Item 8. FINANCIAL STATEMENTS

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Item 8. FINANCIAL STATEMENTS

Index to Financial Statements


						Page
Management’s Report on Internal Control Over Financial Reporting						66
Report of Independent Registered Public Accounting Firm						67
Consolidated Financial Statements:
Consolidated Statements of Operations						69
Consolidated Statements of Comprehensive Income						70
Consolidated Balance Sheets						71
Consolidated Statements of Cash Flows						72
Consolidated Statements of Shareholders’ Equity						73
Notes to Consolidated Financial Statements						76

Schedules are omitted as not required or inapplicable or because the required information is provided in the consolidated financial statements, including the notes thereto.

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MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Management of Moody’s Corporation is responsible for establishing and maintaining adequate internal control over financial reporting and for the assessment of the effectiveness of internal control over financial reporting. As defined by the SEC in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, internal control over financial reporting is a process designed by, or under the supervision of, the Company’s principal executive and principal financial officers, or persons performing similar functions, and effected by the Company’s Board, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

Moody’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of Moody’s management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management of the Company evaluated and assessed the design and operational effectiveness of the Company’s internal control over financial reporting as of December 31, 2025 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, 2025.

The effectiveness of our internal control over financial reporting as of December 31, 2025 has been audited by KPMG LLP, an independent registered public accounting firm, as stated in their accompanying report which expresses an unqualified opinion on the effectiveness of Moody's internal control over financial reporting as of December 31, 2025.

/s/ ROBERT FAUBER

Robert Fauber

President and Chief Executive Officer

/s/ NOÉMIE HEULAND

Noémie Heuland

Senior Vice President and Chief Financial Officer

February 18, 2026

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Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors

Moody’s Corporation:

Opinions on the Consolidated Financial Statements and Internal Control Over Financial Reporting

We have audited the accompanying consolidated balance sheets of Moody's Corporation and subsidiaries (the Company) as December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive income, shareholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2025, 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, 2025, 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, 2025 and 2024, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2025, 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, 2025 based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Basis for Opinions

The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s consolidated financial statements and an opinion on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

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Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Gross uncertain tax positions

As discussed in Note 15 to the consolidated financial statements, the Company has recorded uncertain tax positions (UTPs) of $158 million as of December 31, 2025. The Company determines whether it is more-likely-than-not that a tax position will be sustained based on its technical merits as of the reporting date. A tax position that meets this more-likely-than-not threshold is then measured and recognized at the largest amount of benefit that is greater than fifty percent likely to be realized upon effective settlement with a taxing authority.

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

The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested 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. We involved valuation professionals with specialized skills and knowledge, who assisted in assessing transfer pricing documentation for compliance with applicable laws and regulations. Additionally, we involved tax 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 authorities;
assessing the expiration of statutes of limitations; and
performing an assessment of the Company’s tax positions and comparing the results to the Company’s assessment.

In addition, we evaluated the Company’s ability to accurately estimate its gross UTPs by comparing historical gross UTPs to actual results upon conclusion of tax audits.

/s/ KPMG LLP

We have served as the Company’s auditor since 2008.

New York, New York

February 18, 2026

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MOODY’S CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(Amounts in millions, except per share data)


	Year Ended December 31,
	2025		2024		2023
Revenue	$	7,718	$	7,088	$	5,916
Expenses
Operating	1,973		1,945		1,687
Selling, general and administrative	1,803		1,735		1,632
Depreciation and amortization	480		431		373
Restructuring	108		59		87
Charges related to asset abandonment	3		43		—

Total expenses	4,367		4,213		3,779
Operating income	3,351		2,875		2,137
Non-operating expense, net
Interest expense, net	(213)		(237)		(251)
Other non-operating (expense) income, net	(31)		61		49
Gain on divestiture of business	23		—		—
Non-operating expense, net	(221)		(176)		(202)
Income before provision for income taxes	3,130		2,699		1,935
Provision for income taxes	668		640		327
Net income	2,462		2,059		1,608
Less: Net income attributable to noncontrolling interests	3		1		1
Net income attributable to Moody’s	$	2,459	$	2,058	$	1,607
Earnings per share
Basic	$	13.73	$	11.32	$	8.77
Diluted	$	13.67	$	11.26	$	8.73
Weighted average shares outstanding
Basic	179.1		181.8		183.2
Diluted	179.9		182.7		184.0

The accompanying notes are an integral part of the consolidated financial statements.

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MOODY’S CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Amounts in millions)


	Year Ended December 31, 2025						Year Ended December 31, 2024						Year Ended December 31, 2023
	Pre-tax amounts		Tax amounts		After-tax amounts		Pre-tax amounts		Tax amounts		After-tax amounts		Pre-tax amounts		Tax amounts		After-tax amounts
Net Income					$	2,462					$	2,059					$	1,608
Other Comprehensive Income (Loss):
Foreign Currency Adjustments:
Foreign currency translation adjustments, net	$	594	$	(2)	$	592	$	(309)	$	(3)	$	(312)	$	213	$	(1)	$	212

Net gains (losses) on net investment hedges	(629)		160		(469)		299		(77)		222		(177)		45		(132)

Cash Flow Hedges:

Reclassification of losses included in net income	2		(1)		1		3		(1)		2		2		(1)		1



Pension and Other Retirement Benefits:
Amortization of actuarial (gains) losses, prior service (credits) costs, and settlement (gain) charge included in net income	(2)		—		(2)		(2)		—		(2)		(3)		—		(3)
Net actuarial gains (losses)	9		(2)		7		25		(6)		19		(8)		2		(6)
Total Other Comprehensive Income (Loss)	$	(26)	$	155	$	129	$	16	$	(87)	$	(71)	$	27	$	45	$	72
Comprehensive Income					2,591						1,988						1,680
Less: comprehensive loss attributable to noncontrolling interests					(9)						—						(4)
Comprehensive Income Attributable to Moody’s					$	2,600					$	1,988					$	1,684

The accompanying notes are an integral part of the consolidated financial statements.

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MOODY’S CORPORATION

CONSOLIDATED BALANCE SHEETS

(Amounts in millions, except share and per share data)


	December 31,
	2025		2024
ASSETS
Current assets:
Cash and cash equivalents	$	2,384	$	2,408
Short-term investments	64		566
Accounts receivable, net of allowances for credit losses of $29 in 2025 and $32 in 2024	2,024		1,801
Other current assets	714		515

Total current assets	5,186		5,290
Property and equipment, net of accumulated depreciation of $1,572 in 2025 and $1,453 in 2024	722		656
Operating lease right-of-use assets	282		216
Goodwill	6,368		5,994
Intangible assets, net	1,866		1,890
Deferred tax assets, net	305		293
Other assets	1,101		1,166
Total assets	$	15,830	$	15,505
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	1,304	$	1,344
Current portion of operating lease liabilities	95		102
Current portion of long-term debt	—		697
Deferred revenue	1,582		1,454

Total current liabilities	2,981		3,597
Non-current portion of deferred revenue	56		57
Long-term debt	6,994		6,731
Deferred tax liabilities, net	315		449
Uncertain tax positions	158		211
Operating lease liabilities	262		216
Other liabilities	859		517
Total liabilities	11,625		11,778
Contingencies (Note 19)
Shareholders’ equity:
Preferred stock, par value $0.01 per share; 10,000,000 shares authorized; no shares issued and outstanding	—		—
Series common stock, par value $0.01 per share; 10,000,000 shares authorized; no shares issued and outstanding			—
Common stock, par value $0.01 per share; 1,000,000,000 shares authorized; 342,902,272 shares issued at December 31, 2025 and December 31, 2024, respectively.	3		3
Capital surplus	1,676		1,451
Retained earnings	17,853		16,071
Treasury stock, at cost; 165,359,285 and 162,593,213 shares of common stock at December 31, 2025 and December 31, 2024, respectively	(14,978)		(13,322)
Accumulated other comprehensive loss	(500)		(638)
Total Moody’s shareholders’ equity	4,054		3,565
Noncontrolling interests	151		162
Total shareholders’ equity	4,205		3,727
Total liabilities and shareholders’ equity	$	15,830	$	15,505

The accompanying notes are an integral part of the consolidated financial statements.

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MOODY’S CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in millions)


	Year Ended December 31,
	2025		2024		2023
Cash flows from operating activities
Net income	$	2,462	$	2,059	$	1,608
Reconciliation of net income to net cash provided by operating activities:
Depreciation and amortization	480		431		373
Stock-based compensation	232		220		193
Deferred income taxes	(17)		(62)		(38)
Non-cash restructuring and abandonment-related charges	9		32		35

Provision for credit losses on accounts receivable	12		15		22


Gain on previously held/sold investments in non-consolidated affiliates	—		(7)		(4)

Gain on divestiture of business	(23)		—		—
Changes in assets and liabilities:
Accounts receivable	(203)		(187)		(12)
Other current assets	(76)		(36)		119
Other assets	36		(17)		(69)
Lease obligations	(33)		(33)		(26)
Accounts payable and accrued liabilities	(55)		225		76
Deferred revenue	148		154		24
Unrecognized tax positions and other non-current tax liabilities	(57)		18		(129)
Other liabilities	(14)		26		(21)
Net cash provided by operating activities	2,901		2,838		2,151
Cash flows from investing activities
Capital additions	(326)		(317)		(271)
Purchases of investments	(188)		(651)		(143)
Sales and maturities of investments	690		135		162
Purchases of investments in non-consolidated affiliates	(19)		(4)		(5)
Sales of/distributions from investments in non-consolidated affiliates	—		2		13

Cash received upon divestiture of business, net of cash transferred to purchaser	40		—		—
Cash paid for acquisitions, net of cash acquired	(227)		(221)		(3)
Receipts from settlements of net investment hedges	32		—		—

Net cash provided by (used in) investing activities	2		(1,056)		(247)
Cash flows from financing activities
Issuance of notes	—		496		—
Repayment of notes	(700)		—		(500)


Proceeds from stock-based compensation plans	49		73		50
Repurchase of shares related to stock-based compensation	(99)		(91)		(71)
Treasury shares	(1,607)		(1,292)		(490)
Dividends	(701)		(620)		(564)
Dividends to noncontrolling interests	(5)		(7)		(9)


Debt issuance costs, extinguishment costs and related fees	—		(5)		—
Net cash used in financing activities	(3,063)		(1,446)		(1,584)
Effect of exchange rate changes on cash and cash equivalents	136		(58)		41
(Decrease) increase in cash and cash equivalents	(24)		278		361
Cash and cash equivalents, beginning of period	2,408		2,130		1,769
Cash and cash equivalents, end of period	$	2,384	$	2,408	$	2,130

The accompanying notes are an integral part of the consolidated financial statements.

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MOODY’S CORPORATION

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(Amounts in millions, except per share data)


	Shareholders of Moody’s Corporation
	Common Stock							Treasury Stock			Accumulated Other Comprehensive Loss		Total Moody’s Shareholders’ Equity		Non- Controlling Interests		Total Shareholders’ Equity
	Shares	Amount		Capital Surplus		Retained Earnings		Shares	Amount
Balance at December 31, 2022	342.9	$	3	$	1,054	$	13,618	(159.7)	$	(11,513)	$	(643)	$	2,519	$	170	$	2,689
Net income						1,607							1,607		1		1,608
Dividends ($3.08 per share)						(566)							(566)		(9)		(575)


Stock-based compensation				193									193				193
Shares issued for stock-based compensation plans at average cost, net				(19)				0.8	—				(19)				(19)


Treasury shares repurchased, inclusive of excise tax				—				(1.5)	(492)				(492)				(492)
Currency translation adjustment, net of net investment hedge activity (net of tax of $44 million)											84		84		(4)		80
Net actuarial losses (net of tax of $2 million)											(6)		(6)				(6)
Amortization of actuarial gains, prior service credits and settlement gain											(3)		(3)				(3)


Amortization of losses on cash flow hedges (net of tax of $1 million)											1		1				1
Balance at December 31, 2023	342.9	$	3	$	1,228	$	14,659	(160.4)	$	(12,005)	$	(567)	$	3,318	$	158	$	3,476

The accompanying notes are an integral part of the consolidated financial statements.

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MOODY’S CORPORATION

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY continued

(Amounts in millions, except per share data)


	Shareholders of Moody’s Corporation
	Common Stock							Treasury Stock			Accumulated Other Comprehensive Loss		Total Moody’s Shareholders’ Equity		Non- Controlling Interests		Total Shareholders’ Equity
	Shares	Amount		Capital Surplus		Retained Earnings		Shares	Amount
Balance at December 31, 2023	342.9	$	3	$	1,228	$	14,659	(160.4)	$	(12,005)	$	(567)	$	3,318	$	158	$	3,476
Net income						2,058							2,058		1		2,059
Dividends ($3.40 per share)						(646)							(646)		(7)		(653)


Stock-based compensation				225									225				225
Shares issued for stock-based compensation plans at average cost, net				(2)				0.7	(16)				(18)				(18)
Noncontrolling interest resulting from majority acquisition													—		10		10


Treasury shares repurchased, inclusive of excise tax				—				(2.9)	(1,301)				(1,301)				(1,301)
Currency translation adjustment, net of net investment hedge activity (net of tax of $80 million)											(90)		(90)		—		(90)
Net actuarial gains (net of tax of $6 million)											19		19				19
Amortization of actuarial gains and prior service credits											(2)		(2)				(2)
Amortization of losses on cash flow hedges (net of tax of $1 million)											2		2				2
Balance at December 31, 2024	342.9	$	3	$	1,451	$	16,071	(162.6)	$	(13,322)	$	(638)	$	3,565	$	162	$	3,727

The accompanying notes are an integral part of the consolidated financial statements.

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MOODY’S CORPORATION

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY continued

(Amounts in millions, except per share data)


	Shareholders of Moody’s Corporation
	Common Stock							Treasury Stock			Accumulated Other Comprehensive Loss		Total Moody’s Shareholders’ Equity		Non- Controlling Interests		Total Shareholders’ Equity
	Shares	Amount		Capital Surplus		Retained Earnings		Shares	Amount
Balance at December 31, 2024	342.9	$	3	$	1,451	$	16,071	(162.6)	$	(13,322)	$	(638)	$	3,565	$	162	$	3,727
Net income						2,459							2,459		3		2,462
Dividends ($3.76 per share)						(677)							(677)		(5)		(682)


Stock-based compensation				239									239				239
Shares issued for stock-based compensation plans at average cost, net				(14)				0.5	(36)				(50)				(50)



Treasury shares repurchased, inclusive of excise tax				—				(3.3)	(1,620)				(1,620)				(1,620)
Currency translation adjustment, net of net investment hedge activity (net of tax of $158 million)											132		132		(9)		123
Net actuarial gains (net of tax of $2 million)											7		7				7
Amortization of actuarial gains and prior service credits											(2)		(2)				(2)
Amortization of losses on cash flow hedges (net of tax of $1 million)											1		1				1

Balance at December 31, 2025	342.9	$	3	$	1,676	$	17,853	(165.4)	$	(14,978)	$	(500)	$	4,054	$	151	$	4,205

The accompanying notes are an integral part of the consolidated financial statements.

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MOODY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(tabular dollar and share amounts in millions, except per share data)

NOTE 1 DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

Moody’s is a global provider of integrated perspectives on risk that empowers organizations and investors to make better decisions. Moody’s reports in two reportable segments: MA and MIS.

MA is comprised of: i) a premier fixed income and economic research business (Research & Insights); ii) a curated data business powered by an extensive database on companies and credit (Data & Information); and iii) three cloud-based subscription businesses serving banking, insurance, and KYC workflows (Decision Solutions). MA leverages its industry expertise across multiple risks such as credit, market, financial crime, supply chain, catastrophe and climate to deliver integrated risk assessment solutions that enable business leaders to identify, measure and manage the implications of interrelated risks and opportunities.

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

Certain reclassifications have been made to prior period amounts to conform to the current presentation.

Adoption of New Accounting Standards in 2025

In December 2023, the FASB issued ASU 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures" ("ASU No. 2023-09"), which is intended to enhance the transparency and decision usefulness of income tax disclosures. The amendments in ASU No. 2023-09 require entities to disclose additional income tax information, primarily related to greater disaggregation of the entity's ETR reconciliation and income taxes paid by jurisdiction disclosures. This ASU is effective for annual periods beginning after December 15, 2024, and should be applied on a prospective basis; however, retrospective application is permitted. The Company adopted this ASU retrospectively for all periods presented with the new required disclosures presented in Note 15.

In July 2025, the FASB issued ASU 2025-05, "Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets", which amends Topic 326 to provide a practical expedient and an accounting policy election related to the estimation of expected credit losses for current accounts receivable and current contract assets that arise from transactions accounted for under ASC 606. Specifically, in developing reasonable and supportable forecasts as part of estimating expected credit losses on accounts receivable, entities may elect a practical expedient that assumes that current conditions as of the balance sheet date do not change for the remaining life of the asset. This ASU is effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods, with early adoption permitted. The Company early adopted this ASU in the fourth quarter of 2025, and applied it prospectively as of January 1, 2025, in accordance with the transition provisions for early adoption. The adoption of this ASU did not have a material impact on the financial statements.

Reclassification of Previously Reported Transaction and Recurring Revenue

In the first quarter of 2025, the Company reclassified certain prior-year transaction and recurring revenue amounts to align with a refined classification methodology. The impact of the reclassifications was not material, and the reclassified amounts for 2024 and 2023 are reflected in Note 3.

NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Consolidation

The consolidated financial statements include those of Moody’s Corporation and its majority- and wholly-owned subsidiaries. The effects of all intercompany transactions have been eliminated. Investments in companies for which the Company has significant influence over operating and financial policies but not a controlling interest are accounted for on an equity basis whereby the Company records its proportional share of the investment’s net income or loss as part of other non-operating income (expense), net and any dividends received reduce the carrying amount of the investment. Equity investments without a readily determinable fair value for which the Company does not have significant influence are accounted for under the ASC Topic 321 measurement alternative; these investments are recorded at initial cost, less impairment, adjusted upward or downward for any observable price changes in similar investments. The Company applies the guidelines set forth in ASC Topic 810 assessing its interests in voting and variable interest entities to decide whether to consolidate an entity. The Company has reviewed the potential variable interest entities and determined that there are no consolidation requirements under ASC Topic 810. The Company consolidates its ICRA subsidiaries on a three month lag.

Cash and Cash Equivalents

Cash equivalents principally consist of investments in money market deposit accounts and money market funds as well as certificates of deposit with maturities of three months or less when purchased.

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Short-term Investments

Short-term investments are securities with maturities greater than 90 days at the time of purchase that are available for operations in the next 12 months. The Company’s short-term investments primarily consist of certificates of deposit and their cost approximates fair value due to the short-term nature of the instruments. Interest and dividends on these investments are recorded into income when earned.

Property and Equipment

Property and equipment are stated at cost and are depreciated using the straight-line method over their estimated useful lives. Expenditures for maintenance and repairs that do not extend the economic useful life of the related assets are charged to expense as incurred.

Computer Software Developed or Obtained for Internal Use

The Company capitalizes costs related to software developed or obtained for internal use. These assets, included in property and equipment in the consolidated balance sheets, relate to MA's cloud-based solutions as well as the Company’s financial, website and other systems. Such costs generally consist of employee compensation, direct costs for third-party license fees and professional services provided by third parties, in each case incurred either during the application development stage or in connection with upgrades and enhancements that increase functionality. Such costs are depreciated over their estimated useful lives on a straight-line basis. Costs incurred during the preliminary project stage of development as well as maintenance costs are expensed as incurred.

The Company also capitalizes implementation costs incurred in cloud computing arrangements (e.g., hosted arrangements) and depreciates the costs over the non-cancellable term of the cloud computing arrangements plus any option renewal periods that are reasonably certain to be exercised or for which the exercise is controlled by the service provider. The Company classifies the amortization of capitalized implementation costs in the same line item in the consolidated statement of operations as the fees associated with the hosting service (i.e., operating and SG&A expense) and classifies the related payments in the consolidated statement of cash flows in the same manner as payments made for fees associated with the hosting service (i.e. cash flows from operating activities). In addition, the capitalization of implementation costs is reflected in the consolidated balance sheets consistent with the location of prepayment of fees for the hosting element (i.e., within other current assets or other assets).

Goodwill

Moody’s evaluates its goodwill for impairment at the reporting unit level, defined as an operating segment (i.e., MA and MIS), or one level below an operating segment (i.e., a component of an operating segment), annually as of July 31 or more frequently if impairment indicators arise in accordance with ASC Topic 350.

The Company evaluates the recoverability of goodwill using a two-step impairment test approach at the reporting unit level. In the first step, the Company assesses various qualitative factors to determine whether the fair value of a reporting unit may be less than its carrying amount. If a determination is made based on the qualitative factors that an impairment does not exist, the Company is not required to perform further testing. If the aforementioned qualitative assessment results in the Company concluding that it is more likely than not that the fair value of a reporting unit may be less than its carrying amount, the fair value of the reporting unit will be quantitatively determined and compared to its carrying value including goodwill. If the fair value of the reporting unit exceeds the carrying value of the net assets assigned to that unit, goodwill is not impaired and the Company is not required to perform further testing. If the fair value of the reporting unit is less than the carrying value, the Company will record a goodwill impairment charge for the amount by which the carrying value exceeds the reporting unit’s fair value.

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 or if there are indicators of potential impairment. For the reporting units where the Company is consistently able to conclude that no impairment exists using only a qualitative approach, the Company’s accounting policy is to perform the second step of the aforementioned goodwill impairment assessment at least once every three years.

Prior to 2025, MA's reporting unit structure consisted of two reporting units comprised of businesses that offer: i) data and data-driven analytical solutions; and ii) risk-management software, workflow and CRE solutions. During the first quarter of 2025, MA reorganized its management and reporting structure, which affected the composition of the reporting units within the MA reportable segment. As a result, MA's reporting unit structure now consists of one reporting unit, which is consistent with the segment's current management structure and operating model. This reorganization did not result in a change to the Company's reportable segments. The Company performed assessments of the reporting units impacted by the reorganization immediately before and after the reorganization became effective and determined that it was not more likely than not that the fair value of any reporting unit was less than its carrying amount.

Subsequent to the aforementioned reorganization of the MA reporting unit structure, for the purposes of assessing the recoverability of goodwill, the Company now has three reporting units: two within the Company’s ratings business (one for the ICRA business and one that encompasses all of Moody’s other ratings operations) and one reporting unit within MA.

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Impairment of Long-lived Assets and Definite-lived Intangible assets

Long-lived assets, which consist primarily of amortizable intangible assets, internal-use computer software, lease ROU Assets and property and equipment are reviewed for recoverability whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

Under the first step of the recoverability assessment, the Company compares the estimated undiscounted future cash flows attributable to the asset or asset group to their carrying value. If the undiscounted future cash flows are greater than the carrying value, no further assessment is required. If the undiscounted future cash flows are less than the carrying value, Moody's proceeds with step two of the assessment. Under step two of this assessment, Moody's is required to determine the fair value of the asset or asset group (reduced by the estimated cost to sell the asset for assets or disposal groups classified as held-for-sale) and recognize an impairment loss if the carrying amount exceeds its fair value.

Stock-Based Compensation

The Company records compensation expense over the requisite service period for all share-based payment award transactions granted to employees based on the fair value of the equity instrument at the time of grant. This includes shares issued under stock option and restricted stock plans.

Derivative Instruments and Hedging Activities

Based on the Company’s risk management policy, the Company may use derivative financial instruments to reduce exposure to changes in foreign exchange rates and interest rates. The Company does not enter into derivative financial instruments for speculative purposes. All derivative financial instruments are recorded on the consolidated balance sheets at their respective fair values on a gross basis. The changes in the value of derivatives that qualify as fair value hedges are recorded in the same income statement line item in earnings in which the corresponding adjustment to the carrying value of the hedged item is presented. The entire change in the fair value of derivatives that qualify as cash flow hedges is recorded to OCI and such amounts are reclassified from AOCI(L) to the same income statement line in earnings in the same period or periods during which the hedged transaction affects income. The Company assesses effectiveness for net investment hedges using the spot-method. The entire change in the fair value of derivatives that qualify as net investment hedges is initially recorded to OCI. Those changes in fair value attributable to components included in the assessment of hedge effectiveness in a net investment hedge are recorded in the currency translation adjustment component of OCI and remain in AOCI(L) until the period in which the hedged item affects earnings. Those changes in fair value attributable to components excluded from the assessment of hedge effectiveness in a net investment hedge are recorded to OCI and amortized to earnings using a systematic and rational method over the duration of the hedge. Any changes in the fair value of derivatives that the Company does not designate as hedging instruments under ASC Topic 815 are recorded in the consolidated statements of operations in the period in which they occur. Cash flows from derivatives are recognized in the consolidated statements of cash flows in a manner consistent with the recognition of the underlying hedged item.

Revenue Recognition and Costs to Obtain or Fulfill a Contract with a Customer

Revenue recognition:

Revenue is recognized when control of promised goods or services is transferred to the customer, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services.

When contracts with customers contain multiple performance obligations, the Company accounts for individual performance obligations separately if they are distinct. The transaction price is allocated to each distinct performance obligation on a relative SSP basis. The Company determines the SSP by using the price charged for a deliverable when sold separately or uses management’s best estimate of SSP for goods or services not sold separately using estimation techniques that maximize observable data points, including: internal factors relevant to its pricing practices such as costs and margin objectives; standalone sales prices of similar products; pricing policies; percentage of the fee charged for a primary product or service relative to a related product or service; and geography.

Sales, usage-based, value added and other taxes are excluded from revenues.

MA Revenue

In the MA segment, products and services offered by the Company include hosted research and data subscriptions, installed and hosted software subscriptions, perpetual installed software licenses and related maintenance, or PCS, and professional services. Subscription and PCS contracts are generally invoiced in advance of the contractual coverage period, which is principally one year, but can range from 3-5 years. Professional services are invoiced as those services are provided. Payment terms and conditions vary by contract type, but primarily include a requirement of payment within 30 to 60 days.

Revenue from research, data and other hosted subscriptions is recognized ratably over the related subscription period as MA's performance obligation to provide access to these products is progressively fulfilled over the stated term of the contract. A large portion of these services are invoiced in the months of November, December and January.

Revenue from installed software subscriptions, which includes PCS, is bifurcated into a software license performance obligation and a PCS performance obligation, which follow the patterns of recognition described above, except for those installed subscriptions where the software license and PCS performance obligations were determined to be incapable of being distinct from each other in accordance with ASC 606-10-25-19 and ASC 606-10-25-20. In such instances, revenue is recognized over time. Revenue from the sale of a software license, when considered distinct from the related software implementation services, is

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generally recognized at the time the product master or first copy is delivered or transferred to the customer. PCS is generally recognized ratably over the contractual period commencing when the software license is fully delivered.

For implementation services and other service projects for which fees are fixed, the Company determined progress towards completion is most accurately measured on a percentage-of-completion basis (input method) as this approach utilizes the most directly observable data points and is therefore used to recognize the related revenue. For implementation services where price varies based on time expended, a time-based measure of progress towards completion of the performance obligation is utilized.

Revenue from professional services rendered is generally recognized over time as the services are performed.

Products and services offered within the MA segment are sold either stand-alone or together in various combinations. In instances where an arrangement contains multiple performance obligations, the Company accounts for the individual performance obligations separately if they are considered distinct. Revenue is generally allocated to all performance obligations based upon the relative SSP at contract inception. For certain performance obligations, judgment is required to determine the SSP. Revenue is recognized for each performance obligation based upon the conditions for revenue recognition noted above.

In the MA segment, customers usually pay a fixed fee for the products and services based on signed contracts. However, accounting for variable consideration is applied mainly for: i) estimates for cancellation rights and price concessions and ii) T&M based services.

The Company estimates the variable consideration associated with cancellation rights and price concessions based on the expected amount to be provided to customers and reduces the amount of revenue to be recognized.

MIS Revenue

In the MIS segment, revenue arrangements with multiple elements are generally comprised of two distinct performance obligations, a rating and the related monitoring service. Revenue attributed to ratings of issued securities is generally recognized when the rating is delivered to the issuer. Revenue attributed to monitoring of issuers or issued securities is recognized ratably over the period in which the monitoring is performed, generally one year. In the case of certain structured finance products, primarily CMBS, issuers can elect to pay all of the annual monitoring fees upfront. These fees are deferred and recognized over the future monitoring periods based on the expected lives of the rated securities.

MIS arrangements generally have standard contractual terms for which the stated payments are due at conclusion of the ratings process for ratings and either upfront or in arrears for monitoring services; and are signed by customers either on a per issue basis or at the beginning of the relationship with the customer. In situations when customer fees for an arrangement may be variable, the Company estimates the variable consideration at inception using the expected value method based on analysis of similar contracts in the same line of business, which is constrained based on the Company’s assessment of the realization of the adjustment amount.

The Company allocates the transaction price within arrangements that include multiple performance obligations based upon the relative SSP of each service. The SSP for both rating and monitoring services is generally based upon observable selling prices where the rating or monitoring service is sold separately to similar customers.

Costs to Obtain or Fulfill a Contract with a Customer:

Costs to obtain a contract with a customer

Costs incurred to obtain customer contracts, such as sales commissions, are deferred and recorded within other current assets and other assets when such costs are determined to be incremental to obtaining a contract, would not have been incurred otherwise and the Company expects to recover those costs. These costs are amortized to expense on a systematic basis consistent with the transfer of the products or services to the customer. Depending on the line of business to which the contract relates, this may be based upon the average economic life of the products sold or average period for which services are provided, inclusive of anticipated contract renewals. Determining the estimated economic life of the products sold requires judgment with respect to anticipated future technological changes. Costs to obtain customer contracts are only incurred in the MA segment.

Cost to fulfill a contract with a customer

Costs incurred to fulfill customer contracts, are deferred and recorded within other current assets and other assets when such costs relate directly to a contract, generate or enhance resources of the Company that will be used in satisfying performance obligations in the future and the Company expects to recover those costs.

The Company capitalizes royalty costs within the MA segment related to third-party information data providers associated with hosted company information and business intelligence products. These costs are amortized to expense consistent with the recognition pattern of the related revenue over time.

In addition, the Company capitalizes work-in-process costs for in-progress MIS ratings, which is recognized consistent with the rendering of the related services to the customers, as ratings are issued.

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Accounts Receivable Allowances

In order to determine an estimate of expected credit losses, receivables are segmented based on similar risk characteristics including historical credit loss patterns to calculate reserve rates. The Company uses an aging method for developing its allowance for credit losses by which receivable balances are stratified based on aging category. A reserve rate is calculated for each aging category which is generally based on historical information, and is adjusted, when necessary, for current conditions (e.g., macroeconomic or industry related). The Company also considers 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. Expected credit losses are reflected as additions to the accounts receivable allowance. Actual uncollectible account write-offs are recorded against the allowance.

Leases

The Company has operating leases, which substantially all relate to the lease of office space. The Company’s leases which are classified as finance leases are not material to the consolidated financial statements.

The Company determines if an arrangement meets the definition of a lease at contract inception. The Company recognizes in its consolidated balance sheets a lease liability and an ROU Asset for all leases with a lease term greater than 12 months. In determining the length of the lease term, the Company utilizes judgment in assessing the likelihood of whether it is reasonably certain that it will exercise an option to extend or early-terminate a lease, if such options are provided in the lease agreement.

ROU Assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU Assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. As substantially all of the Company’s leases do not provide an implicit interest rate, the Company uses its estimated secured incremental borrowing rates at the lease commencement date in determining the present value of lease payments. These secured incremental borrowing rates are attributable to the currency in which the lease is denominated.

At commencement, the Company’s initial measurement of the ROU Asset is calculated as the present value of the remaining lease payments (i.e., lease liability), with additive adjustments reflecting: initial direct costs (e.g., broker commissions) and prepaid lease payments (if any); and reduced by any lease incentives provided by the lessor if: (i) received before lease commencement or (ii) receipt of the lease incentive is contingent upon future events for which the occurrence is both probable and within the Company’s control.

Lease expense for minimum operating lease payments is recognized on a straight-line basis over the lease term. This straight-line lease expense represents a single lease cost which is comprised of both an interest accretion component relating to the lease liability and amortization of the ROU Assets. The Company records this single lease cost in SG&A expenses. However, in situations where an operating lease ROU Asset has been impaired, the subsequent amortization of the ROU Asset is then recorded on a straight-line basis over the remaining lease term and is combined with accretion expense on the lease liability to result in single operating lease cost (which subsequent to impairment will no longer follow a straight-line recognition pattern).

The Company has lease agreements which include lease and non-lease components. For the Company’s office space leases, the lease components (e.g., fixed rent payments) and non-lease components (e.g., fixed common-area maintenance costs) are combined and accounted for as a single lease component.

Variable lease payments (e.g., variable common-area-maintenance costs) are only included in the initial measurement of the lease liability to the extent those payments depend on an index or a rate. Variable lease payments not included in the lease liability are recognized in net income in the period in which the obligation for those payments is incurred.

Contingencies

Moody’s is involved in legal and tax proceedings, governmental, regulatory and legislative investigations and inquiries, claims and litigation that are incidental to the Company’s business, including claims based on ratings assigned by MIS. Moody’s is also subject to ongoing tax audits in the normal course of business. Management periodically assesses the Company’s liabilities and contingencies in connection with these matters based upon the latest information available. Moody’s discloses material pending legal proceedings pursuant to SEC rules and other pending matters as it may determine to be appropriate.

For claims, litigation and proceedings and governmental investigations and inquiries not related to income taxes, the Company records liabilities in the consolidated financial statements when it is both probable that a liability has been incurred and the amount of loss can be reasonably estimated and periodically adjusts these as appropriate. When the reasonable estimate of the loss is within a range of amounts, the minimum amount of the range is accrued unless some higher amount within the range is a better estimate than another amount within the range. In instances when a loss is reasonably possible but uncertainties exist related to the probable outcome and/or the amount or range of loss, management does not record a liability but discloses the contingency if material. As additional information becomes available, the Company adjusts its assessments and estimates of such matters accordingly. Moody’s also discloses material pending legal proceedings pursuant to SEC rules and other pending matters as it may determine to be appropriate.

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cannot predict what the eventual outcome of the pending matters will be or the timing of any resolution of such matters. The Company also may be unable to predict the impact (if any) that any such matters may have on how its business is conducted, on its competitive position or on its financial position, results of operations or cash flows. As the process to resolve any pending matters progresses, management will continue to review the latest information available and assess its ability to predict the outcome of such matters and the effects, if any, on its operations and financial condition and to accrue for and disclose such matters as and when required. However, because such matters are inherently unpredictable and unfavorable developments or resolutions can occur, the ultimate outcome of such matters, including the amount of any loss, may differ from those estimates.

Operating Expenses

Operating expenses include costs associated with the development and production of the Company’s products and services and their delivery to customers. These expenses principally include employee compensation and benefits and travel costs that are incurred in connection with these activities. Operating expenses are charged to income as incurred.

Selling, General and Administrative Expenses

SG&A expenses include such items as compensation and benefits for corporate officers and staff and compensation and other expenses related to sales. They also include items such as office rent, business insurance and professional fees. SG&A expenses are charged to income as incurred.

Foreign Currency Translation

For all operations outside the U.S. where the Company has designated the local currency as the functional currency, assets and liabilities are translated into U.S. dollars using end of year exchange rates, and revenue and expenses are translated using average exchange rates for the year. For these foreign operations, currency translation adjustments are recorded to other comprehensive income.

Comprehensive Income

Comprehensive income represents the change in net assets of a business enterprise during a period due to transactions and other events and circumstances from non-owner sources including: foreign currency translation impacts; net actuarial gains and losses and net prior service costs related to pension and other retirement plans; and gains and losses on derivative instruments designated as net investment hedges or cash flow hedges. Comprehensive income items, including cumulative translation adjustments of entities that are less-than-wholly-owned subsidiaries, will be reclassified to noncontrolling interests and thereby, adjusting AOCI(L) proportionately in accordance with the percentage of ownership interest of the non-controlling shareholder. Additionally, the Company reclassifies the income tax effects from AOCI(L) at such time as the earnings or loss of the related activity are recognized in earnings.

Income Taxes

The Company accounts for income taxes under the asset and liability method in accordance with ASC Topic 740. Therefore, income tax expense is based on reported income before income taxes and deferred income taxes reflect the effect of temporary differences between the amounts of assets and liabilities that are recognized for financial reporting purposes and the amounts that are recognized for income tax purposes.

The Company classifies interest related to unrecognized tax benefits as a component of interest expense in its consolidated statements of operations. Penalties are recognized in other non-operating expenses. For UTPs, the Company first determines whether it is more-likely-than-not (defined as a likelihood of more than fifty percent) that a tax position will be sustained based on its technical merits as of the reporting date, assuming that taxing authorities will examine the position and have full knowledge of all relevant information. A tax position that meets this more-likely-than-not threshold is then measured and recognized at the largest amount of benefit that is greater than fifty percent likely to be realized upon effective settlement with a taxing authority.

The Company has provided deferred taxes for those entities whose earnings are not considered indefinitely reinvested.

Fair Value of Financial Instruments

The Company’s financial instruments include cash, cash equivalents, trade receivables and payables, and certain short-term investments consisting primarily of certificates of deposit and money market deposits, all of which are short-term in nature and, accordingly, approximate fair value.

The Company also invests in mutual funds, which are accounted for as equity securities with readily determinable fair values under ASC Topic 321. The Company measures these investments at fair value with both realized gains and losses and unrealized holding gains and losses for these investments included in net income.

Also, the Company uses derivative instruments to manage certain financial exposures that occur in the normal course of business. These derivative instruments are carried at fair value in the Company’s consolidated balance sheets.

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Fair value is defined by the ASC Topic 820 as the price that would be received from selling an asset or paid to transfer a liability (i.e., an exit price) in an orderly transaction between market participants at the measurement date. The determination of this fair value is based on the principal or most advantageous market in which the Company could commence transactions and considers assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions and risk of nonperformance. Also, determination of fair value assumes that market participants will consider the highest and best use of the asset.

The ASC establishes a fair value hierarchy whereby the inputs contained in valuation techniques used to measure fair value are categorized into three broad levels as follows:

Level 1: quoted market prices in active markets that the reporting entity has the ability to access at the date of the fair value measurement;

Level 2: inputs other than quoted market prices described in Level 1 that are observable for the asset or liability, either directly or indirectly, such as quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities;

Level 3: unobservable inputs that are supported by little or no market activity and that are significant to the fair value measurement of the assets or liabilities.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentration of credit risk principally consist of cash and cash equivalents, short-term investments, trade receivables and derivatives.

For cash and cash equivalents, short-term investments and derivatives, the Company manages its credit exposure by limiting the amount of counterparty risk with any particular financial institution; limits are assigned to each counterparty based on perceived quality of credit and are monitored daily. Cash equivalents are held among various money market deposit accounts, money market funds, and certificates of deposits as of December 31, 2025 and 2024. Short-term investments primarily consist of certificates of deposit as of December 31, 2025 and 2024. Derivatives primarily consist of foreign exchange forwards or swap contracts (interest rate swaps and cross-currency swaps) as of December 31, 2025 and 2024. For trade receivables, no customer accounted for 10% or more of accounts receivable at December 31, 2025 or 2024.

Earnings per Share of Common Stock

Basic shares outstanding is calculated based on the weighted average number of shares of common stock outstanding during the reporting period. Diluted shares outstanding is calculated giving effect to all potentially dilutive common shares, assuming that such shares were outstanding and dilutive during the reporting period.

Pension and Other Retirement Benefits

Moody’s maintains various noncontributory DBPPs as well as other contributory and noncontributory retirement plans. The expense and assets/liabilities that the Company reports for its pension and other retirement benefits are dependent on many assumptions concerning the outcome of future events and circumstances. These assumptions represent the Company’s best estimates and may vary by plan. The differences between the assumptions for the expected long-term rate of return on plan assets and actual experience is spread over a five-year period to the market-related value of plan assets, which is used in determining the expected return on assets component of annual pension expense. All other actuarial gains and losses are generally deferred and amortized over the estimated average future working life of active plan participants.

The Company recognizes as an asset or liability in its consolidated balance sheet the funded status of its defined benefit retirement plans, measured on a plan-by-plan basis. Changes in the funded status due to actuarial gains/losses are recorded as part of other comprehensive income during the period the changes occur.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the period. Actual results could differ from those estimates.

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Recently Issued Accounting Pronouncements

In November 2024, the FASB issued ASU 2024-03, "Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses" ("ASU No. 2024-03"). The amendments in this ASU require more detailed disclosures about specific expense categories in the notes to financial statements (including employee compensation, depreciation and intangible asset amortization) and apply to both interim and annual reporting periods. ASU No. 2024-03 also requires disclosure of total selling expenses for both interim and annual reporting periods, with an additional requirement to provide an entity’s definition of selling expenses in annual reporting. This ASU is effective in fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The amendments in this ASU should be applied either (1) prospectively for annual and interim reporting periods beginning after the aforementioned effective dates or (2) retrospectively to any or all prior periods presented in the financial statements. The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements and disclosures.

In September 2025, the FASB issued ASU 2025-06 "Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software" ("ASU No. 2025-06"). This ASU eliminates prescriptive software development stages and requires capitalization of software costs when (1) management commits to funding the project, and (2) completion and intended use are probable, with consideration to when significant uncertainty associated with the development activities of the software no longer exists. This ASU also clarifies the disclosure requirements for internal-use software costs and supersedes prior guidance on website development costs. This ASU is effective for annual reporting periods beginning after December 15, 2027, with early adoption permitted. Entities may transition using prospective, modified prospective, or retrospective approaches. The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statements and disclosures.

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NOTE 3 REVENUES

Revenue by Category

The following table presents the Company’s revenues disaggregated by LOB:


	Year Ended December 31,
	2025		2024		2023
MA:
Decision Solutions (DS)
Banking	$	569	$	551	$	521
Insurance	685		598		550
KYC	438		367		312
Total DS	1,692		1,516		1,383
Research and Insights (R&I)	995		926		884
Data and Information (D&I)	912		853		789
Total external revenue	3,599		3,295		3,056
Intersegment revenue	12		13		13
Total MA	3,611		3,308		3,069
MIS:
Corporate finance (CFG)
Investment-grade	573		488		335
High-yield	324		285		150
Bank loans	503		527		292
Other accounts (1)	732		650		627
Total CFG	2,132		1,950		1,404
Structured finance (SFG)
Asset-backed securities	142		130		121
RMBS	111		98		92
CMBS	99		94		60
Structured credit	202		193		129
Other accounts (SFG)	4		3		3
Total SFG	558		518		405
Financial institutions (FIG)
Banking	500		450		378
Insurance	186		214		123
Managed investments	59		49		32
Other accounts (FIG)	14		14		12
Total FIG	759		727		545
Public, project and infrastructure finance (PPIF)
Public finance / sovereign	275		240		205
Project and infrastructure	360		324		271
Total PPIF	635		564		476
Total ratings revenue	4,084		3,759		2,830
MIS Other	35		34		30
Total external revenue	4,119		3,793		2,860
Intersegment royalty	198		193		186
Total MIS	4,317		3,986		3,046
Eliminations	(210)		(206)		(199)
Total MCO	$	7,718	$	7,088	$	5,916

(1)Other includes: recurring monitoring fees of a rated debt obligation and/or entities that issue such obligations as well as fees from programs such as commercial paper, medium term notes, and ICRA corporate finance revenue.

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The following table presents the Company’s revenues disaggregated by LOB and geographic area:


	Year Ended December 31, 2025						Year Ended December 31, 2024						Year Ended December 31, 2023
	U.S.		Non-U.S.		Total		U.S.		Non-U.S.		Total		U.S.		Non-U.S.		Total
MA:
Decision Solutions	$	674	$	1,018	$	1,692	$	570	$	946	$	1,516	$	550	$	833	$	1,383
Research and Insights	547		448		995		514		412		926		490		394		884
Data and Information	327		585		912		306		547		853		281		508		789
Total MA	1,548		2,051		3,599		1,390		1,905		3,295		1,321		1,735		3,056
MIS:
Corporate finance	1,427		705		2,132		1,333		617		1,950		952		452		1,404
Structured finance	396		162		558		368		150		518		252		153		405
Financial institutions	384		375		759		386		341		727		253		292		545
Public, project and infrastructure finance	416		219		635		359		205		564		292		184		476
Total ratings revenue	2,623		1,461		4,084		2,446		1,313		3,759		1,749		1,081		2,830
MIS Other	—		35		35		—		34		34		1		29		30
Total MIS	2,623		1,496		4,119		2,446		1,347		3,793		1,750		1,110		2,860
Total MCO	$	4,171	$	3,547	$	7,718	$	3,836	$	3,252	$	7,088	$	3,071	$	2,845	$	5,916

The following table presents the Company's reportable segment revenues disaggregated by segment and geographic region:


	Year Ended December 31,
	2025		2024		2023
MA:
U.S.	$	1,548	$	1,390	$	1,321
Non-U.S.:
EMEA	1,406		1,306		1,207
Asia-Pacific	374		345		299
Americas	271		254		229
Total Non-U.S.	2,051		1,905		1,735
Total MA	3,599		3,295		3,056
MIS:
U.S.	2,623		2,446		1,750
Non-U.S.:
EMEA	970		868		679
Asia-Pacific	325		284		271
Americas	201		195		160
Total Non-U.S.	1,496		1,347		1,110
Total MIS	4,119		3,793		2,860
Total MCO	$	7,718	$	7,088	$	5,916

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The following table summarizes the split between transaction and recurring revenue:


	Year Ended December 31,
	2025									2024									2023
	Transaction			Recurring			Total			Transaction			Recurring			Total			Transaction			Recurring			Total
Decision Solutions
Banking	$	93		$	476		$	569		$	113		$	438		$	551		$	126		$	395		$	521
	16		%	84		%	100		%	21		%	79		%	100		%	24		%	76		%	100		%
Insurance	$	21		$	664		$	685		$	26		$	572		$	598		$	47		$	503		$	550
	3		%	97		%	100		%	4		%	96		%	100		%	9		%	91		%	100		%
KYC	$	3		$	435		$	438		$	7		$	360		$	367		$	5		$	307		$	312
	1		%	99		%	100		%	2		%	98		%	100		%	2		%	98		%	100		%
Total Decision Solutions	$	117		$	1,575		$	1,692		$	146		$	1,370		$	1,516		$	178		$	1,205		$	1,383
	7		%	93		%	100		%	10		%	90		%	100		%	13		%	87		%	100		%
Research and Insights	$	12		$	983		$	995		$	12		$	914		$	926		$	14		$	870		$	884
	1		%	99		%	100		%	1		%	99		%	100		%	2		%	98		%	100		%
Data and Information	$	8		$	904		$	912		$	12		$	841		$	853		$	7		$	782		$	789
	1		%	99		%	100		%	1		%	99		%	100		%	1		%	99		%	100		%
Total MA (1)	$	137		$	3,462		$	3,599		$	170		$	3,125		$	3,295		$	199		$	2,857		$	3,056
	4		%	96		%	100		%	5		%	95		%	100		%	7		%	93		%	100		%
Corporate Finance	$	1,559		$	573		$	2,132		$	1,415		$	535		$	1,950		$	887		$	517		$	1,404
	73		%	27		%	100		%	73		%	27		%	100		%	63		%	37		%	100		%
Structured Finance	$	315		$	243		$	558		$	292		$	226		$	518		$	190		$	215		$	405
	56		%	44		%	100		%	56		%	44		%	100		%	47		%	53		%	100		%
Financial Institutions	$	422		$	337		$	759		$	418		$	309		$	727		$	254		$	291		$	545
	56		%	44		%	100		%	57		%	43		%	100		%	47		%	53		%	100		%
Public, Project and Infrastructure Finance	$	438		$	197		$	635		$	384		$	180		$	564		$	301		$	175		$	476
	69		%	31		%	100		%	68		%	32		%	100		%	63		%	37		%	100		%
MIS Other	$	7		$	28		$	35		$	8		$	26		$	34		$	6		$	24		$	30
	20		%	80		%	100		%	24		%	76		%	100		%	20		%	80		%	100		%
Total MIS	$	2,741		$	1,378		$	4,119		$	2,517		$	1,276		$	3,793		$	1,638		$	1,222		$	2,860
	67		%	33		%	100		%	66		%	34		%	100		%	57		%	43		%	100		%
Total Moody’s Corporation	$	2,878		$	4,840		$	7,718		$	2,687		$	4,401		$	7,088		$	1,837		$	4,079		$	5,916
	37		%	63		%	100		%	38		%	62		%	100		%	31		%	69		%	100		%

(1) Revenue from software implementation services and risk management advisory projects, while classified by management as transactional revenue, is recognized over time under GAAP.

The following table presents the timing of revenue recognition:


	Year Ended December 31, 2025						Year Ended December 31, 2024						Year Ended December 31, 2023
	MA		MIS		Total		MA		MIS		Total		MA		MIS		Total
Revenue recognized at a point in time	$	100	$	2,741	$	2,841	$	101	$	2,517	$	2,618	$	102	$	1,638	$	1,740
Revenue recognized over time	3,499		1,378		4,877		3,194		1,276		4,470		2,954		1,222		4,176
Total	$	3,599	$	4,119	$	7,718	$	3,295	$	3,793	$	7,088	$	3,056	$	2,860	$	5,916

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Unbilled Receivables, Deferred Revenue and Remaining Performance Obligations

Unbilled receivables

For certain MA arrangements, the timing of when the Company has the unconditional right to consideration and recognizes revenue occurs prior to invoicing the customer. In addition, certain MIS arrangements contain contractual terms whereby the customers are billed in arrears for annual monitoring services, requiring revenue to be accrued as an unbilled receivable as such services are provided.

The following table presents the Company's unbilled receivables, which are included within accounts receivable, net, at December 31, 2025 and December 31, 2024:


	As of December 31, 2025				As of December 31, 2024
	MA		MIS		MA		MIS
Unbilled Receivables	$	106	$	500	$	122	$	426

Deferred revenue

The Company recognizes deferred revenue when a contract requires a customer to pay consideration to the Company in advance of when revenue related to that contract is recognized. This deferred revenue is relieved when the Company satisfies the related performance obligation and revenue is recognized.

Significant changes in the deferred revenue balances during the year ended December 31, 2025 are as follows:


	Year Ended December 31, 2025
	MA		MIS		Total
Balance at December 31, 2024	$	1,243	$	268	$	1,511
Changes in deferred revenue
Revenue recognized that was included in the deferred revenue balance at the beginning of the period	(1,152)		(220)		(1,372)
Increases due to amounts billable excluding amounts recognized as revenue during the period	1,290		212		1,502
Reclassification to liabilities held-for-sale (1)	(36)		$	—	(36)
Increases due to acquisitions during the period	15				15
Decreases due to divestiture during the period (2)	(26)		$	—	(26)
Effect of exchange rate changes	34		10		44
Total changes in deferred revenue	125		2		127
Balance at December 31, 2025	$	1,368	$	270	$	1,638
Deferred revenue - current	$	1,366	$	216	$	1,582
Deferred revenue - non-current	$	2	$	54	$	56

(1) The 2025 reclassification to liabilities held-for-sale for the MA segment in the table above relates to the planned divestiture of the MA Regulatory Solutions business, more fully discussed in Note 11.

(2) The 2025 divestiture of a business for the MA segment in the table above relates to the divestiture of the MA Learning Solutions Business, more fully discussed in Note 22.

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Significant changes in the deferred revenue balances during the year ended December 31, 2024 are as follows:


	Year Ended December 31, 2024
	MA		MIS		Total
Balance at December 31, 2023	$	1,111	$	270	$	1,381
Changes in deferred revenue
Revenue recognized that was included in the deferred revenue balance at the beginning of the period	(1,044)		(209)		(1,253)
Increases due to amounts billable excluding amounts recognized as revenue during the period	1,200		211		1,411
Increases due to acquisitions during the period	9		—		9
Effect of exchange rate changes	(33)		(4)		(37)
Total changes in deferred revenue	132		(2)		130
Balance at December 31, 2024	$	1,243	$	268	$	1,511
Deferred revenue - current	$	1,243	$	211	$	1,454
Deferred revenue - non-current	$	—	$	57	$	57

Significant changes in the deferred revenue balances during the year ended December 31, 2023 are as follows:


	Year Ended December 31, 2023
	MA		MIS		Total
Balance at December 31, 2022	$	1,055	$	278	$	1,333
Changes in deferred revenue
Revenue recognized that was included in the deferred revenue balance at the beginning of the period	(980)		(211)		(1,191)
Increases due to amounts billable excluding amounts recognized as revenue during the period	1,015		200		1,215

Effect of exchange rate changes	21		3		24
Total changes in deferred revenue	56		(8)		48
Balance at December 31, 2023	$	1,111	$	270	$	1,381
Deferred revenue—current	$	1,109	$	207	$	1,316
Deferred revenue—non-current	$	2	$	63	$	65

For the MA segment, for all periods presented, the increase in deferred revenue was primarily due to organic growth. For the MIS segment, the change in deferred revenue was not significant for all periods presented.

Remaining performance obligations

Remaining performance obligations in the MA segment include both amounts recorded as deferred revenue on the consolidated balance sheet as of December 31, 2025 as well as amounts not yet invoiced to customers as of December 31, 2025, largely reflecting future revenue related to signed multi-year arrangements for hosted and installed subscription-based products. As of December 31, 2025, the aggregate amount of the transaction price allocated to remaining performance obligations was approximately $4.8 billion. The Company expects to recognize into revenue approximately 55% of this balance within one year, approximately 25% of this balance between one to two years and the remaining amount thereafter.

Remaining performance obligations in the MIS segment largely reflect deferred revenue related to monitoring fees for certain structured finance products, primarily CMBS, where the issuers can elect to pay the monitoring fees for the life of the security in advance. As of December 31, 2025, the aggregate amount of the transaction price allocated to remaining performance obligations was approximately $85 million. The Company expects to recognize into revenue approximately 25% of this balance within one year, approximately 50% of this balance between one to five years and the remaining amount thereafter. With respect to the remaining performance obligations for the MIS segment, the Company has applied a practical expedient set forth in ASC Topic 606 permitting the omission of unsatisfied performance obligations relating to contracts with an original expected length of one year or less.

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Costs to Obtain or Fulfill a Contract with a Customer

MA Costs to Obtain a Contract with a Customer


	As of December 31,
	2025		2024

Capitalized costs to obtain sales contracts	$	337	$	294


	Year ended December 31,
	2025		2024		2023
Amortization of capitalized costs to obtain sales contracts	$	117	$	110	$	102

Amortization of costs incurred to obtain customer contracts is included within SG&A expenses in the consolidated statements of operations. Costs incurred to obtain customer contracts are only in the MA segment.

MA and MIS Costs to Fulfill a Contract with a Customer


	As of December 31, 2025						As of December 31, 2024
	MA		MIS		Total		MA		MIS		Total

Capitalized costs to fulfill sales contracts	$	44	$	15	$	59	$	39	$	12	$	51


	Year Ended December 31, 2025						Year Ended December 31, 2024						Year Ended December 31, 2023
	MA		MIS		Total		MA		MIS		Total		MA		MIS		Total
Amortization of capitalized costs to fulfill sales contracts	$	77	$	51	$	128	$	77	$	43	$	120	$	70	$	44	$	114

Amortization of costs to fulfill customer contracts is included within operating expenses in the consolidated statements of operations.

NOTE 4 RECONCILIATION OF WEIGHTED AVERAGE SHARES OUTSTANDING

Below is a reconciliation of basic to diluted shares outstanding:


	Year Ended December 31,
	2025	2024	2023
Basic	179.1	181.8	183.2
Dilutive effect of shares issuable under stock-based compensation plans	0.8	0.9	0.8
Diluted	179.9	182.7	184.0
Antidilutive options to purchase common shares and restricted stock as well as contingently issuable restricted stock which are excluded from the table above	0.2	0.4	0.5

The calculation of basic shares outstanding is based on the weighted average number of shares of common stock outstanding during the reporting period. The calculation of diluted EPS requires certain assumptions regarding the use of both cash proceeds and assumed proceeds that would be received upon the exercise of stock options and vesting of restricted stock outstanding as of December 31, 2025, 2024 and 2023.

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NOTE 5 CASH EQUIVALENTS AND INVESTMENTS

The tables below provide additional information on the Company’s cash equivalents and investments:


	As of December 31, 2025
	Cost		Gross Unrealized Gains		Fair Value		Consolidated Balance Sheet location
	Cash and cash equivalents		Short-term investments		Other assets
Certificates of deposit and money market deposit accounts/funds (1)	$	1,459	$	—	$	1,459	$	1,393	$	64	$	2
Mutual funds	$	95	$	13	$	108	$	—	$	—	$	108


	As of December 31, 2024
	Cost		Gross Unrealized Gains		Fair Value		Consolidated Balance Sheet location
	Cash and cash equivalents		Short-term investments		Other assets

Certificates of deposit and money market deposit accounts/funds (1)	$	1,911	$	—	$	1,911	$	1,345	$	566	$	—
Mutual funds	$	88	$	10	$	98	$	—	$	—	$	98

(1) Consists of time deposits, money market deposit accounts and money market funds. The remaining contractual maturities for the certificates of deposits classified as short-term investments are 1 month to 12 months at both December 31, 2025 and December 31, 2024. The remaining contractual maturities for the certificates of deposit classified in other assets are 13 months to 22 months at December 31, 2025. Time deposits with a maturity of less than 90 days at time of purchase are classified as cash and cash equivalents.

In addition, the Company is invested in COLI. As of December 31, 2025 and December 31, 2024, the contract value of the COLI was $50 million and $48 million, respectively.

NOTE 6 DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

The Company is exposed to global market risks, including risks from changes in FX rates and changes in interest rates. Accordingly, the Company uses derivatives in certain instances to manage financial exposures that occur in the normal course of business. The Company does not hold or issue derivatives for speculative purposes.

Derivatives and non-derivative instruments designated as accounting hedges:

Fair Value Hedges

Interest Rate Swaps

The Company has entered into interest rate swaps to convert the fixed interest rate on certain of its long-term debt to a floating interest rate based on the SOFR. The purpose of these hedges is to mitigate the risk associated with changes in the fair value of the long-term debt, thus the Company has designated these swaps as fair value hedges. The fair value of the swaps is adjusted quarterly with a corresponding adjustment to the carrying value of the debt. The changes in the fair value of the swaps and the underlying hedged item generally offset and the net cash settlements on the swaps are recorded each period within interest expense, net in the Company’s consolidated statements of operations.

The following table summarizes the Company’s interest rate swaps designated as fair value hedges:


			Notional Amount
Hedged Item	Nature of Swap	As of December 31, 2025			As of December 31, 2024			Floating Interest Rate
2014 Senior Notes due 2044	Pay Floating/Receive Fixed		$	300		$	300		SOFR
2017 Senior Notes due 2028	Pay Floating/Receive Fixed		500			500			SOFR
2018 Senior Notes due 2029	Pay Floating/Receive Fixed		400			400			SOFR
2018 Senior Notes due 2048	Pay Floating/Receive Fixed		300			300			SOFR
2020 Senior Notes due 2025	Pay Floating/Receive Fixed		—			300			SOFR
2022 Senior Notes due 2052	Pay Floating/Receive Fixed		500			500			SOFR
2022 Senior Notes due 2032	Pay Floating/Receive Fixed		250			250			SOFR
Total			$	2,250		$	2,550

Refer to Note 16 for information on the cumulative amount of fair value hedging adjustments included in the carrying amount of the above hedged items.

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The following table summarizes the impact to the statements of operations of the Company’s interest rate swaps designated as fair value hedges:


Total amounts of financial statement line item presented in the statements of operations in which the effects of fair value hedges are recorded				Amount of income (expense) recognized in the Consolidated Statements of Operations
	Year Ended December 31,
	2025		2024			2023
Interest expense, net				$	(213)		$	(237)	$	(251)
Description		Location on Consolidated Statements of Operations
Net interest settlements and accruals on interest rate swaps		Interest expense, net		$	(62)		$	(96)	$	(89)
Fair value changes on interest rate swaps		Interest expense, net		$	85		$	14	$	56
Fair value changes on hedged debt		Interest expense, net		$	(85)		$	(14)	$	(56)

Net Investment Hedges

Debt designated as net investment hedges

The Company has designated €500 million of the 2015 Senior Notes Due 2027 and €750 million of the 2019 Senior Notes due 2030 as net investment hedges to mitigate FX exposure related to a portion of the Company’s euro net investment in certain foreign subsidiaries against changes in euro/USD exchange rates. These hedges are designated as accounting hedges under the applicable sections of ASC Topic 815 and will end upon the repayment of the notes in 2027 and 2030, respectively, unless terminated early at the discretion of the Company.

Cross currency swaps designated as net investment hedges

The Company enters into cross-currency swaps to mitigate FX exposure related to a portion of the Company’s net investment in certain foreign subsidiaries against changes in exchange rates. The following tables provide information on the cross-currency swaps designated as net investment hedges under ASC Topic 815:


December 31, 2025
	Pay			Receive
Nature of Swap	Notional Amount		Weighted Average Interest Rate	Notional Amount		Weighted Average Interest Rate
Pay Fixed/Receive Fixed	€	1,997	2.48%	$	2,114	3.98%
Pay Floating/Receive Floating	€	1,688	Based on ESTR	$	1,750	Based on SOFR
Pay Fixed/Receive Fixed	HK$	3,907	—%	$	500	0.64%
Pay Fixed/Receive Fixed	S$	389	—%	HK$	2,350	0.62%


December 31, 2024
	Pay			Receive
Nature of Swap	Notional Amount		Weighted Average Interest Rate	Notional Amount		Weighted Average Interest Rate
Pay Fixed/Receive Fixed	€	965	2.91%	$	1,014	4.41%
Pay Floating/Receive Floating	€	2,138	Based on ESTR	$	2,250	Based on SOFR

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As of December 31, 2025, these hedges will expire and the notional amounts will be settled as follows unless terminated early at the discretion of the Company:


	EUR/USD				HKD/USD				SGD/HKD
Year Ending December 31,	Notional Amount (Pay)		Notional Amount (Receive)		Notional Amount (Pay)		Notional Amount (Receive)		Notional Amount (Pay)		Notional Amount (Receive)
2027	€	530	$	550	HK$	—	$	—	S$	—	HK$	—
2028	588		600		—		—		—		—
2029	573		614		—		—		—		—
2030	662		700		—		—		—		—
2031	481		500		—		—		—		—
2032	481		500		3,907		500		389		2,350
2033	370		400		$	—	$	—	$	—	$	—
Total	€	3,685	$	3,864	HK$	3,907	$	500	S$	389	HK$	2,350

The following table provides information on the gains (losses) on the Company’s net investment and cash flow hedges:


	Amount of Gain (Loss) Recognized in AOCL on Derivative, net of Tax									Amount of Gain (Loss) Reclassified from AOCL into Income, net of tax									Gain (Loss) Recognized in Income on Derivative (Amount Excluded from Effectiveness Testing)
Derivative and Non-Derivative Instruments in Net Investment Hedging Relationships	Year Ended December 31,									Year Ended December 31,									Year Ended December 31,
2025			2024			2023			2025			2024			2023			2025			2024			2023
Cross currency swaps	$	(339)		$	157		$	(97)		$	—		$	—		$	—		$	62		$	47		$	54
Long-term debt	(130)			65			(35)			—			—			—			—			—			—
Total net investment hedges	$	(469)		$	222		$	(132)		$	—		$	—		$	—		$	62		$	47		$	54
Derivatives in Cash Flow Hedging Relationships
Cross currency swaps	$	—		$	—		$	—		$	1		$	—		$	1		$	—		$	—		$	—
Interest rate contracts	—			—			—			(2)			(2)			(2)			—			—			—
Total cash flow hedges	$	—		$	—		$	—		$	(1)		$	(2)		$	(1)		$	—		$	—		$	—
Total	$	(469)		$	222		$	(132)		$	(1)		$	(2)		$	(1)		$	62		$	47		$	54

The cumulative amount of net investment hedge and cash flow hedge gains (losses) remaining in AOCL is as follows:


	Cumulative Gains (Losses), net of tax
	December 31, 2025		December 31, 2024
Net investment hedges
Cross currency swaps	$	(161)	$	178
FX forwards	29		29
Long-term debt	(62)		68
Total net investment hedges	(194)		275
Cash flow hedges
Interest rate contracts	(42)		(43)
Cross currency swaps	1		1
Total cash flow hedges	(41)		(42)
Total net gain in AOCL	$	(235)	$	233

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Derivatives not designated as accounting hedges:

Foreign exchange forwards

The Company also enters into foreign exchange forward contracts to mitigate the change in fair value on certain assets and liabilities denominated in currencies other than a subsidiary’s functional currency. These forward contracts are not designated as accounting hedges under the applicable sections of ASC Topic 815. Accordingly, changes in the fair value of these contracts are recognized immediately in other non-operating income, net in the Company’s consolidated statements of operations along with the FX gain or loss recognized on the assets and liabilities denominated in a currency other than the subsidiary’s functional currency. These contracts have expiration dates at various times through July 2025.

The following table summarizes the notional amounts of the Company’s outstanding foreign exchange forwards:


	December 31, 2025				December 31, 2024
Notional amount of currency pair(1):	Sell		Buy		Sell		Buy
Contracts to sell USD for GBP	$	693	£	522	$	604	£	470
Contracts to sell USD for JPY	$	17	¥	2,700	$	29	¥	4,000
Contracts to sell USD for CAD	$	39	C$	53	$	35	C$	50
Contracts to sell USD for SGD	$	39	S$	50	$	45	S$	59
Contracts to sell USD for EUR	$	107	€	91	$	—	€	—

Contracts to sell USD for INR	$	26	₹	2,400	$	23	₹	1,900

Contracts to sell EUR for USD	€	21	$	25	€	12	$	12

(1) € = euro, £ = British pound, S$ = Singapore dollar, $ = U.S. dollar, ¥ = Japanese yen, C$ = Canadian dollar, ₹= Indian rupee

Total Return Swaps

The Company has entered into total return swaps to mitigate market-driven changes in the value of certain liabilities associated with the Company's deferred compensation plans. The fair value of these swaps at December 31, 2025 and related gains in the year ended December 31, 2025 were not material. The notional amount of the total return swaps at December 31, 2025 and December 31, 2024 was $72 million and $66 million, respectively.

The following table summarizes the impact to the consolidated statements of operations relating to the gains (losses) on the Company’s derivatives which are not designated as hedging instruments:


		Year Ended December 31,
Derivatives not designated as accounting hedges	Location on Consolidated Statements of Operations	2025		2024		2023
FX forwards	Other non-operating income, net	$	48	$	(24)	$	15
Total return swaps	Operating expense	$	5	$	5	$	2
Total return swaps	SG&A expense	$	2	$	1	$	1

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The table below shows the classification between assets and liabilities on the Company’s consolidated balance sheets for the fair value of the derivative instruments as well as the carrying value of its non-derivative debt instruments designated and qualifying as net investment hedges:


	Derivative and Non-derivative Instruments
	Consolidated Balance Sheet Location	December 31, 2025		December 31, 2024
Assets:
Derivatives designated as accounting hedges:
Cross currency swaps designated as net investment hedges	Other assets	$	—	$	58

Total derivatives designated as accounting hedges		—		58
Derivatives not designated as accounting hedges:
FX forwards on certain assets and liabilities	Other current assets	9		—
Total assets		$	9	$	58
Liabilities:
Derivatives designated as accounting hedges:

Interest rate swaps designated as fair value hedges	Accounts payable and accrued liabilities	$	—	$	3
Cross currency swaps designated as net investment hedges	Other liabilities	456		26
Interest rate swaps designated as fair value hedges	Other liabilities	84		166
Total derivatives designated as accounting hedges		540		195
Non-derivatives designated as accounting hedges:
Long-term debt designated as net investment hedge	Long-term debt	1,468		1,294
Derivatives not designated as accounting hedges:
FX forwards on certain assets and liabilities	Accounts payable and accrued liabilities	—		21
Total liabilities		$	2,008	$	1,510

NOTE 7 PROPERTY AND EQUIPMENT, NET

Property and equipment, net consisted of:


	December 31,
	2025		2024
Office and computer equipment (3 - 10 year estimated useful life)	$	322	$	400
Office furniture and fixtures (3 - 10 year estimated useful life)	58		57
Internal-use computer software (1 - 10 year estimated useful life)	1,649		1,417
Leasehold improvements and building (4 - 20 year estimated useful life)	265		235
Total property and equipment, at cost	2,294		2,109
Less: accumulated depreciation and amortization	(1,572)		(1,453)
Total property and equipment, net	$	722	$	656

The increase in internal-use computer software in the table above primarily relates to capitalized software development costs pursuant to MA's strategic shift to cloud-based solutions. Depreciation and amortization expense related to the above assets for the years ended December 31, 2025, 2024, and 2023 was $265 million, $233 million, and $175 million, respectively, of which $211 million, $180 million, and $121 million, respectively, related to amortization of internal-use computer software. The amounts for the year ended December 31, 2025 exclude incremental amortization expense of $3 million due to a reduction in the useful life of the internal-use software assets pursuant to the Strategic and Operational Efficiency Restructuring Program, which is included within restructuring expense on the consolidated statement of operations, as more fully discussed in Note 9. The amounts for the year ended December 31, 2024 exclude incremental amortization expense of $26 million associated with internal-use computer software which is presented within charges related to asset abandonment on the consolidated statement of operations, as more fully discussed in Note 22.

On a weighted-average basis, Moody's internal-use computer software has an estimated useful life of approximately 4.4 years.

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NOTE 8 GOODWILL AND OTHER ACQUIRED INTANGIBLE ASSETS

The following tables summarize the activity in goodwill:


	Year Ended December 31, 2025
	MA						MIS						Consolidated
	Gross goodwill		Accumulated impairment charge		Net goodwill		Gross goodwill		Accumulated impairment charge		Net goodwill		Gross goodwill		Accumulated impairment charge		Net goodwill
Balance at beginning of year	$	5,626	$	(12)	$	5,614	$	380	$	—	$	380	$	6,006	$	(12)	$	5,994
Additions/ adjustments (1)	135		—		135		8		—		8		143		—		143
Foreign currency translation adjustments	334		—		334		(5)		—		(5)		329		—		329
Reclassification to assets held-for-sale (2)	(89)		—		(89)		—		—		—		(89)		—		(89)
Divestiture of business (3)	(9)		—		(9)		—		—		—		(9)		—		(9)
Ending Balance	$	5,997	$	(12)	$	5,985	$	383	$	—	$	383	$	6,380	$	(12)	$	6,368


	Year Ended December 31, 2024
	MA						MIS						Consolidated
	Gross goodwill		Accumulated impairment charge		Net goodwill		Gross goodwill		Accumulated impairment charge		Net goodwill		Gross goodwill		Accumulated impairment charge		Net goodwill
Balance at beginning of year	$	5,681	$	(12)	$	5,669	$	287	$	—	$	287	$	5,968	$	(12)	$	5,956
Additions/ adjustments (4)	112		—		112		97		—		97		209		—		209
Foreign currency translation adjustments	(167)		—		(167)		(4)		—		(4)		(171)		—		(171)

Ending balance	$	5,626	$	(12)	$	5,614	$	380	$	—	$	380	$	6,006	$	(12)	$	5,994

(1)The 2025 additions/adjustments primarily relate to the acquisition of CAPE Analytics and ICR Chile in 2025.

(2)The 2025 reclassification to assets held-for-sale for the MA segment in the table above relates to the planned divestiture of the MA Regulatory Solutions business, more fully discussed in Note 11.

(3)The 2025 divestiture of business for the MA segment in the table above relates to the divestiture of the MA Learning Solutions Business, more fully discussed in Note 22.

(4)The 2024 additions/adjustments primarily relate to acquisitions in 2024 (most notably GCR, Numerated and Praedicat).

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Acquired intangible assets and related accumulated amortization consisted of:


	December 31,
	2025		2024
Customer relationships	$	2,165	$	2,035
Accumulated amortization	(724)		(631)
Net customer relationships	1,441		1,404
Software/product technology	774		695
Accumulated amortization	(526)		(419)
Net software/product technology	248		276
Database	164		166
Accumulated amortization	(103)		(89)
Net database	61		77
Trade names	201		199
Accumulated amortization	(96)		(83)
Net trade names	105		116
Other (1)	64		67
Accumulated amortization	(53)		(50)
Net other	11		17
Total	$	1,866	$	1,890

(1)Other intangible assets primarily consist of trade secrets, covenants not to compete, and acquired ratings methodologies and models.

Amortization expense relating to acquired intangible assets is as follows:


	Year Ended December 31,
	2025		2024		2023
Amortization expense (1)	$	215	$	198	$	198

(1)Amount for the year ended December 31, 2024 excludes incremental amortization expense of $5 million associated with amortizable intangible assets which is presented within charges related to asset abandonment on the consolidated statement of operations, as more fully discussed in Note 22 to the consolidated financial statements.

Estimated future annual amortization expense for intangible assets subject to amortization is as follows:


Year Ending December 31,
2026	$	207
2027	195
2028	182
2029	150
2030	126
Thereafter	1,006
Total estimated future amortization	$	1,866

NOTE 9 RESTRUCTURING

On December 19, 2024, the CEO of Moody’s approved the Strategic and Operational Efficiency Restructuring Program. The Company estimates that upon completion, the program will result in annualized savings of $250 million to $300 million. This program relates to the Company's strategy to realign its operations toward high priority growth areas and to consolidate certain functions to simplify the organization to enable improved operating efficiency and leverage. This program will primarily include a reduction in staff, the rationalization and exit of certain leased office spaces and the retirement of certain legacy software applications. The program includes $210 million to $230 million of expected pre-tax personnel-related restructuring charges, an amount that includes severance costs (primarily determined under the Company’s existing severance plans), expense related to the modification of equity awards and other related costs. In addition, the program is expected to result in approximately $5 million of non-cash charges from the exit from certain leased office spaces and $10 million to $15 million of non-cash charges related to incremental amortization of internally developed software due to a reduction in the useful life of the software assets. The savings generated from the Strategic and Operational Efficiency Restructuring Program are expected to strengthen the Company's operating margin, with a portion being deployed to support strategic investments. The Strategic and Operational Efficiency Restructuring Program is expected to be substantially complete by the end of 2026. Cash outlays associated with this program are expected to be $210 million to $230 million, which are expected to be paid through 2027.

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On June 30, 2022, the CEO of Moody’s approved the 2022 - 2023 Geolocation Restructuring Program. This program related to the Company's post-COVID-19 geolocation strategy and other strategic initiatives and included the rationalization and exit of certain leased office spaces and a reduction in staff, including the relocation of certain job functions. Cumulative charges related to this program are shown in the table below. The savings generated from the 2022 - 2023 Geolocation Restructuring Program strengthened the Company's operating margin, with a portion being deployed to support strategic investments, including the Company's workplace of the future program and employee retention initiatives. The 2022 - 2023 Geolocation Restructuring Program was substantially complete at the end of 2023.

Total expenses included in the accompanying consolidated statements of operations related to the aforementioned restructuring programs are outlined below:


	Year ended December 31,						Cumulative expense incurred
	2025		2024		2023
2022 - 2023 Geolocation Restructuring Program
Employee Termination Costs (1)	$	—	$	14	$	51	$	151
Real Estate Related Costs (2)	—		—		36		63
Total 2022-2023 Geolocation Restructuring Program Costs	$	—	$	14	$	87	$	214
Strategic and Operational Efficiency Restructuring Program
Employee Termination Costs (1)	$	101	$	45	$	—	$	146


Real Estate Related Costs (3)	4		—		—		4
Internally developed software-related charges (4)	3		—		—		3
Total Strategic and Operational Efficiency Restructuring Program Costs	$	108	$	45	$	—	$	153
Total Restructuring	$	108	$	59	$	87

(1)Primarily includes severance costs, expense related to the modification of equity awards and professional service fees related to execution of the restructuring program.

(2)For the year ended December 31, 2023, primarily includes ROU Asset impairment charges. The fair value of the impaired assets was determined by utilizing the present value of the estimated future cash flows attributable to the assets. The fair value of those assets subsequent to the impairment for the year ended December 31, 2023 was $4 million and was categorized as Level 3 within the ASC Topic 820 fair value hierarchy.

(3)Includes the incremental amortization in the period of ROU Assets that have been abandoned or for which abandonment is planned in future periods.

(4)Includes the incremental amortization in the period relating to a change in estimated useful lives for certain internally developed software that has been abandoned or for which abandonment is planned in future periods.

Changes to the restructuring liability for the aforementioned restructuring programs were as follows:


	2025		2024		2023
Balance as of January 1	$	47	$	36	$	64








2022 - 2023 Geolocation Restructuring Program:
Cost incurred and adjustments	(1)		14		51
Cash payments	(7)		(42)		(79)
Strategic and Operational Efficiency Restructuring Program:
Cost incurred and adjustments	99		44		—
Cash payments	(97)		(5)		—
Balance as of December 31 (1)	$	41	$	47	$	36

(1)Restructuring liability is primarily comprised of employee termination costs and other severance-related charges.

As of December 31, 2025, substantially all of the remaining $41 million restructuring liability is expected to be paid out in 2026.

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NOTE 10 FAIR VALUE

The tables below present information about items that are carried at fair value at December 31, 2025 and 2024:


		Fair value Measurement as of December 31, 2025
	Description	Balance		Level 1		Level 2
Assets:
	Derivatives (1)	$	9	$	—	$	9

	Money market funds/mutual funds	113		113		—
	Total	$	122	$	113	$	9
Liabilities:
	Derivatives (1)	$	540	$	—	$	540
	Total	$	540	$	—	$	540


		Fair Value Measurement as of December 31, 2024
	Description	Balance		Level 1		Level 2
Assets:
	Derivatives (1)	$	58	$	—	$	58
	Money market funds/mutual funds	108		108		—
	Total	$	166	$	108	$	58
Liabilities:
	Derivatives (1)	$	216	$	—	$	216
	Total	$	216	$	—	$	216

(1)Represents fair value of certain derivative contracts as more fully described in Note 6 to the consolidated financial statements.

The following are descriptions of the methodologies utilized by the Company to estimate the fair value of its derivative contracts, money market mutual funds and mutual funds:

Derivatives:

In determining the fair value of the derivative contracts in the tables above, the Company utilizes industry standard valuation models. Where applicable, these models project future cash flows and discount the future amounts to a present value using spot rates, forward points, currency volatilities, interest rates as well as the risk of non-performance of the Company and the counterparties with whom it has derivative contracts. The Company established strict counterparty credit guidelines and only enters into transactions with financial institutions that adhere to these guidelines. Accordingly, the risk of counterparty default is deemed to be minimal.

Money market funds and mutual funds:

The money market funds and mutual funds in the tables above are deemed to be equity securities with readily determinable fair values with changes in fair value recognized through net income under ASC Topic 321. The fair value of these instruments is determined using Level 1 inputs as defined in the ASC Topic 820.

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NOTE 11 OTHER BALANCE SHEET INFORMATION

The following tables contain additional detail related to certain balance sheet captions:


	December 31,
	2025		2024
Other current assets:
Prepaid taxes	$	139	$	81
Prepaid expenses	184		179
Capitalized costs to obtain and fulfill sales contracts	143		131
Foreign exchange forwards on certain assets and liabilities	9		—
Interest receivable on interest rate and cross currency swaps	95		77
Assets held for sale	98		—
Other	46		47
Total other current assets	$	714	$	515


	December 31,
	2025		2024
Other assets:
Investments in non-consolidated affiliates	$	489	$	465
Deposits for real-estate leases	16		15
Indemnification assets related to acquisitions	35		109
Mutual funds, certificates of deposit and money market deposit accounts/funds	110		98
Company owned life insurance (at contract value)	50		48
Capitalized costs to obtain sales contracts	253		214
Derivative instruments designated as accounting hedges	—		58
Pension and other retirement employee benefits	74		60
Other	74		99
Total other assets	$	1,101	$	1,166


	December 31,
	2025		2024
Accounts payable and accrued liabilities:
Benefits and payroll taxes	$	126	$	133
Incentive compensation	390		452
Customer credits, advanced payments and advanced billings	163		142
Dividends	8		32
Professional service fees	49		38
Interest accrued on debt	86		92
Accounts payable	62		53
Income taxes	146		144
Pension and other retirement employee benefits	9		11
Accrued royalties	20		25
FX forwards on certain assets and liabilities	—		21
Restructuring liability	41		46
Derivative instruments designated as accounting hedges	—		3
Interest payable on interest rate and cross currency swaps	66		60
Liabilities held for sale	36		—
Other	102		92
Total accounts payable and accrued liabilities	$	1,304	$	1,344

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	December 31,
	2025		2024
Other liabilities:
Pension and other retirement employee benefits	$	216	$	195

Interest accrued on UTPs	43		47
MAKS indemnification provisions	19		19
Income tax liability – non-current portion	—		12
Derivative instruments designated as accounting hedges	540		192

Other	41		52
Total other liabilities	$	859	$	517

Assets and Liabilities Held-for-Sale:

In December 2025, the Company entered into an agreement to sell the MA Regulatory Solutions business. As of December 31, 2025, the assets and liabilities related to this business are classified as held-for-sale. The Company expects the transaction to close during the first half of 2026.

Investments in non-consolidated affiliates:

The following table provides additional detail regarding Moody's investments in non-consolidated affiliates, as included in other assets in the consolidated balance sheets:


	December 31,
	2025		2024
Equity method investments (1)	$	121	$	127
Investments measured using the measurement alternative (2)	350		328
Other	18		10
Total investments in non-consolidated affiliates	$	489	$	465

(1)Equity securities in which the Company has significant influence over the investee but does not have a controlling financial interest in accordance with ASC Topic 323.

(2)Equity securities without readily determinable fair value for which the Company has elected to apply the measurement alternative in accordance with ASC Topic 321, which is more fully discussed in Note 2.

Moody's holds various investments accounted for under the equity method, the most significant of which is the Company's minority investment in CCXI. Moody's also holds various investments measured using the measurement alternative, the most significant of which is the Company's minority interest in BitSight.

Refer to Note 22 for disclosure on earnings from non-consolidated affiliates, which are included within other non-operating income, net.

NOTE 12 COMPREHENSIVE INCOME AND ACCUMULATED OTHER COMPREHENSIVE INCOME

The amounts reclassified out of AOCL, as shown in the consolidated statements of comprehensive income, were not material for all periods presented.

The following tables show changes in AOCL by component (net of tax):


	Year Ended December 31, 2025
	Pension and Other Retirement Benefits		Gains (Losses) on Cash Flow Hedges		Foreign Currency Translation Adjustments		Net Investment Hedges		Total
Balance at December 31, 2024	$	(39)	$	(42)	$	(832)	$	275	$	(638)
Other comprehensive income (loss) before reclassifications	7		—		601		(469)		139
Amounts reclassified from AOCL	(2)		1		—		—		(1)
Other comprehensive income (loss)	5		1		601		(469)		138
Balance at December 31, 2025	$	(34)	$	(41)	$	(231)	$	(194)	$	(500)

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	Year Ended December 31, 2024
	Pension and Other Retirement Benefits		Gains (Losses) on Cash Flow Hedges		Foreign Currency Translation Adjustments		Net Investment Hedges		Total
Balance at December 31, 2023	$	(56)	$	(44)	$	(520)	$	53	$	(567)
Other comprehensive income (loss) before reclassifications	19		—		(312)		222		(71)
Amounts reclassified from AOCL	(2)		2		—		—		—
Other comprehensive income (loss)	17		2		(312)		222		(71)
Balance at December 31, 2024	$	(39)	$	(42)	$	(832)	$	275	$	(638)


	Year Ended December 31, 2023
	Pension and Other Retirement Benefits		Gains (Losses) on Cash Flow Hedges		Foreign Currency Translation Adjustments		Net Investment Hedges		Total
Balance at December 31, 2022	$	(47)	$	(45)	$	(736)	$	185	$	(643)
Other comprehensive income (loss) before reclassifications	(6)		—		216		(132)		78
Amounts reclassified from AOCL	(3)		1		—		—		(2)
Other comprehensive income (loss)	(9)		1		216		(132)		76
Balance at December 31, 2023	$	(56)	$	(44)	$	(520)	$	53	$	(567)

NOTE 13 PENSION AND OTHER RETIREMENT BENEFITS

U.S. Plans

Moody’s maintains funded and unfunded noncontributory DBPPs. The DBPPs provide defined benefits using a cash balance formula based on years of service and career average salary or final average pay for selected executives. The Company also provides certain healthcare and life insurance benefits for retired U.S. employees. The retirement healthcare plans are contributory; the life insurance plans are noncontributory. Moody’s funded and unfunded U.S. pension plans, the U.S. retirement healthcare plans and the U.S. retirement life insurance plans are collectively referred to herein as the “Retirement Plans.” The U.S. retirement healthcare plans and the U.S. retirement life insurance plans are collectively referred to herein as the “Other Retirement Plans.”

Through 2007, substantially all U.S. employees were eligible to participate in the Company’s DBPPs. Effective January 1, 2008, the Company no longer offers DBPPs to U.S. employees hired or rehired on or after January 1, 2008, and new hires in the U.S. instead will receive a retirement contribution in similar benefit value under the Company’s Profit Participation Plan. Current participants of the Company’s Retirement Plans and Other Retirement Plans continue to accrue benefits based on existing plan benefit formulas.

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The following is a summary of changes in benefit obligations and fair value of plan assets for the Retirement Plans for the years ended December 31:


	Pension Plans				Other Retirement Plans
	2025		2024		2025		2024
Change in benefit obligation:
Benefit obligation, beginning of the period	$	(464)	$	(484)	$	(42)	$	(42)
Service cost	(10)		(10)		(3)		(3)
Interest cost	(25)		(22)		(2)		(2)
Plan participants’ contributions	—		—		(2)		(2)
Benefits paid	21		24		4		3
Actuarial (loss) gain	(3)		—		2		—
Assumption changes	(11)		28		(1)		4
Benefit obligation, end of the period	$	(492)	$	(464)	$	(44)	$	(42)
Change in plan assets:
Fair value of plan assets, beginning of the period	$	460	$	449	$	—	$	—
Actual return on plan assets	55		24		—		—
Benefits paid	(21)		(24)		(3)		(3)
Employer contributions	6		11		1		1
Plan participants’ contributions	—		—		2		2
Fair value of plan assets, end of the period	$	500	$	460	$	—	$	—
Funded status of the plans	$	8	$	(4)	$	(44)	$	(42)
Amounts recorded on the consolidated balance sheets:
Pension and retirement benefits asset – non current	$	75	$	60	$	—	$	—
Pension and retirement benefits liability – current	(7)		(8)		(2)		(2)
Pension and retirement benefits liability – non current	(60)		(56)		(42)		(40)
Net amount recognized	$	8	$	(4)	$	(44)	$	(42)
Accumulated benefit obligation, end of the period	$	(464)	$	(436)

The net increase in the pension benefit obligation from assumption changes in 2025 primarily resulted from a decrease to the discount rates used to measure the obligation. The net decrease in the pension benefit obligation from assumption changes and actuarial losses in 2024 primarily resulted from increase to the discount rates used to measure the obligation.

The following information is for those pension plans with an accumulated benefit obligation in excess of plan assets:


	December 31,
	2025		2024
Aggregate projected benefit obligation	$	68	$	65
Aggregate accumulated benefit obligation	$	60	$	57

The following table summarizes the pre-tax net actuarial losses and prior service costs recognized in AOCL for the Company’s Retirement Plans as of December 31:


	Pension Plans				Other Retirement Plans
	2025		2024		2025		2024
Net actuarial gains (losses)	$	(53)	$	(61)	$	13	$	13
Net prior service credits	—		1		—		—
Total recognized in AOCL – pre-tax	$	(53)	$	(60)	$	13	$	13

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Net periodic pension expenses (income) recognized for the Retirement Plans are as follows for the years ended December 31:


	Pension Plans						Other Retirement Plans
	2025		2024		2023		2025		2024		2023
Components of net periodic expense (income)
Service cost	$	10	$	10	$	11	$	3	$	3	$	3
Interest cost	25		22		22		2		2		2
Expected return on plan assets	(33)		(30)		(32)		—		—		—
Amortization of net actuarial (gains) losses and prior service credits from earlier periods	(1)		—		(1)		(1)		(1)		(1)
(Gain) loss on settlement of pension obligations	—		(1)		(2)		—		—		—
Net periodic expense (income)	$	1	$	1	$	(2)	$	4	$	4	$	4

The following table summarizes the pre-tax amounts recorded in OCI related to the Company’s Retirement Plans for the years ended December 31:


	Pension Plans						Other Retirement Plans
	2025		2024		2023		2025		2024		2023
Amortization of net actuarial (gains) losses and prior service credit	$	(1)	$	(1)	$	(1)	$	(1)	$	(1)	$	(1)
(Gain) loss on settlement of pension obligations	—		(1)		(2)		—		—		—
Net actuarial gain (loss) arising during the period	8		22		(3)		1		4		1
Total recognized in OCI – pre-tax	$	7	$	20	$	(6)	$	—	$	3	$	—

ADDITIONAL INFORMATION:

Assumptions—Retirement Plans

Weighted-average assumptions used to determine benefit obligations at December 31:


	Pension Plans				Other Retirement Plans
	2025		2024		2025		2024
Discount rate	5.24	%	5.43	%	5.30	%	5.40	%
Rate of compensation increase	3.10	%	3.60	%	—		—
Cash balance plan interest crediting rate	4.71	%	4.78	%	—		—

Weighted-average assumptions used to determine net periodic benefit expense for years ended December 31:


	Pension Plans									Other Retirement Plans
2025			2024			2023			2025			2024			2023
Discount rate	5.43	%		4.73	%		4.93	%		5.40	%		4.75	%		4.90	%
Expected return on plan assets	6.60	%		6.10	%		6.55	%		—			—			—
Rate of compensation increase	3.60	%		3.60	%		3.63	%		—			—			—
Cash balance plan interest crediting rate	4.78	%		4.50	%		4.50	%		—			—			—

The expected rate of return on plan assets represents the Company’s best estimate of the long-term return on plan assets and is determined by using a building block approach, which generally weighs the underlying long-term expected rate of return for each major asset class based on their respective allocation target within the plan portfolio, net of plan paid expenses. As the assumption reflects a long-term time horizon, the plan performance in any one particular year does not, by itself, significantly influence the Company’s evaluation. For 2025, the expected rate of return used in calculating the net periodic benefit costs was 6.60%. For 2026, the Company’s expected rate of return assumption is 6.95% to reflect the Company’s current view of long-term capital market outlook.

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Plan Assets

Moody’s investment objective for the assets in the funded pension plan is to earn total returns that will minimize future contribution requirements over the long-term within a prudent level of risk. The Company works with its independent investment consultants to determine asset allocation targets for its pension plan investment portfolio based on its assessment of business and financial conditions, demographic and actuarial data, funding characteristics, and related risk factors. Other relevant factors, including historical and forward looking views of inflation and capital market returns, are also considered. Risk management practices include monitoring plan asset performance, diversification across asset classes and investment styles and periodic rebalancing toward asset allocation targets. The Company’s Asset Management Committee is responsible for overseeing the investment activities of the plan, which includes selecting acceptable asset classes, defining allowable ranges of holdings by asset class and by individual investment managers, defining acceptable securities within each asset class, and establishing investment performance expectations. Ongoing monitoring of the plan includes reviews of investment performance and managers on a regular basis, annual liability measurements, and periodic asset/liability studies.

The Company’s investment policy uses risk-controlled investment strategies by increasing the plan’s asset allocation to fixed income securities and specifying ranges of acceptable target allocation by asset class based on different levels of the plan’s accounting funded status. In addition, the investment policy also requires the investment-grade fixed income assets to be rebalanced between shorter and longer duration bonds as the interest rate environment changes. This investment policy is designed to help protect the plan’s funded status and to limit volatility of the Company’s contributions. Based on the policy, the Company’s current target asset allocation is approximately 35% (range of 23% to 46%) in equity securities, 61% (range of 44% to 77%) in fixed income securities and 5% (range of 2% to 8%) in other investments and the plan will use a combination of active and passive investment strategies and different investment styles for its investment portfolios within each asset class. The plan’s equity investments are diversified across U.S. and non-U.S. stocks of small, medium and large capitalization. The plan’s fixed income investments are diversified principally across U.S. and non-U.S. government and corporate bonds, which are expected to help reduce plan exposure to interest rate variation and to better align assets with obligations. The plan also invests in other fixed income investments such as debts rated below investment grade, emerging market debt, and convertible securities. The plan’s other investment, which is made through a private real estate debt fund, is expected to provide additional diversification benefits and absolute return enhancement to the plan assets.

Fair value of the assets in the Company’s funded pension plan by asset category at December 31, 2025 and 2024 are as follows:


	Fair Value Measurement as of December 31, 2025
Asset Category	Balance		Level 1		Level 2		Measured using NAV practical expedient (1)		% of total assets
Cash and cash equivalents	$	4	$	—	$	4	$	—	1	%
Common/collective trust funds—equity securities
U.S. large-cap	119		—		119		—		24	%
U.S. small and mid-cap	28		—		28		—		6	%

Total equity investments	147		—		147		—		30	%
Emerging markets bond fund	35		—		—		35		7	%
Common/collective trust funds and corporate bonds—fixed income securities
Intermediate-term investment grade U.S. government/ corporate bonds	64		—		64		—		13	%
Mutual funds

Long duration corporate bonds	157		—		157		—		31	%
U.S. Treasury Inflation-Protected Securities (TIPs)	27		27		—		—		5	%
Emerging markets equity	26		—		26		—		5	%

Private investment fund—high yield securities	16		—		—		16		3	%
Total fixed-income investments	325		27		247		51		64	%
Other investment—private real estate fund	24		—		—		24		5	%
Total Assets	$	500	$	27	$	398	$	75	100	%

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	Fair Value Measurement as of December 31, 2024
Asset Category	Balance		Level 1		Level 2		Measured using NAV practical expedient (1)		% of total assets
Cash and cash equivalents	$	2	$	—	$	2	$	—	—	%
Common/collective trust funds—equity securities
U.S. large-cap	114		—		114		—		25	%
U.S. small and mid-cap	25		—		25		—		5	%

Total equity investments	139		—		139		—		30	%
Emerging markets bond fund	30		—		—		30		7	%
Common/collective trust funds and corporate bonds—fixed income securities
Intermediate-term investment grade U.S. government/ corporate bonds	57		—		57		—		12	%
Mutual funds
Long duration corporate bonds	146		—		146		—		32	%
U.S. Treasury Inflation-Protected Securities (TIPs)	26		26		—		—		6	%
Emerging markets equity	21		—		21		—		5	%
Private investment fund—high yield securities	15		—		—		15		3	%
Total fixed-income investments	295		26		224		45		65	%
Other investment—private real estate debt fund	24		—		—		24		5	%
Total Assets	$	460	$	26	$	365	$	69	100	%

(1)Investments are measured using the net asset value per share (or its equivalent) practical expedient and have not been categorized in the fair value hierarchy. The fair value amounts presented in the table are intended to permit a reconciliation of the fair value hierarchy to the value of the total plan assets.

Cash and cash equivalents are primarily comprised of investments in money market mutual funds. In determining fair value, Level 1 investments are valued based on quoted market prices in active markets. Investments in common/collective trust and private mutual funds are valued using the NAV per unit in each fund. The NAV is based on the value of the underlying investments owned by each fund, minus its liabilities, and then divided by the number of shares outstanding. Common/collective trust funds and the private mutual fund are categorized in Level 2 to the extent that they are considered to have a readily determinable fair value. Government/corporate bonds are categorized as Level 2 as their fair values are derived from observable market data. Investments for which fair value is estimated by using the NAV per share (or its equivalent) as a practical expedient are not categorized in the fair value hierarchy.

Except for the Company’s U.S. funded pension plan, all of Moody’s Retirement Plans are unfunded and therefore have no plan assets.

Cash Flows

The Company did not contribute to its U.S. funded pension plan during the years ended December 31, 2025 and 2024, and does not anticipate making a contribution to the funded plan in 2026. For its unfunded plans, actual contributions in 2025 were not material and expected payments in 2026 are not expected to be material.

Estimated Future Benefits Payable

Estimated future benefits payments for the Retirement Plans are as follows as of the year ended December 31, 2025:


Year Ending December 31,	Pension Plans		Other Retirement Plans
2026	$	33	$	2
2027	35		2
2028	38		3
2029	39		3
2030	39		3
2031 - 2035	182		20

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Defined Contribution Plans

Moody’s has a Profit Participation Plan covering substantially all U.S. employees. The Profit Participation Plan provides for an employee salary deferral and the Company matches employee contributions, equal to 50% of employee contribution up to a maximum of 3% of the employee’s pay. Effective January 1, 2008, all new hires are automatically enrolled in the Profit Participation Plan when they meet eligibility requirements unless they decline participation. As the Company’s U.S. DBPPs are closed to new entrants effective January 1, 2008, all eligible new hires will instead receive a retirement contribution into the Profit Participation Plan in value similar to the pension benefits. Additionally, effective January 1, 2008, the Company implemented a deferred compensation plan in the U.S., which is unfunded and provides for employee deferral of compensation and Company matching contributions related to compensation in excess of the IRS limitations on benefits and contributions under qualified retirement plans. Total expenses associated with U.S. defined contribution plans were $67 million, $73 million and $71 million in the years ended December 31, 2025, 2024 and 2023, respectively.

Effective January 1, 2008, Moody’s has designated the Moody’s Stock Fund, an investment option under the Profit Participation Plan, as an Employee Stock Ownership Plan and, as a result, participants in the Moody’s Stock Fund may receive dividends in cash or may reinvest such dividends into the Moody’s Stock Fund. Dividend payments relating to the Moody’s Stock Fund were immaterial in each of the years ended December 31, 2025, 2024, and 2023. The Company records the dividends as a reduction of retained earnings in the Consolidated Statements of Shareholders’ Equity. The Moody’s Stock Fund held approximately 282,442 and 304,076 shares of Moody’s common stock at December 31, 2025 and 2024, respectively.

Non-U.S. Plans

Certain of the Company’s non-U.S. operations provide pension benefits to their employees. The non-U.S. defined benefit pension plans are immaterial. For defined contribution plans, company contributions are primarily determined as a percentage of employees’ eligible compensation. Expenses related to these defined contribution plans for the years ended December 31, 2025, 2024, and 2023 were $61 million, $50 million, and $42 million, respectively.

NOTE 14 STOCK-BASED COMPENSATION PLANS

Under the 1998 Plan, 33.0 million shares of the Company’s common stock have been reserved for issuance. The 2001 Plan, which is shareholder approved, permits the granting of up to 54.6 million shares, of which not more than 10.7 million shares are available for grants of awards other than stock options. The stock plans also provide for the granting of restricted stock. The stock plans provide that options are exercisable not later than ten years from the grant date. The vesting period for awards under the stock plans is generally determined by the Board at the date of the grant and has been four years except for employees who are at or near retirement eligibility, as defined, for which vesting is between one and four years. Additionally, the vesting period is between three years and four years for certain performance-based restricted stock that contain a condition whereby the number of shares that ultimately vest are based on the achievement of certain non-market based performance metrics of the Company. Options may not be granted at less than the fair market value of the Company’s common stock at the date of grant.

The Company maintains the Directors’ Plan for its Board, which permits the granting of awards in the form of non-qualified stock options, restricted stock or performance shares. The vesting period is determined by the Board at the date of the grant and is generally one year for both options and restricted stock. Under the Directors’ Plan, 1.7 million shares of common stock were reserved for issuance. Any director of the Company who is not an employee of the Company or any of its subsidiaries as of the date that an award is granted is eligible to participate in the Directors’ Plan.

Presented below is a summary of the stock-based compensation expense and associated tax benefit in the accompanying consolidated statements of operations:


	Year Ended December 31,
	2025		2024		2023
Stock-based compensation expense	$	234	$	221	$	193
Tax benefit	$	50	$	48	$	45

The fair value of each employee stock option award is estimated on the date of grant using the Black-Scholes option-pricing model that uses the assumptions noted below. The expected dividend yield is derived from the annual dividend rate on the date of grant. The expected stock volatility is based on an assessment of historical weekly stock prices of the Company as well as implied volatility from Moody’s traded options. The risk-free interest rate is based on U.S. government zero coupon bonds with maturities similar to the expected holding period. The expected holding period is determined by examining historical and projected post-vesting exercise behavior activity.

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The following weighted average assumptions were used for options granted:


	Year Ended December 31,
	2025			2024			2023
Expected dividend yield	0.73		%	0.91		%	1.04		%
Expected stock volatility	27		%	28		%	29		%
Risk-free interest rate	4.51		%	4.34		%	4.19		%
Expected holding period (in years)	5.6			5.9			5.8
Grant date fair value	$	163.75		$	120.42		$	94.71

A summary of option activity as of December 31, 2025 and changes during the year then ended is presented below:


Options	Shares	Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
Outstanding, December 31, 2024	0.7	$	267.64
Granted	0.1	$	513.21
Exercised	(0.2)	$	185.62
Outstanding, December 31, 2025	0.6	$	313.90	5.7 years	$	116
Vested and expected to vest, December 31, 2025	0.6	$	313.15	5.7 years	$	115
Exercisable, December 31, 2025	0.3	$	250.42	4.2 years	$	82

The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference between Moody’s closing stock price on the last trading day of the year ended December 31, 2025 and the exercise prices, multiplied by the number of in-the-money options) that would have been received by the option holders had all option holders exercised their options as of December 31, 2025. This amount varies based on the fair value of Moody’s stock. As of December 31, 2025, there was $8 million of total unrecognized compensation expense related to options. The expense is expected to be recognized over a weighted average period of 2.0 years.

The following table summarizes information relating to stock option exercises:


	Year Ended December 31,
	2025		2024		2023
Proceeds from stock option exercises	$	28	$	53	$	32
Aggregate intrinsic value	$	47	$	76	$	58
Tax benefit realized upon exercise	$	10	$	13	$	14

A summary of nonvested restricted stock activity for the year ended December 31, 2025 is presented below:


Nonvested Restricted Stock	Shares	Weighted Average Grant Date Fair Value Per Share
Balance, December 31, 2024	1.3	$	330.84
Granted	0.4	$	479.70
Vested	(0.5)	$	323.29
Forfeited	(0.1)	$	395.00
Balance, December 31, 2025	1.1	$	400.12

As of December 31, 2025, there was $251 million of total unrecognized compensation expense related to nonvested restricted stock. The expense is expected to be recognized over a weighted average period of 2.5 years.

The following table summarizes information relating to the vesting of restricted stock awards:


	Year Ended December 31,
	2025		2024		2023
Fair value of shares vested	$	263	$	199	$	164
Tax benefit realized upon vesting	$	65	$	48	$	40

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A summary of performance-based restricted stock activity for the year ended December 31, 2025 is presented below:


Performance-based restricted stock	Shares	Weighted Average Grant Date Fair Value Per Share
Balance, December 31, 2024	0.3	$	330.78
Granted	0.1	$	501.88
Vested	(0.1)	$	313.05
Balance, December 31, 2025	0.3	$	370.34

The following table summarizes information relating to the vesting of the Company’s performance-based restricted stock awards:


	Year Ended December 31,
	2025		2024		2023
Fair value of shares vested	$	8	$	40	$	24
Tax benefit realized upon vesting	$	1	$	9	$	3

As of December 31, 2025, there was $50 million of total unrecognized compensation expense related to this plan. The expense is expected to be recognized over a weighted average period of 1.7 years.

The Company has a policy of issuing treasury stock to satisfy shares issued under stock-based compensation plans.

In addition, the Company also sponsors the ESPP. Under the ESPP, 6.0 million shares of common stock were reserved for issuance. The ESPP permits eligible employees to purchase common stock of the Company on a monthly basis at a discount to the average of the high and the low trading prices on the New York Stock Exchange on the last trading day of each month. This discount was 5% in 2025, 2024, and 2023, resulting in the ESPP qualifying for non-compensatory status under ASC Topic 718. Accordingly, no compensation expense was recognized for the ESPP in 2025, 2024, and 2023. The employee purchases are funded through after-tax payroll deductions, which plan participants can elect from one percent to ten percent of compensation, subject to the annual federal limit.

NOTE 15 INCOME TAXES

Components of the Company’s income tax provision are as follows:


	Year Ended December 31,
	2025		2024		2023
Current:
Federal	$	231	$	280	$	76
State and Local	99		106		67
Non-U.S.	355		316		222
Total current	685		702		365
Deferred:
Federal	35		(21)		(14)
State and Local	8		(6)		(4)
Non-U.S.	(60)		(35)		(20)
Total deferred	(17)		(62)		(38)
Total provision for income taxes	$	668	$	640	$	327

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A reconciliation of the U.S. federal statutory tax rate to the Company’s ETR on income before provision for income taxes is as follows:


	Year Ended December 31,
	2025				2024				2023
U.S. statutory tax rate	$	657	21.0	%	$	567	21.0	%	$	406	21.0	%
State and local taxes, net of federal tax benefit (1)	93		3.0	%	74		2.7	%	49		2.5	%
Net U.S. tax effect of cross-border tax laws	(4)		(0.1)	%	(14)		(0.5)	%	2		0.1	%
Other nontaxable or nondeductible items	30		1.0	%	22		0.9	%	4		0.2	%
Excess tax benefits on share-based payments	(33)		(1.1)	%	(27)		(1.0)	%	(15)		(0.8)	%
Tax credits - research credit	(12)		(0.4)	%	(15)		(0.6)	%	(19)		(0.9)	%
Domestic state and local income taxes, net of federal effect	731		23.4	%	607		22.5	%	427		22.1	%
Foreign Tax Expense
Belgium
Innovation deduction	(37)		(1.2)	%	(25)		(0.9)	%	(26)		(1.3)	%
Other	15		0.4	%	3		0.1	%	10		0.5	%
United Kingdom	11		0.4	%	34		1.3	%	25		1.2	%
Other foreign jurisdictions	3		0.1	%	1		—	%	7		0.4	%
Tax expense (benefit) relating to foreign operations	(8)		(0.3)	%	13		0.5	%	16		0.8	%

Changes in unrecognized tax benefits	(55)		(1.8)	%	20		0.7	%	(116)		(6.0)	%

Total	$	668	21.3	%	$	640	23.7	%	$	327	16.9	%

(1) For all years presented, state taxes in California, New York and New York City made up the majority (greater than 50 percent) of the tax effect in this category.

Components of the Company’s income tax paid are as follows:


	Year Ended December 31,
	2025		2024		2023
U.S. Federal	$	353	$	223	$	59
U.S. State and Local	132		88		23
Total U.S.	485		311		82

Belgium	32		39		32
Canada	68		63		44
Germany	43		30		35
United Kingdom	79		93		64
Other foreign jurisdictions	118		77		87
Total non-U.S.	340		302		262

Total Income Tax Paid	$	825	$	613	$	344

The source of income before provision for income taxes is as follows:


	Year Ended December 31,
	2025		2024		2023
U.S.	$	1,743	$	1,446	$	892
Non-U.S.	1,387		1,253		1,043
Income before provision for income taxes	$	3,130	$	2,699	$	1,935

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The components of deferred tax assets and liabilities are as follows:


	December 31,
	2025		2024
Deferred tax assets:
Account receivable allowances	$	10	$	10
Stock-based compensation	69		60
Accrued compensation and benefits	52		50
Capitalized costs	43		24
Operating lease liabilities	87		84
Deferred revenue	217		211
Net operating loss	64		58
Uncertain tax positions	30		33
Loss on net investment hedges - OCI	83		—
Interest expense carryforward	25		20
Other	25		30
Total deferred tax assets	705		580
Deferred tax liabilities:
Accumulated depreciation and amortization of intangible assets and capitalized software	(563)		(522)
ROU Assets	(67)		(56)
Capital gains	(14)		(13)


Deferred tax on unremitted foreign earnings	(21)		(20)
Gain on net investment hedges - OCI	(4)		(82)
Other	(16)		(18)
Total deferred tax liabilities	(685)		(711)
Net deferred tax asset and (liabilities)	20		(131)
Valuation allowance	(30)		(25)
Total net deferred tax liabilities	$	(10)	$	(156)

The Company regularly evaluates which entities it will indefinitely reinvest earnings. The Company has provided deferred taxes for those entities whose earnings are not considered indefinitely reinvested.

The Company had valuation allowances of $30 million and $25 million at December 31, 2025 and 2024, respectively, related to foreign net operating losses, for which realization is uncertain.

A reconciliation of the beginning and ending amount of UTPs is as follows:


	Year Ended December 31,
	2025		2024		2023
Balance as of January 1	$	211	$	196	$	322
Additions for tax positions related to the current year	22		33		21
Additions for tax positions of prior years	—		11		3
Reductions for tax positions of prior years	(5)		(11)		(17)
Settlements with taxing authorities	—		(3)		(108)
Lapse of statute of limitations	(70)		(15)		(25)
Balance as of December 31	$	158	$	211	$	196

As of December 31, 2025, the Company had $158 million of UTPs of which $145 million represents the amount that, if recognized, would impact the ETR in future periods.

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Moody’s Corporation and subsidiaries are subject to U.S. federal income tax as well as income tax in various state, local and multiple foreign jurisdictions. The Company’s U.S. federal income tax returns for 2022 through 2024 remain open to examination. Currently, the Company's New York State tax returns for 2022 through 2024 are under examination. Additionally, New York City tax returns for the years 2018 through 2022 are also under examination, while returns for 2023 and 2024 are open for examination. Furthermore, the Company's U.K. corporate income tax returns are under audit for the years 2017 through 2023, with the 2024 return still open for examination.

The Company classifies interest related to UTPs in interest expense in its consolidated statements of operations. Penalties, if incurred, are recognized in other non-operating (expense) income, net. Refer to Note 16 for disclosure of interest (expense) income relating to UTPs and other tax-related liabilities. As of December 31, 2025, 2024, and 2023 the amount of accrued interest recorded in the Company’s consolidated balance sheets related to UTPs was $43 million, $47 million and $36 million, respectively.

In the fourth quarter of 2025, pursuant to a lapse of a statute of limitations, the Company reversed $64 million in reserves (and $15 million in related interest accruals) for uncertain tax positions that were assumed as part of a prior year M&A transaction, for which the sellers had indemnified Moody's. This tax benefit and related reduction to Interest expense, net is offset by the release of the related indemnification asset within Other non-operating income, net, with no impact to net income. In 2023, settlements with taxing authorities were primarily attributable to the favorable resolution of UTPs across various U.S. and non-U.S. jurisdictions.

Tax Legislation

Effective in 2024, multiple foreign jurisdictions in which the Company operates have enacted legislation to adopt a minimum tax rate described in the Global Anti-Base Erosion tax model rules (referred to as GloBE or Pillar II) issued by the OECD. A minimum ETR of 15% would apply to multinational companies with consolidated revenue above €750 million. Under the GloBE rules, a company would be required to determine a combined ETR for all entities located in a jurisdiction. If the jurisdictional tax rate is less than 15%, an additional tax generally will be due to bring the jurisdictional effective tax rate up to 15%. The Pillar II minimum tax did not have a material impact on the Company's results of operations or financial position.

On July 4, 2025, the One Big Beautiful Bill Act was enacted in the U.S. Key provisions of the OBBBA include making permanent certain aspects of the Tax Act, modifying certain international tax rules, and restoring provisions that accelerate deductions for certain business investments and expenditures. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented in subsequent years. The OBBBA did not have material impact on the Company’s consolidated financial statements for the year ended December 31, 2025, and the Company does not expect the changes to have a material impact on the provision for income taxes or net income in future periods.

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NOTE 16 INDEBTEDNESS

The Company’s debt is recorded at its carrying amount, which represents the issuance amount plus or minus any issuance premium or discount, except for certain debt as depicted in the table below, which is recorded at the carrying amount adjusted for the fair value of an interest rate swap used to hedge the fair value of the note.

The following table summarizes total indebtedness:


	December 31, 2025
Notes Payable:	Principal Amount		Fair Value of Interest Rate Swaps(1)		Unamortized (Discount) Premium		Unamortized Debt Issuance Costs		Carrying Value


5.25% 2014 Senior Notes, due 2044	$	600	$	(18)	$	3	$	(4)	$	581
1.75% 2015 Senior Notes, due 2027	587		—		—		—		587


3.25% 2017 Senior Notes, due 2028	500		—		(1)		(1)		498

4.25% 2018 Senior Notes, due 2029	400		(19)		(1)		(1)		379
4.875% 2018 Senior Notes, due 2048	400		(21)		(6)		(3)		370
0.950% 2019 Senior Notes, due 2030	881		—		(2)		(3)		876

3.25% 2020 Senior Notes, due 2050	300		—		(4)		(3)		293
2.55% 2020 Senior Notes, due 2060	300		—		(2)		(3)		295
2.00% 2021 Senior Notes, due 2031	600		—		(5)		(3)		592
2.75% 2021 Senior Notes, due 2041	600		—		(11)		(4)		585
3.10% 2021 Senior Notes, due 2061	500		—		(7)		(5)		488
3.75% 2022 Senior Notes, due 2052	500		(23)		(8)		(4)		465
4.25% 2022 Senior Notes, due 2032	500		(3)		(1)		(3)		493
5.00% 2024 Senior Notes, due 2034	500		—		(4)		(4)		492
Total debt	$	7,168	$	(84)	$	(49)	$	(41)	$	6,994


	December 31, 2024
Notes Payable:	Principal Amount		Fair Value of Interest Rate Swaps (1)		Unamortized (Discount) Premium		Unamortized Debt Issuance Costs		Carrying Value
5.25% 2014 Senior Notes, due 2044	$	600	$	(32)	$	3	$	(4)	$	567
1.75% 2015 Senior Notes due 2027	518		—		—		(1)		517
3.25% 2017 Senior Notes, due 2028	500		(13)		(2)		(1)		484
4.25% 2018 Senior Notes, due 2029	400		(35)		(1)		(1)		363
4.875% 2018 Senior Notes, due 2048	400		(35)		(6)		(3)		356
0.950% 2019 Senior Notes, due 2030	776		—		(1)		(3)		772
3.75% 2020 Senior Notes, due 2025	700		(3)		—		—		697
3.25% 2020 Senior Notes, due 2050	300		—		(4)		(3)		293
2.55% 2020 Senior Notes, due 2060	300		—		(2)		(3)		295
2.00% 2021 Senior Notes, due 2031	600		—		(6)		(4)		590
2.75% 2021 Senior Notes, due 2041	600		—		(12)		(5)		583
3.10% 2021 Senior Notes, due 2061	500		—		(7)		(5)		488
3.75% 2022 Senior Notes, due 2052	500		(43)		(8)		(5)		444
4.25% 2022 Senior Notes, due 2032	500		(8)		(2)		(3)		487
5.00% 2024 Senior Notes, due 2034	500		—		(4)		(4)		492
Total long-term debt	$	7,694	$	(169)	$	(52)	$	(45)	$	7,428
Current portion									(697)
Total long-term debt									$	6,731

(1)The fair value of interest rate swaps in the tables above represents the cumulative amount of fair value hedging adjustments included in the carrying amount of the hedged debt.

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Credit Facility

On May 6, 2024, the Company entered into a five-year senior, unsecured revolving credit facility with the capacity to borrow up to $1.25 billion, which expires in May 2029. Further information on the key terms of this revolving credit facility is below:


					December 31, 2025				December 31, 2024
	Issue Date	Capacity		Maturity	Drawn		Undrawn		Drawn		Undrawn

2024 Credit Facility	May 6, 2024	$	1,250	May 6, 2029	$	—	$	1,250	$	—	$	1,250

Interest on borrowings under the 2024 Credit Facility is payable at rates that are based on an adjusted term SOFR Rate plus a premium that can range from 80.5 BPS to 122.5 BPS, depending on the Company’s index debt ratings, as set forth in the 2024 Credit Facility. The Company also has the option to choose other rates, such as those based on adjusted Daily Simple SOFR or an alternate base rate, as set forth in the 2024 Credit Facility. Regardless of borrowing activity under the 2024 Credit Facility, the Company pays quarterly fees for the 2024 Credit Facility that can range from 7 BPS of the 2024 Credit Facility amount to 15 BPS, depending on the Company’s index debt ratings. The 2024 Credit Facility contains certain customary covenants and also contains a financial covenant that requires the Company to maintain a total debt to EBITDA Ratio of (i) not more than 4 to 1 at the end of any fiscal quarter or (ii) not more than 4.5 to 1 as of the end of the first three consecutive quarters immediately following any acquisition with consideration in excess of $500 million, subject to certain conditions as set forth in the 2024 Credit Facility.

Commercial Paper

On August 3, 2016, the Company entered into a private placement commercial paper program under which the Company may issue CP notes up to a maximum amount of $1.0 billion. Borrowings under the CP Program are backstopped by the 2024 Credit Facility. Amounts under the CP Program may be re-borrowed. The maturity of the CP Notes will vary, but may not exceed 397 days from the date of issue. The CP Notes are sold at a discount from par, or alternatively, sold at par and bear interest at rates that will vary based upon market conditions. The rates of interest will depend on whether the CP Notes will be a fixed or floating rate. The interest on a floating rate may be based on the following: (a) certificate of deposit rate; (b) commercial paper rate; (c) the federal funds rate; (d) the SOFR; (e) prime rate; (f) Treasury rate; or (g) such other base rate as may be specified in a supplement to the private placement agreement. The CP Program contains certain events of default including, among other things: non-payment of principal, interest or fees; entrance into any form of moratorium; and bankruptcy and insolvency events, subject in certain instances to cure periods. As of December 31, 2025, the Company has no CP borrowings outstanding.

Notes Payable

During the first quarter of 2025, the Company fully repaid the $700 million of 3.75% 2020 Senior Notes which had reached maturity.

At December 31, 2025, the Company was in compliance with all covenants contained within all of the debt agreements. All of the debt agreements contain cross default provisions which state that default under one of the aforementioned debt instruments could in turn permit lenders under other debt instruments to declare borrowings outstanding under those instruments to be immediately due and payable. As of December 31, 2025, there were no such cross defaults.

The repayment schedule for the Company’s borrowings is as follows:


Year Ending December 31,	Total
2026	$	—
2027	587
2028	500
2029	400
2030	881
Thereafter	4,800
Total	$	7,168

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Interest expense, net

The following table summarizes the components of interest as presented in the consolidated statements of operations and the cash paid for interest:


	Year Ended December 31,
	2025		2024		2023
Expense on borrowings(1)	$	(251)	$	(300)	$	(296)
(Expense) income on UTPs and other tax related liabilities(2)	3		(13)		8
Net periodic pension costs - interest component	(30)		(26)		(26)
Income	65		102		63

Interest expense, net	$	(213)	$	(237)	$	(251)
Interest paid(3)	$	235	$	280	$	281

(1) Expense on borrowings includes interest on long-term debt, as well as realized gains/losses related to interest rate swaps and cross currency swaps, which are more fully discussed in Note 6.

(2) The amount for the year ended December 31, 2025 includes a $15 million reduction of tax-related interest expense related to the lapse in the statute of limitations of certain tax positions. Refer to Note 15 for additional information. The amount for the year ended December 31, 2023 includes a $22 million reduction of tax-related interest expense primarily related to the resolutions of tax matters.

(3) Interest paid includes net settlements on interest rate swaps more fully discussed in Note 6.

The fair value and carrying value of the Company’s debt as of December 31, 2025 and 2024 are as follows:


	December 31, 2025				December 31, 2024
	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Total debt	$	6,994	$	6,245	$	7,428	$	6,601

The fair value of the Company’s debt is estimated based on quoted prices in active markets as of the reporting date, which are considered Level 1 inputs within the fair value hierarchy.

NOTE 17 CAPITAL STOCK

Authorized Capital Stock

The total number of shares of all classes of stock that the Company has authority to issue under its Restated Certificate of Incorporation is 1.02 billion shares with a par value of $0.01, of which 1.0 billion are shares of common stock, 10.0 million are shares of preferred stock and 10.0 million are shares of series common stock. The preferred stock and series common stock can be issued with varying terms, as determined by the Board.

Share Repurchase Program

The Company first implemented a systematic share repurchase program in the third quarter of 2005 through an SEC Rule 10b5-1 program and has maintained its program since. Moody’s may also purchase opportunistically when conditions warrant. As a result, Moody’s share repurchase activity will continue to vary from quarter to quarter. The table below summarizes the Company’s remaining authority under its share repurchase program as of December 31, 2025:


Date Authorized	Amount Authorized		Remaining Authority
October 21, 2025	$	4,000	$	3,960

During 2025, Moody’s repurchased 3.3 million shares of its common stock under its share repurchase program and issued a net 0.5 million shares under employee stock-based compensation plans. The net amount includes shares withheld for employee payroll taxes.

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Dividends

The Company’s cash dividends were:


	Dividends Per Share
	Year ended December 31,
	2025				2024				2023
	Declared		Paid		Declared		Paid		Declared		Paid
First quarter	$	0.94	$	0.94	$	0.85	$	0.85	$	0.77	$	0.77
Second quarter	0.94		0.94		0.85		0.85		0.77		0.77
Third quarter	0.94		0.94		0.85		0.85		0.77		0.77
Fourth quarter	0.94		0.94		0.85		0.85		0.77		0.77
Total	$	3.76	$	3.76	$	3.40	$	3.40	$	3.08	$	3.08

On February 10, 2026, the Board approved the declaration of a quarterly dividend of $1.03 per share of Moody’s common stock, payable on March 13, 2026 to shareholders of record at the close of business on March 2, 2026. The continued payment of dividends at the rate noted above, or at all, is subject to the discretion of the Board.

NOTE 18 LEASES

The Company has operating leases, substantially all of which relate to the lease of office space. The Company's leases which are classified as finance leases are not material to the consolidated financial statements. Certain of the Company's leases include options to renew, with renewal terms that can extend the lease term from one year to 20 years at the Company's discretion.

The following table presents the components of the Company’s lease cost:


	Year ended December 31,
	2025		2024		2023
Operating lease cost	$	88	$	88	$	93

Sublease income	(7)		(7)		(7)
Variable lease cost	21		22		22
Total lease cost	$	102	$	103	$	108

During 2025, the Company recorded charges of $4 million related to the non-cash acceleration of amortization of ROU Assets that have been abandoned or for which abandonment is planned in future periods. During 2023, the Company recorded charges of $32 million related to the exit of certain real estate leases that resulted in ROU Asset impairment. These charges were recorded within restructuring expense in the consolidated statements of operations. Refer to Note 9 for further details.

The following tables present other information related to the Company’s operating leases:


	Year ended December 31,
	2025		2024		2023
Cash paid for amounts included in the measurement of operating lease liabilities	$	117	$	120	$	119
Right-of-use assets obtained in exchange for new operating lease liabilities	$	143	$	21	$	40


	December 31,
	2025		2024		2023
Weighted-average remaining lease term (in years)	6.6		3.8		4.4
Weighted-average discount rate applied to operating leases	4.7	%	3.2	%	3.2	%

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The following table presents a maturity analysis of the future minimum lease payments included within the Company’s operating lease liabilities at December 31, 2025:


Year Ending December 31,	Operating Leases
2026	$	100
2027	87
2028	31
2029	36
2030	30
Thereafter	147
Total lease payments (undiscounted)	431
Less: Interest	74
Present value of lease liabilities:	$	357
Lease liabilities - current	$	95
Lease liabilities - noncurrent	$	262

In the fourth quarter of 2025, the Company entered into an operating lease for a new headquarters in New York City, for which the Company has not yet been granted access to the leased floors. Accordingly, the ROU Assets and operating lease liabilities at December 31, 2025 do not reflect the amounts for this lease. The future minimum lease payments for this lease are approximately $600 million and will commence in 2026 with a lease term of 17 years.

NOTE 19 CONTINGENCIES

Given the nature of the Company's activities, Moody’s and its subsidiaries are subject to legal and tax proceedings, governmental, regulatory and legislative investigations, subpoenas and other inquiries, and claims and litigation by governmental and private parties that are based on ratings assigned by MIS or that are otherwise incidental to the Company’s business. Moody’s and MIS also are subject to periodic reviews, inspections, examinations and investigations by regulators in the U.S. and other jurisdictions, any of which may result in claims, legal proceedings, assessments, fines, penalties or restrictions on business activities. Moody’s also is subject to ongoing tax audits as addressed in Note 15 to the consolidated financial statements.

Management periodically assesses the Company’s liabilities and contingencies in connection with these matters based upon the latest information available. For claims, litigation and proceedings and governmental investigations and inquiries not related to income taxes, the Company records liabilities in the consolidated financial statements when it is both probable that a liability has been incurred and the amount of loss can be reasonably estimated and periodically adjusts these as appropriate. When the reasonable estimate of the loss is within a range of amounts, the minimum amount of the range is accrued unless some higher amount within the range is a better estimate than another amount within the range. In instances when a loss is reasonably possible but uncertainties exist related to the probable outcome and/or the amount or range of loss, management does not record a liability but discloses the contingency if material. As additional information becomes available, the Company adjusts its assessments and estimates of such matters accordingly. Moody’s also discloses material pending legal proceedings pursuant to SEC rules and other pending matters as it may determine to be appropriate.

In view of the inherent difficulty of assessing the potential outcome of legal proceedings, governmental, regulatory and legislative investigations and inquiries, claims and litigation and similar matters and contingencies, particularly when the claimants seek large or indeterminate damages or assert novel legal theories or the matters involve a large number of parties, the Company often cannot predict what the eventual outcome of the pending matters will be or the timing of any resolution of such matters. The Company also may be unable to predict the impact (if any) that any such matters may have on how its business is conducted, on its competitive position or on its financial position, results of operations or cash flows. As the process to resolve any pending matters progresses, management will continue to review the latest information available and assess its ability to predict the outcome of such matters and the effects, if any, on its operations and financial condition and to accrue for and disclose such matters as and when required. However, because such matters are inherently unpredictable and unfavorable developments or resolutions can occur, the ultimate outcome of such matters, including the amount of any loss, may differ from those estimates.

NOTE 20 SEGMENT INFORMATION

The Company is organized into two operating segments: MA and MIS and accordingly, the Company reports in two reportable segments: MA and MIS.

The MA segment develops a wide range of products and services that support the risk management activities of institutional participants in global financial markets. The MA segment consists of three LOBs - DS, R&I, and D&I.

The MIS segment consists of five LOBs. The CFG, FIG, PPIF and SFG LOBs generate revenue principally from fees for the assignment and ongoing monitoring of credit ratings on debt obligations and the entities that issue such obligations in markets worldwide. The MIS Other LOB primarily consists of financial instruments pricing services in the Asia-Pacific region, ICRA non-ratings revenue and revenue from providing professional services.

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Revenue for MA and expenses for MIS include an intersegment fee charged to MIS from MA for certain MA products and services utilized in MIS’s ratings process. Additionally, revenue for MIS and expenses for MA include intersegment fees charged to MA for the rights to use and distribute content, data and products developed by MIS. These intersegment fees are generally based on the market value of the products and services being transferred between the segments.

Overhead expenses include costs such as rent and occupancy, information technology and support staff such as finance, human resources and legal. Such costs and corporate expenses that exclusively benefit one segment are fully charged to that segment.

For overhead costs and corporate expenses that benefit both segments, costs are generally allocated to each segment based on historical and forecasted current year revenue amounts.

“Eliminations” in the following table represent intersegment revenue/expense. Moody’s does not report the Company’s assets by reportable segment, as this metric is not used by the chief operating decision maker to allocate resources to the segments.

Financial Information by Segment

The table below presents revenue, significant expenses regularly provided to the CODM and Adjusted Operating Income by reportable segment. The CODM, identified as the Company's CEO, utilizes the Adjusted Operating Income measure to assess the profitability of the Company and each of its reportable segments each quarter. Adjusted Operating Income is also used in our budgeting and forecasting processes, enabling the allocation of capital resources across the Company's strategic initiatives.


	Year Ended December 31,
	2025								2024
	MA		MIS		Eliminations		Consolidated		MA		MIS		Eliminations		Consolidated
Total external revenue	$	3,599	$	4,119	$	—	$	7,718	$	3,295	$	3,793	$	—	$	7,088
Intersegment revenue	12		198		(210)		—		13		193		(206)		—
Revenue	3,611		4,317		(210)		7,718		3,308		3,986		(206)		7,088
Compensation expense	1,438		1,136		—		2,574		1,370		1,169		—		2,539
Non-compensation expense	779		423		—		1,202		731		410		—		1,141
Intersegment expense	198		12		(210)		—		193		13		(206)		—
Operating, SG&A	2,415		1,571		(210)		3,776		2,294		1,592		(206)		3,680
Adjusted Operating Income	1,196		2,746		—		3,942		1,014		2,394		—		3,408
Add:
Depreciation and amortization	393		87		—		480		353		78		—		431
Restructuring	77		31		—		108		42		17		—		59
Charges related to asset abandonment	3		—		—		3		43		—		—		43



Operating Income							$	3,351							$	2,875
Non-operating expense, net							$	(221)							$	(176)
Income before provision for income taxes							$	3,130							$	2,699

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	Year Ended December 31, 2023
	MA		MIS		Eliminations		Consolidated
Total external revenue	$	3,056	$	2,860	$	—	$	5,916
Intersegment revenue	13		186		(199)		—
Revenue	3,069		3,046		(199)		5,916
Compensation expense	1,238		1,003		—		2,241
Non-compensation expense	708		370		—		1,078
Intersegment expense	186		13		(199)		—
Operating, SG&A	2,132		1,386		(199)		3,319
Adjusted Operating Income	937		1,660		—		2,597
Add:
Depreciation and amortization	298		75		—		373
Restructuring	59		28		—		87
Operating income							$	2,137
Non-operating expense, net							$	(202)
Income before provision for income taxes							$	1,935

The table below shows cumulative restructuring expense incurred through December 31, 2025 by reportable segment.


	MA		MIS		Total



2022 - 2023 Geolocation Restructuring Program	$	116	$	98	$	214
Strategic and Operational Efficiency Restructuring Program	$	111	$	42	$	153

The total costs expected to be incurred related to the Strategic and Operational Efficiency Restructuring Program are $150 million to $165 million for the MA segment and $75 million to $85 million for the MIS segment, which include allocations of charges associated with corporate functions.

The restructuring programs are more fully discussed in Note 9.

CONSOLIDATED REVENUE AND LONG-LIVED ASSETS INFORMATION BY GEOGRAPHIC AREA


	Year Ended December 31,
	2025		2024		2023
Revenue:
U.S.	$	4,171	$	3,836	$	3,071
Non-U.S.:
EMEA	2,376		2,174		1,886
Asia-Pacific	699		629		570
Americas	472		449		389
Total Non-U.S.	3,547		3,252		2,845
Total	$	7,718	$	7,088	$	5,916

Long-lived assets at December 31:
U.S.	$	4,516	$	4,395	$	4,323
Non-U.S.	4,722		4,361		4,562
Total	$	9,238	$	8,756	$	8,885

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NOTE 21 VALUATION AND QUALIFYING ACCOUNTS

Accounts receivable allowances represent estimates for uncollectible accounts. The valuation allowance on deferred tax assets relates to foreign net operating tax losses for which realization is uncertain. Below is a summary of activity:


Year Ended December 31,	Balance at Beginning of the Year		Charged to costs and expenses		Deductions (1)		Balance at End of the Year
2025
Allowances for credit losses	$	(32)	$	(12)	$	15	$	(29)
Deferred tax assets—valuation allowance	$	(25)	$	(2)	$	(3)	$	(30)
2024
Allowances for credit losses	$	(35)	$	(15)	$	18	$	(32)
Deferred tax assets—valuation allowance	$	(24)	$	(2)	$	1	$	(25)
2023
Allowances for credit losses	$	(40)	$	(22)	$	27	$	(35)
Deferred tax assets—valuation allowance	$	(21)	$	(2)	$	(1)	$	(24)

(1)Primarily reflects write-off of uncollectible accounts receivable and currency translation adjustments.

NOTE 22 OTHER STATEMENTS OF OPERATIONS INFORMATION

Other non-operating (expense) income, net

The following table summarizes the components of other non-operating income, net as presented in the consolidated statements of operations:


	Year Ended December 31,
	2025		2024		2023
FX loss (1)	$	(9)	$	—	$	(30)
Net periodic pension income - non-service and non-interest cost components	36		30		35
Income/gain from investments in non-consolidated affiliates	20		15		19
Gain on previously held equity method investments (2)	—		7		—
Gain (loss) on investments	11		13		14
Release of indemnification asset (3)	(79)		—		—
Other	(10)		(4)		11
Total	$	(31)	$	61	$	49

(1) The amount for the year ended December 31, 2023 includes a $23 million loss recorded pursuant to an immaterial out-of-period adjustment relating to the 2022 fiscal year.

(2) The amount for the year ended December 31, 2024 reflects non-cash gains relating to the step-acquisitions of Praedicat and GCR.

(3) In the fourth quarter of 2025, pursuant to a lapse of a statute of limitations, the Company reversed $64 million in reserves, and $15 million in related interest, for uncertain tax positions that it had assumed as part of a prior year M&A transaction, for which the sellers had indemnified Moody's. This tax benefit and related reduction to Interest expense, net are offset by the release of the related indemnification asset with no impact to net income. Refer to Note 15 for additional information.

Gain on divestiture of business:

The gain on divestiture of business relates to the sale of the MA Learning Solutions business, which was completed in the fourth quarter of 2025.

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Charges related to asset abandonment:

During the years ended December 31, 2025 and 2024, the Company incurred severance charges and incremental amortization expense related to the change in estimated useful lives of certain internally developed software and amortizable intangible assets that were associated with the sustainability content offerings, for which production is now being outsourced. The following table summarizes the expenses related to asset abandonment included in the accompanying consolidated statements of operations:


	Year ended December 31,				Cumulative expense incurred
	2025		2024
Severance charges	$	3	$	12		$	15
Incremental amortization	—		31			31
Total	$	3	$	43		$	46

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