Item 1. Financial Statements

MOODY’S CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(Amounts in millions, except per share data)

			Three Months Ended March 31,
			2024						2023
Revenue			$	1,786					$	1,470
Expenses
Operating			467						428
Selling, general, and administrative			413						386
Depreciation and amortization			100						88
Restructuring			5						14
Total expenses			985						916
Operating income			801						554
Non-operating (expense) income, net
Interest expense, net			(62)						(48)
Other non-operating income, net			13						—
Total non-operating (expense) income, net			(49)						(48)
Income before provision for income taxes			752						506
Provision for income taxes			175						5
Net income attributable to Moody's			$	577					$	501
Earnings per share attributable to Moody's common shareholders
Basic			$	3.16					$	2.73
Diluted			$	3.15					$	2.72
Weighted average number of shares outstanding
Basic			182.6						183.3
Diluted			183.4						184.1

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

MOODY’S CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

(Amounts in millions)

			Three Months Ended March 31, 2024																		Three Months Ended March 31, 2023
			Pre-tax amounts						Tax amounts						After-tax amounts						Pre-tax amounts						Tax amounts						After-tax amounts
Net Income															$	577																	$	501
Other Comprehensive Income (Loss):
Foreign Currency Adjustments:
Foreign currency translation adjustments, net			$	(115)					$	—					(115)						$	109					$	(2)					107
Net gains (losses) on net investment hedges			101						(27)						74						(76)						19						(57)
Cash Flow Hedges:
Reclassification of losses included in net income			1						—						1						1						—						1
Pension and Other Retirement Benefits:
Net actuarial losses			(1)						—						(1)						—						—						—
Total other comprehensive (loss) income			$	(14)					$	(27)					$	(41)					$	34					$	17					$	51
Comprehensive income															536																		552
Less: comprehensive loss attributable to noncontrolling interests															—																		(3)
Comprehensive Income Attributable to Moody's															$	536																	$	555

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

MOODY’S CORPORATION

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

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

			March 31, 2024						December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents			$	2,476					$	2,130
Short-term investments			58						63
Accounts receivable, net of allowance for credit losses of $35 in 2024 and $35 in 2023			1,835						1,659
Other current assets			437						489
Total current assets			4,806						4,341
Property and equipment, net of accumulated depreciation of $1,320 in 2024 and $1,272 in 2023			613						603
Operating lease right-of-use assets			260						277
Goodwill			5,909						5,956
Intangible assets, net			1,983						2,049
Deferred tax assets, net			270						258
Other assets			1,170						1,138
Total assets			$	15,011					$	14,622
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities			$	976					$	1,076
Current portion of operating lease liabilities			109						108
Current portion of long-term debt			685						—
Deferred revenue			1,612						1,316
Total current liabilities			3,382						2,500
Non-current portion of deferred revenue			61						65
Long-term debt			6,259						7,001
Deferred tax liabilities, net			458						402
Uncertain tax positions			201						196
Operating lease liabilities			280						306
Other liabilities			635						676
Total liabilities			11,276						11,146
Contingencies (Note 15)
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 March 31, 2024 and December 31, 2023, respectively			3						3
Capital surplus			1,252						1,228
Retained earnings			15,081						14,659
Treasury stock, at cost; 160,292,910 and 160,430,754 shares of common stock at March 31, 2024 and December 31, 2023, respectively			(12,153)						(12,005)
Accumulated other comprehensive loss			(608)						(567)
Total Moody's shareholders' equity			3,575						3,318
Noncontrolling interests			160						158
Total shareholders' equity			3,735						3,476
Total liabilities, noncontrolling interests, and shareholders' equity			$	15,011					$	14,622

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

MOODY’S CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(Amounts in millions)

			Three Months Ended March 31,
			2024						2023
Cash flows from operating activities
Net income			$	577					$	501
Reconciliation of net income to net cash provided by operating activities:
Depreciation and amortization			100						88
Stock-based compensation			53						47
Deferred income taxes			25						—
Provision for credit losses on accounts receivable			4						3
Changes in assets and liabilities:
Accounts receivable			(197)						(54)
Other current assets			49						74
Other assets			(19)						(21)
Lease obligations			(7)						(5)
Accounts payable and accrued liabilities			(110)						(178)
Deferred revenue			308						296
Uncertain tax positions and other non-current tax liabilities			6						(119)
Other liabilities			(14)						(24)
Net cash provided by operating activities			775						608
Cash flows from investing activities
Capital additions			(78)						(73)
Purchases of investments			(50)						(45)
Sales and maturities of investments			46						55
Purchases of investments in non-consolidated affiliates			(2)						—
Cash paid for acquisitions, net of cash acquired			(12)						—
Net cash used in investing activities			(96)						(63)
Cash flows from financing activities
Proceeds from stock-based compensation plans			20						11
Treasury shares			(120)						(41)
Repurchase of shares related to stock-based compensation			(53)						(45)
Dividends			(155)						(141)
Net cash used in financing activities			(308)						(216)
Effect of exchange rate changes on cash and cash equivalents			(25)						21
Increase in cash and cash equivalents			346						350
Cash and cash equivalents, beginning of period			2,130						1,769
Cash and cash equivalents, end of period			$	2,476					$	2,119

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

MOODY’S CORPORATION

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (UNAUDITED)

(Amounts in millions, except per share data)

Shareholders of Moody's Corporation
			Common Stock												Capital Surplus						Retained Earnings						Treasury Stock												Accumulated Other Comprehensive Loss						Total Moody's Shareholders' Equity						Non- Controlling Interests						Total Shareholders' Equity
			Shares						Amount									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																					501																								501						—						501
Dividends ($0.77 per share)																					(140)																								(140)						—						(140)
Stock-based compensation															47																														47												47
Shares issued for stock-based compensation plans at average cost, net															(33)												0.4						(15)												(48)												(48)
Treasury shares repurchased, inclusive of excise tax															—												(0.1)						(42)												(42)												(42)
Currency translation adjustment, net of net investment hedge activity (net of tax of $17 million)																																							53						53						(3)						50
Amortization of losses on cash flow hedges																																							1						1												1
Balance at March 31, 2023			342.9						$	3					$	1,068					$	13,979					(159.4)						$	(11,570)					$	(589)					$	2,891					$	167					$	3,058

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

MOODY'S CORPORATION

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (UNAUDITED)

(Amounts in millions, except per share data)

Shareholders of Moody's Corporation
			Common Stock												Capital Surplus						Retained Earnings						Treasury Stock												Accumulated Other Comprehensive Loss						Total Moody's Shareholders' Equity						Non- Controlling Interests						Total Shareholders' Equity
			Shares						Amount									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																					577																								577						—						577
Dividends ($0.85 per share)																					(155)																								(155)						—						(155)
Stock-based compensation															54																														54												54
Shares issued for stock-based compensation plans at average cost, net															(30)												0.4						(29)												(59)												(59)
Purchase of noncontrolling interest																																													—						2						2
Treasury shares repurchased, inclusive of excise tax															—												(0.3)						(119)												(119)												(119)
Currency translation adjustment, net of net investment hedge activity (net of tax of $27 million)																																							(41)						(41)						—						(41)
Net actuarial losses																																							(1)						(1)												(1)
Amortization of losses on cash flow hedges																																							1						1												1
Balance at March 31, 2024			342.9						$	3					$	1,252					$	15,081					(160.3)						$	(12,153)					$	(608)					$	3,575					$	160					$	3,735

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

MOODY’S CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(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 integrated risk assessment firm that empowers organizations to anticipate, adapt and thrive in a new era of exponential risk. Our data, analytical solutions and insights help decision-makers identify opportunities and manage the risks of doing business with others. Moody’s reports in two reportable segments: MA and MIS.

MA is a global provider of: i) data and information; ii) research and insights; and iii) decision solutions, which help companies make better and faster decisions. 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.

These interim financial statements have been prepared in accordance with the instructions to Form 10-Q and should be read in conjunction with the Company’s consolidated financial statements and related notes in the Company’s 2023 annual report on Form 10-K filed with the SEC on February 14, 2024. The results of interim periods are not necessarily indicative of results for the full year or any subsequent period. In the opinion of management, all adjustments (including normal recurring accruals) considered necessary for a fair presentation of financial position, results of operations and cash flows at the dates and for the periods presented have been included. The year-end consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP.

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

Recently Issued Accounting Standards

In November 2023, the FASB issued ASU 2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures" ("ASU No. 2023-07"), which expands segment disclosure requirements for public entities. ASU No. 2023-07 will require entities to disclose significant segment expenses by reportable segment if they are regularly provided to the CODM and included in each reported measure of segment profit or loss. In addition, this ASU permits entities to disclose more than one measure of segment profit or loss used by the CODM. Additionally, disclosure of the CODM’s title and position will be required on an annual basis, as well as an explanation of how the CODM uses the reported measure(s). Furthermore, all existing annual disclosures about segment profit or loss and assets must be provided on an interim basis in addition to disclosure of significant segment expenses and other segment items. This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, and requires retrospective application to 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 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 is currently evaluating the impact of adopting this ASU on its consolidated financial statements and disclosures.

Reclassification of Previously Reported Revenue by LOB

In the second quarter of 2023, the Company expanded its disaggregation of revenue disclosures for MA's Decision Solutions LOB to enhance insight and transparency into this business. In conjunction with this new presentation, the Company reclassified certain revenue relating to structured finance solutions from the Decision Solutions LOB to the Research & Insights LOB. Additionally, in the first quarter of 2024, pursuant to the integration of RMS into the Company's order-to-cash systems, the Company reclassified certain prior year revenue by geography disclosures. The impact of the aforementioned reclassifications was not material and prior year revenue disclosures have been reclassified to conform to this new presentation, which is disclosed in Note 2.

NOTE 2. REVENUES

Revenue by Category

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

			Three Months Ended March 31,
			2024						2023
MA:
Decision Solutions (DS)
Banking			$	134					$	131
Insurance			144						133
KYC			87						70
Total DS			365						334
Research and Insights (R&I)			222						215
Data and Information (D&I)			212						188
Total external revenue			799						737
Intersegment revenue			3						3
Total MA			802						740
MIS:
Corporate Finance (CFG)
Investment-grade			147						115
High-yield			67						32
Bank loans			155						59
Other accounts (1)			160						150
Total CFG			529						356
Structured Finance (SFG)
Asset-backed securities			33						27
RMBS			24						25
CMBS			17						14
Structured credit			39						32
Other accounts			1						1
Total SFG			114						99
Financial Institutions (FIG)
Banking			121						100
Insurance			59						33
Managed investments			12						6
Other accounts			3						3
Total FIG			195						142
Public, Project and Infrastructure Finance (PPIF)
Public finance / sovereign			59						52
Project and infrastructure			82						77
Total PPIF			141						129
Total ratings revenue			979						726
MIS Other			8						7
Total external revenue			987						733
Intersegment revenue			47						45
Total MIS			1,034						778
Eliminations			(50)						(48)
Total MCO			$	1,786					$	1,470

(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.

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

			Three Months Ended March 31, 2024																		Three Months Ended March 31, 2023
			U.S.						Non-U.S						Total						U.S.						Non-U.S						Total
MA:
Decision Solutions			$	138					$	227					$	365					$	132					$	202					$	334
Research and Insights			122						100						222						118						97						215
Data and Information			77						135						212						67						121						188
Total MA			337						462						799						317						420						737
MIS:
Corporate Finance			372						157						529						246						110						356
Structured Finance			76						38						114						61						38						99
Financial Institutions			98						97						195						63						79						142
Public, Project and Infrastructure Finance			86						55						141						76						53						129
Total ratings revenue			632						347						979						446						280						726
MIS Other			—						8						8						—						7						7
Total MIS			632						355						987						446						287						733
Total MCO			$	969					$	817					$	1,786					$	763					$	707					$	1,470

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

			Three Months Ended March 31,
			2024						2023
MA:
U.S.			$	337					$	317
Non-U.S.:
EMEA			316						287
Asia-Pacific			85						78
Americas			61						55
Total Non-U.S.			462						420
Total MA			799						737
MIS:
U.S.			632						446
Non-U.S.:
EMEA			226						173
Asia-Pacific			70						71
Americas			59						43
Total Non-U.S.			355						287
Total MIS			987						733
Total MCO			$	1,786					$	1,470

The following table summarizes the split between Transaction Revenue and Recurring Revenue.

			Three Months Ended March 31,
			2024																		2023
			Transaction						Recurring						Total						Transaction						Recurring						Total
Decision Solutions			$	37					$	328					$	365					$	40					$	294					$	334
			10		%				90		%				100		%				12		%				88		%				100		%
Research and Insights			$	4					$	218					$	222					$	5					$	210					$	215
			2		%				98		%				100		%				2		%				98		%				100		%
Data and Information			$	1					$	211					$	212					$	—					$	188					$	188
			—		%				100		%				100		%				—		%				100		%				100		%
Total MA (1)			$	42					$	757					$	799					$	45					$	692					$	737
			5		%				95		%				100		%				6		%				94		%				100		%
Corporate Finance			$	399					$	130					$	529					$	230					$	126					$	356
			75		%				25		%				100		%				65		%				35		%				100		%
Structured Finance			$	59					$	55					$	114					$	45					$	54					$	99
			52		%				48		%				100		%				45		%				55		%				100		%
Financial Institutions			$	122					$	73					$	195					$	70					$	72					$	142
			63		%				37		%				100		%				49		%				51		%				100		%
Public, Project and Infrastructure Finance			$	96					$	45					$	141					$	86					$	43					$	129
			68		%				32		%				100		%				67		%				33		%				100		%
MIS Other			$	1					$	7					$	8					$	—					$	7					$	7
			12		%				88		%				100		%				—		%				100		%				100		%
Total MIS			$	677					$	310					$	987					$	431					$	302					$	733
			69		%				31		%				100		%				59		%				41		%				100		%
Total Moody's Corporation			$	719					$	1,067					$	1,786					$	476					$	994					$	1,470
			40		%				60		%				100		%				32		%				68		%				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 (please also refer to the following table).

The following table presents the timing of revenue recognition:

			Three Months Ended March 31, 2024																								Three Months Ended March 31, 2023
			MA						MIS						Total																								MA						MIS						Total
Revenue recognized at a point in time			$	21					$	677					$	698																							$	27					$	431					$	458
Revenue recognized over time			778						310						1,088																								710						302						1,012
Total			$	799					$	987					$	1,786																							$	737					$	733					$	1,470

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 March 31, 2024 and December 31, 2023:

			As of March 31, 2024												As of December 31, 2023
			MA						MIS						MA						MIS
Unbilled Receivables			$	133					$	461					$	119					$	415

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 three months ended March 31, 2024 and 2023 are as follows:

			Three Months Ended March 31, 2024																		Three Months Ended March 31, 2023
			MA						MIS						Total						MA						MIS						Total
Balance at December 31,			$	1,111					$	270					$	1,381					$	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			(437)						(94)						(531)						(471)						(98)						(569)
Increases due to amounts billable excluding amounts recognized as revenue during the period			652						187						839						688						179						867
Effect of exchange rate changes			(14)						(2)						(16)						16						1						17
Total changes in deferred revenue			201						91						292						233						82						315
Balance at March 31,			$	1,312					$	361					$	1,673					$	1,288					$	360					$	1,648
Deferred revenue - current			$	1,310					$	302					$	1,612					$	1,287					$	291					$	1,578
Deferred revenue - non-current			$	2					$	59					$	61					$	1					$	69					$	70

The increase in deferred revenue during both the three months ended March 31, 2024 and 2023 is primarily due to the significant portion of contract renewals that occur during the first quarter within both segments.

Remaining performance obligations

Remaining performance obligations in the MA segment include both amounts recorded as deferred revenue on the balance sheet as of March 31, 2024 as well as amounts not yet invoiced to customers as of March 31, 2024, largely reflecting future revenue related to signed multi-year arrangements for hosted and installed subscription-based products. As of March 31, 2024, the aggregate amount of the transaction price allocated to remaining performance obligations was approximately $3.9 billion. The Company expects to recognize into revenue approximately 60% 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 March 31, 2024, the aggregate amount of the transaction price allocated to remaining performance obligations was approximately $91 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.

NOTE 3. STOCK-BASED COMPENSATION

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

			Three Months Ended March 31,
			2024						2023
Stock-based compensation cost			$	53					$	47
Tax benefit			$	12					$	10

During the first quarter of 2024, the Company granted 0.2 million employee stock options, which had a weighted average grant date fair value of $120.28 per share. The Company also granted 0.5 million shares of restricted stock in the first quarter of 2024, which had a weighted average grant date fair value of $372.18 per share. Both the employee stock options and restricted stock generally vest ratably over four years. Additionally, the Company granted 0.2 million shares of performance-based awards whereby the number of shares that ultimately vest are based on the achievement of certain non-market-based performance metrics of the Company over a period of two to four years. The weighted average grant date fair value of these awards was $361.44 per share.

The following weighted average assumptions were used in determining the fair value using the Black-Scholes option-pricing model for options granted in 2024:

Expected dividend yield			0.91		%
Expected stock volatility			28		%
Risk-free interest rate			4.34		%
Expected holding period			5.9 years

Unrecognized stock-based compensation expense at March 31, 2024 was $26 million and $375 million for unvested stock options and restricted stock, respectively, which is expected to be recognized over a weighted average period of 1.9 years and 2.8 years, respectively. Additionally, there was $67 million of unrecognized stock-based compensation expense relating to the aforementioned non-market-based performance-based awards, which is expected to be recognized over a weighted average period of 2.7 years.

The following table summarizes information relating to stock option exercises and restricted stock vesting:

			Three Months Ended March 31,
			2024						2023
Exercise of stock options:
Proceeds from stock option exercises			$	16					$	7
Aggregate intrinsic value			$	21					$	15
Tax benefit realized upon exercise			$	3					$	4
Number of shares exercised			0.1						0.1
Vesting of restricted stock:
Fair value of shares vested			$	169					$	140
Tax benefit realized upon vesting			$	41					$	33
Number of shares vested			0.4						0.5
Vesting of performance-based restricted stock:
Fair value of shares vested			$	40					$	24
Tax benefit realized upon vesting			$	9					$	3
Number of shares vested			0.1						0.1

NOTE 4. INCOME TAXES

Moody’s ETR was 23.3% and 1.0% for the three months ended March 31, 2024 and 2023, respectively. The increase in the ETR for the three months ended March 31, 2024 compared to the same period in the prior year was primarily due to tax benefits recognized in the first quarter of 2023, which reflect the resolution of uncertain tax positions in various U.S. and non-U.S. tax jurisdictions and will not recur in 2024. The Company’s year-to-date provision for income taxes differs from the tax computed by applying its estimated annual ETR to the pre-tax earnings primarily due to the following items recognized in 2024: i) net increase of $3 million related to the establishment of UTPs; and ii) Excess Tax Benefits from stock-based compensation of $14 million.

The Company classifies interest related to UTPs in interest expense, net in its consolidated statements of operations. Penalties, if incurred, would be recognized in other non-operating income, net. The Company had a net increase in its UTP reserves of $6 million ($5 million, net of federal tax) during the first quarter of 2024.

Moody’s is subject to U.S. federal income tax as well as income tax in various state, local and foreign jurisdictions. The Company’s U.S. federal income tax returns for 2019 through 2020 are currently under examination and 2021 through 2022 remain open to examination. The Company’s New York City tax returns for 2018 through 2020 are currently under examination. The Company’s U.K. tax returns for 2017 through 2022 remain open to examination.

For ongoing audits, it is possible the balance of UTPs could decrease in the next twelve months as a result of the settlement of such audits, which might involve the payment of additional taxes, the adjustment of certain deferred taxes and/or the recognition of tax benefits. It is also possible that new issues will be raised by tax authorities which could necessitate increases to the balance of UTPs. As the Company is unable to predict the timing or outcome of these audits, it is unable to estimate the amount of changes to the balance of UTPs at this time. However, the Company believes that it has adequately provided for its financial exposure relating to all open tax years, by tax jurisdiction, in accordance with the applicable provisions of ASC Topic 740 regarding UTPs.

The following table shows the amount the Company paid for income taxes:

			Three Months Ended March 31,
			2024						2023
Income taxes paid			$	87					$	66

In August 2022, the U.S. Congress passed the Inflation Reduction Act, which included a corporate minimum tax on book earnings of 15%, an excise tax on corporate share repurchases of 1%, and certain climate change and energy tax credit incentives. The adoption of a corporate minimum tax of 15% is not expected to impact Moody’s ETR. The excise tax of 1% on corporate share buybacks will not have an impact on the Company’s ETR for 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 Two) issued by the OECD. A minimum ETR of 15% would apply to multinational companies with consolidated revenue above €750 million, with an effective date beginning in 2024. 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 ETR up to 15%. We have evaluated the potential impact of the Pillar Two global minimum tax proposals on our consolidated financial statements and related disclosures. As of March 31, 2024, the Pillar Two minimum tax requirement is not expected to have a material impact on our full-year 2024 results of operations or financial position.

NOTE 5. RECONCILIATION OF WEIGHTED AVERAGE SHARES OUTSTANDING

Below is a reconciliation of basic to diluted shares outstanding:

			Three Months Ended March 31,
			2024						2023
Basic			182.6						183.3
Dilutive effect of shares issuable under stock-based compensation plans			0.8						0.8
Diluted			183.4						184.1
Anti-dilutive options to purchase common shares and restricted stock as well as contingently issuable restricted stock which are excluded from the table above			0.4						0.7

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 March 31, 2024 and 2023.

NOTE 6. CASH EQUIVALENTS AND INVESTMENTS

The table below provides additional information on the Company’s cash equivalents and investments:

			As of March 31, 2024
																					Balance sheet location
			Cost						Gains/(Losses)						Fair Value						Cash and cash equivalents						Short-term investments						Other assets
Certificates of deposit and money market deposit accounts/funds (1)			$	1,360					$	—					$	1,360					$	1,297					$	58					$	5
Mutual funds			$	96					$	9					$	105					$	—					$	—					$	105

			As of December 31, 2023
																					Balance sheet location
			Cost						Gains/(Losses)						Fair Value						Cash and cash equivalents						Short-term investments						Other assets
Certificates of deposit and money market deposit accounts/funds (1)			$	1,178					$	—					$	1,178					$	1,112					$	63					$	3
Mutual funds			$	91					$	6					$	97					$	—					$	—					$	97

(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 one month to 12 months at both March 31, 2024 and December 31, 2023. The remaining contractual maturities for the certificates of deposits classified in other assets are 13 months to 14 months at March 31, 2024 and 14 months at December 31, 2023. 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 invested in Corporate-Owned Life Insurance (COLI). As of March 31, 2024 and December 31, 2023, the contract value of the COLI was $48 million and $47 million, respectively.

NOTE 7. 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 March 31, 2024						As of December 31, 2023						Floating Interest Rate
2017 Senior Notes due 2028						Pay Floating/Receive Fixed						$	500					$	500					SOFR
2020 Senior Notes due 2025						Pay Floating/Receive Fixed						300						300						SOFR
2014 Senior Notes due 2044						Pay Floating/Receive Fixed						300						300						SOFR
2018 Senior Notes due 2048						Pay Floating/Receive Fixed						300						300						SOFR
2018 Senior Notes due 2029						Pay Floating/Receive Fixed						400						400						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												$	2,550					$	2,550

Refer to Note 13 for information on the cumulative amount of fair value hedging adjustments included in the carrying amount of the above hedged items.

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/(loss) recognized in the consolidated statements of operations
			Three Months Ended March 31,
			2024						2023
Interest expense, net												$	(62)					$	(48)
Description						Location on Consolidated Statements of Operations
Net interest settlements and accruals on interest rate swaps						Interest expense, net						$	(25)					$	(18)
Fair value changes on interest rate swaps						Interest expense, net						$	(29)					$	46
Fair value changes on hedged debt						Interest expense, net						$	29					$	(46)

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 euro net investment in certain foreign subsidiaries against changes in euro/USD exchange rates. The following tables provide information on the cross-currency swaps designated as net investment hedges under ASC Topic 815:

March 31, 2024
						Pay												Receive
Nature of Swap						Notional Amount						Weighted Average Interest Rate						Notional Amount						Weighted Average Interest Rate
Pay Fixed/Receive Fixed						€	765					3.67%						$	800					5.25%
Pay Floating/Receive Floating						2,138						Based on ESTR						2,250						Based on SOFR
Total						€	2,903											$	3,050

December 31, 2023
						Pay												Receive
Nature of Swap						Notional Amount						Weighted Average Interest Rate						Notional Amount						Weighted Average Interest Rate
Pay Fixed/Receive Fixed						€	765					3.67%						$	800					5.25%
Pay Floating/Receive Floating						2,138						Based on ESTR						2,250						Based on SOFR
Total						€	2,903											$	3,050

As of March 31, 2024 these hedges will expire and the notional amounts will be settled as follows unless terminated early at the discretion of the Company:

Years Ending December 31,						Notional Amount (Pay)						Notional Amount (Receive)
2026						€	450					$	500
2027						531						550
2028						588						600
2029						373						400
2031						481						500
2032						480						500
Total						€	2,903					$	3,050

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

Derivative and Non-Derivative Instruments in Net Investment Hedging Relationships						Amount of Gain/(Loss) Recognized in AOCL on Derivative, net of Tax												Amount of Loss Reclassified from AOCL into Income, net of Tax												Gain Recognized in Income on Derivative (Amount Excluded from Effectiveness Testing)
			Three Months Ended March 31,												Three Months Ended March 31,												Three Months Ended March 31,
			2024						2023						2024						2023						2024						2023
Cross currency swaps						$	51					$	(39)					$	—					$	—					$	11					$	16
Long-term debt						23						(18)						—						—						—						—
Total net investment hedges						$	74					$	(57)					$	—					$	—					$	11					$	16
Derivatives in Cash Flow Hedging Relationships
Interest rate contracts						$	—					$	—					$	(1)					$	(1)					$	—					$	—
Total cash flow hedges						$	—					$	—					$	(1)					$	(1)					$	—					$	—
Total						$	74					$	(57)					$	(1)					$	(1)					$	11					$	16

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
			March 31, 2024						December 31, 2023
Net investment hedges
Cross currency swaps			$	72					$	21
FX forwards			29						29
Long-term debt			26						3
Total net investment hedges			$	127					$	53
Cash flow hedges
Interest rate contracts			$	(44)					$	(45)
Cross currency swaps			1						1
Total cash flow hedges			(43)						(44)
Total net gain in AOCL			$	84					$	9

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 August 2024.

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

			March 31, 2024															December 31, 2023
Notional amount of currency pair**(1)****:**			Sell						Buy									Sell						Buy
Contracts to sell USD for GBP			$	460					£			362						$	513					£			407
Contracts to sell USD for JPY			$	17					¥			2,500						$	14					¥			2,000
Contracts to sell USD for CAD			$	48					C$			65						$	147					C$			200
Contracts to sell USD for SGD			$	52					S$			70						$	50					S$			67
Contracts to sell USD for EUR			$	22					€			20						$	60					€			55
Contracts to sell USD for INR			$	23					₹			1,900						$	23					₹			1,900
Contracts to sell USD for AUD			$	5					A$			8						$	5					A$			8
Contracts to sell CAD for USD			C$	—					$			—						C$	25					$			19

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

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 March 31, 2024 and related gains in the three months ended March 31, 2024 were not material. The notional amount of the total return swaps as of March 31, 2024 was $62 million.

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

Derivatives not designated as accounting hedges						Location on Consolidated Statements of Operations									Three Months Ended March 31,
									2024						2023
FX forwards						Other non-operating income, net									$	(13)					$	5
Total return swaps						Operating expense									$	3					$	—
Total return swaps						SG&A expense									$	1					$	—

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

						Derivative and Non-Derivative Instruments
						Balance Sheet Location						March 31, 2024						December 31, 2023
Assets:
Derivatives designated as accounting hedges:
Cross-currency swaps designated as net investment hedges						Other assets						$	14					$	3
Derivatives not designated as accounting hedges:
FX forwards on certain assets and liabilities						Other current assets						—						13
Total assets												$	14					$	16
Liabilities:
Derivatives designated as accounting hedges:
Interest rate swaps designated as fair value hedges						Accounts payable and accrued liabilities						$	14					$	—
Cross-currency swaps designated as net investment hedges						Other liabilities						125						183
Interest rate swaps designated as fair value hedges						Other liabilities						197						183
Total derivatives designated as accounting hedges												336						366
Non-derivatives designated as accounting hedges:
Long-term debt designated as net investment hedge						Long-term debt						1,350						1,381
Derivatives not designated as accounting hedges:
FX forwards on certain assets and liabilities						Accounts payable and accrued liabilities						4						—
Total liabilities												$	1,690					$	1,747

NOTE 8. GOODWILL AND OTHER ACQUIRED INTANGIBLE ASSETS

The following table summarizes the activity in goodwill for the periods indicated:

			Three Months Ended March 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 (1)			13						—						13						2						—						2						15						—						15
Foreign currency translation adjustments			(61)						—						(61)						(1)						—						(1)						(62)						—						(62)
Ending balance			$	5,633					$	(12)					$	5,621					$	288					$	—					$	288					$	5,921					$	(12)					$	5,909

			Year Ended December 31, 2023
			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			$	5,474					$	(12)					$	5,462					$	377					$	—					$	377					$	5,851					$	(12)					$	5,839
Additions/ adjustments (2)			90						—						90						(87)						—						(87)						3						—						3
Foreign currency translation adjustments			117						—						117						(3)						—						(3)						114						—						114
Ending balance			$	5,681					$	(12)					$	5,669					$	287					$	—					$	287					$	5,968					$	(12)					$	5,956

(1) The 2024 additions/adjustments primarily relate to certain immaterial acquisitions which were completed in the first quarter of 2024.

(2) The 2023 additions/adjustments primarily relate to a reallocation of goodwill pursuant to a realignment of certain components of the Company's ESG business in the first quarter of 2023.

Acquired intangible assets and related amortization consisted of:

			March 31, 2024						December 31, 2023
Customer relationships			$	2,045					$	2,065
Accumulated amortization			(573)						(556)
Net customer relationships			1,472						1,509
Software/product technology			667						674
Accumulated amortization			(377)						(364)
Net software/product technology			290						310
Database			178						179
Accumulated amortization			(86)						(82)
Net database			92						97
Trade names			198						199
Accumulated amortization			(75)						(72)
Net trade names			123						127
Other (1)			52						52
Accumulated amortization			(46)						(46)
Net other			6						6
Total acquired intangible assets, net			$	1,983					$	2,049

(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:

			Three Months Ended March 31,
			2024						2023
Amortization expense			$	49					$	51

NOTE 9. RESTRUCTURING

On June 30, 2022, the chief executive officer of Moody’s approved the 2022 - 2023 Geolocation Restructuring Program. The Company estimates that the program will result in annualized savings of $145 million to $165 million per year. 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 are expected to strengthen 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 completed at the end of 2023. Cash outlays associated with this program, which primarily relate to personnel-related costs, are expected to be $130 million to $140 million, substantially all of which are expected to be paid by the end of 2024.

Total expense included in the accompanying consolidated statements of operations relating to the aforementioned restructuring program is below:

			Three months ended March 31,												Cumulative expense incurred
2022 - 2023 Geolocation Restructuring Program			2024						2023
Employee Termination Costs			$	5					$	13					$	141
Real Estate Related Costs			—						1						63
Other Costs			—						—						1
Total Restructuring			$	5					$	14					$	205

Changes to the restructuring liability during the first quarter of 2024 were as follows:

Balance as of December 31, 2023												$	36
2022 - 2023 Geolocation Restructuring Program:
Cost incurred and adjustments												5
Cash payments												(17)
Balance as of March 31, 2024												$	24

The restructuring liability is primarily comprised of employee termination costs, with an immaterial amount of real estate-related and other costs. As of March 31, 2024, substantially all of the remaining $24 million restructuring liability is expected to be paid out in 2024.

NOTE 10. FAIR VALUE

The tables below present information about items that are carried at fair value at March 31, 2024 and December 31, 2023:

			Fair Value Measurement as of March 31, 2024
Description			Balance						Level 1						Level 2
Assets:
Derivatives (1)			$	14					$	—					$	14
Money market funds/mutual funds			115						115						—
Total			$	129					$	115					$	14
Liabilities:
Derivatives (1)			$	340					$	—					$	340
Total			$	340					$	—					$	340

			Fair Value Measurement as of December 31, 2023
Description			Balance						Level 1						Level 2
Assets:
Derivatives (1)			$	16					$	—					$	16
Money market funds/mutual funds			107						107						—
Total			$	123					$	107					$	16
Liabilities:
Derivatives (1)			$	366					$	—					$	366
Total			$	366					$	—					$	366

(1) Represents fair value of certain derivative contracts as more fully described in Note 7 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 table 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 mutual funds in the table above are deemed to be equity securities with readily determinable fair values with changes in the 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.

NOTE 11. OTHER BALANCE SHEET AND STATEMENTS OF OPERATIONS INFORMATION

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

			March 31, 2024						December 31, 2023
Other current assets:
Prepaid taxes			$	87					$	115
Prepaid expenses			147						133
Capitalized costs to obtain and fulfill sales contracts			121						116
Foreign exchange forwards on certain assets and liabilities			—						13
Interest receivable on interest rate and cross currency swaps			49						79
Other			33						33
Total other current assets			$	437					$	489
Other assets:
Investments in non-consolidated affiliates			$	522					$	521
Deposits for real-estate leases			16						16
Indemnification assets related to acquisitions			113						111
Mutual funds, certificates of deposit and money market deposit accounts/funds			110						100
Company owned life insurance (at contract value)			48						47
Capitalized costs to obtain sales contracts			202						196
Derivative instruments designated as accounting hedges			14						3
Pension and other retirement employee benefits			41						41
Other			104						103
Total other assets			$	1,170					$	1,138
Accounts payable and accrued liabilities:
Salaries and benefits			$	154					$	130
Incentive compensation			96						345
Customer credits, advanced payments and advanced billings			141						105
Dividends			5						7
Professional service fees			61						46
Interest accrued on debt			39						83
Accounts payable			88						23
Income taxes			147						108
Pension and other retirement employee benefits			15						15
Accrued royalties			28						24
Foreign exchange forwards on certain assets and liabilities			4						—
Restructuring liability			23						35
Derivative instruments designated as accounting hedges			14						—
Interest payable on interest rate and cross currency swaps			51						67
Other			110						88
Total accounts payable and accrued liabilities			$	976					$	1,076

			March 31, 2024						December 31, 2023
Other liabilities:
Pension and other retirement employee benefits			$	193					$	190
Interest accrued on UTPs			38						36
MAKS indemnification provisions			19						19
Income tax liability - non-current portion			12						15
Derivative instruments designated as accounting hedges			322						366
Other			51						50
Total other liabilities			$	635					$	676

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:

			March 31, 2024						December 31, 2023
Equity method investments (1)			$	187					$	186
Investments measured using the measurement alternative (2)			327						327
Other			8						8
Total investments in non-consolidated affiliates			$	522					$	521
(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.

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.

Earnings from non-consolidated affiliates, which are included within other non-operating income, net, are disclosed within the table below.

Other non-operating income, net:

The following table summarizes the components of other non-operating income, net:

			Three Months Ended March 31,
			2024						2023
FX loss (1)			$	(3)					$	(26)
Net periodic pension income - non-service and non-interest cost components			8						9
Income from investments in non-consolidated affiliates			—						2
Gain on investments			3						5
Other (2)			5						10
Total			$	13					$	—

(1) The amount for the three months ended March 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 three months ended March 31, 2023 reflects a benefit of $9 million related to the favorable resolutions of various tax matters.

NOTE 12. COMPREHENSIVE INCOME AND ACCUMULATED OTHER COMPREHENSIVE LOSS

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

			Three Months Ended March 31,
			2024																		2023
Gains/(Losses)			Pension and Other Retirement Benefits			Cash Flow Hedges			Foreign Currency Translation Adjustments			Net Investment Hedges			Total						Pension and Other Retirement Benefits			Cash Flow Hedges			Foreign Currency Translation Adjustments			Net Investment Hedges			Total
Balance at December 31,			$	(56)		$	(44)		$	(520)		$	53		$	(567)					$	(47)		$	(45)		$	(736)		$	185		$	(643)
Other comprehensive (loss)/income before reclassifications			(1)			—			(115)			74			(42)						—			—			110			(57)			53
Amounts reclassified from AOCL			—			1			—			—			1						—			1			—			—			1
Other comprehensive (loss)/income			(1)			1			(115)			74			(41)						—			1			110			(57)			54
Balance at March 31,			$	(57)		$	(43)		$	(635)		$	127		$	(608)					$	(47)		$	(44)		$	(626)		$	128		$	(589)

NOTE 13. 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:

March 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					$	(38)					$	3					$	(4)					$	561
1.75% 2015 Senior Notes, due 2027			540						—						—						(1)						539
3.25% 2017 Senior Notes, due 2028			500						(27)						(2)						(1)						470
4.25% 2018 Senior Notes, due 2029			400						(40)						(1)						(2)						357
4.875% 2018 Senior Notes, due 2048			400						(40)						(6)						(3)						351
0.950% 2019 Senior Notes, due 2030			810						—						(2)						(4)						804
3.75% 2020 Senior Notes, due 2025			700						(14)						—						(1)						685
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						(41)						(8)						(5)						446
4.25% 2022 Senior Notes, due 2032			500						(12)						(2)						(4)						482
Total debt			$	7,250					$	(212)					$	(49)					$	(45)					$	6,944
Current portion																											(685)
Total long-term debt																											$	6,259

December 31, 2023
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					$	(34)					$	3					$	(4)					$	565
1.75% 2015 Senior Notes, due 2027			552						—						—						(1)						551
3.25% 2017 Senior Notes, due 2028			500						(26)						(2)						(2)						470
4.25% 2018 Senior Notes, due 2029			400						(34)						(2)						(2)						362
4.875% 2018 Senior Notes, due 2048			400						(36)						(6)						(3)						355
0.950% 2019 Senior Notes, due 2030			829						—						(2)						(4)						823
3.75% 2020 Senior Notes, due 2025			700						(16)						(1)						(1)						682
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						(29)						(8)						(5)						458
4.25% 2022 Senior Notes, due 2032			500						(8)						(2)						(4)						486
Total long-term debt			$	7,281					$	(183)					$	(51)					$	(46)					$	7,001

(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.

Notes Payable

At March 31, 2024, 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 March 31, 2024, there were no such cross defaults.

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

Year Ending December 31,																																																																																																			Year Ending Total
2024 (After March 31,)																																																																																																			$	—
2025																																																																																																			700
2026																																																																																																			—
2027																																																																																																			540
2028																																																																																																			500
Thereafter																																																																																																			5,510
Total																																																																																																			$	7,250

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:

			Three Months Ended March 31,
			2024						2023
Income			$	22					$	10
Expense on borrowings(1)			(74)						(70)
(Expense) income on UTPs and other tax related liabilities(2)			(4)						18
Net periodic pension costs - interest component			(6)						(6)
Interest expense, net			$	(62)					$	(48)
Interest paid(3)			$	100					$	96

(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 7.

(2) The amount for the three months ended March 31, 2023 reflects 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, which are more fully discussed in Note 7.

The fair value and carrying value of the Company’s debt as of March 31, 2024 and December 31, 2023 are as follows:

			March 31, 2024												December 31, 2023
			Carrying Amount						Estimated Fair Value						Carrying Amount						Estimated Fair Value
Total debt			$	6,944					$	6,240					$	7,001					$	6,402

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 14. 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:

			Three Months Ended March 31,
			2024						2023
Operating lease cost			$	22					$	24
Sublease income			(2)						(2)
Variable lease cost			5						5
Total lease cost			$	25					$	27

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

			Three Months Ended March 31,
			2024						2023
Cash paid for amounts included in the measurement of operating lease liabilities			$	30					$	30
Right-of-use assets obtained in exchange for new operating lease liabilities			$	4					$	5

			March 31, 2024						March 31, 2023
Weighted-average remaining lease term			4.2 years						4.8 years
Weighted-average discount rate applied to operating leases			3.2		%				3.1		%

The following table presents a maturity analysis of the future minimum lease payments included within the Company’s operating lease liabilities at March 31, 2024:

Year Ending December 31,						Operating Leases
2024 (After March 31,)						$	91
2025						108
2026						89
2027						71
2028						20
After 2028						36
Total lease payments (undiscounted)						415
Less: Interest						26
Present value of lease liabilities:						$	389
Lease liabilities - current						$	109
Lease liabilities - noncurrent						$	280

NOTE 15. 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. MIS is responding to SEC requests for documents and information in connection with an investigation of MIS’s compliance with record preservation requirements relating to certain business communications sent over electronic messaging channels that have not been approved by MIS. The SEC is conducting similar investigations of the record preservation practices of other NRSROs and other registrants subject to record preservation requirements. Moody’s also is subject to ongoing tax audits as addressed in Note 4 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 16. 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.

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 allocated to each segment based on the segment’s share of full-year 2018 actual revenue which comprises a “Baseline Pool” established in 2019, which will remain fixed over time. In subsequent periods, incremental overhead costs (or reductions thereof) will be allocated to each segment based on the prevailing shares of total revenue represented by each segment.

“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 CODM to allocate resources to the segments. Consequently, it is not practical to show assets by reportable segment.

Financial Information by Segment

The table below shows revenue and Adjusted Operating Income by reportable segment. Adjusted Operating Income is a financial metric utilized by the Company’s CODM to assess the profitability of each reportable segment. Refer to Note 2 for further details on the components of the Company’s revenue.

			Three Months Ended March 31,
			2024																								2023
			MA						MIS						Eliminations						Consolidated						MA						MIS						Eliminations						Consolidated
Total external revenue			$	799					$	987					$	—					$	1,786					$	737					$	733					$	—					$	1,470
Intersegment revenue			3						47						(50)						—						3						45						(48)						—
Revenue			802						1,034						(50)						1,786						740						778						(48)						1,470
Operating, SG&A			564						366						(50)						880						526						336						(48)						814
Adjusted Operating Income			$	238					$	668					$	—					$	906					$	214					$	442					$	—					$	656
Add:
Depreciation and amortization			82						18						—						100						70						18						—						88
Restructuring			2						3						—						5						8						6						—						14
Operating Income																					$	801																							$	554

The table below shows cumulative restructuring expense incurred through March 31, 2024 by reportable segment.

			MA						MIS						Total
2022 - 2023 Geolocation Restructuring Program			$	110					$	95					$	205

The 2022 - 2023 Geolocation Restructuring Program is more fully discussed in Note 9.

Consolidated Revenue Information by Geographic Area

			Three Months Ended March 31,
			2024						2023
United States			$	969					$	763
Non-U.S.:
EMEA			542						460
Asia-Pacific			155						149
Americas			120						98
Total Non-U.S.			817						707
Total			$	1,786					$	1,470

NOTE 17. SUBSEQUENT EVENT

On April 26, 2024, the Board approved the declaration of a quarterly dividend of $0.85 per share of Moody’s common stock, payable on June 7, 2024 to shareholders of record at the close of business on May 17, 2024.