Moody's (MCO) 10-K risk factor changes: FY2020 vs FY2019

[removed: A.Legal] [added: Legal] and Regulatory Risks

[removed: These] [added: The current] laws and regulations:

–seek to encourage, and may result in, increased competition among [removed: rating agencies] [added: CRAs] and in the credit rating business;

–provide [removed: for direct jurisdiction of] the SEC [added: with direct jurisdiction] over CRAs that seek NRSRO status, and grant authority to the SEC to inspect the operations of CRAs; and

[removed: –authorize the adoption of] [added: –provide for] enhanced oversight standards and [removed: new] [added: specialized] pleading standards, which may result in increases in the number of legal proceedings claiming liability for losses suffered by investors on rated securities and aggregate legal defense costs.

For example, new laws and regulations may affect MIS’s communications with issuers as part of the rating assignment process, alter the manner in which MIS’s [added: credit] ratings are developed, assigned and communicated, affect the manner in which MIS or its customers or users of credit ratings operate, impact the demand for MIS’s [added: credit] ratings and alter the economics of the credit ratings business, including by restricting or mandating business models for [removed: rating agencies.][added: CRAs.]

Although these legislative and regulatory initiatives apply to [removed: rating agencies] [added: CRAs] and credit markets generally, they may affect Moody’s in a disproportionate manner.

[Table [removed: of Contents](#i_0_7)][added: of](#i764aab6d00b34fe7b9dd0fc7012d6e15_7) [Contents](#i764aab6d00b34fe7b9dd0fc7012d6e15_7)]

In addition, MA derives a significant amount of its sales [removed: in the ERS and Professional Services LOBs] from banks and other financial services providers who are subject to regulatory oversight.

In addition to the extensive and evolving U.S. laws and regulations governing the industry, foreign jurisdictions have taken measures to [removed: increase regulation of rating agencies] [added: regulate CRAs] and the markets for [added: credit] ratings.

In particular, the EU has adopted a common regulatory framework for [removed: rating agencies] [added: CRAs] operating in the [removed: EU.][added: EU and continues to monitor the credit rating industry and analyze approaches that may strengthen existing regulation.]

[removed: Applicable] [added: –In the EU, applicable] rules include procedural requirements with respect to ratings of sovereign issuers, liability for intentional or grossly negligent failure to abide by applicable regulations, mandatory rotation requirements of CRAs hired by issuers of securities for ratings of resecuritizations, and restrictions on CRAs or their shareholders if certain ownership thresholds are crossed.

[removed: Compliance] [added: For example, compliance] with the EU [added: and other foreign] regulations may increase costs of operations and could have a significant negative effect on Moody’s operations, profitability or ability to compete, or the markets for its products and services, including in ways that Moody’s presently is unable to predict.

In addition, exposure to increased liability under the EU regulations [added: and regulations of other foreign jurisdictions] may further increase costs and legal risks associated with the issuance of credit ratings and materially and adversely impact Moody’s results of operations.

[removed: In addition,] [added: With respect to MA,] regulators in Europe and other foreign markets in which MA is active have issued guidance similar to that issued in the U.S. relating to financial institutions’ assessment and management of risks associated with third-party relationships.

[removed: The EU and other jurisdictions engage in rulemaking on an ongoing basis that could significantly impact operations or the markets for Moody’s products and services, including regulations extending to products and services not currently regulated and] [added: These] regulations [removed: affecting] [added: could: (i) affect] the need for debt securities to be rated, [removed: expansion of] [added: (ii) expand] supervisory [removed: remit] [added: remits] to include non-EU ratings used for regulatory purposes, [removed: increasing] [added: (iii) increase] the level of competition in the market for credit ratings, [removed: establishing] [added: (iv) establish] criteria for credit ratings or [removed: limiting] [added: limit] the entities authorized to provide credit ratings, [removed: regulation] [added: and (iv) restrict the collection, use, accuracy, correction and sharing] of [added: personal information by CRAs, or (v) regulate] pricing (such that fees that are based on costs and are non-discriminatory) on [removed: activities] [added: products and services] provided by MA such as [removed: the distribution of] [added: those products that incorporate] ratings and [removed: research, and laws and regulations related to collection, use, accuracy, correction and sharing of personal information] [added: research originated] by [removed: CRAs.][added: MIS.]

Although Moody’s will monitor [removed: these developments,] [added: developments related to financial reforms outside the U.S. affecting the credit rating industry and] Moody’s [added: customers, Moody’s] cannot predict the extent of such future laws and regulations, and the effect that they will have on Moody’s business or the potential for increased exposure to liability could be significant.

Moody’s faces exposure to litigation and government and regulatory proceedings, investigations and inquiries related to MIS’s ratings actions, as well as other business practices and [removed: products.][added: products within both MIS and MA.]

[added: For instance,] Moody’s [removed: has] faced numerous class action lawsuits and other litigation, government investigations and inquiries concerning events linked to the U.S. subprime residential mortgage sector and broader deterioration in the credit markets during the financial crisis of 2007-2008.

See Note [removed: 22] [added: 21] to the consolidated financial statements for more information regarding ongoing investigations and civil litigation that the Company currently faces.

The Company’s ability to comply with applicable laws and regulations, including [removed: anti-corruption] [added: anti-corruption, antitrust and securities trading] laws, is largely dependent on its establishment and maintenance of compliance, review and reporting systems, as well as its ability to attract and retain qualified compliance and risk management personnel.

If Moody’s employees violate its policies or if the Company’s risk management methods are not effective, the Company [removed: could] [added: may] be subject to criminal and civil liability, the suspension of the Company’s employees, fines, penalties, regulatory sanctions, injunctive relief, exclusion from certain markets or other penalties, and may suffer harm to its reputation, financial condition and operating results.

As a result, our effective tax rate is determined based on the [removed: pre-tax] [added: taxable] income and applicable tax rates in the various jurisdictions in which the Company operates.

Many aspects of the [removed: new] legislation [removed: are currently] [added: remain] uncertain or unclear and may not be clarified for some time.

Furthermore, the Tax Act may impact the volume of debt securities issued as discussed in the Risk Factor, [removed: Changes] [added: *Changes] in the Volume of Debt Securities Issued in Domestic and/or Global Capital Markets, Asset Levels and Flows into Investment Levels and Changes in Interest Rates and Other Volatility in the Financial Markets May Negatively Impact the Nature and Economics of the Company’s [removed: Business.][added: Business*.]

For example, economic uncertainty in the Eurozone or elsewhere, [removed: including] [added: including, but not limited to,] in Latin America or China, affects the number of securities offerings undertaken within those particular areas.

–the transition away from [added: benchmark reference rates based on market participant judgements, such as] LIBOR [added: and EURIBOR,] to [added: rates based on observable transactions, such as] the Secured Overnight Financing [removed: Rate, SOFR, as a benchmark reference for short-term interests;][added: Rate (SOFR);]

–competition with [removed: local rating agencies] [added: CRAs] that have greater familiarity, longer operating histories and/or support from local governments or other institutions;

–difficulties in staffing and managing foreign operations, including [removed: the expected] [added: potential] relocation and/or restaffing of employees [removed: due to] [added: as a result of] Brexit;

–difficulties and delays in translating documentation into foreign languages; [removed: and]

–potentially adverse tax [removed: consequences.][added: consequences; and]

Additionally, Moody’s is subject to complex U.S., foreign and other local laws and regulations that are applicable to its operations abroad, such as [added: laws and regulations governing economic and trade sanctions, tariffs, embargoes, and anticorruption laws including] the Foreign Corrupt Practices Act of 1977, the U.K. Bribery Act of 2010 and other [removed: anti-bribery and anti-corruption] [added: similar local] laws.

Any determination that the Company has violated [added: sanctions,] anti-bribery or anti-corruption laws could have a material adverse effect on Moody’s business, operating results and financial condition.

Any significant failure, compromise, cyber-breach, interruption or a significant slowdown of operations of the Company’s infrastructure, whether due to human error, capacity constraints, hardware failure or defect, weather (including climate change), natural disasters, fire, power loss, telecommunication failures, break-ins, sabotage, intentional acts of vandalism, acts of terrorism, political unrest, [removed: pandemic,] [added: pandemic (including the COVID-19 pandemic),] war or otherwise, may impair the Company’s ability to deliver its products and services.

To the extent any of the Company’s third-party providers ceases to provide these services in an efficient, cost-effective manner or fails to adequately expand its services to meet the Company’s needs and the needs of the Company’s [removed: customers,] [added: customers (including as a result of] the [added: COVID-19 pandemic), the] Company could experience lower revenues and higher costs.

Economic and government factors such as a long-term continuation of difficult economic conditions, [removed: a re-emergence of] the [removed: sovereign debt crisis in Europe, the ultimate impact] [added: scaling back, wind-down or termination] of [removed: Brexit] [added: COVID-19 economic stimulus] and [added: support programs, and] current uncertainty in various other jurisdictions, may have an adverse impact on the Company’s business.

There is price competition in the credit rating, research, [added: and] credit risk management markets, [removed: research] [added: as well as in the market for research, business intelligence] and analytical services [removed: and financial training and certification services.][added: offered by MA.]

At the same time, a challenging business environment and consolidation among [added: both competitors and] customers, particularly those involved in structured finance [removed: products,] [added: products] and [added: commercial real estate, and] other factors affecting demand may enhance the market power of competitors and reduce the Company’s customer base.

Factors that may have already affected credibility and could potentially continue to have an impact in this regard include the appearance of a conflict of interest, the performance of securities relative to the rating assigned to such securities, the timing and nature of changes in ratings, a major compliance failure, negative perceptions or publicity and increased criticism by users of ratings, regulators and legislative bodies, including as to the ratings [removed: process] [added: process, including as to the Company’s recent ESG initiatives,] and its implementation with respect to one or more securities and intentional, poor representation of our products and services by our partners or agents or unintentional misrepresentations of Moody’s products and services in advertising materials, public relations information, social media or other external communications.

The Introduction of Competing [removed: Products or] [added: Products,] Technologies [added: or Services] by Other Companies Can Negatively Impact the Nature and Economics of the Company’s Business.

In addition to the effects of the COVID-19 pandemic and resulting global disruptions on our business and operations discussed in Item 7 of this Form 10-K and in the risk factors below, additional or unforeseen effects from the COVID-19 pandemic and the global economic climate may give rise to or amplify many of these risks discussed below.

A.

Additionally, the change in the Presidential administration and changes in Congress may increase the uncertainty with regard to potential changes in these laws and regulations and the enforcement of any new or existing legislation or directives by government authorities.

MOODY'S 2020 10-K 29

Ratings emanating from outside the EU are subject to ESMA’s oversight if they are endorsed into the EU.

Additionally, other foreign jurisdictions have recently taken measures to increase regulation of rating agencies and markets for ratings.

The EU and other jurisdictions, as discussed further below, adopt legislation and engage in rulemaking on an ongoing basis that significantly impacts operations and the markets for the Company's products and services.

Future laws and regulations could extend to products and services not currently regulated.

Future regulations could also affect products and services the Company offers in the ESG sector (including those offered by Moody’s ESG Solutions Group).

The U.K. left the EU on January 31, 2020, thereby entering an 11-month implementation period.

The Brexit implementation period ended on December 31, 2020.

Following the Brexit implementation period, the MIS U.K. registered CRA ceased to be registered with and regulated by ESMA and became subject to regulation by the U.K. Financial Conduct Authority.

Regulatory arrangements put in place in both the U.K. and the EU allow credit ratings to be available for regulatory use in both the EU and the U.K. after the end of the Brexit-implementation period.

MIS has put arrangements in place to endorse its U.K. credit ratings into the EU and its EU credit ratings into the U.K. The U.K. and the EU are expected to agree by March 2021 to a memorandum of understanding establishing the framework for structured regulatory cooperation on financial services.

The contents and extent of the memorandum of understanding are currently unclear, and therefore the impact on Moody’s customers and other stakeholders is currently uncertain.

Both of Moody’s segments face risks related to financial reforms outside the U.S. affecting the credit rating industry and Moody’s customers.

MIS is a registered entity and is therefore subject to formal regulation and periodic or other inspections in the EU and other foreign jurisdictions, such as, but not limited to, Hong Kong and China, where it operates through registered subsidiaries.

For example:

30 MOODY'S 2020 10-K

[Table of](#i764aab6d00b34fe7b9dd0fc7012d6e15_7) [Contents](#i764aab6d00b34fe7b9dd0fc7012d6e15_7)

–In Hong Kong, applicable rules include liability for the intentional or negligent dissemination of false and misleading information and procedural requirements for the notification of certain matters to regulators.

In addition, MIS Hong Kong is subject to a code of conduct applicable to CRAs that impose procedural and substantive requirements on the preparation and issuance of credit ratings, restrictions on activities deemed to create a conflict of interest including the disclosure of its compensation arrangements with rated entities and special requirements for the rating of structured finance instruments.

A failure to comply with these procedural and substantive requirements also exposes MIS Hong Kong to the risk of regulatory enforcement action which could result in financial penalties or, in serious cases, its ability to conduct credit rating activities in Hong Kong.

–In China, while MIS is not a licensed credit rating agency, it does issue global credit ratings from offices outside of China regarding Chinese issuers.

In addition, the Company holds a 30% investment in a credit rating agency licensed in China.

China has laws applicable to domestic credit rating agencies as well as foreign investment in such entities and entities in general (including national security review).

Such laws are broadly crafted and the implementation and interpretation of such laws are subject to the broad discretion of Chinese regulators, which could affect our ability to conduct business in China.

–In addition, U.S. economic sanctions have increasingly targeted Chinese persons.

In response, China recently issued a blocking statute that establishes a framework for limiting the effect of foreign sanctions on Chinese persons.

Blocking statutes typically create conflicts of law.

An entity that is subject to conflicting laws in multiple jurisdictions may need to determine a means to comply with such laws.

Such conflicts could eventually affect the ability of entities to adhere to applicable laws.

MOODY'S 2020 10-K 31

[Table of](#i764aab6d00b34fe7b9dd0fc7012d6e15_7) [Contents](#i764aab6d00b34fe7b9dd0fc7012d6e15_7)

The lack of strong legal and technological intellectual property protections in foreign jurisdictions in which we operate may increase our vulnerability and may pose risks to our business.

From time to time, laws are passed that require publication of certain information, in some cases at no cost, that the Company considers to be its intellectual property and that it currently sells or licenses for a fee, which could result in lost revenue.

32 MOODY'S 2020 10-K

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Additionally, a change in the Presidential administration and changes in Congress increase the uncertainty with regard to potential changes in the U.S. federal tax laws and the interpretation or enforcement of legislation or directives by tax authorities.

–uncertainty regarding the future relationship between the U.S. and China, which may result in further restrictions or actions by the U.S. government with respect to doing business in China and/or by the Chinese government with respect to business conducted by foreign entities in China;

In addition, the global economic climate amplifies many of these risks.

MOODY'S 2019 10-K 17

As a result, ESMA has direct supervisory authority for CRAs in the EU and has the power to take enforcement action against non-compliant CRAs, including through the issuance of public notices, withdrawal of registration and, in some cases, the imposition of fines.

Although the Commission published a report in 2016 concluding that no new European legislation was needed for the industry at that time, the report also stated that it would continue to monitor the credit rating industry and analyze approaches that may strengthen existing regulation.

For example, in 2018, ESMA published final guidance on the applicability of EU regulation to endorsed ratings which became effective on January 1, 2019.

MIS is a registered entity and is therefore subject to formal regulation and periodic inspection in the EU.

Such guidelines include the European Banking Authority’s Guidelines on Outsourcing which became effective on September 30, 2019.

18 MOODY'S 2019 10-K

On January 6, 2015, a rule with direct relevance to the CRA industry was published in the Official Journal of the European Union regarding the types of information that CRAs are to provide about certain ratings (those that were paid for by issuers) for publication on a central website administered by ESMA (the European Ratings Platform).

This rule directly relates to the Company’s intellectual property as it requires that the Company provide proprietary information at no cost that the Company currently sells, which could result in lost revenue.

ESMA launched the European Rating Platform for public use on December 1, 2016.

MOODY'S 2019 10-K 19

20 MOODY'S 2019 10-K

MOODY'S 2019 10-K 21

22 MOODY'S 2019 10-K

Moody’s is highly dependent on the continued services of Raymond W.

If Moody’s is unsuccessful in completing such transactions on favorable terms or if opportunities for expansion do not arise, its business, operating results and financial condition could be materially adversely affected.

Such investments may not be successful or may not result in the anticipated benefits resulting in asset write-offs.

MOODY'S 2019 10-K 23

In August 2017, Moody’s acquired Bureau van Dijk for $3,542 million.

The anticipated synergies of the Bureau van Dijk acquisition, as well as other completed transactions, may not be fully realized due to a variety of factors.

At December 31, 2019, Moody’s had $3,722 million of goodwill and $1,498 million of intangible assets on its balance sheet, both of which increased significantly due to the acquisition of Bureau van Dijk in 2017.

C.

24 MOODY'S 2019 10-K

Legislators have stated that they intend to propose amendments to the CCPA before it goes into effect, and it remains unclear what, if any, modifications will be made to this legislation or how it will be interpreted.

MOODY'S 2019 10-K 25

See “Forward-Looking Statements” commencing on page [removed: 59] [added: 71] and Item 1A.

“Risk Factors” commencing on page [removed: 17] [added: 29] for a discussion of uncertainties, risks and other factors associated with these statements.

Moody’s reports in two [removed: reportable] segments: MIS and MA.

[removed: MIS, the credit rating agency,] [added: MIS] publishes credit ratings and provides assessment services on a wide range of debt [removed: obligations] [added: obligations, programs] and [added: facilities, and] the entities that issue such obligations in markets [removed: worldwide.][added: worldwide, including various corporate, financial institution and governmental obligations, and structured finance securities.]

Additionally, MIS earns revenue from certain non-ratings-related operations, which consist primarily of financial instrument pricing services in the Asia-Pacific [removed: region as well as] [added: region,] revenue from [added: providing ESG research, data and assessments and revenue from] ICRA’s non-ratings operations.

The Company has seven primary reporting units at December 31, [removed: 2019:] [added: 2020:] two within the Company’s ratings business (one for the ICRA business and one that encompasses all of Moody’s other ratings operations) and five reporting units within MA: Content, ERS, MALS, Bureau van Dijk and Reis.

The Bureau van Dijk reporting unit primarily consists of the Bureau van Dijk [removed: business,] [added: business] and [removed: primarily] [added: the newly acquired RDC and AM businesses, and] provides business intelligence and company information products.

The Reis reporting unit, which consists of the [added: Reis business and] newly acquired [removed: Reis] [added: Catylist] business, provides commercial real estate market information and analytical tools.

[Table [removed: of Contents](#i_0_7)][added: of](#i764aab6d00b34fe7b9dd0fc7012d6e15_7) [Contents](#i764aab6d00b34fe7b9dd0fc7012d6e15_7)]

If the fair value of the reporting unit exceeds the carrying value of the net assets assigned to that unit, goodwill is not [removed: impaired and the Company is not required to perform further testing.][added: impaired.]

The Company evaluates its reporting units on an annual basis, or more frequently if there are changes in the reporting structure of the Company due to acquisitions, realignments [added: of reporting units] or if there are indicators of potential impairment.

[removed: The quantitative assessments did] [added: For each reporting unit analyzed, an increase in the WACC of one percentage point would] not result in the carrying value of the reporting unit exceeding its fair value.

The qualitative [removed: analysis for Reis] [added: analyses] resulted in the Company determining that it was not more likely than not that the fair value of [removed: the Reis] [added: any] reporting unit was less than its carrying amount.

The following table identifies the amount of goodwill allocated to each reporting unit as of December 31, [removed: 2019] [added: 2020] and the amount by which the net assets of each reporting unit would exceed the fair value under Step 2 of the goodwill impairment test as prescribed in ASC Topic 350, assuming hypothetical reductions in their fair values as of the date of the last quantitative goodwill impairment assessment for each reporting unit [removed: (July] [added: (June 30, 2020 for ICRA and Reis; July] 31, 2019 for all [added: remaining] reporting [removed: units except Reis).][added: units).]

| | | | | | | | | | Sensitivity Analysis | | | | | | | | | | | | | | | | | | | | | [removed: | | | | | | | | | | | | | | | | | |]

| | | | | | | | | | Deficit Caused by a Hypothetical Reduction to Fair Value | | | | | | | | | | | | | | | | | | | | | [removed: | | | | | | | | | | | | | | | | | |]

| | | | Goodwill | | | | | | 10 | | % | | | | 20 | | % | | | | 30 | | % | | | | 40 | | % | [removed: | | | | | | | | | | | | | | | | | |]

| MIS | | | $ | [removed: 98] [added: 99] | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | [removed: | | | | | | | | | | | | | | | | | |]

| MALS | | | [removed: 125] | | | | | | [removed: —] [added: (56)] | | | | | | — | | | | | | [removed: (12) | | | | | | (37) | | | | | | | | | | | |] [added: (56)] | | | | | | | | |

| Bureau van Dijk | | | [removed: 2,045] [added: 2,746] | | | | | | — | | | | | | — | | | | | | — | | | | | | (266) | | | [removed: | | | | | | | | | | | | | | | | | |]

As of the date of [removed: the filing of] this annual report on Form 10-K, the Company is unable to estimate the financial impact, if any, that may result from a potential unfavorable conclusion of these matters or any other ICRA inquiry.

The following is a discussion regarding the Company’s methodology for determining the fair value of its reporting [removed: units, excluding ICRA,] [added: units] as of [removed: July 31, 2019,] the date of each reporting unit’s last quantitative [removed: assessment.][added: assessment (June 30, 2020 for Reis and ICRA; and July 31, 2019 for the remaining reporting units).]

As ICRA is a publicly traded company in India, the Company [removed: was able to observe] [added: estimates] its fair value [removed: based on] [added: using] its [added: observable] market capitalization.

The following discusses the key assumptions utilized in the discounted cash flow valuation methodology that [removed: requires] [added: require] significant management judgment:

[removed: *–Future] [added: –Future] cash flow [removed: assumptions* —The] [added: assumptions - The] projections for future cash flows utilized in the models are derived from historical experience and assumptions regarding future growth and profitability of each reporting unit.

Beyond [removed: six years,] [added: the forecasted period,] a terminal value was determined using a perpetuity growth rate based on inflation and real GDP growth rates.

[removed: *–WACC* —The] [added: –WACC - The] WACC is the rate used to discount each reporting unit’s estimated future cash flows.

A sensitivity analysis of the WACC was performed on all reporting [removed: units as of July 31, 2019.][added: units.]

In addition, [removed: in 2018] the Company [added: has] recorded a deferred tax asset of [removed: $48] [added: $50] million related to potential foreign tax credits which could be realized if certain UTPs resulted in tax assessments.

Accounting for contingencies, including those matters described in Note [removed: 22] [added: 21] to the consolidated financial statements, is highly subjective and requires the use of judgments and estimates in assessing their magnitude and likely outcome.

[removed: Such amounts] [added: Expected credit losses] are reflected as additions to the accounts receivable allowance.

[removed: Moody’s] [added: The Company] also considers [added: customer specific information (e.g., bankruptcy or financial difficulty) when estimating its expected credit losses, as well as] the economic environment of the customers, both from an industry and geographic perspective, in evaluating the need for allowances.

The discount rates used to measure the present value of the Company’s benefit obligation for its Retirement Plans as of December 31, [removed: 2019] [added: 2020] were derived using a cash flow matching method whereby the Company compares each plan’s projected payment obligations by year with the corresponding yield on the FTSE pension discount curve.

Moody’s major assumptions vary by plan and assumptions used are set forth in Note [removed: 16] [added: 15] to the consolidated financial statements.

Additionally, the Company has updated its mortality assumption by adopting the newly released mortality improvement scale [removed: MP-2019] [added: MP-2020] to accompany the Pri2012 mortality tables to reflect the latest information regarding future mortality expectations by the Society of Actuaries.

For Moody’s Retirement Plans, the total actuarial losses as of December 31, [removed: 2019] [added: 2020] that have not been recognized in annual expense are [removed: $122] [added: $152] million, and Moody’s expects to recognize a net periodic expense of [removed: $8] [added: $11] million in [removed: 2020] [added: 2021] related to the amortization of actuarial losses.

[removed: As permitted under ASC Topic 715, the Company amortizes the] impact of asset returns over a five-year period for purposes of calculating the market-related value of assets that is used in determining the expected return on assets’ component of annual expense and in calculating the total unrecognized gain or loss subject to amortization.

As of December 31, [removed: 2019,] [added: 2020,] the Company has an unrecognized asset [removed: loss] [added: gain] of [removed: $26] [added: $49] million, of which [removed: $3] [added: $13] million will be recognized in the market-related value of assets that is used to calculate the expected return on [removed: assets’] [added: assets] component of [removed: 2020] [added: 2021] expense.

The table below shows the estimated effect that a one percentage-point decrease in each of these assumptions will have on Moody’s [removed: 2020] [added: 2021] income before provision for income taxes.

These effects have been calculated using the Company’s current projections of [removed: 2020] [added: 2021] expenses, assets and liabilities related to Moody’s Retirement Plans, which could change as updated data becomes available.

This Management’s Discussion and Analysis of Financial Condition and Results of Operations contains Forward-Looking Statements.

Moody’s is a global integrated risk assessment firm that empowers organizations and investors to make better decisions.

MA is a global provider of data and analytic solutions which help companies make better and faster decisions.

MA’s analytic models, industry insights, software tools and proprietary data assets allow companies to inform and perform many critical business activities with trust and confidence.

MA’s approach to aggregating, broadening and deepening available data, research, analytic tools and software solutions fosters a more integrated and efficient delivery to MA's customers resulting in better decisions around risks and opportunities.

COVID-19

The Company is closely monitoring the impact of the COVID-19 pandemic on all aspects of its business.

While the Company has selectively reopened certain of its offices, Moody’s continues to require remote work for most employees globally and has operated effectively to date.

The Company continues to monitor regional developments relating to the COVID-19 pandemic to inform decisions on the reopening of its offices.

The Company experienced disruption in certain sectors of its business beginning late in the first quarter of 2020 resulting from market volatility associated with the COVID-19 crisis.

However, at the date of the filing of this annual report on Form 10-K, the Company is unable to predict either the potential near-term or longer-term impact that the COVID-19 crisis may have on its financial position and operating results due to numerous uncertainties regarding the duration and severity of the crisis, including the length of time to distribute a vaccine.

As a result, it is reasonably possible that the Company could experience material impacts including, but not limited to: reductions in revenue and cash flows; additional credit losses related to accounts receivables; asset impairment charges; and changes in the funded status of defined benefit pension plans.

While it is reasonably possible that the COVID-19 crisis could impact the results of operations and cash flows of the Company in the near term, Moody's believes that it has adequate liquidity to maintain its operations with minimal disruption and to maintain compliance with its debt covenants.

In 2020, in order to maximize liquidity and to increase available cash on hand through this period of uncertainty, the Company added $700 million in additional long-term borrowings as more fully discussed in the section entitled "Liquidity and Capital Resources" below and in Note 18 to the consolidated financial statements.

In addition, the Company reduced discretionary spending, including temporarily suspending its share repurchase program beginning late in the first quarter of 2020 and spanning through the third quarter.

The Company resumed its share repurchase program in the fourth quarter of 2020.

The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted on March 27, 2020 in the United States.

The Company utilized certain provisions in the CARES Act and other IRS guidance which permit the deferral of certain income and payroll tax remittances.

MOODY'S 2020 10-K 43

Interim goodwill impairment assessments performed in 2020 in advance of the Company's annual assessment

During the first half of 2020, the observable market capitalization of ICRA declined to a level that resulted in a significant decline in headroom (the amount by which the fair value of a reporting unit exceeds its carrying value) from amounts reported in the Company's Form 10-K for the year ended December 31, 2019.

ICRA is a publicly traded company in India, and accordingly the Company is able to derive its fair value based on its observable average market capitalization (plus a control premium) over a relatively short duration of time.

While the estimate of the fair value of the ICRA reporting unit resulted in no impairment of goodwill in the first half of 2020, further declines in ICRA's average market capitalization could result in impairment in future quarters.

As of the date of the filing of this annual report on Form 10-K, the ICRA market capitalization reflects a level that does not result in impairment.

As discussed in further detail in Note 10 to the Company's consolidated financial statements, ICRA has disclosed that it completed the internal examinations it conducted into anonymous allegations that were forwarded to ICRA by SEBI, certain additional allegations made during the course of that examination, and a separate anonymous complaint.

ICRA reported that its Board of Directors have taken appropriate actions based on the findings of the completed examinations.

44 MOODY'S 2020 10-K

[Table of](#i764aab6d00b34fe7b9dd0fc7012d6e15_7) [Contents](#i764aab6d00b34fe7b9dd0fc7012d6e15_7)

At June 30, 2020, the Company performed an interim quantitative goodwill impairment assessment on the Reis reporting unit (acquired in October 2018), which resulted in no impairment of goodwill.

The Company performed this quantitative assessment in response to a decline in projected cash flows relative to Reis' acquisition case projections and included the estimated impact of the COVID-19 crisis on the business.

While the fair value at June 30, 2020 of the Reis reporting unit exceeded its carrying value, further declines in its financial projections could result in impairment in future quarters.

Annual goodwill impairment assessment performed at July 31, 2020

At July 31, 2020, the Company performed qualitative assessment for each of the reporting units.

| Content | | | 381 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |

| ERS | | | 800 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |

| MALS | | | 127 | | | | | | — | | | | | | — | | | | | | (12) | | | | | | (37) | | |

| ICRA | | | 212 | | | | | | — | | | | | | (2) | | | | | | (44) | | | | | | (85) | | |

| Reis | | | 191 | | | | | | — | | | | | | (22) | | | | | | (48) | | | | | | (74) | | |

| Totals | | | $ | 4,556 | | | | | $ | — | | | | | $ | (24) | | | | | $ | (104) | | | | | $ | (462) | |

MOODY'S 2020 10-K 45

This MD&A contains Forward-Looking Statements.

Moody’s is a provider of (i) credit ratings and assessment services; (ii) credit, capital markets and economic research, data and analytical tools; (iii) software solutions that support financial risk management activities; (iv) quantitatively derived credit scores; (v) learning solutions and certification services; (vi) offshore financial research and analytical services (this business was divested with the sale of MAKS in the fourth quarter of 2019); and (vii) company information and business intelligence products.

MA provides financial intelligence and analytical tools to assist businesses in making decisions.

MA’s portfolio of solutions consists of specialized research, data, software, and professional services, which are assembled to support the financial analysis and risk management activities of institutional customers worldwide.

MOODY'S 2019 10-K 31

At July 31, 2019, the Company performed quantitative assessments of the Content, ERS, MALS, Bureau van Dijk, MIS, and ICRA reporting units and a qualitative assessment for the Reis reporting unit, which was acquired by Moody's within one year of the Company's annual assessment date.

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Content | | | 363 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | | | | | | | | | |

| ERS | | | 690 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | | | | | | | | | |

| ICRA | | | 220 | | | | | | — | | | | | | — | | | | | | — | | | | | | (30) | | | | | | | | | | | | | | | | | | | | |

| Reis (1) | | | 181 | | | | | | N/A | | | | | | N/A | | | | | | N/A | | | | | | N/A | | | | | | | | | | | | | | | | | | | | |

| Totals | | | $ | 3,722 | | | | | $ | — | | | | | $ | — | | | | | $ | (12) | | | | | $ | (333) | | | | | | | | | | | | | | | | | | | |

(1)Reis was acquired in October 2018.

Due to the close proximity of the Reis acquisition, the purchase price approximates the fair value of the reporting unit.

In the event that Reis' actual performance does not meet its acquisition-case cash flows, an impairment in future quarters could result.

As illustrated in the preceding table, the reporting unit most at risk for potential impairment is the MALS reporting unit and failure to meet its financial projections could result in impairment in future quarters.

As discussed in further detail in Note 11 to the Company's consolidated financial statements, ICRA has reported that it is addressing certain matters which are currently under investigation.

32 MOODY'S 2019 10-K

Cash flows for the six years subsequent to the date of the quantitative goodwill impairment analysis were utilized in the determination of the fair value of each reporting unit.

The growth rates assumed a gradual increase in revenue based on a continued improvement in the global economy and capital markets, new customer acquisition and new products.

The WACC for all reporting units ranged from 8.5% to 9.0% as of July 31, 2019.

For all reporting units analyzed, an increase in the WACC of one percentage point would not result in the carrying value of the reporting unit exceeding its fair value.

MOODY'S 2019 10-K 33

Due to the complexities involved in applying the provisions of the Tax Act, in 2017 the Company recorded a provisional estimate of $247 million related to the transition tax in 2017.

In 2018, the IRS issued notices clarifying certain aspects of the transition tax.

As a result, the Company reduced its provision for the transition tax by $11 million.

The IRS may issue additional regulations or notices in future periods to clarify or amend provisions of the Tax Act and such guidance could result in revisions in future periods to the amounts recorded for the existing provisions and interpretations of the Tax Act.

Due to additional UTPs recorded, the Company increased the deferred tax asset to $50 million in 2019.

Due to the reduction in U.S. corporate income tax rates beginning in 2018, a decrease of $56 million was recorded to net deferred tax assets in 2017.

The above amounts may be impacted by a number of additional considerations, including but not limited to the issuance of regulations and the Company’s ongoing analysis of the new law.

34 MOODY'S 2019 10-K

Moody’s records variable consideration in respect of estimated future adjustments to customer billings as an adjustment to revenue, using the expected value method based on analysis of similar contracts in the same line of business.

Additionally, estimates of uncollectible accounts due to uncertainty relating to customers inability to pay are recorded as bad debt expense and are reflected as additions to the accounts receivable allowance.

Actual billing adjustments are recorded against the allowance depending on the nature of the adjustment.

Moody’s evaluates its accounts receivable allowance by reviewing and assessing historical collection and adjustment experience and the current status of customer accounts.

Based on its analysis, Moody’s adjusts its allowance as considered appropriate in the circumstances.

This process involves a high degree of judgment and estimation and could involve significant dollar amounts.

Accordingly, Moody’s results of operations can be affected by adjustments to the allowance.

Management believes that the allowance is adequate to cover anticipated adjustments and write-offs under current conditions.

Information in response to this item is set forth under the caption “Market Risk” in Part II, Item 7 on page [removed: 51] [added: 63] of this annual report on Form 10-K.

[Table [removed: of Contents](#i_0_7)][added: of](#i764aab6d00b34fe7b9dd0fc7012d6e15_7) [Contents](#i764aab6d00b34fe7b9dd0fc7012d6e15_7)]

72 MOODY'S 2020 10-K

MOODY'S 2019 10-K 59

Moody’s reports in two [removed: reportable] segments: MIS and MA.

Financial Statements of this annual [removed: report,] [added: report] and are herein incorporated by reference.

MIS publishes credit ratings and provides assessment services on a wide range of debt [removed: obligations] [added: obligations, programs] and [added: facilities, and] the entities that issue such obligations in markets worldwide, including various [removed: corporate] [added: corporate, financial institution] and governmental obligations, [added: and] structured finance [removed: securities and commercial paper programs.][added: securities.]

Ratings are disseminated via press releases to the public [added: primarily] through a variety of [removed: print and] electronic media, including the internet and real-time information systems widely used by securities traders and investors.

[removed: –Approximately 4,900 rated non-financial corporate issuers;][added: | | | | Rated Non-Financial Corporates | | | | | | Rated Public Finance Issuers | | | | | | | | | | | |]

MIS [added: also] earns revenue from certain non-ratings-related operations, which primarily consist of financial instruments pricing services in the Asia-Pacific [removed: region as well as] [added: region,] revenue from [removed: ICRA non-rating] [added: ESG research, data and assessments and revenue from ICRA's non-ratings] operations.

[removed: In addition, the Company’s] [added: The] Board [removed: of Directors] oversees sustainability matters, with assistance from the [added: Audit and] Governance & Nominating [removed: Committee,] [added: Committees,] as part of its oversight of management and the Company’s overall strategy.

The content of [removed: this website] [added: those websites] is not incorporated by reference herein.

[Table [removed: of Contents](#i_0_7)][added: of](#i764aab6d00b34fe7b9dd0fc7012d6e15_7) [Contents](#i764aab6d00b34fe7b9dd0fc7012d6e15_7)]

[added: As part of this effort,] Moody’s advances sustainability by considering [removed: Environmental, Social,] [added: environmental, social,] and [removed: Governance (ESG)] [added: governance (“ESG”)] factors throughout its operations and [removed: two business segments.][added: products and services.]

Moody’s efforts to promote sustainability-related thought leadership, assessments and data to market participants include following the policies of recognized sustainability [removed: and corporate social responsibility parties] [added: organizations] that develop standards or frameworks and/or evaluate and assess performance, including [added: the] Global Reporting Initiative [removed: (GRI)] and Sustainability Accounting Standards [removed: Board (SASB).][added: Board.]

Moody’s believes [added: that] the overall long-term outlook remains favorable for continued growth of the global fixed-income market and related financial information market, which includes information such as credit opinions, research, data, analytics, risk management tools and related services.

[removed: –Health] [added: - Performance and prospects for growth] of the [removed: world’s] major [added: world] economies;

[removed: –Fiscal] [added: - Fiscal] and monetary [removed: policy of] [added: policies pursued by their] governments; and

In an environment of increasing financial complexity and heightened attention to credit analysis and risk management, Moody’s is well positioned to benefit from continued growth in global fixed-income market activity and [removed: a] more widespread use of credit ratings, research and related analytical products.

Strong secular trends should continue to provide long-term growth [removed: opportunities.][added: opportunities in MIS.]

[removed: For MIS, key growth drivers include debt market issuance driven by global GDP growth, continued] [added: - Continued] disintermediation of fixed-income markets in both developed and emerging economies driving issuance and demand for new ratings products and [removed: services.][added: services; and]

[removed: Growth in global fixed income markets in a given year is dependent on many macroeconomic and capital market factors including interest rates, business] [added: | Interest rates | | | Business] investment [removed: spending, corporate] [added: spending | | | Corporate] refinancing [removed: needs, merger] [added: needs | | | Merger] and acquisition [removed: activity, issuer profits, consumer] [added: activity | | | Issuer financial health | | | Consumer] borrowing levels [removed: and securitization activity.][added: | | | Securitization activity | | | Expansion of ratings coverage | | | Expansion into geographies with developing debt capital markets | | |]

[removed: An] [added: While already common in U.S. and Western European markets, an] ongoing trend in the world’s capital markets is the disintermediation of financial systems.

[removed: We expect] [added: Moody’s expects that] MA products and services that improve efficiencies, provide business [removed: insights] [added: insights,] and enable compliance with financial regulation, including AML, KYC, and accounting standards, will continue to be [removed: adopted by] [added: in demand from] institutions worldwide.

[removed: Finally, in] [added: In] order to respond to other sources of demand and drive growth, MA is actively investing in new products, including enhanced data sets and improved delivery [removed: methods] [added: services] (e.g., software-as-a-service).

There are [added: also] some rating markets, based on industry, geography and/or instrument type, in which Moody’s has made investments and obtained market positions superior to [removed: S&P,] [added: its competitors,] while in other markets, the reverse is true.

In ERS, MA faces competition from both large software providers [removed: such as SS&C Technologies, Fidelity National Information Services, SAS, Oracle, Finastra, Oliver Wyman, Verisk Analytics] and various other vendors [removed: and] [added: as well as] in-house solutions.

[removed: First,] MA’s subscription businesses provide a significant base of recurring revenue to [removed: offset cyclicality] [added: mitigate cyclical changes] in [removed: ratings] [added: debt] issuance volumes that may result in volatility in MIS’s revenues.

During [removed: 2019,] [added: 2020,] Moody’s continued to invest in and acquire complementary businesses [removed: in MIS and MA] as further described below:

[removed: MIS] [added: MIS, certain of the Company's ratings affiliates] and many of the [added: issuers and/or] securities that it rates are subject to extensive regulation in [removed: both] the [removed: U.S.] [added: U.S., EU] and in other countries (including by state and local authorities).

Existing and proposed laws and regulations can impact the Company’s [removed: operations] [added: operations, products] and the markets [removed: for securities that it rates.][added: in which the Company operates.]

The regulatory landscape [removed: has changed rapidly in recent years and] continues to evolve.

The Reform Act added Section 15E to the Exchange Act and provided the SEC with the authority to establish a registration and oversight program for [removed: credit rating agencies] [added: CRAs] registered as NRSROs.

Among other things, the Reform Act requires the SEC to submit an annual report to Congress providing an overview of SEC activities with respect to NRSROs, and [removed: detailing] the SEC’s views on the state of competition, transparency and conflicts of interests among NRSROs.

To date, through a series of rulemakings, the SEC has implemented [removed: a number of] [added: several] Exchange Act provisions related to NRSROs.

The Company has [removed: made] [added: made,] and continues to [removed: make] [added: make,] substantial IT and other investments, and has implemented the relevant compliance obligations.

In the EU, the CRA industry is registered and supervised through a [removed: pan-European] [added: pan-EU] regulatory framework.

The European Securities and Markets Authority (ESMA) has direct supervisory responsibility for [removed: the] registered [removed: CRA industry] [added: CRAs] throughout the [removed: EU.][added: EU MIS’ EU CRA subsidiaries are registered and are subject to formal regulation and periodic inspection.]

Applicable rules [removed: include] [added: include, but are not limited to,] procedural requirements with respect to use of credit ratings, independence and avoidance of conflicts of interest, conflicts of interest concerning investments in CRAs, [removed: CRA rotation,] methodologies, models and key rating assumptions, [added: CRA rotation and] use of multiple CRAs, outsourcing, disclosures, credit ratings of sovereign issuers, liability for intentional or grossly negligent failure to abide by applicable regulations, reporting requirements to ESMA regarding fees, and additional procedural and substantive requirements on the pricing of services.

From time to time, ESMA publishes interpretive guidance, or thematic reports regarding various aspects of the [added: CRA] regulation and, annually, sets out its work program for the forthcoming year.

The [removed: European] Commission is [added: also] expected to publish a report in [removed: Q1 2020] [added: 2021] on CRAs and the integration of sustainability factors into their credit [removed: rating opinions and in Q2 on Sustainability Research and Ratings.][added: ratings.]

In light of the regulations that have gone into effect in both the [removed: E.U.] [added: EU] and the U.S. (as well as many other countries), periodically and as a matter of course pursuant to their enabling legislation, regulatory authorities [removed: have] [added: have,] and will continue [removed: to] [added: to,] publish reports that describe their oversight [removed: activities over the industry.][added: activities.]

In addition, other legislation and/or interpretation of existing regulation relating to the Company’s operations, including credit rating, ancillary and research services [added: has been or] is being considered by local, national and multinational bodies and this type of activity is likely to continue in the future.

These licenses are provided pursuant to standard [removed: fee-bearing] agreements containing customary restrictions and intellectual property protections.

Moody’s is a global integrated risk assessment firm that empowers organizations and investors to make better decisions.

| | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | | | | | |

|  | | | | | |  | | | | | |  | | | | | |

|  | | | Independent provider of credit rating opinions and related information for over 100 years | | |  | | | A global integrated risk assessment firm that empowers organizations to make better decisions | | |  | | | Global provider of data and analytic solutions which help companies make better and faster decisions. | | |

| 59.7% | | | 2020 Adjusted Operating Margin | | | Total 2020 Revenue of $5.4 billion | | | | | | 29.4% | | | 2020 Adjusted Operating Margin | | |

| 57.1% | | | 2020 Operating Margin | | |  | | | | | | 20.3% | | | 2020 Operating Margin | | |

| | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | |

| | | | | | | 44.5% | | | 2020 Operating Margin | | | | | | | | |

| | | | | | | 49.7% | | | 2020 Adjusted Operating Margin | | | | | | | | |

10 MOODY'S 2020 10-K

| | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

|  | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | |

| | | |  | | | | | | 2007 - 2016 | | | | | |

| | | | | | | Expanded beyond ratings agency | | | | | | | | |

| | | | | | | | | | •Established Moody’s Analytics •Built the ERS business (e.g., Fermat, B&H) •Expanded ratings to China (i.e., CCXI) | | | | | |

| | | | | | | | | | | | | | | |

| | | |  | | | | | | 2017 - 2020 | | | | | |

| | | | | | | Built out substantial data and analytics capabilities | | | | | | | | |

| | | | | | | | | | •Complemented ERS business with private company information (i.e., BvD) •Accelerated capability expansion (e.g., company database, CRE data, ESG data) | | | | | |

| | | | | | | | | | | | | | | |

| | | |  | | | | | | 2021 and Beyond | | | | | |

| | | | | | | Positioned to serve a wide range of risk assessment markets | | | | | | | | |

| | | | | | | | | | •Competitive differentiator: integration of data and analytics combined with expertise and technology enablement •Further investment in data and analytics capabilities such as private company, CRE and ESG to serve high growth risk assessment use cases (e.g., KYC and compliance) | | | | | |

MOODY'S 2020 10-K 11

[Table of](#i764aab6d00b34fe7b9dd0fc7012d6e15_7) [Contents](#i764aab6d00b34fe7b9dd0fc7012d6e15_7)

Moody's Investors Service Overview

A rating from MIS enables issuers to create timely, go-to-market debt strategies with the ability to capture wider investor focus and deeper liquidity options.

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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| The Benefits of a Moody's Rating | | | | | | | | | | | | | | | | | | | | |

|  | | | | | | | | | | | | | | | | | | | | |

|  | | | | | |  | | | | | |  | | | | | |  | | |

| Access to capital | | | | | | Transparency, credit comparison and market stability | | | | | | Planning and budgeting | | | | | | Analytical capabilities | | |

| •Moody’s opinions on credit are used by institutional investors throughout the world, making an issuer’s debt potentially more attractive to a wide range of buyers. | | | | | | •Signals a willingness by issuers to be transparent and provides issuers with an independent assessment against which to compare creditworthiness. | | | | | | •May help issuers when formulating internal capital plans and funding strategies | | | | | | •Among ratings advisors, Moody’s has a strong position and is well-recognized for the depth and breadth of its analytical capabilities. | | |

| | | | | | | | | | | | | | | | | | | | | |

Moody’s is a provider of (i) credit ratings and assessment services; (ii) credit, capital markets and economic research, data and analytical tools; (iii) software solutions that support financial risk management activities; (iv) quantitatively derived credit scores; (v) learning solutions and certification services; (vi) offshore financial research and analytical services (this business was divested with the sale of the MAKS in the fourth quarter of 2019); and (vii) company information and business intelligence products.

MIS provides ratings in more than 130 countries.

As of December 31, 2019, MIS had the following ratings relationships:

–Approximately 4,100 rated financial institutions issuers;

–Approximately 17,200 rated public finance issuers (including sovereign, sub-sovereign and supranational issuers);

–Approximately 9,500 rated structured finance transactions; and

–Approximately 1,000 rated infrastructure and project finance issuers.

MA provides financial intelligence and analytical tools to assist businesses in making decisions.

MA’s portfolio of solutions consists of specialized research, data, software, and professional services, which are assembled to support the financial analysis and risk management activities of institutional customers worldwide.

MA customers represent more than 11,000 institutions worldwide operating in over 155 countries.

During 2019, Moody’s research website was accessed by over 306,000 individuals including 41,000 customer users.

Corporate Social Responsibility

Moody’s believes that knowledge fuels opportunity.

The core of Moody’s business is to provide credit ratings, research, tools and analysis that help to equip participants in the global financial markets to understand risks and make important investment decisions with critical insight.

Moody’s global corporate social responsibility (CSR) efforts are rooted in that same approach.

Moody’s is committed to working to empower people with the knowledge, resources and confidence they need to create a better future – for themselves, their communities and the environment.

The CSR Council, chaired by President and CEO Raymond W.

McDaniel, Jr. and comprised of members of the management team, evaluates the Company’s CSR progress and generates recommendations on its CSR strategy.

The CSR Working Group, comprised of senior executives, is then charged with implementing the Company’s CSR strategy.

For more information on Moody’s approach to CSR, see moodys.com/csr.

10 MOODY'S 2019 10-K

Moody’s sustainability-related achievements in 2019 included the following: (i) Moody’s began reporting using recommendations from SASB; (ii) the Company became a signatory to the Principles for Responsible Investment; (iii) it joined the United Nations Global Compact; and (iv) it issued its second annual report on how the Company has implemented the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD).

Over recent decades, global fixed-income markets have grown significantly both in terms of the amount and types of securities or other obligations outstanding.

–Debt capital markets activity;

–Disintermediation of credit markets;

–Business investment spending, including mergers and acquisitions.

Growth in MA is likely to be driven by deeper and broader penetration of the customer base as data demands, regulatory compliance and other analytical requirements drive demand for MA’s products and expertise.

MIS’s results can be affected by factors such as the performance and prospects for growth of the major world economies, the fiscal and monetary policies pursued by their governments, and the decisions of issuers to request MIS ratings to aid investors in their investment decisions.

Furthermore, the strong growth seen in the issuance of structured finance securities from the mid-1990’s reversed dramatically in 2008 due to market turmoil, before stabilizing in 2011.

Despite significant declines from peak market issuance levels, Moody’s believes that structured finance securities will continue to play a role in global fixed-income markets and provide opportunities for long-term revenue growth.

Additionally, information technology also provides opportunities to further build a global platform to support Moody’s continued expansion in developing markets.

MOODY'S 2019 10-K 11

In the aftermath of the global financial crisis, banking, insurance and capital markets authorities promulgated a wide range of new regulations to restore stability and confidence in financial institutions under their oversight.

Programs such as Basel III, Solvency II, and CCAR — among many others — prompted banks, insurers, securities dealers, and asset managers to invest in more robust risk management practices and systems.

Many of these investments drew on expertise and tools offered by MA, resulting in strong revenue growth in the post-crisis period.

As banking and capital markets stabilized, and with financial institutions better capitalized, regulatory-driven demand for certain MA products has moderated, while in other areas (e.g., anti-money laundering (AML) and know-your-customer (KYC) compliance) regulatory-driven demand for data and solutions remains strong.

Legislative bodies and regulators in the U.S., Europe and other jurisdictions continue to conduct regulatory reviews of CRAs, which may result in, for example, an increased number of competitors, changes to the business model or restrictions on certain business activities of MIS, removal of references to ratings in certain regulations, or increased costs of doing business for MIS.

At present, Moody’s is unable to assess the nature and effect that any regulatory changes may have on future growth opportunities.

MIS’s largest competitor in the global credit rating business is S&P Global Ratings (S&P), a division of S&P Global.

In addition to S&P, MIS’s competitors in the U.S. include Fitch Ratings, A.M. Best Company, Kroll Bond Rating Agency Inc., and Morningstar Inc. In Europe, there are approximately 40 companies currently registered with ESMA, which include both purely domestic European CRAs and International CRAs such as S&P and Fitch.

For information regarding legal proceedings, see Part II, Item 8 –“Financial Statements”, Note [removed: 22] [added: 21] “Contingencies” in this Form 10-K.

FOR THE FISCAL YEAR ENDED [removed: DECEMBER] [added: December] 31, [removed: 2019][added: 2020]

The aggregate market value of Moody’s Corporation Common Stock held by nonaffiliates* on June 30, [removed: 2019] [added: 2020] (based upon its closing transaction price on the New York Stock Exchange on such date) was approximately [removed: $37.0] [added: $51] billion.

As of January 31, [removed: 2020, 187.4] [added: 2021, 187.1] million shares of Common Stock of Moody’s Corporation were outstanding.

Portions of the Registrant’s definitive proxy statement for use in connection with its annual meeting of stockholders scheduled to be held on April [removed: 21, 2020,] [added: 20, 2021,] are incorporated by reference into Part III of this Form 10-K.

[Table [removed: of Contents](#i_0_7)][added: of](#i764aab6d00b34fe7b9dd0fc7012d6e15_7) [Contents](#i764aab6d00b34fe7b9dd0fc7012d6e15_7)]

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| | | | [Glossary of Terms and [removed: Abbreviations](#i_0_10) | | | | | | [4](#i_0_10)\-9 | | |] [added: Abbreviations](#i764aab6d00b34fe7b9dd0fc7012d6e15_10)] | | | | | | [added: [4](#i764aab6d00b34fe7b9dd0fc7012d6e15_10)\-9] | | |

| [PART [removed: I.](#i_0_13) | | | | | | | | |] [added: I.](#i764aab6d00b34fe7b9dd0fc7012d6e15_13)] | | | | | | | | | | | |

| Item 1. | | | [removed: [BUSINESS](#i_0_16) | | | | | | [10](#i_0_16) | | |] [added: [BUSINESS](#i764aab6d00b34fe7b9dd0fc7012d6e15_16)] | | | | | | [added: [10](#i764aab6d00b34fe7b9dd0fc7012d6e15_16)] | | |

| | | | [removed: [Background](#i_0_19) | | | | | | [10](#i_0_19) | | |] [added: [Background](#i764aab6d00b34fe7b9dd0fc7012d6e15_19)] | | | | | | [added: [10](#i764aab6d00b34fe7b9dd0fc7012d6e15_19)] | | |

| | | | [The [removed: Company](#i_0_22) | | | | | | [10](#i_0_22)\-11 | | |] [added: Company](#i764aab6d00b34fe7b9dd0fc7012d6e15_22)] | | | | | | [added: [10](#i764aab6d00b34fe7b9dd0fc7012d6e15_22)\-15] | | |

| | | | [Prospects for [removed: Growth](#i_0_25) | | | | | | [11](#i_0_25)\-12 | | |] [added: Growth](#i764aab6d00b34fe7b9dd0fc7012d6e15_28)] | | | | | | [added: [22](#i764aab6d00b34fe7b9dd0fc7012d6e15_28)\-24] | | |

| | | | [removed: [Competition](#i_0_28) | | | | | | [12](#i_0_28) | | |] [added: [Competition](#i764aab6d00b34fe7b9dd0fc7012d6e15_31)] | | | | | | [added: [24](#i764aab6d00b34fe7b9dd0fc7012d6e15_31)] | | |

| | | | [Moody’s [removed: Strategy](#i_0_31) | | | | | | [12](#i_0_31)\-13 | | |] [added: Strategy](#i764aab6d00b34fe7b9dd0fc7012d6e15_34)] | | | | | | [added: [20](#i764aab6d00b34fe7b9dd0fc7012d6e15_34)\-21] | | |

| | | | [removed: [Regulation](#i_0_34) | | | | | | [13](#i_0_34)\-14 | | |] [added: [Regulation](#i764aab6d00b34fe7b9dd0fc7012d6e15_40)] | | | | | | [added: [24](#i764aab6d00b34fe7b9dd0fc7012d6e15_40)\-25] | | |

| | | | [Intellectual [removed: Property](#i_0_37) | | | | | | [14](#i_0_37)\-15 | | |] [added: Property](#i764aab6d00b34fe7b9dd0fc7012d6e15_43)] | | | | | | [added: [26](#i764aab6d00b34fe7b9dd0fc7012d6e15_43)] | | |

| | | | [Available [removed: Information](#i_0_43) | | | | | | [15](#i_0_43) | | |] [added: Information](#i764aab6d00b34fe7b9dd0fc7012d6e15_49)] | | | | | | [added: [26](#i764aab6d00b34fe7b9dd0fc7012d6e15_49)] | | |

| | | | [Executive Officers of the [removed: Registrant](#i_0_46) | | | | | | [15](#i_0_46)\-16 | | |] [added: Registrant](#i764aab6d00b34fe7b9dd0fc7012d6e15_52)] | | | | | | [added: [27](#i764aab6d00b34fe7b9dd0fc7012d6e15_52)\-28] | | |

| Item 1A. | | | [RISK [removed: FACTORS](#i_0_49) | | | | | | [17](#i_0_49)\-25 | | |] [added: FACTORS](#i764aab6d00b34fe7b9dd0fc7012d6e15_55)] | | | | | | [added: [29](#i764aab6d00b34fe7b9dd0fc7012d6e15_55)\-39] | | |

| Item 1B. | | | [UNRESOLVED STAFF [removed: COMMENTS](#i_0_52) | | | | | | [26](#i_0_52) | | |] [added: COMMENTS](#i764aab6d00b34fe7b9dd0fc7012d6e15_58)] | | | | | | [added: [40](#i764aab6d00b34fe7b9dd0fc7012d6e15_58)] | | |

| Item 2. | | | [removed: [PROPERTIES](#i_0_55) | | | | | | [26](#i_0_55) | | |] [added: [PROPERTIES](#i764aab6d00b34fe7b9dd0fc7012d6e15_61)] | | | | | | [added: [40](#i764aab6d00b34fe7b9dd0fc7012d6e15_61)] | | |

| Item 3. | | | [LEGAL [removed: PROCEEDINGS](#i_0_58) | | | | | | [26](#i_0_58) | | |] [added: PROCEEDINGS](#i764aab6d00b34fe7b9dd0fc7012d6e15_64)] | | | | | | [added: [40](#i764aab6d00b34fe7b9dd0fc7012d6e15_64)] | | |

| Item 4. | | | [MINE SAFETY [removed: DISCLOSURES](#i_0_61) | | | | | | [26](#i_0_61) | | |] [added: DISCLOSURES](#i764aab6d00b34fe7b9dd0fc7012d6e15_67)] | | | | | | [added: [40](#i764aab6d00b34fe7b9dd0fc7012d6e15_67)] | | |

| [PART [removed: II.](#i_0_64) | | | | | | | | |] [added: II.](#i764aab6d00b34fe7b9dd0fc7012d6e15_70)] | | | | | | | | | | | |

| Item 5. | | | [MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY [removed: SECURITIES](#i_0_67) | | | | | | [27](#i_0_67) | | |] [added: SECURITIES](#i764aab6d00b34fe7b9dd0fc7012d6e15_73)] | | | | | | [added: [41](#i764aab6d00b34fe7b9dd0fc7012d6e15_73)] | | |

| | | | [Moody’s Purchases of Equity [removed: Securities](#i_0_70) | | | | | | [27](#i_0_70) | | |] [added: Securities](#i764aab6d00b34fe7b9dd0fc7012d6e15_76)] | | | | | | [added: [41](#i764aab6d00b34fe7b9dd0fc7012d6e15_76)] | | |

| | | | [Common Stock [removed: Information](#i_0_73) | | | | | | [27](#i_0_73) | | |] [added: Information](#i764aab6d00b34fe7b9dd0fc7012d6e15_79)] | | | | | | [added: [41](#i764aab6d00b34fe7b9dd0fc7012d6e15_79)] | | |

| | | | [Equity Compensation Plan [removed: Information](#i_0_76) | | | | | | [27](#i_0_76) | | |] [added: Information](#i764aab6d00b34fe7b9dd0fc7012d6e15_82)] | | | | | | [added: [41](#i764aab6d00b34fe7b9dd0fc7012d6e15_82)] | | |

| | | | [Performance [removed: Graph](#i_0_79) | | | | | | [28](#i_0_79) | | |] [added: Graph](#i764aab6d00b34fe7b9dd0fc7012d6e15_85)] | | | | | | [added: [42](#i764aab6d00b34fe7b9dd0fc7012d6e15_85)] | | |

| Item 7. | | | [MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF [removed: OPERATIONS](#i_0_85) | | | | | | [31](#i_0_85) | | |] [added: OPERATIONS](#i764aab6d00b34fe7b9dd0fc7012d6e15_91)] | | | | | | [added: [43](#i764aab6d00b34fe7b9dd0fc7012d6e15_91)] | | |

| | | | [The [removed: Company](#i_0_88) | | | | | | [31](#i_0_88) | | |] [added: Company](#i764aab6d00b34fe7b9dd0fc7012d6e15_94)] | | | | | | [added: [43](#i764aab6d00b34fe7b9dd0fc7012d6e15_94)] | | |

| | | | [Critical Accounting [removed: Estimates](#i_0_91) | | | | | | [31](#i_0_91)\-37 | | |] [added: Estimates](#i764aab6d00b34fe7b9dd0fc7012d6e15_97)] | | | | | | [added: [44](#i764aab6d00b34fe7b9dd0fc7012d6e15_97)\-49] | | |

| | | | [Reportable [removed: Segments](#i_0_94) | | | | | | [37](#i_0_94) | | |] [added: Segments](#i764aab6d00b34fe7b9dd0fc7012d6e15_100)] | | | | | | [added: [49](#i764aab6d00b34fe7b9dd0fc7012d6e15_100)] | | |

| | | | [Results of [removed: Operations](#i_0_97) | | | | | | [38](#i_0_97)\-51 | | |] [added: Operations](#i764aab6d00b34fe7b9dd0fc7012d6e15_103)] | | | | | | [added: [50](#i764aab6d00b34fe7b9dd0fc7012d6e15_103)\-63] | | |

| | | | [Market [removed: Risk](#i_0_103) | | | | | | [51](#i_0_103)\-52 | | |] [added: Risk](#i764aab6d00b34fe7b9dd0fc7012d6e15_106)] | | | | | | [added: [63](#i764aab6d00b34fe7b9dd0fc7012d6e15_106)\-64] | | |

| | | | [Liquidity and Capital [removed: Resources](#i_0_106) | | | | | | [53](#i_0_106)\-58 | | |] [added: Resources](#i764aab6d00b34fe7b9dd0fc7012d6e15_109)] | | | | | | [added: [65](#i764aab6d00b34fe7b9dd0fc7012d6e15_109)\-70] | | |

| | | | [Recently Issued Accounting [removed: Pronouncements](#i_0_112) | | | | | | [58](#i_0_112) | | |] [added: Pronouncements](#i764aab6d00b34fe7b9dd0fc7012d6e15_115)] | | | | | | [added: [71](#i764aab6d00b34fe7b9dd0fc7012d6e15_115)] | | |

| | | | [Forward-Looking [removed: Statements](#i_0_118) | | | | | | [59](#i_0_118) | | |] [added: Statements](#i764aab6d00b34fe7b9dd0fc7012d6e15_121)] | | | | | | [added: [71](#i764aab6d00b34fe7b9dd0fc7012d6e15_121)] | | |

| Item 7A. | | | [QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET [removed: RISK](#i_0_121) | | | | | | [59](#i_0_121) | | |] [added: RISK](#i764aab6d00b34fe7b9dd0fc7012d6e15_124)] | | | | | | [added: [72](#i764aab6d00b34fe7b9dd0fc7012d6e15_124)] | | |

| Item 9. | | | [CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL [removed: DISCLOSURE](#i_0_271) | | | | | | [118](#i_0_271) | | |] [added: DISCLOSURE](#i764aab6d00b34fe7b9dd0fc7012d6e15_247)] | | | | | | [added: [131](#i764aab6d00b34fe7b9dd0fc7012d6e15_247)] | | |

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.

MOODY'S 2020 10-K 1

| | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | [Human Capital](#i764aab6d00b34fe7b9dd0fc7012d6e15_2664) | | | | | | [16](#i764aab6d00b34fe7b9dd0fc7012d6e15_2664)\-19 | | |

| | | | | | | | | | | | |

| | | | | | | | | | | | |

| | | | [Contingencies](#i764aab6d00b34fe7b9dd0fc7012d6e15_118) | | | | | | [71](#i764aab6d00b34fe7b9dd0fc7012d6e15_118) | | |

| Item 8. | | | [FINANCIAL STATEMENTS](#i764aab6d00b34fe7b9dd0fc7012d6e15_127) | | | | | | [73](#i764aab6d00b34fe7b9dd0fc7012d6e15_127)\-130 | | |

2 MOODY'S 2020 10-K

[Table of](#i764aab6d00b34fe7b9dd0fc7012d6e15_7) [Contents](#i764aab6d00b34fe7b9dd0fc7012d6e15_7)

| | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | Page(s) | | |

| | | | | | | | | | | | |

| [INDEX TO EXHIBITS](#i764aab6d00b34fe7b9dd0fc7012d6e15_277) | | | | | | | | | [133](#i764aab6d00b34fe7b9dd0fc7012d6e15_277)\-137 | | |

| [SIGNATURES](#i764aab6d00b34fe7b9dd0fc7012d6e15_283) | | | | | | | | | [138](#i764aab6d00b34fe7b9dd0fc7012d6e15_283) | | |

MOODY'S 2020 10-K 3

[Table of](#i764aab6d00b34fe7b9dd0fc7012d6e15_7) [Contents](#i764aab6d00b34fe7b9dd0fc7012d6e15_7)

| Acquire Media (AM) | | | | | | An aggregator and distributor of curated real-time news, multimedia, data, and alerts; acquired by the Company on October 21, 2020 | | |

| AML | | | | | | Anti-money laundering | | |

| API | | | | | | Application Programming Interface | | |

| 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 | | |

| Catylist | | | | | | A provider of commercial real estate (CRE) solutions for brokers; acquired by the Company on December 30, 2020 | | |

4 MOODY'S 2020 10-K

[Table of](#i764aab6d00b34fe7b9dd0fc7012d6e15_7) [Contents](#i764aab6d00b34fe7b9dd0fc7012d6e15_7)

| COLI | | | | | | Corporate-Owned Life Insurance | | |

| COVID-19 | | | | | | An outbreak of a novel strain of coronavirus resulting in an international public health crisis and a global pandemic | | |

| ESPP | | | | | | Employee stock purchase plan | | |

| 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 | | |

MOODY'S 2020 10-K 5

[Table of](#i764aab6d00b34fe7b9dd0fc7012d6e15_7) [Contents](#i764aab6d00b34fe7b9dd0fc7012d6e15_7)

| GDP | | | | | | Gross domestic product | | |

| GDPR | | | | | | European Union’s General Data Protection Regulation | | |

| KYC | | | | | | Know-your-customer | | |

| 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 | | |

| MESG | | | | | | Moody's ESG Solutions Group | | |

6 MOODY'S 2020 10-K

[Table of](#i764aab6d00b34fe7b9dd0fc7012d6e15_7) [Contents](#i764aab6d00b34fe7b9dd0fc7012d6e15_7)

| 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. | | |

MOODY'S 2019 10-K

| | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | [Employees](#i_0_40) | | | | | | [15](#i_0_40) | | | | | | | | | | | |

| Item 6. | | | [SELECTED FINANCIAL DATA](#i_0_82) | | | | | | [29](#i_0_82)\-30 | | | | | | | | | | | |

| | | | [Contingencies](#i_0_115) | | | | | | [59](#i_0_115) | | | | | | | | | | | |

| Item 8. | | | [FINANCIAL STATEMENTS](#i_0_124) | | | | | | [60](#i_0_124)\-117 | | | | | | | | | | | |

2 MOODY'S 2019 10-K

| [INDEX TO EXHIBITS](#i_0_301) | | | | | | | | | | | | [120](#i_0_301)\-124 | | | | | | | | |

| [SIGNATURES](#i_0_307) | | | | | | | | | | | | [125](#i_0_307) | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Exhibits filed Herewith | | | | | | | | |

| 4.1 | | | | | | Description of the Registrant’s securities registered pursuant to Section 12 of the Securities Exchange Act of 1934 | | |

| 10.3.1.3 | | | | | | Second Amendment to the Amended and Restated 2001 Moody’s Corporation Key Employees’ Stock Incentive Plan (as amended, December 18, 2017) | | |

| 10.3.3.2 | | | | | | Form of Employee Non-Qualified Stock Option Grant Agreement (for awards granted in 2020 or later) for the Amended and Restated 2001 Moody’s Corporation Key Employees’ Stock Incentive Plan | | |

| 10.3.4.3 | | | | | | Form of Performance Share Award Letter (for awards granted in 2020 or later) for the Amended and Restated 2001 Moody’s Corporation Key Employees’ Stock Incentive Plan | | |

| 10.3.5.2 | | | | | | Form of Restricted Stock Unit Grant Agreement (for awards granted in 2020 or later) for the Amended and Restated 2001 Moody’s Corporation Key Employees’ Stock Incentive Plan | | |

| 10.10 | | | | | | Moody’s Corporation Retirement Account, amended and restated as of January 1, 2018 | | |

| 21 | | | | | | SUBSIDIARIES OF THE REGISTRANT | | |

| 23.1 | | | | | | CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | | |

| 31.1 | | | | | | Chief Executive Officer Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | | |

| 31.2 | | | | | | Chief Financial Officer Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | | |

| 32.1 | | | | | | Chief Executive Officer Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | | |

| 32.2 | | | | | | Chief Financial Officer Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | | |

| 101.INS | | | | | | Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document) | | |

| 101.SCH | | | | | | Inline XBRL Taxonomy Extension Schema Document | | |

| 101. CAL | | | | | | Inline XBRL Taxonomy Extension Calculation Linkbase Document | | |

| 101.DEF | | | | | | Inline XBRL Definitions Linkbase Document | | |

| 101.LAB | | | | | | Inline XBRL Taxonomy Extension Labels Linkbase Document | | |

| 101.PRE | | | | | | Inline XBRL Taxonomy Extension Presentation Linkbase Document | | |

| 104 | | | | | | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) | | |

MOODY'S 2019 10-K 3

| CCAR | | | | | | Comprehensive Capital Analysis and Review; annual review by the Federal Reserve in the U.S. to ensure that financial institutions have sufficient capital in times of economic and financial stress and that they have robust, forward-looking capital-planning processes that account for their unique risks. | | |

| CCXI Gain | | | | | | In the first quarter of 2017, as part of a strategic business realignment, CCXI issued additional capital to its majority shareholder in exchange for a ratings business wholly-owned by the majority shareholder and which has the right to rate a different class of debt instrument in the Chinese market. The capital issuance by CCXI in exchange for this ratings business diluted Moody’s ownership interest in CCXI to 30% of a larger business and resulted in a $60 million non-cash, non-taxable gain. | | |

| CECL | | | | | | Current expected credit losses | | |

4 MOODY'S 2019 10-K

| D&B | | | | | | Dun & Bradstreet | | |

| Financial Reform Act | | | | | | Dodd-Frank Wall Street Reform and Consumer Protection Act | | |

MOODY'S 2019 10-K 5

| IASB | | | | | | International Accounting Standards Board | | |

As of December 31, [removed: 2019,] [added: 2020,] Moody’s operations were conducted from [removed: 25] [added: 26] U.S. offices and [removed: 114] [added: 98] non-U.S. office locations, all of which are leased.

[Table [removed: of Contents](#i_0_7)][added: of](#i764aab6d00b34fe7b9dd0fc7012d6e15_7) [Contents](#i764aab6d00b34fe7b9dd0fc7012d6e15_7)]

40 MOODY'S 2020 10-K

26 MOODY'S 2019 10-K

For the three months ended December 31, [removed: 2019:][added: 2020:]

| Period | | | | | | Total Number of Shares Purchased [removed: (1)] [added: (1)] | | | | | | Average Price Paid per Share | | | | | | Total Number of Shares Purchased as Part of Publicly Announced Program | | | | | | Approximate Dollar Value of Shares That May Yet Be Purchased Under The Program [removed: (2)] [added: (2)] | | |

(1)Includes surrender to the Company of [removed: 2,301, 888] [added: 2,306, 429] and [removed: 2,239] [added: 9,136] shares of common stock in October, November and December, respectively, to satisfy tax withholding obligations in connection with the vesting of restricted stock issued to employees.

On [removed: December 15, 2015,] [added: October 22, 2018,] the Board [removed: authorized a] [added: approved] $1 billion [added: in] share repurchase [removed: program] [added: authority,] which was fully utilized during [removed: 2019.][added: 2020.]

On [removed: October 22, 2018,] [added: December 16, 2019,] the Board approved an additional $1 billion [removed: for the] [added: in] share repurchase [removed: program,] [added: authority,] which at December 31, [removed: 2019] [added: 2020] had approximately [removed: $334] [added: $831] million of remaining authority.

There is no established expiration date for [added: either of] the [added: aforementioned] remaining [removed: authorization.][added: authorizations.]

During the fourth quarter of [removed: 2019,] [added: 2020,] Moody’s issued [removed: 0.1] [added: 0.2] million shares under employee stock-based compensation plans.

The number of registered shareholders of record at January 31, [removed: 2020] [added: 2021] was [removed: 1,801.][added: 1,721.]

The table below sets forth, as of December 31, [removed: 2019,] [added: 2020,] certain information regarding the Company’s equity compensation plans.

| Plan Category | | | | | | Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights | | | | | | | | | Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights [removed: (2)] [added: (2)] | | | | | | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (excluding Securities Reflected in Column (a)) | | | | | |

(1)Includes [removed: 3,394,705] [added: 2,505,011] options and unvested restricted shares outstanding under the Company's 2001 Key Employees' Stock Incentive Plan and [removed: 9,766] [added: 5,418] unvested restricted shares outstanding under the 1998 Non-Employee Directors' Stock Incentive Plan.

This number also includes a maximum of [removed: 873,510] [added: 657,510] performance shares outstanding under the Company's 2001 Key Employees' Stock Incentive Plan, which is the maximum number of shares issuable pursuant to performance share awards assuming the maximum payout [removed: at 225%] of [removed: the target award for performance shares granted in 2017 and the maximum payout of] 200% of the target award for performance shares granted in [removed: 2018] [added: 2018, 2019] and [removed: 2019.][added: 2020.]

Assuming payout at target, the number of shares to be issued upon the vesting of outstanding performance share awards is [removed: 415,754.][added: 328,755.]

(3)Includes [removed: 14,724,774] [added: 14,102,262] shares available for issuance as under the 2001 Stock Incentive Plan, of which all may be issued as options and [removed: 8,552,689] [added: 8,032,220] may be issued as restricted stock, performance shares or other stock-based awards under the 2001 Stock Incentive Plan and [removed: 893,602] [added: 887,433] shares available for issuance as options, shares of restricted stock or performance shares under the 1998 Directors Plan, and [removed: 2,679,555] [added: 2,631,082] shares available for issuance under the Company’s Employee Stock Purchase Plan.

[Table [removed: of Contents](#i_0_7)][added: of](#i764aab6d00b34fe7b9dd0fc7012d6e15_7) [Contents](#i764aab6d00b34fe7b9dd0fc7012d6e15_7)]

The comparison assumes that $100.00 was invested in the Company’s common stock and in each of the foregoing indices on December 31, [removed: 2014.][added: 2015.]

The total return for the common stock was [removed: 163%] [added: 206%] during the performance period as compared with a total return during the same period of [removed: 74%] [added: 103% and 84%] for [removed: both] the [added: S&P 500 Composite Index and the] Russell 3000 Financial Services [removed: Index and the S&P 500 Composite Index.][added: Index, respectively.]

[removed: ][added: ]

| | | | Year Ended December 31, | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |]

| | | | [removed: 2014 | | | | | |] 2015 | | | | | | 2016 | | | | | | 2017 | | | | | | 2018 | | | | | | 2019 | | | | | | [removed: | | | | | | | | | | | | | | | | | | | | | | | |] [added: 2020] | | | | | |

| October 1- 31 | | | | | | 2,306 | | | | | | $ | — | | | | | — | | | | | | $1,081 million | | |

| November 1- 30 | | | | | | 396,164 | | | | | | $ | 277.73 | | | | | 395,735 | | | | | | $971 million | | |

| December 1- 31 | | | | | | 511,332 | | | | | | $ | 278.92 | | | | | 502,196 | | | | | | $831 million | | |

| Total | | | | | | 909,802 | | | | | | $ | 278.40 | | | | | 897,931 | | | | | | | | |

Additionally, on February 9, 2021, the Board approved an additional $1.0 billion of share repurchase authority.

| | | | (a) | | | | | | | | | (b) | | | | | | (c) | | | | | | | | |

| Equity compensation plans approved by security holders | | | | | | 3,167,939 | | | (1) | | | | | | $ | 133.95 | | | | | 17,620,777 | | | (3) | | |

| Total | | | | | | 3,167,939 | | | | | | | | | $ | 133.95 | | | | | 17,620,777 | | | | | |

MOODY'S 2020 10-K 41

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Moody’s Corporation | | | $ | 100.00 | | | | | $ | 95.41 | | | | | $ | 151.24 | | | | | $ | 145.03 | | | | | $ | 248.37 | | | | | $ | 306.18 | | | | |

| S&P 500 Composite Index | | | $ | 100.00 | | | | | $ | 111.96 | | | | | $ | 136.40 | | | | | $ | 130.42 | | | | | $ | 171.49 | | | | | $ | 203.04 | | | | |

| Russell 3000—Financial Services Index | | | $ | 100.00 | | | | | $ | 117.96 | | | | | $ | 141.49 | | | | | $ | 129.67 | | | | | $ | 172.37 | | | | | $ | 183.75 | | | | |

42 MOODY'S 2020 10-K

[Table of](#i764aab6d00b34fe7b9dd0fc7012d6e15_7) [Contents](#i764aab6d00b34fe7b9dd0fc7012d6e15_7)

| October 1- 31 | | | | | | 269,922 | | | | | | $ | 211.45 | | | | | 267,621 | | | | | | $540 million | | |

| November 1- 30 | | | | | | 434,096 | | | | | | $ | 220.21 | | | | | 433,208 | | | | | | $445 million | | |

| December 1- 31 | | | | | | 477,686 | | | | | | $ | 232.83 | | | | | 475,447 | | | | | | $1,334 million | | |

| Total | | | | | | 1,181,704 | | | | | | $ | 223.32 | | | | | 1,176,276 | | | | | | | | |

On December 16, 2019, the Board approved an additional $1 billion for the share repurchase program, which may commence following the completion of the existing program.

| | | | | | | (a) | | | | | | | | | (b) | | | | | | (c) | | | | | |

| Equity compensation plans approved by security holders | | | | | | 4,277,981 | | | (1) | | | | | | $ | 93.51 | | | | | 18,297,931 | | | (3) | | |

| Total | | | | | | 4,277,981 | | | | | | | | | $ | 93.51 | | | | | 18,297,931 | | | | | |

MOODY'S 2019 10-K 27

Comparison of Cumulative Total Return

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Moody’s Corporation | | | $ | 100.00 | | | | | $ | 106.09 | | | | | $ | 101.22 | | | | | $ | 160.45 | | | | | $ | 153.86 | | | | | $ | 263.49 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| S&P 500 Composite Index | | | $ | 100.00 | | | | | $ | 101.38 | | | | | $ | 113.51 | | | | | $ | 138.29 | | | | | $ | 132.23 | | | | | $ | 173.86 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Russell 3000—Financial Services Index | | | $ | 100.00 | | | | | $ | 100.68 | | | | | $ | 118.77 | | | | | $ | 142.45 | | | | | $ | 130.56 | | | | | $ | 173.54 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

28 MOODY'S 2019 10-K

| [Management’s Report on Internal Control Over Financial [removed: Reporting](#i_0_127)] [added: Reporting](#i764aab6d00b34fe7b9dd0fc7012d6e15_130)] | | | | | | [removed: [61](#i_0_127)] [added: [74](#i764aab6d00b34fe7b9dd0fc7012d6e15_130)] | | |

| [Report of Independent Registered Public Accounting [removed: Firm](#i_0_130)] [added: Firm](#i764aab6d00b34fe7b9dd0fc7012d6e15_133)] | | | | | | [removed: [62](#i_0_130)\-63] [added: [75](#i764aab6d00b34fe7b9dd0fc7012d6e15_133)\-76] | | |

| [Consolidated Statements of [removed: Operations](#i_0_133)] [added: Operations](#i764aab6d00b34fe7b9dd0fc7012d6e15_136)] | | | | | | [removed: [64](#i_0_133)] [added: [77](#i764aab6d00b34fe7b9dd0fc7012d6e15_136)] | | |

| [Consolidated Statements of Comprehensive [removed: Income](#i_0_136)] [added: Income](#i764aab6d00b34fe7b9dd0fc7012d6e15_139)] | | | | | | [removed: [65](#i_0_136)] [added: [78](#i764aab6d00b34fe7b9dd0fc7012d6e15_139)] | | |

| [Consolidated Balance [removed: Sheets](#i_0_139)] [added: Sheets](#i764aab6d00b34fe7b9dd0fc7012d6e15_142)] | | | | | | [removed: [66](#i_0_139)] [added: [79](#i764aab6d00b34fe7b9dd0fc7012d6e15_142)] | | |

| [Consolidated Statements of Cash [removed: Flows](#i_0_145)] [added: Flows](#i764aab6d00b34fe7b9dd0fc7012d6e15_145)] | | | | | | [removed: [67](#i_0_145)] [added: [80](#i764aab6d00b34fe7b9dd0fc7012d6e15_145)] | | |

| [Consolidated Statements of Shareholders’ Equity [removed: (Deficit)](#i_0_148)] [added: (Deficit)](#i764aab6d00b34fe7b9dd0fc7012d6e15_148)] | | | | | | [removed: [68](#i_0_148)\-70] [added: [81](#i764aab6d00b34fe7b9dd0fc7012d6e15_148)\-83] | | |

| [Notes to Consolidated Financial [removed: Statements](#i_0_154)] [added: Statements](#i764aab6d00b34fe7b9dd0fc7012d6e15_151)] | | | | | | [removed: [71](#i_0_154)\-117] [added: [84](#i764aab6d00b34fe7b9dd0fc7012d6e15_151)\-130] | | |

[Table [removed: of Contents](#i_0_7)][added: of](#i764aab6d00b34fe7b9dd0fc7012d6e15_7) [Contents](#i764aab6d00b34fe7b9dd0fc7012d6e15_7)]

Management of the Company [removed: has undertaken an assessment of] [added: evaluated and assessed] the design and operational effectiveness of the Company’s internal control over financial reporting as of December 31, [removed: 2019] [added: 2020] based on criteria established in the Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

Based on the assessment performed, management has concluded that Moody’s maintained effective internal control over financial reporting as of December 31, [removed: 2019.][added: 2020.]

The effectiveness of our internal control over financial reporting as of December 31, [removed: 2019] [added: 2020] has been audited by KPMG LLP, an independent registered public accounting firm, as stated in their [added: accompanying] report which [removed: appears herein.][added: expresses an unqualified opinion on the effectiveness of Moody's internal control over financial reporting as of December 31, 2020.]

We have audited the accompanying consolidated balance sheets of Moody’s Corporation and subsidiaries (the Company) as of December 31, [removed: 2019] [added: 2020] and [removed: 2018,] [added: 2019,] the related consolidated statements of operations, comprehensive income, shareholders’ equity (deficit), and cash flows for each of the years in the three-year period ended December 31, [removed: 2019,] [added: 2020,] and the related notes (collectively, the consolidated financial statements).

We also have audited the Company’s internal control over financial reporting as of December 31, [removed: 2019,] [added: 2020,] based on criteria established in *Internal Control – Integrated Framework (2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, [removed: 2019] [added: 2020] and [removed: 2018] [added: 2019] and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, [removed: 2019] [added: 2020] in conformity with U.S. generally accepted accounting principles.

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, [removed: 2019] [added: 2020] based on criteria established in *Internal Control – Integrated Framework (2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission.

*Change in Accounting [removed: Principles*][added: Principle*]

As discussed in Note 1 to the [added: consolidated] financial statements, the Company has changed its method of accounting for leases as of January 1, 2019, due to the adoption of Accounting Standard Codification (ASC) Topic 842, [removed: *Leases*, and its method of accounting for revenue as of January 1, 2018, due to the adoption of Accounting Standard Update (ASU) 2014-019 and all related amendments, which established ASC Topic 606, *Revenue—Revenue from Contracts with Customers*.][added: Leases.]

[removed: *Assessment of the carrying] [added: *Carrying] value of goodwill*

As discussed in Note [removed: 11] [added: 10] to the consolidated financial statements, the goodwill balance as of December 31, [removed: 2019] [added: 2020] was [removed: $3,722] [added: $4,556] million.

The Company has seven primary reporting units as of December 31, [removed: 2019:] [added: 2020:] two within the Company’s Moody’s Investors [removed: Services] [added: Service] segment and five within the Moody’s Analytics segment.

The [added: following are the] primary procedures we performed to address this critical audit [removed: matter included the following.][added: matter.]

We [added: evaluated the design and] tested [added: the operating effectiveness of] internal controls over the Company’s goodwill impairment process, including controls related to future operating results and the discount rates used to measure the reporting unit fair values.

We evaluated management’s judgments relating to the assumed revenue growth rates, operating costs, and the discount [removed: rate] [added: rates] by comparing them to available evidence.

[removed: We] [added: For certain reporting units, we] involved [removed: a] valuation [removed: professional] [added: professionals] with specialized skill and knowledge, who assisted in assessing the significant assumptions used to develop the discount [removed: rate,] [added: rates,] including the relevance and reliability of the information used.

As discussed in Note [removed: 18] [added: 17] to the consolidated financial statements, the Company has recorded uncertain tax [removed: benefits] [added: positions] (UTPs), excluding associated interest, of [removed: $477] [added: $483] million as of December 31, [removed: 2019.][added: 2020.]

We identified the assessment of the Company’s [added: gross] UTPs as a critical audit matter because complex judgment was required in evaluating the Company’s interpretation of tax law and its estimate of the ultimate resolution of the tax positions.

We [added: evaluated the design and] tested [added: the operating effectiveness of] internal controls over the Company’s tax process, including those related to the timely identification of UTPs, the assessment of new information related to previously identified UTPs, and the measurement of UTPs.

[removed: We] [added: Additionally, we] involved tax [removed: and valuation] professionals with specialized skills and knowledge, who assisted in:

- evaluating the Company’s interpretation of tax laws and judgments about the administrative practices of tax [added: authorities]

[removed: -] [added: We involved valuation professionals with specialized skills and knowledge, who assisted in] assessing transfer pricing studies for compliance with applicable laws and [removed: regulations,][added: regulations.]

- inspecting settlement documents with applicable taxing [removed: authorities,][added: authorities]

- assessing the expiration of statutes of [removed: limitations, and][added: limitations]

- performing an assessment of the Company’s tax positions and comparing the results to the Company’s [added: assessment.]

| | | | Year Ended December 31, | | | | | | | | | | | | | | | [removed: | | | | | | | | | | | |]

| | | | [removed: 2019 | | | | | | 2018 | | | | | | 2017] [added: 2020] | | | | | | [added: 2019] | | | | | | [added: 2018] | | |

| Revenue | | | $ | [removed: 4,829] [added: 5,371] | | | | | $ | [removed: 4,443] [added: 4,829] | | | | | $ | [removed: 4,204 | | | | | | | | | | | |] [added: 4,443] | |

| Expenses | | | | | | | | | | | | | | | | | | [removed: | | | | | | | | | | | |]

| Operating | | | [removed: 1,387 | | | | | | 1,246 | | | | | | 1,216] [added: 1,475] | | | | | | [added: 1,387] | | | | | | [added: 1,246] | | |

| Selling, general and administrative | | | [removed: 1,167 | | | | | | 1,080 | | | | | | 986] [added: 1,229] | | | | | | [added: 1,167] | | | | | | [added: 1,080] | | |

/s/ ROBERT FAUBER

Robert Fauber

[Table of](#i764aab6d00b34fe7b9dd0fc7012d6e15_7) [Contents](#i764aab6d00b34fe7b9dd0fc7012d6e15_7)

[Table of](#i764aab6d00b34fe7b9dd0fc7012d6e15_7) [Contents](#i764aab6d00b34fe7b9dd0fc7012d6e15_7)

*Gross uncertain tax positions*

The following are the primary procedures we performed to address this critical audit matter.

February 19, 2021

76 MOODY'S 2020 10-K

[Table of](#i764aab6d00b34fe7b9dd0fc7012d6e15_7) [Contents](#i764aab6d00b34fe7b9dd0fc7012d6e15_7)

MOODY'S 2020 10-K 77

[Table of](#i764aab6d00b34fe7b9dd0fc7012d6e15_7) [Contents](#i764aab6d00b34fe7b9dd0fc7012d6e15_7)

| Net losses on cash flow hedges | | | (68) | | | | | | 17 | | | | | | (51) | | | | | | — | | | | | | — | | | | | | — | | | | | | (1) | | | | | | — | | | | | | (1) | | |

78 MOODY'S 2020 10-K

[Table of](#i764aab6d00b34fe7b9dd0fc7012d6e15_7) [Contents](#i764aab6d00b34fe7b9dd0fc7012d6e15_7)

MOODY'S 2020 10-K 79

[Table of](#i764aab6d00b34fe7b9dd0fc7012d6e15_7) [Contents](#i764aab6d00b34fe7b9dd0fc7012d6e15_7)

| Prepayment penalty relating to early redemption of debt | | | 24 | | | | | | 12 | | | | | | — | | |

| Settlement of treasury rate lock | | | (68) | | | | | | — | | | | | | — | | |

80 MOODY'S 2020 10-K

[Table of](#i764aab6d00b34fe7b9dd0fc7012d6e15_7) [Contents](#i764aab6d00b34fe7b9dd0fc7012d6e15_7)

MOODY'S 2020 10-K 81

[Table of](#i764aab6d00b34fe7b9dd0fc7012d6e15_7) [Contents](#i764aab6d00b34fe7b9dd0fc7012d6e15_7)

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | Shareholders of Moody’s Corporation | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | Shares | | | | | | Amount | | | | | | Capital Surplus | | | | | | Retained Earnings | | | | | | Shares | | | | | | Amount | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Balance at December 31, 2018 | | | 342.9 | | | | | | $ | 3 | | | | | $ | 601 | | | | | $ | 8,594 | | | | | (151.6) | | | | | | $ | (8,313) | | | | | $ | (426) | | | | | $ | 459 | | | | | $ | 197 | | | | | $ | 656 | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Adoption of ASU 2018-02, relating to the Tax Act | | | | | | | | | | | | | | | | | | | | | 20 | | | | | | | | | | | | | | | | | | (20) | | | | | | — | | | | | | | | | | | | — | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

82 MOODY'S 2020 10-K

[Table of](#i764aab6d00b34fe7b9dd0fc7012d6e15_7) [Contents](#i764aab6d00b34fe7b9dd0fc7012d6e15_7)

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY continued

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | Shareholders of Moody’s Corporation | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | Shares | | | | | | Amount | | | | | | Capital Surplus | | | | | | Retained Earnings | | | | | | Shares | | | | | | Amount | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Balance at December 31, 2019 | | | 342.9 | | | | | | $ | 3 | | | | | $ | 642 | | | | | $ | 9,656 | | | | | (155.2) | | | | | | $ | (9,250) | | | | | $ | (439) | | | | | $ | 612 | | | | | $ | 219 | | | | | $ | 831 | |

| Adoption of New Credit Losses Accounting Standard | | | | | | | | | | | | | | | | | | | | | (2) | | | | | | | | | | | | | | | | | | | | | | | | (2) | | | | | | | | | | | | (2) | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Balance at December 31, 2020 | | | 342.9 | | | | | | $ | 3 | | | | | $ | 735 | | | | | $ | 11,011 | | | | | (155.8) | | | | | | $ | (9,748) | | | | | $ | (432) | | | | | $ | 1,569 | | | | | $ | 194 | | | | | $ | 1,763 | |

60 MOODY'S 2019 10-K

/s/ RAYMOND W.

MCDANIEL, JR.

Raymond W.

McDaniel, Jr.

February 21, 2020

MOODY'S 2019 10-K 61

62 MOODY'S 2019 10-K

*Assessment of gross unrecognized tax benefits*

authorities,

assessment.

MOODY'S 2019 10-K 63

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Purchase Price Hedge Gain | | | — | | | | | | — | | | | | | 111 | | | | | | | | | | | | | | |

| CCXI Gain | | | — | | | | | | — | | | | | | 60 | | | | | | | | | | | | | | |

64 MOODY'S 2019 10-K

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Available for Sale Securities: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Net unrealized gains on available for sale securities | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 2 | | | | | | — | | | | | | 2 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Reclassification of gains included in net income | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (4) | | | | | | — | | | | | | (4) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

MOODY'S 2019 10-K 65

66 MOODY'S 2019 10-K

| CCXI Gain | | | — | | | | | | — | | | | | | (60) | | | | | | | | | | | | | | |

| Purchase Price Hedge Gain | | | — | | | | | | — | | | | | | (111) | | | | | | | | | | | | | | |

| Receipts from Purchase Price Hedge | | | — | | | | | | — | | | | | | 111 | | | | | | | | | | | | | | |

MOODY'S 2019 10-K 67

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Balance at December 31, 2016 | | | 342.9 | | | | | | $ | 3 | | | | | $ | 477 | | | | | $ | 6,689 | | | | | (152.2) | | | | | | $ | (8,030) | | | | | $ | (364) | | | | | $ | (1,225) | | | | | $ | 198 | | | | | $ | (1,027) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Net unrealized gain on available for sale securities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (1) | | | | | | (1) | | | | | | (1) | | | | | | (2) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

68 MOODY'S 2019 10-K

MOODY'S 2019 10-K 69

70 MOODY'S 2019 10-K

Moody’s is a provider of (i) credit ratings and assessment services; (ii) credit, capital markets and economic research, data and analytical tools; (iii) software solutions that support financial risk management activities; (iv) quantitatively derived credit scores; (v) learning solutions and certification services; (vi) offshore financial research and analytical services (this business was divested with the sale of MAKS in the fourth quarter of 2019); and (vii) company information and business intelligence products.

MA provides financial intelligence and analytical tools to assist businesses in making decisions.

MA’s portfolio of solutions consists of specialized research, data, software, and professional services, which are assembled to support the financial analysis and risk management activities of institutional customers worldwide.

The operating results of MAKS are reported within the MA segment (and PS LOB) through the closing of the transaction in the fourth quarter.

The New Lease Accounting Standard requires lessees to recognize an ROU Asset and lease liability for all leases with terms of more than 12 months.

The Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, has determined that there were no changes in the Company’s internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, these internal controls over financial reporting during the three months ended December 31, [removed: 2019.][added: 2020.]

Although a significant portion of the Company's workforce began working remotely in mid-March due to the COVID-19 pandemic, Moody's has not experienced any material impact to its internal controls over financial reporting.

[Table [removed: of Contents](#i_0_7)][added: of](#i764aab6d00b34fe7b9dd0fc7012d6e15_7) [Contents](#i764aab6d00b34fe7b9dd0fc7012d6e15_7)]

Except for the information relating to the executive officers of the Company set forth in Part I of this annual report on Form 10-K, the information called for by Items 10-14 is contained in the Company’s definitive proxy statement for use in connection with its annual meeting of stockholders scheduled to be held on April [removed: 21, 2020,] [added: 20, 2021,] and is incorporated herein by reference.

MOODY'S 2020 10-K 131

118 MOODY'S 2019 10-K

Information required by this Item 10 is included under the heading “Information about our Executive Officers” in Part I, Item 1 of this Form 10‑K, as well as under the headings “Item 1–Election of Directors,” “Corporate Governance–Codes of Business Conduct and Ethics,” and “The Audit Committee,” in the 2021 Proxy Statement and is incorporated by reference.

Information required by this Item 11 is included under the headings “Compensation Discussion and Analysis,” “Summary Compensation Table,” “Grants of Plan-Based Awards Table for 2020,” “Outstanding Equity Awards at Fiscal Year-End Table for 2020,” “Option Exercises and Stock Vested Table for 2020,” “Pension Benefits Table for 2020,” “Non-Qualified Deferred Compensation Table,” “Potential Payments Upon Termination or Change in Control,” “Compensation of Directors,” “Relationship of Compensation Practices to Risk Management” “CEO Pay Ratio,” and “Report of the Compensation & Human Resources Committee” in the 2021 Proxy Statement and is incorporated by reference.

Information required by this Item 12 is included under the heading “Equity Compensation Plan Information” in Part II, Item 5 of this Form 10-K, as well as under the heading “Security Ownership of Certain Beneficial Owners and Management” in the 2021 Proxy Statement and is incorporated by reference.

Information required by this Item 13 is included under the headings “Corporate Governance –Director Independence” and “Certain Relationships and Related Transactions” in the 2021 Proxy Statement and is incorporated by reference.

[Table [removed: of Contents](#i_0_7)][added: of](#i764aab6d00b34fe7b9dd0fc7012d6e15_7) [Contents](#i764aab6d00b34fe7b9dd0fc7012d6e15_7)]

Information required by this Item 14 is included under the headings “Item 2–Ratification of Appointment of Independent Registered Public Accountants–Principal Accounting Fees and Services” and “The Audit Committee” in the 2021 Proxy Statement and is incorporated by reference.

132 MOODY'S 2020 10-K

MOODY'S 2019 10-K 119

See Index to Financial Statements on page [removed: 60,] [added: 73,] in Part II.

| S-K EXHIBIT NUMBER | | | | | | | | | | | | [removed: | | |]

| 3 | | | | | | Articles Of Incorporation And By-laws | | | | | | [removed: | | |]

| | | | | | | .1 | | | [Restated Certificate of Incorporation of the Registrant, effective [removed: April 17, 2013 (incorporated] [added: April](https://www.sec.gov/Archives/edgar/data/1059556/000119312520120693/d881553dex33.htm) [22](https://www.sec.gov/Archives/edgar/data/1059556/000119312520120693/d881553dex33.htm)[, 20](https://www.sec.gov/Archives/edgar/data/1059556/000119312520120693/d881553dex33.htm)[20](https://www.sec.gov/Archives/edgar/data/1059556/000119312520120693/d881553dex33.htm) [(incorporated] by reference to Exhibit [removed: 3.4 to] [added: 3.](https://www.sec.gov/Archives/edgar/data/1059556/000119312520120693/d881553dex33.htm)[3](https://www.sec.gov/Archives/edgar/data/1059556/000119312520120693/d881553dex33.htm) [to] the Report on Form 8-K of the Registrant, file number 1-14037, filed April [removed: 22, 2013)](http://www.sec.gov/Archives/edgar/data/1059556/000119312513165172/d524004dex34.htm) | | |] [added: 2](https://www.sec.gov/Archives/edgar/data/1059556/000119312520120693/d881553dex33.htm)[7](https://www.sec.gov/Archives/edgar/data/1059556/000119312520120693/d881553dex33.htm)[, 20](https://www.sec.gov/Archives/edgar/data/1059556/000119312520120693/d881553dex33.htm)[20](https://www.sec.gov/Archives/edgar/data/1059556/000119312520120693/d881553dex33.htm)[)](https://www.sec.gov/Archives/edgar/data/1059556/000119312520120693/d881553dex33.htm)] | | |

| | | | | | | .2 | | | [Amended and Restated By-laws of Moody’s Corporation, [removed: effective April 17, 2013 (incorporated] [added: effective](https://www.sec.gov/Archives/edgar/data/1059556/000119312520320848/d35055dex31.htm) [Dece](https://www.sec.gov/Archives/edgar/data/1059556/000119312520320848/d35055dex31.htm)[mber 14](https://www.sec.gov/Archives/edgar/data/1059556/000119312520320848/d35055dex31.htm)[, 20](https://www.sec.gov/Archives/edgar/data/1059556/000119312520320848/d35055dex31.htm)[20](https://www.sec.gov/Archives/edgar/data/1059556/000119312520320848/d35055dex31.htm) [(incorporated] by reference to Exhibit [removed: 3.2 to] [added: 3.](https://www.sec.gov/Archives/edgar/data/1059556/000119312520320848/d35055dex31.htm)[1](https://www.sec.gov/Archives/edgar/data/1059556/000119312520320848/d35055dex31.htm) [to] the Report on Form 8-K of the Registrant, file number 1-14037, [removed: filed April 22, 2013)](http://www.sec.gov/Archives/edgar/data/1059556/000119312513165172/d524004dex32.htm) | | |] [added: filed](https://www.sec.gov/Archives/edgar/data/1059556/000119312520320848/d35055dex31.htm) [December 18](https://www.sec.gov/Archives/edgar/data/1059556/000119312520320848/d35055dex31.htm)[, 20](https://www.sec.gov/Archives/edgar/data/1059556/000119312520320848/d35055dex31.htm)[20](https://www.sec.gov/Archives/edgar/data/1059556/000119312520320848/d35055dex31.htm)[)](https://www.sec.gov/Archives/edgar/data/1059556/000119312520320848/d35055dex31.htm)] | | |

| 4 | | | | | | Instruments Defining The Rights Of Security Holders, Including Indentures | | | | | | [removed: | | |]

| | | | | | | .1* | | | [Description of the Registrant’s securities registered pursuant to Section 12 of the Securities Exchange Act of [removed: 1934](https://www.sec.gov/Archives/edgar/data/1059556/000105955620000005/mco-20191231xexx41.htm) | | |] [added: 1934](https://www.sec.gov/Archives/edgar/data/1059556/000105955621000010/mco-20201231xexx41.htm)] | | |

| | | | | | | .2 | | | [Specimen Common Stock certificate (incorporated by reference to Exhibit 4.1 to the Report on Form 8-K of the Registrant, file number 1-14037, filed October 4, 2000)](http://www.sec.gov/Archives/edgar/data/1059556/000095012300009095/y40976ex4-1.txt) | | | [removed: | | |]

| | | | | | | .3.1 | | | [Indenture, dated as of August 19, 2010, between Moody’s Corporation and Wells Fargo, [removed: National](http://www.sec.gov/Archives/edgar/data/1059556/000119312510193121/dex41.htm) [](http://www.sec.gov/Archives/edgar/data/1059556/000119312510193121/dex41.htm)[Association,] [added: National Association,] as trustee (incorporated by reference to Exhibit 4.1 to the Report on Form 8-K of [removed: the](http://www.sec.gov/Archives/edgar/data/1059556/000119312510193121/dex41.htm) [](http://www.sec.gov/Archives/edgar/data/1059556/000119312510193121/dex41.htm)[Registrant,] [added: the Registrant,] file number 1-14037, filed August [removed: 19,](http://www.sec.gov/Archives/edgar/data/1059556/000119312510193121/dex41.htm) [2](http://www.sec.gov/Archives/edgar/data/1059556/000119312510193121/dex41.htm)[010)](http://www.sec.gov/Archives/edgar/data/1059556/000119312510193121/dex41.htm) | | |] [added: 19, 2010)](http://www.sec.gov/Archives/edgar/data/1059556/000119312510193121/dex41.htm)] | | |

| | | | | | | .3.2 | | | [removed: [Supplemental] [added: [Second Supplemental] Indenture, dated as of August [removed: 19, 2010,] [added: 20, 2012,] between Moody’s Corporation and Wells Fargo, National Association, as trustee, including the form of the [removed: 5.50%] [added: 4.50%] Senior Notes due [removed: 2020] [added: 2022] (incorporated by reference to Exhibit [removed: 4.2] [added: 4.1] to the Report on Form 8-K of the Registrant, file number 1-14037, filed August [removed: 19, 2010)](http://www.sec.gov/Archives/edgar/data/1059556/000119312510193121/dex42.htm) | | |] [added: 20, 2012)](http://www.sec.gov/Archives/edgar/data/1059556/000119312512362080/d400058dex41.htm)] | | |

| | | | | | | .3.3 | | | [removed: [Second] [added: [Third] Supplemental Indenture, dated as of August [removed: 20, 2012,] [added: 12, 2013,] between Moody’s Corporation and Wells Fargo, National Association, as trustee, including the form of the [removed: 4.50%] [added: 4.875%] Senior Notes due [removed: 2022] [added: 2024] (incorporated by reference to Exhibit 4.1 to the Report on Form 8-K of the Registrant, file number 1-14037, filed August [removed: 20, 2012)](http://www.sec.gov/Archives/edgar/data/1059556/000119312512362080/d400058dex41.htm) | | |] [added: 12, 2013)](http://www.sec.gov/Archives/edgar/data/1059556/000119312513331124/d583113dex41.htm)] | | |

| | | | | | | .3.4 | | | [removed: [Third] [added: [Fourth] Supplemental Indenture, dated [removed: as of August 12, 2013,] [added: July 16, 2014,] between [removed: Moody’s Corporation] [added: the Company] and Wells [removed: Fargo,] [added: Fargo Bank,] National Association, as trustee, including the form of [removed: the 4.875%] [added: 5.250%] Senior Notes due [removed: 2024] [added: 2044] (incorporated by reference to Exhibit 4.1 to the Report on Form 8-K of the Registrant, file number 1-14037, filed [removed: August 12, 2013)](http://www.sec.gov/Archives/edgar/data/1059556/000119312513331124/d583113dex41.htm) | | |] [added: July 16, 2014)](http://www.sec.gov/Archives/edgar/data/1059556/000119312514270522/d756901dex41.htm)] | | |

| | | | | | | [removed: .3.5] [added: .3.6] | | | [removed: [Fourth] [added: [Sixth] Supplemental Indenture, dated [removed: July 16, 2014,] [added: as of March 2, 2017,] between the Company and Wells Fargo Bank, National Association, as trustee, including the form of [removed: 5.250%] [added: 2.750%] Senior Notes due [removed: 2044 (incorporated] [added: 2021](http://www.sec.gov/Archives/edgar/data/1059556/000119312517069905/d302686dex41.htm) [(incorporated] by reference to Exhibit 4.1 to the Report on Form 8-K of the Registrant, file number 1-14037, filed [removed: July 16, 2014)](http://www.sec.gov/Archives/edgar/data/1059556/000119312514270522/d756901dex41.htm) | | |] [added: March 3, 2017)](http://www.sec.gov/Archives/edgar/data/1059556/000119312517069905/d302686dex41.htm)] | | |

| | | | | | | [removed: .3.6.1] [added: .3.5.1] | | | [Fifth Supplemental Indenture, dated March 9, 2015, between the Company, Wells Fargo Bank, National Association, as trustee and Elavon Financial Services Limited, UK Branch as paying agent and transfer agent and Elavon Financial Services Limited as registrar, including the form or 1.75% Senior Notes due 2027 (incorporated by reference to Exhibit 4.1 to the Report on Form 8-K of the Registrant, file number 1-14037, filed March 10, 2015)](http://www.sec.gov/Archives/edgar/data/1059556/000119312515083614/d885366dex41.htm) | | | [removed: | | |]

[Table [removed: of Contents](#i_0_7)][added: of](#i764aab6d00b34fe7b9dd0fc7012d6e15_7) [Contents](#i764aab6d00b34fe7b9dd0fc7012d6e15_7)]

| | | | | | | [removed: .3.6.2] [added: .3.5.2] | | | [Agency Agreement, dated March 9, 2015, between the Company, Wells Fargo Bank, National Association, as trustee and Elavon Financial Services Limited, UK Branch as paying agent and transfer agent and Elavon Financial Services Limited as registrar ((incorporated by reference to Exhibit 4.3 to the Report on Form 8-K of the Registrant, file number 1-14037, filed March 10, 2015)](http://www.sec.gov/Archives/edgar/data/1059556/000119312515083614/d885366dex43.htm) | | | [removed: | | |]

| | | | | | | [removed: .3.7] [added: .3.8] | | | [removed: [Sixth Supplemental] [added: [Eighth Supplement] Indenture, dated as of [removed: March 2, 2017,] [added: June 7, 2018,] between the Company and Wells [removed: Fargo Bank,] [added: Fargo,] National Association, as trustee, including the form of [removed: 2.750%] [added: 3.250%] Senior [removed: Notes] [added: Note] due 2021 [removed: and form of Floating Rate Senior Notes due 2018] (incorporated by reference to Exhibit 4.1 to the Report on Form 8-K of the Registrant, file number 1-14037, filed [removed: March 3, 2017)](http://www.sec.gov/Archives/edgar/data/1059556/000119312517069905/d302686dex41.htm) | | |] [added: June 7, 2018)](http://www.sec.gov/Archives/edgar/data/1059556/000119312518186875/d597409dex41.htm)] | | |

| | | | | | | [removed: .3.8] [added: .3.7] | | | [Seventh Supplemental Indenture, dated as of June 12, 2017, between Moody’s Corporation and Wells Fargo, National Association, as trustee, including the form of 2.625% Senior Notes due 2023 and the form of 3.250% Senior Notes due 2028 (incorporated by reference to Exhibit 4.3 to the Report on Form 8-K of the Registrant, file number 1-14037, filed June 12, 2017)](http://www.sec.gov/Archives/edgar/data/1059556/000119312517201435/d411371dex43.htm) | | | [removed: | | |]

| | | | | | | .3.9 | | | [removed: [Eighth Supplement] [added: [Ninth Supplemental] Indenture, dated as of [removed: June 7,] [added: December 17,] 2018, between the Company and Wells [removed: Fargo,] [added: Fargo Bank,] National Association, as trustee, including the form of [removed: 3.250%] [added: 4.250%] Senior Note due [removed: 2021] [added: 2029 and the form of 4.875% Senior Note due 2048] (incorporated by reference to Exhibit 4.1 to the Report on Form 8-K of the Registrant, file number 1-14037, filed [removed: June 7, 2018)](http://www.sec.gov/Archives/edgar/data/1059556/000119312518186875/d597409dex41.htm) | | |] [added: December 21, 2018)](http://www.sec.gov/Archives/edgar/data/1059556/000119312518356349/d674499dex41.htm)] | | |

| | | | | | | [removed: .3.10] [added: .3.13] | | | [removed: [Ninth] [added: [Thirteenth] Supplemental Indenture, dated as of [removed: December 17, 2018,] [added: August 18, 2020,] between the Company and Wells Fargo Bank, National Association, as trustee, including the form of [removed: 4.250% Senior Note due 2029 and the form of 4.875%] [added: 2.550%] Senior Note due [removed: 2048 (incorporated] [added: 2060](https://www.sec.gov/Archives/edgar/data/1059556/000119312520223656/d31017dex41.htm) [(incorporated] by reference to Exhibit 4.1 to the Report on Form 8-K of the [removed: Registrant, file] [added: Registrant,](https://www.sec.gov/Archives/edgar/data/1059556/000119312520223656/d31017dex41.htm) [file] number 1-14037, filed [removed: December 21, 2018)](http://www.sec.gov/Archives/edgar/data/1059556/000119312518356349/d674499dex41.htm) | | |] [added: August 18, 2020)](https://www.sec.gov/Archives/edgar/data/1059556/000119312520223656/d31017dex41.htm)] | | |

| | | | | | | [removed: .3.11.1] [added: .3.10.1] | | | [Tenth Supplemental Indenture, dated as of November 25, 2019, between the Company, Wells Fargo Bank, National Association, as trustee, Elavon Financial Services Limited, UK Branch as paying agent and U.S. Bank National Association as registrar and transfer agent, including the form of 0.950% Senior Note due 2030 (incorporated by reference to Exhibit 4.1 to the Report on Form 8-K of the Registrant, file number 1-14037, filed November 25, 2019)](http://www.sec.gov/Archives/edgar/data/1059556/000119312519299868/d773656dex41.htm) | | | [removed: | | |]

| | | | | | | [removed: .3.11.2] [added: .3.10.2] | | | [Agency Agreement, dated November 25, 2019, between the Company, Wells Fargo Bank, National Association, as trustee, Elavon Financial Services Limited, UK Branch as paying agent and U.S. Bank National Association as registrar and transfer agent. (incorporated by reference to Exhibit 4.3 to the Report on Form 8-K of the Registrant, file number 1-14037, filed November 25, 2019)](http://www.sec.gov/Archives/edgar/data/1059556/000119312519299868/d773656dex43.htm) | | | [removed: | | |]

| 10 | | | | | | Material Contracts | | | | | | [removed: | | |]

| | | | | | | .1.1† | | | [1998 Moody’s Corporation Non-Employee Directors’ Stock Incentive Plan (Adopted September 8, 2000; Amended and Restated as of December 11, 2012, October 20, 2015, December 14, 2015 and December 18, 2017) (incorporated by reference to Exhibit 10.2.1 to the Registrant’s Annual Report on Form 10-K, file number 1-14037, filed February 27, 2018)](http://www.sec.gov/Archives/edgar/data/1059556/000119312518058986/d540752dex1021.htm) | | | [removed: | | |]

| | | | | | | .1.2† | | | [Form of Non-Employee Director Restricted Stock Unit Grant Agreement (for awards after 2017) for the 1998 Moody’s Corporation Non-Employee Directors’ Stock Incentive Plan (Adopted September 8, 2000; Amended and Restated as of December 11, 2012, October 20, 2015, December 14, 2015 and December 18, 2017)](http://www.sec.gov/Archives/edgar/data/1059556/000119312518058986/d540752dex1023.htm) [removed: | | |] [added: [(incorporated by](http://www.sec.gov/Archives/edgar/data/1059556/000119312518058986/d540752dex1023.htm) [reference to Exhibit 10.2.3 to the R](http://www.sec.gov/Archives/edgar/data/1059556/000119312518058986/d540752dex1023.htm)[egistrant's Annual Report on Form 10-K](http://www.sec.gov/Archives/edgar/data/1059556/000119312518058986/d540752dex1023.htm)[, file number 1-14037, f](http://www.sec.gov/Archives/edgar/data/1059556/000119312518058986/d540752dex1023.htm)[iled February 27, 20](http://www.sec.gov/Archives/edgar/data/1059556/000119312518058986/d540752dex1023.htm)[18)](http://www.sec.gov/Archives/edgar/data/1059556/000119312518058986/d540752dex1023.htm)] | | |

| | | | | | | .2† | | | [Moody’s Corporation 1999 Employee Stock Purchase Plan (as amended and restated December 15, 2008) (formerly, The Dun & Bradstreet Corporation 1999 Employee Stock Purchase Plan) (incorporated by reference to Exhibit 10.38 to the Registrant’s Annual Report on Form 10-K, file number 1-14037, filed March 2, 2009)](http://www.sec.gov/Archives/edgar/data/1059556/000119312509041352/dex1038.htm) | | | [removed: | | |]

| | | | | | | .3.1.1† | | | [Amended and Restated 2001 Moody’s Corporation Key Employees’ Stock Incentive Plan (as amended, December 18, 2017) (incorporated by reference to Exhibit 10.4.1 to the Registrant’s Annual Report on Form 10-K, file number 1-14037, filed February 27, 2018)](http://www.sec.gov/Archives/edgar/data/1059556/000119312518058986/d540752dex1041.htm) | | | [removed: | | |]

| | | | | | | .3.1.2† | | | [First Amendment to the Amended and Restated 2001 Moody’s Corporation Key Employees’ Stock Incentive Plan (as amended, December 18, 2017) (incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q, file number file number 1-14037, filed May 2, 2019)](http://www.sec.gov/Archives/edgar/data/1059556/000119312519133505/d734583dex101.htm) | | | [removed: | | |]

| | | | | | | [removed: .3.1.3†*] [added: .3.1.3†] | | | [Second Amendment to the Amended and Restated 2001 Moody’s Corporation Key Employees’ Stock Incentive Plan (as amended, December 18, [removed: 2017](https://www.sec.gov/Archives/edgar/data/1059556/000105955620000005/mco-20191231xexx10313.htm) [and] [added: 2017 and] April 15, [removed: 2019](https://www.sec.gov/Archives/edgar/data/1059556/000105955620000005/mco-20191231xexx10313.htm)[)](https://www.sec.gov/Archives/edgar/data/1059556/000105955620000005/mco-20191231xexx10313.htm)] [added: 2019)](https://www.sec.gov/Archives/edgar/data/1059556/000105955620000005/mco-20191231xexx10313.htm) [(incorporated by refer](https://www.sec.gov/Archives/edgar/data/1059556/000105955620000005/mco-20191231xexx10313.htm)[ence to Exhibit](https://www.sec.gov/Archives/edgar/data/1059556/000105955620000005/mco-20191231xexx10313.htm) [10.](https://www.sec.gov/Archives/edgar/data/1059556/000105955620000005/mco-20191231xexx10313.htm)[3.1.3 to the R](https://www.sec.gov/Archives/edgar/data/1059556/000105955620000005/mco-20191231xexx10313.htm)[egistrant's Annual Re](https://www.sec.gov/Archives/edgar/data/1059556/000105955620000005/mco-20191231xexx10313.htm)[port on Form 10-K, fi](https://www.sec.gov/Archives/edgar/data/1059556/000105955620000005/mco-20191231xexx10313.htm)[le number](https://www.sec.gov/Archives/edgar/data/1059556/000105955620000005/mco-20191231xexx10313.htm) [1-14037](https://www.sec.gov/Archives/edgar/data/1059556/000105955620000005/mco-20191231xexx10313.htm)[, filed February](https://www.sec.gov/Archives/edgar/data/1059556/000105955620000005/mco-20191231xexx10313.htm) [24, 2020)](https://www.sec.gov/Archives/edgar/data/1059556/000105955620000005/mco-20191231xexx10313.htm)[](https://www.sec.gov/Archives/edgar/data/1059556/000105955620000005/mco-20191231xexx10313.htm)] | | |

| | | | | | | [removed: .3.2†] [added: .3.2.1†] | | | [Form of Employee Non-Qualified Stock Option [removed: and Restricted Stock] Grant Agreement (for awards granted [removed: prior to 2017)] [added: between 2017 and 2019)] for the Amended and Restated 2001 Moody’s Corporation Key Employees’ Stock Incentive Plan (incorporated by reference to Exhibit [removed: 10.2] [added: 10.17] to the Registrant’s [removed: Quarterly] [added: Annual] Report on Form [removed: 10-Q,] [added: 10-K,] file number 1-14037, filed [removed: November 3, 2004)](http://www.sec.gov/Archives/edgar/data/1059556/000095012304012947/y68310exv10w2.htm)] [added: February 24, 2017)](https://www.sec.gov/Archives/edgar/data/1059556/000119312517054522/d330369dex1017.htm)] | | |

| | | | | | | [removed: .3.3.1†] [added: .3.2.2†] | | | [Form of Employee Non-Qualified Stock Option Grant Agreement (for awards granted [removed: between 2017 and 2019)] [added: in 2020 or later)] for the Amended and Restated 2001 Moody’s Corporation Key Employees’ Stock Incentive [removed: Plan (incorporated] [added: Plan](https://www.sec.gov/Archives/edgar/data/1059556/000105955620000005/mco-20191231xexx10332.htm) [](https://www.sec.gov/Archives/edgar/data/1059556/000105955620000005/mco-20191231xexx10332.htm)[(incorporated] by reference to [removed: Exhibit 10.17 to] [added: Exhibit](https://www.sec.gov/Archives/edgar/data/1059556/000105955620000005/mco-20191231xexx10332.htm) [10.](https://www.sec.gov/Archives/edgar/data/1059556/000105955620000005/mco-20191231xexx10332.htm)[3.](https://www.sec.gov/Archives/edgar/data/1059556/000105955620000005/mco-20191231xexx10332.htm)[3](https://www.sec.gov/Archives/edgar/data/1059556/000105955620000005/mco-20191231xexx10332.htm)[.](https://www.sec.gov/Archives/edgar/data/1059556/000105955620000005/mco-20191231xexx10332.htm)[2](https://www.sec.gov/Archives/edgar/data/1059556/000105955620000005/mco-20191231xexx10332.htm) [to] the [removed: Registrant’s] [added: Registrant's] Annual Report on Form 10-K, file number 1-14037, filed February 24, [removed: 2017)](http://www.sec.gov/Archives/edgar/data/1059556/000095012304012947/y68310exv10w2.htm)] [added: 2020)](https://www.sec.gov/Archives/edgar/data/1059556/000105955620000005/mco-20191231xexx10332.htm)] | | |

| | | | | | | [removed: .3.3.2†*] [added: .3.4.2†] | | | [Form of [removed: Employee Non-Qualified] [added: Restricted] Stock [removed: Option] [added: Unit] Grant Agreement (for awards granted in 2020 or later) for the Amended and Restated 2001 Moody’s Corporation Key Employees’ Stock Incentive [removed: Plan](https://www.sec.gov/Archives/edgar/data/1059556/000105955620000005/mco-20191231xexx10332.htm)] [added: Plan](https://www.sec.gov/Archives/edgar/data/1059556/000105955620000005/mco-20191231xexx10352.htm) [](https://www.sec.gov/Archives/edgar/data/1059556/000105955620000005/mco-20191231xexx10352.htm)[(incorporated by reference to Exhibit](https://www.sec.gov/Archives/edgar/data/1059556/000105955620000005/mco-20191231xexx10352.htm) [10.](https://www.sec.gov/Archives/edgar/data/1059556/000105955620000005/mco-20191231xexx10352.htm)[3.](https://www.sec.gov/Archives/edgar/data/1059556/000105955620000005/mco-20191231xexx10352.htm)[5](https://www.sec.gov/Archives/edgar/data/1059556/000105955620000005/mco-20191231xexx10352.htm)[.](https://www.sec.gov/Archives/edgar/data/1059556/000105955620000005/mco-20191231xexx10352.htm)[2](https://www.sec.gov/Archives/edgar/data/1059556/000105955620000005/mco-20191231xexx10352.htm) [to the Registrant's Annual Report on Form 10-K, file number 1-14037, filed February 24, 2020)](https://www.sec.gov/Archives/edgar/data/1059556/000105955620000005/mco-20191231xexx10352.htm)] | | |

| | | | | | | [removed: .3.4.1†] [added: .3.3.1†] | | | [Form of Performance Share Award Letter (for awards granted [removed: in 2017)] [added: between 2018 and 2019)] for the Amended and Restated 2001 Moody’s Corporation Key Employees’ Stock Incentive Plan (incorporated by reference to Exhibit [removed: 10.16] [added: 10.4.6] to the Registrant’s Annual Report on Form 10-K, file number 1-14037, filed February [removed: 24, 2017)](http://www.sec.gov/Archives/edgar/data/1059556/000119312517054522/d330369dex1016.htm)] [added: 27, 2018)](http://www.sec.gov/Archives/edgar/data/1059556/000119312518058986/d540752dex1046.htm)] | | |

| | | | | | | [removed: .3.4.2†] [added: .3.3.2†] | | | [Form of Performance Share Award Letter (for awards granted [removed: between 2018 and 2019)] [added: in 2020 or later)] for the Amended and Restated 2001 Moody’s Corporation Key Employees’ Stock Incentive [removed: Plan (incorporated] [added: Plan](https://www.sec.gov/Archives/edgar/data/1059556/000105955620000005/mco-20191231xexx10343.htm) [](https://www.sec.gov/Archives/edgar/data/1059556/000105955620000005/mco-20191231xexx10343.htm)[(incorporated] by reference to [removed: Exhibit 10.4.6] [added: Exhibit](https://www.sec.gov/Archives/edgar/data/1059556/000105955620000005/mco-20191231xexx10343.htm) [10.](https://www.sec.gov/Archives/edgar/data/1059556/000105955620000005/mco-20191231xexx10343.htm)[3.](https://www.sec.gov/Archives/edgar/data/1059556/000105955620000005/mco-20191231xexx10343.htm)[4](https://www.sec.gov/Archives/edgar/data/1059556/000105955620000005/mco-20191231xexx10343.htm)[.3] to the [removed: Registrant’s] [added: Registrant's] Annual Report on Form 10-K, file number 1-14037, filed February [removed: 27, 2018)](http://www.sec.gov/Archives/edgar/data/1059556/000119312518058986/d540752dex1046.htm)] [added: 24, 2020)](https://www.sec.gov/Archives/edgar/data/1059556/000105955620000005/mco-20191231xexx10343.htm)] | | |

| | | | | | | [removed: .3.4.3†*] [added: .3.4.1†] | | | [Form of [removed: Performance Share Award Letter] [added: Restricted Stock Unit Grant Agreement] (for awards granted [removed: in 2020 or later)] [added: prior to 2020)] for the Amended and Restated 2001 Moody’s Corporation Key Employees’ Stock Incentive [removed: Plan](https://www.sec.gov/Archives/edgar/data/1059556/000105955620000005/mco-20191231xexx10343.htm)] [added: Plan (incorporated by reference to Exhibit 10.18 to the Registrant’s Annual Report on Form 10-K, file number 1-14037, filed February 24, 2017)](http://www.sec.gov/Archives/edgar/data/1059556/000119312517054522/d330369dex1018.htm)] | | |

| | | | | | | [removed: .5†] [added: .18] | | | [removed: [Moody’s Corporation Deferred Compensation Plan, effective] [added: [Form Commercial Paper Dealer Agreement between Moody’s Corporation,] as [removed: of January 1, 2008] [added: Issuer, and the Dealer party thereto] (incorporated by reference to Exhibit 10.1 to the Report on Form 8-K of the Registrant, file number 1-14037, filed [removed: October 26, 2007)](http://www.sec.gov/Archives/edgar/data/1059556/000119312507227062/dex101.htm)] [added: August 3, 2016)](http://www.sec.gov/Archives/edgar/data/1059556/000119312516670078/d227101dex101.htm)] | | |

| | | | | | | .10†* | | | [Moody’s Corporation Retirement [removed: Account, amended] [added: Account](https://www.sec.gov/Archives/edgar/data/1059556/000105955621000010/mco-20201231xexx1010.htm) [](https://www.sec.gov/Archives/edgar/data/1059556/000105955621000010/mco-20201231xexx1010.htm)[(](https://www.sec.gov/Archives/edgar/data/1059556/000105955621000010/mco-20201231xexx1010.htm)[amended] and restated as of January 1, [removed: 2018](https://www.sec.gov/Archives/edgar/data/1059556/000105955620000005/mco-20191231xexx1010.htm)] [added: 20](https://www.sec.gov/Archives/edgar/data/1059556/000105955621000010/mco-20201231xexx1010.htm)[21](https://www.sec.gov/Archives/edgar/data/1059556/000105955621000010/mco-20201231xexx1010.htm)[)](https://www.sec.gov/Archives/edgar/data/1059556/000105955621000010/mco-20201231xexx1010.htm)] | | |

| | | | | | | [removed: .17†] [added: .20] | | | [removed: [Transition Agreement between] [added: [Loan Agreement, dated as of June 6, 2017, among Moody’s Corporation,] the [removed: Company] [added: Lenders party thereto] and [removed: Mark Almeida, dated October 21, 2019] [added: JPMorgan Chase Bank, N.A., as Administrative Agent] (incorporated by reference to Exhibit [removed: 10.1] [added: 4.1] to the Report on Form 8-K of the Registrant, file number 1-14037, filed [removed: on October 25, 2019)](http://www.sec.gov/Archives/edgar/data/1059556/000119312519274778/d824117dex101.htm)] [added: June 12, 2017)](http://www.sec.gov/Archives/edgar/data/1059556/000119312517201435/d411371dex41.htm)] | | |

| | | | | | | [removed: .18] [added: .17] | | | [Settlement Agreement dated January 13, 2017 between (1) Moody’s Corporation, Moody’s Investors Service, Inc. and Moody’s Analytics, Inc., and (2) the United States, acting through the United States Department of Justice and the United States Attorney’s Office for the District of New Jersey, along with various States and the District of Columbia, acting through their respective Attorneys General (incorporated by reference to the Report on Form 8-K of the Registrant, file number 1-14037, filed January 17, 2017)](http://www.sec.gov/Archives/edgar/data/1059556/000119312517010398/d321447dex101.htm) | | |

| | | | | | | [removed: .20] [added: .19] | | | [Five-Year Credit Agreement dated as of November 14, 2018, among Moody’s Corporation, the Borrowing Subsidiaries Party Thereto, the Lenders Party Thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, Bank of America, N.A. and Citibank, N.A. as Co-Syndication Agents, and Barclays Bank plc, MUFG Bank, Ltd. and TD Bank, N.A. as Co-Documentation Agents (incorporated by reference to Exhibit 4.1 to the Report on Form 8-K of the Registrant, file number 1-14037, filed November 20, 2018)](http://www.sec.gov/Archives/edgar/data/1059556/000119312518331369/d652893dex41.htm) | | |

MOODY'S 2020 10-K 133

| | | | | | | .3.11 | | | [Eleventh Supplement Indenture, dated as of March 24, 2020, between the Company and Wells Fargo Bank, National Association, as](https://www.sec.gov/Archives/edgar/data/1059556/000119312520084546/d885192dex41.htm) [t](https://www.sec.gov/Archives/edgar/data/1059556/000119312520084546/d885192dex41.htm)[rustee](https://www.sec.gov/Archives/edgar/data/1059556/000119312520084546/d885192dex41.htm)[, including the](https://www.sec.gov/Archives/edgar/data/1059556/000119312520084546/d885192dex41.htm) [f](https://www.sec.gov/Archives/edgar/data/1059556/000119312520084546/d885192dex41.htm)[orm of 3.750% Senior Note due 2025](https://www.sec.gov/Archives/edgar/data/1059556/000119312520084546/d885192dex41.htm) [(incorporated by refer](https://www.sec.gov/Archives/edgar/data/1059556/000119312520084546/d885192dex41.htm)[e](https://www.sec.gov/Archives/edgar/data/1059556/000119312520084546/d885192dex41.htm)[n](https://www.sec.gov/Archives/edgar/data/1059556/000119312520084546/d885192dex41.htm)[ce](https://www.sec.gov/Archives/edgar/data/1059556/000119312520084546/d885192dex41.htm) [to Exhibit](https://www.sec.gov/Archives/edgar/data/1059556/000119312520084546/d885192dex41.htm) [4.1 to the Report on Form 8-K of the Registrant](https://www.sec.gov/Archives/edgar/data/1059556/000119312520084546/d885192dex41.htm)[,](https://www.sec.gov/Archives/edgar/data/1059556/000119312520084546/d885192dex41.htm) [file number 1-14037, filed](https://www.sec.gov/Archives/edgar/data/1059556/000119312520084546/d885192dex41.htm) [March](https://www.sec.gov/Archives/edgar/data/1059556/000119312520084546/d885192dex41.htm) [2](https://www.sec.gov/Archives/edgar/data/1059556/000119312520084546/d885192dex41.htm)[5](https://www.sec.gov/Archives/edgar/data/1059556/000119312520084546/d885192dex41.htm)[, 20](https://www.sec.gov/Archives/edgar/data/1059556/000119312520084546/d885192dex41.htm)[20](https://www.sec.gov/Archives/edgar/data/1059556/000119312520084546/d885192dex41.htm)[)](https://www.sec.gov/Archives/edgar/data/1059556/000119312520084546/d885192dex41.htm) | | |

| | | | | | | .3.12 | | | [Twelfth Supplemental Indenture, dated as of May 20, 2020, between the Company and Wells Fargo Bank, National Association, as](https://www.sec.gov/Archives/edgar/data/1059556/000119312520147322/d934405dex41.htm) [t](https://www.sec.gov/Archives/edgar/data/1059556/000119312520147322/d934405dex41.htm)[rustee](https://www.sec.gov/Archives/edgar/data/1059556/000119312520147322/d934405dex41.htm)[, including the form of](https://www.sec.gov/Archives/edgar/data/1059556/000119312520147322/d934405dex41.htm) [3.250% Senior Note due 2050](https://www.sec.gov/Archives/edgar/data/1059556/000119312520147322/d934405dex41.htm) [(](https://www.sec.gov/Archives/edgar/data/1059556/000119312520147322/d934405dex41.htm)[incorporated by reference to Exhibit 4.1 to the Report on Form 8-K of the Regis](https://www.sec.gov/Archives/edgar/data/1059556/000119312520147322/d934405dex41.htm)[trant,](https://www.sec.gov/Archives/edgar/data/1059556/000119312520147322/d934405dex41.htm) [file number 1-14037, filed Ma](https://www.sec.gov/Archives/edgar/data/1059556/000119312520147322/d934405dex41.htm)[y 20](https://www.sec.gov/Archives/edgar/data/1059556/000119312520147322/d934405dex41.htm)[, 2020)](https://www.sec.gov/Archives/edgar/data/1059556/000119312520147322/d934405dex41.htm) | | |

| | | | | | | | | | | | |

134 MOODY'S 2020 10-K

[Table of](#i764aab6d00b34fe7b9dd0fc7012d6e15_7) [Contents](#i764aab6d00b34fe7b9dd0fc7012d6e15_7)

| | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | .5†* | | | [Moody’s Corporation Deferred Compensation Plan](https://www.sec.gov/Archives/edgar/data/1059556/000105955621000010/mco-20201231xexx105.htm) [](https://www.sec.gov/Archives/edgar/data/1059556/000105955621000010/mco-20201231xexx105.htm)[(amende](https://www.sec.gov/Archives/edgar/data/1059556/000105955621000010/mco-20201231xexx105.htm)[d and restated](https://www.sec.gov/Archives/edgar/data/1059556/000105955621000010/mco-20201231xexx105.htm) [effective as of January](https://www.sec.gov/Archives/edgar/data/1059556/000105955621000010/mco-20201231xexx105.htm) [1, 20](https://www.sec.gov/Archives/edgar/data/1059556/000105955621000010/mco-20201231xexx105.htm)[20)](https://www.sec.gov/Archives/edgar/data/1059556/000105955621000010/mco-20201231xexx105.htm) | | |

MOODY'S 2020 10-K 135

[Table of](#i764aab6d00b34fe7b9dd0fc7012d6e15_7) [Contents](#i764aab6d00b34fe7b9dd0fc7012d6e15_7)

| | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | .11†* | | | [Profit Participation Plan of Moody’s Corporation (amended and restated as of January 1, 20](https://www.sec.gov/Archives/edgar/data/1059556/000105955621000010/mco-20201231xexx1011.htm)[20](https://www.sec.gov/Archives/edgar/data/1059556/000105955621000010/mco-20201231xexx1011.htm)[)](https://www.sec.gov/Archives/edgar/data/1059556/000105955621000010/mco-20201231xexx1011.htm) | | |

136 MOODY'S 2020 10-K

[Table of](#i764aab6d00b34fe7b9dd0fc7012d6e15_7) [Contents](#i764aab6d00b34fe7b9dd0fc7012d6e15_7)

| | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

120 MOODY'S 2019 10-K

MOODY'S 2019 10-K 121

| | | | | | | .3.5.1† | | | [Form of Restricted Stock Unit Grant Agreement (for awards granted prior to 2020) for the Amended and Restated 2001 Moody’s Corporation Key Employees’ Stock Incentive Plan (incorporated by reference to Exhibit 10.18 to the Registrant’s Annual Report on Form 10-K, file number 1-14037, filed February 24, 2017)](http://www.sec.gov/Archives/edgar/data/1059556/000119312517054522/d330369dex1018.htm) | | |

| | | | | | | .3.5.2†* | | | [Form of Restricted Stock Unit Grant Agreement (for awards granted in 2020 or later) for the Amended and Restated 2001 Moody’s Corporation Key Employees’ Stock Incentive Plan](https://www.sec.gov/Archives/edgar/data/1059556/000105955620000005/mco-20191231xexx10352.htm) | | |

122 MOODY'S 2019 10-K

| | | | | | | .11† | | | [Profit Participation Plan of Moody’s Corporation (amended and restated as of January 1, 2018) (incorporated by reference to Exhibit 4.3 to the Registrant’s Registration Statement on Form S-8, file number 333-228577, filed November 28, 2018)](http://www.sec.gov/Archives/edgar/data/1059556/000119312518336604/d663436dex43.htm) | | |

| | | | | | | .19 | | | [Form Commercial Paper Dealer Agreement between Moody’s Corporation, as Issuer, and the Dealer party thereto (incorporated by reference to Exhibit 10.1 to the Report on Form 8-K of the Registrant, file number 1-14037, filed August 3, 2016)](http://www.sec.gov/Archives/edgar/data/1059556/000119312516670078/d227101dex101.htm) | | |

| | | | | | | .21 | | | [Loan Agreement, dated as of June 6, 2017, among Moody’s Corporation, the Lenders party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent (incorporated by reference to Exhibit 4.1 to the Report on Form 8-K of the Registrant, file number 1-14037, filed June 12, 2017)](http://www.sec.gov/Archives/edgar/data/1059556/000119312517201435/d411371dex41.htm) | | |

MOODY'S 2019 10-K 123

[Table [removed: of Contents](#i_0_7)][added: of](#i764aab6d00b34fe7b9dd0fc7012d6e15_7) [Contents](#i764aab6d00b34fe7b9dd0fc7012d6e15_7)]

| [removed: By: /s/] [added: /s/ CAROLINE SULLIVAN | | | /s/] RAYMOND W. MCDANIEL, [removed: JR.] [added: JR.] | | |

| [added: Caroline Sullivan, | | |] Raymond W. McDaniel, [removed: Jr.] [added: Jr.,] | | |

Date: February [removed: 21, 2020][added: 19, 2021]

| *President and Chief Executive Officer* | | | [removed: *Director*] [added: *Lead Independent Director*] | | |

| [added: /s/ BASIL L. ANDERSON] | | | /s/ HENRY A. MCKINNELL, JR. PH.D. | | |

| [removed: /s/ CAROLINE SULLIVAN] [added: Basil L. Anderson,] | | | Henry A. McKinnell, Jr. Ph.D., | | |

| *Senior Vice President and Corporate Controller* | | | [added: *Chairman*] | | |

| [added: /s/ JORGE A. BERMUDEZ] | | | /s/ LESLIE F. SEIDMAN | | |

| [added: Jorge A. Bermudez,] | | | Leslie F. Seidman, | | |

| *Director* | | | [added: *Director*] | | |

| [added: /s/ THÉRÈSE ESPERDY] | | | /s/ BRUCE VAN SAUN | | |

| [added: Thérèse Esperdy,] | | | Bruce Van Saun, | | |

| [removed: /s/ THÉRÈSE ESPERDY] [added: *Director*] | | | *Director* | | |

| | | | Date: February [removed: 21, 2020] [added: 19, 2021] | | |

MOODY'S 2020 10-K 137

| By: /s/ ROBERT FAUBER | | |

| Robert Fauber | | |

| /s/ ROBERT FAUBER | | | /s/ VINCENT A. FORLENZA | | |

| Robert Fauber, | | | Vincent A. Forlenza, | | |

| /s/ MARK KAYE | | | /s/ KATHRYN M. HILL | | |

| Mark Kaye, | | | Kathryn M. Hill, | | |

| | | | | | |

| | | | | | |

| | | | | | |

| | | | | | |

| | | | | | |

| | | | | | |

| | | | | | |

| *Director* | | | *Director* | | |

| | | | | | |

| | | | | | |

138 MOODY'S 2020 10-K

124 MOODY'S 2019 10-K

| /s/ RAYMOND W. MCDANIEL, JR. | | | /s/ KATHRYN M. HILL | | |

| Raymond W. McDaniel, Jr., | | | Kathryn M. Hill, | | |

| /s/ MARK KAYE | | | /s/ VINCENT A. FORLENZA | | |

| Mark Kaye, | | | Vincent A. Forlenza, | | |

| Caroline Sullivan, | | | *Chairman* | | |

| /s/ BASIL L. ANDERSON | | | *Director* | | |

| Basil L. Anderson, | | | | | |

| /s/ JORGE A. BERMUDEZ | | | *Director* | | |

| Jorge A. Bermudez, | | | | | |

| | | | /s/ GERRIT ZALM | | |

| | | | Gerrit Zalm, | | |

| Thérèse Esperdy, | | | | | |

MOODY'S 2019 10-K 125

The Company’s selected consolidated financial data should be read in conjunction with Item 7.

“MD&A” and the Moody’s Corporation consolidated financial statements and notes thereto.

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| | | | | | | Year Ended December 31, | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| amounts in millions, except per share data | | | | | | 2019 | | | | | | 2018 | | | | | | 2017 | | | | | | 2016 | | | | | | 2015 | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Results of operations | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Revenue | | | | | | $ | 4,829 | | | | | $ | 4,443 | | | | | $ | 4,204 | | | | | $ | 3,604 | | | | | $ | 3,485 | | | | | | | | | | | | | | | | | | | | | | | | | |

| Expenses | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Operating and SG&A Expenses (1) | | | | | | 2,554 | | | | | | 2,326 | | | | | | 2,202 | | | | | | 1,950 | | | | | | 1,880 | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Restructuring | | | | | | 60 | | | | | | 49 | | | | | | — | | | | | | 12 | | | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Depreciation and amortization | | | | | | 200 | | | | | | 192 | | | | | | 158 | | | | | | 127 | | | | | | 114 | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Acquisition-Related Expenses | | | | | | 3 | | | | | | 8 | | | | | | 23 | | | | | | — | | | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Settlement Charge | | | | | | — | | | | | | — | | | | | | — | | | | | | 864 | | | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Loss pursuant to the divestiture of MAKS | | | | | | 14 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Total Expenses | | | | | | 2,831 | | | | | | 2,575 | | | | | | 2,383 | | | | | | 2,953 | | | | | | 1,994 | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Operating income(2) | | | | | | 1,998 | | | | | | 1,868 | | | | | | 1,821 | | | | | | 651 | | | | | | 1,491 | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Non-operating (expense) income, net (3)(1) | | | | | | (188) | | | | | | (196) | | | | | | (34) | | | | | | (94) | | | | | | (112) | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Income before provision for income taxes (2) | | | | | | 1,810 | | | | | | 1,672 | | | | | | 1,787 | | | | | | 557 | | | | | | 1,379 | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Provision for income taxes (4) | | | | | | 381 | | | | | | 352 | | | | | | 779 | | | | | | 282 | | | | | | 430 | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Net income (2) (5) | | | | | | 1,429 | | | | | | 1,320 | | | | | | 1,008 | | | | | | 275 | | | | | | 949 | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Less: Net income attributable to noncontrolling interests | | | | | | 7 | | | | | | 10 | | | | | | 7 | | | | | | 9 | | | | | | 8 | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Net income attributable to Moody’s (2)(5) | | | | | | $ | 1,422 | | | | | $ | 1,310 | | | | | $ | 1,001 | | | | | $ | 266 | | | | | $ | 941 | | | | | | | | | | | | | | | | | | | | | | | | | |

| Earnings per share | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Basic (2) (5) | | | | | | $ | 7.51 | | | | | $ | 6.84 | | | | | $ | 5.24 | | | | | $ | 1.38 | | | | | $ | 4.70 | | | | | | | | | | | | | | | | | | | | | | | | | |

| Diluted (2) (5) | | | | | | $ | 7.42 | | | | | $ | 6.74 | | | | | $ | 5.15 | | | | | $ | 1.36 | | | | | $ | 4.63 | | | | | | | | | | | | | | | | | | | | | | | | | |

| Weighted average shares outstanding | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Basic | | | | | | 189.3 | | | | | | 191.6 | | | | | | 191.1 | | | | | | 192.7 | | | | | | 200.1 | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Diluted | | | | | | 191.6 | | | | | | 194.4 | | | | | | 194.2 | | | | | | 195.4 | | | | | | 203.4 | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Dividends declared per share | | | | | | $ | 2.00 | | | | | $ | 1.76 | | | | | $ | 1.14 | | | | | $ | 1.49 | | | | | $ | 1.39 | | | | | | | | | | | | | | | | | | | | | | | | | |

| Operating margin (2) | | | | | | 41.4 | | % | | | | 42.0 | | % | | | | 43.3 | | % | | | | 18.1 | | % | | | | 42.8 | | % | | | | | | | | | | | | | | | | | | | | | | | | |

| Operating Cash Flow (6) | | | | | | $ | 1,675 | | | | | $ | 1,461 | | | | | $ | 755 | | | | | $ | 1,259 | | | | | $ | 1,198 | | | | | | | | | | | | | | | | | | | | | | | | | |

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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | December 31, | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | 2019 | | | | | | 2018 | | | | | | 2017 | | | | | | 2016 | | | | | | 2015 | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Balance sheet data | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Total assets | | | $ | 10,265 | | | | | $ | 9,526 | | | | | $ | 8,594 | | | | | $ | 5,327 | | | | | $ | 5,103 | | | | | | | | | | | | | | | | | | | | | | | | | |

| Long-term debt | | | $ | 5,581 | | | | | $ | 5,226 | | | | | $ | 5,111 | | | | | $ | 3,063 | | | | | $ | 3,381 | | | | | | | | | | | | | | | | | | | | | | | | | |

| Operating lease liabilities, long-term | | | $ | 485 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | | | | | | | | | | | | | | | | | | | | | |