press release for a complete list of guidance and a reco nciliation between adjusted measures to GAAP as well as assumptions used by the Company with respect to its guidance.
2Q 2020 Investor Presentation - August 11, 2020 36MA Sales Outlook1 Resilient Amid COVID-19 Disruption
Retention remains strong Current Outlook Prior Outlook
Existing contractual
No change obligations being met
94.6% 94.1% by MA and customers
2012 2Q 20202 Renewal yield4 outlook better Renewal yield4
Stable
Y TD 2020 ACTUALS than prior expectations might be affected
~96% ~91% ~90% Adapting to virtual sales Social distancing
Improving environment; in person meetings preventing face to face
Research3 ERS BvD resuming in certain countries selling efforts
» Customer engagement is high through virtual » Sales grew in 2Q 2020; pipeline outlook is improving
interactions
» Face-to-face interactions resuming in some parts of the world
» Valuable content and insights support strong retention
» Continue to expect longer sales cycles than 9-12 month
» Elevated usage of credit and economic research historical average
persists
1. All assumptions and guidance as of July 30, 2020.
2. Trailing twelve months; includes BvD from 2019 onward.
3. Reflects RD&A excluding BvD.
4. Incorporates retention and pricing components of recurring business growth.
2Q 2020 Investor Presentation - August 11, 2020 37RD&A: Subscription Growth Driven by Retention, Upgrades
and Pricing & New Sales
Subscription Sales Growth
(constant currency)
First Half
8.2% 4.7% 108.5% Expansion of ratings coverage
2020
95.6%
Retained Base Upgrades and Price New Sales Business Base Production of insightful credit
analysis
Full Year
5.4% 110.6%
2019
96.2% 9.0%
New customers in geographies
Retained Base Upgrades and Price New Sales Business Base with developing debt capital
markets
Full Year
4.8%
2018
95.8% 9.1% 109.7%
Expansion of data sets and
Retained Base Upgrades and Price New Sales Business Base delivery options
Full Year
5.7%
2017
8.2% 109.4%
95.5% Strong customer retention
Retained Base Upgrades and Price New Sales Business Base
Note: The sales growth attributions presented on this slide are related to RD&A subscription sales on a constant currency basis includes Reis and excludes Bureau van Dijk and ABS Suite. Upgrades reflect amendments to existing customer
contracts. New Sales reflect new contracts with new and existing customers.
2Q 2020 Investor Presentation - August 11, 2020 38ERS Empowers Customers’ Success With Analytics
Technology with a purpose – Enabling better, faster decisions
Our business solutions Our customers
Accounting Balance sheet Insurers
management
Impairments,
IFRS-17 Portfolio,
valuation & ALM
Banks Corporates
Customers
Credit decisioning & RegTech
lending
Regulatory
Credit modeling, reporting Pension Asset
scoring Funds Managers
& spreading
2Q 2020 Investor Presentation - August 11, 2020 39ERS: Recurring 80% of Revenue with Mid-teens CAGR
ERS Revenue: Recurring1 vs. Non-recurring » ERS recurring revenue has grown by approximately
Recurring Revenue CAGR2 = 16% $200 million since 2015
$500 100%
» Emphasis on subscription products supports scalability,
drives operating leverage and margin
$400 77% 80%
» Ease of use and lower cost of ownership shifting
% Recurring
$ Millions
61%
$300 60% customer demand to SaaS
» Next gen products enhance customer experience,
$200 40%
improve adoption rates and shorten sales cycles
$100 20% » TTM3 sales as of 2Q 2020:
– Subscriptions (recurring)4 +13%
$0 0%
2015 2016 2017 2018 2019 TTM3 2Q20
– One-time (non-recurring) +14%
One-Time (L) Recurring (L)1 % Recurring (R)
1. Recurring revenue includes maintenance and subscription.
2. Compound Annual Growth Rate, 2015-2019.
3. Trailing twelve months ended June 30, 2020.
4. Subscriptions / recurring sales include maintenance. Excluding maintenance, TTM subscription / recurring sales would be +21%.
2Q 2020 Investor Presentation - August 11, 2020 40Global Regulatory and Accounting Drivers for the ERS
Business EMEA
Rev ised SA
FRTB* operational risk* CVA rev iew*
Incorporate ESG risks into
superv isory process BoE/ PRA Rev ised SA Updated Lev erage
ST market risk* Ratio*
Rev ised minimum HLA requirement
capital requirements Rev ised
f or MR* Rev ised G-SIB standardized CVA rev iew*
Output f loor* assessment* approach CR*
Rev ised IRB HLA
approach CR* requirement
Output f loor*
EU Inv estment
Output f loor* BoE/ PRA ST Firms Directive CCAR /
BoE/ PRA ST DFAST
EU-wide ST* and Regulation
HLA EU Sustainability
requirement NSFR FRTB*
BoE/ PRA BES taxonomy
CVA rev iew* (Climate-related element) Climate Change Rev ised
ST standardized
Rev ised minimum Interest Rate approach CR*
capital requirements Benchmark Reform Rev ised G-SIB
SFTR regulatory assessment*
f or MR* technical standards
Rev ised SA
EU “Banking Package” CCAR / CCAR / CCAR /
operational risk*
CRR2, CRD5, BRRD2 EU MLD5 DFAST DFAST DFAST
Interest Rate and SRMR2* Rev ised SA
Rev ised SA New securitization operational risk*
Benchmark Reform IRRBB review
marketLev
Updated risk*
erage f ramework
Rev ised G-SIB SCCL f or large
Ratio* EBA Guidelines on banks* Rev ised SA
assessment*
Outsourcing market risk*
Rev ised IRB FBO ST
approach CR* Agreements Updated Lev erage
CCAR / Interest Rate
Credit Risk TLAC Vickers reform Benchmark Reform Ratio*
Rev ised DFAST
standardized Management* DNB NCUA RBC Rev ised minimum
CECL TLAC
approach CR* New securitization Climate rule f or large capital
f ramework ST SEC Liquidity rules NSFR* credit unions requirements for
FRTB* Minimum TLAC (ETF, mutual f unds) MR*
Rev ised IRB
Lev erage Superv isory rating approach CR*
Ratio sy stem for LFIs
2023 and beyond 2022 2021 2020 2019 2020 2021 2022 2023 and beyond
Source: Moody ’s Analytics market research as of July 2020.
Note: *Regulation has been delayed/ cancelled to allow banks to focus their resources on navigating the coronavirus pandemic - please see below for details
OSFI has delayed the Net Stable Funding Ratio Return (DT1) – formal reporting from Q3 2020 to Q1 2021. The FED has extended by 18 months the initial compliance dates under the single-counterparty credit limit (SCCL) rule, for bank holding companies and foreign banking
organizations. The EBA communicated new deadlines within which it plans to implement certain elements of the Capital Requirements Directive and Regulation (CRD 5 and CRR 2) and the amended Bank Recovery and Resolution Directive (BRRD 2). This pushes out Integrated Reporting
and ALMM elements of the package to 2021, but leaves many elements still to happen in 2020. Delays noted in last quarters report; Basel IV, G-SIB, EU-wide Stress Test and APRA delays APS 220 on credit risk management
2Q 2020 Investor Presentation - August 11, 2020 41Bureau van Dijk Collects and Enhances Information to Deliver
High Value Solutions…
High Value Customer Solutions
KYC, compliance and financial crime Corporate finance and M&A
Conduct on-boarding and anti-money laundering research with Find targets/sellers, perform M&A/deal analysis and conduct due
extensive corporate structure and beneficial ownership data combined diligence using detailed deal and company data in a standardized format.
with information on politically exposed persons (PEPs), sanctions and
adverse news.
Transfer pricing
Find comparable companies and conduct peer analysis for tax compliance.
Supplier risk and procurement
Increased demand to lower risk within the supply chain and for
companies to have a better understanding of who they are doing
business with. Moody’s recently launched a Beta of the Know Your Business development
Supplier tool helping healthcare providers research PPE suppliers for Improve efficiency of sales and marketing efforts by using Orbis data to
criminal histories and negative media mentions. enrich and refresh CRM systems, research new markets and improve
customer targeting.
Credit and financial risk Data management
Assess customers, partners or suppliers using globally comparable
financial strength metrics and standardized financial statements. Combine multiple data sources into single entity views using unique
identifiers and matching, de-duplication and data enhancement services.
2Q 2020 Investor Presentation - August 11, 2020 42… for a Diverse Client Base and Broad Range of Use Cases
BvD Customer Mix by industry1 Use Case Growth Rates
38%
Growth of Compliance
45%
12% Use Case
YoY Growth (2019 vs. 2018)
Government
and 40% Avg Growth of Other Compliance
Financial
Education, Use Cases
Institutions, 35%
29% 22%
30%
25%
Professional Research
Services, 20% 20% (Economic/Library) Trade Credit
Corporates, 15%
Business development Data management
29% 10%
Bank credit risk
5% Corporate finance Tax/Transfer pricing
and M&A
0%
0% 5% 10% 15% 20% 25% 30% 35%
Percent of Total Sales1
1. For full year 2019.
Source: Moody’s Analytics.
2Q 2020 Investor Presentation - August 11, 2020 43BvD + RDC Makes Us a Leading Global Player in KYC
Improved accuracy and streamlined decisions
» Bureau van Dijk accelerating growth with Moody’s. BvD post acquisition
revenue growth1 of ~16% and adjustment operating margin2 of ~52%
» BvD + RDC creates a leading provider of data for compliance-related use
BvD
cases
» The KYC space is a $900M market with ~18% 5-yr CAGR3
375M+ 195M+ 188M
PUBLIC & PRIVATE ACTIVE OWNERSHIP SHAREHOLDERS
» 2019 pro forma combined compliance product sales of ~$150M4 ENTITIES LINKS
– Expect combined sales to more than double by 20235 +
» Complementary assets: RDC
– RDC’s Global Risk Information Database (GRID): over 12 million profiles of
risk-related organizations and individuals 12.5M+ 1,000 1.7M+
– Worldwide entity and ultimate ownership data from BvD’s Orbis database RISK PROFILES MONITORED LISTS POLITICALLY
and Compliance Catalyst tool EXPOSED
PEOPLE
1. 2019 revenue growth. 2018 revenue includes the impact of $17M of revenue reductions relating to previous adjustments to deferred revenue recorded as part of acquisition accounting.
2. Direct adjusted operating margin for Bureau van Dijk for full year 2019. Excludes the allocation of corporate overhead expenses.
3. Source: Burton-Taylor, “AML/KYC Data & Services Global Sizing 2019”, November 2019; Moody’s Analytics estimates.
4. Pro forma estimate assuming RDC owned for full year 2019.
5. Guidance as of February 12, 2020.
2Q 2020 Investor Presentation - August 11, 2020 446 Appendix
Corporate Finance: Revenue and Issuance
Revenue1: Mix by Quarter Issuance 3: Mix by Quarter
Global Non-Financial Investment-Grade Bonds Global Non-Financial Speculative-Grade Bonds
Other 2 Investment Grade Speculative Grade Bank Loans U.S. Speculative-Grade Bank Loans Non-U.S. Speculative-Grade Bank Loans
$600
$43 $1,200
$ Billions
$500 $99
$1,000 $18
$400 $89 $44
$ Millions
$83 $89 $800 $50 $164
$121 $73 $68 $75 $55
$300 $291 $72 $43
$78 $70 $57 $69 $57 $75 $600 $26 $25 $108 $119
$59 $39 $111
$200 $39 $19 $144 $210 $100 $105 $162 $134
$72 $57 $97 $96 $106 $80 $28 $105
$55 $400 $94 $123 $105 $120 $732
$100 $64 $103
$139 $135 $145 $140 $140 $139 $145 $139 $200 $33 $406 $433
$128 $305 $329 $314 $370
$236 $221
$0
$0
2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20
2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20
Revenue1: Mix by Year
Issuance 3: Mix by Year
Other 2 Investment Grade Speculative Grade Bank Loans Non-U.S. Speculative-Grade Bank Loans U.S. Speculative-Grade Bank Loans
$1,600 Global Non-Financial Speculative-Grade Bonds Global Non-Financial Investment-Grade Bonds
$1,400 $3,000
$313
$ Billions
$1,200 $349 $379
$2,500 $144
$ Millions
$247
$204 $258
$1,000 $242 $254 $120 $425
$212 $254 $175 $2,000 $638 $204
$800 $155 $183 $181 $504 $414
$219 $379 $353 $425 $354 $601 $492
$229 $301 $271 $1,500 $426
$600 $120 $194 $305 $329 $411 $405 $329 $311
$230 $262 $330 $304
$120 $193 $1,000 $273
$400 $197 $293 $250
$137 $1,271 $1,419
$488 $554 $547 $500 $1,125 $1,073 $1,043 $1,120 $1,192 $1,074
$200 $363 $420 $421 $425 $641 $750
$275 $312
$0 $0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
1. Historical data has been adjusted to conform with current information and excludes intercompany revenue. The revenue reclassi fication of REITs to Corporate Finance from Structured Finance is reflected starting from 1Q 2018.
2. Other includes: monitoring, commercial paper, medium term notes, and ICRA.
3. Sources: Moody’s Analytics, Dealogic. U.S. and Non-U.S. Speculative-Grade Bank Loans represent only Moody’s rated speculative-grade bank loans. Non-U.S. Speculative-Grade Bank Loan Origination data available starting 2016. Note:
Debt issuance categories do not directly correspond to Moody’s revenue categorization.
2Q 2020 Investor Presentation - August 11, 2020 46Corporate Finance: Revenue Diversification
Revenue1: Distribution by Geography
Revenue1: Distribution by Recurring vs. Transaction
Non - U.S. U.S.
Transaction Recurring
100%
100%
80% 27% 25% 20%
35% 31% 30% 29% 28% 31% 29%
80% 38%
65% 63% 64% 65% 68% 63% 66% 62% 65% 69% 72%
60%
60%
40%
40% 73% 75% 80%
65% 69% 70% 71% 72% 69% 71%
62%
20% 35% 37% 36% 35% 37% 34% 38% 35%
32% 31% 28% 20%
0% 0%
2Q18 3Q18 4Q18 FY18 1Q19 2Q19 3Q19 4Q19 FY19 1Q20 2Q20 2Q18 3Q18 4Q18 FY18 1Q19 2Q19 3Q19 4Q19 FY19 1Q20 2Q20
Revenue1: Distribution by Product
Other 2 Investment Grade Speculative Grade Bank Loans
100%
8%
24% 20% 22% 23% 19% 21% 20%
31% 26% 28% 17%
80%
7% 16% 18% 15% 21% 17% 17%
13% 13%
60% 15% 19%
18% 20% 27% 51%
25% 27% 22% 25% 32%
19%
40%
44% 50%
20% 35% 40% 36% 36% 36% 38% 37% 32%
24%
0%
2Q18 3Q18 4Q18 FY18 1Q19 2Q19 3Q19 4Q19 FY19 1Q20 2Q20
1. Historical data has been adjusted to conform with current information and excludes intercompany revenue. The revenue reclassi fication of REITs from Corporate Finance to Structured Finance is reflected starting from 1Q 2018.
2. Other includes: monitoring, commercial paper, medium term notes, and ICRA.
Note: Percentages have been rounded and may not total to 100%.
2Q 2020 Investor Presentation - August 11, 2020 47Structured Finance: Revenue and Issuance
Revenue1: Mix by Quarter Issuance 2: Mix by Quarter
ABS RMBS CMBS Structured Credit Other ABS RMBS CMBS Structured Credit
$160 $350
$140 $300
$1 $44
$120 $0
$1 $250
$ Millions
$1 $49 $49
$ Billions
$1 $1
$100 $55 $47 $1 $64 $57
$41 $32 $1 $200 $36 $39
$51 $51 $38
$80 $35 $40 $29 $1 $27 $25
$34
$21 $150 $26 $70 $85 $31
$60 $18 $24 $20 $25 $21 $87
$15 $18 $18 $17 $74 $16 $63
$13 $64
$27 $100 $48 $65 $3
$40 $24 $24 $24 $24 $22 $26 $27 $23 $4
$50 $115 $103 $16
$20 $89 $79 $90 $91
$28 $25 $26 $23 $26 $25 $25 $22 $23 $65 $66
$43
$0 $0
2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20
Revenue1: Mix by Year Issuance 2: Mix by Year
ABS RMBS CMBS Structured Credit Other
$600 ABS RMBS CMBS Structured Credit
$1,400
$2 $2 $1,200
$2 $2
$0 $165 $4
$400 $1,000
$ Millions
$0 $0 $135 $196
$ Billions
$137 $122
$91 $96 $148 $73 $200 $153
$800 $39 $136
$65 $159 $115
$143 $36 $94 $132 $116 $120 $145
$95 $116 $122 $140 $133 $78 $81 $600 $114
$120 $117 $94 $270
$200 $371
$231 $254 $283
$85 $98 $400 $189 $238 $200 $204
$73 $76 $81 $85 $90 $95
$110
$200 $319 $335 $317 $319 $292 $298 $337 $384 $348
$98 $92 $91 $94 $97 $107 $99
$0 $0
2012 2013 2014 2015 2016 2017 2018 2019 2011 2012 2013 2014 2015 2016 2017 2018 2019
1. Historical data has been adjusted to conform with current information and excludes intercompany revenue. The revenue reclassi fication of REITs to Corporate Finance from Structured Finance is reflected starting from 1Q 2018.
2. Sources: AB Alert, CM Alert, Moody’s Corporation. Debt issuance categories do not directly correspond to Moody’s revenue cate gorization.
Notes: ABS (Asset Backed Securitization) includes asset-backed commercial paper and long-term asset-backed securities. RMBS (Residential Mortgage Backed Securitization) includes covered bonds. CMBS includes commercial mortgage -
backed securities and commercial real estate CDOs. Structured Credit includes CLOs and CDOs.
2Q 2020 Investor Presentation - August 11, 2020 48Structured Finance: Revenue Diversification
Revenue1: Distribution by Geography Revenue1: Distribution by Recurring vs. Transaction
Non - U.S. U.S. Transaction Recurring
100%
100%
80%
56% 80% 33% 36% 37% 36% 39%
63% 62% 63% 63% 61% 64% 64% 62% 63% 64% 44% 45% 43% 42% 48%
57%
60%
60%
40%
40%
67% 64% 63% 64% 61%
44% 56% 55% 57% 58% 52%
20% 37% 38% 37% 37% 39% 36% 36% 38% 37% 36% 43%
20%
0% 0%
2Q18 3Q18 4Q18 FY18 1Q19 2Q19 3Q19 4Q19 FY19 1Q20 2Q20 2Q18 3Q18 4Q18 FY18 1Q19 2Q19 3Q19 4Q10 FY19 1Q20 2Q20
Revenue1: Distribution by Product
ABS RMBS CREF Structured Credit Other
100% 1% 0% 0% 0% 1% 1% 1% 1% 1% 1% 1%
29% 30% 26%
80% 39% 41% 35% 37% 38% 35%
43% 44%
16%
60% 23% 18%
18% 18% 17% 19%
14% 13% 20% 16%
40% 28%
23% 21% 24% 22% 28%
21% 21% 19% 20% 21%
20%
22% 22% 23% 23% 24% 23% 23% 23% 28%
22% 21%
0%
2Q18 3Q18 4Q18 FY18 1Q19 2Q19 3Q19 4Q19 FY19 1Q20 2Q20
1. Historical data has been adjusted to conform with current information and excludes intercompany revenue. The revenue reclassi fication of REITs to Corporate Finance from Structured Finance is reflected starting from 1Q 2018.
Notes: ABS (Asset Backed Securitization) includes asset-backed commercial paper and long-term asset-backed securities. RMBS (Residential Mortgage Backed Securitization) includes covered bonds. CMBS includes commercial mortgage -
backed securities and commercial real estate CDOs. Structured Credit includes CLOs and CDOs.
Percentages have been rounded and may not total to 100%.
2Q 2020 Investor Presentation - August 11, 2020 49Financial Institutions: Revenue and Issuance
Revenue1: Mix by Quarter Issuance 2: Mix by Quarter
Banking Insurance Managed Investments Other Global Speculative Grade Financial Corporate Bonds
Global Investment Grade Financial Corporate Bonds
$ Millions
$160
$ Billions
$2
$140 $500
$3 $3 $3 $8 $29
$3 $3 $3 $3
$120 $7 $10 $7 $6 $400 $36
$6 $4 $5 $44 $24
$100 $30 $20 $18
$33 $3 $29 $28 $31 $18
$38 $31 $34
$80 $6 $300 $27
$15
$60
$200 $4 $396 $396
$40 $77 $80 $84 $80 $86 $88 $339 $327 $315 $309 $333
$73 $76 $279
$63
$20 $100 $170
$0
2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 $0
2Q18 3Q18 4Q18 1Q19 2Q19 3Q 19 4Q19 1Q20 2Q20
Revenue1: Mix by Year Issuance 2: Mix by Year
Banking Insurance Managed Investments Other Global Speculative Grade Financial Corporate Bonds
$500 $12 Global Investment Grade Financial Corporate Bonds
$450 $13 $13 $25 $2,000
$22 $25
$400 $2 $9 $10
$ Millions
$0 $119
$ Billions
$350 $0 $16 $17 $102 $114 $1,600
$0 $16 $19
$19 $79 $74
$300 $96 $102 $137 $197 $183 $108
$17 $89 $92 $136
$79 $1,200 $112
$250 $73 $161
$200
$320 $800
$150 $300 $290 $1,312
$242 $244 $240 $1,266 $1,247 $1,194 $1,232 $1,248 $1,298
$205 $228 $234 $1,072 $1,187
$100
$400
$50
$0
$0
2011 2012 2013 2014 2015 2016 2017 2018 2019
2011 2012 2013 2014 2015 2016 2017 2018 2019
1. Historical data has been adjusted to conform with current information and excludes intercompany revenue.
2. Sources: Moody’s Analytics, Dealogic. Note: Debt issuance categories do not directly correspond to Moody’s revenue categorization.
2Q 2020 Investor Presentation - August 11, 2020 50Financial Institutions: Revenue Diversification
Revenue1: Distribution by Geography Revenue1: Distribution by Recurring vs. Transaction
Non - U.S. U.S. Transaction Recurring
100%
100%
80% 37% 44% 40% 42% 42% 42%
45% 50% 45% 48% 49% 80%
53% 53% 51% 52% 46%
58% 59% 54% 58% 55%
60% 72%
60%
40%
63%
40%
55% 56% 60% 58% 55% 58% 58%
50% 52% 51%
20% 47% 47% 49% 48% 54%
20% 42% 41% 46% 42% 45%
28%
0%
0%
2Q18 3Q18 4Q18 FY18 1Q19 2Q19 3Q19 4Q19 FY19 1Q20 2Q20
2Q18 3Q18 4Q18 FY18 1Q19 2Q19 3Q19 4Q19 FY19 1Q20 2Q20
Revenue1: Distribution by Product
Banking Insurance Managed Investments Other
3% 3% 2% 2% 3% 3% 2% 1%
100%
5% 3% 8% 5% 4% 5% 5% 6%
80% 26% 25% 22% 26% 27% 25% 24%
31%
60%
40%
66% 69% 68% 66% 66% 67% 69%
62%
20%
0%
FY18 1Q19 2Q19 3Q19 4Q19 FY19 1Q20 2Q20
1. Historical data has been adjusted to conform with current information and excludes intercompany revenue.
Note: Percentages have been rounded and may not total to 100%.
2Q 2020 Investor Presentation - August 11, 2020 51Public, Project and Infrastructure: Revenue and Issuance
Revenue1: Mix by Quarter Issuance 2: Mix by Quarter
Public Finance and Sovereign Project & Infrastructure Finance Other Long-Term Rated U.S. Muni Bonds Rated Global Project & Infrastructure Finance Bonds
$150
$250
$ Billions
$200
$100 $60 $69
$62
$ Millions
$56 $55 $52 $150 $52 $114
$54 $49 $47 $75
$67 $57 $64 $64
$50 $100 $39 $51
$58 $65 $57 $64 $129
$52 $45 $42 $46 $53 $50 $82 $95 $95
$78 $74 $71 $79 $76
$0 $0
2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20
Revenue1: Mix by Year Issuance 2: Mix by Year
Public Finance and Sovereign Project & Infrastructure Finance Other Long-Term Rated U.S. Muni Bonds Rated Global Project & Infrastructure Finance Bonds
$500
$450 $900
$400 $800
$ Millions
$ Billions
$350 $700
$213 $224
$188 $600
$300 $174 $206
$167 $181 $500 $207 $266 $243
$250 $142
$121 $400 $220
$200
$150 $300
$100 $202 $225 $218 $222 $200 $364 $408 $384 $374
$156 $181 $174 $177 $185 $313 $302 $307 $292
$100 $248
$50
$0 $0
2011 2012 2013 2014 2015 2016 2017 2018 2019 2011 2012 2013 2014 2015 2016 2017 2018 2019
1. Historical data has been adjusted to conform with current information and excludes intercompany revenue.
2. Global Rated Project & Infrastructure Finance available starting in 2016 and represents Moody’s rated issuance.
Sources: Thomson SDC, Moody’s Corporation. Note: Debt issuance categories do not directly correspond to Moody’s revenue categ orization.
2Q 2020 Investor Presentation - August 11, 2020 52Public, 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%
80% 80% 36% 39% 42% 39% 41% 37%
57% 60% 60% 59% 61% 63% 62%
65% 64% 64% 65%
60% 60%
40% 40%
66% 69% 67% 72%
64% 61% 61% 59% 65% 63%
58%
20% 43% 40% 40% 41% 39% 37% 38% 20%
35% 36% 36% 35%
0% 0%
2Q18 3Q18 4Q18 FY18 1Q19 2Q19 3Q19 4Q19 FY19 1Q20 2Q20 2Q18 3Q18 4Q18 FY18 1Q19 2Q19 3Q19 4Q19 FY19 1Q20 2Q20
Revenue1: Distribution by Product
Public Finance and Sovereign Project & Infrastructure Finance Other
100%
80%
52% 54% 53% 51% 51% 52% 48% 50% 48% 52%
55%
60%
40%
48% 46% 47% 49% 49% 48% 52% 50% 52% 48%
20% 45%
0%
2Q18 3Q18 4Q18 FY18 1Q19 2Q19 3Q19 4Q19 FY19 1Q20 2Q20
1. Historical data has been adjusted to conform with current information and excludes intercompany revenue.
Note: Percentages have been rounded and may not total to 100%.
2Q 2020 Investor Presentation - August 11, 2020 53You can also read
