1Q 2018 Investor Presentation -...

1Q 2018 Investor Presentation

May 10, 2018

May 10, 2018 2

Disclaimer

Certain statements contained in this release are forward-looking statements and are based on future expectations, plans and prospects for the Company’s business and operations

that involve a number of risks and uncertainties. The forward-looking statements and other information in this release are made as of the date (except where noted otherwise), 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. 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, 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 the U.K.’s referendum vote whereby the U.K. citizens voted to withdraw from

the EU; 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; 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 Financial Reform Act and regulations resulting from that Act; the potential for increased competition and regulation in the EU and other foreign jurisdictions; exposure

to litigation related to our rating opinions, as well as any other litigation, government and regulatory proceedings, investigations and inquires to which the Company may be subject

from time to time; provisions in the Financial Reform Act 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 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. Other factors, risks and

uncertainties relating to our acquisition of Bureau van Dijk could cause our actual results to differ, perhaps materially, from those indicated by these forward-looking statements,

including risks relating to the integration of Bureau van Dijk’s operations, products and employees into Moody’s and the poss ibility that anticipated synergies and other benefits of the

acquisition will not be realized in the amounts anticipated or will not be realized within the expected timeframe; risks that the acquisition could have an adverse effect on the business

of Bureau van Dijk or its prospects, including, without limitation, on relationships with vendors, suppliers or customers; claims made, from time to time, by vendors, suppliers or

customers; changes in the European or global marketplaces that have an adverse effect on the business of Bureau van Dijk. 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 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, 2017, and in other

filings made by the Company 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 Company’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.

May 10, 2018 3

Table of Contents

1. Financial Overview

2. Capital Markets Overview

3. Moody’s Investors Service (MIS)

4. Moody’s Analytics (MA)

5. Conclusion

6. Appendix

May 10, 2018 4

» Ratings

» Estimated Default Frequency

Analytics (EDFs)

» Market-Implied

Ratings (MIRs)

Ratings

EDFs

MIRs

Credit Risk

Measurement

Specialized Use Cases,

e.g., ESG, KYC / AML,

Transfer Pricing, etc.

Other Financial

Risk

Assessments

Information

Aggregation &

Harmonization

Gather and Curate

Widest Range of

Financial and Credit

Risk Data

Methodologies

Company Data

Research

Training & Certification

Analyst Outreach

Risk

Understanding

Curated Data & Technology

Advisory Services

Stress Testing

Software

Risk

Management

» Defend and enhance our core

ratings & research businesses

– Ratings: predictive, predictable and

transparent

– Research: timely and insightful

» Pursue strategic growth

opportunities

– Leverage the brand to extend our reach

in financial markets

– More broadly occupy credit / financial risk

management and information vertical

– Extend both thought leadership footprint

and presence as a recognized standard

– Move upstream in emerging financial

markets

Moody’s Mission: To be the World’s Most Respected

Authority Serving Risk-Sensitive Financial Markets

1 Financial Overview

May 10, 2018 6

Provides financial

intelligence and analytical

tools supporting our clients’

growth, efficiency and risk

management objectives

Solutions address diverse

needs and customers

Extending brand into new

markets and deepening

customer relationship

Independent provider of

credit rating opinions and

related information for over

100 years

Proven ratings accuracy

and deeply experienced

analysts

Expanded sales and

marketing activities in

Commercial group

Leading global provider of

credit rating opinions,

insight and tools for

financial risk

measurement and

management

Revenue of

$4.4 billion

Operating Income

of $1.9 billion

MIS

86%

MA

14%

MIS

65%

MA

35%

Note: Financial data for the trailing twelve months ended March 31, 2018.

Overview of Moody’s Corporation

May 10, 2018 7

1 Guidance as of April 27, 2018.

2 Adjusted diluted EPS is an adjusted measure. See appendix for reconciliations from adjusted financial measures to U.S. GAAP.

3 Includes an approximate $0.65 benefit resulting from U.S. corporate tax reform. See appendix for reconciliations from adjusted financial measures to U.S. GAAP.

4 2013 – 2017 operating and adjusted operating margins have been restated to conform to the new presentation of pension accounting.

5 Adjusted Operating Margin is an adjusted measure. See appendix for reconciliation from adjusted financial measures to U.S. GAAP.

6 As of May 2018, over the last five available fiscal years ended 2017. Free Cash Flow is an adjusted financial measure. See appendix for reconciliation from adjusted financial

measures to U.S. GAAP. Source: FactSet.

7 Includes: CLGX, DNB, EXPN, FDS, INFO, MORN, MSCI, SPGI, TRI and VRSK.

Operating Margin4

Adjusted Diluted EPS2Revenue

$0.0

$1.0

$2.0

$3.0

$4.0

$5.0

2013 2014 2015 2016 2017 2018F

$ B

illio

ns

Low-double-digit

% growth

$1 of

Revenue

$3.74$4.31 $4.71 $4.94

$6.07

$2.00

$3.00

$4.00

$5.00

$6.00

$7.00

$8.00

2013 2014 2015 2016 2017 2018F

42

.0%

43

.5%

42

.8%

18

.1%

43

.3%

45

.1%

46

.3%

46

.0%

45

.9%

47

.6%

0%

10%

20%

30%

40%

50%

60%

2013 2014 2015 2016 2017 2018F

Operating Margin Adj. Operating Margin

~ 4

8%

43

% -

44

%

$0.12

$0.22

$0.28

S&P 500

Select Peers

Moody's

5-year Average Free Cash Flow Conversion6

$7.65

to

$7.853

11

1

5

7

Financial Performance

May 10, 2018 8

Note: Long-term growth opportunities presented on this slide are on average over time.

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.

Long-Term Growth Opportunities

Three Levers to Achieve EPS Growth

May 10, 2018 9

$893

$1,221$1,098

$739

$200$43

$197

$236$272

$285

$290

$84

$0

$400

$800

$1,200

$1,600

150

170

190

210

230

2013 2014 2015 2016 2017 1Q18

$ M

illions

Mill

ion

s o

f S

ha

res

Share Repurchases (R) Dividends Paid (R)

Shares Outstanding (L)

$1,090

$1,457$1,370

Disciplined Approach to Capital Allocation

1 Dividend payout ratio is defined as dividends per share paid/adjusted net income.

2 Annualized dividend total, based on first and second quarter dividend of $0.44 declared on January 24, 2018 and April 24, 2018, respectively.

Share Repurchases and Dividends Paid Annualized Dividend Per Share

$1,024

Investing in Growth Opportunities Return of Capital

Reinvestment

Invest in existing

businesses to

support organic

growth

Acquisitions

Evaluate carefully to

make sure aligned

with strategy and

market evolution

Dividends

Grow dividend in line

with earnings; target

25% - 30% payout1

Share Repurchase

Follow reinvestment,

dividends and

acquisitions in capital

allocation prioritization

$0.90

$1.12

$1.36$1.48 $1.52

$1.76

2013 2014 2015 2016 2017 20182

$490

$128

May 10, 2018 10

» Current long-term credit ratings from S&P and Fitch are BBB+ (negative) / BBB+ (stable)

» Solid investment-grade rating provides reliable, cost-effective access to capital in a

variety of market environments

0.0x

0.5x

1.0x

1.5x

2.0x

2.5x

3.0x

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

2010 2011 2012 2013 2014 2015 2016 2017 2018E

$ M

illio

ns

Debt Outstanding (L) Gross Debt/Adj. Operating Income (R)

De-leveraging in 2018 to Maintain Current BBB+

Credit Rating

1 Amount is an adjusted measure. See Appendix for reconciliations from adjusted financial measures to U.S. GAAP.

1

May 10, 2018 11

1 See press release titled “Moody's Corporation Reports Results for First Quarter 2018” from April 27, 2018 for Moody’s full 2018 guidance.

2 These metrics are adjusted measures. See Appendix for reconciliations from adjusted financial measures to U.S. GAAP.

Guidance as of April 27, 20181

Revenue Low-double-digit % growth

Operating Expenses Low-double-digit % growth

Operating Margin 43% - 44%

~48% (Adjusted2)

Effective Tax Rate 22% - 23%

EPS $7.20 - $7.40

$7.65 - $7.85 (Adjusted2)

Free Cash Flow2 ~$1.6 billion

2018 Outlook

2 Capital Markets Overview

May 10, 2018 13

Historically, Rising Rates Have not had a Significant

Impact on Moody’s Revenue

1 10-yr U.S. Treasury Yields are represented by the rate at the end-of-period.

Source: www.treasury.gov.

+200bps

+120bps

+100bps

+180bps

MCO Revenue and Interest Rates

5.8%

7.8%

4.7%

6.5%

2.3%

3.3%

1.8%

3.0%2.5%2.4%

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

$4,500

199

2

199

3

199

4

199

5

199

6

199

7

199

8

199

9

200

0

200

1

200

2

200

3

200

4

200

5

200

6

200

7

200

8

200

9

201

0

201

1

201

2

201

3

201

4

201

5

201

6

201

7

$ M

illio

ns

MIS Revenue (L) MA Revenue (L) MCO Revenue (L) 10-yr U.S. Treasury Yield (R)1

http://www.treasury.gov/

May 10, 2018 14

Debt Leverage Down in North America, Stable in

Europe; Interest Coverage Remains Steady

Credit Metrics: North American Speculative Grade Companies

Source: Moody’s Investors Service.

1.7x 1.6x 1.4x 1.3x 1.6x 1.9x 1.7x 1.7x 1.6x 1.7x 1.7x 1.8x 1.9x

4.2x 4.2x 4.5x 4.5x 4.4x 4.2x 4.3x 4.6x 4.8x 4.9x 5.1x 5.2x 5.0x

0.0x

1.0x

2.0x

3.0x

4.0x

5.0x

6.0x

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 3Q 2017

Inte

rest

Covera

ge

(EBITDA - Capex) / Interest Expense Debt / EBITDA

Credit Metrics: European Speculative Grade Companies

1.4x 1.8x 1.6x 1.5x 1.5x 1.5x 1.8x 1.6x 1.7x

4.9x4.3x 4.5x 4.8x 5.0x 4.9x

4.1x4.5x 4.5x

0.0x

1.0x

2.0x

3.0x

4.0x

5.0x

6.0x

2009 2010 2011 2012 2013 2014 2015 2016 2017

Inte

rest

Covera

ge

(EBITDA - Capex) / Interest Expense Debt / EBITDA

May 10, 2018 15

1.4%

1.7%

1.0%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

2012 2013 2014 2015 2016 2017 2018 2019F

Global U.S. Europe

Global Default Rates Remain Under Historic Average

Default Rates for Corporate Rated Issuance1

4.3% global historic average1

1 Moody’s rated corporate global speculative grade default historical average of 4.3% since 1998. 2019 forecast for trailing twelve months ended March 31, 2019.


» Global speculative-grade default rate at 3.2% as of March 31, 2018; expected to decline

to 1.4% by March 2019

May 10, 2018 16

North America and EMEA Non-Financial Corporates

Have Significant Refunding Needs1

Debt Maturities: North America Moody’s-Rated Corporate Bonds and Loans

$175$206

$226 $225 $239

$28$60

$90$121

$180

$8$49

$101

$181$223

$0

$50

$100

$150

$200

$250

$300

2018 2019 2020 2021 2022

$ B

illio

ns

Source: MIS, February 2018.

Note: Data represents U.S. & Canadian MIS rated corporate bonds & loans.

Debt Maturities: EMEA Moody’s-Rated Corporate Bonds and Loans

$188 $193 $179 $186

$45 $49 $65 $65$52 $58 $59 $66

$0

$50

$100

$150

$200

$250

$300

2018 2019 2020 2021

$ B

illio

ns

Source: MIS, July 2017.

2018 – 2022 CAGR

Investment Grade Bonds: 8%

Speculative Grade Bonds: 60%

Speculative Grade Bank Loans: 127%

1 Amount reflects total maturities identified in the above sources.

Investment Grade Bonds Speculative Grade Bonds Speculative Grade Bank Loans

2018 – 2021 CAGR

Investment Grade Bonds: flat

Speculative Grade Bonds: 13%

Speculative Grade Bank Loans: 8%

May 10, 2018 17

Debt Refinancing and M&A are Most Frequently

Stated Uses of Proceeds

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.

Uses of Funds from USD High Yield Bonds and Bank Loans1

62% 52%

83%

71% 74%78%

71%65%

54%64%

71%67%

63% 53%

19%

31% 30%25%

31%41% 54%

41%

39%43%

22% 17%

11%

7% 8% 8%7% 8%

5% 6%5% 6%

12% 9% 4%

18% 17% 18% 22% 20% 16% 17% 13% 15%

1999 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 1Q18

% o

f M

entions

Debt Refinancing M&A Capital Spending Shareholder Payments

May 10, 2018 18

Disintermediation of Credit is an Ongoing Trend in the Global Capital Markets

Sources: ECB, Federal Reserve, BarCap Indices. Europe bank loan data includes Eurozone and UK bank loans. Europe bond data includes euro and sterling denominated bonds.

European data is through February 2018 and U.S. data is through March 2018.

European Non-Financial Corporate

Bonds vs. Bank Loans Outstanding

4

8

%

€0

€1,000

€2,000

€3,000

€4,000

€5,000

€6,000

€7,000

€B

illio

ns

Bonds Loans

U.S. Non-Financial Corporate

Bonds vs. Bank Loans Outstanding

4

8

%

$0

$1,500

$3,000

$4,500

$6,000

$7,500

$9,000

$ B

illio

ns

Bonds Loans

76%

24%

49%

51%

May 10, 2018 19

Robust Growth of New Rating Mandates

0

400

800

1,200

2012 2013 2014 2015 2016 2017 1Q17 1Q18

# o

f N

ew

Mandate

s

EMEA United States Rest of World

1,044

Global New Rating Mandates1

» In 1Q 2018, Moody’s new rating mandates increased to 296, up 13% from 261 in

4Q 2017 and up 39% from 213 in 1Q 2017

» Expect ~1,000 new mandates in 20182

854

1,026990

771 738

213296

+39%

1 Rated by Moody’s Investors Service.

2 New mandates estimate as of April 27, 2018.

May 10, 2018 20

1 MIS recurring revenue is typically billed annually and recognized ratably over 12 months. Recurring revenue can also be billed upfront and recognized over the life of the security.

$0

$200

$400

$600

$800

$1,000

$1,200

2013 2014 2015 2016 2017 1Q17 1Q18

$ M

illio

ns

Corporate Finance Structured FinanceFinancial Institutions Public, Project, & Infrastructure FinanceMIS Other

» MIS recurring revenue growth primarily driven by increased monitoring fees from new mandates in 2017

» Recurring revenue averages ~36% of total MIS revenue

MIS Recurring Revenue

As a % of MIS

revenue38% 39% 39% 39% 36%

New Rating Mandates Provide Recurring Revenue1

Growth

35% 36%

3 Moody’s Investors Service

May 10, 2018 22

35%

65%

Recurring Transaction

TTM 1Q 2018 Revenue: $2.8 billion

Moody’s Investors Service Financial Profile

Public,

Project, &

Infrastructure

Finance

15%

Financial

Institutions

15%

Corporate

Finance

50%

Structured

Finance

19%

MIS Other

1%

61%

39%

U.S. Non-U.S.

» 36% recurring revenue



2018 Revenue Guidance as of April 27, 2018

Global mid-single-digit % range

U.S. low-single-digit % range

Non-U.S. high-single-digit % range

Corporate Finance mid-single-digit % range

Structured Finance high-single-digit % range

Financial Institutions mid-single-digit % range

Public, Project & Infrastructure Finance low-single-digit % range


May 10, 2018 23

Americas APACEMEA

» 32,500 rated

companies and

structured deals

» $34+ trillion total

debt rated

» 19,500 research

publications

» Offices in 5

countries

» 4,600 rated

companies and

structured deals


debt rated

» 6,300 research

publications

» Offices in 12

countries

» 2,000 rated

companies and

structured deals


debt rated

» 3,500 research

publications

» Offices in 7

countries

Note: Data as of December 31, 2017.

Numbers of rated entities (other than sovereigns and supranational institutions) and structured deals, research publications and event participants/activities rounded to nearest hundred.

$72+ trillionof Total Rated Debt

4,700Rated Non-Financial

Corporates

4,100Rated Financial Institutions

138Rated Sovereigns

47Rated Supranational

Institutions

450Rated Sub-Sovereigns

17,700Rated Public

Finance Issuers

1,000Rated Infrastructure &

Project Finance Issuers

11,000Rated Structured

Deals

213Rating

Methodologies

Broad Coverage Serves Global Needs

May 10, 2018 24

» We remain focused on analytical expertise and the continuous refinement of our

credit methodologies to provide predictive, predictable and transparent ratings

» Reinforces investor “demand pull”

Three-Year Cumulative Default Rates of Fundamental Rated Universe1

0%

10%

20%

30%

40%

50%

60%

1 The data in the chart above shows the three-year cumulative default rates by rating from January 1998, through December 2017 of fundamental Moody’s rated universe globally. Rating

category is based on senior unsecured rating (or equivalent) of the issuer. Source: Moody’s Investors Service.

2 Institutional Investor Survey.

~15 Years Lead/Senior Analyst

tenure

Rating Performance Drives Investor Confidence

#1 U.S. Credit

Rating Agency

2012-20172

May 10, 2018 25

Illustrative Value of a Moody’s Rating

Example: 10 year $500 million corporate bond

$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.

$500,000,000

x 4.3%

= $21,500,000

x 10 years

= $215,000,000

Unrated Rated by Moody’s

$500,000,000

x 4.0%

= $20,000,000

x 10 years

= $200,000,000

Bond

Interest rate

Annual interest payments

Tenor

Lifetime interest expense

May 10, 2018 26

54 7283

111

141170

201

230

274

0

50

100

150

200

250

300

Mar2010

Mar2011

Mar2012

Mar2013

Mar2014

Mar2015

Mar2016

Mar2017

Mar2018

Num

ber

of

Issuers

Continue to Invest in Key International Markets

Moody’s-Rated Chinese Issuers1

1 Includes rated issuers where major operations or headquarters are in Mainland China. Hong Kong, Macau and Taiwan are not included.

2 Based on full year 2017 rated bond issuance (deal count) in China’s Interbank Market. Source: CCXI.

Sources: Dealogic, Moody’s Analytics, Moody’s Investors Service.

China» Successful joint venture with CCXI,

leading domestic rating agency

» CCXI provides >1,000 domestic

Chinese ratings; 34% coverage in

20172

» Cross border market rated via MIS

Hong Kong office

» China recently announced it will allow

foreign firms to provide credit rating

services in part of the domestic market

Latin America» Deepens Moody’s presence in a

dynamic and expanding market

Rest of World

» Acquired full ownership of KIS, a

leading provider of domestic credit

ratings

» Increased majority stake in ICRA to

serve growing domestic bond market

2007 2017

Emerging Asia Latin AmericaMiddle East CEE/CISAfrica

Revenue in Emerging Markets

May 10, 2018 27

OtherGreen Bond Assessment

» ~$250 billion green bond

issuance volume

forecasted for 20181

» 34 green bond

assessments assigned

as of April 2018 globally

» Servicer Quality

Assessments in

LATAM

» Private Monitored

Rating extension

» Private Rating for

Investors- Sub

sovereign

» SME ratings

through Euler-

Hermes Ratings

(4.99% ownership)

1 Source: Moody’s Investors Service.

New Non-Credit Assessments Meet Market Needs

ESG

» Dedicated ESG teams

in U.S., Europe and

Asia

» ESG research, heat

maps

» Extensive ESG

outreach & membership

May 10, 2018 28

MIS Focus Areas

x

x

x

We focus on three core

activities in MIS…

Reading &

Extracting

Publishing

&

Visualizing

Analyzing

…and incorporate new technologies into

our current processes

Natural Language

Processing

Machine Learning,

Artificial Intelligence

& Big Data

Robotic Process

Automation

Further Operationalizing Enabling Technologies

4 Moody’s Analytics

May 10, 2018 30

Research, Data and Analytics

60%

Enterprise Risk Solutions

30%

Professional Services

10%

Moody’s Analytics Financial Profile

80%

20%


43%

57%

U.S. Non-U.S.

» > 97% recurring revenue

» 96% retention rate1


» Combination of one-off contracts and

semi-recurring revenue

2018 Revenue Guidance as of April 27, 2018

Global2 mid-twenties % range

U.S. low-double-digit % range

Non-U.S. mid-thirties % range

Research, Data & Analytics2 approximately 40%

Enterprise Risk Solutions low-single-digit % range

Professional Services high-single-digit % range

1 Excludes Bureau van Dijk.

2 Organic MA global revenue is expected to increase in the low-double-digit percent range and organic RD&A revenue is expected to increase in the mid-teens percent range.

TTM 1Q 2018 Revenue: $1.5 billion

May 10, 2018 31

Moody’s Analytics has Several Platforms for Growth

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

$ M

illio

ns

Moody’s Analytics

2017 Revenue: $1,430m

2008 – 2017 CAGR: +11%

(~62% organic)


2017 Revenue: $149m

2008 – 2017 CAGR: +32%

(~15% organic)


2017 Revenue: $449m

2008 – 2017 CAGR: +16%

(~67% organic)

Research, Data & Analytics

2017 Revenue: $833m

2008 – 2017 CAGR: +8%

(~74% organic)

Revenue More Than Doubled Since Inception

Note: Individual line of business revenues may not foot due to rounding.

May 10, 2018 32

» €3 billion acquisition closed on August 10, 2017

» Bureau van Dijk is a leading aggregator and distributor of

private company business intelligence and data, serving

over 6,000 unique institutions worldwide

» Extends MA’s reach beyond financial institutions and

insurance

» Adds capacity to MA’s attractive RD&A business through

extensive customer base and geographic footprint

» Combination anticipated to deliver significant synergies.

Expect ~$45 million in annual revenue and expense

synergies by 2019, increasing to ~$80 million by 20211

» Integration proceeding according to plan with focus on

implementing controls appropriate for a unit of a listed U.S.

company while delivering on strategy and business plan.

1 Anticipated annual revenue and expense synergies, as of April 27, 2018.

2 Based on IFRS.

Long History of Profitable Growth2

€109

€272

€48

€139

Revenue EBITDA

Bureau van Dijk Acquisition

(€ in millions)

Bureau van Dijk aggregates, standardizes and distributes an extensive private company

data set

May 10, 2018 33

Diversified IP Network1 High Value Customer Solutions

Data from 160+

Information Providers

Publicly Available Data

Other Data Sourced

By Bureau van Dijk

280 Million Private Companies

67 Thousand Public Companies

170 Million Director Contacts

1 Data as of December 31, 2017.

Bureau van Dijk Collects and Enhances Information

to Deliver a Market Leading Global Dataset

Compliance and Financial Crime

Corporate Finance and M&A

Credit Risk

Transfer Pricing

Business Development

Data Management

May 10, 2018 34

Expansion of ratings coverage

Production of insightful credit

analysis

New customers in

geographies with developing

debt capital markets

Expansion of data sets and

delivery options

Strong customer retention

RD&A: Subscription Growth Driven by Retention, Upgrades and Pricing & New Sales

Full

Ye

ar

201

5F

ull

Yea

r 2

01

6

95.4% 110.2%8.0%6.8%

Retained Base Upgrades and Price New Sales Business Base

96.3% 110.5%7.2%7.0%


Note: The sales growth attributions presented on this slide are related to RD&A subscription sales on a constant currency basis and excludes Bureau van Dijk. Upgrades reflect

amendments to existing customer contracts. New Sales reflect new contracts with new and existing customers.

Subscription Sales Growth(constant currency)

Full

Ye

ar

2017

95.5% 109.4%8.2%5.7%


May 10, 2018 35

ERS Solutions Address Diverse Needs and

Customers

Credit Risk & Actuarial

AnalyticsHelps risk managers assess and

manage current and future exposures

across all asset classes

Accounting Calculation &

ReportingProduces key calculations and reports

required by many of the world’s accounting

standards

Regulatory Calculation &

ReportingGenerates key calculations and reports

required by many of the world’s financial

regulations

Credit Assessment &

Origination Automates financial spreading

and credit scoring, decision

making and monitoring

Portfolio & Capital StrategyHelps firms to improve portfolio

performance and meet regulatory and

economic capital requirements

Asset & Liability ManagementIntegrates ALM, liquidity risk management,

funds transfer pricing and regulatory reporting

capabilities into a seamless enterprise platform

May 10, 2018 36

1 Renewables revenue includes subscriptions and maintenance.

$0

$50

$100

$150

$200

$250

$300

$350

$400

$450

$500

$ M

illio

ns

Renewable Total

TTM Revenue

1

ERS Renewable Products Drive Growth

Prior to 2016: Growth from installed software

» One-time projects – installed software & services

» Bespoke projects accelerated development of IP

» 61% of revenue from renewable products in 2015

2016+: SaaS & subscriptions drive growth

» Expanding SaaS and subscription product array

» Subscriptions generate lower Annual Contract Value in

short run, but better Lifetime Customer Value

» 69% of revenue from renewable products in 2017

Key Growth Drivers

» New accounting standards require Moody’s expertise at

banks and Insurance companies

– CECL, IFRS17

» Moody’s software and analytics enable customers’ to

realize digitization and automation initiatives

5 Conclusion

May 10, 2018 38

Why Invest in Moody’s?

» We strive to be the world’s most respected authority serving risk-sensitive financial

markets

» We have had strong revenue and earnings growth, as well as cash flow conversion

– 2013 – 2017 revenue CAGR of 9%

– 2013 – 2017 adjusted diluted EPS1 CAGR of 15%

– 2013 – 2017 free cash flow1 conversion rate of ~28%

» We are committed to returning capital to our shareholders

– 2013 – 2017 returned $5.4 billion, or 114% of free cash flow, to shareholders via share

repurchases and dividends

» We will selectively invest in strategic growth opportunities

– Leverage brand to extend our relevance in financial markets

– Expand our product offerings and geographic influence

1 Adjusted diluted EPS is an adjusted measure. See appendix for reconciliations from adjusted financial measures to U.S. GAAP.

6 Appendix

May 10, 2018 41

Corporate Finance: Revenue and Issuance

1 Historical data has been adjusted to conform with current information and excludes intercompany revenue.

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.

$103 $105 $109 $108 $113 $116 $124 $126 $131

$66 $79 $61 $56$72 $85 $79 $66

$81$30

$51 $59$41

$64$63 $63 $64

$58$41

$69 $71$73

$104 $92 $85$78

$108

$0

$50

$100

$150

$200

$250

$300

$350

$400

1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18

$ M

illio

ns

Revenue1: Mix by Quarter

Other Investment Grade Speculative Grade Bank Loans

$178 $216 $275 $312 $363 $420 $421 $425 $478$119 $109$137

$197$193

$230$305 $262

$301

$84$143

$120

$194$229

$219$183

$181

$254

$28$96

$120

$155

$212

$242 $204 $254

$359

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

2009 2010 2011 2012 2013 2014 2015 2016 2017

$ M

illio

ns

Revenue1: Mix by Year


$317 $339 $320$215

$351 $341 $320 $269 $309

$53$103 $91

$65

$123 $104 $99$100

$98$71

$99 $120

$124

$206$160

$138$134

$165$8

$25 $39

$48

$84$60

$44

$59$67

$0

$200

$400

$600

$800

$1,000

1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18

$ B

illi

on

s

Issuance3: Mix by Quarter

Non-U.S. Speculative-Grade Bank Loans

U.S. Speculative-Grade Bank Loans

Global Non-Financial Speculative-Grade Bonds

Global Non-Financial Investment-Grade Bonds

$1,129

$641 $750$1,125 $1,073 $1,043 $1,120 $1,192 $1,270

$221

$293$250

$329 $411 $405 $329 $311$422

$79

$273 $330

$353$504 $425 $354 $414

$638$120

$ 247

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

2009 2010 2011 2012 2013 2014 2015 2016 2017

$ B

illi

on

s

Issuance3: Mix by Year

Non-U.S. Speculative-Grade Bank LoansU.S. Speculative-Grade Bank LoansGlobal Non-Financial Speculative-Grade BondsGlobal Non-Financial Investment-Grade Bonds

2

2

May 10, 2018 42

36% 38% 39% 38% 32% 32% 35% 38% 34% 35%

19% 21%27% 23%

20% 24% 22% 20% 22% 21%

23% 20%16%

16%

18%18% 18% 19% 18% 15%

21% 22% 18% 23%29% 26% 24% 23% 26% 29%

0%

20%

40%

60%

80%

100%

FY13 FY14 FY15 FY16 1Q17 2Q17 3Q17 4Q17 FY17 1Q18


73% 70% 69% 68% 74% 74% 73% 70% 73% 73%

27% 30% 31% 32% 26% 26% 27% 30% 27% 27%

0%

20%

40%

60%

80%

100%


Revenue1: Distribution by Recurring vs. Transaction

Transaction Recurring

Corporate Finance: Revenue Diversification


2 Other includes: monitoring, commercial paper, medium term notes, and ICRA.

Percentages have been rounded and may not total to 100%.

38% 38% 32% 32% 31%38% 33% 37% 35% 35%

62% 62% 68% 68% 69%62% 67% 63% 65% 65%

0%

20%

40%

60%

80%

100%


Revenue1: Distribution by Geography

Non - U.S. U.S.

Revenue1: Distribution by Product

2

May 10, 2018 43

Structured Finance: Revenue and Issuance

$20 $27 $23 $24 $23 $24 $23 $27 $28

$21$21

$19 $25 $20 $22 $22$25 $24

$28$33 $33

$40

$29$30 $38

$46$33

$22

$30$29

$42

$27

$42$46

$50

$43

$1

$1$0

$1

$0

$1$1

$1

$1

$0

$20

$40

$60

$80

$100

$120

$140

1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18

$ M

illio

ns


ABS RMBS CREF Structured Credit Other


2 Sources: AB Alert, CM Alert, Moody’s Corporation. Debt issuance categories do not directly correspond to Moody’s revenue categorization.

Notes: ABS (Asset Backed Securitization) includes asset-backed commercial paper and long-term asset-backed securities. RMBS (Residential Mortgage Backed Securitization) includes

covered bonds. CREF (Commercial Real Estate Finance) includes commercial mortgage-backed securities, real estate finance, commercial real estate CDOs, and real estate investment

trusts (REITs). Structured Credit includes CLOs and CDOs.

$101 $91 $107 $110 $98 $92 $91 $94 $97

$59 $65$90 $85

$73 $76 $81 $85 $90$46 $53

$70 $95 $116 $122 $140 $133 $143$99 $82

$78$91 $96

$137$135 $122

$165

$0 $0

$0$0 $0

$0$2 $2

$2

$0

$200

$400

$600

2009 2010 2011 2012 2013 2014 2015 2016 2017

$ M

illio

ns



$296 $220$319 $335 $317 $319 $292 $298 $337

$355$396

$371$231 $189 $238

$200 $204$254

$30 $24$36

$73

$120$114

$117 $94$120

$93

$59 $39 $65

$94$159

$132 $116

$136

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

2009 2010 2011 2012 2013 2014 2015 2016 2017

$ B

illi

on

s


ABS RMBS CREF Structured Credit

$62$88 $68 $80 $74 $88

$67$107 $102

$58

$61

$36$48 $47

$75

$59

$73$62$21

$16

$25

$33$18

$26

$34

$41$26

$12$24

$25

$56$14

$32$42

$48

$36

$0

$50

$100

$150

$200

$250

$300

1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18

$ B

illi

on

s


ABS RMBS CREF Structured Credit

May 10, 2018 44

Structured Finance: Revenue Diversification

60% 62% 64% 62% 57% 63% 66% 70% 65% 64%

40% 38% 36% 38% 43% 37% 34% 30% 35% 36%

0%

20%

40%

60%

80%

100%




36% 34% 31% 33% 35% 32% 30% 29% 31% 35%

64% 66% 69% 67% 65% 68% 70% 71% 69% 65%

0%

20%

40%

60%

80%

100%



Non - U.S. U.S.

26% 22% 20% 22% 23% 20% 18% 18% 19% 22%

19%18% 18% 19% 20%

19%17% 17% 18% 19%

30%28% 31% 31% 29%

25% 29% 31% 29% 26%

25%32% 31% 28% 27%

35% 36% 33% 33% 33%

0% 0% 0% 1% 0% 1% 0% 0% 0% 0%

0%

20%

40%

60%

80%

100%






Notes: ABS (Asset Backed Securitization) includes asset-backed commercial paper and long-term asset-backed securities. RMBS (Residential Mortgage Backed Securitization) includes

covered bonds. CREF (Commercial Real Estate Finance) includes commercial mortgage-backed securities, real estate finance, commercial real estate CDOs, and real estate investment

trusts (REITs). Structured Credit includes CLOs and CDOs.

May 10, 2018 45

Financial Institutions: Revenue and Issuance

$59 $60 $63 $59$79 $70 $70

$80 $77

$30 $24 $26$23

$25$23 $24

$30 $28$4$4

$4$4

$5$6 $5

$6 $6$3$3

$3$3

$3$3 $4

$3 $3

$0

$20

$40

$60

$80

$100

$120

$140

1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18

$ M

illio

ns


Banking Insurance Managed Investments Other

$176 $192 $205 $228 $234 $242 $244 $240$300

$66$69 $73

$79 $89 $92 $96 $102

$102

$16$18

$17$19 $16 $19 $16 $17

$22

$0$0

$0$0 $0 $2 $9 $10

$13

$0

$50

$100

$150

$200

$250

$300

$350

$400

$450

$500

2009 2010 2011 2012 2013 2014 2015 2016 2017

$ M

illio

ns



$1,764

$1,340 $1,266 $1,312$1,072

$1,247 $1,194 $1,187 $1,230

$80

$87 $79$137

$161

$197$136 $112

$180

$0

$400

$800

$1,200

$1,600

$2,000

2009 2010 2011 2012 2013 2014 2015 2016 2017

$ B

illi

on

s


Global Speculative Grade Financial Corporate Bonds

Global Investment Grade Financial Corporate Bonds


2 Sources: Moody’s Analytics, Dealogic. Note: Debt issuance categories do not directly correspond to Moody’s revenue categorization.

$369$318 $284

$216

$419

$294 $278$239

$409

$26

$29$38

$19

$45

$47$39

$49

$39

$0

$100

$200

$300

$400

$500

1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18

$ B

illi

on

s


Global Speculative Grade Financial Corporate Bonds

Global Investment Grade Financial Corporate Bonds

May 10, 2018 46

Financial Institutions: Revenue Diversification



35% 35% 37% 37%48% 43% 40%

48% 45% 44%

65% 65% 63% 63%52% 57% 60%

52% 55% 56%

0%

20%

40%

60%

80%

100%




58% 60% 57% 57% 55% 57% 60% 57% 57% 58%

42% 40% 43% 43% 45% 43% 40% 43% 43% 42%

0%

20%

40%

60%

80%

100%



Non - U.S. U.S.

69% 68% 67% 65%70% 69% 69% 67% 69% 67%

26% 26% 26% 28%22% 23% 23% 25% 23% 25%

5% 5% 4% 5% 5% 6% 4% 5% 5% 5%

0% 1% 3% 3% 3% 3% 3% 3% 3% 3%

0%

20%

40%

60%

80%

100%




May 10, 2018 47

$142 $159 $156 $181 $174 $177 $202 $225 $218

$104$113 $121

$142 $167 $181$174

$188 $213

$0$0 $0

$0$0

$0$0

$0$0

$0

$50

$100

$150

$200

$250

$300

$350

$400

$450

$500

2009 2010 2011 2012 2013 2014 2015 2016 2017

$ M

illi

on

s


Public Finance and SovereignProject & Infrastructure FinanceOther


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 categorization.

$355 $374 $248

$313 $302 $307 $364 $408 $375

$207 $266

$0

$100

$200

$300

$400

$500

$600

$700

$800

$900

2009 2010 2011 2012 2013 2014 2015 2016 2017

$ B

illi

on

s


Rated Global Project & Infrastructure Finance Bonds

Long-Term Rated U.S. Muni Bonds

Public, Project and Infrastructure: Revenue and Issuance

$94$114 $105 $95 $82 $95 $80

$127

$58

$26

$72

$50 $59 $57

$68 $75

$66

$54

$0

$50

$100

$150

$200

$250

1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18

$ B

illi

on

s


Rated Global Project & Infrastructure Finance Bonds

Long-Term Rated U.S. Muni Bonds

$55 $55 $60 $54 $53 $53 $49$62

$47

$37$57 $45 $49 $45 $51 $60

$57

$46

$0

$0$0 $0

$0$0

$0$0

$0

$0

$20

$40

$60

$80

$100

$120

$140

1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18

$ M

illio

ns


Public Finance and SovereignProject & Infrastructure FinanceOther

May 10, 2018 48



60% 58% 60% 63% 60% 64% 65% 68% 65%58%

40% 42% 40% 37% 40% 36% 35% 32% 35%42%

0%

20%

40%

60%

80%

100%




37% 37% 35% 33% 36% 37% 42% 38% 38% 43%

63% 63% 65% 67% 64% 63% 58% 62% 62% 57%

0%

20%

40%

60%

80%

100%



Non - U.S. U.S.

51% 49% 54% 54% 54% 51% 45%52% 51% 50%

49% 51% 46% 46% 46% 49% 55%48% 49% 50%

0% 0% 0% 0% 0% 0% 0% 0% 0% 0%

0%

20%

40%

60%

80%

100%


Public Finance and Sovereign Project & Infrastructure Finance Other


Public, Project and Infrastructure: Revenue Diversification

May 10, 2018 49

Moody’s Analytics: Financial Overview

$165 $168 $168 $167 $175 $181$218

$258 $269

$90 $98 $102 $130 $96 $97

$113

$143 $100

$37 $38 $36$37

$36 $36

$38

$40$38

$0

$50

$100

$150

$200

$250

$300

$350

$400

$450

$500

1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18

$ M

illio

ns


1 Historical data has been adjusted to conform with current information and excludes intercompany revenue. Research, Data and Analytics includes Bureau van

Dijk revenue beginning from the acquisition close date, August 10, 2017.


$411 $419 $445 $483 $520 $572 $626 $668$833

$151 $181 $196$243 $263

$329$374

$419

$449

$11 $19 $62 $108$119

$168$150

$147

$149

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

2009 2010 2011 2012 2013 2014 2015 2016 2017

$ M

illio

ns




Research, Data and

Analytics

23% 27% 26% 25% 21% 20% 21% 24% 22% 15%

77% 73% 74% 75% 79% 80% 79% 76% 78% 85%

0%

20%

40%

60%

80%

100%



55% 56% 54% 51% 49% 50% 56% 56% 55% 60%

45% 44% 46% 49% 51% 50% 44% 44% 45% 40%

0%

20%

40%

60%

80%

100%



Non-U.S. U.S.

58% 54% 54% 54% 57% 58% 59% 59% 58%66%

29% 31% 33% 34% 31% 31% 31% 32% 31%25%

13% 16% 13% 12% 12% 11% 10% 9% 10% 9%

0%

20%

40%

60%

80%

100%




May 10, 2018 50

MIS MA Non-U.S.U.S.

Corporate Finance

33%

Structured Finance

12%

Financial Institutions

10%

Public, Project & Infrastructure

10%

MIS Other1%

Research, Data &

Analytics21%


10%


3%

Revenue is Diversified by Business, Geography and Type

TTM 1Q18 Revenue by Business

United States54%

EMEA29%

Asia-Pacific11%

Americas6%

TTM 1Q18 Revenue by Geography

TTM 1Q18 Revenue by Type

51%35%

80%

49%65%

20%

MCO MIS MA


May 10, 2018 51

Moody’s Corporate Speculative Grade Credit Cycle

Gauge

1 North America long-term average: LSI: from 2002, B3-Neg: from 2007, Refunding: from 2007, Downgrade / Update Ratio: from 2008, CQ score: from 2011, Default rate: from 1990.

2 Europe long-term average: LSI: from 2012, CQ Score: from 2011, B3-Neg: from 2011, Downgrade / Update Ratio: from 2009, Default rate: from 1999.

3 Trailing twelve months (TTM) ended March 31, 2018.


Improving Neutral Trending Worse

Latest

Metric

1-Year

Ago

Long-

Term

Average1

Record

Worst

Latest

Metric

1-Year

Ago

Long-

Term

Average2

Record

Worst

Liquidity Stress Index 2.8% 5.3% 6.6% 20.8% 6.5% 9.9% 11.6% 18.5%

B3-Neg / Lower 190 243 195 291 40 57 41 60

% B3-Neg / Lower 12.7% 16.7% 15.1% 26.1% 8.6% 13.3% 11.7% 17.2%

3-Year Refunding Index 3.8x 3.8x 6.2x 1.5x N/A N/A N/A N/A

Downgrade / Upgrade Ratio3 0.8x 0.6x 3.4x 11.7x 0.5x 0.9x 2.4x 20.5x

Covenant Quality Score 4.32 4.12 4.06 4.52 3.56 3.39 3.22 4.85

Default Rate (forecast) 1.7% 3.9% 4.7% 15.0% 1.0% 2.4% 3.7% 13.0%

North America Europe

May 10, 2018 52

Moody’s Global Presence

1 As of March 31, 2018.

2 As of March 31, 2017.

U.S. employees non-U.S. employees total employees2

U.S. employees non-U.S. employees total employees1

3,589 8,445 12,034

2018

3,411 7,247 10,658

2017

AmericasArgentina Mexico

Brazil Panama

Canada Peru

Costa Rica United States

Europe, Middle East & AfricaAustria Poland

Belgium Portugal

Cyprus Russia

Czech Republic Saudi Arabia

Denmark Slovakia

France South Africa

Germany Spain

Ireland Sweden

Israel Switzerland

Italy UAE

Mauritius United Kingdom

Netherlands

Asia-PacificAustralia Malaysia

China Nepal

Hong Kong Singapore

India Sri Lanka

Japan Thailand

Korea

May 10, 2018 53

Corporate Social Responsibility: Opening the Door

to a Better FutureThree Focus Areas, All Supported by Our Colleagues

Sharing Our Passion and Purpose With the World

Empowering employees in communities all over the world to change people’s lives with their

time, talent and resources. Provide more opportunities through Moody’s TeamUp®, skills-

based and pro bono volunteering, nonprofit board service and employee giving programs.

Activating an Environmentally

Sustainable Future

Developing internal awareness in our

workplaces through the Environmental

Task Force, and external tools and

services, such as the MIS ESG Initiative

and Moody’s Green Bond Assessment.

Helping Young People Reach

Their Potential

Opening greater opportunities for

untapped students and young adults

ages 15-24 to prepare for successful

careers in technology, economics

and finance, and developing a

diverse & inclusive talent pipeline.

Empowering people with

financial knowledge

Changing the lives of people all over

the world—especially women and

untapped groups—and helping them

grow their businesses by acquiring

the tools and know-how to navigate

in the financial world. Includes

Reshape TomorrowTM, our signature

financial empowerment initiative.

May 10, 2018 54

Reconciliation of Adjusted Financial Measures to

GAAPAdjusted Operating Income and Adjusted Operating Margin Reconciliation1

(in $ millions) 2013 2014 2015 2016 2017 TTM 1Q18

Operating Income $1,248.0 $1,449.8 $1,490.7 $650.9 $1,820.8 $1,864.9

Operating Margin 42.0% 43.5% 42.8% 18.1% 43.3% 42.8%

Add Adjustment:

Depreciation & Amortization 93.4 95.6 113.5 126.7 158.3 174.8

Acquisition-Related Expenses - - - - 22.5 23.3

Restructuring - - - 12.0 - -

Goodwill Impairment Charge - - - - - -

Settlement Charge - - - 863.8 - -

Adjusted Operating Income $1,341.4 $1,545.4 $1,604.2 $1,653.4 $2,001.6 $2,063.1

Adjusted Operating Margin 45.1% 46.3% 46.0% 45.9% 47.6% 47.4%

Moody's Corporation Operating Margin Guidance Reconciliation

1 2013 - 2017 operating and adjusted operating income have been restated to conform to the new presentation of pension accounting.


2018F2

Projected Operating Margin - GAAP 43% - 44%

Projected impact from Depreciation & Amortization Approximately 4.0%

Projected impact from Acquisition-Related Expenses Approximately 0.5%

Projected Adjusted Operating Margin Approximately 48%

Free Cash Flow Reconciliation(in $ millions) 2013 2014 2015 2016 2017 2018F2

Net cash flows from operating activities $965.6 $1,017.3 $1,198.1 $1,259.2 $747.5 ~$1,700

Less: Capital expenditures 42.3 74.6 89.0 115.2 90.6 ~$120

Free Cash Flow $923.3 $942.7 $1,109.1 $1,144.0 $656.9 ~$1,600

May 10, 2018 55

Reconciliation of Adjusted Financial Measures to

GAAP (cont.)

Moody's Corporation Diluted EPS Reconciliation

2013 2014 2015 2016 2017 2018F1

Diluted EPS - GAAP $3.60 $4.61 $4.63 $1.36 $5.15 $7.20 - $7.40

Legacy Tax (0.09) (0.03) (0.03) - - -

Impact of Litigation Settlement 0.14 - - $3.59 - -

ICRA Gain - (0.37) - - - -

FX Gain due to Subsidiary Liquidation - - - ($0.18) - -

Restructuring - - - $0.04 - -CCXI Gain - - - - ($0.31) -

Acquisition-Related Expenses - - - - $0.10 ~$0.05

Purchase Price Hedge Gain - - - - ($0.37) -

Net Acquisition-Related Intangible

Amortization Expenses$0.09 $0.10 $0.11 $0.13 $0.23 ~$0.40

Transition tax related to U.S. tax reform- - - -

$1.28 -

Net Impact of U.S./European tax change

on deferred taxes- - - - ($0.01) -

Adjusted Diluted EPS $3.74 $4.31 $4.71 $4.94 $6.07 $7.65 - $7.85

Note: Table may not sum to total due to rounding.


Investor Relations

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May 10, 2018 57

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