Item 1. Financial Statements

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Item 1. Financial Statements

MOODY’S CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(Amounts in millions, except per share data)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Revenue	$	2,007	$	1,813	$	5,829	$	5,416
Expenses
Operating	492		512		1,472		1,448
Selling, general and administrative	453		434		1,335		1,293
Depreciation and amortization	123		108		356		318
Restructuring	21		6		81		13
Charges related to asset abandonment	1		15		4		30

Total expenses	1,090		1,075		3,248		3,102
Operating income	917		738		2,581		2,314
Non-operating (expense) income, net
Interest expense, net	(58)		(60)		(180)		(185)
Other non-operating income, net	8		25		42		45
Total non-operating (expense) income, net	(50)		(35)		(138)		(140)
Income before provision for income taxes	867		703		2,443		2,174
Provision for income taxes	220		169		592		510
Net income	647		534		1,851		1,664
Less: Net income attributable to noncontrolling interests	1		—		2		1
Net income attributable to Moody's	$	646	$	534	$	1,849	$	1,663
Earnings per share attributable to Moody's common shareholders
Basic	$	3.61	$	2.94	$	10.30	$	9.13
Diluted	$	3.60	$	2.93	$	10.26	$	9.09
Weighted average number of shares outstanding
Basic	178.9		181.7		179.5		182.2
Diluted	179.6		182.5		180.2		183.0

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 September 30, 2025						Three Months Ended September 30, 2024
	Pre-tax amounts		Tax amounts		After-tax amounts		Pre-tax amounts		Tax amounts		After-tax amounts
Net Income					$	647					$	534
Other Comprehensive Income (Loss):
Foreign Currency Adjustments:
Foreign currency translation adjustments, net	$	(26)	$	1	(25)		$	252	$	(3)	249

Net gains (losses) on net investment hedges	8		(3)		5		(184)		48		(136)

Cash Flow Hedges:

Reclassification of losses included in net income	—		—		—		1		—		1



Total other comprehensive (loss) income	$	(18)	$	(2)	$	(20)	$	69	$	45	$	114
Comprehensive income					627						648
Less: comprehensive loss attributable to noncontrolling interests					(1)						—
Comprehensive Income Attributable to Moody's					$	628					$	648


	Nine Months Ended September 30, 2025						Nine Months Ended September 30, 2024

	Pre-tax amounts		Tax amounts		After-tax amounts		Pre-tax amounts		Tax amounts		After-tax amounts
Net Income					$	1,851					$	1,664
Other Comprehensive Income (Loss):
Foreign Currency Adjustments:
Foreign currency translation adjustments, net	$	586	$	—	586		$	98	$	(3)	95

Net losses on net investment hedges	(652)		163		(489)		(40)		10		(30)

Cash Flow Hedges:

Reclassification of losses included in net income	1		—		1		2		—		2
Pension and Other Retirement Benefits:
Amortization of actuarial gains and prior service credits included in net income	(1)		—		(1)		(1)		—		(1)
Net actuarial losses	(1)		—		(1)		(3)		1		(2)
Total other comprehensive (loss) income	$	(67)	$	163	$	96	$	56	$	8	$	64
Comprehensive income					1,947						1,728
Less: comprehensive loss attributable to noncontrolling interests					(4)						—
Comprehensive Income Attributable to Moody's					$	1,951					$	1,728

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)


	September 30, 2025		December 31, 2024
ASSETS
Current assets:
Cash and cash equivalents	$	2,181	$	2,408
Short-term investments	78		566
Accounts receivable, net of allowance for credit losses of $33 in 2025 and $32 in 2024	1,774		1,801
Other current assets	566		515

Total current assets	4,599		5,290
Property and equipment, net of accumulated depreciation of $1,506 in 2025 and $1,453 in 2024	712		656
Operating lease right-of-use assets	300		216
Goodwill	6,465		5,994
Intangible assets, net	1,916		1,890
Deferred tax assets, net	288		293
Other assets	1,135		1,166
Total assets	$	15,415	$	15,505
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	1,032	$	1,344
Current portion of operating lease liabilities	98		102

Current portion of long-term debt	—		697
Deferred revenue	1,369		1,454

Total current liabilities	2,499		3,597
Non-current portion of deferred revenue	58		57
Long-term debt	6,983		6,731
Deferred tax liabilities, net	348		449
Uncertain tax positions	232		211
Operating lease liabilities	282		216
Other liabilities	901		517
Total liabilities	11,303		11,778
Contingencies (Note 16)
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 September 30, 2025 and December 31, 2024, respectively	3		3
Capital surplus	1,617		1,451
Retained earnings	17,410		16,071
Treasury stock, at cost; 164,507,047 and 162,593,213 shares of common stock at September 30, 2025 and December 31, 2024, respectively	(14,535)		(13,322)
Accumulated other comprehensive loss	(538)		(638)
Total Moody's shareholders' equity	3,957		3,565
Noncontrolling interests	155		162
Total shareholders' equity	4,112		3,727
Total liabilities, noncontrolling interests and shareholders' equity	$	15,415	$	15,505

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

MOODY’S CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(Amounts in millions)


	Nine Months Ended September 30,
	2025		2024
Cash flows from operating activities
Net income	$	1,851	$	1,664
Reconciliation of net income to net cash provided by operating activities:
Depreciation and amortization	356		318
Stock-based compensation	174		166
Deferred income taxes	40		9

Non-cash restructuring and abandonment-related charges	8		15
Provision for credit losses on accounts receivable	11		14

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





Changes in assets and liabilities:
Accounts receivable	63		(43)
Other current assets	13		25
Other assets	(16)		(1)
Lease obligations	(28)		(24)
Accounts payable and accrued liabilities	(317)		45
Deferred revenue	(130)		(51)
Uncertain tax positions and other non-current tax liabilities	17		12
Other liabilities	1		22
Net cash provided by operating activities	2,043		2,164
Cash flows from investing activities
Capital additions	(245)		(243)
Purchases of investments	(158)		(623)
Sales and maturities of investments	656		105
Purchases of investments in non-consolidated affiliates	(14)		(4)


Receipts from settlements of net investment hedges	32		—
Cash paid for acquisitions, net of cash acquired	(227)		(110)

Net cash provided by (used in) investing activities	44		(875)
Cash flows from financing activities
Issuance of notes	—		496
Repayment of notes	(700)		—




Proceeds from stock-based compensation plans	44		60
Repurchase of shares related to stock-based compensation	(92)		(85)
Treasury shares	(1,170)		(812)

Dividends	(534)		(465)
Dividends to noncontrolling interests	(2)		(1)


Debt issuance costs, extinguishment costs and related fees	—		(5)
Net cash used in financing activities	(2,454)		(812)

Effect of exchange rate changes on cash and cash equivalents	140		35
(Decrease) increase in cash and cash equivalents	(227)		512
Cash and cash equivalents, beginning of period	2,408		2,130
Cash and cash equivalents, end of period	$	2,181	$	2,642

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 June 30, 2024	342.9	$	3	$	1,324		$	15,478		(160.8)	$	(12,410)	$	(617)	$	3,778	$	160	$	3,938
Net income							534								534		—		534
Dividends ($0.85 per share)							(157)								(157)		(5)		(162)
Stock-based compensation				58											58				58
Shares issued for stock-based compensation plans at average cost, net				8						—	4				12				12
Noncontrolling interest resulting from majority acquisition															—		8		8

Treasury shares repurchased, inclusive of excise tax				—						(0.9)	(434)				(434)				(434)

Currency translation adjustment, net of net investment hedge activity (net of tax of $45 million)													113		113		—		113



Amortization of losses on cash flow hedges													1		1				1
Balance at September 30, 2024	342.9	$	3	$	1,390		$	15,855		(161.7)	$	(12,840)	$	(503)	$	3,905	$	163	$	4,068

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							1,663								1,663		1		1,664
Dividends ($2.55 per share)							(467)								(467)		(6)		(473)
Stock-based compensation				169											169				169
Shares issued for stock-based compensation plans at average cost, net				(7)						0.6	(18)				(25)				(25)
Noncontrolling interest resulting from majority acquisition															—		10		10


Treasury shares repurchased, inclusive of excise tax				—						(1.9)	(817)				(817)				(817)

Currency translation adjustment, net of net investment hedge activity (net of tax of $7 million)													65		65		—		65
Net actuarial losses (net of tax of $1 million)													(2)		(2)				(2)
Amortization of actuarial gains and prior service credits													(1)		(1)				(1)
Amortization of losses on cash flow hedges													2		2				2
Balance at September 30, 2024	342.9	$	3	$	1,390		$	15,855		(161.7)	$	(12,840)	$	(503)	$	3,905	$	163	$	4,068

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 June 30, 2025	342.9	$	3	$	1,552		$	16,933		(163.5)	$	(14,020)	$	(519)	$	3,949	$	159	$	4,108
Net income							646								646		1		647
Dividends ($0.94 per share)							(169)								(169)		(4)		(173)
Stock-based compensation				59											59				59
Shares issued for stock-based compensation plans at average cost, net				6						—	2				8				8


Treasury shares repurchased, inclusive of excise tax										(1.0)	(517)				(517)				(517)
Currency translation adjustment, net of net investment hedge activity (net of tax of $2 million)													(19)		(19)		(1)		(20)



Balance at September 30, 2025	342.9	$	3	$	1,617		$	17,410		(164.5)	$	(14,535)	$	(538)	$	3,957	$	155	$	4,112

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, 2024	342.9	$	3	$	1,451		$	16,071		(162.6)	$	(13,322)	$	(638)	$	3,565	$	162	$	3,727
Net income							1,849								1,849		2		1,851
Dividends ($2.82 per share)							(510)								(510)		(5)		(515)

Stock-based compensation				180											180				180
Shares issued for stock-based compensation plans at average cost, net				(14)						0.5	(34)				(48)				(48)



Treasury shares repurchased, inclusive of excise tax				—						(2.4)	(1,179)				(1,179)				(1,179)

Currency translation adjustment, net of net investment hedge activity (net of tax of $163 million)													101		101		(4)		97
Net actuarial losses													(1)		(1)				(1)
Amortization of actuarial gains and prior service credits													(1)		(1)				(1)
Amortization of losses on cash flow hedges													1		1				1
Balance at September 30, 2025	342.9	$	3	$	1,617		$	17,410		(164.5)	$	(14,535)	$	(538)	$	3,957	$	155	$	4,112

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 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 a global provider of: i) decision solutions; ii) research and insights; and iii) data and information, 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 2024 annual report on Form 10-K filed with the SEC on February 14, 2025. 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 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 prepared to adopt and comply with the disclosure requirements set forth in this ASU upon its effective date.

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 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. Entities should apply the new guidance prospectively. The Company does not expect the adoption of this ASU to have a material impact on its financial statements.

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.

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 are reflected in Note 3.

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

This update should be read in conjunction with the summary of significant accounting policies disclosures made in the Company's Form 10-K for the year ended December 31, 2024. All significant accounting policies described in the Form 10-K for the year ended December 31, 2024 remain unchanged with the exception of the following update:

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). 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, 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.

NOTE 3. REVENUES

Revenue by Category

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


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
MA:
Decision Solutions (DS)
Banking	$	140	$	140	$	419	$	405
Insurance	171		148		502		439
KYC	113		95		321		270
Total DS	424		383		1,242		1,114
Research and Insights (R&I)	252		235		737		683
Data and Information (D&I)	233		213		677		635
Total external revenue	909		831		2,656		2,432
Intersegment revenue	3		3		9		10
Total MA	912		834		2,665		2,442
MIS:
Corporate Finance (CFG)
Investment-grade	124		149		431		416
High-yield	114		80		266		232
Bank loans	155		120		413		422
Other accounts (1)	183		166		542		499
Total CFG	576		515		1,652		1,569
Structured Finance (SFG)
Asset-backed securities	35		34		105		101
RMBS	29		24		84		73
CMBS	25		27		78		66
Structured credit	55		49		149		138
Other accounts	2		1		3		2
Total SFG	146		135		419		380
Financial Institutions (FIG)
Banking	136		108		386		344
Insurance	52		46		151		166
Managed investments	17		13		43		40
Other accounts	3		3		10		10
Total FIG	208		170		590		560
Public, Project and Infrastructure Finance (PPIF)
Public finance / sovereign	68		61		215		187
Project and infrastructure	93		93		271		262
Total PPIF	161		154		486		449
Total ratings revenue	1,091		974		3,147		2,958
MIS Other	7		8		26		26
Total external revenue	1,098		982		3,173		2,984
Intersegment revenue	50		48		149		144
Total MIS	1,148		1,030		3,322		3,128
Eliminations	(53)		(51)		(158)		(154)
Total MCO	$	2,007	$	1,813	$	5,829	$	5,416

(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 tables present the Company’s revenues disaggregated by LOB and geographic area:


	Three Months Ended September 30, 2025						Three Months Ended September 30, 2024
	U.S.		Non-U.S		Total		U.S.		Non-U.S		Total
MA:
Decision Solutions	$	167	$	257	$	424	$	144	$	239	$	383
Research and Insights	137		115		252		128		107		235
Data and Information	82		151		233		74		139		213
Total MA	386		523		909		346		485		831
MIS:
Corporate Finance	405		171		576		364		151		515
Structured Finance	108		38		146		98		37		135
Financial Institutions	111		97		208		90		80		170
Public, Project and Infrastructure Finance	108		53		161		100		54		154
Total ratings revenue	732		359		1,091		652		322		974
MIS Other	—		7		7		1		7		8
Total MIS	732		366		1,098		653		329		982
Total MCO	$	1,118	$	889	$	2,007	$	999	$	814	$	1,813


	Nine Months Ended September 30, 2025						Nine Months Ended September 30, 2024
	U.S.		Non-U.S		Total		U.S.		Non-U.S		Total
MA:
Decision Solutions	$	496	$	746	$	1,242	$	420	$	694	$	1,114
Research and Insights	404		333		737		374		309		683
Data and Information	242		435		677		227		408		635
Total MA	1,142		1,514		2,656		1,021		1,411		2,432
MIS:
Corporate Finance	1,110		542		1,652		1,078		491		1,569
Structured Finance	299		120		419		266		114		380
Financial Institutions	305		285		590		292		268		560
Public, Project and Infrastructure Finance	319		167		486		284		165		449
Total ratings revenue	2,033		1,114		3,147		1,920		1,038		2,958
MIS Other	—		26		26		1		25		26
Total MIS	2,033		1,140		3,173		1,921		1,063		2,984
Total MCO	$	3,175	$	2,654	$	5,829	$	2,942	$	2,474	$	5,416

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


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
MA:
U.S.	$	386	$	346	$	1,142	$	1,021
Non-U.S.:
EMEA	358		334		1,036		969
Asia-Pacific	96		84		276		251
Americas	69		67		202		191
Total Non-U.S.	523		485		1,514		1,411
Total MA	909		831		2,656		2,432
MIS:
U.S.	732		653		2,033		1,921
Non-U.S.:
EMEA	236		212		740		685
Asia-Pacific	84		73		245		225
Americas	46		44		155		153
Total Non-U.S.	366		329		1,140		1,063
Total MIS	1,098		982		3,173		2,984
Total MCO	$	2,007	$	1,813	$	5,829	$	5,416

The following tables summarize the split between Transaction Revenue and Recurring Revenue:


	Three Months Ended September 30,
	2025									2024
	Transaction			Recurring			Total			Transaction			Recurring			Total
Decision Solutions
Banking	$	25		$	115		$	140		$	28		$	112		$	140
	18		%	82		%	100		%	20		%	80		%	100		%
Insurance	$	3		$	168		$	171		$	6		$	142		$	148
	2		%	98		%	100		%	4		%	96		%	100		%
KYC	$	1		$	112		$	113		$	3		$	92		$	95
	1		%	99		%	100		%	3		%	97		%	100		%
Total Decision Solutions	$	29		$	395		$	424		$	37		$	346		$	383
	7		%	93		%	100		%	10		%	90		%	100		%
Research and Insights	$	3		$	249		$	252		$	3		$	232		$	235
	1		%	99		%	100		%	1		%	99		%	100		%
Data and Information	$	2		$	231		$	233		$	2		$	211		$	213
	1		%	99		%	100		%	1		%	99		%	100		%
Total MA (1)	$	34		$	875		$	909		$	42		$	789		$	831
	4		%	96		%	100		%	5		%	95		%	100		%
Corporate Finance	$	433		$	143		$	576		$	382		$	133		$	515
	75		%	25		%	100		%	74		%	26		%	100		%
Structured Finance	$	86		$	60		$	146		$	78		$	57		$	135
	59		%	41		%	100		%	58		%	42		%	100		%
Financial Institutions	$	123		$	85		$	208		$	92		$	78		$	170
	59		%	41		%	100		%	54		%	46		%	100		%
Public, Project and Infrastructure Finance	$	111		$	50		$	161		$	109		$	45		$	154
	69		%	31		%	100		%	71		%	29		%	100		%
MIS Other	$	—		$	7		$	7		$	2		$	6		$	8
	—		%	100		%	100		%	25		%	75		%	100		%
Total MIS	$	753		$	345		$	1,098		$	663		$	319		$	982
	69		%	31		%	100		%	68		%	32		%	100		%
Total Moody's Corporation	$	787		$	1,220		$	2,007		$	705		$	1,108		$	1,813
	39		%	61		%	100		%	39		%	61		%	100		%



	Nine Months Ended September 30,
	2025									2024
	Transaction			Recurring			Total			Transaction			Recurring			Total
Decision Solutions
Banking	$	76		$	343		$	419		$	85		$	320		$	405
	18		%	82		%	100		%	21		%	79		%	100		%
Insurance	$	15		$	487		$	502		$	20		$	419		$	439
	3		%	97		%	100		%	5		%	95		%	100		%
KYC	$	1		$	320		$	321		$	6		$	264		$	270
	—		%	100		%	100		%	2		%	98		%	100		%
Total Decision Solutions	$	92		$	1,150		$	1,242		$	111		$	1,003		$	1,114
	7		%	93		%	100		%	10		%	90		%	100		%
Research and Insights	$	9		$	728		$	737		$	9		$	674		$	683
	1		%	99		%	100		%	1		%	99		%	100		%
Data and Information	$	6		$	671		$	677		$	7		$	628		$	635
	1		%	99		%	100		%	1		%	99		%	100		%
Total MA (1)	$	107		$	2,549		$	2,656		$	127		$	2,305		$	2,432
	4		%	96		%	100		%	5		%	95		%	100		%
Corporate Finance	$	1,225		$	427		$	1,652		$	1,169		$	400		$	1,569
	74		%	26		%	100		%	75		%	25		%	100		%
Structured Finance	$	238		$	181		$	419		$	213		$	167		$	380
	57		%	43		%	100		%	56		%	44		%	100		%
Financial Institutions	$	340		$	250		$	590		$	329		$	231		$	560
	58		%	42		%	100		%	59		%	41		%	100		%
Public, Project and Infrastructure Finance	$	340		$	146		$	486		$	315		$	134		$	449
	70		%	30		%	100		%	70		%	30		%	100		%
MIS Other	$	5		$	21		$	26		$	6		$	20		$	26
	19		%	81		%	100		%	23		%	77		%	100		%
Total MIS	$	2,148		$	1025		$	3,173		$	2,032		$	952		$	2,984
	68		%	32		%	100		%	68		%	32		%	100		%
Total Moody's Corporation	$	2,255		$	3,574		$	5,829		$	2,159		$	3,257		$	5,416
	39		%	61		%	100		%	40		%	60		%	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 tables present the timing of revenue recognition:


	Three Months Ended September 30, 2025						Nine Months Ended September 30, 2025
	MA		MIS		Total		MA		MIS		Total
Revenue recognized at a point in time	$	21	$	753	$	774	$	65	$	2,148	$	2,213
Revenue recognized over time	888		345		1,233		2,591		1,025		3,616
Total	$	909	$	1,098	$	2,007	$	2,656	$	3,173	$	5,829



	Three Months Ended September 30, 2024						Nine Months Ended September 30, 2024
	MA		MIS		Total		MA		MIS		Total
Revenue recognized at a point in time	$	26	$	663	$	689	$	65	$	2,032	$	2,097
Revenue recognized over time	805		319		1,124		2,367		952		3,319
Total	$	831	$	982	$	1,813	$	2,432	$	2,984	$	5,416

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 September 30, 2025 and December 31, 2024:


	As of September 30, 2025				As of December 31, 2024
	MA		MIS		MA		MIS
Unbilled Receivables	$	114	$	530	$	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 three and nine months ended September 30, 2025 and 2024 are as follows:



	Three Months Ended September 30, 2025						Three Months Ended September 30, 2024
	MA		MIS		Total		MA		MIS		Total
Balance at June 30,	$	1,285	$	350	$	1,635	$	1,146	$	336	$	1,482
Changes in deferred revenue:
Revenue recognized that was included in the deferred revenue balance at the beginning of the period	(612)		(123)		(735)		(551)		(120)		(671)
Increases due to amounts billable excluding amounts recognized as revenue during the period	491		87		578		410		92		502
Reclassification to liabilities held-for-sale (1)	$	(23)	—		(23)		—		—		—
Increases due to acquisitions during the period	—		—		—		5				5
Effect of exchange rate changes	(27)		(1)		(28)		37		4		41
Total changes in deferred revenue	(171)		(37)		(208)		(99)		(24)		(123)
Balance at September 30,	$	1,114	$	313	$	1,427	$	1,047	$	312	$	1,359

(1) The 2025 reclassification to liabilities held-for-sale for the MA segment in the table above relate to the planned divestiture of the MA Learning Solutions business, more fully discussed in Note 12.



	Nine Months Ended September 30, 2025						Nine Months Ended September 30, 2024
	MA		MIS		Total		MA		MIS		Total
Balance at December 31,	$	1,243	$	268	$	1,511	$	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	(1,074)		(205)		(1,279)		(950)		(197)		(1,147)
Increases due to amounts billable excluding amounts recognized as revenue during the period	910		239		1,149		860		238		1,098
Reclassification to liabilities held-for-sale (1)	$	(23)	—		(23)		—		—		—
Increases due to acquisitions during the period	15				15		5		—		5
Effect of exchange rate changes	43		11		54		21		1		22
Total changes in deferred revenue	(129)		45		(84)		(64)		42		(22)
Balance at September 30,	$	1,114	$	313	$	1,427	$	1,047	$	312	$	1,359
Deferred revenue - current	$	1,113	$	256	$	1,369	$	1,047	$	253	$	1,300
Deferred revenue - non-current	$	1	$	57	$	58	$	—	$	59	$	59

For the MA segment, the decrease in deferred revenue for the three months ended September 30, 2025 and 2024 was primarily due to the recognition of annual subscription and maintenance revenue for the period, for which billing occurs in December and January. For the nine months ended September 30, 2025 and 2024, the decrease in the deferred revenue balance is attributable to recognition of revenues related to the aforementioned December billings being mostly offset by the impact of the high concentration of billings in the first quarter..

For the MIS segment, the change in the deferred revenue balance for all periods presented was primarily related to the significant portion of contract renewals that occur during the first quarter and are generally recognized over a one year period.

Remaining performance obligation

Remaining performance obligations in the MA segment include both amounts recorded as deferred revenue on the balance sheet as of September 30, 2025 as well as amounts not yet invoiced to customers as of September 30, 2025, largely reflecting future revenue related to signed multi-year arrangements for hosted and installed subscription-based products. As of September 30, 2025, the aggregate amount of the transaction price allocated to remaining performance obligations was approximately $4.1 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 September 30, 2025, the aggregate amount of the transaction price allocated to remaining performance obligations was approximately $87 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 4. 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 September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Stock-based compensation cost	$	58	$	57	$	176	$	166
Tax benefit	$	13	$	12	$	38	$	36

During the first nine months of 2025, the Company granted 0.1 million employee stock options, which had a weighted average grant date fair value of $163.59 per share. The Company also granted 0.4 million shares of restricted stock in the first nine months of 2025, which had a weighted average grant date fair value of $512.07 per share. Both the employee stock options and restricted stock generally vest ratably over four years. Additionally, the Company granted 0.1 million shares of performance-based awards whereby the number of shares that ultimately vest is based on the achievement of certain non-market-based performance metrics of the Company over three years. The weighted average grant date fair value of these awards was $501.88 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 2025:


Expected dividend yield	0.73	%
Expected stock volatility	27	%
Risk-free interest rate	4.51	%
Expected holding period	5.6 years

Unrecognized stock-based compensation expense at September 30, 2025 was $11 million and $287 million for unvested stock options and restricted stock, respectively, which is expected to be recognized over a weighted average period of 2.0 years and 2.5 years, respectively. Additionally, there was $59 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 1.8 years.

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


	Nine Months Ended September 30,
	2025		2024
Exercise of stock options:
Proceeds from stock option exercises	$	26	$	44
Aggregate intrinsic value	$	42	$	60
Tax benefit realized upon exercise	$	9	$	10
Number of shares exercised	0.1		0.3
Vesting of restricted stock:
Fair value of shares vested	$	245	$	183
Tax benefit realized upon vesting	$	60	$	45
Number of shares vested	0.5		0.5
Vesting of performance-based restricted stock:
Fair value of shares vested	$	8	$	40
Tax benefit realized upon vesting	$	1	$	9
Number of shares vested (1)	—		0.1

(1) The number of shares vested in 2025 was approximately 15 thousand.

NOTE 5. INCOME TAXES

Moody’s ETR was 25.4% and 24.0% for the three months ended September 30, 2025 and 2024, respectively. The increase of 1.4% primarily reflects tax benefits recognized in the third quarter of 2024, which resulted from the resolutions of uncertain tax positions, coupled with an increase in current year state income taxes.

Moody’s ETR was 24.2% and 23.5% for the nine months ended September 30, 2025 and 2024, respectively. The year-to-date ETR as of September 30, 2025 was generally in line with the same period in the prior year. The Company’s provision for income taxes for the nine months ended September 30, 2025 differs from the tax computed by applying its estimated annual ETR to the pre-tax earnings primarily due to the excess tax benefits from stock-based compensation of $30 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 an increase in its UTP reserves of $5 million, during the third quarter of 2025 (both on a gross basis and net of federal tax benefits) and an increase of $21 million ($19 million, net of federal tax benefits) during the first nine months of 2025.

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 2021 through 2024 remain open to examination. The Company’s New York City tax returns for 2018 through 2022 are currently under examination, and 2023 is open to examination. The Company's U.K. corporate income tax returns are currently under audit for years 2017 through 2021, while years 2022 through 2023 remain open to examination.

In the fourth quarter of 2025, pursuant to a lapse of a statute of limitations, the Company expects to reverse $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 will be offset by the release of the related indemnification asset within Other non-operating income, net, with no impact to net income. 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 future 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:


	Nine Months Ended September 30,
	2025		2024
Income taxes paid	$	644	$	391

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 period ended September 30, 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.

Effective in 2024, multiple foreign jurisdictions in which the Company operates 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% applies to multinational companies with consolidated revenue above €750 million. Under the GloBE rules, a company is required to determine a combined ETR for all entities located in a jurisdiction. If the jurisdictional effective 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 impact of the Pillar II global minimum tax rules on our consolidated financial statements and related disclosures. As of September 30, 2025, the Pillar II minimum tax requirement is not expected to have a material impact on our full-year results of operations or financial position.

NOTE 6. RECONCILIATION OF WEIGHTED AVERAGE SHARES OUTSTANDING

Below is a reconciliation of basic to diluted shares outstanding:


	Three Months Ended September 30,		Nine Months Ended September 30,

	2025	2024	2025	2024
Basic	178.9	181.7	179.5	182.2
Dilutive effect of shares issuable under stock-based compensation plans	0.7	0.8	0.7	0.8
Diluted	179.6	182.5	180.2	183.0
Anti-dilutive options to purchase common shares and restricted stock as well as contingently issuable restricted stock which are excluded from the table above	0.2	0.3	0.2	0.4

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 September 30, 2025 and 2024.

NOTE 7. CASH EQUIVALENTS AND INVESTMENTS

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


	As of September 30, 2025
							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)	$	1,228	$	—	$	1,228	$	1,149	$	78	$	1
Mutual funds	$	91	$	14	$	105	$	—	$	—	$	105


	As of December 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)	$	1,911	$	—	$	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 one month to 12 months at both September 30, 2025 and December 31, 2024. The remaining contractual maturities for the certificates of deposits classified in other assets are 16 months to 23 months at September 30, 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 invested in COLI. As of September 30, 2025 and December 31, 2024, the contract value of the COLI was $50 million and $48 million, respectively.

NOTE 8. 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 September 30, 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 14 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 September 30,					Nine Months Ended September 30,
	2025		2024			2025			2024
Interest expense, net				$	(58)		$	(60)		$	(180)	$	(185)

Description		Location on Consolidated Statements of Operations
Net interest settlements and accruals on interest rate swaps		Interest expense, net		$	(15)		$	(25)		$	(48)	$	(74)
Fair value changes on interest rate swaps		Interest expense, net		$	13		$	79		$	75	$	57
Fair value changes on hedged debt		Interest expense, net		$	(13)		$	(79)		$	(75)	$	(57)

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:


September 30, 2025
	Pay			Receive
Nature of Swap	Notional Amount (1)		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%

(1) € = euro, HK$ = Hong Kong dollar, S$ = Singapore dollar


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

As of September 30, 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
Years Ending December 31,	Notional Amount (Pay) (1)		Notional Amount (Receive)		Notional Amount (Pay) (1)		Notional Amount (Receive)		Notional Amount (Pay) (1)		Notional Amount (Receive) (1)
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

(1) € = euro, HK$ = Hong Kong dollar, S$ = Singapore dollar

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 September 30,						Three Months Ended September 30,						Three Months Ended September 30,
	2025			2024			2025			2024			2025			2024

Cross currency swaps		$	6		$	(95)		$	—		$	—		$	17		$	12
Long-term debt		(1)			(41)			—			—			—			—
Total net investment hedges		$	5		$	(136)		$	—		$	—		$	17		$	12
Derivatives in Cash Flow Hedging Relationships
Cross currency swap		$	—		$	—		$	1		$	—		$	—		$	—
Interest rate contracts		$	—		$	—		$	(1)		$	(1)		$	—		$	—
Total cash flow hedges		$	—		$	—		$	—		$	(1)		$	—		$	—
Total		$	5		$	(136)		$	—		$	(1)		$	17		$	12


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)
	Nine Months Ended September 30,					Nine Months Ended September 30,					Nine Months Ended September 30,
		2025		2024			2025		2024			2025		2024

Cross currency swaps		$	(359)	$	(20)		$	—	$	—		$	46	$	34
Long-term debt		(130)		(10)			—		—			—		—
Total net investment hedges		$	(489)	$	(30)		$	—	$	—		$	46	$	34
Derivatives in Cash Flow Hedging Relationships
Cross currency swaps		$	—	$	—		$	1	$	—		$	—	$	—
Interest rate contracts		—		—			(2)		(2)			—		—
Total cash flow hedges		$	—	$	—		$	(1)	$	(2)		$	—	$	—
Total		$	(489)	$	(30)		$	(1)	$	(2)		$	46	$	34

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
	September 30, 2025		December 31, 2024
Net investment hedges
Cross currency swaps	$	(181)	$	178
FX forwards	29		29
Long-term debt	(62)		68
Total net investment hedges	$	(214)	$	275
Cash flow hedges
Interest rate contracts	$	(41)	$	(43)
Cross currency swaps	—		1
Total cash flow hedges	(41)		(42)
Total net gain in AOCL	$	(255)	$	233

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 December 2025.

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


	September 30, 2025				December 31, 2024
Notional amount of currency pair (1):	Sell		Buy		Sell		Buy
Contracts to sell USD for GBP	$	597	£	442	$	604	£	470
Contracts to sell USD for JPY	$	24	¥	3,500	$	29	¥	4,000
Contracts to sell USD for CAD	$	38	C$	53	$	35	C$	50
Contracts to sell USD for SGD	$	74	S$	95	$	45	S$	59
Contracts to sell USD for EUR	$	105	€	89	$	—	€	—

Contracts to sell USD for INR	$	20	₹	1,729	$	23	₹	1,900

Contracts to sell EUR for USD	€	—	$	—	€	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 September 30, 2025 and related gains in the three and nine months ended September 30, 2025 were not material. The notional amount of the total return swaps as of September 30, 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:


Derivatives not designated as accounting hedges	Location on Consolidated Statements of Operations		Three Months Ended September 30,				Nine Months Ended September 30,
		2025	2024		2025		2024
FX forwards	Other non-operating income, net		$	(17)	$	39	$	49	$	21
Total return swaps	Operating expense		$	2	$	1	$	5	$	5
Total return swaps	SG&A expense		$	—	$	1	$	1	$	2

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	September 30, 2025		December 31, 2024
Assets:
Derivatives designated as accounting hedges:

Cross-currency swaps designated as net investment hedges	Other assets	$	—	$	58



Derivatives not designated as accounting hedges:
FX forwards on certain assets and liabilities	Other current assets	2		—

Total assets		$	2	$	58
Liabilities:
Derivatives designated as accounting hedges:

Interest rate swaps designated as fair value hedges	Accounts payable and accrued liabilities	$	4	$	3
Cross-currency swaps designated as net investment hedges	Other liabilities	480		26
Interest rate swaps designated as fair value hedges	Other liabilities	90		166
Total derivatives designated as accounting hedges		574		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	4		21
Total liabilities		$	2,046	$	1,510

NOTE 9. GOODWILL AND OTHER ACQUIRED INTANGIBLE ASSETS

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


	Nine Months Ended September 30, 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)	136		—		136		8		—		8		144		—		144
Foreign currency translation adjustments	336		—		336		—		—		—		336		—		336
Reclassification to assets held-for-sale (2)	(9)		—		(9)		—		—		—		(9)		—		(9)
Ending balance	$	6,089	$	(12)	$	6,077	$	388	$	—	$	388	$	6,477	$	(12)	$	6,465


	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 (3)	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 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 relate to the planned divestiture of the MA Learning Solutions business, more fully discussed in Note 12.

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

Acquired intangible assets and related amortization consisted of:


	September 30, 2025		December 31, 2024
Customer relationships	$	2,149	$	2,035
Accumulated amortization	(686)		(631)
Net customer relationships	1,463		1,404
Software/product technology	774		695
Accumulated amortization	(507)		(419)
Net software/product technology	267		276
Database	163		166
Accumulated amortization	(99)		(89)
Net database	64		77
Trade names	200		199
Accumulated amortization	(91)		(83)
Net trade names	109		116
Other (1)	63		67
Accumulated amortization	(50)		(50)
Net other	13		17
Total acquired intangible assets, net (2)	$	1,916	$	1,890

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

(2) Excludes approximately $15M of net acquired intangible assets, which were reclassified to assets held-for-sale related to the planned divestiture of the MA Learning Solutions business, more fully discussed in Note 12.

Amortization expense relating to acquired intangible assets is as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Amortization expense	$	55	$	51	$	163	$	148

NOTE 10. 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 $170 million to $200 million of expected pre-tax personnel-related restructuring charges, an amount that includes severance costs, expense related to the modification of equity awards and other related costs primarily determined under the Company’s existing severance plans. In addition, the program is expected to result in $10 million to $20 million of non-cash charges from the exit from certain leased office spaces and $20 million to $30 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 $170 million to $200 million, which are expected to be paid through 2027.

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


	Three months ended September 30,				Nine months ended September 30,				Cumulative expense incurred
	2025		2024		2025		2024
Strategic and Operational Efficiency Restructuring Program
Employee termination and other related costs (1)	$	21	$	—	$	75	$	—	$	120
Real estate related costs (2)	—		—		4		—		4
Internally developed software-related charges (3)	—		—		2		—		2
Total Restructuring	$	21	$	—	$	81	$	—	$	126

(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) Includes the non-cash acceleration of amortization of ROU Assets that have been abandoned or for which abandonment is planned in future periods.

(3) Includes the non-cash acceleration of amortization of internally developed software that has been abandoned.

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



Balance as of December 31, 2024	$	39











Strategic and Operational Efficiency Restructuring Program:
Cost incurred and adjustments	72
Cash payments	(79)
Balance as of September 30, 2025 (1)	$	32

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

As of September 30, 2025, substantially all of the remaining $32 million restructuring liability is expected to be paid out in the next twelve months.

NOTE 11. FAIR VALUE

The tables below present information about items that are carried at fair value at September 30, 2025 and December 31, 2024:


	Fair Value Measurement as of September 30, 2025
Description	Balance		Level 1		Level 2
Assets:
Derivatives (1)	$	2	$	—	$	2
Money market funds/mutual funds	115		115		—
Total	$	117	$	115	$	2
Liabilities:
Derivatives (1)	$	578	$	—	$	578
Total	$	578	$	—	$	578


	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 8 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 12. OTHER BALANCE SHEET AND STATEMENTS OF OPERATIONS INFORMATION

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


	September 30, 2025		December 31, 2024
Other current assets:
Prepaid taxes	$	112	$	81
Prepaid expenses	188		179
Capitalized costs to obtain and fulfill sales contracts	131		131
Foreign exchange forwards on certain assets and liabilities	2		—

Interest receivable on interest rate and cross currency swaps	59		77
Assets held-for-sale	32		—
Other	42		47
Total other current assets	$	566	$	515

Other assets:
Investments in non-consolidated affiliates	$	483	$	465
Deposits for real-estate leases	17		15
Indemnification assets related to acquisitions	116		109
Mutual funds, certificates of deposit and money market deposit accounts/funds	106		98
Company owned life insurance (at contract value)	50		48
Capitalized costs to obtain sales contracts	226		214
Derivative instruments designated as accounting hedges	—		58
Pension and other retirement employee benefits	62		60
Other	75		99
Total other assets	$	1,135	$	1,166

Accounts payable and accrued liabilities:
Salaries and benefits	$	135	$	133
Incentive compensation	263		452
Customer credits, advanced payments and advanced billings	129		142

Dividends	14		32
Professional service fees	40		38
Interest accrued on debt	51		92
Accounts payable	54		53
Income taxes	89		144
Pension and other retirement employee benefits	11		11
Accrued royalties	19		25
Foreign exchange forwards on certain assets and liabilities	4		21
Restructuring liability	36		46

Derivative instruments designated as accounting hedges	4		3
Interest payable on interest rate and cross currency swaps	53		60
Liabilities held-for-sale	32		—
Other	98		92
Total accounts payable and accrued liabilities	$	1,032	$	1,344


	September 30, 2025		December 31, 2024
Other liabilities:
Pension and other retirement employee benefits	$	208	$	195
Interest accrued on UTPs	63		47
MAKS indemnification provisions	19		19
Income tax liability - non-current portion	—		12
Derivative instruments designated as accounting hedges	570		192

Other	41		52
Total other liabilities	$	901	$	517

Assets and Liabilities Held-for-Sale

In August 2025, the Company entered into a definitive agreement to sell the MA Learning Solutions business. As of September 30, 2025, the assets and liabilities related to this business, which are not material, are classified as held-for-sale. The Company expects the transaction to close during the fourth quarter of 2025.

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:


	September 30, 2025		December 31, 2024
Equity method investments (1)	$	119	$	127
Investments measured using the measurement alternative (2)	350		328
Other	14		10
Total investments in non-consolidated affiliates	$	483	$	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.

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 September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
FX gains (losses)	$	(7)	$	—	$	(10)	$	(7)
Net periodic pension income - non-service and non-interest cost components	9		9		27		25
Income from investments in non-consolidated affiliates	4		8		18		10
Gain on previously held equity method investments (1)	—		7		—		7
Gain on investments	3		4		8		12
Other	(1)		(3)		(1)		(2)
Total	$	8	$	25	$	42	$	45

(1) The amounts for the three and nine months ended September 30, 2024 reflect non-cash gains relating to the step-acquisitions of Praedicat and GCR.

Charges related to asset abandonment:

During the three and nine months ended September 30, 2025, the Company recorded severance charges pursuant to a reduction in staff due to the Company's decision in 2024 to outsource the production of certain sustainability content utilized in our product offerings. During the three and nine months ended September 30, 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 are associated with the sustainability content offerings for which production is being outsourced. Cumulative charges relating to this action as of September 30, 2025 were $47 million.

NOTE 13. COMPREHENSIVE INCOME AND ACCUMULATED OTHER COMPREHENSIVE LOSS

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):



	Three Months Ended September 30,
	2025										2024
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 June 30,	$	(41)	$	(41)	$	(218)	$	(219)	$	(519)	$	(59)	$	(43)	$	(674)	$	159	$	(617)
Other comprehensive income (loss) before reclassifications	—		—		(24)		5		(19)		—		—		249		(136)		113
Amounts reclassified from AOCL	—		—		—		—		—		—		1		—		—		1
Other comprehensive income (loss)	—		—		(24)		5		(19)		—		1		249		(136)		114
Balance at September 30,	$	(41)	$	(41)	$	(242)	$	(214)	$	(538)	$	(59)	$	(42)	$	(425)	$	23	$	(503)


	Nine Months Ended September 30,
	2025										2024
	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,	$	(39)	$	(42)	$	(832)	$	275	$	(638)	$	(56)	$	(44)	$	(520)	$	53	$	(567)
Other comprehensive income (loss) before reclassifications	(1)		—		590		(489)		100		(2)		—		95		(30)		63
Amounts reclassified from AOCL	(1)		1		—		—		—		(1)		2		—		—		1

Other comprehensive income (loss)	(2)		1		590		(489)		100		(3)		2		95		(30)		64
Balance at September 30,	$	(41)	$	(41)	$	(242)	$	(214)	$	(538)	$	(59)	$	(42)	$	(425)	$	23	$	(503)

NOTE 14. INDEBTEDNESS

The Company’s debt is recorded at its carrying value, 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 value 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:


September 30, 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	$	(20)	$	3	$	(4)	$	579
1.75% 2015 Senior Notes, due 2027	587		—		—		(1)		586
3.25% 2017 Senior Notes, due 2028	500		(4)		(1)		(1)		494
4.25% 2018 Senior Notes, due 2029	400		(21)		(1)		(1)		377
4.875% 2018 Senior Notes, due 2048	400		(23)		(6)		(3)		368
0.950% 2019 Senior Notes, due 2030	881		—		(1)		(3)		877
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		—		(12)		(4)		584
3.10% 2021 Senior Notes, due 2061	500		—		(6)		(5)		489
3.75% 2022 Senior Notes, due 2052	500		(23)		(8)		(4)		465
4.25% 2022 Senior Notes, due 2032	500		(3)		(2)		(3)		492
5.00% 2024 Senior Notes, due 2034	500		—		(4)		(4)		492
Total long-term debt	$	7,168	$	(94)	$	(49)	$	(42)	$	6,983


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 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 value of the hedged debt.

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 September 30, 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 September 30, 2025, there were no such cross defaults.

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


Year Ending December 31,	Year Ending Total
2025 (After September 30,)	$	—
2026	—
2027	587
2028	500
2029	400
Thereafter	5,681
Total	$	7,168

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 September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Income	$	14	$	28	$	51	$	73
Expense on borrowings(1)	(59)		(79)		(193)		(227)
Expense on UTPs and other tax related liabilities	(6)		(3)		(17)		(12)
Net periodic pension costs - interest component	(7)		(6)		(21)		(19)
Interest expense, net	$	(58)	$	(60)	$	(180)	$	(185)
Interest paid(2)	$	56	$	83	$	192	$	234

(1) Expense on borrowings includes interest on long-term debt, as well as realized gains/losses related to interest rate and cross currency swaps, which are more fully discussed in Note 8.

(2) Interest paid includes net settlements on interest rate and cross currency swaps, which are more fully discussed in Note 8.

The fair value and carrying value of the Company’s debt as of September 30, 2025 and December 31, 2024 are as follows:


	September 30, 2025				December 31, 2024
	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
Total debt	$	6,983	$	6,283	$	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 15. 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 September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Operating lease cost	$	22	$	23	$	66	$	66
Sublease income	(2)		(1)		(6)		(5)
Variable lease cost	5		5		15		16
Total lease cost	$	25	$	27	$	75	$	77

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


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Cash paid for amounts included in the measurement of operating lease liabilities	$	30	$	31	$	91	$	90
Right-of-use assets obtained in exchange for new operating lease liabilities	$	95	$	15	$	142	$	20


	September 30, 2025		September 30, 2024
Weighted-average remaining lease term	6.5 years		4.0 years
Weighted-average discount rate applied to operating leases	4.6	%	3.2	%

The following table presents a maturity analysis of the future minimum lease payments included within the Company’s operating lease liabilities at September 30, 2025:


Year Ending December 31,	Operating Leases
2025 (After September 30,)	$	28
2026	100
2027	86
2028	31
2029	35
After 2029	177
Total lease payments (undiscounted)	457
Less: Interest	77
Present value of lease liabilities:	$	380
Lease liabilities - current	$	98
Lease liabilities - noncurrent	$	282

NOTE 16. 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 5 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 17. 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 generally allocated to each segment based on historical/budgeted 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 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, 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 used in our budgeting and forecasting process, enabling the allocation of capital resources across the Company's strategic initiatives.


	Three Months Ended September 30,
	2025								2024
	MA		MIS		Eliminations		Consolidated		MA		MIS		Eliminations		Consolidated
Total external revenue	$	909	$	1,098	$	—	$	2,007	$	831	$	982	$	—	$	1,813
Intersegment revenue	3		50		(53)		—		3		48		(51)		—
Revenue	912		1,148		(53)		2,007		834		1,030		(51)		1,813
Compensation expense	352		283		—		635		350		318		—		668
Non-compensation expense	197		113		—		310		183		95		—		278
Intersegment expense	50		3		(53)		—		48		3		(51)		—
Operating, SG&A	599		399		(53)		945		581		416		(51)		946
Adjusted Operating Income	$	313	$	749	$	—	$	1,062	$	253	$	614	$	—	$	867
Less:
Depreciation and amortization	101		22		—		123		88		20		—		108

Restructuring	15		6		—		21		4		2		—		6
Charges related to asset abandonment	1		—		—		1		15		—		—		15
Operating Income							$	917							$	738
Non-operating (expense) income, net							$	(50)							$	(35)
Income before provision for income taxes							$	867							$	703

	Nine Months Ended September 30,
	2025								2024
	MA		MIS		Eliminations		Consolidated		MA		MIS		Eliminations		Consolidated
Total external revenue	$	2,656	$	3,173	$	—	$	5,829	$	2,432	$	2,984	$	—	$	5,416
Intersegment revenue	9		149		(158)		—		10		144		(154)		—
Revenue	2,665		3,322		(158)		5,829		2,442		3,128		(154)		5,416
Compensation expense	1,069		843		—		1,912		1,023		867		—		1,890
Non-compensation expense	589		306		—		895		554		297		—		851
Intersegment expense	149		9		(158)		—		144		10		(154)		—
Operating, SG&A	1,807		1,158		(158)		2,807		1,721		1,174		(154)		2,741
Adjusted Operating Income	$	858	$	2,164	$	—	$	3,022	$	721	$	1,954	$	—	$	2,675
Less:
Depreciation and amortization	292		64		—		356		260		58		—		318
Restructuring	59		22		—		81		7		6		—		13
Charges related to asset abandonment	4		—		—		4		30		—		—		30
Operating Income							$	2,581							$	2,314
Non-operating (expense) income, net							$	(138)							$	(140)
Income before provision for income taxes							$	2,443							$	2,174

The table below shows cumulative restructuring expense incurred through September 30, 2025 by reportable segment.


	MA		MIS		Total




Strategic and Operational Efficiency Restructuring Program	$	93	$	33	$	126

The costs expected to be incurred related to the Strategic and Operational Efficiency Restructuring Program are $125 million to $155 million for the MA segment and $75 million to $95 million for the MIS segment, which include allocations of charges associated with corporate functions. This restructuring program is more fully discussed in Note 10.

Consolidated Revenue Information by Geographic Area


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
United States	$	1,118	$	999	$	3,175	$	2,942
Non-U.S.:
EMEA	594		546		1,776		1,654
Asia-Pacific	180		157		521		476
Americas	115		111		357		344
Total Non-U.S.	889		814		2,654		2,474
Total	$	2,007	$	1,813	$	5,829	$	5,416

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