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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

(MARK ONE)

☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE FISCAL YEAR ENDED December 31, 2020

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM TO .

COMMISSION FILE NUMBER 1-14037

MOODY’S CORPORATION

(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

Delaware			13-3998945
(STATE OF INCORPORATION)			(I.R.S. EMPLOYER IDENTIFICATION NO.)

7 World Trade Center at 250 Greenwich Street, New York, New York 10007

(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)

(ZIP CODE)

REGISTRANT’S TELEPHONE NUMBER, INCLUDING AREA CODE: (212) 553-0300.

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

TITLE OF EACH CLASS						TRADING SYMBOL(S)						NAME OF EACH EXCHANGE ON WHICH REGISTERED
Common Stock, par value $0.01 per share						MCO						New York Stock Exchange
1.75% Senior Notes Due 2027						MCO 27						New York Stock Exchange
0.950% Senior Notes Due 2030						MCO 30						New York Stock Exchange

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

NONE

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☑ No ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☑

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer			☑			Accelerated Filer ☐			Non-accelerated Filer ☐			Smaller reporting company			☐			Emerging growth company			☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C.7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☑

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☑

The aggregate market value of Moody’s Corporation Common Stock held by nonaffiliates* on June 30, 2020 (based upon its closing transaction price on the New York Stock Exchange on such date) was approximately $51 billion.

As of January 31, 2021, 187.1 million shares of Common Stock of Moody’s Corporation were outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Registrant’s definitive proxy statement for use in connection with its annual meeting of stockholders scheduled to be held on April 20, 2021, are incorporated by reference into Part III of this Form 10-K.

The Index to Exhibits is included as Part IV, Item 15(3) of this Form 10-K.

*Calculated by excluding all shares held by executive officers and directors of the Registrant without conceding that all such persons are “affiliates” of the Registrant for purposes of federal securities laws.

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MOODY’S CORPORATION

INDEX TO FORM 10-K

									Page(s)
			Glossary of Terms and Abbreviations						4-9
PART I.
Item 1.			BUSINESS						10
			Background						10
			The Company						10-15
			Human Capital						16-19
			Moody’s Strategy						20-21
			Prospects for Growth						22-24
			Competition						24
			Regulation						24-25
			Intellectual Property						26
			Available Information						26
			Executive Officers of the Registrant						27-28
Item 1A.			RISK FACTORS						29-39
Item 1B.			UNRESOLVED STAFF COMMENTS						40
Item 2.			PROPERTIES						40
Item 3.			LEGAL PROCEEDINGS						40
Item 4.			MINE SAFETY DISCLOSURES						40
PART II.
Item 5.			MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES						41
			Moody’s Purchases of Equity Securities						41
			Common Stock Information						41
			Equity Compensation Plan Information						41
			Performance Graph						42
Item 7.			MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS						43
			The Company						43
			Critical Accounting Estimates						44-49
			Reportable Segments						49
			Results of Operations						50-63
			Market Risk						63-64
			Liquidity and Capital Resources						65-70
			Recently Issued Accounting Pronouncements						71
			Contingencies						71
			Forward-Looking Statements						71
Item 7A.			QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK						72
Item 8.			FINANCIAL STATEMENTS						73-130
Item 9.			CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE						131
Item 9A.			CONTROLS AND PROCEDURES						131

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									Page(s)
Item 9B.			OTHER INFORMATION						131
PART III.
Item 10.			DIRECTORS, EXECUTIVE OFFICERS AND CORPORATION GOVERNANCE						132
Item 11.			EXECUTIVE COMPENSATION						132
Item 12.			SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS						132
Item 13.			CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE						132
Item 14.			PRINCIPAL ACCOUNTING FEES AND SERVICES						132
PART IV.
Item 15.			EXHIBITS AND FINANCIAL STATEMENT SCHEDULES						133
INDEX TO EXHIBITS									133-137
Item 16.			FORM 10-K SUMMARY						137
SIGNATURES									138

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GLOSSARY OF TERMS AND ABBREVIATIONS

The following terms, abbreviations and acronyms are used to identify frequently used terms in this report:

TERM						DEFINITION
ABS Suite						Business acquired by the Company in October 2019 which includes a software platform used by issuers and trustees for administration of asset-backed and mortgage-backed securities programs
Acquire Media (AM)						An aggregator and distributor of curated real-time news, multimedia, data, and alerts; acquired by the Company on October 21, 2020
Acquisition-Related Amortization						Amortization of definite-lived intangible assets acquired by the Company from all business combination transactions
Acquisition-Related Expenses						Consists of expenses incurred over a multi-year period to complete and integrate the acquisition of Bureau van Dijk
Adjusted Diluted EPS						Diluted EPS excluding the impact of certain items as detailed in the section entitled “Non-GAAP Financial Measures”
Adjusted Net Income						Net Income excluding the impact of certain items as detailed in the section entitled “Non-GAAP Financial Measures”
Adjusted Operating Income						Operating income excluding the impact of certain items as detailed in the section entitled "Non-GAAP Financial Measures"
Adjusted Operating Margin						Adjusted Operating Income divided by revenue
Americas						Represents countries within North and South America, excluding the U.S.
AML						Anti-money laundering
AOCI						Accumulated other comprehensive income (loss); a separate component of shareholders’ equity (deficit)
API						Application Programming Interface
ASC						The FASB Accounting Standards Codification; the sole source of authoritative GAAP as of July 1, 2009 except for rules and interpretive releases of the SEC, which are also sources of authoritative GAAP for SEC registrants
Asia-Pacific						Represents Australia and countries in Asia including but not limited to: China, India, Indonesia, Japan, Korea, Malaysia, Singapore, Sri Lanka and Thailand
ASR						Accelerated Share Repurchase
ASU						The FASB Accounting Standards Update to the ASC. It also provides background information for accounting guidance and the bases for conclusions on the changes in the ASC. ASUs are not considered authoritative until codified into the ASC
B&H						Barrie & Hibbert Limited, an acquisition completed in December 2011; part of the MA segment, a leading provider of risk management modeling tools for insurance companies worldwide
Board						The board of directors of the Company
BPS						Basis points
Brexit						The withdrawal of the United Kingdom from the European Union
Bureau van Dijk						Bureau van Dijk Electronic Publishing, B.V.; a global provider of business intelligence and company information; acquired by the Company on August 10, 2017 via the acquisition of Yellow Maple I B.V., an indirect parent of Bureau van Dijk; part of the RD&A LOB and a reporting unit within the MA reportable segment
Catylist						A provider of commercial real estate (CRE) solutions for brokers; acquired by the Company on December 30, 2020
CCXI						China Cheng Xin International Credit Rating Co. Ltd.; China’s first and largest domestic credit rating agency approved by the People’s Bank of China; the Company acquired a 49% interest in 2006; currently Moody’s owns 30% of CCXI.

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TERM						DEFINITION
CFG						Corporate finance group; an LOB of MIS
CLO						Collateralized loan obligation
CMBS						Commercial mortgage-backed securities; an asset class within SFG
COLI						Corporate-Owned Life Insurance
Commission						European Commission
Common Stock						The Company’s common stock
Company						Moody’s Corporation and its subsidiaries; MCO; Moody’s
Content						A reporting unit within the MA segment that offers subscription based research, data and analytical products, including credit ratings produced by MIS, credit research, quantitative credit scores and other analytical tools, economic research and forecasts
COVID-19						An outbreak of a novel strain of coronavirus resulting in an international public health crisis and a global pandemic
CP						Commercial Paper
CP Notes						Unsecured commercial paper issued under the CP Program
CP Program						A program entered into on August 3, 2016 allowing the Company to privately place CP up to a maximum of $1 billion for which the maturity may not exceed 397 days from the date of issue and which is backstopped by the 2018 Facility.
CRAs						Credit rating agencies
DBPPs						Defined benefit pension plans
Dodd-Frank Act						Dodd-Frank Wall Street Reform and Consumer Protection Act
EBITDA						Earnings before interest, taxes, depreciation and amortization
EMEA						Represents countries within Europe, the Middle East and Africa
EPS						Earnings per share
ERS						Enterprise Risk Solutions; an LOB within MA, which offers risk management software solutions as well as related risk management advisory engagements services
ESA						Economics and Structured Analytics; part of the RD&A line of business within MA
ESG						Environmental, Social and Governance
ESMA						European Securities and Markets Authority
ESPP						Employee stock purchase plan
ETR						Effective tax rate
EU						European Union
EUR						Euros
EURIBOR						The Euro Interbank Offered Rate
Eurozone						Monetary union of the EU member states which have adopted the euro as their common currency
Excess Tax Benefits						The difference between the tax benefit realized at exercise of an option or delivery of a restricted share and the tax benefit recorded at the time the option or restricted share is expensed under GAAP
Exchange Act						The Securities Exchange Act of 1934, as amended
External Revenue						Revenue excluding any intersegment amounts
FASB						Financial Accounting Standards Board
Fermat						Fermat International; an acquisition completed in October 2008; part of the MA segment; a provider of risk and performance management software to the global banking industry

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TERM						DEFINITION
FIG						Financial institutions group; an LOB of MIS
Four Twenty Seven						A provider of data, intelligence, and analysis related to physical climate risks; acquired by the Company in July 2019
Free Cash Flow						Net cash provided by operating activities less cash paid for capital additions
FTSE						Financial Times Stock Exchange
FX						Foreign exchange
GAAP						U.S. Generally Accepted Accounting Principles
GBP						British pounds
GDP						Gross domestic product
GDPR						European Union’s General Data Protection Regulation
ICRA						ICRA Limited; a provider of credit ratings and research in India.
INR						Indian Rupee
IRS						Internal Revenue Service
IT						Information technology
KIS						Korea Investors Service, Inc.; a Korean rating agency and consolidated subsidiary of the Company
KIS Pricing						Korea Investors Service Pricing, Inc.; a Korean provider of fixed income securities pricing and consolidated subsidiary of the Company
KIS Research						Korea Investors Service Research; a Korean provider of financial research and consolidated subsidiary of the Company
Korea						Republic of South Korea
KYC						Know-your-customer
LIBOR						London Interbank Offered Rate
LOB						Line of business
MA						Moody’s Analytics—a reportable segment of MCO; a global provider of data and analytic solutions which help companies make better and faster decisions; consists of two LOBs—RD&A and ERS
Make Whole Amount						The prepayment penalty amount relating to certain Senior Notes, which is a premium based on the excess, if any, of the discounted value of the remaining scheduled payments over the prepaid principal
MAKS						Moody’s Analytics Knowledge Services; formerly known as Copal Amba; provides offshore research and analytic services to the global financial and corporate sectors; formerly part of the PS LOB within the MA reportable segment; this business was divested in November 2019
MALS						Moody’s Analytics Learning Solutions; a reporting unit within the MA segment that includes on-line and classroom-based training services as well as credentialing and certification services
MCO						Moody’s; Moody’s Corporation and its subsidiaries; the Company
MD&A						Management’s Discussion and Analysis of Financial Condition and Results of Operations
MESG						Moody's ESG Solutions Group
MIS						Moody’s Investors Service—a reportable segment of MCO; consists of five LOBs—SFG, CFG, FIG, PPIF and MIS Other
MIS Other						Consists of non-ratings revenue from ICRA, KIS Pricing and KIS Research revenue as well as revenue from providing ESG research, data and assessments. These businesses are components of MIS; MIS Other is an LOB of MIS
Moody’s						Moody’s Corporation and its subsidiaries; MCO; the Company

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TERM						DEFINITION
MSS						Moody's Shared Services; primarily consists of information technology and support staff such as finance, human resources and legal that support both MIS and MA.
NAV						Net asset value
Net Income						Net income attributable to Moody’s Corporation, which excludes net income from consolidated noncontrolling interests belonging to the minority interest holder
New Credit Losses Accounting Standard						Updates to the ASC pursuant to ASU No. 2016-13, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”. This new accounting guidance requires the use of an “expected credit loss” impairment model for most financial assets reported at amortized cost, which will require entities to estimate expected credit losses over the lifetime of the instrument.
New Lease Accounting Standard						Updates to the ASC pursuant to ASU No. 2016-02, “Leases (ASC Topic 842)”. This new accounting guidance requires lessees to recognize a right-of-use asset and lease liability on the balance sheet for all leases with terms of more than 12 months. Recognition, measurement and presentation of expenses and cash flows depend on classification as either a finance or operating lease
N/A						Not applicable
NM						Percentage change is not meaningful
Non-GAAP						A financial measure not in accordance with GAAP; these measures, when read in conjunction with the Company’s reported results, can provide useful supplemental information for investors analyzing period-to-period comparisons of the Company’s performance, facilitate comparisons to competitors’ operating results and to provide greater transparency to investors of supplemental information used by management in its financial and operational decision making
NRSRO						Nationally Recognized Statistical Rating Organization, which is a credit rating agency registered with the SEC.
OCI						Other comprehensive income (loss); includes gains and losses on cash flow and net investment hedges, certain gains and losses relating to pension and other retirement benefit obligations and foreign currency translation adjustments
Omega Performance						A provider of online credit training; acquired by the Company in August 2018
Operating segment						Term defined in the ASC relating to segment reporting; the ASC defines an operating segment as a component of a business entity that has each of the three following characteristics: i) the component engages in business activities from which it may recognize revenue and incur expenses; ii) the operating results of the component are regularly reviewed by the entity’s chief operating decision maker; and iii) discrete financial information about the component is available.
Other Retirement Plans						The U.S. retirement healthcare and U.S. retirement life insurance plans
PCS						Post-Contract Customer Support
PPIF						Public, project and infrastructure finance; an LOB of MIS
Profit Participation Plan						Defined contribution profit participation plan that covers substantially all U.S. employees of the Company
PS						Professional Services, a former LOB within MA which consisted of MAKS and MALS that provided offshore analytical and research services as well as learning solutions and certification programs. Subsequent to the divestiture of MAKS in 2019, revenue from the MALS reporting unit, which previous to 2020 was reported in the PS LOB, is now reported as part of the RD&A LOB. Prior periods have not been reclassified as the amounts were not material.
RD&A						Research, Data and Analytics; an LOB within MA that offers: subscription based research, data and analytical products, including credit ratings produced by MIS; credit research; quantitative credit scores and other analytical tools; economic research and forecasts; business intelligence and company information products; commercial real estate data and analytical tools; and on-line and classroom-based training services as well as credentialing and certification services
Redeemable Non-controlling Interest						Represents minority shareholders' interest in entities which are controlled but not wholly-owned by Moody's and for which Moody's obligation to redeem the minority shareholders' interest is represented by a put/call relationship

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TERM						DEFINITION
Reform Act						Credit Rating Agency Reform Act of 2006
Regulatory Data Corporation (RDC)						A provider of anti-money laundering (AML) and know-your-customer (KYC) data and due diligence services; the Company acquired RDC in February 2020
REIT						Real Estate Investment Trust
Reis, Inc. (Reis)						A provider of U.S. commercial real estate (CRE) data; acquired by the Company in October 2018; part of the RD&A LOB and a reporting unit within the MA reportable segment.
Relationship Revenue						For MIS, represents recurring monitoring fees of a rated debt obligation and/or entities that issue such obligations, as well as revenue from programs such as commercial paper, medium-term notes and shelf registrations. For MIS Other represents subscription-based revenue. For MA, represents subscription-based revenue and software maintenance revenue
Reporting unit						The level at which Moody’s evaluates its goodwill for impairment under U.S. GAAP; defined as an operating segment or one level below an operating segment
Retirement Plans						Moody’s funded and unfunded pension plans, the healthcare plans and life insurance plans
Revenue Accounting Standard						Updates to the ASC pursuant to ASU No. 2014-09, “Revenue from Contracts with Customers (ASC Topic 606)”. This new accounting guidance significantly changes the accounting framework under U.S. GAAP relating to revenue recognition and to the accounting for the deferral of incremental costs of obtaining or fulfilling a contract with a customer
RiskFirst						A company providing risk analytic solutions for the asset management and pension fund communities; acquired by the Company in July 2019
RMBS						Residential mortgage-backed securities; an asset class within SFG
ROU Asset						Assets recorded pursuant to the New Lease Accounting Standard which represent the Company’s right to use an underlying asset for the term of a lease
SaaS						Software-as-a-Service
SEC						U.S. Securities and Exchange Commission
Securities Act						Securities Act of 1933, as amended
SFG						Structured finance group; an LOB of MIS
SG&A						Selling, general and administrative expenses
SSP						Standalone selling price
T&M						Time-and-Material
Tax Act						The “Tax Cuts and Jobs Act” enacted into U.S. law on December 22, 2017, which significantly amends the tax code in the U.S.
Total Debt						All indebtedness of the Company as reflected on the consolidated balance sheets
Transaction Revenue						For MIS, represents the initial rating of a new debt issuance as well as other one-time fees. For MIS Other, represents revenue from professional services as well as data services, research and analytical engagements. For MA, represents perpetual software license fees and revenue from software implementation services, risk management advisory projects, training and certification services, and research and analytical engagements
U.K.						United Kingdom
U.S.						United States
USD						U.S. dollar
UTPs						Uncertain tax positions
Vigeo Eiris (VE)						A provider of Environmental, Social and Governance (ESG) research, data and assessments; acquired by the Company in April 2019
WACC						Weighted Average Cost of Capital

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TERM						DEFINITION
ZM Financial Systems (ZMFS)						A provider of risk and financial management software for the U.S. banking sector; acquired by the Company in December 2020
2018 Restructuring Program						Restructuring program approved by the chief executive officer of Moody’s on October 26, 2018. This program included relocation of certain functions from high-cost to lower-cost jurisdictions, a reduction of staff, including from acquisitions and pursuant to a review of the business criticality of certain positions, and the rationalization and exit of certain real estate leases due to consolidation of various business activities.
2020 MA Strategic Reorganization Restructuring Program						Restructuring program approved by the chief executive officer of Moody’s on December 22, 2020, relating to a strategic reorganization in the MA reportable segment.
2020 Real Estate Rationalization Restructuring Program						Restructuring program approved by the chief executive officer of Moody’s on July 29, 2020, primarily in response to the COVID-19 pandemic which revolves around the rationalization and exit of certain real estate leases.
2012 Senior Notes						Principal amount of $500 million, 4.50% senior unsecured notes due in September 2022
2013 Senior Notes						Principal amount of $500 million, 4.875% senior unsecured notes due in February 2024
2014 Senior Notes						Principal amount of $600 million, 5.25% senior unsecured notes due in July 2044
2015 Senior Notes						Principal amount of €500 million, 1.75% senior unsecured notes due in March 2027
2017 Senior Notes Due 2023						Principal amount of $500 million, 2.625% senior unsecured notes due January 15, 2023
2017 Senior Notes Due 2028						Principal amount of $500 million, 3.25% senior unsecured notes due January 15, 2028
2017 Senior Notes Due 2021						Principal amount of $500 million, 2.75% senior unsecured notes originally due in December 2021, but early repaid by the Company in 2020.
2018 Facility						Five-year unsecured revolving credit facility, with capacity to borrow up to $1 billion; backstops CP issued under the CP Program
2018 Senior Notes						Principal amount of $300 million, 3.25% senior unsecured notes originally due in June 2021, but early repaid by the Company in 2020.
2018 Senior Notes Due 2029						Principal amount of $400 million, 4.25% senior unsecured notes due February 1, 2029
2018 Senior Notes Due 2048						Principal amount of $400 million, 4.875% senior unsecured notes due December 17, 2048
2019 Senior Notes						Principal amount of €750 million, 0.950% senior unsecured notes due in February 25, 2030
2020 Senior Notes Due 2025						Principal amount of $700 million, 3.75% senior unsecured notes due March 24, 2025
2020 Senior Notes Due 2050						Principal amount of $300 million, 3.25% senior unsecured notes due May 20, 2050
2020 Senior Notes Due 2060						Principal amount of $500 million, 2.55% senior unsecured notes due August 18, 2060
7WTC						The Company’s corporate headquarters located at 7 World Trade Center in New York, NY

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PART I