Investor Presentation -...

Investor Presentation1Q 2017

May 10, 2017

2May 10, 2017

DisclaimerCertain statements contained in this presentation are forward-looking statements and are based on future expectations, plans and prospects for Moody’s

business and operations that involve a number of risks and uncertainties. The forward-looking statements in this presentation are made as of the date hereof,

and the Company disclaims any duty to 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 certain factors 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, world-wide credit market disruptions or an economic slowdown, 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 world-wide 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; 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 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. 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, 2016, 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.

3May 10, 2017

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

4May 10, 2017

Moody’s Mission: To be the World’s Most Respected Authority Serving Risk-Sensitive Financial Markets

Introduction | Financial Overview | Capital Markets Overview | Moody’s Investors Service | Moody’s Analytics | Conclusion | Appendix

Risk Understanding Risk Understanding Risk Understanding

Methodologies

Training & Certification

Analyst Outreach

Risk

Understanding

Ratings

Estimated Default Frequency

Analytics (EDFs)

Market-Implied Ratings

(MIRs)

Risk

Measurement

Research

(from both MIS & MA)

Advisory Services

Stress Testing

Software

Risk

Management

Moody’s is an essential component of the global capital markets, providing credit ratings,

research, tools and analysis that contribute to open and integrated financial markets.

5May 10, 2017

Financial Overview1

6May 10, 2017

Research, data and software for financial risk analysis

and related professional services

Customers in 145 countries3

4,600 institutional customers; business with 86 of top

100 global banks3

Overview of Moody’s Corporation1


» Leading global provider of credit rating opinions, insight and tools for financial

risk measurement and management

» TTM 1Q17 revenue of $3.8 billion; adjusted operating income2 of $1.8 billion

Independent provider of credit rating opinions and

related information for over 100 years

MIS provides ratings in more than 120 countries3

Ratings relationships with ~11,000 corporate issuers,

~18,000 public finance issuers and has rated and

currently monitors ~64,000 structured finance

obligations3

» 67% of total MCO revenue

» 84% of total MCO adjusted

operating income2

» 33% of total MCO revenue

» 16% of total MCO adjusted

operating income2

1 All financial data is for the trailing twelve months ended March 31, 2017.

2 Adjusted operating income is an Non-GAAP measure. See appendix for reconciliation from adjusted financial measures to GAAP.

3 As of December 31, 2016.

7May 10, 2017

Revenue is Diversified by Business, Geography and Type

TTM 1Q17 Revenue by Business

United States59%

EMEA25%

Asia-Pacific10%

Americas6%

Corporate Finance

33%

Structured Finance

12%

Financial Institutions

10%

Public, Project & Infrastructure

11%

MIS Other1%

Research, Data &

Analytics18%

Enterprise Risk Solutions

11%

Professional Services

4%

MIS MA

TTM 1Q17 Revenue by Geography

U.S. Non-U.S.

TTM 1Q17 Revenue by Type

50%37%

75%

50%63%

25%

MCO MIS MA

Recurring Transaction


Note: All financial data is for the trailing twelve months ended March 31, 2017.

8May 10, 2017

1 Guidance as of May 5, 2017.

2 Represents adjusted EPS. See appendix for reconciliation from adjusted EPS to GAAP EPS.

3 Expect to be toward the upper end of the range. Excludes $0.31 CCXI gain.

4 Adjusted Operating Margin is a Non-GAAP measure. See appendix for reconciliation from adjusted financial measures to GAAP.

5 As of May 2017, over last five available fiscal years. Free Cash Flow is a Non-GAAP financial measure. Source: FactSet.

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

Operating Margin

EPS2Revenue

$0.0

$1.0

$2.0

$3.0

$4.0

$5.0

2012 2013 2014 2015 2016 2017F

$ B

illio

ns

Mid-single-

digit

% growth

$1 of

Revenue

$2.99$3.65

$4.21$4.60 $4.81

$2.00

$2.50

$3.00

$3.50

$4.00

$4.50

$5.00

$5.50

2012 2013 2014 2015 2016 2017F

39

.5%

41

.5%

43

.2%

42

.3%

17

.7%

43

.3%

44

.7%

46

.0%

45

.5%

45

.5%

0%

20%

40%

60%

80%

100%

2012 2013 2014 2015 2016 2017F

Operating Margin Adj. Operating Margin~

46

%

~4

3%

$0.10

$0.23

$0.30

S&P 500

Select Peers

Moody's

5-year Average Free Cash Flow Conversion5

$5.15

to

$5.303


1 1

1

4

6

Financial Performance

9May 10, 2017

Long-Term Growth Opportunities


Note: Revenue and EPS long-term growth opportunities 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.

Three Levers to Achieve EPS Growth

10May 10, 2017

Moody’s Investors Service

» Revised organizational structure

» Reengineering analytical support

group

» Upgrading IT for improved system

automation

All Areas of the Company Undertaking Actions to Actively Manage Expense Growth

Moody’s Analytics Moody’s Shared Services

» Higher margin product focus

» Limited growth of low-margin

services

» Salesforce efficiency

» Staffing shift to low-cost locations

» Improved process efficiency

through re-engineering and

technology enablement

» Flattened rate of headcount growth

» Increased use of Moody’s Analytics

Knowledge Services (MAKS)

» Compensation management

» Performance culture

» Real estate densification

Expense and best practice initiatives to drive

MCO operating margin to the mid-40s % range over the next several years


11May 10, 2017

Moody’s has a Disciplined Approach to Capital AllocationInvesting in Growth Opportunities Return of Capital

Reinvestment Acquisitions Dividends Share Repurchases

» Invest in existing businesses

to support organic growth

» FY 2017 capex guidance:

~$100 million1

» Aligned with strategy

» Opportunistic; ideally able to

use offshore cash

» Payout ratio potential is 25%

- 30% of net income at

current leverage2

» TTM 1Q 2017 payout ratio

was ~30%3

» FY 2017 share repurchase

guidance: ~$500 million4

» Average annualized net

share count reduction of

~4% from 2012 to 1Q 2017

» 1Q 2017 average repurchase

price of $112.24


2 Assumes continued balance of return of capital between dividends and share repurchase subject to available cash, market conditions and other ongoing capital allocation decisions.

3 Dividend payout ratio is defined as TTM 1Q 2017 dividend paid/adjusted net income.

4 Guidance as of May 5, 2017 (subject to available cash, market conditions and other ongoing capital allocation decisions).

Share Repurchases and Dividends Paid Annualized Dividend Per Share(Last 5 Years)


$197

$893

$1,221$1,098

$739

$55

$143

$197

$236$272

$285

$73

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

170

180

190

200

210

220

230

2012 2013 2014 2015 2016 1Q 2017

$ M

illions

Mill

ions o

f S

hare

s

Share Repurchases (R) Dividends Paid (R)

Shares Outstanding (L)

$340

$1,090

$1,457$1,370

$0.40

$0.60

$0.80

$1.00

$1.20

$1.40

$1.60

Jun-1

2

Sep-1

2

De

c-1

2

Ma

r-1

3

Jun-1

3

Sep-1

3

De

c-1

3

Ma

r-1

4

Jun-1

4

Sep-1

4

De

c-1

4

Ma

r-1

5

Jun-1

5

Sep-1

5

De

c-1

5

Ma

r-1

6

Jun-1

6

Sep-1

6

De

c-1

6

Ma

r-1

7

$1.52

$1,024

$128

12May 10, 2017

Full Year 2017 Guidance as of May 5, 2017

1 These metrics are adjusted measures. See Appendix for a reconciliation of these measures to their comparable GAAP measure.

2 Expect to be toward the upper end of the range.

3 Excludes $0.31 CCXI gain.

4 Includes payment of the settlement charge related to an agreement with the U.S. Department of Justice and the attorneys general of 21 U.S. states and the District of Columbia.

» Revenue: Increase in the mid-single-digit % range

» Operating Expense: Decrease in the 25% - 30% range

» Adjusted Operating Expense1: Increase in the mid-single-digit % range

» Operating Margin: Approximately 43%

» Adjusted Operating Margin1: Approximately 46%

» Effective Tax Rate: Approximately 30%

» Earnings Per Share2 $5.46 - $5.61

» Adjusted Earnings Per Share1,2,3: $5.15 - $5.30

» Share Repurchases: Approximately $500 million (subject to available cash, market

conditions and other ongoing capital allocation decisions)

» Capital Expenditures: Approximately $100 million

» Depreciation & Amortization: Approximately $135 million

» Operating Cash Flow: Approximately $600 million

» Free Cash Flow1,4: Approximately $500 million


13May 10, 2017

Capital Markets Overview2

14May 10, 2017

Historically, Rising Rates Have not had a Significant Impact on Moody’s Revenue

+200bps

+120bps

+100bps

+180bps

5.8%

7.8%

4.7%

6.5%

2.3%

3.3%

1.8%

3.0%

2.2%

2.5%

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

19921993 19941995 1996 19971998199920002001200220032004200520062007200820092010201120122013201420152016

$ M

illio

ns

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

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

2 10-yr U.S. Treasury Yields are represented by the rate as of May 9, 2017.

Source: www.treasury.gov.

MCO Revenue and Interest Rates


» Despite the December 2016 and March 2017 Fed rate hikes, the 10-year U.S.

Treasury yield eased from mid-December’s 2.6% to ~2.4%2

http://www.treasury.gov/

15May 10, 2017

Debt Leverage up in North America and Europe; Interest Coverage Remains Reasonable


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

4.2x 4.2x4.5x 4.5x 4.4x 4.2x 4.3x

4.6x 4.8x 4.9x 5.1x 5.2x

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

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 1.5x

4.9x4.3x 4.5x

4.8x 5.0x 4.9x

4.1x4.8x

0.0x

1.0x

2.0x

3.0x

4.0x

5.0x

6.0x

2009 2010 2011 2012 2013 2014 2015 3Q 2016

Inte

rest

Covera

ge

(EBITDA - Capex) / Interest Expense Debt / EBITDA

16May 10, 2017

Global Default Rates Remain Under Historic Average

Default Rates for Corporate Rated Issuance3

2.4%

3.0%

1.8%1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

4.5%

5.0%

5.5%

6.0%

2012 2013 2014 2015 2016 2017F 2018F

Global U.S. Europe

4.4% global historic average


1 Illustrates top 10 industries with highest forecasted one-year default rates.

2 Default rate forecasts are not reported in these sectors in Europe due to small sample size (fewer than ten issuers).

3 Moody’s rated corporate global speculative grade default historical average of 4.4% since 1983. 2018 forecast for trailing twelve months ended March 31, 2018.


Corporate Default Rate Forecast by Industry1

» Global speculative-grade default rate at 3.8% as of March 31, 2017; expected to decline to 2.4% by

March 2018, helped by fewer commodity defaults.

Industry Group (Top 10 Highest Default Forecasts)

U.S. Europe

Retail 4.5% 4.0%

Media: Advertising, Printing & Publishing 4.4% 1.7%

Metals & Mining 3.7% 1.7%

Consumer goods: durable2 3.6%

Transportation: Cargo 3.5% 2.8%

Services: Business 3.5% 2.2%

Environmental Industries2 3.5%

Energy: Oil & Gas 3.3% 2.9%

Wholesale2 3.2%

Energy: Electricity2 3.1%

17May 10, 2017

North America and EMEA Non-Financial Corporates Have Over $3.3 Trillion of Refunding Needs1

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

$171$196 $199 $193

$220

$27$57

$87

$130$162

$9$46

$122

$221$260

$0

$50

$100

$150

$200

$250

$300

2017 2018 2019 2020 2021

$ B

illio

ns

Source: MIS, February 2017.

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

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

$196 $190 $176 $166

$41$71 $62

$81$52 $56 $62 $67

$0

$50

$100

$150

$200

$250

$300

2017 2018 2019 2020

$ B

illio

ns

Source: MIS, July 2016.

2017 – 2021 CAGR

Investment Grade Bonds: 7%

Speculative Grade Bonds: 57%

Speculative Grade Bank Loans: 130%

1 Amount reflects total maturities identified in the above sources.

Investment Grade Bonds Speculative Grade Bonds Speculative Grade Bank Loans

2017 – 2020 CAGR

Investment Grade Bonds: (5%)

Speculative Grade Bonds: 25%

Speculative Grade Bank Loans: 9%


18May 10, 2017

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 Capital Markets Research Group (CMRG).

Uses of Funds from USD High Yield Bonds and Bank Loans1

73%

62% 52%

83%

71% 74%78%

71%65%

54%64%

76%

45%

63% 53%

19%

31% 30%25%

31%41% 54%

41%

33%

24% 22% 17%

11%

7% 8% 8%7% 8%

5% 6%

4%

9% 12% 9% 4%

18% 17% 18% 22% 20% 16% 17%12%

1998 1999 2008 2009 2010 2011 2012 2013 2014 2015 2016 1Q 2017

% o

f M

entions

Debt Refinancing M&A Capital Spending Shareholder Payments


19May 10, 2017

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 and U.S. data is through March 2017.

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

77%

23%

48%

52%


20May 10, 2017

» FY 2016 speculative-grade bank loan issuance in the U.S. totaled ~$400 billion vs. ~$100 billion in

Europe

» Record activity in 1Q 2017 as issuers took advantage of the highly favorable market backdrop to

refinance and extend outstanding bank loan debt on issuer-friendly terms

Moody’s Rated U.S. Corporate Speculative-Grade Bank Loans1

Rising Rates are Supporting Leveraged Loan Activity

1 U.S. Speculative-Grade Bank Loan represents Moody’s rated new bank loan programs.

Sources: Moody’s Capital Markets Research Group, Dealogic

$0

$200

$400

$600

2009 2010 2011 2012 2013 2014 2015 2016 1Q'17

$ B

illio

ns


21May 10, 2017

Disintermediation is a Key Driver of Moody’s Global New Rating Mandates

0

400

800

1,200

2012 2013 2014 2015 2016 1Q 2016 1Q 2017

# o

f N

ew

Mandate

s

EMEA United States Rest of World

Global New Rating Mandates1

1 Rated by Moody’s Investors Service.


» In 1Q 2017, Moody’s new rating mandates increased to 219, up 24% from 177 in 4Q 2016

and up 42% from 154 in 1Q 2016

854

1,026 990

771


738

154219

22May 10, 2017

Moody’s Investors Service3

23May 10, 2017

Rating Quality

Research & Insight

Service Level

Value Proposition

Expanded sales and

marketing activities in

Commercial Group

Proven rating accuracy

and deeply experienced

analysts

Improving the issuer /

investor experience

Focus on research

leadership

Moody’s Investors Service: A Leading Provider of Credit Ratings, Research and Risk Analysis


24May 10, 2017

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

$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

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.


25May 10, 2017

Moody’s Continues to Invest in Key International Markets

$0

$50

$100

$150

$200

$250

$300

$350

$ B

illio

ns

Emerging Markets Rated Corporate Bond Issuance1


Moody’s-Rated Chinese Issuers2

0

50

100

150

200

250

Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16

Num

ber

of

Issuers

Americas

» 2015: Acquired 100% of Equilibrium

EMEA

» 2013: Opened MIS Warsaw office

» 2016: Opened MIS Stockholm office

» 2016: Collaboration with Euler

Hermes Rating

APAC

» 2006: Joint venture in China domestic

market with CCXI

» 2013: Opened MIS Mumbai and

Shanghai offices

» 2015: Acquired majority control of

ICRA

» 2016: Increased stake in KIS to 100%

» 2017: Strategic realignment and

expansion involving CCXI

1 Moving 12 month sum; includes rated investment grade and high yield corporate bond issuance (financial and non-financial). Chart is through March 2017.

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

Sources: Dealogic, Moody’s Capital Markets Research Group, Moody’s Investors Service.

26May 10, 2017

37%

63%


TTM 1Q 2017 Revenue: $2.5 billion

Moody’s Investors Service Financial Profile

Public,

Project, &

Infrastructure

Finance

17%

Financial

Institutions

15%

Corporate

Finance

49%

Structured

Finance

18%

MIS Other

1%

63%

37%

U.S. Non-U.S.

» 37% recurring revenue



2017 Revenue Guidance as of May 5, 2017

Global mid-single-digit % range

U.S. mid-single-digit % range

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

Corporate Finance mid-single-digit % range

Structured Finance mid-single-digit % range

Financial Institutions mid-single-digit % range

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



Note: All financial data, except guidance, is for the trailing twelve months ended March 31, 2017.

27May 10, 2017

Moody’s Analytics4

28May 10, 2017

Moody’s Analytics Provides Essential Insight Serving Global Financial Markets


Research Data & Analytics Enterprise Risk Solutions Professional Services

» MIS research & data

» MIS ratings feeds

» Quantitative credit metrics (EDFs)

» Economic research, data & models

» Structured finance analytics & data

» Software solutions and risk

management services that assist with:

- Financial spreading

- Risk scoring

- Default modeling

- Exposure aggregation &

management

- Portfolio analytics

- Stress testing

- Risk-Weighted Assets (RWA)

calculation and reporting

» Outsourced research & consulting

» Financial training & education

˗ In-house training, seminars &

on-line learning

˗ Professional certification

29May 10, 2017

Research, Data and Analytics

54%Enterprise

Risk Solutions

34%


12%

TTM 1Q 2017 Revenue: $1.2 billion

Moody’s Analytics Financial Profile

75%

25%


49%

51%

U.S. Non-U.S. » > 95% recurring revenue

» 95% retention rate


» Combination of one-off contracts and

semi-recurring revenue


2017 Revenue Guidance as of May 5, 2017

Global mid-single-digit % range

U.S. low-single-digit % range

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

Research, Data & Analytics high-single-digit % range

Enterprise Risk Solutions mid-single-digit % range

Professional Services low-single-digit % range

Note: All financial data, except guidance, is for the trailing twelve months ended March 31, 2017.

30May 10, 2017

Moody’s Analytics has Multiple Platforms for Growth

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

2008 2009 2010 2011 2012 2013 2014 2015 2016

$ M

illio

ns

2016 Revenue and

2008 – 2016 CAGR

~65% organic


$147.0m, 37% CAGR

~15% organic


$418.8m, 17% CAGR

~65% organic

Research, Data & Analytics

$667.6m, 6% CAGR

>90% organic


Added ~$700 Million in Revenue in 9 Years

31May 10, 2017

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

+10.0%

95.9%109.7%6.3% 7.5%

Retained Base Upgrades and Price New Sales Business Base

+9.5%

+6.6%

Full

Ye

ar

201

4F

ull

Ye

ar

201

5F

ull

Ye

ar

201

6

95.4% 110.2%8.0%6.8%


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. Upgrades reflect amendments to existing customer

contracts. New Sales reflect new contracts with new and existing customers. Reported total revenue growth reflects total RD&A revenue.


Subscription Sales Growth(constant currency)

Reported Total

Revenue Growth

32May 10, 2017

$0

$50

$100

$150

$200

$250

$300

$350

Services Products

Recurring Revenue

67%

Transaction Revenue

33%

ERS: TTM Revenue by Type

ERS: TTM Revenue

ERS Continues to Focus on Product Sales and isDe-emphasizing Lower Margin Services Sales


1 Products revenue include subscriptions, license and maintenance.

1

33May 10, 2017

Professional Services: Extending the Brand Into New Markets and Deepening Customer Relationships


Knowledge process

outsourcing

Certificates, designations

and accreditations

Financial services

training

» Leading provider of research,

analytics and business

intelligence services to global

financial institutions

» Bespoke front-office support with

client-dedicated analyst teams for

150+ clients

» More than 2,600 employees in

offices in India, China, Sri Lanka

and Costa Rica

» 15 years of experience helping

clients enhance profitability,

increase operational flexibility and

drive revenues

» Canada’s leading provider of

financial services education and

designations

» 270+ courses taken by 800,000+

financial professionals

» Endorsed by the Investment

Industry Regulatory Organization

of Canada (IIROC), Canada’s

stock exchanges and Canada’s

securities regulatory commissions

» Provider of global learning

capabilities to banks, asset

managers, regulators and non-

bank financial institutions

» Expansion into new markets:

˗ India: Signed MOU with the

National Institute of

Securities Markets (NISM)

to jointly offer certification

programs

˗ Africa: MA is fast becoming

a recognized standard for

credit training in the region

34May 10, 2017

Conclusion5

35May 10, 2017

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

– 2012 – 2016 revenue CAGR of 7%

– 2012 – 2016 adjusted EPS1 CAGR of 13%

– 2012 – 2016 free cash flow conversion rate of ~30%

» We are committed to returning capital to our shareholders

– 2012 – 2016 returned $5.3 billion, or 110% 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 See appendix for reconciliation of adjusted EPS to GAAP EPS.


37May 10, 2017

Appendix6

38May 10, 2017

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 Capital Markets Research Group, Dealogic; U.S. and Non-U.S. Speculative-Grade Bank Loan Origination represent Moody’s rated new bank loan programs. 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.

$104 $108 $105 $104 $103 $105 $109 $108 $113

$87 $84$63 $71 $66 $79 $61 $56

$72

$63 $61

$33 $27 $30

$51$59

$41

$64

$45 $67

$48 $44 $41

$69 $71$73

$104

$0

$50

$100

$150

$200

$250

$300

$350

1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17

Reven

ue

$ M

illi

on

s

Historical Revenue1 Mix: By Quarter

Other Investment Grade Speculative Grade Bank Loans

$179 $178 $216$275 $312 $363

$420 $421 $425$66 $119$109

$137$197

$193

$230$305 $262

$27

$84

$143

$120

$194$229

$219$183

$181

$36

$28

$96

$120

$155

$212

$242 $204 $254

$0

$200

$400

$600

$800

$1,000

$1,200

2008 2009 2010 2011 2012 2013 2014 2015 2016

Reven

ue

$ M

illi

on

s

Historical Revenue1 Mix: By Year


$343 $331$237 $209

$317 $339 $320$215

$346

$120 $99

$62$48

$53$103

$91

$64

$123

$75 $109

$95$75

$71

$99 $120

$124

$206

$8

$25 $32

$47

$77

$0

$100

$200

$300

$400

$500

$600

$700

$800

1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17

Issu

an

ce $

Bil

lio

ns

Global Rated Non-Financial Bonds and Speculative Grade Bank Loans (Quarterly)3

Non-U.S. Speculative-Grade Bank Loan Origination

U.S. Speculative-Grade Bank Loan Origination

Global Non-Financial Speculative-Grade Bond Issuance

Global Non-Financial Investment-Grade Bond Issuance

$763

$1,129

$641 $750

$1,125 $1,073 $1,043 $1,120 $1,191

$65

$221

$293$250

$329 $411 $405 $329 $311

$134

$79

$273 $330

$353$504

$425 $354$414

$112

$0

$500

$1,000

$1,500

$2,000

$2,500

2008 2009 2010 2011 2012 2013 2014 2015 2016

Issu

an

ce $

Bil

lio

ns

Global Rated Non-Financial Bonds and Speculative Grade Bank Loans (Annually)3

Non-U.S. Speculative-Grade Bank Loan OriginationU.S. Speculative-Grade Bank Loan OriginationGlobal Non-Financial Speculative-Grade Bond IssuanceGlobal Non-Financial Investment-Grade Bond Issuance


2

2

39May 10, 2017

36% 36% 38% 39% 43%35% 36% 39% 38% 32%

23% 19% 21%27%

27%

26% 20% 20% 23%20%

23%23% 20%

16% 13%17% 20% 15% 16%

18%

18% 21% 22% 18% 17% 22% 23% 26% 23%29%

0%

20%

40%

60%

80%

100%

FY12 FY13 FY14 FY15 1Q16 2Q16 3Q16 4Q16 FY16 1Q17


74% 73% 70% 69% 63%71% 70% 68% 68% 74%

26% 27% 30% 31% 37%29% 30% 32% 32% 26%

0%

20%

40%

60%

80%

100%


Revenue1 Distribution: 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%.

34% 38% 38% 32% 28% 32% 33% 34% 32% 31%

66% 62% 62% 68% 72% 68% 67% 66% 68% 69%

0%

20%

40%

60%

80%

100%


Revenue1 Distribution: Geography

Non - U.S. U.S.

Revenue1 Distribution: Product


2

40May 10, 2017

Structured Finance: Revenue and Issuance

$21 $26 $21 $24 $20 $27 $23 $24 $23

$18$22

$19$23

$21$21

$19 $25 $20

$33$32

$37$38

$28$33

$33$40

$29

$29

$41$36

$30

$22

$30$29

$42

$27

$0

$1$0 $0

$1

$1$0

$1

$0

$0

$20

$40

$60

$80

$100

$120

$140

1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17

Reven

ue

$ M

illi

on

s


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.

$133 $101 $91 $107 $110 $98 $92 $91 $94

$74$59 $65

$90 $85$73 $76 $81 $85

$55

$46 $53

$70 $95 $116 $122 $140 $133

$142

$99 $82

$78$91 $96

$137$135 $122

$0

$0 $0

$0$0 $0

$0$2 $2

$0

$200

$400

$600

2008 2009 2010 2011 2012 2013 2014 2015 2016

Reven

ue

$ M

illi

on

s



$346 $296 $220$319 $335 $317 $319 $292 $298

$766

$355$396

$371$231 $189 $238

$200 $204

$36

$30 $24$36

$73

$120$114

$117 $94

$107

$93 $59$39

$65$94

$159$132 $116

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

2008 2009 2010 2011 2012 2013 2014 2015 2016

Issu

an

ce $

Bil

lio

ns

Global Rated Structured Finance(Annually)2

ABS RMBS CREF Structured Credit

$73 $81$64 $74 $62

$88$68 $80 $74

$38$41

$58$63

$58

$61

$36$48 $47

$30$32 $27

$28$21

$16

$25

$33$18

$25

$44$32

$30

$12

$24

$25

$56

$14

$0

$50

$100

$150

$200

$250

1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17

Issu

an

ce $

Bil

lio

ns

Global Rated Structured Finance(Quarterly)2

ABS RMBS CREF Structured Credit


41May 10, 2017

Structured Finance: Revenue Diversification

58% 60% 62% 64%55% 61% 60%

68% 62% 57%

42% 40% 38% 36%45% 39% 40%

32% 38% 43%

0%

20%

40%

60%

80%

100%




46%36% 34% 31% 34% 35% 31% 32% 33% 35%

54%64% 66% 69% 66% 65% 69% 68% 67% 65%

0%

20%

40%

60%

80%

100%



Non - U.S. U.S.

29% 26% 22% 20% 22% 24% 22% 19% 22% 23%

22%19%

18% 18%23% 19% 18%

19%19% 20%

25%30%

28% 31%30% 30% 31%

30%31% 29%

24% 25%32% 31% 24% 26% 27% 32% 28% 27%

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

0%

20%

40%

60%

80%

100%



Revenue1 Distribution: by Product



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.


42May 10, 2017

Financial Institutions: Revenue and Issuance

$63 $62 $58 $61 $59 $60 $63 $59

$79

$25 $21 $26 $24 $30 $24$26

$23

$25$4$5 $3 $4 $4

$4$4

$4

$5$2 $2 $2 $2 $3

$3$3

$3

$3

$0

$20

$40

$60

$80

$100

$120

1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17

Reven

ue

$ M

illi

on

s


Banking Insurance Managed Investments Other

$175 $176 $192 $205 $228 $234 $242 $244 $240

$71 $66$69

$73$79 $89 $92 $96 $102

$17 $16$18

$17

$19$16

$19 $16 $17

$0 $0$0

$0

$0$0

$2 $9 $10

$0

$50

$100

$150

$200

$250

$300

$350

$400

2008 2009 2010 2011 2012 2013 2014 2015 2016

Reven

ue

$ M

illi

on

s



$1,779 $1,764

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

$1,247 $1,194 $1,186

$32 $80

$87$79

$137

$161

$197$136 $113

$0

$400

$800

$1,200

$1,600

$2,000

2008 2009 2010 2011 2012 2013 2014 2015 2016

Issu

an

ce $

Bil

lio

ns

Global Rated Financial Bonds(Annually)2

Global Spec Grade Corporate Bond Issuance

Global Inv Grade Corporate Bond Issuance


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

$379

$285 $262 $268

$369$318 $284

$215

$410

$42

$42$28 $24

$26

$29$38

$19

$44

$0

$100

$200

$300

$400

$500

1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17

Issu

an

ce $

Bil

lio

ns

Global Rated Financial Bonds(Quarterly)2

Global Speculative Grade Financial Corporate Bond Issuance

Global Investment Grade Financial Corporate Bond Issuance


43May 10, 2017

Financial Institutions: Revenue Diversification



37% 35% 35% 37% 39% 33%41% 35% 37%

48%

63% 65% 65% 63% 61% 67%59% 65% 63%

52%

0%

20%

40%

60%

80%

100%




59% 58% 60% 57% 58% 55% 57% 58% 57% 55%

41% 42% 40% 43% 42% 45% 43% 42% 43% 45%

0%

20%

40%

60%

80%

100%



Non - U.S. U.S.

70% 69% 68% 67% 62% 66% 65% 66% 65%70%

24% 26% 26% 26% 31% 26% 27% 26% 28%22%

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

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

0%

20%

40%

60%

80%

100%





44May 10, 2017

$143 $142 $159 $156$181 $174 $177

$202 $225

$87 $104$113 $121

$142 $167 $181$174

$188

$0$0

$0 $0

$0$0

$0$0

$0

$0

$50

$100

$150

$200

$250

$300

$350

$400

$450

2008 2009 2010 2011 2012 2013 2014 2015 2016

Reven

ue

$ 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.

$350 $355 $374

$248$302 $307

$364 $358$408

$190

$0

$100

$200

$300

$400

$500

$600

2008 2009 2010 2011 2012 2013 2014 2015 2016

Issu

an

ce $

Bil

lio

ns

Long-Term Rated U.S. Municipal Bond and Global Rated Project & Infrastructure Finance Issuance

(Annually)2

Rated Global Project & Infrastructure Finance Issuance

Long-Term Rated U.S. Muni Bond Issuance

Public, Project and Infrastructure: Revenue and Issuance


$94 $107$84 $74

$94$114 $105 $95 $82

$22

$66 $48 $54

$110

$0

$50

$100

$150

$200

$250

1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17

Issu

an

ce $

Bil

lio

ns

Long-Term Rated U.S. Municipal Bond and Global Rated Project & Infrastructure Finance Issuance

(Quarterly)2

Rated Global Project & Infrastructure Finance Issuance

Long-Term Rated U.S. Muni Bond Issuance

$56 $54$46 $46

$55 $55 $60 $54 $53

$45 $46$45 $40

$37

$57 $45 $49 $45

$0 $0$0

$0$0

$0$0 $0

$0

$0

$20

$40

$60

$80

$100

$120

1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17

Reven

ue

$ M

illi

on

s


Public Finance and SovereignProject & Infrastructure FinanceOther

45May 10, 2017



61% 60% 58% 60% 59% 65% 63% 62% 63% 60%

39% 40% 42% 40% 41% 35% 37% 38% 37% 40%

0%

20%

40%

60%

80%

100%




35% 37% 37% 35% 33% 33% 28%37% 33% 36%

65% 63% 63% 65% 67% 67% 72%63% 67% 64%

0%

20%

40%

60%

80%

100%



Non - U.S. U.S.

56% 51% 49% 54% 60%49%

57% 53% 54% 54%

44% 49% 51% 46% 40%51%

43% 47% 46% 46%

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


46May 10, 2017

Moody’s Analytics: Financial Overview

$150 $158 $158 $161 $165 $168 $168 $167 $175

$77 $83 $92$122 $90 $98 $102 $130 $96

$37$38 $37

$38$37 $38 $36

$37$36

$0

$50

$100

$150

$200

$250

$300

$350

$400

1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17

Reven

ue

$ M

illi

on

s




$413 $411 $419 $445 $483 $520 $572 $626 $668

$119 $151 $181 $196$243 $263

$329$374

$419

$12 $11 $19 $62 $108$119

$168$150

$147

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

2008 2009 2010 2011 2012 2013 2014 2015 2016

Reven

ue

$ M

illi

on

s




Research, Data and

Analytics

23% 23% 27% 26% 24% 24% 24% 29% 25% 21%

77% 77% 73% 74% 76% 76% 76% 71% 75% 79%

0%

20%

40%

60%

80%

100%



57% 55% 56% 54% 51% 52% 51% 53% 51% 49%

43% 45% 44% 46% 49% 48% 49% 47% 49% 51%

0%

20%

40%

60%

80%

100%



Non-U.S. U.S.

58% 58% 54% 54% 57% 55% 55% 50% 54% 57%

29% 29% 31% 33% 31% 32% 33% 39% 34% 31%

13% 13% 16% 13% 13% 12% 12% 11% 12% 12%

0%

20%

40%

60%

80%

100%





47May 10, 2017

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 2010, Downgrade / Update Ratio: from 2009, Default rate: from 1999.

3 Trailing twelve months as of March 31, 2017.



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 5.3% 10.3% 6.8% 20.8% 9.9% 11.0% 12.4% 18.5%

B3-Neg / Lower 243 291 193 291 57 53 39 60

% B3-Neg / Lower 17% 20% 15% 26% 13.3% 12.2% 11.9% 17.2%

3-Year Refunding Index 3.8x 3.7x 6.4x 1.5x N/A N/A N/A N/A

Downgrade / Upgrade Ratio3 1.2x 3.1x 2.4x 11.7x 0.9x 1.7x 2.6x 20.5x

Covenant Quality Score 4.12 4.24 4.02 4.52 3.61 3.36 3.21 4.85

Default Rate (forecast) 3.0% 4.7% 4.7% 15.0% 1.8% 2.5% 3.8% 13.0%

North America Europe

48May 10, 2017

Revenue Growth by Quarter: MCO, MIS and MAYear-over-Year % Change

-20%

-10%

0%

10%

20%

30%

40%

50%

Q1'1

1

Q2'1

1

Q3'1

1

Q4'1

1

Q1'1

2

Q2'1

2

Q3'1

2

Q4'1

2

Q1'1

3

Q2'1

3

Q3'1

3

Q4'1

3

Q1'1

4

Q2'1

4

Q3'1

4

Q4'1

4

Q1'1

5

Q2'1

5

Q3'1

5

Q4'1

5

Q1'1

6

Q2'1

6

Q3'1

6

Q4'1

6

Q1'1

7

MIS MA MCO

(2%)

3%

16%

1%

6%

19%

15%

5%

1%

23%

13%

7%

12%

5%

2%

U.S

. debt ceili

ng s

tandoff

Fears

Euro

debt crisis

may

spre

ad to Ita

ly &

Spain

Crim

ean c

risis

Oil

prices c

rash

Euro

/ G

reece s

tandoff

Glo

bal m

acro

concern

s

(13%)

(6%)

11% 9%

1%

(2%)


27%

19%

6%

49May 10, 2017

$1.90$2.07

$2.27 $2.33 $2.37

$0.53$0.67

$0.0

$0.5

$1.0

$1.5

$2.0

$2.5

$0.0

$1.0

$2.0

$3.0

$4.0

$5.0

2012 2013 2014 2015 2016 1Q 2016 1Q 2017

Revenue $

Billio

ns

Issuance $

Trilli

ons

Global Non-Financial Bonds and US HY Bank Loans (L) Global Financial Bonds (L)

Global Structured Finance (L) U.S. Municipal Bonds (L)

MIS Revenue (R)

MIS Revenue vs. Rated Issuance1

» In addition to issuance activity levels, MIS revenue is impacted by (i) the mix of issuance activity, (ii) pricing

and (iii) growth in monitored credits

1 Rated global investment grade bonds, global high yield bonds, U.S. high yield bank loans, global structured finance, and U.S. municipal issuance.

Source: Moody’s Capital Markets Research Group, Dealogic, AB Alert, CM Alert, Thomson SDC. U.S. High Yield Bank Loans represent Moody’s rated new U.S. bank loan programs.

Year-over-Year

Percent Change2012 2013 2014 2015 2016

2012-2016

CAGR1Q 2017

Issuance 16% 0% 6% -6% 2% 3% 26%

Revenue 20% 9% 9% 3% 2% 6% 27%


50May 10, 2017

Moody’s is a Seasoned Capital Markets Issuer

» Successfully issued across the maturity curve and in multiple currencies (USD and EUR) and

formats (fixed and floating)

» Initial maturities ranging from 18-month to 30-year

0.0x

0.5x

1.0x

1.5x

2.0x

2.5x

3.0x

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

$4,500

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 TTM 1Q2017

$ M

illio

ns

Adjusted EBITDA (L) Total Debt Outstanding (L) Gross Debt/EBITDA (R)

Public Bond Offerings

» 2010: $500m 10yr bond

» 2012: $500m 10yr bond

» 2013: $500m 10yr bond

» 2014: $450m 5yr bond

$300m 30yr bond

» 2015: €500m 12yr bond

$300m 30yr bond3

» 2017: $500m 5yr bond

$300m 1.5yr floating rate note

1 Amount is an adjusted measure. See Appendix for a reconciliation of this adjusted financial measure to its comparable GAAP measure.

2 Debt outstanding at end of period.

3 On November 13, 2015, Moody’s issued $300 million of 5.25% senior unsecured notes due 2044 in a reopening of its existing series of such notes.


1 2

51May 10, 2017

Moody’s Global Presence

1 As of March 31, 2017.

2 As of March 31, 2016.

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

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

3,411 7,247 10,658

2017

3,441 7,311 10,752

2016


52May 10, 2017

Adjusted Operating Income and Adjusted Operating Margin Reconciliation

Reconciliation of Adjusted Financial Measures to GAAP

(in $ millions) 2012 2013 2014 2015 2016

TTM 1Q

2017

As Reported Operating Income $1,077.4 $1,234.6 $1,439.1 $1,473.4 $638.7 $778.0

Operating Margin 39.5% 41.5% 43.2% 42.3% 17.7% 20.7%

Add Adjustment:

Depreciation & Amortization 93.5 93.4 95.6 113.5 126.7 129.3

Restructuring - - - - 12.0 8.7

Goodwill Impairment Charge 12.2 - - - - -

Settlement Charge - - - - 863.8 863.8

Adjusted Operating Income $1,183.1 $1,328.0 $1,534.7 $1,586.9 $1,641.2 $1,779.8

Adjusted Operating Margin 43.3% 44.7% 46.0% 45.5% 45.5% 47.3%


Moody's Corporation Operating Margin Guidance Reconciliation

Moody's Corporation Free Cash Flow Guidance Reconciliation


2017F1

Projected Operating Margin - GAAP Approximately 43%

Projected impact from Depreciation

& Amortization Approximately 3%

Projected Adjusted Operating

Margin Approximately 46%

(in $ millions) 2017F1

Cash Flow from Operations Approximately $600 million

Less Capital Expenditures Approximately $100 million

Free Cash Flow Approximately $500 million

53May 10, 2017

Reconciliation of Adjusted Financial Measures to GAAP (cont.)

Moody's Corporation EPS Reconciliation

2012 2013 2014 2015 2016 2017F1

Diluted EPS - GAAP $3.05 $3.60 $4.61 $4.63 $1.36 $5.46 - $5.61

Legacy Tax (0.06) (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)

Adjusted Diluted EPS $2.99 $3.65 $4.21 $4.60 $4.81 $5.15 - $5.30


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


Moody's Corporation Adjusted Operating Expense Reconciliation

2017F1

Operating Expense Guidance Decreased in the 25% to 30% range

Impact of 2016 settlement and restructuring charge

Adjusted Operating Expense Guidance Increase in the mid-single-digit percent range

54May 10, 2017

Reconciliation of Adjusted Financial Measures to GAAP (cont.)

Moody's Corporation EBITDA Reconciliation

($ Millions) 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

TTM

1Q 20172

Net Income attributable to

Moody's $753.9 $701.5 $457.6 $402.0 $507.8 $571.4 $690.0 $804.5 $988.7 $941.3 $266.6 $427.8

Provision for Income Taxes $506.6 $415.0 $268.2 $239.1 $201.0 $261.8 $324.3 $353.4 $455.0 $430.0 $282.2 $298.6

Interest Expense, Net ($3.0) $24.3 $52.2 $33.4 $52.5 $62.1 $63.8 $91.8 $116.8 $115.1 $137.8 $146.1

Depreciation & Amortization $39.5 $42.9 $75.1 $64.1 $66.3 $79.2 $93.5 $93.4 $95.6 $113.5 $126.7 $129.3

EBITDA $1,297.0 $1,183.7 $853.1 $738.6 $827.6 $974.5 $1,171.6 $1,343.1 $1,656.1 $1,599.9 $813.3 $1,001.8

Net Settlement1 - - - - - - - - - - $700.7 $700.7

Net Restructuring1 - - - - - - - - - - $8.1 $5.9

Adjusted EBITDA $1,297.0 $1,183.7 $853.1 $738.6 $827.6 $974.5 $1,171.6 $1,343.1 $1,656.1 $1,599.9 $1,522.1 $1,708.4


1 Net of $163.1m tax on settlement charge and $3.9m and $2.8m tax on restructuring charge for full-year 2016 and TTM 1Q 2017, respectively.

2 Trailing twelve months as of March 31, 2017.

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

55May 10, 2017

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56May 10, 2017

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